|        |
|--------|
|        |  |
| þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |

|        |
|--------|
|        |  |
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |

|                          |
|--------------------------|
|                          |  |
| Ohio                     | 31-0746871 |
| (State of incorporation) | (I.R.S. Employer Identification No.) |

|                                                                                                   |
|---------------------------------------------------------------------------------------------------|
|                                                                                                   |
| 6200 S. Gilmore RoadFairfield, Ohio 45014-5141(Address of principal executive offices) (Zip Code) |
| (513) 870-2000(Registrant’s telephone number, including area code)                          |

----

----

|          |
|----------|
|          |  |  |
| Part I   |   | 4 |
| Item 1.  | Business | 4 |
|     | Cincinnati Financial Corporation – Introduction | 4 |
|     | Our Business and Our Strategy | 5 |
|     | Our Segments | 16 |
|     | Other | 29 |
|     | Regulation | 30 |
| Item 1A. | Risk Factors | 33 |
| Item 1B. | Unresolved Staff Comments | 40 |
| Item 2.  | Properties | 40 |
| Item 3.  | Legal Proceedings | 40 |
| Item 4.  | Mine Safety Disclosures | 40 |
| Part II  |   | 41 |
| Item 5.  | Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 41 |
| Item 6   | Selected Financial Data | 44 |
| Item 7.  | Management's Discussion and Analysis of Financial Condition and Results of Operations | 45 |
|     | Introduction | 45 |
|     | Executive Summary | 45 |
|     | Critical Accounting Estimates | 51 |
|     | Recent Accounting Pronouncements | 58 |
|     | Financial Results | 59 |
|     | Liquidity and Capital Resources | 95 |
|     | Safe Harbor Statement | 111 |
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 113 |
| Item 8.  | Financial Statements and Supplementary Data | 119 |
|     | Responsibility for Financial Statements | 119 |
|     | Management’s Annual Report on Internal Control Over Financial Reporting | 120 |
|     | Report of Independent Registered Public Accounting Firm | 121 |
|     | Consolidated Balance Sheets | 123 |
|     | Consolidated Statements of Income | 124 |
|     | Consolidated Statements of Comprehensive Income | 125 |
|     | Consolidated Statements of Shareholders’ Equity | 126 |
|     | Consolidated Statements of Cash Flows | 127 |
|     | Notes to Consolidated Financial Statements | 128 |
| Item 9.  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 160 |
| Item 9A. | Controls and Procedures | 160 |
| Item 9B. | Other Information | 160 |
| Part III |   | 161 |
| Item 10. | Directors, Executive Officers and Corporate Governance | 161 |
| Item 11. | Executive Compensation | 163 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 163 |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 163 |
| Item 14. | Principal Accounting Fees and Services | 163 |
| Part IV  |   | 164 |
| Item 15. | Exhibits, Financial Statement Schedules | 164 |

----

----

|         |                                                                 |
|---------|-----------------------------------------------------------------|
| • | providing insurance market stability through financial strength |

|         |                                                         |
|---------|---------------------------------------------------------|
| • | producing competitive, up-to-date products and services |

|         |                                                     |
|---------|-----------------------------------------------------|
| • | developing associates committed to superior service |

|         |                                                                                                   |
|---------|---------------------------------------------------------------------------------------------------|
| • | Commitment to our professional independent insurance agencies and to their continued success |

|         |                                                                                                                                                |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Financial strength to fulfill our promises and be a consistent market for our agents’ business, supporting stability and confidence |

|         |                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Operating structure that supports local decision making, showcasing our claims excellence and allowing us to balance growth with underwriting discipline |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Underwriting profit (loss) – Includes revenues from earned premiums from insurance policies sold, reduced by losses and loss expenses from insurance coverages provided by those policies. Those revenues are further reduced by underwriting expenses from marketing policies or related administration of our insurance operation. The net result represents an underwriting profit when revenues exceed losses and expenses. |

|         |                                                                                                                                                                                                                                                                                                                                                                  |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Investment income – Is generated primarily from investing the premiums collected from insurance policies, until funds from cash or invested assets are needed to pay losses for insurance claims or other expenses. Interest income from bond investments or dividend income from stock investments are the main categories of our investment income. |

|         |                                                                                                                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Realized investment gains (losses) – Occur from appreciation or depreciation of invested assets over time. Gains or losses are generally recognized when invested assets are sold or become impaired. |

|         |                                                                                        |
|---------|----------------------------------------------------------------------------------------|
| • | choose to sell a limited product line or only one type of insurance (monoline carrier) |

|         |                                                                          |
|---------|--------------------------------------------------------------------------|
| • | target a certain segment of the market (for example, personal insurance) |

|         |                                                           |
|---------|-----------------------------------------------------------|
| • | focus on one or more states or regions (regional carrier) |

----

|         |                                                     |
|---------|-----------------------------------------------------|
| • | independent agents, who represent multiple carriers |

|         |                                                       |
|---------|-------------------------------------------------------|
| • | captive agents, who represent one carrier exclusively |

|         |                               |
|---------|-------------------------------|
| • | direct marketing to consumers |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our $9.460 billion fixed-maturity portfolio is diversified and exceeds total insurance reserves. The portfolio had an average rating of A2/A, and its fair value exceeded total insurance reserve liabilities by approximately 35 percent at December 31, 2014. No corporate bond exposure accounted for more than 0.7 percent of our fixed-maturity portfolio, and no municipal exposure accounted for more than 0.3 percent. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The strength of our fixed-maturity portfolio provides an opportunity to invest for potential capital appreciation by purchasing equity securities. Our $4.858 billion equity portfolio minimizes concentrations in single stocks or industries. At December 31, 2014, no single security accounted for more than 3.3 percent of our portfolio of publicly traded common stocks, and no single sector accounted for more than 17.3 percent. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We ended 2014 with a 0.9-to-1 ratio of property casualty premiums to surplus, a key measure of property casualty insurance company capacity and security. A lower ratio indicates more security for policyholders and greater capacity for growth by an insurer. We believe our ratio provides ample flexibility to diversify risk by expanding our operations into new geographies and product areas. The estimated industry average ratio was 0.7-to-1 at year-end 2014. |

|         |                                                                                                                                                                                                                                                                                                                                                                                 |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We ended 2014 with an 8.1 percent ratio of life statutory adjusted risk-based surplus to liabilities, a key measure of life insurance company capital strength. The estimated industry average ratio was 12.1 percent at year-end 2014. A higher ratio indicates an insurer’s stronger security for policyholders and capacity to support business growth. |

