CINF 10-K & 10-Q changes, risk factors and insider trading

Unforeseen losses, or unintended coverages, the type and magnitude of which we cannot predict, may emerge. These additional losses could arise from changes in the legal environment, new or amended laws and regulations, climate change, catastrophic events, increases in loss severity or frequency, environmental claims, mass torts or other causes such as social inflation. Such future losses could be substantial. The increase inElevated inflation in recent periods has significantly increased our loss costs in our auto and property businesses. It is possible that inflation could remain at high levels for a prolonged period or increase further, leading to additional increases in our loss costs. In addition, a significant portion of claims costs consists of medical costs. As a result, an increase in medical inflation could materially and adversely impact our loss costs and our loss reserves. Recent changes in the macroeconomic environment have impacted medical labor and materials costs, the potential persistency of which could result in future loss costs that are higher than our current expectations.

Our life policy reserves are also subject to uncertainty. Periods of higher death claims outside of long-term historical norms, such as during the COVID-19 pandemic,norms and not anticipated within our actuarial models could make our life policy reserves inadequate to cover actual future death claims. Increases in estimates of future death claims would increase life policy reserve levels and in turn decrease earnings.

The occurrence of terrorist attacks in the geographic areas we serve could result in substantially higher claims under our insurance policies than we have anticipated. Some of our insurance policies provide coverage for terrorism risk in all areas we serve, including Tier 1 and Tier 2 cities. We have exposure to small co-op utilities, water utilities, wholesale fuel distributors, small shopping malls and small colleges throughout our 46 active states. Because of the number of associates located at our Fairfield, Ohio, headquarters, it is also exposed to terrorism risk. Additionally, our life insurance subsidiary could be adversely affected in the event of a terrorist event or an Cincinnati Financial Corporation - 2024 10-K - Page 31 epidemic, particularly if the epidemic were to affect a broad range of the population or affect the overall economy. A catastrophe or epidemic event also could affect our operations by damaging our headquarters facility, injuring associates and visitors or disrupting our associates’ ability to perform their assigned tasks. Our associate health plan is self-funded and could similarly be affected.

Our results of operations would be adversely affected if the level of losses we experience over a period of time were to exceed our actuarially determined expectations. In addition, our financial condition may be adversely affected if we were required to sell securities prior to maturity or at unfavorable prices to pay an unusually high level of loss and loss expenses. Securities pricing might be even less favorable as a result of widespread losses and catastrophic events impacting a number of other companies and insurers. We also have been and may in the future be exposed to state guaranty fund assessments if other carriers in a state cannot meet their obligations to policyholders.

Cincinnati Re and Cincinnati Global provide reinsurance or insurance coverage for property catastrophe events on a worldwide basis, including coverage for losses due to war, terrorism or political violence. Wars can occur anywhere, and our results of operations could be adversely affected, especially if effects of wars expand over time and space. We have limited direct exposure within our insurance operations to businesses or individuals in Russia, Ukraine or Gaza. We have exposure within our insurance operations, primarily through reinsurance treaties, to insured losses related to wars that include risks in the Middle East region. If effectshostilities relatedexpand toin thethese regions or war inbreaks Gaza expand significantlyout in thea Middle Eastnew region, causing a high frequency of loss events, or a single extreme event, during the coverage period of our treaties or policies, our financial position and results of operations could be materially affected. Cincinnati Re is staffed with seasoned underwriting and analytical associates who strive to assume risks that we understand, both quantitatively and qualitatively, but given their global scope, a failure of their risk selection and modeling could materially affect our financial position and results of operations. We are also expanding Cincinnati Global, our global specialty underwriter with premiums primarily for U.S. and international property exposures. Cincinnati Global also writes North American and United Kingdom (U.K.) contingency and event cancellation coverage and worldwide credit and political risk coverage and political violence coverage. If there is a high frequency of large property catastrophe or terrorism events, or a single extreme event, during the coverage period of Cincinnati Global’s policies, our financial position and results of operations could be materially affected.

Economic downturns or other events have in the past and may in the future result in a softening of the insurance market and agents or consumers choosing a competitor’s product that may in turn adversely affect our premium revenues and underwriting profit. Such economic events experienced during recent periods included elevated inflation, global supply chain disruptions, implementation of tariffs, increasing interest rates, tightening credit markets and higher fuel costs.

Events, such as global supply chain disruptions, implementation of tariffs, an increasing interest rate environment and inflationary pressures, have contributed to significant disruption and volatility for financial markets and decreased economic activity. In the event that these conditions occur or continue, recur or result in a prolonged economic downturn or recession, they could materially and adversely impact our financial condition, results of operations or cash flows. These market conditions have in the past, and could in the future, cause our investment income or the value of securities we own to decrease. Additionally, the companies we invest in might be severely affected by a severe catastrophic event, terrorist attack, or epidemic event, which could in turn lower their stock value and affect our financial condition and results of operations.

Investment income is an important component of our revenues and net income. The ability to increase investment income and generate longer-term growth in book value is affected by factors beyond our control, such as: inflation, trade policy, economic growth, interest rates, world political conditions, changes in laws and regulations, future actions or inactions of the U.S. government, epidemic events, terrorism attacks or threats, war, adverse events affecting other companies in our industry or the industries in which we invest, market events leading to credit constriction, and other widespread unpredictable events. These events have in the past and may in the future adversely affect the economy generally and cause our investment income or the value of securities we own to decrease. Wars can occur anywhere in the world and have an adverse effect on our investment portfolio, especially if effects of wars expand over time and space. We do not have material exposure to investments based in Russia, Ukraine, Israel or Gaza. If there is significant expansion of wars beyond these regions, it may have adverse effects on our investment performance. Any significant decline in our investment income will have an adverse effect on our net income, and thereby on our shareholders’ equity and our statutory capital and surplus. For a more detailed discussion of risks associated with our investments, refer to Item 7A, Quantitative and Qualitative Disclosures About Market Risk.

Our ability to successfully execute business functions also depends on hiring and retaining the qualified associates we employ. Competition for high-quality executives and other key associates occurs within the insurance industry and from other industries. We also must effectively develop and manage associates, including providing training and resources. Such tools and information can allow them to effectively perform critical business functions and adapt to changing business needs. During tight labor markets, such as we experienced in recent years, there is intense competition for associates qualified to execute important business functions. Many markets in which we operate are experiencing a low unemployment rate and labor shortages are affecting many industries. If we are unable to attract and retain certain associates, or if we fail to provide adequate training or resources, or fail to provide a work environment that is attractive to associates, we could limit the success of executing our strategic plans and vital business functions. Additionally, loss of key personnel or an inability to successfully execute on succession plans could negatively impact growth, operating results, financial condition, essential business relationships, profitability, and other business operations.

Through The Cincinnati Insurance Company, Cincinnati Financial Corporation is one of the 25 largest property casualty insurers in the nation, based on net written premium volume for the first nine months of 2024,2025, among approximatelymore than 2,000 U.S. stock and mutual insurercompanies operating independently or in groups. We market our insurance products through a select group of independent insurance agencies in 46 states as discussed in Item 1, Our Business and Our Strategy.

