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Cincinnati Financial reports fourth quarter profit, 2011 loss

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Staff Report 6:00 PM Wednesday, February 8, 2012

FAIRFIELD - Cincinnati Financial Corporation, Butler County’s second largest employer, today reported a fourth-quarter 2011 profit of $134 million compared with $126 million in the fourth quarter of 2010.

Fourth-quarter underwriting profits from Cincinnati Financial’s main business, property casualty insurance operations, rose to $98 million before taxes, the first underwriting profit for any 2011 quarter and its best result for any quarter since 2007, according to Steven J. Johnston, president and chief executive officer.

“Strong fourth-quarter results reflected better core underwriting as well as our recently reported favorable impacts from lower catastrophe loss estimates, improving pricing trends for commercial insurance and higher securities valuations in our investment portfolio,” Johnston said in a statement.

Operating income for the fourth quarter 2011 was $139 million, up 23 percent compared with $113 million in fourth quarter 2010.

Profit for 2011 profit was $166 million, compared with $377 million in 2010. Operating income for 2011 was $121 million, down 56 percent compared with $274 million in 2010, according to the company.

“Operating income of $139 million for the fourth quarter more than offset our nine-month operating loss of $18 million, leading to a full-year operating income of $121 million,” Johnston said. “While that total is roughly half of what we reported for 2010, we are pleased to be in a profit position after a year that brought us the two worst catastrophes in our company’s 60-year history.”

Special teams of experienced claims representatives were dispatched in April to several areas from Tuscaloosa, Ala., northeast through Birmingham, Ala., Knoxville, Tenn., and Gastonia, N.C. They helped independent agents and local claims staff to respond to more than 9,000 claims from policyholders who reported losses due to severe weather in April, according to Cincinnati Financial.

When those spring storms hit, the company focused on providing its affected policyholders and agents with service and value that would support its relationships and long-term perspective on business, Johnston said.

“This approach over time has helped build the financial strength and resources to absorb $402 million of pre-tax catastrophe losses in 2011 and still end the year with exceptionally strong policyholder reserves and with balance sheets that are stronger than at year-end 2010,” he said.

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