----

|                                                                                           |
|-------------------------------------------------------------------------------------------|
|                                                                                           |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                           Statutory Information     |   | At December 31, |
|                                                                                      |   | 2014 |   | 2013 |
| Standard market property casualty insurance subsidiary                                    |   |   |  |   |   |  |
|    Statutory capital and surplus                                           |   | $ | 4,472 |  |   | $ | 4,326 |  |
|    Risk-based capital (RBC)                                                |   | 4,490 |  |   | 4,343 |  |
|    Authorized control level risk-based capital                             |   | 563 |  |   | 534 |  |
|                                                                                      |   |   |   |   |
|    Risk-based capital to authorized control level risk-based capital ratio |   | 8.0 |  |   | 8.1 |  |
|    Written premium to surplus ratio                                        |   | 0.9 |  |   | 0.9 |  |
| Life insurance subsidiary                                                                 |   |   |  |   |   |  |
|    Statutory capital and surplus                                           |   | $ | 223 |  |   | $ | 247 |  |
|    Risk-based capital (RBC)                                                |   | 241 |  |   | 264 |  |
|    Authorized control level risk-based capital                             |   | 33 |  |   | 31 |  |
|    Total liabilities excluding separate account business                   |   | 2,978 |  |   | 2,807 |  |
|                                                                                      |   |   |   |   |
|    Risk-based capital to authorized control level risk-based capital ratio |   | 7.3 |  |   | 8.1 |  |
|    Life statutory risk-based adjusted surplus to liabilities ratio         |   | 8.1 |  |   | 9.5 |  |
| Excess and surplus lines insurance subsidiary                                             |   |   |  |   |   |  |
|    Statutory capital and surplus                                           |   | $ | 266 |  |   | $ | 228 |  |
|    Risk-based capital (RBC)                                                |   | 266 |  |   | 228 |  |
|    Authorized control level risk-based capital                             |   | 32 |  |   | 25 |  |
|                                                                                      |   |   |   |   |
|    Risk-based capital to authorized control level risk-based capital ratio |   | 8.4 |  |   | 9.2 |  |
|    Written premium to surplus ratio                                        |   | 0.6 |  |   | 0.6 |  |
|                                                                                      |   |   |   |   |

----

|                                                                             |
|-----------------------------------------------------------------------------|
|                                                                             |  |  |  |  |  |  |  |  |  |  |
|                                                                        | Insurer Financial Strength Ratings |   |
| Ratingagency                                                                | Standard market propertycasualty insurance subsidiary | Life insurancesubsidiary | Excess and surplus linesinsurance subsidiary | Date of most recentaffirmation or action |
|                                                                        |   |   | Rating Tier |   |   | Rating Tier |   |   | RatingTier |   |
| A. M. Best Co.  ambest.com                                        | A+ | Superior | 2 of 16 | A | Excellent | 3 of 16 | A | Excellent | 3 of 16 | Stable outlook (12/12/14) |
| Fitch Ratings  fitchratings.com                                   | A+ | Strong | 5 of 21 | A+ | Strong | 5 of 21 | - | - | - | Stable outlook (11/18/14) |
| Moody's Investors   Service  moodys.com                 | A1 | Good | 5 of 21 | - | - | - | - | - | - | Stable outlook (4/30/13) |
| Standard & Poor's   Ratings Services  spratings.com | A | Strong | 6 of 21 | A | Strong | 6 of 21 | - | - | - | Positive outlook (6/18/14) |

----

|                              |
|------------------------------|
|                              |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)        | Earnedpremiums | % of totalearned | Agencylocations | Averagepremium perlocation |
| Year ended December 31, 2014 |   |  |   |  |   |  |   |  |
| Ohio                         | $ | 715 |  | 17.7 | % | 246 |  | $ | 2.9 |  |
| Illinois                     | 288 |  | 7.1 |  | 136 |  | 2.1 |  |
| Indiana                      | 261 |  | 6.4 |  | 111 |  | 2.4 |  |
| Pennsylvania                 | 222 |  | 5.5 |  | 99 |  | 2.2 |  |
| Georgia                      | 216 |  | 5.3 |  | 95 |  | 2.3 |  |
| Michigan                     | 204 |  | 5.0 |  | 138 |  | 1.5 |  |
| North Carolina               | 201 |  | 5.0 |  | 95 |  | 2.1 |  |
| Tennessee                    | 155 |  | 3.8 |  | 60 |  | 2.6 |  |
| Virginia                     | 146 |  | 3.6 |  | 65 |  | 2.2 |  |
| Alabama                      | 139 |  | 3.4 |  | 46 |  | 3.0 |  |
|                         |   |   |   |   |

|         |                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------|
| • | allow our field and headquarters associates to collaborate with each other and with agencies more efficiently |

|         |                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | provide our agencies the ability to access our systems and data from their agency management systems to process business transactions from their offices |

|         |                                                                                                                                                                            |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | allow policyholders to directly access, from their systems and mobile devices, pertinent policy information online in order to further improve efficiency for our agencies |

|         |                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------|
| • | automate our internal processes so our associates can spend more time serving agents and policyholders |

|         |                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------|
| • | reduce duplicated effort or friction points in technology processes, introducing more efficiency that reduces company and agency costs |

