Item 1. Financial Statements (unaudited)

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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,
	2022		2021
Assets
Investments
Fixed maturities, at fair value (amortized cost: 2022—$12,812; 2021—$12,230)	$	11,734	$	13,022
Equity securities, at fair value (cost: 2022—$4,292; 2021—$4,121)	8,840		11,315

Other invested assets	414		329
Total investments	20,988		24,666
Cash and cash equivalents	1,083		1,139

Investment income receivable	152		144
Finance receivable	87		98
Premiums receivable	2,403		2,053
Reinsurance recoverable	561		570
Prepaid reinsurance premiums	91		78
Deferred policy acquisition costs	1,036		905
Land, building and equipment, net, for company use (accumulated depreciation: 2022—$317; 2021—$303)	204		205
Other assets	706		570
Separate accounts	888		959
Total assets	$	28,199	$	31,387

Liabilities
Insurance reserves
Loss and loss expense reserves	$	8,113	$	7,305
Life policy and investment contract reserves	3,053		3,014
Unearned premiums	3,798		3,271
Other liabilities	1,249		1,092
Deferred income tax	780		1,744
Note payable	44		54
Long-term debt and lease obligations	843		843
Separate accounts	888		959
Total liabilities	18,768		18,282

Commitments and contingent liabilities (Note 12)

Shareholders' Equity
Common stock, par value—$2 per share; (authorized: 2022 and 2021—500 million shares; issued: 2022 and 2021—198.3 million shares)	397		397
Paid-in capital	1,379		1,356
Retained earnings	10,797		12,625
Accumulated other comprehensive income	(828)		648
Treasury stock at cost (2022—41.2 million shares and 2021—38.0 million shares)	(2,314)		(1,921)
Total shareholders' equity	9,431		13,105
Total liabilities and shareholders' equity	$	28,199	$	31,387

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 Income


(Dollars in millions, except per share data)	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Revenues
Earned premiums	$	1,882	$	1,669	$	5,345	$	4,806
Investment income, net of expenses	193		179		573		528
Investment gains and losses, net	(674)		(70)		(2,494)		954
Fee revenues	5		4		12		11
Other revenues	2		3		7		8
Total revenues	1,408		1,785		3,443		6,307
Benefits and Expenses
Insurance losses and contract holders' benefits	1,418		1,072		3,766		2,990
Underwriting, acquisition and insurance expenses	551		511		1,604		1,440
Interest expense	14		13		40		39
Other operating expenses	4		5		13		14
Total benefits and expenses	1,987		1,601		5,423		4,483
Income (Loss) Before Income Taxes	(579)		184		(1,980)		1,824
Provision (Benefit) for Income Taxes
Current	19		55		90		166
Deferred	(180)		(24)		(571)		182
Total provision (benefit) for income taxes	(161)		31		(481)		348
Net Income (Loss)	$	(418)	$	153	$	(1,499)	$	1,476
Per Common Share
Net income (loss)—basic	$	(2.64)	$	0.95	$	(9.41)	$	9.16
Net income (loss)—diluted	(2.64)		0.94		(9.41)		9.07

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 Comprehensive Income


(Dollars in millions)	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Net Income (Loss)	$	(418)	$	153	$	(1,499)	$	1,476
Other Comprehensive Income (Loss)
Change in unrealized gains and losses on investments, net of tax (benefit) of $(109), $(19), $(393) and $(33), respectively	(405)		(69)		(1,477)		(119)
Amortization of pension actuarial loss and prior service cost, net of tax of $0, $1, $0 and $2, respectively	—		1		—		5
Change in life deferred acquisition costs, life policy reserves and other, net of tax of $0, $0, $0 and $2, respectively	—		—		1		8
Other comprehensive loss	(405)		(68)		(1,476)		(106)
Comprehensive Income (Loss)	$	(823)	$	85	$	(2,975)	$	1,370

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,
	2022		2021		2022		2021
Common Stock
Beginning of period	$	397	$	397	$	397	$	397
Share-based awards	—		—		—		—
End of period	397		397		397		397

Paid-In Capital
Beginning of period	1,367		1,334		1,356		1,328
Share-based awards	1		1		(11)		(13)
Share-based compensation	9		8		29		25
Other	2		1		5		4
End of period	1,379		1,344		1,379		1,344

