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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
 (Mark one)
☑       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. 
For the quarterly period ended September 30, 2023.
☐       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. 
For the transition period from _____________________ to _____________________.
Commission file number 0-4604
CINCINNATI FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Ohio 31-0746871
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer Identification No.)
6200 S. Gilmore Road, Fairfield,Ohio 45014-5141
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (513) 870-2000
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stockCINFNasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 
☑Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☑Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, a smaller reporting company or an emerging growth company. See definition of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
☑ Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☐ Smaller reporting company
☐ Emerging growth company
☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):
☐Yes ☑ No
As of October 20, 2023, there were 156,907,720 shares of common stock outstanding.

Table of Contents
CINCINNATI FINANCIAL CORPORATION AND SUBSIDIARIES
FORM 10-Q FOR THE QUARTER ENDED September 30, 2023
 
TABLE OF CONTENTS
 
 
 
 
 
 
 
 
          Safe Harbor Statement
 
          Corporate Financial Highlights
          Financial Results
 
          Other Matters
 
 
 
 
 
 
 

Cincinnati Financial Corporation Third-Quarter 2023 10-Q
Page 2
Table of Contents
Part I – Financial Information
Item 1.    Financial Statements (unaudited)
 
Cincinnati Financial Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Dollars in millions, except per share data)September 30,December 31,
20232022
Assets  
Investments  
Fixed maturities, at fair value (amortized cost: 2023—$14,050; 2022—$12,979)
$12,843 $12,132 
Equity securities, at fair value (cost: 2023—$4,399; 2022—$4,294)
10,031 9,841 
Other invested assets534 452 
Total investments23,408 22,425 
Cash and cash equivalents899 1,264 
Investment income receivable182 160 
Finance receivable103 92 
Premiums receivable2,654 2,322 
Reinsurance recoverable699 665 
Prepaid reinsurance premiums69 51 
Deferred policy acquisition costs1,101 1,013 
Land, building and equipment, net, for company use (accumulated depreciation:
   2023—$333; 2022—$322)
199 202 
Other assets683 646 
Separate accounts918 892 
Total assets$30,915 $29,732 
Liabilities  
Insurance reserves  
Loss and loss expense reserves$9,077 $8,400 
Life policy and investment contract reserves2,920 3,015 
Unearned premiums4,195 3,689 
Other liabilities1,315 1,229 
Deferred income tax997 1,054 
Note payable25 50 
Long-term debt and lease obligations844 841 
Separate accounts918 892 
Total liabilities20,291 19,170 
Commitments and contingent liabilities (Note 12)
Shareholders' Equity  
Common stock, par value—$2 per share; (authorized: 2023 and 2022—500 million
   shares; issued: 2023 and 2022—198.3 million shares)
397 397 
Paid-in capital1,422 1,392 
Retained earnings12,018 11,711 
Accumulated other comprehensive income (827)(614)
Treasury stock at cost (2023—41.4 million shares and 2022—41.2 million shares)
(2,386)(2,324)
Total shareholders' equity10,624 10,562 
Total liabilities and shareholders' equity$30,915 $29,732 
 Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
Cincinnati Financial Corporation Third-Quarter 2023 10-Q
Page 3
Table of Contents
Cincinnati Financial Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(Dollars in millions, except per share data)Three months ended September 30,Nine months ended September 30,
2023202220232022
Revenues    
Earned premiums$2,033 $1,884 $5,894 $5,350 
Investment income, net of expenses225 193 655 573 
Investment gains and losses, net(456)(674)84 (2,494)
Fee revenues6 5 16 12 
Other revenues3 2 8 7 
Total revenues1,811 1,410 6,657 3,448 
Benefits and Expenses    
Insurance losses and contract holders' benefits1,332 1,418 4,070 3,772 
Underwriting, acquisition and insurance expenses609 551 1,744 1,604 
Interest expense13 14 40 40 
Other operating expenses5 4 17 13 
 Total benefits and expenses1,959 1,987 5,871 5,429 
Income (Loss) Before Income Taxes(148)(577)786 (1,981)
Provision (Benefit) for Income Taxes    
Current57 19 124 90 
Deferred(106)(180)2 (571)
Total provision (benefit) for income taxes(49)(161)126 (481)
Net Income (Loss)$(99)$(416)$660 $(1,500)
Per Common Share    
Net income (loss)—basic$(0.63)$(2.63)$4.20 $(9.42)
Net income (loss)—diluted(0.63)(2.63)4.17 (9.42)
Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
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Cincinnati Financial Corporation and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
2023202220232022
Net Income (Loss)$(99)$(416)$660 $(1,500)
Other Comprehensive Income (Loss)    
Change in unrealized gains and losses on investments, net of benefit of $(79), $(109), $(76) and $(393), respectively
(290)(405)(284)(1,477)
Amortization of pension actuarial loss and prior service cost, net of tax (benefit) of $0, $0, $(2) and $0, respectively
— — (5)— 
Change in life policy reserves, reinsurance recoverable and other, net of tax of $22, $25, $19 and $104, respectively
89 95 76 393 
Other comprehensive loss(201)(310)(213)(1,084)
Comprehensive Income (Loss)$(300)$(726)$447 $(2,584)
Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

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Cincinnati Financial Corporation and Subsidiaries
Condensed Consolidated Statements of Shareholders' Equity
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
2023202220232022
Common Stock
   Beginning of period$397 $397 $397 $397 
   Share-based awards— — — — 
   End of period397 397 397 397 
Paid-In Capital
   Beginning of period1,410 1,367 1,392 1,356 
   Share-based awards1 1 (5)(11)
   Share-based compensation9 9 31 29 
   Other2 2 4 5 
   End of period1,422 1,379 1,422 1,379 
Retained Earnings
   Beginning of period12,235 11,331 11,711 12,625 
Cumulative effect of change in accounting for long-duration insurance contracts (Note 1)— — — 10 
Adjusted beginning of period12,235 11,331 11,711 12,635 
   Net income (loss)(99)(416)660 (1,500)
Dividends declared (118)(109)(353)(329)
   End of period12,018 10,806 12,018 10,806 
Accumulated Other Comprehensive Income (Loss)
   Beginning of period(626)(478)(614)648 
Cumulative effect of change in accounting for long-duration insurance contracts (Note 1)— — — (352)
Adjusted beginning of period(626)(478)(614)296 
   Other comprehensive loss(201)(310)(213)(1,084)
   End of period(827)(788)(827)(788)
Treasury Stock
   Beginning of period(2,386)(2,112)(2,324)(1,921)
   Share-based awards1 1 8 13 
   Shares acquired - share repurchase authorization— (203)(67)(399)
   Shares acquired - share-based compensation plans(2)— (5)(8)
   Other1 — 2 1 
   End of period(2,386)(2,314)(2,386)(2,314)
      Total Shareholders' Equity$10,624 $9,480 $10,624 $9,480 
(In millions, except per common share)
Common Stock - Shares Outstanding
   Beginning of period156.8 159.2 157.1 160.3 
   Share-based awards— — 0.3 0.5 
   Shares acquired - share repurchase authorization— (2.1)(0.6)(3.7)
   Other0.1 — 0.1 — 
   End of period156.9 157.1 156.9 157.1 
Dividends declared per common share$0.75 $0.69 $2.25 $2.07 
Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
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Cincinnati Financial Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
 (Dollars in millions)Nine months ended September 30,
20232022
Cash Flows From Operating Activities  
Net income (loss)$660 $(1,500)
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation, amortization and other88 102 
Investment gains and losses, net(69)2,513 
Interest credited to contract holders33 34 
Deferred income tax expense2 (571)
Changes in:  
Premiums and reinsurance receivable(392)(354)
Deferred policy acquisition costs(88)(118)
Other assets(30)(6)
Loss and loss expense reserves677 808 
Life policy and investment contract reserves73 53 
Unearned premiums506 527 
Other liabilities8 3 
Current income tax receivable/payable7 (70)
Net cash provided by operating activities1,475 1,421 
Cash Flows From Investing Activities  
Sale, call or maturity of fixed maturities826 911 
Sale of equity securities68 333 
Purchase of fixed maturities(1,853)(1,445)
Purchase of equity securities(157)(380)
Changes in finance receivables(10)12 
Investment in building and equipment(10)(12)
Change in other invested assets, net(102)(65)
Net cash used in investing activities(1,238)(646)
Cash Flows From Financing Activities  
Payment of cash dividends to shareholders(338)(316)
Shares acquired - share repurchase authorization(67)(399)
Changes in note payable
(25)(10)
Proceeds from stock options exercised7 8 
Contract holders' funds deposited67 54 
Contract holders' funds withdrawn(165)(98)
Other(81)(70)
Net cash used in financing activities(602)(831)
Net change in cash and cash equivalents(365)(56)
Cash and cash equivalents at beginning of year1,264 1,139 
Cash and cash equivalents at end of period$899 $1,083 
Supplemental Disclosures of Cash Flow Information:  
Interest paid$28 $27 
Income taxes paid94 144 
Noncash Activities  
Equipment acquired under finance lease obligations$10 $13 
Share-based compensation15 24 
Other assets and other liabilities120 203 
 Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
NOTE 1 — Accounting Policies
The condensed consolidated financial statements include the accounts of Cincinnati Financial Corporation and its consolidated subsidiaries, each of which is wholly owned. These statements are presented in conformity with accounting principles generally accepted in the United States of America (GAAP). All intercompany balances and transactions have been eliminated in consolidation.
 
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Our actual results could differ from those estimates. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been condensed or omitted.
 
Our September 30, 2023, condensed consolidated financial statements are unaudited. We believe that we have made all adjustments, consisting only of normal recurring accruals, that are necessary for fair presentation. These condensed consolidated financial statements should be read in conjunction with our consolidated financial statements included in our 2022 Annual Report on Form 10-K. The results of operations for interim periods do not necessarily indicate results to be expected for the full year.

Adopted Accounting Updates
ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts
In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. ASU 2018-12 requires changes to the measurement and disclosure of long-duration insurance contracts. In November 2020, the FASB issued an ASU that delayed the effective date of ASU 2018-12 to interim and annual reporting periods beginning after December 15, 2022.

Related to the company's term and whole life products included in life policy and investment contract reserves, the new guidance requires that cash flow assumptions be reviewed at least annually to determine any necessary updates. Additionally, the discount rate assumption is required to be updated quarterly based on upper-medium grade fixed-income instrument yields (market value discount rates). The life policy and investment contract reserves balance is adjusted through insurance losses and contract holders' benefits for cash flow assumption updates and through accumulated other comprehensive income (AOCI) for discount rate updates.

These ASUs also amend the previous guidance related to life deferred policy acquisition costs by requiring amortization of those costs on a constant level basis for a group of contracts that approximates straight-line and the removal of shadow deferred policy acquisition costs for universal life and deferred annuity products. These ASUs also require entities to provide additional disclosures including disaggregated rollforwards of the life policy and investment contract reserves, separate account liabilities and life deferred policy acquisition costs.

We adopted these ASUs on a modified retrospective basis on January 1, 2023, resulting in an after-tax increase to shareholders' equity of $31 million.














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The following table illustrates the effect of adopting ASU 2018-12 in the condensed consolidated balance sheets:
(Dollars in millions)September 30, 2023December 31, 2022
As originally reportedAs adjustedDifference
Reinsurance recoverable$699 $640 $665 $25 
Prepaid reinsurance premiums69 79 51 (28)
Deferred policy acquisition costs1,101 1,014 1,013 (1)
Total assets30,915 29,736 29,732 (4)
Life policy and investment contract reserves2,920 3,059 3,015 (44)
Deferred income tax997 1,045 1,054 9 
Total liabilities20,291 19,205 19,170 (35)
Retained earnings12,018 11,702 11,711 9 
Accumulated other comprehensive income(827)(636)(614)22 
Total shareholders' equity10,624 10,531 10,562 31 
Total liabilities and shareholders' equity30,915 29,736 29,732 (4)

The following table illustrates the effect of adopting ASU 2018-12 in the condensed consolidated statements of income and condensed consolidated statements of comprehensive income:
(Dollars in millions, except per share data)Three months ended September 30,
20232022
As originally reportedAs adjustedDifference
Earned premiums$2,033 $1,882 $1,884 $2 
Insurance losses and contract holders' benefits1,332 1,418 1,418 — 
Underwriting, acquisition and insurance expenses609 551 551 — 
Deferred income tax expense(106)(180)(180)— 
Net Income (Loss)(99)(418)(416)2 
Change in life policy reserves, reinsurance recoverable and other, net of tax89 — 95 95 
Other comprehensive income (loss)(201)(405)(310)95 
Comprehensive Income (Loss)(300)(823)(726)97 
Net income (loss) per share:
Basic$(0.63)$(2.64)$(2.63)$0.01 
Diluted(0.63)(2.64)(2.63)0.01 
(Dollars in millions, except per share data)Nine months ended September 30,
20232022
As originally reportedAs adjustedDifference
Earned premiums$5,894 $5,345 $5,350 $5 
Insurance losses and contract holders' benefits4,070 3,766 3,772 6 
Underwriting, acquisition and insurance expenses1,744 1,604 1,604 — 
Deferred income tax expense2 (571)(571)— 
Net Income (Loss)660 (1,499)(1,500)(1)
Change in life policy reserves, reinsurance recoverable and other, net of tax76 1 393 392 
Other comprehensive income (loss)(213)(1,476)(1,084)392 
Comprehensive Income (Loss)447 (2,975)(2,584)391 
Net income (loss) per share:
Basic$4.20 $(9.41)$(9.42)$(0.01)
Diluted4.17 (9.41)(9.42)(0.01)

The adoption of ASU 2018-12 did not have a material impact on the company's condensed consolidated cash flows.
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NOTE 2 – Investments
The following table provides amortized cost, gross unrealized gains, gross unrealized losses and fair value for our fixed-maturity securities:
(Dollars in millions)Amortized
cost		Gross unrealizedFair value
At September 30, 2023gainslosses
Fixed-maturity securities:    
Corporate $7,786 $27 $700 $7,113 
States, municipalities and political subdivisions4,911 2 489 4,424 
Government-sponsored enterprises 897 — 23 874 
United States government223 — 6 217 
Commercial mortgage-backed214 — 18 196 
Foreign government19 — — 19 
Total$14,050 $29 $1,236 $12,843 
At December 31, 2022    
Fixed-maturity securities:    
Corporate $7,412 $37 $580 $6,869 
States, municipalities and political subdivisions4,901 24 303 4,622 
Government-sponsored enterprises186 — 3 183 
United States government196 — 5 191 
Commercial mortgage-backed 250 — 16 234 
Foreign government34 — 1 33 
Total$12,979 $61 $908 $12,132 
 
The net unrealized investment losses in our fixed-maturity portfolio at September 30, 2023, are primarily due to an increase in U.S. Treasury yields, partially offset by a tightening of corporate credit spreads. Our commercial mortgage-backed securities had an average rating of Aa3/AA- and Aa2/AA- at September 30, 2023, and December 31, 2022, respectively.

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The table below provides fair values and gross unrealized losses by investment category and by the duration of the securities' continuous unrealized loss positions:
(Dollars in millions)Less than 12 months12 months or moreTotal
At September 30, 2023Fair
value		Unrealized
losses		Fair
value		Unrealized
losses		Fair
value		Unrealized
losses
Fixed-maturity securities:      
Corporate $1,283 $58 $5,431 $642 $6,714 $700 
States, municipalities and political subdivisions2,331 89 1,902 400 4,233 489 
Government-sponsored enterprises742 17 95 6 837 23 
United States government80 1 130 5 210 6 
Commercial mortgage-backed1 — 194 18 195 18 
Foreign government9 — 5 — 14 — 
Total$4,446 $165 $7,757 $1,071 $12,203 $1,236 
At December 31, 2022      
Fixed-maturity securities:      
Corporate $5,651 $412 $661 $168 $6,312 $580 
States, municipalities and political subdivisions2,600 274 77 29 2,677 303 
Government-sponsored enterprises123 3 3 — 126 3 
United States government146 3 41 2 187 5 
Commercial mortgage-backed215 13 14 3 229 16 
Foreign government25 1 4 — 29 1 
Total$8,760 $706 $800 $202 $9,560 $908 

Contractual maturity dates for fixed-maturities securities were:
(Dollars in millions)Amortized
cost		Fair
value		% of fair
value
At September 30, 2023
Maturity dates:   
Due in one year or less$825 $814 6.3 %
Due after one year through five years4,507 4,314 33.6 
Due after five years through ten years3,522 3,246 25.3 
Due after ten years5,196 4,469 34.8 
Total$14,050 $12,843 100.0 %

Actual maturities may differ from contractual maturities when there is a right to call or prepay obligations with or without call or prepayment penalties.

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The following table provides investment income and investment gains and losses, net:
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
2023202220232022
Investment income:
Interest$154 $129 $441 $376 
Dividends69 66 205 203 
Other 5 3 18 6 
Total228 198 664 585 
Less investment expenses3 5 9 12 
Total$225 $193 $655 $573 
Investment gains and losses, net:    
Equity securities:    
Investment gains and losses on securities sold, net$(5)$16 $2 $34 
Unrealized gains and losses on securities still held, net(458)(705)99 (2,568)
Subtotal(463)(689)101 (2,534)
Fixed-maturity securities:    
Gross realized gains1 — 2 6 
Gross realized losses(1)— (2)(3)
Write-down of impaired securities with intent to sell— — (4)— 
Subtotal— — (4)3 
Other7 15 (13)37 
Total$(456)$(674)$84 $(2,494)
 
The fair value of our equity portfolio was $10.031 billion and $9.841 billion at September 30, 2023, and December 31, 2022, respectively. Apple Inc. (Nasdaq:AAPL), an equity holding, was our largest single investment holding with a fair value of $764 million and $597 million, which was 7.9% and 6.3% of our publicly traded common equities portfolio and 3.3% and 2.7% of the total investment portfolio at September 30, 2023, and December 31, 2022, respectively.

The allowance for credit losses was $3 million and $1 million at September 30, 2023, and December 31, 2022, respectively. Changes decreased the allowance $1 million for the three months ended September 30, 2023, and increased the allowance $2 million for the nine months ended September 30, 2023. Changes were less than $1 million for both the three and nine months ended September 30, 2022.

There were 4,490 fixed-maturity securities with a total unrealized loss of $1.236 billion, which were in an unrealized loss position at September 30, 2023. Of that total, 202 fixed-maturity securities had fair values below 70% of amortized cost. There were 3,272 fixed-maturity securities with a total unrealized loss of $908 million, which were in an unrealized loss position at December 31, 2022. Of that total, 49 fixed-maturity securities had fair values below 70% of amortized cost.
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NOTE 3 – Fair Value Measurements
In accordance with accounting guidance for fair value measurements and disclosures, we categorized our financial instruments, based on the priority of the observable and market-based data for the valuation technique used, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices with readily available independent data in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable market inputs (Level 3). When various inputs for measurement fall within different levels of the fair value hierarchy, the lowest observable input that has a significant impact on fair value measurement is used. Our valuation techniques have not changed from those used at December 31, 2022, and ultimately management determines fair value. See our 2022 Annual Report on Form 10-K, Item 8, Note 3, Fair Value Measurements, Page 137, for information on characteristics and valuation techniques used in determining fair value.

Fair Value Disclosures for Assets
The following tables illustrate the fair value hierarchy for those assets measured at fair value on a recurring basis at September 30, 2023, and December 31, 2022. We do not have any liabilities carried at fair value.
(Dollars in millions)Level 1Level 2Level 3Total
At September 30, 2023
Fixed maturities, available for sale:    
Corporate $— $7,113 $— $7,113 
States, municipalities and political subdivisions— 4,424 — 4,424 
Government-sponsored enterprises— 874 — 874 
United States government217 — — 217 
Commercial mortgage-backed — 196 — 196 
Foreign government— 19 — 19 
Subtotal217 12,626 — 12,843 
Common equities9,678 — — 9,678 
Nonredeemable preferred equities— 353 — 353 
Separate accounts taxable fixed maturities— 823 — 823 
Top Hat savings plan mutual funds and common
   equity (included in Other assets)		63 — — 63 
Total$9,958 $13,802 $— $23,760 
At December 31, 2022
Fixed maturities, available for sale:    
Corporate $— $6,869 $— $6,869 
States, municipalities and political subdivisions— 4,622 — 4,622 
Government-sponsored enterprises— 183 — 183 
United States government191 — — 191 
Commercial mortgage-backed — 234 — 234 
Foreign government— 33 — 33 
Subtotal191 11,941 — 12,132 
Common equities9,454 — — 9,454 
Nonredeemable preferred equities— 387 — 387 
Separate accounts taxable fixed maturities — 815 — 815 
Top Hat savings plan mutual funds and common
  equity (included in Other assets)		57 — — 57 
Total$9,702 $13,143 $— $22,845 
 
We also held Level 1 cash and cash equivalents of $899 million and $1.264 billion at September 30, 2023, and December 31, 2022, respectively.
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Fair Value Disclosures for Assets and Liabilities Not Carried at Fair Value 
The disclosures below are presented to provide information about the effects of current market conditions on financial instruments that are not reported at fair value in our condensed consolidated financial statements.
 