----

----

|                                                              |
|--------------------------------------------------------------|
|                                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                   |   | 2014 |   | 2013 |   | 2012 |   | Percent of total 2014 |
| Segment:                                                     |   |   |  |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                   |   | $ | 2,922 |  |   | $ | 2,760 |  |   | $ | 2,459 |  |   | 66.5 | % |
| Personal lines insurance                                     |   | 1,068 |  |   | 1,005 |  |   | 918 |  |   | 24.3 |  |
| Excess and surplus lines insurance                           |   | 153 |  |   | 128 |  |   | 105 |  |   | 3.5 |  |
| Life insurance                                               |   | 250 |  |   | 241 |  |   | 249 |  |   | 5.7 |  |
| Total                                                        |   | $ | 4,393 |  |   | $ | 4,134 |  |   | $ | 3,731 |  |   | 100.0 | % |
|                                                         |   |   |  |   |   |  |   |   |  |   |   |  |
| Business line:                                               |   |   |  |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                   |   |   |   |   |   |   |   |   |
| Commercial casualty                                          |   | $ | 969 |  |   | $ | 897 |  |   | $ | 793 |  |   | 22.0 | % |
| Commercial property                                          |   | 776 |  |   | 673 |  |   | 573 |  |   | 17.7 |  |
| Commercial auto                                              |   | 548 |  |   | 507 |  |   | 444 |  |   | 12.5 |  |
| Workers' compensation                                        |   | 365 |  |   | 374 |  |   | 341 |  |   | 8.3 |  |
| Other commercial                                             |   | 264 |  |   | 309 |  |   | 308 |  |   | 6.0 |  |
| Total commercial lines insurance                             |   | 2,922 |  |   | 2,760 |  |   | 2,459 |  |   | 66.5 |  |
|                                                         |   |   |   |   |   |   |   |   |
| Personal lines insurance                                     |   |   |  |   |   |  |   |   |  |   |   |  |
| Personal auto                                                |   | 489 |  |   | 460 |  |   | 425 |  |   | 11.1 |  |
| Homeowner                                                    |   | 456 |  |   | 428 |  |   | 378 |  |   | 10.4 |  |
| Other personal                                               |   | 123 |  |   | 117 |  |   | 115 |  |   | 2.8 |  |
| Total personal lines insurance                               |   | 1,068 |  |   | 1,005 |  |   | 918 |  |   | 24.3 |  |
|                                                         |   |   |   |   |   |   |   |   |
| Excess and surplus lines insurance                           |   | 153 |  |   | 128 |  |   | 105 |  |   | 3.5 |  |
|                                                         |   |   |   |   |   |   |   |   |
| Life insurance                                               |   |   |   |   |   |   |   |   |
| Term life insurance                                          |   | 138 |  |   | 129 |  |   | 124 |  |   | 3.2 |  |
| Universal life insurance                                     |   | 41 |  |   | 41 |  |   | 45 |  |   | 0.9 |  |
| Other life insurance, annuity and disability income products |   | 71 |  |   | 71 |  |   | 80 |  |   | 1.6 |  |
| Subtotal                                                     |   | 250 |  |   | 241 |  |   | 249 |  |   | 5.7 |  |
| Total                                                        |   | $ | 4,393 |  |   | $ | 4,134 |  |   | $ | 3,731 |  |   | 100.0 | % |
|                                                         |   |   |   |   |   |   |   |   |

----

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Enhance underwriting expertise and knowledge – We continue to increase our use of information and develop our skills for better underwriting performance, focusing on areas that will benefit most from additional effort. We also continue to expand our pricing and segmentation capabilities by using predictive analytics, expecting cumulative benefits of these efforts to improve loss ratios over time. Expanded capabilities include streamlining and optimizing data to increase accuracy, timeliness and ease of use. Development and use of additional business data to support more accurate underwriting, more granular pricing and other business decision-making also continues through a multi-year, phased project. Project deliverables include enhancing our data management program in phases, including further developing the data warehouse used in our insurance operations, helping us achieve our strategic objectives. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Improve internal processes – Improved processes support our strategic goals, helping to deploy improved products and pricing more quickly. They also help reduce internal costs and allow us to focus more resources on agency services. Improved workflow tools should increase our efficiency, providing additional operational reporting metrics and making it easier for agencies to do business with us. |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Expansion of our marketing and service capabilities – We continue to enhance our generalist approach to allow our appointed agencies to better compete in the marketplace by providing services an agent’s clients want and need. During 2015, we will continue to develop and coordinate targeted marketing, including cross-selling opportunities. That includes working to further develop and market programs through our Target Markets department, which offered 17 programs at the end of 2014. We continue to migrate these programs to our enhanced policy administration platform and will make improvements to our programs during this migration. An early 2015 initiative aims to provide a platform for our agents to target group business such as professional and trade associations and franchises. We are also working with risk purchasing groups to provide liability coverages for homogeneous classes of business. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | New agency appointments – We continue to appoint new agencies to develop additional points of distribution, focusing on areas where our property casualty insurance market share is less than 1 percent while also considering economic and catastrophe risk factors. In 2015, we are planning approximately 100 appointments of independent agencies that write in aggregate $1 billion or more in property casualty business annually with various insurance carriers. We generally appoint those agencies in order to have them represent us to sell life insurance, as well as our property casualty insurance, to their clients. We plan to appoint approximately 50 additional independent life agencies to offer only our life insurance products and service. Our excess and surplus lines marketing will focus on selected areas and work to increase penetration with recently appointed agencies. |