Retained Earnings
Beginning of period	11,324		11,205		12,625		10,085


Net income (loss)	(418)		153		(1,499)		1,476
Dividends declared	(109)		(101)		(329)		(304)
End of period	10,797		11,257		10,797		11,257

Accumulated Other Comprehensive Income
Beginning of period	(423)		731		648		769


Other comprehensive loss	(405)		(68)		(1,476)		(106)
End of period	(828)		663		(828)		663

Treasury Stock
Beginning of period	(2,112)		(1,809)		(1,921)		(1,790)
Share-based awards	1		1		13		16
Shares acquired - share repurchase authorization	(203)		(12)		(399)		(40)
Shares acquired - share-based compensation plans	—		—		(8)		(7)
Other	—		—		1		1
End of period	(2,314)		(1,820)		(2,314)		(1,820)

Total Shareholders' Equity	$	9,431	$	11,841	$	9,431	$	11,841

(In millions, except per common share)
Common Stock - Shares Outstanding
Beginning of period	159.2		161.1		160.3		160.9
Share-based awards	—		0.1		0.5		0.6
Shares acquired - share repurchase authorization	(2.1)		(0.1)		(3.7)		(0.4)


End of period	157.1		161.1		157.1		161.1

Dividends declared per common share	$	0.69	$	0.63	$	2.07	$	1.89

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,
	2022		2021
Cash Flows From Operating Activities
Net income (loss)	$	(1,499)	$	1,476
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	81		69
Investment gains and losses, net	2,513		(933)
Share-based compensation	29		25
Interest credited to contract holders	34		33
Deferred income tax expense	(571)		182
Changes in:
Investment income receivable	(8)		(6)
Premiums and reinsurance receivable	(354)		(280)
Deferred policy acquisition costs	(118)		(84)
Other assets	(6)		(12)
Loss and loss expense reserves	808		546
Life policy and investment contract reserves	52		76
Unearned premiums	527		382
Other liabilities	3		95
Current income tax receivable/payable	(70)		(51)
Net cash provided by operating activities	1,421		1,518
Cash Flows From Investing Activities
Sale of fixed maturities	93		88
Call or maturity of fixed maturities	818		1,049
Sale of equity securities	333		123
Purchase of fixed maturities	(1,445)		(1,831)
Purchase of equity securities	(380)		(276)


Investment in finance receivables	(18)		(30)
Collection of finance receivables	30		28
Investment in building and equipment	(12)		(12)
Change in other invested assets, net	(65)		(30)
Net cash used in investing activities	(646)		(891)
Cash Flows From Financing Activities
Payment of cash dividends to shareholders	(316)		(295)
Shares acquired - share repurchase authorization	(399)		(40)
Changes in note payable	(10)		5
Proceeds from stock options exercised	8		10
Contract holders' funds deposited	54		64
Contract holders' funds withdrawn	(98)		(104)
Other	(70)		(82)
Net cash used in financing activities	(831)		(442)
Net change in cash and cash equivalents	(56)		185
Cash and cash equivalents at beginning of year	1,139		900
Cash and cash equivalents at end of period	$	1,083	$	1,085
Supplemental Disclosures of Cash Flow Information:
Interest paid	$	27	$	26
Income taxes paid	144		205
Noncash Activities

Equipment acquired under finance lease obligations	$	13	$	9
Share-based compensation	24		22
Other assets and other liabilities	203		137

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, 2022, 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 2021 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.

The company continues to monitor the impact of the coronavirus (SARS-CoV-2 or COVID-19) pandemic outbreak. The company cannot predict the impact the pandemic will have on its future consolidated financial position, results of operations and cash flows, however the impact could be material.

Pending 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. We plan to adopt these ASUs on a modified retrospective basis on January 1, 2023.

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.

Based on current conditions, management estimates at September 30, 2022, that adoption would not have a material impact and would have resulted in an after-tax increase to shareholders' equity of approximately $50 million. The ultimate impact of adoption of these ASUs will be affected by the market value discount rates and other assumptions determined at the January 1, 2023, adoption date and could be material. The process of addressing necessary remaining implementation-related items, including modifications to reporting and analysis capabilities as well as actuarial systems and associated data processes is substantially complete.

