What changed in this filing

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

2026-04-27 compared with 2025-10-27 · 55 added, 58 removed, 173 unchanged (40% of the section changed)

5 unchanged sentences

Our view of potential risks and our sensitivity to such risks is discussed in our 2025 Annual Report on Form 10-K, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, Page 109.

The fair value of our investment portfolio was $30.326 billion at September 30, 2025, up $2.661 billion from year-end 2024, including a $1.448 billion increase in the fixed-maturity portfolio, a $1.362 billion increase in the equity portfolio and a $149 million decrease in short-term investments.

(Dollars in millions) At September 30, 2025 At December 31, 2024

The fair value of our investment portfolio was $31.163 billion at March 31, 2026, up $198 million from year-end 2025, including a $422 million increase in the fixed-maturity portfolio, a $125 million decrease in the equity portfolio and a $99 million decrease in short-term investments.

(Dollars in millions) At March 31, 2026 At December 31, 2025

amortized cost Percent

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Total $ 23,421 100.0 % $ 31,163 100.0 % $ 22,607 100.0 % $ 30,965 100.0 %

At September 30, 2025, substantially all of our consolidated investment portfolio, measured at fair value, is classified as Level 1 or Level 2.

At March 31, 2026, substantially all of our consolidated investment portfolio, measured at fair value, is classified as Level 1 or Level 2.

See Item 1, Note 3, Fair Value Measurements, for additional discussion of our valuation techniques.

In addition to our investment portfolio, the total investments amount reported in our condensed consolidated balance sheets includes Other invested assets.

Other invested assets included $623 million of private equity investments, $99 million of real estate through direct property ownership and development projects in the United States, $37 million of life policy loans and $14 million in Lloyd's deposit at September 30, 2025.

Cincinnati Financial Corporation Third-Quarter 2025 10-Q

Other invested assets included $656 million of private equity investments, $128 million of real estate through direct property ownership and development projects in the United States, $39 million of life policy loans and $15 million in Lloyd's deposit at March 31, 2026.

Cincinnati Financial Corporation First-Quarter 2026 10-Q

FIXED-MATURITY SECURITIES INVESTMENTS

4 unchanged sentences

By regularly investing in the bond market, we build a broad, diversified portfolio that we believe mitigates the impact of adverse economic factors.

In the first nine months of 2025, the increase in fair value of our fixed-maturity portfolio was due to net purchases of securities, plus a decrease in our net unrealized loss position that reflected a decrease in U.S.

Treasury yields and a slight tightening of corporate credit spreads.

At September 30, 2025, our fixed-maturity portfolio with an average rating of A2/A+ was valued at 98.8% of its amortized cost, compared with 96.7% at December 31, 2024.

At September 30, 2025, our investment-grade fixed-maturity securities represented 97.4% of the portfolio based on ratings provided by nationally recognized statistical rating organizations or the Securities Valuation Office of the National Association of Insurance Commissioners.

In the first three months of 2026, the increase in fair value of our fixed-maturity portfolio was due to net purchases of securities, partially offset by an increase in our net unrealized loss position that reflected an increase in U.S.

Treasury yields and a widening of corporate credit spreads.

At March 31, 2026, our fixed-maturity portfolio with an average rating of A2/A was valued at 97.9% of its amortized cost, compared with 99.0% at December 31, 2025.

At March 31, 2026, our investment-grade fixed-maturity securities represented 98.1% of the portfolio based on ratings provided by nationally recognized statistical rating organizations or the Securities Valuation Office of the National Association of Insurance Commissioners.

Attributes of the fixed-maturity portfolio include:

At September 30, 2025 At December 31, 2024

At March 31, 2026 At December 31, 2025

Weighted average yield-to-amortized cost 5.13 % 5.11 %

2 unchanged sentences

We discuss maturities of our fixed-maturity portfolio in our 2025 Annual Report on Form 10-K, Item 8, Note 2, Investments, Page 131, and in this quarterly report Item 2, Investments Results.

Cincinnati Financial Corporation Third-Quarter 2025 10-Q

Cincinnati Financial Corporation First-Quarter 2026 10-Q

TAXABLE FIXED MATURITIES

Our taxable fixed-maturity portfolio, with a fair value of $13.593 billion at September 30, 2025, included:

(Dollars in millions) At September 30, 2025 At December 31, 2024

Our taxable fixed-maturity portfolio, with a fair value of $14.469 billion at March 31, 2026, included:

(Dollars in millions) At March 31, 2026 At December 31, 2025

Investment-grade corporate $ 9,833 $ 9,505

7 unchanged sentences

Our strategy is to buy, and typically hold, fixed-maturity investments to maturity, but we monitor credit profiles and fair value movements when determining holding periods for individual securities.