We are targeting an annual value creation ratio averaging 10% to 13% over the next five-year period. At 19.8%18.8% for 2024,2025, our performance was above the high end of that range. ItWe wasalso below the low end of the range for the three-year period and atexceeded the high end of the range for both the three-year and five-year period, bothperiods that ended in December 2024.2025.

The 20242025 value creation ratio improveddecreased by 0.31.0 percentage points, compared with 2023,2024, and again included a significant contribution from operating results, as shown in the table above,above. thatThe 2025 ratio decrease included 0.8 percentage points from net income before investment gains and 0.2 percentage points in overall net gains from our investment portfolio and other items. The increase in 2024, compared with 2023, was 0.8primarily percentage-pointsdue higherto thanan lastincrease year. The 2024 ratio improvement fromin operating results which was partially offset by a reduction in overall net gains from our investment portfolio and other items, including a reduction of 2.5 percentage points from our fixed-maturity securities investment portfolio. The increase in 2023, compared with 2022, was primarily due to an increase in overall net gains from our investment portfolio.

*** Dividend declared to shareholders divided by beginning of year book value Cincinnati Financial Corporation - 2025 10-K - Page 46 When looking at our longer-term objectives, we see three primary performance drivers for our value creation ratio:

The board of directors is committed to rewarding shareholders directly through cash dividends and share repurchase authorizations. Through 2025, the company has increased the annual cash dividend rate for 65 consecutive years, a record we believe is matched by only seven other publicly traded U.S. companies. In addition to regular dividends, strong capital and excellent company performance has provided opportunities to further reward shareholders. The board regularly evaluates relevant factors in dividend-related decisions, and the 20242025 increase to the regular dividend reflected confidence in our outstanding capital, liquidity and financial flexibility, as well as progress of our initiatives to improve earnings performance while growing insurance premium revenues. We discuss our financial position in more detail in Liquidity and Capital Resources.

Total investments increased by 12% during 20242025 on a fair value basis. Entering 2025,2026, we believe the portfolio continues to be well diversified and is well positioned to withstand short-term fluctuations. We discuss our investment strategy in Item 1, Investments Segment, and results for the segment in Investments Results. Total assets also increased by 11%,12%, compared with year-end 2023.2024. Shareholders’ equity increased by 15%14% and book value per share increased by 16%,15%, for reasons discussed in the preceding Executive Summary.

Property casualty net written premiums grew 15%9% and earned premiums grew 12%13% in 2024.2025. The growth reflected average renewal price increases, premium growth initiatives and a higher level of insured exposures, including a contribution to net written premium growth of less than 1 percentage point from Cincinnati Re and Cincinnati Global in total. Growth in 20232024 net written premiums and earned premiums was driven by factors similar to 2024.2025. Trends and related factors are discussed in Commercial Lines, Personal Lines and Excess and Surplus Lines Insurance Results.

Our property casualty insurance operations generated an underwriting profit for each of the three years ending in 2024.2025. UnderwritingThe results$79 improvedmillion decrease in both2025 2024underwriting and 2023,profit, compared with the2024, respectiveincluded prior-yeara period.$249 For both years, the underwriting profitmillion increase includedin improvedlosses overallfrom insurednatural losscatastrophe experienceevents and $13 million less benefit from net favorable reserve development on prior accident years before catastrophe effects, as price increases helped to offset elevated losses reflecting economic or other forms of inflation that increased our uncertainty regarding ultimate losses. Loss experience is discussed further in Financial Results for our property casualty business and related segments. The $179 million increase in 2024 underwriting profit,2024, compared with 2023, included a $66 million increase in losses from natural catastrophe events and $27 million less benefit from net favorable reserve development on prior accident years before catastrophe losses. The $261 million increase in 2023, compared with 2022, included a $31 million increase in losses from catastrophe events and $81 million more benefit from net favorable reserve development on prior accident years before catastrophe losses.

Initiatives to improve our combined ratio are discussed in Item 1, Our Business and Our Strategy, Strategic Initiatives.Strategy. In 2024,2025, 20232024 and 2022,2023, favorable development on reserves for claims that occurred in prior accident years helped offset other incurred losses and loss expenses. Reserve development is discussed further in Property Casualty Loss and Loss Expense Obligations and Reserves. Losses from weather-related catastrophes are another important item influencing the combined ratio and are discussed along with other factors in Financial Results for our property casualty business and related segments.

The significant accounting policies used in the preparation of the financial statements are discussed in Item 8, Note 1 of the Consolidated Financial Statements. In conjunction with that discussion, material implications of uncertainties associated with the methods, assumptions and estimates underlying the company’s critical accounting policies are discussed below. The audit committee of the board of directors reviews the annual financial statements with management and the independent registered public accounting firm. These discussions cover: the quality of earnings; review of reserves and accruals; reconsideration of the suitability of accounting principles; review of highly Cincinnati Financial Corporation - 2025 10-K - Page 49 judgmental areas including critical accounting estimates; audit adjustments; and such other inquiries as may be appropriate.

•For events designated as natural catastrophes resulting in losses for Cincinnati Re and Cincinnati Global, we begin with a review of in-force policies, treaties and related limits likely to be affected by each event. For both Cincinnati Re and Cincinnati Global, use of information from third-party catastrophe models, industry estimates, Cincinnati Financial Corporation - 2025 10-K - Page 50 and our own proprietary adjustments are used for the estimate of ultimate losses for each catastrophe event. Incurred losses from catastrophe events for both Cincinnati Re and Cincinnati Global can be designated catastrophes by PCS, or deemed as a catastrophe by the international insurance industry or, for Cincinnati Re, as reported by ceding companies. IBNR reserves are calculated as the difference between the estimate of the ultimate loss and loss expenses and the sum of total loss and loss expense payments and total case reserves.

Our actuarial staff also devotes significant time and effort to the estimation of model and method parameters. The loss development and Bornhuetter-Ferguson methods require the estimation of numerous loss development factors. The Bornhuetter-Ferguson methods also involve the estimation of numerous expected loss ratios by accident year. ModelsStochastic fromreserving themodels probabilisticcan trend family requireinvolve the estimation of development trends, calendar year inflation trends and exposure levels. Consequently, our actuarial staff monitors a number of trends and measures to gain key business insights necessary for exercising appropriate judgment when estimating the parameters mentioned, such as:

•Calendar year inflation. For long-tail and mid-tail business lines, calendar year inflation trends for future paid losses and paid DCCE do not vary significantly from a stable, long-term average. Our actuaries base reserve estimates derived from probabilisticstochastic trend familyreserving models on this assumption.