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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 unrealized					Fair value
At September 30, 2022			gains			losses
Fixed maturity securities:
Corporate	$	7,307		$	33		$	661	$	6,679
States, municipalities and political subdivisions	4,911			4			433		4,482
Commercial mortgage-backed	253			—			13		240
United States government	193			—			5		188
Government-sponsored enterprises	122			—			3		119
Foreign government	26			—			—		26

Total	$	12,812		$	37		$	1,115	$	11,734






At December 31, 2021
Fixed maturity securities:
Corporate	$	7,043		$	467		$	13	$	7,497
States, municipalities and political subdivisions	4,768			330			3		5,095
Commercial mortgage-backed	264			9			—		273
United States government	121			2			—		123
Government-sponsored enterprises	8			—			—		8
Foreign government	26			—			—		26






Total	$	12,230		$	808		$	16	$	13,022

The net unrealized investment losses in our fixed-maturity portfolio at September 30, 2022, are primarily due to an increase in U.S. Treasury yields and a widening of corporate credit spreads. Our commercial mortgage-backed securities had an average rating of Aa2/AA- and Aa2/AA at September 30, 2022, and December 31, 2021, 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 months				12 months or more				Total
At September 30, 2022	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed maturity securities:
Corporate	$	5,835	$	535	$	376	$	126	$	6,211	$	661
States, municipalities and political subdivisions	3,831		414		48		19		3,879		433
Commercial mortgage-backed	225		11		14		2		239		13
United States government	173		5		12		—		185		5
Government-sponsored enterprises	101		3		3		—		104		3
Foreign government	21		—		—		—		21		—
Total	$	10,186	$	968	$	453	$	147	$	10,639	$	1,115





At December 31, 2021
Fixed maturity securities:
Corporate	$	861	$	13	$	15	$	—	$	876	$	13
States, municipalities and political subdivisions	105		2		2		1		107		3
Commercial mortgage-backed	10		—		11		—		21		—
United States government	48		—		—		—		48		—
Government-sponsored enterprises	7		—		—		—		7		—
Foreign government	16		—		—		—		16		—





Total	$	1,047	$	15	$	28	$	1	$	1,075	$	16

Contractual maturity dates for fixed-maturities securities were:


(Dollars in millions)	Amortized cost		Fair value		% of fair value
At September 30, 2022
Maturity dates:
Due in one year or less	$	690	$	687	5.9	%
Due after one year through five years	3,861		3,717		31.7
Due after five years through ten years	3,573		3,334		28.4
Due after ten years	4,688		3,996		34.0
Total	$	12,812	$	11,734	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,
	2022		2021		2022		2021
Investment income:
Interest	$	129	$	121	$	376	$	356
Dividends	66		61		203		179
Other	3		1		6		4
Total	198		183		585		539
Less investment expenses	5		4		12		11
Total	$	193	$	179	$	573	$	528

Investment gains and losses, net:
Equity securities:
Investment gains and losses on securities sold, net	$	16	$	(1)	$	34	$	6
Unrealized gains and losses on securities still held, net	(705)		(104)		(2,568)		869

Subtotal	(689)		(105)		(2,534)		875
Fixed maturities:
Gross realized gains	—		10		6		24
Gross realized losses	—		(1)		(3)		(3)
Write-down of impaired securities	—		(1)		—		(1)
Subtotal	—		8		3		20

Other	15		27		37		59

Total	$	(674)	$	(70)	$	(2,494)	$	954

The fair value of our equity portfolio was $8.840 billion and $11.315 billion at September 30, 2022, and December 31, 2021, respectively. At September 30, 2022, and December 31, 2021, Apple Inc. (Nasdaq:AAPL), an equity holding, was our largest single investment holding with a fair value of $638 million and $862 million, which was 7.6% and 7.9% of our publicly traded common equities portfolio and 3.1% and 3.5% of the total investment portfolio, respectively.

At September 30, 2022, and December 31, 2021, the allowance for credit losses was $1 million and less than

$1 million, respectively. Changes in the amount during each period were less than $1 million. During the three months ended September 30, 2022, there were no fixed-maturity securities that were written down to fair value due to an intention to be sold. During the nine months ended September 30, 2022, there were two fixed-maturity securities that were written down to fair value due to an intention to be sold resulting in impairment charges of less than $1 million. During the three and nine months ended September 30, 2021, there were five fixed-maturity securities that were written down to fair value due to an intention to be sold.

At September 30, 2022, 4,049 fixed-maturity securities with a total unrealized loss of $1.115 billion were in an unrealized loss position. Of that total, 118 fixed-maturity securities had fair values below 70% of amortized cost. At December 31, 2021, 278 fixed-maturity securities with a total unrealized loss of $16 million were in an unrealized loss position. Of that total, no 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, 2021, and ultimately management determines fair value. See our 2021 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, 2022, and December 31, 2021. We do not have any liabilities carried at fair value.


