Cincinnati Financial Sees $584 Million Profit in 2004

The Cincinnati Financial Corp. reported record net income of $584 million, or $3.44 per diluted share, for 2004. Net income was $374 million, or $2.21 per share, in 2003. Net income per share included net realized investment gains of 36 cents per share in 2004 versus a loss of 16 cents in 2003. Net income for 2003 included $15 million, or 9 cents per share, from an after-tax software cost recovery. Per-share amounts for all periods have been adjusted for the 5 percent stock dividend paid June 15, 2004.

Total revenues advanced $433 million, or 13.6 percent, to a record $3.614 billion, reflecting 9.9 percent total earned premium growth and realized investment gains versus realized losses in 2003. Revenues from pretax investment income rose 5.7 percent to a record $492 million for 2004.
Results for both years benefited from the release of reserves for uninsured/underinsured motorist losses following a 2003 Ohio Supreme Court decision. Results for 2004 included the release of $32 million pretax ($21 million, or 12 cents per share, after tax). Results for 2003 included the release of $38 million pretax ($25 million, or 15 cents per share, after tax).

“Favorable market trends of the past several years, careful attention to underwriting and sustained efforts of our independent agents and associates all played a part in the record results we achieved in 2004,” CEO John J. Schiff Jr. said in a statement. “A highlight was the property/casualty underwriting profit of $298 million pretax, more than double last year’s level. Looking across our business, we see many trends that we believe will help us continue to provide high quality insurance products for policyholders and long-term value for shareholders.”