•Exposure levels. Historical earned premiums, when adjusted to reflect common levels of product pricing and loss cost inflation, can serve as a proxy for historical exposures. Our actuaries require this assumption to estimate expected loss ratios and expected DCCE ratios used by the Bornhuetter-Ferguson reserving methods. They may Cincinnati Financial Corporation - 2025 10-K - Page 52 also use this assumption to establish exposure levels for recent accident years, characterized by “green” or immature data, when working with probabilisticstochastic trend familyreserving models.

These key assumptions have not changed for several years. Paid losses, reported losses and paid DCCE are subject to random as well as systematic influences. As a result, actual paid losses, reported losses and paid DCCE are virtually certain to differ from projections. Such differences are consistent with what specific models for our business lines predict and with the related patterns in the historical data used to develop these models. As a result, management does not closely monitor statistically insignificant differences between actual and projected data.

The application of our invested assets impairment policy resulted in no write-downs of impaired securities intended to be sold thatin 2025 or 2024. Write-downs of impaired securities intended to be sold reduced our income before income taxes by less than $1 million in 2024, $4 million in 2023 and $5 million in 2022.2023. Write-downs represent noncash charges to income and are reported as investment losses. The application of our noninvested assets impairment policy did not have a material effect on our financial condition in 20242025 or 2023.2024.

An available for sale fixedfixed-maturity maturitysecurity is impaired if the fair value of the security is below amortized cost. The impaired loss is charged to net income when we have the intent to sell the security or it is more likely than not we will be required to sell the security before recovery of the amortized cost. For impaired securities we intend to hold, an allowance for credit related losses is recorded in investment losses when the company determines a credit loss has been incurred based on certain factors such as adverse conditions, credit rating downgrades or failure of the issuer to make scheduled principal or interest payments. A credit loss is determined using a discounted cash flow analysis by comparing the present value of expected cash flows with the amortized cost basis, limited to the difference between fair value and amortized cost. Noncredit losses are recognized in other comprehensive income as a change in unrealized gains and losses on investments. We provide information about valuations of our invested assets in Item 8, Note 2 of the Consolidated Financial Statements.

Investments held by the parent company and the investment portfolios for the insurance subsidiaries are managed and reported as the investments segment, separate from our underwriting business. Net investment income and net investment gains and losses for our investment portfolios are discussed in the Investments Results.

Earned and net written premiums for our consolidated property casualty operations grew in 2024,2025, reflecting average renewal price increases, a higher level of insured exposures and strategic initiatives for targeted growth. A key measure of property casualty profitability is underwriting profit or loss. Profit increased in 2024, reflecting improved overall insured loss experience before catastrophe effects, as price increases helped to offset elevated losses reflecting economic or other forms of inflation that increased our uncertainty regarding ultimate losses. Our 20242025 underwriting profit of $580$501 million was $179$79 million moreless than in 2023,2024, including a $66$249 million unfavorable effect from a higher amount of catastrophe losses, mostlyprimarily causedfrom bythe severeJanuary weather.2025 wildfires in southern California. Prior accident year loss experience before catastrophes during 20242025 was $27$13 million less favorable than in 2023.2024. When estimating the ultimate cost of total loss and loss expenses, we consider many factors, including trends for inflation, historical paid and reported losses, large loss activity and other data or information for the industry and our company. Higher losses and loss expenses, especially for liability lines of business, reflect increased uncertainty of estimated ultimate losses. Until longer-term paid loss cost trends or other inflation effects become more clear, we intend to remain prudent in reserving for estimated ultimate losses. We continue working to improve underwriting profitability, such as through higher pricing and our ongoing initiatives to improve pricing precision and loss experience related to claims and loss control practices. Underwriting profit trends are discussed further below.

•Premiums – Agency renewal written premiums increased $819$943 million or 13% in 2024,2025, compared with 2023,2024, and continued to contribute to growth in earned premiums and net written premiums that rose in each of our property casualty insurance segments. The renewal premium increase was largely due to average renewal price Cincinnati Financial Corporation - 2025 10-K - Page 58 increases and a higher level of insured exposures. Price increases with enhanced precision continue to benefit operating results.

New business written premiums produced through agencies increaseddecreased $364$67 million in 2024,2025, compared with 2023.2024. Agents appointed during 20242025 or 20232024 produced a 20242025 increase in standard lines new business of $116$87 million. Growth initiatives also favorably affect growth in subsequent years, particularly as newer agency relationships mature over time.

Cincinnati Re produced $597$591 million of 20242025 net written premiumspremiums, anda contributed $39$6 million to growthdecrease in other written premiums, compared with 2023.2024. Cincinnati Re assumes risks through reinsurance treaties and in some cases cedes part of the risk and related premiums to one or more unaffiliated reinsurance companies through transactions known as retrocessions. The decrease included a $12 million net favorable effect from estimated premiums to reinstate treaties affected by the California wildfires. In 2024,2025, earned premiums for Cincinnati Re totaled $573$582 million.

Cincinnati Global also contributed to the increase in other written premiums. Net written premiums for Cincinnati Global were $303$334 million in 2024,2025, andan contributed $23 millionincrease of the$31 growthmillion in other written premiums, compared with 2023.2024. In 2024,2025, earned premiums for Cincinnati Global totaled $271$311 million.

Other written premiums also include premiums ceded to reinsurers as part of our ceded reinsurance program. An increase in ceded premiums, other than Cincinnati Re and Cincinnati Global premiums, reduced net written premium growth by $49$58 million in 2024.2025. Other written premiums for 2025 included a net unfavorable amount of $52 million for reinsurance treaty reinstatement premiums related to the California wildfires, including a favorable $12 million for Cincinnati Re and an unfavorable $64 million for our personal lines insurance segment.

•Combined ratio – The combined ratio improvedincreased by 1.5 percentage points in 2024,2025, compared with 2023,2024, including a 0.21.6 percentage-point decreaseincrease in the ratio for catastrophe losses. The 20242025 ratio for current accident year losses and loss expenses before catastrophes decreasedincreased by 1.80.2 percentage points. That ratio improvementincrease included an increase of 1.4 points for the IBNR portion and a decrease of 3.21.2 points for the case incurred portion. Price increases and other underwriting efforts have helped to offsetmanage effects of losses that have elevated significantly since 2021 due toinclude inflation effects discussed below, as earned premiums in 2024 grew faster than those losses and loss expenses.effects. The remainder of the 20242025 combined ratio improvementincrease included a decrease of 0.10.6 percentage points in the ratio for underwriting expenses, partially offset by 0.60.3 percentage points less benefit in the ratio for prior accident year losses and loss expenses before catastrophes. We further discuss ratios related to reserve development in the sections that follow the Catastrophe Losses Incurred table below.

Loss and loss expenses include both net paid losses and reserve changes for unpaid losses as well as the associated loss expenses. For all property casualty lines of business in aggregate, net loss and loss expense reserves at December 31, 2024,2025, were $1.055$1.344 billion higher than at year-end 2023,2024, including $998$1.143 millionbillion for incurred but not reported (IBNR) reserves. The $1.055$1.344 billion reserve increase raised year-end 20232024 net loss and loss expense reserves by 12%,14%, matchingcompared with a 12%13% increase in 20242025 earned premiums.

