Item 2. Management’s Discussion and Analysis of Financial Condition and

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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 2025 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).

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

Our business is subject to certain risks and uncertainties that may cause actual results to differ materially from those suggested by forward-looking statements. Any forward-looking statements contained herein, are based upon our current estimates, assumptions and plans that are subject to uncertainty. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words like “seek,” “expect,” “will,” “should,” “could,” “might,” “anticipate,” “believe,” “estimate,” “intend,” “likely,” “future,” or other similar expressions. Forward-looking statements speak only as of the date they were made; we assume no obligation to update such statements. Factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements include, but are not limited to:

Insurance-Related Risks

  • Risks and uncertainties associated with our loss reserves or actual claim costs exceeding reserves

  • Increased frequency and/or severity of claims or development of claims that are unforeseen at the time of policy issuance

  • Unusually high levels of catastrophe losses due to risk concentrations or changes in weather patterns, environmental events, war or political unrest, terrorism incidents, cyberattacks, civil unrest or other causes; and our ability to manage catastrophe risk

  • Risks associated with analytical models in key areas such as underwriting, pricing, capital management, reserving, investments, reinsurance, and catastrophe risk management

  • Inadequate estimates or assumptions, or reliance on third-party data used for critical accounting estimates

  • 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

  • Mergers, acquisitions, and other consolidations of agencies that result in a concentration of a significant amount of premium in one agency or agency group and/or alter our competitive advantages

  • Our inability to manage business opportunities, growth prospects, and expenses for our ongoing operations

  • Changing consumer insurance-buying habits

  • The inability to obtain adequate ceded reinsurance on acceptable terms, for acceptable amounts, and from financially strong reinsurers; and the potential for nonpayment or delay in payment by reinsurers

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  • Domestic and global events, such as the wars in Ukraine and in the Middle East, future pandemics, inflationary trends, changes in U.S. trade and tariff policy, and disruptions in the banking and financial services industry, resulting in insurance losses, capital market or credit market uncertainty, followed by prolonged periods of economic instability or recession, that lead to:

◦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

◦Significant or prolonged decline in the fair value of securities and impairment of the assets

◦Significant decline in investment income due to reduced or eliminated dividend payouts from securities

◦Significant rise in losses from surety or director and officer policies written for financial institutions or other insured entities or in losses from policies written by Cincinnati Re or Cincinnati Global

◦An unusually high level of claims in our insurance or reinsurance operations that increase litigation-related expenses

◦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

◦The inability of our workforce, agencies, or vendors to perform necessary business functions

Financial, Economic, and Investment Risks

  • Declines in overall stock market values negatively affecting our equity portfolio and book value

  • Downgrades in our financial strength ratings

  • Interest rate fluctuations or other factors that could significantly affect:

◦Our ability to generate growth in investment income

◦Values of our fixed-maturity investments and accounts in which we hold bank-owned life insurance contract assets

◦Our traditional life policy reserves

  • Economic volatility and illiquidity associated with our alternative investments in private equity, private credit, real property, and limited partnerships

  • Failure to comply with covenants and other requirements under our credit facilities, senior debt, and other debt obligations

  • Recession, prolonged elevated inflation, or other economic conditions resulting in lower demand for insurance products or increased payment delinquencies

  • The inability of our subsidiaries to pay dividends consistent with current or past levels impacting our ability to pay shareholder dividends or repurchase shares

General Business, Technology, and Operational Risks

  • Ineffective information technology systems or failing to develop and implement improvements in technology

  • Difficulties with technology or data security breaches, including cyberattacks, could negatively affect our, or our agents’, ability to conduct business; disrupt our relationships with agents, policyholders, and others; cause reputational damage, mitigation expenses, data loss, and expose us to liability

  • Difficulties with our operations and technology that may negatively impact our ability to conduct business, including cloud-based data information storage, data security, 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 models and methods, including usage-based insurance methods, automation, artificial intelligence, or technology projects and enhancements expected to increase our efficiency, pricing accuracy, underwriting profit, and competitiveness

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  • Intense competition, and the impact of innovation, emerging technologies, artificial intelligence 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

  • Inability to defer policy acquisition costs for any business segment if pricing and loss trends would lead management to conclude that the segment could not achieve sustainable profitability

  • Unforeseen departure of certain executive officers or other key employees 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

  • Events, such as a pandemic, an epidemic, natural catastrophe, or terrorism, which could hamper our ability to assemble our workforce, work effectively in a remote environment, or other failures of business continuity or disaster recovery programs

Regulatory, Compliance, and Legal Risks

  • 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

◦Increase 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 laws, regulations, or interpretations

◦Increase other expenses

◦Limit our ability to set fair, adequate, and reasonable rates

◦Restrict our ability to cancel policies

◦Impose new underwriting standards

◦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, environmental claims, mass torts or administrative proceedings, including effects of social inflation and third-party litigation funding on the size and frequency of litigation awards

  • Events or actions, including unauthorized intentional circumvention of controls, which reduce our future ability to maintain effective internal control over financial reporting under the Sarbanes-Oxley Act of 2002

  • Effects of changing social, global, economic, and regulatory environments

  • Additional measures affecting corporate financial reporting and governance that can affect the market value of our common stock

Risks and uncertainties are further discussed in other filings with the Securities and Exchange Commission, including our 2025 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 30.

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CORPORATE FINANCIAL HIGHLIGHTS

Net Income and Comprehensive Income Data

(Dollars in millions, except per share data)Three months ended March 31,
20262025% Change
Earned premiums$2,604$2,34411
Investment income, net of expenses (pretax)31828014
Investment gains and losses, net (pretax)(70)(67)(4)
Total revenues2,8632,56612
Net income (loss)274(90)nm
Comprehensive income (loss)123(52)nm
Net income (loss) per share—diluted1.75(0.57)nm
Cash dividends declared per share0.940.878
Diluted weighted average shares outstanding157.0156.40

Total revenues increased $297 million for the first quarter of 2026, compared with the first quarter of 2025, primarily due 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.

