A.M. Best Affirms Ratings of The Cincinnati Financial Corporation and Its Subsidiaries.OLDWICK, N.J. -- A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of A++ (Superior) and issuer credit ratings (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "aa+" of The Cincinnati Insurance Companies (CIC CIC circulating immune complexes. CIC Circulating immune complexes. See Immune complexes. ) and its standard line property/casualty members. Concurrently, A.M. Best has affirmed the FSR of A+ (Superior) and ICR of "aa-" of The Cincinnati Life Insurance Company (Cincinnati Life). A.M. Best also has affirmed the ICR of "aa-" and senior debt ratings of CIC and Cincinnati Life's publicly traded parent, Cincinnati Financial Cincinnati Financial Corporation (NASDAQ: CINF) offers property and casualty insurance, its main business, through The Cincinnati Insurance Company, The Cincinnati Indemnity Company and The Cincinnati Casualty Company. Corporation (CINF CINF Community Imagery Needs Forecast (US Federal government) CINF Conservation Survey Record Information ) (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CINF). The outlook for all ratings is stable. All companies are domiciled dom·i·cile n. 1. A residence; a home. 2. One's legal residence. v. dom·i·ciled, dom·i·cil·ing, dom·i·ciles v.tr. 1. in Fairfield, OH. (See below for a detailed list of the companies and ratings.) The ratings for CIC reflect its superior risk-adjusted capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. , very strong five-year average operating performance, historically redundant reserves and highly successful business profile within its targeted regional markets, which centers on a distribution system developed through strong relationships with local independent insurance agencies. The group also benefits from the financial flexibility afforded by CINF, which maintains modest financial leverage, strong interest coverage ratios and considerable liquid assets Cash, or property immediately convertible to cash, such as Securities, notes, life insurance policies with cash surrender values, U.S. savings bonds, or an account receivable. . Somewhat offsetting these strengths are CIC's high common stock investment leverage and the group's geographic concentration in the Midwest and Southeast, which exposes it to economic, legislative and judicial changes and weather and catastrophe related losses. Despite these offsetting factors and the increase in competitive pressures in its core books of business, the outlook reflects CIC's superior risk-adjusted capitalization and its historical ability to generate solid operating results through underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. cycles, which will enable the group to absorb any near-term increases in volatility as a result of its investment philosophy or weather related events. A key element of CIC's business strategy is its focus on marketing and servicing clients through a network of independent agents fostered through strong, long-term relationships. CIC's agency relationships are strengthened by the localized presence of the group's field support associates. Although CIC's capitalization supports its current A.M. Best ratings, CIC is highly susceptible to fluctuations in equity market values, as common stocks represent approximately 86% of the group's statutory surplus at year-end 2007. This situation is compounded by CIC's equity concentration within the financial/banking sectors and its significant ownership stake in Fifth Third Bancorp. As a result, lower market valuations of equity holdings due to broad concerns about credit quality, liquidity and the general health of the economy resulted in a 9% decline in CIC's statutory surplus at year-end 2007. The ratings of Cincinnati Life reflect its integral position within CINF, strong risk-adjusted capitalization, diverse life insurance product offerings and the benefits derived from its property/casualty based independent agency distribution platform. Partially offsetting these rating factors are the company's modest size relative to its affiliated property/casualty companies, growing level of triple-x reserves, which continue to weaken its overall weak statutory operating results and its improved but high exposure to equity investments. The FSR of A++ (Superior) and ICRs of "aa+" have been affirmed for The Cincinnati Insurance Companies and its following property/casualty members: * The Cincinnati Insurance Company * The Cincinnati Indemnity Company * The Cincinnati Casualty Company The following debt ratings have been affirmed: Cincinnati Financial Corporation-- --"aa-" on $28 million 6.90% senior unsecured debentures, due 2028 --"aa-" on $375 million 6.125% senior unsecured notes, due 2034 --"aa-" on $392 million 6.92% senior unsecured debentures, due 2028 The FSR of A+ (Superior) and ICR of "aa-" have been affirmed for The Cincinnati Life Insurance Company. For Best's Debt Ratings, all other Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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