The 56.6%56.8% ratio for current accident year loss and loss expenses before catastrophe losses for 20242025 decreasedincreased 1.80.2 percentage points compared with the 58.4%56.6% accident year 20232024 ratio measured as of December 31, 2023.2024. The decreaseincrease included a 1.40.4 percentage-point decreaseincrease in the ratio for current accident year losses of $2 million or more per claim, shown in the table below. It also included an unfavorable 0.3 points for the net effect of $52 million for reinsurance treaty reinstatement premiums related to the January 2025 wildfires in southern California.

Reserve development on prior accident years continued to net to a favorable amount in 2024,2025, and was primarily due to less-than-anticipated loss emergence on known claims. We recognized $236$196 million of favorable development in 2024,2025, compared with $236 million in 2024 and $215 million in 2023 and $159 million in 2022.2023. Of the $21$40 million increasedecrease in 2024,2025, compared with 2023,2024, $19$46 million was attributable to our commercial propertyauto line of business. Approximately 89%97% of our net favorable reserve development on prior accident years recognized during 20242025 occurred in our workers' compensation, commercial property and homeownerworkers' compensation lines of business. In 2023,2024, our workers' compensation, commercial property and homeowner lines of business were responsible for approximately 80%89% of the favorable reserve development. As discussed in Liquidity and Capital Resources, Property Casualty Loss and Loss Expense Obligations and Reserves, Property Casualty Insurance Development of Estimated Reserves by Accident Year, commercial casualty and workers' compensation are considered long-tail lines with the potential for revisions inherent in estimating reserves. Favorable development recognized during 20222023 was primarily from our workers’ compensationcompensation, commercial property and homeowner lines of business. Development by accident year is further discussed in Liquidity and Capital Resources, Property Casualty Insurance Development of Estimated Reserves by Accident Year.

In 2024,2025, total large losses incurred decreasedincreased by $98$163 million, or 26%,58%, net of reinsurance, primarilylargely due to aan decreaseincrease for our commercial lines insurance segment. The corresponding 20242025 ratio decreasedincreased 1.71.3 percentage points, compared with 2023.2024. The large loss data included in the table above does not include Cincinnati Re and Cincinnati Global. Our analysis of large losses incurred indicated no unexpected concentration of these losses and reserve increases by geographic region, policy inception, agency or field marketing territory. We believe the inherent volatility of aggregate loss experience for our portfolio of larger policies is greater than that of our portfolio of smaller policies, and we continue to monitor the volatility in addition to general inflationary trends in loss costs.

Consolidated property casualty commission expenses rose $167$240 million, or 12%,15%, in 2024,2025, with profit-sharing commissions for agencies increasing by $18$41 million. The 20242025 ratio of commission expenses as a percent of earned premiums decreasedincreased by 0.10.4 percentage points, compared with 2023.2024. The ratio for 20232024 decreased compared with 2022.2023. In 2025, other underwriting expenses as a percent of earned premiums decreased by 1.0 percentage points, compared with 2024, as earned premiums rose faster than other underwriting expenses. The ratio improvement was primarily from a decrease in employee-related expenses. The 2025 ratio also included an unfavorable 0.2 points for the effect of reinstatement premiums. In 2024, other underwriting expenses as a percent of earned premiums matched 2023, as earned premiums kept pace with other underwriting expenses. In 2023, other underwriting expenses as a percent of earned premiums increased, compared with 2022, as earned premiums rose at a slower pace than other underwriting expenses. The three-year period ending in 20242025 also included ongoing expense management efforts.

•Combined ratio – The 20242025 combined ratio improved by 3.02.1 percentage points compared with 2023,2024, including a 1.81.9 percentage-point decrease in the ratio component for catastrophe losses. The 20242025 combined ratio alsoimprovement improvedwas partially offset by 1.50.6 points due tofrom a lowerhigher ratio for current accident year loss and loss expenses before catastrophe losses, compared with 2023.2024. That ratio improvementincrease included an increase of 2.91.9 points for the IBNR portion and a decrease of 4.41.3 points for the case incurred portion. Price increases and other underwriting actions have helped offsetto manage effects of losses that have elevated significantly since 2021 due toinclude inflation effects, as earned premiums in 2024 grew faster than those losses and loss expenses.effects. Development on prior accident years loss and loss expense reserves before catastrophes during 20242025 was 0.20.1 percentage points less favorable than in 2023,2024, as discussed below.

Our 5%6% increase in 20242025 agency renewal written premiums included higher average pricing. We measure average changes in commercial lines renewal pricing as the rate of change in renewal premium for the new policy period compared with the premium for the expiring policy period, assuming no change in the level of insured exposures or policy coverage between those periods for respective policies. In 2024,2025, our standard commercial lines policies averaged an estimated pricing change at a percentage nearin the low end of the high-single-digitmid-single-digit range. Our average commercial lines pricing change includes the flat pricing effect of certain coverages within package policies written for a three-year term that were in force but did not expire during the period being measured. Therefore, the average commercial lines pricing change we report reflects a blend of policies that did not expire and other policies that did expire during the measurement period.

For only those commercial lines policies that did expire and were then renewed during 2024,2025, we estimate that the average price increase was at a percentage innear the high-single-digithigh end of the mid-single-digit range. During 2024,2025, we continued to further segment our commercial lines policies, emphasizing identification and retention of policies we believed had relatively stronger price adequacy. Conversely, we continued to seek more aggressive renewal terms and conditions on policies we believed had relatively weaker pricing, in turn retaining fewer of those policies.

In 2024,2025, our commercial lines new business premiums written by our agencies increased $157$27 million, or 27%,4%, compared with 2023,2024, as we continued to carefully underwrite each policy in a highly competitive market. New business premium volume in recent years has been significantly influenced by new agency appointments. Agencies appointed since the beginning of 20232024 produced commercial lines new business written premiums of $72$80 million, in aggregate, during 2024,2025, up $56$58 million from what they produced during 2023.2024. All other agencies contributed the remaining $669$688 million, updown $101$31 million from the $568$719 million they produced in 2023.2024.

Other written premiums primarily consist of premiums that are ceded to reinsurers and lower our net written premiums. AnA increasedecrease in ceded premiums reducedincreased net written premium growth by $20$17 million in 2024.2025.

Total revenues increased $297$1.026 millionbillion for the firstsecond quarter of 2026, compared with the firstsecond quarter of 2025, primarily due toincluding higher net investment gains, earned premiums and investment income. For the first six months of 2026, compared with the same period of 2025, total revenues increased $1.323 billion, including higher net investment gains, earned premiums and investment income. Premium and investment revenue trends are discussed further in the respective sections of Financial Results.

