Cincinnati Financial 2026 Q1 Earnings Call - Pricing Discipline Navigates Shifting Market Cycles

Jim, Conference Call Moderator: Good day, ladies and gentlemen, and thank you all for joining us for this Cincinnati Financial Corporation First Quarter 2026 Earnings Conference Call. As a reminder, all phone participants are in a muted or listen-only mode to prevent any potential background noise. Today’s session is also being recorded. It is now my pleasure to turn the floor over to Investor Relations Officer, Mr. Dennis McDaniel. Welcome, Dennis.

Dennis McDaniel, Investor Relations Officer, Cincinnati Financial Corporation: Hello, this is Dennis McDaniel at Cincinnati Financial. Thank you for joining us for our first quarter 2026 earnings conference call. Late yesterday, we issued a news release on our results, along with our supplemental financial package, including our quarter and investment portfolio. To find copies of any of these documents, please visit our investor website, investors.cinfin.com. The shortest route to the information is the Quarterly Results section near the middle of the Investor Review page. On this call, you’ll first hear from President and Chief Executive Officer, Steve Spray, and then from Executive Vice President and Chief Financial Officer, Mike Sewell. After their prepared remarks, investors participating on the call may ask questions.

At that time, some responses may be made by others in the room with us, including Executive Chairman Steve Johnston, Chief Investment Officer Steve Soloria, and Cincinnati Insurance’s Chief Claims Officer Marc J. Schambow, and Senior Vice President of Corporate Finance Andy Schnell. Please note that some of the matters to be discussed today are forward-looking. These forward-looking statements involve certain risks and uncertainties. With respect to these risks and uncertainties, we direct your attention to our news release and to our various filings with the SEC. Also, a reconciliation of non-GAAP measures was provided with the news release. Statutory accounting data is prepared in accordance with statutory accounting rules and therefore is not reconciled to GAAP. Now I’ll turn over the call to Steve.

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Good morning, thank you for joining us today to hear more about our results. Performance for the first quarter of the year was good and included several aspects that demonstrated the success of our proven strategy and our ability to execute it. Both our insurance and investment operations performed quite well. Net income of $274 million for the first quarter of 2026 included recognition of $82 million on an after-tax basis for the decrease in fair value of equity securities still held. Non-GAAP operating income was strong, $330 million for the quarter, compared with an operating loss of $37 million a year ago.

The 95.6% first quarter 2026 property casualty combined ratio improved by 17.7 percentage points compared with first quarter last year, including a decrease of 14.2 points for catastrophe losses. We had an excellent 87.5% accident year 2026 combined ratio before catastrophe losses for the first quarter. Turning to premium growth, our consolidated property casualty net written premiums grew 7% for the quarter, including a favorable 2% effect from net reinstatement premiums recorded in first quarter 2025. Our strong financial position and sophisticated pricing and segmentation models allowed us to benefit from market disruption over the past few years. We stayed the course, providing a stable market for our agents, in turn, growing at an accelerated pace.

In fact, in just the last seven years, we’ve doubled the size of our consolidated property casualty net written premiums. As those market challenges shift, growth is slowing as our underwriters continue to emphasize pricing and risk segmentation on a policy-by-policy basis in their underwriting decisions. Estimated average renewal price increases for most lines of business during the first quarter were lower than the fourth quarter of 2025, but still at levels we believe were healthy. Commercial lines in total averaged increases near the high end of the low single-digit % range, and excess and surplus lines was again in the mid-single digit range. Our personal line segment included personal auto and homeowner in the high single-digit range. Our premium growth objectives are further supported by exceptional claim service and our deep relationships with best-in-class independent insurance agents.

Next, I’ll comment on first quarter performance by insurance segment compared with a year ago. As we pursue profitable premium growth, we believe pricing discipline in a challenging market contributed to strong profitability this quarter. Commercial Lines grew net written premiums 3% with a 98.6% combined ratio that increased by 6.7 percentage points, including 6.0 points from higher catastrophe losses. Personal Lines grew net written premiums 15%, driven by Cincinnati Private Client. The combined ratio for Personal Lines was 96.8%, 54.5 percentage points better than last year, including a decrease of 41.9 points from lower catastrophe losses. Excess and surplus lines grew net written premiums 8% and produced a very good combined ratio of 89.3%.