Net income for the first quarter of 2026, compared with the first-quarter 2025 net loss, increased $364 million, including increases of $326 million in after-tax property casualty underwriting profit and $31 million in after-tax investment income. Catastrophe losses for the first quarter of 2026, mostly weather related, were $233 million lower after taxes and contributed favorably to both net income and property casualty underwriting profit. Life insurance segment results increased by $2 million on a pretax basis.

Performance by segment is discussed below in Financial Results. As discussed in our 2025 Annual Report on Form 10-K, Item 7, Executive Summary, Page 46, there are several reasons why our performance during 2026 may ultimately 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 2025, the company had increased the annual cash dividend rate for 65 consecutive years, a record we believe is matched by only seven other U.S. publicly traded companies. In January 2026, the board of directors increased the regular quarterly dividend to 94 cents per share, setting the stage for our 66th consecutive year of increasing cash dividends. During the first three months of 2026, cash dividends declared by the company increased 8% compared with the same period of 2025. Our board regularly evaluates relevant factors in decisions related to dividends and share repurchases. The 2026 dividend 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.

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Balance Sheet Data and Performance Measures

(Dollars in millions, except share data)At March 31,At December 31,
20262025
Total investments$32,001$31,783
Total assets41,21141,002
Short-term debt2525
Long-term debt791790
Shareholders' equity15,71415,911
Book value per share101.60102.35
Debt-to-total-capital ratio4.9%4.9%

Total assets at March 31, 2026, increased 1% compared with year-end 2025, and included an increase of 1% in total investments that reflected net purchases that were offset by lower fair values for many securities in our equity and fixed maturity portfolios. Shareholders' equity decreased 1% and book value per share also decreased 1% during the first three months of 2026. Our debt-to-total-capital ratio (capital is the sum of debt plus shareholders' equity) matched year-end 2025.

Our value creation ratio is our primary performance metric. As shown in the tables below, that ratio was 0.2% for the first three months of 2026, compared with negative 0.5% for the same period in 2025. The increase was primarily due to an increase in net income before investment gains which was partially offset by a reduction in overall net gains from our investment portfolio. Book value per share decreased $0.75 during the first three months of 2026 and contributed negative 0.7 percentage points to the value creation ratio, while dividends declared at $0.94 per share contributed 0.9 points. Value creation ratio major contributors and in total, along with calculations from per-share amounts, are shown in the tables below.

Three months ended March 31,
20262025
Value creation ratio major contributors:
Net income before investment gains2.1%(0.3)%
Change in fixed-maturity securities, realized and unrealized gains(1.1)0.4
Change in equity securities, investment gains(0.4)(0.4)
Other(0.4)(0.2)
Value creation ratio0.2%(0.5)%

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(Dollars are per share)Three months ended March 31,
20262025
Value creation ratio:
End of period book value*$101.60$87.78
Less beginning of period book value102.3589.11
Change in book value(0.75)(1.33)
Dividend declared to shareholders0.940.87
Total value creation$0.19$(0.46)
Value creation ratio from change in book value**(0.7)%(1.5)%
Value creation ratio from dividends declared to shareholders***0.91.0
Value creation ratio0.2%(0.5)%
* 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 2025 net written premiums for more than 2,000 U.S. stock and mutual insurance companies. We market our insurance products through a select group of independent insurance agencies as discussed in our 2025 Annual Report on Form 10-K, Item 1, Our Business and Our Strategy, Page 6. At March 31, 2026, we actively marketed through 2,361 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 2025 Annual Report on Form 10-K, Item 7, Executive Summary, Page 46, 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 three months of 2026, our consolidated property casualty net written premium year-over-year growth was 7%. As of February 2026, A.M. Best projected the industry's full-year 2026 written premium growth at approximately 4%. For the five-year period 2021 through 2025, 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 an average GAAP combined ratio over any five-year period that is consistently within the range of 92% to 98%. For the first three months of 2026, our GAAP combined ratio was 95.6%, including 11.3 percentage points of current accident year catastrophe losses partially offset by 3.2 percentage points of favorable loss reserve development on prior accident years. Our statutory combined ratio was 95.6% for the first three months of 2026. As of February 2026, A.M. Best projected the industry's full-year 2026 statutory combined ratio at approximately 97%, including approximately 8 percentage points of catastrophe losses and a favorable effect of approximately 1 percentage point of loss reserve development on prior accident years. The industry's ratio again excludes its mortgage and financial guaranty lines of business.

  • 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 three months of 2026, pretax investment income was $318 million, up 14% compared with the same period in 2025. We believe our investment portfolio mix provides an appropriate balance of income stability and growth with capital appreciation potential.

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Financial Strength

An important part of our long-term strategy is financial strength, which is described in our 2025 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 2025 Annual Report on Form 10-K, Item 7, Liquidity and Capital Resources, 2026 Reinsurance Ceded Programs, Page 102. 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 March 31, 2026, we held $5.584 billion of our cash and cash equivalents and invested assets at the parent-company level, of which $4.964 billion, or 88.9%, was invested in common stocks, and $422 million, or 7.6%, was cash or cash equivalents. Our debt-to-total-capital ratio was 4.9% at March 31, 2026. Another important indicator of financial strength is our ratio of property casualty net written premiums to statutory surplus, which was 1.0-to-1 for the 12 months ended March 31, 2026, matching year-end 2025.

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 April 24, 2026, our insurance subsidiaries continued to be highly rated.

