Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 18, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 000-04604 | ||
Entity Registrant Name | Cincinnati Financial Corporation | ||
Entity Incorporation, State or Country Code | OH | ||
Entity Tax Identification Number | 31-0746871 | ||
Entity Address, Address Line One | 6200 S. Gilmore Road | ||
Entity Address, City or Town | Fairfield | ||
Entity Address, State or Province | OH | ||
Entity Address, Postal Zip Code | 45014-5141 | ||
City Area Code | 513 | ||
Local Phone Number | 870-2000 | ||
Title of 12(b) Security | Common stock, $2.00 par | ||
Trading Symbol | CINF | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 15,792,340,443 | ||
Entity Common Stock, Shares Outstanding | 162,686,260 | ||
Entity Central Index Key | 0000020286 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Documents Incorporated by Reference | Portions of the definitive Proxy Statement for Cincinnati Financial Corporation’s Annual Meeting of Shareholders to be held on May 2, 2020 , are incorporated by reference into Part III of this Form 10-K. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Investments | ||
Fixed maturities, at fair value (amortized cost: 2019—$11,108; 2018—$10,643) | $ 11,698 | $ 10,689 |
Equity securities, at fair value (cost: 2019—$3,581; 2018—$3,368) | 7,752 | 5,920 |
Other invested assets | 296 | 123 |
Total investments | 19,746 | 16,732 |
Cash and cash equivalents | 767 | 784 |
Investment income receivable | 133 | 132 |
Finance receivable | 77 | 71 |
Premiums receivable | 1,777 | 1,644 |
Reinsurance recoverable | 610 | 484 |
Prepaid reinsurance premiums | 54 | 44 |
Deferred policy acquisition costs | 774 | 738 |
Land, building and equipment, net, for company use (accumulated depreciation: 2019—$276; 2018—$265) | 207 | 195 |
Other assets | 381 | 308 |
Separate accounts | 882 | 803 |
Total assets | 25,408 | 21,935 |
Insurance reserves | ||
Loss and loss expense reserves | 6,147 | 5,707 |
Life policy and investment contract reserves | 2,835 | 2,779 |
Unearned premiums | 2,788 | 2,516 |
Other liabilities | 928 | 804 |
Deferred income tax | 1,079 | 627 |
Note payable | 39 | 32 |
Long-term debt and lease obligations | 846 | 834 |
Separate accounts | 882 | 803 |
Total liabilities | 15,544 | 14,102 |
Commitments and contingent liabilities (Note 16) | 0 | 0 |
Shareholders' Equity | ||
Common stock, par value—$2 per share; (authorized: 2019 and 2018—500 million shares; issued: 2019 and 2018—198.3 million shares) | 397 | 397 |
Paid-in capital | 1,306 | 1,281 |
Retained earnings | 9,257 | 7,625 |
Accumulated other comprehensive income | 448 | 22 |
Treasury stock at cost (2019—35.4 million shares and 2018—35.5 million shares) | (1,544) | (1,492) |
Total shareholders' equity | 9,864 | 7,833 |
Total liabilities and shareholders' equity | $ 25,408 | $ 21,935 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, amortized cost | $ 11,108 | $ 10,643 |
Equity securities, cost | 3,581 | 3,368 |
Land, building and equipment, accumulated depreciation | $ 276 | $ 265 |
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 | 35.4 | 35.5 |
Consolidated Statements Of Inco
Consolidated Statements Of Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | |||
Earned premiums | $ 5,604 | $ 5,170 | $ 4,954 |
Investment income, net of expenses | 646 | 619 | 609 |
Investment gains and losses, net | 1,650 | (402) | 148 |
Fee revenues | 15 | 15 | 16 |
Other revenues | 9 | 5 | 5 |
Total revenues | 7,924 | 5,407 | 5,732 |
Benefits and Expenses | |||
Insurance losses and contract holders' benefits | 3,638 | 3,490 | 3,390 |
Underwriting, acquisition and insurance expenses | 1,738 | 1,597 | 1,546 |
Interest expense | 53 | 53 | 53 |
Other operating expenses | 23 | 16 | 13 |
Total benefits and expenses | 5,452 | 5,156 | 5,002 |
Income Before Income Taxes | 2,472 | 251 | 730 |
Provision (Benefit) for Income Taxes | |||
Current | 132 | 11 | 129 |
Deferred | 343 | (47) | (444) |
Total provision (benefit) for income taxes | 475 | (36) | (315) |
Net Income | $ 1,997 | $ 287 | $ 1,045 |
Per Common Share | |||
Net income—basic (in usd per share) | $ 12.24 | $ 1.76 | $ 6.36 |
Net income—diluted (in usd per share) | $ 12.10 | $ 1.75 | $ 6.29 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income | $ 1,997 | $ 287 | $ 1,045 |
Other Comprehensive Income (Loss) | |||
Change in unrealized gains and losses on investments, net of tax (benefit) of $114, $(72) and $317, respectively | 430 | (267) | 598 |
Amortization of pension actuarial gains and losses and prior service cost, net of tax (benefit) of $2, $(1) and $7, respectively | 5 | (3) | 7 |
Change in life deferred acquisition costs, life policy reserves and other, net of tax (benefit) of $(3), $2 and $1, respectively | (9) | 7 | (2) |
Other comprehensive income (loss) | 426 | (263) | 603 |
Comprehensive Income | $ 2,423 | $ 24 | $ 1,648 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Unrealized gains on investments available-for-sale, net of tax | $ 114 | $ (72) | $ 317 |
Amortization of pension actuarial loss and prior service cost, net of tax | 2 | (1) | 7 |
Change in life deferred acquisition costs, life policy reserves and other, net of tax | $ (3) | $ 2 | $ 1 |
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 | New Accounting Pronouncement, Early Adoption, EffectRetained Earnings | New Accounting Pronouncement, Early Adoption, EffectAccumulated Other Comprehensive Income |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative effect of change in accounting for equity securities as of January 1, 2018 | $ 0 | $ 0 | ||||||
Adjusted beginning of year | 5,037 | 1,693 | ||||||
Beginning Balance at Dec. 31, 2016 | $ 397 | $ 1,252 | 5,037 | 1,693 | $ (1,319) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based awards | 0 | (18) | 26 | |||||
Share-based compensation | 26 | |||||||
Other | 5 | 5 | ||||||
Net Income | $ 1,045 | 1,045 | ||||||
Dividends declared | (410) | |||||||
Other comprehensive income (loss) | 603 | 603 | ||||||
Shares acquired - share repurchase authorization | (92) | |||||||
Shares acquired - share-based compensation plans | (7) | |||||||
Ending Balance at Dec. 31, 2017 | 8,243 | $ 397 | 1,265 | 5,180 | 2,788 | (1,387) | ||
Beginning Balance (in shares) at Dec. 31, 2016 | 164,400 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based awards (in shares) | 800 | |||||||
Shares acquired—share repurchase authorization (in shares) | (1,300) | |||||||
Shares acquired - share-based compensation plans (in shares) | (100) | |||||||
Other (in shares) | 100 | |||||||
Ending Balance (in shares) at Dec. 31, 2017 | 163,900 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative effect of change in accounting for equity securities as of January 1, 2018 | 2,503 | (2,503) | ||||||
Adjusted beginning of year | 7,683 | 285 | ||||||
Adjustment to reclassify certain tax effects from AOCI to retained earnings | Accounting Standards Update 2018-02 | $ (492) | $ 492 | ||||||
Share-based awards | $ 0 | (17) | 21 | |||||
Share-based compensation | 28 | |||||||
Other | 5 | 4 | ||||||
Net Income | 287 | 287 | ||||||
Dividends declared | (345) | |||||||
Other comprehensive income (loss) | (263) | (263) | ||||||
Shares acquired - share repurchase authorization | (125) | |||||||
Shares acquired - share-based compensation plans | (5) | |||||||
Ending Balance at Dec. 31, 2018 | $ 7,833 | $ 397 | 1,281 | 7,625 | 22 | (1,492) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based awards (in shares) | 700 | |||||||
Shares acquired—share repurchase authorization (in shares) | (1,800) | |||||||
Shares acquired - share-based compensation plans (in shares) | 0 | |||||||
Other (in shares) | 0 | |||||||
Ending Balance (in shares) at Dec. 31, 2018 | 198,300 | 162,800 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative effect of change in accounting for equity securities as of January 1, 2018 | $ 2,503 | 0 | 0 | |||||
Adjusted beginning of year | 7,625 | 22 | ||||||
Adjustment to reclassify certain tax effects from AOCI to retained earnings | Accounting Standards Update 2018-02 | 0 | 0 | ||||||
Share-based awards | $ 0 | (12) | 21 | |||||
Share-based compensation | 30 | |||||||
Other | 7 | 3 | ||||||
Net Income | 1,997 | 1,997 | ||||||
Dividends declared | (365) | |||||||
Other comprehensive income (loss) | 426 | 426 | ||||||
Shares acquired - share repurchase authorization | (67) | |||||||
Shares acquired - share-based compensation plans | (9) | |||||||
Ending Balance at Dec. 31, 2019 | $ 9,864 | $ 397 | $ 1,306 | $ 9,257 | $ 448 | $ (1,544) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based awards (in shares) | 493 | 700 | ||||||
Shares acquired—share repurchase authorization (in shares) | (600) | |||||||
Shares acquired - share-based compensation plans (in shares) | (100) | |||||||
Other (in shares) | 100 | |||||||
Ending Balance (in shares) at Dec. 31, 2019 | 198,300 | 162,900 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Adjustment to reclassify certain tax effects from AOCI to retained earnings | Accounting Standards Update 2018-02 | $ 0 | $ 0 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows From Operating Activities | |||
Net Income | $ 1,997 | $ 287 | $ 1,045 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 72 | 63 | 55 |
Investment gains and losses, net | (1,640) | 408 | (148) |
Share-based compensation | 30 | 28 | 26 |
Interest credited to contract holders' | 44 | 47 | 48 |
Deferred income tax expense | 343 | (47) | (444) |
Changes in: | |||
Investment income receivable | (1) | 2 | 0 |
Premiums and reinsurance receivable | (174) | (109) | 77 |
Deferred policy acquisition costs | (61) | (48) | (36) |
Other assets | (22) | (1) | (43) |
Loss and loss expense reserves | 163 | 434 | 188 |
Life policy and investment contract reserves | 107 | 96 | 96 |
Unearned premiums | 184 | 112 | 97 |
Other liabilities | 74 | 0 | 24 |
Current income tax receivable/payable | 92 | (91) | 67 |
Net cash provided by operating activities | 1,208 | 1,181 | 1,052 |
Cash Flows From Investing Activities | |||
Sale of fixed maturities | 102 | 36 | 23 |
Call or maturity of fixed maturities | 1,241 | 1,127 | 1,172 |
Sale of equity securities | 203 | 403 | 523 |
Purchase of fixed maturities | (1,742) | (1,510) | (1,723) |
Purchase of equity securities | (382) | (441) | (513) |
Investment in finance receivables | (34) | (33) | (32) |
Collection of finance receivables | 29 | 25 | 23 |
Investment in buildings and equipment | (24) | (20) | (16) |
Change in other invested assets, net | (72) | (38) | (15) |
Net cash used in investing activities | (679) | (451) | (558) |
Cash Flows From Financing Activities | |||
Payment of cash dividends to shareholders | (355) | (336) | (400) |
Shares acquired - share repurchase authorization | (67) | (125) | (92) |
Changes in note payable | 7 | 8 | 4 |
Proceeds from stock options exercised | 11 | 9 | 13 |
Contract holders' funds deposited | 86 | 84 | 79 |
Contract holders' funds withdrawn | (174) | (183) | (164) |
Other | (54) | (60) | (54) |
Net cash used in financing activities | (546) | (603) | (614) |
Net change in cash and cash equivalents | (17) | 127 | (120) |
Cash and cash equivalents at beginning of year | 784 | 657 | 777 |
Cash and cash equivalents at end of year | 767 | 784 | 657 |
Supplemental Disclosures of Cash Flow Information | |||
Interest paid | 53 | 53 | 52 |
Income taxes paid | 34 | 98 | 60 |
Noncash Activities | |||
Conversion of securities | 0 | 0 | 5 |
Equipment acquired under finance lease obligations | 14 | 21 | 14 |
Cashless exercise of stock options | 9 | 5 | 7 |
Other assets and other liabilities | $ 29 | $ 48 | $ 75 |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary Of Significant Accounting Policies | Summary of Significant Accounting Policies Nature of Operations Cincinnati Financial Corporation (CFC) operates through The Cincinnati Insurance Company and Cincinnati Global Underwriting Ltd. SM (Cincinnati Global) insurance subsidiaries and two complementary subsidiary companies. Cincinnati Global was acquired effective February 28, 2019. Refer to Note 20, Acquisition, for additional information. The Cincinnati Insurance Company leads our 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 1,796 independent insurance agencies with 2,458 reporting locations across 45 states. Other subsidiaries of The Cincinnati Insurance Company include: The Cincinnati Life Insurance Company, which markets life insurance and fixed annuities; and The Cincinnati Specialty Underwriters Insurance Company, which offers excess and surplus lines property casualty insurance products. The Cincinnati Insurance Company also conducts the business of our reinsurance assumed operations, Cincinnati Re SM . 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, 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). The consolidated financial statements include Cincinnati Global's results for the period from February 28, 2019, through December 31, 2019. Foreign exchange rates related to Cincinnati Global's operations did not have a material impact to our consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. The preparation of the consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. Our actual results could differ from those estimates. Investments Our portfolio investments are primarily in publicly traded fixed-maturity and equity security investments. Fixed-maturity investments (taxable bonds, tax-exempt bonds, redeemable preferred equities and commercial mortgage- backed securities) classified as available for sale and equity investments (common and nonredeemable preferred equities) are recorded at fair value in the consolidated financial statements. Beginning January 1, 2018, changes in fair value of equity securities are now reported in net income instead of other comprehensive income as stated below under ‘Adopted Accounting Updates’. The number of fixed-maturity securities with fair value below 100% 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. Impairment charges for fixed maturities are recorded for other-than-temporary declines in value if fair value is below amortized cost and, in the asset impairment committee’s judgment, the fair value is not expected to be recouped within a designated recovery period. Our invested asset impairment policy also states that fixed maturities with fair value 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 2019 , 2018 and 2017 . We include the noncredit portion of fixed-maturity OTTI charges and unrealized gains and losses on fixed-maturity investments, net of taxes, in shareholders’ equity as accumulated other comprehensive income (AOCI). Investment gains and losses are recognized in net income based on the trade date accounting method. Included within our other invested assets were $71 million and $60 million of private equity investments, $32 million and $33 million of life policy loans and $29 million and $30 million of real estate through direct property ownership and development projects in the United States at December 31, 2019 and 2018 , respectively. Other invested assets also included $164 million held on deposit at Lloyd's at December 31, 2019 . 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 and real estate development investments. Lloyd's deposits are held as cash and cash equivalents. Investment income, net of expenses, 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 is defined 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 the company’s nationally recognized 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 the company’s nationally recognized pricing vendor is immaterial. For the purpose of ASC 825 disclosure, we estimate the fair value of our 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, 2019 , 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 45 states. Our 10 largest states generated 54.8% and 58.4% of total earned premiums in 2019 and 2018 , respectively. Ohio, our largest state, accounted for 15.1% and 15.9% of total earned premiums in 2019 and 2018 , respectively. Illinois, Georgia, North Carolina, Indiana and Pennsylvania each accounted for between 4% and 6% of total earned premiums in 2019 . Our largest single agency relationship accounted for approximately 1.3% of our total property casualty earned premiums in 2019 . No aggregate agency relationship locations under a single ownership structure accounted for more than 4% of our total property casualty earned premiums in 2019 . 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 primarily 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. We assess recoverability of deferred acquisition costs at a 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 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. We estimate that we may recover some of our costs through salvage and subrogation. Policyholder Dividends Certain workers’ compensation policies include the possibility of a policyholder earning a return of a portion of 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 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. 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 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 and future 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 in proportion to premium revenue recognized. We use the same assumptions used in establishing the liability for the contract. 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 policy reserve 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 or notional benefit base. 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, 2019 , the current fair value of the BOLI invested assets and cash exceeded the current fair value of the contract holders’ account value by approximately $52 million . At December 31, 2018, the current fair value of the contract holders' account value exceeded the current fair value of the BOLI invested assets and cash by approximately $3 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 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 investment 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 The Cincinnati Insurance Company offers reinsurance assumed for casualty (predominantly domestic exposure), specialty and property (worldwide exposure). Treaties are written on a pro rata and excess of loss basis. We also continue to assume risk with limited exposure as a reinsurer for involuntary state pools. Written premium is recorded, net of contract specific retrocessions, on an ultimate estimate basis and primarily earned on a pro rata basis over the coverage period of the treaty. Expenses are recorded as per contract terms and deferred over the earning period of the premium. We establish known loss reserves when reported. We establish reserves for losses in excess of reported activity in the form of IBNR. Reserves are established using actuarial analysis, which includes models and methods traditionally used for the types of exposures written. We establish reserves for event specific occurrences using modeling data and company specific data when available. We enter into other reinsurance transactions to reduce risk and uncertainty by buying property casualty reinsurance and retrocessional reinsurance as well as life reinsurance. Reinsurance and retrocessional 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. Premiums that we cede 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 establish an insignificant allowance for uncollectible reinsurance. Income Taxes We calculate deferred income tax liabilities and assets using tax rates in effect when temporary differences in the consolidated financial statement income and taxable income are expected to reverse. We recognize deferred income taxes for numerous temporary differences between our taxable income and consolidated 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 premiums, insurance reserves and basis differences in the carrying value of investments held. We charge deferred income taxes associated with balances that impact other comprehensive income, such as unrealized appreciation and depreciation of fixed-maturity investments, to shareholders’ equity in accumulated other comprehensive income (AOCI). We charge deferred taxes associated with other differences to income. See Note 11, Income Taxes, for further detail on our uncertain tax positions and other income tax items. 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 finance 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, internal payroll and payroll-related costs. Our depreciation is based on estimated useful lives (ranging from three to 39.5 years ) using straight-line and accelerated methods. Depreciation expense was $25 million for 2019 , $31 million for 2018 and $28 million for 2017 . We review our accumulated depreciation for our building, equipment and software assets and write off fully depreciated assets for obsolesce and nonuse. 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 2019 , 2018 or 2017 . 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 sales-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 2019 , 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. Goodwill and Intangible Assets We recognize goodwill and intangible assets generated through acquisitions within other assets in the consolidated balance sheets. Goodwill arises when the fair value of consideration transferred exceeds the fair value of the net identifiable assets acquired at the acquisition date. Goodwill and intangible assets with an indefinite life are not amortized. Intangible assets with a definite life are amortized on a straight-line basis over the estimated useful lives as follows: broker relationships, 15 years ; internally developed technology, five years ; value of business acquired, over the remaining coverage period of the underlying insurance contracts. We test for impairments on an annual basis or more frequently if events or circumstances indicate that the asset might be impaired. The company performed its annual impairment test on goodwill and intangibles on September 30, which did not result in the recognition of an impairment loss. Subsequent Events There were no subsequent events requiring adjustment to the consolidated financial statements or disclosure. Adopted Accounting Updates ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 revised 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 company adopted this ASU on January 1, 2018, and applied it on a modified retrospective basis without prior period amounts restated. As a result of the adoption, $2.503 billion of after-tax unrealized gains on equity securities was reclassified on January 1, 2018, from accumulated other comprehensive income to retained earnings. Results of operations were impacted as changes in fair value of equity securities are now reported in net income instead of reported in other comprehensive income. As a result of the adoption of this ASU, for the year ended December 31, 2018, the net investment loss of $402 million in the consolidated statements of income included a decrease of $404 million from the fair value change of equity securities. ASU 2016-02, Leases (Topic 842) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The main provision of ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842 and ASU 2018-11, Targeted Improvements to Topic 842 . ASU 2018-10 makes narrow-scope amendments to certain aspects of the new leasing standard while ASU 2018-11 provides relief from costs of implementing certain aspects of the new leasing standard. The company adopted this ASU effective January 1, 2019, and it did not have a material impact on our company's consolidated financial position, cash flows or results of operations. The company has elected the practical expedient package for carrying forward historical lease classifications, not re-evaluating for embedded leases and not reassessing initial direct costs. The company also elected additional practical expedients to not recognize short-term leases on the balance sheet and to only combine lease and nonlease components for certain asset classes. We also elected not to restate prior periods. In support of our insurance operations, the company leases real estate properties which qualify as operating leases and also leases equipment and autos which qualify as finance leases. ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities In March 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08 amends guidance on the amortization period of premiums on certain purchased callable debt securities. The amendments shorten the amortization period of premiums on certain purchased callable debt securities to the earliest call date. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment to beginning retained earnings. The company adopted this ASU effective January 1, 2019, and it did not have a material impact on our company's consolidated financial position, cash flows or results of operations. ASU 2018-07, Compensation - Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . ASU 2018-07 expands the scope of Topic 718, Compensation - Stock Compensation , which currently only includes share-based payments issued to employees, to include share-based payments issued to nonemployees for the acquisition of goods and services. The company adopted this ASU effective January 1, 2019, and it did not have a material impact on our company's consolidated financial position, cash flows or results of operations. Pending Accounting Updates ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . In addition, the FASB issued ASU 2018-19, Codification Improvements to Topic 326 , ASU 2019-04, Codification Improvements to Topic 326, ASU 2019-05, Targeted Transition Relief and ASU 2019-11, Codification Improvements to Topic 326. These ASU’s amend previous guidance on the impairment of financial instruments by adding an impairment model that allows an entity to recognize expected credit losses as an allowance rather than impairing as they are incurred. The new guidance is intended to reduce complexity of credit impairment models and result in a more timely recognition of expected credit losses. The guidance is effective for reporting periods beginning after December 15, 2019, and for most affected instruments must be adopted using a modified retrospective approach, with a cumulative effect adjustment recorded to beginning retained earnings. These ASU's have not yet been adopted; however, they will not have a material impact on our company's consolidated financial position, cash flows or results of operations. ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts In August 2018, the FASB issued ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts . ASU 2018-12 is intended to improve the timeliness of recognizing changes in the liability for future policy benefits and modify the rate used to discount future cash flows. The ASU will simplify and improve the accounting for certain market-bas |
Investments
Investments | 12 Months Ended |
Dec. 31, 2019 | |
Investments [Abstract] | |
Investments | Investments The following table provides amortized cost, gross unrealized gains, gross unrealized losses and fair value for our fixed-maturity securities: (Dollars in millions) Amortized cost Gross unrealized Fair At December 31, 2019 gains losses Fixed-maturity securities: Corporate $ 6,074 $ 332 $ 5 $ 6,401 States, municipalities and political subdivisions 4,477 252 1 4,728 Commercial mortgage-backed 290 11 — 301 Government-sponsored enterprises 137 — 1 136 United States government 102 2 — 104 Foreign government 28 — — 28 Total $ 11,108 $ 597 $ 7 $ 11,698 At December 31, 2018 Fixed-maturity securities: Corporate $ 5,712 $ 85 $ 87 $ 5,710 States, municipalities and political subdivisions 4,251 84 31 4,304 Commercial mortgage-backed 287 3 2 288 Government-sponsored enterprises 316 1 7 310 United States government 67 1 1 67 Foreign government 10 — — 10 Total $ 10,643 $ 174 $ 128 $ 10,689 The net unrealized investment gains in our fixed-maturity portfolio at December 31, 2019 , 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, 2019 and 2018 . 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, 2019 Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Fixed-maturity securities: Corporate $ 199 $ 2 $ 118 $ 3 $ 317 $ 5 States, municipalities and political subdivisions 98 1 10 — 108 1 Commercial mortgage-backed 6 — — — 6 — Government-sponsored enterprises 26 1 51 — 77 1 United States government — — 4 — 4 — Foreign government 11 — — — 11 — Total $ 340 $ 4 $ 183 $ 3 $ 523 $ 7 At December 31, 2018 Fixed-maturity securities: Corporate $ 2,082 $ 51 $ 501 $ 36 $ 2,583 $ 87 States, municipalities and political subdivisions 823 18 340 13 1,163 31 Commercial mortgage-backed 77 — 64 2 141 2 Government-sponsored enterprises 49 1 211 6 260 7 United States government — — 33 1 33 1 Total $ 3,031 $ 70 $ 1,149 $ 58 $ 4,180 $ 128 Contractual maturity dates for fixed-maturity investments were: (Dollars in millions) Amortized cost Fair value % of fair value At December 31, 2019 Maturity dates: Due in one year or less $ 455 $ 459 3.9 % Due after one year through five years 3,180 3,302 28.2 Due after five years through ten years 3,792 4,011 34.3 Due after ten years 3,681 3,926 33.6 Total $ 11,108 $ 11,698 100.0 % 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, 2019 and 2018 , the company had fixed-maturity investments with a fair value of $117 million and $112 million , respectively, on deposit with various states in compliance with regulatory requirements. In addition, cash and fixed-maturity investments deposited with third parties used as collateral to secure liabilities on behalf of insureds, cedants and other creditors had a fair value of $95 million and $75 million at December 31, 2019 and 2018 , respectively. At December 31, 2019 , Apple, Inc. (Nasdaq:AAPL), an equity holding, was our largest single investment holding with a fair value of $414 million , which was 5.5% of our publicly traded common equities portfolio and 2.1% of the total investment portfolio. In the normal course of investing activities, the company enters into investments in limited partnerships, including private equity, real estate investments and asset-backed securities issued by third-parties. The company’s maximum exposure to loss with respect to these investments is limited to the investment carrying values included in the company’s consolidated balance sheets and any unfunded commitments. The following table provides investment income and investment gains and losses: (Dollars in millions) Years ended December 31, 2019 2018 2017 Investment income: Interest $ 446 $ 445 $ 445 Dividends 201 181 170 Other 12 5 4 Total 659 631 619 Less investment expenses 13 12 10 Total $ 646 $ 619 $ 609 Investment gains and losses, net: Equity securities: Investment gains and losses on securities sold, net $ 26 $ 9 $ — Unrealized gains and losses on securities still held, net 1,626 (404 ) — Gross realized gains — — 195 Gross realized losses — — (72 ) Other-than-temporary impairments — — (3 ) Subtotal 1,652 (395 ) 120 Fixed maturities: Gross realized gains 13 12 25 Gross realized losses (3 ) (2 ) — Other-than-temporary impairments (9 ) (5 ) (6 ) Subtotal 1 5 19 Other (3 ) (12 ) 9 Total $ 1,650 $ (402 ) $ 148 For the years ended December 31, 2019 , 2018 and 2017 , there were no credit losses on fixed-maturity securities for which a portion of OTTI has been recognized in other comprehensive income. During 2019 , we other-than-temporarily impaired three securities. At December 31, 2019 , 38 fixed-maturity investments with a total unrealized loss of $3 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% of amortized cost. During 2018 , we other-than-temporarily impaired one security. At December 31, 2018 , 400 fixed-maturity investments with a total unrealized loss of $58 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% of amortized cost. During 2017 , we other-than-temporarily impaired six securities. At December 31, 2017 , 249 fixed-maturity investments with a total unrealized loss of $18 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% of amortized cost. There were no equity security investments in an unrealized loss position for 12 months or more as of December 31, 2017 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
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, 2018 , 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, 2019 and 2018 . 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, 2019 Significant other observable inputs (Level 2) Total Fixed maturities, available for sale: Corporate $ — $ 6,401 $ — $ 6,401 States, municipalities and political subdivisions — 4,728 — 4,728 Commercial mortgage-backed — 301 — 301 Government-sponsored enterprises — 136 — 136 United States Government 104 — — 104 Foreign government — 28 — 28 Subtotal 104 11,594 — 11,698 Common equities 7,518 — — 7,518 Nonredeemable preferred equities — 234 — 234 Separate accounts taxable fixed maturities — 855 — 855 Top Hat savings plan mutual funds and common equity (included in Other assets) 45 — — 45 Total $ 7,667 $ 12,683 $ — $ 20,350 At December 31, 2018 Fixed maturities, available for sale: Corporate $ — $ 5,709 $ 1 $ 5,710 States, municipalities and political subdivisions — 4,300 4 4,304 Commercial mortgage-backed — 288 — 288 Government-sponsored enterprises — 310 — 310 United States Government 67 — — 67 Foreign government — 10 — 10 Subtotal 67 10,617 5 10,689 Common equities 5,742 — — 5,742 Nonredeemable preferred equities — 178 — 178 Separate accounts taxable fixed maturities — 791 — 791 Top Hat savings plan mutual funds and common equity (included in Other assets) 34 — — 34 Total $ 5,843 $ 11,586 $ 5 $ 17,434 We also held Level 1 cash and cash equivalents of $767 million and $784 million at December 31, 2019 and 2018 , respectively. Level 3 assets reported at fair value in our consolidated financial statements are not material, and therefore no further disclosures are provided. 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, 2019 Note payable $ — $ 39 $ — $ 39 6.900% senior debentures, due 2028 — 34 — 34 6.920% senior debentures, due 2028 — 506 — 506 6.125% senior notes, due 2034 — 512 — 512 Total $ — $ 1,091 $ — $ 1,091 At December 31, 2018 Note payable $ — $ 32 $ — $ 32 6.900% senior debentures, due 2028 — 32 — 32 6.920% senior debentures, due 2028 — 471 — 471 6.125% senior notes, due 2034 — 440 — 440 Total $ — $ 975 $ — $ 975 Fair value of the note payable was determined based upon the outstanding balance at December 31, 2019 and 2018 , because it is short term and tied to a variable interest rate. 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, 2019 and 2018 . None of the long-term debt is encumbered by rating triggers. The note payable and long-term debt were classified as Level 2 as an active market does not exist, but fair value is determined based on observable inputs. 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, 2019 Life policy loans $ — $ — $ 44 $ 44 At December 31, 2018 Life policy loans $ — $ — $ 40 $ 40 Outstanding principal and interest for these life policy loans totaled $32 million and $33 million at December 31, 2019 and 2018 , respectively. 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, 2019 Deferred annuities $ — $ — $ 770 $ 770 Structured settlements — 212 — 212 Total $ — $ 212 $ 770 $ 982 At December 31, 2018 Deferred annuities $ — $ — $ 742 $ 742 Structured settlements — 185 — 185 Total $ — $ 185 $ 742 $ 927 Recorded reserves for the deferred annuities were $760 million and $787 million at December 31, 2019 and 2018 , respectively. Recorded reserves for the structured settlements were $151 million and $156 million at December 31, 2019 and 2018 , respectively. Fair values for deferred annuities were calculated based upon internally developed models because active markets and observable inputs do not exist. 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, 2019 and 2018 , 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. Fair values for structured settlements were calculated based on internally developed models which assume 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, 2019 and 2018 , to account for nonperformance risk. The structured settlements were classified as Level 2 as an active market does not exist, but fair value is based on observable inputs. |
Property Casualty Loss And Loss
Property Casualty Loss And Loss Expenses | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
