Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 19, 2016 | Jun. 30, 2015 | |
Document Documentand Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | CINCINNATI FINANCIAL CORP | ||
Entity Central Index Key | 20,286 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 164,339,638 | ||
Entity Public Float | $ 7,466,710,235 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Investments | ||
Fixed maturities, at fair value (amortized cost: 2015—$9,324; 2014—$8,871) | $ 9,650 | $ 9,460 |
Equity securities, at fair value (cost: 2015—$2,938; 2014—$2,728) | 4,706 | 4,858 |
Other invested assets | 67 | 68 |
Total investments | 14,423 | 14,386 |
Cash and cash equivalents | 544 | 591 |
Investment income receivable | 129 | 123 |
Finance receivable | 62 | 75 |
Premiums receivable | 1,431 | 1,405 |
Reinsurance recoverable | 542 | 545 |
Prepaid reinsurance premiums | 54 | 29 |
Deferred policy acquisition costs | 616 | 578 |
Land, building and equipment, net, for company use (accumulated depreciation: 2015—$459; 2014—$446) | 185 | 194 |
Other assets | 154 | 70 |
Separate accounts | 748 | 752 |
Total assets | 18,888 | 18,748 |
Insurance reserves | ||
Loss and loss expense reserves | 4,718 | 4,485 |
Life policy and investment contract reserves | 2,583 | 2,497 |
Unearned premiums | 2,201 | 2,082 |
Other liabilities | 717 | 648 |
Deferred income tax | 638 | 840 |
Note payable | 35 | 49 |
Long-term debt and capital lease obligations | 821 | 822 |
Separate accounts | 748 | 752 |
Total liabilities | 12,461 | 12,175 |
Commitments and contingent liabilities (Note 16) | 0 | 0 |
Shareholders' Equity | ||
Common stock, par value—$2 per share; (authorized: 2015 and 2014—500 million shares; issued: 2015 and 2014—198.3 million shares) | 397 | 397 |
Paid-in capital | 1,232 | 1,214 |
Retained earnings | 4,762 | 4,505 |
Accumulated other comprehensive income | 1,344 | 1,744 |
Treasury stock at cost (2015—34.4 million shares and 2014—34.6 million shares) | 1,308 | 1,287 |
Total shareholders' equity | 6,427 | 6,573 |
Total liabilities and shareholders' equity | $ 18,888 | $ 18,748 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, amortized cost | $ 9,324 | $ 8,871 |
Equity securities, cost | 2,938 | 2,728 |
Land, building and equipment, accumulated depreciation | $ 459 | $ 446 |
Common stock, par value | $ 2 | $ 2 |
common stock, authorized | 500 | 500 |
Common stock, issued | 198.3 | 198.3 |
Common stock, shares outstanding | 198.3 | 198.3 |
Treasury stock, shares | 34.4 | 34.6 |
Consolidated Statements Of Inco
Consolidated Statements Of Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | |||
Earned premiums | $ 4,480 | $ 4,243 | $ 3,902 |
Investment income, net of expenses | 572 | 549 | 529 |
Realized investment gains, net | 70 | 133 | 83 |
Fee revenues | 13 | 12 | 8 |
Other revenues | 7 | 8 | 9 |
Total revenues | 5,142 | 4,945 | 4,531 |
Benefits and Expenses | |||
Insurance losses and contract holders' benefits | 2,808 | 2,856 | 2,505 |
Underwriting, acquisition and insurance expenses | 1,387 | 1,301 | 1,243 |
Interest expense | 53 | 53 | 54 |
Other operating expenses | 13 | 14 | 15 |
Total benefits and expenses | 4,261 | 4,224 | 3,817 |
Income Before Income Taxes | 881 | 721 | 714 |
Provision for Income Taxes | |||
Current | 231 | 159 | 178 |
Deferred | 16 | 37 | 19 |
Total provision for income taxes | 247 | 196 | 197 |
Net Income | $ 634 | $ 525 | $ 517 |
Per Common Share | |||
Net income—basic (in usd per share) | $ 3.87 | $ 3.21 | $ 3.16 |
Net income—diluted (in usd per share) | $ 3.83 | $ 3.18 | $ 3.12 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income | $ 634 | $ 525 | $ 517 |
Other Comprehensive Income | |||
Change in unrealized gains and losses on investments, net of tax of $(220), $134, and $161, respectively | (405) | 250 | 299 |
Amortization of pension actuarial loss and prior service cost, net of tax of $(2), $(6), and $29, respectively | (4) | (12) | 54 |
Change in life deferred acquisition costs, life policy reserves and other, net of tax of $4, $2, and $12, respectively | 9 | 2 | 22 |
Other comprehensive (loss) income | (400) | 240 | 375 |
Comprehensive Income | $ 234 | $ 765 | $ 892 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Unrealized gains on investments available-for-sale, net of tax | $ (220) | $ 134 | $ 161 |
Amortization of pension actuarial loss and prior service cost, net of tax | (2) | (6) | 29 |
Change in life deferred acquisition costs, life policy reserves and other, net of tax | $ 4 | $ 2 | $ 12 |
Consolidated Statements Of Shar
Consolidated Statements Of Shareholders' Equity - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income | Treasury Stock |
Beginning Balance at Dec. 31, 2012 | $ 394 | $ 1,134 | $ 4,021 | $ 1,129 | $ (1,225) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based awards | 3 | 36 | 10 | |||
Share-based compensation | 18 | |||||
Other | 3 | 5 | ||||
Net Income | $ 517 | 517 | ||||
Dividends declared | (270) | |||||
Other comprehensive income | 375 | 375 | ||||
Shares acquired - share repurchase authorization | (52) | |||||
Shares acquired - share-based compensation plans | (28) | |||||
Ending Balance at Dec. 31, 2013 | 6,070 | $ 397 | 1,191 | 4,268 | 1,504 | (1,290) |
Beginning Balance (in shares) at Dec. 31, 2012 | 162,900 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based awards (in shares) | 1,600 | |||||
Shares acquired—share repurchase authorization (in shares) | (1,000) | |||||
Shares acquired - share-based compensation plans (in shares) | (600) | |||||
Other (in shares) | 200 | |||||
Ending Balance (in shares) at Dec. 31, 2013 | 163,100 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based awards | $ 0 | 0 | 37 | |||
Share-based compensation | 19 | |||||
Other | 4 | 6 | ||||
Net Income | 525 | 525 | ||||
Dividends declared | (288) | |||||
Other comprehensive income | 240 | 240 | ||||
Shares acquired - share repurchase authorization | (21) | |||||
Shares acquired - share-based compensation plans | (19) | |||||
Ending Balance at Dec. 31, 2014 | $ 6,573 | $ 397 | 1,214 | 4,505 | 1,744 | (1,287) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based awards (in shares) | 1,300 | |||||
Shares acquired—share repurchase authorization (in shares) | (500) | |||||
Shares acquired - share-based compensation plans (in shares) | (400) | |||||
Other (in shares) | 200 | |||||
Ending Balance (in shares) at Dec. 31, 2014 | 198,300 | 163,700 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based awards | $ 0 | (7) | 41 | |||
Share-based compensation | 20 | |||||
Other | 5 | 7 | ||||
Net Income | $ 634 | 634 | ||||
Dividends declared | (377) | |||||
Other comprehensive income | (400) | (400) | ||||
Shares acquired - share repurchase authorization | (53) | |||||
Shares acquired - share-based compensation plans | (16) | |||||
Ending Balance at Dec. 31, 2015 | $ 6,427 | $ 397 | $ 1,232 | $ 4,762 | $ 1,344 | $ (1,308) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based awards (in shares) | 996 | 1,300 | ||||
Shares acquired—share repurchase authorization (in shares) | (1,000) | |||||
Shares acquired - share-based compensation plans (in shares) | (300) | |||||
Other (in shares) | 200 | |||||
Ending Balance (in shares) at Dec. 31, 2015 | 198,300 | 163,900 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows From Operating Activities | |||
Net Income | $ 634 | $ 525 | $ 517 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 52 | 51 | 50 |
Realized investment gains, net | (70) | (133) | (83) |
Share-based compensation | 20 | 19 | 18 |
Interest credited to contract holders' | 44 | 47 | 44 |
Deferred income tax expense | 16 | 37 | 19 |
Changes in: | |||
Investment income receivable | (6) | (2) | (6) |
Premiums and reinsurance receivable | (48) | (60) | (64) |
Deferred policy acquisition costs | (18) | (20) | (44) |
Other assets | (39) | 19 | (32) |
Loss and loss expense reserves | 233 | 174 | 81 |
Life policy reserves | 101 | 119 | 84 |
Unearned premiums | 119 | 106 | 184 |
Other liabilities | 44 | (11) | 77 |
Current income tax receivable/payable | (18) | 2 | (49) |
Net cash provided by operating activities | 1,064 | 873 | 796 |
Cash Flows From Investing Activities | |||
Sale of fixed maturities | 43 | 26 | 40 |
Call or maturity of fixed maturities | 1,199 | 1,019 | 930 |
Sale of equity securities | 342 | 335 | 178 |
Purchase of fixed maturities | (1,722) | (1,312) | (1,381) |
Purchase of equity securities | (493) | (392) | (265) |
Investment in finance receivables | (14) | (18) | (39) |
Collection of finance receivables | 30 | 31 | 30 |
Investment in buildings and equipment, net | (10) | (9) | (7) |
Change in other invested assets, net | 1 | 9 | 5 |
Net cash used in investing activities | (624) | (311) | (509) |
Cash Flows From Financing Activities | |||
Payment of cash dividends to shareholders | (366) | (278) | (263) |
Shares acquired - share repurchase authorization | (53) | (21) | (52) |
Payments of note payable | (14) | (55) | 0 |
Proceeds from stock options exercised | 24 | 22 | 25 |
Contract holders' funds deposited | 83 | 86 | 86 |
Contract holders' funds withdrawn | (148) | (143) | (128) |
Excess tax benefits on share-based compensation | 4 | 2 | 5 |
Other | (17) | (17) | (14) |
Net cash used in financing activities | (487) | (404) | (341) |
Net change in cash and cash equivalents | (47) | 158 | (54) |
Cash and cash equivalents at beginning of year | 591 | 433 | 487 |
Cash and cash equivalents at end of year | 544 | 591 | 433 |
Supplemental Disclosures of Cash Flow Information | |||
Interest paid | 52 | 53 | 53 |
Income taxes paid | 245 | 154 | 222 |
Noncash Activities | |||
Conversion of securities | 3 | 7 | 0 |
Equipment acquired under capital lease obligations | 20 | 12 | 28 |
Cashless exercise of stock options | 16 | 19 | 28 |
Other assets and other liabilities | $ 27 | $ 0 | $ 0 |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary Of Significant Accounting Policies | Summary of Significant Accounting Policies Nature of Operations Cincinnati Financial Corporation (CFC) operates through our insurance group and two complementary subsidiary companies. The Cincinnati Insurance Company leads our standard market property casualty insurance group that also includes two subsidiaries: The Cincinnati Casualty Company and The Cincinnati Indemnity Company. This group markets a broad range of standard market commercial and personal policies. The group focuses on delivery of quality customer service to our select group of 1,526 independent insurance agencies with 1,956 reporting locations across 39 states. In 2015 the Cincinnati Insurance Company began our reinsurance assumed operations, Cincinnati Re. Other subsidiaries of The Cincinnati Insurance Company include The Cincinnati Life Insurance Company, which markets life and disability income insurance and fixed annuities, and The Cincinnati Specialty Underwriters Insurance Company, which offers excess and surplus lines property casualty insurance products. The two CFC complementary subsidiaries are CSU Producer Resources Inc., which provides insurance brokerage services to our independent agencies so their clients can access our excess and surplus lines insurance products, and CFC Investment Company (CFC-I), which offers commercial leasing and financing services to our agents, their clients and other customers. Basis of Presentation Our consolidated financial statements include the accounts of the parent and its wholly owned subsidiaries and 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. Investments Our portfolio investments are primarily in publicly traded fixed-maturity, equity and short-term investments. Fixed-maturity investments (taxable bonds, tax-exempt bonds, redeemable preferred equities and commercial mortgage- backed securities) and equity investments (common and nonredeemable preferred equities) are classified as available for sale and recorded at fair value in the consolidated financial statements. The number of fixed-maturity securities with fair value below 100 percent of amortized cost can be expected to fluctuate as interest rates rise or fall. Because of our strong capital and long-term investment horizon, our general intent is to hold fixed-maturity investments until maturity, regardless of short-term fluctuations in fair values. Our invested asset impairment policy states that fixed maturities below their amortized cost that the company (1) intends to sell or (2) more likely than not will be required to sell before recovery of their amortized cost basis are deemed to be other-than-temporarily impaired (OTTI). The amortized cost of any such securities is reduced to fair value as the new cost basis, and a realized loss is recorded in the period in which it is recognized. When these two criteria are not met, and the company believes that full collection of interest and/or principal is not likely, we determine the net present value of future cash flows by using the effective interest rate implicit in the security at the date of acquisition as the discount rate and compare that amount with the amortized cost and fair value of the security. The difference between the net present value of the expected future cash flows and amortized cost of the security is considered a credit loss and recognized as a realized loss in the period in which it occurred. The difference between the fair value and the net present value of the cash flows of the security, the noncredit loss, is recognized in other comprehensive income as an unrealized loss. We had no fixed-maturity securities with a noncredit loss for the years ended 2015 and 2014. When determining OTTI charges for our equity portfolio, our invested asset impairment policy considers qualitative and quantitative factors, including facts and circumstances specific to individual securities, asset classes, the financial condition of the issuer, changes in dividend payment, the length of time fair value had been less than cost, the severity of the decline in fair value below cost, the volatility of the security and our ability and intent to hold each position until its forecasted recovery. We include the noncredit portion of fixed-maturity OTTI charges and all other unrealized gains and losses on investments, net of taxes, in shareholders’ equity as accumulated other comprehensive income (AOCI). Realized gains and losses on investments are recognized in net income based on the trade date accounting method. Included within our other invested assets are $31 million of life policy loans and $36 million of private equity investments. Life policy loans are carried at the receivable value. The private equity investments provide their financial statements to us and generally report investments on their balance sheets at fair value. We use the equity method of accounting for private equity investments. Investment income consists mainly of interest and dividends. We record interest on an accrual basis and record dividends at the ex-dividend date. We amortize premiums and discounts on fixed-maturity securities using the effective interest method over the expected life of the security. Fair Value Disclosures We account for our investment portfolio at fair value and apply fair value measurements as defined by ASC 820, Fair Value Measurements and Disclosures , to financial instruments. Fair value is applicable to ASC 320, Investments-Debt and Equity Securities , and ASC 825, Financial Instruments . ASC 820 defines fair value as the exit price or the amount that would be (1) received to sell an asset or (2) paid to transfer a liability in an orderly transaction between marketplace participants at the measurement date. When determining an exit price, we rely upon observable market data whenever possible. We primarily base fair value for investments in equity and fixed-maturity securities (including redeemable preferred stock and assets held in separate accounts) on quoted market prices or on prices from a pricing vendor, an outside resource that supplies global securities pricing, dividend, corporate action and descriptive information to support fund pricing, securities operations, research and portfolio management. The company obtains and reviews the pricing service’s valuation methodologies and related inputs and validates these prices by replicating a sample across each asset class using a discounted cash flow model. When a price is not available from these sources, as in the case of securities that are not publicly traded, we determine the fair value using various inputs including quotes from independent brokers. The fair value of investments not priced by a pricing vendor is less than 1 percent of the fair value of our total investment portfolio. For the purpose of ASC 825 disclosure, we estimate the fair value of long-term senior notes on market pricing of similar debt instruments that are actively trading. We estimate the fair value of our note payable on the year-end outstanding balance because it is short term and tied to a variable interest rate. We estimate the fair value of liabilities for investment contracts and annuities using discounted cash flow calculations across a wide range of economic interest rate scenarios with a provision for our nonperformance risk. We estimate the fair value for policyholder loans on insurance contracts using a discounted cash flow model. Determination of fair value for structured settlements assumes the discount rates used to calculate the present value of expected payments are the risk-free spot rates plus an A3 rated bond spread for financial issuers at December 31, 2015, to account for nonperformance risk. See Note 3, Fair Value Measurements, for further details. Cash and Cash Equivalents Cash and cash equivalents are highly liquid instruments that include liquid debt instruments with original maturities of less than three months. These are carried at cost, which approximates fair value. Property Casualty Insurance The consolidated property casualty companies actively write property casualty insurance through independent agencies in 39 states. Our 10 largest states generated 62 percent and 63 percent of total earned premiums in 2015 and 2014, respectively. Ohio, our largest state, accounted for 17 percent and 18 percent of total earned premiums in 2015 and 2014, respectively. Illinois, Indiana, Georgia, Pennsylvania, Michigan and North Carolina each accounted for between 5 percent and 7 percent of total earned premiums in 2015. Our largest single agency relationship accounted for approximately less than 1 percent of our total property casualty earned premiums in 2015. No aggregate agency relationship locations under a single ownership structure accounted for more than 3 percent of our total property casualty earned premiums in 2015. We record revenues for installment charges as fee revenues in the consolidated statements of income. Property casualty written premiums are deferred and recorded as earned premiums on a pro rata basis over the terms of the policies. We record as unearned premiums the portion of written premiums that applies to unexpired policy terms. Expenses associated with successfully acquiring insurance policies – commissions, premium taxes and underwriting costs – are deferred and amortized over the terms of the policies. All acquisition costs are in accordance with Accounting Standards Update (ASU) 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts . We assess recoverability of deferred acquisition costs at the segment level, consistent with the way we acquire, service and manage insurance policies and measure profitability. We analyze our acquisition cost assumptions to reflect actual experience, and we evaluate potential premium deficiencies. Certain property casualty policies are not entered into policy underwriting systems as of the effective date of coverage. An estimate is recorded for these unprocessed written premiums. A large majority of the estimate is unearned and has no material impact on earned premiums. Premiums receivable are reviewed for impairment on a quarterly basis. We maintain an allowance for uncollectible premiums. We establish reserves to cover the expected cost of claims, losses and expenses related to investigating, processing and resolving claims. Although the appropriate amount of reserves is inherently uncertain, we base our decisions on past experience and current facts. Reserves are based on claims reported prior to the end of the year and estimates of unreported claims. We take into account the fact that we may recover some of our costs through salvage and subrogation. We regularly review and update reserves using the most current information available. Any resulting adjustments are reflected in current calendar year insurance losses and policyholder benefits. Policyholder Dividends Certain workers’ compensation policies include the possibility of a policyholder earning a return of a portion of its premium in the form of a policyholder dividend. The dividend generally is calculated by determining the profitability of a policy year along with the associated premium. We reserve for all probable future policyholder dividend payments. We record policyholder dividends as other underwriting expenses. Life Insurance We offer several types of life insurance and disability income insurance, and we account for each according to the duration of the contract. Short-duration life and health contracts are written to cover claims that arise during a short, fixed term of coverage. We generally have the right to change the amount of premium charged or cancel the coverage at the end of each contract term. Group life insurance is an example. We record premiums for short-duration life and health contracts similarly to property casualty contracts. Long-duration contracts are written to provide coverage for an extended period of time. Traditional long-duration contracts require policyholders to pay scheduled gross premiums, generally not less frequently than annually, over the term of the coverage. Premiums for these contracts, such as whole life insurance and disability income insurance, are recognized as revenue when due. Some traditional long-duration contracts, such as ten-pay whole life insurance, have premium payment periods shorter than the period over which coverage is provided. For these contracts, the excess of premium over the amount required to pay expenses and benefits is recognized over the term of the coverage rather than over the premium payment period. We establish a liability for traditional long-duration contracts as we receive premiums. The amount of this liability is the present value of future expenses and benefits less the present value of future net premiums. Net premium is the portion of gross premium required to provide for all expenses and benefits. We estimate future expenses and benefits and net premium using assumptions for expected expenses, mortality, morbidity, withdrawal rates and investment income. We include a provision for deviation, meaning we allow for some uncertainty in making our assumptions. We establish our assumptions when the contract is issued, and we generally maintain those assumptions for the life of the contract. 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. We use our own experience and historical trends for setting our assumption for expected expenses. We base our assumption for expected investment income on our own experience, adjusted for current economic conditions. We capitalize acquisition costs for traditional long-duration contracts. We charge these capitalized costs associated with successfully acquiring traditional long-duration contract insurance policies over the premium-paying period of the policies. We use the same assumptions used in establishing the liability for the contract. All acquisition costs are in accordance with ASU 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts . We update our acquisition cost assumptions periodically to reflect actual experience, and we evaluate our deferred acquisition costs for recoverability. Universal life contracts are long-duration contracts for which contractual provisions are not fixed, unlike whole life insurance. Universal life contracts allow policyholders to vary the amount of premium, within limits, without our consent. However, we may vary the mortality, expense charges and the interest crediting rate, within limits, used to accumulate policy values. We do not record universal life premiums as revenue. Instead we recognize as revenue the mortality charges, administration charges and surrender charges when received. Some of our universal life contracts assess administration charges in the early years of the contract that are compensation for services we will provide in the later years of the contract. These administration charges are deferred and are recognized over the period when we provide those future services. We maintain a liability equal to the policyholder account value. There is no provision for adverse deviation. 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. We capitalize acquisition costs associated with successfully acquiring universal life long-duration contracts. We charge these capitalized costs to expenses over the term of coverage of the contract in accordance with the recognition of gross profit from the contract. When we charge deferred policy acquisition costs to expenses, we use assumptions based on our best estimates of long-term experience. We review and modify these assumptions on a regular basis. Separate Accounts We have issued universal life contracts with guaranteed minimum returns, referred to as bank-owned life insurance contracts (BOLIs). A BOLI is designed so the bank is the policy owner and the policy beneficiary. We legally segregate and record as separate accounts the assets and liabilities for some of our BOLIs, based on the specific contract provisions. We guarantee minimum investment returns, account values and death benefits for our separate account BOLIs. Our other BOLIs are general account products. We carry the assets of separate account BOLIs at fair value. The liabilities on separate account BOLIs primarily are the contract holders’ claims to the related assets and are carried at an amount equal to the contract holders’ account value. At December 31, 2015, the current fair value of the BOLI invested assets and cash exceeded the current fair value of the contract holders’ account value by approximately $21 million . If the BOLI projected fair value were to fall below the value we guaranteed, a liability would be established with a corresponding charge to the company’s earnings. Generally, investment income and realized investment gains and losses of the separate accounts accrue directly to the contract holder, and we do not include them in the consolidated statements of income. Revenues and expenses related to separate accounts consist of contractual fees and mortality, surrender and expense risk charges. Also, each separate account BOLI includes a negotiated capital gain and loss sharing arrangement between the company and the bank. A percentage of each separate account’s realized capital gain and loss representing contract fees and assessments accrues to us and is transferred from the separate account to our general account and is recognized as revenue or expense. We record as revenues separate account investment management fees in Fee revenues of the consolidated statements of income. Reinsurance Assumed The Cincinnati Insurance Company is expanding in the area of assumed reinsurance. Business written includes treaties that provide coverage for property catastrophe events on a worldwide basis. Premiums are primarily earned on a pro rata basis over the coverage period of the treaty. We also assume risk with limited exposure as a reinsurer for other insurance companies, reinsurers and involuntary state pools. Reinsurance Ceded We reduce risk and uncertainty by buying property casualty and life reinsurance. Reinsurance contracts do not relieve us from our obligation to policyholders, but rather help protect our financial strength to perform that duty. All of these ceded reinsurance contracts transfer the economic risk of loss. Ceded premiums are deferred and recorded as earned premiums on a pro rata basis over the terms of the contracts. We estimate loss amounts recoverable from our reinsurers based on the reinsurance policy terms. Historically, our claims with reinsurers have been paid. We do not have an allowance for uncollectible reinsurance. Income Taxes We calculate deferred income tax liabilities and assets using tax rates in effect when temporary differences in financial statement income and taxable income are expected to reverse. We recognize deferred income taxes for numerous temporary differences between our taxable income and financial statement income and other changes in shareholders’ equity. Such temporary differences relate primarily to unrealized gains and losses on investments and differences in the recognition of deferred acquisition costs, unearned premium and insurance reserves. We charge deferred income taxes associated with balances that impact other comprehensive income, such as unrealized appreciation and depreciation of investments (except the amounts related to the effect of income tax rate changes), to shareholders’ equity in AOCI. We charge deferred taxes associated with other differences to income. See Note 11, Income Taxes, for further detail on our uncertain tax positions. Although no Internal Revenue Service (IRS) penalties currently are accrued, if incurred, they would be recognized as a component of income tax expense. Earnings per Share Net income per common share is based on the weighted average number of common shares outstanding during each of the respective years. We calculate net income per common share (diluted) assuming the exercise or conversion of share‑based awards using the treasury stock method. Land, Building and Equipment We record land at cost, and record building and equipment at cost less accumulated depreciation. Equipment held under capital leases also is classified as property and equipment with the related lease obligations recorded as liabilities. We capitalize and amortize costs for internally developed computer software during the application development stage. These costs generally consist of external consulting, payroll and payroll-related costs. Our depreciation is based on estimated useful lives (ranging from three years to 39.5 years) using straight-line and accelerated methods. Depreciation expense was $36 million for 2015, and $37 million for 2014 and 2013, respectively. We monitor land, building and equipment and software assets for potential impairments. Potential impairments may include a significant decrease in the fair values of the assets, considerable cost overruns on projects, a change in legal factors or business climate or other factors that indicate that the carrying amount may not be recoverable or useful. There were no recorded land, building and equipment impairments for 2015, 2014 or 2013. Finance Receivables Our leasing subsidiary provides auto and equipment direct financing (leases and loans) to commercial and individual clients. We generally transfer ownership of the property to the client as the terms of the leases expire. Our lease contracts contain bargain purchase options. We account for these leases and loans as direct financing-type leases. We capitalize and amortize lease or loan origination costs over the life of the financing, using the effective interest method. These costs may include, but are not limited to finder fees, broker fees, filing fees and the cost of credit reports. We record income as other revenues over the financing term using the effective interest method in the consolidated statements of income, Finance receivables are reviewed for impairment and are insignificant to our consolidated financial position, results of operations and cash flows. Employee Benefit Pension Plan We sponsor a defined benefit pension plan that was modified during 2008. We closed entry into the pension plan, and only participants 40 years of age or older could elect to remain in the plan. Our pension expense is based on certain actuarial assumptions and also is composed of several components that are determined using the projected unit credit actuarial cost method. Refer to Note 13, Employee Retirement Benefits, for more information about our defined benefit pension plan. Share-Based Compensation We grant qualified and nonqualified share-based compensation under authorized plans. The stock options generally vest on a graded scale over three years following the date of grant and are exercisable over 10 -year periods. We grant service-based restricted stock units that cliff vest three years after the date of grant as well as service-based restricted stock units that vest ratably over the three year vesting term. We also grant performance-based restricted stock units that vest if certain market conditions are attained. In 2015, the CFC compensation committee approved share-based awards including incentive stock options, nonqualified stock options, service-based restricted and performance-based restricted stock units. See Note 17, Share-Based Associate Compensation Plans, for further details. Subsequent Events There were no subsequent events requiring adjustment to the financial statements or disclosure. Adopted Accounting Updates ASU 2015-03, Interest-Imputation of Interest In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest. ASU 2015-03 reduces the complexity of disclosing debt issuance costs and debt discount and premium on the balance sheet by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU 2015-15, Interest-Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. ASU 2015-15 allows entities to defer and present debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The company adopted these ASU's retrospectively as of December 31, 2015. Certain prior year amounts have been reclassified to conform with the current-year presentation, including Other assets and Long-term debt and capital lease obligations which were reduced by approximately $5 million each. There were no changes to shareholders' equity as a result of these adoptions. There were no other impacts on our company's consolidated financial position, cash flows or results of operations. Pending Accounting Updates ASU 2014-09, Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers . ASU 2014-09 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Insurance contracts do not fall within the scope of this ASU. The effective date of ASU 2014-09 is for annual reporting periods beginning after December 15, 2017 with early adoption permitted. The ASU has not yet been adopted; however, there is not expected to be a material impact on our company’s consolidated financial position, cash flows or results of operations. ASU 2014-12, Compensation-Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In June 2014, the FASB issued ASU 2014-12, Compensation-Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. ASU 2014-12 requires that performance targets that affect vesting and that could be achieved after the requisite service period be treated as performance conditions. The effective date of ASU 2014-12 is for interim and annual reporting periods beginning after December 15, 2015. The ASU has not yet been adopted and will not have a material impact on our company’s consolidated financial position, cash flows or results of operations. ASU 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis. ASU 2015-02 makes amendments to the current consolidation guidance, focusing mainly on the investment management industry; however entities across all industries could be impacted. The effective date of ASU 2015-02 is for interim and annual reporting periods beginning after December 15, 2015. The ASU has not yet been adopted; however, there is not expected to be a material impact on our company’s consolidated financial position, cash flows or results of operations. ASU 2015-09, Financial Services-Insurance: Disclosures about Short-Duration Contracts In May 2015, the FASB issued ASU 2015-09, Financial Services-Insurance: Disclosures About Short-Duration Contracts. ASU 2015-09 requires entities to provide additional disclosures about the liability for unpaid claims and claim adjustment expenses to increase the transparency of significant estimates. ASU 2015-09 also requires entities to disclose information about significant changes in methodologies and assumptions used to calculate the liability for unpaid claims and claim adjustment expenses, including reasons for the change and the effects on the financial statements. ASU 2015-09 also requires entities to disclose a rollforward of the liability of unpaid claims and claim adjustment expense for annual and interim reporting periods. The effective date of ASU 2015-09 is for annual reporting periods beginning after December 15, 2015, and interim reporting periods within annual periods beginning after December 15, 2016. The ASU has not yet been adopted and will not have a material impact on our company’s consolidated financial position, cash flows or results of operations, but the ASU will require additional disclosures to our annual and interim financial statements. ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 revises the accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The effective date of ASU 2016-01 is for interim and annual reporting periods beginning after December 15, 2017. The ASU has not yet been adopted. Management is currently evaluating the impact on our company’s consolidated financial position, cash flows and results of operations. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2015 | |