(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At September 30, 2022
Fixed maturities, available for sale:
Corporate	$	—	$	6,679	$	—	$	6,679
States, municipalities and political subdivisions	—		4,482		—		4,482
Commercial mortgage-backed	—		240		—		240
United States government	188		—		—		188
Government-sponsored enterprises	—		119		—		119
Foreign government	—		26		—		26


Subtotal	188		11,546		—		11,734
Common equities	8,433		—		—		8,433
Nonredeemable preferred equities	—		407		—		407

Separate accounts taxable fixed maturities	—		811		—		811
Top Hat savings plan mutual funds and common equity (included in Other assets)	51		—		—		51
Total	$	8,672	$	12,764	$	—	$	21,436

At December 31, 2021
Fixed maturities, available for sale:
Corporate	$	—	$	7,497	$	—	$	7,497
States, municipalities and political subdivisions	—		5,095		—		5,095
Commercial mortgage-backed	—		273		—		273
United States government	123		—		—		123
Government-sponsored enterprises	—		8		—		8
Foreign government	—		26		—		26

Subtotal	123		12,899		—		13,022
Common equities	10,862		—		—		10,862
Nonredeemable preferred equities	—		453		—		453
Separate accounts taxable fixed maturities	—		948		—		948
Top Hat savings plan mutual funds and common equity (included in Other assets)	64		—		—		64
Total	$	11,049	$	14,300	$	—	$	25,349

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We also held Level 1 cash and cash equivalents of $1.083 billion and $1.139 billion at September 30, 2022, and December 31, 2021, respectively.

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 value				Principal amount
Interest rate	Year of issue		September 30,		December 31,		September 30,		December 31,
		2022	2021		2022		2021
6.900%	1998	Senior debentures, due 2028	$	27	$	27	$	28	$	28
6.920%	2005	Senior debentures, due 2028	391		391		391		391
6.125%	2004	Senior notes, due 2034	371		371		374		374
Total			$	789	$	789	$	793	$	793

The following table shows fair values of our note payable and long-term debt:


(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At September 30, 2022
Note payable	$	—	$	44	$	—	$	44
6.900% senior debentures, due 2028	—		29		—		29
6.920% senior debentures, due 2028	—		415		—		415
6.125% senior notes, due 2034	—		384		—		384
Total	$	—	$	872	$	—	$	872

At December 31, 2021
Note payable	$	—	$	54	$	—	$	54
6.900% senior debentures, due 2028	—		34		—		34
6.920% senior debentures, due 2028	—		501		—		501
6.125% senior notes, due 2034	—		510		—		510
Total	$	—	$	1,099	$	—	$	1,099

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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)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At September 30, 2022
Life policy loans	$	—	$	—	$	37	$	37

Deferred annuities	—		—		612		612
Structured settlements	—		139		—		139
Total	$	—	$	139	$	612	$	751

At December 31, 2021
Life policy loans	$	—	$	—	$	44	$	44

Deferred annuities	—		—		778		778
Structured settlements	—		201		—		201
Total	$	—	$	201	$	778	$	979

Outstanding principal and interest for these life policy loans totaled $31 million at September 30, 2022, and December 31, 2021.

Recorded reserves for the deferred annuities were $753 million and $762 million at September 30, 2022, and December 31, 2021, respectively. Recorded reserves for the structured settlements were $131 million and $136 million at September 30, 2022, and December 31, 2021, 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,
	2022		2021		2022		2021
Gross loss and loss expense reserves, beginning of period	$	7,603	$	6,955	$	7,229	$	6,677
Less reinsurance recoverable	287		274		327		277
Net loss and loss expense reserves, beginning of period	7,316		6,681		6,902		6,400





Net incurred loss and loss expenses related to:
Current accident year	1,391		1,090		3,687		3,072
Prior accident years	(43)		(102)		(143)		(331)
Total incurred	1,348		988		3,544		2,741
Net paid loss and loss expenses related to:
Current accident year	484		416		1,021		893
Prior accident years	464		349		1,709		1,344
Total paid	948		765		2,730		2,237
Net loss and loss expense reserves, end of period	7,716		6,904		7,716		6,904
Plus reinsurance recoverable	329		322		329		322
Gross loss and loss expense reserves, end of period	$	8,045	$	7,226	$	8,045	$	7,226

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 $68 million at September 30, 2022, and $66 million at September 30, 2021, for certain life and health loss and loss expense reserves.