Property Casualty Loss And Loss Expenses | Property Casualty Loss and Loss Expenses We use actuarial methods, models, assumptions and judgment to estimate, as of a financial statement date, the property casualty loss and loss expense reserves required to pay for and settle all outstanding insured claims, including incurred but not reported (IBNR) claims, as of that date. The actuarial estimate is subject to review and adjustment by an inter-departmental committee that includes actuarial, claims, underwriting, loss prevention and finance management. This committee is familiar with relevant company and industry business, claims and underwriting trends, as well as general economic and legal trends that could affect future loss and loss expense payments. The amount we will actually have to pay for claims can be highly uncertain. This uncertainty, together with the size of our reserves, makes the loss and loss expense reserves our most significant estimate. Our reserving process takes into account known facts and interpretations of circumstances and factors including the type of claim, policy provisions pertaining to each claim, potential subrogation or salvage recoverable, large loss activity and trends, new business activity, judicial decisions, economic conditions, changes in law and regulation and product and underwriting changes. There have been no significant changes in methodologies and assumptions used in calculating loss and loss expense reserves for all years presented. There were no material additional premiums or return premiums accrued for as a result of prior-year effects. Our claims representatives establish case reserves when claims are reported to provide for our unpaid loss and loss expense obligation associated with individual claims. For events designated as natural catastrophes resulting in losses incurred related to direct premiums, we calculate IBNR reserves directly as a result of an estimated claim counts and estimated average dollar amount per claim for each event. Once individual case reserves are established for a catastrophe event, we reduce the IBNR reserves. Our actuarial staff uses generally accepted actuarial methods and models to derive ultimate loss and IBNR reserve estimates. The time interval between a claims occurrence and its settlement is one of the crucial attributes when estimating ultimate losses and IBNR reserves. Due to the uncertainties inherent with loss reserves, our ultimate loss experience could prove better or worse than what our carried reserves reflect. To the extent that reserves are inadequate and are required to be increased, the amount of the increase is a charge in that period, raising our loss and loss expense ratio and reducing earnings. To the extent that reserves are redundant and are required to be released, the amount of the release is a credit in that period, reducing our loss and loss expense ratio and increasing earnings. This table summarizes activity for our consolidated property casualty loss and loss expense reserves: (Dollars in millions) Years ended December 31, 2019 2018 2017 Gross loss and loss expense reserves, January 1 $ 5,646 $ 5,219 $ 5,035 Less reinsurance recoverable 238 187 298 Net loss and loss expense reserves, January 1 5,408 5,032 4,737 Net loss and loss expense reserves related to acquisition of Cincinnati Global at February 28, 2019 246 — — Net incurred loss and loss expenses related to: Current accident year 3,600 3,390 3,257 Prior accident years (248 ) (167 ) (119 ) Total incurred 3,352 3,223 3,138 Net paid loss and loss expenses related to: Current accident year 1,462 1,391 1,404 Prior accident years 1,798 1,456 1,439 Total paid 3,260 2,847 2,843 Net loss and loss expense reserves, December 31 5,746 5,408 5,032 Plus reinsurance recoverable 342 238 187 Gross loss and loss expense reserves, December 31 $ 6,088 $ 5,646 $ 5,219 In 2019 , 2018 and 2017 , the reserve for loss and loss expense in the consolidated balance sheets also included $59 million , $61 million and $54 million , respectively, for certain life and health loss and loss expense reserves. Additional disclosures for reserves related to these health claims are not material and therefore not provided. During 2019 , we experienced $248 million of favorable development on prior accident years including $192 million of favorable development in commercial lines, $27 million of favorable development in personal lines and $11 million of favorable development in excess and surplus lines. Within commercial lines, we recognized favorable development of $78 million for the commercial casualty line, $77 million for the workers' compensation line, $25 million for the commercial property line and $6 million for the commercial auto line due to reduced uncertainty of prior accident year loss and loss expense for these lines. Within personal lines, we recognized favorable reserve development of $26 million in personal auto. We recognized unfavorable reserve development of $11 million for the homeowner line of business due primarily to higher-than-anticipated loss development on known claims. During 2018 , we experienced $167 million of favorable development on prior accident years including $157 million of favorable development in commercial lines, $13 million of adverse development in personal lines, $24 million of favorable development in excess and surplus lines and $1 million of adverse development in our reinsurance assumed operations. We recognized favorable development of $58 million for the workers' compensation line and $47 million for both the commercial property line and commercial casualty line due to reduced uncertainty of prior accident year loss and loss expense for these lines. During 2017 , we experienced $119 million of favorable development on prior accident years including $73 million of favorable development in commercial lines, $14 million of favorable development in personal lines, $29 million of favorable development in excess and surplus lines and $3 million of favorable development in our reinsurance assumed operations. We recognized favorable development of $54 million for the workers’ compensation line, $33 million for the commercial property line and $30 million for the other commercial lines due to reduced uncertainty of prior accident year loss and loss expense for these lines. We recognized unfavorable reserve development of $33 million for the commercial auto line 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. Commercial casualty developed unfavorably by $11 million due to paid losses or re-estimates of case reserves at higher than expected levels. Included in our lines of business are asbestos and environmental claims. We carried $85 million and $89 million of net loss and loss expense reserves for asbestos and environmental claims at December 31, 2019 and 2018 , respectively. The asbestos and environmental claims amounts for each respective year constituted less than 2.0% 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 almost all policies or endorsed the exclusion to the policies. We have no exposure to asbestos and environmental claims with our recent acquisition of Cincinnati Global. We continue to monitor our claims for evidence of material exposure to other mass tort classes but have found no such credible evidence to date. The following table provides a reconciliation of the property casualty incurred losses and allocated loss adjustment expenses (ALAE) development and paid losses and ALAE development information at December 31, 2019 . (Dollars in millions) Cumulative incurred losses and ALAE as reported within the triangles, net of reinsurance Cumulative paid losses and ALAE as reported within the triangles, net of reinsurance Liabilities for loss and ALAE for accident years not presented in the triangles, net of reinsurance Total liabilities for loss and ALAE, net of reinsurance Reinsurance recoverable on unpaid losses Total liabilities for gross loss and loss expense reserves Commercial casualty $ 4,910 $ 2,863 $ 88 $ 2,135 $ 30 $ 2,165 Workers' compensation 2,061 1,433 295 923 64 987 Commercial auto 2,200 1,566 15 649 5 654 Commercial property 2,739 2,469 13 283 111 394 Personal auto 1,933 1,659 6 280 33 313 Homeowner 1,779 1,621 2 160 21 181 Excess and surplus 658 333 1 326 8 334 Other lines 771 Total liabilities for loss and ALAE reserves 5,799 Unallocated loss adjustment expense reserves 289 Gross loss and loss expense reserves $ 6,088 For all lines of business, the claim counts reported are primarily measured by insurance coverages that are triggered when a loss occurs and a reserve is established. For this purpose, coverages are defined as unique combinations of certain attributes such as line of business and cause of loss. Claims that are opened and closed without payment are included in the reported claim counts. Claim counts are presented on a direct basis only and do not reflect any assumed or ceded reinsurance. In the following tables, commercial casualty and workers' compensation each disclose 10 accident years of loss and ALAE reserves and cumulative number of reported claims. Commercial auto, commercial property, personal auto and homeowner each disclose five accident years of loss and ALAE reserves and cumulative number of reported claims as each of these lines have five year cumulative average annual percentage payouts of approximately 95% or higher. The excess and surplus lines began operations in 2008 with earned premiums and loss and ALAE reserves being immaterial prior to 2011. Accordingly, we disclosed nine accident years of loss and ALAE reserves and cumulative number of reported claims for the excess and surplus lines, and will disclose additional accident years in subsequent annual filings, not to exceed 10 years. Commercial Casualty The following table shows the commercial casualty incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency: (Dollars in millions, reported claims in thousands) As of December 31, 2019 Incurred losses and ALAE, net of reinsurance for the years ended December 31, Total of incurred but not reported liabilities plus expected development on reported losses Cumulative number of reported claims Accident Unaudited Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 495 $ 394 $ 378 $ 349 $ 347 $ 348 $ 349 $ 343 $ 341 $ 336 $ 11 20 2011 466 404 377 377 375 380 366 365 368 11 19 2012 466 414 417 394 394 404 399 397 14 18 2013 448 443 431 416 413 407 391 31 20 2014 503 496 479 476 479 465 34 21 2015 533 526 529 516 508 78 21 2016 563 574 557 555 120 21 2017 610 597 577 160 20 2018 650 641 272 20 2019 672 440 15 Total $ 4,910 Cumulative paid losses and ALAE, net of reinsurance 2010 $ 33 $ 92 $ 159 $ 203 $ 256 $ 285 $ 300 $ 314 $ 318 $ 321 2011 27 93 149 227 266 298 315 325 337 2012 27 88 170 232 288 330 346 364 2013 35 90 159 232 286 312 337 2014 34 97 172 287 338 390 2015 38 108 200 287 362 2016 46 126 228 331 2017 48 122 234 2018 44 148 2019 39 Total 2,863 All outstanding liabilities before 2010, net of reinsurance 88 Liabilities for loss and ALAE, net of reinsurance $ 2,135 The following table shows the average annual percentage payout of incurred losses for the commercial casualty line of business: Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited) Years 1 2 3 4 5 6 7 8 9 10 Average annual percentage payout 7.8% 15.0% 18.2% 18.4% 13.3% 9.1% 4.8% 3.9% 2.2% 0.8% Workers’ Compensation The following table shows the workers’ compensation incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency: (Dollars in millions, reported claims in thousands) As of December 31, 2019 Incurred losses and ALAE, net of reinsurance for the years ended December 31, Total of incurred Cumulative number of reported claims Accident Unaudited Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 283 $ 274 $ 248 $ 242 $ 240 $ 239 $ 240 $ 237 $ 236 $ 237 $ 19 26 2011 284 251 246 242 239 236 231 229 228 17 24 2012 265 245 234 220 213 211 209 208 21 21 2013 264 246 221 212 208 205 202 16 20 2014 261 233 214 203 201 198 18 19 2015 246 220 208 195 179 33 17 2016 230 218 206 188 31 16 2017 218 208 190 56 15 2018 222 207 65 15 2019 224 90 13 Total $ 2,061 Cumulative paid losses and ALAE, net of reinsurance 2010 $ 67 $ 134 $ 164 $ 181 $ 192 $ 198 $ 202 $ 204 $ 207 $ 209 2011 65 131 161 177 186 190 192 195 197 2012 62 121 147 162 171 175 178 180 2013 61 119 144 157 164 168 170 2014 56 110 134 148 157 162 2015 47 93 115 129 134 2016 46 97 119 131 2017 45 88 106 2018 48 95 2019 49 Total 1,433 All outstanding liabilities before 2010, net of reinsurance 295 Liabilities for loss and ALAE, net of reinsurance $ 923 The following table shows the average annual percentage payout of incurred losses for the workers’ compensation line of business: Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited) Years 1 2 3 4 5 6 7 8 9 10 Average annual percentage payout 26.4% 26.7% 12.0% 7.0% 3.9% 2.2% 1.3% 1.0% 1.2% 0.8% Commercial Auto The following table shows the commercial auto incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency: (Dollars in millions, reported claims in thousands) As of December 31, 2019 Incurred losses and ALAE, net of reinsurance for the years ended December 31, Total of incurred Cumulative number of reported claims Accident Unaudited Year 2015 2016 2017 2018 2019 2015 $ 374 $ 384 $ 394 $ 401 $ 400 $ 3 51 2016 417 430 450 463 7 53 2017 451 441 443 27 51 2018 453 442 72 49 2019 452 133 42 Total $ 2,200 Cumulative paid losses and ALAE, net of reinsurance 2015 $ 173 $ 244 $ 303 $ 349 $ 375 2016 184 273 350 408 2017 187 266 334 2018 184 266 2019 183 Total 1,566 All outstanding liabilities before 2015, net of reinsurance 15 Liabilities for loss and ALAE, net of reinsurance $ 649 The following table shows the average annual percentage payout of incurred losses for the commercial auto line of business. Commercial auto includes both physical damage and liability losses. A majority of the incurred losses paid after year 2 are the result of liability losses. Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited) Years 1 2 3 4 5 Average annual percentage payout 41.4% 18.4% 15.5% 12.1% 6.3% Commercial Property The following table shows the commercial property incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency: (Dollars in millions, reported claims in thousands) As of December 31, 2019 Incurred losses and ALAE, net of reinsurance for the years ended December 31, Total of incurred Cumulative number of reported claims Accident Unaudited Year 2015 2016 2017 2018 2019 2015 $ 454 $ 414 $ 416 $ 415 $ 414 $ 2 17 2016 590 551 541 545 4 17 2017 587 560 556 5 18 2018 630 603 9 18 2019 621 22 15 Total $ 2,739 Cumulative paid losses and ALAE, net of reinsurance 2015 $ 279 $ 388 $ 407 $ 411 $ 411 2016 358 504 528 539 2017 395 522 547 2018 386 559 2019 413 Total 2,469 All outstanding liabilities before 2015, net of reinsurance 13 Liabilities for loss and ALAE, net of reinsurance $ 283 The following table shows the average annual percentage payout of incurred losses for the commercial property line of business: Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited) Years 1 2 3 4 5 Average annual percentage payout 66.9% 26.2% 4.5% 1.5% 0.1% Personal Auto The following table shows the personal auto incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency: (Dollars in millions, reported claims in thousands) As of December 31, 2019 Incurred losses and ALAE, net of reinsurance for the years ended December 31, Total of incurred Cumulative number of reported claims Accident Unaudited Year 2015 2016 2017 2018 2019 2015 $ 343 $ 356 $ 356 $ 360 $ 361 $ — 108 2016 383 384 386 384 — 110 2017 412 394 391 — 109 2018 424 398 18 111 2019 399 54 96 Total $ 1,933 Cumulative paid losses and ALAE, net of reinsurance 2015 $ 229 $ 292 $ 325 $ 346 $ 354 2016 243 316 351 370 2017 256 324 358 2018 262 327 2019 250 Total 1,659 All outstanding liabilities before 2015 net of reinsurance 6 Liabilities for loss and ALAE, net of reinsurance $ 280 The following table shows the average annual percentage payout of incurred losses for the personal auto line of business. Personal auto includes both physical damage and liability losses. A majority of the incurred losses paid after year 2 are the result of liability losses. Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited) Years 1 2 3 4 5 Average annual percentage payout 64.2% 17.4% 9.1% 5.4% 2.4% Homeowner The following table shows the homeowner incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency: (Dollars in millions, reported claims in thousands) As of December 31, 2019 Incurred losses and ALAE, net of reinsurance for the years ended December 31, Total of incurred Cumulative number of reported claims Accident Unaudited Year 2015 2016 2017 2018 2019 2015 $ 284 $ 275 $ 275 $ 274 $ 274 $ — 24 2016 315 304 303 302 — 23 2017 356 383 385 1 26 2018 370 386 6 23 2019 432 39 20 Total $ 1,779 Cumulative paid losses and ALAE, net of reinsurance 2015 $ 203 $ 260 $ 269 $ 272 $ 273 2016 208 283 295 299 2017 277 356 378 2018 268 368 2019 303 Total 1,621 All outstanding liabilities before 2015, net of reinsurance 2 Liabilities for loss and ALAE, net of reinsurance $ 160 The following table shows the average annual percentage payout of incurred losses for the homeowner line of business: Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited) Years 1 2 3 4 5 Average annual percentage payout 70.9% 23.0% 4.4% 1.2% 0.3% Excess and Surplus Lines The following table shows the excess and surplus lines incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency: (Dollars in millions, reported claims in thousands) As of December 31, 2019 Incurred losses and ALAE, net of reinsurance for the years ended December 31, Total of incurred Cumulative number of reported claims Accident Unaudited Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2011 $ 48 $ 47 $ 44 $ 38 $ 36 $ 35 $ 35 $ 34 $ 34 $ — 1 2012 67 56 49 40 37 36 35 36 1 1 2013 74 64 54 45 42 41 41 1 2 2014 95 82 75 64 60 59 6 2 2015 96 81 73 67 65 8 2 2016 93 87 84 82 14 3 2017 104 95 95 26 3 2018 116 109 44 3 2019 137 83 2 Total $ 658 Cumulative paid losses and ALAE, net of reinsurance 2011 $ 8 $ 14 $ 23 $ 27 $ 30 $ 32 $ 34 $ 33 $ 33 2012 9 15 19 25 29 31 32 33 2013 7 12 20 27 32 34 37 2014 9 17 27 37 43 48 2015 8 19 29 41 51 2016 10 21 39 51 2017 11 23 41 2018 11 26 2019 13 Total 333 All outstanding liabilities before 2011, net of reinsurance 1 Liabilities for loss and ALAE, net of reinsurance $ 326 The following table shows the average annual percentage payout of incurred losses for the excess and surplus lines insurance segment. Excess and surplus lines consist mostly of commercial casualty and commercial property coverages. A majority of the incurred losses paid after year 2 are the result of commercial casualty losses. Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited) Years 1 2 3 4 5 6 7 8 9 Average annual percentage payout 15.3% 14.4% 19.1% 15.5% 11.6% 7.2% 3.3% 1.3% 0.8% |
Life Policy And Investment Cont
Life Policy And Investment Contract Reserves | 12 Months Ended |
Dec. 31, 2019 | |
Liability for Future Policy Benefit, before Reinsurance [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 and future 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, 2019 2018 Life policy reserves: Ordinary/traditional life $ 1,226 $ 1,149 Other 50 48 Subtotal 1,276 1,197 Investment contract reserves: Deferred annuities 760 787 Universal life 640 632 Structured settlements 151 156 Other 8 7 Subtotal 1,559 1,582 Total life policy and investment contract reserves $ 2,835 $ 2,779 |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Costs [Abstract] | |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs Expenses directly related to successfully acquired insurance policies – primarily commissions, premium taxes and underwriting costs – are deferred and amortized over the terms of the policies. We update our acquisition cost assumptions periodically to reflect actual experience, and we evaluate the costs for recoverability. The table below shows the deferred policy acquisition costs and asset reconciliation: (Dollars in millions) Years ended December 31, 2019 2018 2017 Property casualty: Deferred policy acquisition costs asset, January 1 $ 464 $ 438 $ 408 Capitalized deferred policy acquisition costs 1,034 933 897 Amortized deferred policy acquisition costs (986 ) (907 ) (867 ) Deferred policy acquisition costs asset, December 31 $ 512 $ 464 $ 438 Life: Deferred policy acquisition costs asset, January 1 $ 274 $ 232 $ 229 Capitalized deferred policy acquisition costs 61 60 51 Amortized deferred policy acquisition costs (48 ) (39 ) (46 ) Shadow deferred policy acquisition costs (25 ) 21 (2 ) Deferred policy acquisition costs asset, December 31 $ 262 $ 274 $ 232 Consolidated: Deferred policy acquisition costs asset, January 1 $ 738 $ 670 $ 637 Capitalized deferred policy acquisition costs 1,095 993 948 Amortized deferred policy acquisition costs (1,034 ) (946 ) (913 ) Shadow deferred policy acquisition costs (25 ) 21 (2 ) Deferred policy acquisition costs asset, December 31 $ 774 $ 738 $ 670 No premium deficiencies were recorded in the consolidated statements of income in 2019 , 2018 and 2017 , as the sum of the anticipated loss and loss expenses, policyholder dividends and unamortized deferred acquisition expenses did not exceed the related unearned premiums and anticipated investment income. |
Note Payable
Note Payable | 12 Months Ended |
Dec. 31, 2019 | |
Notes Payable, Current [Abstract] | |
Note Payable | Note Payable We have one line of credit through multiple commercial banks that was due to expire May 13, 2019. Effective February 4, 2019, we extended our unsecured revolving credit facility for five years , amending the expiration to February 4, 2024, with the option of two one-year extensions. The borrowing capacity was increased to $300 million from $225 million with an additional $300 million accordion feature. Terms and conditions are similar to the former agreement except the net worth covenant has been eliminated and the debt-to-total capital maximum shall not exceed 35% . On December 6, 2019, we exercised our option to extend the term of the line of credit one year to February 4, 2025. We had no compensating balance requirements on short-term debt for either 2019 or 2018 . At December 31, 2019 and 2018, $39 million and $32 million was drawn on the line of credit, respectively. The interest rate charged on our borrowings on this credit agreement ranged from 2.59% to 3.41% during 2019 and ranged from 2.45% to 4.75% during 2018 . In addition, we have letters of credit related to our Cincinnati Re and Cincinnati Global operations with no amounts drawn at December 31, 2019 and 2018. |
Long-Term Debt And Lease Obliga
Long-Term Debt And Lease Obligation | 12 Months Ended |
Dec. 31, 2019 | |
Long-term Debt and Lease Obligation [Abstract] | |
Long-Term Debt And Capital Lease Obligation | Long-Term Debt and 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, 2019 2018 2019 2018 6.900% 1998 Senior debentures, due 2028 $ 27 $ 27 $ 28 $ 28 6.920% 2005 Senior debentures, due 2028 391 391 391 391 6.125% 2004 Senior notes, due 2034 370 370 374 374 Total $ 788 $ 788 $ 793 $ 793 The finance lease term for equipment and autos is 3 to 6 years while the operating lease term for real estate properties is typically 5 years . Lease obligations totaled $57 million and $46 million in 2019 and 2018 , respectively. Included in the consolidated balance sheet lease obligations is a net $1 million for interest and remaining lease residual values for finance leases we expect to pay. Below are the expected lease obligations we expect to pay through years 2025 and thereafter: (Dollars in millions) Years ended December 31, 2020 2021 2022 2023 2024 2025 and thereafter Finance lease obligations $ 14 $ 10 $ 8 $ 6 $ 3 $ 1 Operating lease obligations 5 2 2 2 1 3 Total lease obligations $ 19 $ 12 $ 10 $ 8 $ 4 $ 4 The following table provides lease cost and other information for the year ended December 31, 2019: (Dollars in millions) 2019 Lease cost: Finance lease cost $ 9 Operating lease cost 4 Total lease cost $ 13 Other information finance leases: Finance cash outflows $ 15 Weighted average discount rate 2.96 % Weighted average remaining lease term in years 3.65 Other information operating leases: Operating cash outflows $ 8 Weighted average discount rate 3.69 % Weighted average remaining lease term in years 4.71 |
Shareholders' Equity And Divide
Shareholders' Equity And Dividend Restrictions | 12 Months Ended |
Dec. 31, 2019 | |
Shareholders Equity And Dividend Restrictions [Abstract] | |
Shareholders' Equity And Dividend Restrictions | Shareholders’ Equity and Dividend Restrictions Declared cash dividends per share were $2.24 , $2.12 and $2.50 for the years ended December 31, 2019 , 2018 and 2017 , respectively. Our lead insurance subsidiary, The Cincinnati Insurance Company, paid dividends to the parent company of $625 million in 2019 , $500 million in 2018 and $465 million in 2017 . State regulatory requirements restrict the dividends insurance subsidiaries can pay. Generally, the most our lead insurance subsidiary can pay without prior regulatory approval is the greater of 10% of statutory capital and surplus or 100% 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 2020 , the total that our lead insurance subsidiary may pay in dividends is approximately $562 million . Dividend payments from Cincinnati Global to the parent company are subject to regulation by UK law. Cincinnati Global paid no dividends to the parent company in 2019 . 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) 2019 2018 2017 Before tax Income tax Net Before Income Net Before Income Net Investments: AOCI, January 1 $ 46 $ 9 $ 37 $ 3,540 $ 733 $ 2,807 $ 2,625 $ 908 $ 1,717 Cumulative effect of change in accounting for equity securities as of January 1, 2018 — — — (3,155 ) (652 ) (2,503 ) — — — Adjusted AOCI, beginning of period 46 9 37 385 81 304 2,625 908 1,717 OCI before investment gains and losses, net, recognized in net income 545 115 430 (334 ) (71 ) (263 ) 1,054 366 688 Investment gains and losses, net, recognized in net income (1 ) (1 ) — (5 ) (1 ) (4 ) (139 ) (49 ) (90 ) OCI 544 114 430 (339 ) (72 ) (267 ) 915 317 598 Adjustment to reclassify certain tax effects from AOCI — — — — — — — (492 ) 492 AOCI, December 31 $ 590 $ 123 $ 467 $ 46 $ 9 $ 37 $ 3,540 $ 733 $ 2,807 Pension obligations: AOCI, January 1 $ (16 ) $ (2 ) $ (14 ) $ (12 ) $ (1 ) $ (11 ) $ (26 ) $ (8 ) $ (18 ) OCI excluding amortization recognized in net income 6 2 4 (5 ) (1 ) (4 ) 12 6 6 Amortization recognized in net income 1 — 1 1 — 1 2 1 1 OCI 7 2 5 (4 ) (1 ) (3 ) 14 7 7 AOCI, December 31 $ (9 ) $ — $ (9 ) $ (16 ) $ (2 ) $ (14 ) $ (12 ) $ (1 ) $ (11 ) Life deferred acquisition costs, life policy reserves and other: AOCI, January 1 $ (1 ) $ — $ (1 ) $ (10 ) $ (2 ) $ (8 ) $ (9 ) $ (3 ) $ (6 ) OCI before investment gains and losses, net, recognized in net income (15 ) (3 ) (12 ) (3 ) (1 ) (2 ) 8 5 3 Investment gains and losses, net, recognized in net income 3 — 3 12 3 9 (9 ) (4 ) (5 ) OCI (12 ) (3 ) (9 ) 9 2 7 (1 ) 1 (2 ) AOCI, December 31 $ (13 ) $ (3 ) $ (10 ) $ (1 ) $ — $ (1 ) $ (10 ) $ (2 ) $ (8 ) Summary of AOCI: AOCI, January 1 $ 29 $ 7 $ 22 $ 3,518 $ 730 $ 2,788 $ 2,590 $ 897 $ 1,693 Cumulative effect of change in accounting for equity securities as of January 1, 2018 — — — (3,155 ) (652 ) (2,503 ) — — — Adjusted AOCI, beginning of period 29 7 22 363 78 285 2,590 897 1,693 Investments OCI 544 114 430 (339 ) (72 ) (267 ) 915 317 598 Pension obligations OCI 7 2 5 (4 ) (1 ) (3 ) 14 7 7 Life deferred acquisition costs, life policy reserves and other OCI (12 ) (3 ) (9 ) 9 2 7 (1 ) 1 (2 ) Total OCI 539 113 426 (334 ) (71 ) (263 ) 928 325 603 Adjustment to reclassify certain tax effects from AOCI — — — — — — — (492 ) 492 AOCI, December 31 $ 568 $ 120 $ 448 $ 29 $ 7 $ 22 $ 3,518 $ 730 $ 2,788 Investments gains and losses, net, and life deferred acquisition costs, life policy reserves and other investment gains and losses, net, are recorded in the investment gains and losses, net, line item in the consolidated statements of income. Amortization on pension obligations is recorded in the insurance losses and contract holders' benefits and underwriting, acquisition and insurance expenses line items in the consolidated statements of income. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2019 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Reinsurance Primary components of our property casualty reinsurance assumed operations include involuntary and voluntary assumed as well as contracts from our reinsurance assumed operations, known as Cincinnati Re. Primary components of our ceded reinsurance include a property per risk treaty, property excess treaty, casualty per occurrence treaty, casualty excess treaty, property catastrophe treaty and 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. The table below summarizes our consolidated property casualty insurance net written premiums, earned premiums and incurred loss and loss expenses: (Dollars in millions) Years ended December 31, 2019 2018 2017 Direct written premiums $ 5,477 $ 5,018 $ 4,854 Assumed written premiums 244 173 125 Ceded written premiums (205 ) (161 ) (139 ) Net written premiums $ 5,516 $ 5,030 $ 4,840 Direct earned premiums $ 5,340 $ 4,931 $ 4,752 Assumed earned premiums 199 149 132 Ceded earned premiums (205 ) (160 ) (162 ) Earned premiums $ 5,334 $ 4,920 $ 4,722 Direct incurred loss and loss expenses $ 3,402 $ 3,188 $ 2,961 Assumed incurred loss and loss expenses 117 125 113 Ceded incurred loss and loss expenses (167 ) (90 ) 64 Incurred loss and loss expenses $ 3,352 $ 3,223 $ 3,138 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. The table below summarizes our consolidated life insurance earned premiums and contract holders' benefits incurred: (Dollars in millions) Years ended December 31, 2019 2018 2017 Direct earned premiums $ 341 $ 320 $ 300 Ceded earned premiums (71 ) (70 ) (68 ) Earned premiums $ 270 $ 250 $ 232 Direct contract holders' benefits incurred $ 359 $ 328 $ 319 Ceded contract holders' benefits incurred (73 ) (61 ) (67 ) Contract holders' benefits incurred $ 286 $ 267 $ 252 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, 2019 | |
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, 2019 2018 Deferred tax assets: Loss and loss expense reserves $ 66 $ 60 Unearned premiums 113 105 Deferred international earnings 51 — Other 39 33 Deferred tax assets before valuation allowance 269 198 Valuation allowance for international operations 41 — Deferred tax assets net of valuation allowance 228 198 Deferred tax liabilities: Investment gains and other, net 995 542 Deferred acquisition costs 139 131 Life policy reserves 120 117 Investments 23 18 Other 30 17 Total gross deferred tax liabilities 1,307 825 Net deferred income tax liability $ 1,079 $ 627 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. Deferred tax assets are reduced by a valuation allowance when management believes it is more likely than not that some, or all, of the deferred tax assets will not be realized. After considering all positive and negative evidence of taxable income in the carryback and carryforward periods as permitted by law, we believe it is more likely than not that all of the deferred tax asset on our U.S. domestic operations will be realized. As a result, we have no valuation allowance as of December 31, 2019 and 2018 for our U.S. domestic operations. As more fully discussed below, we do carry a valuation allowance on the deferred tax assets related to Cincinnati Global, which we acquired in 2019. For financial reporting purposes, income before income taxes includes the following components: (Dollars in millions) For the years ended December 31, 2019 2018 2017 United States $ 2,440 $ 251 $ 730 International 32 — — Total income before income taxes $ 2,472 $ 251 $ 730 The provision (benefit) for income taxes consists of: (Dollars in millions) For the years ended December 31, 2019 2018 2017 Provision (benefit) for income taxes: Current – United States federal $ 137 $ 11 $ 129 International (5 ) — — Total current 132 11 129 Deferred – United States federal 338 (47 ) (444 ) International 5 — — Total deferred 343 (47 ) (444 ) Total provision (benefit) for income taxes $ 475 $ (36 ) $ (315 ) The differences between the 21% and 35% statutory federal income tax rate and our effective income tax rate were as follows: (Dollars in millions) Years ended December 31, 2019 2018 2017 Tax at statutory rate: $ 519 21.0 % $ 53 21.0 % $ 256 35.0 % Increase (decrease) resulting from: Tax-exempt income from municipal bonds (19 ) (0.8 ) (20 ) (8.0 ) (36 ) (4.9 ) Dividend received exclusion (16 ) (0.6 ) (15 ) (6.0 ) (34 ) (4.7 ) Tax accounting method changes — — (50 ) (19.9 ) — — Deferred tax benefit due to tax rate change — — — — (495 ) (67.8 ) Other (9 ) (0.4 ) (4 ) (1.4 ) (6 ) (0.8 ) Provision (benefit) for income taxes $ 475 19.2 % $ (36 ) (14.3 )% $ (315 ) (43.2 )% In 2018, we received approval from the IRS to change our method of tax accounting for certain items applicable for the 2017 tax year and tax return, primarily related to the valuation of our tax basis unpaid losses. Accounting guidance does not allow recognition of the impact of certain tax accounting method changes until approved by the IRS. As a result, we recognized a $50 million income tax benefit in 2018 for the difference between the current 21% tax rate and the 2017 tax rate of 35% for the related items. This reduced our effective tax rate by 19.9% for the year ended December 31, 2018. On December 22, 2017, the Tax Cuts and Jobs Act (Tax Act) was enacted and represented one of the most comprehensive changes in U.S. corporate income taxation since 1986. The Tax Act revised the U.S. corporate income tax by lowering the corporate income tax rate from a top marginal rate of 35% to a flat rate of 21% . In addition to lowering tax rates, changes were made to the amount of the dividends received deduction and the required proration addback for qualified dividend income and tax exempt municipal interest. The Tax Act was effective January 1, 2018. The reduction in corporate income tax rate decreased our net deferred tax liability as of December 22, 2017, by $495 million . The effect of the rate change was recorded as a one-time noncash benefit to income tax expense in our consolidated statements of income for the year ended December 31, 2017. This benefit results from re-measuring our net deferred tax liability at the newly enacted corporate income tax rate of 21% (the rate at which the deferred items are expected to be reversed) versus the 35% rate at which the net deferred tax benefits were previously carried. Of this $495 million benefit, $492 million relates to net unrealized gains on investments and other AOCI amounts. The remainder relates to differences in the recognition of deferred acquisition costs, unearned premiums, insurance reserves and basis differences in the carrying value of investments held. The provision for federal income taxes is based upon the filing of a consolidated income tax return for the company and its domestic subsidiaries within the United States. As of December 31, 2019, 2018 and 2017, we have no operating loss carryforwards in the United States. The life group operating loss carryforward from our 2017 tax year was fully utilized in our 2018 tax year resulting in a tax benefit of less than one million. For the years ended December 31, 2019, 2018 and 2017, we have no capital loss carryforwards in the United States. As more fully discussed below, Cincinnati Global which we acquired in 2019, has operating loss carryforwards in the United Kingdom. Unrecognized Tax Benefits As of December 31, 2019 and 2018, we had a gross unrecognized tax benefit of $34 million . We carried no amounts for unrecognized tax benefits for the year ended December 31, 2017. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits. (Dollars in millions) Years ended December 31, 2019 2018 2017 Gross unrecognized tax benefits at January 1 $ 34 $ — $ — Gross increase in prior year positions — — — Gross decrease in prior year positions — — — Gross increase in current year positions — 34 — Settlements with tax authorities — — — Lapse of statute of limitations — — — Gross unrecognized tax benefits at December 31 $ 34 $ 34 $ — The unrecognized tax benefit liability is carried in other liabilities in the consolidated balance sheets. Included in the unrecognized tax benefit liability as of December 31, 2019 is $34 million , if recognized, would affect the effective tax rate. Although no interest and penalties currently are accrued, if incurred, they would be recognized as a component of income tax expense. We do not expect any changes to our unrecognized tax benefit liability in the next twelve months. The statute of limitations for federal tax purposes has closed for tax years ended December 31, 2015 and earlier. In 2019, the IRS began its examination of the tax year ended December 31, 2017. At this time, no adjustments have been proposed. 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 ended December 31, 2015 and earlier. Cincinnati Global operates in the United Kingdom and as such, is subject to tax in that jurisdiction. The statute of limitation for tax return review by Her Majesty’s Revenue and Customs (HMRC) has closed for tax years ended December 31, 2017 and earlier. There are currently no tax returns under review by HMRC. Income taxes paid in our consolidated statements of cash flows are shown net of refunds received. We received refunds of $94 million in 2019 , none in 2018 and $18 million in 2017. Acquisition of Cincinnati Global As more fully discussed in Note 1, Accounting Policies and Note 20, Acquisition, we closed on the acquisition of Cincinnati Global during the first quarter of 2019. As a result of this acquisition, $59 million of net deferred tax assets were acquired or established at the acquisition date with an offsetting valuation allowance of $55 million. As of December 31, 2019, Cincinnati Global had $41 million of net deferred tax assets with an offsetting valuation allowance of $41 million . Deferred tax assets are reduced by a valuation allowance when management believes it is more likely than not that some, or all, of the deferred tax assets will not be realized. After considering all positive and negative evidence related to the Cincinnati Global operations, we believe it was appropriate to set up a valuation allowance for purposes of our opening Cincinnati Global balance sheet and is appropriate to carry a valuation allowance as of December 31, 2019. The following is a tabular reconciliation of the total amounts of our Cincinnati Global valuation allowance. (Dollars in millions) Years ended December 31, 2019 2018 2017 Valuation allowance at January 1 $ — $ — $ — Acquisition accounting amount 55 — — Current year operations (14 ) — — Valuation allowance at December 31 $ 41 $ — $ — As of December 31, 2019, Cincinnati Global had operating loss carryforwards of $147 million in the United Kingdom. These Cincinnati Global losses can only be utilized within the Cincinnati Global group in the United Kingdom and cannot offset the income of our CFC group domestic operations in the United States. |
