CINF - Earnings call transcript Q1 2020 | Cincinnati Financial Corporation

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the First Quarter 2020 Earnings Conference Call. All lines are currently on a listen-only mode. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instruction] As a reminder, today’s conference is being recorded.

It is now my pleasure to hand the conference over to Mr. Officer Financials. Relations Investor McDaniel, for Cincinnati Dennis

Dennis McDaniel

many Hello, you first for Dennis we McDaniel sincerely everywhere, quarter turbulence the period Financial. you Thank of Cincinnati improve face people joining knew important earnings hope call. this during and conference this of is XXXX We challenges things us to that for our overtime.

any news including of navigation left. along far with find financial package, our Late our investment cinfin.com/investors. results, copies documents, investor yesterday, is in the our The to these our quarterly of we please visit shortest the release on results link on issued the To quarter-end a the portfolio. website, menu supplemental information route

Officer; and from Officer, you their remarks, Sewell. Financial call, prepared then After first Mike this questions. participating may Steve ask will call Executive on Johnston, the investors from Chief On Chief hear President and

Cincinnati including Theresa Steve Mullen; with Vice time, Officer, Marty that the in of and At room and Chief responses others some Chief Finance, Officer, Corporate Marty Investment by President Chief Claims made Insurance’s Insurance us, Hoffer. Senior maybe Hollenbeck; Spray; Officer,

and direct please with the various GAAP. rules to accounting to with accounting the release. news With risks of not news some of in the statutory provided SEC. is risks are forward-looking. filings to was matters Statutory respect First, release your we accordance These attention with is non-GAAP our Forward-Looking note to Also, and a involve and certain and be uncertainties, measures discussed these Statements to that reconciliation today reconciled uncertainties. our data therefore prepared

to over call the turn will I Now, Steve.

Steven Johnston

our quarter to thank you results. hear Good morning more joining for you, and us Dennis. today first about Thank

of feeling applaud the pandemic, our I the all. find efforts thankful. frontlines working stand to I reflect of past on to tirelessly us quarter, the As protect I on healthcare industry the myself

clients, the creativity with dedication business. associates best independent our thank their appreciate in working uncertainty. business agents professionalism for much has leadership they them illuminated the and the forward, our to I through to and and guiding This their keep pandemic I moving deliver

by part what thankful I’m face to rebuild we to policy noble helping of lost. holders the I’m market, and in storms respond this stood didn’t us of in first led even the volatility was a experienced for be we have loss undeterred ready quarter. industry. recent to that the stock the a volatility revenues total in relent pandemic though negative net and Spring the

hold or report stocks us remarks. in Since of XXXX increase will the portfolio ruling this through provide the our statement. income rules we continue accounting in required to decrease his value thoughts to changed our of appreciated level on additional Mike

cost to a portion value still has gain our increase the over reasons than stocks portfolio time. the strong X.X% to of portfolio as only portfolio appreciate billion. a value stock has The The to over in end shareholder over investment work to significant long-term, we why bond is we in $X.X is believe nice superior dividend more cost yield of the basis total and potential quarter net its a even portfolio

quarter, performance income. investment weather business were losses to good, operating typical otherwise While a related catastrophe insurance and grow profitably first double roughly our was we continue and our

as million unfavorable million operating income well remain from Non-GAAP XX% investment plans. reflecting our execute $XX strategy, a in effect our abilities catastrophe from higher $XX quarter, We centered first confident last in to our year’s agency approach our on decreased losses. as or

effects before losses year-ago. percentage property Elevated by points higher combined points loss catastrophe than improved increase. ratio accident current X.X X.X loss a catastrophe Our XX.X% was and The points. of ratio X.X represented the percentage year loss casualty expense

was the first the accident satisfactory second but as year, which level, a was it ratio past strong at of prior was on not quarterly years XX development highest favorable in as the reserve last Overall quarters. still quarter

continue risk operating efforts ongoing benefit product geography and line risks segmentation of plus our The by results. to benefit to of diversify

and Our on pricing we profitable or diligently retaining underwriters confidence less decline profit That business. determine satisfactory. work to reinforces business to segment are accounts more a new policy-by-policy on improving on renewals opportunities basis, when margins profitable

as Outstanding Company strength agents and value continue share work to to claim a of the They to clients. our representing their their we superior with of leading communicate produce performance. premium operating larger for also more independent financial us insurance revenues help service They the business. us earn industry

casualty in premiums than growth in XX%, rose renewal levels insurance generally higher property written consolidated net Our segment. each at and XXXX including price increases

is our new growth believe to continue overall healthy. in strong premiums We business written