Insurer Financial Strength Ratings
Rating agencyStandard market property casualty insurance subsidiariesLife insurance subsidiaryExcess and surplus lines insurance subsidiaryOutlook
Rating tierRating tierRating tier
A.M. Best Co. ambest.comA+Superior2 of 16A+Superior2 of 16A+Superior2 of 16Stable
Fitch Ratings fitchratings.comAA-Very Strong4 of 21AA-Very Strong4 of 21---Stable
Moody's Investors Service moodys.comA1Good5 of 21------Stable
S&P Global Ratings spratings.comA+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 March 31,
20262025% Change
Earned premiums$2,519$2,26411
Fee revenues440
Total revenues2,5232,26811
Loss and loss expenses from:
Current accident year before catastrophe losses1,4631,3707
Current accident year catastrophe losses285608(53)
Prior accident years before catastrophe losses(68)(50)(36)
Prior accident years catastrophe losses(13)(41)68
Loss and loss expenses1,6671,887(12)
Underwriting expenses7416799
Underwriting profit (loss)$115$(298)nm
Ratios as a percent of earned premiums:Pt. Change
Current accident year before catastrophe losses58.1%60.5%(2.4)
Current accident year catastrophe losses11.326.8(15.5)
Prior accident years before catastrophe losses(2.7)(2.2)(0.5)
Prior accident years catastrophe losses(0.5)(1.8)1.3
Loss and loss expenses66.283.3(17.1)
Underwriting expenses29.430.0(0.6)
Combined ratio95.6%113.3%(17.7)
Combined ratio95.6%113.3%(17.7)
Contribution from catastrophe losses and prior years reserve development8.122.8(14.7)
Combined ratio before catastrophe losses and prior years reserve development87.5%90.5%(3.0)

Our consolidated property casualty insurance operations generated an underwriting profit of $115 million for the first quarter of 2026. The first-quarter 2026 underwriting profit increase of $413 million, compared with an underwriting loss in first-quarter 2025, included a favorable decrease of $295 million in losses from catastrophes, mostly caused by severe weather, partially offset by a slightly lower amount of total favorable reserve development on prior accident years. The change in underwriting profitability for the first quarter of 2026 also included a favorable effect from higher current accident year loss and loss expenses before catastrophe losses that grew slower than earned premiums. For the first three months of 2026, the combined ratio before catastrophe losses and prior years reserve development improved by 3.0 percentage points compared with the same period of 2025.

Underwriting results for the first quarter of 2026 included improved current accident year loss experience before catastrophe losses, as price increases have helped to offset elevated losses reflecting economic or other forms of inflation. 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. 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. 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.

For all property casualty lines of business in aggregate, net loss and loss expense reserves at March 31, 2026, were $466 million, or 4%, higher than at year-end 2025, including an increase of $419 million for the incurred but not reported (IBNR) portion.

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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 first quarter of 2026 decreased by 17.7 percentage points, compared with the same period of 2025, including a decrease of 14.2 points from catastrophe losses and loss expenses. Other combined ratio components that changed 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 3.2 percentage points in the first three months of 2026, compared with 4.0 percentage points in the same period of 2025. 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 three months of 2026. That 58.1% ratio was 2.4 percentage points lower, compared with the 60.5% accident year 2025 ratio measured as of March 31, 2025, including a decrease of 1.0 points in the ratio for large losses of $2 million or more per claim, discussed below. The ratio improvement of 2.4 percentage points included an increase of 0.3 points for the IBNR portion and a decrease of 2.7 points for the case incurred portion. The improvement also reflected a favorable 1.4 points for the effect of $52 million of net reinstatement premiums in first-quarter 2025 related to the January 2025 wildfires in southern California.

The underwriting expense ratio decreased for the first quarter of 2026, compared with the same period a year ago. The decrease was partly due to premium growth outpacing growth in various expenses. The three-month 2026 ratio also included a favorable 0.7 points for the effect of first-quarter 2025 reinstatement premiums. The ratio for both periods also included ongoing expense management efforts.

Consolidated Property Casualty Insurance Premiums

(Dollars in millions)Three months ended March 31,
20262025% Change
Agency renewal written premiums$2,045$1,9127
Agency new business written premiums339383(11)
Other written premiums28420042
Net written premiums2,6682,4957
Unearned premium change(149)(231)35
Earned premiums$2,519$2,26411

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 2026, are discussed in more detail by segment below in Financial Results.

Consolidated property casualty net written premiums for the three months ended March 31, 2026, grew $173 million compared with the same period of 2025. 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 decreased by $44 million for the first three months of 2026, compared with the same period of 2025, due to the personal lines segment. New agency appointments during 2026 and 2025 produced a $19 million increase in new business for the first three months of 2026 compared with the same period of 2025. 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

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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 to $254 million for the three months ended March 31, 2026, compared with the same period of 2025. The first three months of 2025 included a favorable $12 million of net reinstatement premiums to reinstate treaties affected by the California wildfires. 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 for Cincinnati Global increased by $23 million to $98 million for the three months ended March 31, 2026, compared with the same period of 2025.

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program. A decrease in ceded premiums increased net written premiums by $76 million for the first three months of 2026, compared with the same period of 2025. Other written premiums for the first quarter of 2025 included a net unfavorable amount of $52 million for reinsurance treaty reinstatement premiums related to the California wildfires, including a favorable $12 million for Cincinnati Re and an unfavorable $64 million for our personal lines insurance segment.

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 10.8 percentage points to the combined ratio in the first three months of 2026, compared with 25.0 percentage points in the same period of 2025. During the first quarter of 2026, there were no material changes to our estimates of ultimate losses related to the January 2025 California wildfires.

During 2025 and for the first three months of 2026, there was no recovery from reinsurers related to the reinsurance program for Cincinnati Re only effective June 1, 2025. During the first quarter of 2026 there were no material changes to the estimated reinsurance recoveries related to the January 2025 California wildfires recorded as of December 31, 2025. Reinsurance ceded programs are described in our 2025 Annual Report on Form 10-K, Item 7, Liquidity and Capital Resources, 2026 Reinsurance Ceded Programs, Page 102.