Investments [Abstract] | |
Investments | Investments The following table provides cost or amortized cost, gross unrealized gains, gross unrealized losses and fair value for our fixed-maturity and equity securities: (Dollars in millions) Cost or amortized cost Gross unrealized Fair At December 31, 2015 gains losses Fixed-maturity securities: Corporate $ 5,294 $ 255 $ 96 $ 5,453 States, municipalities and political subdivisions 3,440 172 1 3,611 Commercial mortgage-backed 287 4 2 289 Government-sponsored enterprises 284 — 6 278 Foreign government 10 — — 10 Convertibles and bonds with warrants attached 5 — — 5 United States government 4 — — 4 Subtotal 9,324 431 105 9,650 Equity securities: Common equities 2,749 1,787 51 4,485 Nonredeemable preferred equities 189 32 — 221 Subtotal 2,938 1,819 51 4,706 Total $ 12,262 $ 2,250 $ 156 $ 14,356 At December 31, 2014 Fixed-maturity securities: Corporate $ 5,117 $ 420 $ 11 $ 5,526 States, municipalities and political subdivisions 3,267 178 2 3,443 Commercial mortgage-backed 250 9 — 259 Government-sponsored enterprises 213 — 5 208 Foreign government 10 — — 10 Convertibles and bonds with warrants attached 7 — — 7 United States government 7 — — 7 Subtotal 8,871 607 18 9,460 Equity securities: Common equities 2,583 2,099 3 4,679 Nonredeemable preferred equities 145 35 1 179 Subtotal 2,728 2,134 4 4,858 Total $ 11,599 $ 2,741 $ 22 $ 14,318 The net unrealized investment gains in our fixed-maturity portfolio are primarily the result of the continued low interest rate environment that increased the fair value of our fixed-maturity portfolio. Our commercial mortgage-backed securities had an average rating of Aa1/AA at December 31, 2015 and 2014. The seven largest net unrealized investment gains in our common stock portfolio are from Exxon Mobil Corporation (NYSE:XOM), Honeywell International Incorporated (NYSE:HON), The Procter & Gamble Company (NYSE:PG), BlackRock Inc. (NYSE:BLK), Microsoft Corporation (Nasdaq:MFST), Johnson and Johnson (NYSE:JNJ), and JP Morgan Chase & Co. (NYSE:JPM), which had a combined gross unrealized gain of $566 million . At December 31, 2015, JP Morgan Chase & Co. was our largest single equity holding with a fair value of 3.3 percent of our publicly traded common equities portfolio and 1.0 percent of the total investment portfolio. The table below provides fair values and 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 December 31, 2015 Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Fixed-maturity securities: Corporate $ 1,099 $ 63 $ 133 $ 33 $ 1,232 $ 96 States, municipalities and political subdivisions 47 1 22 — 69 1 Commercial mortgage-backed 103 2 2 — 105 2 Government-sponsored enterprises 100 2 127 4 227 6 Subtotal 1,349 68 284 37 1,633 105 Equity securities: Common equities 270 51 — — 270 51 Nonredeemable preferred equities 35 — — — 35 — Subtotal 305 51 — — 305 51 Total $ 1,654 $ 119 $ 284 $ 37 $ 1,938 $ 156 At December 31, 2014 Fixed-maturity securities: Corporate $ 261 $ 8 $ 90 $ 3 $ 351 $ 11 States, municipalities and political subdivisions 17 — 135 2 152 2 Commercial mortgage-backed 3 — 23 — 26 — Government-sponsored enterprises 11 — 181 5 192 5 Subtotal 292 8 429 10 721 18 Equity securities: Common equities 85 3 — — 85 3 Nonredeemable preferred equities 16 — 17 1 33 1 Subtotal 101 3 17 1 118 4 Total $ 393 $ 11 $ 446 $ 11 $ 839 $ 22 Contractual maturity dates for fixed-maturity investments were: (Dollars in millions) Amortized cost Fair value % of fair value At December 31, 2015 Maturity dates: Due in one year or less $ 453 $ 459 4.8 % Due after one year through five years 3,068 3,243 33.6 Due after five years through ten years 3,592 3,649 37.8 Due after ten years 2,211 2,299 23.8 Total $ 9,324 $ 9,650 100.0 % Actual maturities may differ from contractual maturities when there is a right to call or prepay obligations with or without call or prepayment penalties. At December 31, 2015, fixed-maturity investments with amortized cost of $74 million and fair value of $77 million were on deposit with various states in compliance with regulatory requirements. At December 31, 2014, fixed‑maturity investments with amortized cost of $75 million and fair value of $78 million were on deposit with various states in compliance with regulatory requirements. The following table provides investment income, realized investment gains and losses, and the change in unrealized investment gains and losses: (Dollars in millions) Years ended December 31, 2015 2014 2013 Investment income: Interest $ 428 $ 417 $ 413 Dividends 150 138 122 Other 3 2 3 Total 581 557 538 Less investment expenses 9 8 9 Total $ 572 $ 549 $ 529 Realized investment gains and losses: Fixed maturities: Gross realized gains $ 18 $ 21 $ 15 Gross realized losses — (3 ) — Other-than-temporary impairments (18 ) (15 ) (2 ) Equity securities: Gross realized gains 129 136 64 Gross realized losses (26 ) — — Other-than-temporary impairments (34 ) (9 ) — Other 1 3 6 Total $ 70 $ 133 $ 83 Change in unrealized investment gains and losses: Fixed maturities $ (263 ) $ 106 $ (387 ) Equity securities (362 ) 278 847 Less deferred income taxes (220 ) 134 161 Total $ (405 ) $ 250 $ 299 For the years ended December 31, 2015, 2014 and 2013, there were no credit losses on fixed-maturity securities for which a portion of OTTI has been recognized in other comprehensive income. During 2015, we other-than-temporarily impaired 20 securities. At December 31, 2015, 69 fixed-maturity investments with a total unrealized loss of $37 million had been in an unrealized loss position for 12 months or more. Of that total, five fixed-maturity investments had fair values below 70 percent of amortized cost. There were no equity security investments in an unrealized loss position for 12 months or more as of December 31, 2015. During 2014, we other-than-temporarily impaired six securities. At December 31, 2014, 144 fixed-maturity investments with a total unrealized loss of $10 million had been in an unrealized loss position for 12 months or more. Of that total, no fixed-maturity investments had fair values below 70 percent of amortized cost. There were three equity security investments in an unrealized loss position for 12 months or more with a total unrealized loss of $1 million as of December 31, 2014. Of that total, no equity security investments had fair values below 70 percent of cost. During 2013, we other-than-temporarily impaired seven securities. At December 31, 2013, 40 fixed-maturity investments with a total unrealized loss of $5 million had been in an unrealized loss position for 12 months or more. Of that total, no fixed-maturity investments had fair values below 70 percent of amortized cost. There were no equity security investments in an unrealized loss position for 12 months or more as of December 31, 2013. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements 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, 2014, and ultimately management determines fair value. Financial instruments reported at fair value in our consolidated financial statements are categorized based upon the following characteristics or inputs to the valuation techniques: • Level 1 – Financial assets and liabilities for which inputs are observable and are obtained from reliable quoted prices for identical assets or liabilities in active markets. This is the most reliable fair value measurement and includes, for example, active exchange-traded equity securities. • Level 2 – Financial assets and liabilities for which values are based on quoted prices in markets that are not active or for which values are based on similar assets and liabilities that are actively traded. This also includes pricing models for which the inputs are corroborated by market data. The technique used for the Level 2 fixed-maturity securities and taxable fixed maturities in separate accounts is the application of market based modeling. The inputs used for all classes of fixed-maturity securities listed in the table below include relevant market information by asset class, trade activity of like securities, marketplace quotes, benchmark yields, spreads off benchmark yields, interest rates, U.S. Treasury or swap curves, yield to maturity and economic events. Specific to commercial mortgage-backed securities, key inputs also include prepayment and default projections based on past performance of the underlying collateral and current market data. All of the Level 2 fixed-maturity securities are priced by a nationally recognized pricing vendor. The Level 2 nonredeemable preferred equities technique used is the application of market based modeling. The inputs used, similar to those used by the pricing vendor for our fixed-maturity securities, include relevant market information, trade activity of like securities, yield to maturity, corporate action notices and economic events. All of the Level 2 nonredeemable preferred equities are priced by a nationally recognized pricing vendor. • Level 3 – Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Level 3 inputs include the following: ◦ Quotes from brokers or other external sources that are not considered binding; ◦ Quotes from brokers or other external sources where it cannot be determined that market participants would in fact transact for the asset or liability at the quoted price; or ◦ Quotes from brokers or other external sources where the inputs are not deemed observable. The following tables illustrate the fair value hierarchy for those assets measured at fair value on a recurring basis at December 31, 2015 and 2014. We do not have any liabilities carried at fair value. There were no transfers between Level 1 and Level 2. (Dollars in millions) Quoted prices in active markets for Significant unobservable At December 31, 2015 Significant other observable inputs (Level 2) Total Fixed maturities, available for sale: Corporate $ — $ 5,402 $ 51 $ 5,453 States, municipalities and political subdivisions — 3,611 — 3,611 Commercial mortgage-backed — 289 — 289 Government-sponsored enterprises — 278 — 278 Foreign government — 10 — 10 Convertibles and bonds with warrants attached — 5 — 5 United States government 4 — — 4 Subtotal 4 9,595 51 9,650 Common equities, available for sale 4,485 — — 4,485 Nonredeemable preferred equities, available for sale — 218 3 221 Separate accounts taxable fixed maturities — 736 1 737 Top Hat savings plan mutual funds and common equity (included in Other assets) 21 — — 21 Total $ 4,510 $ 10,549 $ 55 $ 15,114 At December 31, 2014 Fixed maturities, available for sale: Corporate $ — $ 5,508 $ 18 $ 5,526 States, municipalities and political subdivisions — 3,443 — 3,443 Commercial mortgage-backed — 259 — 259 Government-sponsored enterprises — 208 — 208 Foreign government — 10 — 10 Convertibles and bonds with warrants attached — 7 — 7 United States government 7 — — 7 Subtotal 7 9,435 18 9,460 Common equities, available for sale 4,679 — — 4,679 Nonredeemable preferred equities, available for sale — 177 2 179 Separate accounts taxable fixed maturities — 731 — 731 Top Hat savings plan mutual funds and common equity (included in Other assets) 18 — — 18 Total $ 4,704 $ 10,343 $ 20 $ 15,067 Each financial instrument that was deemed to have significant unobservable inputs when determining valuation is identified in the following tables by security type with a summary of changes in fair value for the years ended December 31, 2015 and 2014. Total Level 3 assets continue to be less than 1 percent of financial assets measured at fair value in the consolidated balance sheets. Assets presented in the table below were valued based primarily on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. Transfers into Level 3 included situations where a fair value quote was not provided by the company's nationally recognized pricing vendor and as a result the price was stale or had been replaced with a broker quote where the inputs had not been corroborated to be market observable resulting in the security being classified as Level 3. Transfers out of Level 3 included situations where a broker quote was used in the prior period and a fair value quote became available from the company's pricing vendor in the current period. A quote utilizing the new pricing source was not available as of the prior period, and any gains or losses related to the change in valuation source for individual securities were not significant. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to us. The following table provides the change in Level 3 assets during 2015 and 2014: (Dollars in millions) Asset fair value measurements using significant unobservable input Corporate fixed maturities Taxable fixed maturities-separate accounts Nonredeemable preferred equities Total Beginning balance, January 1, 2015 $ 18 $ — $ 2 $ 20 Total gains or losses (realized/unrealized): Included in net income — — — — Included in other comprehensive income — — 1 1 Purchases 36 1 — 37 Sales — — — — Transfers into Level 3 — — — — Transfers out of Level 3 (3 ) — — (3 ) Ending balance, December 31, 2015 $ 51 $ 1 $ 3 $ 55 Beginning balance, January 1, 2014 $ 2 $ — $ 2 $ 4 Total gains or losses (realized/unrealized): Included in net income — — — — Included in other comprehensive income — — — — Purchases — — — — Sales — — — — Transfers into Level 3 16 — — 16 Transfers out of Level 3 — — — — Ending balance, December 31, 2014 $ 18 $ — $ 2 $ 20 With the exception of the above table, additional disclosures for the Level 3 category are not material. Fair Value Disclosure 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 consolidated financial statements. The following table shows fair values of our note payable and long-term debt: (Dollars in millions) Quoted prices in active markets for Significant other Significant unobservable inputs (Level 3) Total At December 31, 2015 Note payable $ — $ 35 $ — $ 35 6.900% senior debentures, due 2028 — 31 — 31 6.920% senior debentures, due 2028 — 480 — 480 6.125% senior notes, due 2034 — 425 — 425 Total $ — $ 971 $ — $ 971 At December 31, 2014 Note payable $ — $ 49 $ — $ 49 6.900% senior debentures, due 2028 — 34 — 34 6.920% senior debentures, due 2028 — 496 — 496 6.125% senior notes, due 2034 — 449 — 449 Total $ — $ 1,028 $ — $ 1,028 Fair value of the note payable was determined based upon the outstanding balance at December 31, 2015 and 2014, because it is short term and tied to a variable interest rate. The note payable was classified as Level 2 as an active market does not exist, but fair value is determined based on observable inputs. Fair value of the long-term debt was determined under the fair value measurements and disclosure accounting rules based on market pricing of similar debt instruments that are actively trading. We determine fair value for our debt the same way that we value corporate fixed maturities in our investment portfolio. Fair value can vary with macroeconomic conditions. Regardless of the fluctuations in fair value, the outstanding principal amount of our long-term debt is $793 million at both December 31, 2015 and 2014. None of the long-term debt is encumbered by rating triggers. The following table shows the fair value of our life policy loans, included in other invested assets: (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 December 31, 2015 Life policy loans $ — $ — $ 40 $ 40 At December 31, 2014 Life policy loans $ — $ — $ 39 $ 39 Outstanding principal and interest for these life policy loans totaled $31 million at December 31, 2015 and 2014. To determine the fair value, we make the following significant assumptions: (1) the discount rates used to calculate the present value of expected payments are the risk-free spot rates, as nonperformance risk is minimal; and (2) the loan repayment rate by which policyholders pay off their loan balances is in line with past experience. The following table shows fair value 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 December 31, 2015 Deferred annuities $ — $ — $ 886 $ 886 Structured settlements — 208 — 208 Total $ — $ 208 $ 886 $ 1,094 At December 31, 2014 Deferred annuities $ — $ — $ 897 $ 897 Structured settlements — 217 — 217 Total $ — $ 217 $ 897 $ 1,114 Recorded reserves for the deferred annuities were $860 million and $863 million at December 31, 2015 and 2014, respectively. Recorded reserves for the structured settlements were $174 million and $182 million at December 31, 2015 and 2014, respectively. Fair values for deferred annuities were calculated based upon internally developed models because active, observable markets do not exist for those items. To determine the fair value, we made the following significant assumptions: (1) the discount rates used to calculate the present value of expected payments are the risk-free spot rates plus an A3 rated bond spread for financial issuers at December 31, 2015 and 2014, to account for nonperformance risk; (2) the rate of interest credited to policyholders is the portfolio net earned interest rate less a spread for expenses and profit; and (3) additional lapses occur when the credited interest rate is exceeded by an assumed competitor credited rate, which is a function of the risk-free rate of the economic scenario being modeled. Determination of fair value for structured settlements assumes the discount rates used to calculate the present value of expected payments are the risk-free spot rates plus an A3 rated bond spread for financial issuers at December 31, 2015 and 2014, to account for nonperformance risk. |
Property Casualty Loss And Loss
Property Casualty Loss And Loss Expenses | 12 Months Ended |
Dec. 31, 2015 | |
Insurance [Abstract] | |
Property Casualty Loss And Loss Expenses | Property Casualty Loss and Loss Expenses This table summarizes activity for our consolidated property casualty loss and loss expense reserves: (Dollars in millions) Years ended December 31, 2015 2014 2013 Gross loss and loss expense reserves, January 1 $ 4,438 $ 4,241 $ 4,169 Less reinsurance recoverable 282 299 356 Net loss and loss expense reserves, January 1 4,156 3,942 3,813 Net incurred loss and loss expenses related to: Current accident year 2,756 2,725 2,448 Prior accident years (184 ) (98 ) (147 ) Total incurred 2,572 2,627 2,301 Net paid loss and loss expenses related to: Current accident year 1,152 1,212 1,045 Prior accident years 1,197 1,201 1,127 Total paid 2,349 2,413 2,172 Net loss and loss expense reserves, December 31 4,379 4,156 3,942 Plus reinsurance recoverable 281 282 299 Gross loss and loss expense reserves, December 31 $ 4,660 $ 4,438 $ 4,241 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 management that 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 consolidated balance sheets also includes $58 million , $47 million and $70 million for certain accident, life and health loss reserves at December 31, 2015, 2014 and 2013, respectively. During 2015, we experienced $184 million of favorable development on prior accident years including $154 million of favorable development in commercial lines, $5 million of adverse development in personal lines and $35 million of favorable development in excess and surplus lines. Favorable development in 2015 was $86 million more than in 2014, due primarily to reduced uncertainty of prior accident year loss and loss adjustment net expense. This illustrates the potential for revisions inherent in estimating reserves, especially for long-tail lines such as commercial casualty and workers’ compensation. We recognized favorable development of $93 million for the workers' compensation line, largely due to more favorable 2015 workers' compensation trends for estimated payments to be made in future calendar years that were down slightly from 2014. We recognized favorable development of $63 million for the commercial casualty line. Development for products liability was favorable for most prior accident years and development of prior years for commercial umbrella coverage improved slightly better than expected. Therefore, estimated ultimate losses were lowered. Our commercial auto line experienced $31 million of adverse development due to higher loss cost effects in recent accident years, resulting in an increase of our reserve estimate for claims that have not yet been settled. We believe we were slow to recognize some of the higher loss cost effects. During 2014, we experienced $98 million of favorable development on prior accident years including $57 million of favorable development in commercial lines, $12 million of favorable development in personal lines and $29 million of favorable development in excess and surplus lines. Favorable development in 2014 was $49 million less than in 2013, largely due to the change in prior accident years before catastrophes. We recognized favorable reserve development of $51 million for the workers’ compensation line, $34 million for the commercial property line and $14 million for the homeowner line, due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines. Our commercial casualty line experienced $5 million of adverse development due to an increase in its paid loss and loss expenses for cumulative accident years three or more years old, resulting in an increase recognized in estimates for IBNR losses and loss expenses for all prior accident years in total compared to 2013 and 2012. Our commercial auto line developed unfavorably by $39 million during 2014 due to higher loss cost effects in recent accident years, resulting in an increase of our reserve estimate for claims that have not yet been settled. During 2013, we experienced $147 million of favorable development on prior accident years including $95 million of favorable development in commercial lines, $39 million of favorable development in personal lines and $13 million of favorable development in excess and surplus lines. Favorable development in 2013 was $249 million less than in 2012, largely due to the change in prior accident years before catastrophes. We recognized favorable reserve development of $70 million for the commercial casualty line, $22 million for the commercial property line, $14 million for the workers' compensation line and $19 million for the homeowner line, due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines. Asbestos and Environmental Reserves We carried $84 million of net loss and loss expense reserves for asbestos and environmental claims and $45 million of reserves for mold claims at December 31, 2015, compared with $81 million and $51 million , respectively, at December 31, 2014. The asbestos and environmental claims amounts for each respective year constituted 1.9 percent and 2.0 percent of total net loss and loss expense reserves at these year-end dates. We believe our exposure to asbestos and environmental claims is limited, largely because our reinsurance retention was $500,000 or below prior to 1987. We also were predominantly a personal lines company in the 1960s and 1970s. During the 1980s and early 1990s, commercial lines grew as a percentage of our overall business and our exposure to asbestos and environmental claims grew accordingly. Over that period, we included an asbestos and environmental exclusion in most policies or endorsed the exclusion to the policies. We have not engaged in any mergers or acquisitions through which such a liability could have been assumed. We continue to monitor our claims for evidence of material exposure to other mass tort classes such as silicosis, but we have found no such credible evidence to date. |
Life Policy And Investment Cont
Life Policy And Investment Contract Reserves | 12 Months Ended |
Dec. 31, 2015 | |
Liability for Future Policy Benefits [Abstract] | |
Life Policy And Investment Contract Reserves | 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 economic conditions. We establish reserves for the company’s universal life, deferred annuity 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) At December 31, 2015 2014 Traditional life $ 943 $ 875 Deferred annuities 860 863 Universal life 558 530 Structured settlements 174 182 Other 48 47 Total life policy and investment contract reserves $ 2,583 $ 2,497 |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs | 12 Months Ended |
Dec. 31, 2015 | |
Deferred Costs [Abstract] | |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs Expenses associated with successfully acquiring 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) Years ended December 31, 2015 2014 2013 Property casualty: Deferred policy acquisition costs asset, January 1 $ 379 $ 366 $ 337 Capitalized deferred policy acquisition costs 801 783 756 Amortized deferred policy acquisition costs (792 ) (770 ) (727 ) Deferred policy acquisition costs asset, December 31 $ 388 $ 379 $ 366 Life: Deferred policy acquisition costs asset, January 1 $ 199 $ 199 $ 133 Capitalized deferred policy acquisition costs 45 44 46 Amortized deferred policy acquisition costs (37 ) (37 ) (31 ) Amortized shadow deferred policy acquisition costs 21 (7 ) 51 Deferred policy acquisition costs asset, December 31 $ 228 $ 199 $ 199 Consolidated: Deferred policy acquisition costs asset, January 1 $ 578 $ 565 $ 470 Capitalized deferred policy acquisition costs 846 827 802 Amortized deferred policy acquisition costs (829 ) (807 ) (758 ) Amortized shadow deferred policy acquisition costs 21 (7 ) 51 Deferred policy acquisition costs asset, December 31 $ 616 $ 578 $ 565 The change in amortized shadow deferred policy acquisition costs in 2015 and 2013 compared to 2014 was the result of increasing interest rates. No premium deficiencies were recorded in the consolidated statements of income in 2015, 2014 and 2013, as the sum of the anticipated loss and loss adjustment expenses, policyholder dividends and unamortized deferred acquisition expenses did not exceed the related unearned premiums and anticipated investment income. |
Note Payable
Note Payable | 12 Months Ended |
Dec. 31, 2015 | |
Notes Payable, Current [Abstract] | |
Note Payable | Note Payable We have one line of credit in 2015 and 2014 through multiple commercial banks with a borrowing capacity of $225 million and an additional $50 million accordion feature. Our unsecured revolving credit facility has a term of five years that expires May 13, 2019 . We had no compensating balance requirements on short-term debt for either 2015 or 2014. At December 31, 2015, $35 million was drawn on the line of credit. At December 31, 2014, $49 million was drawn on the line of credit. The interest rate charged on our borrowings on this credit agreement ranged from 1.07 percent to 1.19 percent during 2015 and ranged from 1.15 percent to 1.30 percent during 2014. |
Long-Term Debt And Capital Leas
Long-Term Debt And Capital Lease Obligation | 12 Months Ended |
Dec. 31, 2015 | |
Long-term Debt and Capital Lease Obligations [Abstract] | |
Long-Term Debt And Capital Lease Obligation | Long-Term Debt and Capital Lease Obligations This table summarizes the principal amounts of our long-term debt excluding unamortized discounts, none of which are encumbered by rating triggers: (Dollars in millions) Book value Principal amount Interest rate Year of issue At December 31, At December 31, 2015 2014 2015 2014 6.900% 1998 Senior debentures, due 2028 $ 26 $ 26 $ 28 $ 28 6.920% 2005 Senior debentures, due 2028 391 391 391 391 6.125% 2004 Senior notes, due 2034 369 369 374 374 Total $ 786 $ 786 $ 793 $ 793 Capital lease obligations, excluding an insignificant amount of interest, totaled $35 million and $36 million in 2015 and 2014, respectively. Below are the expected capital lease obligations that we expect to pay over the next six years: (Dollars in millions) Years ended December 31, 2016 2017 2018 2019 2020 2021 Capital lease obligations $ 13 $ 8 $ 6 $ 4 $ 3 $ 1 |
Shareholders' Equity And Divide
Shareholders' Equity And Dividend Restrictions | 12 Months Ended |
Dec. 31, 2015 | |
Shareholders Equity And Dividend Restrictions [Abstract] | |
Shareholders' Equity And Dividend Restrictions | Shareholders’ Equity and Dividend Restrictions Declared cash dividends per share were $2.30 , $1.76 and $1.655 for the years ended December 31, 2015, 2014 and 2013, respectively. Our insurance subsidiary declared dividends to the parent company of $447 million in 2015, $400 million in 2014 and $375 million in 2013. State regulatory requirements restrict the dividends insurance subsidiaries can pay. Dividends must be paid within 30 days of declaration. Generally, the most our insurance subsidiary can pay without prior regulatory approval is the greater of 10 percent of statutory capital and surplus or 100 percent of statutory net income for the prior calendar year. Dividends exceeding these limitations may be paid only with approval of the insurance department of the domiciliary state. During 2016, the total that our insurance subsidiary, which is the parent of all other insurance subsidiaries, may declare in dividends is approximately $534 million . Accumulated Other Comprehensive Income The table below shows beginning and end of year accumulated other comprehensive income (AOCI) for investments, pension obligations, life deferred acquisition costs, life policy reserves and other. The changes from the beginning of year to the end of year are the result of changes to other comprehensive income or loss (OCI). (Dollars in millions) 2015 2014 2013 Before tax Income tax Net Before Income Net Before Income Net Investments: AOCI, January 1 $ 2,719 $ 942 $ 1,777 $ 2,335 $ 808 $ 1,527 $ 1,875 $ 647 $ 1,228 OCI before realized gains recognized in net income (556 ) (196 ) (360 ) 514 181 333 537 188 349 Realized gains and losses recognized in net income (69 ) (24 ) (45 ) (130 ) (47 ) (83 ) (77 ) (27 ) (50 ) OCI (625 ) (220 ) (405 ) 384 134 250 460 161 299 AOCI, December 31 $ 2,094 $ 722 $ 1,372 $ 2,719 $ 942 $ 1,777 $ 2,335 $ 808 $ 1,527 Pension obligations: AOCI, January 1 $ (36 ) $ (12 ) $ (24 ) $ (18 ) $ (6 ) $ (12 ) $ (101 ) $ (35 ) $ (66 ) OCI excluding amortization recognized in net income (12 ) (5 ) (7 ) (21 ) (7 ) (14 ) 83 29 54 Amortization recognized in net income 6 3 3 3 1 2 — — — OCI (6 ) (2 ) (4 ) (18 ) (6 ) (12 ) 83 29 54 AOCI, December 31 $ (42 ) $ (14 ) $ (28 ) $ (36 ) $ (12 ) $ (24 ) $ (18 ) $ (6 ) $ (12 ) Life deferred acquisition costs, life policy reserves and other: AOCI, January 1 $ (12 ) $ (3 ) $ (9 ) $ (16 ) $ (5 ) $ (11 ) $ (50 ) $ (17 ) $ (33 ) OCI before realized gains recognized in net income 14 5 9 7 3 4 40 14 26 Realized gains and losses recognized in net income (1 ) (1 ) — (3 ) (1 ) (2 ) (6 ) (2 ) (4 ) OCI 13 4 9 4 2 2 34 12 22 AOCI, December 31 $ 1 $ 1 $ — $ (12 ) $ (3 ) $ (9 ) $ (16 ) $ (5 ) $ (11 ) Summary of AOCI: AOCI, January 1 $ 2,671 $ 927 $ 1,744 $ 2,301 $ 797 $ 1,504 $ 1,724 $ 595 $ 1,129 Investments OCI (625 ) (220 ) (405 ) 384 134 250 460 161 299 Pension obligations OCI (6 ) (2 ) (4 ) (18 ) (6 ) (12 ) 83 29 54 Life deferred acquisition costs, life policy reserves and other OCI 13 4 9 4 2 2 34 12 22 Total OCI (618 ) (218 ) (400 ) 370 130 240 577 202 375 AOCI, December 31 $ 2,053 $ 709 $ 1,344 $ 2,671 $ 927 $ 1,744 $ 2,301 $ 797 $ 1,504 |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2015 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Reinsurance Primary components of our property casualty operations assumed reinsurance 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 catastrophe bonds 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. Our consolidated statements of income include earned consolidated property casualty insurance premiums on assumed and ceded business: (Dollars in millions) Years ended December 31, 2015 2014 2013 Direct earned premiums $ 4,396 $ 4,209 $ 3,903 Assumed earned premiums 29 12 11 Ceded earned premiums (154 ) (176 ) (201 ) Earned premiums $ 4,271 $ 4,045 $ 3,713 Our consolidated statements of income include incurred consolidated property casualty insurance loss and loss expenses on assumed and ceded business: (Dollars in millions) Years ended December 31, 2015 2014 2013 Direct incurred loss and loss expenses $ 2,596 $ 2,661 $ 2,323 Assumed incurred loss and loss expenses 12 6 11 Ceded incurred loss and loss expenses (36 ) (40 ) (33 ) Incurred loss and loss expenses $ 2,572 $ 2,627 $ 2,301 Our ceded incurred results generally vary with our catastrophe experience. Our life insurance company purchases reinsurance for protection of a portion of 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. Our consolidated statements of income include earned life insurance premiums on ceded business: (Dollars in millions) Years ended December 31, 2015 2014 2013 Direct earned premiums $ 271 $ 259 $ 248 Ceded earned premiums (62 ) (61 ) (59 ) Earned premiums $ 209 $ 198 $ 189 Our consolidated statements of income include life insurance contract holders’ benefits incurred on ceded business: (Dollars in millions) Years ended December 31, 2015 2014 2013 Direct contract holders' benefits incurred $ 292 $ 299 $ 266 Ceded contract holders' benefits incurred (56 ) (70 ) (62 ) Contract holders' benefits incurred $ 236 $ 229 $ 204 The ceded benefits incurred can vary depending on the type of life insurance policy held and the year the policy was issued. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The significant components of deferred tax assets and liabilities included in the consolidated balance sheets at December 31 were as follows: (Dollars in millions) At December 31, 2015 2014 Deferred tax assets: Loss and loss expense reserves $ 191 $ 197 Unearned premiums 151 145 Investments 25 16 Other 42 41 Total gross deferred tax assets 409 399 Deferred tax liabilities: Unrealized investment gains, net 719 937 Deferred acquisition costs 187 183 Life policy reserves 137 110 Other 4 9 Total gross deferred tax liabilities 1,047 1,239 Net deferred income tax liability $ 638 $ 840 Deferred tax assets and liabilities reflect temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount recognized for tax purposes. The differences between the 35 percent statutory federal income tax rate and our effective income tax rate were as follows: (Dollars in millions) Years ended December 31, 2015 2014 2013 Tax at statutory rate: $ 308 35.0 % $ 252 35.0 % $ 250 35.0 % Increase (decrease) resulting from: Tax-exempt income from municipal bonds (33 ) (3.7 ) (33 ) (4.6 ) (32 ) (4.5 ) Dividend received exclusion (32 ) (3.6 ) (29 ) (4.0 ) (26 ) (3.6 ) Other 4 0.3 6 0.8 5 0.7 Provision for income taxes $ 247 28.0 % $ 196 27.2 % $ 197 27.6 % The provision for federal income taxes is based upon filing a consolidated income tax return for the company and its subsidiaries. As of December 31, 2015, 2014 and 2013, we had no operating or capital loss carry forwards. Unrecognized Tax Benefits As a result of positions either taken in our 2012 through 2014 federal tax returns filed with the IRS or expected to be taken in the 2015 filing, we believe it is more likely than not that our tax liability will be sustained upon examination by the IRS. We therefore carry no amount for unrecognized tax benefits for the years ended 2012 through 2015. The statute of limitations for federal tax purposes has closed for tax years 2011 and earlier. There are no federal returns under examination and we have not been notified of any upcoming IRS examinations. Income taxes paid in our consolidated statements of cash flows are shown net of refunds received of less than $1 million in 2015, 2014, and 2013. In addition to our IRS filings, we file income tax returns with immaterial amounts in various state jurisdictions. The statute of limitations for state income tax purposes has closed for tax years 2011 and earlier. There are no state income returns under examination and we have not been notified of any upcoming state examinations. |