----

|         |                            |
|---------|----------------------------|
| • | Commercial lines insurance |

|         |                          |
|---------|--------------------------|
| • | Personal lines insurance |

|         |                                    |
|---------|------------------------------------|
| • | Excess and surplus lines insurance |

|         |                |
|---------|----------------|
| • | Life insurance |

|         |             |
|---------|-------------|
| • | Investments |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Commercial casualty – Provides coverage to businesses against third-party liability from accidents occurring on their premises or arising out of their operations, including liability coverage for injuries sustained from products sold as well as coverage for professional services, such as dentistry. Specialized casualty policies may include liability coverage for excess insurance and umbrella liability, including personal umbrella liability written as an endorsement to commercial umbrella coverages, and employment practices liability (EPLI), which protects businesses against claims by employees that their legal rights as employees of the company have been violated, and against other acts or failures to act under specified circumstances. The commercial casualty business line includes liability coverage written as part of commercial package policies. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Commercial property – Provides coverage for loss or damage to buildings, inventory and equipment caused by covered causes of loss such as fire, wind, hail, water, theft and vandalism, as well as business interruption resulting from a covered loss. Commercial property also includes crime insurance, which provides coverage for losses such as embezzlement or misappropriation of funds by an employee, among others; and inland marine insurance, which provides coverage for builder’s risk, cargo, electronic data processing equipment and a variety of mobile equipment, such as contractor’s equipment. Various property coverages can be written as stand-alone policies or can be added to a commercial package policy. |

|         |                                                                                                                                                                                                                                                                                                                                        |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Commercial auto – Protects businesses against liability to others for both bodily injury and property damage, medical payments to insureds and occupants of their vehicles, physical damage to an insured’s own vehicle from collision and various other perils, and damages caused by uninsured motorists. |

|         |                                                                                                                                                                                                                                      |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Workers’ compensation – Covers employers for specified benefits payable under state or federal law for workplace injuries to employees. We write workers’ compensation coverage in all of our active states except |

----

|         |                                                                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Other commercial lines – This includes the variety of other types of insurance products we offer to businesses. The main coverages offered are summarized below. |

|         |                                                                                                           |
|---------|-----------------------------------------------------------------------------------------------------------|
| ◦ | Management liability and surety (formerly surety and executive risk) – This includes the following: |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ◦ | Specialty packages – Includes coverages for property, liability and business interruption tailored to meet the needs of specific industry classes such as artisan contractors, dentists, garage operators, financial institutions, metalworkers, printers, religious institutions or smaller main street businesses. Businessowners policies, which combine property, liability and business interruption coverages for small businesses, are included in specialty packages. |

|         |                                                                                                                                                                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ◦ | Machinery and equipment – Specialized coverage provides protection for loss or damage to boilers and machinery, including production and computer equipment and business interruption, due to sudden and accidental mechanical breakdown, steam explosion or artificially generated electrical current. |

|                              |
|------------------------------|
|                              |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)        | Earnedpremiums | % of totalearned | Agencylocations | Averagepremium perlocation |
| Year ended December 31, 2014 |   |  |   |  |   |  |   |  |
| Ohio                         | $ | 413 |  | 14.5 | % | 243 |  | $ | 1.7 |  |
| Illinois                     | 209 |  | 7.3 |  | 136 |  | 1.5 |  |
| Pennsylvania                 | 191 |  | 6.7 |  | 99 |  | 1.9 |  |
| Indiana                      | 172 |  | 6.0 |  | 109 |  | 1.6 |  |
| North Carolina               | 141 |  | 4.9 |  | 93 |  | 1.5 |  |
| Michigan                     | 133 |  | 4.7 |  | 134 |  | 1.0 |  |
| Georgia                      | 122 |  | 4.3 |  | 89 |  | 1.4 |  |
| Virginia                     | 118 |  | 4.1 |  | 64 |  | 1.8 |  |
| Tennessee                    | 111 |  | 3.9 |  | 59 |  | 1.9 |  |
| Wisconsin                    | 105 |  | 3.7 |  | 60 |  | 1.8 |  |
|                         |   |   |   |   |

----

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Personal auto – Protects against liability to others for both bodily injury and property damage, medical payments to insureds and occupants of their vehicle, physical damage to an insured’s own vehicle from collision and various other perils, and damages caused by uninsured motorists. In addition, many states require policies to provide first-party personal injury protection, frequently referred to as no-fault coverage. |

|         |                                                                                                                                                                                                                                                                  |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Homeowner – Protects against losses to dwellings and contents from a wide variety of perils, as well as liability arising out of personal activities both on and off the covered premises. We also offer coverage for condominium unit owners and renters. |

|         |                                                                                                                                                                                                                 |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Other personal lines – This includes the variety of other types of insurance products we offer to individuals such as dwelling fire, inland marine, personal umbrella liability and watercraft coverages. |

----

|                              |
|------------------------------|
|                              |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)        | Earnedpremiums | % of totalearned | Agencylocations | Averagepremium perlocation |
| Year ended December 31, 2014 |   |  |   |  |   |  |   |  |
| Ohio                         | $ | 288 |  | 27.6 | % | 219 |  | $ | 1.3 |  |
| Georgia                      | 84 |  | 8.1 |  | 84 |  | 1.0 |  |
| Indiana                      | 77 |  | 7.4 |  | 90 |  | 0.9 |  |
| Illinois                     | 69 |  | 6.6 |  | 97 |  | 0.7 |  |
| Michigan                     | 65 |  | 6.2 |  | 114 |  | 0.6 |  |
| Alabama                      | 56 |  | 5.4 |  | 44 |  | 1.3 |  |
| North Carolina               | 55 |  | 5.3 |  | 82 |  | 0.7 |  |
| Kentucky                     | 52 |  | 5.0 |  | 38 |  | 1.4 |  |
| Tennessee                    | 41 |  | 3.9 |  | 53 |  | 0.8 |  |
| Minnesota                    | 37 |  | 3.6 |  | 54 |  | 0.7 |  |
|                         |   |   |   |   |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Commercial casualty – Covers businesses for third-party liability from accidents occurring on their premises or arising out of their operations, including products and completed operations. The majority of these policies have coverage limits of $1 million or less. Miscellaneous errors and omissions and professional coverage for liability from actual or alleged errors in judgment, breaches of duty or other wrongful acts related to activities of insured businesses is also available, as is excess liability coverage that adds another layer of protection to the insured’s other liability insurance policies. Typical businesses covered include contractors, manufacturers, real estate owners and managers, retail, consultants, and bars or taverns. Policies covering liability at special events are also available. |