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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 March 31,
Comm.Pers.E&S
DatesRegionlineslineslinesOtherTotal
2026
Jan. 23-29Midwest, Northeast, South$15$29$—$2$46
Mar. 10-12Midwest, South1030——40
Mar. 13-14Midwest, Northeast, South2934——63
Mar. 26-27Midwest353——38
All other 2026 catastrophes325311298
Development on 2025 and prior catastrophes(1)(2)(1)(9)(13)
Calendar year incurred total$120$147$—$5$272
2025
Jan. 7-28West$—$325$—$124$449
Mar. 14-17Midwest, Northeast, South42751—118
All other 2025 catastrophes14231341
Development on 2024 and prior catastrophes(14)(13)(1)(13)(41)
Calendar year incurred total$42$410$1$114$567

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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 March 31,
20262025% Change
Current accident year losses greater than $5 million$8$26(69)
Current accident year losses $2 million - $5 million20200
Large loss prior accident year reserve development5056(11)
Total large losses incurred78102(24)
Losses incurred but not reported219279(22)
Other losses excluding catastrophe losses83868822
Catastrophe losses266558(52)
Total losses incurred$1,401$1,627(14)
Ratios as a percent of earned premiums:Pt. Change
Current accident year losses greater than $5 million0.3%1.2%(0.9)
Current accident year losses $2 million - $5 million0.80.9(0.1)
Large loss prior accident year reserve development2.02.4(0.4)
Total large loss ratio3.14.5(1.4)
Losses incurred but not reported8.712.3(3.6)
Other losses excluding catastrophe losses33.230.42.8
Catastrophe losses10.624.6(14.0)
Total loss ratio55.6%71.8%(16.2)

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 first-quarter 2026 property casualty total large losses incurred of $78 million, net of reinsurance, was lower than the $111 million quarterly average during full-year 2025 and the $102 million experienced for the first quarter of 2025. The ratio for these large losses was 1.4 percentage points lower compared with last year's first quarter. We believe results for the three-month period 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 March 31,
20262025% Change
Earned premiums$1,241$1,1795
Fee revenues12(50)
Total revenues1,2421,1815
Loss and loss expenses from:
Current accident year before catastrophe losses7797228
Current accident year catastrophe losses12156116
Prior accident years before catastrophe losses(52)(29)(79)
Prior accident years catastrophe losses(1)(14)93
Loss and loss expenses84773515
Underwriting expenses3773498
Underwriting profit$18$97(81)
Ratios as a percent of earned premiums:Pt. Change
Current accident year before catastrophe losses62.8%61.1%1.7
Current accident year catastrophe losses9.74.84.9
Prior accident years before catastrophe losses(4.2)(2.4)(1.8)
Prior accident years catastrophe losses(0.1)(1.2)1.1
Loss and loss expenses68.262.35.9
Underwriting expenses30.429.60.8
Combined ratio98.6%91.9%6.7
Combined ratio98.6%91.9%6.7
Contribution from catastrophe losses and prior years reserve development5.41.24.2
Combined ratio before catastrophe losses and prior years reserve development93.2%90.7%2.5

Overview

Performance highlights for the commercial lines segment include:

  • Premiums – Earned premiums and net written premiums for the commercial lines segment grew during the first three months of 2026, compared with the same period a year ago, primarily due to agency 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 3% for the first three months of 2026, compared with the same period of 2025, including price increases. During the first quarter of 2026, our overall standard commercial lines policies averaged estimated renewal price increases at percentages near the high end of the low-single-digit range. We continue to segment commercial lines policies, emphasizing identification and retention of those we believe have relatively stronger pricing. Conversely, we continue to maintain 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.

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

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measurement period. For commercial lines policies that did expire and were then renewed during the first quarter of 2026, we estimate that our average percentage price increases were in the mid-single-digit range for our commercial casualty, commercial property and commercial auto lines of business. The estimated average percentage price change for workers' compensation was a decrease in the mid-single-digit range.

Our commercial lines segment's increase in agency renewal written premiums for the first three months of 2026 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.

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 three months of 2026 contributed $18 million to net written premiums, compared with $23 million for the same period of 2025.

New business written premiums for commercial lines increased $2 million for the first three months of 2026, compared with the same period of 2025, as we continued to carefully underwrite each policy 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 decreased net written premiums by approximately $1 million for the first three months of 2026, compared with the same period of 2025.

Commercial Lines Insurance Premiums

(Dollars in millions)Three months ended March 31,
20262025% Change
Agency renewal written premiums$1,184$1,1523
Agency new business written premiums2052031
Other written premiums(30)(30)0
Net written premiums1,3591,3253
Unearned premium change(118)(146)19
Earned premiums$1,241$1,1795
  • Combined ratio – The first-quarter 2026 commercial lines combined ratio increased by 6.7 percentage points, compared with the first quarter of 2025, including an increase of 6.0 points in losses from catastrophes. The first-quarter combined ratio increased by 1.7 points from current accident year loss and loss expenses before catastrophe losses, including an increase of 3.0 points for the IBNR portion and a decrease of 1.3 points for the case incurred portion. Underwriting results also included favorable reserve development on prior accident years, as discussed below. The current accident year ratios were measured as of March 31 of the respective years and included a decrease of 1.4 percentage points for the first three months of 2026 in the ratio for large losses of $2 million or more per claim, discussed below.

Catastrophe losses and loss expenses accounted for 9.6 percentage points of the combined ratio for the first three months of 2026, compared with 3.6 percentage points for the same period a year ago. Through 2025, the 10-year annual average for that catastrophe measure for the commercial lines segment was 5.9 percentage points, and the five-year annual average was 5.3 percentage points.