The total. pace the in us agent quarter to sessions for new for quote first rose of business

past the in effects counts seen decline of to have few pandemic. the due submission weeks, However, we

renewal are to during renewals on commercial first of XXXX the end in renewal many high soon advance date, of in were because pandemic quarter premiums. in line too of For expiration business digit of price our effects quarter estimated range, processed percent average the is segment, assess than higher policy our the near any XXXX increases well single it low

The points with X%. combined losses premiums year-ago, ratio catastrophe written compared tripled while for quarter commercial a as grew lines rose first net XX.X percentage

of agents and points course or While the in represented recent the commercial losses profitably combined Nashville, area X.X ratio. losses for Tennessee segments has us, the overtime the grown total catastrophe quarter, tornado of first three our

Our average segment first with lines quarter improve than also personal The experience ratio to combined combined rate pricing XXXX. homeowner’s XXXX to in including ratio XX%. that personal the continued for higher line continued below was increases,

ratio had premiums premiums risks commercial full-year ratios defense and of for casualty our and casualty to and ENS and by ENS our similar business. had excess and a grew cost-containment line we paid market ratio XX% been standard have nearing for net Our are cost-containment surplus carefully line About written combined below and XXXX. XXXX XX%. defense segment a of Each of XX%

unfavorable commercial our XXXX point, casualty XXXX quarter business. segment half reserves we reserve for But expenses similar this ENS little net first for defense so in was the loss resulting a it development prudently lower increase a business standard a that casualty despite year-ago experience The for and first year-ago. cost-containment than to ratio ENS rose by was quarter a

Re to written and ratio had another Cincinnati well quarter, the net perform ratio also just below the growth XX% fine Global combined premium XX%. XX%. including continued with Cincinnati of below combined

premiums income Our life an insurance in loss, life in bars drew insurance the operating mostly resulting for energy sector subsidiary again basis. X% up with earned We net on term several although is a impaired this X%. portfolio,

than the in claims personal early information meaningful experience, in determine and as March result yet loss of a auto of Finally, have regarding enough reduced COVID-XX we trends future seeing a don’t reduction pandemic reported our to future experience loss other segments, effects insurance April. for driving for

areas other on Now our Mike Officer, Financial of will results. financial Sewell, our Chief comment important

Michael Sewell

and you Thank for all Steve of joining you us thanks today.

unusual, reviewing FASB total Some is new required securities negative revenues. be total our quite loss of value may and to negative the in income results be by resulting fair has the possible reported our Reporting from when since unnecessary revenues startled variability. changes XXXX, been in equity but net the statement rules accounting through

from $X.X year-ago. X% during on we continue taxes, of the offset premiums income, The a and revenues before and quarter respectively X% March decreased XX hold grew billion securities, investment which equity from fair first that by to value

million. effect is On income the offset equity It all $X.X compare an that the income generated positive the a basis, last to stock net effect with to income after of year’s of our $XXX similar $XXX of first boosted by a last nearly when year of and to a market strong in quarter portfolio operations. quarter million interesting billion tax by decrease had negative fourth

FASB income better and security the to of still other maturity of fixed seem give business future. in revenues will investors to value it in clear still a Volatility comprehensive with fair like operations more to investors does understand equity see this net are it Changes clearly. and not insurance. trying held the value reported revisit of and in this where can securities, near affects consistent book income Hopefully picture

Investment dividend during a the the including of quarter Turning totaled bond of the grow for million. first X% Net growth portfolio purchases stocks compared to a income a year-ago. from customary topics. $XXX our income X% with to income. quarter, for rose quarter continue Interest XXXX, XX% same more

quarter XX average pre-tax last down from points the was year. of X.XX% first The yield basis