Net income for the firstsecond quarter of 2026, compared with the first-quartersecond 2025quarter netof loss,2025, increased $364$570 million, including increases of $326$657 million in after-tax investment gains and losses and $28 million in after-tax investment income, partially offset by a decrease of $115 million in after-tax property casualty underwriting profit and $31 million in after-tax investment income.profit. Catastrophe losses for the firstsecond quarter of 2026, mostly weather related, were $233$61 million lowerhigher after taxes and contributed favorablyunfavorably to both net income and property casualty underwriting profit. Life insurance segment results increaseddecreased by $2$1 million on a pretax basis.

The board of directors is committed to rewarding shareholders directly through cash dividends and through share repurchase authorizations. Through 2025, the company had increased the annual cash dividend rate for 65 consecutive years, a record we believe is matched by only seven other U.S. publicly traded companies. In January 2026, the board of directors increased the regular quarterly dividend to 94 cents per share, setting the stage for our 66th consecutive year of increasing cash dividends. During the first threesix months of 2026, cash dividends declared by the company increased 8% compared with the same period of 2025. Our board regularly evaluates relevant factors in decisions related to dividends and share repurchases. The 2026 dividend increase reflected our strong operating performance and signaled management's and the board's positive outlook and confidence in our outstanding capital, liquidity and financial flexibility.

Total assets at MarchJune 31,30, 2026, increased 1%5% compared with year-end 2025, and included an increase of 1%4% in total investments that reflected net purchases thatand were offset by lowerhigher fair values for many securities in our equity and fixed maturity portfolios.portfolio. Shareholders' equity decreasedincreased 1%5% and book value per share alsoincreased decreased 1%6% during the first threesix months of 2026. Our debt-to-total-capital ratio (capital is the sum of debt plus shareholders' equity) matcheddecreased compared with year-end 2025.

Our value creation ratio is our primary performance metric. As shown in the tables below, that ratio was 0.2%8.0% for the first threesix months of 2026, compared with negative 0.5%4.6% for the same period in 2025. The increase was primarily due to an increase in net income before investment gains which was partially offset by a reduction in overall net gains from our investment portfolio.portfolio and net income before investment gains. Book value per share decreasedincreased $0.75$6.29 during the first threesix months of 2026 and contributed negative 0.76.2 percentage points to the value creation ratio, while dividends declared at $0.94$1.88 per share contributed 0.91.8 points. Value creation ratio major contributors and in total, along with calculations from per-share amounts, are shown in the tables below.

Operating through The Cincinnati Insurance Company, Cincinnati Financial Corporation is one of the 25 largest property casualty insurers in the nation, based on 2025 net written premiums for more than 2,000 U.S. stock and mutual insurance companies. We market our insurance products through a select group of independent insurance agencies as discussed in our 2025 Annual Report on Form 10-K, Item 1, Our Business and Our Strategy, Page 6. At MarchJune 31,30, 2026, we actively marketed through 2,3612,407 agencies located in 46 states. We maintain a long-term perspective that guides us in addressing immediate challenges or opportunities while focusing on the major decisions that best position our company for success through all market cycles.

•Premium growth – We believe our agency relationships and initiatives can lead to a property casualty written premium growth rate over any five-year period that exceeds the industry average. For the first threesix months of 2026, our consolidated property casualty net written premium year-over-year growth was 7%.5%. As of February 2026, A.M. Best projected the industry's full-year 2026 written premium growth at approximately 4%. For the five-year period 2021 through 2025, our growth rate exceeded that of the industry. The industry's growth rate excludes its mortgage and financial guaranty lines of business.

•Combined ratio – We believe our underwriting philosophy and initiatives can generate an average GAAP combined ratio over any five-year period that is consistently within the range of 92% to 98%. For the first threesix months of 2026, our GAAP combined ratio was 95.6%,98.2%, including 11.312.8 percentage points of current accident year catastrophe losses partially offset by 3.22.4 percentage points of favorable loss reserve development on prior accident years. Our statutory combined ratio was 95.6%97.3% for the first threesix months of 2026. As of February 2026, A.M. Best projected the industry's full-year 2026 statutory combined ratio at approximately 97%, including approximately 8 percentage points of catastrophe losses and a favorable effect of approximately 1 percentage point of loss reserve development on prior accident years. The industry's ratio again excludes its mortgage and financial guaranty lines of business.

•Investment contribution – We believe our investment philosophy and initiatives can drive investment income growth and lead to a total return on our equity investment portfolio over a five-year period that exceeds the five-year return of the Standard & Poor's 500 Index. For the first threesix months of 2026, pretax investment income was $318$637 million, up 14%13% compared with the same period in 2025. We believe our investment portfolio mix provides an appropriate balance of income stability and growth with capital appreciation potential.

At MarchJune 31,30, 2026, we held $5.584$5.722 billion of our cash and cash equivalents and invested assets at the parent-company level, of which $4.964$5.232 billion, or 88.9%,91.4%, was invested in common stocks, and $422$201 million, or 7.6%,3.5%, was cash or cash equivalents. Our debt-to-total-capital ratio was 4.9%4.6% at MarchJune 31,30, 2026. Another important indicator of financial strength is our ratio of property casualty net written premiums to statutory surplus, which was 1.0-to-1 for the 12 months ended MarchJune 31,30, 2026, matching year-end 2025.

At AprilJuly 24, 2026, our insurance subsidiaries continued to be highly rated.

Our consolidated property casualty insurance operations generated an underwriting loss of $18 million for the second quarter of 2026 and an underwriting profit of $115$97 million for the first quartersix months of 2026. The first-quartersecond-quarter 2026 underwriting profit increasedecrease of $413$146 million, compared with an underwriting loss in first-quartersecond-quarter 2025, included aan favorableunfavorable decreaseincrease of $295$77 million in losses from catastrophes, mostly caused by severe weather, partially offset byand a slightly lower amount of total favorable reserve development on prior accident years. The change in underwriting profitability for the firstsecond quarter of 2026 alsowas included a favorable effectprimarily from higher currentincurred accidentbut yearnot reported (IBNR) loss and loss expenses beforefor the current accident year. The six-month underwriting profit of $97 million, compared with an underwriting loss of $170 million for the first six months of 2025, included a favorable decrease of $254 million in current accident year catastrophe losses that grew slower than earned premiums.losses. For the first threesix months of 2026, the combined ratio before catastrophe losses and prior years reserve development improvedincreased by 3.00.1% percentage points compared with the same period of 2025.

Underwriting results for the second quarter and first quartersix months of 2026 included improvedratios for the current accident year loss experience before catastrophe losses,losses asthat priceincreased increasesfor havethe helpedsecond quarter and decreased for the first six months of 2026. Pricing segmentation is expected to help offset elevated losses reflecting economic or other forms of inflation. When estimating the ultimate cost of total loss and loss expenses, we consider many factors, including trends for inflation, historical paid and reported losses, large loss activity and other data or information for the industry or our company. Due to increased uncertainty regarding ultimate losses, we intend to remain prudent in reserving for estimated ultimate losses until longer-term loss cost trends become more clear. We believe future property casualty underwriting results will continue to benefit from price increases and our ongoing initiatives to improve pricing precision and loss experience related to claims and loss control practices.