|         |                                                                                                                                                                                                                                                                                                                                                                                    |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Commercial property – Insures buildings, inventory, equipment and business income from loss or damage due to causes such as fire, wind, hail, water, theft and vandalism. Examples of property we commonly insure with excess and surplus lines policies include temporarily vacant buildings, habitational, restaurants and relatively higher-hazard manufacturing classes. |

|                              |
|------------------------------|
|                              |  |  |  |  |  |
| (Dollars in millions)        | Earnedpremiums | % of totalearned |
| Year ended December 31, 2014 |   |  |   |  |
| Ohio                         | $ | 14 |  | 9.5 | % |
| Texas                        | 13 |  | 8.7 |  |
| Indiana                      | 11 |  | 7.5 |  |
| Illinois                     | 10 |  | 6.8 |  |
| Georgia                      | 10 |  | 6.6 |  |
| Alabama                      | 8 |  | 5.2 |  |
| Missouri                     | 7 |  | 4.6 |  |
| Michigan                     | 6 |  | 4.1 |  |
| North Carolina               | 6 |  | 4.0 |  |
| Pennsylvania                 | 5 |  | 3.5 |  |
|                         |   |   |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Term life insurance – Policies under which a death benefit is payable only if the insured dies during a specific period of time. For policies without a return of premium provision, no benefit is payable if the insured person survives to the end of the term. For policies in force with a return of premium provision, a benefit equal to the sum of all paid base premiums is payable if the insured person survives to the end of the term. Premiums are fixed, and they must be paid as scheduled. The policies are fully underwritten. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Universal life insurance – Long-duration life insurance policies. Contract premiums are neither fixed nor guaranteed; however, the contract does specify a minimum interest crediting rate and a maximum cost of insurance charge and expense charge. Premiums may be varied by the contract owner. The cash values, available as a loan collateralized by the cash surrender value, are not guaranteed and depend on the amount and timing of actual premium payments and the amount of actual contract assessments. The policies are fully underwritten. |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Worksite products – Term life insurance, return of premium term life insurance, whole life insurance, universal life and disability insurance offered to employees through their employer. Premiums are collected by the employer using payroll deduction. Policies are issued using a simplified underwriting approach and on a guaranteed issue basis. Worksite insurance products provide our property casualty agency force with excellent cross-serving opportunities for both commercial and personal accounts. Agents report that offering worksite marketing to employees of their commercial accounts provides a benefit to the employees at no cost to the employer. Worksite marketing also connects agents with new customers who may not have previously benefited from receiving the services of a professional independent insurance agent. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Whole life insurance – Policies that provide life insurance for the entire lifetime of the insured. The death benefit is guaranteed never to decrease and premiums are guaranteed never to increase. While premiums are fixed, they must be paid as scheduled. These policies provide guaranteed cash values that are available as loans collateralized by the cash surrender value. The policies are fully underwritten. |

|         |                                                                                                                                                               |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Disability income insurance that provides monthly benefits to offset the loss of income when the insured person is unable to work due to accident or illness. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Deferred annuities that provide regular income payments that commence after the end of a specified period or when the annuitant attains a specified age. During the deferral period, any payments made under the contract accumulate at the crediting rate declared by the company but not less than a contract-specified guaranteed minimum interest rate. A deferred annuity may be surrendered during the deferral period for a cash value equal to the accumulated payments plus interest less the surrender charge, if any. |

|         |                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------|
| • | Immediate annuities that provide some combination of regular income and lump-sum payments in exchange for a single premium. |

|         |                                                                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Because our property casualty operations are held in high regard, property casualty agency management is predisposed to consider selling our life products. |

|         |                                                                                                                                                                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Marketing efforts for both our property casualty and life insurance businesses are directed by our field marketing department, which assures consistency of communication and operations. Life field marketing representatives are available to meet face-to-face with agency personnel and their clients as well. |

|         |                                                                                                                                                                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our life headquarters underwriters and other associates are available to the agents and field team to assist in the placement of business. Fewer and fewer of our competitors provide direct, personal support between the agent and the insurance carrier. |

----

|         |                                                                                                                                                                                                  |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Term life insurance is our largest life insurance product line. We continue to introduce new term products with features our agents indicate are important, such as a return of premium benefit. |

|         |                                                                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We also offer products addressing the needs of businesses with key person and buy-sell coverages. We offer quality, personal life insurance coverage to personal and commercial clients of our agencies. |

|                              |
|------------------------------|
|                              |  |  |  |  |  |
| (Dollars in millions)        | Premiums | % of totalearned |
| Year ended December 31, 2014 |   |  |   |  |
| Ohio                         | $ | 48 |  | 18.6 | % |
| Pennsylvania                 | 19 |  | 7.2 |  |
| Indiana                      | 17 |  | 6.5 |  |
| Illinois                     | 16 |  | 6.4 |  |
| Georgia                      | 13 |  | 5.1 |  |
|                         |   |   |