$X had not quarter While invest we first net of of reported sales the bonds quarter as bonds, many as we of XXst. we million, in continue settled to end the March near purchased

the total same further As in period the we roughly than XXXX, reported our basis and average XX-Q, was yield of XX purchase in pre-tax income. exempt lower points bonds interest pressuring tax for the taxable

Investment including billion for both unfavorable were for The XXXX decrease before million was and bond changes quarter net effects, the portfolio. of stock portfolio our bond our valuation $XXX portfolios. just over $X first overall tax for

continued operating appreciated income. down in value net equity $X.X although with million grow help to our billion investment three to from $XXX activities Cash generated We portfolio. XX% first nearly ended quarter it from flow a including was XXXX, the months the of flow for of year-ago. billion $X.X Cash

quarter. to was with year’s casually plus of and At investments the higher property of expenses majority taxes, increase and initiatives a containment continues of higher first strategic that be our Balancing ratio Global. quarter last employee-related in Cincinnati due XXXX The expense effect business priority. full the first points than expense X.X underwriting was to percentage premium

and targeting upper the net actuarially range Regarding aim the loss net approach we loss of estimated consistent expense loss reserves. reserves, by of for a amounts half and

the a During favorable first accident of on we years. experienced net development prior satisfactory amount casually property, XXXX, quarter of

as the by Favorable business points. losses We such information ratio estimated reserve quarter. quarter paid consider year and X.X percentage for new losses and line combined of development ultimate by every accident benefit our

our revised most tail quarter, shorter line in the for segment. were the personal This estimates of lines

experienced The of our line revisions. tail year, commercial segment lines in first longer last quarter more

more accident As for all-lines we XX% estimates by year included needed. update and an basis XXXX year, the net year, for XXXX reserve years. we obtain will On and data accident X% prior development as accident through

strength Next, We excellent financial remains I flexibility. comment we capital on management. ample believe have and financial our will

of The Our decrease the relatively the insurance XXst parent our March, debt-to-total year-end by March value securities, was portfolio company marketable in cash and quarter-end since XX%, the billion. market low. reserves XX% bond while decline equity during than exceeded capital remains $X.X drove fair more the balance

since the financial our beliefs the and reviewed insurance their industry our considering Fitch about rating high, Rating and Ratings very recently agencies strength financial earlier firm of on position, rate the month. this a impact pandemic their

to share grants our compensation one first of the X.X to and $XXX.XX. continues of an to price Repurchasing repurchased average total a objectives, we capital per during quarter of shares management and incentive be of shares help offset million

added to typical value our $X.XX, of investment book share. creation per share will end operations contributions value insurance I by prepared per increased are fashion. $X.XX, non-insurance my than the Property of main other They items ratio. remarks a first reduced underwriting drivers value life decreased income the summary life by value book on quarter by represent insurance casualty $X.XX. book

for decreased share. shareholders. book gains was investment in the net losses equity net portfolio dividends share investment $X.XX first portfolio $XX.XX per quarter a $X.XX, by to losses and declared $X.XX, book book value share value by Net during the for we income and decreased decrease the to gains fixed per per and effect value The of $XX.X

will to call turn I Steve. now, And over back the

Steven Johnston

Mike. physical virus future there no want exists rendering commercial uncertainty other this claims point does ask we policies of the on provide not damage loss all I unless Thanks unnecessary. or interruption is And There peril, is emphasize. investors physical loss another damage our to about or direct calls. and to coverage business direct property coverage because related to Virtually have loss do property not questions that for exclusion heard experience produce for property,

commercial while property. a policies circumstances For there claims our this not commercial on the reason most we not property do for loss unless actively direct do we contain facts market, will each where policies exclusion claim and write for states or specific standard COVID-XX, property is provide coverage evaluate in business physical to interruption of our business based involved, specific damage

strength many Company’s to we weather risk expertise [XX-year] storms this have and the one. the have technology, weathered (Ph) financial history, management Throughout our we and the

the have people We the best in industry.

to our health will forward. associates, the Cincinnati carry holders protecting we us and agents of our and family, emerging strengths serving an care policy as organization new take Together, of with

Stecher. Theresa As a Marty with open me Hollenbeck, are Spray, questions. Please and today Marty Mike call and the Ken Steve for Mullen, Hopper, reminder,

Operator

comes from first with Mike of Suisse. Credit Our question instructions] Zaremski the [Operator line

Mike Zaremski

Hey, morning, good gentlemen.