Cincinnati Re and Cincinnati Global each continue to contribute to profitability and reflect our efforts to diversify risk and further improve income stability. Cincinnati Re’s first quarter of 2026 net written premiums decreased by less than 1%. Its combined ratio was an outstanding 79.7%. Cincinnati Global’s combined ratio was also stellar at 78.7%, along with premium growth of 31% as it continues to benefit from product expansion in recent years. Our life insurance subsidiary continued to deliver excellent results, including 24% net income growth. In addition, term life insurance earned premiums grew 7%. I’ll end my commentary with a summary of our primary measure of long-term financial performance, the value creation ratio. Our VCR was 0.2% for the first quarter of 2026. Net income before investment gains or losses for the quarter contributed 2.1%.

Lower overall valuation of our investment portfolio and other items contributed negative 1.9%. I’ll turn it over to Chief Financial Officer Michael J. Sewell for additional insights regarding our financial performance.

Michael J. Sewell, Executive Vice President and Chief Financial Officer, Cincinnati Financial Corporation: Thank you, Steve, thanks to all of you for joining us today. We reported growth of 14% in investment income in the first quarter of 2026, driven by strong cash flow from insurance operations. Bond interest income grew 12% and net purchases of fixed maturity securities totaled $624 million for the first three months of the year. The first quarter pre-tax average yield of 5.02% for the fixed maturity portfolio was up 10 basis points compared with last year. The average pre-tax yield for the total of purchased taxable and tax-exempt bonds during the first quarter of this year was 5.37%. Dividend income was up 13%, including a $6 million special dividend received from one of our equity holdings. Net sales of equity securities totaled $54 million for the quarter.

Valuation changes in aggregate for the first quarter were unfavorable for both our equity portfolio and our bond portfolio. Before tax effects, the net loss of $71 million for the equity portfolio and $220 million for the bond portfolio. At the end of the first quarter, the total investment portfolio net appreciated value was approximately $7.7 billion. The equity portfolio was in a net gain position of $8.1 billion, while the fixed maturity portfolio was in a net loss position of $401 million. Cash flow continued to benefit investment income growth. Cash flow from operating activities for the first three months of 2026 was $656 million, more than double a year ago.

Regarding expense management, our first quarter 2026 property casualty underwriting expense ratio decreased by 0.6 percentage points, reflecting a favorable 0.7 points from the effect of net reinstatement premiums in the first quarter 2025. Turning to loss reserves, our approach remains consistent. We aim for net amounts in the upper half of the actuarially estimated range of net loss and loss expense reserves. As we do each quarter, we consider new information such as paid losses and case reserves. We updated estimated ultimate losses and loss expenses by accident year and line of business. For the first three months of 2026, our net addition to property casualty loss and loss expense reserves was $466 million, including $419 million for the IBNR portion.

During the first quarter, we experienced $81 million of property casualty net favorable reserve development on prior accident years that benefited the combined ratio by 3.2 percentage points. On an all lines basis by accident year, net favorable reserve development for the first 3 months of 2026 included favorable $72 million for 2025, favorable $25 million for 2024, and an unfavorable $16 million in aggregate for accident years prior to 2024. I’ll conclude my comments with first quarter capital management highlights. We paid $133 million in dividends to shareholders. We repurchased approximately 1.1 million shares at an average price per share of $164.93. We believe both our financial flexibility and our financial strength are in great shape.

Parent company cash and marketable securities at quarter end was $5.6 billion. Debt to total capital remained under 10%. Our quarter end book value was $101.60 per share, with nearly $16 billion of GAAP consolidated shareholders’ equity, providing plenty of capacity for the profitable growth of our insurance operations. Now I’ll turn the call back over to Steve.

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Thanks, Mike. I think this quarter’s solid results demonstrate that we have the people and plans in place to keep building on our success, regardless of market cycles and conditions. Our associates continue to answer the call for our agents and the communities they serve, developing deep relationships and informing smart underwriting decisions. Early in March, AM Best also expressed their confidence in our plans by affirming our A+ rating, citing our strong balance sheet and operating performance. If you’d like to hear more about how we’ll continue to deliver value for policyholders, agents, associates, and shareholders, we invite you to join us for our annual meeting of shareholders this Saturday, May second, at the Cincinnati Art Museum. You are also welcome to listen to our webcast of the meeting available at investors.cinfin.com.