This table summarizes the book value and principal amounts of our long-term debt:
(Dollars in millions) Book valuePrincipal amount
Interest
rate		Year of 
issue		 September 30,December 31,September 30,December 31,
 2023202220232022
6.900%1998Senior debentures, due 2028$27 $27 $28 $28 
6.920%2005Senior debentures, due 2028391 391 391 391 
6.125%2004Senior notes, due 2034372 371 374 374 
Total $790 $789 $793 $793 
 
The following table shows fair values of our note payable and long-term debt:
(Dollars in millions)Level 1Level 2Level 3Total
At September 30, 2023
Note payable$— $25 $— $25 
6.900% senior debentures, due 2028
— 28 — 28 
6.920% senior debentures, due 2028
— 411 — 411 
6.125% senior notes, due 2034
— 371 — 371 
Total$— $835 $— $835 
At December 31, 2022
Note payable$— $50 $— $50 
6.900% senior debentures, due 2028
— 29 — 29 
6.920% senior debentures, due 2028
— 418 — 418 
6.125% senior notes, due 2034
— 388 — 388 
Total$— $885 $— $885 
 
The following table shows the fair value of our life policy loans included in other invested assets and the fair values of our deferred annuities and structured settlements included in life policy and investment contract reserves:
(Dollars in millions)Level 1Level 2Level 3Total
At September 30, 2023
Life policy loans$— $— $36 $36 
Deferred annuities— — 595 595 
Structured settlements— 129 — 129 
Total$— $129 $595 $724 
At December 31, 2022
Life policy loans$— $— $37 $37 
Deferred annuities— — 621 621 
Structured settlements— 143 — 143 
Total$— $143 $621 $764 
 
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Outstanding principal and interest for these life policy loans totaled $31 million at both September 30, 2023, and December 31, 2022.
 
Recorded reserves for the deferred annuities were $680 million and $734 million at September 30, 2023, and December 31, 2022, respectively. Recorded reserves for the structured settlements were $124 million and $129 million at September 30, 2023, and December 31, 2022, respectively.


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NOTE 4 – Property Casualty Loss and Loss Expenses
This table summarizes activity for our consolidated property casualty loss and loss expense reserves:
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
2023202220232022
Gross loss and loss expense reserves, beginning of period$8,807 $7,603 $8,336 $7,229 
Less reinsurance recoverable424 287 405 327 
Net loss and loss expense reserves, beginning of period8,383 7,316 7,931 6,902 
Net incurred loss and loss expenses related to:    
Current accident year1,314 1,391 4,053 3,687 
Prior accident years(53)(43)(213)(143)
Total incurred1,261 1,348 3,840 3,544 
Net paid loss and loss expenses related to:    
Current accident year597 484 1,286 1,021 
Prior accident years461 464 1,899 1,709 
Total paid1,058 948 3,185 2,730 
Net loss and loss expense reserves, end of period8,586 7,716 8,586 7,716 
Plus reinsurance recoverable419 329 419 329 
Gross loss and loss expense reserves, end of period$9,005 $8,045 $9,005 $8,045 
 
We use actuarial methods, models and judgment to estimate, as of a financial statement date, the property casualty loss and loss expense reserves required to pay for and settle all outstanding insured claims, including incurred but not reported (IBNR) claims, as of that date. The actuarial estimate is subject to review and adjustment by an inter-departmental committee that includes actuarial, claims, underwriting, loss prevention and accounting management. This committee is familiar with relevant company and industry business, claims and underwriting trends, as well as general economic and legal trends that could affect future loss and loss expense payments. The amount we will actually have to pay for claims can be highly uncertain. This uncertainty, together with the size of our reserves, makes the loss and loss expense reserves our most significant estimate. The reserve for loss and loss expenses in the condensed consolidated balance sheets also included $72 million and $68 million at September 30, 2023, and 2022, respectively, for certain life and health loss and loss expense reserves.

We experienced $53 million of favorable development on prior accident years, including $34 million of favorable development in commercial lines, $8 million of favorable development in personal lines and no net development in excess and surplus lines for the three months ended September 30, 2023. Within commercial lines, we recognized favorable reserve development of $20 million for the workers' compensation line and $11 million for the commercial property line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines.

We experienced $213 million of favorable development on prior accident years, including $125 million of favorable development in commercial lines, $54 million of favorable development in personal lines and $14 million of favorable development in excess and surplus lines for the nine months ended September 30, 2023. Within commercial lines, we recognized favorable reserve development of $46 million for the workers' compensation line and $36 million for both the commercial property and commercial casualty lines due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines. Within personal lines, we recognized favorable reserve development of $44 million for the homeowner line and $12 million for the personal auto line.

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We experienced $43 million of favorable development on prior accident years, including $4 million of favorable development in commercial lines, $8 million of favorable development in personal lines and $7 million of favorable development in excess and surplus lines for the three months ended September 30, 2022. Within commercial lines, we recognized favorable reserve development of $24 million for the commercial property line and $16 million for the workers' compensation line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines. This was partially offset by unfavorable reserve development of $23 million for the commercial casualty line and $16 million for the commercial auto line.

We experienced $143 million of favorable development on prior accident years, including $51 million of favorable development in commercial lines, $56 million of favorable development in personal lines and $13 million of favorable development in excess and surplus lines for the nine months ended September 30, 2022. Within commercial lines, we recognized favorable reserve development of $43 million for the workers' compensation line and $36 million for the commercial property line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines. This was partially offset by unfavorable reserve development of $25 million for the commercial casualty line and $15 million for the commercial auto line. Within personal lines, we recognized favorable reserve development of $51 million for the homeowner line.
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NOTE 5 – Life Policy and Investment Contract Reserves
In the first quarter of 2023, we adopted ASU 2018-12 which resulted in changes to the life policy and investment contract reserves and the expansion of required disclosures. The below disclosures represent application of the updated guidance. See Note 1, Accounting Policies, for further discussion.

We establish the reserves for traditional life policies including term, whole life and other products based on certain cash flow assumptions including expected expenses, mortality, morbidity, lapse rates and timing of claim presentation. These assumptions are established based on our current expectations and are reviewed annually to determine any necessary updates. Assumptions are also updated on an interim basis if evidence suggests that they should be revised. We use both our own experience and industry experience, adjusted for historical trends, in arriving at our assumptions for expected mortality, morbidity and lapse rates. These reserves also include a discount rate assumption that is based on market value discount rates and is updated quarterly. Certain assumptions, including the mortality, lapse and long-term interest rate reversion targets, were updated in the second quarter of 2023 as part of our annual assumption unlocking. Changes in the inputs, judgments and assumptions during the period and the related measurement impact on the liability are reflected in the below tables.
 
We establish reserves for the company's deferred annuity, universal life and structured settlement policies equal to the cumulative account balances, which include premium deposits plus credited interest less charges and withdrawals. Some of our universal life policies contain no-lapse guarantee provisions. For these policies, we establish a reserve in addition to the account balance, based on expected no-lapse guarantee benefits and expected policy assessments.

The following table summarizes our life policy and investment contract reserves and provides a reconciliation of the balances described in the below tables to those in the condensed consolidated balance sheets:
(Dollars in millions)September 30,
2023		December 31,
2022
Life policy reserves:
Term$956 $961 
Whole life381 408 
Other97 94 
Subtotal1,434 1,463 
Investment contract reserves:
Deferred annuities680 734 
Universal life575 578 
Structured settlements124 129 
Other107 111 
Subtotal1,486 1,552 
Total life policy and investment contract reserves$2,920 $3,015 

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The table below shows the ASU 2018-12 adoption impacts to the life policy and investment contract reserves as of January 1, 2021 (transition date), pretax:
(Dollars in millions)TermWhole lifeDeferred annuityUniversal lifeOtherTotal
At January 1, 2021
Balance, pre-adoption at December 31, 2020$901 $363 $761 $567 $323 $2,915 
Removal of shadow adjustments— — — — 13 13 
Net premiums in excess of gross premiums14 1 — — — 15 
Remeasurement at market value discount rates372 245 — — — 617 
Balance, post-adoption at January 1, 2021$1,287 $609 $761 $567 $336 $3,560 

The table below shows the ASU 2018-12 adoption impacts to the life reinsurance recoverable asset as of January 1, 2021, pretax:
(Dollars in millions)TermWhole lifeDeferred annuityUniversal lifeOtherTotal
At January 1, 2021
Balance, pre-adoption at December 31, 2020$113 $26 $— $— $78 $217 
Remeasurement at market value discount rates29 18 — — — 47 
Other adjustments20 1 — 2 — 23 
Balance, post-adoption at January 1, 2021$162 $45 $— $2 $78 $287 

Other above includes structured settlements, other life policy reserves and other investment contract reserves. The removal of shadow adjustments above represents an increase to the life policy and investment contract reserve balance as it is no longer required under ASU 2018-12 for liabilities amortized in accordance with deferred acquisition costs. Shadow adjustments were historically included to present the carrying amount of the liability as if unrealized holding gains and losses had been realized. The net premiums in excess of gross premiums adjustment represents an increase to the liability as the remeasured net premiums, calculated as the present value of future benefits and related expenses using updated cash flow assumptions as of the transition date less the carrying amount of the liability prior to transition, exceeded the present value of future gross premiums. For purposes of calculating the updated present value of future benefits and related expenses above, the discount rate assumption that was used prior to adoption of ASU 2018-12 was retained. The remeasurement at market value discount rates adjustment represents the increase to the liability as a result of updating the discount rate assumption for our term and whole life products from the rates used prior to adoption of ASU 2018-12 to market value discount rates that existed at the transition date. As the discount rate assumption decreased significantly from the date the contracts were initially made, this adjustment represents the largest impact on the liability as a result of the initial adoption of ASU 2018-12. The life reinsurance recoverable asset is included in the remeasurement as the assumptions used in estimating the life reinsurance recoverable are consistent with those used in estimating the related liabilities. Other adjustments includes a reclassification from prepaid reinsurance premiums to reinsurance recoverable.

The shadow removal and remeasurement at market value discount rates adjustments were recorded as an increase to the life policy and investment contract reserves liability and a decrease to opening AOCI as of the transition date. The net premiums in excess of gross premiums adjustment was recorded as an increase to the life policy and investment contract reserves liability and a decrease to the opening balance of retained earnings as of the transition date.

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The balances and changes in the term and whole life policy reserves included in life policy and investment contract reserves is as follows:
(Dollars in millions)Three months ended September 30,
20232022
TermWhole lifeTermWhole life
Present value of expected net premiums:
Balance, beginning of period$1,664 $212 $1,723 $210 
Beginning balance at original discount rate1,712 219 1,704 209 
Effect of changes in cash flow assumptions— (1)(13)(2)
Effect of actual variances from expected experience(3)2 (3)— 
Adjusted beginning of period balance1,709 220 1,688 207 
Issuances33 7 50 11 
Interest accrual18 3 17 2 
Net premiums collected(45)(7)(44)(6)
Ending balance at original discount rate1,715 223 1,711 214 
Effect of changes in discount rate assumptions(133)(17)(94)(13)
Balance, end of period1,582 206 1,617 201 
Present value of expected future policy benefits:
Balance, beginning of period2,662 633 2,702 646 
Beginning balance at original discount rate2,737 615 2,663 590 
Effect of changes in cash flow assumptions— — (12)(2)
Effect of actual variances from expected experience(6)2 (2)— 
Adjusted beginning of period balance2,731 617 2,649 588 
Issuances33 7 49 11 
Interest accrual30 8 29 7 
Benefits paid(39)(9)(48)(7)
Ending balance at original discount rate2,755 623 2,679 599 
Effect of changes in discount rate assumptions(234)(37)(159)(5)
Balance, end of period2,521 586 2,520 594 
Net liability for future policy benefits:
Present value of expected future policy benefits less expected net premiums939 380 903 393 
Impact of flooring at cohort level17 1 22 2 
Net life policy reserves956 381 925 395 
Less reinsurance recoverable at original discount rate(99)(25)(98)(25)
Less effect of discount rate assumption changes on reinsurance recoverable(7)(3)(9)(4)
Net life policy reserves, after reinsurance recoverable$850 $353 $818 $366 
Weighted-average duration of the net life policy reserves in years11161116
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(Dollars in millions)Nine months ended September 30,
20232022
TermWhole lifeTermWhole life
Present value of expected net premiums:
Balance, beginning of period$1,643 $208 $1,801 $241 
Beginning balance at original discount rate1,708 217 1,503 201 
Effect of changes in cash flow assumptions(5)(7)132 (3)
Effect of actual variances from expected experience(15)3 5 — 
Adjusted beginning of period balance1,688 213 1,640 198 
Issuances111 24 154 30 
Interest accrual53 7 49 6 
Net premiums collected(137)(21)(132)(20)
Ending balance at original discount rate1,715 223 1,711 214 
Effect of changes in discount rate assumptions(133)(17)(94)(13)
Balance, end of period1,582 206 1,617 201 
Present value of expected future policy benefits:
Balance, beginning of period2,584 614 2,993 826 
Beginning balance at original discount rate2,692 607 2,425 577 
Effect of changes in cash flow assumptions5 (10)150 (5)
Effect of actual variances from expected experience(19)3 15 — 
Adjusted beginning of period balance2,678 600 2,590 572 
Issuances111 24 153 29 
Interest accrual90 23 84 22 
Benefits paid(124)(24)(148)(24)
Ending balance at original discount rate2,755 623 2,679 599 
Effect of changes in discount rate assumptions(234)(37)(159)(5)
Balance, end of period2,521 586 2,520 594 
Net liability for future policy benefits:
Present value of expected future policy benefits less expected net premiums939 380 903 393 
Impact of flooring at cohort level 17 1 22 2 
Net life policy reserves956 381 925 395 
Less reinsurance recoverable at original discount rate(99)(25)(98)(25)
Less effect of discount rate assumption changes on reinsurance recoverable(7)(3)(9)(4)
Net life policy reserves, after reinsurance recoverable$850 $353 $818 $366 
Weighted-average duration of the net life policy reserves in years11161116

The total impact of flooring at cohort level in the above tables includes the effect of discount rate assumption changes of $5 million and $13 million at September 30, 2023 and 2022, respectively.

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The following table shows the amount of undiscounted and discounted expected future benefit payments and expected gross premiums for our term and whole life policies:
(Dollars in millions)At September 30,
20232022
UndiscountedDiscountedUndiscountedDiscounted
Term
Expected future benefit payments$4,768 $2,521 $4,618 $2,520 
Expected future gross premiums4,364 2,464 4,402 2,528 
Whole life
Expected future benefit payments$1,631 $586 $1,540 $594 
Expected future gross premiums653 379 596 356 

The following table shows the amount of revenue and interest recognized in the condensed consolidated statements of income related to our term and whole life policies:

(Dollars in millions)Three months ended September 30,Nine months ended September 30,
2023202220232022
Gross premiums
Term$71 $70 $217 $210 
Whole life14 11 39 35 
Total$85 $81 $256 $245 
Interest accretion
Term$13 $12 $37 $35 
Whole life5 5 16 16 
Total$18 $17 $53 $51 

Adverse development that resulted in an immediate charge to income due to net premiums exceeding gross premiums was immaterial for the three and nine months ended September 30, 2023, and 2022.

The following table shows the weighted-average interest rate for our term and whole life products:
At September 30,
20232022
Term
Interest accretion rate5.29 %5.15 %
Current discount rate5.73 5.18 
Whole life
Interest accretion rate5.92 %5.97 %
Current discount rate5.95 5.51 

The discount rate assumption was developed by calculating forward rates from market yield curves of upper-medium grade fixed-income instruments.

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The following table shows the balances and changes in policyholders' account balances included in investment contract reserves:
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
2023202220232022
Deferred annuityUniversal lifeDeferred annuityUniversal lifeDeferred annuityUniversal lifeDeferred annuityUniversal life
Balance, beginning of period$696 $456 $755 $457 $734 $457 $763 $454 
Premiums received13 8 12 8 38 28 23 29 
Policy charges— (9)— (10)— (29)— (29)
Surrenders and withdrawals(32)(2)(17)(4)(100)(9)(37)(9)
Benefit payments(3)(1)(3)(1)(9)(5)(13)(4)
Interest credited6 4 5 5 17 14 16 14 
Balance, end of period$680 $456 $752 $455 $680 $456 $752 $455 
Weighted average crediting rate3.45 %4.29 %3.10 %4.24 %3.45 %4.29 %3.10 %4.24 %
Net amount at risk$— $3,989 $— $4,108 $— $3,989 $— $4,108 
Cash surrender value675 424 748 421 675 424 748 421 

The net amount at risk above represents the guaranteed benefit amount in excess of the current account balances.

The following table shows the balance of account values by range of guaranteed minimum crediting rates, in basis points, and the related range of the difference between rates being credited to policyholders and the respective guaranteed minimums for our deferred annuity and universal life contracts:
(Dollars in millions)At guaranteed minimum1 to 50 basis points above51-150 basis points aboveGreater than 150 basis pointsTotal
At September 30, 2023
Deferred annuity
1.00-3.00%$5 $380 $16 $229 630 
3.01-4.00%50 — — — 50 
Total$55 $380 $16 $229 $680 
Universal life
1.00-3.00%$60 $— $57 $3 $120 
3.01-4.00%54 — — — 54 
Greater than 4.00%282 — — — 282 
Total$396 $— $57 $3 $456 
At September 30, 2022
Deferred annuity
1.00-3.00%$467 $— $170 $64 $701 
3.01-4.00%51 — — — 51 
Total$518 $— $170 $64 $752 
Universal life
1.00-3.00%$59 $46 $8 $2 $115 
3.01-4.00%52 — — — 52 
Greater than 4.00%288 — — — 288 
Total$399 $46 $8 $2 $455 

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The following table shows the balances and changes in the other additional liability related to the no-lapse guarantees contained within our universal life contracts:
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
2023202220232022
Balance, beginning of period$122 $122 $121 $133 
Balance, beginning of period before shadow reserve adjustments124 123 123 131 
Effect of changes in cash flow assumptions— — (5)(2)
Effect of actual variances from expected experience2 1 1 6 
Adjusted beginning of period balance126 124 119 135 
Interest accrual1 1 3 3 
Excess death benefits(4)(2)(6)(14)
Attributed assessments3 3 9 9 
Effect of changes in interest rate assumptions(5)(4)(4)(11)
Balance, end of period before shadow reserve adjustments121 122 121 122 
Shadow reserve adjustments(2)(3)(2)(3)
Balance, end of period119 119 119 119 
Less reinsurance recoverable, end of period7 5 7 5 
Net other additional liability, after reinsurance recoverable$126 $124 $126 $124 
Weighted-average duration of the other additional liability in years32343234

The following table shows balances and changes in separate accounts balances during the period:
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
2023202220232022
Balance, beginning of period$911 $860 $892 $959 
Interest credited before policy charges11 9 31 29 
Change in unrealized gains and losses impacting separate accounts liabilities— 20 — (85)
Benefit payments(3)— (6)(10)
Other(1)(1)1 (5)
Balance, end of period$918 $888 $918 $888 
Cash surrender value$912 $886 $912 $886 
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NOTE 6 – Deferred Policy Acquisition Costs
Expenses directly related to successfully acquired insurance policies – primarily commissions, premium taxes and underwriting costs – are deferred and amortized over the terms of the policies. We update our acquisition cost assumptions periodically to reflect actual experience. For property casualty, we evaluate the costs for recoverability. The adoption of ASU 2018-12 on January 1, 2023 resulted in a simplified amortization of life deferred acquisition costs and the removal of shadow deferred acquisition costs. See Note 1, Accounting Policies, for further discussion. The table below shows the deferred policy acquisition costs and asset reconciliation.
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
2023202220232022
Property casualty:
Deferred policy acquisition costs asset, beginning of period$771 $723 $682 $602 
Capitalized deferred policy acquisition costs355 325 1,134 1,064 
Amortized deferred policy acquisition costs(366)(342)(1,056)(960)
Deferred policy acquisition costs asset, end of period$760 $706 $760 $706 
Life:
Deferred policy acquisition costs asset, beginning of period$338 $323 $331 $314 
Capitalized deferred policy acquisition costs10 11 32 33 
Amortized deferred policy acquisition costs(7)(7)(22)(20)
Deferred policy acquisition costs asset, end of period$341 $327 $341 $327 
Consolidated:
Deferred policy acquisition costs asset, beginning of period$1,109 $1,046 $1,013 $916 
Capitalized deferred policy acquisition costs365 336 1,166 1,097 
Amortized deferred policy acquisition costs(373)(349)(1,078)(980)
Deferred policy acquisition costs asset, end of period$1,101 $1,033 $1,101 $1,033 

The removal of shadow deferred policy acquisition costs as a result of the adoption of ASU 2018-12 resulted in a $33 million increase, across all products, from $263 million pre-adoption at December 31, 2020, to $296 million post-adoption at January 1, 2021.

