Cincinnati Financial Corporation (CFC) serves up a whole
menu of insurance -- plain and simple or with extras if
you like. The company's flagship Cincinnati Insurance
(operating through four property/casualty subsidiaries) sells
commercial property, liability, excess and surplus, auto, bond, and
fire insurance; personal lines include homeowners, auto, and
liability products. Subsidiary Cincinnati Life sells life,
disability income, and annuities. The company's CFC Investment
subsidiary provides commercial financing, leasing, and real estate
services to its independent insurance agents. Its CSU Producers
Resources offers insurance brokerage services to independent
agencies. The Schiff family formed CFC in 1968.
CFC operates through five segments: Commercial Lines Insurance,
Personal Lines Insurance, Excess and Surplus Lines Insurance, Life
Insurance, and Investments. Commercial Lines Insurance, which
accounts for about 60% of total sales, provides coverage including
commercial property/casualty, workers' compensation, and management
liability. Personal Lines Insurance, accounting for some 20% of
sales, writes personal automobile and homeowner products.
Investment earnings represent some 10% of revenue, while excess
and surplus lines and life insurance make up the remainder.
Subsidiaries include standard property/casualty insurers
Cincinnati Casualty Company and Cincinnati Indemnity Company,
Cincinnati Life Insurance Company, and Cincinnati Specialty
Underwriters Insurance Company.
CFC markets its policies in 49 states, the District of
Columbia, and Puerto Rico. The company writes some 20% of its
business in Ohio, and is strong in Illinois, Indiana, Georgia,
Sales and Marketing
The company maintains a force of some 1,500 field associates who
provide local service to some 1,530 distributing
independent agencies and policy holders.
Its commercial lines segment targets primarily small to
mid-sized businesses. CFC has tied its growth to expanding
the territories in which it markets, and increasing the number
of new agencies with which it strikes new relationships.
Cincinnati Insurance launched its first-ever national television
ad in 2015.
CFC revenue, which has been on the rise for the past five years,
rose 4% to $5.1 billion in 2015 on higher earned premiums and fee
revenues. Increased renewal rates for commercial and
property/casualty products, as well as price increases, led to the
growth, as did higher new business written premiums. Additionally,
gains in excess and surplus lines and life insurance sales
contributed to the rise. All of those gains were partially offset
by a decline in investment earnings.
Due to the company's growing revenues, net income has also been
on the rise. In 2014 it increased 21% to $634 million. Cash flow
from operations increased 2% to $1.1 billion that year.
Going forward, the company plans to wring more profit out of
policies by raising deductibles and conducting more site
inspections of properties it insures. CFC also works on developing
new products and helping its independent and captive agents better
market existing policies. To further broaden its operations, the
company works toward deepening its penetration into each market it
serves. For example, it has been introducing workers' compensation
coverage in more states.
Cincinnati Insurance is also expanding its products and services
for wealthy individuals. It introduced the Executive Capstone
program in New York in 2015, and it plans to launch these offerings
in additional states including Texas, California, Massachusetts,
and New Jersey.