Cincinnati Financial Posts Higher Profit

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NU Online News Service, Oct. 29, 3 :24 p.m.EST?Cincinnati Financial Corporation posted a third-quarter netincome of $104 million, a jump from $72 million in profit reportedduring the year-ago period.

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The Fairfield, Ohio-based insurer's statutory net writtenpremiums for its property-casualty insurance affiliates--TheCincinnati Insurance Company, The Cincinnati Indemnity Company andThe Cincinnati Casualty Company--jumped 13.4 percent to $723million compared to last year.

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The quarterly earnings, the firm said, reflect a settlement witha vendor to recoup $23 million from a $39 million charge theinsurer incurred three years ago to write off previouslycapitalized software development costs.

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The company also posted $10 million in net realized investmentgains for the quarter, in contrast to an $11 million loss itrecorded one year ago.

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"We are on track for record full-year 2003 revenue and incomeand the best property-casualty profitability we have recorded inmore than 10 years," said John Schiff, chief executive officer atCincinnati Financial.

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Mr. Schiff added, though, that catastrophe losses for thequarter were slightly higher than the company anticipated. Theinsurer's catastrophe losses, net of reinsurance, came in at $41million, higher than $5 million posted one year ago.

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"Catastrophe losses for the quarter included $15 million relatedto Hurricane Isabel, which affected policyholders in Maryland, NewYork, North Carolina, Pennsylvania, Virginia and West Virginia inSeptember, and $15 million related to storms in July," Mr. Schiffsaid. "The remainder primarily was related to newly reported claimsfrom earlier events, including $12 million from the April 2003 hailstorm in Ohio and Kentucky."

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Commenting on the company's premium growth, Mr. Schiff notedthat net written premiums for commercial lines of insurance rose14.9 percent from the year-ago period, to reach $507 million,representing some 70 percent of the company's total p-c net writtenpremiums for the quarter.

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"Competition in the commercial lines marketplace, particularlyfor the better accounts, is mounting," he said. "In this market, weare experiencing our best results--both in terms of growth andprofitability--for commercial package programs. Premiums in theseareas continue to grow at double-digit rates."

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Mr. Schiff observed that net written premiums for personal linessegment also rose, up 10.2 percent to $216 million compared to oneyear ago. "Across the board in personal lines, our premium growthis being driven by higher rates and coverage pricing," he said.

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Based in Fairfield, Ohio, Cincinnati Financial is the parentcompany of Cincinnati Insurance, which includes Cincinnati Casualtyand Cincinnati Indemnity.

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Through its subsidiaries, Cincinnati Financial sells commercialproperty, liability, auto, bond and fire insurance, and itspersonal lines include homeowners and liability products. Lastyear, it posted $2.84 billion in overall sales.

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