As a reminder, with Mike and me today are Steve Johnston, Steve Soloria, Marc Schambow, and Andy Schnell. Jim, please open the call for questions.

Jim, Conference Call Moderator: Gentlemen, thank you for your remarks. To our phone audience, at this time, if you would like to ask a question, simply press Star followed by the digit One on your telephone keypad. Pressing Star on one will place your line into a queue, and I will open your lines individually, and you’ll be invited to direct your question. We’ll take our first question today from the line of Michael Phillips at Oppenheimer. Please go ahead.

Michael Phillips, Analyst, Oppenheimer: Thank you. Good morning, everybody, and thanks for the time. Steve, I want to dive a little more into the renewal price change in commercial. Seemed to decelerate a little more than maybe we’ve heard from others, but it’s obviously hard to really accurately say on that. Your high end of low single-digit, obviously that’s impacted by your commercial property and comp. They’re not a small piece of that segment. Maybe could you provide any comments on the pricing environment in your commercial casualty, specifically what that looks like today, and maybe how that compares to what you see as loss trends in commercial casualty? Thanks, Steve.

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Yeah, thanks. Good morning, Michael. Good to hear from you. Yeah, you know, the high end of the low-single-digit range, just so you know, that takes into account, you know, some of the impact that we’ll get from our 3-year policies. Specifically to casualty, and you know, not bifurcating it down, but just all in on casualty, we’re getting mid-single-digit increases. I think more importantly from my perspective, Michael, in shifting market cycles, I think our focus on policy, you know, we’re a package writer focused on policy by policy, you know, risk selection, terms, conditions, and then using the pricing tools that we have and segmenting the book, is where we focus most of our efforts versus any straight average.

The straight average just doesn’t tell the story through any market cycle. I think even now, as things are softening, I think it’s even more crucial that our underwriters working with agents continue to deliver on that segmentation strategy.

Michael Phillips, Analyst, Oppenheimer: Okay, Steve. Thank you. I guess switching over to personal, specifically the umbrella book. You’ve grown that nicely in the last couple of years. I think you’re north of $200 million or so of premium, it’s a small base. Can you just talk about your strategy there? You know, how big do you want that to be, say, over the next year or 2? Does it get to a half a billion in the next 2 years? You know, obviously, thoughts on the volatility of that business in terms of losses. Just kinda thinking about, you know, how much you wanna grow in the near term on umbrella. Thank you.

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Thanks, Mike. No specific guidance on how large or how much we wanna grow that umbrella. Again, in personal lines, I think as you know, we’re a package writer. In many cases, that umbrella comes along with that, probably even more so with our focus on private client. You know, those individuals, higher net worth folks are, you know, are desiring larger limits and, we’ve got the balance sheet, we’ve got the expertise, and that has performed well for us. You know, legal system abuse in commercial lines has been well documented. It’s something we pay attention to, certainly in personal lines, especially with umbrella and excess.

You know, we feel good about where we are there and, we will continue to grow it.

Michael Phillips, Analyst, Oppenheimer: Okay. Yeah. Thank you. Then just one quick numbers question, if I could. Mike, that $72 million on 2025 accident year, I assume that’s homeowners and property lines.

Michael J. Sewell, Executive Vice President and Chief Financial Officer, Cincinnati Financial Corporation: Repeat that again?

Michael Phillips, Analyst, Oppenheimer: Yeah. You, Mike, you mentioned the $72 million of favorable in 25 accident year. I just was curious to make sure that was that homeowners and commercial property?

Michael J. Sewell, Executive Vice President and Chief Financial Officer, Cincinnati Financial Corporation: Yes.

Michael Phillips, Analyst, Oppenheimer: Okay, cool. Thank you, guys.

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Thank you, Mike.

Jim, Conference Call Moderator: Our next question today will come from the line of Joshua Shanker at Bank of America.

Joshua Shanker, Analyst, Bank of America: Thank you for taking my question. First, I just want to say, Dennis, on Dennis’s retirement, it’s a big deal at Cincinnati Financial, and I wish Dennis the best and he’s just the best in the business, so I only have great things to say and think about him. We’re gonna miss you, Dennis.

Dennis McDaniel, Investor Relations Officer, Cincinnati Financial Corporation: Well, thank you, Josh. The good thing is the team is ready to continue to execute. I’m around for a few more months, but thank you.