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The table below shows the life deferred policy acquisition costs asset by product:
(Dollars in millions)
Three months ended September 30, 2023TermWhole lifeDeferred annuityUniversal lifeTotal
Balance, beginning of period$233 $45 $8 $52 $338 
Capitalized deferred policy acquisition costs8 2 — — 10 
Amortized deferred policy acquisition costs(7)— — — (7)
Balance, end of period$234 $47 $8 $52 $341 
Three months ended September 30, 2022
Balance, beginning of period$222 $40 $7 $54 $323 
Capitalized deferred policy acquisition costs9 2 — — $11 
Amortized deferred policy acquisition costs(5)(1)— (1)$(7)
Balance, end of period$226 $41 $7 $53 $327 
(Dollars in millions)
Nine months ended September 30, 2023TermWhole lifeDeferred annuityUniversal lifeTotal
Balance, beginning of period$228 $43 $7 $53 $331 
Capitalized deferred policy acquisition costs24 6 1 1 32 
Amortized deferred policy acquisition costs(18)(2)— (2)(22)
Balance, end of period$234 $47 $8 $52 $341 
Nine months ended September 30, 2022
Balance, beginning of period$215 $38 $7 $54 $314 
Capitalized deferred policy acquisition costs27 5 — 1 $33 
Amortized deferred policy acquisition costs(16)(2)— (2)$(20)
Balance, end of period$226 $41 $7 $53 $327 

No premium deficiencies were recorded in the condensed consolidated statements of income, as the sum of the anticipated loss and loss expenses, policyholder dividends and unamortized deferred acquisition expenses did not exceed the related unearned premiums and anticipated investment income.
 
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NOTE 7 – Accumulated Other Comprehensive Income
The adoption of ASU 2018-12 on January 1, 2023 resulted in restatement of certain amounts below. See Note 1, Accounting Policies, for further discussion. Accumulated other comprehensive income (AOCI) includes changes in unrealized gains and losses on investments, changes in pension obligations and changes in life policy reserves, reinsurance recoverable and other as follows:
(Dollars in millions)Three months ended September 30,
20232022
Before taxIncome taxNetBefore taxIncome taxNet
Investments:
AOCI, beginning of period$(838)$(179)$(659)$(564)$(119)$(445)
OCI before investment gains and losses, net, recognized in net income(369)(79)(290)(514)(109)(405)
Investment gains and losses, net, recognized in net income— — — — — — 
OCI(369)(79)(290)(514)(109)(405)
AOCI, end of period$(1,207)$(258)$(949)$(1,078)$(228)$(850)
Pension obligations:
AOCI, beginning of period$29 $7 $22 $27 $7 $20 
OCI excluding amortization recognized in net income— — — — — — 
Amortization recognized in net income— — — — — — 
OCI— — — — — — 
AOCI, end of period$29 $7 $22 $27 $7 $20 
Life policy reserves, reinsurance recoverable and other:
AOCI, beginning of period$13 $2 $11 $(67)$(14)$(53)
OCI before investment gains and losses, net, recognized in net income111 22 89 120 25 95 
Investment gains and losses, net, recognized in net income— — — — — — 
OCI111 22 89 120 25 95 
AOCI, end of period$124 $24 $100 $53 $11 $42 
Summary of AOCI:
AOCI, beginning of period$(796)$(170)$(626)$(604)$(126)$(478)
Investments OCI(369)(79)(290)(514)(109)(405)
Pension obligations OCI— — — — — — 
Life policy reserves, reinsurance recoverable and other OCI111 22 89 120 25 95 
Total OCI(258)(57)(201)(394)(84)(310)
AOCI, end of period$(1,054)$(227)$(827)$(998)$(210)$(788)
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(Dollars in millions)Nine months ended September 30,
20232022
Before taxIncome taxNetBefore taxIncome taxNet
Investments:
AOCI, beginning of period$(847)$(182)$(665)$792 $165 $627 
OCI before investment gains and losses, net, recognized in net income(364)(77)(287)(1,867)(392)(1,475)
Investment gains and losses, net, recognized in net income4 1 3 (3)(1)(2)
OCI(360)(76)(284)(1,870)(393)(1,477)
AOCI, end of period$(1,207)$(258)$(949)$(1,078)$(228)$(850)
Pension obligations:
AOCI, beginning of period$36 $9 $27 $27 $7 $20 
OCI excluding amortization recognized in net income(5)(2)(3)— — — 
Amortization recognized in net income(2)— (2)— — — 
OCI(7)(2)(5)— — — 
AOCI, end of period$29 $7 $22 $27 $7 $20 
Life policy reserves, reinsurance recoverable and other:
AOCI, beginning of period$29 $5 $24 $1 $— $1 
Cumulative effect of change in accounting for long duration insurance contracts— — — (445)(93)(352)
Adjusted AOCI, beginning of period29 5 24 (444)(93)(351)
OCI before investment gains and losses, net, recognized in net income95 19 76 497 104 393 
Investment gains and losses, net, recognized in net income— — — — — — 
OCI95 19 76 497 104 393 
AOCI, end of period$124 $24 $100 $53 $11 $42 
Summary of AOCI:
AOCI, beginning of period$(782)$(168)$(614)$820 $172 $648 
Cumulative effect of change in accounting for long duration insurance contracts— — — (445)(93)(352)
Adjusted AOCI, beginning of period(782)(168)(614)375 79 296 
Investments OCI(360)(76)(284)(1,870)(393)(1,477)
Pension obligations OCI(7)(2)(5)— — — 
Life policy reserves, reinsurance recoverable and other OCI95 19 76 497 104 393 
Total OCI(272)(59)(213)(1,373)(289)(1,084)
AOCI, end of period$(1,054)$(227)$(827)$(998)$(210)$(788)

Investment gains and losses, net, and other investment gains and losses, net, are recorded in the investment gains and losses, net, line item in the condensed consolidated statements of income. Amortization of pension obligations is recorded in the insurance losses and contract holders' benefits and underwriting, acquisition and insurance expenses line items in the condensed consolidated statements of income.
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NOTE 8 – Reinsurance
Primary components of our property casualty reinsurance assumed operations include involuntary and voluntary assumed as well as contracts from our reinsurance assumed operations, known as Cincinnati Re. Primary components of our ceded reinsurance include a property per risk treaty, property excess treaty, casualty per occurrence treaty, casualty excess treaty, property catastrophe treaty and retrocessions on our reinsurance assumed operations. Management’s decisions about the appropriate level of risk retention are affected by various factors, including changes in our underwriting practices, capacity to retain risks and reinsurance market conditions.

The table below summarizes our consolidated property casualty insurance net written premiums, earned premiums and incurred loss and loss expenses:
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
2023202220232022
Direct written premiums$1,939 $1,730 $5,869 $5,304 
Assumed written premiums89 92 527 548 
Ceded written premiums(71)(72)(270)(239)
Net written premiums$1,957 $1,750 $6,126 $5,613 
Direct earned premiums$1,912 $1,743 $5,478 $4,935 
Assumed earned premiums142 161 435 416 
Ceded earned premiums(97)(95)(252)(227)
Earned premiums$1,957 $1,809 $5,661 $5,124 
Direct incurred loss and loss expenses$1,220 $1,247 $3,784 $3,316 
Assumed incurred loss and loss expenses82 164 216 304 
Ceded incurred loss and loss expenses(41)(63)(160)(76)
Incurred loss and loss expenses$1,261 $1,348 $3,840 $3,544 

Our life insurance company purchases reinsurance for protection of a portion of the risks that are written. Primary components of our life reinsurance program include individual mortality coverage, aggregate catastrophe and accidental death coverage in excess of certain deductibles.

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The table below summarizes our consolidated life insurance earned premiums and contract holders' benefits incurred:
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
2023202220232022
Direct earned premiums$97 $94 $293 $283 
Ceded earned premiums(21)(19)(60)(57)
Earned premiums$76 $75 $233 $226 
Direct contract holders' benefits incurred92 90 289 302 
Ceded contract holders' benefits incurred(21)(20)(59)(74)
Contract holders' benefits incurred$71 $70 $230 $228 
 
The ceded benefits incurred can vary depending on the type of life insurance policy held and the year the policy was issued.

The allowance for uncollectible property casualty premiums was $16 million and $13 million at September 30, 2023, and December 31, 2022, respectively. The allowances for credit losses on other premiums receivable and reinsurance recoverable assets were immaterial at September 30, 2023, and December 31, 2022.
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NOTE 9 – Income Taxes
The differences between the 21% statutory federal income tax rate and our effective income tax rate were as follows:
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
2023202220232022
Tax at statutory rate:$(31)21.0 %$(122)21.0 %$165 21.0 %$(416)21.0 %
Increase (decrease) resulting from:        
Tax-exempt income from municipal bonds(5)3.4 (5)0.9 (15)(1.9)(15)0.8 
Dividend received exclusion(5)3.4 (5)0.9 (16)(2.0)(15)0.8 
Release of unrecognized tax benefit— — (34)5.9 — — (34)1.7 
Other(8)5.3 5 (0.8)(8)(1.1)(1)— 
Provision (benefit) for income taxes$(49)33.1 %$(161)27.9 %$126 16.0 %$(481)24.3 %
 
The provision (benefit) for federal income taxes is based upon filing a consolidated income tax return for the company and its domestic subsidiaries.

We continue to believe that after considering all positive and negative evidence of taxable income in the carryback and carryforward periods as permitted by law, it is more likely than not that all of the deferred tax assets on our U.S. domestic operations will be realized. As a result, we have no valuation allowance for our U.S. domestic operations at September 30, 2023, and December 31, 2022. As more fully discussed below, we do carry a valuation allowance on the deferred tax assets related to Cincinnati Global Underwriting Ltd.SM (Cincinnati Global).

Unrecognized Tax Benefits
During the third quarter of 2022, we received favorable guidance from the Internal Revenue Service (IRS) supporting our tax position related to our unrecognized tax benefit set up in 2018. As a result of this guidance, we released our $34 million gross unrecognized tax benefit liability at September 30, 2022. The $34 million release was recognized as an additional income tax benefit and shown separately in our effective income tax rate reconciliation.

Cincinnati Global
As a result of operations for the three and nine months ended September 30, 2023, Cincinnati Global decreased its net deferred tax assets by $10 million and $20 million, respectively, with an offsetting decrease of $10 million and $20 million, respectively, to the valuation allowance. Cincinnati Global had a net deferred tax asset of $11 million and an offsetting valuation allowance of $11 million at September 30, 2023.

Deferred tax assets are reduced by a valuation allowance when management believes it is more likely than not that some, or all, of the deferred tax assets will not be realized. After considering all positive and negative evidence, we continue to believe it is appropriate to carry a valuation allowance at September 30, 2023.

Cincinnati Global had operating loss carryforwards in the United States of $6 million and $5 million and in the United Kingdom of $99 million and $109 million at September 30, 2023, and December 31, 2022, respectively. These Cincinnati Global losses can only be utilized within the Cincinnati Global group.

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NOTE 10 – Net Income (Loss) Per Common Share
Basic earnings per share are computed based on the weighted average number of common shares outstanding. Diluted earnings per share are computed based on the weighted average number of common and dilutive potential common shares outstanding using the treasury stock method. The table shows calculations for basic and diluted earnings per share:
(In millions, except per share data)Three months ended September 30,Nine months ended September 30,
2023202220232022
Numerator:    
Net income (loss)—basic and diluted
$(99)$(416)$660 $(1,500)
Denominator:    
Basic weighted-average common shares outstanding156.9 158.0 157.0 159.3 
Effect of share-based awards:    
Stock options— — 0.7 — 
Nonvested shares— — 0.5 — 
Diluted weighted-average shares 156.9 158.0 158.2 159.3 
Earnings (loss) per share:    
Basic$(0.63)$(2.63)$4.20 $(9.42)
Diluted$(0.63)$(2.63)$4.17 $(9.42)
Number of anti-dilutive share-based awards2.4 2.3 1.3 1.9 

The above table shows the number of anti-dilutive share-based awards for the three and nine months ended September 30, 2023 and 2022. In accordance with Accounting Standards Codification 260, Earnings per Share, the assumed exercise of share-based awards was excluded from the computation of diluted loss per share for the three months ended September 30, 2023 and for the three and nine months ended September 30, 2022, because their exercise would have anti-dilutive effects. See our 2022 Annual Report on Form 10-K, Item 8, Note 17, Share-Based Associate Compensation Plans, Page 170, for information about share-based awards.

NOTE 11 – Employee Retirement Benefits
The following summarizes the components of net periodic benefit for our qualified and supplemental pension plans:
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
2023202220232022
Service cost$1 $2 $4 $7 
Non-service (benefit) costs:
Interest cost3 3 9 8 
Expected return on plan assets(5)(6)(15)(17)
Amortization of actuarial loss and prior service cost — — (2)— 
Other— — (5)— 
 Total non-service benefit (2)(3)(13)(9)
Net periodic benefit$(1)$(1)$(9)$(2)

See our 2022 Annual Report on Form 10-K, Item 8, Note 13, Employee Retirement Benefits, Page 163, for information on our retirement benefits. The net periodic benefit is allocated in the same proportion primarily to the underwriting, acquisition and insurance expenses line item with the remainder allocated to the insurance losses and contract holders' benefits line item on the condensed consolidated statements of income for both 2023 and 2022.

We made matching contributions totaling $6 million to our 401(k) and Top Hat savings plans during both the third quarter of 2023 and 2022 and contributions of $20 million for both the first nine months of 2023 and 2022.
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We made no contributions to our qualified pension plan during the first nine months of 2023.

NOTE 12 – Commitments and Contingent Liabilities
The company, through its insurance subsidiaries, is involved in claims litigation arising in the ordinary course of conducting its business, both as a liability insurer defending or providing indemnity for third-party claims brought against insureds and as an insurer defending coverage claims brought against it. The company accounts for such activity through the establishment of unpaid loss and loss expense reserves. Subject to the uncertainties discussed in Note 4, Property Casualty Loss and Loss Expenses, and in the discussion in the balance of this Note, we believe that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses, costs of defense, and reinsurance recoveries, is immaterial to our consolidated financial position, results of operations and cash flows.

Beginning in April 2020, like many companies in the property casualty insurance industry, the company’s property casualty subsidiaries, were named as defendants in lawsuits seeking insurance coverage under commercial property insurance policies issued by the company for alleged losses resulting from the shutdown or suspension of their businesses due to the COVID-19 pandemic. Although the allegations vary, the plaintiffs generally seek a declaration of insurance coverage, damages for breach of contract in unspecified amounts for claim denials, interest and attorney fees. Some of the lawsuits also allege that the insurance claims were denied in bad faith or otherwise in violation of state laws and seek extra-contractual or punitive damages.

The company denies the allegations in these lawsuits and continues to vigorously defend them. The company maintains that it has no coverage obligations with respect to these lawsuits for business income allegedly lost by the plaintiffs due to the COVID-19 pandemic based on the terms of the applicable insurance policies. Although the policy terms vary, in general, the claims at issue in these lawsuits were denied because the policyholder identified no direct physical loss or damage to property at the insured premises, and the governmental orders that led to the complete or partial shutdown of the business were not due to the existence of any direct physical loss or damage to property in the immediate vicinity of the insured premises and did not prohibit access to the insured premises, as required by the terms of the insurance policies. Depending on the individual policy, additional policy terms and conditions may also prohibit coverage, such as exclusions for pollutants, ordinance or law, loss of use, and acts or decisions. The company’s standard commercial property insurance policies generally did not contain a specific virus exclusion.

In addition to the inherent difficulty in predicting litigation outcomes, the COVID-19 pandemic business income coverage lawsuits present a number of uncertainties and contingencies that are not yet known, including how many policyholders will ultimately file claims, the number of lawsuits that will be filed, the extent to which any class may be certified, and the size and scope of any such classes. The legal theories advanced by plaintiffs vary by case as do the state laws that govern the policy interpretation. Most of these lawsuits have been dismissed, both by courts and by plaintiffs, but some have been appealed and a few others remain pending in trial courts. Appellate decisions issued to date generally have been favorable for the insurance industry, and the company has received numerous favorable rulings on appeal with no adverse appellate rulings to date. Some cases remain to be decided and in some jurisdictions, cases have been stayed pending appellate decisions in their state or federal circuit. Accordingly, little discovery has occurred on pending cases. In addition, business income calculations depend upon a wide range of factors that are particular to the circumstances of each individual policyholder and, here, virtually none of the plaintiffs have submitted proofs of loss or otherwise quantified or factually supported any allegedly covered loss. Moreover, the company’s experience shows that demands for damages often bear little relation to a reasonable estimate of potential loss. Accordingly, management cannot now reasonably estimate the possible loss or range of loss, if any. Nonetheless, given the number of claims and potential claims, the indeterminate amounts sought, and the inherent unpredictability of litigation, it is possible that adverse outcomes, if any, in the aggregate could have a material adverse effect on the company’s consolidated financial position, results of operations and cash flows.

The company and its subsidiaries also are occasionally involved in other legal and regulatory proceedings, some of which assert claims for substantial amounts. These actions include, among others, putative class actions seeking certification of state or national classes. Such proceedings have alleged, for example, improper depreciation of labor costs in repair estimates. The company’s insurance subsidiaries also are occasionally parties to individual actions in which extra-contractual damages, punitive damages or penalties are sought, such as claims alleging bad faith handling of insurance claims or writing unauthorized coverage or claims alleging discrimination by former or current associates.
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On a quarterly basis, we review these outstanding matters. Under current accounting guidance, we establish accruals when it is probable that a loss has been incurred and we can reasonably estimate its potential exposure. The company accounts for such probable and estimable losses, if any, through the establishment of legal expense reserves. Based on our quarterly review, we believe that our accruals for probable and estimable losses are reasonable and that the amounts accrued do not have a material effect on our consolidated financial position, results of operations and cash flows. However, if any one or more of these matters results in a judgment against us or settlement for an amount that is significantly greater than the amount accrued, the resulting liability could have a material effect on the company’s consolidated financial position, results of operations and cash flows. Based on our most recent review, our estimate for any other matters for which the risk of loss is not probable, but more than remote, is immaterial.

NOTE 13 – Segment Information
We operate primarily in two industries, property casualty insurance and life insurance. Our chief operating decision maker regularly reviews our reporting segments to make decisions about allocating resources and assessing performance. Our reporting segments are:
•Commercial lines insurance
•Personal lines insurance
•Excess and surplus lines insurance
•Life insurance
•Investments

We report as Other the noninvestment operations of the parent company and its noninsurer subsidiary, CFC Investment Company. We also report as Other the underwriting results of Cincinnati Re and Cincinnati Global. See our 2022 Annual Report on Form 10-K, Item 8, Note 18, Segment Information, Page 173, for a description of revenue, income or loss before income taxes and identifiable assets for each of the five segments.