For the three months ended September 30, 2022, 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. 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.

For the nine months ended September 30, 2022, 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. 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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For the three months ended September 30, 2021, we experienced $102 million of favorable development on prior accident years, including $107 million of favorable development in commercial lines, $3 million of favorable development in personal lines and $3 million of unfavorable development in excess and surplus lines. Within commercial lines, we recognized favorable reserve development of $52 million for the commercial casualty line and $34 million for the commercial property line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines.

For the nine months ended September 30, 2021, we experienced $331 million of favorable development on prior accident years, including $276 million of favorable development in commercial lines, $35 million of favorable development in personal lines and $6 million of unfavorable development in excess and surplus lines. Within commercial lines, we recognized favorable reserve development of $85 million for the commercial casualty line, $68 million for the commercial property line, $59 million for the workers' compensation line and $44 million for the commercial auto line 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 $24 million in personal auto.

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NOTE 5 – Life Policy and Investment Contract Reserves

We establish the reserves for traditional life insurance policies based on expected expenses, mortality, morbidity, withdrawal rates, timing of claim presentation and investment yields, including a provision for uncertainty. Once these assumptions are established, they generally are maintained throughout the lives of the contracts. We use both our own experience and industry experience, adjusted for historical trends, in arriving at our assumptions for expected mortality, morbidity and withdrawal rates as well as for expected expenses. We base our assumptions for expected investment income on our own experience adjusted for current and future economic conditions.

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.

This table summarizes our life policy and investment contract reserves:


(Dollars in millions)	September 30, 2022		December 31, 2021
Life policy reserves:
Ordinary/traditional life	$	1,432	$	1,376
Other	52		52
Subtotal	1,484		1,428
Investment contract reserves:
Deferred annuities	753		762
Universal life	677		679
Structured settlements	131		136
Other	8		9
Subtotal	1,569		1,586
Total life policy and investment contract reserves	$	3,053	$	3,014

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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, and we evaluate the costs for recoverability. 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,
	2022		2021		2022		2021
Property casualty:
Deferred policy acquisition costs asset, beginning of period	$	723	$	630	$	602	$	542
Capitalized deferred policy acquisition costs	325		287		1,064		924
Amortized deferred policy acquisition costs	(342)		(300)		(960)		(849)
Deferred policy acquisition costs asset, end of period	$	706	$	617	$	706	$	617

Life:
Deferred policy acquisition costs asset, beginning of period	$	322	$	294	$	303	$	263
Capitalized deferred policy acquisition costs	16		15		46		44
Amortized deferred policy acquisition costs	(12)		(12)		(33)		(35)
Shadow deferred policy acquisition costs	4		1		14		26
Deferred policy acquisition costs asset, end of period	$	330	$	298	$	330	$	298

Consolidated:
Deferred policy acquisition costs asset, beginning of period	$	1,045	$	924	$	905	$	805
Capitalized deferred policy acquisition costs	341		302		1,110		968
Amortized deferred policy acquisition costs	(354)		(312)		(993)		(884)
Shadow deferred policy acquisition costs	4		1		14		26
Deferred policy acquisition costs asset, end of period	$	1,036	$	915	$	1,036	$	915

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

Accumulated other comprehensive income (AOCI) includes changes in unrealized gains and losses on investments, changes in pension obligations and changes in life deferred acquisition costs, life policy reserves and other as follows:


(Dollars in millions)	Three months ended September 30,
	2022						2021
	Before tax		Income tax		Net		Before tax		Income tax		Net
Investments:
AOCI, beginning of period	$	(564)	$	(119)	$	(445)	$	962	$	201	$	761


OCI before investment gains and losses, net, recognized in net income	(514)		(109)		(405)		(80)		(18)		(62)
Investment gains and losses, net, recognized in net income	—		—		—		(8)		(1)		(7)
OCI	(514)		(109)		(405)		(88)		(19)		(69)
AOCI, end of period	$	(1,078)	$	(228)	$	(850)	$	874	$	182	$	692