----

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                | At December 31, 2014 |   | At December 31, 2013 |
|                                                 | Cost or amortized cost | Percent of total |   |   | Percent of total |   | Cost or amortized cost | Percent of total |   |   | Percent of total |
|                                                 |   | Fair value |   |   | Fair value |
| Taxable fixed maturities                             | $ | 5,882 |  | 50.7 | % |   | $ | 6,330 |  | 44.2 | % |   | $ | 5,814 |  | 52.1 | % |   | $ | 6,211 |  | 46.0 | % |
| Tax-exempt fixed maturities                          | 2,989 |  | 25.8 |  |   | 3,130 |  | 21.9 | % |   | 2,824 |  | 25.3 |  |   | 2,910 |  | 21.6 |  |
| Common equity securities                             | 2,583 |  | 22.3 |  |   | 4,679 |  | 32.7 | % |   | 2,396 |  | 21.5 |  |   | 4,213 |  | 31.2 |  |
| Nonredeemable preferred  equity securities | 145 |  | 1.2 |  |   | 179 |  | 1.2 | % |   | 127 |  | 1.1 |  |   | 162 |  | 1.2 |  |
| Total                                                | $ | 11,599 |  | 100.0 | % |   | $ | 14,318 |  | 100.0 | % |   | $ | 11,161 |  | 100.0 | % |   | $ | 13,496 |  | 100.0 | % |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |

|         |                                                                                                                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Fixed-maturity investments – Includes taxable and tax-exempt bonds and redeemable preferred stocks. During 2014, purchases and market value gains offset sales and calls. During 2013, purchases were largely offset by redemptions and fair value declines. |

|         |                                                                                                                                                                                              |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Equity investments – Includes common and nonredeemable preferred stocks. During both 2014 and 2013, purchases and fair value gains offset sales by relatively large amounts. |

----

|                                                          |
|----------------------------------------------------------|
|                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                    | At December 31, 2014 |   | At December 31, 2013 |
|                                                     | Fairvalue |   | Percentof total |   | Fairvalue |   | Percentof total |
| Combined ratings from Moody's and Standard & Poor's: |   |  |   |   |  |   |   |  |   |   |  |
| Aaa, Aa, A, AAA, AA, A                                   | $ | 5,686 |  |   | 60.1 | % |   | $ | 5,468 |  |   | 59.9 | % |
| Baa, BBB                                                 | 3,198 |  |   | 33.8 |  |   | 3,197 |  |   | 35.1 |  |
| Ba, BB                                                   | 305 |  |   | 3.2 |  |   | 231 |  |   | 2.5 |  |
| B, B                                                     | 15 |  |   | 0.2 |  |   | 16 |  |   | 0.2 |  |
| Caa, CCC                                                 | 3 |  |   | 0.0 |  |   | 4 |  |   | 0.0 |  |
| Nonrated                                                 | 253 |  |   | 2.7 |  |   | 205 |  |   | 2.3 |  |
| Total                                                    | $ | 9,460 |  |   | 100.0 | % |   | $ | 9,121 |  |   | 100.0 | % |
|                                                     |   |   |   |   |   |   |   |

|                                          |
|------------------------------------------|
|                                          |  |  |  |  |  |  |
|                                     | At December 31, |
|                                     | 2014 |   | 2013 |   |
| Weighted average yield-to-amortized cost | 4.76 |  | % | 4.86 |  | % |
| Weighted average maturity                | 6.4 |  | yrs | 6.2 |  | yrs |
| Effective duration                       | 4.4 |  | yrs | 4.5 |  | yrs |
|                                     |   |   |   |   |

----

|                                                   |
|---------------------------------------------------|
|                                                   |  |  |  |  |  |  |  |
| (Dollars in millions)                             | At December 31, |
|                                              | 2014 |   | 2013 |
| Investment-grade corporate                        | $ | 5,208 |  |   | $ | 5,293 |  |
| States, municipalities and political subdivisions | 313 |  |   | 301 |  |
| Below investment-grade corporate                  | 318 |  |   | 240 |  |
| Commercial mortgage backed                        | 259 |  |   | 143 |  |
| Government sponsored enterprises                  | 208 |  |   | 200 |  |
| Foreign government                                | 10 |  |   | 10 |  |
| Convertibles and bonds with warrants attached     | 7 |  |   | 17 |  |
| United States government                          | 7 |  |   | 7 |  |
| Total                                             | $ | 6,330 |  |   | $ | 6,211 |  |
|                                              |   |   |   |