Net Income Per Common Share
Net Income Per Common Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | Net Income 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) Years ended December 31, 2015 2014 2013 Numerator: Net income—basic and diluted $ 634 $ 525 $ 517 Denominator: Basic weighted-average common shares outstanding 164.0 163.5 163.5 Effect of share-based awards: Stock options 1.0 1.0 1.2 Nonvested shares 0.6 0.6 0.7 Diluted weighted-average shares 165.6 165.1 165.4 Earnings per share: Basic $ 3.87 $ 3.21 $ 3.16 Diluted 3.83 3.18 3.12 Number of anti-dilutive share-based awards 0.4 0.7 0.4 The current sources of dilution of our common shares are certain equity-based awards as discussed in Note 17, Share-Based Associate Compensation Plans. The above table includes the number of anti-dilutive share-based awards at year-end 2015, 2014 and 2013. We did not include these share-based awards in the computation of net income per common share (diluted) because their exercise would have anti-dilutive effects. |
Employee Retirement Benefits
Employee Retirement Benefits | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Retirement Benefits | Employee Retirement Benefits We sponsor a qualified defined benefit pension plan. During 2008, we changed the form of retirement benefit we offer some associates to a company match on contributions to a 401(k) plan from the defined benefit pension plan. We closed entry into the pension plan for new associates as of June 30, 2008, and only participants 40 years of age or older as of August 31, 2008, could elect to continue to participate. For participants remaining in the pension plan, we continue to contribute to fund future benefit obligations. Benefits for the defined benefit pension plan are based on years of credited service and compensation level. Contributions are based on the prescribed method defined in the Pension Protection Act. Our pension expense is based on certain actuarial assumptions and also is composed of several components that are determined using the projected unit credit actuarial cost method. The qualified plan has been amended to allow for distribution of vested balances to terminated participants. We also sponsor a defined contribution plan (401(k) plan). Matching company contributions totaled $12 million , $11 million and $10 million during the years 2015, 2014 and 2013, respectively. Associates who are not accruing benefits under the pension plan are eligible to receive the company match of up to 6 percent of cash compensation. We also pay all operating expenses for the 401(k) plan. Participants vest in the company match for the 401(k) plan after three years of eligible service. We maintain a supplemental executive retirement plan (SERP) with a benefit obligation of $14 million at year-end 2015 and $13 million at year-end 2014, which is included in the projected benefit obligation. The company also makes available to a select group of associates the CFC Top Hat Savings Plan, a nonqualified deferred compensation plan, which had a fair value of $21 million and $18 million at December 31, 2015 and 2014, respectively. Defined Benefit Pension Plan Assumptions We evaluate our pension plan assumptions annually and update them as necessary. This is a summary of the weighted-average assumptions used to determine our benefit obligations at December 31 for the plans: Qualified Pension Plan SERP 2015 2014 2015 2014 Discount rate 4.55 % 4.25 % 4.30 % 4.05 % Rate of compensation increase 2.75-3.25 2.75-3.25 2.75-3.25 2.75-3.25 To determine the discount rate for each plan, a theoretical settlement portfolio of high-quality rated corporate bonds was chosen to provide payments approximately matching the plan’s projected benefit payments. A single interest rate for each plan was determined resulting in a discounted value of the plan's benefit payments that equates to the market value of the selected bonds. The discount rate is reflective of current market interest rate conditions and our plan's liability characteristics. Based on this analysis, we increased the rate from the prior year by 0.30 percentage points for the qualified pension plan and by 0.25 percentage points for the SERP. Compensation increase assumptions reflect anticipated rates of inflation, real return on wage growth and merit and promotional increases. The mortality assumption was updated in 2014 to the RP-2014 Employee Mortality Tables and RP-2014 Annuitant Mortality Tables for males and females projected generationally with Scale MP-2014. During 2015, the 2014 mortality tables were updated to include the generational projection using Scale MP-2015.The updated mortality table did not have a significant impact on our financial statements as our qualified plan assumes the majority of benefits will be paid in the form of lump sums. This is a summary of the weighted-average assumptions used to determine our net expense for the plans: Qualified Pension Plan SERP 2015 2014 2013 2015 2014 2013 Discount rate 4.25 % 5.15 % 4.20 % 4.05 % 4.80 % 3.95 % Expected return on plan assets 7.25 7.25 7.50 n/a n/a n/a Rate of compensation increase 2.75-3.25 2.75-3.25 2.75-3.25 2.75-3.25 2.75-3.25 2.75-3.25 The discount rate was decreased by 0.90 percentage points for the qualified pension plan and 0.75 percentage points for the SERP due to market interest rate conditions at the beginning of 2015. The discount rate assumptions for our benefit obligation generally track with high-quality rated corporate bond yields chosen in our theoretical settlement portfolio, and yearly adjustments reflect any changes to those bond yields. We believe the expected return on plan assets is representative of the expected long-term rate of return on these assets, which is consistent with 2015 expectations of interest rates and based partially on the fact that the plan’s common stock holdings pay dividends. We believe this rate is representative of the expected long-term rate of return on these plan assets. We review historical actual return on plan assets when determining our expected long-term rate of return. Total portfolio return for 2015 was 0.6 percent and for 2014 was 11.7 percent. Our compensation increase assumptions in 2015 reflect anticipated rates of inflation, real return on wage growth and merit and promotional increases. Benefit obligation activity using an actuarial measurement date for our qualified pension plan and SERP at December 31 follows: (Dollars in millions) At December 31, 2015 2014 Change in projected benefit obligation: Benefit obligation, January 1 $ 319 $ 284 Service cost 12 10 Interest cost 14 15 Actuarial (gain) loss (3 ) 35 Benefits paid (19 ) (27 ) Other — 2 Projected benefit obligation, December 31 $ 323 $ 319 Accumulated benefit obligation $ 293 $ 284 Change in plan assets: Fair value of plan assets, January 1 $ 288 $ 280 Actual return on plan assets 3 30 Employer contribution 6 5 Benefits paid (19 ) (27 ) Fair value of plan assets, December 31 $ 278 $ 288 Funded status, December 31 $ (45 ) $ (31 ) Our unfunded status increased for 2015 primarily due to a decline in plan assets and losses from other assumptions partially offset by actuarial gains resulting from increases in discount rates. A reconciliation follows of the funded status for our qualified plan and SERP at the end of the measurement period to the amounts recognized in the consolidated balance sheets at December 31: (Dollars in millions) At December 31, 2015 2014 Pension amounts recognized in the consolidated balance sheets: Other assets $ — $ — Other liabilities (45 ) (31 ) Net amount recognized $ (45 ) $ (31 ) Pension amounts recognized in accumulated other comprehensive income: Net actuarial loss $ 41 $ 34 Prior service cost 1 2 Total $ 42 $ 36 Below are the components of our net periodic benefit cost, as well as other changes in plan assets and benefit obligations recognized in other comprehensive income for our qualified plan and SERP at December 31: (Dollars in millions) Years ended December 31, 2015 2014 2013 Net periodic benefit cost: Service cost $ 12 $ 10 $ 13 Interest cost 14 15 13 Expected return on plan assets (18 ) (17 ) (17 ) Amortization of actuarial loss and prior service cost 6 2 9 Other 1 3 2 Net periodic benefit cost $ 15 $ 13 $ 20 (Dollars in millions) Years ended December 31, 2015 2014 2013 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Current year actuarial loss (gain) $ 13 $ 21 $ (72 ) Amortization of actuarial loss (6 ) (5 ) (10 ) Current year prior service cost — 2 — Amortization of prior service cost (1 ) — (1 ) Total recognized in other comprehensive loss (income) $ 6 $ 18 $ (83 ) The total recognized in net periodic benefit cost and other comprehensive income (loss) was a net cost of $21 million , net cost of $31 million , and a net benefit of $63 million for the years ended December 31, 2015, 2014 and 2013, respectively. The change in the amount recognized in other comprehensive income from 2014 is largely due to losses from investment return being different than assumed and losses from other assumptions partially offset by an increase in discount rate. The 2014 change in the amount recognized in other comprehensive income from 2013 is largely due to decreases in discount and lump sum rates, partially offset with greater than anticipated return on plan assets. The estimated costs to be amortized from AOCI into net periodic benefit cost over the next year for our plans are $2 million in actuarial loss and $1 million in prior service cost. Defined Benefit Pension Plan Assets The pension plan assets are managed to maximize total return over the long term while providing sufficient liquidity and current return to satisfy the cash flow requirements of the plan. The plan’s day-to-day investment decisions are managed by our internal investment department; however, overall investment strategies are discussed with our employee benefits committee. Our investment strategy, currently driven by the low interest rate environment, is to weight our portfolio towards large-cap, high-quality, dividend-growing equities that we have historically favored. As our plan matures and interest rates normalize, we expect a greater allocation to fixed-income securities to better align asset and liability market risks. Our fixed-maturity bond portfolio is investment grade. The plan does not engage in derivative transactions. Excluding cash, during 2015 we held approximately 83 percent of our pension portfolio in domestic common equity investments. The remainder of the portfolio consisted of 12 percent in states, municipalities and taxable political subdivisions fixed-maturity investments and 5 percent in domestic corporate fixed-maturity investments. Our common equity portfolio consisted of 22 percent in the information technology sector, 20 percent in the financial sector, 13 percent in the healthcare sector, 11 percent in the consumer staples sector and 10 percent in the industrial sector at year-end 2015. No additional sectors accounted for 10 percent or more of our common equity portfolio balance at year-end 2015. We had $21 million of cash on hand at December 31, 2015, to cover retirements. Investments in securities are valued based on the fair value hierarchy outlined in Note 3, Fair Value Measurements. The pension plan did not have any liabilities carried at fair value during the years ended December 31, 2015 and 2014. There have been no transfers between Level 1 and Level 2 for the years ended December 31, 2015 and 2014. The following table shows the fair value hierarchy for those assets measured at fair value on a recurring basis at December 31, 2015 and 2014. Excluded from the table below is cash on hand of $21 million and $11 million at December 31, 2015 and 2014, respectively. (Dollars in millions) Quoted prices in Significant other Significant (Level 3) Total At December 31, 2015 Fixed maturities, available for sale: States, municipalities and political subdivisions $ — $ 32 $ — $ 32 Corporate securities — 13 — 13 Total fixed maturities, available for sale — 45 — 45 Common equities, available for sale 212 — — 212 Total $ 212 $ 45 $ — $ 257 At December 31, 2014 Fixed maturities, available for sale: States, municipalities and political subdivisions $ — $ 33 $ — $ 33 Corporate securities — 19 — 19 Total fixed maturities, available for sale — 52 — 52 Common equities, available for sale 225 — — 225 Total $ 225 $ 52 $ — $ 277 Our pension plan assets included 267,113 and 467,113 shares of the company’s common stock at December 31, 2015 and 2014, which had a fair value of $16 million and $24 million at December 31, 2015 and 2014, respectively. The defined benefit pension plan did not purchase any shares of our common stock during 2015 and 2014. During 2015, the pension plan sold 200,000 shares of the company’s common stock. No shares of our common stock were sold during 2014. The company paid $1 million in cash dividends on our common stock to the pension plan in both 2015 and 2014. We contributed $5 million to our qualified plan during the first quarter of 2016 and estimate $6 million of benefit payments from the SERP during 2016. We expect to make the following benefit payments for our qualified plan and SERP, reflecting expected future service: (Dollars in millions) Years ended December 31, 2016 2017 2018 2019 2020 2021 - 2025 Expected future benefit payments $ 29 $ 26 $ 24 $ 24 $ 25 $ 141 |
Statutory Accounting Informatio
Statutory Accounting Information | 12 Months Ended |
Dec. 31, 2015 | |
Staturory Accounting Information [Abstract] | |
Statutory Accounting Information | Statutory Accounting Information Insurance companies’ statutory financial statements are presented on the basis of accounting practices prescribed or permitted by applicable state insurance departments of domicile. Insurance companies use statutory accounting practices (SAP) as recognized by various states. We have adopted the National Association of Insurance Commissioners’ (NAIC) Accounting Practices and Procedures manual, version effective January 1, 2001, and updates through the current year as a component of prescribed or permitted practices by laws of the state of domicile. The primary differences between SAP and GAAP include the valuation of unrealized investment gains and losses, expensing of policy acquisition costs, actuarial assumptions for life insurance reserves and deferred income taxes based on differences in statutory and taxable income. Statutory net income (loss) and capital and surplus are determined in accordance with SAP prescribed or permitted by insurance regulatory authorities for five legal entities, our insurance subsidiary and its four insurance subsidiaries. Statutory capital and surplus for our insurance subsidiary, The Cincinnati Insurance Company, includes capital and surplus of its four insurance subsidiaries. All capital and surplus amounts exceed statutory risk-based capital requirements. The statutory net income (loss) and statutory capital and surplus are presented below: (Dollars in millions) Net income (loss) Capital and surplus Years ended December 31, At December 31, 2015 2014 2013 2015 2014 The Cincinnati Insurance Company $ 534 $ 436 $ 418 $ 4,412 $ 4,472 The Cincinnati Casualty Company 12 12 10 337 330 The Cincinnati Indemnity Company 3 3 2 88 86 The Cincinnati Specialty Underwriters Insurance Company 49 32 18 306 266 The Cincinnati Life Insurance Company (11 ) (19 ) (20 ) 208 223 |
Transactions With Affiliated Pa
Transactions With Affiliated Parties | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Transactions With Affiliated Parties | Transactions With Affiliated Parties We paid certain officers and directors, or insurance agencies of which they are shareholders, commissions of $7 million in 2015, $7 million in 2014 and $6 million 2013, on premium volume of $42 million , $41 million and $35 million for 2015, 2014 and 2013, respectively. |
Commitments And Contingent Liab
Commitments And Contingent Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingent Liabilities | Commitments and Contingent Liabilities In the ordinary course of conducting business, the company and its subsidiaries are involved in various legal proceedings, namely claims litigation. The company's insurance subsidiaries participate in most of these proceedings by either defending third-party claims brought against insureds or litigating first-party coverage claims. The company accounts for such activity through the establishment of unpaid loss and loss adjustment expense reserves. We believe that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and costs of defense, is immaterial to our consolidated financial condition, 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 a state or national class. Such proceedings have alleged, for example, breach of an alleged duty to search national data bases to ascertain unreported deaths of insureds under life insurance policies. The company’s insurance subsidiaries also are occasionally parties to individual actions in which extra-contractual damages, punitive damages or penalties are sought, such as claims alleging bad faith in the handling of insurance claims or claims alleging discrimination by former 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 condition or results of operations. 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 results of operations or cash flows. Based on our most recent review, our estimate for any other matter for which the risk of loss is more than remote is less than $1 million. |
Share-Based Associate Compensat
Share-Based Associate Compensation Plans | 12 Months Ended |
Dec. 31, 2015 | |
Share-based Compensation [Abstract] | |
Stock-Based Associate Compensation Plans | Share-Based Associate Compensation Plans Four equity compensation plans currently permit us to grant various types of equity awards. We currently grant incentive stock options, nonqualified stock options, service-based restricted stock units and performance-based restricted stock units to associates, including some with market-based performance objectives under our shareholder-approved plans. We also have a Holiday Stock Plan that permits annual awards of one share of common stock to each full-time associate for each full calendar year of service up to a maximum of 10 shares. One of our equity compensation plans permits us to grant stock to our outside directors as a component of their annual compensation. We used treasury shares for share-based compensation award issues or exercises during 2014 and 2015. Share-based compensation cost after tax was $14 million , $13 million and $12 million for the years ended December 31, 2015, 2014 and 2013, respectively. The related income tax benefit recognized was $6 million for each of the years ended December 31, 2015, 2014 and 2013, respectively. Options exercised during the years ended December 31, 2015, 2014 and 2013, had intrinsic value of $15 million , $13 million , and $17 million , respectively. Intrinsic value is the market price less the exercise price. Options vested during the years ended December 31, 2015, 2014 and 2013, had total intrinsic value of $7 million , $9 million and $15 million , respectively. As of December 31, 2015, we had $23 million of unrecognized total compensation cost related to nonvested stock options and restricted stock unit awards. That cost will be recognized over a weighted-average period of 1.7 years. Stock Options Stock options are granted to associates at an exercise price equal to the fair value as determined by the average high and low sales price reported on the Nasdaq Global Select Market for the grant date and are exercisable over 10 -year periods. The stock options generally vest ratably over a three -year period. In determining the share-based compensation amounts, we estimate the fair value of each option granted on the date of grant using a binomial option-pricing model. We make the following assumptions to develop the binomial option-pricing model as follows: • Weighted-average expected term is based on historical experience of similar awards with consideration for current exercise trends. • Expected volatility is based on our stock price over a historical period that approximates the expected term. • Dividend yield is determined by dividing the annualized per share dividend by the stock price on the date of grant. • Risk-free rates are the implied yield currently available on zero-coupon U.S. Treasury issues with a remaining term approximating the expected term. The following weighted average assumptions were used in determining fair value for option grants issued during 2015 and 2014: 2015 2014 2012 Weighted-average expected term 8-9 years 8-9 years 9-10 years Expected volatility 25.04-26.15% 25.20-26.22% 25.25-26.31% Dividend yield 3.52% 3.76% 3.65% Risk-free rates 1.94-2.01% 2.42-2.62% 1.82-2.00% Weighted-average fair value of options granted during the period $11.15 $10.16 $9.71 This is a summary of options information: (Dollars in millions, shares in thousands) Shares Weighted- exercise price Aggregate Outstanding option shares at January 1, 2015 4,958 $ 39.10 Granted 386 52.24 Exercised (996 ) 40.30 Forfeited or expired (476 ) 41.64 Outstanding option shares at December 31, 2015 3,872 39.78 $ 77 Options exercisable at end of period 3,128 $ 37.54 $ 69 Cash received from the exercise of options was $24 million , $22 million and $25 million for the years ended December 31, 2015, 2014 and 2013, respectively. We acquired 292,414 , 378,276 and 577,745 shares totaling $16 million , $19 million and $28 million , respectively, from associates in consideration for option exercises during 2015, 2014 and 2013. The weighted-average remaining contractual life for options expected to vest as of December 31, 2015, was 8.5 years. Options outstanding and exercisable consisted of the following at December 31, 2015: (Shares in thousands) Options outstanding Options exercisable Range of exercise prices Shares Weighted-average Weighted- Shares Weighted- $25.00 to $29.99 582 3.59 years $ 26.58 582 $ 26.58 $30.00 to $34.99 574 4.99 years 33.95 574 33.95 $35.00 to $39.99 841 3.90 years 37.29 841 37.29 $40.00 to $44.99 700 4.06 years 44.75 583 44.75 $45.00 to $49.99 798 3.89 years 46.00 546 45.62 $50.00 to $54.99 377 9.10 years 52.24 2 52.25 Total 3,872 4.55 years 39.78 3,128 37.54 The weighted-average remaining contractual life for exercisable awards as of December 31, 2015, was 3.6 years. Under all active shareholder approved plans, a total of 17.3 million shares were authorized to be granted. At December 31, 2015, 4.7 million shares remained available for future issuance under the plans. During 2015, we granted 20,880 shares of common stock to our directors for 2014 board service fees. Restricted Stock Units Service-based restricted stock units granted to associates are valued at fair value of the shares on the date of grant less the present value of the dividends that holders of restricted stock units do not receive on the shares underlying the restricted stock units during the vesting period. Service-based restricted stock units generally cliff vest three years after the date of grant. During 2015, we also granted restricted stock units which vest on a three year ratable vesting schedule. Service-based restricted stock units vested during the year had an intrinsic value of $26 million , $14 million and $15 million for the years ended December 31, 2015, 2014 and 2013, respectively. We have performance-based awards that vest on the first day of March after a three -calendar-year performance period. These awards vest according to the level of three -year total shareholder return achieved compared with a peer group over a three -year performance period with payouts ranging from 0 - 200 percent for awards granted in 2013, 2014 and 2015. Three -year total shareholder return is calculated by using annualized total return of a stock to an investor due to capital gain appreciation plus reinvestment of all dividends. We issued 103,586 shares of performance-based restricted stock units during 2015 at the target-level performance hurdle for the three -year performance period ended December 31, 2014, as we achieved a three -year total shareholder return that exceeded six of 10 peers in our 2012 peer group. For the three -year performance period ended December 31, 2015, our total shareholder return exceeded four of 10 peers in our 2013 peer group. We expect payout of these shares at the threshold level to occur in March of 2016. Performance-based awards vested during the year had an intrinsic value of $6 million , $3 million and $3 million for the years ended December 31, 2015, 2014 and 2013, respectively. These performance-based awards are valued using a Monte-Carlo valuation on the date of grant, which uses a risk‑neutral framework to model future stock price movements based upon the risk-free rate of return, the volatility of each peer and the pairwise correlations of each peer being modeled. Compensation cost is recognized regardless of whether the market-based performance objective has been satisfied. We make assumptions to develop the Monte-Carlo model as follows: • Correlation coefficients are based upon the stock price data used to calculate the historical volatilities. The correlation coefficients are used to model the way the price of each entity's stock tends to move in relation to each other. • Expected volatility is based on each company's historical volatility using daily stock price observations. Volatility ranged from 13.78 percent to 34.69 percent for 2015 grants and 18.69 percent to 41.21 percent for 2014 grants. We have used a historical volatility term of 2.88 years for both the 2015 and 2014 grants. • Dividend yield has been modeled assuming dividends are reinvested in the issuing entity on a continuous basis and the holder of the award is not entitled to receive dividends paid during the performance period. Dividend yields of 3.52 percent for 2015 grants and 3.74 percent for 2014 grants were used. • Risk-free rates are equal to the yield, as of the measurement date, of the zero-coupon U.S. Treasury bill that is commensurate with the performance measurement period. Risk-free rates used were 0.99 percent for 2015 and 0.66 percent for 2014 grants. This is a summary of service-based and performance-based share information, assuming a target payout for performance-based shares, for the year 2015: (Shares in thousands) Service-based Weighted- Performance-based Weighted- Nonvested at January 1, 2015 968 $ 37.42 283 $ 38.55 Granted 334 47.06 81 45.73 Vested (370 ) 31.74 (104 ) 34.89 Forfeited or canceled (30 ) 42.35 (4 ) 34.89 Nonvested at December 31, 2015 902 43.15 256 42.35 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | 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 results of our reinsurance assumed operations, known as Cincinnati Re. Revenues come primarily from unaffiliated customers: • All four insurance segments record revenues from insurance premiums earned. Life insurance segment revenues also include separate account investment management fees. • Fee revenues for the commercial and personal insurance segments primarily represent installment fees. Fee revenues for the life insurance segment represent separate account investment management fees. • Our investments’ revenues consist of pretax net investment income and realized investment gains and losses. • Other revenues are primarily finance income and, for 2015, earned premiums of Cincinnati Re. Income or loss before income taxes for each segment is reported based on the nature of that business area’s operations: • Income before income taxes for the insurance segments is defined as underwriting profit or loss. ◦ For commercial lines, personal lines and excess and surplus lines insurance segments, we calculate underwriting profit or loss as premiums earned and fee revenue minus loss and loss expenses and underwriting expenses incurred. ◦ For the life insurance segment, we calculate underwriting profit or loss as premiums earned and separate account investment management fees, minus contract holders’ benefits and expenses incurred, plus investment interest credited to contract holders. • Income before income taxes for the investments segment is net investment income plus realized investment gains and losses for investments of the entire company, minus investment interest credited to contract holders of the life insurance segment. • Loss before income taxes for the Other category is primarily due to interest expense from debt of the parent company, operating expenses of our headquarters and, for 2015, premiums earned minus loss and loss expenses and underwriting expenses of Cincinnati Re. Identifiable assets are used by each segment in its operations. We do not separately report the identifiable assets for the commercial, personal or excess and surplus lines segments because we do not use that measure to analyze the segments. We include all investment assets, regardless of ownership, in the investments segment. This table summarizes segment information: (Dollars in millions) Years ended December 31, 2015 2014 2013 Revenues: Commercial lines insurance Commercial casualty $ 1,010 $ 938 $ 856 Commercial property 815 728 623 Commercial auto 561 528 479 Workers' compensation 367 370 365 Other commercial 243 292 313 Commercial lines insurance premiums 2,996 2,856 2,636 Fee revenues 4 4 3 Total commercial lines insurance 3,000 2,860 2,639 Personal lines insurance Personal auto 506 476 443 Homeowner 463 443 403 Other personal 128 122 115 Personal lines insurance premiums 1,097 1,041 961 Fee revenues 3 2 1 Total personal lines insurance 1,100 1,043 962 Excess and surplus lines insurance 168 148 116 Fee revenues 1 — — Total excess and surplus lines insurance 169 148 116 Life insurance premiums 209 198 189 Separate account investment management fees 5 6 4 Total life insurance 214 204 193 Investments Investment income, net of expenses 572 549 529 Realized investment gains, net 70 133 83 Total investment revenue 642 682 612 Other 17 8 9 Total revenues $ 5,142 $ 4,945 $ 4,531 Income (loss) before income taxes: Insurance underwriting results Commercial lines insurance $ 345 $ 146 $ 186 Personal lines insurance (12 ) 10 33 Excess and surplus lines insurance 51 30 14 Life insurance (2 ) (5 ) 9 Investments 556 599 532 Other (57 ) (59 ) (60 ) Total income before income taxes $ 881 $ 721 $ 714 December 31, December 31, Identifiable assets: 2015 2014 Property casualty insurance $ 2,717 $ 2,656 Life insurance 1,325 1,316 Investments 14,485 14,441 Other 361 335 Total $ 18,888 $ 18,748 |
Quarterly Supplementary Data
Quarterly Supplementary Data | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Supplementary Data | Quarterly Supplementary Data This table includes unaudited quarterly financial information for the years ended December 31, 2015 and 2014: (Dollars in millions except per share data) Quarter 1st 2nd 3rd 4th Full year 2015 Revenues $ 1,285 $ 1,316 $ 1,278 $ 1,263 $ 5,142 Income before income taxes 174 248 243 216 881 Net income 128 176 174 156 634 Net income per common share—basic 0.78 1.07 1.06 0.95 3.87 Net income per common share—diluted 0.77 1.06 1.05 0.94 3.83 2014 Revenues $ 1,189 $ 1,214 $ 1,280 $ 1,262 $ 4,945 Income before income taxes 119 107 259 236 721 Net income 91 84 183 167 525 Net income per common share—basic 0.56 0.51 1.12 1.03 3.21 Net income per common share—diluted 0.55 0.51 1.11 1.02 3.18 Note: The sum of the quarterly reported per share amounts may not equal the full year as each is computed independently. Revenues including realized investment gains and losses, which are integral to our financial results over the long term, may cause this value to fluctuate substantially because we have substantial discretion in the timing of investment sales. Also, applicable accounting standards require us to recognize gains and losses from certain changes in fair values of securities and embedded derivatives without actual realization of those gains and losses. |
Summary Of Investments Other Th