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Segment information is summarized in the following table: 
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
2023202220232022
Revenues:    
Commercial lines insurance    
Commercial casualty$365 $360 $1,115 $1,046 
Commercial property321 292 933 846 
Commercial auto216 213 644 627 
Workers' compensation66 73 212 209 
Other commercial 94 90 280 256 
Commercial lines insurance premiums1,062 1,028 3,184 2,984 
Fee revenues1 1 3 3 
Total commercial lines insurance1,063 1,029 3,187 2,987 
Personal lines insurance   
Personal auto185 158 524 465 
Homeowner271 213 755 609 
Other personal71 60 205 172 
Personal lines insurance premiums527 431 1,484 1,246 
Fee revenues1 1 3 3 
Total personal lines insurance528 432 1,487 1,249 
Excess and surplus lines insurance135 125 394 361 
Fee revenues1 1 2 2 
Total excess and surplus lines insurance136 126 396 363 
Life insurance premiums76 75 233 226 
Fee revenues3 2 8 4 
Total life insurance79 77 241 230 
Investments
    Investment income, net of expenses225 193 655 573 
    Investment gains and losses, net(456)(674)84 (2,494)
Total investment revenue(231)(481)739 (1,921)
Other
Premiums233 225 599 533 
Other3 2 8 7 
Total other revenues236 227 607 540 
Total revenues$1,811 $1,410 $6,657 $3,448 
Income (loss) before income taxes:    
Insurance underwriting results    
Commercial lines insurance$52 $11 $83 $25 
Personal lines insurance1 (18)(92)(2)
Excess and surplus lines insurance14 9 38 44 
Life insurance17 13 38 21 
Investments(262)(508)648 (2,003)
Other30 (84)71 (66)
Total income (loss) before income taxes$(148)$(577)$786 $(1,981)
Identifiable assets:September 30,
2023		December 31,
2022
Property casualty insurance$5,302 $5,178 
Life insurance1,556 1,518 
Investments23,063 22,133 
Other994 903 
Total$30,915 $29,732 
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Item 2.    Management’s Discussion and Analysis of Financial Condition and
        Results of Operations
The following discussion highlights significant factors influencing the condensed consolidated results of operations and financial position of Cincinnati Financial Corporation. It should be read in conjunction with the consolidated financial statements and related notes included in our 2022 Annual Report on Form 10-K. Unless otherwise noted, the industry data is prepared by A.M. Best Co., a leading insurance industry statistical, analytical and financial strength rating organization. Information from A.M. Best is presented on a statutory basis for insurance company regulation in the United States of America. When we provide our results on a comparable statutory basis, we label it as such; all other company data is presented in accordance with accounting principles generally accepted in the United States of America (GAAP).
 
As discussed in Item 1, Note 1, Accounting Policies, Page 8, effective January 1, 2023, we adopted ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. We adjusted applicable financial statements. Related financial data shown in Management's Discussion and Analysis of Financial Condition and Results of Operations also have been adjusted.

We present per share data on a diluted basis unless otherwise noted, adjusting those amounts for all stock splits and dividends. Dollar amounts are rounded to millions; calculations of percent changes are based on dollar amounts rounded to the nearest million. Certain percentage changes are identified as not meaningful (nm).
 
SAFE HARBOR STATEMENT    
This is our “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995. Our business is subject to certain risks and uncertainties that may cause actual results to differ materially from those suggested by the forward-looking statements in this report. Some of those risks and uncertainties are discussed in our 2022 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 32.
Factors that could cause or contribute to such differences include, but are not limited to:
•Effects of the COVID-19 pandemic that could affect results for reasons such as:
◦Securities market disruption or volatility and related effects such as decreased economic activity and continued supply chain disruptions that affect our investment portfolio and book value
◦An unusually high level of claims in our insurance or reinsurance operations that increase litigation-related expenses
◦An unusually high level of insurance losses, including risk of legislation or court decisions extending business interruption insurance in commercial property coverage forms to cover claims for pure economic loss related to the COVID-19 pandemic
◦Decreased premium revenue and cash flow from disruption to our distribution channel of independent agents, consumer self-isolation, travel limitations, business restrictions and decreased economic activity
◦Inability of our workforce, agencies or vendors to perform necessary business functions
•Ongoing developments concerning business interruption insurance claims and litigation related to the COVID-19 pandemic that affect our estimates of losses and loss adjustment expenses or our ability to reasonably estimate such losses, such as:
◦The continuing duration of the pandemic and governmental actions to limit the spread of the virus that may produce additional economic losses
◦The number of policyholders that will ultimately submit claims or file lawsuits
◦The lack of submitted proofs of loss for allegedly covered claims
◦Judicial rulings in similar litigation involving other companies in the insurance industry
◦Differences in state laws and developing case law
◦Litigation trends, including varying legal theories advanced by policyholders
◦Whether and to what degree any class of policyholders may be certified
◦The inherent unpredictability of litigation
•Unusually high levels of catastrophe losses due to risk concentrations, changes in weather patterns (whether as a result of global climate change or otherwise), environmental events, war or political unrest, terrorism incidents, cyberattacks, civil unrest or other causes
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•Increased frequency and/or severity of claims or development of claims that are unforeseen at the time of policy issuance, due to inflationary trends or other causes
•Inadequate estimates or assumptions, or reliance on third-party data used for critical accounting estimates
•Declines in overall stock market values negatively affecting our equity portfolio and book value
•Interest rate fluctuations or other factors that could significantly affect:
•Our ability to generate growth in investment income
•Values of our fixed-maturity investments, including accounts in which we hold bank-owned life insurance contract assets
•Our traditional life policy reserves
•Domestic and global events, such as Russia's invasion of Ukraine, war in the Middle East and recent disruptions in the banking and financial services industry, resulting in capital market or credit market uncertainty, followed by prolonged periods of economic instability or recession, that lead to:
◦Significant or prolonged decline in the fair value of a particular security or group of securities and impairment of the asset(s)
◦Significant decline in investment income due to reduced or eliminated dividend payouts from a particular security or group of securities
◦Significant rise in losses from surety or director and officer policies written for financial institutions or other insured entities
•Our inability to manage Cincinnati Global or other subsidiaries to produce related business opportunities and growth prospects for our ongoing operations
•Recession, prolonged elevated inflation or other economic conditions resulting in lower demand for insurance products or increased payment delinquencies
•Ineffective information technology systems or discontinuing to develop and implement improvements in technology may impact our success and profitability
•Difficulties with technology or data security breaches, including cyberattacks, that could negatively affect our or our agents' ability to conduct business; disrupt our relationships with agents, policyholders and others; cause reputational damage, mitigation expenses and data loss and expose us to liability under federal and state laws
•Difficulties with our operations and technology that may negatively impact our ability to conduct business, including cloud-based data information storage, data security, cyberattacks, remote working capabilities, and/or outsourcing relationships and third-party operations and data security
•Disruption of the insurance market caused by technology innovations such as driverless cars that could decrease consumer demand for insurance products
•Delays, inadequate data developed internally or from third parties, or performance inadequacies from ongoing development and implementation of underwriting and pricing methods, including telematics and other usage-based insurance methods, or technology projects and enhancements expected to increase our pricing accuracy, underwriting profit and competitiveness
•Intense competition, and the impact of innovation, technological change and changing customer preferences on the insurance industry and the markets in which we operate, could harm our ability to maintain or increase our business volumes and profitability
•Changing consumer insurance-buying habits and consolidation of independent insurance agencies could alter our competitive advantages
•Inability to obtain adequate ceded reinsurance on acceptable terms, amount of reinsurance coverage purchased, financial strength of reinsurers and the potential for nonpayment or delay in payment by reinsurers
•Inability to defer policy acquisition costs for any business segment if pricing and loss trends would lead management to conclude that segment could not achieve sustainable profitability
•Inability of our subsidiaries to pay dividends consistent with current or past levels
•Events or conditions that could weaken or harm our relationships with our independent agencies and hamper opportunities to add new agencies, resulting in limitations on our opportunities for growth, such as:
◦Downgrades of our financial strength ratings
◦Concerns that doing business with us is too difficult
◦Perceptions that our level of service, particularly claims service, is no longer a distinguishing characteristic in the marketplace
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◦Inability or unwillingness to nimbly develop and introduce coverage product updates and innovations that our competitors offer and consumers expect to find in the marketplace
•Actions of insurance departments, state attorneys general or other regulatory agencies, including a change to a federal system of regulation from a state-based system, that:
◦Impose new obligations on us that increase our expenses or change the assumptions underlying our critical accounting estimates
◦Place the insurance industry under greater regulatory scrutiny or result in new statutes, rules and regulations
◦Restrict our ability to exit or reduce writings of unprofitable coverages or lines of business
◦Add assessments for guaranty funds, other insurance‑related assessments or mandatory reinsurance arrangements; or that impair our ability to recover such assessments through future surcharges or other rate changes
◦Increase our provision for federal income taxes due to changes in tax law
◦Increase our other expenses
◦Limit our ability to set fair, adequate and reasonable rates
◦Place us at a disadvantage in the marketplace
◦Restrict our ability to execute our business model, including the way we compensate agents
•Adverse outcomes from litigation or administrative proceedings, including effects of social inflation and third-party litigation funding on the size of litigation awards
•Events or actions, including unauthorized intentional circumvention of controls, that reduce our future ability to maintain effective internal control over financial reporting under the Sarbanes-Oxley Act of 2002
•Unforeseen departure of certain executive officers or other key employees due to retirement, health or other causes that could interrupt progress toward important strategic goals or diminish the effectiveness of certain longstanding relationships with insurance agents and others
•Our inability, or the inability of our independent agents, to attract and retain personnel in a competitive labor market, impacting the customer experience and altering our competitive advantages
•Events, such as an epidemic, natural catastrophe or terrorism, that could hamper our ability to assemble our workforce at our headquarters location or work effectively in a remote environment
Further, our insurance businesses are subject to the effects of changing social, global, economic and regulatory environments. Public and regulatory initiatives have included efforts to adversely influence and restrict premium rates, restrict the ability to cancel policies, impose underwriting standards and expand overall regulation. We also are subject to public and regulatory initiatives that can affect the market value for our common stock, such as measures affecting corporate financial reporting and governance. The ultimate changes and eventual effects, if any, of these initiatives are uncertain.

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CORPORATE FINANCIAL HIGHLIGHTS
Net Income and Comprehensive Income Data
(Dollars in millions, except per share data)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Earned premiums$2,033 $1,884 8 $5,894 $5,350 10 
Investment income, net of expenses (pretax)225 193 17 655 573 14 
Investment gains and losses, net (pretax)(456)(674)32 84 (2,494)nm
Total revenues1,811 1,410 28 6,657 3,448 93 
Net income (loss)(99)(416)76 660 (1,500)nm
Comprehensive income (loss)(300)(726)59 447 (2,584)nm
Net income (loss) per share—diluted(0.63)(2.63)76 4.17 (9.42)nm
Cash dividends declared per share0.75 0.69 9 2.25 2.07 9 
Diluted weighted average shares outstanding156.9 158.0 (1)158.2 159.3 (1)

Total revenues increased $401 million for the third quarter of 2023, compared with the third quarter of 2022, primarily due to a smaller reduction in net investment gains in addition to higher earned premiums and investment income. Premium and investment revenue trends are discussed further in the respective sections of Financial Results.

Investment gains and losses are recognized on the sales of investments, on certain changes in fair values of securities even though we continue to hold the securities or as otherwise required by GAAP. We have substantial discretion in the timing of investment sales, and that timing generally is independent of the insurance underwriting process. The change in fair value of securities is also generally independent of the insurance underwriting process.

The net loss of $99 million for the third quarter of 2023, compared with a net loss in the third quarter of 2022 of $416 million, was a change of $317 million, including increases of $172 million in after-tax net investment gains and losses, $25 million in after-tax investment income and $141 million in after-tax property casualty underwriting income. Catastrophe losses for the third quarter of 2023, mostly weather related, were $58 million lower after taxes and favorably affected both net income and property casualty underwriting income. Life insurance segment results increased by $4 million on a pretax basis.

For the first nine months of 2023, net income increased $2.160 billion, compared with the first nine months of 2022,
including increases of $2.037 billion in after-tax investment gains and losses, $66 million in after-tax investment income and $81 million in after-tax property casualty underwriting income. The property casualty underwriting income increase included an unfavorable $116 million after-tax effect from higher catastrophe losses. Life insurance segment results increased by $17 million on a pretax basis.

The increase in property casualty underwriting income for the third quarter of 2023 included improved overall insured loss experience before catastrophe effects, as price increases have helped to offset elevated paid losses reflecting economic or other forms of inflation that are increasing our uncertainty regarding ultimate losses. Until longer-term paid loss cost trends become more clear, we intend to remain prudent in reserving for estimated ultimate losses and this is discussed further in Financial Results by property casualty insurance segment.

Performance by segment is discussed below in Financial Results. As discussed in our 2022 Annual Report on Form 10-K, Item 7, Executive Summary, Page 48, there are several reasons why our performance during 2023 may be below our long-term targets.
 
The board of directors is committed to rewarding shareholders directly through cash dividends and through share repurchase authorizations. Through 2022, the company had increased the annual cash dividend rate for 62 consecutive years, a record we believe is matched by only seven other U.S. publicly traded companies. In January 2023, the board of directors increased the regular quarterly dividend to 75 cents per share, setting the stage for our 63rd consecutive year of increasing cash dividends. During the first nine months of 2023, cash dividends declared by the company increased 9% compared with the same period of 2022. Our board regularly evaluates relevant factors in decisions related to dividends and share repurchases. The 2023 dividend
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increase reflected our strong operating performance and signaled management's and the board's positive outlook and confidence in our outstanding capital, liquidity and financial flexibility.

Balance Sheet Data and Performance Measures
(Dollars in millions, except share data)At September 30,At December 31,
20232022
Total investments$23,408 $22,425 
Total assets30,915 29,732 
Short-term debt25 50 
Long-term debt790 789 
Shareholders' equity10,624 10,562 
Book value per share67.72 67.21 
Debt-to-total-capital ratio7.1 %7.4 %
Total assets at September 30, 2023, increased 4% compared with year-end 2022, and included a 4% increase in total investments that reflected net purchases that were partially offset by lower fair values for many securities in our portfolio. Shareholders' equity increased 1% and book value per share also increased 1% during the first nine months of 2023. Our debt-to-total-capital ratio (capital is the sum of debt plus shareholders' equity) decreased compared with year-end 2022.

Our value creation ratio is our primary performance metric. As shown in the tables below, that ratio was 4.4% for the first nine months of 2023, and was more than the same period in 2022 primarily due to a higher amount in overall net gains from our investment portfolio. Book value per share increased $0.71 during the first nine months of 2023 and contributed 1.1 percentage points to the value creation ratio, while dividends declared at $2.25 per share contributed 3.3 points. Value creation ratios by major components and in total, along with calculations from per-share amounts, are shown in the tables below.
 Three months ended September 30,Nine months ended September 30,
2023202220232022
Value creation ratio major components:    
Net income before investment gains2.4 %1.1 %5.6 %3.7 %
Change in fixed-maturity securities, realized and unrealized gains(2.6)(3.9)(2.7)(11.5)
Change in equity securities, investment gains(3.3)(5.2)0.8 (15.6)
Other0.9 (0.4)0.7 (0.6)
     Value creation ratio(2.6)%(8.4)%4.4 %(24.0)%
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(Dollars are per share)Three months ended September 30,Nine months ended September 30,
2023202220232022
Book value change per share
Book value as originally reported December 31,
   2022		$67.01 
Cumulative effect of change in accounting for
   long-duration insurance contracts, net of tax		0.20 
Book value as adjusted December 31, 2022$67.21 
Value creation ratio:    
End of period book value*- as originally reported $67.72 $60.01 $67.72 $60.01 
Less beginning of period book value - as
  originally reported 		70.33 66.30 67.01 81.72 
Change in book value - as originally reported (2.61)(6.29)0.71 (21.71)
Dividend declared to shareholders0.75 0.69 2.25 2.07 
Total value creation $(1.86)$(5.60)$2.96 $(19.64)
Value creation ratio from change in book value**(3.7)%(9.4)%1.1 %(26.5)%
Value creation ratio from dividends declared to shareholders***1.1 1.0 3.3 2.5 
Value creation ratio(2.6)%(8.4)%4.4 %(24.0)%
    * Book value per share is calculated by dividing end of period total shareholders' equity by end of period shares outstanding
  ** Change in book value divided by the beginning of period book value
*** Dividend declared to shareholders divided by beginning of period book value

DRIVERS OF LONG-TERM VALUE CREATION
Operating through The Cincinnati Insurance Company, Cincinnati Financial Corporation is one of the 25 largest property casualty insurers in the nation, based on 2022 net written premiums for approximately 2,000 U.S. stock and mutual insurer groups. We market our insurance products through a select group of independent insurance agencies as discussed in our 2022 Annual Report on Form 10-K, Item 1, Our Business and Our Strategy, Page 6. At September 30, 2023, we actively marketed through 2,053 agencies located in 46 states. We maintain a long-term perspective that guides us in addressing immediate challenges or opportunities while focusing on the major decisions that best position our company for success through all market cycles.

To measure our long-term progress in creating shareholder value, our value creation ratio is our primary financial performance target. As discussed in our 2022 Annual Report on Form 10-K, Item 7, Executive Summary, Page 48, management believes this measure is a meaningful indicator of our long-term progress in creating shareholder value and has three primary performance drivers:

•Premium growth – We believe our agency relationships and initiatives can lead to a property casualty written premium growth rate over any five-year period that exceeds the industry average. For the first nine months of 2023, our consolidated property casualty net written premium year-over-year growth was 9%, compared with the industry's 10% growth rate reported by A.M. Best for the first six months of 2023. For the five-year period 2018 through 2022, our growth rate exceeded that of the industry. The industry's growth rate excludes its mortgage and financial guaranty lines of business.
•Combined ratio – We believe our underwriting philosophy and initiatives can generate a GAAP combined ratio over any five-year period that is consistently within the range of 95% to 100%. For the first nine months of 2023, our GAAP combined ratio was 97.5%, including 11.9 percentage points of current accident year catastrophe losses partially offset by 3.8 percentage points of favorable loss reserve development on prior accident years. Our statutory combined ratio was 96.5% for the first nine months of 2023, comparing favorably with the industry's 104.5% reported by A.M. Best for the first six months of 2023. The industry's ratio again excludes its mortgage and financial guaranty lines of business.
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•Investment contribution – We believe our investment philosophy and initiatives can drive investment income growth and lead to a total return on our equity investment portfolio over a five-year period that exceeds the five-year return of the Standard & Poor's 500 Index. For the first nine months of 2023, pretax investment income was $655 million, up 14% compared with the same period in 2022. We believe our investment portfolio mix provides an appropriate balance of income stability and growth with capital appreciation potential.

Financial Strength
An important part of our long-term strategy is financial strength, which is described in our 2022 Annual Report on Form 10-K, Item 1, Our Business and Our Strategy, Financial Strength, Page 8. One aspect of our financial strength is prudent use of reinsurance ceded to help manage financial performance variability due to catastrophe loss experience. A description of how we use reinsurance ceded is included in our 2022 Annual Report on Form 10-K, Item 7, Liquidity and Capital Resources, 2023 Reinsurance Ceded Programs, Page 104. Another aspect of our financial strength is our investment portfolio, which remains well-diversified as discussed in this quarterly report in Item 3, Quantitative and Qualitative Disclosures About Market Risk. Our strong parent-company liquidity and financial strength increase our flexibility to maintain a cash dividend through all periods and to continue to invest in and expand our insurance operations.

At September 30, 2023, we held $4.561 billion of our cash and cash equivalents and invested assets at the parent-company level, of which $4.142 billion, or 90.8%, was invested in common stocks, and $227 million, or 5.0%, was cash or cash equivalents. Our debt-to-total-capital ratio was 7.1% at September 30, 2023. Another important indicator of financial strength is our ratio of property casualty net written premiums to statutory surplus, which was 1.2-to-1 for the 12 months ended September 30, 2023, compared with 1.1-to-1 at year-end 2022.

Financial strength ratings assigned to us by independent rating firms also are important. In addition to rating our parent company's senior debt, four firms award insurer financial strength ratings to one or more of our insurance subsidiary companies based on their quantitative and qualitative analyses. These ratings primarily assess an insurer's ability to meet financial obligations to policyholders and do not necessarily address all of the matters that may be important to investors. Ratings are under continuous review and subject to change or withdrawal at any time by the rating agency. Each rating should be evaluated independently of any other rating; please see each rating agency's website for its most recent report on our ratings.

