A.M. Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "aa-" of The Cincinnati Insurance Company, the lead property/casualty company, and its subsidiaries, The Cincinnati Indemnity Company, The Cincinnati Casualty Company and The Cincinnati Specialty Underwriters Insurance Company (Wilmington, DE), which are collectively referred to as The Cincinnati Insurance Companies (CIC). Additionally, A.M. Best has affirmed the Long-Term ICR of "a-" and the Long-Term Issue Credit Ratings (Long-Term IR) of the companies' publicly traded parent, Cincinnati Financial Corporation (CINF) [NASDAQ:CINF]. The outlook of these Credit Ratings (ratings) is stable. All companies are domiciled in Fairfield, OH, except where specified.

The affirmation of CIC's ratings reflect the group's superior risk-adjusted capitalization and historically conservative loss reserving standards that have resulted in recognition of the substantial favorable development of prior accident-year loss reserves. The ratings also reflect the group's historically strong operating earnings, which have improved in recent years. In addition, the ratings recognize the strong distribution network within its targeted regional markets that is centered on cultivating strong, long-term relationships with local independent insurance agencies. Lastly, CIC benefits from the financial flexibility afforded by CINF, which maintains modest financial leverage and is a source of additional liquidity through its access to capital markets and lines of credit.

The positive rating factors are partially offset by the variability in CIC's earnings in the earliest year of the recent five-year period relative to its similarly rated commercial lines peers, primarily due to significant natural catastrophe losses on underwriting results. The group also continues to address the below-average performance on its personal and commercial automobile lines of business. The group has recognized the need for re-underwriting, which includes rate increases and improving pricing precision, aided by utilization of predictive analytics.

The group's market profile continues to improve but still remains somewhat geographically concentrated. As a result, the group remains more exposed to potential economic, legislative and judicial changes than its more geographically diversified peers. This geographic concentration also leaves the group susceptible to catastrophe and non-catastrophe weather-related losses, as evidenced in recent accident years. Additionally, CIC maintains high common stock leverage relative to its peers. While the stock holdings are composed of dividend-paying stocks that enhance investment income, they expose risk-adjusted capitalization to equity market fluctuations, most recently in 2015.

The outlook reflects CIC's ability to withstand variability in the group's underwriting and operating performance due to its superior level of risk-adjusted capitalization, as well as A.M. Best's expectation that management's initiatives will result in sustained improvement in underwriting and operating results.

The following Long-Term IRs have been affirmed with a stable outlook:

Cincinnati Financial Corporation—-- "a-" on $28.0 million 6.90% senior unsecured debentures, due 2028-- "a-" on $371 million 6.125% senior unsecured notes, due 2034-- "a-" on $391 million 6.92% senior unsecured debentures, due 2028

This press release relates to Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best's Credit Ratings .

A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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