Summary Of Investments Other Than Investments In Related Parties | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Summary Of Investments Other Than Investments In Related Parties | Schedule I Cincinnati Financial Corporation and Subsidiaries Summary of Investments - Other Than Investments in Related Parties (Dollars in millions) At December 31, 2015 Type of investment Cost or amortized cost Fair value Balance sheet Fixed maturities: States, municipalities and political subdivisions: The Cincinnati Insurance Company $ 2,696 $ 2,820 $ 2,820 The Cincinnati Casualty Company 137 143 143 The Cincinnati Indemnity Company 38 40 40 The Cincinnati Life Insurance Company 202 223 223 The Cincinnati Specialty Underwriters Insurance Company 366 384 384 CSU Producer Resources Inc. 1 1 1 Total 3,440 3,611 3,611 Convertibles and bonds with warrants attached: The Cincinnati Insurance Company 5 5 5 Total 5 5 5 United States government: The Cincinnati Insurance Company 1 1 1 The Cincinnati Casualty Company 2 2 2 The Cincinnati Indemnity Company 1 1 1 The Cincinnati Life Insurance Company — — — Total 4 4 4 Government-sponsored enterprises: The Cincinnati Life Insurance Company 280 274 274 The Cincinnati Insurance Company 4 4 4 Total 284 278 278 Foreign government: The Cincinnati Insurance Company 10 10 10 Total 10 10 10 All other corporate bonds: The Cincinnati Insurance Company 2,642 2,719 2,719 The Cincinnati Casualty Company 120 123 123 The Cincinnati Indemnity Company 27 27 27 The Cincinnati Specialty Underwriters Insurance Company 152 156 156 The Cincinnati Life Insurance Company 2,587 2,657 2,657 CSU Producer Resources Inc. 3 2 2 Cincinnati Financial Corporation 50 58 58 Total 5,581 5,742 5,742 Total fixed maturities $ 9,324 $ 9,650 $ 9,650 Schedule I (continued) Cincinnati Financial Corporation and Subsidiaries Summary of Investments - Other Than Investments in Related Parties (Dollars in millions) At December 31, 2015 Type of investment Cost or amortized cost Fair value Balance sheet Equity securities: Common equities: The Cincinnati Insurance Company $ 1,608 $ 2,718 $ 2,718 The Cincinnati Casualty Company 46 82 82 The Cincinnati Indemnity Company 12 21 21 The Cincinnati Specialty Underwriters Insurance Company 44 71 71 CSU Producer Resources Inc. 12 13 13 Cincinnati Financial Corporation 1,027 1,580 1,580 Total 2,749 4,485 4,485 Nonredeemable preferred equities: The Cincinnati Insurance Company 181 209 209 The Cincinnati Life Insurance Company 5 9 9 Cincinnati Financial Corporation 3 3 3 Total 189 221 221 Total equity securities $ 2,938 $ 4,706 $ 4,706 Other invested assets: Policy loans: The Cincinnati Life Insurance Company $ 31 — $ 31 Private equity: Cincinnati Financial Corporation 36 — 36 Total other invested assets $ 67 — $ 67 Total investments $ 12,329 — $ 14,423 |
Condensed Financial Statements
Condensed Financial Statements Of Parent Company | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Financial Statements Of Parent Company | Schedule II Cincinnati Financial Corporation (parent company only) Condensed Balance Sheets (Dollars in millions) At December 31, 2015 2014 Assets Investments Fixed maturities, at fair value $ 58 $ 69 Equity securities, at fair value 1,583 1,643 Other invested assets 36 37 Total investments 1,677 1,749 Cash and cash equivalents 106 72 Equity in net assets of subsidiaries 5,482 5,627 Investment income receivable 6 6 Land, building and equipment, net, for company use (accumulated depreciation: 139 144 Income tax receivable 6 — Other assets 21 18 Due from subsidiaries 107 107 Total assets $ 7,544 $ 7,723 Liabilities Dividends declared but unpaid $ 75 $ 72 Deferred federal income tax 173 216 Long-term debt 786 786 Other liabilities 83 76 Total liabilities 1,117 1,150 Shareholders' Equity Common stock 397 397 Paid-in capital 1,232 1,214 Retained earnings 4,762 4,505 Accumulated other comprehensive income 1,344 1,744 Treasury stock at cost (1,308 ) (1,287 ) Total shareholders' equity 6,427 6,573 Total liabilities and shareholders' equity $ 7,544 $ 7,723 This condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes included in Part II, Item 8. Schedule II (continued) Cincinnati Financial Corporation (parent company only) Condensed Statements of Income (Dollars in millions) Years ended December 31, 2015 2014 2013 Revenues Investment income, net of expenses $ 53 $ 46 $ 41 Realized investment (losses) and gains, net (19 ) 34 21 Other revenue 15 16 15 Total revenues 49 96 77 Expenses Interest expense 52 52 53 Other expenses 28 28 29 Total expenses 80 80 82 Income (Loss) Before Income Taxes and Earnings of Subsidiaries (31 ) 16 (5 ) Benefit for income taxes (23 ) (5 ) (11 ) Net Income (Loss) Before Earnings of Subsidiaries (8 ) 21 6 Increase in equity of subsidiaries 642 504 511 Net Income $ 634 $ 525 $ 517 This condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes included in Part II, Item 8. Schedule II (continued) Cincinnati Financial Corporation (parent company only) Condensed Statements of Comprehensive Income (Dollars in millions) Years ended December 31, 2015 2014 2013 Net Income $ 634 $ 525 $ 517 Other Comprehensive Income, Before Tax Unrealized (losses) and gains on investments available-for-sale (111 ) 150 303 Unrealized (losses) and gains on investments held by subsidiaries (444 ) 367 240 Reclassification adjustment for gains and (losses) included in net income 19 (34 ) (21 ) Reclassification adjustment for (gains) included in net income on subsidiaries (89 ) (99 ) (62 ) Unrealized gains and (losses) on other — 7 (1 ) Unrealized gains and (losses) on other subsidiaries 13 (3 ) 35 Unrealized (losses) and gains on investments available-for-sale, investments held by subsidiaries and other (612 ) 388 494 Amortization of pension actuarial losses and (gains) and prior service cost (6 ) (18 ) 83 Other comprehensive (loss) income before tax (618 ) 370 577 Income taxes on above of other comprehensive (loss) income (218 ) 130 202 Other comprehensive (loss) income, net of tax (400 ) 240 375 Comprehensive Income $ 234 $ 765 $ 892 This condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes included in Part II, Item 8. Schedule II (continued) Cincinnati Financial Corporation (parent company only) Condensed Statements of Cash Flows (Dollars in millions) Years ended December 31, 2015 2014 2013 Cash Flows From Operating Activities Net income $ 634 $ 525 $ 517 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 7 7 7 Realized investment losses and (gains), net 19 (34 ) (21 ) Dividends from subsidiaries 447 400 378 Changes in: Increase in equity of subsidiaries (642 ) (504 ) (511 ) Investment income receivable — (1 ) (2 ) Current federal income taxes (7 ) 3 12 Deferred income tax (10 ) (6 ) (6 ) Other assets (3 ) 20 (30 ) Other liabilities 13 (14 ) 39 Intercompany receivable for operations 16 22 (39 ) Net cash provided by operating activities 474 418 344 Cash Flows From Investing Activities Call or maturity of fixed maturities 8 4 23 Sale of equity securities 54 112 75 Purchase of equity securities (110 ) (225 ) (179 ) Investment in buildings and equipment, net — (2 ) (1 ) Change in other invested assets, net 1 4 4 Return of capital from subsidiaries — — 22 Net cash used by investing activities (47 ) (107 ) (56 ) Cash Flows From Financing Activities Payments on notes payable — (55 ) — Payment of cash dividends to shareholders (366 ) (278 ) (263 ) Shares acquired - share repurchase authorization (53 ) (21 ) (52 ) Proceeds from stock options exercised 24 22 25 Other 2 2 3 Net cash used in financing activities (393 ) (330 ) (287 ) Net change in cash and cash equivalents 34 (19 ) 1 Cash and cash equivalents at beginning of year 72 91 90 Cash and cash equivalents at end of year $ 106 $ 72 $ 91 This condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes included in Part II, Item 8. |
Supplementary Insurance Informa
Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2015 | |
Supplementary Insurance Information [Abstract] | |
Supplementary Insurance Information | Schedule III Cincinnati Financial Corporation and Subsidiaries Supplementary Insurance Information (Dollars in millions) Years ended December 31, 2015 2014 2013 Deferred policy acquisition costs: Commercial lines insurance $ 264 $ 257 $ 251 Personal lines insurance 103 108 104 Excess and surplus lines insurance 15 14 11 Cincinnati Re 6 — — Total property casualty insurance 388 379 366 Life insurance 228 199 199 Total $ 616 $ 578 $ 565 Gross future policy benefits, losses, claims and expense losses: Commercial lines insurance $ 3,925 $ 3,797 $ 3,667 Personal lines insurance 498 439 417 Excess and surplus lines insurance 227 202 157 Cincinnati Re 10 — — Total property casualty insurance 4,660 4,438 4,241 Life insurance 2,605 2,519 2,441 Total (1) $ 7,265 $ 6,957 $ 6,682 Gross unearned premiums: Commercial lines insurance $ 1,472 $ 1,441 $ 1,372 Personal lines insurance 593 562 535 Excess and surplus lines insurance 87 78 67 Cincinnati Re 48 — — Total property casualty insurance 2,200 2,081 1,974 Life insurance 1 1 2 Total (1) $ 2,201 $ 2,082 $ 1,976 Other policy claims and benefits payable: Commercial lines insurance $ — $ — $ — Personal lines insurance — — — Excess and surplus lines insurance — — — Cincinnati Re — — — Total property casualty insurance — — — Life insurance 36 25 19 Total (1) $ 36 $ 25 $ 19 Earned premiums: Commercial lines insurance $ 2,996 $ 2,856 $ 2,636 Personal lines insurance 1,097 1,041 961 Excess and surplus lines insurance 168 148 116 Cincinnati Re 10 — — Total property casualty insurance 4,271 4,045 3,713 Life insurance 209 198 189 Total $ 4,480 $ 4,243 $ 3,902 Schedule III (continued) Cincinnati Financial Corporation and Subsidiaries Supplementary Insurance Information (Dollars in millions) Years ended December 31, 2015 2014 2013 Investment income, net of expenses: Commercial lines insurance $ — $ — $ — Personal lines insurance — — — Excess and surplus lines insurance — — — Cincinnati Re — — — Total property casualty insurance (2) 368 358 348 Life insurance 150 144 140 Total $ 518 $ 502 $ 488 Benefits, claims losses and settlement expenses: Commercial lines insurance $ 1,708 $ 1,812 $ 1,596 Personal lines insurance 789 740 639 Excess and surplus lines insurance 70 75 66 Cincinnati Re 5 — — Total property casualty insurance 2,572 2,627 2,301 Life insurance 236 229 204 Total $ 2,808 $ 2,856 $ 2,505 Amortization of deferred policy acquisition costs: Commercial lines insurance $ 552 $ 537 $ 514 Personal lines insurance 210 209 192 Excess and surplus lines insurance 28 24 21 Cincinnati Re 2 — — Total property casualty insurance 792 770 727 Life insurance 37 37 31 Total (3) $ 829 $ 807 $ 758 Underwriting, acquisition and insurance expenses: Commercial lines insurance $ 395 $ 365 $ 343 Personal lines insurance 113 84 98 Excess and surplus lines insurance 20 19 15 Cincinnati Re 1 — — Total property casualty insurance 529 468 456 Life insurance 29 26 29 Total (3) $ 558 $ 494 $ 485 Net written premiums: Commercial lines insurance $ 3,025 $ 2,922 $ 2,760 Personal lines insurance 1,128 1,068 1,005 Excess and surplus lines insurance 175 153 128 Cincinnati Re 33 — — Total property casualty insurance 4,361 4,143 3,893 Accident health insurance 2 3 2 Total $ 4,363 $ 4,146 $ 3,895 Notes to Schedule III: (1) The sum of gross future policy benefits, losses, claims and expense losses, gross unearned premium and other policy claims and benefits payable is equal to the sum of Loss and loss expense reserves, Life policy reserves and investment contract reserves and Unearned premiums reported in the company’s consolidated balance sheets. (2) This segment information is not regularly allocated to segments and reviewed by company management in making decisions about resources to be allocated to the segments or to assess their performance. (3) The sum of amortization of deferred policy acquisition costs and other underwriting and insurance expenses is equal to Underwriting, acquisition and insurance expenses in the consolidated statements of income. |
Reinsurance - Schedule IV
Reinsurance - Schedule IV | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Text Block] | Schedule IV Cincinnati Financial Corporation and Subsidiaries Reinsurance (Dollars in millions) Years ended December 31, 2015 2014 2013 Gross amounts: Life insurance in force $ 91,451 $ 88,045 $ 85,015 Earned premiums Commercial lines insurance $ 3,088 $ 2,973 $ 2,777 Personal lines insurance 1,131 1,080 1,002 Excess and surplus lines insurance 177 156 124 Cincinnati Re — — — Total property casualty insurance 4,396 4,209 3,903 Life insurance 271 259 248 Total $ 4,667 $ 4,468 $ 4,151 Ceded amounts to other companies: Life insurance in force $ 38,716 $ 37,689 $ 36,952 Earned premiums Commercial lines insurance $ 102 $ 128 $ 151 Personal lines insurance 35 40 42 Excess and surplus lines insurance 9 8 8 Cincinnati Re 8 — — Total property casualty insurance 154 176 201 Life insurance 62 61 59 Total $ 216 $ 237 $ 260 Assumed amounts from other companies: Life insurance in force $ — $ — $ — Earned premiums Commercial lines insurance $ 10 $ 11 $ 10 Personal lines insurance 1 1 1 Excess and surplus lines insurance — — — Cincinnati Re 18 — — Total property casualty insurance 29 12 11 Life insurance — — — Total $ 29 $ 12 $ 11 Net amounts: Life insurance in force $ 52,735 $ 50,356 $ 48,063 Earned premiums Commercial lines insurance $ 2,996 $ 2,856 $ 2,636 Personal lines insurance 1,097 1,041 961 Excess and surplus lines insurance 168 148 116 Cincinnati Re 10 — — Total property casualty insurance 4,271 4,045 3,713 Life insurance 209 198 189 Total $ 4,480 $ 4,243 $ 3,902 Percentage of amounts assumed to net: Life insurance in force — % — % — % Earned premiums Commercial lines insurance 0.3 % 0.4 % 0.4 % Personal lines insurance 0.1 0.1 0.1 Excess and surplus lines insurance — — — Cincinnati Re 188.0 — — Total property casualty insurance 0.7 0.5 0.5 Life insurance — — — Total 0.7 0.5 0.5 |
Valuation And Qualifying Accoun
Valuation And Qualifying Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Valuation and Qualifying Accounts [Abstract] | |
Valuation And Qualifying Accounts | Schedule V Cincinnati Financial Corporation and Subsidiaries Valuation and Qualifying Accounts (Dollars in millions) At December 31, 2015 2014 2013 Allowance for doubtful receivables: Beginning balance, January 1 $ 3 $ 2 $ 2 Additions charged to costs and expenses 3 2 1 Deductions (2 ) (1 ) (1 ) Ending balance, December 31 $ 4 $ 3 $ 2 |
Supplementary Information Conce
Supplementary Information Concerning Property Casualty Insurance Operations | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Information for Property, Casualty Insurance Underwriters [Abstract] | |
Supplementary Information Concerning Property Casualty Insurance Operations | Schedule VI Cincinnati Financial Corporation and Subsidiaries Supplementary Information Concerning Property Casualty Insurance Operations (Dollars in millions) Years ended December 31, 2015 2014 2013 Deferred policy acquisition costs: Commercial lines insurance $ 264 $ 257 $ 251 Personal lines insurance 103 108 104 Excess and surplus lines insurance 15 14 11 Cincinnati Re 6 — — Total $ 388 $ 379 $ 366 Reserves for unpaid claims and claim adjustment expenses: Commercial lines insurance $ 3,925 $ 3,797 $ 3,667 Personal lines insurance 498 439 417 Excess and surplus lines insurance 227 202 157 Cincinnati Re 10 — — Total $ 4,660 $ 4,438 $ 4,241 Reserve discount deducted $ — $ — $ — Gross unearned premiums: Commercial lines insurance $ 1,472 $ 1,441 $ 1,370 Personal lines insurance 593 562 534 Excess and surplus lines insurance 87 78 66 Cincinnati Re 48 — — Total $ 2,200 $ 2,081 $ 1,970 Earned premiums: Commercial lines insurance $ 2,996 $ 2,856 $ 2,636 Personal lines insurance 1,097 1,041 961 Excess and surplus lines insurance 168 148 116 Cincinnati Re 10 — — Total $ 4,271 $ 4,045 $ 3,713 Investment income: Commercial lines insurance $ — $ — $ — Personal lines insurance — — — Excess and surplus lines insurance — — — Cincinnati Re — — — Total (1) $ 368 $ 358 $ 348 Note to Schedule VI: (1) This segment information is not regularly allocated to segments and not reviewed by company management in making decisions about resources to be allocated to the segments or to assess their performance. Schedule VI (continued) Cincinnati Financial Corporation and Subsidiaries Supplementary Information Concerning Property Casualty Insurance Operations (Dollars in millions) Years ended December 31, 2015 2014 2013 Loss and loss expenses incurred related to current accident year: Commercial lines insurance $ 1,862 $ 1,869 $ 1,691 Personal lines insurance 784 752 678 Excess and surplus lines insurance 105 104 79 Cincinnati Re 5 — — Total $ 2,756 $ 2,725 $ 2,448 Loss and loss expenses incurred related to prior accident years: Commercial lines insurance $ (154 ) $ (57 ) $ (95 ) Personal lines insurance 5 (12 ) (39 ) Excess and surplus lines insurance (35 ) (29 ) (13 ) Cincinnati Re — — — Total $ (184 ) $ (98 ) $ (147 ) Amortization of deferred policy acquisition costs: Commercial lines insurance $ 552 $ 537 $ 514 Personal lines insurance 210 209 192 Excess and surplus lines insurance 28 24 21 Cincinnati Re 2 — — Total $ 792 $ 770 $ 727 Paid loss and loss expenses: Commercial lines insurance $ 1,575 $ 1,666 $ 1,498 Personal lines insurance 731 717 639 Excess and surplus lines insurance 43 30 35 Cincinnati Re — — — Total $ 2,349 $ 2,413 $ 2,172 Net written premiums: Commercial lines insurance $ 3,025 $ 2,922 $ 2,760 Personal lines insurance 1,128 1,068 1,005 Excess and surplus lines insurance 175 153 128 Cincinnati Re 33 — — Total $ 4,361 $ 4,143 $ 3,893 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations Cincinnati Financial Corporation (CFC) operates through our insurance group and two complementary subsidiary companies. The Cincinnati Insurance Company leads our standard market property casualty insurance group that also includes two subsidiaries: The Cincinnati Casualty Company and The Cincinnati Indemnity Company. This group markets a broad range of standard market commercial and personal policies. The group focuses on delivery of quality customer service to our select group of 1,526 independent insurance agencies with 1,956 reporting locations across 39 states. In 2015 the Cincinnati Insurance Company began our reinsurance assumed operations, Cincinnati Re. Other subsidiaries of The Cincinnati Insurance Company include The Cincinnati Life Insurance Company, which markets life and disability income insurance and fixed annuities, and The Cincinnati Specialty Underwriters Insurance Company, which offers excess and surplus lines property casualty insurance products. The two CFC complementary subsidiaries are CSU Producer Resources Inc., which provides insurance brokerage services to our independent agencies so their clients can access our excess and surplus lines insurance products, and CFC Investment Company (CFC-I), which offers commercial leasing and financing services to our agents, their clients and other customers. |
Basis of Presentation | Basis of Presentation Our consolidated financial statements include the accounts of the parent and its wholly owned subsidiaries and 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. |
Investments | Investments Our portfolio investments are primarily in publicly traded fixed-maturity, equity and short-term investments. Fixed-maturity investments (taxable bonds, tax-exempt bonds, redeemable preferred equities and commercial mortgage- backed securities) and equity investments (common and nonredeemable preferred equities) are classified as available for sale and recorded at fair value in the consolidated financial statements. The number of fixed-maturity securities with fair value below 100 percent of amortized cost can be expected to fluctuate as interest rates rise or fall. Because of our strong capital and long-term investment horizon, our general intent is to hold fixed-maturity investments until maturity, regardless of short-term fluctuations in fair values. Our invested asset impairment policy states that fixed maturities below their amortized cost that the company (1) intends to sell or (2) more likely than not will be required to sell before recovery of their amortized cost basis are deemed to be other-than-temporarily impaired (OTTI). The amortized cost of any such securities is reduced to fair value as the new cost basis, and a realized loss is recorded in the period in which it is recognized. When these two criteria are not met, and the company believes that full collection of interest and/or principal is not likely, we determine the net present value of future cash flows by using the effective interest rate implicit in the security at the date of acquisition as the discount rate and compare that amount with the amortized cost and fair value of the security. The difference between the net present value of the expected future cash flows and amortized cost of the security is considered a credit loss and recognized as a realized loss in the period in which it occurred. The difference between the fair value and the net present value of the cash flows of the security, the noncredit loss, is recognized in other comprehensive income as an unrealized loss. We had no fixed-maturity securities with a noncredit loss for the years ended 2015 and 2014. When determining OTTI charges for our equity portfolio, our invested asset impairment policy considers qualitative and quantitative factors, including facts and circumstances specific to individual securities, asset classes, the financial condition of the issuer, changes in dividend payment, the length of time fair value had been less than cost, the severity of the decline in fair value below cost, the volatility of the security and our ability and intent to hold each position until its forecasted recovery. We include the noncredit portion of fixed-maturity OTTI charges and all other unrealized gains and losses on investments, net of taxes, in shareholders’ equity as accumulated other comprehensive income (AOCI). Realized gains and losses on investments are recognized in net income based on the trade date accounting method. Included within our other invested assets are $31 million of life policy loans and $36 million of private equity investments. Life policy loans are carried at the receivable value. The private equity investments provide their financial statements to us and generally report investments on their balance sheets at fair value. We use the equity method of accounting for private equity investments. Investment income consists mainly of interest and dividends. We record interest on an accrual basis and record dividends at the ex-dividend date. We amortize premiums and discounts on fixed-maturity securities using the effective interest method over the expected life of the security. |
Fair Value Disclosures | Fair Value Disclosures We account for our investment portfolio at fair value and apply fair value measurements as defined by ASC 820, Fair Value Measurements and Disclosures , to financial instruments. Fair value is applicable to ASC 320, Investments-Debt and Equity Securities , and ASC 825, Financial Instruments . ASC 820 defines fair value as the exit price or the amount that would be (1) received to sell an asset or (2) paid to transfer a liability in an orderly transaction between marketplace participants at the measurement date. When determining an exit price, we rely upon observable market data whenever possible. We primarily base fair value for investments in equity and fixed-maturity securities (including redeemable preferred stock and assets held in separate accounts) on quoted market prices or on prices from a pricing vendor, an outside resource that supplies global securities pricing, dividend, corporate action and descriptive information to support fund pricing, securities operations, research and portfolio management. The company obtains and reviews the pricing service’s valuation methodologies and related inputs and validates these prices by replicating a sample across each asset class using a discounted cash flow model. When a price is not available from these sources, as in the case of securities that are not publicly traded, we determine the fair value using various inputs including quotes from independent brokers. The fair value of investments not priced by a pricing vendor is less than 1 percent of the fair value of our total investment portfolio. For the purpose of ASC 825 disclosure, we estimate the fair value of long-term senior notes on market pricing of similar debt instruments that are actively trading. We estimate the fair value of our note payable on the year-end outstanding balance because it is short term and tied to a variable interest rate. We estimate the fair value of liabilities for investment contracts and annuities using discounted cash flow calculations across a wide range of economic interest rate scenarios with a provision for our nonperformance risk. We estimate the fair value for policyholder loans on insurance contracts using a discounted cash flow model. Determination of fair value for structured settlements assumes the discount rates used to calculate the present value of expected payments are the risk-free spot rates plus an A3 rated bond spread for financial issuers at December 31, 2015, to account for nonperformance risk. See Note 3, Fair Value Measurements, for further details. |
Cash And Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents are highly liquid instruments that include liquid debt instruments with original maturities of less than three months. These are carried at cost, which approximates fair value. |
Property Casualty Insurance | Property Casualty Insurance The consolidated property casualty companies actively write property casualty insurance through independent agencies in 39 states. Our 10 largest states generated 62 percent and 63 percent of total earned premiums in 2015 and 2014, respectively. Ohio, our largest state, accounted for 17 percent and 18 percent of total earned premiums in 2015 and 2014, respectively. Illinois, Indiana, Georgia, Pennsylvania, Michigan and North Carolina each accounted for between 5 percent and 7 percent of total earned premiums in 2015. Our largest single agency relationship accounted for approximately less than 1 percent of our total property casualty earned premiums in 2015. No aggregate agency relationship locations under a single ownership structure accounted for more than 3 percent of our total property casualty earned premiums in 2015. We record revenues for installment charges as fee revenues in the consolidated statements of income. Property casualty written premiums are deferred and recorded as earned premiums on a pro rata basis over the terms of the policies. We record as unearned premiums the portion of written premiums that applies to unexpired policy terms. Expenses associated with successfully acquiring insurance policies – commissions, premium taxes and underwriting costs – are deferred and amortized over the terms of the policies. All acquisition costs are in accordance with Accounting Standards Update (ASU) 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts . We assess recoverability of deferred acquisition costs at the segment level, consistent with the way we acquire, service and manage insurance policies and measure profitability. We analyze our acquisition cost assumptions to reflect actual experience, and we evaluate potential premium deficiencies. Certain property casualty policies are not entered into policy underwriting systems as of the effective date of coverage. An estimate is recorded for these unprocessed written premiums. A large majority of the estimate is unearned and has no material impact on earned premiums. Premiums receivable are reviewed for impairment on a quarterly basis. We maintain an allowance for uncollectible premiums. We establish reserves to cover the expected cost of claims, losses and expenses related to investigating, processing and resolving claims. Although the appropriate amount of reserves is inherently uncertain, we base our decisions on past experience and current facts. Reserves are based on claims reported prior to the end of the year and estimates of unreported claims. We take into account the fact that we may recover some of our costs through salvage and subrogation. We regularly review and update reserves using the most current information available. Any resulting adjustments are reflected in current calendar year insurance losses and policyholder benefits. |
Policyholder Dividends | Policyholder Dividends Certain workers’ compensation policies include the possibility of a policyholder earning a return of a portion of its premium in the form of a policyholder dividend. The dividend generally is calculated by determining the profitability of a policy year along with the associated premium. We reserve for all probable future policyholder dividend payments. We record policyholder dividends as other underwriting expenses. |
Life Insurance | Life Insurance We offer several types of life insurance and disability income insurance, and we account for each according to the duration of the contract. Short-duration life and health contracts are written to cover claims that arise during a short, fixed term of coverage. We generally have the right to change the amount of premium charged or cancel the coverage at the end of each contract term. Group life insurance is an example. We record premiums for short-duration life and health contracts similarly to property casualty contracts. Long-duration contracts are written to provide coverage for an extended period of time. Traditional long-duration contracts require policyholders to pay scheduled gross premiums, generally not less frequently than annually, over the term of the coverage. Premiums for these contracts, such as whole life insurance and disability income insurance, are recognized as revenue when due. Some traditional long-duration contracts, such as ten-pay whole life insurance, have premium payment periods shorter than the period over which coverage is provided. For these contracts, the excess of premium over the amount required to pay expenses and benefits is recognized over the term of the coverage rather than over the premium payment period. We establish a liability for traditional long-duration contracts as we receive premiums. The amount of this liability is the present value of future expenses and benefits less the present value of future net premiums. Net premium is the portion of gross premium required to provide for all expenses and benefits. We estimate future expenses and benefits and net premium using assumptions for expected expenses, mortality, morbidity, withdrawal rates and investment income. We include a provision for deviation, meaning we allow for some uncertainty in making our assumptions. We establish our assumptions when the contract is issued, and we generally maintain those assumptions for the life of the contract. 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. We use our own experience and historical trends for setting our assumption for expected expenses. We base our assumption for expected investment income on our own experience, adjusted for current economic conditions. We capitalize acquisition costs for traditional long-duration contracts. We charge these capitalized costs associated with successfully acquiring traditional long-duration contract insurance policies over the premium-paying period of the policies. We use the same assumptions used in establishing the liability for the contract. All acquisition costs are in accordance with ASU 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts . We update our acquisition cost assumptions periodically to reflect actual experience, and we evaluate our deferred acquisition costs for recoverability. Universal life contracts are long-duration contracts for which contractual provisions are not fixed, unlike whole life insurance. Universal life contracts allow policyholders to vary the amount of premium, within limits, without our consent. However, we may vary the mortality, expense charges and the interest crediting rate, within limits, used to accumulate policy values. We do not record universal life premiums as revenue. Instead we recognize as revenue the mortality charges, administration charges and surrender charges when received. Some of our universal life contracts assess administration charges in the early years of the contract that are compensation for services we will provide in the later years of the contract. These administration charges are deferred and are recognized over the period when we provide those future services. We maintain a liability equal to the policyholder account value. There is no provision for adverse deviation. 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. We capitalize acquisition costs associated with successfully acquiring universal life long-duration contracts. We charge these capitalized costs to expenses over the term of coverage of the contract in accordance with the recognition of gross profit from the contract. When we charge deferred policy acquisition costs to expenses, we use assumptions based on our best estimates of long-term experience. We review and modify these assumptions on a regular basis. |
Separate Accounts | Separate Accounts We have issued universal life contracts with guaranteed minimum returns, referred to as bank-owned life insurance contracts (BOLIs). A BOLI is designed so the bank is the policy owner and the policy beneficiary. We legally segregate and record as separate accounts the assets and liabilities for some of our BOLIs, based on the specific contract provisions. We guarantee minimum investment returns, account values and death benefits for our separate account BOLIs. Our other BOLIs are general account products. We carry the assets of separate account BOLIs at fair value. The liabilities on separate account BOLIs primarily are the contract holders’ claims to the related assets and are carried at an amount equal to the contract holders’ account value. At December 31, 2015, the current fair value of the BOLI invested assets and cash exceeded the current fair value of the contract holders’ account value by approximately $21 million . If the BOLI projected fair value were to fall below the value we guaranteed, a liability would be established with a corresponding charge to the company’s earnings. Generally, investment income and realized investment gains and losses of the separate accounts accrue directly to the contract holder, and we do not include them in the consolidated statements of income. Revenues and expenses related to separate accounts consist of contractual fees and mortality, surrender and expense risk charges. Also, each separate account BOLI includes a negotiated capital gain and loss sharing arrangement between the company and the bank. A percentage of each separate account’s realized capital gain and loss representing contract fees and assessments accrues to us and is transferred from the separate account to our general account and is recognized as revenue or expense. We record as revenues separate account investment management fees in Fee revenues of the consolidated statements of income. |