For all property casualty lines of business in aggregate, net loss and loss expense reserves at MarchJune 31,30, 2026, were $466$981 million,million or 4%,9%, higher than at year-end 2025, including an increase of $419$845 million for the incurred but not reported (IBNR) portion.

Our consolidated property casualty combined ratio for the firstsecond quarter of 2026 decreasedincreased by 17.75.9 percentage points, compared with the same period of 2025, including an increase of 2.3 points from catastrophe losses and loss expenses. For the first six months of 2026, compared with the 2025 six-month period, our combined ratio decreased by 5.6 percentage points, including a decrease of 14.25.8 points from catastrophe losses and loss expenses. Other combined ratio components that changed are discussed below and in further detail in Financial Results by property casualty insurance segment.

The combined ratio can be affected significantly by natural catastrophe losses and other large losses as discussed in detail below. The combined ratio can also be affected by updated estimates of loss and loss expense reserves established for claims that occurred in prior periods, referred to as prior accident years. Net favorable development on prior accident year reserves, including reserves for catastrophe losses, benefited the combined ratio by 3.22.4 percentage points in the first threesix months of 2026, compared with 4.03.3 percentage points in the same period of 2025. Net favorable development is discussed in further detail in Financial Results by property casualty insurance segment.

The ratio for current accident year loss and loss expenses before catastrophe losses improved in the first threesix months of 2026. That 58.1%58.2% ratio was 2.40.2 percentage points lower, compared with the 60.5%58.4% accident year 2025 ratio measured as of MarchJune 31,30, 2025, including a decrease of 1.0 points in the ratio for large losses of $2 million or more per claim, discussed below.below, that matched the 2025 ratio. The ratio improvement of 2.40.2 percentage points included an increase of 0.30.9 points for the IBNR portion and a decrease of 2.71.1 points for the case incurred portion. The improvement also reflected a favorable 1.4 points for the effect of $52 million of net reinstatement premiums in first-quarter 2025 related to the January 2025 wildfires in southern California.

Consolidated property casualty net written premiums for the threesecond quarter and six months ended MarchJune 31,30, 2026, grew $173$92 million and $265 million compared with the same periodperiods of 2025. Our premium growth initiatives from prior years have provided an ongoing favorable effect on growth during the current year, particularly as newer agency relationships mature over time.

Consolidated property casualty agency new business written premiums decreased by $44$51 million for the second quarter and decreased by $95 million for the first threesix months of 2026, compared with the same periodperiods of 2025, due to the personal lines segment. New agency appointments during 2026 and 2025 produced a $19$38 million increase in new business for the first threesix months of 2026 compared with the same period of 2025. As we appoint new agencies that choose to move accounts to us, we report these accounts as new business. While this business is new to us, in many cases it is not new to the agent. We believe these seasoned accounts tend to be priced more accurately than business that may be less familiar to our agent upon obtaining it from a competing agent.

Net written premiums for Cincinnati Re, included in other written premiums, decreasedincreased by $1$27 million toin $254 million forboth the threesecond quarter and the six months ended MarchJune 31,30, 2026, compared with the same periodperiods of 2025.2025, Theto first three months of 2025 included a favorable $12$191 million ofand net$445 reinstatementmillion, premiums to reinstate treaties affected by the California wildfires.respectively. Cincinnati Re assumes risks through reinsurance treaties and in some cases cedes part of the risk and related premiums to one or more unaffiliated reinsurance companies through transactions known as retrocessions.

Cincinnati Global is also included in other written premiums. Net written premiums for Cincinnati Global increased by $1 million in the second quarter and $23 million for the six months ended June 30, 2026, to $98 million forand the$196 threemillion, months ended March 31, 2026,respectively, compared with the same periodperiods of 2025.

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program. A decrease in ceded premiums increased net written premiums by $76$5 million and $81 million for the second quarter and first threesix months of 2026, compared with the same periodperiods of 2025. Other written premiums for the first quartersix months of 2025 included a net unfavorable amount of $52 million for reinsurance treaty reinstatement premiums related to the California wildfires, including a favorable $12 million for Cincinnati Re and an unfavorable $64 million for our personal lines insurance segment.wildfires.

Catastrophe losses and loss expenses typically have a material effect on property casualty results and can vary significantly from period to period. Losses from catastrophes contributed 10.814.5 and 12.6 percentage points to the combined ratio in the second quarter and first threesix months of 2026, compared with 25.012.2 and 18.4 percentage points in the same periodperiods of 2025. During the first quarter of 2026, there were no material changes to our estimates of ultimate losses related to the January 2025 California wildfires.

We believe the inherent variability of aggregate loss experience for our portfolio of larger policies is greater than that of our portfolio of smaller policies, and we continue to monitor the variability in addition to general inflationary trends in loss costs. Our analysis continues to indicate no unexpected concentration of large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. The first-quartersecond-quarter 2026 property casualty total large losses incurred of $78$135 million, net of reinsurance, was lowerhigher than the $111 million quarterly average during full-year 2025 and the $102$82 million experienced for the firstsecond quarter of 2025. The ratio for these large losses was 1.41.9 percentage points lowerhigher compared with last year's second quarter. The second-quarter 2026 amount of total large losses incurred unfavorably contributed to the increase in the six-month 2026 total large loss ratio, compared with 2025, offsetting a first-quarter 2026 ratio that was 1.4 points lower than the first quarter.quarter of 2025. We believe results for the three-month period largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $2 million. Losses by size are discussed in further detail in results of operations by property casualty insurance segment.

•Premiums – Earned premiums and net written premiums for the commercial lines segment grew during the second quarter and first threesix months of 2026, compared with the same periodperiods a year ago, primarily due to agency renewal written premium growth that continued to include higher average pricing. The table below analyzes the primary components of premiums. We continue to use predictive analytics tools to improve pricing precision and segmentation while leveraging our local relationships with agents through the efforts of our teams that work closely with them. We seek to maintain appropriate pricing discipline for both new and renewal business as our agents and underwriters assess account quality to make careful decisions on a policy-by-policy basis whether to write or renew a policy.

Agency renewal written premiums increased 3% for the second quarter and first threesix months of 2026, compared with the same periodperiods of 2025, including price increases. During the firstsecond quarter of 2026, our overall standard commercial lines policies averaged estimated renewal price increases at percentages near the high end of the low-single-digit range. We continue to segment commercial lines policies, emphasizing identification and retention of those we believe have relatively stronger pricing. Conversely, we continue to maintain stricter renewal terms and conditions on policies we believe have relatively weaker pricing, thus retaining fewer of those policies. We measure average changes in commercial lines renewal pricing as the percentage rate of change in renewal premium for the new policy period compared with the premium for the expiring policy period, assuming no change in the level of insured exposures or policy coverage between those periods for the respective policies.