Steven Johnston

Mike. morning Good

Mike Zaremski

interruption. virus us a business of specific not question investors First stock is be the appear of on them beyond market to kind taking exclusion. I about policies. language the having Most you guess your of kind are offered

to if Are need language - filing doesn’t policies correct I constitute in virus the that kind your of litigation given is that, business most the virus more your damage that? the don’t and to are be potential everyone I’m does triggered appreciate policies policies think, of interpreting trying damage. have the of property have stating exclusion. COVID disruption property by don’t customers claims, risk because basically of that there But exclusion,

Steven Johnston

Mike, going company, fair I other that, insurance think every claims. share expect of are we like our receive to we COVID-XX

we that in position natural. think, But, feel our coverage is just strong I with language. our

Mike Zaremski

Okay. the Understood. you in industry? all pause stock Switching continuing buyback. uncertain missed quarter you gears prepared or the environment remarks, given that have stock in taking second a I might the kind And are for back are to business of to buy more in

Michael Sewell

This Mike. Yes. is

buying be and rest we likely not year. for of the So, will the we will not and

have have I has philosophy. buyback always Steve maintenance, said, We that or have a said said, we always always

so have so, done And this we that far year. again

though, the was million is I higher When look that we that in and million back. two out really it a kind been is looking first required a and here it at we you bought shares even have running shares. of a quarter, little back So, half overtime,

about back did The this that shares year, level were same actually to that got of the ago. us maintenance we we XX-years

the program. So not do have achieved our as what see probably the and maintenance buybacks done remainder any we through other have I of part year we of

Mike Zaremski

one, And to may, Understood. back this going Okay. interruption. last one I if

other everyone made. peers to are stated that the and industry, seeing are claims expect and you though some being through them be Given your those to in claims also of there coming don’t attempted pay

in should anonymous in legal we So at near-term? potential least a assume of provision later event kind should some types this costs costs material for just of account to we expect some type is the of or year or the adjustment

Steven Johnston

quarter, facts still circumstances extended information will the are storm, out in of come material. I and in quarter third think we we and more the provide think second that middle here I this the as and to

Mike Zaremski

of And just, lastly, if Is If answer of policies there you in of answer have maybe this. business interruption terms thumb Thanks. you rule a that. endorsements? general Okay. could able are to what percentage property a

Steven Johnston

half, It about Yes. is Mike.

Stephen Spray

half Spray Steve of where is policies right. increases holder and Mike, Steve this limit. about our their the is It is policy

of Our many includes standard form like for income property XX,XXX. others, a automatically sub-limit business

Mike Zaremski

you. Thank

Operator

Bobman Returns. Our with will come next Ron question from Capital

RonBobman

tower, property a Steve. cat had a thanks the What Hi, that covered payrolls are Hi, I lot. what Hi team. reinsurance treaty. question on by million $XXX the treaty?

Steven Johnston

in there would Well, I say that is not a exclusion there. virus

Ron Bobman

I sorry, just I’m so I understand.

covers it So payrolls? all

Steven Johnston

a policy. generally virus property, a is and catastrophe a is follow there. property It exclusion in would we have they it And risk fortunes our

Ron Bobman

between? somewhere ever of pandemic events is other be it treaty Now low are single sort would relevant, or it but be if multiple module, on which event becomes clause in twist hours the strange losses considered implications or it the from will I think the of the whether a what one and that and

Steven Johnston

would we hours, that expectation the determined. XXX but to in our wouldn’t If that position. be that point, is for clause us hours got that as Yes, we be ever

Ron Bobman

thoughts plans And policy wordings or Okay. on the subject? to modify any BI

Steven Johnston

so that think don’t is something here is point, third this again at second but quarter quarter, evolves. I

policies be that do property. or We an an things just exclusion eye wording. we strong damage to keep loss feel require would and And policies the in will to suspenders. those we We and that feel belts the physical feel on our

Ron Bobman

lot. a Thanks this. Okay. with Best luck of

Steven Johnston

Thank Okay. you.