The net effect of reserve development on prior accident years during the first three months of 2026 was favorable for commercial lines overall by $53 million, compared with $43 million for the same period in 2025. For the first three months of 2026, our commercial property and workers' compensation lines of business were the main contributors to the commercial lines net favorable reserve development. The net favorable reserve development recognized during the first three months of 2026 for our commercial lines insurance segment was mainly for accident years 2025 and 2024 and was primarily due to lower-than-anticipated loss emergence on known claims. Our commercial casualty line of business included $3 million of favorable reserve development on prior accident years for the first three months of 2026 while commercial auto included $2 million of unfavorable reserve development. Reserve estimates are inherently uncertain as described in our 2025 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 50.

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The commercial lines underwriting expense ratio increased for the first three months of 2026, compared with the same period a year ago. The increase was largely due to an increase in profit-sharing commissions for agencies. The ratio for both periods also included ongoing expense management efforts.

Commercial Lines Insurance Losses Incurred by Size

(Dollars in millions, net of reinsurance)Three months ended March 31,
20262025% Change
Current accident year losses greater than $5 million$—$7(100)
Current accident year losses $2 million - $5 million515(67)
Large loss prior accident year reserve development3544(20)
Total large losses incurred4066(39)
Losses incurred but not reported94163(42)
Other losses excluding catastrophe losses44131839
Catastrophe losses11740193
Total losses incurred$692$58718
Ratios as a percent of earned premiums:Pt. Change
Current accident year losses greater than $5 million—%0.6%(0.6)
Current accident year losses $2 million - $5 million0.41.2(0.8)
Large loss prior accident year reserve development2.83.8(1.0)
Total large loss ratio3.25.6(2.4)
Losses incurred but not reported7.613.9(6.3)
Other losses excluding catastrophe losses35.526.88.7
Catastrophe losses9.53.46.1
Total loss ratio55.8%49.7%6.1

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 first-quarter 2026 commercial lines total large losses incurred of $40 million, net of reinsurance, was lower than the quarterly average of $74 million during full-year 2025 and the $66 million of total large losses incurred for the first quarter of 2025. The decrease in commercial lines large losses for the first three months of 2026 was primarily due to our commercial casualty line of business. The first-quarter 2026 ratio for commercial lines total large losses was 2.4 percentage points lower than last year's first-quarter ratio. We believe results for the three-month period 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 March 31,
20262025% Change
Earned premiums$873$69825
Fee revenues21100
Total revenues87569925
Loss and loss expenses from:
Current accident year before catastrophe losses4654425
Current accident year catastrophe losses149423(65)
Prior accident years before catastrophe losses(5)(6)17
Prior accident years catastrophe losses(2)(13)85
Loss and loss expenses607846(28)
Underwriting expenses23821013
Underwriting profit (loss)$30$(357)nm
Ratios as a percent of earned premiums:Pt. Change
Current accident year before catastrophe losses53.2%63.3%(10.1)
Current accident year catastrophe losses17.160.6(43.5)
Prior accident years before catastrophe losses(0.5)(0.8)0.3
Prior accident years catastrophe losses(0.3)(1.9)1.6
Loss and loss expenses69.5121.2(51.7)
Underwriting expenses27.330.1(2.8)
Combined ratio96.8%151.3%(54.5)
Combined ratio96.8%151.3%(54.5)
Contribution from catastrophe losses and prior years reserve development16.357.9(41.6)
Combined ratio before catastrophe losses and prior years reserve development80.5%93.4%(12.9)

Overview

Performance highlights for the personal lines segment include:

  • Premiums – Personal lines earned premiums and net written premiums continued to grow during the first three months of 2026, primarily due to agency renewal written premium growth that included higher average pricing. The table below analyzes the primary components of premiums.

Agency renewal written premiums increased 15% for the first three months of 2026, reflecting rate increases in selected states, a higher level of insured exposures and other factors such as 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 used to repair damaged homes.

We estimate that premium rates for our personal auto and homeowner lines of business increased at average percentages in the high-single-digit range during the first three months of 2026. 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 decreased $51 million or 40% for the first three months of 2026, compared with the same period of 2025. We believe we maintained underwriting and pricing discipline as we continued to carefully underwrite each policy in a highly competitive market.

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program. For our personal lines insurance segment, a decrease in 2026 ceded premiums increased net written premiums by approximately $62 million for the first three months of 2026, compared with the same period of 2025. Ceded premiums for the first three months of 2025 included a net amount of $64 million for reinsurance reinstatement premiums related to the January 2025 wildfires in southern California.

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Personal Lines Insurance Premiums

(Dollars in millions)Three months ended March 31,
20262025% Change
Agency renewal written premiums$726$63415
Agency new business written premiums76127(40)
Other written premiums(27)(89)70
Net written premiums77567215
Unearned premium change9826277
Earned premiums$873$69825
  • Combined ratio – Our personal lines combined ratio for the first quarter of 2026 improved by 54.5 percentage points, compared with first-quarter 2025, including a decrease of 41.9 points in losses from catastrophes. The first-quarter 2026 combined ratio improvement also included a decrease of 10.1 percentage points from current accident year loss and loss expenses before catastrophe losses, including a decrease of 4.4 points for the IBNR portion and a decrease of 5.7 points for the case incurred portion. The three-month 2025 current accident year ratio before catastrophe losses included an unfavorable 5.3 points for the effect of reinstatement premiums. The total current accident year ratios before catastrophe losses were measured as of March 31 of the respective years and included a decrease of 0.8 percentage points for the first three months of 2026 in the ratio for large losses of $2 million or more per claim, discussed below.