Reinsurance | Reinsurance Assumed The Cincinnati Insurance Company is expanding in the area of assumed reinsurance. Business written includes treaties that provide coverage for property catastrophe events on a worldwide basis. Premiums are primarily earned on a pro rata basis over the coverage period of the treaty. We also assume risk with limited exposure as a reinsurer for other insurance companies, reinsurers and involuntary state pools. Reinsurance Ceded We reduce risk and uncertainty by buying property casualty and life reinsurance. Reinsurance contracts do not relieve us from our obligation to policyholders, but rather help protect our financial strength to perform that duty. All of these ceded reinsurance contracts transfer the economic risk of loss. Ceded premiums are deferred and recorded as earned premiums on a pro rata basis over the terms of the contracts. We estimate loss amounts recoverable from our reinsurers based on the reinsurance policy terms. Historically, our claims with reinsurers have been paid. We do not have an allowance for uncollectible reinsurance. |
Income Taxes | Income Taxes We calculate deferred income tax liabilities and assets using tax rates in effect when temporary differences in financial statement income and taxable income are expected to reverse. We recognize deferred income taxes for numerous temporary differences between our taxable income and financial statement income and other changes in shareholders’ equity. Such temporary differences relate primarily to unrealized gains and losses on investments and differences in the recognition of deferred acquisition costs, unearned premium and insurance reserves. We charge deferred income taxes associated with balances that impact other comprehensive income, such as unrealized appreciation and depreciation of investments (except the amounts related to the effect of income tax rate changes), to shareholders’ equity in AOCI. We charge deferred taxes associated with other differences to income. See Note 11, Income Taxes, for further detail on our uncertain tax positions. Although no Internal Revenue Service (IRS) penalties currently are accrued, if incurred, they would be recognized as a component of income tax expense. |
Earnings per Share | Earnings per Share Net income per common share is based on the weighted average number of common shares outstanding during each of the respective years. We calculate net income per common share (diluted) assuming the exercise or conversion of share‑based awards using the treasury stock method. |
Land, Building And Equipment | Land, Building and Equipment We record land at cost, and record building and equipment at cost less accumulated depreciation. Equipment held under capital leases also is classified as property and equipment with the related lease obligations recorded as liabilities. We capitalize and amortize costs for internally developed computer software during the application development stage. These costs generally consist of external consulting, payroll and payroll-related costs. Our depreciation is based on estimated useful lives (ranging from three years to 39.5 years) using straight-line and accelerated methods. Depreciation expense was $36 million for 2015, and $37 million for 2014 and 2013, respectively. We monitor land, building and equipment and software assets for potential impairments. Potential impairments may include a significant decrease in the fair values of the assets, considerable cost overruns on projects, a change in legal factors or business climate or other factors that indicate that the carrying amount may not be recoverable or useful. There were no recorded land, building and equipment impairments for 2015, 2014 or 2013. |
Finance Receivables | Finance Receivables Our leasing subsidiary provides auto and equipment direct financing (leases and loans) to commercial and individual clients. We generally transfer ownership of the property to the client as the terms of the leases expire. Our lease contracts contain bargain purchase options. We account for these leases and loans as direct financing-type leases. We capitalize and amortize lease or loan origination costs over the life of the financing, using the effective interest method. These costs may include, but are not limited to finder fees, broker fees, filing fees and the cost of credit reports. We record income as other revenues over the financing term using the effective interest method in the consolidated statements of income, Finance receivables are reviewed for impairment and are insignificant to our consolidated financial position, results of operations and cash flows. |
Employee Benefit Pension Plan | Employee Benefit Pension Plan We sponsor a defined benefit pension plan that was modified during 2008. We closed entry into the pension plan, and only participants 40 years of age or older could elect to remain in the plan. Our pension expense is based on certain actuarial assumptions and also is composed of several components that are determined using the projected unit credit actuarial cost method. Refer to Note 13, Employee Retirement Benefits, for more information about our defined benefit pension plan. |
Stock-Based Compensation | Share-Based Compensation We grant qualified and nonqualified share-based compensation under authorized plans. The stock options generally vest on a graded scale over three years following the date of grant and are exercisable over 10 -year periods. We grant service-based restricted stock units that cliff vest three years after the date of grant as well as service-based restricted stock units that vest ratably over the three year vesting term. We also grant performance-based restricted stock units that vest if certain market conditions are attained. In 2015, the CFC compensation committee approved share-based awards including incentive stock options, nonqualified stock options, service-based restricted and performance-based restricted stock units. See Note 17, Share-Based Associate Compensation Plans, for further details. |
Subsequent Events | Subsequent Events There were no subsequent events requiring adjustment to the financial statements or disclosure. |
New Accounting Pronouncements, Policy [Policy Text Block] | Adopted Accounting Updates ASU 2015-03, Interest-Imputation of Interest In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest. ASU 2015-03 reduces the complexity of disclosing debt issuance costs and debt discount and premium on the balance sheet by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU 2015-15, Interest-Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. ASU 2015-15 allows entities to defer and present debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. |
Interest Capitalization, Policy [Policy Text Block] | ASU 2015-03, Interest-Imputation of Interest In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest. ASU 2015-03 reduces the complexity of disclosing debt issuance costs and debt discount and premium on the balance sheet by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU 2015-15, Interest-Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. ASU 2015-15 allows entities to defer and present debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. |
Pending Accounting Updates | Pending Accounting Updates ASU 2014-09, Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers . ASU 2014-09 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Insurance contracts do not fall within the scope of this ASU. The effective date of ASU 2014-09 is for annual reporting periods beginning after December 15, 2017 with early adoption permitted. The ASU has not yet been adopted; however, there is not expected to be a material impact on our company’s consolidated financial position, cash flows or results of operations. ASU 2014-12, Compensation-Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In June 2014, the FASB issued ASU 2014-12, Compensation-Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. ASU 2014-12 requires that performance targets that affect vesting and that could be achieved after the requisite service period be treated as performance conditions. The effective date of ASU 2014-12 is for interim and annual reporting periods beginning after December 15, 2015. The ASU has not yet been adopted and will not have a material impact on our company’s consolidated financial position, cash flows or results of operations. ASU 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis. ASU 2015-02 makes amendments to the current consolidation guidance, focusing mainly on the investment management industry; however entities across all industries could be impacted. The effective date of ASU 2015-02 is for interim and annual reporting periods beginning after December 15, 2015. The ASU has not yet been adopted; however, there is not expected to be a material impact on our company’s consolidated financial position, cash flows or results of operations. ASU 2015-09, Financial Services-Insurance: Disclosures about Short-Duration Contracts In May 2015, the FASB issued ASU 2015-09, Financial Services-Insurance: Disclosures About Short-Duration Contracts. ASU 2015-09 requires entities to provide additional disclosures about the liability for unpaid claims and claim adjustment expenses to increase the transparency of significant estimates. ASU 2015-09 also requires entities to disclose information about significant changes in methodologies and assumptions used to calculate the liability for unpaid claims and claim adjustment expenses, including reasons for the change and the effects on the financial statements. ASU 2015-09 also requires entities to disclose a rollforward of the liability of unpaid claims and claim adjustment expense for annual and interim reporting periods. The effective date of ASU 2015-09 is for annual reporting periods beginning after December 15, 2015, and interim reporting periods within annual periods beginning after December 15, 2016. The ASU has not yet been adopted and will not have a material impact on our company’s consolidated financial position, cash flows or results of operations, but the ASU will require additional disclosures to our annual and interim financial statements. ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 revises the accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The effective date of ASU 2016-01 is for interim and annual reporting periods beginning after December 15, 2017. The ASU has not yet been adopted. Management is currently evaluating the impact on our company’s consolidated financial position, cash flows and results of operations. |
Revenue Recognition, Policy [Policy Text Block] | ASU 2014-09, Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers . ASU 2014-09 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Insurance contracts do not fall within the scope of this ASU. The effective date of ASU 2014-09 is for annual reporting periods beginning after December 15, 2017 with early adoption permitted. The ASU has not yet been adopted; however, there is not expected to be a material impact on our company’s consolidated financial position, cash flows or results of operations. |
Compensation Related Costs, Policy [Policy Text Block] | ASU 2014-12, Compensation-Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In June 2014, the FASB issued ASU 2014-12, Compensation-Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. ASU 2014-12 requires that performance targets that affect vesting and that could be achieved after the requisite service period be treated as performance conditions. The effective date of ASU 2014-12 is for interim and annual reporting periods beginning after December 15, 2015. The ASU has not yet been adopted and will not have a material impact on our company’s consolidated financial position, cash flows or results of operations. |
Consolidation, Policy [Policy Text Block] | ASU 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis. ASU 2015-02 makes amendments to the current consolidation guidance, focusing mainly on the investment management industry; however entities across all industries could be impacted. The effective date of ASU 2015-02 is for interim and annual reporting periods beginning after December 15, 2015. The ASU has not yet been adopted; however, there is not expected to be a material impact on our company’s consolidated financial position, cash flows or results of operations. |
Short-Duration Contracts, Policy [Policy Text Block] | ASU 2015-09, Financial Services-Insurance: Disclosures about Short-Duration Contracts In May 2015, the FASB issued ASU 2015-09, Financial Services-Insurance: Disclosures About Short-Duration Contracts. ASU 2015-09 requires entities to provide additional disclosures about the liability for unpaid claims and claim adjustment expenses to increase the transparency of significant estimates. ASU 2015-09 also requires entities to disclose information about significant changes in methodologies and assumptions used to calculate the liability for unpaid claims and claim adjustment expenses, including reasons for the change and the effects on the financial statements. ASU 2015-09 also requires entities to disclose a rollforward of the liability of unpaid claims and claim adjustment expense for annual and interim reporting periods. The effective date of ASU 2015-09 is for annual reporting periods beginning after December 15, 2015, and interim reporting periods within annual periods beginning after December 15, 2016. The ASU has not yet been adopted and will not have a material impact on our company’s consolidated financial position, cash flows or results of operations, but the ASU will require additional disclosures to our annual and interim financial statements. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 revises the accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The effective date of ASU 2016-01 is for interim and annual reporting periods beginning after December 15, 2017. The ASU has not yet been adopted. Management is currently evaluating the impact on our company’s consolidated financial position, cash flows and results of operations. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments [Abstract] | |
Analysis Of Cost Or Amortized Cost, Gross Unrealized Gains And Losses And Fair Value for Investments | The following table provides cost or amortized cost, gross unrealized gains, gross unrealized losses and fair value for our fixed-maturity and equity securities: (Dollars in millions) Cost or amortized cost Gross unrealized Fair At December 31, 2015 gains losses Fixed-maturity securities: Corporate $ 5,294 $ 255 $ 96 $ 5,453 States, municipalities and political subdivisions 3,440 172 1 3,611 Commercial mortgage-backed 287 4 2 289 Government-sponsored enterprises 284 — 6 278 Foreign government 10 — — 10 Convertibles and bonds with warrants attached 5 — — 5 United States government 4 — — 4 Subtotal 9,324 431 105 9,650 Equity securities: Common equities 2,749 1,787 51 4,485 Nonredeemable preferred equities 189 32 — 221 Subtotal 2,938 1,819 51 4,706 Total $ 12,262 $ 2,250 $ 156 $ 14,356 At December 31, 2014 Fixed-maturity securities: Corporate $ 5,117 $ 420 $ 11 $ 5,526 States, municipalities and political subdivisions 3,267 178 2 3,443 Commercial mortgage-backed 250 9 — 259 Government-sponsored enterprises 213 — 5 208 Foreign government 10 — — 10 Convertibles and bonds with warrants attached 7 — — 7 United States government 7 — — 7 Subtotal 8,871 607 18 9,460 Equity securities: Common equities 2,583 2,099 3 4,679 Nonredeemable preferred equities 145 35 1 179 Subtotal 2,728 2,134 4 4,858 Total $ 11,599 $ 2,741 $ 22 $ 14,318 |
Fair Values And Unrealized Losses by Investment Category And By The Duration Of The Securities' Continuous Unrealized Loss Position | The table below provides fair values and 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 December 31, 2015 Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Fixed-maturity securities: Corporate $ 1,099 $ 63 $ 133 $ 33 $ 1,232 $ 96 States, municipalities and political subdivisions 47 1 22 — 69 1 Commercial mortgage-backed 103 2 2 — 105 2 Government-sponsored enterprises 100 2 127 4 227 6 Subtotal 1,349 68 284 37 1,633 105 Equity securities: Common equities 270 51 — — 270 51 Nonredeemable preferred equities 35 — — — 35 — Subtotal 305 51 — — 305 51 Total $ 1,654 $ 119 $ 284 $ 37 $ 1,938 $ 156 At December 31, 2014 Fixed-maturity securities: Corporate $ 261 $ 8 $ 90 $ 3 $ 351 $ 11 States, municipalities and political subdivisions 17 — 135 2 152 2 Commercial mortgage-backed 3 — 23 — 26 — Government-sponsored enterprises 11 — 181 5 192 5 Subtotal 292 8 429 10 721 18 Equity securities: Common equities 85 3 — — 85 3 Nonredeemable preferred equities 16 — 17 1 33 1 Subtotal 101 3 17 1 118 4 Total $ 393 $ 11 $ 446 $ 11 $ 839 $ 22 |
Contractual Maturity Dates For Fixed-Maturity And Short-Term Investments | Contractual maturity dates for fixed-maturity investments were: (Dollars in millions) Amortized cost Fair value % of fair value At December 31, 2015 Maturity dates: Due in one year or less $ 453 $ 459 4.8 % Due after one year through five years 3,068 3,243 33.6 Due after five years through ten years 3,592 3,649 37.8 Due after ten years 2,211 2,299 23.8 Total $ 9,324 $ 9,650 100.0 % |
Investment Income, Realized Investment Gains And Losses And Change In Unrealized Investment Gains And Losses | The following table provides investment income, realized investment gains and losses, and the change in unrealized investment gains and losses: (Dollars in millions) Years ended December 31, 2015 2014 2013 Investment income: Interest $ 428 $ 417 $ 413 Dividends 150 138 122 Other 3 2 3 Total 581 557 538 Less investment expenses 9 8 9 Total $ 572 $ 549 $ 529 Realized investment gains and losses: Fixed maturities: Gross realized gains $ 18 $ 21 $ 15 Gross realized losses — (3 ) — Other-than-temporary impairments (18 ) (15 ) (2 ) Equity securities: Gross realized gains 129 136 64 Gross realized losses (26 ) — — Other-than-temporary impairments (34 ) (9 ) — Other 1 3 6 Total $ 70 $ 133 $ 83 Change in unrealized investment gains and losses: Fixed maturities $ (263 ) $ 106 $ (387 ) Equity securities (362 ) 278 847 Less deferred income taxes (220 ) 134 161 Total $ (405 ) $ 250 $ 299 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Hierarchy for Assets Measured at Fair Value on a Recurring Basis | The following tables illustrate the fair value hierarchy for those assets measured at fair value on a recurring basis at December 31, 2015 and 2014. We do not have any liabilities carried at fair value. There were no transfers between Level 1 and Level 2. (Dollars in millions) Quoted prices in active markets for Significant unobservable At December 31, 2015 Significant other observable inputs (Level 2) Total Fixed maturities, available for sale: Corporate $ — $ 5,402 $ 51 $ 5,453 States, municipalities and political subdivisions — 3,611 — 3,611 Commercial mortgage-backed — 289 — 289 Government-sponsored enterprises — 278 — 278 Foreign government — 10 — 10 Convertibles and bonds with warrants attached — 5 — 5 United States government 4 — — 4 Subtotal 4 9,595 51 9,650 Common equities, available for sale 4,485 — — 4,485 Nonredeemable preferred equities, available for sale — 218 3 221 Separate accounts taxable fixed maturities — 736 1 737 Top Hat savings plan mutual funds and common equity (included in Other assets) 21 — — 21 Total $ 4,510 $ 10,549 $ 55 $ 15,114 At December 31, 2014 Fixed maturities, available for sale: Corporate $ — $ 5,508 $ 18 $ 5,526 States, municipalities and political subdivisions — 3,443 — 3,443 Commercial mortgage-backed — 259 — 259 Government-sponsored enterprises — 208 — 208 Foreign government — 10 — 10 Convertibles and bonds with warrants attached — 7 — 7 United States government 7 — — 7 Subtotal 7 9,435 18 9,460 Common equities, available for sale 4,679 — — 4,679 Nonredeemable preferred equities, available for sale — 177 2 179 Separate accounts taxable fixed maturities — 731 — 731 Top Hat savings plan mutual funds and common equity (included in Other assets) 18 — — 18 Total $ 4,704 $ 10,343 $ 20 $ 15,067 |
Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | The following table provides the change in Level 3 assets during 2015 and 2014: (Dollars in millions) Asset fair value measurements using significant unobservable input Corporate fixed maturities Taxable fixed maturities-separate accounts Nonredeemable preferred equities Total Beginning balance, January 1, 2015 $ 18 $ — $ 2 $ 20 Total gains or losses (realized/unrealized): Included in net income — — — — Included in other comprehensive income — — 1 1 Purchases 36 1 — 37 Sales — — — — Transfers into Level 3 — — — — Transfers out of Level 3 (3 ) — — (3 ) Ending balance, December 31, 2015 $ 51 $ 1 $ 3 $ 55 Beginning balance, January 1, 2014 $ 2 $ — $ 2 $ 4 Total gains or losses (realized/unrealized): Included in net income — — — — Included in other comprehensive income — — — — Purchases — — — — Sales — — — — Transfers into Level 3 16 — — 16 Transfers out of Level 3 — — — — Ending balance, December 31, 2014 $ 18 $ — $ 2 $ 20 |
Fair Value of Life Policy Loans | The following table shows the fair value of our life policy loans, included in other invested assets: (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 December 31, 2015 Life policy loans $ — $ — $ 40 $ 40 At December 31, 2014 Life policy loans $ — $ — $ 39 $ 39 |
Debt | |
Fair Values of Deferred Annuities, Structured Settlements and Other Items | The following table shows fair values of our note payable and long-term debt: (Dollars in millions) Quoted prices in active markets for Significant other Significant unobservable inputs (Level 3) Total At December 31, 2015 Note payable $ — $ 35 $ — $ 35 6.900% senior debentures, due 2028 — 31 — 31 6.920% senior debentures, due 2028 — 480 — 480 6.125% senior notes, due 2034 — 425 — 425 Total $ — $ 971 $ — $ 971 At December 31, 2014 Note payable $ — $ 49 $ — $ 49 6.900% senior debentures, due 2028 — 34 — 34 6.920% senior debentures, due 2028 — 496 — 496 6.125% senior notes, due 2034 — 449 — 449 Total $ — $ 1,028 $ — $ 1,028 |
Deferred Annuities and Structured Settlements | |
Fair Values of Deferred Annuities, Structured Settlements and Other Items | The following table shows fair value 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 December 31, 2015 Deferred annuities $ — $ — $ 886 $ 886 Structured settlements — 208 — 208 Total $ — $ 208 $ 886 $ 1,094 At December 31, 2014 Deferred annuities $ — $ — $ 897 $ 897 Structured settlements — 217 — 217 Total $ — $ 217 $ 897 $ 1,114 |
Property Casualty Loss And Lo37
Property Casualty Loss And Loss Expenses (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Insurance [Abstract] | |
Consolidated Property Casualty Loss And Loss Expense Reserves | This table summarizes activity for our consolidated property casualty loss and loss expense reserves: (Dollars in millions) Years ended December 31, 2015 2014 2013 Gross loss and loss expense reserves, January 1 $ 4,438 $ 4,241 $ 4,169 Less reinsurance recoverable 282 299 356 Net loss and loss expense reserves, January 1 4,156 3,942 3,813 Net incurred loss and loss expenses related to: Current accident year 2,756 2,725 2,448 Prior accident years (184 ) (98 ) (147 ) Total incurred 2,572 2,627 2,301 Net paid loss and loss expenses related to: Current accident year 1,152 1,212 1,045 Prior accident years 1,197 1,201 1,127 Total paid 2,349 2,413 2,172 Net loss and loss expense reserves, December 31 4,379 4,156 3,942 Plus reinsurance recoverable 281 282 299 Gross loss and loss expense reserves, December 31 $ 4,660 $ 4,438 $ 4,241 |
Life Policy And Investment Co38
Life Policy And Investment Contract Reserves (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Liability for Future Policy Benefits [Abstract] | |
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) At December 31, 2015 2014 Traditional life $ 943 $ 875 Deferred annuities 860 863 Universal life 558 530 Structured settlements 174 182 Other 48 47 Total life policy and investment contract reserves $ 2,583 $ 2,497 |
Deferred Policy Acquisition C39
Deferred Policy Acquisition Costs (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Deferred Costs [Abstract] | |
Deferred Policy Acquisition Costs And Asset Reconciliation, Including the Amortized Deferred Policy Acquisition Costs | The table below shows the deferred policy acquisition costs and asset reconciliation: (Dollars in millions) Years ended December 31, 2015 2014 2013 Property casualty: Deferred policy acquisition costs asset, January 1 $ 379 $ 366 $ 337 Capitalized deferred policy acquisition costs 801 783 756 Amortized deferred policy acquisition costs (792 ) (770 ) (727 ) Deferred policy acquisition costs asset, December 31 $ 388 $ 379 $ 366 Life: Deferred policy acquisition costs asset, January 1 $ 199 $ 199 $ 133 Capitalized deferred policy acquisition costs 45 44 46 Amortized deferred policy acquisition costs (37 ) (37 ) (31 ) Amortized shadow deferred policy acquisition costs 21 (7 ) 51 Deferred policy acquisition costs asset, December 31 $ 228 $ 199 $ 199 Consolidated: Deferred policy acquisition costs asset, January 1 $ 578 $ 565 $ 470 Capitalized deferred policy acquisition costs 846 827 802 Amortized deferred policy acquisition costs (829 ) (807 ) (758 ) Amortized shadow deferred policy acquisition costs 21 (7 ) 51 Deferred policy acquisition costs asset, December 31 $ 616 $ 578 $ 565 |
Long-Term Debt And Capital Le40
Long-Term Debt And Capital Lease Obligation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Long-term Debt and Capital Lease Obligations [Abstract] | |
Book Value And Principal Amounts Of Long-Term Debt | This table summarizes the principal amounts of our long-term debt excluding unamortized discounts, none of which are encumbered by rating triggers: (Dollars in millions) Book value Principal amount Interest rate Year of issue At December 31, At December 31, 2015 2014 2015 2014 6.900% 1998 Senior debentures, due 2028 $ 26 $ 26 $ 28 $ 28 6.920% 2005 Senior debentures, due 2028 391 391 391 391 6.125% 2004 Senior notes, due 2034 369 369 374 374 Total $ 786 $ 786 $ 793 $ 793 |
Capital Lease Payments Over Next Five Years | Below are the expected capital lease obligations that we expect to pay over the next six years: (Dollars in millions) Years ended December 31, 2016 2017 2018 2019 2020 2021 Capital lease obligations $ 13 $ 8 $ 6 $ 4 $ 3 $ 1 |
Shareholders' Equity And Divi41
Shareholders' Equity And Dividend Restrictions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Shareholders Equity And Dividend Restrictions [Abstract] | |
Change In AOCI Includes Changes In Unrealized Gains And Losses On Investments And Pension Obligations | The changes from the beginning of year to the end of year are the result of changes to other comprehensive income or loss (OCI). (Dollars in millions) 2015 2014 2013 Before tax Income tax Net Before Income Net Before Income Net Investments: AOCI, January 1 $ 2,719 $ 942 $ 1,777 $ 2,335 $ 808 $ 1,527 $ 1,875 $ 647 $ 1,228 OCI before realized gains recognized in net income (556 ) (196 ) (360 ) 514 181 333 537 188 349 Realized gains and losses recognized in net income (69 ) (24 ) (45 ) (130 ) (47 ) (83 ) (77 ) (27 ) (50 ) OCI (625 ) (220 ) (405 ) 384 134 250 460 161 299 AOCI, December 31 $ 2,094 $ 722 $ 1,372 $ 2,719 $ 942 $ 1,777 $ 2,335 $ 808 $ 1,527 Pension obligations: AOCI, January 1 $ (36 ) $ (12 ) $ (24 ) $ (18 ) $ (6 ) $ (12 ) $ (101 ) $ (35 ) $ (66 ) OCI excluding amortization recognized in net income (12 ) (5 ) (7 ) (21 ) (7 ) (14 ) 83 29 54 Amortization recognized in net income 6 3 3 3 1 2 — — — OCI (6 ) (2 ) (4 ) (18 ) (6 ) (12 ) 83 29 54 AOCI, December 31 $ (42 ) $ (14 ) $ (28 ) $ (36 ) $ (12 ) $ (24 ) $ (18 ) $ (6 ) $ (12 ) Life deferred acquisition costs, life policy reserves and other: AOCI, January 1 $ (12 ) $ (3 ) $ (9 ) $ (16 ) $ (5 ) $ (11 ) $ (50 ) $ (17 ) $ (33 ) OCI before realized gains recognized in net income 14 5 9 7 3 4 40 14 26 Realized gains and losses recognized in net income (1 ) (1 ) — (3 ) (1 ) (2 ) (6 ) (2 ) (4 ) OCI 13 4 9 4 2 2 34 12 22 AOCI, December 31 $ 1 $ 1 $ — $ (12 ) $ (3 ) $ (9 ) $ (16 ) $ (5 ) $ (11 ) Summary of AOCI: AOCI, January 1 $ 2,671 $ 927 $ 1,744 $ 2,301 $ 797 $ 1,504 $ 1,724 $ 595 $ 1,129 Investments OCI (625 ) (220 ) (405 ) 384 134 250 460 161 299 Pension obligations OCI (6 ) (2 ) (4 ) (18 ) (6 ) (12 ) 83 29 54 Life deferred acquisition costs, life policy reserves and other OCI 13 4 9 4 2 2 34 12 22 Total OCI (618 ) (218 ) (400 ) 370 130 240 577 202 375 AOCI, December 31 $ 2,053 $ 709 $ 1,344 $ 2,671 $ 927 $ 1,744 $ 2,301 $ 797 $ 1,504 Investments realized gains and life deferred acquisition costs, life policy reserves and other realized gains are recorded in the realized investment gains, net, line item in the consolidated statements of income. Amortization on pension obligations is recorded in the insurance losses and contract holders' benefits and underwriting, acquisition and insurance expenses in the consolidated statements of income. |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Reinsurance Disclosures [Abstract] | |
Earned Consolidated Property Casualty Insurance Premiums On Assumed And Ceded Business | Our consolidated statements of income include earned consolidated property casualty insurance premiums on assumed and ceded business: (Dollars in millions) Years ended December 31, 2015 2014 2013 Direct earned premiums $ 4,396 $ 4,209 $ 3,903 Assumed earned premiums 29 12 11 Ceded earned premiums (154 ) (176 ) (201 ) Earned premiums $ 4,271 $ 4,045 $ 3,713 |
Incurred Consolidated Property Casualty Insurance Loss And Loss Expenses On Assumed And Ceded Business | Our consolidated statements of income include incurred consolidated property casualty insurance loss and loss expenses on assumed and ceded business: (Dollars in millions) Years ended December 31, 2015 2014 2013 Direct incurred loss and loss expenses $ 2,596 $ 2,661 $ 2,323 Assumed incurred loss and loss expenses 12 6 11 Ceded incurred loss and loss expenses (36 ) (40 ) (33 ) Incurred loss and loss expenses $ 2,572 $ 2,627 $ 2,301 |
Earned Life Insurance Premiums On Ceded Business | Our consolidated statements of income include earned life insurance premiums on ceded business: (Dollars in millions) Years ended December 31, 2015 2014 2013 Direct earned premiums $ 271 $ 259 $ 248 Ceded earned premiums (62 ) (61 ) (59 ) Earned premiums $ 209 $ 198 $ 189 |
Life Insurance Contract Holders' Benefits Incurred On Ceded Business | Our consolidated statements of income include life insurance contract holders’ benefits incurred on ceded business: (Dollars in millions) Years ended December 31, 2015 2014 2013 Direct contract holders' benefits incurred $ 292 $ 299 $ 266 Ceded contract holders' benefits incurred (56 ) (70 ) (62 ) Contract holders' benefits incurred $ 236 $ 229 $ 204 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Components Of Deferred Tax Assets And Liabilities | The significant components of deferred tax assets and liabilities included in the consolidated balance sheets at December 31 were as follows: (Dollars in millions) At December 31, 2015 2014 Deferred tax assets: Loss and loss expense reserves $ 191 $ 197 Unearned premiums 151 145 Investments 25 16 Other 42 41 Total gross deferred tax assets 409 399 Deferred tax liabilities: Unrealized investment gains, net 719 937 Deferred acquisition costs 187 183 Life policy reserves 137 110 Other 4 9 Total gross deferred tax liabilities 1,047 1,239 Net deferred income tax liability $ 638 $ 840 |
Differences Between The 35 Percent Statutory Income Tax Rate And Effective Income Tax Rate | The differences between the 35 percent statutory federal income tax rate and our effective income tax rate were as follows: (Dollars in millions) Years ended December 31, 2015 2014 2013 Tax at statutory rate: $ 308 35.0 % $ 252 35.0 % $ 250 35.0 % Increase (decrease) resulting from: Tax-exempt income from municipal bonds (33 ) (3.7 ) (33 ) (4.6 ) (32 ) (4.5 ) Dividend received exclusion (32 ) (3.6 ) (29 ) (4.0 ) (26 ) (3.6 ) Other 4 0.3 6 0.8 5 0.7 Provision for income taxes $ 247 28.0 % $ 196 27.2 % $ 197 27.6 % |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Calculations For Basic And Diluted Earnings Per Share | The table shows calculations for basic and diluted earnings per share: (In millions except per share data) Years ended December 31, 2015 2014 2013 Numerator: Net income—basic and diluted $ 634 $ 525 $ 517 Denominator: Basic weighted-average common shares outstanding 164.0 163.5 163.5 Effect of share-based awards: Stock options 1.0 1.0 1.2 Nonvested shares 0.6 0.6 0.7 Diluted weighted-average shares 165.6 165.1 165.4 Earnings per share: Basic $ 3.87 $ 3.21 $ 3.16 Diluted 3.83 3.18 3.12 Number of anti-dilutive share-based awards 0.4 0.7 0.4 |
Employee Retirement Benefits (T
Employee Retirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Benefit Obligation Activity Using An Actuarial Measurement Date For Qualified Plan And SERP | Benefit obligation activity using an actuarial measurement date for our qualified pension plan and SERP at December 31 follows: (Dollars in millions) At December 31, 2015 2014 Change in projected benefit obligation: Benefit obligation, January 1 $ 319 $ 284 Service cost 12 10 Interest cost 14 15 Actuarial (gain) loss (3 ) 35 Benefits paid (19 ) (27 ) Other — 2 Projected benefit obligation, December 31 $ 323 $ 319 Accumulated benefit obligation $ 293 $ 284 Change in plan assets: Fair value of plan assets, January 1 $ 288 $ 280 Actual return on plan assets 3 30 Employer contribution 6 5 Benefits paid (19 ) (27 ) Fair value of plan assets, December 31 $ 278 $ 288 Funded status, December 31 $ (45 ) $ (31 ) |
Reconciliation Of The Funded Status For Qualified Plan And SERP | A reconciliation follows of the funded status for our qualified plan and SERP at the end of the measurement period to the amounts recognized in the consolidated balance sheets at December 31: (Dollars in millions) At December 31, 2015 2014 Pension amounts recognized in the consolidated balance sheets: Other assets $ — $ — Other liabilities (45 ) (31 ) Net amount recognized $ (45 ) $ (31 ) Pension amounts recognized in accumulated other comprehensive income: Net actuarial loss $ 41 $ 34 Prior service cost 1 2 Total $ 42 $ 36 |
Components Of Net Periodic Benefit Cost As Well As Other Changes In Plan Assets And Benefit Obligations Recognized In Other Comprehensive Income For Qualified Plan And SERP | Below are the components of our net periodic benefit cost, as well as other changes in plan assets and benefit obligations recognized in other comprehensive income for our qualified plan and SERP at December 31: (Dollars in millions) Years ended December 31, 2015 2014 2013 Net periodic benefit cost: Service cost $ 12 $ 10 $ 13 Interest cost 14 15 13 Expected return on plan assets (18 ) (17 ) (17 ) Amortization of actuarial loss and prior service cost 6 2 9 Other 1 3 2 Net periodic benefit cost $ 15 $ 13 $ 20 (Dollars in millions) Years ended December 31, 2015 2014 2013 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Current year actuarial loss (gain) $ 13 $ 21 $ (72 ) Amortization of actuarial loss (6 ) (5 ) (10 ) Current year prior service cost — 2 — Amortization of prior service cost (1 ) — (1 ) Total recognized in other comprehensive loss (income) $ 6 $ 18 $ (83 ) |