Joshua Shanker, Analyst, Bank of America: Here’s my questions. First of all, when I look at the growth rate of the homeowners business and I compare that to other personal and auto, I kind of think of a high net worth package as you want everything from the company, or maybe I’m wrong from the customer, or maybe I’m wrong about that. You know, you sell a whole package. We want your cars, we want your toys, we want your art. Why is there such a difference in the growth rates? Are you looking for a property-only type of high net worth purchase? What’s the difference between the growth rates of the subgroups within personal line?

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Yeah. Thanks, Josh. You know, you’re all over it. We are a package writer both in middle market, personal lines, and in Private Client. We want to be an online solution for the policyholders. You, you make a great point, and I think it’s one of the advantages that we have by both being a premier carrier for our agents in middle market and high net worth. There’s diversification that naturally comes with that business. High net worth, you’re right, it is more property-driven. Homes are larger, you know, there’s just maybe fewer vehicles. High net worth generally is property-driven, less auto. Middle market is the opposite: lower property, higher auto pricing. You didn’t ask this, I’ll take it a step further.

We’re getting geographic diversification between middle market and high net worth as well. Middle market, you know, in general, tends to be more in the center of the country. Private Client, seems to be, you know, or is, not seems to be, but is more Northeast, West Coast, Florida-driven.

Joshua Shanker, Analyst, Bank of America: When I look at the numbers, 23% growth in the homeowners segment, but the new business production is down a lot. I assume most of that growth is really coming through rate these past couple of quarters. Can we bifurcate between how much rate you’re asking and how much your appetite for unit growth has changed in the past 6 months?

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: You’re, you’re right. There’s a lot of moving parts. You know, one thing I would say, I’d go back to also, Josh, is that last year, we had reinstatement premiums in the homeowner line, and that’s, you know, that’s making the comps different. I’d point you to that. With regards to, you know, just the new business, you know, after the loss last year in California, as we’ve discussed, we did an immediate after-action lessons learned. Growth in California new business really slowed last year. It’s kind of picked back up here in the first quarter, not enough to maybe overcome what’s come down there. We’ve still got a lot of rate working into the book.

I think the biggest thing, though, Josh, to wrap it all up, again, a lot of moving parts, but if you look at 2024 and 2025, and we’ve talked a lot about this, they were historic hard market years, especially for personal lines. You know, I think we’re just really returning back to maybe a little bit more of a normal state.

Joshua Shanker, Analyst, Bank of America: Is there a decline in the amount of new business as measured by number of homes that you’re putting on in 1Q 2026 versus 1Q 2025 and 1Q 2024?

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Yeah. The, you know, in commercial lines, you know, our policy counts are growing. In personal lines, the exposure units have been down a little bit. I don’t know how much it would impact that, but to answer your question, yeah, their policy counts are down a bit.

Joshua Shanker, Analyst, Bank of America: If you don’t mind.

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Which we think is a good thing. Oh, yeah, sorry.

Joshua Shanker, Analyst, Bank of America: No, no, continue. I’ll get one line. You think it’s a good thing you were saying.

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Yeah. No, we’re just getting, you know, just like it’s just one-on-one. We’re getting more rate for less exposure. We think that bodes well.

Joshua Shanker, Analyst, Bank of America: In California, when you are raising price, are you finding that you’re retaining that customer, the customer’s happy to stay on that price, or is that causing a higher amount of churn?

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: There’s competition back in California. Just as a reminder there as well, Josh, all new homeowner business that we’re writing today and have been over the last several years is on an excess and surplus lines basis. The rates, I think, over the last several years, they have been pretty stable, that we feel they’re adequate. We’re comfortable with the pricing there. We are seeing some additional competition come back in to California for the new business.

Joshua Shanker, Analyst, Bank of America: Well, thank you very much for all the clarity.

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: No, great questions, Josh. Thank you.

Jim, Conference Call Moderator: Next, we’ll hear from Michael Zaremski at BMO Capital Markets.

Michael Zaremski, Analyst, BMO Capital Markets: Great. Thanks. First question, shifting to capital management. We saw an elevated share purchase level. I don’t think we’ve seen that in a while. You know, I can see, you know, debt to cap currently versus historical. You know, we can see top-line growth is kind of running a bit lower as the market becomes more competitive. Maybe just should we be run rating this level of buybacks unless things change meaningfully on the valuation of the CINF stock?