Catastrophe losses and loss expenses accounted for 16.8 percentage points of the combined ratio for the first three months of 2026, compared with 58.7 points for the same period a year ago. The 10-year annual average catastrophe loss ratio for the personal lines segment through 2025 was 14.0 percentage points, and the five-year annual average was 15.8 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.

The net effect of reserve development on prior accident years during the first quarter of 2026 was favorable by $7 million, compared with $19 million for the same period of 2025. Our homeowner line of business was the main contributor to the personal lines net favorable reserve development for the first three months of 2026. 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 2025 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 50.

The personal lines underwriting expense ratio decreased for the first three months of 2026, compared with the same period a year ago. The decrease was partly due to growth in premiums outpacing growth in various expenses. The three-month 2025 ratio also included an unfavorable 2.5 points for the effect of reinstatement premiums. The ratio for both periods also included ongoing expense management efforts.

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Personal Lines Insurance Losses Incurred by Size

(Dollars in millions, net of reinsurance)Three months ended March 31,
20262025% Change
Current accident year losses greater than $5 million$8$19(58)
Current accident year losses $2 million - $5 million155200
Large loss prior accident year reserve development151225
Total large losses incurred38366
Losses incurred but not reported7174(4)
Other losses excluding catastrophe losses28225411
Catastrophe losses144405(64)
Total losses incurred$535$769(30)
Ratios as a percent of earned premiums:Pt. Change
Current accident year losses greater than $5 million0.9%2.8%(1.9)
Current accident year losses $2 million - $5 million1.80.71.1
Large loss prior accident year reserve development1.81.80.0
Total large loss ratio4.55.3(0.8)
Losses incurred but not reported8.110.5(2.4)
Other losses excluding catastrophe losses32.336.4(4.1)
Catastrophe losses16.457.9(41.5)
Total loss ratio61.3%110.1%(48.8)

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 first quarter of 2026, the personal lines total large loss ratio, net of reinsurance, was 0.8 percentage points lower than last year's first quarter. The increase in personal lines total large losses incurred for the first three months of 2026 occurred primarily for umbrella coverage in our other personal line of business. We believe results for the three-month period 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 March 31,
20262025% Change
Earned premiums$180$16211
Fee revenues110
Total revenues18116311
Loss and loss expenses from:
Current accident year before catastrophe losses11710610
Current accident year catastrophe losses12(50)
Prior accident years before catastrophe losses(7)(8)13
Prior accident years catastrophe losses(1)(1)0
Loss and loss expenses1109911
Underwriting expenses504414
Underwriting profit$21$205
Ratios as a percent of earned premiums:Pt. Change
Current accident year before catastrophe losses64.6%65.6%(1.0)
Current accident year catastrophe losses1.10.80.3
Prior accident years before catastrophe losses(4.1)(5.0)0.9
Prior accident years catastrophe losses(0.4)(0.5)0.1
Loss and loss expenses61.260.90.3
Underwriting expenses28.127.40.7
Combined ratio89.3%88.3%1.0
Combined ratio89.3%88.3%1.0
Contribution from catastrophe losses and prior years reserve development(3.4)(4.7)1.3
Combined ratio before catastrophe losses and prior years reserve development92.7%93.0%(0.3)

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 first three months of 2026, compared with the same period a year ago, including increases in both agency renewal and new business written premiums. Renewal written premiums rose 7% for the three months ended March 31, 2026, compared with the same period of 2025, largely due to higher renewal pricing. For the first three months of 2026, excess and surplus lines policy renewals experienced estimated average price increases at percentages in the mid-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 9% for the first three months of 2026 compared with the same period of 2025, 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 March 31,
20262025% Change
Agency renewal written premiums$135$1267
Agency new business written premiums58539
Other written premiums(11)(11)0
Net written premiums1821688
Unearned premium change(2)(6)67
Earned premiums$180$16211
  • Combined ratio – The excess and surplus lines combined ratio increased by 1.0 percentage points for the first three months of 2026, compared with the same period of 2025. The increase was primarily due to a lower level of favorable reserve development on prior accident year loss and loss expenses for the three months ended March 31, 2026, compared with the first three months of 2025.

The 64.6% first-quarter 2026 ratio for current accident year loss and loss expenses before catastrophe losses was 1.0 percentage points lower, compared with the 65.6% accident year 2025 ratio measured as of March 31, 2025, including a decrease of 0.4 points for the IBNR portion and a decrease of 0.6 points for the case incurred portion.

Excess and surplus lines net reserve development on prior accident years, as a ratio to earned premiums, was favorable by 4.5% for the first three months of 2026, compared with 5.5% for the same period of 2025. Reserve estimates are inherently uncertain as described in our 2025 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 50.

The excess and surplus lines underwriting expense ratio increased for the first three months of 2026 compared with the same period a year ago, primarily due to an increase in commission expenses. The ratio also included 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 March 31,
20262025% Change
Current accident year losses greater than $5 million$—$—nm
Current accident year losses $2 million - $5 million——nm
Large loss prior accident year reserve development——nm
Total large losses incurred——nm
Losses incurred but not reported3846(17)
Other losses excluding catastrophe losses402467
Catastrophe losses1—nm
Total losses incurred$79$7013
Ratios as a percent of earned premiums:Pt. Change
Current accident year losses greater than $5 million—%—%0.0
Current accident year losses $2 million - $5 million——0.0
Large loss prior accident year reserve development——0.0
Total large loss ratio——0.0
Losses incurred but not reported20.828.1(7.3)
Other losses excluding catastrophe losses22.114.87.3
Catastrophe losses0.70.20.5
Total loss ratio43.6%43.1%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 first quarter of both 2026 and 2025, our excess and surplus lines insurance segment had no large losses of $2 million or more per claim.