Fair Value Hierarchy Of Assets Measured At Fair Value On A Recurring Basis | (Dollars in millions) Quoted prices in Significant other Significant (Level 3) Total At December 31, 2015 Fixed maturities, available for sale: States, municipalities and political subdivisions $ — $ 32 $ — $ 32 Corporate securities — 13 — 13 Total fixed maturities, available for sale — 45 — 45 Common equities, available for sale 212 — — 212 Total $ 212 $ 45 $ — $ 257 At December 31, 2014 Fixed maturities, available for sale: States, municipalities and political subdivisions $ — $ 33 $ — $ 33 Corporate securities — 19 — 19 Total fixed maturities, available for sale — 52 — 52 Common equities, available for sale 225 — — 225 Total $ 225 $ 52 $ — $ 277 |
Expected Future Benefit Payments For Qualified Plan And SERP | We expect to make the following benefit payments for our qualified plan and SERP, reflecting expected future service: (Dollars in millions) Years ended December 31, 2016 2017 2018 2019 2020 2021 - 2025 Expected future benefit payments $ 29 $ 26 $ 24 $ 24 $ 25 $ 141 |
Benefit Obligations | |
Weighted-Average Assumptions Used | This is a summary of the weighted-average assumptions used to determine our benefit obligations at December 31 for the plans: Qualified Pension Plan SERP 2015 2014 2015 2014 Discount rate 4.55 % 4.25 % 4.30 % 4.05 % Rate of compensation increase 2.75-3.25 2.75-3.25 2.75-3.25 2.75-3.25 |
Net Periodic Benefit Cost | |
Weighted-Average Assumptions Used | This is a summary of the weighted-average assumptions used to determine our net expense for the plans: Qualified Pension Plan SERP 2015 2014 2013 2015 2014 2013 Discount rate 4.25 % 5.15 % 4.20 % 4.05 % 4.80 % 3.95 % Expected return on plan assets 7.25 7.25 7.50 n/a n/a n/a Rate of compensation increase 2.75-3.25 2.75-3.25 2.75-3.25 2.75-3.25 2.75-3.25 2.75-3.25 |
Statutory Accounting Informat46
Statutory Accounting Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Staturory Accounting Information [Abstract] | |
Statutory Net Income And Statutory Surplus | The statutory net income (loss) and statutory capital and surplus are presented below: (Dollars in millions) Net income (loss) Capital and surplus Years ended December 31, At December 31, 2015 2014 2013 2015 2014 The Cincinnati Insurance Company $ 534 $ 436 $ 418 $ 4,412 $ 4,472 The Cincinnati Casualty Company 12 12 10 337 330 The Cincinnati Indemnity Company 3 3 2 88 86 The Cincinnati Specialty Underwriters Insurance Company 49 32 18 306 266 The Cincinnati Life Insurance Company (11 ) (19 ) (20 ) 208 223 |
Share-Based Associate Compens47
Share-Based Associate Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Share-based Compensation [Abstract] | |
Assumptions Used In Option Grants Issued | The following weighted average assumptions were used in determining fair value for option grants issued during 2015 and 2014: 2015 2014 2012 Weighted-average expected term 8-9 years 8-9 years 9-10 years Expected volatility 25.04-26.15% 25.20-26.22% 25.25-26.31% Dividend yield 3.52% 3.76% 3.65% Risk-free rates 1.94-2.01% 2.42-2.62% 1.82-2.00% Weighted-average fair value of options granted during the period $11.15 $10.16 $9.71 |
Stock Option Information | This is a summary of options information: (Dollars in millions, shares in thousands) Shares Weighted- exercise price Aggregate Outstanding option shares at January 1, 2015 4,958 $ 39.10 Granted 386 52.24 Exercised (996 ) 40.30 Forfeited or expired (476 ) 41.64 Outstanding option shares at December 31, 2015 3,872 39.78 $ 77 Options exercisable at end of period 3,128 $ 37.54 $ 69 |
Options Outstanding And Exercisable | Options outstanding and exercisable consisted of the following at December 31, 2015: (Shares in thousands) Options outstanding Options exercisable Range of exercise prices Shares Weighted-average Weighted- Shares Weighted- $25.00 to $29.99 582 3.59 years $ 26.58 582 $ 26.58 $30.00 to $34.99 574 4.99 years 33.95 574 33.95 $35.00 to $39.99 841 3.90 years 37.29 841 37.29 $40.00 to $44.99 700 4.06 years 44.75 583 44.75 $45.00 to $49.99 798 3.89 years 46.00 546 45.62 $50.00 to $54.99 377 9.10 years 52.24 2 52.25 Total 3,872 4.55 years 39.78 3,128 37.54 |
Restricted Stock Unit Information | This is a summary of service-based and performance-based share information, assuming a target payout for performance-based shares, for the year 2015: (Shares in thousands) Service-based Weighted- Performance-based Weighted- Nonvested at January 1, 2015 968 $ 37.42 283 $ 38.55 Granted 334 47.06 81 45.73 Vested (370 ) 31.74 (104 ) 34.89 Forfeited or canceled (30 ) 42.35 (4 ) 34.89 Nonvested at December 31, 2015 902 43.15 256 42.35 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | This table summarizes segment information: (Dollars in millions) Years ended December 31, 2015 2014 2013 Revenues: Commercial lines insurance Commercial casualty $ 1,010 $ 938 $ 856 Commercial property 815 728 623 Commercial auto 561 528 479 Workers' compensation 367 370 365 Other commercial 243 292 313 Commercial lines insurance premiums 2,996 2,856 2,636 Fee revenues 4 4 3 Total commercial lines insurance 3,000 2,860 2,639 Personal lines insurance Personal auto 506 476 443 Homeowner 463 443 403 Other personal 128 122 115 Personal lines insurance premiums 1,097 1,041 961 Fee revenues 3 2 1 Total personal lines insurance 1,100 1,043 962 Excess and surplus lines insurance 168 148 116 Fee revenues 1 — — Total excess and surplus lines insurance 169 148 116 Life insurance premiums 209 198 189 Separate account investment management fees 5 6 4 Total life insurance 214 204 193 Investments Investment income, net of expenses 572 549 529 Realized investment gains, net 70 133 83 Total investment revenue 642 682 612 Other 17 8 9 Total revenues $ 5,142 $ 4,945 $ 4,531 Income (loss) before income taxes: Insurance underwriting results Commercial lines insurance $ 345 $ 146 $ 186 Personal lines insurance (12 ) 10 33 Excess and surplus lines insurance 51 30 14 Life insurance (2 ) (5 ) 9 Investments 556 599 532 Other (57 ) (59 ) (60 ) Total income before income taxes $ 881 $ 721 $ 714 December 31, December 31, Identifiable assets: 2015 2014 Property casualty insurance $ 2,717 $ 2,656 Life insurance 1,325 1,316 Investments 14,485 14,441 Other 361 335 Total $ 18,888 $ 18,748 |
Quarterly Supplementary Data (T
Quarterly Supplementary Data (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Financial Information | This table includes unaudited quarterly financial information for the years ended December 31, 2015 and 2014: (Dollars in millions except per share data) Quarter 1st 2nd 3rd 4th Full year 2015 Revenues $ 1,285 $ 1,316 $ 1,278 $ 1,263 $ 5,142 Income before income taxes 174 248 243 216 881 Net income 128 176 174 156 634 Net income per common share—basic 0.78 1.07 1.06 0.95 3.87 Net income per common share—diluted 0.77 1.06 1.05 0.94 3.83 2014 Revenues $ 1,189 $ 1,214 $ 1,280 $ 1,262 $ 4,945 Income before income taxes 119 107 259 236 721 Net income 91 84 183 167 525 Net income per common share—basic 0.56 0.51 1.12 1.03 3.21 Net income per common share—diluted 0.55 0.51 1.11 1.02 3.18 |
Summary Of Significant Accoun50
Summary Of Significant Accounting Policies (Narrative) (Details) | 12 Months Ended | |||
Dec. 31, 2015USD ($)statesubsidiaryindependent_insurance_agencyreporting_locations | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2008 | |
Significant Accounting Policies | ||||
Income Tax Examination, Penalties Expense | $ 0 | |||
Number of operating subsidaries | subsidiary | 2 | |||
Number of independent insurance agencies | independent_insurance_agency | 1,526 | |||
Number of reporting locations | reporting_locations | 1,956 | |||
Number of states in which entity operates | state | 39 | |||
Defined Benefit Plan Qualifying Age | 40 years | |||
Current fair value of the BOLI invested assets and cash exceeded the current fair value of the contract holders' account value | $ 21,000,000 | |||
Other invested assets | 67,000,000 | $ 68,000,000 | ||
Depreciation expense | 36,000,000 | 37,000,000 | $ 37,000,000 | |
Land, building and equipment impairments | $ 0 | $ 0 | $ 0 | |
Minimum | ||||
Significant Accounting Policies | ||||
Estimated useful lives | 3 years | |||
Maximum | ||||
Significant Accounting Policies | ||||
Estimated useful lives | 39 years 6 months | |||
Life Policy Loans | ||||
Significant Accounting Policies | ||||
Other invested assets | $ 31,000,000 | |||
Venture Capital Funds | ||||
Significant Accounting Policies | ||||
Other invested assets | $ 36,000,000 | |||
10 Largest States | ||||
Significant Accounting Policies | ||||
Generated percentage of total earned premiums | 62.00% | 63.00% | ||
Ohio, Largest State | ||||
Significant Accounting Policies | ||||
Generated percentage of total earned premiums | 17.00% | 18.00% | ||
Indiana, Illinois, Pennsylvania, Georgia, Michigan and North Carolina | Minimum | ||||
Significant Accounting Policies | ||||
Generated percentage of total earned premiums | 5.00% | |||
Indiana, Illinois, Pennsylvania, Georgia, Michigan and North Carolina | Maximum | ||||
Significant Accounting Policies | ||||
Generated percentage of total earned premiums | 7.00% | |||
Largest Single Agency Relationship | ||||
Significant Accounting Policies | ||||
Generated percentage of total earned premiums | 1.00% | |||
All Other | Maximum | ||||
Significant Accounting Policies | ||||
Generated percentage of total earned premiums | 3.00% | |||
Stock Options | ||||
Significant Accounting Policies | ||||
Awards vesting period | 3 years | |||
Weighted-average remaining contractual life for options expected to vest | 10 years | |||
Restricted Stock Units | ||||
Significant Accounting Policies | ||||
Awards vesting period | 3 years | |||
Property Casualty Insurance Segment | ||||
Significant Accounting Policies | ||||
Number of operating subsidaries | subsidiary | 2 | |||
Fixed Maturities | ||||
Significant Accounting Policies | ||||
Number Of Securities Continuous Unrealized Loss Position More Than Twelve Months and Below 70 Percent of Amortized Cost | 5 | |||
Number of securities total unrealized loss in an unrealized loss position for 12 months or more | 69 | 144 | 40 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) $ in Millions | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Gain (Loss) on Investments | |||
Largest equity holdings to total equity portfolio | 3.30% | ||
Largest equity holdings to total portfolio | 1.00% | ||
Investments, deposit with various states | $ 74 | $ 75 | |
Investments in fair value, deposit with various states | $ 15,114 | $ 15,067 | |
Impaired securities | 20 | 6 | 7 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, aggregate loss | $ 37 | $ 10 | $ 5 |
Fixed Maturities | |||
Gain (Loss) on Investments | |||
Number of securities total unrealized loss in an unrealized loss position for 12 months or more | 69 | 144 | 40 |
Number Of Securities Continuous Unrealized Loss Position More Than Twelve Months and Below 70 Percent of Amortized Cost | 5 | ||
Equity Securities | |||
Gain (Loss) on Investments | |||
Number of securities total unrealized loss in an unrealized loss position for 12 months or more | 0 | 3 | 0 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, aggregate loss | $ 1 | ||
Exxon Mobil Corporation, The Procter & Gamble Company, Honeywell International Inc, BlackRock Inc., Genuine Parts Company, RPM International, and Johnson and Johnson [Member] | |||
Gain (Loss) on Investments | |||
Available-for-sale securities, accumulated net gain position | $ 566 | ||
Seven Primary Contributors | |||
Gain (Loss) on Investments | |||
Number of securities | 7 | ||
On Deposit With Various States | |||
Gain (Loss) on Investments | |||
Investments in fair value, deposit with various states | $ 77 | $ 78 |
Investments (Analysis Of Cost O
Investments (Analysis Of Cost Or Amortized Cost Gross Unrealized Gains And Losses And Fair Value For Investments) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fixed Maturities | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | $ 9,324 | $ 8,871 |
Gross unrealized gains | 431 | 607 |
Gross unrealized losses | 105 | 18 |
Fair value | 9,650 | 9,460 |
Fixed Maturities | Corporate Securities | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 5,294 | 5,117 |
Gross unrealized gains | 255 | 420 |
Gross unrealized losses | 96 | 11 |
Fair value | 5,453 | 5,526 |
Fixed Maturities | States, Municipalities and Political Subdivisions | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 3,440 | 3,267 |
Gross unrealized gains | 172 | 178 |
Gross unrealized losses | 1 | 2 |
Fair value | 3,611 | 3,443 |
Fixed Maturities | Commercial Mortgage Backed Securities | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 287 | 250 |
Gross unrealized gains | 4 | 9 |
Gross unrealized losses | 2 | 0 |
Fair value | 289 | 259 |
Fixed Maturities | Government-Sponsored Enterprises | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 284 | 213 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 6 | 5 |
Fair value | 278 | 208 |
Fixed Maturities | Foreign Government | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 10 | 10 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair value | 10 | 10 |
Fixed Maturities | Convertibles and Bonds with Warrants Attached | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 5 | 7 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair value | 5 | 7 |
Fixed Maturities | United States Government | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 4 | 7 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair value | 4 | 7 |
Equity Securities | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 2,938 | 2,728 |
Gross unrealized gains | 1,819 | 2,134 |
Gross unrealized losses | 51 | 4 |
Fair value | 4,706 | 4,858 |
Equity Securities | Common Equities | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 2,749 | 2,583 |
Gross unrealized gains | 1,787 | 2,099 |
Gross unrealized losses | 51 | 3 |
Fair value | 4,485 | 4,679 |
Equity Securities | Nonredeemable Preferred Equities | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 189 | 145 |
Gross unrealized gains | 32 | 35 |
Gross unrealized losses | 0 | 1 |
Fair value | 221 | 179 |
Fixed Maturities And Equity Securities | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 12,262 | 11,599 |
Gross unrealized gains | 2,250 | 2,741 |
Gross unrealized losses | 156 | 22 |
Fair value | $ 14,356 | $ 14,318 |
Investments (Fair Values And Un
Investments (Fair Values And Unrealized Losses By Investment Category And By The Duration Of The Securities' Continuous Unrealized Loss Position) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Investments, Unrealized Loss Position | ||
Less than 12 months fair value | $ 1,654 | $ 393 |
Less than 12 months unrealized losses | 119 | 11 |
12 months or more fair value | 284 | 446 |
12 months or more unrealized losses | 37 | 11 |
Total fair value | 1,938 | 839 |
Total unrealized losses | 156 | 22 |
Fixed Maturities | ||
Investments, Unrealized Loss Position | ||
Less than 12 months fair value | 1,349 | 292 |
Less than 12 months unrealized losses | 68 | 8 |
12 months or more fair value | 284 | 429 |
12 months or more unrealized losses | 37 | 10 |
Total fair value | 1,633 | 721 |
Total unrealized losses | 105 | 18 |
Fixed Maturities | Corporate Securities | ||
Investments, Unrealized Loss Position | ||
Less than 12 months fair value | 1,099 | 261 |
Less than 12 months unrealized losses | 63 | 8 |
12 months or more fair value | 133 | 90 |
12 months or more unrealized losses | 33 | 3 |
Total fair value | 1,232 | 351 |
Total unrealized losses | 96 | 11 |
Fixed Maturities | States, Municipalities and Political Subdivisions | ||
Investments, Unrealized Loss Position | ||
Less than 12 months fair value | 47 | 17 |
Less than 12 months unrealized losses | 1 | 0 |
12 months or more fair value | 22 | 135 |
12 months or more unrealized losses | 0 | 2 |
Total fair value | 69 | 152 |
Total unrealized losses | 1 | 2 |
Fixed Maturities | Commercial Mortgage Backed Securities | ||
Investments, Unrealized Loss Position | ||
Less than 12 months fair value | 103 | 3 |
Less than 12 months unrealized losses | 2 | 0 |
12 months or more fair value | 2 | 23 |
12 months or more unrealized losses | 0 | 0 |
Total fair value | 105 | 26 |
Total unrealized losses | 2 | 0 |
Fixed Maturities | Government-Sponsored Enterprises | ||
Investments, Unrealized Loss Position | ||
Less than 12 months fair value | 100 | 11 |
Less than 12 months unrealized losses | 2 | 0 |
12 months or more fair value | 127 | 181 |
12 months or more unrealized losses | 4 | 5 |
Total fair value | 227 | 192 |
Total unrealized losses | 6 | 5 |
Equity Securities | ||
Investments, Unrealized Loss Position | ||
Less than 12 months fair value | 305 | 101 |
Less than 12 months unrealized losses | 51 | 3 |
12 months or more fair value | 0 | 17 |
12 months or more unrealized losses | 0 | 1 |
Total fair value | 305 | 118 |
Total unrealized losses | 51 | 4 |
Equity Securities | Common Equities | ||
Investments, Unrealized Loss Position | ||
Less than 12 months fair value | 270 | 85 |
Less than 12 months unrealized losses | 51 | 3 |
12 months or more fair value | 0 | 0 |
12 months or more unrealized losses | 0 | 0 |
Total fair value | 270 | 85 |
Total unrealized losses | 51 | 3 |
Equity Securities | Nonredeemable Preferred Equities | ||
Investments, Unrealized Loss Position | ||
Less than 12 months fair value | 35 | 16 |
Less than 12 months unrealized losses | 0 | 0 |
12 months or more fair value | 0 | 17 |
12 months or more unrealized losses | 0 | 1 |
Total fair value | 35 | 33 |
Total unrealized losses | $ 0 | $ 1 |
Investments (Contractual Maturi
Investments (Contractual Maturity Dates For Fixed-Maturity And Short-Term Investments) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Amortized cost | ||
Due in one year or less | $ 453 | |
Due after one year through five years | 3,068 | |
Due after five years through ten years | 3,592 | |
Due after ten years | 2,211 | |
Total | 9,324 | $ 8,871 |
Fair value | ||
Due in one year or less | 459 | |
Due after one year through five years | 3,243 | |
Due after five years through ten years | 3,649 | |
Due after ten years | 2,299 | |
Total | $ 9,650 | $ 9,460 |
% of fair value | ||
Due in one year or less | 4.80% | |
Due after one year through five years | 33.60% | |
Due after five years through ten years | 37.80% | |
Due after ten years | 23.80% | |
Total | 100.00% |
Investments (Investment Income
Investments (Investment Income Realized Investment Gains And Losses And Change In Unrealized Investment Gains And Losses) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Investment income: | |||
Interest | $ 428 | $ 417 | $ 413 |
Dividends | 150 | 138 | 122 |
Other | 3 | 2 | 3 |
Total | 581 | 557 | 538 |
Less investment expenses | 9 | 8 | 9 |
Total | 572 | 549 | 529 |
Realized investment gains and losses: | |||
Other | 1 | 3 | 6 |
Total | 70 | 133 | 83 |
Change in unrealized investment gains and losses: | |||
Unrealized (losses) and gains on investments available-for-sale | (405) | 250 | 299 |
OCI, portion attributable to Parent | (218) | 130 | 202 |
OCI, portion attributable to Parent | (618) | 370 | 577 |
Fixed Maturities | |||
Realized investment gains and losses: | |||
Gross realized gains | 18 | 21 | 15 |
Gross realized losses | 0 | (3) | 0 |
Other-than-temporary impairments | (18) | (15) | (2) |
Change in unrealized investment gains and losses: | |||
Unrealized (losses) and gains on investments available-for-sale | (263) | 106 | (387) |
Equity Securities | |||
Realized investment gains and losses: | |||
Gross realized gains | 129 | 136 | 64 |
Gross realized losses | (26) | 0 | 0 |
Other-than-temporary impairments | (34) | (9) | 0 |
Change in unrealized investment gains and losses: | |||
Unrealized (losses) and gains on investments available-for-sale | (362) | 278 | 847 |
Accumulated Net Unrealized Investment Gain (Loss) | |||
Change in unrealized investment gains and losses: | |||
OCI, portion attributable to Parent | (220) | 134 | 161 |
OCI, portion attributable to Parent | $ (405) | $ 250 | $ 299 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Principal amount of debt | $ 793 | $ 793 |
Recorded outstanding principal and interest for these life policy loans | 62 | 75 |
Reserves for structured settlements | $ 4,718 | $ 4,485 |
Maximum | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Percentage of Level 3 assets measured at fair value | 1.00% | 1.00% |
Life Policy Loans | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Recorded outstanding principal and interest for these life policy loans | $ 31 | $ 31 |
Deferred Annuities and Structured Settlements | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Recorded reserves for the deferred annuities | 860 | 863 |
Reserves for structured settlements | $ 174 | $ 182 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value Hierarchy For Assets Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | $ 9,650 | $ 9,460 |
Available for sale securities, equity securities | 4,706 | 4,858 |
Separate accounts taxable fixed maturities | 748 | 752 |
Total | 15,114 | 15,067 |
Top Hat Savings Plan - Mutual Funds and Common Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Top Hat savings plan mutual funds and common equity (included in Other assets) | 21 | 18 |
Fixed Maturities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 9,650 | 9,460 |
Fixed Maturities | Corporate Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 5,453 | 5,526 |
Fixed Maturities | States, Municipalities and Political Subdivisions | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 3,611 | 3,443 |
Fixed Maturities | Commercial Mortgage Backed Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 289 | 259 |
Fixed Maturities | Government-Sponsored Enterprises | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 278 | 208 |
Fixed Maturities | Foreign Government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 10 | 10 |
Fixed Maturities | Convertibles and Bonds with Warrants Attached | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 5 | 7 |
Fixed Maturities | United States Government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 4 | 7 |
Equity Securities | Common Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, equity securities | 4,485 | 4,679 |
Equity Securities | Nonredeemable Preferred Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, equity securities | 221 | 179 |
Taxable Fixed Maturities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Separate accounts taxable fixed maturities | 737 | 731 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Total | 4,510 | 4,704 |
Level 1 | Top Hat Savings Plan - Mutual Funds and Common Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Top Hat savings plan mutual funds and common equity (included in Other assets) | 21 | 18 |
Level 1 | Fixed Maturities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 4 | 7 |
Level 1 | Fixed Maturities | Corporate Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Level 1 | Fixed Maturities | States, Municipalities and Political Subdivisions | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Level 1 | Fixed Maturities | Commercial Mortgage Backed Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Level 1 | Fixed Maturities | Government-Sponsored Enterprises | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Level 1 | Fixed Maturities | Foreign Government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Level 1 | Fixed Maturities | Convertibles and Bonds with Warrants Attached | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Level 1 | Fixed Maturities | United States Government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 4 | 7 |
Level 1 | Equity Securities | Common Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, equity securities | 4,485 | 4,679 |
Level 1 | Equity Securities | Nonredeemable Preferred Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, equity securities | 0 | 0 |
Level 1 | Taxable Fixed Maturities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Separate accounts taxable fixed maturities | 0 | 0 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Total | 10,549 | 10,343 |
Level 2 | Top Hat Savings Plan - Mutual Funds and Common Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Top Hat savings plan mutual funds and common equity (included in Other assets) | 0 | 0 |
Level 2 | Fixed Maturities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 9,595 | 9,435 |
Level 2 | Fixed Maturities | Corporate Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 5,402 | 5,508 |
Level 2 | Fixed Maturities | States, Municipalities and Political Subdivisions | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 3,611 | 3,443 |
Level 2 | Fixed Maturities | Commercial Mortgage Backed Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 289 | 259 |
Level 2 | Fixed Maturities | Government-Sponsored Enterprises | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 278 | 208 |
Level 2 | Fixed Maturities | Foreign Government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 10 | 10 |
Level 2 | Fixed Maturities | Convertibles and Bonds with Warrants Attached | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 5 | 7 |
Level 2 | Fixed Maturities | United States Government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Level 2 | Equity Securities | Common Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, equity securities | 0 | 0 |
Level 2 | Equity Securities | Nonredeemable Preferred Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, equity securities | 218 | 177 |
Level 2 | Taxable Fixed Maturities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Separate accounts taxable fixed maturities | 736 | 731 |
Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Total | 55 | 20 |
Level 3 | Top Hat Savings Plan - Mutual Funds and Common Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Top Hat savings plan mutual funds and common equity (included in Other assets) | 0 | 0 |
Level 3 | Fixed Maturities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 51 | 18 |
Level 3 | Fixed Maturities | Corporate Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 51 | 18 |
Level 3 | Fixed Maturities | States, Municipalities and Political Subdivisions | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Level 3 | Fixed Maturities | Commercial Mortgage Backed Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Level 3 | Fixed Maturities | Government-Sponsored Enterprises | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Level 3 | Fixed Maturities | Foreign Government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Level 3 | Fixed Maturities | Convertibles and Bonds with Warrants Attached | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Level 3 | Fixed Maturities | United States Government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Level 3 | Equity Securities | Common Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, equity securities | 0 | 0 |
Level 3 | Equity Securities | Nonredeemable Preferred Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, equity securities | 3 | 2 |
Level 3 | Taxable Fixed Maturities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Separate accounts taxable fixed maturities | $ 1 | $ 0 |
Fair Value Measurements (Asset
Fair Value Measurements (Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Beginning balance | $ 20 | $ 4 |
Total gains or losses (realized/unrealized): | ||
Included in net income | 0 | 0 |
Included in other comprehensive income | 1 | 0 |
Purchases | 37 | 0 |
Sales | 0 | 0 |
Transfers into Level 3 | 0 | 16 |
Transfers out of Level 3 | (3) | 0 |
Ending balance | 55 | 20 |
Corporate Fixed Maturities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Beginning balance | 18 | 2 |
Total gains or losses (realized/unrealized): | ||
Included in net income | 0 | 0 |
Included in other comprehensive income | 0 | 0 |
Purchases | 36 | 0 |
Sales | 0 | 0 |
Transfers into Level 3 | 0 | 16 |
Transfers out of Level 3 | (3) | 0 |
Ending balance | 51 | 18 |
Taxable Fixed Maturities [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Beginning balance | 0 | 0 |
Total gains or losses (realized/unrealized): | ||
Included in net income | 0 | 0 |
Included in other comprehensive income | 0 | 0 |
Purchases | 1 | 0 |
Sales | 0 | 0 |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Ending balance | 1 | 0 |
Nonredeemable Preferred Equities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Beginning balance | 2 | 2 |
Total gains or losses (realized/unrealized): | ||
Included in net income | 0 | 0 |
Included in other comprehensive income | 1 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Ending balance | $ 3 | $ 2 |
Fair Value Measurements (Fair59
Fair Value Measurements (Fair Value of Note Payable and Long-Term Debt) (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of note payable | $ 35 | $ 49 |
Total | 971 | 1,028 |
6.900% Senior Debentures, Due 2028 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | $ 31 | $ 34 |
Interest rate | 6.90% | 6.90% |
Debt instrument, year of maturity | 2,028 | 2,028 |
6.920% Senior Debentures, Due 2028 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | $ 480 | $ 496 |
Interest rate | 6.92% | 6.92% |
Debt instrument, year of maturity | 2,028 | 2,028 |
6.125% Senior Notes, Due 2034 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | $ 425 | $ 449 |
Interest rate | 6.125% | 6.125% |
Debt instrument, year of maturity | 2,034 | 2,034 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of note payable | $ 0 | $ 0 |
Total | 0 | 0 |
Level 1 | 6.900% Senior Debentures, Due 2028 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | 0 | 0 |
Level 1 | 6.920% Senior Debentures, Due 2028 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | 0 | 0 |
Level 1 | 6.125% Senior Notes, Due 2034 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | 0 | 0 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of note payable | 35 | 49 |
Total | 971 | 1,028 |
Level 2 | 6.900% Senior Debentures, Due 2028 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | 31 | 34 |
Level 2 | 6.920% Senior Debentures, Due 2028 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | 480 | 496 |
Level 2 | 6.125% Senior Notes, Due 2034 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | 425 | 449 |
Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of note payable | 0 | 0 |
Total | 0 | 0 |
Level 3 | 6.900% Senior Debentures, Due 2028 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | 0 | 0 |
Level 3 | 6.920% Senior Debentures, Due 2028 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | 0 | 0 |
Level 3 | 6.125% Senior Notes, Due 2034 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | $ 0 | $ 0 |
Fair Value Measurements (Fair60
Fair Value Measurements (Fair Value of Life Policy) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of life policy loans | $ 40 | $ 39 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of life policy loans | 0 | 0 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of life policy loans | 0 | 0 |
Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of life policy loans | $ 40 | $ 39 |
Fair Value Measurements (Fair61
Fair Value Measurements (Fair Value Of Deferred Annuities, Structured Settlements And Other Items) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | $ 1,094 | $ 1,114 |
Deferred Annuities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | 886 | 897 |
Structured Settlements | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | 208 | 217 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | 0 | 0 |
Level 1 | Deferred Annuities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | 0 | 0 |
Level 1 | Structured Settlements | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | 0 | 0 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | 208 | 217 |
Level 2 | Deferred Annuities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | 0 | 0 |
Level 2 | Structured Settlements | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | 208 | 217 |
Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | 886 | 897 |
Level 3 | Deferred Annuities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | 886 | 897 |
Level 3 | Structured Settlements | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | $ 0 | $ 0 |
Property Casualty Loss And Lo62
Property Casualty Loss And Loss Expenses (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | ||||
Certain accident, life and health loss reserves | $ 4,660,000,000 | $ 4,438,000,000 | $ 4,241,000,000 | $ 4,169,000,000 |
Prior year claims and claims adjustment expense | (184,000,000) | (98,000,000) | (147,000,000) | |
Recovery Of Liability For Unpaid Claims And Claims Adjustment Expense Incurred Claims Prior Years | (86,000,000) | |||
Increase in favorable reserve developement on prior accident | 49,000,000 | 249,000,000 | ||
Net loss and loss expense reserves for asbestos and environmental claims | 84,000,000 | 81,000,000 | ||
Environmental claims related to mold | $ 45,000,000 | $ 51,000,000 | ||
Percentage of reserves for asbestos and environmental claims | 1.90% | 2.00% | ||
Maximum | ||||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | ||||
Reinsurance retention | $ 500,000 | |||
Certain Accident, Life and Health Lines | ||||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | ||||
Certain accident, life and health loss reserves | 58,000,000 | $ 47,000,000 | 70,000,000 | |
Commercial Insurance | ||||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | ||||
Prior year claims and claims adjustment expense | (154,000,000) | (57,000,000) | (95,000,000) | |
Commercial Insurance | Workers' Compensation Line | ||||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | ||||
Prior year claims and claims adjustment expense | (93,000,000) | (51,000,000) | (14,000,000) | |
Commercial Insurance | Commercial Property Line | ||||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | ||||
Prior year claims and claims adjustment expense | (34,000,000) | (22,000,000) | ||
Commercial Insurance | Homeowner Line | ||||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | ||||
Prior year claims and claims adjustment expense | (14,000,000) | (19,000,000) | ||
Commercial Insurance | Commercial Casualty Line | ||||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | ||||
Prior year claims and claims adjustment expense | (63,000,000) | 5,000,000 | (70,000,000) | |
Commercial Insurance | Commercial Auto Line | ||||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | ||||
Prior year claims and claims adjustment expense | 31,000,000 | 39,000,000 | ||
Personal Insurance | ||||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | ||||
Prior year claims and claims adjustment expense | 5,000,000 | (12,000,000) | (39,000,000) | |
Excess and Surplus Lines Insurance | ||||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | ||||
Prior year claims and claims adjustment expense | $ (35,000,000) | $ (29,000,000) | $ (13,000,000) |
Property Casualty Loss And Lo63
Property Casualty Loss And Loss Expenses (Consolidated Property Casualty Loss And Loss Expense Reserves) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Insurance [Abstract] | |||
Gross loss and loss expense reserves, January 1 | $ 4,438 | $ 4,241 | $ 4,169 |
Less reinsurance recoverable | 282 | 299 | 356 |
Net loss and loss expense reserves, January 1 | 4,156 | 3,942 | 3,813 |
Net incurred loss and loss expenses related to: | |||