----

|                       |
|-----------------------|
|                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions) | Local issued general |   | Special revenue |   | State issued general |   | Fair value |   | Percent of |
| At December 31, 2014  | obligation bonds |   | bonds |   | obligation bonds |   | total |   | total |
| Texas                 | $ | 368 |  |   | $ | 71 |  |   | $ | — |  |   | $ | 439 |  |   | 14.0 | % |
| Indiana               | 2 |  |   | 244 |  |   | — |  |   | 246 |  |   | 7.9 |  |
| Ohio                  | 120 |  |   | 78 |  |   | 9 |  |   | 207 |  |   | 6.6 |  |
| Michigan              | 194 |  |   | 8 |  |   | — |  |   | 202 |  |   | 6.5 |  |
| Washington            | 127 |  |   | 30 |  |   | 7 |  |   | 164 |  |   | 5.2 |  |
| Illinois              | 146 |  |   | 18 |  |   | — |  |   | 164 |  |   | 5.2 |  |
| Arizona               | 78 |  |   | 47 |  |   | — |  |   | 125 |  |   | 4.0 |  |
| Wisconsin             | 87 |  |   | 30 |  |   | 2 |  |   | 119 |  |   | 3.8 |  |
| Pennsylvania          | 83 |  |   | 15 |  |   | 10 |  |   | 108 |  |   | 3.5 |  |
| Florida               | 26 |  |   | 74 |  |   | — |  |   | 100 |  |   | 3.2 |  |
| New York              | 59 |  |   | 36 |  |   | 4 |  |   | 99 |  |   | 3.2 |  |
| New Jersey            | 55 |  |   | 15 |  |   | 2 |  |   | 72 |  |   | 2.3 |  |
| Kansas                | 51 |  |   | 21 |  |   | — |  |   | 72 |  |   | 2.3 |  |
| Colorado              | 44 |  |   | 25 |  |   | — |  |   | 69 |  |   | 2.2 |  |
| California            | 40 |  |   | 19 |  |   | 3 |  |   | 62 |  |   | 2.0 |  |
| All other states      | 493 |  |   | 337 |  |   | 52 |  |   | 882 |  |   | 28.1 |  |
| Total                 | $ | 1,973 |  |   | $ | 1,068 |  |   | $ | 89 |  |   | $ | 3,130 |  |   | 100.0 | % |
|                  |   |   |   |   |   |   |   |   |   |
| At December 31, 2013  |   |   |   |   |   |   |   |   |   |
| Texas                 | $ | 385 |  |   | $ | 66 |  |   | $ | — |  |   | $ | 451 |  |   | 15.5 | % |
| Michigan              | 238 |  |   | 9 |  |   | — |  |   | 247 |  |   | 8.5 |  |
| Indiana               | 8 |  |   | 232 |  |   | — |  |   | 240 |  |   | 8.2 |  |
| Ohio                  | 119 |  |   | 87 |  |   | 6 |  |   | 212 |  |   | 7.3 |  |
| Illinois              | 184 |  |   | 19 |  |   | — |  |   | 203 |  |   | 7.0 |  |
| Washington            | 150 |  |   | 32 |  |   | 5 |  |   | 187 |  |   | 6.4 |  |
| Wisconsin             | 108 |  |   | 32 |  |   | 2 |  |   | 142 |  |   | 4.9 |  |
| Pennsylvania          | 93 |  |   | 9 |  |   | 9 |  |   | 111 |  |   | 3.8 |  |
| Arizona               | 55 |  |   | 31 |  |   | — |  |   | 86 |  |   | 3.0 |  |
| Florida               | 24 |  |   | 62 |  |   | — |  |   | 86 |  |   | 3.0 |  |
| New York              | 48 |  |   | 31 |  |   | 4 |  |   | 83 |  |   | 2.9 |  |
| Colorado              | 45 |  |   | 17 |  |   | — |  |   | 62 |  |   | 2.1 |  |
| New Jersey            | 44 |  |   | 17 |  |   | — |  |   | 61 |  |   | 2.1 |  |
| Minnesota             | 42 |  |   | 7 |  |   | 2 |  |   | 51 |  |   | 1.8 |  |
| Utah                  | 31 |  |   | 19 |  |   | — |  |   | 50 |  |   | 1.7 |  |
| All other states      | 338 |  |   | 270 |  |   | 30 |  |   | 638 |  |   | 21.8 |  |
| Total                 | $ | 1,912 |  |   | $ | 940 |  |   | $ | 58 |  |   | $ | 2,910 |  |   | 100.0 | % |
|                  |   |   |   |   |   |   |   |   |   |

----

|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |  |  |  |  |
|                   | Percent of publicly traded common stock portfolio |
|                   | At December 31, 2014 |   | At December 31, 2013 |
|                   | CincinnatiFinancial |   | S&P 500 IndustryWeightings |   | CincinnatiFinancial |   | S&P 500 IndustryWeightings |
| Sector:                |   |  |   |   |  |   |   |  |   |   |  |
| Information technology | 17.3 | % |   | 19.8 | % |   | 18.7 | % |   | 18.6 | % |
| Industrials            | 14.3 |  |   | 10.3 |  |   | 14.0 |  |   | 10.9 |  |
| Financial              | 13.8 |  |   | 16.3 |  |   | 12.0 |  |   | 16.2 |  |
| Healthcare             | 11.9 |  |   | 14.7 |  |   | 11.5 |  |   | 13.0 |  |
| Energy                 | 10.5 |  |   | 8.0 |  |   | 10.5 |  |   | 10.3 |  |
| Consumer staples       | 10.5 |  |   | 10.0 |  |   | 10.5 |  |   | 9.8 |  |
| Consumer discretionary | 10.2 |  |   | 12.1 |  |   | 9.8 |  |   | 12.5 |  |
| Materials              | 5.5 |  |   | 3.2 |  |   | 5.7 |  |   | 3.5 |  |
| Utilities              | 3.7 |  |   | 3.3 |  |   | 4.2 |  |   | 2.9 |  |
| Telecomm services      | 2.3 |  |   | 2.3 |  |   | 3.1 |  |   | 2.3 |  |
| Total                  | 100.0 | % |   | 100.0 | % |   | 100.0 | % |   | 100.0 | % |
|                   |   |   |   |   |   |   |   |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Insurance Holding Company Regulation – We are regulated as an insurance holding company system in the respective states of domicile of our primary standard market property casualty company subsidiary and its surplus lines and life insurance subsidiaries. These regulations require that we annually furnish financial and other information about the operations of the individual companies within the holding company system. All transactions within a holding company affecting insurers must be fair and equitable. Notice to the state insurance commissioner is required prior to the consummation of transactions affecting the ownership or control of an insurer and prior to certain material transactions between an insurer and any person or entity in its holding company group. In addition, some of those transactions cannot be consummated without the commissioner’s prior approval. Recent amendments to the Model Insurance Holding Company System Regulatory Act and Regulation, adopted by the National Association of Insurance Commissioners (NAIC) and passed by a number of state legislatures, require insurance holding company systems to provide regulators with more information about the risks posed by any noninsurance company subsidiaries in the holding company system. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Subsidiary Dividends – The Cincinnati Insurance Company is 100 percent owned by Cincinnati Financial Corporation. The dividend-paying capacity of The Cincinnati Insurance Company and its 100 percent owned subsidiaries is regulated by the laws of the applicable state of domicile. Under these laws, our insurance subsidiaries must provide a 10-day advance informational notice to the insurance commissioner for the domiciliary state prior to payment of any dividend or distribution to its shareholders. Generally, the most our insurance subsidiary can pay without prior regulatory approval is the greater of 10 percent of statutory capital and surplus or 100 percent of statutory net income for the prior calendar year. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Insurance Operations – All of our insurance subsidiaries are subject to licensing and supervision by departments of insurance in the states in which they do business. The nature and extent of such regulations vary, but generally are rooted in statutes that delegate regulatory, supervisory and administrative powers to state insurance departments. Such regulations, supervision and administration of the insurance subsidiaries include, among others, the standards of solvency that must be met and maintained; the licensing of insurers and their agents and brokers; the nature and limitations on investments; deposits of securities for the benefit of policyholders; regulation of standard market policy forms and premium rates; policy cancellations and nonrenewals; periodic examination of the affairs of insurance companies; annual and other reports required to be filed on the financial condition of insurers or for other purposes; requirements regarding reserves for unearned premiums, losses and other matters; the nature of and limitations on dividends to policyholders and shareholders; the nature and extent of required participation in insurance guaranty funds; the involuntary assumption of hard-to-place or high-risk insurance business, primarily workers’ compensation insurance; and the collection, remittance and reporting of certain taxes and fees. Our primary insurance regulators have adopted the Model Audit Rule for annual statutory financial reporting. This regulation closely mirrors the Sarbanes-Oxley Act on matters such as auditor independence, corporate governance and internal controls over financial reporting. The regulation permits the audit committee of Cincinnati Financial Corporation’s board of directors to also serve as the audit committee of each of our insurance subsidiaries for purposes of this regulation. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Insurance Guaranty Associations – Each state has insurance guaranty association laws under which the associations may assess life and property casualty insurers doing business in the state for certain obligations of insolvent insurance companies to policyholders and claimants. Typically, states assess each member insurer in an amount related to the insurer’s proportionate share of business written by all member insurers in the state. Our insurance companies received a savings of less than $1 million from guaranty association refunds in both 2014 and 2013. We cannot predict the amount and timing of any future assessments or refunds on our insurance subsidiaries under these laws. |