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LIFE INSURANCE RESULTS

(Dollars in millions)Three months ended March 31,
20262025% Change
Earned premiums$85$806
Fee revenues110
Total revenues86816
Contract holders' benefits incurred84814
Investment interest credited to contract holders(32)(32)0
Underwriting expenses incurred23230
Total benefits and expenses75724
Life insurance segment profit$11$922

Overview

Performance highlights for the life insurance segment include:

  • Revenues – Revenues increased for the three months ended March 31, 2026, 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 1% to $88.080 billion at March 31, 2026, from $87.311 billion at year-end 2025.

Fixed annuity deposits received for the three months ended March 31, 2026, were $7 million, compared with $4 million for the same period of 2025. Fixed annuity deposits have a minimal impact on 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 March 31,
20262025% Change
Term life insurance$61$577
Whole life insurance14138
Universal life and other10100
Earned premiums$85$806
  • 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 $11 million for our life insurance segment in the first three months of 2026, compared with a profit of $9 million for the same period of 2025, was primarily due to increased earned premiums.

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 increased in the first three months of 2026 primarily due to continued growth of in-force policy face amounts and less favorable impacts from the unlocking of interest rate and other actuarial assumptions.

Underwriting expenses for the first three months of 2026 matched the same period a year ago.

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

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invested assets, the life insurance subsidiary reported net income of $26 million for the three months ended March 31, 2026, compared with $21 million for the three months ended March 31, 2025. The life insurance subsidiary portfolio had net after-tax investment losses of less than $1 million for the three months ended March 31, 2026, compared with $1 million for the three months ended March 31, 2025.

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 14% for the first three months of 2026, compared with the same period of 2025. Interest income increased by $25 million for the first quarter, as net purchases of fixed-maturity securities in recent quarters and higher bond yields are working to generally offset effects of the low interest rates on maturing bonds purchased for several years prior to 2022. Dividend income increased by $9 million for the three months ended March 31, 2026. The increase for the first three months of 2026 was primarily due to a $6 million special dividend from one of our holdings in addition to dividend payouts that have generally been increasing slightly in recent quarters.

Investments Results

(Dollars in millions)Three months ended March 31,
20262025% Change
Total investment income, net of expenses$318$28014
Investment interest credited to contract holders(32)(32)0
Investment gains and losses, net(70)(67)(4)
Investments profit, pretax$216$18119

We continue to consider the low interest rate environment that prevailed for several years prior to 2022 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 March 31, 2026
Fixed-maturity pretax yield profile:
Expected to mature during the remainder of 20264.76%$670
Expected to mature during 20274.99987
Expected to mature during 20285.511,183
Average yield and total expected maturities from the remainder of 2026 through 20285.15$2,840

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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-to-amortized cost for total fixed-maturity securities acquired during the first three months of 2026 was higher than the 5.11% average yield-to-amortized cost of the fixed-maturity securities portfolio at the end of 2025. Our fixed-maturity portfolio's average yield-to-amortized cost of 5.02% for the first three months of 2026, from the investment income table below, was lower than the 5.11% yield-to-amortized cost for the year-end 2025 fixed-maturities portfolio.

Three months ended March 31,
20262025
Average pretax yield-to-amortized cost on new fixed-maturities:
Acquired taxable fixed-maturities5.43%5.91%
Acquired tax-exempt fixed-maturities4.434.40
Average total fixed-maturities acquired5.375.80

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 2025 Annual Report on Form 10-K, Item 1, Investments Segment, Page 21, and Item 7, Investments Outlook, Page 86. 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 March 31,
20262025% Change
Investment income:
Interest$235$21012
Dividends766713
Other12771
Less investment expenses5425
Investment income, pretax31828014
Less income taxes554815
Total investment income, after-tax$263$23213
Investment returns:
Average invested assets plus cash and cash equivalents$33,504$29,946
Average yield pretax3.80%3.74%
Average yield after-tax3.143.10
Effective tax rate17.217.2
Fixed-maturity returns:
Average amortized cost$18,724$17,071
Average yield pretax5.02%4.92%
Average yield after-tax4.104.02
Effective tax rate18.418.3

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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 is included in investment gains and losses and also in net income. The change in unrealized gains or losses for fixed-maturity securities is 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 2025 Annual Report on Form 10-K, Item 8, Note 1, Summary of Significant Accounting Policies, Page 124.

The table below summarizes total investment gains and losses, before taxes.

(Dollars in millions)Three months ended March 31,
20262025
Investment gains and losses:
Equity securities:
Investment gains and losses on securities sold, net$33$(1)
Unrealized gains and losses on securities still held, net(104)(71)
Subtotal(71)(72)
Fixed maturities:
Gross realized gains2—
Gross realized losses(1)—
Change in allowance for credit losses, net(1)(2)
Subtotal—(2)
Other17
Total investment gains and losses reported in net income(70)(67)
Change in unrealized investment gains and losses:
Fixed maturities(220)67
Total$(290)$—

Of the 5,442 fixed-maturity and short-term securities in the portfolio, 17 securities were trading below 70% of amortized cost at March 31, 2026. 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.

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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 three months of 2026 for our Other operations increased slightly, compared with the same period of 2025. Cincinnati Re had $152 million of earned premiums for the first three months of 2026 and generated an underwriting profit of $31 million. Cincinnati Global had $73 million of earned premiums for the first three months of 2026 and generated an underwriting profit of $15 million. Total expenses for Other decreased for the first three months of 2026, primarily due to lower loss and loss expenses from Cincinnati Re and Cincinnati Global.

Other income (loss) in the table below represents profit before income taxes. For the first three months of 2026, total other income was driven by underwriting profit from Cincinnati Re and Cincinnati Global. For the first three months of 2025, total other loss resulted from an underwriting loss from Cincinnati Re and interest expense from debt of the parent company.

