A.M. Best Affirms Ratings of The Cincinnati Life Insurance Company

A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a+” of The Cincinnati Life Insurance Company (Cincinnati Life) (Fairfield, OH), a wholly owned subsidiary of The Cincinnati Insurance Company (CIC), and an indirect subsidiary of Cincinnati Financial Corporation (CINF) [NASDAQ:CINF], CIC’s ultimate parent. The outlook for both ratings is stable.

The ratings of Cincinnati Life reflect its adequate but declining risk-adjusted capitalization, good quality investment portfolio, positive premium growth trends in its core ordinary life insurance line of business and strategic role within CINF.

Partially offsetting these factors are challenges in managing the new business expense strain related to ordinary life sales and the spread compression on interest-sensitive reserves in the low interest rate environment. Recent declines in statutory surplus reflect operating losses primarily tied to retaining Regulation XXX reserves, which have added to the expense strain associated with new business production. Cincinnati Life contributes modestly to the revenue and earnings of the enterprise. A.M. Best believes that with the anticipated implementation of principles-based reserving in 2017, statutory operating results will improve due to the elimination of Regulation XXX reserving on new business.

This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.

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