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Yeah. Hey, Mike, this Mike Sewell. That’s a great question, and thank you for it. You know, it was probably, I’ll say, a little elevated for Q1 of this year. Is it unusual? No, it’s not. We still, you know, said that we’re doing maintenance, maybe a little bit of maintenance plus. The last year that we did, I’ll say a little over 1 million shares in Q1 was back in 2020. You know, six years ago, we did 2.5 million shares. If I start to look at full years, we’ve done almost 1.1 million this year. Last year, we did 1.3 million, 1.1. Before that, 2022, we did 3.7 million. I would say this is not unusual.

Michael J. Sewell, Executive Vice President and Chief Financial Officer, Cincinnati Financial Corporation: It’s, I would call it maintenance plus. We’ll see how things go the rest of the year and what we determine to do.

Michael Zaremski, Analyst, BMO Capital Markets: Got it. Thanks for the clarification there. Just maybe switching gears to the question I think we get the most on is back to the lawsuit, social inflation lines of business. You know, we can see from your KPIs that, you know, the casualty has been, you know, favorable for the last 5 quarters. You know, the underlying is in, you know, in commercial auto and et cetera, it seems to be improving a bit. You know, would you say you guys are kinda getting over the hump of more, you know, rearview mirror there, or is it still kind of TBD and kind of making sure to be very careful on growth using your analytics in those lines of business? Thanks.

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Thanks, Mike. You’re again all over it. I’d say it’s both. We are confident in the pricing and the risk selection that we’re seeing there. I’d say we also feel that we’re not out of the woods as an industry and specifically us when it comes to social inflation, legal system abuse, as we’d probably prefer to call it. You’re seeing some tort reform push around the country. We monitor that. APCIA, I think, does an excellent job on behalf of the industry. I just think that there’s still a tremendous amount of uncertainty around that. You can see it. You can see it in our ex-cat, accident year picks, both in commercial casualty, commercial auto, I think is where you’ll. You know, that’s kind of the epicenter.

Just, you know, I don’t think we’re over any hump, but I also think we’re prepared for what might come at us. Just, one, based on our picks, but two, like you mentioned, the analytics, the way we’re pricing, risk by risk and risk selection.

Michael Zaremski, Analyst, BMO Capital Markets: Got it. It’s helpful. Then just lastly, stepping back, when we think about the overall competitive environment in commercial lines and, you know, taking into account, you know, your risk collection analytics, et cetera, is it fair to kind of if we paint a broad brush to say, you know, pricing powers on commercial lines is still biased downwards versus kind of stable-ish over the coming year, despite kind of still material levels of social inflation impacting the broader industry?

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Yeah, you know, Mike, I won’t project forward for you, but where we are right now, I would say it’s, it is, you can’t paint the whole book, you know, with a broad brush. We’re definitely seeing pressure. The larger the premium, the larger the account, the more pressure there is there. Then kind of peel that back a little bit, it’s even more so on commercial property. We’re still seeing net rate, as I was mentioning to Mike Phillips earlier, the average just really doesn’t tell the story. It’s look at every single policy on a risk-adjusted basis and make decisions from there. Our underwriters just I can’t speak highly enough of how they’re executing on that through all market cycles.

I think what makes it maybe more efficient, more effective is that they are dealing with the most professional agents in the business that can convey value. That’s what we’re looking for long-term consistency, stability, and predictability. I just think, you know, I’d be remiss if I didn’t mention just how our underwriters and our agents are executing on that.

Michael Zaremski, Analyst, BMO Capital Markets: Just lastly, you know, I know Cincinnati’s been proactively moving into the, you know, I don’t know if larger account is the right word, because we don’t want to compare you guys to Chubb or AIG, but kind of bigger premium policy levels over, you know, many years now. Does that, you know, just mean, you know, maybe the hit rate could be a bit lower on the larger premium stuff if the current competitive environment sticks? Thanks.

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Yes. Yes, Mike, absolutely. You’re right. We’ve always written larger accounts for our agents, but we really decided to get deliberate about it and build out expertise within the last decade. We continue to grow that unit. Our agents are responding well to the expertise that we bring to the table across all, you know, kinda all disciplines there. Yes, as we’re growing that, it might be putting a little bit more of an outsized pressure because not only are we not winning on some accounts based on our view of the risk, you know, retention is struggling there a little bit too.