Net Income Per Common Share
Net Income Per Common Share | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 2018 2017 Numerator: Net income—basic and diluted $ 1,997 $ 287 $ 1,045 Denominator: Basic weighted-average common shares outstanding 163.2 163.2 164.2 Effect of share-based awards: Stock options 1.2 0.8 1.1 Nonvested shares 0.7 0.5 0.7 Diluted weighted-average shares 165.1 164.5 166.0 Earnings per share: Basic $ 12.24 $ 1.76 $ 6.36 Diluted 12.10 1.75 6.29 Number of anti-dilutive share-based awards — 1.3 0.7 The 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 2019 , 2018 and 2017 |
Employee Retirement Benefits
Employee Retirement Benefits | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Retirement Benefits | Employee Retirement Benefits We sponsor a qualified defined benefit pension plan that we closed entry into 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. During 2008, we changed the form of retirement benefit we offer some associates to a company match on contributions to a 401(k) plan as further explained below. For participants remaining in the pension plan, we continue 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 net periodic benefit cost 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 sponsor a defined contribution plan (401(k) plan) for eligible associates with matching company contributions totaling $19 million , $18 million and $16 million during the years 2019 , 2018 and 2017 , respectively. Associates who are not accruing benefits under the pension plan are eligible to receive the company match of up to 6% of cash compensation. 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 $11 million at year-end 2019 and $10 million at year-end 2018 , 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 $45 million and $34 million at December 31, 2019 and 2018 , respectively. Company matching contributions to the CFC Top Hat Savings Plan totaled approximately $1 million for the years 2019 , 2018 and 2017 , 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 2019 2018 2019 2018 Discount rate 3.40 % 4.34 % 3.33 % 4.25 % Rate of compensation increase 2.25-3.25 2.25-3.25 2.25-3.25 2.25-3.25 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 decreased the rate from the prior year by 0.94 percentage points for the qualified pension plan and by 0.92 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 is updated annually to reflect the updated scale, but at year-end 2019 the base table was also changed to reflect the Pri-2012 tables released in 2019 . The RP-2014 table projected generationally with Scale MP-2018 and Scale MP-2017 were used for the years 2018 and 2017 , respectively. The updated mortality table did not have a significant impact on our consolidated 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 periodic benefit cost for the plans: Qualified Pension Plan SERP 2019 2018 2017 2019 2018 2017 Discount rate 4.34 % 3.73 % 4.30 % 4.25 % 3.61 % 4.10 % Expected return on plan assets 7.00 7.25 7.25 n/a n/a n/a Rate of compensation increase 2.25-3.25 2.75-3.25 2.75-3.25 2.25-3.25 2.75-3.25 2.75-3.25 The discount rate was increased by 0.61 percentage points for the qualified pension plan and 0.64 percentage points for the SERP due to market interest rate conditions at the beginning of 2019 . 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 2019 expectations of interest rates and based partially on the fact that the plan’s common stock holdings pay dividends. We review historical actual return on plan assets when determining our expected long-term rate of return. Total portfolio return for 2019 was 24.5% and for 2018 was negative 1.7% . Our compensation increase assumptions in 2019 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, 2019 2018 Change in projected benefit obligation: Benefit obligation, January 1 $ 318 $ 351 Service cost 8 11 Interest cost 13 13 Actuarial loss (gain) 45 (19 ) Benefits paid (34 ) (38 ) Projected benefit obligation, December 31 $ 350 $ 318 Change in plan assets: Fair value of plan assets, January 1 $ 318 $ 345 Actual return on plan assets 70 (4 ) Employer contribution — 15 Benefits paid (34 ) (38 ) Fair value of plan assets, December 31 $ 354 $ 318 Funded status, December 31 $ 4 $ — Accumulated benefit obligation $ 327 $ 297 Our funded status improved for 2019 primarily due to higher returns on plan assets partially offset by actuarial losses from decreases in discount rates and assumed lump sum 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, 2019 2018 Pension amounts recognized in the consolidated balance sheets: Other assets $ 4 $ — Total $ 4 $ — Pension amounts recognized in accumulated other comprehensive income: Net actuarial loss $ 9 $ 16 Total $ 9 $ 16 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, 2019 2018 2017 Net periodic benefit cost: Service cost $ 8 $ 11 $ 11 Non-service costs (benefit): Interest cost 13 13 14 Expected return on plan assets (20 ) (22 ) (21 ) Amortization of actuarial loss and prior service cost 1 1 2 Other 1 2 1 Net periodic benefit cost $ 3 $ 5 $ 7 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Current year actuarial (gain) loss $ (5 ) $ 7 $ (11 ) Amortization of actuarial loss (2 ) (3 ) (3 ) Total recognized in other comprehensive (income) loss $ (7 ) $ 4 $ (14 ) Total recognized in net periodic benefit cost and other comprehensive (income) loss $ (4 ) $ 9 $ (7 ) The 2019 amount recognized in net periodic benefit cost and other comprehensive income improved from 2018 largely due to changes in the actuarial gain resulting from increases in discount and assumed lump sum rates. The estimated costs to be amortized from AOCI into net periodic benefit cost over the next year for our plans are $3 million in actuarial loss and less than $1 million in prior service cost. Service costs and non-service costs (benefit) are allocated in the same proportion primarily to underwriting, acquisition and insurance expenses line item with the remainder allocated to the insurance losses and contract holders' benefits line item on the consolidated statements of income for 2019 , 2018 and 2017 . 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 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 2019 we held approximately 77% of our pension portfolio in domestic common equity investments. The remainder of the portfolio consisted of 8% in states, municipalities and taxable political subdivisions fixed-maturity investments, 8% in domestic corporate fixed-maturity investments and 7% in United States government fixed maturity investments. Our common equity portfolio consisted of 23% in the financial sector, 21% in the information technology sector, 13% in the healthcare sector, 13% in the industrial sector, and 11% in the consumer discretionary industrial sector at year-end 2019 . No additional sectors accounted for 10% or more of our common equity portfolio balance at year-end 2019 . 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, 2019 and 2018 . There have been no transfers between Level 1 and Level 2 for the years ended December 31, 2019 and 2018 . The following table shows the fair value hierarchy for those assets measured at fair value on a recurring basis at December 31, 2019 and 2018 . Excluded from the table below is cash on hand of $17 million and $32 million at December 31, 2019 and 2018 , respectively. (Dollars in millions) Quoted prices in Significant other Significant (Level 3) Total At December 31, 2019 Fixed maturities, available for sale: States, municipalities and political subdivisions $ — $ 25 $ — $ 25 Corporate — 27 — 27 United States Government 25 — — 25 Total fixed maturities, available for sale 25 52 — 77 Common equities 260 — — 260 Total $ 285 $ 52 $ — $ 337 At December 31, 2018 Fixed maturities, available for sale: States, municipalities and political subdivisions $ — $ 29 $ — $ 29 Corporate — 37 — 37 United States Government 5 — — 5 Total fixed maturities, available for sale 5 66 — 71 Common equities 215 — — 215 Total $ 220 $ 66 $ — $ 286 Our pension plan assets included 232,113 shares of the company’s common stock at both December 31, 2019 and 2018 , which had a fair value of $24 million and $18 million at December 31, 2019 and 2018 , respectively. The defined benefit pension plan did not purchase or sell any shares of our common stock during 2019 and 2018 . The company paid less than $1 million in 2019 and 2018 in cash dividends on our common stock to the pension plan. We estimate $9 million of benefit payments from the SERP during 2020 . 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, 2020 2021 2022 2023 2024 2025 - 2029 Expected future benefit payments $ 31 $ 26 $ 25 $ 26 $ 28 $ 147 |
Statutory Accounting Informatio
Statutory Accounting Information | 12 Months Ended |
Dec. 31, 2019 | |
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 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 and capital and surplus are determined in accordance with SAP prescribed or permitted by insurance regulatory authorities for five legal entities, our lead 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 and statutory capital and surplus are presented below: (Dollars in millions) Net income Capital and surplus Years ended December 31, At December 31, 2019 2018 2017 2019 2018 The Cincinnati Insurance Company $ 558 $ 626 $ 401 $ 5,620 $ 4,919 The Cincinnati Casualty Company 13 16 21 437 398 The Cincinnati Indemnity Company 3 5 4 111 102 The Cincinnati Specialty Underwriters Insurance Company 62 69 58 526 479 The Cincinnati Life Insurance Company 19 — 12 204 191 |
Transactions With Affiliated Pa
Transactions With Affiliated Parties | 12 Months Ended |
Dec. 31, 2019 | |
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 $8 million in 2019 , $7 million in 2018 and $7 million in 2017 , on premium volume of $48 million , $45 million and $45 million for 2019 , 2018 and 2017 , respectively. |
Commitments And Contingent Liab
Commitments And Contingent Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
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 named as defendants in various legal proceedings. Most of these proceedings are claims litigation involving the company's insurance subsidiaries in which the company is either defending or providing indemnity for 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 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 databases 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 handling of insurance claims or writing unauthorized coverage or claims alleging discrimination by former or current associates. On a quarterly basis, we review these outstanding matters. Under current accounting guidance, we establish accruals when it is probable that a loss has been incurred and we can reasonably estimate its potential exposure. The company accounts for such probable and estimable losses, if any, through the establishment of legal expense reserves. Based on our quarterly review, we believe that our accruals for probable and estimable losses are reasonable and that the amounts accrued do not have a material effect on our consolidated financial 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 matters for which the risk of loss is not probable, but more than remote, is immaterial. |
Share-Based Associate Compensat
Share-Based Associate Compensation Plans | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement, Noncash Expense [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 2019 and 2018 . Share-based compensation cost after tax was $24 million , $23 million and $17 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. The related income tax benefit recognized was $6 million , $5 million , and $9 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Options exercised during the years ended December 31, 2019 , 2018 and 2017 , had intrinsic value of $26 million , $15 million and $19 million , respectively. Intrinsic value is the market price less the exercise price. Options vested during the years ended December 31, 2019 , 2018 and 2017 , had total intrinsic value of $23 million , $6 million and $8 million , respectively. As of December 31, 2019 , we had $34 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 1.8 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: 2019 2018 2017 Weighted-average expected term 7-8 years 7-8 years 8 years Expected volatility 14.49-15.39% 15.04-15.10% 16.95% Dividend yield 2.61% 2.98% 2.83% Risk-free rates 2.62-2.64% 2.77-2.83% 2.33% Weighted-average fair value of options granted during the period $11.73 $9.87 $10.79 Below is a summary of option information for the year 2019 : (Dollars in millions, except exercise price. Shares in thousands) Shares Weighted- exercise price Aggregate Weighted-average Outstanding option shares at January 1, 2019 3,274 $ 56.08 Granted 704 85.67 Exercised (493 ) 42.57 Forfeited or expired (48 ) 63.46 Outstanding option shares at December 31, 2019 3,437 63.99 $ 141 6.13 years Options exercisable at end of period 2,139 $ 55.25 $ 107 4.71 years Cash received from the exercise of options was $11 million , $9 million and $13 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. We acquired 103,237 , 69,649 and 96,030 shares totaling $9 million , $5 million and $7 million , respectively, from associates in consideration for option exercises during 2019 , 2018 and 2017 . The weighted-average remaining contractual life for options expected to vest as of December 31, 2019 , was 8.48 years . Under all active shareholder approved plans, a total of 17.3 million shares were authorized to be granted. At December 31, 2019 , 8.2 million shares remained available for future issuance under the plans. During 2019 , we granted 15,102 shares of common stock to our directors for 2018 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. We also grant 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 $25 million , $24 million and $23 million for the years ended December 31, 2019 , 2018 and 2017 , 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% to 200% for awards granted in 2019 , 2018 and 2017 . 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. For the three-year performance period ended December 31, 2019 , our total shareholder return exceeded five of our nine peers. We expect payout of these shares at the target level to occur in March of 2020. During 2019 , we issued 20,549 shares of performance-based restricted stock units at the threshold-level performance hurdle for the three-year performance period ended December 31, 2018, as our total shareholder return exceeded four of nine peers in our 2016 peer group. We issued 80,666 shares of performance-based restricted stock units during 2018 at the target-level performance hurdle for the three -year performance period ended December 31, 2017, as our total shareholder return exceeded five of nine peers in our 2015 peer group. Performance-based awards vested during the year had an intrinsic value of $2 million , $6 million and $7 million for the years ended December 31, 2019 , 2018 and 2017 , 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 with the period commensurate with the performance measurement period. • Dividend yield has been modeled assuming dividends are reinvested in additional shares of the issuing entity on the ex-dividend date during the performance period. • 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. The following assumptions were used in determining fair value for performance-based grants issued: 2019 2018 2017 Expected term 2.86 years 2.89 years 2.89 years Expected volatility 15.10-25.00% 16.01-26.32% 15.75-28.35% Dividend yield 2.61% 2.81% 2.83% Risk-free rates 2.48% 2.22% 1.44% Below is a summary of service-based and performance-based share information, assuming a target payout for performance-based shares, for the year 2019 : (Shares in thousands) Service-based Weighted- Performance-based Weighted- Nonvested at January 1, 2019 813 $ 62.31 182 $ 59.83 Granted 288 79.57 52 87.97 Vested (293 ) 57.40 (21 ) 70.68 Forfeited or canceled (25 ) 69.43 (48 ) 70.68 Nonvested at December 31, 2019 783 70.27 165 64.23 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2019 | |
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 underwriting results of Cincinnati Re, our reinsurance assumed operation, and Cincinnati Global, our London-based global specialty underwriter, which was acquired on February 28, 2019. Revenues come primarily from unaffiliated customers: • All four insurance segments record revenues from insurance premiums earned. • Fee revenues for the commercial, personal and excess and surplus 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 investment gains and losses. • Other revenues are primarily finance income and earned premiums of Cincinnati Re and Cincinnati Global. 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 fee revenue, 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 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 premiums earned minus loss and loss expenses and underwriting expenses of Cincinnati Re and Cincinnati Global. 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. Segment information is summarized in the following table: (Dollars in millions) Years ended December 31, 2019 2018 2017 Revenues: Commercial lines insurance Commercial casualty $ 1,102 $ 1,075 $ 1,072 Commercial property 958 920 903 Commercial auto 707 664 634 Workers' compensation 300 324 335 Other commercial 252 235 221 Commercial lines insurance premiums 3,319 3,218 3,165 Fee revenues 5 5 5 Total commercial lines insurance 3,324 3,223 3,170 Personal lines insurance Personal auto 621 614 582 Homeowner 607 563 518 Other personal 176 159 141 Personal lines insurance premiums 1,404 1,336 1,241 Fee revenues 4 5 5 Total personal lines insurance 1,408 1,341 1,246 Excess and surplus lines insurance 278 234 209 Fee revenues 2 1 1 Total excess and surplus lines insurance 280 235 210 Life insurance premiums 270 250 232 Fee revenues 4 4 5 Total life insurance 274 254 237 Investments Investment income, net of expenses 646 619 609 Investment gains and losses, net 1,650 (402 ) 148 Total investment revenue 2,296 217 757 Other Premiums 333 132 107 Other 9 5 5 Total other revenue 342 137 112 Total revenues $ 7,924 $ 5,407 $ 5,732 Income (loss) before income taxes: Insurance underwriting results Commercial lines insurance $ 241 $ 151 $ 119 Personal lines insurance 8 (20 ) (32 ) Excess and surplus lines insurance 53 63 61 Life insurance 1 8 (1 ) Investments 2,197 121 664 Other (28 ) (72 ) (81 ) Total income before income taxes $ 2,472 $ 251 $ 730 December 31, December 31, Identifiable assets: 2019 2018 Property casualty insurance $ 3,437 $ 3,285 Life insurance 1,516 1,424 Investments 19,583 16,741 Other 872 485 Total $ 25,408 $ 21,935 |
Quarterly Supplementary Data
Quarterly Supplementary Data | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Supplementary Data | Quarterly Supplementary Data This table includes unaudited quarterly financial information for the years ended December 31, 2019 and 2018 : (Dollars in millions, except per share data) Quarter 1st 2nd 3rd 4th Full year 2019 Revenues $ 2,159 $ 1,913 $ 1,700 $ 2,152 $ 7,924 Income before income taxes 867 530 294 781 2,472 Net income 695 428 248 626 1,997 Net income per common share—basic 4.27 2.62 1.51 3.84 12.24 Net income per common share—diluted 4.22 2.59 1.49 3.79 12.10 2018 Revenues $ 1,224 $ 1,558 $ 1,915 $ 710 $ 5,407 (Loss) income before income taxes (50 ) 264 618 (581 ) 251 Net (loss) income (31 ) 217 553 (452 ) 287 Net (loss) income per common share—basic (0.19 ) 1.33 3.40 (2.78 ) 1.76 Net (loss) income per common share—diluted (0.19 ) 1.32 3.38 (2.78 ) 1.75 The sum of the quarterly reported per share amounts may not equal the full year as each is computed independently. Revenues including 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. |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition On February 28, 2019 (closing date or acquisition date), pursuant to the agreement (the SPA) for the sale and purchase of the entire issued share capital of MSP Underwriting Limited (MSP), dated October 11, 2018, by and between the company and Münchener Rückversicherungs Gesellschaft AG (Munich Re), the company acquired from Munich Re all of the issued and outstanding share capital of MSP and its subsidiaries, including the Lloyd's managing agent, Beaufort Underwriting Agency Limited for Syndicate 318 (the acquisition). MSP was rebranded as Cincinnati Global effective May 1, 2019, reflecting its new identity as a subsidiary of the company. The acquisition of Cincinnati Global reflects progress toward our long-term objective of diversifying revenue and profitability by expanding our operations geographically and by line of business. As aggregate consideration for the purchase of the share capital of Cincinnati Global and its subsidiaries, the company paid £48 million , or $64 million , in cash to Munich Re at the closing of the acquisition. The amount paid at closing was calculated as the difference between the target net asset value (NAV) set forth in the SPA and the estimated NAV of Cincinnati Global and its subsidiaries at the closing date. On August 1, 2019, the company and Munich Re agreed to an adjusted purchase price of £47 million , or $63 million , reflecting a £1 million decrease in the NAV of Cincinnati Global. This agreement represented the final purchase price with no further adjustments to the assets acquired and liabilities assumed. The fair value of the assets acquired, liabilities assumed and the allocation of the final purchase price on the acquisition date have been summarized in the following table: (Dollars in millions) Assets Investments and other invested assets $ 198 Cash and cash equivalents 64 Premiums receivable 45 Reinsurance recoverable 42 Other assets 23 Total assets acquired $ 372 Liabilities Loss and loss expense reserves $ 277 Unearned premiums 88 Other liabilities 24 Total liabilities assumed $ 389 Fair value of identifiable intangible assets: Syndicate capacity - indefinite lived $ 31 Syndicate broker relationships - definite lived 12 Value of business acquired - definite lived 4 Internally developed technology - definite lived 3 Total fair value of identifiable intangible assets $ 50 Total purchase price paid $ 63 Total assets acquired (including fair value of identifiable intangible assets) 422 Total liabilities assumed 389 Fair value of net assets acquired prior to allocation of goodwill 33 Excess of purchase price paid over fair value of net assets acquired assigned to goodwill $ 30 In connection with the acquisition, the company incurred immaterial transaction related expenses. |
Summary Of Investments Other Th
Summary Of Investments Other Than Investments In Related Parties | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-15, Insurance Companies, 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, 2019 Type of investment Cost or amortized cost Fair value Balance sheet Fixed maturities: States, municipalities and political subdivisions: The Cincinnati Insurance Company $ 3,320 $ 3,515 $ 3,515 The Cincinnati Casualty Company 199 210 210 The Cincinnati Indemnity Company 46 48 48 The Cincinnati Life Insurance Company 348 360 360 The Cincinnati Specialty Underwriters Insurance Company 525 556 556 CSU Producer Resources Inc. 1 1 1 Cincinnati Financial Corporation 38 38 38 Total 4,477 4,728 4,728 United States government: The Cincinnati Insurance Company 65 67 67 The Cincinnati Casualty Company 1 1 1 The Cincinnati Indemnity Company 1 1 1 Cincinnati Global Underwriting Ltd. 35 35 35 Total 102 104 104 Government-sponsored enterprises: The Cincinnati Life Insurance Company 122 121 121 Cincinnati Global Underwriting Ltd. 5 5 5 Cincinnati Financial Corporation 10 10 10 Total 137 136 136 Foreign government: The Cincinnati Insurance Company 10 10 10 Cincinnati Global Underwriting Ltd. 18 18 18 Total 28 28 28 All other corporate bonds: The Cincinnati Insurance Company 2,956 3,095 3,095 The Cincinnati Casualty Company 107 112 112 The Cincinnati Indemnity Company 33 34 34 The Cincinnati Specialty Underwriters Insurance Company 175 186 186 The Cincinnati Life Insurance Company 3,033 3,215 3,215 CSU Producer Resources Inc. 1 1 1 Cincinnati Global Underwriting Ltd. 58 58 58 Cincinnati Financial Corporation 1 1 1 Total 6,364 6,702 6,702 Total fixed maturities $ 11,108 $ 11,698 $ 11,698 Schedule I (continued) Cincinnati Financial Corporation and Subsidiaries Summary of Investments - Other Than Investments in Related Parties (Dollars in millions) At December 31, 2019 Type of investment Cost or amortized cost Fair value Balance sheet Equity securities: Common equities: The Cincinnati Insurance Company $ 1,763 $ 4,063 $ 4,063 The Cincinnati Casualty Company 58 141 141 The Cincinnati Indemnity Company 17 33 33 The Cincinnati Specialty Underwriters Insurance Company 90 184 184 CSU Producer Resources Inc. 17 29 29 Cincinnati Financial Corporation 1,426 3,068 3,068 Total 3,371 7,518 7,518 Nonredeemable preferred equities: The Cincinnati Insurance Company 197 218 218 The Cincinnati Life Insurance Company 12 15 15 Cincinnati Financial Corporation 1 1 1 Total 210 234 234 Total equity securities $ 3,581 $ 7,752 $ 7,752 Other invested assets: Policy loans: The Cincinnati Life Insurance Company $ 32 — $ 32 Deposits at Lloyd's: Cincinnati Global Underwriting Ltd. 97 — 97 Cincinnati Financial Corporation 67 — 67 Private equity: The Cincinnati Insurance Company (1) 37 — 37 The Cincinnati Life Insurance Company (1) 3 — 3 Cincinnati Financial Corporation (1) 31 — 31 Real estate: The Cincinnati Insurance Company (1) 8 — 8 The Cincinnati Life Insurance Company (1) 16 — 16 Cincinnati Financial Corporation (1) 5 — 5 Total other invested assets $ 296 — $ 296 Total investments $ 14,985 — $ 19,746 |
Condensed Financial Statements
Condensed Financial Statements Of Parent Company | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information 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, 2019 2018 Assets Investments Fixed maturities, at fair value (amortized cost: 2019—$49; 2018—$35) $ 49 $ 35 Equity securities, at fair value (cost: 2019—$1,427; 2018—$1,282) 3,069 2,234 Other invested assets 103 36 Total investments 3,221 2,305 Cash and cash equivalents 197 209 Equity in net assets of subsidiaries 7,424 6,152 Investment income receivable 7 6 Land, building and equipment, net, for company use (accumulated depreciation: 141 137 Income tax receivable 2 1 Other assets 61 48 Due from subsidiaries 107 106 Total assets $ 11,160 $ 8,964 Liabilities Dividends declared but unpaid $ 91 $ 86 Deferred federal income tax 345 198 Long-term debt 788 788 Other liabilities 72 59 Total liabilities 1,296 1,131 Shareholders' Equity Common stock 397 397 Paid-in capital 1,306 1,281 Retained earnings 9,257 7,625 Accumulated other comprehensive income 448 22 Treasury stock at cost (1,544 ) (1,492 ) Total shareholders' equity 9,864 7,833 Total liabilities and shareholders' equity $ 11,160 $ 8,964 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 and Comprehensive Income (Dollars in millions) Years ended December 31, 2019 2018 2017 Revenues Investment income, net of expenses $ 75 $ 65 $ 62 Investment gains and losses, net 728 (108 ) 28 Other revenue 15 15 15 Total revenues 818 (28 ) 105 Expenses Interest expense 52 52 52 Other expenses 37 31 28 Total expenses 89 83 80 Income (Loss) Before Income Taxes and Earnings of Subsidiaries 729 (111 ) 25 Provision (Benefit) for Income Taxes 146 (31 ) (161 ) Net Income (Loss) Before Earnings of Subsidiaries 583 (80 ) 186 Increase in equity of subsidiaries 1,414 367 859 Net Income $ 1,997 $ 287 $ 1,045 Other Comprehensive Income (Loss), Net of Taxes Change in unrealized gain (loss) on securities — (2 ) 235 Amortization of pension actuarial gains (losses) and prior service costs 5 (3 ) 7 Other Comprehensive Income (Loss), Net of Taxes Before Other Comprehensive Income of Subsidiaries 5 (5 ) 242 Other comprehensive income (loss) of subsidiaries 421 (258 ) 361 Other comprehensive income (loss) 426 (263 ) 603 Comprehensive Income $ 2,423 $ 24 $ 1,648 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, 2019 2018 2017 Cash Flows From Operating Activities Net income $ 1,997 $ 287 $ 1,045 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 10 7 7 Investment gains and losses, net (720 ) 114 (28 ) Dividends from subsidiaries 625 500 465 Changes in: Increase in equity of subsidiaries (1,414 ) (367 ) (859 ) Investment income receivable (1 ) 2 — Current federal income taxes (1 ) 14 (5 ) Deferred income tax 146 (35 ) (150 ) Other assets 4 (17 ) (20 ) Other liabilities 4 3 15 Intercompany receivable for operations 20 19 13 Net cash provided by operating activities 670 527 483 Cash Flows From Investing Activities Sale of fixed maturities 3 1 — Call or maturity of fixed maturities 21 19 14 Sale of equity securities 122 131 230 Purchase of fixed maturities (39 ) (17 ) (2 ) Purchase of equity securities (237 ) (177 ) (293 ) Investment in buildings and equipment (13 ) (12 ) (3 ) Cash paid for acquisition (63 ) — — Change in other invested assets, net (67 ) (11 ) — Net cash used in investing activities (273 ) (66 ) (54 ) Cash Flows From Financing Activities Payment of cash dividends to shareholders (355 ) (336 ) (400 ) Shares acquired - share repurchase authorization (67 ) (125 ) (92 ) Proceeds from stock options exercised 11 9 13 Other 2 1 1 Net cash used in financing activities (409 ) (451 ) (478 ) Net change in cash and cash equivalents (12 ) 10 (49 ) Cash and cash equivalents at beginning of year 209 199 248 Cash and cash equivalents at end of year $ 197 $ 209 $ 199 |
Supplementary Insurance Informa
Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Abstract] | |
Supplementary Insurance Information | Schedule III Cincinnati Financial Corporation and Subsidiaries Supplementary Insurance Information (Dollars in millions) Years ended December 31, 2019 2018 2017 Deferred policy acquisition costs: Commercial lines insurance $ 311 $ 291 $ 284 Personal lines insurance 130 126 121 Excess and surplus lines insurance 25 21 17 Other 46 26 16 Total property casualty insurance 512 464 438 Life insurance 262 274 232 Total $ 774 $ 738 $ 670 Gross future policy benefits, losses, claims and expense losses: Commercial lines insurance $ 4,569 $ 4,466 $ 4,236 Personal lines insurance 687 679 587 Excess and surplus lines insurance 351 298 264 Other 481 203 132 Total property casualty insurance 6,088 5,646 5,219 Life insurance 2,859 2,802 2,753 Total (1) $ 8,947 $ 8,448 $ 7,972 Gross unearned premiums: Commercial lines insurance $ 1,665 $ 1,576 $ 1,548 Personal lines insurance 757 725 683 Excess and surplus lines insurance 152 123 105 Other 213 91 67 Total property casualty insurance 2,787 2,515 2,403 Life insurance 1 1 1 Total (1) $ 2,788 $ 2,516 $ 2,404 Other policy claims and benefits payable: Commercial lines insurance $ — $ — $ — Personal lines insurance — — — Excess and surplus lines insurance — — — Other — — — Total property casualty insurance — — — Life insurance 35 38 30 Total (1) $ 35 $ 38 $ 30 Earned premiums: Commercial lines insurance $ 3,319 $ 3,218 $ 3,165 Personal lines insurance 1,404 1,336 1,241 Excess and surplus lines insurance 278 234 209 Other 333 132 107 Total property casualty insurance 5,334 4,920 4,722 Life insurance 270 250 232 Total $ 5,604 $ 5,170 $ 4,954 Schedule III (continued) Cincinnati Financial Corporation and Subsidiaries Supplementary Insurance Information (Dollars in millions) Years ended December 31, 2019 2018 2017 Investment income, net of expenses: Commercial lines insurance $ — $ — $ — Personal lines insurance — — — Excess and surplus lines insurance — — — Other — — — Total property casualty insurance (2) 419 401 392 Life insurance 152 153 155 Total $ 571 $ 554 $ 547 Benefits, claims losses and settlement expenses: Commercial lines insurance $ 2,030 $ 2,049 $ 2,042 Personal lines insurance 985 972 918 Excess and surplus lines insurance 142 104 86 Other 195 98 92 Total property casualty insurance 3,352 3,223 3,138 Life insurance 286 267 252 Total $ 3,638 $ 3,490 $ 3,390 Amortization of deferred policy acquisition costs: Commercial lines insurance $ 631 $ 608 $ 590 Personal lines insurance 251 242 225 Excess and surplus lines insurance 47 39 35 Other 57 18 17 Total property casualty insurance 986 907 867 Life insurance 48 39 46 Total (3) $ 1,034 $ 946 $ 913 Underwriting, acquisition and insurance expenses: Commercial lines insurance $ 422 $ 415 $ 419 Personal lines insurance 164 147 135 Excess and surplus lines insurance 38 29 28 Other 42 24 18 Total property casualty insurance 666 615 600 Life insurance 38 36 33 Total (3) $ 704 $ 651 $ 633 Net written premiums: Commercial lines insurance $ 3,410 $ 3,245 $ 3,202 Personal lines insurance 1,435 1,378 1,294 Excess and surplus lines insurance 303 249 219 Other 368 158 125 Total property casualty insurance 5,516 5,030 4,840 Accident health insurance 2 3 3 Total $ 5,518 $ 5,033 $ 4,843 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, 2019 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Text Block] | Schedule IV Cincinnati Financial Corporation and Subsidiaries Reinsurance (Dollars in millions) Years ended December 31, 2019 2018 2017 Gross amounts: Life insurance in force $ 108,130 $ 104,726 $ 99,888 Earned premiums Commercial lines insurance $ 3,421 $ 3,314 $ 3,258 Personal lines insurance 1,446 1,372 1,275 Excess and surplus lines insurance 292 245 219 Other 181 — — Total property casualty insurance 5,340 4,931 4,752 Life insurance 341 320 300 Total $ 5,681 $ 5,251 $ 5,052 Ceded amounts to other companies: Life insurance in force $ 38,146 $ 38,584 $ 38,711 Earned premiums Commercial lines insurance $ 109 $ 104 $ 99 Personal lines insurance 43 37 35 Excess and surplus lines insurance 14 11 10 Other 39 8 18 Total property casualty insurance 205 160 162 Life insurance 71 70 68 Total $ 276 $ 230 $ 230 Assumed amounts from other companies: Life insurance in force $ — $ — $ — Earned premiums Commercial lines insurance $ 7 $ 8 $ 6 Personal lines insurance 1 1 1 Excess and surplus lines insurance — — — Other 191 140 125 Total property casualty insurance 199 149 132 Life insurance — — — Total $ 199 $ 149 $ 132 Net amounts: Life insurance in force $ 69,984 $ 66,142 $ 61,177 Earned premiums Commercial lines insurance $ 3,319 $ 3,218 $ 3,165 Personal lines insurance 1,404 1,336 1,241 Excess and surplus lines insurance 278 234 209 Other 333 132 107 Total property casualty insurance 5,334 4,920 4,722 Life insurance 270 250 232 Total $ 5,604 $ 5,170 $ 4,954 Percentage of amounts assumed to net: Life insurance in force — % — % — % Earned premiums Commercial lines insurance 0.2 % 0.3 % 0.2 % Personal lines insurance 0.1 0.1 0.1 Excess and surplus lines insurance — — — Other 57.4 106.1 116.1 Total property casualty insurance 3.7 3.0 2.8 Life insurance — — — Total 3.6 2.9 2.7 |