Pension obligations:
AOCI, beginning of period	$	27	$	7	$	20	$	(36)	$	(6)	$	(30)
OCI excluding amortization recognized in net income	—		—		—		—		—		—
Amortization recognized in net income	—		—		—		2		1		1
OCI	—		—		—		2		1		1
AOCI, end of period	$	27	$	7	$	20	$	(34)	$	(5)	$	(29)

Life deferred acquisition costs, life policy reserves and other:
AOCI, beginning of period	$	2	$	—	$	2	$	—	$	—	$	—
OCI before investment gains and losses, net, recognized in net income	—		—		—		—		—		—
Investment gains and losses, net, recognized in net income	—		—		—		—		—		—
OCI	—		—		—		—		—		—
AOCI, end of period	$	2	$	—	$	2	$	—	$	—	$	—

Summary of AOCI:
AOCI, beginning of period	$	(535)	$	(112)	$	(423)	$	926	$	195	$	731


Investments OCI	(514)		(109)		(405)		(88)		(19)		(69)
Pension obligations OCI	—		—		—		2		1		1
Life deferred acquisition costs, life policy reserves and other OCI	—		—		—		—		—		—
Total OCI	(514)		(109)		(405)		(86)		(18)		(68)
AOCI, end of period	$	(1,049)	$	(221)	$	(828)	$	840	$	177	$	663

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(Dollars in millions)	Nine months ended September 30,
	2022						2021
	Before tax		Income tax		Net		Before tax		Income tax		Net
Investments:
AOCI, beginning of period	$	792	$	165	$	627	$	1,026	$	215	$	811


OCI before investment gains and losses, net, recognized in net income	(1,867)		(392)		(1,475)		(132)		(29)		(103)
Investment gains and losses, net, recognized in net income	(3)		(1)		(2)		(20)		(4)		(16)
OCI	(1,870)		(393)		(1,477)		(152)		(33)		(119)
AOCI, end of period	$	(1,078)	$	(228)	$	(850)	$	874	$	182	$	692

Pension obligations:
AOCI, beginning of period	$	27	$	7	$	20	$	(41)	$	(7)	$	(34)
OCI excluding amortization recognized in net income	—		—		—		2		1		1
Amortization recognized in net income	—		—		—		5		1		4
OCI	—		—		—		7		2		5
AOCI, end of period	$	27	$	7	$	20	$	(34)	$	(5)	$	(29)

Life deferred acquisition costs, life policy reserves and other:
AOCI, beginning of period	$	1	$	—	$	1	$	(10)	$	(2)	$	(8)
OCI before investment gains and losses, net, recognized in net income	1		—		1		10		2		8
Investment gains and losses, net, recognized in net income	—		—		—		—		—		—
OCI	1		—		1		10		2		8
AOCI, end of period	$	2	$	—	$	2	$	—	$	—	$	—

Summary of AOCI:
AOCI, beginning of period	$	820	$	172	$	648	$	975	$	206	$	769


Investments OCI	(1,870)		(393)		(1,477)		(152)		(33)		(119)
Pension obligations OCI	—		—		—		7		2		5
Life deferred acquisition costs, life policy reserves and other OCI	1		—		1		10		2		8
Total OCI	(1,869)		(393)		(1,476)		(135)		(29)		(106)
AOCI, end of period	$	(1,049)	$	(221)	$	(828)	$	840	$	177	$	663

Investment gains and losses, net, and life deferred acquisition costs, life policy reserves 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 on 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,
	2022		2021		2022		2021
Direct written premiums	$	1,730	$	1,527	$	5,304	$	4,721
Assumed written premiums	92		66		548		432
Ceded written premiums	(72)		(55)		(239)		(208)
Net written premiums	$	1,750	$	1,538	$	5,613	$	4,945

Direct earned premiums	$	1,743	$	1,553	$	4,935	$	4,447
Assumed earned premiums	161		117		416		327
Ceded earned premiums	(95)		(74)		(227)		(189)
Earned premiums	$	1,809	$	1,596	$	5,124	$	4,585

Direct incurred loss and loss expenses	$	1,247	$	876	$	3,316	$	2,525
Assumed incurred loss and loss expenses	164		165		304		297
Ceded incurred loss and loss expenses	(63)		(53)		(76)		(81)
Incurred loss and loss expenses	$	1,348	$	988	$	3,544	$	2,741

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,
	2022		2021		2022		2021
Direct earned premiums	$	92	$	93	$	278	$	278

Ceded earned premiums	(19)		(20)		(57)		(57)
Earned premiums	$	73	$	73	$	221	$	221

Direct contract holders' benefits incurred	93		103		298		310

Ceded contract holders' benefits incurred	(23)		(19)		(76)		(61)
Contract holders' benefits incurred	$	70	$	84	$	222	$	249

The ceded benefits incurred can vary depending on the type of life insurance policy held and the year the policy was issued.