At October 25, 2023, our insurance subsidiaries continued to be highly rated.
Insurer Financial Strength Ratings
Rating
agency		Standard market property casualty insurance subsidiariesLife insurance
 subsidiary		Excess and surplus lines insurance subsidiaryOutlook
  Rating
tier		 Rating
tier		 Rating
tier		 
A.M. Best Co.
 ambest.com
A+Superior2 of 16A+Superior2 of 16A+Superior2 of 16Stable
Fitch Ratings
 fitchratings.com
A+Strong5 of 21A+Strong5 of 21---Stable
Moody's Investors  Service
 moodys.com
A1Good5 of 21------Stable
S&P Global  Ratings
 spratings.com
A+Strong5 of 21A+Strong5 of 21---Stable
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CONSOLIDATED PROPERTY CASUALTY INSURANCE HIGHLIGHTS
Consolidated property casualty insurance results include premiums and expenses for our standard market insurance segments (commercial lines and personal lines), our excess and surplus lines segment, Cincinnati Re® and our London-based global specialty underwriter Cincinnati Global Underwriting Ltd.SM (Cincinnati Global).
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Earned premiums$1,957$1,8098 $5,661$5,12410 
Fee revenues330 880 
Total revenues1,9601,8128 5,6695,13210 
Loss and loss expenses from:      
Current accident year before catastrophe losses1,1301,1161 3,3803,1278 
Current accident year catastrophe losses184275(33)67356020 
Prior accident years before catastrophe losses(48)(20)(140)(178)(74)(141)
Prior accident years catastrophe losses(5)(23)78 (35)(69)49 
Loss and loss expenses1,2611,348(6)3,8403,5448 
Underwriting expenses58753011 1,6801,5419 
Underwriting profit (loss)$112$(66)nm$149$47217 
Ratios as a percent of earned premiums:  Pt. Change  Pt. Change
    Current accident year before catastrophe losses57.7 %61.7 %(4.0)59.7 %61.0 %(1.3)
    Current accident year catastrophe losses9.4 15.2 (5.8)11.9 10.9 1.0 
    Prior accident years before catastrophe losses(2.4)(1.1)(1.3)(3.2)(1.4)(1.8)
    Prior accident years catastrophe losses(0.3)(1.3)1.0 (0.6)(1.4)0.8 
Loss and loss expenses64.4 74.5 (10.1)67.8 69.1 (1.3)
Underwriting expenses30.0 29.4 0.6 29.7 30.1 (0.4)
Combined ratio94.4 %103.9 %(9.5)97.5 %99.2 %(1.7)
Combined ratio94.4 %103.9 %(9.5)97.5 %99.2 %(1.7)
Contribution from catastrophe losses and prior years reserve development6.7 12.8 (6.1)8.1 8.1 0.0 
Combined ratio before catastrophe losses and prior years reserve development87.7 %91.1 %(3.4)89.4 %91.1 %(1.7)
 
Our consolidated property casualty insurance operations generated an underwriting profit of $112 million for the third quarter of 2023 and $149 million for the first nine months of the year. Compared with an underwriting loss of $66 million for the third quarter of 2022, the third-quarter 2023 improvement of $178 million included a favorable decrease of $73 million in losses from catastrophes, mostly caused by severe weather. The third-quarter 2023 change in underwriting profitability also included higher current accident year loss and loss expenses before catastrophe losses that grew more slowly than earned premiums and higher amounts of favorable reserve development on prior accident years.The nine-month underwriting profit improvement of $102 million, compared with the first nine months of 2022, included an unfavorable increase of $147 million in losses from catastrophes. The nine-month 2023 period also experienced higher current accident year loss and loss expenses before catastrophe losses that grew more slowly than earned premiums and higher amounts of favorable reserve development on prior accident years.

Elevated inflation was a driver of higher losses and loss expenses in 2023 as costs have increased significantly to repair damaged autos or other property that we insure. We also experienced higher losses for liability coverages for some of our lines of business. Due to increased uncertainty regarding ultimate losses, we intend to remain prudent in reserving for estimated ultimate losses until longer-term loss cost trends become more clear. The higher loss experience is discussed in Financial Results by property casualty insurance segment. We believe future property casualty underwriting results will continue to benefit from price increases and our ongoing initiatives to improve pricing precision and loss experience related to claims and loss control practices.
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For all property casualty lines of business in aggregate, net loss and loss expense reserves at September 30, 2023, were $655 million, or 8%, higher than at year-end 2022, including an increase of $539 million for the incurred but not reported (IBNR) portion.

We measure and analyze property casualty underwriting results primarily by the combined ratio and its component ratios. The GAAP-basis combined ratio is the percentage of incurred losses plus all expenses per each earned premium dollar – the lower the ratio, the better the performance. An underwriting profit results when the combined ratio is below 100%. A combined ratio above 100% indicates that an insurance company's losses and expenses exceeded premiums.

Our consolidated property casualty combined ratio for the third quarter of 2023 improved by 9.5 percentage points, compared with the same period of 2022, including a decrease of 4.8 points from lower catastrophe losses and loss expenses. For the first nine months of 2023, compared with the 2022 nine-month period, our combined ratio decreased by 1.7 percentage points, despite an increase of 1.8 points from catastrophe losses and loss expenses. Other combined ratio components that increased are discussed below and in further detail in Financial Results by property casualty insurance segment.
The combined ratio can be affected significantly by natural catastrophe losses and other large losses as discussed in detail below. The combined ratio can also be affected by updated estimates of loss and loss expense reserves established for claims that occurred in prior periods, referred to as prior accident years. Net favorable development on prior accident year reserves, including reserves for catastrophe losses, benefited the combined ratio by 3.8 percentage points in the first nine months of 2023, compared with 2.8 percentage points in the same period of 2022. Net favorable development is discussed in further detail in Financial Results by property casualty insurance segment.
 
The ratio for current accident year loss and loss expenses before catastrophe losses improved in the first nine months of 2023. That 59.7% ratio was 1.3 percentage points lower, compared with the 61.0% accident year 2022 ratio measured as of September 30, 2022, including a decrease of 0.6 points in the ratio for large losses of $2 million or more per claim, discussed below. The ratio improvement of 1.3 percentage points included an increase of 3.0 points for the IBNR portion and a decrease of 4.3 points for the case incurred portion.
 
The underwriting expense ratio increased for the third quarter and decreased for the first nine months of 2023, compared with the same periods a year ago. The increase for third-quarter 2023 was primarily due to an increase in employee and travel-related expenses while the nine-month 2023 decrease was primarily due to a decrease in profit-sharing commissions for agencies. The ratios also included ongoing expense management efforts and higher earned premiums.
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Consolidated Property Casualty Insurance Premiums
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Agency renewal written premiums$1,549 $1,390 11 $4,727 $4,269 11 
Agency new business written premiums313 264 19 867 794 9 
Other written premiums95 96 (1)532 550 (3)
Net written premiums1,957 1,750 12 6,126 5,613 9 
Unearned premium change— 59 (100)(465)(489)5 
Earned premiums$1,957 $1,809 8 $5,661 $5,124 10 
 
The trends in net written premiums and earned premiums summarized in the table above include the effects of price increases. Price change trends that heavily influence renewal written premium increases or decreases, along with other premium growth drivers for 2023, are discussed in more detail by segment below in Financial Results.
 
Consolidated property casualty net written premiums for the third quarter and nine months ended September 30, 2023, grew $207 million and $513 million compared with the same periods of 2022. Our premium growth initiatives from prior years have provided an ongoing favorable effect on growth during the current year, particularly as newer agency relationships mature over time.

Consolidated property casualty agency new business written premiums increased by $49 million and $73 million for the third quarter and first nine months of 2023, compared with the same periods of 2022. New agency appointments during 2023 and 2022 produced a $44 million increase in standard lines new business for the first nine months of 2023 compared with the same period of 2022. As we appoint new agencies that choose to move accounts to us, we report these accounts as new business. While this business is new to us, in many cases it is not new to the agent. We believe these seasoned accounts tend to be priced more accurately than business that may be less familiar to our agent upon obtaining it from a competing agent.

Net written premiums for Cincinnati Re, included in other written premiums, decreased by $1 million and $26 million to $85 million and $492 million, respectively, for the three and nine months ended September 30, 2023, compared with the same periods of 2022. Cincinnati Re assumes risks through reinsurance treaties and in some cases cedes part of the risk and related premiums to one or more unaffiliated reinsurance companies through transactions known as retrocessions.
 
Cincinnati Global is also included in other written premiums. Net written premiums increased for Cincinnati Global by $12 million and $38 million to $69 million and $215 million, respectively, for the three and nine months ended September 30, 2023, compared with the same periods of 2022.

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program. An increase in ceded premiums reduced net written premiums by $7 million and $27 million for the third quarter and first nine months of 2023, compared with the same periods of 2022.

Catastrophe losses and loss expenses typically have a material effect on property casualty results and can vary significantly from period to period. Losses from catastrophes contributed 9.1 and 11.3 percentage points to the combined ratio in the third quarter and first nine months of 2023, compared with 13.9 and 9.5 percentage points in the same periods of 2022.

Effective June 1, 2023, we restructured our reinsurance program for Cincinnati Re that included property catastrophe excess of loss coverage. The restructured treaties are for a period of one year and provide $40 million of coverage for various combinations of occurrences for business written in North America on a direct basis and by Cincinnati Re. Cincinnati Global catastrophe losses are not applicable to the treaty. There is a per occurrence limit of $20 million for Cincinnati Re catastrophe losses in excess of $80 million per event. The remaining coverage is for business written by Cincinnati Re and on a direct basis that applies to catastrophe losses in excess of $600 million per event. Ceded premiums for these treaties are estimated to be approximately $8 million.

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We did not renew our quota share reinsurance arrangement for our personal lines risks in California that we insure through excess and surplus lines policies. The expiring treaty first became effective in May 2022 and no similar treaty replaced it.

The following table shows consolidated property casualty insurance catastrophe losses and loss expenses incurred, net of reinsurance, as well as the effect of loss development on prior period catastrophe events. We individually list declared catastrophe events for which our incurred losses reached or exceeded $25 million.

Consolidated Property Casualty Insurance Catastrophe Losses and Loss Expenses Incurred
(Dollars in millions, net of reinsurance)Three months ended September 30,Nine months ended September 30,
  Comm.Pers.E&S Comm.Pers.E&S 
DatesRegionlineslineslinesOtherTotallineslineslinesOtherTotal
2023     
Mar. 1-4Midwest, Northeast, South$(1)$(3)$— $— $(4)$27 $27 $— $2 $56 
Mar. 23-28 Midwest, Northeast, South(2)(3)— — (5)20 24 — — 44 
Mar. 30 - Apr. 1Midwest, Northeast, South(1)— — — (1)62 33 — — 95 
Apr. 3-7Midwest, Northeast, South2 2 — — 4 12 32 — — 44 
May 2-9Midwest, South(1)(1)— — (2)23 7 — — 30 
Jun. 21-27Midwest, Northeast, South, West14 4 — — 18 23 17 — — 40 
Jun. 28 - Jul. 4Midwest, Northeast, South, West8 11 — — 19 10 16 — — 26 
All other 2023 catastrophes53 69 (1)34 155 125 171 3 39 338 
Development on 2022 and prior catastrophes(1)(6)(1)3 (5)(2)(42)(1)10 (35)
Calendar year incurred total$71 $73 $(2)$37 $179 $300 $285 $2 $51 $638 
2022     
Jun. 11-17Midwest, Northeast, South$1 $(2)$— $— $(1)$18 $17 $— $— $35 
Sep. 27 - Oct.1South (Ian)26 51 — 143 220 26 51 — 143 220 
All other 2022 catastrophes23 27 — 6 56 157 126 3 19 305 
Development on 2021 and prior catastrophes(4)(7)— (12)(23)(17)(40)— (12)(69)
Calendar year incurred total$46 $69 $— $137 $252 $184 $154 $3 $150 $491 
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The following table includes data for losses incurred of $2 million or more per claim, net of reinsurance.
 
Consolidated Property Casualty Insurance Losses Incurred by Size
(Dollars in millions, net of reinsurance)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Current accident year losses greater than $5 million$24 $38 (37)$103 $99 4 
Current accident year losses $2 million - $5 million52 41 27 102 116 (12)
Large loss prior accident year reserve development32 16 100 60 47 28 
Total large losses incurred108 95 14 265 262 1 
Losses incurred but not reported150 131 15 474 241 97 
Other losses excluding catastrophe losses639 700 (9)1,906 2,056 (7)
Catastrophe losses170 246 (31)614 478 28 
Total losses incurred$1,067 $1,172 (9)$3,259 $3,037 7 
Ratios as a percent of earned premiums:  Pt. Change  Pt. Change
Current accident year losses greater than $5 million1.2 %2.1 %(0.9)1.8 %1.9 %(0.1)
Current accident year losses $2 million - $5 million2.7 2.3 0.4 1.8 2.3 (0.5)
Large loss prior accident year reserve development1.6 0.9 0.7 1.1 0.9 0.2 
Total large loss ratio5.5 5.3 0.2 4.7 5.1 (0.4)
Losses incurred but not reported7.6 7.2 0.4 8.4 4.7 3.7 
Other losses excluding catastrophe losses32.7 38.7 (6.0)33.7 40.2 (6.5)
Catastrophe losses8.7 13.6 (4.9)10.8 9.3 1.5 
Total loss ratio54.5 %64.8 %(10.3)57.6 %59.3 %(1.7)
 
We believe the inherent variability of aggregate loss experience for our portfolio of larger policies is greater than that of our portfolio of smaller policies, and we continue to monitor the variability in addition to general inflationary trends in loss costs. Our analysis continues to indicate no unexpected concentration of large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. The third-quarter 2023 property casualty total large losses incurred of $108 million, net of reinsurance, was higher than the $77 million quarterly average during full-year 2022 and the $95 million experienced for the third quarter of 2022. The ratio for these large losses was 0.2 percentage points higher compared with last year's third quarter. The third-quarter 2023 amount of total large losses incurred unfavorably contributed to the decrease in the nine-month 2023 total large loss ratio, compared with 2022, partially offsetting a first-half 2023 ratio that was 0.7 points lower than the first half of 2022. We believe results for the three- and nine-month periods largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $2 million. Losses by size are discussed in further detail in results of operations by property casualty insurance segment.
FINANCIAL RESULTS
Consolidated results reflect the operating results of each of our five segments along with the parent company, Cincinnati Re, Cincinnati Global and other activities reported as "Other." The five segments are:
•Commercial lines insurance
•Personal lines insurance
•Excess and surplus lines insurance
•Life insurance
•Investments

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COMMERCIAL LINES INSURANCE RESULTS
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Earned premiums$1,062 $1,028 3 $3,184 $2,984 7 
Fee revenues1 1 0 3 3 0 
Total revenues1,063 1,029 3 3,187 2,987 7 
Loss and loss expenses from:      
Current accident year before catastrophe losses642 664 (3)1,959 1,896 3 
Current accident year catastrophe losses72 50 44 302 201 50 
Prior accident years before catastrophe losses(33)— nm(123)(34)(262)
Prior accident years catastrophe losses(1)(4)75 (2)(17)88 
Loss and loss expenses680 710 (4)2,136 2,046 4 
Underwriting expenses331 308 7 968 916 6 
Underwriting profit$52 $11 373 $83 $25 232 
Ratios as a percent of earned premiums:  Pt. Change  Pt. Change
Current accident year before catastrophe losses60.5 %64.5 %(4.0)61.6 %63.5 %(1.9)
Current accident year catastrophe losses6.8 4.9 1.9 9.5 6.8 2.7 
Prior accident years before catastrophe losses(3.2)— (3.2)(3.9)(1.1)(2.8)
Prior accident years catastrophe losses(0.1)(0.4)0.3 (0.1)(0.6)0.5 
Loss and loss expenses64.0 69.0 (5.0)67.1 68.6 (1.5)
Underwriting expenses31.2 30.0 1.2 30.4 30.7 (0.3)
Combined ratio95.2 %99.0 %(3.8)97.5 %99.3 %(1.8)
Combined ratio95.2 %99.0 %(3.8)97.5 %99.3 %(1.8)
Contribution from catastrophe losses and prior years reserve development3.5 4.5 (1.0)5.5 5.1 0.4 
Combined ratio before catastrophe losses and prior years reserve development91.7 %94.5 %(2.8)92.0 %94.2 %(2.2)
 
Overview
Performance highlights for the commercial lines segment include:
•Premiums – Earned premiums and net written premiums for the commercial lines segment grew during the third quarter and first nine months of 2023, compared with the same periods a year ago, reflecting renewal written premium growth that continued to include higher average pricing. The table below analyzes the primary components of premiums. We continue to use predictive analytics tools to improve pricing precision and segmentation while leveraging our local relationships with agents through the efforts of our teams that work closely with them. We seek to maintain appropriate pricing discipline for both new and renewal business as our agents and underwriters assess account quality to make careful decisions on a policy-by-policy basis whether to write or renew a policy.
Agency renewal written premiums increased by 6% for both the third quarter and first nine months of 2023, compared with the same periods of 2022, including price increases. During the third quarter of 2023, our overall standard commercial lines policies averaged estimated renewal price increases at percentages near the low end of the high-single-digit range. We continue to segment commercial lines policies, emphasizing identification and retention of those we believe have relatively stronger pricing. Conversely, we have been seeking stricter renewal terms and conditions on policies we believe have relatively weaker pricing, thus retaining fewer of those policies. We measure average changes in commercial lines renewal pricing as the percentage rate of change in renewal premium for the new policy period compared with the premium for the expiring policy period, assuming no change in the level of insured exposures or policy coverage between those periods for the respective policies.
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Our average overall commercial lines renewal pricing change includes the impact of flat pricing for certain coverages within package policies written for a three-year term that were in force but did not expire during the period being measured. Therefore, our reported change in average commercial lines renewal pricing reflects a blend of three-year policies that did not expire and other policies that did expire during the measurement period. For commercial lines policies that did expire and were then renewed during the third quarter of 2023, we estimate that our average percentage price increases were in the high-single-digit range for our commercial property, commercial auto and commercial casualty lines of business. The estimated average percentage price change for workers' compensation was a decrease in the low-single-digit range.
Our commercial lines segment's increase in agency renewal written premiums for the first nine months of 2023 also included changes in the level of insured exposures. Part of the insured exposure increase reflects our response to inflation effects that increase the cost of building materials to repair damaged commercial structures. We use building valuation software to automate much of that underwriting process and may also manually adjust premiums to reflect property costs.
Renewal premiums for certain policies, primarily our commercial casualty and workers' compensation lines of business, include the results of policy audits that adjust initial premium amounts based on differences between estimated and actual sales or payroll related to a specific policy. Audits completed during the first nine months of 2023 contributed $105 million to net written premiums, compared with $72 million for the same period of 2022.
New business written premiums for commercial lines decreased $1 million and $39 million during the third quarter and first nine months of 2023, compared with the same periods of 2022, reflecting pricing discipline in a highly competitive market. Trend analysis for year-over-year comparisons of individual quarters is more difficult to assess for commercial lines new business written premiums, due to inherent variability. That variability is often driven by larger policies with annual premiums greater than $100,000.
Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program. For our commercial lines insurance segment, an increase in ceded premiums reduced net written premiums by $6 million and $17 million for the third quarter and first nine months of 2023, compared with the same periods of 2022.

