Cites Independent Board, Shareholder Return Track Record
CINCINNATI, Apr 24, 2002 /PRNewswire/ -- Cincinnati Financial Corporation (Nasdaq: CINF) today responded to a press release issued earlier by the California Public Employees' Retirement System (CalPERS).John J. Schiff, Jr., chairman and chief executive officer of Cincinnati Financial, commented, "We're disappointed that CalPERS apparently has rejected the decision of our shareholders to retain our current board composition.
"At our recent annual meeting, more than 75 percent of our shareholders agreed that the Company's unique, agent-centered business model works best with directors selected for their qualifications, not to conform to an arbitrary quota or definition. Currently our 15-member board includes independent business executives alongside independent insurance agents who bring us a special ability to serve policyholders and agents in the communities where we do business," commented Schiff.
He noted that from the Company's perspective, 10 of its directors are independent, while three of the last four appointments to the board met even CalPERS' strict definition of independence-which includes requirements not adopted by Nasdaq or the Securities and Exchange Commission.
Schiff added that Cincinnati Financial clearly has given shareholders a solid return under its current board structure. "We have a record of more than 40 years of increasing dividends. We have been recognized by organizations such as PricewaterhouseCoopers and Morgan Stanley for the transparency and clarity of our disclosures. We have a reputation for setting adequate loss reserves and have consistently received high financial strength ratings from A.M. Best Company, Moody's Investors Service, Standard & Poor's and, most recently, Fitch Ratings.
"We have generated a five-year (1997-2001) total return to shareholders of 193 percent versus 137 percent for the S&P Property Casualty Index and 166 percent for the S&P 500 Index. Since the beginning of 2002, our stock price has appreciated 19.8 percent compared with 12.4 percent for the S&P Property Casualty Index and a decline of 4.1 percent for the S&P 500. Our Company successfully fulfills its mission and we're proud of it," Schiff stressed.
Schiff concluded, "We are in a relationship business, and we responded to CalPERS' initial inquiries with personal conversations and face-to-face meetings. We would prefer to continue the dialog in that manner, either with CalPERS representatives or others who wish to learn more about our formula for success.
"We encourage those investors to contact us directly to learn about our philosophy, the way we do business and our track record of success," Schiff added. "In fact, we will be announcing our first-quarter results tomorrow (April 25) and will hold a conference call for investors and shareholders at 2:30 p.m. Eastern. All interested parties are invited to listen to our discussion of our markets, our business and our financial performance."
For additional information or for access to the Webcast of the Company's first-quarter earnings conference call on April 25 at 2:30 p.m. EDT, please visit our Web site at www.cinfin.com .
Cincinnati Financial Corporation offers property and casualty insurance, our main business, through The Cincinnati Insurance Company, The Cincinnati Indemnity Company and The Cincinnati Casualty Company. The Cincinnati Life Insurance Company markets life, disability income and long term care insurance and annuities. CFC Investment Company supports the insurance subsidiaries and their independent agent representatives through commercial leasing and financing activities. CinFin Capital Management provides asset management services to institutions, corporations and individuals.
SOURCE Cincinnati Financial Corporation
CONTACT: Kenneth W. Stecher, Chief Financial Officer of Cincinnati
Financial Corporation, +1-513-603-5236
URL: http://www.cinfin.com