At September 30, 2022, and December 31, 2021, the allowance for uncollectible property casualty premiums was $15 million and $14 million, respectively. At September 30, 2022, and December 31, 2021, the allowances for credit losses on other premiums receivable and recoverable assets were immaterial.

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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,
	2022				2021				2022				2021
Tax at statutory rate:	$	(122)	21.0	%	$	39	21.0	%	$	(416)	21.0	%	$	383	21.0	%
Increase (decrease) resulting from:
Tax-exempt income from municipal bonds	(5)		0.9		(5)		(2.7)		(15)		0.8		(15)		(0.8)
Dividend received exclusion	(5)		0.9		(5)		(2.7)		(15)		0.8		(14)		(0.8)
Release of unrecognized tax benefit	(34)		5.9		—		—		(34)		1.7		—		—
Other	5		(0.9)		2		1.2		(1)		—		(6)		(0.3)
Provision (benefit) for income taxes	$	(161)	27.8	%	$	31	16.8	%	$	(481)	24.3	%	$	348	19.1	%

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, 2022, and December 31, 2021. 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).

Enactment of the Inflation Reduction Act of 2022

The Inflation Reduction Act of 2022 (Tax Act) was enacted on August 16, 2022. Along with other changes, the Tax Act created a new corporate alternative minimum tax (AMT) for certain corporations based on 15% of adjusted financial statement income for the taxable year. In addition, the Tax Act imposes a 1% excise tax on corporate stock repurchases. The effective date of these two provisions is January 1, 2023. We do not expect the enactment of the Tax Act to have a material impact on our financial statements. Any excise tax incurred on corporate stock repurchases will be recognized as part of the cost basis of the treasury stock acquired and not reported as part of income tax expense.

Unrecognized Tax Benefits

During the current quarter, 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 is recognized as an additional income tax benefit and is shown separately in our effective income tax rate reconciliation. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits:


(Dollars in millions)	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Gross unrecognized tax benefits, beginning of period	$	34	$	34	$	34	$	34
Gross increase in prior year positions	—		—		—		—
Gross decrease in prior year positions	(34)		—		(34)		—
Gross increase in current year positions	—		—		—		—
Settlements with tax authorities	—		—		—		—
Lapse of statute of limitations	—		—		—		—
Gross unrecognized tax benefits, end of period	$	—	$	34	$	—	$	34

During the current quarter, the Congressional Joint Committee on Taxation completed review of our 2017 tax return and related carryback claims with no change to our returns as filed. Our 2018 tax year remains open and we recently received notice from the IRS of their intent to audit tax year ended December 31, 2020.

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Cincinnati Global

As a result of operations for the three and nine months ended September 30, 2022, Cincinnati Global increased its net deferred tax assets by $7 million and decreased it by $4 million with an offsetting increase of $7 million and decrease of $4 million to the valuation allowance. At September 30, 2022, Cincinnati Global had a net deferred tax asset of $49 million and an offsetting valuation allowance of $49 million.

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, 2022.

At September 30, 2022, and December 31, 2021, Cincinnati Global had operating loss carryforwards in the United States of $6 million and $8 million, respectively, and in the United Kingdom of $123 million and $130 million, respectively. These Cincinnati Global losses can only be utilized within the Cincinnati Global group in both the United States and in the United Kingdom and cannot offset the income of our domestic operations in the United States.

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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,
	2022			2021			2022			2021
Numerator:
Net income (loss)—basic and diluted		$	(418)		$	153		$	(1,499)		$	1,476
Denominator:
Basic weighted-average common shares outstanding		158.0			161.1			159.3			161.1
Effect of share-based awards:
Stock options		—			1.2			—			1.1
Nonvested shares		—			0.6			—			0.6
Diluted weighted-average shares		158.0			162.9			159.3			162.8
Earnings (loss) per share:
Basic		$	(2.64)		$	0.95		$	(9.41)		$	9.16
Diluted		$	(2.64)		$	0.94		$	(9.41)		$	9.07
Number of anti-dilutive share-based awards		2.3			0.4			1.9			0.9

The above table shows the number of anti-dilutive share-based awards for the three and nine months ended September 30, 2022 and 2021. In accordance with Accounting Standards Codification 260, Earnings per Share, the assumed exercise of share-based awards were excluded from the computation of diluted loss per share for the three and nine months ended September 30, 2022, because their exercise would have anti-dilutive effects. See our 2021 Annual Report on Form 10-K, Item 8, Note 17, Share-Based Associate Compensation Plans, Page 169, for information about share-based awards.