Current accident year | 2,756 | 2,725 | 2,448 |
Prior accident years | (184) | (98) | (147) |
Total incurred | 2,572 | 2,627 | 2,301 |
Net paid loss and loss expenses related to: | |||
Current accident year | 1,152 | 1,212 | 1,045 |
Prior accident years | 1,197 | 1,201 | 1,127 |
Total paid | 2,349 | 2,413 | 2,172 |
Net loss and loss expense reserves, December 31 | 4,379 | 4,156 | 3,942 |
Plus reinsurance recoverable | 281 | 282 | 299 |
Gross loss and loss expense reserves, December 31 | $ 4,660 | $ 4,438 | $ 4,241 |
Life Policy And Investment Co64
Life Policy And Investment Contract Reservess (Reserve In Addition To The Account Balance Based On Expected No-Lapse Guarantee Benefits And Expected Policy Assessments) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Liability for Future Policy Benefit, by Product Segment | ||
Life policy and investment contract reserves | $ 2,583 | $ 2,497 |
Ordinary/Traditional Life | ||
Liability for Future Policy Benefit, by Product Segment | ||
Life policy and investment contract reserves | 943 | 875 |
Deferred Annuities | ||
Liability for Future Policy Benefit, by Product Segment | ||
Life policy and investment contract reserves | 860 | 863 |
Universal Life | ||
Liability for Future Policy Benefit, by Product Segment | ||
Life policy and investment contract reserves | 558 | 530 |
Structured Settlements | ||
Liability for Future Policy Benefit, by Product Segment | ||
Life policy and investment contract reserves | 174 | 182 |
Other | ||
Liability for Future Policy Benefit, by Product Segment | ||
Life policy and investment contract reserves | $ 48 | $ 47 |
Deferred Policy Acquisition C65
Deferred Policy Acquisition Costs (Deferred Policy Acquisition Costs And Asset Reconciliation Including The Amortized Deferred Policy Acquisition Costs) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred Costs [Roll Forward] | |||
Deferred policy acquisition costs asset at January 1 | $ 578 | $ 565 | $ 470 |
Capitalized deferred policy acquisition costs | 846 | 827 | 802 |
Amortized deferred policy acquisition costs | (829) | (807) | (758) |
Amortized shadow deferred policy acquisition costs | 21 | (7) | 51 |
Deferred policy acquisition costs asset at December 31 | 616 | 578 | 565 |
Property Casualty Insurance Segment [Member] | |||
Deferred Costs [Roll Forward] | |||
Deferred policy acquisition costs asset at January 1 | 379 | 366 | 337 |
Capitalized deferred policy acquisition costs | 801 | 783 | 756 |
Amortized deferred policy acquisition costs | (792) | (770) | (727) |
Deferred policy acquisition costs asset at December 31 | 388 | 379 | 366 |
Life Insurance Product Line [Member] | |||
Deferred Costs [Roll Forward] | |||
Deferred policy acquisition costs asset at January 1 | 199 | 199 | 133 |
Capitalized deferred policy acquisition costs | 45 | 44 | 46 |
Amortized deferred policy acquisition costs | (37) | (37) | (31) |
Amortized shadow deferred policy acquisition costs | 21 | (7) | 51 |
Deferred policy acquisition costs asset at December 31 | $ 228 | $ 199 | $ 199 |
Note Payable (Narrative) (Detai
Note Payable (Narrative) (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Debt Disclosure | ||
Number of lines of credit | 1 | |
Aggregate borrowing capacity | $ 225 | |
Accordian feature available amount | $ 50 | |
Line of credit facility, term | 5 years | |
Expiration date of Line of credit | May 13, 2019 | |
Note payable | $ 35 | $ 49 |
Minimum | ||
Debt Disclosure | ||
Line of credit, interest rate | 1.07% | 1.15% |
Maximum | ||
Debt Disclosure | ||
Line of credit, interest rate | 1.19% | 1.30% |
Long-Term Debt And Capital Le67
Long-Term Debt And Capital Lease Obligation (Book Value And Principal Amounts Of Long-Term Debt (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument | ||
Book value | $ 786 | $ 786 |
Principal amount | $ 793 | $ 793 |
6.900% Senior Debentures, Due 2028 | ||
Debt Instrument | ||
Interest rate | 6.90% | 6.90% |
Debt issuance year | 1,998 | |
Book value | $ 26 | $ 26 |
Principal amount | $ 28 | $ 28 |
6.920% Senior Debentures, Due 2028 | ||
Debt Instrument | ||
Interest rate | 6.92% | 6.92% |
Debt issuance year | 2,005 | |
Book value | $ 391 | $ 391 |
Principal amount | $ 391 | $ 391 |
6.125% Senior Notes, Due 2034 | ||
Debt Instrument | ||
Interest rate | 6.125% | 6.125% |
Debt issuance year | 2,004 | |
Book value | $ 369 | $ 369 |
Principal amount | $ 374 | $ 374 |
Long-Term Debt And Capital Le68
Long-Term Debt And Capital Lease Obligation (Capital Lease Payments Over Next Five Years) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Long-term Debt and Capital Lease Obligations [Abstract] | ||
2,016 | $ 13 | |
2,017 | 8 | |
2,018 | 6 | |
2,019 | 4 | |
2,020 | 3 | |
2,021 | 1 | |
Capital lease obligations | $ 35 | $ 36 |
Shareholders' Equity And Divi69
Shareholders' Equity And Dividend Restrictions (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Shareholders Equity And Dividend Restrictions [Abstract] | |||
Declared cash dividends, per share | $ 2.30 | $ 1.76 | $ 1.655 |
Dividends declared by insurance subsidiary to parent | $ 447 | $ 400 | $ 375 |
Dividend payment without prior regulatory approval, Minimum percent of policyholder surplus | 10.00% | ||
Dividend payment without prior regulatory approval, percent of statutory net income for the prior calendar year | 100.00% | ||
Dividends might be paid during next year | $ 534 |
Shareholders' Equity And Divi70
Shareholders' Equity And Dividend Restrictions (Change In AOCI Includes Changes In Unrealized Gains And Losses On Investments And Pension Obligations) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income, Before Tax | |||
Pension obligations OCI | $ (6) | $ (18) | $ 83 |
Accumulated Other Comprehensive Income, Income Tax | |||
Income taxes on above of other comprehensive (loss) income | (218) | 130 | 202 |
Accumulated Other Comprehensive Income, Net of Tax | |||
AOCI, balance at the beginning of the period | 1,744 | ||
Other comprehensive (loss) income before tax | (618) | 370 | 577 |
AOCI, balance at the end of the period | 1,344 | 1,744 | |
Accumulated Net Unrealized Investment Gain (Loss) | |||
Accumulated Other Comprehensive Income, Before Tax | |||
AOCI, balance at the beginning of the period | 2,719 | 2,335 | 1,875 |
OCI before realized gains (losses) recognized in net income | (556) | 514 | 537 |
Realized gains (losses) recognized in net income | (69) | (130) | (77) |
OCI, portion attributable to Parent | (625) | 384 | 460 |
AOCI, balance at the end of the period | 2,094 | 2,719 | 2,335 |
Accumulated Other Comprehensive Income, Income Tax | |||
AOCI, balance at the beginning of the period | 942 | 808 | 647 |
OCI before realized gains (losses) recognized in net income | (196) | 181 | 188 |
Realized gains (losses) recognized in net income | (24) | (47) | (27) |
Income taxes on above of other comprehensive (loss) income | (220) | 134 | 161 |
AOCI, balance at the end of the period | 722 | 942 | 808 |
Accumulated Other Comprehensive Income, Net of Tax | |||
AOCI, balance at the beginning of the period | 1,777 | 1,527 | 1,228 |
OCI before realized gains (losses) recognized in net income | (360) | 333 | 349 |
Realized gains (losses) recognized in net income | (45) | (83) | (50) |
Other comprehensive (loss) income before tax | (405) | 250 | 299 |
AOCI, balance at the end of the period | 1,372 | 1,777 | 1,527 |
Accumulated Defined Benefit Plans Adjustment | |||
Accumulated Other Comprehensive Income, Before Tax | |||
AOCI, balance at the beginning of the period | (36) | (18) | (101) |
OCI before realized gains (losses) recognized in net income | (12) | (21) | 83 |
Realized gains (losses) recognized in net income | 6 | 3 | 0 |
OCI, portion attributable to Parent | (6) | (18) | 83 |
AOCI, balance at the end of the period | (42) | (36) | (18) |
Accumulated Other Comprehensive Income, Income Tax | |||
AOCI, balance at the beginning of the period | (12) | (6) | (35) |
OCI before realized gains (losses) recognized in net income | (5) | (7) | 29 |
Realized gains (losses) recognized in net income | 3 | 1 | 0 |
Income taxes on above of other comprehensive (loss) income | (2) | (6) | 29 |
AOCI, balance at the end of the period | (14) | (12) | (6) |
Accumulated Other Comprehensive Income, Net of Tax | |||
AOCI, balance at the beginning of the period | (24) | (12) | (66) |
OCI before realized gains (losses) recognized in net income | (7) | (14) | 54 |
Realized gains (losses) recognized in net income | 3 | 2 | 0 |
Other comprehensive (loss) income before tax | (4) | (12) | 54 |
AOCI, balance at the end of the period | (28) | (24) | (12) |
Accumulated Net Unrealized Gain (Loss) on Deferred Costs, Reserves And Other | |||
Accumulated Other Comprehensive Income, Before Tax | |||
AOCI, balance at the beginning of the period | (12) | (16) | (50) |
OCI before realized gains (losses) recognized in net income | 14 | 7 | 40 |
Realized gains (losses) recognized in net income | (1) | (3) | (6) |
OCI, portion attributable to Parent | 13 | 4 | 34 |
AOCI, balance at the end of the period | 1 | (12) | (16) |
Accumulated Other Comprehensive Income, Income Tax | |||
AOCI, balance at the beginning of the period | (3) | (5) | (17) |
OCI before realized gains (losses) recognized in net income | 5 | 3 | 14 |
Realized gains (losses) recognized in net income | (1) | (1) | (2) |
Income taxes on above of other comprehensive (loss) income | 4 | 2 | 12 |
AOCI, balance at the end of the period | 1 | (3) | (5) |
Accumulated Other Comprehensive Income, Net of Tax | |||
AOCI, balance at the beginning of the period | (9) | (11) | (33) |
OCI before realized gains (losses) recognized in net income | 9 | 4 | 26 |
Realized gains (losses) recognized in net income | 0 | (2) | (4) |
Other comprehensive (loss) income before tax | 9 | 2 | 22 |
AOCI, balance at the end of the period | 0 | (9) | (11) |
Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Income, Before Tax | |||
AOCI, balance at the beginning of the period | 2,671 | 2,301 | 1,724 |
Investments OCI | (625) | 384 | 460 |
Pension obligations OCI | (6) | (18) | 83 |
Life deferred acquisition costs, life policy reserves and other OCI | 13 | 4 | 34 |
Total OCI | (618) | 370 | 577 |
AOCI, balance at the end of the period | 2,053 | 2,671 | 2,301 |
Accumulated Other Comprehensive Income, Income Tax | |||
AOCI, balance at the beginning of the period | 927 | 797 | 595 |
Investments OCI | (220) | 134 | 161 |
Pension obligations OCI | (2) | (6) | 29 |
Life deferred acquisition costs, life policy reserves and other OCI | 4 | 2 | 12 |
Total OCI | (218) | 130 | 202 |
AOCI, balance at the end of the period | 709 | 927 | 797 |
Accumulated Other Comprehensive Income, Net of Tax | |||
AOCI, balance at the beginning of the period | 1,744 | 1,504 | 1,129 |
Investments OCI | (405) | 250 | 299 |
Pension obligations OCI | (4) | (12) | 54 |
Life deferred acquisition costs, life policy reserves and other OCI | 9 | 2 | 22 |
Total OCI | (400) | 240 | 375 |
AOCI, balance at the end of the period | $ 1,344 | $ 1,744 | $ 1,504 |
Reinsurance (Earned Consolidate
Reinsurance (Earned Consolidated Property Casualty Insurance Premiums On Assumed And Ceded Business) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||
Direct earned premiums | $ 4,667 | $ 4,468 | $ 4,151 |
Assumed earned premiums | 29 | 12 | 11 |
Ceded earned premiums | (216) | (237) | (260) |
Property, Liability and Casualty Insurance Product Line [Member] | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||
Direct earned premiums | 4,396 | 4,209 | 3,903 |
Assumed earned premiums | 29 | 12 | 11 |
Ceded earned premiums | (154) | (176) | (201) |
Net earned premiums | $ 4,271 | $ 4,045 | $ 3,713 |
Reinsurance (Incurred Consolida
Reinsurance (Incurred Consolidated Property Casualty Insurance Loss And Loss Expenses On Assumed And Ceded Business) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net incurred loss and loss expenses | $ 2,808 | $ 2,856 | $ 2,505 |
Property, Liability and Casualty Insurance Product Line [Member] | |||
Direct incurred loss and loss expenses | 2,596 | 2,661 | 2,323 |
Assumed incurred loss and loss expenses | 12 | 6 | 11 |
Ceded incurred loss and loss expenses | (36) | (40) | (33) |
Net incurred loss and loss expenses | $ 2,572 | $ 2,627 | $ 2,301 |
Reinsurance (Earned Life Insura
Reinsurance (Earned Life Insurance Premiums On Ceded Business) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Direct earned premiums | $ 4,667 | $ 4,468 | $ 4,151 |
Ceded earned premiums | (216) | (237) | (260) |
Life Insurance Segment | |||
Direct earned premiums | 271 | 259 | 248 |
Ceded earned premiums | (62) | (61) | (59) |
Net earned premiums | $ 209 | $ 198 | $ 189 |
Reinsurance (Life Insurance Con
Reinsurance (Life Insurance Contract Holders' Benefits Incurred On Ceded Business) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net incurred loss and loss expenses | $ 2,808 | $ 2,856 | $ 2,505 |
Life Insurance Segment | |||
Direct contract holders' benefits incurred | 292 | 299 | 266 |
Ceded contract holders' benefits incurred | (56) | (70) | (62) |
Net incurred loss and loss expenses | $ 236 | $ 229 | $ 204 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Tax at statutory rate, percentage | 35.00% | 35.00% | 35.00% |
Income taxes paid, net | $ 1 | $ 1 | $ 1 |
Income Taxes (Components Of Def
Income Taxes (Components Of Deferred Tax Assets And Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Loss and loss expense reserves | $ 191 | $ 197 |
Unearned premiums | 151 | 145 |
Investments | 25 | 16 |
Other | 42 | 41 |
Total gross deferred tax assets | 409 | 399 |
Deferred tax liabilities: | ||
Unrealized investment gains, net | 719 | 937 |
Deferred acquisition costs | 187 | 183 |
Life policy reserves | 137 | 110 |
Other | 4 | 9 |
Total gross deferred tax liabilities | 1,047 | 1,239 |
Net deferred income tax liability | $ 638 | $ 840 |
Income Taxes (Differences Betwe
Income Taxes (Differences Between The 35 Percent Statutory Income Tax Rate And Effective Income Tax Rate) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Tax at statutory rate: | $ 308 | $ 252 | $ 250 |
Tax at statutory rate (percentage): | 35.00% | 35.00% | 35.00% |
Increase (decrease) resulting from: | |||
Tax-exempt income from municipal bonds | $ (33) | $ (33) | $ (32) |
Dividend received exclusion | (32) | (29) | (26) |
Other | 4 | 6 | 5 |
Total provision for income taxes | $ 247 | $ 196 | $ 197 |
Tax at statutory rate: | |||
Tax-exempt income from municipal bonds (percentage) | (3.70%) | (4.60%) | (4.50%) |
Dividend received exclusion (percentage) | (3.60%) | (4.00%) | (3.60%) |
Other (percentage) | 0.30% | 0.80% | 0.70% |
Effective tax, percentage | 28.00% | 27.20% | 27.60% |
Net Income Per Common Share (Ca
Net Income Per Common Share (Calculations For Basic And Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator: | |||||||||||
Net income—basic and diluted | $ 156 | $ 174 | $ 176 | $ 128 | $ 167 | $ 183 | $ 84 | $ 91 | $ 634 | $ 525 | $ 517 |
Denominator: | |||||||||||
Basic weighted-average common shares outstanding | 164 | 163.5 | 163.5 | ||||||||
Diluted weighted-average shares | 165.6 | 165.1 | 165.4 | ||||||||
Earnings per share: | |||||||||||
Basic (in usd per share) | $ 0.95 | $ 1.06 | $ 1.07 | $ 0.78 | $ 1.03 | $ 1.12 | $ 0.51 | $ 0.56 | $ 3.87 | $ 3.21 | $ 3.16 |
Diluted (in usd per share) | $ 0.94 | $ 1.05 | $ 1.06 | $ 0.77 | $ 1.02 | $ 1.11 | $ 0.51 | $ 0.55 | $ 3.83 | $ 3.18 | $ 3.12 |
Number of anti-dilutive share-based awards | 0.4 | 0.7 | 0.4 | ||||||||
Stock Options | |||||||||||
Denominator: | |||||||||||
Effect of stock-based awards | 1 | 1 | 1.2 | ||||||||
Restricted Stock Units (RSUs) | |||||||||||
Denominator: | |||||||||||
Effect of stock-based awards | 0.6 | 0.6 | 0.7 |
Employee Retirement Benefits (N
Employee Retirement Benefits (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2008 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Minimum participant age to elect | 40 years | |||||
Employer discretionary contribution amount | $ 12 | $ 11 | $ 10 | |||
Requisite service period | 3 years | |||||
Actual return on plan assets | 0.60% | 11.70% | ||||
Total recognized in net periodic benefit cost and other comprehensive income | $ (21) | $ 31 | (63) | |||
Amortization of actuarial loss | 2 | |||||
Amortization of prior service cost | 1 | |||||
Pension plan assets at fair value | $ 278 | 288 | $ 280 | |||
Domestic Equity Securities | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Allocation percentage of investments | 83.00% | |||||
Domestic Equity Securities | Information Technology Sector | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Allocation percentage of investments | 22.00% | |||||
Domestic Equity Securities | Financial Services Sector [Member] | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Allocation percentage of investments | 20.00% | |||||
Domestic Equity Securities | Healthcare Sector | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Allocation percentage of investments | 13.00% | |||||
Domestic Equity Securities | Consumer Staple Sector [Member] [Domain] | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Allocation percentage of investments | 11.00% | |||||
Domestic Equity Securities | Industrial Sector | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Allocation percentage of investments | 10.00% | |||||
Domestic Equity Securities | All Remaining Sectors | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Allocation percentage of investments | 10.00% | |||||
States, Municipalities and Political Subdivisions | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Allocation percentage of investments | 12.00% | |||||
Domestic Corporate Debt Securities | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Allocation percentage of investments | 5.00% | |||||
Cash and Cash Equivalents | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Pension plan assets at fair value | $ 21 | $ 11 | ||||
Maximum | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Matching contribution to defined contribution plan | 6.00% | |||||
Pension Plan | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Pension plan assets, shares | 267,113 | 467,113 | ||||
Pension plan assets, fair value | $ 16 | $ 24 | ||||
Shares sold during period | 200,000 | |||||
Cash dividends paid | $ 1 | $ 1 | ||||
Pension Plan | Benefit Obligations | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Percentage of increase decrease in discount rate | 0.30% | |||||
Pension Plan | Net Periodic Benefit Costs | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Percentage of increase decrease in discount rate | 0.90% | |||||
Supplemental Employee Retirement Plan | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Accrued employee benefit | $ 14 | 13 | ||||
Supplemental Employee Retirement Plan | Forecast | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Expected contribution by employer during 2016 | $ 6 | |||||
Supplemental Employee Retirement Plan | Benefit Obligations | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Percentage of increase decrease in discount rate | 0.25% | |||||
Supplemental Employee Retirement Plan | Net Periodic Benefit Costs | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Percentage of increase decrease in discount rate | 0.75% | |||||
Top Hat Savings Plan - Mutual Funds and Common Equities | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
CFC Top Hat Savings Plan | $ 21 | $ 18 | ||||
Subsequent Event | Pension Plan | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block | ||||||
Expected contribution by employer during 2016 | $ 5 |
Employee Retirement Benefits (W
Employee Retirement Benefits (Weighted-Average Assumptions Used) (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Benefit Obligations | Pension Plan | |||
Schedule of Benefit Obligations Weighted Average Assumptions | |||
Discount rate | 4.55% | 4.25% | |
Benefit Obligations | Pension Plan | Minimum | |||
Schedule of Benefit Obligations Weighted Average Assumptions | |||
Rate of compensation increase | 2.75% | 2.75% | |
Benefit Obligations | Pension Plan | Maximum | |||
Schedule of Benefit Obligations Weighted Average Assumptions | |||
Rate of compensation increase | 3.25% | 3.25% | |
Benefit Obligations | Supplemental Employee Retirement Plan | |||
Schedule of Benefit Obligations Weighted Average Assumptions | |||
Discount rate | 4.30% | 4.05% | |
Benefit Obligations | Supplemental Employee Retirement Plan | Minimum | |||
Schedule of Benefit Obligations Weighted Average Assumptions | |||
Rate of compensation increase | 2.75% | 2.75% | |
Benefit Obligations | Supplemental Employee Retirement Plan | Maximum | |||
Schedule of Benefit Obligations Weighted Average Assumptions | |||
Rate of compensation increase | 3.25% | 3.25% | |
Net Periodic Benefit Cost | Pension Plan | |||
Schedule of Benefit Obligations Weighted Average Assumptions | |||
Discount rate | 4.25% | 5.15% | 4.20% |
Expected return on plan assets | 7.25% | 7.25% | 7.50% |
Net Periodic Benefit Cost | Pension Plan | Minimum | |||
Schedule of Benefit Obligations Weighted Average Assumptions | |||
Rate of compensation increase | 2.75% | 2.75% | 2.75% |
Net Periodic Benefit Cost | Pension Plan | Maximum | |||
Schedule of Benefit Obligations Weighted Average Assumptions | |||
Rate of compensation increase | 3.25% | 3.25% | 3.25% |
Net Periodic Benefit Cost | Supplemental Employee Retirement Plan | |||
Schedule of Benefit Obligations Weighted Average Assumptions | |||
Discount rate | 4.05% | 4.80% | 3.95% |
Net Periodic Benefit Cost | Supplemental Employee Retirement Plan | Minimum | |||
Schedule of Benefit Obligations Weighted Average Assumptions | |||
Rate of compensation increase | 2.75% | 2.75% | 2.75% |
Net Periodic Benefit Cost | Supplemental Employee Retirement Plan | Maximum | |||
Schedule of Benefit Obligations Weighted Average Assumptions | |||
Rate of compensation increase | 3.25% | 3.25% | 3.25% |
Employee Retirement Benefits (B
Employee Retirement Benefits (Benefit Obligation Activity Using An Actuarial Measurement Date For Qualified Plan And SERP) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Change in projected benefit obligation: | |||
Benefit obligation, January 1 | $ 319 | $ 284 | |
Service cost | 12 | 10 | $ 13 |
Interest cost | 14 | 15 | 13 |
Actuarial (gain) loss | (3) | 35 | |
Benefits paid | (19) | (27) | |
Other | 0 | 2 | 0 |
Projected benefit obligation, December 31 | 323 | 319 | 284 |
Accumulated benefit obligation | 293 | 284 | |
Change in plan assets: | |||
Fair value of plan assets, January 1 | 288 | 280 | |
Actual return on plan assets | 3 | 30 | |
Employer contribution | 6 | 5 | |
Benefits paid | (19) | (27) | |
Fair value of plan assets, December 31 | 278 | 288 | $ 280 |
Unfunded status: | |||
Funded status, December 31 | $ (45) | $ (31) |
Employee Retirement Benefits (R
Employee Retirement Benefits (Reconciliation Of The Funded Status For Qualified Plan And SERP) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Compensation and Retirement Disclosure [Abstract] | ||
Other assets | $ 0 | $ 0 |
Other liabilities | (45) | (31) |
Net amount recognized | (45) | (31) |
Pension amounts recognized in accumulated other comprehensive income: | ||
Net actuarial loss | 41 | 34 |
Prior service cost | 1 | 2 |
Total | $ 42 | $ 36 |
Employee Retirement Benefits (C
Employee Retirement Benefits (Components Of Net Periodic Benefit Cost As Well As Other Changes In Plan Assets And Benefit Obligations Recognized In Other Comprehensive Income For Qualified Plan And SERP) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Compensation and Retirement Disclosure [Abstract] | |||
Service cost | $ 12 | $ 10 | $ 13 |
Interest cost | 14 | 15 | 13 |
Expected return on plan assets | (18) | (17) | (17) |
Amortization of actuarial loss and prior service cost | 6 | 2 | 9 |
Other | 1 | 3 | 2 |
Net periodic benefit cost | 15 | 13 | 20 |
Current year actuarial loss (gain) | 13 | 21 | (72) |
Amortization of actuarial loss | 6 | 5 | 10 |
Other | 0 | 2 | 0 |
Amortization of prior service cost | (1) | 0 | (1) |
Total recognized in other comprehensive loss (income) | $ 6 | $ 18 | $ (83) |
Employee Retirement Benefits (F
Employee Retirement Benefits (Fair Value Hierarchy Of Assets Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, debt securities | $ 9,650 | $ 9,460 |
Available for sale securities, equity securities | 4,706 | 4,858 |
Fixed Maturities | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, debt securities | 45 | 52 |
Fixed Maturities | States, Municipalities and Political Subdivisions | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, debt securities | 32 | 33 |
Fixed Maturities | Corporate Fixed Maturities | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, debt securities | 13 | 19 |
Equity Securities | Common Stock | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, equity securities | 212 | 225 |
Debt And Equity Securities | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, equity securities | 257 | 277 |
Level 1 | Fixed Maturities | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, debt securities | 0 | 0 |
Level 1 | Fixed Maturities | States, Municipalities and Political Subdivisions | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, debt securities | 0 | 0 |
Level 1 | Fixed Maturities | Corporate Fixed Maturities | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, debt securities | 0 | 0 |
Level 1 | Equity Securities | Common Stock | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, equity securities | 212 | 225 |
Level 1 | Debt And Equity Securities | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, equity securities | 212 | 225 |
Level 2 | Fixed Maturities | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, debt securities | 45 | 52 |
Level 2 | Fixed Maturities | States, Municipalities and Political Subdivisions | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, debt securities | 32 | 33 |
Level 2 | Fixed Maturities | Corporate Fixed Maturities | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, debt securities | 13 | 19 |
Level 2 | Equity Securities | Common Stock | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, equity securities | 0 | 0 |
Level 2 | Debt And Equity Securities | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, debt securities | 45 | 52 |
Level 3 | Fixed Maturities | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, debt securities | 0 | 0 |
Level 3 | Fixed Maturities | States, Municipalities and Political Subdivisions | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, debt securities | 0 | 0 |
Level 3 | Fixed Maturities | Corporate Fixed Maturities | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, debt securities | 0 | 0 |
Level 3 | Equity Securities | Common Stock | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, equity securities | 0 | 0 |
Level 3 | Debt And Equity Securities | ||
Schedule of Pension and Other Postretirment Plan Assets by Fair Value | ||
Available for sale securities, equity securities | $ 0 | $ 0 |
Employee Retirement Benefits (E
Employee Retirement Benefits (Expected Future Benefit Payments For Qualified Plan And SERP) (Details) $ in Millions | Dec. 31, 2015USD ($) |
Compensation and Retirement Disclosure [Abstract] | |
Expected future benefit payments, 2016 | $ 29 |
Expected future benefit payments, 2017 | 26 |
Expected future benefit payments, 2018 | 24 |
Expected future benefit payments, 2019 | 24 |
Expected future benefit payments, 2020 | 25 |
Expected future benefit payments, 2021 - 2025 | $ 141 |
Statutory Accounting Informat86
Statutory Accounting Information (Schedule Of Statutory Net Income And Statutory Surplus (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
The Cincinnati Insurance Company | |||
Statutory Accounting Practices | |||
SAP net income (loss) | $ 534 | $ 436 | $ 418 |
Capital and surplus | 4,412 | 4,472 | |
The Cincinnati Casualty Company | |||
Statutory Accounting Practices | |||
SAP net income (loss) | 12 | 12 | 10 |
Capital and surplus | 337 | 330 | |
The Cincinnati Indemnity Company | |||
Statutory Accounting Practices | |||
SAP net income (loss) | 3 | 3 | 2 |
Capital and surplus | 88 | 86 | |
The Cincinnati Specialty Underwriters Insurance Company | |||
Statutory Accounting Practices | |||
SAP net income (loss) | 49 | 32 | 18 |
Capital and surplus | 306 | 266 | |
The Cincinnati Life Insurance Company | |||
Statutory Accounting Practices | |||
SAP net income (loss) | (11) | (19) | $ (20) |
Capital and surplus | $ 208 | $ 223 |
Transactions With Affliated Par
Transactions With Affliated Parties (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transaction | |||
Payment for commissions | $ 7 | $ 7 | $ 6 |
Earned premiums | 4,480 | 4,243 | 3,902 |
Affiliated Parties | |||
Related Party Transaction | |||
Earned premiums | $ 42 | $ 41 | $ 35 |
Commitments And Contingent Li88
Commitments And Contingent Liabilities (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Maximum | |
Estimate for which the risk of loss is more than remote | $ 1 |
Share-Based Associate Compens89
Share-Based Associate Compensation Plans (Narrative) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)peers_exceededPeerscompensation_plansshares | Dec. 31, 2014USD ($)peers_exceededPeersshares | Dec. 31, 2013USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Number of equity compensation plans | compensation_plans | 4 | ||
Maximum number of shares awarded to each full-time employee for their service | shares | 10 | ||
Share based compensation | $ 14 | $ 13 | $ 12 |
Tax benefit from compensation expense | 6 | 6 | 6 |
Options exercised, intrinsic value | 15 | 13 | 17 |
Options vested, intrinsic value | 7 | $ 9 | 15 |
Unrecognized compensation costs related to non-vested awards | $ 23 | ||
Expected weighted-average period to recognize the unrecognized compensation costs related to non-vested awards | 1 year 8 months 18 days | ||
Number of peers exceeded | peers_exceeded | 4 | 6 | |
Number of peers 2013 | Peers | 10 | ||
Number of peers 2012 | Peers | 10 | ||
Proceeds from stock options exercised | $ 24 | $ 22 | 25 |
Shares of common stock granted in period | shares | 386,000 | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Awards exercise peirod | 10 years | ||
Awards vesting period | 3 years | ||
Proceeds from stock options exercised | $ 24 | $ 22 | $ 25 |
Shares repurchased | shares | 292,414 | 378,276 | 577,745 |
Shares repurchased, value | $ 16 | $ 19 | $ 28 |
Weighted average remaining contractual term | 8 years 6 months 10 days | ||
Weighted-average remaining contractual life for exercisable awards | 3 years 7 months 10 days | ||
Shares authorized to be granted under the shareholder-approved plans | shares | 17,300,000 | ||
Shares available for future issuance under the plans | shares | 4,700,000 | ||
Stock Options | Directors | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Shares of common stock granted in period | shares | 20,880 | ||
Restricted Stock Units | Service Based Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Awards vesting period | 3 years | ||
Awards other than options vested, intrinsic value | $ 26 | 14 | 15 |
Restricted Stock Units | Performance Based Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Awards vesting period | 3 years | ||
share based performance metric for performance shares | 3 years | ||
Awards other than options vested, intrinsic value | $ 6 | $ 3 | $ 3 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Minimum | 13.78% | 18.69% | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum | 34.69% | 41.21% | |
Risk-free rates, minimum | 0.00% | 0.00% | 0.00% |
Risk-free rates, maximum | 200.00% | 200.00% | 200.00% |
Number of shares issued | shares | 103,586 | ||
Expected volatility | 2 years 10 months 18 days | 2 years 10 months 18 days | |
Dividend yield | 3.52% | 3.74% | |
Risk-free rates | 0.99% | 0.66% |
Share-Based Associate Compens90
Share-Based Associate Compensation Plans(Assumptions Used In Option Grants Issued) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Weighted-average fair value of options granted during the period | $ 11.15 | $ 10.16 | $ 9.71 |
Minimum | |||
Weighted-average expected term | 8 years | 8 years | 9 years |
Expected volatility | 25.04% | 25.20% | 25.25% |
Dividend yield | 3.52% | 3.76% | 3.65% |
Risk-free rates | 1.94% | 2.42% | 1.82% |
Maximum | |||
Weighted-average expected term | 9 years | 9 years | 10 years |
Expected volatility | 26.15% | 26.22% | 26.31% |
Dividend yield | 3.52% | 3.76% | 3.65% |
Risk-free rates | 2.01% | 2.62% | 2.00% |
Share-Based Associate Compens91
Share-Based Associate Compensation Plans (Stock Option Information) (Details) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($)$ / sharesshares | |
Shares | |
Outstanding at beginning of year | shares | 4,958 |
Granted | shares | 386 |
Exercised | shares | (996) |
Forfeited or expired | shares | (476) |
Outstanding at end of year | shares | 3,872 |
Options exercisable at end of period | shares | 3,128 |
Weighted-average exercise price | |
Outstanding at beginning of year | $ / shares | $ 39.10 |
Granted | $ / shares | 52.24 |
Exercised | $ / shares | 40.30 |
Forfeited or expired | $ / shares | 41.64 |
Outstanding at end of year | $ / shares | 39.78 |
Options exercisable at end of period | $ / shares | $ 37.54 |
Aggregate intrinsic value | |
Outstanding at end of year | $ | $ 77 |
Options exercisable at end of period | $ | $ 69 |
Share-Based Associate Compens92
Share-Based Associate Compensation Plans (Options Outstanding And Exercisable) (Details) - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Options Outstanding [Abstract] | ||
Shares | 3,872 | 4,958 |
Weighted-average remaining contractual life | 4 years 6 months 17 days | |
Weighted-average exercise price | $ 39.78 | $ 39.10 |
Options Exercisable [Abstract] | ||
Shares | 3,128 | |
Weighted-average exercise price | $ 37.54 | |
Range 1 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | ||
Range of per-share exercise prices, lower limit | 25 | |
Range of per-share exercise prices, upper limit | $ 29.99 | |
Options Outstanding [Abstract] | ||
Shares | 582 | |
Weighted-average remaining contractual life | 3 years 7 months 1 day | |
Weighted-average exercise price | $ 26.58 | |
Options Exercisable [Abstract] | ||
Shares | 582 | |
Weighted-average exercise price | $ 26.58 | |
Range 2 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | ||
Range of per-share exercise prices, lower limit | 30 | |
Range of per-share exercise prices, upper limit | $ 34.99 | |
Options Outstanding [Abstract] | ||
Shares | 574 | |
Weighted-average remaining contractual life | 4 years 11 months 25 days | |
Weighted-average exercise price | $ 33.95 | |
Options Exercisable [Abstract] | ||
Shares | 574 | |
Weighted-average exercise price | $ 33.95 | |
Range 3 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | ||
Range of per-share exercise prices, lower limit | 35 | |
Range of per-share exercise prices, upper limit | $ 39.99 | |
Options Outstanding [Abstract] | ||
Shares | 841 | |
Weighted-average remaining contractual life | 3 years 10 months 25 days | |
Weighted-average exercise price | $ 37.29 | |
Options Exercisable [Abstract] | ||
Shares | 841 | |
Weighted-average exercise price | $ 37.29 | |
Range 4 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | ||
