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CINCINNATI FINANCIAL CORP : Change in Directors or Principal Officers (form 8-K)

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06/25/2019 | 04:09pm EDT

Item 5.02(b) Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers On June 25, 2019, Cincinnati Financial Corporation director W. Rodney McMullen informed the company that he will not stand for re-election to the board of directors at the company's Annual Meeting of Shareholders in 2020. Mr. McMullen's decision to not stand for re-election is not the result of any disagreement with the company.

Safe Harbor
This is our "Safe Harbor" statement under the Private Securities Litigation
Reform Act of 1995. Our business is subject to certain risks and uncertainties
that may cause actual results to differ materially from those suggested by the
forward-looking statements in this report. Some of those risks and uncertainties
are discussed in our 2018 Annual Report on Form 10-K, Item 1A, Risk Factors,
Page 33.
Factors that could cause or contribute to such differences include, but are not
limited to:
•   Unusually high levels of catastrophe losses due to risk concentrations,

changes in weather patterns, environmental events, terrorism incidents or

other causes

• Increased frequency and/or severity of claims or development of claims that

are unforeseen at the time of policy issuance

• Inadequate estimates, assumptions or reliance on third-party data used for

critical accounting estimates

• Declines in overall stock market values negatively affecting the company's

equity portfolio and book value

• Prolonged low interest rate environment or other factors that limit the

    company's ability to generate growth in investment income or interest rate
    fluctuations that result in declining values of fixed-maturity investments,
    including declines in accounts in which we hold bank-owned life insurance
    contract assets

• Domestic and global events resulting in capital market or credit market

uncertainty, followed by prolonged periods of economic instability or

recession, that lead to:

•      Significant or prolonged decline in the fair value of a particular
       security or group of securities and impairment of the asset(s)

•      Significant decline in investment income due to reduced or eliminated
       dividend payouts from a particular security or group of securities

•      Significant rise in losses from surety and director and officer policies
       written for financial institutions or other insured entities

•   Our inability to integrate MSP and its subsidiaries into our on-going

operations, or disruptions to our on-going operations due to such integration

• Recession or other economic conditions resulting in lower demand for

insurance products or increased payment delinquencies

• Difficulties with technology or data security breaches, including

    cyberattacks, that could negatively affect our ability to conduct
    business; disrupt our relationships with agents, policyholders and others;
    cause reputational damage, mitigation expenses and data loss and expose us to
    liability under federal and state laws

• Disruption of the insurance market caused by technology innovations such as

driverless cars that could decrease consumer demand for insurance products

• Delays, inadequate data developed internally or from third parties, or

    performance inadequacies from ongoing development and implementation of
    underwriting and pricing methods, including telematics and other usage-based
    insurance methods, or technology projects and enhancements expected to
    increase our pricing accuracy, underwriting profit and competitiveness

• Increased competition that could result in a significant reduction in the

company's premium volume

• Changing consumer insurance-buying habits and consolidation of independent

insurance agencies that could alter our competitive advantages

• Inability to obtain adequate ceded reinsurance on acceptable terms, amount of

reinsurance coverage purchased, financial strength of reinsurers and the

potential for nonpayment or delay in payment by reinsurers

• Inability to defer policy acquisition costs for any business segment if

pricing and loss trends would lead management to conclude that segment could

not achieve sustainable profitability

• Inability of our subsidiaries to pay dividends consistent with current or

past levels

• Events or conditions that could weaken or harm the company's relationships

with its independent agencies and hamper opportunities to add new agencies,

resulting in limitations on the company's opportunities for growth, such as:

• Downgrades of the company's financial strength ratings

• Concerns that doing business with the company is too difficult

•      Perceptions that the company's level of service, particularly claims
       service, is no longer a distinguishing characteristic in the marketplace


•      Inability or unwillingness to nimbly develop and introduce coverage
       product updates and innovations that our competitors offer and consumers
       expect to find in the marketplace

•   Actions of insurance departments, state attorneys general or other regulatory

agencies, including a change to a federal system of regulation from a

state-based system, that:

•      Impose new obligations on us that increase our expenses or change the
       assumptions underlying our critical accounting estimates

•      Place the insurance industry under greater regulatory scrutiny or result
       in new statutes, rules and regulations

•      Restrict our ability to exit or reduce writings of unprofitable coverages
       or lines of business

•      Add assessments for guaranty funds, other insurance­related assessments or
       mandatory reinsurance arrangements; or that impair our ability to recover
       such assessments through future surcharges or other rate changes

• Increase our provision for federal income taxes due to changes in tax law

• Increase our other expenses

• Limit our ability to set fair, adequate and reasonable rates

• Place us at a disadvantage in the marketplace

•      Restrict our ability to execute our business model, including the way we
       compensate agents

• Adverse outcomes from litigation or administrative proceedings

• Events or actions, including unauthorized intentional circumvention of

    controls, that reduce the company's future ability to maintain effective
    internal control over financial reporting under the Sarbanes-Oxley Act
    of 2002

• Unforeseen departure of certain executive officers or other key employees due

    to retirement, health or other causes that could interrupt progress toward
    important strategic goals or diminish the effectiveness of certain
    longstanding relationships with insurance agents and others

• Events, such as an epidemic, natural catastrophe or terrorism, that could

hamper our ability to assemble our workforce at our headquarters location

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

© Edgar Online, source Glimpses

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