Valuation And Qualifying Accoun
Valuation And Qualifying Accounts | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-09, 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, 2019 2018 2017 Allowance for doubtful receivables: Beginning balance, January 1 $ 6 $ 6 $ 5 Additions charged to costs and expenses 8 6 6 Deductions (6 ) (6 ) (5 ) Ending balance, December 31 $ 8 $ 6 $ 6 Deferred tax valuation allowance: Beginning balance, January 1 $ — $ — $ — Additions charged to costs and expenses 55 — — Deductions (14 ) — — Ending balance, December 31 41 — — Total valuation and qualifying accounts $ 49 $ 6 $ 6 |
Supplementary Information Conce
Supplementary Information Concerning Property Casualty Insurance Operations | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-18, Supplemental Information, 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, 2019 2018 2017 Deferred policy acquisition costs: Commercial lines insurance $ 311 $ 291 $ 284 Personal lines insurance 130 126 121 Excess and surplus lines insurance 25 21 17 Other 46 26 16 Total $ 512 $ 464 $ 438 Reserves for unpaid claims and claim adjustment expenses: Commercial lines insurance $ 4,569 $ 4,466 $ 4,236 Personal lines insurance 687 679 587 Excess and surplus lines insurance 351 298 264 Other 481 203 132 Total $ 6,088 $ 5,646 $ 5,219 Reserve discount deducted $ — $ — $ — Gross unearned premiums: Commercial lines insurance $ 1,665 $ 1,576 $ 1,548 Personal lines insurance 757 725 683 Excess and surplus lines insurance 152 123 105 Other 213 91 67 Total $ 2,787 $ 2,515 $ 2,403 Earned premiums: Commercial lines insurance $ 3,319 $ 3,218 $ 3,165 Personal lines insurance 1,404 1,336 1,241 Excess and surplus lines insurance 278 234 209 Other 333 132 107 Total $ 5,334 $ 4,920 $ 4,722 Investment income, net of expenses: Commercial lines insurance $ — $ — $ — Personal lines insurance — — — Excess and surplus lines insurance — — — Other — — — Total (1) $ 419 $ 401 $ 392 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, 2019 2018 2017 Loss and loss expenses incurred related to current accident year: Commercial lines insurance $ 2,222 $ 2,206 $ 2,115 Personal lines insurance 1,012 960 932 Excess and surplus lines insurance 153 128 115 Other 213 96 95 Total $ 3,600 $ 3,390 $ 3,257 Loss and loss expenses incurred related to prior accident years: Commercial lines insurance $ (192 ) $ (157 ) $ (73 ) Personal lines insurance (27 ) 13 (14 ) Excess and surplus lines insurance (11 ) (24 ) (29 ) Other (18 ) 1 (3 ) Total $ (248 ) $ (167 ) $ (119 ) Amortization of deferred policy acquisition costs: Commercial lines insurance $ 631 $ 608 $ 590 Personal lines insurance 251 242 225 Excess and surplus lines insurance 47 39 35 Other 57 18 17 Total $ 986 $ 907 $ 867 Paid loss and loss expenses: Commercial lines insurance $ 2,023 $ 1,816 $ 1,866 Personal lines insurance 966 913 898 Excess and surplus lines insurance 90 74 61 Other 181 44 18 Total $ 3,260 $ 2,847 $ 2,843 Net written premiums: Commercial lines insurance $ 3,410 $ 3,245 $ 3,202 Personal lines insurance 1,435 1,378 1,294 Excess and surplus lines insurance 303 249 219 Other 368 158 125 Total $ 5,516 $ 5,030 $ 4,840 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations Cincinnati Financial Corporation (CFC) operates through The Cincinnati Insurance Company and Cincinnati Global Underwriting Ltd. SM (Cincinnati Global) insurance subsidiaries and two complementary subsidiary companies. Cincinnati Global was acquired effective February 28, 2019. Refer to Note 20, Acquisition, for additional information. The Cincinnati Insurance Company leads our 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 1,796 independent insurance agencies with 2,458 reporting locations across 45 states. Other subsidiaries of The Cincinnati Insurance Company include: The Cincinnati Life Insurance Company, which markets life insurance and fixed annuities; and The Cincinnati Specialty Underwriters Insurance Company, which offers excess and surplus lines property casualty insurance products. The Cincinnati Insurance Company also conducts the business of our reinsurance assumed operations, Cincinnati Re SM . 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, 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). The consolidated financial statements include Cincinnati Global's results for the period from February 28, 2019, through December 31, 2019. Foreign exchange rates related to Cincinnati Global's operations did not have a material impact to our consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. The preparation of the consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the consolidated 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 and equity security investments. Fixed-maturity investments (taxable bonds, tax-exempt bonds, redeemable preferred equities and commercial mortgage- backed securities) classified as available for sale and equity investments (common and nonredeemable preferred equities) are recorded at fair value in the consolidated financial statements. Beginning January 1, 2018, changes in fair value of equity securities are now reported in net income instead of other comprehensive income as stated below under ‘Adopted Accounting Updates’. The number of fixed-maturity securities with fair value below 100% 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. Impairment charges for fixed maturities are recorded for other-than-temporary declines in value if fair value is below amortized cost and, in the asset impairment committee’s judgment, the fair value is not expected to be recouped within a designated recovery period. Our invested asset impairment policy also states that fixed maturities with fair value 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 2019 , 2018 and 2017 . We include the noncredit portion of fixed-maturity OTTI charges and unrealized gains and losses on fixed-maturity investments, net of taxes, in shareholders’ equity as accumulated other comprehensive income (AOCI). Investment gains and losses are recognized in net income based on the trade date accounting method. Included within our other invested assets were $71 million and $60 million of private equity investments, $32 million and $33 million of life policy loans and $29 million and $30 million of real estate through direct property ownership and development projects in the United States at December 31, 2019 and 2018 , respectively. Other invested assets also included $164 million held on deposit at Lloyd's at December 31, 2019 . 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 and real estate development investments. Lloyd's deposits are held as cash and cash equivalents. Investment income, net of expenses, 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 Fair value is defined 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 the company’s nationally recognized 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 the company’s nationally recognized pricing vendor is immaterial. For the purpose of ASC 825 disclosure, we estimate the fair value of our 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, 2019 , to account for nonperformance risk. See Note 3, Fair Value Measurements, for further details. |
Cash And Cash Equivalents | Cash and Cash Equivalents |
Property Casualty Insurance | Property Casualty Insurance The consolidated property casualty companies actively write property casualty insurance through independent agencies in 45 states. Our 10 largest states generated 54.8% and 58.4% of total earned premiums in 2019 and 2018 , respectively. Ohio, our largest state, accounted for 15.1% and 15.9% of total earned premiums in 2019 and 2018 , respectively. Illinois, Georgia, North Carolina, Indiana and Pennsylvania each accounted for between 4% and 6% of total earned premiums in 2019 . Our largest single agency relationship accounted for approximately 1.3% of our total property casualty earned premiums in 2019 . No aggregate agency relationship locations under a single ownership structure accounted for more than 4% of our total property casualty earned premiums in 2019 . 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 primarily 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. We assess recoverability of deferred acquisition costs at a 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 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. We estimate that we may recover some of our costs through salvage and subrogation. |
Policyholder Dividends | Policyholder Dividends Certain workers’ compensation policies include the possibility of a policyholder earning a return of a portion of 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 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. 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 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 and future 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 in proportion to premium revenue recognized. We use the same assumptions used in establishing the liability for the contract. 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 policy reserve 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 or notional benefit base. 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, 2019 , the current fair value of the BOLI invested assets and cash exceeded the current fair value of the contract holders’ account value by approximately $52 million . At December 31, 2018, the current fair value of the contract holders' account value exceeded the current fair value of the BOLI invested assets and cash by approximately $3 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 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 investment 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 The Cincinnati Insurance Company offers reinsurance assumed for casualty (predominantly domestic exposure), specialty and property (worldwide exposure). Treaties are written on a pro rata and excess of loss basis. We also continue to assume risk with limited exposure as a reinsurer for involuntary state pools. Written premium is recorded, net of contract specific retrocessions, on an ultimate estimate basis and primarily earned on a pro rata basis over the coverage period of the treaty. Expenses are recorded as per contract terms and deferred over the earning period of the premium. We establish known loss reserves when reported. We establish reserves for losses in excess of reported activity in the form of IBNR. Reserves are established using actuarial analysis, which includes models and methods traditionally used for the types of exposures written. We establish reserves for event specific occurrences using modeling data and company specific data when available. We enter into other reinsurance transactions to reduce risk and uncertainty by buying property casualty reinsurance and retrocessional reinsurance as well as life reinsurance. Reinsurance and retrocessional 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. Premiums that we cede 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 establish an insignificant 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 the consolidated financial statement income and taxable income are expected to reverse. We recognize deferred income taxes for numerous temporary differences between our taxable income and consolidated 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 premiums, insurance reserves and basis differences in the carrying value of investments held. We charge deferred income taxes associated with balances that impact other comprehensive income, such as unrealized appreciation and depreciation of fixed-maturity investments, to shareholders’ equity in accumulated other comprehensive income (AOCI). We charge deferred taxes associated with other differences to income. See Note 11, Income Taxes, for further detail on our uncertain tax positions and other income tax items. 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 finance 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, internal payroll and payroll-related costs. Our depreciation is based on estimated useful lives (ranging from three to 39.5 years ) using straight-line and accelerated methods. Depreciation expense was $25 million for 2019 , $31 million for 2018 and $28 million for 2017 . We review our accumulated depreciation for our building, equipment and software assets and write off fully depreciated assets for obsolesce and nonuse. 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 2019 , 2018 or 2017 . |
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 sales-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 2019 , 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. |
Goodwill and Intangible Assets, Policy | Goodwill and Intangible Assets We recognize goodwill and intangible assets generated through acquisitions within other assets in the consolidated balance sheets. Goodwill arises when the fair value of consideration transferred exceeds the fair value of the net identifiable assets acquired at the acquisition date. Goodwill and intangible assets with an indefinite life are not amortized. Intangible assets with a definite life are amortized on a straight-line basis over the estimated useful lives as follows: broker relationships, 15 years ; internally developed technology, five years ; value of business acquired, over the remaining coverage period of the underlying insurance contracts. We test for impairments on an annual basis or more frequently if events or circumstances indicate that the asset might be impaired. The company performed its annual impairment test on goodwill and intangibles on September 30, which did not result in the recognition of an impairment loss. |
Subsequent Events | Subsequent Events There were no subsequent events requiring adjustment to the consolidated financial statements or disclosure. |
Adopted Accounting Updates | Adopted Accounting Updates ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 revised 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 company adopted this ASU on January 1, 2018, and applied it on a modified retrospective basis without prior period amounts restated. As a result of the adoption, $2.503 billion of after-tax unrealized gains on equity securities was reclassified on January 1, 2018, from accumulated other comprehensive income to retained earnings. Results of operations were impacted as changes in fair value of equity securities are now reported in net income instead of reported in other comprehensive income. As a result of the adoption of this ASU, for the year ended December 31, 2018, the net investment loss of $402 million in the consolidated statements of income included a decrease of $404 million from the fair value change of equity securities. ASU 2016-02, Leases (Topic 842) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The main provision of ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842 and ASU 2018-11, Targeted Improvements to Topic 842 . ASU 2018-10 makes narrow-scope amendments to certain aspects of the new leasing standard while ASU 2018-11 provides relief from costs of implementing certain aspects of the new leasing standard. The company adopted this ASU effective January 1, 2019, and it did not have a material impact on our company's consolidated financial position, cash flows or results of operations. The company has elected the practical expedient package for carrying forward historical lease classifications, not re-evaluating for embedded leases and not reassessing initial direct costs. The company also elected additional practical expedients to not recognize short-term leases on the balance sheet and to only combine lease and nonlease components for certain asset classes. We also elected not to restate prior periods. In support of our insurance operations, the company leases real estate properties which qualify as operating leases and also leases equipment and autos which qualify as finance leases. ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities In March 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08 amends guidance on the amortization period of premiums on certain purchased callable debt securities. The amendments shorten the amortization period of premiums on certain purchased callable debt securities to the earliest call date. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment to beginning retained earnings. The company adopted this ASU effective January 1, 2019, and it did not have a material impact on our company's consolidated financial position, cash flows or results of operations. ASU 2018-07, Compensation - Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . ASU 2018-07 expands the scope of Topic 718, Compensation - Stock Compensation , which currently only includes share-based payments issued to employees, to include share-based payments issued to nonemployees for the acquisition of goods and services. The company adopted this ASU effective January 1, 2019, and it did not have a material impact on our company's consolidated financial position, cash flows or results of operations. |
Pending Accounting Updates | Pending Accounting Updates ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . In addition, the FASB issued ASU 2018-19, Codification Improvements to Topic 326 , ASU 2019-04, Codification Improvements to Topic 326, ASU 2019-05, Targeted Transition Relief and ASU 2019-11, Codification Improvements to Topic 326. These ASU’s amend previous guidance on the impairment of financial instruments by adding an impairment model that allows an entity to recognize expected credit losses as an allowance rather than impairing as they are incurred. The new guidance is intended to reduce complexity of credit impairment models and result in a more timely recognition of expected credit losses. The guidance is effective for reporting periods beginning after December 15, 2019, and for most affected instruments must be adopted using a modified retrospective approach, with a cumulative effect adjustment recorded to beginning retained earnings. These ASU's have not yet been adopted; however, they will not have a material impact on our company's consolidated financial position, cash flows or results of operations. ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts In August 2018, the FASB issued ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts . ASU 2018-12 is intended to improve the timeliness of recognizing changes in the liability for future policy benefits and modify the rate used to discount future cash flows. The ASU will simplify and improve the accounting for certain market-based options or guarantees associated with deposit or account balance contracts, simplify amortization of deferred acquisition costs while improving and expanding required disclosures. In November 2019, the FASB issued ASU 2019-09, Financial Services - Insurance (Topic 944): Effective Date . ASU 2019-09 delays the effective date of ASU 2018-12 by one year to interim and annual reporting periods beginning after December 15, 2021. These ASU's have 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, 2019 | |
Investments [Abstract] | |
Analysis Of Cost Or Amortized Cost, Gross Unrealized Gains And Losses And Fair Value for Investments | The following table provides amortized cost, gross unrealized gains, gross unrealized losses and fair value for our fixed-maturity securities: (Dollars in millions) Amortized cost Gross unrealized Fair At December 31, 2019 gains losses Fixed-maturity securities: Corporate $ 6,074 $ 332 $ 5 $ 6,401 States, municipalities and political subdivisions 4,477 252 1 4,728 Commercial mortgage-backed 290 11 — 301 Government-sponsored enterprises 137 — 1 136 United States government 102 2 — 104 Foreign government 28 — — 28 Total $ 11,108 $ 597 $ 7 $ 11,698 At December 31, 2018 Fixed-maturity securities: Corporate $ 5,712 $ 85 $ 87 $ 5,710 States, municipalities and political subdivisions 4,251 84 31 4,304 Commercial mortgage-backed 287 3 2 288 Government-sponsored enterprises 316 1 7 310 United States government 67 1 1 67 Foreign government 10 — — 10 Total $ 10,643 $ 174 $ 128 $ 10,689 |
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, 2019 Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Fixed-maturity securities: Corporate $ 199 $ 2 $ 118 $ 3 $ 317 $ 5 States, municipalities and political subdivisions 98 1 10 — 108 1 Commercial mortgage-backed 6 — — — 6 — Government-sponsored enterprises 26 1 51 — 77 1 United States government — — 4 — 4 — Foreign government 11 — — — 11 — Total $ 340 $ 4 $ 183 $ 3 $ 523 $ 7 At December 31, 2018 Fixed-maturity securities: Corporate $ 2,082 $ 51 $ 501 $ 36 $ 2,583 $ 87 States, municipalities and political subdivisions 823 18 340 13 1,163 31 Commercial mortgage-backed 77 — 64 2 141 2 Government-sponsored enterprises 49 1 211 6 260 7 United States government — — 33 1 33 1 Total $ 3,031 $ 70 $ 1,149 $ 58 $ 4,180 $ 128 |
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, 2019 Maturity dates: Due in one year or less $ 455 $ 459 3.9 % Due after one year through five years 3,180 3,302 28.2 Due after five years through ten years 3,792 4,011 34.3 Due after ten years 3,681 3,926 33.6 Total $ 11,108 $ 11,698 100.0 % |
Investment Income, Realized Investment Gains And Losses And Change In Unrealized Investment Gains And Losses | The following table provides investment income and investment gains and losses: (Dollars in millions) Years ended December 31, 2019 2018 2017 Investment income: Interest $ 446 $ 445 $ 445 Dividends 201 181 170 Other 12 5 4 Total 659 631 619 Less investment expenses 13 12 10 Total $ 646 $ 619 $ 609 Investment gains and losses, net: Equity securities: Investment gains and losses on securities sold, net $ 26 $ 9 $ — Unrealized gains and losses on securities still held, net 1,626 (404 ) — Gross realized gains — — 195 Gross realized losses — — (72 ) Other-than-temporary impairments — — (3 ) Subtotal 1,652 (395 ) 120 Fixed maturities: Gross realized gains 13 12 25 Gross realized losses (3 ) (2 ) — Other-than-temporary impairments (9 ) (5 ) (6 ) Subtotal 1 5 19 Other (3 ) (12 ) 9 Total $ 1,650 $ (402 ) $ 148 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 and 2018 . 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, 2019 Significant other observable inputs (Level 2) Total Fixed maturities, available for sale: Corporate $ — $ 6,401 $ — $ 6,401 States, municipalities and political subdivisions — 4,728 — 4,728 Commercial mortgage-backed — 301 — 301 Government-sponsored enterprises — 136 — 136 United States Government 104 — — 104 Foreign government — 28 — 28 Subtotal 104 11,594 — 11,698 Common equities 7,518 — — 7,518 Nonredeemable preferred equities — 234 — 234 Separate accounts taxable fixed maturities — 855 — 855 Top Hat savings plan mutual funds and common equity (included in Other assets) 45 — — 45 Total $ 7,667 $ 12,683 $ — $ 20,350 At December 31, 2018 Fixed maturities, available for sale: Corporate $ — $ 5,709 $ 1 $ 5,710 States, municipalities and political subdivisions — 4,300 4 4,304 Commercial mortgage-backed — 288 — 288 Government-sponsored enterprises — 310 — 310 United States Government 67 — — 67 Foreign government — 10 — 10 Subtotal 67 10,617 5 10,689 Common equities 5,742 — — 5,742 Nonredeemable preferred equities — 178 — 178 Separate accounts taxable fixed maturities — 791 — 791 Top Hat savings plan mutual funds and common equity (included in Other assets) 34 — — 34 Total $ 5,843 $ 11,586 $ 5 $ 17,434 |
Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | |
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, 2019 Life policy loans $ — $ — $ 44 $ 44 At December 31, 2018 Life policy loans $ — $ — $ 40 $ 40 |
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, 2019 Note payable $ — $ 39 $ — $ 39 6.900% senior debentures, due 2028 — 34 — 34 6.920% senior debentures, due 2028 — 506 — 506 6.125% senior notes, due 2034 — 512 — 512 Total $ — $ 1,091 $ — $ 1,091 At December 31, 2018 Note payable $ — $ 32 $ — $ 32 6.900% senior debentures, due 2028 — 32 — 32 6.920% senior debentures, due 2028 — 471 — 471 6.125% senior notes, due 2034 — 440 — 440 Total $ — $ 975 $ — $ 975 |
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, 2019 Deferred annuities $ — $ — $ 770 $ 770 Structured settlements — 212 — 212 Total $ — $ 212 $ 770 $ 982 At December 31, 2018 Deferred annuities $ — $ — $ 742 $ 742 Structured settlements — 185 — 185 Total $ — $ 185 $ 742 $ 927 |
(Tables)
(Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 2018 2017 Gross loss and loss expense reserves, January 1 $ 5,646 $ 5,219 $ 5,035 Less reinsurance recoverable 238 187 298 Net loss and loss expense reserves, January 1 5,408 5,032 4,737 Net loss and loss expense reserves related to acquisition of Cincinnati Global at February 28, 2019 246 — — Net incurred loss and loss expenses related to: Current accident year 3,600 3,390 3,257 Prior accident years (248 ) (167 ) (119 ) Total incurred 3,352 3,223 3,138 Net paid loss and loss expenses related to: Current accident year 1,462 1,391 1,404 Prior accident years 1,798 1,456 1,439 Total paid 3,260 2,847 2,843 Net loss and loss expense reserves, December 31 5,746 5,408 5,032 Plus reinsurance recoverable 342 238 187 Gross loss and loss expense reserves, December 31 $ 6,088 $ 5,646 $ 5,219 |
Reconciliation of Property casualty Incurred Losses and ALAE and Paid Losses and ALAE Development Information | The following table provides a reconciliation of the property casualty incurred losses and allocated loss adjustment expenses (ALAE) development and paid losses and ALAE development information at December 31, 2019 . (Dollars in millions) Cumulative incurred losses and ALAE as reported within the triangles, net of reinsurance Cumulative paid losses and ALAE as reported within the triangles, net of reinsurance Liabilities for loss and ALAE for accident years not presented in the triangles, net of reinsurance Total liabilities for loss and ALAE, net of reinsurance Reinsurance recoverable on unpaid losses Total liabilities for gross loss and loss expense reserves Commercial casualty $ 4,910 $ 2,863 $ 88 $ 2,135 $ 30 $ 2,165 Workers' compensation 2,061 1,433 295 923 64 987 Commercial auto 2,200 1,566 15 649 5 654 Commercial property 2,739 2,469 13 283 111 394 Personal auto 1,933 1,659 6 280 33 313 Homeowner 1,779 1,621 2 160 21 181 Excess and surplus 658 333 1 326 8 334 Other lines 771 Total liabilities for loss and ALAE reserves 5,799 Unallocated loss adjustment expense reserves 289 Gross loss and loss expense reserves $ 6,088 |
Schedule of Incurred and Paid Losses and ALAE Development by Accident Year | The following table shows the commercial auto incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency: (Dollars in millions, reported claims in thousands) As of December 31, 2019 Incurred losses and ALAE, net of reinsurance for the years ended December 31, Total of incurred Cumulative number of reported claims Accident Unaudited Year 2015 2016 2017 2018 2019 2015 $ 374 $ 384 $ 394 $ 401 $ 400 $ 3 51 2016 417 430 450 463 7 53 2017 451 441 443 27 51 2018 453 442 72 49 2019 452 133 42 Total $ 2,200 Cumulative paid losses and ALAE, net of reinsurance 2015 $ 173 $ 244 $ 303 $ 349 $ 375 2016 184 273 350 408 2017 187 266 334 2018 184 266 2019 183 Total 1,566 All outstanding liabilities before 2015, net of reinsurance 15 Liabilities for loss and ALAE, net of reinsurance $ 649 The following table shows the commercial casualty incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency: (Dollars in millions, reported claims in thousands) As of December 31, 2019 Incurred losses and ALAE, net of reinsurance for the years ended December 31, Total of incurred but not reported liabilities plus expected development on reported losses Cumulative number of reported claims Accident Unaudited Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 495 $ 394 $ 378 $ 349 $ 347 $ 348 $ 349 $ 343 $ 341 $ 336 $ 11 20 2011 466 404 377 377 375 380 366 365 368 11 19 2012 466 414 417 394 394 404 399 397 14 18 2013 448 443 431 416 413 407 391 31 20 2014 503 496 479 476 479 465 34 21 2015 533 526 529 516 508 78 21 2016 563 574 557 555 120 21 2017 610 597 577 160 20 2018 650 641 272 20 2019 672 440 15 Total $ 4,910 Cumulative paid losses and ALAE, net of reinsurance 2010 $ 33 $ 92 $ 159 $ 203 $ 256 $ 285 $ 300 $ 314 $ 318 $ 321 2011 27 93 149 227 266 298 315 325 337 2012 27 88 170 232 288 330 346 364 2013 35 90 159 232 286 312 337 2014 34 97 172 287 338 390 2015 38 108 200 287 362 2016 46 126 228 331 2017 48 122 234 2018 44 148 2019 39 Total 2,863 All outstanding liabilities before 2010, net of reinsurance 88 Liabilities for loss and ALAE, net of reinsurance $ 2,135 The following table shows the excess and surplus lines incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency: (Dollars in millions, reported claims in thousands) As of December 31, 2019 Incurred losses and ALAE, net of reinsurance for the years ended December 31, Total of incurred Cumulative number of reported claims Accident Unaudited Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2011 $ 48 $ 47 $ 44 $ 38 $ 36 $ 35 $ 35 $ 34 $ 34 $ — 1 2012 67 56 49 40 37 36 35 36 1 1 2013 74 64 54 45 42 41 41 1 2 2014 95 82 75 64 60 59 6 2 2015 96 81 73 67 65 8 2 2016 93 87 84 82 14 3 2017 104 95 95 26 3 2018 116 109 44 3 2019 137 83 2 Total $ 658 Cumulative paid losses and ALAE, net of reinsurance 2011 $ 8 $ 14 $ 23 $ 27 $ 30 $ 32 $ 34 $ 33 $ 33 2012 9 15 19 25 29 31 32 33 2013 7 12 20 27 32 34 37 2014 9 17 27 37 43 48 2015 8 19 29 41 51 2016 10 21 39 51 2017 11 23 41 2018 11 26 2019 13 Total 333 All outstanding liabilities before 2011, net of reinsurance 1 Liabilities for loss and ALAE, net of reinsurance $ 326 The following table shows the personal auto incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency: (Dollars in millions, reported claims in thousands) As of December 31, 2019 Incurred losses and ALAE, net of reinsurance for the years ended December 31, Total of incurred Cumulative number of reported claims Accident Unaudited Year 2015 2016 2017 2018 2019 2015 $ 343 $ 356 $ 356 $ 360 $ 361 $ — 108 2016 383 384 386 384 — 110 2017 412 394 391 — 109 2018 424 398 18 111 2019 399 54 96 Total $ 1,933 Cumulative paid losses and ALAE, net of reinsurance 2015 $ 229 $ 292 $ 325 $ 346 $ 354 2016 243 316 351 370 2017 256 324 358 2018 262 327 2019 250 Total 1,659 All outstanding liabilities before 2015 net of reinsurance 6 Liabilities for loss and ALAE, net of reinsurance $ 280 The following table shows the commercial property incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency: (Dollars in millions, reported claims in thousands) As of December 31, 2019 Incurred losses and ALAE, net of reinsurance for the years ended December 31, Total of incurred Cumulative number of reported claims Accident Unaudited Year 2015 2016 2017 2018 2019 2015 $ 454 $ 414 $ 416 $ 415 $ 414 $ 2 17 2016 590 551 541 545 4 17 2017 587 560 556 5 18 2018 630 603 9 18 2019 621 22 15 Total $ 2,739 Cumulative paid losses and ALAE, net of reinsurance 2015 $ 279 $ 388 $ 407 $ 411 $ 411 2016 358 504 528 539 2017 395 522 547 2018 386 559 2019 413 Total 2,469 All outstanding liabilities before 2015, net of reinsurance 13 Liabilities for loss and ALAE, net of reinsurance $ 283 The following table shows the workers’ compensation incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency: (Dollars in millions, reported claims in thousands) As of December 31, 2019 Incurred losses and ALAE, net of reinsurance for the years ended December 31, Total of incurred Cumulative number of reported claims Accident Unaudited Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 283 $ 274 $ 248 $ 242 $ 240 $ 239 $ 240 $ 237 $ 236 $ 237 $ 19 26 2011 284 251 246 242 239 236 231 229 228 17 24 2012 265 245 234 220 213 211 209 208 21 21 2013 264 246 221 212 208 205 202 16 20 2014 261 233 214 203 201 198 18 19 2015 246 220 208 195 179 33 17 2016 230 218 206 188 31 16 2017 218 208 190 56 15 2018 222 207 65 15 2019 224 90 13 Total $ 2,061 Cumulative paid losses and ALAE, net of reinsurance 2010 $ 67 $ 134 $ 164 $ 181 $ 192 $ 198 $ 202 $ 204 $ 207 $ 209 2011 65 131 161 177 186 190 192 195 197 2012 62 121 147 162 171 175 178 180 2013 61 119 144 157 164 168 170 2014 56 110 134 148 157 162 2015 47 93 115 129 134 2016 46 97 119 131 2017 45 88 106 2018 48 95 2019 49 Total 1,433 All outstanding liabilities before 2010, net of reinsurance 295 Liabilities for loss and ALAE, net of reinsurance $ 923 The following table shows the homeowner incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency: (Dollars in millions, reported claims in thousands) As of December 31, 2019 Incurred losses and ALAE, net of reinsurance for the years ended December 31, Total of incurred Cumulative number of reported claims Accident Unaudited Year 2015 2016 2017 2018 2019 2015 $ 284 $ 275 $ 275 $ 274 $ 274 $ — 24 2016 315 304 303 302 — 23 2017 356 383 385 1 26 2018 370 386 6 23 2019 432 39 20 Total $ 1,779 Cumulative paid losses and ALAE, net of reinsurance 2015 $ 203 $ 260 $ 269 $ 272 $ 273 2016 208 283 295 299 2017 277 356 378 2018 268 368 2019 303 Total 1,621 All outstanding liabilities before 2015, net of reinsurance 2 Liabilities for loss and ALAE, net of reinsurance $ 160 |
Schedule of Average Annual Percentage Payout of Incurred Claims | The following table shows the average annual percentage payout of incurred losses for the commercial property line of business: Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited) Years 1 2 3 4 5 Average annual percentage payout 66.9% 26.2% 4.5% 1.5% 0.1% The following table shows the average annual percentage payout of incurred losses for the homeowner line of business: Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited) Years 1 2 3 4 5 Average annual percentage payout 70.9% 23.0% 4.4% 1.2% 0.3% The following table shows the average annual percentage payout of incurred losses for the commercial casualty line of business: Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited) Years 1 2 3 4 5 6 7 8 9 10 Average annual percentage payout 7.8% 15.0% 18.2% 18.4% 13.3% 9.1% 4.8% 3.9% 2.2% 0.8% The following table shows the average annual percentage payout of incurred losses for the workers’ compensation line of business: Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited) Years 1 2 3 4 5 6 7 8 9 10 Average annual percentage payout 26.4% 26.7% 12.0% 7.0% 3.9% 2.2% 1.3% 1.0% 1.2% 0.8% The following table shows the average annual percentage payout of incurred losses for the commercial auto line of business. Commercial auto includes both physical damage and liability losses. A majority of the incurred losses paid after year 2 are the result of liability losses. Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited) Years 1 2 3 4 5 Average annual percentage payout 41.4% 18.4% 15.5% 12.1% 6.3% The following table shows the average annual percentage payout of incurred losses for the personal auto line of business. Personal auto includes both physical damage and liability losses. A majority of the incurred losses paid after year 2 are the result of liability losses. Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited) Years 1 2 3 4 5 Average annual percentage payout 64.2% 17.4% 9.1% 5.4% 2.4% The following table shows the average annual percentage payout of incurred losses for the excess and surplus lines insurance segment. Excess and surplus lines consist mostly of commercial casualty and commercial property coverages. A majority of the incurred losses paid after year 2 are the result of commercial casualty losses. Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited) Years 1 2 3 4 5 6 7 8 9 Average annual percentage payout 15.3% 14.4% 19.1% 15.5% 11.6% 7.2% 3.3% 1.3% 0.8% |
Life Policy And Investment Co_2