With the exception of United States agency issues that include government-sponsored enterprises, no individual issuer's securities accounted for more than 0.8% of the taxable fixed-maturity portfolio at September 30, 2025.

Our investment-grade corporate bonds had an average rating of Baa1 by Moody's or BBB+ by S&P Global Ratings and represented 67.2% of the taxable fixed-maturity portfolio's fair value at September 30, 2025, compared with 65.9% at year-end 2024.

With the exception of United States agency issues that include government-sponsored enterprises, no individual issuer's securities accounted for more than 0.9% of the taxable fixed-maturity portfolio at March 31, 2026.

Our investment-grade corporate bonds had an average rating of Baa1 by Moody's or BBB+ by S&P Global Ratings and represented 68.0% of the taxable fixed-maturity portfolio's fair value at March 31, 2026, compared with 67.8% at year-end 2025.

The heaviest concentration in our investment-grade corporate bond portfolio, based on fair value at

September 30, 2025, was the financial sector.

March 31, 2026, was the financial sector.

It represented 27.1% of our investment-grade corporate bond portfolio, compared with 28.8% at year-end 2025.

3 unchanged sentences

See risk factors entitled “Financial disruption or a prolonged economic downturn could affect our investment performance” and “Our ability to achieve our performance objectives could be affected by changes in the financial, credit and capital markets or the general economy.”

Our taxable fixed-maturity portfolio at September 30, 2025, included $778 million of asset-backed securities at fair value with an average rating of Aa2/AA.

Our taxable fixed-maturity portfolio at March 31, 2026, included $766 million of asset-backed securities at fair value with an average rating of Aa2/AA.

TAX-EXEMPT FIXED MATURITIES

At September 30, 2025, we had $4.037 billion of tax-exempt fixed-maturity securities at fair value with an average rating of Aa2/AA by Moody's and S&P Global Ratings.

At March 31, 2026, we had $4.076 billion of tax-exempt fixed-maturity securities at fair value with an average rating of Aa2/AA by Moody's and S&P Global Ratings.

We traditionally have purchased municipal bonds focusing on general obligation and essential services issues, such as water, waste disposal or others.

The portfolio is well diversified among approximately 2,000 municipal bond issuers.

No single municipal issuer accounted for more than 0.6% of the tax-exempt fixed-maturity portfolio at September 30, 2025.

No single municipal issuer accounted for more than 0.5% of the tax-exempt fixed-maturity portfolio at March 31, 2026.

INTEREST RATE SENSITIVITY ANALYSIS

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As part of this model, the effective duration of the fixed-maturity portfolio is continually monitored by our investment department to evaluate the theoretical impact of interest rate movements.

Cincinnati Financial Corporation Third-Quarter 2025 10-Q

Cincinnati Financial Corporation First-Quarter 2026 10-Q

The table below summarizes the effect of hypothetical changes in interest rates on the fair value of the fixed-maturity portfolio:

1 unchanged sentence

-200 -100 — 100 200

At September 30, 2025 $ 19,606 $ 18,610 $ 17,630 $ 16,563 $ 15,495

At March 31, 2026 $ 20,742 $ 19,646 $ 18,545 $ 17,355 $ 16,192

At December 31, 2025 $ 20,177 $ 19,142 $ 18,123 $ 17,008 $ 15,891

The effective duration of the fixed-maturity portfolio as of September 30, 2025, was 5.6 years, up from 5.0 years at year-end 2024.

The effective duration of the fixed-maturity portfolio as of March 31, 2026, was 5.9 years, up from 5.6 years at year-end 2025.

The above table is a theoretical presentation showing that an instantaneous, parallel shift in the yield curve of 100 basis points could produce an approximately 6.2% change in the fair value of the fixed-maturity portfolio.

7 unchanged sentences

We make short-term investments primarily with funds to be used to make upcoming cash payments, such as dividends, taxes or other corporate purposes.

At September 30, 2025, we had $149 million of short-term investments.

At March 31, 2026, we had $49 million of short-term investments.

EQUITY INVESTMENTS

Our equity investments, with a fair value totaling $12.547 billion at September 30, 2025, included $12.209 billion of common stock securities of companies generally with strong indications of paying and growing their dividends.