Operator

Dwelle will RBC. the of Our line comes next question from Mark with

Mark Dwelle

morning. Good

again? two related a you First Could minute ago through follow-up just that BI a to go about on comment just Spray I wanted Steve made sub-limits which to or endorsements.

Stephen Spray

This Steve Mark. Sprite. Sure. is

business increase then a elect many income. like standard And include property commercial can based sub-limit on policy holders policies exposure. limit of coverages, to obviously that other $XX,XXX of Our automatically their

direct across policies So agreement loss have automatically that it just or physical to coverage. a insuring the But to income even is the property happens not sub-limit to ours be trigger need to industry, include you damage XX,XXX, uncommon for XX,XXX. still for in and business the again, for

Mark Dwelle

to of So policies said typical I’m and a sure, they around bought higher to get those, whatever at to and the start had following somebody incremental initially then within a be the BI XX% of up, have then full chose flow which premium just that you make sub-limit it it level pay to the the extent limit. XX,XXX, to information, endorsement an would

Stephen Spray

That is correct.

Mark Dwelle

it. Got

are Okay, is time on we while, first was also in that helpful. second or in how comment are bit reserve the was there the just the auto, bit in a commercial Can a pressure fairing? and segment some in you rather some quarter little what a Changing the a bit, seeing little relays a there quarter row gears there reserves pressure a ENS continued little reserving.

Steven Johnston

We good our Yes. in position feel obviously reserve overall.

line to We do have it and estimate. XX-years its We favorably stands make own. now on best at each developed we look for best as our our

with is with We the that saw paid trends what think way the auto. given commercial it did some been the the do over to was auto, of the years, commercial we past what with several it given appropriate we

of containment, the terms strong casually in going look lines with defense feel at in we again, our ENS, take the and on a of and the across looked standard We best terms for estimate what just and the In that at did we cost there. ENS. was

some asked a For about the losses by a lines. movements We saw the for up go standard surplus excess and favorable we have half paid that and percent.

felt we but with in take appropriate we do it estimate got the the to And place. there, feel action we have good just prudent so, best

Mark Dwelle

increases rate of do auto in ENS the commercial like those and What segments, each in look general?

Steven Johnston

Yes.

single-digits mid this been auto, For getting quarter. we past the the in commercial have

been years combined month-after-month lower single-digits now. is overtime, steady, not but if excellent a up way a just I that, there. exceeding trends time. It the describe nice over I periods increased we It that it just think more ratios been ENS, producing long for inflationary the is have steady approach quarter-after-quarter, is would that with keeping of and very the

Mark Dwelle

Okay. whatnot, your offices doing, of can field just you changing And your many are time sales then, know and the just are so anecdotal policies, us a and I you pay and they with what how are how they proportion a in the and lot of forth. own customers what impression underwriting to or staff of people give spend struggling sense

get of mid you your Just them ground trying customer base. market small of the what as mosaic seeing amongst kind to on and are

Stephen Spray

is the expect over Mark. that. you in flexible would Sure. And all are It there board Yes. our we extremely being holders as policy with

many So, are policies liability based of our sales. payroll on and

it We that are premium. working exposures customers those their to reduce midterms, so will with our reduce here,

contacting on able with us are They being some concerns pay. to

instituted, on a later, cancellations state until or are have up May XXst we mandates premium a putting it. moratorium of nonpayment if We for

and key or help anything collections want pole. and through agents The can to that probably a have here is, little early understand too the our we picture over holders this I we full long help on would say it do a policy will. we our is premium to to still

things So have been good. far,

Mark Dwelle

not question. Or you underwriting I how by mean, in to been Most seeing of mean, across hard are is are seeing areas But regional you the really what itself. of differences? your just hit I that ask generally base? kind would to particularly is the outbreak best virus have

Stephen Spray

the as mean, far You as collections?