(Dollars in millions)Three months ended March 31,
20262025% Change
Interest and fees on loans and leases$3$30
Earned premiums2252250
Other revenues31200
Total revenues2312291
Interest expense13130
Loss and loss expenses103207(50)
Underwriting expenses76760
Operating expenses911(18)
Total expenses201307(35)
Total other income (loss)$30$(78)nm

TAXES

We had $52 million of income tax expense for the three months ended March 31, 2026, compared with $38 million of income tax benefit for the same period of 2025. The effective tax rate for the three months ended March 31, 2026, was 16.0% compared with 29.7% for the same period last year. The change in our effective tax rate between periods was primarily due to changes in underwriting income, changes in our net investment gains and losses and investment 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 March 31, 2026, shareholders' equity was $15.714 billion, compared with $15.911 billion at December 31, 2025. Total debt was $816 million at March 31, 2026, relatively unchanged from $815 million at December 31, 2025. At March 31, 2026, cash and cash equivalents totaled $1.210 billion, compared with $1.431 billion at December 31, 2025.

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 $200 million to the parent company in the first three months of 2026, compared with no dividends declared for the same period of 2025. For full-year 2025, our lead insurance subsidiary paid dividends totaling $550 million to the parent company. State of Ohio regulatory requirements restrict the dividends our insurance subsidiary can pay. For full-year 2026, total dividends that our insurance subsidiary can pay to our parent company without regulatory approval are approximately $975 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 2025 Annual Report on Form 10-K, Item 1, Investments Segment, Page 21.

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 invest excess cash flows, 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 March 31,
20262025% Change
Premiums collected$2,481$2,2779
Loss and loss expenses paid(1,201)(1,399)14
Commissions and other underwriting expenses paid(972)(924)(5)
Cash flow from underwriting308(46)nm
Investment income received22920611
Cash flow from operations$537$160236

Collected premiums for property casualty insurance rose $204 million during the first three months of 2026, compared with the same period in 2025. Loss and loss expenses paid for the 2026 period decreased $198 million. Commissions and other underwriting expenses paid increased $48 million.

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We discuss our future obligations for claims payments and for underwriting expenses in our 2025 Annual Report on Form 10-K, Item 7, Obligations, Page 92.

Capital Resources

At March 31, 2026, our debt-to-total-capital ratio was 4.9%, considerably below our 35% covenant threshold, with $791 million in long-term debt and $25 million in borrowing on our revolving short-term line of credit. At March 31, 2026, $375 million was available for future cash management needs as part of the general provisions of the line of credit agreement. The line of credit also includes a $400 million accordion feature, a $400 million sublimit for letters of credit, and a $75 million sublimit for swing line loans. Based on our capital requirements at March 31, 2026, 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 held common equities with a fair value of $228 million, in Lloyd's trust accounts to provide a portion of the capital needed to support Cincinnati Global's operations at March 31, 2026.

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 three months of 2026. Our debt ratings are discussed in our 2025 Annual Report on Form 10-K, Item 7, Liquidity and Capital Resources, Long-Term Debt, Page 91.

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, 2025, in our 2025 Annual Report on Form 10-K, Item 7, Contractual Obligations, Page 92. There have been no material changes to our estimates of future contractual obligations since our 2025 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 $710 million in the first three months of 2026. 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 $262 million in the first three months of 2026.

There were no contributions to our qualified pension plan during the first three months of 2026.

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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 2026, the board of directors declared regular quarterly cash dividends of 94 cents per share for an indicated annual rate of $3.76 per share. During the first three months of 2026, we used $133 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 2025 Annual Report on Form 10-K, Item 7, Property Casualty Loss and Loss Expense Obligations and Reserves, Page 93.

Total gross reserves at March 31, 2026, increased $434 million compared with December 31, 2025. Case loss reserves increased by $24 million, IBNR loss reserves increased by $336 million and loss expense reserves increased by $74 million. The total gross increase was primarily due to our commercial casualty, commercial property, personal auto and homeowner lines of business and 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 March 31, 2026
Commercial lines insurance:
Commercial casualty$1,209$1,788$925$3,92233.0%
Commercial property2162901146205.2
Commercial auto4474821901,1199.4
Workers' compensation3715931091,0739.0
Other commercial175722014483.8
Subtotal2,4183,2251,5397,18260.4
Personal lines insurance:
Personal auto3211821416445.4
Homeowner3502981377856.6
Other personal136276114233.6
Subtotal8077562891,85215.6
Excess and surplus lines4125833591,35411.4
Cincinnati Re2251,014101,24910.5
Cincinnati Global10713642472.1
Total$3,969$5,714$2,201$11,884100.0%
At December 31, 2025
Commercial lines insurance:
Commercial casualty$1,246$1,736$905$3,88734.0%
Commercial property2101951095144.5
Commercial auto4484551851,0889.5
Workers' compensation3695951011,0659.3
Other commercial172731934383.8
Subtotal2,4453,0541,4936,99261.1
Personal lines insurance:
Personal auto3141521356015.2
Homeowner3302351306956.1
Other personal120259103893.4
Subtotal7646462751,68514.7
Excess and surplus lines4075443481,29911.4
Cincinnati Re2181,00381,22910.7
Cincinnati Global11113132452.1
Total$3,945$5,378$2,127$11,450100.0%

LIFE POLICY AND INVESTMENT CONTRACT RESERVES

Gross life policy and investment contract reserves were $2.965 billion at March 31, 2026, compared with $2.992 billion at year-end 2025. Details about these reserves are in this quarterly report Item 1, Note 5, Life Policy and Investment Contract Reserves. We discussed our life insurance reserving practices in our 2025 Annual Report on Form 10-K, Item 7, Life Insurance Policyholder Obligations and Reserves, Page 99.

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OTHER MATTERS

SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies are discussed in our 2025 Annual Report on Form 10-K, Item 8, Note 1, Summary of Significant Accounting Policies, Page 124, 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 2025 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.

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