Commercial Lines Insurance Premiums
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Agency renewal written premiums$914 $860 6 $2,940 $2,764 6 
Agency new business written premiums148 149 (1)431 470 (8)
Other written premiums(33)(25)(32)(95)(82)(16)
Net written premiums1,029 984 5 3,276 3,152 4 
Unearned premium change33 44 (25)(92)(168)45 
Earned premiums$1,062 $1,028 3 $3,184 $2,984 7 
 
•Combined ratio – The third-quarter 2023 commercial lines combined ratio improved by 3.8 percentage points, compared with the third quarter of 2022, despite an increase of 2.2 points in losses from catastrophes. The third-quarter combined ratio also decreased 4.0 points from current accident year loss and loss expenses before catastrophe losses, including an increase of 2.3 points for the IBNR portion and a decrease of 6.3 points for the case incurred portion. For the first nine months of 2023, the combined ratio improved by 1.8 percentage points, compared with the same period a year ago, despite an increase of 3.2 points in losses from catastrophes. The nine-month 2023 combined ratio also included a decrease of 1.9 points from current accident year loss and loss expenses before catastrophe losses, including an increase of 4.1 points for the IBNR portion and a decrease of 6.0 points for the case incurred portion. Underwriting results also included a higher level of favorable reserve development on prior accident years, as discussed below. The current accident year ratios were measured as of September 30 of the respective years and included a decrease of 1.5 percentage points for the third quarter and a decrease of 0.8 points for the first nine months of 2023 in the ratio for large losses of $2 million or more per claim, discussed below.
When estimating the ultimate cost of total loss and loss expenses, we consider many factors, including trends for inflation, historical paid and reported losses, large loss activity and other data or information for the industry or our company. Elevated inflation was a driver of higher losses and loss expenses as costs have increased significantly to repair damaged business property or autos that we insure, in addition to higher losses for liability
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coverages for some of our lines of business. Due to increased uncertainty regarding ultimate losses, we intend to remain prudent in reserving for estimated ultimate losses until longer-term loss cost trends become more clear.
Commercial umbrella coverages, part of our commercial casualty line of business that help protect businesses against liability from occurrences such as accidents or injuries, contributed a decrease of approximately 2.5 percentage points to the commercial lines segment nine-month 2023 ratio for loss and loss expenses decrease of 1.5% shown in the table above. For the first nine months of 2023, incurred losses and loss expenses for commercial umbrella coverages of $257 million decreased $59 million or 19%, compared with the same period of 2022, including a decrease of $8 million or 7% for the IBNR portion, while earned premiums of $379 million increased 2%. The estimated combined ratio for commercial umbrella for the first nine months of 2023 was 96%, compared with an estimated 115% for the same period of 2022.
Commercial umbrella paid loss experience is inherently variable. The profile of coverage limits for policies in force at the end of 2022 included 43% with $1 million of coverage per policy, 91% with $5 million or less and 99% with $10 million or less of coverage. Our commercial umbrella insurance coverages have a strong record of profitability for us, including an estimated combined ratio averaging below 85% for the five years ending in 2022.
Catastrophe losses and loss expenses accounted for 6.7 and 9.4 percentage points of the combined ratio for the third quarter and first nine months of 2023, compared with 4.5 and 6.2 percentage points for the same periods a year ago. Through 2022, the 10-year annual average for that catastrophe measure for the commercial lines segment was 5.5 percentage points, and the five-year annual average was 6.2 percentage points.
The net effect of reserve development on prior accident years during the third quarter and first nine months of 2023 was favorable for commercial lines overall by $34 million and $125 million, compared with $4 million and $51 million for the same periods in 2022. For the first nine months of 2023, our workers' compensation, commercial casualty and commercial property lines of business were the main contributors to the commercial lines net favorable reserve development on prior accident years. The net favorable reserve development recognized during the first nine months of 2023 for our commercial lines insurance segment was mainly for accident years 2022 and 2020 and was primarily due to lower-than-anticipated loss emergence on known claims. Reserve estimates are inherently uncertain as described in our 2022 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 53.
The commercial lines underwriting expense ratio increased for the third quarter and decreased for the first nine months of 2023, compared with the same periods a year ago. The increase for third-quarter 2023 was primarily due to an increase in employee and travel-related expenses while the nine-month 2023 decrease was primarily due to a decrease in profit-sharing commissions for agencies. The ratios also included ongoing expense management efforts and higher earned premiums.

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Commercial Lines Insurance Losses Incurred by Size
(Dollars in millions, net of reinsurance)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Current accident year losses greater than $5 million$18 $30 (40)$76 $61 25 
Current accident year losses $2 million - $5 million28 29 (3)68 95 (28)
Large loss prior accident year reserve development30 14 114 52 43 21 
Total large losses incurred76 73 4 196 199 (2)
Losses incurred but not reported88 97 (9)242 196 23 
Other losses excluding catastrophe losses336 386 (13)1,055 1,149 (8)
Catastrophe losses67 44 52 288 179 61 
Total losses incurred$567 $600 (6)$1,781 $1,723 3 
Ratios as a percent of earned premiums:  Pt. Change  Pt. Change
Current accident year losses greater than $5 million1.7 %3.0 %(1.3)2.4 %2.0 %0.4 
Current accident year losses $2 million - $5 million2.6 2.8 (0.2)2.1 3.3 (1.2)
Large loss prior accident year reserve development2.8 1.3 1.5 1.6 1.4 0.2 
Total large loss ratio7.1 7.1 0.0 6.1 6.7 (0.6)
Losses incurred but not reported8.3 9.4 (1.1)7.6 6.6 1.0 
Other losses excluding catastrophe losses31.7 37.7 (6.0)33.2 38.4 (5.2)
Catastrophe losses6.3 4.2 2.1 9.0 6.0 3.0 
Total loss ratio53.4 %58.4 %(5.0)55.9 %57.7 %(1.8)

We continue to monitor new losses and case reserve increases greater than $2 million for trends in factors such as initial reserve levels, loss cost inflation and claim settlement expenses. Our analysis continues to indicate no unexpected concentration of these large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. The third-quarter 2023 commercial lines total large losses incurred of $76 million, net of reinsurance, was higher than the quarterly average of $56 million during full-year 2022 and the $73 million of total large losses incurred for the third quarter of 2022. The decrease in commercial lines large losses for the first nine months of 2023 was primarily due to our commercial casualty line of business. The third-quarter 2023 ratio for commercial lines total large losses matched last year's third-quarter ratio. The third-quarter 2023 amount of total large losses incurred unfavorably contributed to the decrease in the nine-month 2023 total large loss ratio, compared with 2022, as it partially offset a first-half 2023 ratio that was 0.7 points lower than the first half of 2022. We believe results for the three- and nine-month periods largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $2 million.

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PERSONAL LINES INSURANCE RESULTS
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Earned premiums$527 $431 22 $1,484 $1,246 19 
Fee revenues1 1 0 3 3 0 
Total revenues528 432 22 1,487 1,249 19 
Loss and loss expenses from:      
Current accident year before catastrophe losses297 256 16 865 740 17 
Current accident year catastrophe losses79 76 4 327 194 69 
Prior accident years before catastrophe losses(2)(1)(100)(12)(16)25 
Prior accident years catastrophe losses(6)(7)14 (42)(40)(5)
Loss and loss expenses368 324 14 1,138 878 30 
Underwriting expenses159 126 26 441 373 18 
Underwriting profit (loss)$1 $(18)nm$(92)$(2)nm
Ratios as a percent of earned premiums:  Pt. Change  Pt. Change
Current accident year before catastrophe losses56.3 %59.5 %(3.2)58.3 %59.4 %(1.1)
Current accident year catastrophe losses15.1 17.7 (2.6)22.0 15.6 6.4 
Prior accident years before catastrophe losses(0.4)(0.2)(0.2)(0.8)(1.3)0.5 
Prior accident years catastrophe losses(1.2)(1.8)0.6 (2.8)(3.2)0.4 
Loss and loss expenses69.8 75.2 (5.4)76.7 70.5 6.2 
Underwriting expenses30.1 29.3 0.8 29.7 29.9 (0.2)
Combined ratio99.9 %104.5 %(4.6)106.4 %100.4 %6.0 
Combined ratio99.9 %104.5 %(4.6)106.4 %100.4 %6.0 
Contribution from catastrophe losses and prior years reserve development13.5 15.7 (2.2)18.4 11.1 7.3 
Combined ratio before catastrophe losses and prior years reserve development86.4 %88.8 %(2.4)88.0 %89.3 %(1.3)

Overview
Performance highlights for the personal lines segment include:
•Premiums – Personal lines earned premiums and net written premiums continued to grow during the third quarter and first nine months of 2023, including increased new business and renewal written premiums that included higher average pricing. Cincinnati Private ClientSM net written premiums included in the personal lines insurance segment results totaled approximately $356 million and $938 million for the third quarter and first nine months of 2023, compared with $249 million and $685 million for the same periods of 2022. Cincinnati Private Client net written premiums for the respective periods included excess and surplus lines homeowner policies with premiums totaling $34 million in third-quarter 2023, $85 million in first nine months of 2023, $15 million in third-quarter 2022 and $49 million for the first nine months of 2022. The table below analyzes the primary components of premiums.
Agency renewal written premiums increased 24% and 22% for the third quarter and first nine months of 2023, reflecting rate increases in selected states, a higher level of insured exposures and other factors such as higher policy retention rates and changes in policy deductibles or mix of business. Part of the insured exposure increase reflects our response to inflation effects that increase the cost of building materials to repair damaged homes.
We estimate that premium rates for our personal auto line of business increased at average percentages in the high-single-digit range during the first nine months of 2023, with the third quarter in the low-double-digit range. We plan to increase rates aggressively in future quarters, and we expect full-year 2023 written premiums will include an average rate increase of approximately 10% for our personal auto line of business. For our homeowner line of business, we estimate that premium rates for the first nine months of 2023 increased at average percentages in the mid-single-digit range, with the third quarter near the low end of the high-single-digit
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range. For both our personal auto and homeowner lines of business, some individual policies experienced lower or higher rate changes based on each risk's specific characteristics and enhanced pricing precision enabled by predictive models.
Personal lines new business written premiums increased $41 million or 51% for the third quarter, compared with the same period of 2022 with approximately half of the increase occurring in the middle market part of our personal lines insurance segment. For the first nine months of 2023, compared with the same period of 2022, personal lines new business written premiums increased $86 million or 39%, including approximately $31 million from Cincinnati Private Client policies and $55 million from middle-market policies. We believe we maintained underwriting and pricing discipline across all personal lines markets as we expanded use of enhanced pricing precision tools.
Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program. For our personal lines insurance segment, an increase in 2023 ceded premiums reduced net written premiums by $1 million and $12 million for the third quarter and first nine months, compared with the same periods of 2022.
Personal Lines Insurance Premiums
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Agency renewal written premiums$542 $437 24 $1,471 $1,208 22 
Agency new business written premiums122 81 51 307 221 39 
Other written premiums(18)(16)(13)(55)(43)(28)
Net written premiums646 502 29 1,723 1,386 24 
Unearned premium change(119)(71)(68)(239)(140)(71)
Earned premiums$527 $431 22 $1,484 $1,246 19 
 
•Combined ratio – Our personal lines combined ratio for the third quarter of 2023 improved by 4.6 percentage points, compared with third-quarter 2022, including a decrease of 2.0 points in losses from catastrophes. The third-quarter 2023 combined ratio also included a decrease of 3.2 percentage points from current accident year loss and loss expenses before catastrophe losses, including a decrease of 2.0 points for the IBNR portion and a decrease of 1.2 points for the case incurred portion. For the first nine months of 2023, the combined ratio increased by 6.0 percentage points, compared with the same period a year ago, including an increase of 6.8 points in losses from catastrophes. The nine-month 2023 combined ratio also included a decrease of 1.1 points from current accident year loss and loss expenses before catastrophe losses, including an increase of 2.5 points for the IBNR portion and a decrease of 3.6 points for the case incurred portion. Those current accident year ratios were measured as of September 30 of the respective years and included an increase of 1.3 percentage points for the third quarter, and a decrease of 0.5 points for the first nine months of 2023, in the ratio for large losses of $2 million or more per claim, discussed below.
When estimating the ultimate cost of total loss and loss expenses, we consider many factors, including trends in inflation, historical paid and reported losses, large loss activity and other data or information for the industry or our company. Elevated inflation was a driver of higher losses and loss expenses as costs have increased significantly to repair damaged autos or homes that we insure. Due to increased uncertainty regarding ultimate losses, we intend to remain prudent in reserving for estimated ultimate losses until longer-term loss cost trends become more clear. For example, for the first nine months of 2023, personal auto incurred loss and loss expenses before catastrophe losses increased $45 million or 13%, compared with the same period of 2022, including an increase of $18 million or 86% for the IBNR portion, while earned premiums rose 13%.
Catastrophe losses and loss expenses accounted for 13.9 and 19.2 percentage points of the combined ratio for the third quarter and first nine months of 2023, compared with 15.9 and 12.4 points for the same periods a year ago. The 10-year annual average catastrophe loss ratio for the personal lines segment through 2022 was 10.6 percentage points, and the five-year annual average was 12.0 percentage points.
In addition to the average rate increases discussed above, we continue to refine our pricing to better match premiums to the risk of loss on individual policies. Improved pricing precision and broad-based rate increases are expected to help position the combined ratio at a profitable level over the long term. In addition, greater geographic diversification is expected to reduce the volatility of homeowner loss ratios attributable to weather-related catastrophe losses over time.
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The net effect of reserve development on prior accident years during the third quarter and first nine months of 2023 was favorable for personal lines overall by $8 million and $54 million, compared with $8 million and $56 million of favorable development for the same periods of 2022. Our homeowner line of business was the primary contributor to the personal lines net favorable reserve development for the first nine months of 2023. The net favorable reserve development was primarily due to lower-than-anticipated loss emergence on known claims. Reserve estimates are inherently uncertain as described in our 2022 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 53.
The personal lines underwriting expense ratio increased for the third quarter and decreased for the first nine months of 2023, compared with the same periods a year ago. The increase for third-quarter 2023 was primarily due to increases in reinsurance commissions and profit-sharing commissions for agencies while the nine-month 2023 decrease was mainly due to a decrease in profit-sharing commissions for agencies. The ratios also included ongoing expense management efforts and higher earned premiums.
Personal Lines Insurance Losses Incurred by Size
(Dollars in millions, net of reinsurance)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Current accident year losses greater than $5 million$6 $8 (25)$27 $38 (29)
Current accident year losses $2 million - $5 million24 12 100 34 19 79 
Large loss prior accident year reserve development2 2 0 9 4 125 
Total large losses incurred32 22 45 70 61 15 
Losses incurred but not reported7 9 (22)60 7 nm
Other losses excluding catastrophe losses210 185 14 591 548 8 
Catastrophe losses71 66 8 277 150 85 
Total losses incurred$320 $282 13 $998 $766 30 
Ratios as a percent of earned premiums:  Pt. Change  Pt. Change
Current accident year losses greater than $5 million1.1 %1.9 %(0.8)1.8 %3.1 %(1.3)
Current accident year losses $2 million - $5 million4.7 2.6 2.1 2.3 1.5 0.8 
Large loss prior accident year reserve development0.4 0.6 (0.2)0.6 0.3 0.3 
Total large loss ratio6.2 5.1 1.1 4.7 4.9 (0.2)
Losses incurred but not reported1.2 2.0 (0.8)4.0 0.6 3.4 
Other losses excluding catastrophe losses39.9 43.0 (3.1)39.9 44.0 (4.1)
Catastrophe losses13.4 15.5 (2.1)18.7 12.0 6.7 
Total loss ratio60.7 %65.6 %(4.9)67.3 %61.5 %5.8 

We continue to monitor new losses and case reserve increases greater than $2 million for trends in factors such as initial reserve levels, loss cost inflation and claim settlement expenses. Our analysis continues to indicate no unexpected concentration of these large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. In the third quarter of 2023, the personal lines total large loss ratio, net of reinsurance, was 1.1 percentage points higher than last year's third quarter. The increase in personal lines total large losses incurred for the first nine months of 2023 occurred primarily for our homeowner line of business. The third-quarter 2023 amount of total large losses incurred unfavorably contributed to the decrease in the nine-month 2023 total large loss ratio, compared with 2022, partially offsetting a first-half 2023 ratio that was 0.8 points lower than the first half of 2022. We believe results for the three- and nine-month periods largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $2 million.

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EXCESS AND SURPLUS LINES INSURANCE RESULTS
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Earned premiums$135 $125 8 $394 $361 9 
Fee revenues1 1 0 2 2 0 
Total revenues136 126 8 396 363 9 
Loss and loss expenses from:      
Current accident year before catastrophe losses88 93 (5)268 236 14 
Current accident year catastrophe losses(1)— nm3 3 0 
Prior accident years before catastrophe losses1 (7)nm(13)(13)0 
Prior accident years catastrophe losses(1)— nm(1)— nm
Loss and loss expenses87 86 1 257 226 14 
Underwriting expenses35 31 13 101 93 9 
Underwriting profit$14 $9 56 $38 $44 (14)
Ratios as a percent of earned premiums:  Pt. Change  Pt. Change
Current accident year before catastrophe losses64.8 %74.8 %(10.0)67.9 %65.4 %2.5 
Current accident year catastrophe losses(0.6)(0.4)(0.2)0.8 0.8 0.0 
Prior accident years before catastrophe losses0.9 (5.9)6.8 (3.3)(3.6)0.3 
Prior accident years catastrophe losses(0.2)(0.1)(0.1)(0.2)(0.2)0.0 
Loss and loss expenses64.9 68.4 (3.5)65.2 62.4 2.8 
Underwriting expenses25.6 25.5 0.1 25.7 26.0 (0.3)
Combined ratio90.5 %93.9 %(3.4)90.9 %88.4 %2.5 
Combined ratio90.5 %93.9 %(3.4)90.9 %88.4 %2.5 
Contribution from catastrophe losses and prior years reserve development
0.1 (6.4)6.5 (2.7)(3.0)0.3 
Combined ratio before catastrophe losses and prior years reserve development90.4 %100.3 %(9.9)93.6 %91.4 %2.2 
 
Overview
Performance highlights for the excess and surplus lines segment include:
•Premiums – Excess and surplus lines earned premiums and net written premiums continued to grow during the third quarter and first nine months of 2023, compared with the same periods a year ago, largely due to increases in agency new business written premiums. For both 2023 periods, excess and surplus lines policy renewals experienced estimated average price increases at percentages in the high-single-digit range. We measure average changes in excess and surplus lines renewal pricing as the percentage rate of change in renewal premium for the new policy period compared with the premium for the expiring policy period, assuming no change in the level of insured exposures or policy coverage between those periods for respective policies.
New business written premiums produced by agencies increased by 26% for the third quarter and 25% for the first nine months of 2023 compared with the same periods of 2022, as we continued to carefully underwrite each policy in a highly competitive market. Some of what we report as new business came from accounts that were not new to our agents. We believe our agents' seasoned accounts tend to be priced more accurately than business that may be less familiar to them.
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Excess and Surplus Lines Insurance Premiums
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Agency renewal written premiums$93 $93 0 $316 $297 6 
Agency new business written premiums43 34 26 129 103 25 
Other written premiums(8)(6)(33)(25)(20)(25)
Net written premiums128 121 6 420 380 11 
Unearned premium change7 4 75 (26)(19)(37)
Earned premiums$135 $125 8 $394 $361 9 
 
•Combined ratio – The excess and surplus lines combined ratio decreased by 3.4 percentage points for the third quarter but increased 2.5 points for the first nine months of 2023, compared with the same periods of 2022, with the change for both periods primarily due to current accident year loss and loss expenses before catastrophe losses.
The third-quarter 2023 ratio for current accident year loss and loss expenses before catastrophe losses was 10.0 percentage points lower, compared with the 74.8% accident year 2022 ratio measured as of September 30, 2022, including a decrease of 6.0 points for the IBNR portion and a decrease of 4.0 points for the case incurred portion. The nine-month 2023 ratio for current accident year loss and loss expenses before catastrophe losses was 2.5 percentage points higher, compared with the 65.4% accident year 2022 ratio measured as of September 30, 2022, including an increase of 9.1 points for the IBNR portion and a decrease of 6.6 points for the case incurred portion.

Excess and surplus lines net reserve development on prior accident years, as a ratio to earned premiums, was an unfavorable 0.7% for the third quarter and a favorable 3.5% for the first nine months of 2023, compared with favorable 6.0% and 3.8% for the same periods of 2022. The $14 million of net favorable reserve development recognized during the first nine months of 2023 was mostly for accident year 2022. The favorable reserve development was due primarily to lower-than-anticipated loss emergence on known claims. Reserve estimates are inherently uncertain as described in our 2022 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 53.

The excess and surplus lines underwriting expense ratio increased slightly for the third quarter, mainly due to higher reinsurance commissions, and decreased for the first nine months of 2023, compared with the same periods of 2022. Both 2023 periods benefited from ongoing expense management efforts and premium growth.
 
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Excess and Surplus Lines Insurance Losses Incurred by Size
(Dollars in millions, net of reinsurance)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Current accident year losses greater than $5 million$— $— nm$— $— nm
Current accident year losses $2 million - $5 million— — nm— 2 (100)
Large loss prior accident year reserve development— — nm(1)— nm
Total large losses incurred— — nm(1)2 nm
Losses incurred but not reported16 25 (36)63 38 66 
Other losses excluding catastrophe losses45 40 13 118 122 (3)
Catastrophe losses(1)(1)0 2 2 0 
Total losses incurred$60 $64 (6)$182 $164 11 
Ratios as a percent of earned premiums:  Pt. Change  Pt. Change
Current accident year losses greater than $5 million— %— %0.0 — %— %0.0 
Current accident year losses $2 million - $5 million— — 0.0 — 0.6 (0.6)
Large loss prior accident year reserve development— — 0.0 (0.2)— (0.2)
Total large loss ratio— — 0.0 (0.2)0.6 (0.8)
Losses incurred but not reported11.9 20.0 (8.1)15.9 10.5 5.4 
Other losses excluding catastrophe losses33.2 32.4 0.8 29.9 33.9 (4.0)
Catastrophe losses(0.9)(0.5)(0.4)0.5 0.6 (0.1)
Total loss ratio44.2 %51.9 %(7.7)46.1 %45.6 %0.5 
 
We continue to monitor new losses and case reserve increases greater than $2 million for trends in factors such as initial reserve levels, loss cost inflation and claim settlement expenses. Our analysis continues to indicate no unexpected concentration of these large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. In the third quarter of 2023, the excess and surplus lines total ratio for large losses, net of reinsurance, matched last year's third quarter. The third-quarter 2023 amount of total large losses incurred unfavorably contributed to the decrease in the nine-month 2023 total large loss ratio, compared with 2022, as it partially offset a first-half 2023 ratio that was 1.1 points lower than the first half of 2022. We believe results for the three- and nine-month periods largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $2 million.

