Cincinnati Financial Reports $45M Cat Losses for 2ndQ

Cincinnati Financial Corporation announced it expects to record approximately $45 million of pre-tax catastrophe losses and $35 million in losses greater than $1 million in its property casualty insurance subsidiaries will record for the second quarter of 2002. These estimates compare with $35 million and $21 million, respectively, reported in the second quarter of 2001.

Wind, hailstorms and associated flooding during April, May and June, primarily in Midwest and Mid-Atlantic states, are expected to result in an estimated $45 million in catastrophe losses. While the largest event at $22.8 million was a late April storm affecting policyholders across 13 states, five other storms contributed to the loss total, including three June events with preliminary loss estimates totaling $15.6 million.

The $45 million in catastrophe losses is expected to contribute approximately 7.8 points to the second-quarter 2002 combined ratio, with an after-tax earnings impact estimated at 18 cents per diluted share. 2001 second-quarter catastrophes added 6.9 points to the combined ratio for that period, impacting after-tax earnings by 14 cents per diluted share.

With a week left in the second-quarter reporting cycle, 23 non-catastrophe losses above $1 million have been recorded for a total of approximately $35 million. At that level, these large losses are expected to contribute approximately 6.1 points to the second-quarter 2002 combined ratio and would affect after-tax earnings for the same period by an estimated 14 cents per diluted share. Second-quarter losses in this category during 2001 added 4.1 points to the ratio and affected after-tax earnings by 8 cents per diluted share.

The company’s 2002 combined ratio target remains at 101.3 percent.