Cincinnati Financial Corporation

will begin momentarily. Until such time, you will hear music. Thank you and please continue to stand by. Music Thank you. Thank you. Thank you. Thank you. Thank you all for standing by and welcome to the CINF first quarter 2022 earnings conference call. Please note that all lines will be in listen only mode until the question and answer session of today's conference. To ask a question over the phone by that time, you may press the star key followed by the number one. Please also note that today's call is being recorded. I'll now turn the call over to your host, Dennis McDaniel, investor relations officer. Sir, you may now begin.

Hello, this is Dennis McDaniel at Cincinnati Financial. Thank you for joining us for our first quarter 2022 earnings conference call. Late yesterday, we issued a news release on our results along with our supplemental financial package, including our quarter-end investment portfolio. To find copies of any of these documents, please visit our investor website, simfin.com slash investors. The shortest route to the information is the quarterly results link in the navigation menu on the far left. On this call, you'll first hear from Chairman, President, and Chief Executive Officer Steve Johnston, and then from Chief Financial Officer Mike Sewell. After their prepared remarks, investors participating on the call may ask questions. At that time, some responses may be made by others in the room with us, including Chief Investment Officer Marty Hollenbeck and Cincinnati Insurance's President Steve Spray, Chief Claims Officer Mark Shambo, and Senior Vice President of Corporate Finance Teresa Hopper. First, please note that some of the matters to be discussed today are forward-looking. These forward-looking statements involve certain risks and uncertainties. With respect to these risks and uncertainties, we direct your attention to our news release and to our various filings with the SEC. Also, a reconciliation of non-GAAP measures was provided with the news release. Statutory accounting data is prepared in accordance with statutory accounting rules and therefore is not reconciled to GAAP. Now, I'll turn over the call to Steve.

Thank you, Dennis, and good morning, everyone. Thank you for joining us today to hear more about our first quarter results. It was another quarter of good operating performance. Our agency-focused strategy led to profitable growth and reflects well on the skill and dedication of our associates and excellent relationships with terrific independent agents. We reported a net loss of $273 million for the quarter, due to the recognition of a reduction in the fair value of securities held in our equity portfolio. Non-GAAP operating income for the first quarter of 2022 was up $31 million or 14% versus a year ago. Our 89.9% first quarter property casualty combined ratio was 1.3 percentage points better than last year's first quarter. The current accident year loss and loss expense ratio before catastrophe loss effects rose slightly compared with accident year 2021 measured at three months, reflecting an increase in large losses for our property lines of business. We again managed our business to healthy levels of policy retention with meaningful average renewal price increases for each of our property casualty insurance segments. Policy retention rates for both commercial and personal lines improved from a year ago to the upper 80% range. Consolidated property casualty net written premiums rose 12% for the first quarter of 2022. Our pricing segmentation efforts continue to support what we believe is profitable growth as our underwriters work to retain and write more profitable accounts while taking appropriate action on opportunities that we determined have inadequate pricing. We also believe renewal pricing during the first quarter was again ahead of our estimate for prospective loss cost trends for each property casualty segment. Our commercial lines insurance segment continued to experience estimated average renewal price increases in the mid-single-digit percentage range, similar to the fourth quarter In the first quarter, personal lines average renewal price increases slowed by a small amount compared to the fourth quarter, remaining in the low single-digit range. Our excess and surplus lines insurance segment continued in the high single-digit range. Our commercial line segment grew first quarter 2022 net written premiums by 8% with a combined ratio of 92.3%. Our personal line segment Net written premium grew 11%, reflecting our continued planned expansion of high net worth business produced by our agencies. The segment's first quarter combined ratio of 83.9% improved 17.2 percentage points from a year ago, driven by lower catastrophe losses. Our excess and surplus line segment had an 85.9% combined ratio and continued strong growth with first quarter 2022 net written premiums rising by 25%. Cincinnati RE and Cincinnati Global each had a nice quarter with healthy growth. Cincinnati RE grew net written premiums by 30% for the first quarter 2022 with a combined ratio in the mid 90% range. Cincinnati Global grew net written premiums by 24% with a combined ratio also in the mid 90% range. Our life insurance subsidiary generated first quarter 2022 net income of $10 million, matching last year's first quarter and grew term life insurance earned premiums by 6%. I'll conclude with the value creation ratio, our primary measure of long-term financial performance. VCR was negative 6.9% for the quarter, while net income before investment gains or losses contributed 1.9 percentage points Lower investment valuations during the quarter resulted in the investment gains or losses component contributing negative 8.6 points. Now, our Chief Financial Officer, Mike Sewell, will highlight several other important aspects of our financial performance.