Our average overall commercial lines renewal pricing change includes the impact of flat pricing for certain coverages within package policies written for a three-year term that were in force but did not expire during the period being measured. Therefore, our reported change in average commercial lines renewal pricing reflects a blend of three-year policies that did not expire and other policies that did expire during the measurement period. For commercial lines policies that did expire and were then renewed during the firstsecond quarter of 2026, we estimate that our average percentage price increases were in the mid-single-digit range for our commercial casualty, commercial propertycasualty and commercial auto lines of business. For our commercial property line of business we estimate average price increases were in the low-single-digit range. The estimated average percentage price change for workers' compensation was a decrease in the mid-single-digit range.

Our commercial lines segment's increase in agency renewal written premiums for the first threesix months of 2026 also included changes in the level of insured exposures. Part of the insured exposure increase reflects our response to inflation effects that increase the cost of building materials to repair damaged commercial structures.

Renewal premiums for certain policies, primarily our commercial casualty and workers' compensation lines of business, include the results of policy audits that adjust initial premium amounts based on differences between estimated and actual sales or payroll related to a specific policy. Audits completed during the first threesix months of 2026 contributed $18$32 million to net written premiums, compared with $23$48 million for the same period of 2025.

New business written premiums for commercial lines increased $2$8 million forand $10 million during the second quarter and first threesix months of 2026, compared with the same periodperiods of 2025, as we continued to carefully underwrite each policy in a highly competitive market. Trend analysis for year-over-year comparisons of individual quarters is more difficult to assess for commercial lines new business written premiums, due to inherent variability. That variability is often driven by larger policies with annual premiums greater than $100,000.

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program. For our commercial lines insurance segment, an increase in ceded premiums decreased net written premiums by less than $1 million and approximately $1 million for the second quarter and first threesix months of 2026, compared with the same periodperiods of 2025.

•Combined ratio – The first-quartersecond-quarter 2026 commercial lines combined ratio increased by 6.711.2 percentage points, compared with the firstsecond quarter of 2025, including an increase of 6.04.9 points in losses from catastrophes. The first-quartersecond-quarter combined ratio increased by 1.72.6 points from current accident year loss and loss expenses before catastrophe losses, including a decrease of 1.4 points for the IBNR portion and an increase of 4.0 points for the case incurred portion. For the first six months of 2026, the combined ratio increased by 8.9 percentage points, compared with the same period a year ago, including an increase of 5.3 points in losses from catastrophes. The six-month 2026 combined ratio also included an increase of 2.2 points from current accident year loss and loss expenses before catastrophe losses, including an increase of 3.00.9 points for the IBNR portion and aan decreaseincrease of 1.3 points for the case incurred portion. Underwriting results also included favorable reserve development on prior accident years, as discussed below. The current accident year ratios were measured as of MarchJune 3130 of the respective years and included aan decreaseincrease of 1.40.7 percentage points for the first threesix months of 2026 in the ratio for large losses of $2 million or more per claim, discussed below.

Catastrophe losses and loss expenses accounted for 9.611.9 and 10.7 percentage points of the combined ratio for the second quarter and first threesix months of 2026, compared with 3.67.0 and 5.4 percentage points for the same periodperiods a year ago. Through 2025, the 10-year annual average for that catastrophe measure for the commercial lines segment was 5.9 percentage points, and the five-year annual average was 5.3 percentage points.

The net effect of reserve development on prior accident years during the second quarter and first threesix months of 2026 was favorable for commercial lines overall by $53$17 million and $70 million, compared with $43$42 million and $85 million for the same periodperiods in 2025. For the first threesix months of 2026, our commercial property and workers' compensation lines of business were the main contributors to the commercial lines net favorable reserve development. The net favorable reserve development recognized during the first threesix months of 2026 for our commercial lines insurance segment was mainly for accident years 2025 and 2024 and was primarily due to lower-than-anticipated loss emergence on known claims. Our commercial casualty line of business included $3$14 million of favorableunfavorable reserve development on prior accident years for the firstsecond three monthsquarter of 20262026, whiledriven commercialby autoone older accident year that included $2updated millionestimates of unfavorableultimate reservelosses development.for a small number of insureds. Reserve estimates are inherently uncertain as described in our 2025 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 50.

The commercial lines underwriting expense ratio increased for the second quarter and first threesix months of 2026, compared with the same periodperiods a year ago. The increase was largely due to an increase in profit-sharingcommission commissionsexpenses forand agencies.timing of recognition of certain expenses. The ratio for both periods also included ongoing expense management efforts.

We continue to monitor new losses and case reserve increases greater than $2 million for trends in factors such as initial reserve levels, loss cost inflation and claim settlement expenses. Our analysis continues to indicate no unexpected concentration of these large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. The first-quartersecond-quarter 2026 commercial lines total large losses incurred of $40$115 million, net of reinsurance, was lowerhigher than the quarterly average of $74 million during full-year 2025 and the $66$41 million of total large losses incurred for the firstsecond quarter of 2025. The decreaseincrease in commercial lines large losses for the first threesix months of 2026 was primarily due to our commercial casualty lineand commercial property lines of business. The first-quartersecond-quarter 2026 ratio for commercial lines total large losses was 2.45.8 percentage points higher than last year's second-quarter ratio. The second-quarter 2026 amount of total large losses incurred contributed to the increase in the six-month 2026 total large loss ratio, compared with 2025, offsetting a first-quarter 2026 ratio that was 2.4 points lower than lastthe year'sfirst first-quarterquarter ratio.of 2025. We believe results for the three-month period largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $2 million.

•Premiums – Personal lines earned premiums and net written premiums continued to grow during the second quarter and first threesix months of 2026, primarily due to agency renewal written premium growth that included higher average pricing. The table below analyzes the primary components of premiums.

Agency renewal written premiums increased 15%9% and 11% for the second quarter and first threesix months of 2026, reflecting rate increases in selected states, a higher level of insured exposures and other factors such as changes in policy deductibles or mix of business. Policy retention has also decreased in recent quarters to the upper-80% range. Part of the insured exposure increase reflects our response to inflation effects that increase the cost of building materials used to repair damaged homes.

We estimate that premium rates for our personal auto and homeowner lines of business increased at average percentages in the high-single-digit range during the first threesix months of 2026. For both our personal auto and homeowner lines of business, some individual policies experienced lower or higher rate changes based on each risk's specific characteristics and enhanced pricing precision enabled by predictive models.

Personal lines new business written premiums decreased $51$63 million or 40%45% for the second quarter of 2026, compared with the same period of 2025. For the first threesix months of 2026, compared with the same period of 2025.2025, personal lines new business written premiums decreased $114 million, or 43%. We believe we maintained underwriting and pricing discipline as we continued to carefully underwrite each policy in a highly competitive market.

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program. For our personal lines insurance segment, an increase in 2026 ceded premiums decreased net written premiums by approximately $4 million for the second quarter of 2026 compared with the same period of 2025. For the first six months of 2026, a decrease in 2026 ceded premiums increased net written premiums by approximately $62$59 million for the first three months of 2026, compared with the same period of 2025. Ceded premiums for the first threesix months of 2025 included a net amount of $64 million for reinsurance reinstatement premiums related to the January 2025 wildfires in southern California.