Life Policy And Investment Contract Reserves (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Liability for Future Policy Benefit, before Reinsurance [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, 2019 2018 Life policy reserves: Ordinary/traditional life $ 1,226 $ 1,149 Other 50 48 Subtotal 1,276 1,197 Investment contract reserves: Deferred annuities 760 787 Universal life 640 632 Structured settlements 151 156 Other 8 7 Subtotal 1,559 1,582 Total life policy and investment contract reserves $ 2,835 $ 2,779 |
Deferred Policy Acquisition C_2
Deferred Policy Acquisition Costs (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 2018 2017 Property casualty: Deferred policy acquisition costs asset, January 1 $ 464 $ 438 $ 408 Capitalized deferred policy acquisition costs 1,034 933 897 Amortized deferred policy acquisition costs (986 ) (907 ) (867 ) Deferred policy acquisition costs asset, December 31 $ 512 $ 464 $ 438 Life: Deferred policy acquisition costs asset, January 1 $ 274 $ 232 $ 229 Capitalized deferred policy acquisition costs 61 60 51 Amortized deferred policy acquisition costs (48 ) (39 ) (46 ) Shadow deferred policy acquisition costs (25 ) 21 (2 ) Deferred policy acquisition costs asset, December 31 $ 262 $ 274 $ 232 Consolidated: Deferred policy acquisition costs asset, January 1 $ 738 $ 670 $ 637 Capitalized deferred policy acquisition costs 1,095 993 948 Amortized deferred policy acquisition costs (1,034 ) (946 ) (913 ) Shadow deferred policy acquisition costs (25 ) 21 (2 ) Deferred policy acquisition costs asset, December 31 $ 774 $ 738 $ 670 |
Long-Term Debt And Lease Obli_2
Long-Term Debt And Lease Obligation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Long-term Debt and Lease Obligation [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, 2019 2018 2019 2018 6.900% 1998 Senior debentures, due 2028 $ 27 $ 27 $ 28 $ 28 6.920% 2005 Senior debentures, due 2028 391 391 391 391 6.125% 2004 Senior notes, due 2034 370 370 374 374 Total $ 788 $ 788 $ 793 $ 793 |
Capital Lease Payments Over Next Five Years | interest and remaining lease residual values for finance leases we expect to pay. Below are the expected lease obligations we expect to pay through years 2025 and thereafter: (Dollars in millions) Years ended December 31, 2020 2021 2022 2023 2024 2025 and thereafter Finance lease obligations $ 14 $ 10 $ 8 $ 6 $ 3 $ 1 Operating lease obligations 5 2 2 2 1 3 Total lease obligations $ 19 $ 12 $ 10 $ 8 $ 4 $ 4 |
Other Operating and Finance Lease Disclosure [Table Text Block] | The following table provides lease cost and other information for the year ended December 31, 2019: (Dollars in millions) 2019 Lease cost: Finance lease cost $ 9 Operating lease cost 4 Total lease cost $ 13 Other information finance leases: Finance cash outflows $ 15 Weighted average discount rate 2.96 % Weighted average remaining lease term in years 3.65 Other information operating leases: Operating cash outflows $ 8 Weighted average discount rate 3.69 % Weighted average remaining lease term in years 4.71 |
Shareholders' Equity And Divi_2
Shareholders' Equity And Dividend Restrictions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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) 2019 2018 2017 Before tax Income tax Net Before Income Net Before Income Net Investments: AOCI, January 1 $ 46 $ 9 $ 37 $ 3,540 $ 733 $ 2,807 $ 2,625 $ 908 $ 1,717 Cumulative effect of change in accounting for equity securities as of January 1, 2018 — — — (3,155 ) (652 ) (2,503 ) — — — Adjusted AOCI, beginning of period 46 9 37 385 81 304 2,625 908 1,717 OCI before investment gains and losses, net, recognized in net income 545 115 430 (334 ) (71 ) (263 ) 1,054 366 688 Investment gains and losses, net, recognized in net income (1 ) (1 ) — (5 ) (1 ) (4 ) (139 ) (49 ) (90 ) OCI 544 114 430 (339 ) (72 ) (267 ) 915 317 598 Adjustment to reclassify certain tax effects from AOCI — — — — — — — (492 ) 492 AOCI, December 31 $ 590 $ 123 $ 467 $ 46 $ 9 $ 37 $ 3,540 $ 733 $ 2,807 Pension obligations: AOCI, January 1 $ (16 ) $ (2 ) $ (14 ) $ (12 ) $ (1 ) $ (11 ) $ (26 ) $ (8 ) $ (18 ) OCI excluding amortization recognized in net income 6 2 4 (5 ) (1 ) (4 ) 12 6 6 Amortization recognized in net income 1 — 1 1 — 1 2 1 1 OCI 7 2 5 (4 ) (1 ) (3 ) 14 7 7 AOCI, December 31 $ (9 ) $ — $ (9 ) $ (16 ) $ (2 ) $ (14 ) $ (12 ) $ (1 ) $ (11 ) Life deferred acquisition costs, life policy reserves and other: AOCI, January 1 $ (1 ) $ — $ (1 ) $ (10 ) $ (2 ) $ (8 ) $ (9 ) $ (3 ) $ (6 ) OCI before investment gains and losses, net, recognized in net income (15 ) (3 ) (12 ) (3 ) (1 ) (2 ) 8 5 3 Investment gains and losses, net, recognized in net income 3 — 3 12 3 9 (9 ) (4 ) (5 ) OCI (12 ) (3 ) (9 ) 9 2 7 (1 ) 1 (2 ) AOCI, December 31 $ (13 ) $ (3 ) $ (10 ) $ (1 ) $ — $ (1 ) $ (10 ) $ (2 ) $ (8 ) Summary of AOCI: AOCI, January 1 $ 29 $ 7 $ 22 $ 3,518 $ 730 $ 2,788 $ 2,590 $ 897 $ 1,693 Cumulative effect of change in accounting for equity securities as of January 1, 2018 — — — (3,155 ) (652 ) (2,503 ) — — — Adjusted AOCI, beginning of period 29 7 22 363 78 285 2,590 897 1,693 Investments OCI 544 114 430 (339 ) (72 ) (267 ) 915 317 598 Pension obligations OCI 7 2 5 (4 ) (1 ) (3 ) 14 7 7 Life deferred acquisition costs, life policy reserves and other OCI (12 ) (3 ) (9 ) 9 2 7 (1 ) 1 (2 ) Total OCI 539 113 426 (334 ) (71 ) (263 ) 928 325 603 Adjustment to reclassify certain tax effects from AOCI — — — — — — — (492 ) 492 AOCI, December 31 $ 568 $ 120 $ 448 $ 29 $ 7 $ 22 $ 3,518 $ 730 $ 2,788 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Reinsurance Disclosures [Abstract] | |
Property Casualty Insurance Assumed And Ceded Business | The table below summarizes our consolidated property casualty insurance net written premiums, earned premiums and incurred loss and loss expenses: (Dollars in millions) Years ended December 31, 2019 2018 2017 Direct written premiums $ 5,477 $ 5,018 $ 4,854 Assumed written premiums 244 173 125 Ceded written premiums (205 ) (161 ) (139 ) Net written premiums $ 5,516 $ 5,030 $ 4,840 Direct earned premiums $ 5,340 $ 4,931 $ 4,752 Assumed earned premiums 199 149 132 Ceded earned premiums (205 ) (160 ) (162 ) Earned premiums $ 5,334 $ 4,920 $ 4,722 Direct incurred loss and loss expenses $ 3,402 $ 3,188 $ 2,961 Assumed incurred loss and loss expenses 117 125 113 Ceded incurred loss and loss expenses (167 ) (90 ) 64 Incurred loss and loss expenses $ 3,352 $ 3,223 $ 3,138 |
Life Insurance Assumed And Ceded Business | The table below summarizes our consolidated life insurance earned premiums and contract holders' benefits incurred: (Dollars in millions) Years ended December 31, 2019 2018 2017 Direct earned premiums $ 341 $ 320 $ 300 Ceded earned premiums (71 ) (70 ) (68 ) Earned premiums $ 270 $ 250 $ 232 Direct contract holders' benefits incurred $ 359 $ 328 $ 319 Ceded contract holders' benefits incurred (73 ) (61 ) (67 ) Contract holders' benefits incurred $ 286 $ 267 $ 252 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 2018 Deferred tax assets: Loss and loss expense reserves $ 66 $ 60 Unearned premiums 113 105 Deferred international earnings 51 — Other 39 33 Deferred tax assets before valuation allowance 269 198 Valuation allowance for international operations 41 — Deferred tax assets net of valuation allowance 228 198 Deferred tax liabilities: Investment gains and other, net 995 542 Deferred acquisition costs 139 131 Life policy reserves 120 117 Investments 23 18 Other 30 17 Total gross deferred tax liabilities 1,307 825 Net deferred income tax liability $ 1,079 $ 627 |
Schedule of Income before Income Tax | For financial reporting purposes, income before income taxes includes the following components: (Dollars in millions) For the years ended December 31, 2019 2018 2017 United States $ 2,440 $ 251 $ 730 International 32 — — Total income before income taxes $ 2,472 $ 251 $ 730 |
Schedule of The Provision (Benefit) of Income Taxes | The provision (benefit) for income taxes consists of: (Dollars in millions) For the years ended December 31, 2019 2018 2017 Provision (benefit) for income taxes: Current – United States federal $ 137 $ 11 $ 129 International (5 ) — — Total current 132 11 129 Deferred – United States federal 338 (47 ) (444 ) International 5 — — Total deferred 343 (47 ) (444 ) Total provision (benefit) for income taxes $ 475 $ (36 ) $ (315 ) |
Differences Between The 35 Percent Statutory Income Tax Rate And Effective Income Tax Rate | The differences between the 21% and 35% statutory federal income tax rate and our effective income tax rate were as follows: (Dollars in millions) Years ended December 31, 2019 2018 2017 Tax at statutory rate: $ 519 21.0 % $ 53 21.0 % $ 256 35.0 % Increase (decrease) resulting from: Tax-exempt income from municipal bonds (19 ) (0.8 ) (20 ) (8.0 ) (36 ) (4.9 ) Dividend received exclusion (16 ) (0.6 ) (15 ) (6.0 ) (34 ) (4.7 ) Tax accounting method changes — — (50 ) (19.9 ) — — Deferred tax benefit due to tax rate change — — — — (495 ) (67.8 ) Other (9 ) (0.4 ) (4 ) (1.4 ) (6 ) (0.8 ) Provision (benefit) for income taxes $ 475 19.2 % $ (36 ) (14.3 )% $ (315 ) (43.2 )% |
Reconciliation of Unrecognized Tax Benefits | The following is a tabular reconciliation of the total amounts of unrecognized tax benefits. (Dollars in millions) Years ended December 31, 2019 2018 2017 Gross unrecognized tax benefits at January 1 $ 34 $ — $ — Gross increase in prior year positions — — — Gross decrease in prior year positions — — — Gross increase in current year positions — 34 — Settlements with tax authorities — — — Lapse of statute of limitations — — — Gross unrecognized tax benefits at December 31 $ 34 $ 34 $ — |
Reconciliation of Cincinnati Global Valuation Allowance | The following is a tabular reconciliation of the total amounts of our Cincinnati Global valuation allowance. (Dollars in millions) Years ended December 31, 2019 2018 2017 Valuation allowance at January 1 $ — $ — $ — Acquisition accounting amount 55 — — Current year operations (14 ) — — Valuation allowance at December 31 $ 41 $ — $ — |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 2018 2017 Numerator: Net income—basic and diluted $ 1,997 $ 287 $ 1,045 Denominator: Basic weighted-average common shares outstanding 163.2 163.2 164.2 Effect of share-based awards: Stock options 1.2 0.8 1.1 Nonvested shares 0.7 0.5 0.7 Diluted weighted-average shares 165.1 164.5 166.0 Earnings per share: Basic $ 12.24 $ 1.76 $ 6.36 Diluted 12.10 1.75 6.29 Number of anti-dilutive share-based awards — 1.3 0.7 |
Employee Retirement Benefits (T
Employee Retirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Weighted-Average Assumptions Used for Benefit Obligations | 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 2019 2018 2019 2018 Discount rate 3.40 % 4.34 % 3.33 % 4.25 % Rate of compensation increase 2.25-3.25 2.25-3.25 2.25-3.25 2.25-3.25 |
Assumptions of Net Benefit Costs | This is a summary of the weighted-average assumptions used to determine our net periodic benefit cost for the plans: Qualified Pension Plan SERP 2019 2018 2017 2019 2018 2017 Discount rate 4.34 % 3.73 % 4.30 % 4.25 % 3.61 % 4.10 % Expected return on plan assets 7.00 7.25 7.25 n/a n/a n/a Rate of compensation increase 2.25-3.25 2.75-3.25 2.75-3.25 2.25-3.25 2.75-3.25 2.75-3.25 |
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, 2019 2018 Change in projected benefit obligation: Benefit obligation, January 1 $ 318 $ 351 Service cost 8 11 Interest cost 13 13 Actuarial loss (gain) 45 (19 ) Benefits paid (34 ) (38 ) Projected benefit obligation, December 31 $ 350 $ 318 Change in plan assets: Fair value of plan assets, January 1 $ 318 $ 345 Actual return on plan assets 70 (4 ) Employer contribution — 15 Benefits paid (34 ) (38 ) Fair value of plan assets, December 31 $ 354 $ 318 Funded status, December 31 $ 4 $ — Accumulated benefit obligation $ 327 $ 297 |
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, 2019 2018 Pension amounts recognized in the consolidated balance sheets: Other assets $ 4 $ — Total $ 4 $ — Pension amounts recognized in accumulated other comprehensive income: Net actuarial loss $ 9 $ 16 Total $ 9 $ 16 |
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, 2019 2018 2017 Net periodic benefit cost: Service cost $ 8 $ 11 $ 11 Non-service costs (benefit): Interest cost 13 13 14 Expected return on plan assets (20 ) (22 ) (21 ) Amortization of actuarial loss and prior service cost 1 1 2 Other 1 2 1 Net periodic benefit cost $ 3 $ 5 $ 7 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Current year actuarial (gain) loss $ (5 ) $ 7 $ (11 ) Amortization of actuarial loss (2 ) (3 ) (3 ) Total recognized in other comprehensive (income) loss $ (7 ) $ 4 $ (14 ) Total recognized in net periodic benefit cost and other comprehensive (income) loss $ (4 ) $ 9 $ (7 ) |
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, 2019 Fixed maturities, available for sale: States, municipalities and political subdivisions $ — $ 25 $ — $ 25 Corporate — 27 — 27 United States Government 25 — — 25 Total fixed maturities, available for sale 25 52 — 77 Common equities 260 — — 260 Total $ 285 $ 52 $ — $ 337 At December 31, 2018 Fixed maturities, available for sale: States, municipalities and political subdivisions $ — $ 29 $ — $ 29 Corporate — 37 — 37 United States Government 5 — — 5 Total fixed maturities, available for sale 5 66 — 71 Common equities 215 — — 215 Total $ 220 $ 66 $ — $ 286 |
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, 2020 2021 2022 2023 2024 2025 - 2029 Expected future benefit payments $ 31 $ 26 $ 25 $ 26 $ 28 $ 147 |
Statutory Accounting Informat_2
Statutory Accounting Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Staturory Accounting Information [Abstract] | |
Statutory Net Income And Statutory Surplus | The statutory net income and statutory capital and surplus are presented below: (Dollars in millions) Net income Capital and surplus Years ended December 31, At December 31, 2019 2018 2017 2019 2018 The Cincinnati Insurance Company $ 558 $ 626 $ 401 $ 5,620 $ 4,919 The Cincinnati Casualty Company 13 16 21 437 398 The Cincinnati Indemnity Company 3 5 4 111 102 The Cincinnati Specialty Underwriters Insurance Company 62 69 58 526 479 The Cincinnati Life Insurance Company 19 — 12 204 191 |
Share-Based Associate Compens_2
Share-Based Associate Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Stock Option Information | Below is a summary of option information for the year 2019 : (Dollars in millions, except exercise price. Shares in thousands) Shares Weighted- exercise price Aggregate Weighted-average Outstanding option shares at January 1, 2019 3,274 $ 56.08 Granted 704 85.67 Exercised (493 ) 42.57 Forfeited or expired (48 ) 63.46 Outstanding option shares at December 31, 2019 3,437 63.99 $ 141 6.13 years Options exercisable at end of period 2,139 $ 55.25 $ 107 4.71 years |
Restricted Stock Unit Information | elow is a summary of service-based and performance-based share information, assuming a target payout for performance-based shares, for the year 2019 : (Shares in thousands) Service-based Weighted- Performance-based Weighted- Nonvested at January 1, 2019 813 $ 62.31 182 $ 59.83 Granted 288 79.57 52 87.97 Vested (293 ) 57.40 (21 ) 70.68 Forfeited or canceled (25 ) 69.43 (48 ) 70.68 Nonvested at December 31, 2019 783 70.27 165 64.23 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Assumptions Used In Option Grants Issued | The following weighted average assumptions were used in determining fair value for option grants issued: 2019 2018 2017 Weighted-average expected term 7-8 years 7-8 years 8 years Expected volatility 14.49-15.39% 15.04-15.10% 16.95% Dividend yield 2.61% 2.98% 2.83% Risk-free rates 2.62-2.64% 2.77-2.83% 2.33% Weighted-average fair value of options granted during the period $11.73 $9.87 $10.79 |
Performance Based Shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Assumptions Used In Option Grants Issued | he following assumptions were used in determining fair value for performance-based grants issued: 2019 2018 2017 Expected term 2.86 years 2.89 years 2.89 years Expected volatility 15.10-25.00% 16.01-26.32% 15.75-28.35% Dividend yield 2.61% 2.81% 2.83% Risk-free rates 2.48% 2.22% 1.44% |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment information is summarized in the following table: (Dollars in millions) Years ended December 31, 2019 2018 2017 Revenues: Commercial lines insurance Commercial casualty $ 1,102 $ 1,075 $ 1,072 Commercial property 958 920 903 Commercial auto 707 664 634 Workers' compensation 300 324 335 Other commercial 252 235 221 Commercial lines insurance premiums 3,319 3,218 3,165 Fee revenues 5 5 5 Total commercial lines insurance 3,324 3,223 3,170 Personal lines insurance Personal auto 621 614 582 Homeowner 607 563 518 Other personal 176 159 141 Personal lines insurance premiums 1,404 1,336 1,241 Fee revenues 4 5 5 Total personal lines insurance 1,408 1,341 1,246 Excess and surplus lines insurance 278 234 209 Fee revenues 2 1 1 Total excess and surplus lines insurance 280 235 210 Life insurance premiums 270 250 232 Fee revenues 4 4 5 Total life insurance 274 254 237 Investments Investment income, net of expenses 646 619 609 Investment gains and losses, net 1,650 (402 ) 148 Total investment revenue 2,296 217 757 Other Premiums 333 132 107 Other 9 5 5 Total other revenue 342 137 112 Total revenues $ 7,924 $ 5,407 $ 5,732 Income (loss) before income taxes: Insurance underwriting results Commercial lines insurance $ 241 $ 151 $ 119 Personal lines insurance 8 (20 ) (32 ) Excess and surplus lines insurance 53 63 61 Life insurance 1 8 (1 ) Investments 2,197 121 664 Other (28 ) (72 ) (81 ) Total income before income taxes $ 2,472 $ 251 $ 730 December 31, December 31, Identifiable assets: 2019 2018 Property casualty insurance $ 3,437 $ 3,285 Life insurance 1,516 1,424 Investments 19,583 16,741 Other 872 485 Total $ 25,408 $ 21,935 |
Quarterly Supplementary Data (T
Quarterly Supplementary Data (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Financial Information | This table includes unaudited quarterly financial information for the years ended December 31, 2019 and 2018 : (Dollars in millions, except per share data) Quarter 1st 2nd 3rd 4th Full year 2019 Revenues $ 2,159 $ 1,913 $ 1,700 $ 2,152 $ 7,924 Income before income taxes 867 530 294 781 2,472 Net income 695 428 248 626 1,997 Net income per common share—basic 4.27 2.62 1.51 3.84 12.24 Net income per common share—diluted 4.22 2.59 1.49 3.79 12.10 2018 Revenues $ 1,224 $ 1,558 $ 1,915 $ 710 $ 5,407 (Loss) income before income taxes (50 ) 264 618 (581 ) 251 Net (loss) income (31 ) 217 553 (452 ) 287 Net (loss) income per common share—basic (0.19 ) 1.33 3.40 (2.78 ) 1.76 Net (loss) income per common share—diluted (0.19 ) 1.32 3.38 (2.78 ) 1.75 |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
The fair value of assets acquired, liability assumed and the allocation of the purchase price | The fair value of the assets acquired, liabilities assumed and the allocation of the final purchase price on the acquisition date have been summarized in the following table: (Dollars in millions) Assets Investments and other invested assets $ 198 Cash and cash equivalents 64 Premiums receivable 45 Reinsurance recoverable 42 Other assets 23 Total assets acquired $ 372 Liabilities Loss and loss expense reserves $ 277 Unearned premiums 88 Other liabilities 24 Total liabilities assumed $ 389 Fair value of identifiable intangible assets: Syndicate capacity - indefinite lived $ 31 Syndicate broker relationships - definite lived 12 Value of business acquired - definite lived 4 Internally developed technology - definite lived 3 Total fair value of identifiable intangible assets $ 50 Total purchase price paid $ 63 Total assets acquired (including fair value of identifiable intangible assets) 422 Total liabilities assumed 389 Fair value of net assets acquired prior to allocation of goodwill 33 Excess of purchase price paid over fair value of net assets acquired assigned to goodwill $ 30 |
Summary Of Significant Accoun_3
Summary Of Significant Accounting Policies (Narrative) (Details) | Feb. 28, 2019 | Dec. 31, 2019USD ($)statesubsidiaryindependent_insurance_agencyreporting_locations | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2008 |
Significant Accounting Policies | |||||
Unrealized gains reclassified to retained earnings for ASU 2016-01, after tax | $ 2,503,000,000 | ||||
Income Tax Examination, Penalties Expense | $ 0 | ||||
Number of operating subsidaries | subsidiary | 2 | ||||
Number of independent insurance agencies | independent_insurance_agency | 1,796 | ||||
Number of reporting locations | reporting_locations | 2,458 | ||||
Number of states in which entity operates | state | 45 | ||||
Excess (deficit) of Separate Account Fair Value over (under) Contract Holder Account Value | $ 52,000,000 | (3,000,000) | |||
Defined Benefit Plan Qualifying Age | 40 years | ||||
Other invested assets | 296,000,000 | 123,000,000 | |||
Depreciation expense | 25,000,000 | 31,000,000 | $ 28,000,000 | ||
Land, building and equipment impairments | 0 | 0 | 0 | ||
Total | $ (1,650,000,000) | 402,000,000 | $ (148,000,000) | ||
Unrealized Gain (Loss) on Investments | 404,000,000 | ||||
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 | $ 32,000,000 | 33,000,000 | |||
Venture Capital Funds | |||||
Significant Accounting Policies | |||||
Other invested assets | 71,000,000 | 60,000,000 | |||
Real Estate Investment | |||||
Significant Accounting Policies | |||||
Other invested assets | 29,000,000 | $ 30,000,000 | |||
Other than Securities Investment | |||||
Significant Accounting Policies | |||||
Other invested assets | $ 164,000,000 | ||||
10 Largest States | |||||
Significant Accounting Policies | |||||
Generated percentage of total earned premiums | 54.80% | 58.40% | |||
Ohio, Largest State | |||||
Significant Accounting Policies | |||||
Generated percentage of total earned premiums | 15.10% | 15.90% | |||
Illinois, Georgia, North Carolina, Indiana and Pennsylvania | Minimum | |||||
Significant Accounting Policies | |||||
Generated percentage of total earned premiums | 4.00% | ||||
Illinois, Georgia, North Carolina, Indiana and Pennsylvania | Maximum | |||||
Significant Accounting Policies | |||||
Generated percentage of total earned premiums | 6.00% | ||||
Largest Single Agency Relationship | |||||
Significant Accounting Policies | |||||
Generated percentage of total earned premiums | 1.30% | ||||
All Other | Maximum | |||||
Significant Accounting Policies | |||||
Generated percentage of total earned premiums | 4.00% | ||||
Stock Options | |||||
Significant Accounting Policies | |||||
Weighted-average remaining contractual life for options expected to vest | 10 years | ||||
Property Casualty Insurance Segment | |||||
Significant Accounting Policies | |||||
Number of operating subsidaries | subsidiary | 2 | ||||
Stock Options | |||||
Significant Accounting Policies | |||||
Awards vesting period | 3 years | ||||
Restricted Stock Units (RSUs) | |||||
Significant Accounting Policies | |||||
Awards vesting period | 3 years | ||||
Broker Relationships and Internally developed technology | Cincinnati Global | Minimum | |||||
Significant Accounting Policies | |||||
Useful life | 5 years | ||||
Broker Relationships and Internally developed technology | Cincinnati Global | Maximum | |||||
Significant Accounting Policies | |||||
Useful life | 15 years |
Investments (Narrative) (Detail
Investments (Narrative) (Details) $ in Millions | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Gain (Loss) on Investments | |||
Largest single common stock holding | $ 414 | ||
Largest equity holdings to total equity portfolio | 5.50% | ||
Largest equity holdings to total portfolio | 2.10% | ||
Assets Held by Insurance Regulators | $ 117 | $ 112 | |
Collateral at fair value | $ 95 | $ 75 | |
Impaired securities | 3 | 1 | 6 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, aggregate loss | $ 3 | $ 58 | $ 18 |
Fixed Maturities | |||
Gain (Loss) on Investments | |||
Number of securities total unrealized loss in an unrealized loss position for 12 months or more | 38 | 400 | 249 |
Number of securities below 70 percent of amortized cost | 0 | 0 | 0 |
Equity Securities | |||
Gain (Loss) on Investments | |||
Number of securities total unrealized loss in an unrealized loss position for 12 months or more | 0 |
Investments (Analysis Of Cost O
Investments (Analysis Of Cost Or Amortized Cost Gross Unrealized Gains And Losses And Fair Value For Investments) (Details) - Fixed Maturities - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | $ 11,108 | $ 10,643 |
Gross unrealized gains | 597 | 174 |
Gross unrealized losses | 7 | 128 |
Fair value | 11,698 | 10,689 |
Corporate Securities | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 6,074 | 5,712 |
Gross unrealized gains | 332 | 85 |
Gross unrealized losses | 5 | 87 |
Fair value | 6,401 | 5,710 |
States, Municipalities and Political Subdivisions | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 4,477 | 4,251 |
Gross unrealized gains | 252 | 84 |
Gross unrealized losses | 1 | 31 |
Fair value | 4,728 | 4,304 |
Commercial Mortgage Backed Securities | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 290 | 287 |
Gross unrealized gains | 11 | 3 |
Gross unrealized losses | 0 | 2 |
Fair value | 301 | 288 |
Government-Sponsored Enterprises | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 137 | 316 |
Gross unrealized gains | 0 | 1 |
Gross unrealized losses | 1 | 7 |
Fair value | 136 | 310 |
United States Government | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 102 | 67 |
Gross unrealized gains | 2 | 1 |
Gross unrealized losses | 0 | 1 |
Fair value | 104 | 67 |
Foreign Government | ||
Schedule of Available-for-sale Securities | ||
Cost or amortized cost | 28 | 10 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair value | $ 28 | $ 10 |
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) - Fixed Maturities - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Investments, Unrealized Loss Position | ||
Less than 12 months fair value | $ 340 | $ 3,031 |
Less than 12 Months, Unrealized losses | 4 | 70 |
12 months or more fair value | 183 | 1,149 |
12 Months or more, unrealized losses | 3 | 58 |
Total fair value | 523 | 4,180 |
Total Unrealized Losses | 7 | 128 |
Corporate Securities | ||
Investments, Unrealized Loss Position | ||
Less than 12 months fair value | 199 | 2,082 |
Less than 12 Months, Unrealized losses | 2 | 51 |
12 months or more fair value | 118 | 501 |
12 Months or more, unrealized losses | 3 | 36 |
Total fair value | 317 | 2,583 |
Total Unrealized Losses | 5 | 87 |
States, Municipalities and Political Subdivisions | ||
Investments, Unrealized Loss Position | ||
Less than 12 months fair value | 98 | 823 |
Less than 12 Months, Unrealized losses | 1 | 18 |
12 months or more fair value | 10 | 340 |
12 Months or more, unrealized losses | 0 | 13 |
Total fair value | 108 | 1,163 |
Total Unrealized Losses | 1 | 31 |
Commercial Mortgage Backed Securities | ||
Investments, Unrealized Loss Position | ||
Less than 12 months fair value | 6 | 77 |
Less than 12 Months, Unrealized losses | 0 | 0 |
12 months or more fair value | 0 | 64 |
12 Months or more, unrealized losses | 0 | 2 |
Total fair value | 6 | 141 |
Total Unrealized Losses | 0 | 2 |
Government-Sponsored Enterprises | ||
Investments, Unrealized Loss Position | ||
Less than 12 months fair value | 26 | 49 |
Less than 12 Months, Unrealized losses | 1 | 1 |
12 months or more fair value | 51 | 211 |
12 Months or more, unrealized losses | 0 | 6 |
Total fair value | 77 | 260 |
Total Unrealized Losses | 1 | 7 |
United States Government | ||
Investments, Unrealized Loss Position | ||
Less than 12 months fair value | 0 | 0 |
Less than 12 Months, Unrealized losses | 0 | 0 |
12 months or more fair value | 4 | 33 |
12 Months or more, unrealized losses | 0 | 1 |
Total fair value | 4 | 33 |
Total Unrealized Losses | 0 | $ 1 |
Foreign government | ||
Investments, Unrealized Loss Position | ||
Less than 12 months fair value | 11 | |
Less than 12 Months, Unrealized losses | 0 | |
12 months or more fair value | 0 | |
12 Months or more, unrealized losses | 0 | |
Total fair value | 11 | |
Total Unrealized Losses | $ 0 |
Investments (Contractual Maturi
Investments (Contractual Maturity Dates For Fixed-Maturity And Short-Term Investments) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Amortized cost | ||
Due in one year or less | $ 455 | |
Due after one year through five years | 3,180 | |
Due after five years through ten years | 3,792 | |
Due after ten years | 3,681 | |
Total | 11,108 | $ 10,643 |
Fair value | ||
Due in one year or less | 459 | |
Due after one year through five years | 3,302 | |
Due after five years through ten years | 4,011 | |
Due after ten years | 3,926 | |
Total | $ 11,698 | $ 10,689 |
% of fair value | ||
Due in one year or less | 3.90% | |
Due after one year through five years | 28.20% | |
Due after five years through ten years | 34.30% | |
Due after ten years | 33.60% | |
Total | 100.00% |
Investments (Investment Income
Investments (Investment Income Realized Investment Gains And Losses) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Investment income: | |||
Interest | $ 446 | $ 445 | $ 445 |
Dividends | 201 | 181 | 170 |
Other | 12 | 5 | 4 |
Total | 659 | 631 | 619 |
Less investment expenses | 13 | 12 | 10 |
Total | 646 | 619 | 609 |
Gain (Loss) on Sale of Investments | 1,640 | (408) | 148 |
Unrealized Gain (Loss) on Investments | (404) | ||
Investment gains and losses, net: | |||
Other | (3) | (12) | 9 |
Total | 1,650 | (402) | 148 |
Fixed Maturities | |||
Investment gains and losses, net: | |||
Gross realized gains | 13 | 12 | 25 |
Gross realized losses | (3) | (2) | 0 |
Other-than-temporary impairments | (9) | (5) | (6) |
Total | 1 | 5 | 19 |
Equity Securities | |||
Investment income: | |||
Gain (Loss) on Sale of Investments | 26 | 9 | 0 |
Unrealized Gain (Loss) on Investments | 1,626 | (404) | 0 |
Investment gains and losses, net: | |||
Gross realized gains | 0 | 0 | 195 |
Gross realized losses | 0 | 0 | (72) |
Other-than-temporary impairments | 0 | 0 | (3) |
Total | $ 1,652 | $ (395) | $ 120 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
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 | 77 | 71 |
Reserves for structured settlements | 6,147 | 5,707 |
Life Policy Loans | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Recorded outstanding principal and interest for these life policy loans | 32 | 33 |
Deferred Annuities and Structured Settlements | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Recorded reserves for the deferred annuities | 760 | 787 |
Reserves for structured settlements | 151 | 156 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Cash and Cash Equivalents, Fair Value Disclosure | $ 767 | $ 784 |
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, 2019 | Dec. 31, 2018 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | $ 11,698 | $ 10,689 |
Available for sale securities, equity securities | 7,752 | 5,920 |
Separate accounts taxable fixed maturities | 882 | 803 |
Total | 20,350 | 17,434 |
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) | 45 | 34 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Total | 7,667 | 5,843 |
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) | 45 | 34 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Total | 12,683 | 11,586 |
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 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Total | 0 | 5 |
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 |
Fixed Maturities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 11,698 | 10,689 |
Fixed Maturities | Corporate Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 6,401 | 5,710 |
Fixed Maturities | States, Municipalities and Political Subdivisions | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 4,728 | 4,304 |
Fixed Maturities | Commercial Mortgage Backed Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 301 | 288 |
Fixed Maturities | Government-Sponsored Enterprises | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 136 | 310 |
Fixed Maturities | United States Government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 104 | 67 |
Fixed Maturities | Foreign Government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 28 | 10 |
Fixed Maturities | Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 104 | 67 |
Fixed Maturities | Level 1 | Corporate Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Fixed Maturities | Level 1 | States, Municipalities and Political Subdivisions | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Fixed Maturities | Level 1 | Commercial Mortgage Backed Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Fixed Maturities | Level 1 | Government-Sponsored Enterprises | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Fixed Maturities | Level 1 | United States Government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 104 | 67 |
Fixed Maturities | Level 1 | Foreign Government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Fixed Maturities | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 11,594 | 10,617 |
Fixed Maturities | Level 2 | Corporate Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 6,401 | 5,709 |
Fixed Maturities | Level 2 | States, Municipalities and Political Subdivisions | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 4,728 | 4,300 |
Fixed Maturities | Level 2 | Commercial Mortgage Backed Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 301 | 288 |
Fixed Maturities | Level 2 | Government-Sponsored Enterprises | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 136 | 310 |
Fixed Maturities | Level 2 | United States Government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Fixed Maturities | Level 2 | Foreign Government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 28 | 10 |
Fixed Maturities | Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 5 |
Fixed Maturities | Level 3 | Corporate Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 1 |
Fixed Maturities | Level 3 | States, Municipalities and Political Subdivisions | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 4 |
Fixed Maturities | Level 3 | Commercial Mortgage Backed Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Fixed Maturities | Level 3 | Government-Sponsored Enterprises | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Fixed Maturities | Level 3 | United States Government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Fixed Maturities | Level 3 | Foreign Government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, debt securities | 0 | 0 |
Equity Securities | Common Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, equity securities | 7,518 | 5,742 |
Equity Securities | Nonredeemable Preferred Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, equity securities | 234 | 178 |
Equity Securities | Level 1 | Common Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, equity securities | 7,518 | 5,742 |
Equity Securities | Level 1 | Nonredeemable Preferred Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, equity securities | 0 | 0 |
Equity Securities | Level 2 | Common Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, equity securities | 0 | 0 |
Equity Securities | Level 2 | Nonredeemable Preferred Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, equity securities | 234 | 178 |
Equity Securities | Level 3 | Common Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, equity securities | 0 | 0 |
Equity Securities | Level 3 | Nonredeemable Preferred Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Available for sale securities, equity securities | 0 | 0 |
Taxable Fixed Maturities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Separate accounts taxable fixed maturities | 855 | 791 |
Taxable Fixed Maturities | Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Separate accounts taxable fixed maturities | 0 | 0 |
Taxable Fixed Maturities | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Separate accounts taxable fixed maturities | 855 | 791 |
Taxable Fixed Maturities | Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Separate accounts taxable fixed maturities | $ 0 | $ 0 |
Fair Value Measurements (Fair_2
Fair Value Measurements (Fair Value of Note Payable and Long-Term Debt) (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of note payable | $ 39 | $ 32 |
Total | 1,091 | 975 |
6.900% Senior Debentures, Due 2028 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | $ 34 | $ 32 |
Interest rate | 6.90% | 6.90% |
Debt instrument, year of maturity | 2028 | 2028 |
6.920% Senior Debentures, Due 2028 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | $ 506 | $ 471 |
Interest rate | 6.92% | 6.92% |
Debt instrument, year of maturity | 2028 | 2028 |
6.125% Senior Notes, Due 2034 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | $ 512 | $ 440 |
Interest rate | 6.125% | 6.125% |
Debt instrument, year of maturity | 2034 | 2034 |
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 | 39 | 32 |
Total | 1,091 | 975 |
Level 2 | 6.900% Senior Debentures, Due 2028 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | 34 | 32 |
Level 2 | 6.920% Senior Debentures, Due 2028 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | 506 | 471 |
Level 2 | 6.125% Senior Notes, Due 2034 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of senior debt | 512 | 440 |
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 (Fair_3
Fair Value Measurements (Fair Value of Life Policy) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of life policy loans | $ 44 | $ 40 |
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 | $ 44 | $ 40 |
Fair Value Measurements (Fair_4
Fair Value Measurements (Fair Value Of Deferred Annuities, Structured Settlements And Other Items) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | $ 982 | $ 927 |
Deferred Annuities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | 770 | 742 |
Structured Settlements | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | 212 | 185 |
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 | 212 | 185 |
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 | 212 | 185 |
Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | 770 | 742 |
Level 3 | Deferred Annuities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis | ||
Fair value of deferred annuities and structured settlements | 770 | 742 |
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 Lo_2
Property Casualty Loss And Loss Expenses (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property Casualty Insurance Underwriters | ||||
Certain accident, life and health loss reserves | $ 6,088,000,000 | $ 5,646,000,000 | $ 5,219,000,000 | $ 5,035,000,000 |
Prior year claims and claims adjustments expense, (favorable) and unfavorable | (248,000,000) | (167,000,000) | (119,000,000) | |
Net loss and loss expense reserves for asbestos and environmental claims | $ 85,000,000 | $ 89,000,000 | ||
Percentage of reserves for asbestos and environmental claims | 2.00% | 2.00% | ||
Maximum | ||||
Property Casualty Insurance Underwriters | ||||
Reinsurance retention | $ 500,000 | |||
Life and Health Loss Reserves | ||||
Property Casualty Insurance Underwriters | ||||
Certain accident, life and health loss reserves | 59,000,000 | $ 61,000,000 | 54,000,000 | |
Commercial Insurance | ||||
Property Casualty Insurance Underwriters | ||||
Prior year claims and claims adjustments expense, (favorable) and unfavorable | (192,000,000) | (157,000,000) | (73,000,000) | |
Commercial Insurance | Commercial Casualty Line | ||||
Property Casualty Insurance Underwriters | ||||
Certain accident, life and health loss reserves | 2,165,000,000 | |||
Prior year claims and claims adjustments expense, (favorable) and unfavorable | (78,000,000) | (47,000,000) | 11,000,000 | |
Commercial Insurance | Workers' Compensation Line | ||||
Property Casualty Insurance Underwriters | ||||
Certain accident, life and health loss reserves | 987,000,000 | |||
Prior year claims and claims adjustments expense, (favorable) and unfavorable | (77,000,000) | (58,000,000) | (54,000,000) | |
Commercial Insurance | Commercial Property Line | ||||
Property Casualty Insurance Underwriters | ||||
Certain accident, life and health loss reserves | 394,000,000 | |||
Prior year claims and claims adjustments expense, (favorable) and unfavorable | (25,000,000) | (47,000,000) | (33,000,000) | |
Commercial Insurance | Commercial Auto Line | ||||
Property Casualty Insurance Underwriters | ||||
Certain accident, life and health loss reserves | 654,000,000 | |||
Prior year claims and claims adjustments expense, (favorable) and unfavorable | (6,000,000) | 33,000,000 | ||
Commercial Insurance | Other Commercial Lines | ||||
Property Casualty Insurance Underwriters | ||||
Prior year claims and claims adjustments expense, (favorable) and unfavorable | (30,000,000) | |||
Personal Insurance | ||||
Property Casualty Insurance Underwriters | ||||
Prior year claims and claims adjustments expense, (favorable) and unfavorable | (27,000,000) | 13,000,000 | (14,000,000) | |
Personal Insurance | Personal Auto | ||||
Property Casualty Insurance Underwriters | ||||
Certain accident, life and health loss reserves | 313,000,000 | |||
Prior year claims and claims adjustments expense, (favorable) and unfavorable | (26,000,000) | |||
Personal Insurance | Homeowner | ||||
Property Casualty Insurance Underwriters | ||||
Prior year claims and claims adjustments expense, (favorable) and unfavorable | 11,000,000 | |||
Excess and Surplus Lines Insurance | ||||
Property Casualty Insurance Underwriters | ||||
Certain accident, life and health loss reserves | 334,000,000 | |||
Prior year claims and claims adjustments expense, (favorable) and unfavorable | (11,000,000) | (24,000,000) | (29,000,000) | |
Reinsurance assumed and other non segment | ||||
Property Casualty Insurance Underwriters | ||||
Prior year claims and claims adjustments expense, (favorable) and unfavorable | $ (18,000,000) | $ 1,000,000 | $ (3,000,000) |
Consolidated Property Casualty
Consolidated Property Casualty Loss And Loss Expense Reserves (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Feb. 28, 2019 | |
Business Acquisition | ||||
Gross loss and loss expense reserves, January 1 | $ 5,646 | $ 5,219 | $ 5,035 | |
Less reinsurance recoverable | 238 | 187 | 298 | |
Net loss and loss expense reserves, January 1 | 5,408 | 5,032 | 4,737 | |
Net incurred loss and loss expenses related to: | ||||
Current accident year | 3,600 | 3,390 | 3,257 | |
Prior accident years | (248) | (167) | (119) | |
Total incurred | 3,352 | 3,223 | 3,138 | |
Net paid loss and loss expenses related to: | ||||
Current accident year | 1,462 | 1,391 | 1,404 | |
Prior accident years | 1,798 | 1,456 | 1,439 | |
Total paid | 3,260 | 2,847 | 2,843 | |
Net loss and loss expense reserves, December 31 | 5,746 | 5,408 | 5,032 | |
Plus reinsurance recoverable | 342 | 238 | 187 | |
Gross loss and loss expense reserves, December 31 | $ 6,088 | $ 5,646 | $ 5,219 | |
Cincinnati Global | ||||
Business Acquisition | ||||
Net loss and loss expense reserves related to acquisition of Cincinnati Global at February 28, 2019 | $ 246 |
Reconciliation of Incurred Loss
Reconciliation of Incurred Losses and ALAE (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Liability for Claims and Claims Adjustment Expense | ||||
Cumulative incurred losses and ALAE as reported within the triangles, net of reinsurance | $ 2,739 | |||
Total liabilities for loss and ALAE, net of reinsurance | 5,799 | |||
Reinsurance recoverable on unpaid losses | 342 | $ 238 | $ 187 | $ 298 |
Unallocated loss adjustment expense reserves | 289 | |||
Total liabilities for gross loss and loss expense reserves | 6,088 | $ 5,646 | $ 5,219 | $ 5,035 |
Other Short-duration Insurance Product Line | ||||
Liability for Claims and Claims Adjustment Expense | ||||
Total liabilities for loss and ALAE, net of reinsurance | 771 | |||
Commercial Insurance | Commercial Casualty Line | ||||
Liability for Claims and Claims Adjustment Expense | ||||
Cumulative incurred losses and ALAE as reported within the triangles, net of reinsurance | 4,910 | |||
Cumulative paid losses and ALAE as reported within the triangles, net of reinsurance | 2,863 | |||
Liabilities for loss and ALAE for accident years not presented in the triangles, net of reinsurance | 88 | |||
Total liabilities for loss and ALAE, net of reinsurance | 2,135 | |||
Reinsurance recoverable on unpaid losses | 30 | |||
Total liabilities for gross loss and loss expense reserves | 2,165 | |||
Commercial Insurance | Workers' Compensation Line | ||||
Liability for Claims and Claims Adjustment Expense | ||||
Cumulative incurred losses and ALAE as reported within the triangles, net of reinsurance | 2,061 | |||
Cumulative paid losses and ALAE as reported within the triangles, net of reinsurance | 1,433 | |||
Liabilities for loss and ALAE for accident years not presented in the triangles, net of reinsurance | 295 | |||
Total liabilities for loss and ALAE, net of reinsurance | 923 | |||
Reinsurance recoverable on unpaid losses | 64 | |||
Total liabilities for gross loss and loss expense reserves | 987 | |||
Commercial Insurance | Commercial Auto Line | ||||
Liability for Claims and Claims Adjustment Expense | ||||
Cumulative incurred losses and ALAE as reported within the triangles, net of reinsurance | 2,200 | |||
Cumulative paid losses and ALAE as reported within the triangles, net of reinsurance | 1,566 | |||
Liabilities for loss and ALAE for accident years not presented in the triangles, net of reinsurance | 15 | |||
Total liabilities for loss and ALAE, net of reinsurance | 649 | |||
Reinsurance recoverable on unpaid losses | 5 | |||
Total liabilities for gross loss and loss expense reserves | 654 | |||
Commercial Insurance | Commercial Property Line | ||||
Liability for Claims and Claims Adjustment Expense | ||||
Cumulative incurred losses and ALAE as reported within the triangles, net of reinsurance | 2,739 | |||
Cumulative paid losses and ALAE as reported within the triangles, net of reinsurance | 2,469 | |||
Liabilities for loss and ALAE for accident years not presented in the triangles, net of reinsurance | 13 | |||
Total liabilities for loss and ALAE, net of reinsurance | 283 | |||
Reinsurance recoverable on unpaid losses | 111 | |||
Total liabilities for gross loss and loss expense reserves | 394 | |||
Personal Insurance | Personal Auto | ||||
Liability for Claims and Claims Adjustment Expense | ||||
Cumulative incurred losses and ALAE as reported within the triangles, net of reinsurance | 1,933 | |||
Cumulative paid losses and ALAE as reported within the triangles, net of reinsurance | 1,659 | |||
Liabilities for loss and ALAE for accident years not presented in the triangles, net of reinsurance | 6 | |||
Total liabilities for loss and ALAE, net of reinsurance | 280 | |||
Reinsurance recoverable on unpaid losses | 33 | |||
Total liabilities for gross loss and loss expense reserves | 313 | |||
Personal Insurance | Home Owner Line | ||||
Liability for Claims and Claims Adjustment Expense | ||||
Cumulative incurred losses and ALAE as reported within the triangles, net of reinsurance | 1,779 | |||
Cumulative paid losses and ALAE as reported within the triangles, net of reinsurance | 1,621 | |||
Liabilities for loss and ALAE for accident years not presented in the triangles, net of reinsurance | 2 | |||
Total liabilities for loss and ALAE, net of reinsurance | 160 | |||
Reinsurance recoverable on unpaid losses | 21 | |||
Total liabilities for gross loss and loss expense reserves | 181 | |||
Excess and Surplus Lines Insurance | ||||
Liability for Claims and Claims Adjustment Expense | ||||
Cumulative incurred losses and ALAE as reported within the triangles, net of reinsurance | 658 | |||
Cumulative paid losses and ALAE as reported within the triangles, net of reinsurance | 333 | |||
Liabilities for loss and ALAE for accident years not presented in the triangles, net of reinsurance | 1 | |||
Total liabilities for loss and ALAE, net of reinsurance | 326 | |||
Reinsurance recoverable on unpaid losses | 8 | |||
Total liabilities for gross loss and loss expense reserves | $ 334 |
Claims Development - Commercial
Claims Development - Commercial Casualty (Details) reported_claim in Thousands, $ in Millions | Dec. 31, 2019USD ($)reported_claim | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) | Dec. 31, 2010USD ($) |
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | $ 2,739 | |||||||||
Liabilities for loss and ALAE, net of reinsurance | 5,799 | |||||||||
Commercial Casualty Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 4,910 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | 2,863 | |||||||||
All outstanding liabilities before, net of reinsurance | 88 | |||||||||
Liabilities for loss and ALAE, net of reinsurance | 2,135 | |||||||||
2010 | Commercial Casualty Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 336 | $ 341 | $ 343 | $ 349 | $ 348 | $ 347 | $ 349 | $ 378 | $ 394 | $ 495 |
Total of incurred but not reported liabilities plus expected development on reported losses | $ 11 | |||||||||
Cumulative number of reported claims | reported_claim | 20 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 321 | 318 | 314 | 300 | 285 | 256 | 203 | 159 | 92 | $ 33 |
2011 | Commercial Casualty Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 368 | 365 | 366 | 380 | 375 | 377 | 377 | 404 | 466 | |
Total of incurred but not reported liabilities plus expected development on reported losses | $ 11 | |||||||||
Cumulative number of reported claims | reported_claim | 19 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 337 | 325 | 315 | 298 | 266 | 227 | 149 | 93 | $ 27 | |
2012 | Commercial Casualty Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 397 | 399 | 404 | 394 | 394 | 417 | 414 | 466 | ||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 14 | |||||||||
Cumulative number of reported claims | reported_claim | 18 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 364 | 346 | 330 | 288 | 232 | 170 | 88 | $ 27 | ||
2013 | Commercial Casualty Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 391 | 407 | 413 | 416 | 431 | 443 | 448 | |||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 31 | |||||||||
Cumulative number of reported claims | reported_claim | 20 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 337 | 312 | 286 | 232 | 159 | 90 | $ 35 | |||
2014 | Commercial Casualty Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 465 | 479 | 476 | 479 | 496 | 503 | ||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 34 | |||||||||
Cumulative number of reported claims | reported_claim | 21 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 390 | 338 | 287 | 172 | 97 | $ 34 | ||||
2015 | Commercial Casualty Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 508 | 516 | 529 | 526 | 533 | |||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 78 | |||||||||
Cumulative number of reported claims | reported_claim | 21 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 362 | 287 | 200 | 108 | $ 38 | |||||
2016 | Commercial Casualty Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 555 | 557 | 574 | 563 | ||||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 120 | |||||||||
Cumulative number of reported claims | reported_claim | 21 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 331 | 228 | 126 | $ 46 | ||||||
2017 | Commercial Casualty Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 577 | 597 | 610 | |||||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 160 | |||||||||
Cumulative number of reported claims | reported_claim | 20 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 234 | 122 | $ 48 | |||||||
2018 | Commercial Casualty Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 641 | 650 | ||||||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 272 | |||||||||
Cumulative number of reported claims | reported_claim | 20 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 148 | $ 44 | ||||||||
Short-Duration Insurance Contract, Accident Year 2019 | Commercial Casualty Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 672 | |||||||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 440 | |||||||||
Cumulative number of reported claims | reported_claim | 15 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 39 |
Claims Development - Workers Co
Claims Development - Workers Compensation (Details) reported_claim in Thousands, $ in Millions | Dec. 31, 2019USD ($)reported_claim | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) | Dec. 31, 2010USD ($) |
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | $ 2,739 | |||||||||
Liabilities for loss and ALAE, net of reinsurance | 5,799 | |||||||||
Workers' Compensation Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 2,061 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | 1,433 | |||||||||
All outstanding liabilities before, net of reinsurance | 295 | |||||||||
Liabilities for loss and ALAE, net of reinsurance | 923 | |||||||||
2010 | Workers' Compensation Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 237 | $ 236 | $ 237 | $ 240 | $ 239 | $ 240 | $ 242 | $ 248 | $ 274 | $ 283 |
Total of incurred but not reported liabilities plus expected development on reported losses | $ 19 | |||||||||
Cumulative number of reported claims | reported_claim | 26 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 209 | 207 | 204 | 202 | 198 | 192 | 181 | 164 | 134 | $ 67 |
2011 | Workers' Compensation Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 228 | 229 | 231 | 236 | 239 | 242 | 246 | 251 | 284 | |
Total of incurred but not reported liabilities plus expected development on reported losses | $ 17 | |||||||||
Cumulative number of reported claims | reported_claim | 24 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 197 | 195 | 192 | 190 | 186 | 177 | 161 | 131 | $ 65 | |
2012 | Workers' Compensation Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 208 | 209 | 211 | 213 | 220 | 234 | 245 | 265 | ||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 21 | |||||||||
Cumulative number of reported claims | reported_claim | 21 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 180 | 178 | 175 | 171 | 162 | 147 | 121 | $ 62 | ||
2013 | Workers' Compensation Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 202 | 205 | 208 | 212 | 221 | 246 | 264 | |||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 16 | |||||||||
Cumulative number of reported claims | reported_claim | 20 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 170 | 168 | 164 | 157 | 144 | 119 | $ 61 | |||
2014 | Workers' Compensation Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 198 | 201 | 203 | 214 | 233 | 261 | ||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 18 | |||||||||
Cumulative number of reported claims | reported_claim | 19 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 162 | 157 | 148 | 134 | 110 | $ 56 | ||||
2015 | Workers' Compensation Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 179 | 195 | 208 | 220 | 246 | |||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 33 | |||||||||
Cumulative number of reported claims | reported_claim | 17 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 134 | 129 | 115 | 93 | $ 47 | |||||
2016 | Workers' Compensation Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 188 | 206 | 218 | 230 | ||||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 31 | |||||||||
Cumulative number of reported claims | reported_claim | 16 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 131 | 119 | 97 | $ 46 | ||||||
2017 | Workers' Compensation Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 190 | 208 | 218 | |||||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 56 | |||||||||
Cumulative number of reported claims | reported_claim | 15 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 106 | 88 | $ 45 | |||||||
2018 | Workers' Compensation Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 207 | 222 | ||||||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 65 | |||||||||
Cumulative number of reported claims | reported_claim | 15 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 95 | $ 48 | ||||||||
Short-Duration Insurance Contract, Accident Year 2019 | Workers' Compensation Line | Commercial Insurance | ||||||||||
Claims Development | ||||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 224 | |||||||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 90 | |||||||||
Cumulative number of reported claims | reported_claim | 13 | |||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 49 |
Claims Development - Commerci_2
Claims Development - Commercial Auto (Details) reported_claim in Thousands, $ in Millions | Dec. 31, 2019USD ($)reported_claim | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | $ 2,739 | ||||
Liabilities for loss and ALAE, net of reinsurance | 5,799 | ||||
Commercial Auto Line | Commercial Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 2,200 | ||||
Cumulative paid losses and ALAE, net of reinsurance | 1,566 | ||||
All outstanding liabilities before, net of reinsurance | 15 | ||||
Liabilities for loss and ALAE, net of reinsurance | 649 | ||||
2015 | Commercial Auto Line | Commercial Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 400 | $ 401 | $ 394 | $ 384 | $ 374 |
Total of incurred but not reported liabilities plus expected development on reported losses | $ 3 | ||||
Cumulative number of reported claims | reported_claim | 51 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 375 | 349 | 303 | 244 | $ 173 |
2016 | Commercial Auto Line | Commercial Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 463 | 450 | 430 | 417 | |
Total of incurred but not reported liabilities plus expected development on reported losses | $ 7 | ||||
Cumulative number of reported claims | reported_claim | 53 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 408 | 350 | 273 | $ 184 | |
2017 | Commercial Auto Line | Commercial Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 443 | 441 | 451 | ||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 27 | ||||
Cumulative number of reported claims | reported_claim | 51 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 334 | 266 | $ 187 | ||
2018 | Commercial Auto Line | Commercial Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 442 | 453 | |||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 72 | ||||
Cumulative number of reported claims | reported_claim | 49 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 266 | $ 184 | |||
Short-Duration Insurance Contract, Accident Year 2019 | Commercial Auto Line | Commercial Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 452 | ||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 133 | ||||
Cumulative number of reported claims | reported_claim | 42 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 183 |
Claims Development - Commerci_3
Claims Development - Commercial Property (Details) reported_claim in Thousands, $ in Millions | Dec. 31, 2019USD ($)reported_claim | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | $ 2,739 | ||||
Liabilities for loss and ALAE, net of reinsurance | 5,799 | ||||
Commercial Property Line | Commercial Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 2,739 | ||||
Cumulative paid losses and ALAE, net of reinsurance | 2,469 | ||||
All outstanding liabilities before, net of reinsurance | 13 | ||||
Liabilities for loss and ALAE, net of reinsurance | 283 | ||||
2015 | Commercial Property Line | Commercial Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 414 | $ 415 | $ 416 | $ 414 | $ 454 |
Total of incurred but not reported liabilities plus expected development on reported losses | $ 2 | ||||
Cumulative number of reported claims | reported_claim | 17 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 411 | 411 | 407 | 388 | $ 279 |
2016 | Commercial Property Line | Commercial Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 545 | 541 | 551 | 590 | |
Total of incurred but not reported liabilities plus expected development on reported losses | $ 4 | ||||
Cumulative number of reported claims | reported_claim | 17 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 539 | 528 | 504 | $ 358 | |
2017 | Commercial Property Line | Commercial Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 556 | 560 | 587 | ||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 5 | ||||
Cumulative number of reported claims | reported_claim | 18 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 547 | 522 | $ 395 | ||
2018 | Commercial Property Line | Commercial Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 603 | 630 | |||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 9 | ||||
Cumulative number of reported claims | reported_claim | 18 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 559 | $ 386 | |||
Short-Duration Insurance Contract, Accident Year 2019 | Commercial Property Line | Commercial Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 621 | ||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 22 | ||||
Cumulative number of reported claims | reported_claim | 15 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 413 |
Claims Development - Personal A
Claims Development - Personal Auto (Details) reported_claim in Thousands, $ in Millions | Dec. 31, 2019USD ($)reported_claim | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | $ 2,739 | ||||
Liabilities for loss and ALAE, net of reinsurance | 5,799 | ||||
Personal Auto | Personal Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 1,933 | ||||
Cumulative paid losses and ALAE, net of reinsurance | 1,659 | ||||
All outstanding liabilities before, net of reinsurance | 6 | ||||
Liabilities for loss and ALAE, net of reinsurance | 280 | ||||
2015 | Personal Auto | Personal Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 361 | $ 360 | $ 356 | $ 356 | $ 343 |
Total of incurred but not reported liabilities plus expected development on reported losses | $ 0 | ||||
Cumulative number of reported claims | reported_claim | 108 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 354 | 346 | 325 | 292 | $ 229 |
2016 | Personal Auto | Personal Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 384 | 386 | 384 | 383 | |
Total of incurred but not reported liabilities plus expected development on reported losses | $ 0 | ||||
Cumulative number of reported claims | reported_claim | 110 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 370 | 351 | 316 | $ 243 | |
2017 | Personal Auto | Personal Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 391 | 394 | 412 | ||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 0 | ||||
Cumulative number of reported claims | reported_claim | 109 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 358 | 324 | $ 256 | ||
2018 | Personal Auto | Personal Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 398 | 424 | |||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 18 | ||||
Cumulative number of reported claims | reported_claim | 111 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 327 | $ 262 | |||
Short-Duration Insurance Contract, Accident Year 2019 | Personal Auto | Personal Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 399 | ||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 54 | ||||
Cumulative number of reported claims | reported_claim | 96 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 250 |
Claims Development - Homeowner
Claims Development - Homeowner (Details) reported_claim in Thousands, $ in Millions | Dec. 31, 2019USD ($)reported_claim | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | $ 2,739 | ||||
Liabilities for loss and ALAE, net of reinsurance | 5,799 | ||||
Home Owner Line | Personal Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 1,779 | ||||
Cumulative paid losses and ALAE, net of reinsurance | 1,621 | ||||
All outstanding liabilities before, net of reinsurance | 2 | ||||
Liabilities for loss and ALAE, net of reinsurance | 160 | ||||
2015 | Home Owner Line | Personal Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 274 | $ 274 | $ 275 | $ 275 | $ 284 |
Total of incurred but not reported liabilities plus expected development on reported losses | $ 0 | ||||
Cumulative number of reported claims | reported_claim | 24 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 273 | 272 | 269 | 260 | $ 203 |
2016 | Home Owner Line | Personal Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 302 | 303 | 304 | 315 | |
Total of incurred but not reported liabilities plus expected development on reported losses | $ 0 | ||||
Cumulative number of reported claims | reported_claim | 23 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 299 | 295 | 283 | $ 208 | |
2017 | Home Owner Line | Personal Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 385 | 383 | 356 | ||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 1 | ||||
Cumulative number of reported claims | reported_claim | 26 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 378 | 356 | $ 277 | ||
2018 | Home Owner Line | Personal Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 386 | 370 | |||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 6 | ||||
Cumulative number of reported claims | reported_claim | 23 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 368 | $ 268 | |||
Short-Duration Insurance Contract, Accident Year 2019 | Home Owner Line | Personal Insurance | |||||
Claims Development | |||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 432 | ||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 39 | ||||
Cumulative number of reported claims | reported_claim | 20 | ||||
Cumulative paid losses and ALAE, net of reinsurance | $ 303 |
Claims Development - Excess and
Claims Development - Excess and Surplus Lines (Details) reported_claim in Thousands, $ in Millions | Dec. 31, 2019USD ($)reported_claim | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) |
Claims Development | |||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | $ 2,739 | ||||||||
Liabilities for loss and ALAE, net of reinsurance | 5,799 | ||||||||
Excess and Surplus Lines Insurance | |||||||||
Claims Development | |||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 658 | ||||||||
Cumulative paid losses and ALAE, net of reinsurance | 333 | ||||||||
All outstanding liabilities before, net of reinsurance | 1 | ||||||||
Liabilities for loss and ALAE, net of reinsurance | 326 | ||||||||
2011 | Excess and Surplus Lines Insurance | |||||||||
Claims Development | |||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 34 | $ 34 | $ 35 | $ 35 | $ 36 | $ 38 | $ 44 | $ 47 | $ 48 |
Total of incurred but not reported liabilities plus expected development on reported losses | $ 0 | ||||||||
Cumulative number of reported claims | reported_claim | 1 | ||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 33 | 33 | 34 | 32 | 30 | 27 | 23 | 14 | $ 8 |
2012 | Excess and Surplus Lines Insurance | |||||||||
Claims Development | |||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 36 | 35 | 36 | 37 | 40 | 49 | 56 | 67 | |
Total of incurred but not reported liabilities plus expected development on reported losses | $ 1 | ||||||||
Cumulative number of reported claims | reported_claim | 1 | ||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 33 | 32 | 31 | 29 | 25 | 19 | 15 | $ 9 | |
2013 | Excess and Surplus Lines Insurance | |||||||||
Claims Development | |||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 41 | 41 | 42 | 45 | 54 | 64 | 74 | ||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 1 | ||||||||
Cumulative number of reported claims | reported_claim | 2 | ||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 37 | 34 | 32 | 27 | 20 | 12 | $ 7 | ||
2014 | Excess and Surplus Lines Insurance | |||||||||
Claims Development | |||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 59 | 60 | 64 | 75 | 82 | 95 | |||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 6 | ||||||||
Cumulative number of reported claims | reported_claim | 2 | ||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 48 | 43 | 37 | 27 | 17 | $ 9 | |||
2015 | Excess and Surplus Lines Insurance | |||||||||
Claims Development | |||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 65 | 67 | 73 | 81 | 96 | ||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 8 | ||||||||
Cumulative number of reported claims | reported_claim | 2 | ||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 51 | 41 | 29 | 19 | $ 8 | ||||
2016 | Excess and Surplus Lines Insurance | |||||||||
Claims Development | |||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 82 | 84 | 87 | 93 | |||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 14 | ||||||||
Cumulative number of reported claims | reported_claim | 3 | ||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 51 | 39 | 21 | $ 10 | |||||
2017 | Excess and Surplus Lines Insurance | |||||||||
Claims Development | |||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 95 | 95 | 104 | ||||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 26 | ||||||||
Cumulative number of reported claims | reported_claim | 3 | ||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 41 | 23 | $ 11 | ||||||
2018 | Excess and Surplus Lines Insurance | |||||||||
Claims Development | |||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 109 | 116 | |||||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 44 | ||||||||
Cumulative number of reported claims | reported_claim | 3 | ||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 26 | $ 11 | |||||||
Short-Duration Insurance Contract, Accident Year 2019 | Excess and Surplus Lines Insurance | |||||||||
Claims Development | |||||||||
Incurred losses and ALAE, net of reinsurance for the years ended December 31, | 137 | ||||||||
Total of incurred but not reported liabilities plus expected development on reported losses | $ 83 | ||||||||
Cumulative number of reported claims | reported_claim | 2 | ||||||||
Cumulative paid losses and ALAE, net of reinsurance | $ 13 |
Average Annual Payout (Details)
Average Annual Payout (Details) | Dec. 31, 2019 |
Commercial Insurance | Commercial Casualty Line | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
1 | 7.80% |
2 | 15.00% |
3 | 18.20% |
4 | 18.40% |
5 | 13.30% |
6 | 9.10% |
7 | 4.80% |
8 | 3.90% |
9 | 2.20% |
10 | 0.80% |
Commercial Insurance | Workers' Compensation Line | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
1 | 26.40% |
2 | 26.70% |
3 | 12.00% |
4 | 7.00% |
5 | 3.90% |
6 | 2.20% |
7 | 1.30% |
8 | 1.00% |
9 | 1.20% |
10 | 0.80% |
Commercial Insurance | Commercial Auto Line | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
1 | 41.40% |
2 | 18.40% |
3 | 15.50% |
4 | 12.10% |
5 | 6.30% |
Commercial Insurance | Commercial Property Line | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
1 | 66.90% |
2 | 26.20% |
3 | 4.50% |
4 | 1.50% |
5 | 0.10% |
Personal Insurance | Personal Auto | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
1 | 64.20% |
2 | 17.40% |
3 | 9.10% |
4 | 5.40% |
5 | 2.40% |
Personal Insurance | Home Owner Line | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
1 | 70.90% |
2 | 23.00% |
3 | 4.40% |
4 | 1.20% |
5 | 0.30% |
Excess and Surplus Lines Insurance | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
1 | 15.30% |
2 | 14.40% |
3 | 19.10% |
4 | 15.50% |
5 | 11.60% |
6 | 7.20% |
7 | 3.30% |
8 | 1.30% |
9 | 0.80% |
Life Policy And Investment Co_3
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, 2019 | Dec. 31, 2018 |
Liability for Future Policy Benefit, by Product Segment | ||
Life policy and investment contract reserves | $ 2,835 | $ 2,779 |
Life Policy Reserves | ||
Liability for Future Policy Benefit, by Product Segment | ||
Life policy and investment contract reserves | 1,276 | 1,197 |
Life Policy Reserves | Ordinary/Traditional Life | ||
Liability for Future Policy Benefit, by Product Segment | ||
Life policy and investment contract reserves | 1,226 | 1,149 |
Life Policy Reserves | Other Life Policy Reserves | ||
Liability for Future Policy Benefit, by Product Segment | ||
Life policy and investment contract reserves | 50 | 48 |
Investment contract reserves | ||
Liability for Future Policy Benefit, by Product Segment | ||
Life policy and investment contract reserves | 1,559 | 1,582 |
Investment contract reserves | Deferred Annuities | ||
Liability for Future Policy Benefit, by Product Segment | ||
Life policy and investment contract reserves | 760 | 787 |
Investment contract reserves | Universal Life | ||
Liability for Future Policy Benefit, by Product Segment | ||
Life policy and investment contract reserves | 640 | 632 |
Investment contract reserves | Structured Settlements | ||
Liability for Future Policy Benefit, by Product Segment | ||
Life policy and investment contract reserves | 151 | 156 |
Investment contract reserves | Other Investment Contract Reserves | ||
Liability for Future Policy Benefit, by Product Segment | ||
Life policy and investment contract reserves | $ 8 | $ 7 |
Deferred Policy Acquisition C_3
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred Costs [Roll Forward] | |||
Deferred policy acquisition costs asset at January 1 | $ 738 | $ 670 | $ 637 |
Capitalized deferred policy acquisition costs | 1,095 | 993 | 948 |
Amortized deferred policy acquisition costs | (1,034) | (946) | (913) |
Shadow deferred policy acquisition costs | (25) | 21 | (2) |
Deferred policy acquisition costs asset at December 31 | 774 | 738 | 670 |
SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters, Consolidated Property and Casualty Insurance Entity [Member] | |||
Deferred Costs [Roll Forward] | |||
Deferred policy acquisition costs asset at January 1 | 464 | 438 | 408 |
Capitalized deferred policy acquisition costs | 1,034 | 933 | 897 |
Amortized deferred policy acquisition costs | (986) | (907) | (867) |
Deferred policy acquisition costs asset at December 31 | 512 | 464 | 438 |
Life Insurance Product Line [Member] | |||
Deferred Costs [Roll Forward] | |||
Deferred policy acquisition costs asset at January 1 | 274 | 232 | 229 |
Capitalized deferred policy acquisition costs | 61 | 60 | 51 |
Amortized deferred policy acquisition costs | (48) | (39) | (46) |
Shadow deferred policy acquisition costs | (25) | 21 | (2) |
Deferred policy acquisition costs asset at December 31 | $ 262 | $ 274 | $ 232 |
Note Payable (Narrative) (Detai
Note Payable (Narrative) (Details) $ in Millions | Feb. 04, 2019extension | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Debt Disclosure | |||
Number of lines of credit | 1 | 1 | |
Aggregate borrowing capacity | $ 300 | $ 225 | |
Accordian feature available amount | $ 300 | 50 | |
Line of credit facility, term | 5 years | ||
Note payable | $ 39 | $ 32 | |
Number of one year extensions | extension | 2 | ||
Ratio of debt-to-total capital maximum | 0.35 | ||
Minimum | |||
Debt Disclosure | |||
Line of credit, interest rate | 2.59% | 2.45% | |
Maximum | |||
Debt Disclosure | |||
Line of credit, interest rate | 3.41% | 4.75% |
Long-Term Debt And Lease Obli_3
Long-Term Debt And Lease Obligation (Book Value And Principal Amounts Of Long-Term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument | ||
Book value | $ 788 | $ 788 |
Principal amount | $ 793 | $ 793 |
6.900% Senior Debentures, Due 2028 | ||
Debt Instrument | ||
Interest rate | 6.90% | 6.90% |
Book value | $ 27 | $ 27 |
Principal amount | $ 28 | $ 28 |
6.920% Senior Debentures, Due 2028 | ||
Debt Instrument | ||
Interest rate | 6.92% | 6.92% |
Book value | $ 391 | $ 391 |
Principal amount | $ 391 | $ 391 |
6.125% Senior Notes, Due 2034 | ||
Debt Instrument | ||
Interest rate | 6.125% | 6.125% |
Book value | $ 370 | $ 370 |
Principal amount | $ 374 | $ 374 |
Long-Term Debt And Lease Obli_4
Long-Term Debt And Lease Obligation (Lease Payments Over Next Five Years) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Long-term Debt and Lease Obligation [Abstract] | |
Finance Lease 2020 | $ 14 |
Finance Lease 2021 | 10 |
Finance Lease 2022 | 8 |
Finance Lease 2023 | 6 |
Finance Lease 2024 | 3 |
Finance Lease After 2025 | 1 |
Operating Leases 2020 | 5 |
Operating Leases 2021 | 2 |
Operating Leases 2022 | 2 |
Operating Leases 2023 | 2 |
Operating Leases 2024 | 1 |
Operating Leases After 2025 | 3 |
Total Finance and Operating Lease 2020 | 19 |
Total Finance and Operating Lease 2021 | 12 |
Total Finance and Operating Lease 2022 | 10 |
Total Finance and Operating Lease 2023 | 8 |
Total Finance and Operating Lease 2024 | 4 |
Total Finance and Operating Lease After 2025 | $ 4 |
Long-Term Debt And Lease Obli_5
Long-Term Debt And Lease Obligation Long-term Debt and Lease Obligation (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Long-term Debt and Lease Obligation [Abstract] | |
Finance Lease, Right-of-Use Asset, Amortization | $ 9 |
Operating Lease, Expense | 4 |
Total Finance and Operating Lease Cost | 13 |
Finance Lease, Principal Payments | $ 15 |
Finance Lease, Weighted Average Discount Rate, Percent | 2.96% |
Finance Lease, Weighted Average Remaining Lease Term | 3 years 7 months 24 days |
Operating Lease, Payments | $ 8 |
Operating Lease, Weighted Average Discount Rate, Percent | 3.69% |
Operating Lease, Weighted Average Remaining Lease Term | 4 years 8 months 15 days |
Long-Term Debt And Lease Obli_6
Long-Term Debt And Lease Obligation Long-Term Debt and Lease Obligation Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Lessee, Lease, Description [Line Items] | ||
Lessee, Operating Lease, Term of Contract | 5 years | |
Total lease liability | $ 57 | |
Interest Costs Incurred | $ 1 | |
Capital Leases, Future Minimum Payments Due | $ 46 | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, Finance Lease, Term of Contract | 6 years | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, Finance Lease, Term of Contract | 3 years |
Shareholders' Equity And Divi_3
Shareholders' Equity And Dividend Restrictions (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Declared cash dividends, per share | $ 2.24 | $ 2.12 | $ 2.50 |
Dividend payment without prior regulatory approval, maximum 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 | $ 562 | ||
The Cincinnati Insurance Company | |||
Cash Dividends Paid to Parent | 625 | $ 500 | $ 465 |
Cincinnati Global | |||
Cash Dividends Paid to Parent | $ 0 |
Shareholders' Equity And Divi_4
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | Jan. 01, 2018 | Jan. 01, 2017 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income, Before Tax | |||||||
Pension obligations OCI | $ 7 | $ (4) | $ 14 | ||||
Accumulated Other Comprehensive Income, Net of Tax | |||||||
AOCI, balance at the beginning of the period | 22 | ||||||
Unrealized gains reclassified to retained earnings for ASU 2016-01, after tax | 2,503 | ||||||
AOCI, balance at the end of the period | 448 | 22 | |||||
Accumulated Net Unrealized Investment Gain (Loss) | |||||||
Accumulated Other Comprehensive Income, Before Tax | |||||||
AOCI, balance at the beginning of the period | 46 | 3,540 | 2,625 | ||||
Cumulative effect of new accounting principle, before tax | 0 | (3,155) | $ 0 | ||||
Adjusted AOCI, beginning of period | 46 | 385 | 2,625 | ||||
OCI before investment gains and losses, net, recognized in net income | 545 | (334) | 1,054 | ||||
Investment gains and losses, net, recognized in net income | (1) | (5) | (139) | ||||
OCI | 544 | (339) | 915 | ||||
AOCI, balance at the end of the period | 590 | 46 | 3,540 | ||||
Accumulated Other Comprehensive Income, Income Tax | |||||||
AOCI, balance at the beginning of the period | 9 | 733 | 908 | ||||
Cumulative effect of new account principle, tax | 0 | (652) | 0 | ||||
Adjusted AOCI, beginning of period | 9 | 81 | 908 | ||||
OCI before investment gains and losses, net, recognized in net income | 115 | (71) | 366 | ||||
Investment gains and losses, net, recognized in net income | (1) | (1) | (49) | ||||
OCI | 114 | (72) | 317 | ||||
AOCI, balance at the end of the period | 123 | 9 | 733 | ||||
Accumulated Other Comprehensive Income, Net of Tax | |||||||
AOCI, balance at the beginning of the period | 37 | 2,807 | 1,717 | ||||
Unrealized gains reclassified to retained earnings for ASU 2016-01, after tax | 0 | (2,503) | 0 | ||||
Adjusted AOCI, beginning of period | 37 | 304 | 1,717 | ||||
OCI before investment gains and losses, net, recognized in net income | 430 | (263) | 688 | ||||
Investment gains and losses, net, recognized in net income | 0 | (4) | (90) | ||||
OCI | 430 | (267) | 598 | ||||
AOCI, balance at the end of the period | 467 | 37 | 2,807 | ||||
Accumulated Defined Benefit Plans Adjustment | |||||||
Accumulated Other Comprehensive Income, Before Tax | |||||||
AOCI, balance at the beginning of the period | (16) | (12) | (26) | ||||
OCI before investment gains and losses, net, recognized in net income | 6 | (5) | 12 | ||||
Investment gains and losses, net, recognized in net income | 1 | 1 | 2 | ||||
OCI | 7 | (4) | 14 | ||||
AOCI, balance at the end of the period | (9) | (16) | (12) | ||||
Accumulated Other Comprehensive Income, Income Tax | |||||||
AOCI, balance at the beginning of the period | (2) | (1) | (8) | ||||
OCI before investment gains and losses, net, recognized in net income | 2 | (1) | 6 | ||||
Investment gains and losses, net, recognized in net income | 0 | 0 | 1 | ||||
OCI | 2 | (1) | 7 | ||||
AOCI, balance at the end of the period | 0 | (2) | (1) | ||||
Accumulated Other Comprehensive Income, Net of Tax | |||||||
AOCI, balance at the beginning of the period | (14) | (11) | (18) | ||||
OCI before investment gains and losses, net, recognized in net income | 4 | (4) | 6 | ||||
Investment gains and losses, net, recognized in net income | 1 | 1 | 1 | ||||
OCI | 5 | (3) | 7 | ||||
AOCI, balance at the end of the period | (9) | (14) | (11) | ||||
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 | (1) | (10) | (9) | ||||
OCI before investment gains and losses, net, recognized in net income | (15) | (3) | 8 | ||||
Investment gains and losses, net, recognized in net income | 3 | 12 | (9) | ||||
OCI | (12) | 9 | (1) | ||||
AOCI, balance at the end of the period | (13) | (1) | (10) | ||||
Accumulated Other Comprehensive Income, Income Tax | |||||||
AOCI, balance at the beginning of the period | 0 | (2) | (3) | ||||
OCI before investment gains and losses, net, recognized in net income | (3) | (1) | 5 | ||||
Investment gains and losses, net, recognized in net income | 0 | 3 | (4) | ||||
OCI | (3) | 2 | 1 | ||||
AOCI, balance at the end of the period | (3) | 0 | (2) | ||||
Accumulated Other Comprehensive Income, Net of Tax | |||||||
AOCI, balance at the beginning of the period | (1) | (8) | (6) | ||||
OCI before investment gains and losses, net, recognized in net income | (12) | (2) | 3 | ||||
Investment gains and losses, net, recognized in net income | 3 | 9 | (5) | ||||
OCI | (9) | 7 | (2) | ||||
AOCI, balance at the end of the period | (10) | (1) | (8) | ||||
Accumulated Other Comprehensive Income (Loss) | |||||||
Accumulated Other Comprehensive Income, Before Tax | |||||||
AOCI, balance at the beginning of the period | 29 | 3,518 | 2,590 | ||||
Cumulative effect of new accounting principle, before tax | $ 0 | $ (3,155) | $ 0 | ||||
Adjusted AOCI, beginning of period | 29 | 363 | 2,590 | ||||
Investments OCI | 544 | (339) | 915 | ||||
Pension obligations OCI | 7 | (4) | 14 | ||||
Life deferred acquisition costs, life policy reserves and other OCI | (12) | 9 | (1) | ||||
Total OCI | 539 | (334) | 928 | ||||
AOCI, balance at the end of the period | 568 | 29 | 3,518 | ||||
Accumulated Other Comprehensive Income, Income Tax | |||||||
AOCI, balance at the beginning of the period | 7 | 730 | 897 | ||||
Cumulative effect of new account principle, tax | 0 | (652) | 0 | ||||
Adjusted AOCI, beginning of period | 7 | 78 | 897 | ||||
Investments OCI | 114 | (72) | 317 | ||||
Pension obligations OCI | 2 | (1) | 7 | ||||
Life deferred acquisition costs, life policy reserves and other OCI | (3) | 2 | 1 | ||||
Total OCI | 113 | (71) | 325 | ||||
AOCI, balance at the end of the period | 120 | 7 | 730 | ||||
Accumulated Other Comprehensive Income, Net of Tax | |||||||
AOCI, balance at the beginning of the period | 22 | 2,788 | 1,693 | ||||
Unrealized gains reclassified to retained earnings for ASU 2016-01, after tax | 0 | (2,503) | $ 0 | $ (2,503) | $ 0 | 0 | |
Adjusted AOCI, beginning of period | 22 | 285 | $ 1,693 | ||||
Investments OCI | 430 | (267) | 598 | ||||
Pension obligations OCI | 5 | (3) | 7 | ||||
Life deferred acquisition costs, life policy reserves and other OCI | (9) | 7 | (2) | ||||
Total OCI | 426 | (263) | 603 | ||||
AOCI, balance at the end of the period | 448 | 22 | 2,788 | ||||
New Accounting Pronouncement, Early Adoption, Effect | Accounting Standards Update 2018-02 | Accumulated Net Unrealized Investment Gain (Loss) | |||||||
Accumulated Other Comprehensive Income, Before Tax | |||||||
Cumulative effect of new accounting principle, before tax | 0 | 0 | 0 | ||||
Accumulated Other Comprehensive Income, Income Tax | |||||||
Cumulative effect of new account principle, tax | 0 | 0 | (492) | ||||
Accumulated Other Comprehensive Income, Net of Tax | |||||||
Adjustment to reclassify certain tax effects from AOCI | 0 | 0 | 492 | ||||
New Accounting Pronouncement, Early Adoption, Effect | Accounting Standards Update 2018-02 | Accumulated Other Comprehensive Income (Loss) | |||||||
Accumulated Other Comprehensive Income, Before Tax | |||||||
Cumulative effect of new accounting principle, before tax | 0 | 0 | 0 | ||||
Accumulated Other Comprehensive Income, Income Tax | |||||||
Cumulative effect of new account principle, tax | 0 | 0 | (492) | ||||
Accumulated Other Comprehensive Income, Net of Tax | |||||||
Adjustment to reclassify certain tax effects from AOCI | $ 0 | $ 0 | $ 492 |
Reinsurance Reinsurance (Writte
Reinsurance Reinsurance (Written Consolidated Property Casualty Insurance Premiums On Assumed and Ceded Business) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance | |||
Direct premiums earned | $ 5,681 | $ 5,251 | $ 5,052 |
Assumed premiums earned | 199 | 149 | 132 |
Ceded premiums earned | 276 | 230 | 230 |
Incurred loss and loss expenses | 3,638 | 3,490 | 3,390 |
Consolidated Property and Casualty Insurance Entity | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance | |||
Direct premiums written | 5,477 | 5,018 | 4,854 |
Assumed premiums written | 244 | 173 | 125 |
Ceded premiums written | (205) | (161) | (139) |
Net written premiums | 5,516 | 5,030 | 4,840 |
Direct premiums earned | 5,340 | 4,931 | 4,752 |
Assumed premiums earned | 199 | 149 | 132 |
Ceded premiums earned | (205) | (160) | (162) |
Earned premiums | 5,334 | 4,920 | 4,722 |
Direct incurred loss and loss expenses | 3,402 | 3,188 | 2,961 |
Assumed incurred loss and loss expenses | 117 | 125 | 113 |
Ceded incurred loss and loss expenses | (167) | (90) | 64 |
Incurred loss and loss expenses | $ 3,352 | $ 3,223 | $ 3,138 |
Reinsurance (Earned Life Insura
Reinsurance (Earned Life Insurance Premiums On Ceded Business) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Direct premiums earned | $ 5,681 | $ 5,251 | $ 5,052 |
Ceded earned premiums | (276) | (230) | (230) |
Life Insurance Segment | |||
Direct premiums earned | 341 | 320 | 300 |
Ceded earned premiums | (71) | (70) | (68) |
Net earned premiums | 270 | 250 | 232 |
Ceded contract holders' benefits incurred | 359 | 328 | 319 |
Ceded contract holders' benefits incurred | (73) | (61) | (67) |
Contract holders' benefits incurred | $ 286 | $ 267 | $ 252 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Income tax benefit for difference in tax rate | $ 0 | $ 50,000,000 | $ 0 | |
Unrecognized Tax Benefits | 34,000,000 | 34,000,000 | 0 | $ 0 |
Reduction in net deferred tax liability due to change of corporate income tax rate | 495,000,000 | |||
Income taxes paid, net | 94,000,000 | 0 | 18,000,000 | |
Net deferred tax assets, valuation allowance | 41,000,000 | 0 | ||
Accumulated Other Comprehensive Income | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Reduction in net deferred tax liability due to change of corporate income tax rate | $ 492,000,000 | |||
Cincinnati Global | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net deferred tax assets | 41,000,000 | |||
Net deferred tax assets, valuation allowance | $ 41,000,000 | $ 0 |
Income Taxes (Components Of Def
Income Taxes (Components Of Deferred Tax Assets And Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Loss and loss expense reserves | $ 66 | $ 60 |
Unearned premiums | 113 | 105 |
Deferred international earnings | 51 | 0 |
Other | 39 | 33 |
Deferred tax assets before valuation allowance | 269 | 198 |
Valuation allowance for international operations | 41 | 0 |
Deferred tax assets net of valuation allowance | 228 | 198 |
Deferred tax liabilities: | ||
Investment gains and other, net | 995 | 542 |
Deferred acquisition costs | 139 | 131 |
Life policy reserves | 120 | 117 |
Investments | 23 | 18 |
Other | 30 | 17 |
Total gross deferred tax liabilities | 1,307 | 825 |
Net deferred income tax liability | $ 1,079 | $ 627 |
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Tax at statutory rate: | $ 519 | $ 53 | $ 256 |
Tax at statutory rate (percentage): | 21.00% | 21.00% | 35.00% |
Increase (decrease) resulting from: | |||
Tax-exempt income from municipal bonds | $ (19) | $ (20) | $ (36) |
Dividend received exclusion | (16) | (15) | (34) |
Effective Income Tax Rate Reconciliation, Tax Accounting Method Changes, Amount | 0 | (50) | 0 |
Deferred tax benefit due to tax rate change | 0 | 0 | (495) |
Other | (9) | (4) | (6) |
Total provision (benefit) for income taxes | $ 475 | $ (36) | $ (315) |
Tax at statutory rate: | |||
Tax-exempt income from municipal bonds (percentage) | (0.80%) | (8.00%) | (4.90%) |
Dividend received exclusion (percentage) | (0.60%) | (6.00%) | (4.70%) |
Effective Income Tax Rate Reconciliation, Tax Accounting Method Changes, Percent | 0.00% | (19.90%) | 0.00% |
Deferred tax benefit due to tax rate change | 0.00% | 0.00% | (67.80%) |
Other (percentage) | (0.40%) | (1.40%) | (0.80%) |
Effective tax, percentage | 19.20% | (14.30%) | (43.20%) |
Income Taxes - Reconciliation U
Income Taxes - Reconciliation Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Gross unrecognized tax benefits at January 1 | $ 34,000,000 | $ 0 | $ 0 |
Gross increase in prior year positions | 0 | 0 | 0 |
Gross decrease in prior year positions | 0 | 0 | 0 |
Gross increase in current year positions | 0 | 34,000,000 | 0 |
Settlements with tax authorities | 0 | 0 | 0 |
Lapse of statute of limitations | 0 | 0 | 0 |
Gross unrecognized tax benefits at December 31 | $ 34,000,000 | $ 34,000,000 | $ 0 |
Income Taxes The Provision (Ben
Income Taxes The Provision (Benefit) of Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Current federal tax | $ 137 | $ 11 | $ 129 |
Current international tax | (5) | 0 | 0 |
Total current tax | 132 | 11 | 129 |
Deferred federal tax | 338 | (47) | (444) |
Deferred international tax | 5 | 0 | 0 |
Deferred income tax expense | 343 | (47) | (444) |
Total provision (benefit) for income taxes | $ 475 | $ (36) | $ (315) |
Income Taxes Schedule of Income
Income Taxes Schedule of Income before Income Tax (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||||||||
United States income before tax | $ 2,440 | $ 251 | $ 730 | ||||||||
International income before income taxes | 32 | 0 | 0 | ||||||||
Income before income taxes | $ 781 | $ 294 | $ 530 | $ 867 | $ (581) | $ 618 | $ 264 | $ (50) | $ 2,472 | $ 251 | $ 730 |
Income Taxes Reconciliation of
Income Taxes Reconciliation of Cincinnati Global Valuation Allowance (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Valuation Allowance | |
Valuation allowance at January 1 | $ 0 |
Valuation allowance at December 31 | 41 |
Cincinnati Global | |
Valuation Allowance | |
Valuation allowance at January 1 | 0 |
Acquisition accounting amount | 55 |
Current year operations | (14) |
Valuation allowance at December 31 | $ 41 |
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, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | |||||||||||
Net income—basic and diluted | $ 626 | $ 248 | $ 428 | $ 695 | $ (452) | $ 553 | $ 217 | $ (31) | $ 1,997 | $ 287 | $ 1,045 |
Denominator: | |||||||||||
Basic weighted-average common shares outstanding | 163.2 | 163.2 | 164.2 | ||||||||
Diluted weighted-average shares | 165.1 | 164.5 | 166 | ||||||||
Earnings per share: | |||||||||||
Basic (in usd per share) | $ 3.84 | $ 1.51 | $ 2.62 | $ 4.27 | $ (2.78) | $ 3.40 | $ 1.33 | $ (0.19) | $ 12.24 | $ 1.76 | $ 6.36 |
Diluted (in usd per share) | $ 3.79 | $ 1.49 | $ 2.59 | $ 4.22 | $ (2.78) | $ 3.38 | $ 1.32 | $ (0.19) | $ 12.10 | $ 1.75 | $ 6.29 |
Number of anti-dilutive share-based awards | 0 | 1.3 | 0.7 | ||||||||
Stock Options | |||||||||||
Denominator: | |||||||||||
Effect of stock-based awards | 1.2 | 0.8 | 1.1 | ||||||||
Restricted Stock Units (RSUs) | |||||||||||
Denominator: | |||||||||||
Effect of stock-based awards | 0.7 | 0.5 | 0.7 |
Employee Retirement Benefits (N
Employee Retirement Benefits (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2008 | |
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Minimum participant age to elect | 40 years | |||
Employer discretionary contribution amount | $ 19 | $ 18 | $ 16 | |
Requisite service period | 3 years | |||
Actual return on plan assets | 24.50% | 1.70% | ||
Amortization of actuarial loss | $ 3 | |||
Amortization of prior service cost less than $1 million | 1 | |||
Pension plan assets at fair value | $ 354 | $ 318 | 345 | |
Maximum | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Matching contribution to defined contribution plan | 6.00% | |||
Pension Plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Percentage of increase decrease in benefit obligations discount rate | 0.94% | |||
Change In Net Benefit Cost Discount Rate Assumption | 0.61% | |||
Pension plan assets, shares | 232,113 | 232,113 | ||
Pension plan assets, fair value | $ 24 | $ 18 | ||
Pension Plan | Maximum | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Cash dividends paid (less than $1 million) | 1 | 1 | ||
Supplemental Employee Retirement Plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Accrued employee benefit | $ 11 | 10 | ||
Percentage of increase decrease in benefit obligations discount rate | 0.92% | |||
Change In Net Benefit Cost Discount Rate Assumption | 0.64% | |||
Expected contribution by employer during 2020 | $ 9 | |||
Top Hat Savings Plan - Mutual Funds and Common Equities | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
CFC Top Hat Savings Plan | 45 | 34 | ||
Top Hat | Top Hat Savings Plan - Mutual Funds and Common Equities | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Employer discretionary contribution amount | 1 | 1 | $ 1 | |
CFC Top Hat Savings Plan | $ 45 | 34 | ||
Equity Securities | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Allocation percentage of investments | 77.00% | |||
Pension plan assets at fair value | $ 260 | 215 | ||
Equity Securities | Financial Services Sector | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Allocation percentage of investments | 23.00% | |||
Equity Securities | Information Technology Sector | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Allocation percentage of investments | 21.00% | |||
Equity Securities | Healthcare Sector | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Allocation percentage of investments | 13.00% | |||
Equity Securities | Industrial Sector | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Allocation percentage of investments | 13.00% | |||
Equity Securities | Consumer Discretionary Sector | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Allocation percentage of investments | 11.00% | |||
Equity Securities | All Remaining Sectors | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Allocation percentage of investments | 10.00% | |||
Fixed Maturities | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Pension plan assets at fair value | $ 77 | 71 | ||
Fixed Maturities | States, Municipalities and Political Subdivisions | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Allocation percentage of investments | 8.00% | |||
Pension plan assets at fair value | $ 25 | 29 | ||
Fixed Maturities | Domestic Corporate Debt Securities | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Allocation percentage of investments | 8.00% | |||
Pension plan assets at fair value | $ 27 | 37 | ||
Fixed Maturities | United States Government | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Allocation percentage of investments | 7.00% | |||
Pension plan assets at fair value | $ 25 | 5 | ||
Cash and Cash Equivalents | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Pension plan assets at fair value | $ 17 | $ 32 |
Employee Retirement Benefits (
Employee Retirement Benefits (Weighted-Average Assumptions Used) (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pension Plan | |||
Weighted average assumptions used to determine benefit obligations | |||
Benefit obligation discount rate | 3.40% | 4.34% | |
Summary of the weighted average assumtions used to determine net periodic benefit cost | |||
Discount rate | 4.34% | 3.73% | 4.30% |
Expected return on plan assets | 7.00% | 7.25% | 7.25% |
Pension Plan | Minimum | |||
Weighted average assumptions used to determine benefit obligations | |||
Benefit obligation rate of compensation increase | 2.25% | 2.25% | |
Summary of the weighted average assumtions used to determine net periodic benefit cost | |||
Rate of compensation increase | 2.25% | 2.75% | 2.75% |
Pension Plan | Maximum | |||
Weighted average assumptions used to determine benefit obligations | |||
Benefit obligation rate of compensation increase | 3.25% | 3.25% | |
Summary of the weighted average assumtions used to determine net periodic benefit cost | |||
Rate of compensation increase | 3.25% | 3.25% | 3.25% |
Supplemental Employee Retirement Plan | |||
Weighted average assumptions used to determine benefit obligations | |||
Benefit obligation discount rate | 3.33% | 4.25% | |
Summary of the weighted average assumtions used to determine net periodic benefit cost | |||
Discount rate | 4.25% | 3.61% | 4.10% |
Supplemental Employee Retirement Plan | Minimum | |||
Weighted average assumptions used to determine benefit obligations | |||
Benefit obligation rate of compensation increase | 2.25% | 2.25% | |
Summary of the weighted average assumtions used to determine net periodic benefit cost | |||
Rate of compensation increase | 2.25% | 2.75% | 2.75% |
Supplemental Employee Retirement Plan | Maximum | |||
Weighted average assumptions used to determine benefit obligations | |||
Benefit obligation rate of compensation increase | 3.25% | 3.25% | |
Summary of the weighted average assumtions used to determine net periodic benefit cost | |||
Rate of compensation increase | 3.25% | 3.25% | 3.25% |
Employee Retirement Benefits _2
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Change in projected benefit obligation: | |||
Benefit obligation, January 1 | $ 318 | $ 351 | |
Service cost | 8 | 11 | $ 11 |
Interest cost | 13 | 13 | 14 |
Actuarial loss (gain) | 45 | (19) | |
Benefits paid | (34) | (38) | |
Projected benefit obligation, December 31 | 350 | 318 | 351 |
Change in plan assets: | |||
Fair value of plan assets, January 1 | 318 | 345 | |
Actual return on plan assets | 70 | (4) | |
Employer contribution | 0 | 15 | |
Benefits paid | (34) | (38) | |
Fair value of plan assets, December 31 | 354 | 318 | $ 345 |
Unfunded status: | |||
Funded status, December 31 | 4 | 0 | |
Accumulated benefit obligation | $ 327 | $ 297 |
Employee Retirement Benefits _3
Employee Retirement Benefits (Reconciliation Of The Funded Status For Qualified Plan And SERP) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Retirement Benefits [Abstract] | ||
Assets for Plan Benefits, Defined Benefit Plan | $ 4 | $ 0 |
Total | 4 | 0 |
Pension amounts recognized in accumulated other comprehensive income: | ||
Net actuarial loss | 9 | 16 |
Total | $ 9 | $ 16 |
Employee Retirement Benefits _4
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Service cost | $ 8 | $ 11 | $ 11 |
Interest cost | 13 | 13 | 14 |
Expected return on plan assets | (20) | (22) | (21) |
Amortization of actuarial loss and prior service cost | 1 | 1 | 2 |
Other | 1 | 2 | 1 |
Net periodic benefit cost | 3 | 5 | 7 |
Current year actuarial (gain) loss | (5) | 7 | (11) |
Amortization of actuarial loss | (2) | (3) | (3) |
Total recognized in other comprehensive (income) loss | (7) | 4 | (14) |
Total recognized in net periodic benefit cost and other comprehensive (income) loss | $ (4) | $ 9 | $ (7) |
Employee Retirement Benefits _5
Employee Retirement Benefits (Fair Value Hierarchy Of Assets Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | $ 354 | $ 318 | $ 345 |
Fixed Maturities | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 77 | 71 | |
Fixed Maturities | Level 1 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 25 | 5 | |
Fixed Maturities | Level 2 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 52 | 66 | |
Fixed Maturities | Level 3 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 0 | 0 | |
Fixed Maturities | States, Municipalities and Political Subdivisions | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 25 | 29 | |
Fixed Maturities | States, Municipalities and Political Subdivisions | Level 1 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 0 | 0 | |
Fixed Maturities | States, Municipalities and Political Subdivisions | Level 2 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 25 | 29 | |
Fixed Maturities | States, Municipalities and Political Subdivisions | Level 3 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 0 | 0 | |
Fixed Maturities | Domestic Corporate Debt Securities | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 27 | 37 | |
Fixed Maturities | Domestic Corporate Debt Securities | Level 1 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 0 | 0 | |
Fixed Maturities | Domestic Corporate Debt Securities | Level 2 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 27 | 37 | |
Fixed Maturities | Domestic Corporate Debt Securities | Level 3 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 0 | 0 | |
Fixed Maturities | United States Government | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 25 | 5 | |
Fixed Maturities | United States Government | Level 1 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 25 | 5 | |
Fixed Maturities | United States Government | Level 2 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 0 | 0 | |
Fixed Maturities | United States Government | Level 3 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 0 | 0 | |
Equity Securities | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 260 | 215 | |
Equity Securities | Level 1 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 260 | 215 | |
Equity Securities | Level 2 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 0 | 0 | |
Equity Securities | Level 3 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 0 | 0 | |
Fixed Maturities And Equity Securities | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 337 | 286 | |
Fixed Maturities And Equity Securities | Level 1 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 285 | 220 | |
Fixed Maturities And Equity Securities | Level 2 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | 52 | 66 | |
Fixed Maturities And Equity Securities | Level 3 | |||
Defined Benefit Plan Fair Value Disclosure | |||
Pension plan assets at fair value | $ 0 | $ 0 |
Employee Retirement Benefits (E
Employee Retirement Benefits (Expected Future Benefit Payments For Qualified Plan And SERP) (Details) $ in Millions | Dec. 31, 2019USD ($) |
Retirement Benefits [Abstract] | |
Expected future benefit payments, 2020 | $ 31 |
Expected future benefit payments, 2021 | 26 |
Expected future benefit payments, 2022 | 25 |
Expected future benefit payments, 2023 | 26 |
Expected future benefit payments, 2024 | 28 |
Expected future benefit payments, 2025 - 2029 | $ 147 |
Statutory Accounting Informat_3
Statutory Accounting Information (Schedule Of Statutory Net Income And Statutory Surplus (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
The Cincinnati Insurance Company | |||
Statutory Accounting Practices | |||
SAP net income (loss) | $ 558 | $ 626 | $ 401 |
Capital and surplus | 5,620 | 4,919 | |
The Cincinnati Casualty Company | |||
Statutory Accounting Practices | |||
SAP net income (loss) | 13 | 16 | 21 |
Capital and surplus | 437 | 398 | |
The Cincinnati Indemnity Company | |||
Statutory Accounting Practices | |||
SAP net income (loss) | 3 | 5 | 4 |
Capital and surplus | 111 | 102 | |
The Cincinnati Specialty Underwriters Insurance Company | |||
Statutory Accounting Practices | |||
SAP net income (loss) | 62 | 69 | 58 |
Capital and surplus | 526 | 479 | |
The Cincinnati Life Insurance Company | |||
Statutory Accounting Practices | |||
SAP net income (loss) | 19 | 0 | $ 12 |
Capital and surplus | $ 204 | $ 191 |
Transactions With Affliated Par
Transactions With Affliated Parties (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction | |||
Payment for commissions | $ 8 | $ 7 | $ 7 |
Earned premiums | 5,604 | 5,170 | 4,954 |
Affiliated Parties | |||
Related Party Transaction | |||
Earned premiums | $ 48 | $ 45 | $ 45 |
Share-Based Associate Compens_3
Share-Based Associate Compensation Plans (Narrative) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)Peerspeers_exceededcompensation_plansshares | Dec. 31, 2018USD ($)Peerspeers_exceededshares | Dec. 31, 2017USD ($)Peerspeers_exceededshares | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Number of peers exceeded | peers_exceeded | 5 | 4 | 5 |
Number of peers in peer group | Peers | 9 | 9 | 9 |
Number of equity compensation plans | compensation_plans | 4 | ||
Share based compensation | $ 24 | $ 23 | $ 17 |
Tax benefit from compensation expense | 6 | 5 | 9 |
Options exercised, intrinsic value | 26 | 15 | 19 |
Options vested, intrinsic value | 23 | 6 | 8 |
Unrecognized compensation costs related to non-vested awards | $ 34 | ||
Expected weighted-average period to recognize the unrecognized compensation costs related to non-vested awards | 1 year 9 months 18 days | ||
Maximum number of shares awarded to each full-time employee for their service | shares | 10 | ||
Proceeds from stock options exercised | $ 11 | 9 | 13 |
Shares of common stock granted in period (in shares) | shares | 704,000 | ||
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 | $ 11 | $ 9 | $ 13 |
Shares repurchased | shares | 103,237 | 69,649 | 96,030 |
Shares repurchased, value | $ 9 | $ 5 | $ 7 |
Weighted average remaining contractual term | 8 years 5 months 23 days | ||
Shares authorized to be granted under the shareholder-approved plans | shares | 17,300,000 | ||
Shares available for future issuance under the plans | shares | 8,200,000 | ||
Stock Options | Directors | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Shares of common stock granted in period (in shares) | shares | 15,102 | ||
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 2.61% | 2.81% | 2.83% |
Weighted-average expected term | 2 years 10 months 10 days | 2 years 10 months 21 days | 2 years 10 months 21 days |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.48% | 2.22% | 1.44% |
Performance Shares | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Shares, Issued | shares | 20,549 | 80,666 | |
Awards vesting period | 3 years | 3 years | |
Risk-free rates, minimum | 0.00% | 0.00% | 0.00% |
Risk-free rates, maximum | 200.00% | 200.00% | 200.00% |
share based performance metric for performance shares | 3 years | ||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Vested In Period Intrinsic Value Aggregate | $ 2 | $ 6 | $ 7 |
Service Based Shares | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Awards vesting period | 3 years | ||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Vested In Period Intrinsic Value Aggregate | $ 25 | $ 24 | $ 23 |
Share-Based Associate Compens_4
Share-Based Associate Compensation Plans (Assumptions Used In Grants Issued) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Options | |||
Weighted-average fair value of options granted during the period | $ 11.73 | $ 9.87 | $ 10.79 |
Stock Options | Minimum | |||
Weighted-average expected term | 7 years | 7 years | 8 years |
Expected volatility | 14.49% | 15.04% | 16.95% |
Dividend yield | 2.61% | 2.98% | 2.83% |
Risk-free rates | 2.62% | 2.77% | 2.33% |
Stock Options | Maximum | |||
Weighted-average expected term | 8 years | 8 years | 8 years |
Expected volatility | 15.39% | 15.10% | 16.95% |
Dividend yield | 2.61% | 2.98% | 2.83% |
Risk-free rates | 2.64% | 2.83% | 2.33% |
Performance Based Shares | |||
Weighted-average expected term | 2 years 10 months 10 days | 2 years 10 months 21 days | 2 years 10 months 21 days |
Dividend yield | 2.61% | 2.81% | 2.83% |
Risk-free rates | 2.48% | 2.22% | 1.44% |
Performance Based Shares | Minimum | |||
Expected volatility | 15.10% | 16.01% | 15.75% |
Performance Based Shares | Maximum | |||
Expected volatility | 25.00% | 26.32% | 28.35% |
Share-Based Associate Compens_5
Share-Based Associate Compensation Plans (Stock Option Information) (Details) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Shares | |
Outstanding at beginning of year (in shares) | shares | 3,274 |
Granted (in shares) | shares | 704 |
Exercised (in shares) | shares | (493) |
Forfeited or expired (in shares) | shares | (48) |
Outstanding at end of year (in shares) | shares | 3,437 |
Options exercisable at end of period (in shares) | shares | 2,139 |
Weighted-average exercise price | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 56.08 |
Granted (in dollars per share) | $ / shares | 85.67 |
Exercised (in dollars per share) | $ / shares | 42.57 |
Forfeited or expired (in dollars per share) | $ / shares | 63.46 |
Outstanding at end of year (in dollars per share) | $ / shares | 63.99 |
Options exercisable at end of period (in dollars per share) | $ / shares | $ 55.25 |