Our equity investments, with a fair value totaling $12.569 billion at March 31, 2026, included $12.260 billion of common stock securities of companies generally with strong indications of paying and growing their dividends.

Other criteria we evaluate include increasing sales and earnings, proven management and a favorable outlook.

5 unchanged sentences

-30% -20% -10% — 10% 20% 30%

At September 30, 2025 $ 8,783 $ 10,038 $ 11,292 $ 12,547 $ 13,802 $ 15,056 $ 16,311

At March 31, 2026 $ 8,798 $ 10,055 $ 11,312 $ 12,569 $ 13,826 $ 15,083 $ 16,340

At December 31, 2025 $ 8,886 $ 10,155 $ 11,425 $ 12,694 $ 13,963 $ 15,233 $ 16,502

At September 30, 2025, Microsoft (Nasdaq:MSFT) was our largest single common stock holding with a fair value of $940 million, or 7.7% of our publicly traded common stock portfolio and 3.1% of the total investment portfolio.

Forty-two holdings (among nine different sectors) each had a fair value greater than $100 million.

Cincinnati Financial Corporation Third-Quarter 2025 10-Q

Common Stock Portfolio Industry Sector Distribution

At March 31, 2026, Apple Inc.

(Nasdaq:AAPL) was our largest single common stock holding with a fair value of $881 million, or 7.2% of our publicly traded common stock portfolio and 2.8% of the total investment portfolio.

Forty-six holdings (among ten different sectors) each had a fair value greater than $100 million.

Cincinnati Financial Corporation First-Quarter 2026 10-Q

Common Stock Portfolio Sector Distribution

Percent of common stock portfolio

At September 30, 2025 At December 31, 2024

Financial S&P 500 Industry

At March 31, 2026 At December 31, 2025

Financial S&P 500

Weightings Cincinnati

Financial S&P 500 Industry

Financial S&P 500

Information technology 30.9 % 32.9 % 35.4 % 34.4 %

8 unchanged sentences

Real estate 2.2 1.9 1.9 1.8

Communication services 1.2 10.1 1.3 9.4

Telecomm services 1.3 10.3 1.0 10.6

Total 100.0 % 100.0 % 100.0 % 100.0 %

UNREALIZED INVESTMENT GAINS AND LOSSES

At September 30, 2025, unrealized investment gains before taxes for the fixed-maturity portfolio totaled $212 million and unrealized investment losses amounted to $429 million before taxes.

The $217 million net unrealized loss position in our fixed-maturity portfolio at September 30, 2025, decreased in the first nine months of 2025, primarily due to a decrease in U.S.

Treasury yields and a slight tightening of corporate credit spreads.

At March 31, 2026, unrealized investment gains before taxes for the fixed-maturity portfolio totaled $131 million and unrealized investment losses amounted to $532 million before taxes.

The $401 million net unrealized loss position in our fixed-maturity portfolio at March 31, 2026, increased in the first three months of 2026, primarily due to an increase in U.S.

Treasury yields and a widening of corporate credit spreads.

The net loss position for our current fixed-maturity holdings will naturally decline over time as individual securities approach maturity.

2 unchanged sentences

We believe that the appreciated value of equity securities, compared with the cost of securities that is generally used as a tax basis, is a useful measure to help evaluate how fair value can change over time.

On this basis, the net unrealized investment gains at September 30, 2025, consisted of a net gain position in our equity portfolio of $8.393 billion.

On this basis, the net unrealized investment gains at March 31, 2026, consisted of a net gain position in our equity portfolio of $8.143 billion.

Events or factors such as economic growth or recession can affect the fair value and unrealized investment gains of our equity securities.

The five largest holdings in our common stock portfolio at September 30, 2025, were Microsoft, Apple (Nasdaq:AAPL), Broadcom Inc.

(Nasdaq:AVGO), JPMorgan Chase & Co (NYSE:JPM), and Abbvie Inc.

(NYSE:ABBV), which had a combined fair value of $3.652 billion.

The five largest holdings in our common stock portfolio at March 31, 2026, were Apple Inc., Microsoft Corp (Nasdaq:MSFT), Broadcom Inc.

(Nasdaq:AVGO), JPMorgan Chase & Co (NYSE:JPM), and Lam Research Corporation (Nasdaq:LRCX), which had a combined fair value of $3.139 billion.