Steve Johnston, Executive Chairman, Cincinnati Financial Corporation: Thank you.

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Thank you, Mike.

Jim, Conference Call Moderator: Paul Newsome at Piper Sandler, you have our next question. Please go ahead.

Paul Newsome, Analyst, Piper Sandler: I was wanting to go back to the reserve issues. The, you know, very small change in the past, pre-2024. I presume that’s pretty much all casualty at this point. Are we making a little bit of a statement or not? I don’t wanna read too much into $16 million, but about what’s going on with casualty reserves there.

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: No, Paul. Let me state that again. We in total, you know, obviously, we had 3.2 points of favorable development. It was $81 million. This is in total. $72 million of that favorable development was for accident year 2025. $25 million was favorable for 2024. The remaining $16 million unfavorable was across multiple years prior to that. It’s really kind of spread across multiple accident years, and I would say nothing is really popping out to me.

Paul Newsome, Analyst, Piper Sandler: I, a follow-up question, this sort of illustrates I was having trouble sleeping last night. There was a statement in your 10-Q that was sort of a qualifier for the reiteration of your long-term combined ratio goals. It’s something along the lines of there’s several reasons why 26 results might be below the long-term targets. Any color on that thought and what we should be thinking about in terms of what you’re concerned about?

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Yeah. No, Paul, nothing more to read into that. Our long-term target is still 92-98. You know, we’ll continue to underwrite and price risk by risk. You know, with, you know, we’re still riding same mix of business. Everything there is consistent. You know, just with the market that might be putting more pressure, downward pressure on rate. I think there’s just an acknowledgment that we’ll be prudent in our picks there.

Paul Newsome, Analyst, Piper Sandler: Okay. Makes sense. Thanks, guys. Appreciate it.

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Thank you, Paul.

Jim, Conference Call Moderator: Thanks, Paul. A reminder to our phone audience that it is star and 1 if you have a question or even a follow-up. We’ll hear now from Meyer Shields at KBW.

Meyer Shields, Analyst, KBW: Great. Thanks so much. I guess one question. You talked about the 108 agency appointments in the first quarter. I know that historically, Cincinnati’s been very demanding in terms of agency quality. Does that number sort of have to slow down at any point in time? Maybe more or less big picture is, I was hoping you could talk about which geographic regions are seeing the most appointments right now.

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Thanks, Meyer. We, you know, the strategy as a company has always been to have as few agents as possible, but as many as necessary. You look at us on a relative basis to the industry and to our peers. I think we’ve got about roughly 2,400 agency relationships operating out of, you know, 3,500 plus locations. We’ve always had a limited distribution model, even adding 300 or 400 agencies or whatever it might be in a year is still a relatively small number. I think the most important point, and you make it, Meyer, is I feel like in my 35 years, one of the keys to our success is we’ve always done a great job of underwriting agencies. You point to that with the quality.

That’s a big focus of ours, is just making sure that we’re aligned with these agencies, that they’re professional, they’re centers of influence in their community. We think that there are a lot more agencies across the country that meet those standards. We’ll continue to appoint, we’ll continue to keep our standards high. To your question on various states, we feel like we can appoint agencies in any state and do well, but we do prioritize agency appointments in those states where we feel like right now we have a, you know, a better than average shot at good risk-adjusted returns.

Meyer Shields, Analyst, KBW: Okay, great. That’s very helpful. Another question. Do either Cincinnati Global or Cincinnati Re have any exposure to the political violence, marine or energy risks in the Middle East right now?

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: To answer that, thanks for the question, Meyer, it’s very little that we have. I think there was a little bit more on the Cincinnati Re side, it was $5 million, on the Cincinnati Global, it was $1 million, and actually it was below $1 million. Very minor in total. We are, we’ll be watching that one day at a time.

Meyer Shields, Analyst, KBW: Okay, perfect. Thank you so much.

Jim, Conference Call Moderator: We have no further questions from our audience at this time. Mr. Spray, I’m happy to turn the floor back to you, sir, for any additional or closing remarks that you have.

Steve Spray, President and Chief Executive Officer, Cincinnati Financial Corporation: Well, thank you, Jim, and thank you all for joining us today. We look forward to speaking with you again on our second quarter call.

Jim, Conference Call Moderator: Ladies and gentlemen, this does conclude today’s meeting. We thank you all for your participation. You may now disconnect your lines. Have a great day.