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LIFE INSURANCE RESULTS
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Earned premiums$76 $75 1 $233 $226 3 
Fee revenues3 2 50 8 4 100 
Total revenues79 77 3 241 230 5 
Contract holders' benefits incurred71 70 1 230 228 1 
Investment interest credited to contract holders(31)(27)(15)(91)(82)(11)
Underwriting expenses incurred22 21 5 64 63 2 
Total benefits and expenses62 64 (3)203 209 (3)
Life insurance segment profit$17 $13 31 $38 $21 81 
 
Overview
Performance highlights for the life insurance segment include:
•Revenues – Revenues increased for the nine months ended September 30, 2023, compared with the same period a year ago, driven by higher earned premiums from term life insurance, our largest life insurance product line.
Net in-force life insurance policy face amounts increased 2% to $82.055 billion at September 30, 2023, from $80.482 billion at year-end 2022.
Fixed annuity deposits received for the three and nine months ended September 30, 2023, were $13 million and $38 million, compared with $10 million and $23 million for the same periods of 2022. Fixed annuity deposits have a minimal impact to earned premiums because deposits received are initially recorded as liabilities. Profit is earned over time by way of interest rate spreads. We do not write variable or equity-indexed annuities.
Life Insurance Premiums
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Term life insurance$56 $55 2 $170 $165 3 
Whole life insurance12 11 9 37 34 9 
Universal life and other 8 9 (11)26 27 (4)
Net earned premiums$76 $75 1 $233 $226 3 
 
•Profitability – Our life insurance segment typically reports a smaller profit compared with the life insurance subsidiary because profits from investment income spreads are included in our investments segment results. We include only investment income credited to contract holders (including interest assumed in life insurance policy reserve calculations) in our life insurance segment results. A profit of $38 million for our life insurance segment in the first nine months of 2023, compared with a profit of $21 million for the same period of 2022, was primarily due to more favorable mortality experience and higher fee revenues.

Life insurance segment benefits and expenses consist principally of contract holders' (policyholders') benefits incurred related to traditional life and interest-sensitive products and operating expenses incurred, net of deferred acquisition costs. Total benefits decreased in the first nine months of 2023 due to more favorable mortality experience. Life policy and investment contract reserves decreased due to an increase in market value discount rates, partially offset by continued growth in net in-force life insurance policy face amounts. Mortality results decreased compared with the same period of 2022, in part due to pandemic-related death claims incurred in the first three months of last year.

Underwriting expenses for the first nine months of 2023 increased compared with the same period a year ago, largely due to higher general insurance expense levels compared to the same period of 2022.

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We recognize that assets under management, capital appreciation and investment income are integral to evaluating the success of the life insurance segment because of the long duration of life products. On a basis that includes investment income and investment gains or losses from life-insurance-related invested assets, the life insurance subsidiary reported net income of $25 million and $65 million for the three and nine months ended September 30, 2023, compared with $23 million and $51 million for the three and nine months ended September 30, 2022. The life insurance subsidiary portfolio had net after-tax investment gains of less than $1 million and net after-tax investment losses of $1 million for the three and nine months ended September 30, 2023, respectively, compared with net after-tax investment losses of $1 million for the three and nine months ended September 30, 2022.

INVESTMENTS RESULTS
Overview
The investments segment contributes investment income and investment gains and losses to results of operations. Investments traditionally are our primary source of pretax and after-tax profits.
Investment Income
Pretax investment income grew 17% for the third quarter and 14% for the first nine months of 2023, compared with the same periods of 2022. Interest income increased by $25 million and $65 million for the three and nine months ended September 30, 2023, as net purchases of fixed-maturity securities in recent quarters and rising bond yields are working to generally offset effects of the low interest rate environment of the past several years. Although dividend rates generally are increasing more slowly, our minor asset allocation adjustments in our equity portfolio and net purchases of equity securities in recent quarters partially offset the effect of a $5 million special dividend from one of our holdings in the second quarter of 2022, helping dividend income to grow by $3 million and $2 million for the three and nine months ended September 30, 2023.

Investments Results
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Total investment income, net of expenses$225 $193 17 $655 $573 14 
Investment interest credited to contract holders(31)(27)(15)(91)(82)(11)
Investment gains and losses, net(456)(674)32 84 (2,494)nm
Investments profit (loss), pretax$(262)$(508)48 $648 $(2,003)nm
We continue to consider the low interest rate environment that prevailed in recent years as well as the potential for a continuation of both elevated inflation and higher bond yields as we position our portfolio. As bonds in our generally laddered portfolio mature or are called over the near term, we will reinvest with a balanced approach, keeping in mind our long-term strategy and pursuing attractive risk-adjusted after-tax yields. The table below shows the average pretax yield-to-amortized cost associated with expected principal redemptions for our fixed-maturity portfolio. The expected principal redemptions are based on par amounts and include dated maturities, calls and prefunded municipal bonds that we expect will be called during each respective time period.
(Dollars in millions) % YieldPrincipal redemptions
At September 30, 2023
Fixed-maturity pretax yield profile:
Expected to mature during the remainder of 20234.25 %$226 
Expected to mature during 20244.36 1,112 
Expected to mature during 20254.74 1,378 
Average yield and total expected maturities from the remainder of 2023 through 20254.54 $2,716 

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The table below shows the average pretax yield-to-amortized cost for fixed-maturity securities acquired during the periods indicated. The average yield for total fixed-maturity securities acquired during the first nine months of 2023 was higher than the 4.22% average yield-to-amortized cost of the fixed-maturity securities portfolio at the end of 2022. Our fixed-maturity portfolio's average yield of 4.35% for the first nine months of 2023, from the investment income table below, was also higher than the 4.22% yield for the year-end 2022 fixed-maturities portfolio.
Three months ended September 30,Nine months ended September 30,
2023202220232022
Average pretax yield-to-amortized cost on new fixed-maturities:
Acquired taxable fixed-maturities6.60 %5.70 %6.41 %4.82 %
Acquired tax-exempt fixed-maturities4.34 4.32 4.24 3.85 
Average total fixed-maturities acquired6.40 5.39 6.15 4.62 

While our bond portfolio more than covers our insurance reserve liabilities, we believe our diversified common stock portfolio of mainly blue chip, dividend-paying companies represents one of our best investment opportunities for the long term. We discussed our portfolio strategies in our 2022 Annual Report on Form 10-K, Item 1, Investments Segment, Page 24, and Item 7, Investments Outlook, Page 90. We discuss risks related to our investment income and our fixed-maturity and equity investment portfolios in this quarterly report Item 3, Quantitative and Qualitative Disclosures About Market Risk.

The table below provides details about investment income. Average yields in this table are based on the average invested asset and cash amounts indicated in the table, using fixed-maturity securities valued at amortized cost and all other securities at fair value.
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Investment income:      
Interest$154 $129 19 $441 $376 17 
Dividends69 66 5 205 203 1 
Other5 3 67 18 6 200 
Less investment expenses3 5 (40)9 12 (25)
Investment income, pretax225 193 17 655 573 14 
Less income taxes
37 30 23 106 90 18 
Total investment income, after-tax$188 $163 15 $549 $483 14 
Investment returns:
Average invested assets plus cash and cash
  equivalents		$25,490 $23,323 $25,025 $24,081 
Average yield pretax3.53 %3.31 %3.49 %3.17 %
Average yield after-tax2.95 2.80 2.93 2.67 
Effective tax rate16.3 15.8 16.2 15.8 
Fixed-maturity returns:
Average amortized cost$13,879 $12,655 $13,515 $12,521 
Average yield pretax4.44 %4.08 %4.35 %4.00 %
Average yield after-tax3.66 3.38 3.59 3.32 
Effective tax rate17.6 17.1 17.4 17.1 
 
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Total Investment Gains and Losses
Investment gains and losses are recognized on the sale of investments, for certain changes in fair values of securities even though we continue to hold the securities or as otherwise required by GAAP. The change in fair value for equity securities still held are included in investment gains and losses and also in net income. The change in unrealized gains or losses for fixed-maturity securities are included as a component of other comprehensive income (OCI). Accounting requirements for the allowance for credit losses for the fixed-maturity portfolio are disclosed in our 2022 Annual Report on Form 10-K, Item 8, Note 1, Summary of Significant Accounting Policies, Page 127.
 
The table below summarizes total investment gains and losses, before taxes.
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
2023202220232022
Investment gains and losses:
Equity securities:
Investment gains and losses on securities sold, net$(5)$16 $2 $34 
Unrealized gains and losses on securities still held, net(458)(705)99 (2,568)
Subtotal(463)(689)101 (2,534)
Fixed maturities:
Gross realized gains1 — 2 6 
Gross realized losses(1)— (2)(3)
Write-down of impaired securities with intent to sell— — (4)— 
Subtotal— — (4)3 
Other 7 15 (13)37 
Total investment gains and losses reported in net income(456)(674)84 (2,494)
Change in unrealized investment gains and losses:
Fixed maturities(369)(514)(360)(1,870)
Total$(825)$(1,188)$(276)$(4,364)

Of the 4,707 fixed-maturity securities in the portfolio, 202 securities were trading below 70% of amortized cost at September 30, 2023. Our asset impairment committee regularly monitors the portfolio, including a quarterly review of the entire portfolio for potential credit losses. We believe that if liquidity in the markets were to significantly deteriorate or economic conditions were to significantly weaken, we could experience declines in portfolio values and possibly increases in the allowance for credit losses or write-downs to fair value.

Fixed-maturity securities written down to fair value due to an intention to be sold were $4 million for the first nine months of 2023, in addition to a $2 million increase in the allowance for credit losses. Fixed-maturity securities written down to fair value due to an intention to be sold and changes in the allowance for credit losses were each less than $1 million for the first nine months of 2022.
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
2023202220232022
Fixed maturities:    
Real estate$— $— $4 $— 
Total fixed maturities$— $— $4 $— 
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OTHER
We report as Other the noninvestment operations of the parent company and a noninsurance subsidiary, CFC Investment Company. We also report as Other the underwriting results of Cincinnati Re and Cincinnati Global, including earned premiums, loss and loss expenses and underwriting expenses in the table below.

Total revenues for the first nine months of 2023 for our Other operations increased, compared with the same period of 2022, primarily due to earned premiums from Cincinnati Re and Cincinnati Global, with increases of $23 million and $43 million, respectively. Cincinnati Re had $406 million of earned premiums for the first nine months of 2023 and generated an underwriting profit of $88 million. Cincinnati Global had $193 million of earned premiums for the first nine months of 2023 and generated an underwriting profit of $32 million. Total expenses for Other decreased for the first nine months of 2023, primarily due to loss and loss expenses from Cincinnati Re and Cincinnati Global.

Other income or loss in the table below represents profit or losses before income taxes. For all periods shown except the first nine months of 2022, total other income or loss was driven by underwriting profit or loss from Cincinnati Re and Cincinnati Global. Total other loss for the first nine months of 2022 was primarily due to interest expense.
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Interest and fees on loans and leases$2 $2 0 $5 $5 0 
Earned premiums233 225 4 599 533 12 
Other revenues1 — nm3 2 50 
Total revenues236 227 4 607 540 12 
Interest expense13 14 (7)40 40 0 
Loss and loss expenses126 228 (45)309 394 (22)
Underwriting expenses62 65 (5)170 159 7 
Operating expenses5 4 25 17 13 31 
Total expenses206 311 (34)536 606 (12)
 Total other income (loss)$30 $(84)nm$71 $(66)nm
 
TAXES
We had $49 million of income tax benefit for the third quarter of 2023 and $126 million of income tax expense for the nine months ended September 30, 2023, compared with $161 million and $481 million of income tax benefit for the same periods of 2022. The effective tax rate for the three and nine months ended September 30, 2023, was 33.1% and 16.0% compared with 27.9% and 24.3% for the same periods last year. The change in our effective tax rate between periods was primarily due to large changes in our net investment gains and losses included in income for the periods and changes in underwriting income.

Historically, we have pursued a strategy of investing some portion of cash flow in tax-advantaged fixed-maturity and equity securities to minimize our overall tax liability and maximize after-tax earnings. See Tax-Exempt Fixed Maturities in this quarterly report Item 3, Quantitative and Qualitative Disclosures About Market Risk for further discussion on municipal bond purchases in our fixed-maturity investment portfolio. For tax years after 2017, for our property casualty insurance subsidiaries, approximately 75% of interest from tax-advantaged, fixed-maturity investments and approximately 40% of dividends from qualified equities are exempt from federal tax after applying proration. For our noninsurance companies, the dividend received deduction exempts 50% of dividends from qualified equities. Our life insurance company does not own tax-advantaged, fixed-maturity investments or equities subject to the dividend received deduction. Details about our effective tax rate are in this quarterly report Item 1, Note 9, Income Taxes.

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LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2023, shareholders' equity was $10.624 billion, compared with $10.562 billion at December 31, 2022. Total debt was $815 million at September 30, 2023, compared with $839 million at December 31, 2022. At September 30, 2023, cash and cash equivalents totaled $899 million, compared with $1.264 billion at December 31, 2022.

In addition to our historically positive operating cash flow to meet the needs of operations, we have the ability to slow investing activities or sell a portion of our high-quality, liquid investment portfolio if such need arises. We also have additional capacity to borrow on our revolving short-term line of credit, as described further below.

SOURCES OF LIQUIDITY
 
Subsidiary Dividends
Our lead insurance subsidiary declared dividends of $426 million to the parent company in the first nine months of 2023, compared with $504 million for the same period of 2022. For full-year 2022, our lead insurance subsidiary paid dividends totaling $729 million to the parent company. State of Ohio regulatory requirements restrict the dividends our insurance subsidiary can pay. For full-year 2023, total dividends that our insurance subsidiary can pay to our parent company without regulatory approval are approximately $651 million.
 
Investing Activities
Investment income is a source of liquidity for both the parent company and its insurance subsidiaries. We continue to focus on portfolio strategies to balance near-term income generation and long-term book value growth.
 
Parent company obligations can be funded with income on investments held at the parent-company level or through sales of securities in that portfolio, although our investment philosophy seeks to compound cash flows over the long term. These sources of capital can help minimize subsidiary dividends to the parent company, protecting insurance subsidiary capital.

For a discussion of our historic investment strategy, portfolio allocation and quality, see our 2022 Annual Report on Form 10-K, Item 1, Investments Segment, Page 24.
 
Insurance Underwriting
Our property casualty and life insurance underwriting operations provide liquidity because we generally receive premiums before paying losses under the policies purchased with those premiums. After satisfying our cash requirements, we use excess cash flows for investment, increasing future investment income.
 
Historically, cash receipts from property casualty and life insurance premiums, along with investment income, have been more than sufficient to pay claims, operating expenses and dividends to the parent company.
 
The table below shows a summary of the operating cash flow for property casualty insurance (direct method):
(Dollars in millions)Three months ended September 30,Nine months ended September 30,
20232022% Change20232022% Change
Premiums collected$2,025 $1,818 11 $5,806 $5,295 10 
Loss and loss expenses paid(1,058)(948)(12)(3,185)(2,730)(17)
Commissions and other underwriting expenses paid(516)(474)(9)(1,772)(1,674)(6)
Cash flow from underwriting451 396 14 849 891 (5)
Investment income received151 128 18 447 394 13 
Cash flow from operations$602 $524 15 $1,296 $1,285 1 
 
Collected premiums for property casualty insurance rose $511 million during the first nine months of 2023, compared with the same period in 2022. Loss and loss expenses paid for the 2023 period increased $455 million. Commissions and other underwriting expenses paid increased $98 million.
 
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We discuss our future obligations for claims payments and for underwriting expenses in our 2022 Annual Report on Form 10-K, Item 7, Obligations, Page 96.
 
Capital Resources
At September 30, 2023, our debt-to-total-capital ratio was 7.1%, considerably below our 35% covenant threshold, with $790 million in long-term debt and $25 million in borrowing on our revolving short-term line of credit. At September 30, 2023, $275 million was available for future cash management needs as part of the general provisions of the line of credit agreement, with another $300 million available as part of an accordion feature. Based on our capital requirements at September 30, 2023, we do not anticipate a material increase in debt levels exceeding the available line of credit amount during the year. As a result, we expect changes in our debt-to-total-capital ratio to continue to be largely a function of the contribution of unrealized investment gains or losses to shareholders' equity. We have an unsecured letter of credit agreement that provides a portion of the capital needed to support Cincinnati Global's obligations at Lloyd's. The amount of this unsecured letter of credit agreement was $94 million at September 30, 2023, with no amounts drawn.

On March 23, 2023, we amended our line of credit agreement to replace LIBOR with SOFR plus a credit spread adjustment.
 
We provide details of our three long-term notes in this quarterly report Item 1, Note 3, Fair Value Measurements. None of the notes are encumbered by rating triggers.
 
Four independent ratings firms award insurer financial strength ratings to our property casualty insurance companies and three firms rate our life insurance company. Those firms made no changes to our parent company debt ratings during the first nine months of 2023. Our debt ratings are discussed in our 2022 Annual Report on Form 10-K, Item 7, Liquidity and Capital Resources, Long-Term Debt, Page 95.
 
Off-Balance Sheet Arrangements
We do not use any special-purpose financing vehicles or have any undisclosed off-balance sheet arrangements (as that term is defined in applicable SEC rules) that are reasonably likely to have a current or future material effect on the company's financial condition, results of operation, liquidity, capital expenditures or capital resources. Similarly, the company holds no fair-value contracts for which a lack of marketplace quotations would necessitate the use of fair-value techniques.
 
USES OF LIQUIDITY
Our parent company and insurance subsidiary have contractual obligations and other commitments. In addition, one of our primary uses of cash is to enhance shareholder return.
 
Contractual Obligations
We estimated our future contractual obligations as of December 31, 2022, in our 2022 Annual Report on Form 10-K, Item 7, Contractual Obligations, Page 96. There have been no material changes to our estimates of future contractual obligations since our 2022 Annual Report on Form 10-K.

Other Commitments
In addition to our contractual obligations, we have other property casualty operational commitments:
•Commissions – Commissions paid were $1.153 billion in the first nine months of 2023. Commission payments generally track with written premiums, except for annual profit-sharing commissions typically paid during the first quarter of the year.
•Other underwriting expenses – Many of our underwriting expenses are not contractual obligations, but reflect the ongoing expenses of our business. Noncommission underwriting expenses paid were $619 million in the first nine months of 2023.
There were no contributions to our qualified pension plan during the first nine months of 2023.
 
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Investing Activities
After fulfilling operating requirements, we invest cash flows from underwriting, investment and other corporate activities in fixed-maturity and equity securities on an ongoing basis to help achieve our portfolio objectives. We discuss our investment strategy and certain portfolio attributes in this quarterly report Item 3, Quantitative and Qualitative Disclosures About Market Risk.
 
Uses of Capital
Uses of cash to enhance shareholder return include dividends to shareholders and shares acquired under our repurchase program. In January 2023, the board of directors declared regular quarterly cash dividends of 75 cents per share for an indicated annual rate of $3.00 per share. During the first nine months of 2023, we used $338 million to pay cash dividends to shareholders.

PROPERTY CASUALTY INSURANCE LOSS AND LOSS EXPENSE RESERVES
For the business lines in the commercial and personal lines insurance segments, and in total for the excess and surplus lines insurance segment and other property casualty insurance operations, the following table details gross reserves among case, IBNR (incurred but not reported) and loss expense reserves, net of salvage and subrogation reserves. Reserving practices are discussed in our 2022 Annual Report on Form 10-K, Item 7, Property Casualty Loss and Loss Expense Obligations and Reserves, Page 97.
 