NOTE 11 – Employee Retirement Benefits

The following summarizes the components of net periodic (benefit) cost for our qualified and supplemental pension plans:


(Dollars in millions)	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Service cost	$	2	$	2	$	7	$	7
Non-service (benefit) costs:
Interest cost	3		2		8		7
Expected return on plan assets	(6)		(5)		(17)		(16)
Amortization of actuarial loss and prior service cost	—		2		—		5
Other	—		—		—		2
Total non-service benefit	(3)		(1)		(9)		(2)
Net periodic (benefit) cost	$	(1)	$	1	$	(2)	$	5

See our 2021 Annual Report on Form 10-K, Item 8, Note 13, Employee Retirement Benefits, Page 162, for information on our retirement benefits. The net periodic (benefit) cost 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 2022 and 2021.

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We made matching contributions totaling $6 million and $7 million to our 401(k) and Top Hat savings plans during the third quarter of 2022 and 2021 and contributions of $20 million and $18 million for the first nine months of 2022 and 2021, respectively.

We made no contributions to our qualified pension plan during the first nine months of 2022.

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 intends to continue to vigorously defend the lawsuits. 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. These lawsuits are at various stages of litigation: a few filed in 2022, including several that continue to be amended; several that have been dismissed voluntarily and may be refiled; and others that have been dismissed by trial courts and appealed. While appellate decisions issued to date generally have been favorable for the insurance industry and the company, many remain to be decided. In some jurisdictions, many 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

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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.

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 2021 Annual Report on Form 10-K, Item 8, Note 18, Segment Information, Page 172, for a description of revenue, income or loss before income taxes and identifiable assets for each of the five segments.

Cincinnati Financial Corporation Third-Quarter 2022 10-Q

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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,
	2022		2021		2022		2021
Revenues:
Commercial lines insurance
Commercial casualty	$	360	$	323	$	1,046	$	938
Commercial property	292		264		846		776
Commercial auto	213		200		627		591
Workers' compensation	73		66		209		201
Other commercial	90		77		256		221
Commercial lines insurance premiums	1,028		930		2,984		2,727
Fee revenues	1		1		3		3
Total commercial lines insurance	1,029		931		2,987		2,730

Personal lines insurance
Personal auto	158		153		465		457
Homeowner	213		184		609		536
Other personal	60		51		172		153
Personal lines insurance premiums	431		388		1,246		1,146
Fee revenues	1		1		3		3
Total personal lines insurance	432		389		1,249		1,149

Excess and surplus lines insurance	125		105		361		289
Fee revenues	1		1		2		2
Total excess and surplus lines insurance	126		106		363		291

Life insurance premiums	73		73		221		221
Fee revenues	2		1		4		3
Total life insurance	75		74		225		224

Investments
Investment income, net of expenses	193		179		573		528
Investment gains and losses, net	(674)		(70)		(2,494)		954
Total investment revenue	(481)		109		(1,921)		1,482

Other
Premiums	225		173		533		423

Other	2		3		7		8
Total other revenues	227		176		540		431
Total revenues	$	1,408	$	1,785	$	3,443	$	6,307

Income (loss) before income taxes:
Insurance underwriting results
Commercial lines insurance	$	11	$	182	$	25	$	457
Personal lines insurance	(18)		(10)		(2)		16
Excess and surplus lines insurance	9		7		44		25
Life insurance	11		(5)		22		(9)
Investments	(508)		83		(2,003)		1,403
Other	(84)		(73)		(66)		(68)
Total income (loss) before income taxes	$	(579)	$	184	$	(1,980)	$	1,824


Identifiable assets:	September 30, 2022		December 31, 2021
Property casualty insurance	$	5,072	$	4,421
Life insurance	1,525		1,590
Investments	20,726		24,481
Other	876		895
Total	$	28,199	$	31,387

Cincinnati Financial Corporation Third-Quarter 2022 10-Q

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