•Combined ratio – Our personal lines combined ratio for the firstsecond quarter of 2026 improved by 54.52.1 percentage points, compared with first-quartersecond-quarter 2025, including a decrease of 41.91.6 points in losses from catastrophes. The first-quartersecond-quarter 2026 combined ratio improvement also included aan decreaseincrease of 10.11.0 percentage points from current accident year loss and loss expenses before catastrophe losses, including aan decreaseincrease of 4.44.1 points for the IBNR portion and a decrease of 5.73.1 points for the case incurred portion. For the first six months of 2026, the combined ratio improved by 26.5 percentage points, compared with the same period a year ago, including a decrease of 20.5 points in losses from catastrophes. The three-monthsix-month 20252026 combined ratio improvement also included a decrease of 4.1 points from current accident year ratioloss and loss expenses before catastrophe losseslosses, includedincluding an unfavorableincrease 5.3of 0.4 points in the IBNR portion and a decrease of 4.5 points for the effectcase ofincurred reinstatement premiums.portion. The total current accident year ratios before catastrophe losses were measured as of MarchJune 3130 of the respective years and included a decrease of 0.81.0 percentage points for the first threesix months of 2026 in the ratio for large losses of $2 million or more per claim, discussed below.

Catastrophe losses and loss expenses accounted for 16.822.2 and 19.5 percentage points of the combined ratio for the second quarter and first threesix months of 2026, compared with 58.723.8 and 40.0 points for the same periodperiods a year ago. The 10-year annual average catastrophe loss ratio for the personal lines segment through 2025 was 14.0 percentage points, and the five-year annual average was 15.8 percentage points.

The net effect of reserve development on prior accident years during the second quarter and first quartersix months of 2026 was favorable by $7$11 million and $18 million, compared with $19 million and $38 million for the same periodperiods of 2025. Our homeowner line of business was the main contributor to the personal lines net favorable reserve development for the first threesix months of 2026. The net favorable reserve development was primarily due to lower-than-anticipated loss emergence on known claims. Reserve estimates are inherently uncertain as described in our 2025 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 50.

The personal lines underwriting expense ratio decreased for the second quarter and first threesix months of 2026, compared with the same periodperiods a year ago. The decreasesecond-quarter wasand six-month decreases were partly due to growth in premiums outpacing growth in various expenses. The three-month 2025 ratio also included an unfavorable 2.5 points for the effect of reinstatement premiums. The ratio for both periods also included ongoing expense management efforts.

We continue to monitor new losses and case reserve increases greater than $2 million for trends in factors such as initial reserve levels, loss cost inflation and claim settlement expenses. Our analysis continues to indicate no unexpected concentration of these large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. In the firstsecond quarter of 2026, the personal lines total large loss ratio, net of reinsurance, was 0.82.9 percentage points lower than last year's firstsecond quarter. The increasesecond-quarter in2026 personalamount linesof total large losses incurred forfavorably contributed to the decrease in the six-month 2026 total large loss ratio, compared with 2025, in addition to a first-quarter 2026 ratio that was 0.8 points lower than the first three monthsquarter of 2026 occurred primarily for umbrella coverage in our other personal line of business.2025. We believe results for the three-monththree- periodand six-month periods largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $2 million.

•Premiums – Excess and surplus lines earned premiums and net written premiums continued to grow during the second quarter and first threesix months of 2026, compared with the same periodperiods a year ago, including increases in both agency renewal and new business written premiums. Renewal written premiums rose 7%8% for the threesecond quarter and six months ended MarchJune 31,30, 2026, compared with the same periodperiods of 2025, largely due toincluding higher renewal pricing. For theboth first2026 three months of 2026,periods, excess and surplus lines policy renewals experienced estimated average price increases at percentages in the mid-single-digitlow-single-digit range. We measure average changes in excess and surplus lines renewal pricing as the percentage rate of change in renewal premium for the new policy period compared with the premium for the expiring policy period, assuming no change in the level of insured exposures or policy coverage between those periods for respective policies.

New business written premiums produced by agencies increased by 9%6% for the second quarter and 8% for the first threesix months of 2026 compared with the same periodperiods of 2025, as we continued to carefully underwrite each policy in a highly competitive market. Some of what we report as new business came from accounts that were not new to our agents. We believe our agents' seasoned accounts tend to be priced more accurately than business that may be less familiar to them.

•Combined ratio – The excess and surplus lines combined ratio increasedimproved by 1.00.6 percentage points for the second quarter and increased 0.1 points for the first threesix months of 2026, compared with the same periodperiods of 2025. TheChanges increasein wasthe primarilycombined ratio were largely due to a lower levelratios offor favorable reserve development on priorcurrent accident year loss and loss expensesexpenses, including catastrophe losses, and were partially offset by higher ratios for theunderwriting three months ended March 31, 2026, compared with the first three months of 2025.expenses.

The 64.6% first-quartersecond-quarter 2026 ratio for current accident year loss and loss expenses before catastrophe losses was 1.00.3 percentage points lower, compared with the 65.6%64.9% accident year 2025 ratio measured as of MarchJune 31,30, 2025, including aan decreaseincrease of 0.42.2 points for the IBNR portion and a decrease of 0.62.5 points for the case incurred portion. The six-month 2026 ratio for current accident year loss and loss expenses before catastrophe losses was 0.6 percentage points lower, compared with the 65.2% accident year 2025 ratio measured as of June 30, 2025, including an increase of 1.0 points for the IBNR portion and a decrease of 1.6 points for the case incurred portion.

Excess and surplus lines net reserve development on prior accident years, as a ratio to earned premiums, was favorable by 4.5%3.0% for the second quarter and 3.8% for the first threesix months of 2026, compared with 5.5%3.0% and 4.1% for the same periodperiods of 2025. Reserve estimates are inherently uncertain as described in our 2025 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 50.

The excess and surplus lines underwriting expense ratio increased for the second quarter and first threesix months of 2026 compared with the same periodperiods a year ago, primarily due to antiming increaseof inrecognition commissionof various expenses. The ratio also included ongoing expense management efforts and premium growth.

We continue to monitor new losses and case reserve increases greater than $2 million for trends in factors such as initial reserve levels, loss cost inflation and claim settlement expenses. Our analysis continues to indicate no unexpected concentration of these large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. In the second quarter and first quartersix months of both 2026 and 2025, our excess and surplus lines insurance segment had no large losses of $2 million or more per claim. We believe results for the three- and six-month periods largely reflected normal fluctuations in loss patterns.

•Revenues – Revenues increased for the threesix months ended MarchJune 31,30, 2026, compared with the same period a year ago, driven by higher earned premiums from term life insurance, our largest life insurance product line.

Net in-force life insurance policy face amounts increased 1%2% to $88.080$88.734 billion at MarchJune 31,30, 2026, from $87.311 billion at year-end 2025.