Unrealized Investment Losses

1 unchanged sentence

Further, amortized costs for some securities are revised through write-downs recognized in prior periods.

At September 30, 2025, 2,831 of the 5,331 fixed-maturity and short-term securities we owned had fair values below amortized cost, compared with 3,723 of the 5,090 securities we owned at year-end 2024.

The 2,831 holdings with fair values below amortized cost at September 30, 2025, represented 46.5% of the fair value of our fixed-maturity and short-term investments portfolio and $429 million in unrealized losses.

• 2,137 of the 2,831 holdings had fair value between 90% and 100% of amortized cost at September 30, 2025.

At March 31, 2026, 3,356 of the 5,442 fixed-maturity and short-term securities we owned had fair values below amortized cost, compared with 2,597 of the 5,358 securities we owned at year-end 2025.

The 3,356 holdings with fair values below amortized cost at March 31, 2026, represented 62.1% of the fair value of our fixed-maturity and short-term investments portfolio and $532 million in unrealized losses.

• 2,628 of the 3,356 holdings had fair value between 90% and 100% of amortized cost at March 31, 2026.

These primarily consist of securities whose current valuation is largely the result of interest rate factors.

The fair value of these 2,628 securities was $10.223 billion, and they accounted for $241 million in unrealized losses.

• 677 of the 2,831 holdings had fair value between 70% and 90% of amortized cost at September 30, 2025.

• 711 of the 3,356 holdings had fair value between 70% and 90% of amortized cost at March 31, 2026.

We believe the 711 securities will continue to pay interest and ultimately pay principal upon maturity.

Cincinnati Financial Corporation Third-Quarter 2025 10-Q

Cincinnati Financial Corporation First-Quarter 2026 10-Q

The issuers of these 711 securities have strong cash flow to service their debt and meet their contractual obligation to make principal payments.

The fair value of these securities was $1.299 billion, and they accounted for $277 million in unrealized losses.

• 17 of the 2,831 holdings had fair value below 70% of amortized cost at September 30, 2025.

• 17 of the 3,356 holdings had fair value below 70% of amortized cost at March 31, 2026.

We believe these securities will continue to pay interest and ultimately pay principal upon maturity.

2 unchanged sentences

(Dollars in millions) Less than 12 months 12 months or more Total

At September 30, 2025 Fair value Unrealized

At March 31, 2026 Fair value Unrealized

losses Fair value Unrealized

15 unchanged sentences

United States government 69 — 20 1 89 1

Foreign government — — 3 — 3 —

Total fixed-maturity $ 2,206 $ 22 $ 5,671 $ 375 $ 7,877 $ 397

Short-term 100 — — — 100 —

Total fixed-maturity and short-term investments $ 6,683 $ 121 $ 5,823 $ 510 $ 12,506 $ 631

At September 30, 2025, applying our invested asset impairment policy, we determined that the total of $429 million, for securities in an unrealized loss position in the table above, was not the result of a credit loss.

During the first nine months of 2025, no fixed maturity securities were written down to fair value, due to an intention to be sold.

The allowance for credit losses increased $15 million during the first nine months of 2025.

During the first nine months of 2024, no fixed maturity securities were written down to fair value, due to an intention to be sold.

The increase in the allowance for credit losses was $25 million during the first nine months of 2024.

At March 31, 2026, applying our invested asset impairment policy, we determined that the total of $532 million, for securities in an unrealized loss position in the table above, was not the result of a credit loss.

During the first three months of 2026, no fixed maturity securities were written down to fair value, due to an intention to be sold.

The allowance for credit losses decreased less than $1 million during the first three months of 2026.

During the first three months of 2025, no fixed maturity securities were written down to fair value, due to an intention to be sold.

The increase in the allowance for credit losses was $2 million during the first three months of 2025.

During the full year of 2025, no securities were written down to fair value.

1 unchanged sentence

Of that total, 13 securities had fair values below 70% of amortized cost.

Cincinnati Financial Corporation Third-Quarter 2025 10-Q

Cincinnati Financial Corporation First-Quarter 2026 10-Q

The following table summarizes the investment portfolio by severity of decline:

3 unchanged sentences

gain (loss) Gross investment income

At September 30, 2025

At March 31, 2026

Taxable fixed maturities:

36 unchanged sentences

See our 2025 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Asset Impairment, Page 54.

Cincinnati Financial Corporation Third-Quarter 2025 10-Q

Cincinnati Financial Corporation First-Quarter 2026 10-Q

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk