Exhibit 99.1
Cincinnati Financial Corporation Estimates May 2004 Storm Losses
-- Catastrophe losses in May expected to total $50 million
-- In line with company expectations
CINCINNATI, June 3 /PRNewswire-FirstCall/ -- Cincinnati Financial
Corporation (Nasdaq: CINF) today announced a preliminary estimate of
approximately $50 million for May 2004 pretax catastrophe losses resulting
from three periods of severe weather between May 17 and May 31. The Cincinnati
Insurance Companies' policyholders across 18 Midwestern and mid-Atlantic
states were affected by these storms.
Based on these preliminary estimates, the storm losses are expected to
contribute approximately 7 percentage points to the second-quarter property
casualty combined ratio. The impact on after-tax earnings per share for the
second quarter would be approximately 19 cents. For the second-quarter 2003
period, catastrophe losses were $47 million, contributing 7.1 percentage
points to the combined ratio, with an 18 cent impact on earnings per share.
(Per share amounts have been adjusted for the 5 percent stock dividend payable
June 15, 2004, to shareholders of record on April 30, 2004.)
Chairman and Chief Executive Officer John J. Schiff, Jr., CPCU, commented,
"All of us at The Cincinnati Insurance Companies extend our deepest sympathy
to people whose lives have been disrupted by these storms. We assure
policyholders in all of the affected communities that we are working hard for
your recovery from property losses. At times like these, our local field
claims staff and independent agency representatives demonstrate our person-to-
person approach and the true value of Cincinnati's insurance coverage and
service. Teams of experienced claims representatives are assisting local staff
in several areas with a high concentration of reported claims, including
Louisville and Lexington, Kentucky and Canton, Ohio."
Schiff noted, "Through mid-May, we had not incurred any catastrophe losses
this year. However, we typically experience heavy property losses due to
tornadoes and hailstorms in the second and third quarters, leading to a higher
impact in these periods. Our target for the full-year 2004 GAAP combined ratio
remains at 94 percent (93.5 percent on a statutory basis). This target
anticipates that full-year storm losses will be approximately $90 million to
$100 million, contributing in the range of 3.0 to 3.5 percentage points to the
full-year combined ratio. We will review our target if further severe weather
occurs or as adjustments are needed to these early estimates. Policyholders
often require a large window of time to discover and report hail damage."
"Importantly, excluding these storm losses, underwriting results for the
first two months of the second quarter remain healthy," Schiff concluded.
Cincinnati Financial plans to report final second-quarter results on
Thursday, July 22. A conference call to discuss the results will be held at
2:30 p.m. EDT on that day. Details regarding the Internet broadcast of the
conference call are posted on the Investors page of http://www.cinfin.com .
Cincinnati Financial Corporation offers property and casualty insurance,
its main business, through The Cincinnati Insurance Company, The Cincinnati
Indemnity Company and The Cincinnati Casualty Company. The Cincinnati Life
Insurance Company markets life and disability income insurance and annuities.
CFC Investment Company supports the insurance subsidiaries and their
independent agent representatives through commercial leasing and financing
activities. CinFin Capital Management Company provides asset management
services to institutions, corporations and individuals. For additional
information, please visit the company's Web site at http://www.cinfin.com .
This is a "Safe Harbor" statement under the Private Securities Litigation
Reform Act of 1995. Certain forward-looking statements contained herein
involve potential risks and uncertainties. The company's future results could
differ materially from those discussed. Factors that could cause or contribute
to such differences include, but are not limited to:
-- unusually high levels of catastrophe losses due to changes in weather
patterns, environmental events or other causes
-- increased frequency and/or severity of claims
-- events or conditions that could weaken or harm the company's
relationships with its independent agencies and hamper opportunities
to add new agencies, resulting in limitations on the company's
opportunities for growth, such as:
-- downgrade of the company's financial strength ratings,
-- concerns that doing business with the company is too difficult or
-- perceptions that the company's level of service is no longer a
distinguishing characteristic in the marketplace
-- delays in the development, implementation and benefits of technology
enhancements
-- amount of reinsurance purchased and financial strength of reinsurers
-- inaccurate estimates or assumptions used for critical accounting
estimates
-- recession or other economic conditions or regulatory, accounting or
tax changes resulting in lower demand for insurance products
-- sustained decline in overall stock market values negatively affecting
the company's equity portfolio, in particular a sustained decline in
the market value of Fifth Third Bancorp (Fifth Third) shares, a
significant equity holding
-- events that lead to a significant decline in the market value of a
particular security and impairment of the asset
-- prolonged low interest rate environment or other factors that limit
the company's ability to generate growth in investment income
-- insurance regulatory actions, legislation or court decisions that
increase expenses or place the company at a disadvantage in the
marketplace
-- adverse outcomes from litigation or administrative proceedings
Further, the company's insurance businesses are subject to the effects of
changing social, economic and regulatory environments. Public and regulatory
initiatives have included efforts to adversely influence and restrict premium
rates, restrict the ability to cancel policies, impose underwriting standards
and expand overall regulation. The company also is subject to public and
regulatory initiatives that can affect the market value for its common stock,
such as recent measures affecting corporate financial reporting and
governance. The ultimate changes and eventual effects, if any, of these
initiatives are uncertain.
Readers are cautioned that the company undertakes no obligation to review
or update the forward-looking statements included in this material.
SOURCE Cincinnati Financial Corporation
-0- 06/03/2004
/CONTACT: Investors, Heather J. Wietzel, +1-513-603-5236, or Media, Joan
O. Shevchik, +1-513-603-5323, both of the Cincinnati Financial Corporation/
/Web site: http://www.cinfin.com /
(CINF)
CO: Cincinnati Financial Corporation
ST: Ohio
IN: FIN INS
SU: ERP CCA MAV