Total gross reserves at September 30, 2023, increased $669 million compared with December 31, 2022. Case loss reserves increased by $212 million, IBNR loss reserves increased by $338 million and loss expense reserves increased by $119 million. The total gross increase was primarily due to our commercial casualty and commercial auto lines of business and also Cincinnati Re and our excess and surplus lines insurance segment.

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Property Casualty Gross Reserves
(Dollars in millions)Loss reservesLoss expense reservesTotal gross reserves 
Case reservesIBNR reservesPercent of total
At September 30, 2023
Commercial lines insurance:     
Commercial casualty$1,131 $1,136 $763 $3,030 33.7 %
Commercial property431 133 79 643 7.1 
Commercial auto427 313 143 883 9.8 
Workers' compensation460 523 89 1,072 11.9 
Other commercial 155 23 128 306 3.4 
Subtotal2,604 2,128 1,202 5,934 65.9 
Personal lines insurance:     
Personal auto211 94 73 378 4.2 
Homeowner229 125 55 409 4.6 
Other personal110 110 7 227 2.5 
Subtotal550 329 135 1,014 11.3 
Excess and surplus lines336 319 229 884 9.8 
Cincinnati Re150 739 6 895 9.9 
Cincinnati Global148 127 3 278 3.1 
Total$3,788 $3,642 $1,575 $9,005 100.0 %
At December 31, 2022     
Commercial lines insurance:     
Commercial casualty$1,163 $938 $722 $2,823 33.9 %
Commercial property301 256 71 628 7.5 
Commercial auto449 258 131 838 10.1 
Workers' compensation434 521 85 1,040 12.4 
Other commercial 98 16 125 239 2.9 
Subtotal2,445 1,989 1,134 5,568 66.8 
Personal lines insurance:     
Personal auto222 64 64 350 4.2 
Homeowner189 138 49 376 4.5 
Other personal99 86 5 190 2.3 
Subtotal510 288 118 916 11.0 
Excess and surplus lines302 256 195 753 9.0 
Cincinnati Re156 639 6 801 9.6 
Cincinnati Global163 132 3 298 3.6 
Total$3,576 $3,304 $1,456 $8,336 100.0 %
 
LIFE POLICY AND INVESTMENT CONTRACT RESERVES
Gross life policy and investment contract reserves were $2.920 billion at September 30, 2023, compared with $3.015 billion at year-end 2022, reflecting an increase in market value discount rates partially offset by continued growth in life insurance policies in force. We discussed our life insurance reserving practices in our 2022 Annual Report on Form 10-K, Item 7, Life Insurance Policyholder Obligations and Reserves, Page 103, and updated that disclosure in this quarterly report Item 1, Note 1, Accounting Policies.
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OTHER MATTERS
 
SIGNIFICANT ACCOUNTING POLICIES
Our significant accounting policies are discussed in our 2022 Annual Report on Form 10-K, Item 8, Note 1, Summary of Significant Accounting Policies, Page 127, and updated in this quarterly report Item 1, Note 1, Accounting Policies.
 
In conjunction with those discussions, in the Management's Discussion and Analysis in the 2022 Annual Report on Form 10-K, management reviewed the estimates and assumptions used to develop reported amounts related to the most significant policies. Management discussed the development and selection of those accounting estimates with the audit committee of the board of directors.
 
Item 3.    Quantitative and Qualitative Disclosures About Market Risk
Our greatest exposure to market risk is through our investment portfolio. Market risk is the potential for a decrease in securities' fair value resulting from broad yet uncontrollable forces such as: inflation, economic growth or recession, interest rates, world political conditions or other widespread unpredictable events. It is comprised of many individual risks that, when combined, create a macroeconomic impact.
 
Our view of potential risks and our sensitivity to such risks is discussed in our 2022 Annual Report on Form 10-K, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, Page 112.
 
The fair value of our investment portfolio was $22.874 billion at September 30, 2023, up $901 million from year-end 2022, including a $711 million increase in the fixed-maturity portfolio and a $190 million increase in the equity portfolio.
(Dollars in millions)At September 30, 2023At December 31, 2022
Cost or 
amortized cost 		Percent 
of total		Fair valuePercent 
of total		Cost or 
amortized cost 		Percent of totalFair valuePercent
of total
Taxable fixed maturities$10,070 54.5 %$9,175 40.2 %$9,020 52.2 %$8,299 37.8 %
Tax-exempt fixed maturities3,980 21.6 3,668 16.0 3,959 22.9 3,833 17.4 
Common equities3,978 21.6 9,678 42.3 3,851 22.3 9,454 43.0 
Nonredeemable preferred
  equities		421 2.3 353 1.5 443 2.6 387 1.8 
Total$18,449 100.0 %$22,874 100.0 %$17,273 100.0 %$21,973 100.0 %

At September 30, 2023, 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 $398 million of private equity investments, $63 million of real estate through direct property ownership and development projects in the United States, $42 million in Lloyd's deposits and $31 million of life policy loans at September 30, 2023.
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FIXED-MATURITY SECURITIES INVESTMENTS
By maintaining a well-diversified fixed-maturity portfolio, we attempt to reduce overall risk. We invest new money in the bond market on a regular basis, targeting what we believe to be optimal risk-adjusted, after-tax yields. Risk, in this context, includes interest rate, call, reinvestment rate, credit and liquidity risk. We do not make a concerted effort to alter duration on a portfolio basis in response to anticipated movements in interest rates. 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 2023, the increase in fair value of our fixed-maturity portfolio was due to net purchases of securities and tightening of corporate credit spreads, partially offset by an increase in our net unrealized loss position that reflected an increase in U.S. Treasury yields. At September 30, 2023, our fixed-maturity portfolio with an average rating of A2/A was valued at 91.4% of its amortized cost, compared with 93.5% at December 31, 2022.
 
At September 30, 2023, our investment-grade and noninvestment-grade fixed-maturity securities represented 80.6% and 3.9% of the portfolio, respectively. The remaining 15.5% represented fixed-maturity securities that were not rated by Moody's or S&P Global Ratings.

Attributes of the fixed-maturity portfolio include:
At September 30, 2023At December 31, 2022
Weighted average yield-to-amortized cost4.48 %4.22 %
Weighted average maturity7.6yrs7.4yrs
Effective duration4.7yrs4.7yrs
 
We discuss maturities of our fixed-maturity portfolio in our 2022 Annual Report on Form 10-K, Item 8, Note 2, Investments, Page 134, and in this quarterly report Item 2, Investments Results.
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TAXABLE FIXED MATURITIES
Our taxable fixed-maturity portfolio, with a fair value of $9.175 billion at September 30, 2023, included:
(Dollars in millions) At September 30, 2023At December 31, 2022
Investment-grade corporate$6,634 $6,369 
States, municipalities and political subdivisions756 789 
Noninvestment-grade corporate479 500 
Government-sponsored enterprises874 183 
United States government217 191 
Commercial mortgage-backed196 234 
Foreign government19 33 
Total$9,175 $8,299 
 
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 1.2% of the taxable fixed-maturity portfolio at September 30, 2023. Our investment-grade corporate bonds had an average rating of Baa1 by Moody's or BBB by S&P Global Ratings and represented 72.3% of the taxable fixed-maturity portfolio's fair value at September 30, 2023, compared with 76.7% at year-end 2022.
 
The heaviest concentration in our investment-grade corporate bond portfolio, based on fair value at
September 30, 2023, was the financial sector. It represented 40.2% of our investment-grade corporate bond portfolio, compared with 42.7% at year-end 2022. The energy sector represented 11.2% and was 10.8% at year-end 2022. No other sector exceeded 10% of our investment-grade corporate bond portfolio.

As discussed in our 2022 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 32, investments in the financial sector include various risks. See risk factors entitled “Financial disruption or a prolonged economic downturn could materially and adversely 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, 2023, included $196 million of commercial mortgage-backed securities with an average rating of Aa3/AA-.
TAX-EXEMPT FIXED MATURITIES
At September 30, 2023, we had $3.668 billion of tax-exempt fixed-maturity securities 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 1,700 municipal bond issuers. No single municipal issuer accounted for more than 0.6% of the tax-exempt fixed-maturity portfolio at September 30, 2023.

INTEREST RATE SENSITIVITY ANALYSIS
Because of our strong surplus, long-term investment horizon and ability to hold most fixed-maturity investments until maturity, we believe the company is adequately positioned if interest rates were to rise. Although the fair values of our existing holdings may suffer, a higher rate environment would provide the opportunity to invest cash flow in higher-yielding securities, while reducing the likelihood of untimely redemptions of currently callable securities. While higher interest rates would be expected to continue to increase the number of fixed-maturity holdings trading below 100% of amortized cost, we believe lower fixed-maturity security values due solely to interest rate changes would not signal a decline in credit quality. We continue to manage the portfolio with an eye toward both meeting current income needs and managing interest rate risk.
 
Our dynamic financial planning model uses analytical tools to assess market risks. 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.
 
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The table below summarizes the effect of hypothetical changes in interest rates on the fair value of the fixed-maturity portfolio:
(Dollars in millions)Effect from interest rate change in basis points
-200  -100 —100 200
At September 30, 2023$14,050 $13,452 $12,843 $12,229 $11,629 
At December 31, 2022$13,300 $12,714 $12,132 $11,548 $10,974 
 
The effective duration of the fixed-maturity portfolio as of September 30, 2023, was 4.7 years, matching year-end 2022. 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 4.8% change in the fair value of the fixed-maturity portfolio. Generally speaking, the higher a bond is rated, the more directly correlated movements in its fair value are to changes in the general level of interest rates, exclusive of call features. The fair values of average- to lower-rated corporate bonds are additionally influenced by the expansion or contraction of credit spreads.
 
In our dynamic financial planning model, the selected interest rate change of 100 to 200 basis points represents our view of a shift in rates that is quite possible over a one-year period. The rates modeled should not be considered a prediction of future events as interest rates may be much more volatile in the future. The analysis is not intended to provide a precise forecast of the effect of changes in rates on our results or financial condition, nor does it take into account any actions that we might take to reduce exposure to such risks.

EQUITY INVESTMENTS
Our equity investments, with a fair value totaling $10.031 billion at September 30, 2023, included $9.678 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. We believe our equity investment style is an appropriate long-term strategy. While our long-term financial position would be affected by prolonged changes in the market valuation of our investments, we believe our strong surplus position and cash flow provide a cushion against short-term fluctuations in valuation. Continued payment of cash dividends by the issuers of our common equity holdings can provide a floor to their valuation.

The table below summarizes the effect of hypothetical changes in market prices on fair value of our equity portfolio.
(Dollars in millions)Effect from market price change in percent
 -30%-20%-10%—10%20%30%
At September 30, 2023$7,022 $8,025 $9,028 $10,031 $11,034 $12,037 $13,040 
At December 31, 2022$6,889 $7,873 $8,857 $9,841 $10,825 $11,809 $12,793 

At September 30, 2023, Apple Inc. (Nasdaq:AAPL) was our largest single common stock holding with a fair value of $764 million, or 7.9% of our publicly traded common stock portfolio and 3.3% of the total investment portfolio. Thirty-seven holdings among eight different sectors each had a fair value greater than $100 million.
 
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Common Stock Portfolio Industry Sector Distribution
 Percent of common stock portfolio
 At September 30, 2023At December 31, 2022
Cincinnati
 Financial		S&P 500 Industry
Weightings		Cincinnati
Financial		S&P 500 Industry
Weightings
Sector:    
Information technology31.1 %27.5 %26.5 %25.7 %
Financial12.9 12.8 13.6 11.7 
Healthcare12.7 13.3 15.0 15.8 
Industrials11.7 8.3 11.9 8.7 
Consumer staples7.8 6.6 8.8 7.2 
Consumer discretionary7.5 10.7 7.7 9.8 
Materials4.9 2.4 5.0 2.7 
Energy4.9 4.7 5.0 5.2 
Utilities2.8 2.4 2.9 3.2 
Real estate2.3 2.4 2.3 2.7 
Telecomm services1.4 8.9 1.3 7.3 
Total100.0 %100.0 %100.0 %100.0 %
 
UNREALIZED INVESTMENT GAINS AND LOSSES
At September 30, 2023, unrealized investment gains before taxes for the fixed-maturity portfolio totaled $29 million and unrealized investment losses amounted to $1.236 billion before taxes.
 
The $1.207 billion net unrealized loss position in our fixed-maturity portfolio at September 30, 2023, increased in the first nine months of 2023, primarily due to an increase in U.S. Treasury yields that were partially offset by tightening of corporate credit spreads. The net loss position for our current fixed-maturity holdings will naturally decline over time as individual securities approach maturity. In addition, changes in interest rates can cause rapid, significant changes in fair values of fixed-maturity securities and the net loss position, as discussed in Quantitative and Qualitative Disclosures About Market Risk.

For federal income tax purposes, taxes on gains from appreciated investments generally are not due until securities are sold. 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, 2023, consisted of a net gain position in our equity portfolio of $5.632 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 were Apple, Microsoft (Nasdaq:MSFT), Broadcom Inc. (Nasdaq:AVGO), UnitedHealth Group Inc. (NYSE:UNH) and JPMorgan Chase & Co (NYSE:JPM), which had a combined fair value of $2.605 billion.

Unrealized Investment Losses
We expect the number of fixed-maturity securities trading below amortized cost to fluctuate as interest rates rise or fall and credit spreads expand or contract due to prevailing economic conditions. Further, amortized costs for some securities are revised through write-downs recognized in prior periods. At September 30, 2023, 4,490 of the 4,707 fixed-maturity securities we owned had fair values below amortized cost, compared with 3,272 of the 4,521 securities we owned at year-end 2022. The 4,490 holdings with fair values below amortized cost at September 30, 2023, represented 95.0% of the fair value of our fixed-maturity investment portfolio and $1.236 billion in unrealized losses.
•2,831 of the 4,490 holdings had fair value between 90% and 100% of amortized cost at September 30, 2023. These primarily consist of securities whose current valuation is largely the result of interest rate factors. The fair value of these 2,831 securities was $8.696 billion, and they accounted for $365 million in unrealized losses.
•1,457 of the 4,490 fixed-maturity holdings had fair value between 70% and 90% of amortized cost at
September 30, 2023. We believe the 1,457 fixed-maturity securities will continue to pay interest and ultimately
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pay principal upon maturity. The issuers of these 1,457 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 $3.170 billion, and they accounted for $705 million in unrealized losses.
•202 of the 4,490 fixed-maturity holdings had fair value below 70% of amortized cost at September 30, 2023. We believe these fixed-maturity securities will continue to pay interest and ultimately pay principal upon maturity. The fair value of these securities was $337 million, and they accounted for $166 million in unrealized losses.

The table below reviews fair values and unrealized losses by investment category and by the overall duration of the securities' continuous unrealized loss position.
(Dollars in millions)Less than 12 months12 months or moreTotal
At September 30, 2023Fair valueUnrealized
 losses		Fair valueUnrealized
 losses		Fair
 value		Unrealized
 losses
Fixed-maturity securities:      
Corporate $1,283 $58 $5,431 $642 $6,714 $700 
States, municipalities and political subdivisions2,331 89 1,902 400 4,233 489 
Government-sponsored enterprises742 17 95 6 837 23 
United States government80 1 130 5 210 6 
Commercial mortgage-backed1 — 194 18 195 18 
Foreign government9 — 5 — 14 — 
Total$4,446 $165 $7,757 $1,071 $12,203 $1,236 
At December 31, 2022      
Fixed-maturity securities:     
Corporate $5,651 $412 $661 $168 $6,312 $580 
States, municipalities and political subdivisions2,600 274 77 29 2,677 303 
Government-sponsored enterprises123 3 3 — 126 3 
United States government146 3 41 2 187 5 
Commercial mortgage-backed215 13 14 3 229 16 
Foreign government25 1 4 — 29 1 
Total$8,760 $706 $800 $202 $9,560 $908 
 
At September 30, 2023, applying our invested asset impairment policy, we determined that the total of $1.236 billion, 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 2023, one fixed-maturity security was written down to fair value, due to an intention to be sold, resulting in $4 million of noncash charges. Changes in allowance for credit losses were $3 million during the first nine months of 2023. During the first nine months of 2022, two fixed-maturity securities were written down to fair value, due to an intention to be sold, and changes in allowance for credit losses were each less than $1 million.

During the full year of 2022, we wrote down three securities and recorded $5 million in impairment charges. At December 31, 2022, 3,272 fixed-maturity securities with a total unrealized loss of $908 million were in an unrealized loss position. Of that total, 49 fixed-maturity securities had fair values below 70% of amortized cost.

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The following table summarizes the investment portfolio by severity of decline:
(Dollars in millions)Number
of issues		Amortized
cost		Fair valueGross unrealized 
gain (loss)		Gross investment income
At September 30, 2023
Taxable fixed maturities:
Fair valued below 70% of amortized cost118 $354 $238 $(116)$8 
Fair valued at 70% to less than 100% of amortized cost2,102 9,253 8,445 (808)300 
Fair valued at 100% and above of amortized cost120 463 492 29 24 
Investment income on securities sold in current year— — — — 12 
Total2,340 10,070 9,175 (895)344 
Tax-exempt fixed maturities:     
Fair valued below 70% of amortized cost84 149 99 (50)3 
Fair valued at 70% to less than 100% of amortized cost2,186 3,683 3,421 (262)88 
Fair valued at 100% and above of amortized cost97 148 148 — 4 
Investment income on securities sold in current year— — — — 2 
Total2,367 3,980 3,668 (312)97 
Fixed-maturities summary:     
Fair valued below 70% of amortized cost202 503 337 (166)11 
Fair valued at 70% to less than 100% of amortized cost4,288 12,936 11,866 (1,070)388 
Fair valued at 100% and above of amortized cost217 611 640 29 28 
Investment income on securities sold in current year— — — — 14 
Total4,707 $14,050 $12,843 $(1,207)$441 
At December 31, 2022     
Fixed-maturities summary:     
Fair valued below 70% of amortized cost49 $91 $61 $(30)$3 
Fair valued at 70% to less than 100% of amortized cost3,223 10,377 9,499 (878)392 
Fair valued at 100% and above of amortized cost1,249 2,511 2,572 61 92 
Investment income on securities sold in current year— — — — 23 
Total4,521 $12,979 $12,132 $(847)$510 
 
See our 2022 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Asset Impairment, Page 58.

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Item 4.        Controls and Procedures
Evaluation of Disclosure Controls and Procedures – The company maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)).
 
Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. The company's management, with the participation of the company's chief executive officer and chief financial officer, has evaluated the effectiveness of the design and operation of the company's disclosure controls and procedures as of September 30, 2023. Based upon that evaluation, the company's chief executive officer and chief financial officer concluded that the design and operation of the company's disclosure controls and procedures provided reasonable assurance that the disclosure controls and procedures are effective to ensure:
•that information required to be disclosed in the company's reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and
•that such information is accumulated and communicated to the company's management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting – During the three months ended September 30, 2023, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Part II – Other Information
Item 1.    Legal Proceedings
Neither the company nor any of our subsidiaries are involved in any litigation believed to be material other than ordinary, routine litigation incidental to the nature of our business.
Item 1A.    Risk Factors
Our risk factors have not changed materially since they were described in our 2022 Annual Report on Form 10-K filed February 23, 2023. Investors should not interpret the disclosure of a risk to imply that the risk has not already materialized.

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Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
We did not sell any of our shares that were not registered under the Securities Act during the first nine months of 2023. Our repurchase program does not have an expiration date. On January 26, 2018, an additional 15 million shares were authorized, which expanded our current repurchase program. We have 6,726,785 shares available for purchase under our programs at September 30, 2023.
PeriodTotal number
 of shares
 purchased		Average
 price paid
 per share		Total number of shares purchased as part of
publicly announced
plans or programs		Maximum number of
shares that may yet be
purchased under the
plans or programs
July 1-31, 2023— $— — 6,726,785 
August 1-31, 2023— — — 6,726,785 
September 1-30, 2023— — — 6,726,785 
Totals— — —  
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Item 5.    Other Information
Neither the company nor any of our officers or directors adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement as defined by Item 408(a) and Item 408(d) of Regulation S-K during the last fiscal quarter.

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Item 6.    Exhibits
Exhibit No.Exhibit Description
3.1
3.2
31A
31B
32
101.INS
The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
 
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
CINCINNATI FINANCIAL CORPORATION
Date: October 26, 2023
/S/ Michael J. Sewell
Michael J. Sewell, CPA
Chief Financial Officer, Executive Vice President and Treasurer
(Principal Accounting Officer)
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