Aggregate intrinsic value | |
Outstanding at end of year | $ | $ 141 |
Options exercisable at end of period | $ | $ 107 |
Weighted-average remaining contractual life | |
Outstanding option shares at December 31, 2019 | 6 years 1 month 17 days |
Options exercisable at end of period | 4 years 8 months 15 days |
Share-Based Associate Compens_6
Share-Based Associate Compensation Plans (Restricted Stock Unit Information) (Details) - Restricted Stock Units (RSUs) shares in Thousands | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Service Based Shares | |
Nonvested shares | |
Beginning balance (in shares) | shares | 813 |
Granted (in shares) | shares | 288 |
Vested (in shares) | shares | (293) |
Forfeited or canceled (in shares) | shares | (25) |
Ending balance (in shares) | shares | 783 |
Weighted-average grant-date fair value | |
Beginning balance (in dollars per share) | $ / shares | $ 62.31 |
Granted (in dollars per share) | $ / shares | 79.57 |
Vested (in dollars per share) | $ / shares | 57.40 |
Forfeited or canceled (in dollars per share) | $ / shares | 69.43 |
Ending balance (in dollars per share) | $ / shares | $ 70.27 |
Performance Based Shares | |
Nonvested shares | |
Beginning balance (in shares) | shares | 182 |
Granted (in shares) | shares | 52 |
Vested (in shares) | shares | (21) |
Forfeited or canceled (in shares) | shares | (48) |
Ending balance (in shares) | shares | 165 |
Weighted-average grant-date fair value | |
Beginning balance (in dollars per share) | $ / shares | $ 59.83 |
Granted (in dollars per share) | $ / shares | 87.97 |
Vested (in dollars per share) | $ / shares | 70.68 |
Forfeited or canceled (in dollars per share) | $ / shares | 70.68 |
Ending balance (in dollars per share) | $ / shares | $ 64.23 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)industrysegment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information | |||||||||||
Earned premiums | $ 5,604 | $ 5,170 | $ 4,954 | ||||||||
Fee revenues | 15 | 15 | 16 | ||||||||
Other Income | 9 | 5 | 5 | ||||||||
Total revenues | $ 2,152 | $ 1,700 | $ 1,913 | $ 2,159 | $ 710 | $ 1,915 | $ 1,558 | $ 1,224 | 7,924 | 5,407 | 5,732 |
Net Investment Income | 646 | 619 | 609 | ||||||||
Investment gains and losses, net | 1,650 | (402) | 148 | ||||||||
Income before income taxes | 781 | $ 294 | $ 530 | $ 867 | (581) | $ 618 | $ 264 | $ (50) | 2,472 | 251 | 730 |
Identifiable assets | 25,408 | 21,935 | $ 25,408 | 21,935 | |||||||
Number of Industries Operated In | industry | 2 | ||||||||||
Number of Insurance Segments | segment | 4 | ||||||||||
Life Insurance Segment | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | $ 270 | 250 | 232 | ||||||||
Identifiable assets | 1,516 | 1,424 | 1,516 | 1,424 | |||||||
Investments Segment | |||||||||||
Segment Reporting Information | |||||||||||
Identifiable assets | 19,583 | 16,741 | 19,583 | 16,741 | |||||||
Consolidated Property and Casualty Insurance Entity | |||||||||||
Segment Reporting Information | |||||||||||
Identifiable assets | 3,437 | 3,285 | 3,437 | 3,285 | |||||||
Corporate and Other [Member] | |||||||||||
Segment Reporting Information | |||||||||||
Identifiable assets | $ 872 | $ 485 | 872 | 485 | |||||||
Operating Segments | Commercial Insurance | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 3,319 | 3,218 | 3,165 | ||||||||
Fee revenues | 5 | 5 | 5 | ||||||||
Total revenues | 3,324 | 3,223 | 3,170 | ||||||||
Income before income taxes | 241 | 151 | 119 | ||||||||
Operating Segments | Commercial Insurance | Commercial Casualty Line | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 1,102 | 1,075 | 1,072 | ||||||||
Operating Segments | Commercial Insurance | Commercial Property Line | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 958 | 920 | 903 | ||||||||
Operating Segments | Commercial Insurance | Commercial Auto Line | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 707 | 664 | 634 | ||||||||
Operating Segments | Commercial Insurance | Workers' Compensation Line | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 300 | 324 | 335 | ||||||||
Operating Segments | Commercial Insurance | Other Commercial Lines | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 252 | 235 | 221 | ||||||||
Operating Segments | Personal Insurance | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 1,404 | 1,336 | 1,241 | ||||||||
Fee revenues | 4 | 5 | 5 | ||||||||
Total revenues | 1,408 | 1,341 | 1,246 | ||||||||
Income before income taxes | 8 | (20) | (32) | ||||||||
Operating Segments | Personal Insurance | Personal Auto | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 621 | 614 | 582 | ||||||||
Operating Segments | Personal Insurance | Home Owner Line | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 607 | 563 | 518 | ||||||||
Operating Segments | Personal Insurance | Other Personal Lines | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 176 | 159 | 141 | ||||||||
Operating Segments | Excess and Surplus Lines Insurance | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 278 | 234 | 209 | ||||||||
Fee revenues | 2 | 1 | 1 | ||||||||
Total revenues | 280 | 235 | 210 | ||||||||
Income before income taxes | 53 | 63 | 61 | ||||||||
Operating Segments | Life Insurance Segment | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 270 | 250 | 232 | ||||||||
Fee revenues | 4 | 4 | 5 | ||||||||
Total revenues | 274 | 254 | 237 | ||||||||
Income before income taxes | 1 | 8 | (1) | ||||||||
Operating Segments | Investments Segment | |||||||||||
Segment Reporting Information | |||||||||||
Total revenues | 2,296 | 217 | 757 | ||||||||
Net Investment Income | 646 | 619 | 609 | ||||||||
Investment gains and losses, net | 1,650 | (402) | 148 | ||||||||
Income before income taxes | 2,197 | 121 | 664 | ||||||||
Corporate, Non-Segment [Member] | |||||||||||
Segment Reporting Information | |||||||||||
Total revenues | 342 | 137 | 112 | ||||||||
Corporate, Non-Segment [Member] | Reinsurance assumed and other non segment | |||||||||||
Segment Reporting Information | |||||||||||
Earned premiums | 333 | 132 | 107 | ||||||||
Corporate, Non-Segment [Member] | Corporate and Other [Member] | |||||||||||
Segment Reporting Information | |||||||||||
Other Income | 9 | 5 | 5 | ||||||||
Income before income taxes | $ (28) | $ (72) | $ (81) |
Quarterly Supplementary Data (D
Quarterly Supplementary Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 2,152 | $ 1,700 | $ 1,913 | $ 2,159 | $ 710 | $ 1,915 | $ 1,558 | $ 1,224 | $ 7,924 | $ 5,407 | $ 5,732 |
Income before income taxes | 781 | 294 | 530 | 867 | (581) | 618 | 264 | (50) | 2,472 | 251 | 730 |
Net Income (Loss) Attributable to Parent | $ 626 | $ 248 | $ 428 | $ 695 | $ (452) | $ 553 | $ 217 | $ (31) | $ 1,997 | $ 287 | $ 1,045 |
Basic (in usd per share) | $ 3.84 | $ 1.51 | $ 2.62 | $ 4.27 | $ (2.78) | $ 3.40 | $ 1.33 | $ (0.19) | $ 12.24 | $ 1.76 | $ 6.36 |
Diluted (in usd per share) | $ 3.79 | $ 1.49 | $ 2.59 | $ 4.22 | $ (2.78) | $ 3.38 | $ 1.32 | $ (0.19) | $ 12.10 | $ 1.75 | $ 6.29 |
Acquisition Narrative (Details)
Acquisition Narrative (Details) - Feb. 28, 2019 - Cincinnati Global £ in Millions, $ in Millions | USD ($) | GBP (£) |
Business Acquisition | ||
Aggregate considerations paid | $ 63 | £ 47 |
Previously Reported | ||
Business Acquisition | ||
Aggregate considerations paid | 64 | £ 48 |
Adjustment to purchase price | ||
Business Acquisition | ||
Aggregate considerations paid | $ 1 |
Acquisition (Details)
Acquisition (Details) - Cincinnati Global $ in Millions | Feb. 28, 2019USD ($) |
Assets | |
Investments and other invested assets | $ 198 |
Cash and cash equivalents | 64 |
Premiums receivable | 45 |
Reinsurance recoverable | 42 |
Other assets | 23 |
Total assets acquired | 372 |
Liabilities | |
Loss and loss expense reserves | 277 |
Unearned premiums | 88 |
Other liabilities | 24 |
Total liabilities assumed | 389 |
Fair value of identifiable intangible assets | |
Syndicate capacity - indefinite lived | 31 |
Total fair value of identifiable intangible assets | 50 |
Total purchase price paid | 63 |
Total assets acquired (including fair value of identifiable intangible assets) | 422 |
Fair value of net assets acquired prior to allocation of goodwill | 33 |
Excess of purchase price paid over fair value of net assets acquired assigned to goodwill | 30 |
Syndicate Broker Relationships | |
Fair value of identifiable intangible assets | |
Definite lived intangible assets | 12 |
Value Of Business Acquired | |
Fair value of identifiable intangible assets | |
Definite lived intangible assets | 4 |
Developed Technology Rights | |
Fair value of identifiable intangible assets | |
Definite lived intangible assets | $ 3 |
Summary of Investments Other _2
Summary of Investments Other Than Investments In Related Parties (Details) $ in Millions | Dec. 31, 2019USD ($) |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | $ 14,985 |
Fair value | 0 |
Balance sheet | 19,746 |
Fixed Maturities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 11,108 |
Fair value | 11,698 |
Balance sheet | 11,698 |
Equity Securities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 3,581 |
Fair value | 7,752 |
Balance sheet | 7,752 |
Other than Securities Investment | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 296 |
Fair value | 0 |
Balance sheet | 296 |
States, Municipalities and Political Subdivisions | Fixed Maturities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 4,477 |
Fair value | 4,728 |
Balance sheet | 4,728 |
States, Municipalities and Political Subdivisions | Fixed Maturities | Cincinnati Financial Corporation | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 38 |
Fair value | 38 |
Balance sheet | 38 |
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 | 3,320 |
Fair value | 3,515 |
Balance sheet | 3,515 |
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 | 199 |
Fair value | 210 |
Balance sheet | 210 |
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 | 46 |
Fair value | 48 |
Balance sheet | 48 |
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 | 525 |
Fair value | 556 |
Balance sheet | 556 |
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 | 348 |
Fair value | 360 |
Balance sheet | 360 |
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 |
United States Government | Fixed Maturities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 102 |
Fair value | 104 |
Balance sheet | 104 |
United States Government | Fixed Maturities | The Cincinnati Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 65 |
Fair value | 67 |
Balance sheet | 67 |
United States Government | Fixed Maturities | The Cincinnati Casualty 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 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 | Cincinnati Global | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 35 |
Fair value | 35 |
Balance sheet | 35 |
Government-Sponsored Enterprises | Fixed Maturities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 137 |
Fair value | 136 |
Balance sheet | 136 |
Government-Sponsored Enterprises | Fixed Maturities | Cincinnati Financial Corporation | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 10 |
Fair value | 10 |
Balance sheet | 10 |
Government-Sponsored Enterprises | Fixed Maturities | Cincinnati Global | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 5 |
Fair value | 5 |
Balance sheet | 5 |
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 | 122 |
Fair value | 121 |
Balance sheet | 121 |
Foreign Government | Fixed Maturities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 28 |
Fair value | 28 |
Balance sheet | 28 |
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 |
Foreign Government | Fixed Maturities | Cincinnati Global | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 18 |
Fair value | 18 |
Balance sheet | 18 |
All Other Corporate Bonds | Fixed Maturities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 6,364 |
Fair value | 6,702 |
Balance sheet | 6,702 |
All Other Corporate Bonds | Fixed Maturities | Cincinnati Financial Corporation | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 1 |
Fair value | 1 |
Balance sheet | 1 |
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 | 2,956 |
Fair value | 3,095 |
Balance sheet | 3,095 |
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 | 107 |
Fair value | 112 |
Balance sheet | 112 |
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 | 33 |
Fair value | 34 |
Balance sheet | 34 |
All Other Corporate Bonds | Fixed Maturities | Cincinnati Global | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 58 |
Fair value | 58 |
Balance sheet | 58 |
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 | 175 |
Fair value | 186 |
Balance sheet | 186 |
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 | 3,033 |
Fair value | 3,215 |
Balance sheet | 3,215 |
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 | 1 |
Fair value | 1 |
Balance sheet | 1 |
Common Stock | Equity Securities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 3,371 |
Fair value | 7,518 |
Balance sheet | 7,518 |
Common Stock | Equity Securities | Cincinnati Financial Corporation | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 1,426 |
Fair value | 3,068 |
Balance sheet | 3,068 |
Common Stock | Equity Securities | The Cincinnati Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 1,763 |
Fair value | 4,063 |
Balance sheet | 4,063 |
Common Stock | Equity Securities | The Cincinnati Casualty Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 58 |
Fair value | 141 |
Balance sheet | 141 |
Common Stock | Equity Securities | The Cincinnati Indemnity Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 17 |
Fair value | 33 |
Balance sheet | 33 |
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 | 90 |
Fair value | 184 |
Balance sheet | 184 |
Common Stock | Equity Securities | CSU Producers Resources Inc. | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 17 |
Fair value | 29 |
Balance sheet | 29 |
Nonredeemable Preferred Stock | Equity Securities | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 210 |
Fair value | 234 |
Balance sheet | 234 |
Nonredeemable Preferred Stock | Equity Securities | Cincinnati Financial Corporation | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 1 |
Fair value | 1 |
Balance sheet | 1 |
Nonredeemable Preferred Stock | Equity Securities | The Cincinnati Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 197 |
Fair value | 218 |
Balance sheet | 218 |
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 | 12 |
Fair value | 15 |
Balance sheet | 15 |
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 | 32 |
Fair value | 0 |
Balance sheet | 32 |
Lloyd's and other deposits | Other than Securities Investment | Cincinnati Financial Corporation | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 67 |
Fair value | 0 |
Balance sheet | 67 |
Lloyd's and other deposits | Other than Securities Investment | Cincinnati Global | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 97 |
Fair value | 0 |
Balance sheet | 97 |
Limited Partnership | Other than Securities Investment | Cincinnati Financial Corporation | |
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 | The Cincinnati Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 37 |
Balance sheet | 37 |
Limited Partnership | Other than Securities Investment | The Cincinnati Life Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 3 |
Balance sheet | 3 |
Real Estate | Other than Securities Investment | Cincinnati Financial Corporation | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 5 |
Balance sheet | 5 |
Real Estate | Other than Securities Investment | The Cincinnati Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 8 |
Balance sheet | 8 |
Real Estate | Other than Securities Investment | The Cincinnati Life Insurance Company | |
Summary Of Investments Other Than Investments In Related Parties Reportable Data | |
Cost or amortized cost | 16 |
Balance sheet | $ 16 |
Condensed Financial Statement_2
Condensed Financial Statements Of Parent Company Condensed Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Investments | ||||
Fixed maturities, at fair value (amortized cost: 2019—$49; 2018—$35) | $ 11,698 | $ 10,689 | ||
Equity securities, at fair value (cost: 2019—$1,427; 2018—$1,282) | 7,752 | 5,920 | ||
Other invested assets | 296 | 123 | ||
Total investments | 19,746 | 16,732 | ||
Cash and cash equivalents | 767 | 784 | $ 657 | $ 777 |
Investment income receivable | 133 | 132 | ||
Land, building and equipment, net, for company use (accumulated depreciation: 2019—$129; 2018—$121) | 207 | 195 | ||
Other assets | 381 | 308 | ||
Total assets | 25,408 | 21,935 | ||
Liabilities | ||||
Deferred federal income tax | 1,307 | 825 | ||
Long-term debt | 788 | 788 | ||
Other liabilities | 928 | 804 | ||
Total liabilities | 15,544 | 14,102 | ||
Shareholders' Equity | ||||
Common stock | 397 | 397 | ||
Paid-in capital | 1,306 | 1,281 | ||
Retained earnings | 9,257 | 7,625 | ||
Accumulated other comprehensive income | 448 | 22 | ||
Treasury stock at cost | (1,544) | (1,492) | ||
Total shareholders' equity | 9,864 | 7,833 | 8,243 | |
Total liabilities and shareholders' equity | 25,408 | 21,935 | ||
Cincinnati Financial Corporation | ||||
Investments | ||||
Fixed maturities, at fair value (amortized cost: 2019—$49; 2018—$35) | 49 | 35 | ||
Equity securities, at fair value (cost: 2019—$1,427; 2018—$1,282) | 3,069 | 2,234 | ||
Other invested assets | 103 | 36 | ||
Total investments | 3,221 | 2,305 | ||
Cash and cash equivalents | 197 | 209 | $ 199 | $ 248 |
Equity in net assets of subsidiaries | 7,424 | 6,152 | ||
Investment income receivable | 7 | 6 | ||
Land, building and equipment, net, for company use (accumulated depreciation: 2019—$129; 2018—$121) | 141 | 137 | ||
Income tax receivable | 2 | 1 | ||
Other assets | 61 | 48 | ||
Due from subsidiaries | 107 | 106 | ||
Total assets | 11,160 | 8,964 | ||
Liabilities | ||||
Dividends declared but unpaid | 91 | 86 | ||
Deferred federal income tax | 345 | 198 | ||
Long-term debt | 788 | 788 | ||
Other liabilities | 72 | 59 | ||
Total liabilities | 1,296 | 1,131 | ||
Shareholders' Equity | ||||
Common stock | 397 | 397 | ||
Paid-in capital | 1,306 | 1,281 | ||
Retained earnings | 9,257 | 7,625 | ||
Accumulated other comprehensive income | 448 | 22 | ||
Treasury stock at cost | (1,544) | (1,492) | ||
Total shareholders' equity | 9,864 | 7,833 | ||
Total liabilities and shareholders' equity | $ 11,160 | $ 8,964 |
Condensed Financial Statement_3
Condensed Financial Statements Of Parent Company Condensed Balance Sheets (Parenthetical) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Condensed Financial Statements, Captions | ||
Fixed maturities, amortized cost | $ 11,108 | $ 10,643 |
Equity securities, cost | 3,581 | 3,368 |
Land, building and equipment, accumulated depreciation | 276 | 265 |
Cincinnati Financial Corporation | ||
Condensed Financial Statements, Captions | ||
Fixed maturities, amortized cost | 49 | 35 |
Equity securities, cost | 1,427 | 1,282 |
Land, building and equipment, accumulated depreciation | $ 129 | $ 121 |
Condensed Financial Statement_4
Condensed Financial Statements Of Parent Company Condensed Statements Of Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | |||||||||||
Investment income, net of expenses | $ 646 | $ 619 | $ 609 | ||||||||
Investment gains and losses, net | 1,650 | (402) | 148 | ||||||||
Other revenues | 9 | 5 | 5 | ||||||||
Total revenues | $ 2,152 | $ 1,700 | $ 1,913 | $ 2,159 | $ 710 | $ 1,915 | $ 1,558 | $ 1,224 | 7,924 | 5,407 | 5,732 |
Expenses | |||||||||||
Interest expense | 53 | 53 | 53 | ||||||||
Other expenses | 23 | 16 | 13 | ||||||||
Total expenses | 5,452 | 5,156 | 5,002 | ||||||||
Income (Loss) Before Income Taxes and Earnings of Subsidiaries | 781 | 294 | 530 | 867 | (581) | 618 | 264 | (50) | 2,472 | 251 | 730 |
Provision (Benefit) for Income Taxes | 475 | (36) | (315) | ||||||||
Net Income | $ 626 | $ 248 | $ 428 | $ 695 | $ (452) | $ 553 | $ 217 | $ (31) | 1,997 | 287 | 1,045 |
Change in unrealized gain (loss) on securities | 0 | (2) | 235 | ||||||||
Amortization of pension actuarial gains and losses and prior service costs | 5 | (3) | 7 | ||||||||
Other Comprehensive Income (Loss) Before Other Comprehensive Income (Loss) from Subsidiaries | 5 | (5) | 242 | ||||||||
Other Comprehensive Income (Loss) of subsidiaries | 421 | (258) | 361 | ||||||||
Other comprehensive income (loss) | 426 | (263) | 603 | ||||||||
Comprehensive Income | 2,423 | 24 | 1,648 | ||||||||
Cincinnati Financial Corporation | |||||||||||
Revenues | |||||||||||
Investment income, net of expenses | 75 | 65 | 62 | ||||||||
Investment gains and losses, net | 728 | (108) | 28 | ||||||||
Other revenues | 15 | 15 | 15 | ||||||||
Total revenues | 818 | (28) | 105 | ||||||||
Expenses | |||||||||||
Interest expense | 52 | 52 | 52 | ||||||||
Other expenses | 37 | 31 | 28 | ||||||||
Total expenses | 89 | 83 | 80 | ||||||||
Income (Loss) Before Income Taxes and Earnings of Subsidiaries | 729 | (111) | 25 | ||||||||
Provision (Benefit) for Income Taxes | 146 | (31) | (161) | ||||||||
Net Income (Loss) Before Earnings of Subsidiaries | 583 | (80) | 186 | ||||||||
Increase in equity of subsidiaries | 1,414 | 367 | 859 | ||||||||
Net Income | $ 1,997 | $ 287 | $ 1,045 |
Condensed Financial Statement_5
Condensed Financial Statements Of Parent Company Condensed Statements Of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows From Operating Activities | |||||||||||
Net Income | $ 626 | $ 248 | $ 428 | $ 695 | $ (452) | $ 553 | $ 217 | $ (31) | $ 1,997 | $ 287 | $ 1,045 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 72 | 63 | 55 | ||||||||
Gain (Loss) on Sale of Investments | (1,640) | 408 | (148) | ||||||||
Changes in: | |||||||||||
Investment income receivable | (1) | 2 | 0 | ||||||||
Current income tax receivable/payable | 92 | (91) | 67 | ||||||||
Other assets | (22) | (1) | (43) | ||||||||
Other liabilities | 74 | 0 | 24 | ||||||||
Net cash provided by operating activities | 1,208 | 1,181 | 1,052 | ||||||||
Cash Flows From Investing Activities | |||||||||||
Sale of fixed maturities | 102 | 36 | 23 | ||||||||
Call or maturity of fixed maturities | 1,241 | 1,127 | 1,172 | ||||||||
Sale of equity securities | 203 | 403 | 523 | ||||||||
Purchase of fixed maturities | (1,742) | (1,510) | (1,723) | ||||||||
Purchase of equity securities | (382) | (441) | (513) | ||||||||
Investment in buildings and equipment | (24) | (20) | (16) | ||||||||
Change in other invested assets, net | (72) | (38) | (15) | ||||||||
Net cash used in investing activities | (679) | (451) | (558) | ||||||||
Cash Flows From Financing Activities | |||||||||||
Payment of cash dividends to shareholders | (355) | (336) | (400) | ||||||||
Shares acquired - share repurchase authorization | (67) | (125) | (92) | ||||||||
Proceeds from stock options exercised | 11 | 9 | 13 | ||||||||
Other | (54) | (60) | (54) | ||||||||
Net cash used in financing activities | (546) | (603) | (614) | ||||||||
Net change in cash and cash equivalents | (17) | 127 | (120) | ||||||||
Cash and cash equivalents at beginning of year | 784 | 657 | 784 | 657 | 777 | ||||||
Cash and cash equivalents at end of year | 767 | 784 | 767 | 784 | 657 | ||||||
Cincinnati Financial Corporation | |||||||||||
Cash Flows From Operating Activities | |||||||||||
Net Income | 1,997 | 287 | 1,045 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 10 | 7 | 7 | ||||||||
Gain (Loss) on Sale of Investments | (720) | 114 | (28) | ||||||||
Dividends from subsidiaries | 625 | 500 | 465 | ||||||||
Changes in: | |||||||||||
Increase in equity of subsidiaries | (1,414) | (367) | (859) | ||||||||
Investment income receivable | (1) | 2 | 0 | ||||||||
Current federal income taxes | (1) | 14 | (5) | ||||||||
Current income tax receivable/payable | 146 | (35) | (150) | ||||||||
Other assets | 4 | (17) | (20) | ||||||||
Other liabilities | 4 | 3 | 15 | ||||||||
Intercompany receivable for operations | 20 | 19 | 13 | ||||||||
Net cash provided by operating activities | 670 | 527 | 483 | ||||||||
Cash Flows From Investing Activities | |||||||||||
Sale of fixed maturities | 3 | 1 | 0 | ||||||||
Call or maturity of fixed maturities | 21 | 19 | 14 | ||||||||
Sale of equity securities | 122 | 131 | 230 | ||||||||
Purchase of fixed maturities | (39) | (17) | (2) | ||||||||
Purchase of equity securities | (237) | (177) | (293) | ||||||||
Investment in buildings and equipment | (13) | (12) | (3) | ||||||||
Cash paid for acquisition | 63 | ||||||||||
Change in other invested assets, net | (67) | (11) | 0 | ||||||||
Net cash used in investing activities | (273) | (66) | (54) | ||||||||
Cash Flows From Financing Activities | |||||||||||
Payment of cash dividends to shareholders | (355) | (336) | (400) | ||||||||
Shares acquired - share repurchase authorization | (67) | (125) | (92) | ||||||||
Proceeds from stock options exercised | 11 | 9 | 13 | ||||||||
Other | 2 | 1 | 1 | ||||||||
Net cash used in financing activities | (409) | (451) | (478) | ||||||||
Net change in cash and cash equivalents | (12) | 10 | (49) | ||||||||
Cash and cash equivalents at beginning of year | $ 209 | $ 199 | 209 | 199 | 248 | ||||||
Cash and cash equivalents at end of year | $ 197 | $ 209 | $ 197 | $ 209 | $ 199 |
Supplementary Insurance Infor_2
Supplementary Insurance Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Supplementary Insurance Information, by Segment | |||
Deferred policy acquisition costs | $ 774 | $ 738 | $ 670 |
Gross future policy benefits, losses, claims and expense losses | 8,947 | 8,448 | 7,972 |
Gross unearned premium | 2,788 | 2,516 | 2,404 |
Other policy claims and benefits payable | 35 | 38 | 30 |
Earned premiums | 5,604 | 5,170 | 4,954 |
Investment income, net of expenses | 571 | 554 | 547 |
Benefits, claims losses and settlement expense | 3,638 | 3,490 | 3,390 |
Amortization of deferred policy acquisition costs | 1,034 | 946 | 913 |
Underwriting, acquisition and insurance expenses | 704 | 651 | 633 |
Net written premiums | 5,518 | 5,033 | 4,843 |
Commercial Insurance | |||
Supplementary Insurance Information, by Segment | |||
Deferred policy acquisition costs | 311 | 291 | 284 |
Gross future policy benefits, losses, claims and expense losses | 4,569 | 4,466 | 4,236 |
Gross unearned premium | 1,665 | 1,576 | 1,548 |
Earned premiums | 3,319 | 3,218 | 3,165 |
Benefits, claims losses and settlement expense | 2,030 | 2,049 | 2,042 |
Amortization of deferred policy acquisition costs | 631 | 608 | 590 |
Underwriting, acquisition and insurance expenses | 422 | 415 | 419 |
Net written premiums | 3,410 | 3,245 | 3,202 |
Personal Insurance | |||
Supplementary Insurance Information, by Segment | |||
Deferred policy acquisition costs | 130 | 126 | 121 |
Gross future policy benefits, losses, claims and expense losses | 687 | 679 | 587 |
Gross unearned premium | 757 | 725 | 683 |
Earned premiums | 1,404 | 1,336 | 1,241 |
Benefits, claims losses and settlement expense | 985 | 972 | 918 |
Amortization of deferred policy acquisition costs | 251 | 242 | 225 |
Underwriting, acquisition and insurance expenses | 164 | 147 | 135 |
Net written premiums | 1,435 | 1,378 | 1,294 |
Excess and Surplus Lines Insurance | |||
Supplementary Insurance Information, by Segment | |||
Deferred policy acquisition costs | 25 | 21 | 17 |
Gross future policy benefits, losses, claims and expense losses | 351 | 298 | 264 |
Gross unearned premium | 152 | 123 | 105 |
Earned premiums | 278 | 234 | 209 |
Benefits, claims losses and settlement expense | 142 | 104 | 86 |
Amortization of deferred policy acquisition costs | 47 | 39 | 35 |
Underwriting, acquisition and insurance expenses | 38 | 29 | 28 |
Net written premiums | 303 | 249 | 219 |
Reinsurance assumed and other non segment | |||
Supplementary Insurance Information, by Segment | |||
Deferred policy acquisition costs | 46 | 26 | 16 |
Gross future policy benefits, losses, claims and expense losses | 481 | 203 | 132 |
Gross unearned premium | 213 | 91 | 67 |
Earned premiums | 333 | 132 | 107 |
Benefits, claims losses and settlement expense | 195 | 98 | 92 |
Amortization of deferred policy acquisition costs | 57 | 18 | 17 |
Underwriting, acquisition and insurance expenses | 42 | 24 | 18 |
Net written premiums | 368 | 158 | 125 |
Property, Liability and Casualty Insurance Product Line | |||
Supplementary Insurance Information, by Segment | |||
Deferred policy acquisition costs | 512 | 464 | 438 |
Gross future policy benefits, losses, claims and expense losses | 6,088 | 5,646 | 5,219 |
Gross unearned premium | 2,787 | 2,515 | 2,403 |
Earned premiums | 5,334 | 4,920 | 4,722 |
Investment income, net of expenses | 419 | 401 | 392 |
Benefits, claims losses and settlement expense | 3,352 | 3,223 | 3,138 |
Amortization of deferred policy acquisition costs | 986 | 907 | 867 |
Underwriting, acquisition and insurance expenses | 666 | 615 | 600 |
Net written premiums | 5,516 | 5,030 | 4,840 |
Accident Health Insurance Segment | |||
Supplementary Insurance Information, by Segment | |||
Net written premiums | 2 | 3 | 3 |
Life Insurance Segment | |||
Supplementary Insurance Information, by Segment | |||
Deferred policy acquisition costs | 262 | 274 | 232 |
Gross future policy benefits, losses, claims and expense losses | 2,859 | 2,802 | 2,753 |
Gross unearned premium | 1 | 1 | 1 |
Other policy claims and benefits payable | 35 | 38 | 30 |
Earned premiums | 270 | 250 | 232 |
Investment income, net of expenses | 152 | 153 | 155 |
Benefits, claims losses and settlement expense | 286 | 267 | 252 |
Amortization of deferred policy acquisition costs | 48 | 39 | 46 |
Underwriting, acquisition and insurance expenses | $ 38 | $ 36 | $ 33 |
Reinsurance (Details)
Reinsurance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance | |||
Gross amounts, life insurance in force | $ 108,130 | $ 104,726 | $ 99,888 |
Gross amounts | 5,681 | 5,251 | 5,052 |
Ceded amounts to other companies, life insurance in force | 38,146 | 38,584 | 38,711 |
Ceded premiums earned | 276 | 230 | 230 |
Assumed amounts from other companies, life insurance in force | 0 | 0 | 0 |
Assumed amounts from other companies | 199 | 149 | 132 |
Net amounts, life insurance in force | 69,984 | 66,142 | 61,177 |
Premiums Earned, Net | $ 5,604 | $ 5,170 | $ 4,954 |
Percentage of amounts assumed to net, life insurance in force | 0.00% | 0.00% | 0.00% |
Percentage of amounts assumed to net | 3.60% | 2.90% | 2.70% |
Commercial Insurance | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance | |||
Gross amounts | $ 3,421 | $ 3,314 | $ 3,258 |
Ceded premiums earned | 109 | 104 | 99 |
Assumed amounts from other companies | 7 | 8 | 6 |
Premiums Earned, Net | $ 3,319 | $ 3,218 | $ 3,165 |
Percentage of amounts assumed to net | 0.20% | 0.30% | 0.20% |
Personal Insurance | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance | |||
Gross amounts | $ 1,446 | $ 1,372 | $ 1,275 |
Ceded premiums earned | 43 | 37 | 35 |
Assumed amounts from other companies | 1 | 1 | 1 |
Premiums Earned, Net | $ 1,404 | $ 1,336 | $ 1,241 |
Percentage of amounts assumed to net | 0.10% | 0.10% | 0.10% |
Excess and Surplus Lines Insurance | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance | |||
Gross amounts | $ 292 | $ 245 | $ 219 |
Ceded premiums earned | 14 | 11 | 10 |
Assumed amounts from other companies | 0 | 0 | 0 |
Premiums Earned, Net | $ 278 | $ 234 | $ 209 |
Percentage of amounts assumed to net | 0.00% | 0.00% | 0.00% |
Reinsurance assumed and other non segment | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance | |||
Gross amounts | $ 181 | $ 0 | $ 0 |
Ceded premiums earned | 39 | 8 | 18 |
Assumed amounts from other companies | 191 | 140 | 125 |
Premiums Earned, Net | $ 333 | $ 132 | $ 107 |
Percentage of amounts assumed to net | 57.40% | 106.10% | 116.10% |
Property, Liability and Casualty Insurance Product Line | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance | |||
Gross amounts | $ 5,340 | $ 4,931 | $ 4,752 |
Ceded premiums earned | 205 | 160 | 162 |
Assumed amounts from other companies | 199 | 149 | 132 |
Premiums Earned, Net | $ 5,334 | $ 4,920 | $ 4,722 |
Percentage of amounts assumed to net | 3.70% | 3.00% | 2.80% |
Life Insurance Segment | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance | |||
Gross amounts | $ 341 | $ 320 | $ 300 |
Ceded premiums earned | 71 | 70 | 68 |
Assumed amounts from other companies | 0 | 0 | 0 |
Premiums Earned, Net | $ 270 | $ 250 | $ 232 |
Percentage of amounts assumed to net | 0.00% | 0.00% | 0.00% |
Valuation And Qualifying Acco_2
Valuation And Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Valuation and allowance roll forward | |||
Beginning balance, January 1 | $ 6 | $ 6 | |
Ending balance, December 31 | 49 | 6 | $ 6 |
Allowance for doubtful receivables | |||
Valuation and allowance roll forward | |||
Beginning balance, January 1 | 6 | 6 | 5 |
Additions charged to costs and expenses | 8 | 6 | 6 |
Deductions | (6) | (6) | (5) |
Ending balance, December 31 | 8 | 6 | 6 |
Deferred tax valuation allowance | |||
Valuation and allowance roll forward | |||
Beginning balance, January 1 | 0 | 0 | 0 |
Additions charged to costs and expenses | 55 | 0 | 0 |
Deductions | (14) | 0 | 0 |
Ending balance, December 31 | $ 41 | $ 0 | $ 0 |
Supplementary Information Con_2
Supplementary Information Concerning Property Casualty Insurance Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property Casualty Insurance Underwriters | |||
Deferred policy acquisition costs | $ 512 | $ 464 | $ 438 |
Reserves for unpaid claims and claim adjustment expenses | 6,088 | 5,646 | 5,219 |
Unearned premiums | 2,787 | 2,515 | 2,403 |
Earned premiums | 5,334 | 4,920 | 4,722 |
Investment income | 419 | 401 | 392 |
Loss and loss expenses incurred related to current accident year | 3,600 | 3,390 | 3,257 |
Prior year claims and claims adjustments expense, (favorable) and unfavorable | (248) | (167) | (119) |
Amortization of deferred policy acquisition cost | 986 | 907 | 867 |
Paid loss and loss expenses | 3,260 | 2,847 | 2,843 |
Net written premiums | 5,516 | 5,030 | 4,840 |
Commercial Insurance | |||
Property Casualty Insurance Underwriters | |||
Deferred policy acquisition costs | 311 | 291 | 284 |
Reserves for unpaid claims and claim adjustment expenses | 4,569 | 4,466 | 4,236 |
Unearned premiums | 1,665 | 1,576 | 1,548 |
Earned premiums | 3,319 | 3,218 | 3,165 |
Investment income | 0 | 0 | 0 |
Loss and loss expenses incurred related to current accident year | 2,222 | 2,206 | 2,115 |
Prior year claims and claims adjustments expense, (favorable) and unfavorable | (192) | (157) | (73) |
Amortization of deferred policy acquisition cost | 631 | 608 | 590 |
Paid loss and loss expenses | 2,023 | 1,816 | 1,866 |
Net written premiums | 3,410 | 3,245 | 3,202 |
Personal Insurance | |||
Property Casualty Insurance Underwriters | |||
Deferred policy acquisition costs | 130 | 126 | 121 |
Reserves for unpaid claims and claim adjustment expenses | 687 | 679 | 587 |
Unearned premiums | 757 | 725 | 683 |
Earned premiums | 1,404 | 1,336 | 1,241 |
Investment income | 0 | 0 | 0 |
Loss and loss expenses incurred related to current accident year | 1,012 | 960 | 932 |
Prior year claims and claims adjustments expense, (favorable) and unfavorable | (27) | 13 | (14) |
Amortization of deferred policy acquisition cost | 251 | 242 | 225 |
Paid loss and loss expenses | 966 | 913 | 898 |
Net written premiums | 1,435 | 1,378 | 1,294 |
Excess and Surplus Lines Insurance | |||
Property Casualty Insurance Underwriters | |||
Deferred policy acquisition costs | 25 | 21 | 17 |
Reserves for unpaid claims and claim adjustment expenses | 351 | 298 | 264 |
Unearned premiums | 152 | 123 | 105 |
Earned premiums | 278 | 234 | 209 |
Investment income | 0 | 0 | 0 |
Loss and loss expenses incurred related to current accident year | 153 | 128 | 115 |
Prior year claims and claims adjustments expense, (favorable) and unfavorable | (11) | (24) | (29) |
Amortization of deferred policy acquisition cost | 47 | 39 | 35 |
Paid loss and loss expenses | 90 | 74 | 61 |
Net written premiums | 303 | 249 | 219 |
Reinsurance assumed and other non segment | |||
Property Casualty Insurance Underwriters | |||
Deferred policy acquisition costs | 46 | 26 | 16 |
Reserves for unpaid claims and claim adjustment expenses | 481 | 203 | 132 |
Unearned premiums | 213 | 91 | 67 |
Earned premiums | 333 | 132 | 107 |
Investment income | 0 | 0 | 0 |
Loss and loss expenses incurred related to current accident year | 213 | 96 | 95 |
Prior year claims and claims adjustments expense, (favorable) and unfavorable | (18) | 1 | (3) |
Amortization of deferred policy acquisition cost | 57 | 18 | 17 |
Paid loss and loss expenses | 181 | 44 | 18 |
Net written premiums | $ 368 | $ 158 | $ 125 |