Mark Dwelle

seeing business, trying forth? variation get I’m to I and notable that you if change so exceptional? policy any wanting change as guess terms to regional are is on or pressure Collections, or out

Stephen Spray

broad this think I is Yes, based. a pretty

layup the as COVID. as which not newer northeast, I are impacted impacted which and reduce more be liability collections credits that We the wanting exposures their across their by pretty the individuals I say on on would the most is far here. as or their payroll certainly sales. We would much be would to But in side commercialized fleet say for put would board. and far to

Mark Dwelle

answers going the all of luck Thanks. for you Thank Okay. forward. best and

Stephen Spray

you. Sure. Thank

Steven Johnston

you. Thank

Operator

Meyer The KBW. Shields with come line next question will from

Meyer Shields

thanks. morning. Good Mike. Great,

what personal is you are it fit accordingly terms you that seeing comments commercial you kind of so driving that frequency. mentioned and in just auto your Can was think with I auto? clean down is of

Stephen Spray

Spray. would you Steve but probably we it I early are seeing is will a have little frequency too report on reduced commercial date. to to back we Yes, auto something at to is say that this a is That in that. later still tell

watching we Something are closely.

because running. personal I think do are and auto up businesses an and many in are so commercial that auto here, still apples oranges

I almost to in that far is our knock for of wood Construction, think most XX% across able part everyone the premium contractor country. on knows a GL so classes. been the has continue

So are still operating. out those vehicles

of to are average. other a to are retail right One or that the something restaurants is is on exposure extending It to do. areas helping we we feel we but businesses communities. policyholders delivery adding it our the other help the is have their thing many to And moved is that us

at so standpoint up And of the from exposures commercial we non-owned higher going are beginning auto that the on delivery the anticipate our didn’t period. policy

Meyer Shields

Okay, perfect on long-term of makes sort us on compensation perspective of sense. no, you frequently? unemployment historical that give the declining Can workers your influence

Steven Johnston

couple of injured. out of a could to look coming thought in they that the which laid would more crisis, be they be there there at Meyer. tend frequency. there the financial before keep to keep, experienced be as the off, increase employers they could be get gets somebody that determine ones safer. employees Especially Offsetting that And is they with Yes, there an ways could

for I think the insurance, a payments unemployment with be what effect too. would in with have I are we think consideration unemployment also increases another of the some seeing would the there and mitigating insurance

think long-term to in as I really we those perspective, at. the but would be be some of the would looking So, too early terms ask it considerations you tell, that of is

Meyer Shields

much. Okay. Thank you very

Steven Johnston

you. Thank

Operator

the of from come Deutsche Phil will Bank. Stefano line with question next Our

Phil Stefano

is kind talk just with it longer get from that, is may written know the by shelter-in-place been about Yes. third it How to some can and of shock little could the distribution us will I and what don’t what have the you new feels we I extent premium the the are to quarter volumes business pressures. just wanted seeing. mean, help think I short-term talk morning. retention about feel it expecting. is was hoping and quarter, directionally you to that peer Thanks. messaged to to, likely way premiums are about a qualitatively Good second some that up, go more reliant likely about upon this but face-to-face trajectory, the some business you agents extent than a you contacts do might maybe may I go be. like

Steven Johnston

Yes.

long-term the working Phil, for well. think model extremely our is I

As Steve Spray likes go to I the think, have to but say, it shape is built I are for naturally a to in situation let submissions will see is comment, as we like in. chance it just that this and is him now an going down economy a

as field And and working seeing are every agencies we the the our we model, a agency I the of this, pie. shrinks, forth. seem bigger that with What of pie with we think discipline, relationships, so out though the facing all in be people, to with getting the we works is, great piece as doing that communities, come are our

I bigger piece think pie will as that come the grows. of the out pie with

long So, good in for shape. pool, are we I the feel

Steve he invite would anything I to if wants. add

Stephen Spray

is agencies do, think and any company is if us. I spent do in I Company. it limited think Phil field, as we that as built say XX-years that, few helps Cincinnati the I for I franchise, having Having that this, Insurance is perfect.

