The Cincinnati Insurance Companies Ratings Affirmed

A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit rating (ICR) of “aa” of The Cincinnati Insurance Companies (CIC) and its standard market property/casualty members.

Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and ICR of “a+” of The Cincinnati Life Insurance Company (Cincinnati Life). A.M. Best also has affirmed the FSR of A (Excellent) and ICR of “a” of The Cincinnati Specialty Underwriters Insurance Company (CSU) (Wilmington, DE), and the ICR and debt ratings of “a” of Cincinnati Financial Corporation (CINF).

The outlook for all ratings is stable.

Best said CIC’s ratings reflect its superior risk-adjusted capitalization, strong five-year average operating performance, historically redundant reserves and successful distribution within its targeted regional markets.

A key element of CIC’s business strategy is the group’s focus on marketing and servicing clients through a network of independent agents fostered through strong, long-term relationships. The successful execution of CIC’s business strategy is evidenced by its historically strong underwriting and operating results, which have outperformed peer composite norms and the property and casualty industry over time and through underwriting cycles.

The ratings also reflect the financial flexibility provided by CINF, which maintains modest financial leverage and considerable liquid assets totaling $998 million (sum of stocks, bonds and cash on balance sheets) at year-end 2009.

Partially offsetting these positive rating factors are CIC’s elevated common stock leverage, geographic concentration and recent underwriting variability driven by soft market conditions on its core commercial lines book of business and historically underperforming personal lines book of business.

Source: A.M. Best, www.ambest.com/ratings

Topics Carriers AM Best