Range of per-share exercise prices, lower limit | 40 | |
Range of per-share exercise prices, upper limit | $ 44.99 | |
Options Outstanding [Abstract] | ||
Shares | 700 | |
Weighted-average remaining contractual life | 4 years 23 days | |
Weighted-average exercise price | $ 44.75 | |
Options Exercisable [Abstract] | ||
Shares | 583 | |
Weighted-average exercise price | $ 44.75 | |
Range 5 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | ||
Range of per-share exercise prices, lower limit | 45 | |
Range of per-share exercise prices, upper limit | $ 49.99 | |
Options Outstanding [Abstract] | ||
Shares | 798 | |
Weighted-average remaining contractual life | 3 years 10 months 20 days | |
Weighted-average exercise price | $ 46 | |
Options Exercisable [Abstract] | ||
Shares | 546 | |
Weighted-average exercise price | $ 45.62 | |
Range6 [Member] [Domain] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | ||
Range of per-share exercise prices, lower limit | 50 | |
Range of per-share exercise prices, upper limit | $ 54.99 | |
Options Outstanding [Abstract] | ||
Shares | 377 | |
Weighted-average remaining contractual life | 9 years 1 month 5 days | |
Weighted-average exercise price | $ 52.24 | |
Options Exercisable [Abstract] | ||
Shares | 2 | |
Weighted-average exercise price | $ 52.25 |
Share-Based Associate Compens93
Share-Based Associate Compensation Plans (Restricted Stock Unit Information) (Details) - Restricted Stock Units shares in Thousands | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Service Based Shares | |
Nonvested shares | |
Beginning balance | shares | 968 |
Granted | shares | 334 |
Vested | shares | (370) |
Forfeited or canceled | shares | (30) |
Ending balance | shares | 902 |
Weighted-average grant-date fair value | |
Beginning balance | $ / shares | $ 37.42 |
Granted | $ / shares | 47.06 |
Vested | $ / shares | 31.74 |
Forfeited or canceled | $ / shares | 42.35 |
Ending balance | $ / shares | $ 43.15 |
Performance Based Shares | |
Nonvested shares | |
Beginning balance | shares | 283 |
Granted | shares | 81 |
Vested | shares | (104) |
Forfeited or canceled | shares | (4) |
Ending balance | shares | 256 |
Weighted-average grant-date fair value | |
Beginning balance | $ / shares | $ 38.55 |
Granted | $ / shares | 45.73 |
Vested | $ / shares | 34.89 |
Forfeited or canceled | $ / shares | 34.89 |
Ending balance | $ / shares | $ 42.35 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)segmentindustry | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segment Reporting Information | |||||||||||
Earned premiums | $ 4,480 | $ 4,243 | $ 3,902 | ||||||||
Total revenues | $ 1,263 | $ 1,278 | $ 1,316 | $ 1,285 | $ 1,262 | $ 1,280 | $ 1,214 | $ 1,189 | 5,142 | 4,945 | 4,531 |
Other Income | 7 | 8 | 9 | ||||||||
Fees and Commissions | 13 | 12 | 8 | ||||||||
Net Investment Income | 572 | 549 | 529 | ||||||||
Total | 70 | 133 | 83 | ||||||||
Income before income taxes | 216 | $ 243 | $ 248 | $ 174 | 236 | $ 259 | $ 107 | $ 119 | 881 | 721 | 714 |
Identifiable assets | 18,888 | 18,748 | $ 18,888 | 18,748 | |||||||
Number of Industries Operated In | industry | 2 | ||||||||||
Number of Insurance Segments | segment | 4 | ||||||||||
Life Insurance Segment | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | $ 209 | 198 | 189 | ||||||||
Identifiable assets | 1,325 | 1,316 | 1,325 | 1,316 | |||||||
Investments Segment | |||||||||||
Segment Reporting Information | |||||||||||
Identifiable assets | 14,485 | 14,441 | 14,485 | 14,441 | |||||||
Consolidated Property and Casualty Insurance Entity | |||||||||||
Segment Reporting Information | |||||||||||
Identifiable assets | 2,717 | 2,656 | 2,717 | 2,656 | |||||||
Corporate and Other Non-Segment | |||||||||||
Segment Reporting Information | |||||||||||
Other Income | 17 | 8 | 9 | ||||||||
Income before income taxes | (57) | (59) | (60) | ||||||||
Identifiable assets | $ 361 | $ 335 | 361 | 335 | |||||||
Operating Segments | Commercial Insurance | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 2,996 | 2,856 | 2,636 | ||||||||
Total revenues | 3,000 | 2,860 | 2,639 | ||||||||
Fees and Commissions | 4 | 4 | 3 | ||||||||
Income before income taxes | 345 | 146 | 186 | ||||||||
Operating Segments | Commercial Insurance | Commercial Casualty Line | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 1,010 | 938 | 856 | ||||||||
Operating Segments | Commercial Insurance | Commercial Property Line | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 815 | 728 | 623 | ||||||||
Operating Segments | Commercial Insurance | Commercial Auto Line | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 561 | 528 | 479 | ||||||||
Operating Segments | Commercial Insurance | Workers' Compensation Line | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 367 | 370 | 365 | ||||||||
Operating Segments | Commercial Insurance | Other Commercial Lines | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 243 | 292 | 313 | ||||||||
Operating Segments | Personal Insurance | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 1,097 | 1,041 | 961 | ||||||||
Total revenues | 1,100 | 1,043 | 962 | ||||||||
Fees and Commissions | 3 | 2 | 1 | ||||||||
Income before income taxes | (12) | 10 | 33 | ||||||||
Operating Segments | Personal Insurance | Personal Auto | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 506 | 476 | 443 | ||||||||
Operating Segments | Personal Insurance | Home Owner Line | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 463 | 443 | 403 | ||||||||
Operating Segments | Personal Insurance | Other Personal Lines | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 128 | 122 | 115 | ||||||||
Operating Segments | Excess and Surplus Lines Insurance | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 168 | 148 | 116 | ||||||||
Total revenues | 169 | 148 | 116 | ||||||||
Fees and Commissions | 1 | 0 | 0 | ||||||||
Income before income taxes | 51 | 30 | 14 | ||||||||
Operating Segments | Life Insurance Segment | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 209 | 198 | 189 | ||||||||
Total revenues | 214 | 204 | 193 | ||||||||
Fees and Commissions | 5 | 6 | 4 | ||||||||
Income before income taxes | (2) | (5) | 9 | ||||||||
Operating Segments | Investments Segment | |||||||||||
Segment Reporting Information | |||||||||||
Total revenues | 642 | 682 | 612 | ||||||||
Net Investment Income | 572 | 549 | 529 | ||||||||
Total | 70 | 133 | 83 | ||||||||
Income before income taxes | $ 556 | $ 599 | $ 532 |
Quarterly Supplementary Data (D
Quarterly Supplementary Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 1,263 | $ 1,278 | $ 1,316 | $ 1,285 | $ 1,262 | $ 1,280 | $ 1,214 | $ 1,189 | $ 5,142 | $ 4,945 | $ 4,531 |
Income before income taxes | 216 | 243 | 248 | 174 | 236 | 259 | 107 | 119 | 881 | 721 | 714 |
Net Income (Loss) Attributable to Parent | $ 156 | $ 174 | $ 176 | $ 128 | $ 167 | $ 183 | $ 84 | $ 91 | $ 634 | $ 525 | $ 517 |
Basic (in usd per share) | $ 0.95 | $ 1.06 | $ 1.07 | $ 0.78 | $ 1.03 | $ 1.12 | $ 0.51 | $ 0.56 | $ 3.87 | $ 3.21 | $ 3.16 |
Diluted (in usd per share) | $ 0.94 | $ 1.05 | $ 1.06 | $ 0.77 | $ 1.02 | $ 1.11 | $ 0.51 | $ 0.55 | $ 3.83 | $ 3.18 | $ 3.12 |
Summary of Investments Other 96
Summary of Investments Other Than Investments In Related Parties (Details)1 $ in Millions | Dec. 31, 2015USD ($) |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | $ 12,329 |
Fair value | 0 |
Balance sheet | 14,423 |
Fixed Maturities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 9,324 |
Fair value | 9,650 |
Balance sheet | 9,650 |
Equity Securities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 2,938 |
Fair value | 4,706 |
Balance sheet | 4,706 |
Other than Securities Investment | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 67 |
Fair value | 0 |
Balance sheet | 67 |
States, Municipalities and Political Subdivisions | Fixed Maturities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 3,440 |
Fair value | 3,611 |
Balance sheet | 3,611 |
States, Municipalities and Political Subdivisions | Fixed Maturities | The Cincinnati Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 2,696 |
Fair value | 2,820 |
Balance sheet | 2,820 |
States, Municipalities and Political Subdivisions | Fixed Maturities | The Cincinnati Casualty Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 137 |
Fair value | 143 |
Balance sheet | 143 |
States, Municipalities and Political Subdivisions | Fixed Maturities | The Cincinnati Indemnity Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 38 |
Fair value | 40 |
Balance sheet | 40 |
States, Municipalities and Political Subdivisions | Fixed Maturities | The Cincinnati Life Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 202 |
Fair value | 223 |
Balance sheet | 223 |
States, Municipalities and Political Subdivisions | Fixed Maturities | The Cincinnati Specialty Underwriters Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 366 |
Fair value | 384 |
Balance sheet | 384 |
States, Municipalities and Political Subdivisions | Fixed Maturities | CSU Producers Resources Inc. | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 1 |
Fair value | 1 |
Balance sheet | 1 |
Convertibles and Bonds with Warrants Attached | Fixed Maturities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 5 |
Fair value | 5 |
Balance sheet | 5 |
Convertibles and Bonds with Warrants Attached | Fixed Maturities | The Cincinnati Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 5 |
Fair value | 5 |
Balance sheet | 5 |
United States Government | Fixed Maturities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 4 |
Fair value | 4 |
Balance sheet | 4 |
United States Government | Fixed Maturities | The Cincinnati Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 1 |
Fair value | 1 |
Balance sheet | 1 |
United States Government | Fixed Maturities | The Cincinnati Casualty Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 2 |
Fair value | 2 |
Balance sheet | 2 |
United States Government | Fixed Maturities | The Cincinnati Indemnity Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 1 |
Fair value | 1 |
Balance sheet | 1 |
United States Government | Fixed Maturities | The Cincinnati Life Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 0 |
Fair value | 0 |
Balance sheet | 0 |
Government-Sponsored Enterprises | Fixed Maturities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 284 |
Fair value | 278 |
Balance sheet | 278 |
Government-Sponsored Enterprises | Fixed Maturities | The Cincinnati Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 4 |
Fair value | 4 |
Balance sheet | 4 |
Government-Sponsored Enterprises | Fixed Maturities | The Cincinnati Life Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 280 |
Fair value | 274 |
Balance sheet | 274 |
Foreign Government | Fixed Maturities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 10 |
Fair value | 10 |
Balance sheet | 10 |
Foreign Government | Fixed Maturities | The Cincinnati Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 10 |
Fair value | 10 |
Balance sheet | 10 |
Common Stock | Equity Securities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 2,749 |
Fair value | 4,485 |
Balance sheet | 4,485 |
Common Stock | Equity Securities | The Cincinnati Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 1,608 |
Fair value | 2,718 |
Balance sheet | 2,718 |
Common Stock | Equity Securities | The Cincinnati Casualty Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 46 |
Fair value | 82 |
Balance sheet | 82 |
Common Stock | Equity Securities | The Cincinnati Indemnity Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 12 |
Fair value | 21 |
Balance sheet | 21 |
Common Stock | Equity Securities | The Cincinnati Specialty Underwriters Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 44 |
Fair value | 71 |
Balance sheet | 71 |
Common Stock | Equity Securities | CSU Producers Resources Inc. | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 12 |
Fair value | 13 |
Balance sheet | 13 |
Common Stock | Equity Securities | Cincinnati Financial Corporation | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 1,027 |
Fair value | 1,580 |
Balance sheet | 1,580 |
Nonredeemable Preferred Stock | Equity Securities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 189 |
Fair value | 221 |
Balance sheet | 221 |
Nonredeemable Preferred Stock | Equity Securities | The Cincinnati Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 181 |
Fair value | 209 |
Balance sheet | 209 |
Nonredeemable Preferred Stock | Equity Securities | The Cincinnati Life Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 5 |
Fair value | 9 |
Balance sheet | 9 |
Nonredeemable Preferred Stock | Equity Securities | Cincinnati Financial Corporation | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 3 |
Fair value | 3 |
Balance sheet | 3 |
All Other Corporate Bonds | Fixed Maturities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 5,581 |
Fair value | 5,742 |
Balance sheet | 5,742 |
All Other Corporate Bonds | Fixed Maturities | The Cincinnati Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 2,642 |
Fair value | 2,719 |
Balance sheet | 2,719 |
All Other Corporate Bonds | Fixed Maturities | The Cincinnati Casualty Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 120 |
Fair value | 123 |
Balance sheet | 123 |
All Other Corporate Bonds | Fixed Maturities | The Cincinnati Indemnity Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 27 |
Fair value | 27 |
Balance sheet | 27 |
All Other Corporate Bonds | Fixed Maturities | The Cincinnati Life Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 2,587 |
Fair value | 2,657 |
Balance sheet | 2,657 |
All Other Corporate Bonds | Fixed Maturities | The Cincinnati Specialty Underwriters Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 152 |
Fair value | 156 |
Balance sheet | 156 |
All Other Corporate Bonds | Fixed Maturities | CSU Producers Resources Inc. | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 3 |
Fair value | 2 |
Balance sheet | 2 |
All Other Corporate Bonds | Fixed Maturities | Cincinnati Financial Corporation | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 50 |
Fair value | 58 |
Balance sheet | 58 |
Policy Loans | Other than Securities Investment | The Cincinnati Life Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 31 |
Fair value | 0 |
Balance sheet | 31 |
Limited Partnership | Other than Securities Investment | Cincinnati Financial Corporation | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 36 |
Fair value | 0 |
Balance sheet | $ 36 |
Condensed Financial Statement97
Condensed Financial Statements Of Parent Company Condensed Statements Of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows From Operating Activities | |||||||||||
Net Income | $ 156 | $ 174 | $ 176 | $ 128 | $ 167 | $ 183 | $ 84 | $ 91 | $ 634 | $ 525 | $ 517 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 52 | 51 | 50 | ||||||||
Realized investment gains, net | (70) | (133) | (83) | ||||||||
Changes in: | |||||||||||
Investment income receivable | (6) | (2) | (6) | ||||||||
Current income tax receivable/payable | (18) | 2 | (49) | ||||||||
Other assets | (39) | 19 | (32) | ||||||||
Other liabilities | 44 | (11) | 77 | ||||||||
Net cash provided by operating activities | 1,064 | 873 | 796 | ||||||||
Cash Flows From Investing Activities | |||||||||||
Sale of fixed maturities | 43 | 26 | 40 | ||||||||
Call or maturity of fixed maturities | 1,199 | 1,019 | 930 | ||||||||
Sale of equity securities | 342 | 335 | 178 | ||||||||
Purchase of fixed maturities | (1,722) | (1,312) | (1,381) | ||||||||
Purchase of equity securities | (493) | (392) | (265) | ||||||||
Investment in buildings and equipment, net | (10) | (9) | (7) | ||||||||
Change in other invested assets, net | 1 | 9 | 5 | ||||||||
Net cash used by investing activities | (624) | (311) | (509) | ||||||||
Cash Flows From Financing Activities | |||||||||||
Payments of note payable | (14) | (55) | 0 | ||||||||
Payment of cash dividends to shareholders | (366) | (278) | (263) | ||||||||
Shares acquired - share repurchase authorization | (53) | (21) | (52) | ||||||||
Proceeds from stock options exercised | 24 | 22 | 25 | ||||||||
Other | (17) | (17) | (14) | ||||||||
Net cash used in financing activities | (487) | (404) | (341) | ||||||||
Net change in cash and cash equivalents | (47) | 158 | (54) | ||||||||
Cash and cash equivalents at beginning of year | 591 | 433 | 591 | 433 | 487 | ||||||
Cash and cash equivalents at end of year | 544 | 591 | 544 | 591 | 433 | ||||||
Cincinnati Financial Corporation | |||||||||||
Cash Flows From Operating Activities | |||||||||||
Net Income | 634 | 525 | 517 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 7 | 7 | 7 | ||||||||
Realized investment gains, net | 19 | (34) | (21) | ||||||||
Dividends from subsidiaries | 447 | 400 | 378 | ||||||||
Changes in: | |||||||||||
Increase in equity of subsidiaries | (642) | (504) | (511) | ||||||||
Investment income receivable | 0 | (1) | (2) | ||||||||
Current federal income taxes | (7) | 3 | 12 | ||||||||
Current income tax receivable/payable | (10) | (6) | (6) | ||||||||
Other assets | (3) | 20 | (30) | ||||||||
Other liabilities | 13 | (14) | 39 | ||||||||
Intercompany receivable for operations | 16 | 22 | (39) | ||||||||
Net cash provided by operating activities | 474 | 418 | 344 | ||||||||
Cash Flows From Investing Activities | |||||||||||
Call or maturity of fixed maturities | 8 | 4 | 23 | ||||||||
Sale of equity securities | 54 | 112 | 75 | ||||||||
Purchase of equity securities | (110) | (225) | (179) | ||||||||
Investment in buildings and equipment, net | 0 | (2) | (1) | ||||||||
Change in other invested assets, net | 1 | 4 | 4 | ||||||||
Return of capital from subsidiaries | 0 | 0 | 22 | ||||||||
Net cash used by investing activities | (47) | (107) | (56) | ||||||||
Cash Flows From Financing Activities | |||||||||||
Payments of note payable | 0 | (55) | 0 | ||||||||
Payment of cash dividends to shareholders | (366) | (278) | (263) | ||||||||
Shares acquired - share repurchase authorization | (53) | (21) | (52) | ||||||||
Proceeds from stock options exercised | 24 | 22 | 25 | ||||||||
Other | 2 | 2 | 3 | ||||||||
Net cash used in financing activities | (393) | (330) | (287) | ||||||||
Net change in cash and cash equivalents | 34 | (19) | 1 | ||||||||
Cash and cash equivalents at beginning of year | $ 72 | $ 91 | 72 | 91 | 90 | ||||||
Cash and cash equivalents at end of year | $ 106 | $ 72 | $ 106 | $ 72 | $ 91 |
Condensed Financial Statement98
Condensed Financial Statements Of Parent Company Condensed Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Investments | ||||
Fixed maturities, at fair value | $ 9,650 | $ 9,460 | ||
Equity securities, at fair value | 4,706 | 4,858 | ||
Other invested assets | 67 | 68 | ||
Total investments | 14,423 | 14,386 | ||
Cash and cash equivalents | 544 | 591 | $ 433 | $ 487 |
Investment income receivable | 129 | 123 | ||
Land, building and equipment, net, for company use (accumulated depreciation: 2015—$118; 2014—$112) | 185 | 194 | ||
Other assets | 154 | 70 | ||
Total assets | 18,888 | 18,748 | ||
Liabilities | ||||
Deferred federal income tax | 1,047 | 1,239 | ||
Long-term debt | 786 | 786 | ||
Other liabilities | 717 | 648 | ||
Total liabilities | 12,461 | 12,175 | ||
Shareholders' Equity | ||||
Common stock | 397 | 397 | ||
Paid-in capital | 1,232 | 1,214 | ||
Retained earnings | 4,762 | 4,505 | ||
Accumulated other comprehensive income | 1,344 | 1,744 | ||
Treasury stock at cost | (1,308) | (1,287) | ||
Total shareholders' equity | 6,427 | 6,573 | 6,070 | |
Total liabilities and shareholders' equity | 18,888 | 18,748 | ||
Cincinnati Financial Corporation | ||||
Investments | ||||
Fixed maturities, at fair value | 58 | 69 | ||
Equity securities, at fair value | 1,583 | 1,643 | ||
Other invested assets | 36 | 37 | ||
Total investments | 1,677 | 1,749 | ||
Cash and cash equivalents | 106 | 72 | $ 91 | $ 90 |
Equity in net assets of subsidiaries | 5,482 | 5,627 | ||
Investment income receivable | 6 | 6 | ||
Land, building and equipment, net, for company use (accumulated depreciation: 2015—$118; 2014—$112) | 139 | 144 | ||
Income tax receivable | 6 | 0 | ||
Other assets | 21 | 18 | ||
Due from subsidiaries | 107 | 107 | ||
Total assets | 7,544 | 7,723 | ||
Liabilities | ||||
Dividends declared but unpaid | 75 | 72 | ||
Deferred federal income tax | 173 | 216 | ||
Long-term debt | 786 | 786 | ||
Other liabilities | 83 | 76 | ||
Total liabilities | 1,117 | 1,150 | ||
Shareholders' Equity | ||||
Common stock | 397 | 397 | ||
Paid-in capital | 1,232 | 1,214 | ||
Retained earnings | 4,762 | 4,505 | ||
Accumulated other comprehensive income | 1,344 | 1,744 | ||
Treasury stock at cost | (1,308) | (1,287) | ||
Total shareholders' equity | 6,427 | 6,573 | ||
Total liabilities and shareholders' equity | $ 7,544 | $ 7,723 |
Condensed Financial Statement99
Condensed Financial Statements Of Parent Company Condensed Balance Sheets (Parenthetical) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Condensed Financial Statements, Captions | ||
Land, building and equipment, accumulated depreciation | $ 459 | $ 446 |
Cincinnati Financial Corporation | ||
Condensed Financial Statements, Captions | ||
Land, building and equipment, accumulated depreciation | $ 118 | $ 112 |
Condensed Financial Statemen100
Condensed Financial Statements Of Parent Company Condensed Statements Of Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | |||||||||||
Investment income, net of expenses | $ 572 | $ 549 | $ 529 | ||||||||
Total | 70 | 133 | 83 | ||||||||
Other revenues | 7 | 8 | 9 | ||||||||
Total revenues | $ 1,263 | $ 1,278 | $ 1,316 | $ 1,285 | $ 1,262 | $ 1,280 | $ 1,214 | $ 1,189 | 5,142 | 4,945 | 4,531 |
Expenses | |||||||||||
Interest expense | 53 | 53 | 54 | ||||||||
Other expenses | 13 | 14 | 15 | ||||||||
Total expenses | 4,261 | 4,224 | 3,817 | ||||||||
Income (Loss) Before Income Taxes and Earnings of Subsidiaries | 216 | 243 | 248 | 174 | 236 | 259 | 107 | 119 | 881 | 721 | 714 |
Benefit for income taxes | 247 | 196 | 197 | ||||||||
Net Income | $ 156 | $ 174 | $ 176 | $ 128 | $ 167 | $ 183 | $ 84 | $ 91 | 634 | 525 | 517 |
Cincinnati Financial Corporation | |||||||||||
Revenues | |||||||||||
Investment income, net of expenses | 53 | 46 | 41 | ||||||||
Total | (19) | 34 | 21 | ||||||||
Other revenues | 15 | 16 | 15 | ||||||||
Total revenues | 49 | 96 | 77 | ||||||||
Expenses | |||||||||||
Interest expense | 52 | 52 | 53 | ||||||||
Other expenses | 28 | 28 | 29 | ||||||||
Total expenses | 80 | 80 | 82 | ||||||||
Income (Loss) Before Income Taxes and Earnings of Subsidiaries | (31) | 16 | (5) | ||||||||
Benefit for income taxes | (23) | (5) | (11) | ||||||||
Net Income (Loss) Before Earnings of Subsidiaries | (8) | 21 | 6 | ||||||||
Increase in equity of subsidiaries | 642 | 504 | 511 | ||||||||
Net Income | $ 634 | $ 525 | $ 517 |
Condensed Financial Statemen101
Condensed Financial Statements Of Parent Company Condensed Statements Of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Condensed Financial Statements, Captions | |||||||||||
Net Income | $ 156 | $ 174 | $ 176 | $ 128 | $ 167 | $ 183 | $ 84 | $ 91 | $ 634 | $ 525 | $ 517 |
Unrealized (losses) and gains on investments available-for-sale | (405) | 250 | 299 | ||||||||
Unrealized (losses) and gains on investments available-for-sale, investments held by subsidiaries and other | (612) | 388 | 494 | ||||||||
Amortization of pension actuarial losses and (gains) and prior service cost | (6) | (18) | 83 | ||||||||
Other comprehensive (loss) income before tax | (618) | 370 | 577 | ||||||||
Income taxes on above of other comprehensive (loss) income | (218) | 130 | 202 | ||||||||
Other comprehensive (loss) income, net of tax | (400) | 240 | 375 | ||||||||
Comprehensive Income | 234 | 765 | 892 | ||||||||
Cincinnati Financial Corporation | |||||||||||
Condensed Financial Statements, Captions | |||||||||||
Net Income | 634 | 525 | 517 | ||||||||
Unrealized (losses) and gains on investments available-for-sale | (111) | 150 | 303 | ||||||||
Unrealized (losses) and gains on investments held by subsidiaries | (444) | 367 | 240 | ||||||||
Reclassification adjustment for gains and (losses) included in net income | 19 | (34) | (21) | ||||||||
Reclassification adjustment for (gains) included in net income on subsidiaries | (89) | (99) | (62) | ||||||||
Unrealized gains and (losses) on other | 0 | 7 | (1) | ||||||||
Unrealized gains and (losses) on other subsidiaries | $ 13 | $ (3) | $ 35 |
Supplementary Insurance Info102
Supplementary Insurance Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Supplementary Insurance Information, by Segment | |||
Deferred policy acquisition costs | $ 616 | $ 578 | $ 565 |
Gross future policy benefits, losses, claims and expense losses | 7,265 | 6,957 | 6,682 |
Gross unearned premium | 2,201 | 2,082 | 1,976 |
Other policy claims and benefits payable | 36 | 25 | 19 |
Earned premiums | 4,480 | 4,243 | 3,902 |
Investment income, net of expenses | 518 | 502 | 488 |
Benefits, claims losses and settlement expense | 2,808 | 2,856 | 2,505 |
Amortization of deferred policy acquisition costs | 829 | 807 | 758 |
Underwriting, acquisition and insurance expenses | 558 | 494 | 485 |
Net written premiums | 4,363 | 4,146 | 3,895 |
Commercial Insurance | |||
Supplementary Insurance Information, by Segment | |||
Deferred policy acquisition costs | 264 | 257 | 251 |
Gross future policy benefits, losses, claims and expense losses | 3,925 | 3,797 | 3,667 |
Gross unearned premium | 1,472 | 1,441 | 1,372 |
Earned premiums | 2,996 | 2,856 | 2,636 |
Benefits, claims losses and settlement expense | 1,708 | 1,812 | 1,596 |
Amortization of deferred policy acquisition costs | 552 | 537 | 514 |
Underwriting, acquisition and insurance expenses | 395 | 365 | 343 |
Net written premiums | 3,025 | 2,922 | 2,760 |
Personal Insurance | |||
Supplementary Insurance Information, by Segment | |||
Deferred policy acquisition costs | 103 | 108 | 104 |
Gross future policy benefits, losses, claims and expense losses | 498 | 439 | 417 |
Gross unearned premium | 593 | 562 | 535 |
Earned premiums | 1,097 | 1,041 | 961 |
Benefits, claims losses and settlement expense | 789 | 740 | 639 |
Amortization of deferred policy acquisition costs | 210 | 209 | 192 |
Underwriting, acquisition and insurance expenses | 113 | 84 | 98 |
Net written premiums | 1,128 | 1,068 | 1,005 |
Excess And Surplus Lines Insurance | |||
Supplementary Insurance Information, by Segment | |||
Deferred policy acquisition costs | 15 | 14 | 11 |
Gross future policy benefits, losses, claims and expense losses | 227 | 202 | 157 |
Gross unearned premium | 87 | 78 | 67 |
Earned premiums | 168 | 148 | 116 |
Benefits, claims losses and settlement expense | 70 | 75 | 66 |
Amortization of deferred policy acquisition costs | 28 | 24 | 21 |
Underwriting, acquisition and insurance expenses | 20 | 19 | 15 |
Net written premiums | 175 | 153 | 128 |
Reinsurance assumed and other non segment [Member] | |||
Supplementary Insurance Information, by Segment | |||
Deferred policy acquisition costs | 6 | 0 | 0 |
Gross future policy benefits, losses, claims and expense losses | 10 | 0 | 0 |
Gross unearned premium | 48 | 0 | 0 |
Earned premiums | 10 | 0 | 0 |
Benefits, claims losses and settlement expense | 5 | 0 | 0 |
Amortization of deferred policy acquisition costs | 2 | 0 | 0 |
Underwriting, acquisition and insurance expenses | 1 | 0 | 0 |
Net written premiums | 33 | 0 | 0 |
Property, Liability and Casualty Insurance Product Line [Member] | |||
Supplementary Insurance Information, by Segment | |||
Deferred policy acquisition costs | 388 | 379 | 366 |
Gross future policy benefits, losses, claims and expense losses | 4,660 | 4,438 | 4,241 |
Gross unearned premium | 2,200 | 2,081 | 1,974 |
Earned premiums | 4,271 | 4,045 | 3,713 |
Investment income, net of expenses | 368 | 358 | 348 |
Benefits, claims losses and settlement expense | 2,572 | 2,627 | 2,301 |
Amortization of deferred policy acquisition costs | 792 | 770 | 727 |
Underwriting, acquisition and insurance expenses | 529 | 468 | 456 |
Net written premiums | 4,361 | 4,143 | 3,893 |
Accident Health Insurance Segment [Member] | |||
Supplementary Insurance Information, by Segment | |||
Net written premiums | 2 | 3 | 2 |
Life Insurance Segment | |||
Supplementary Insurance Information, by Segment | |||
Deferred policy acquisition costs | 228 | 199 | 199 |
Gross future policy benefits, losses, claims and expense losses | 2,605 | 2,519 | 2,441 |
Gross unearned premium | 1 | 1 | 2 |
Other policy claims and benefits payable | 36 | 25 | 19 |
Earned premiums | 209 | 198 | 189 |
Investment income, net of expenses | 150 | 144 | 140 |
Benefits, claims losses and settlement expense | 236 | 229 | 204 |
Amortization of deferred policy acquisition costs | 37 | 37 | 31 |
Underwriting, acquisition and insurance expenses | $ 29 | $ 26 | $ 29 |
Reinsurance (Details)
Reinsurance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||
Gross amounts, life insurance in force | $ 91,451 | $ 88,045 | $ 85,015 |
Gross amounts | 4,667 | 4,468 | 4,151 |
Ceded amounts to other companies, life insurance in force | 38,716 | 37,689 | 36,952 |
Ceded amounts to other companies | 216 | 237 | 260 |
Assumed amounts from other companies, life insurance in force | 0 | 0 | 0 |
Assumed amounts from other companies | 29 | 12 | 11 |
Net amounts, life insurance in force | 52,735 | 50,356 | 48,063 |
Premiums Earned, Net | $ 4,480 | $ 4,243 | $ 3,902 |
Percentage of amounts assumed to net, life insurance in force | 0.00% | 0.00% | 0.00% |
Percentage of amounts assumed to net | 0.70% | 0.50% | 0.50% |
Commercial Insurance | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||
Gross amounts | $ 3,088 | $ 2,973 | $ 2,777 |
Ceded amounts to other companies | 102 | 128 | 151 |
Assumed amounts from other companies | 10 | 11 | 10 |
Premiums Earned, Net | $ 2,996 | $ 2,856 | $ 2,636 |
Percentage of amounts assumed to net | 0.30% | 0.40% | 0.40% |
Personal Insurance | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||
Gross amounts | $ 1,131 | $ 1,080 | $ 1,002 |
Ceded amounts to other companies | 35 | 40 | 42 |
Assumed amounts from other companies | 1 | 1 | 1 |
Premiums Earned, Net | $ 1,097 | $ 1,041 | $ 961 |
Percentage of amounts assumed to net | 0.10% | 0.10% | 0.10% |
Excess And Surplus Lines Insurance | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||
Gross amounts | $ 177 | $ 156 | $ 124 |
Ceded amounts to other companies | 9 | 8 | 8 |
Assumed amounts from other companies | 0 | 0 | 0 |
Premiums Earned, Net | $ 168 | $ 148 | $ 116 |
Percentage of amounts assumed to net | 0.00% | 0.00% | 0.00% |
Reinsurance assumed and other non segment [Member] | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||
Gross amounts | $ 0 | $ 0 | $ 0 |
Ceded amounts to other companies | 8 | 0 | 0 |
Assumed amounts from other companies | 18 | 0 | 0 |
Premiums Earned, Net | $ 10 | $ 0 | $ 0 |
Percentage of amounts assumed to net | 188.00% | 0.00% | 0.00% |
Property, Liability And Casualty Insurance Segment [Member] | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||
Gross amounts | $ 4,396 | $ 4,209 | $ 3,903 |
Ceded amounts to other companies | 154 | 176 | 201 |
Assumed amounts from other companies | 29 | 12 | 11 |
Premiums Earned, Net | $ 4,271 | $ 4,045 | $ 3,713 |
Percentage of amounts assumed to net | 0.70% | 0.50% | 0.50% |
Life Insurance Segment | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||
Gross amounts | $ 271 | $ 259 | $ 248 |
Ceded amounts to other companies | 62 | 61 | 59 |
Assumed amounts from other companies | 0 | 0 | 0 |
Premiums Earned, Net | $ 209 | $ 198 | $ 189 |
Percentage of amounts assumed to net | 0.00% | 0.00% | 0.00% |
Valuation And Qualifying Acc104
Valuation And Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Valuation and Qualifying Accounts [Abstract] | |||
Beginning balance, January 1 | $ 3 | $ 2 | $ 2 |
Additions charged to costs and expenses | 3 | 2 | 1 |
Deductions | (2) | (1) | (1) |
Ending balance, December 31 | $ 4 | $ 3 | $ 2 |
Supplementary Information Co105
Supplementary Information Concerning Property Casualty Insurance Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | |||
Deferred policy acquisition costs | $ 388 | $ 379 | $ 366 |
Reserves for unpaid claims and claim adjustment expenses | 4,660 | 4,438 | 4,241 |
Unearned premiums | 2,200 | 2,081 | 1,970 |
Earned premiums | 4,271 | 4,045 | 3,713 |
Investment income | 368 | 358 | 348 |
Loss and loss expenses incurred related to current accident year | 2,756 | 2,725 | 2,448 |
Prior year claims and claims adjustment expense | (184) | (98) | (147) |
Amortization of deferred policy acquisition cost | 792 | 770 | 727 |
Paid loss and loss expenses | 2,349 | 2,413 | 2,172 |
Net written premiums | 4,361 | 4,143 | 3,893 |
Commercial Insurance | |||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | |||
Deferred policy acquisition costs | 264 | 257 | 251 |
Reserves for unpaid claims and claim adjustment expenses | 3,925 | 3,797 | 3,667 |
Unearned premiums | 1,472 | 1,441 | 1,370 |
Earned premiums | 2,996 | 2,856 | 2,636 |
Investment income | 0 | 0 | 0 |
Loss and loss expenses incurred related to current accident year | 1,862 | 1,869 | 1,691 |
Prior year claims and claims adjustment expense | (154) | (57) | (95) |
Amortization of deferred policy acquisition cost | 552 | 537 | 514 |
Paid loss and loss expenses | 1,575 | 1,666 | 1,498 |
Net written premiums | 3,025 | 2,922 | 2,760 |
Personal Insurance | |||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | |||
Deferred policy acquisition costs | 103 | 108 | 104 |
Reserves for unpaid claims and claim adjustment expenses | 498 | 439 | 417 |
Unearned premiums | 593 | 562 | 534 |
Earned premiums | 1,097 | 1,041 | 961 |
Investment income | 0 | 0 | 0 |
Loss and loss expenses incurred related to current accident year | 784 | 752 | 678 |
Prior year claims and claims adjustment expense | 5 | (12) | (39) |
Amortization of deferred policy acquisition cost | 210 | 209 | 192 |
Paid loss and loss expenses | 731 | 717 | 639 |
Net written premiums | 1,128 | 1,068 | 1,005 |
Excess And Surplus Lines Insurance | |||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | |||
Deferred policy acquisition costs | 15 | 14 | 11 |
Reserves for unpaid claims and claim adjustment expenses | 227 | 202 | 157 |
Unearned premiums | 87 | 78 | 66 |
Earned premiums | 168 | 148 | 116 |
Investment income | 0 | 0 | 0 |
Loss and loss expenses incurred related to current accident year | 105 | 104 | 79 |
Prior year claims and claims adjustment expense | (35) | (29) | (13) |
Amortization of deferred policy acquisition cost | 28 | 24 | 21 |
Paid loss and loss expenses | 43 | 30 | 35 |
Net written premiums | 175 | 153 | 128 |
Reinsurance assumed and other non segment [Member] | |||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | |||
Deferred policy acquisition costs | 6 | 0 | 0 |
Reserves for unpaid claims and claim adjustment expenses | 10 | 0 | 0 |
Unearned premiums | 48 | 0 | 0 |
Earned premiums | 10 | 0 | 0 |
Investment income | 0 | 0 | 0 |
Loss and loss expenses incurred related to current accident year | 5 | 0 | 0 |
Prior year claims and claims adjustment expense | 0 | 0 | 0 |
Amortization of deferred policy acquisition cost | 2 | 0 | 0 |
Paid loss and loss expenses | 0 | 0 | 0 |
Net written premiums | $ 33 | $ 0 | $ 0 |