We have fewer relationships to manage.

deep with them. have We relationships of each

homes out are XXXX. their and the the associates have since company from holders in our, communities into they and communities, the X,XXX of where policy X,XXX where work field agents our are. strategy agents our taking Our

sets and literally it storm deep just claims on to promise. up in claims relationships able the community sit delivering are speak handling as there So, that like we us handle we here well just today,

Steve. agree with So, I

I submission that dip flattened in that, they counts, although have dipped, have they think too.

deeper Our at like with those ratio of I think has said, agents pie, I think, got bigger shot a Steve and relationships our the our local a because key. piece hit is being and bit, of

Phil Stefano

is mean a workers’ pricing And conversation for it has just I Understood. Thank is the revisit you. a compensation to that line pressure. minute, clearly

that We maybe that impact have slowed just business? like this of the down, loss seen increasing workers’ line some COVID feel favorable Does the cost. are given changes changes in the the of of development for and compensation that happening trajectory potential something maybe it regulatory

Steven Johnston

Yes.

I think, it would.

are only pretty we being good here workers think a about X% our position of in I with comp premiums.

have It been here, any Ohio to of. have is California is speak workers the Our state And fund. don’t disciplined, very state have pricing in soften. of small. feel seen monopolistic comp a as I really we largest we We terms

We commissions. haven’t done crazy things with

we are firming I And profit do some there that the would points potential. I that best getting sure that We segment on opening be retaining ones really highest expect to, given I make that we book, ones comments in mentioned as have the done our the would that think the you to need rate are that as and made the forward. that we it go

Phil Stefano

it. Got

Okay. will to ask. And ask. quite one, not sure I’m And I last how

to this but that But But do explicit like awkward. apologize something if that it is worry So our Like a the I it that advocate notable. primary And exclusion. virus to out exclusion. wanted not is notable, play help contrary might is be something have guess policies It I a seems not I comes about. to the there. our Can that. an is messaging not have you doesn’t program extent virus is devil’s me reinsurance understand

Steven Johnston

I that not you to What what program, actually. talking our talked reinsurer. very it thinking I reinsurers, about Because when when was see to we a we our I’m think was glad we reinsurance about brought Yes. maybe up would zagging. somebody assume. what I was And see And I would

following with our we with policy seed in of we us the are they to. provisions aligned that fortunes terms basically reinsurance is it So, are that of the

Phil Stefano

another, Okay, so way policy. goes the so or one primary

section. goes So to reinsurance

Steven Johnston

Yes.

Phil Stefano

Understood.

Okay, sense. that sir. Thank you, make

Steven Johnston

you. Yes, thank

Operator

will next Sandler. The from with Newsome Paul question Piper come

Paul Newsome

they with bit other in about April, a that happening March, business much. in pulling not and weeks be morning, wanted other the from little retentions general agents not calls also And of are in what Good conference sales. well. are carriers from last and just folks. couple My sense ask as to maybe more I might is at least selling

So that kind the here new Is down. think and see retentions there will go that the are presumption I seeing what go or margin you we on of up is sales not?

Stephen Spray

Paul.

think think tell to very But we the is we to other as of place risk risk are are probably carriers where it write of market I needs though, early. can basis new that aren’t adjusted that on well. can And what policyholder I able on a active take the we meet that hearing in write is it the margin. trying still your agent still think make and is bit I business feel I or you, the that we maybe maybe a that steep.

your I going forward. It new are are the of solid. is feedback going right is sense a But watch real bit, think to But is getting has business well. general from that we slowed as kind agents something the the to retentions are but have we just and that

Paul Newsome

you I’m is of may options, cetera there to and anticipation factories move you lawsuits liability and do be hospitals are protect homes for that too Is happening thinking, - and claims any et things of your Outside like liability I’m I know, if increased in nursing mean, some or it curious enough. seeing just and and early? sense that their or of any that needed workers have doctors

Steven Johnston

I think it is early. too

seeing here we we quarters what next play are that think here, of out some unprecedented now. times and I that the think are will I over that just in

are really that. not seeing We

Stephen Spray

on or Paul, premiums. large Spray. compensation I was about just this to on that being Steve don’t earlier is rare book where account of write is, would do be or only a talking And the small facilities X% would that would large the a number of healthcare workers’ hospitals or write that we our have the number workers’ what compensation workers’ policy we of on we have. municipalities of top It skilled is we compensation. Steve

as exposure for to be us, responders is I So, to going first think well. minimal

Paul Newsome

Appreciate Thanks. it. Great.

