Cincinnati Financial Corporation Increases Regular Quarterly Cash Dividend

Sets stage for 49th consecutive year of higher dividends with 1 percent increase in indicated annual dividend rate


CINCINNATI, Aug. 17  /PRNewswire-FirstCall/ -- Cincinnati Financial Corporation (NASDAQ:CINF) today announced that the board of directors voted at its regular meeting on August 14, 2009, to increase the regular quarterly cash dividend from 39 cents to 39.5 cents per share, payable October 15, 2009, to shareholders of record as of September 18, 2009.

At the new level, the indicated annual dividend is $1.58 per share. In 2008, cash dividends paid were $1.53 per share and dividends declared were $1.56 per share. The company had 162,569,163 shares outstanding at June 30, 2009.

Kenneth W. Stecher, president and chief executive officer, commented, "The company has consistently increased dividends for 48 years, and the board of directors chose to continue that record for the benefit of our shareholders. This action demonstrates their confidence in our strong capital, liquidity and financial flexibility and in our initiatives to improve earnings performance.

"We have rebalanced our investment portfolio, positioning it to resume an increasing trend for growth and income. We are making major strides to improve pricing accuracy and policy administration efficiency for our property casualty insurance products, improving our service to agents and allowing for expense savings. Additionally, we are working to increase geographical diversification by expanding our insurance operations to new states and adding agencies in established states. Our long-term perspective drives our long-term commitment through all market and economic cycles to create value for shareholders by investing in and expanding our insurance operations."

Cincinnati Financial Corporation offers business, home and auto insurance, our main business, through The Cincinnati Insurance Company and its two standard market property casualty companies. The same local independent insurance agencies that market those policies may offer products of our other subsidiaries, including life and disability income insurance, annuities and surplus lines property and casualty insurance. For additional information about the company, please visit http://www.cinfin.com/.

           Mailing Address:                 Street Address:
           P.O. Box 145496                  6200 South Gilmore Road
           Cincinnati, Ohio 45250-5496      Fairfield, Ohio 45014-5141


  Safe Harbor Statement


This is our "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995. Our business is subject to certain risks and uncertainties that may cause actual results to differ materially from those suggested by the forward-looking statements in this report. Some of those risks and uncertainties are discussed in our 2008 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 25. Although we often review or update our forward-looking statements when events warrant, we caution our readers that we undertake no obligation to do so.

Factors that could cause or contribute to such differences include, but are not limited to:

  --  Unusually high levels of catastrophe losses due to risk
      concentrations, changes in weather patterns, environmental events,
      terrorism incidents or other causes
  --  Increased frequency and/or severity of claims
  --  Inadequate estimates or assumptions used for critical accounting
      estimates
  --  Recession or other economic conditions resulting in lower demand for
      insurance products or increased payment delinquencies
  --  Delays in adoption and implementation of underwriting and pricing
      methods that could increase our pricing accuracy, underwriting profit
      and competitiveness
  --  Inability to defer policy acquisition costs for our personal lines
      segment if pricing and loss trends would lead management to conclude
      this segment could not achieve sustainable profitability
  --  Declines in overall stock market values negatively affecting the
      company's equity portfolio and book value
  --  Events, such as the credit crisis, followed by prolonged periods of
      economic instability, that lead to:
      --  Significant or prolonged decline in the value of a particular
          security or group of securities and impairment of the asset(s)
      --  Significant decline in investment income due to reduced or
          eliminated dividend payouts from a particular security or group of
          securities
      --  Significant rise in losses from surety and director and officer
          policies written for financial institutions
  --  Prolonged low interest rate environment or other factors that limit
      the company's ability to generate growth in investment income or
      interest rate fluctuations that result in declining values of
      fixed-maturity investments, including declines in accounts in which we
      hold bank-owned life insurance contract assets
  --  Increased competition that could result in a significant reduction in
      the company's premium volume
  --  Changing consumer insurance-buying habits and consolidation of
      independent insurance agencies that could alter our competitive
      advantages
  --  Ability to obtain adequate reinsurance on acceptable terms, amount of
      reinsurance purchased, financial strength of reinsurers and the
      potential for non-payment or delay in payment by reinsurers
  --  Events or conditions that could weaken or harm the company's
      relationships with its independent agencies and hamper opportunities
      to add new agencies, resulting in limitations on the company's
      opportunities for growth, such as:
      --  Multi-notch downgrades of the company's financial strength ratings
      --  Concerns that doing business with the company is too difficult
      --  Perceptions that the company's level of service, particularly
          claims service, is no longer a distinguishing characteristic in
          the marketplace
      --  Delays or inadequacies in the development, implementation,
          performance and benefits of technology projects and enhancements
  --  Actions of insurance departments, state attorneys general or other
      regulatory agencies, including a change to a federal system of
      regulation from a state-based system, that:
      --  Restrict our ability to exit or reduce writings of unprofitable
          coverages or lines of business
      --  Place the insurance industry under greater regulatory scrutiny or
          result in new statutes, rules and regulations
      --  Increase our expenses
      --  Add assessments for guaranty funds, other insurance related
          assessments or mandatory reinsurance arrangements; or that impair
          our ability to recover such assessments through future surcharges
          or other rate changes
      --  Limit our ability to set fair, adequate and reasonable rates
      --  Place us at a disadvantage in the marketplace
      --  Restrict our ability to execute our business model, including the
          way we compensate agents
  --  Adverse outcomes from litigation or administrative proceedings
  --  Events or actions, including unauthorized intentional circumvention of
      controls, that reduce the company's future ability to maintain
      effective internal control over financial reporting under the
      Sarbanes-Oxley Act of 2002
  --  Unforeseen departure of certain executive officers or other key
      employees due to retirement, health or other causes that could
      interrupt progress toward important strategic goals or diminish the
      effectiveness of certain longstanding relationships with insurance
      agents and others

  --  Events, such as an epidemic, natural catastrophe or terrorism, that
      could hamper our ability to assemble our workforce at our headquarters
      location



Further, the company's insurance businesses are subject to the effects of changing social, economic and regulatory environments. Public and regulatory initiatives have included efforts to adversely influence and restrict premium rates, restrict the ability to cancel policies, impose underwriting standards and expand overall regulation. The company also is subject to public and regulatory initiatives that can affect the market value for its common stock, such as recent measures affecting corporate financial reporting and governance. The ultimate changes and eventual effects, if any, of these initiatives are uncertain. 

DATASOURCE: Cincinnati Financial Corporation



CONTACT:  Investors: Dennis E. McDaniel,  [phone],

; Media: Joan O. Shevchik, [phone],

, both of Cincinnati Financial Corporation



Web Site:  http://www.cinfin.com/ 

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