Steven Johnston

Thanks Paul.

Operator

Montgomery. next Greenberg Janney question from [Operator the will line Instructions]. of The of Larry come

Larry Greenberg

Good morning.

Steven Johnston

morning Good Larry.

Larry Greenberg

that not are We is okay. in but Carolina, South

Steven Johnston

there We are not yet.

Larry Greenberg

Yes.

virus a standard where exclusion. policies So, your virus would don’t policies interruption on was most market just curious I business of exclusion. statement have your think that have I’m the that,

Stephen Spray

Larry, filed typically in Spray. would and straight ISO. Steve are That we where States be where inactive have Yes. we

associates on the don’t So we there. have ground. We agents don’t have

So, straight so a inactive would we states -. have coverages where would of outside we state, we file where secondary active ISO, write our some

Larry Greenberg

Got it.

Steven Johnston

lines well excess on also ride the as out of our on as that they we the Lloyds. company surplus have And binders CSU, and

Larry Greenberg

then, Okay, it line? great. whether you And Thanks. the losses premium questions, account will just how you offset coming an accounting up, going premium stay-at-home that be a going credits to for in is to are or the treat

Michael Sewell

expense. now. right looking the but Yes. It be that there group, Sewell. others and This will We might be of as Mike line be is an as now, that a understand, it will NAIC be at right might in expense of issue,

Larry Greenberg

very much. Great. Thank you

Steven Johnston

you, Thank Larry.

Operator

from question Credit will next come of Suisse. The the line Zaremski with Mike

Mike Zaremski

back fitting Thanks for me in.

succinct start you extent program reinsurance Can reinsurance. some to on about to were paid for would we remind or follow-up out. required a Just the policies writing be where claims those us business to interruption How just in some think reason, COVID payments? do

Steven Johnston

Yes.

$XXX in it action or that be something if are nice the we program is fortunate confident it get of to we is and know there some But that million, feel untested, would we just legislative that situations. program won’t that the is there. attaches falls unanticipated why have Our we which

Mike Zaremski

is Thank Okay, I all perfect. you, have. That gentlemen.

Steven Johnston

Mike. you, Thank

Operator

the audio is We remarks. get questions There no closing further showing. back to

Steven Johnston

the our today. very on meeting for you X:XX to AM. Xnd of will you all of us some shareholder Nicole. thanks May much, ever We hope Eastern. And joining first thank you join us virtual at Saturday, Okay, for

While meeting the the for and to safe register we felt We during on details was keep person online to until the shareholders Please meeting. XXXX. for meeting the how pandemic. best associates intend visit www.cincin.com to resume in way moving

on we day. can’t to look make you you the with again speaking second forward If all call. Thank our very great a much and have meeting, quarter you

Operator

thank concludes please And today’s does participation. lines. call. your This ask conference disconnect you your you for We that

Dennis McDaniel	Investor Relations
Steven Johnston	President and Chief Executive Officer
Michael Sewell	Chief Financial Officer
Martin Hollenbeck	Chief Investment Officer
Stephen Spray	Cincinnati Insurance’s Chief Insurance Officer
Martin Mullen	Chief Claims Officer
Theresa Hoffer	Senior Vice President of Corporate Finance
Mike Zaremski	Credit Suisse
Ron Bobman	Capital Returns
Mark Dwelle	RBC Capital Markets
Meyer Shields	Keefe Bruyette & Woods
Phil Stefano	Deutsche Bank
Paul Newsome	Piper Sandler
Larry Greenberg	Janney Montgomery Scott

Cincinnati Financial (CINF) 28 Apr 202020 Q1 Earnings call transcript