|         |                                                                                                                                                                                                                              |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Shared Market and Joint Underwriting Plans – State insurance regulation requires insurers to participate in assigned risk plans, reinsurance facilities and joint underwriting associations, which are mechanisms that |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Statutory Accounting – For public reporting, insurance companies prepare financial statements in accordance with GAAP. However, certain data also must be calculated according to statutory accounting rules as defined in the NAIC’s Accounting Practices and Procedures Manual. While not a substitute for any GAAP measure of performance, statutory data frequently is used by industry analysts and other recognized reporting sources to facilitate comparisons of the performance of insurance companies. |

|         |                                                                                                                                                                                                                                                                                  |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Insurance Reserves – State insurance laws require that property casualty and life insurers annually analyze the adequacy of reserves. Our appointed actuaries must submit an opinion that reserves are adequate for policy claims-paying obligations and related expenses. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Investment Regulation – Insurance company investments must comply with laws and regulations pertaining to the type, quality and concentration of investments. Such laws and regulations permit investments in federal, state and municipal obligations, corporate bonds, preferred and common equity securities, mortgage loans, real estate and certain other investments, subject to specified limits and other qualifications. At December 31, 2014, the company believes it was in compliance with these laws and regulations in all material respects. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Risk-Based Capital Requirements – The NAIC’s risk-based capital (RBC) requirements for property casualty and life insurers serve as an early warning tool for the NAIC and state regulators to identify companies that may be undercapitalized and may merit further regulatory action. The NAIC has a standard formula for annually assessing RBC. The formula for calculating RBC for property casualty companies takes into account asset and credit risks but places more emphasis on underwriting factors for reserving and pricing. The formula for calculating RBC for life insurance companies takes into account factors relating to insurance, business, asset and interest-rate risks. |

----

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Downgrade of the financial strength ratings of our insurance subsidiaries. We believe our strong insurer financial strength ratings, in particular, the A+ (Superior) ratings from A.M. Best for our standard market property casualty insurance group and each subsidiary in that group, are an important competitive advantage. See Item 1, Our Business and Our Strategy, Financial Strength, for additional discussion of our financial strength ratings. |

|         |                                                                                                                                                                                                                                                                                                                                                                |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Concerns that doing business with us is difficult or not profitable, perceptions that our level of service is no longer a distinguishing characteristic in the marketplace, perceptions that our products do not meet the needs of our agents’ clients or perceptions that our business practices are not compatible with agents’ business models. |

|         |                                                                                                            |
|---------|------------------------------------------------------------------------------------------------------------|
| • | Mergers and acquisitions could result in a concentration of a significant amount of premium in one agency. |

|         |                                                                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Delays in the development, implementation, performance and benefits of technology systems and enhancements or independent agent perceptions that our technology solutions do not match their needs. |

----

|         |                                                                   |
|---------|-------------------------------------------------------------------|
| • | Hurricanes in the gulf, eastern and southeastern coastal regions. |

|         |                                                                                                                                                                                                                                                                                               |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Earthquakes in many regions, most particularly in the New Madrid fault zone, which lies within the central Mississippi valley, extending from northeast Arkansas through southeast Missouri, western Tennessee and western Kentucky to southern Illinois, southern Indiana and parts of Ohio. |

|         |                                                                                          |
|---------|------------------------------------------------------------------------------------------|
| • | Tornado, wind and hail in the Midwest, South, Southeast, Southwest and the mid-Atlantic. |

|         |                        |
|---------|------------------------|
| • | Wildfires in the West. |

----

----

|         |                                     |
|---------|-------------------------------------|
| • | Competitiveness of premiums charged |

|         |                                                                 |
|---------|-----------------------------------------------------------------|
| • | Relationships among carriers, agents, brokers and policyholders |

|         |                                                                                                 |
|---------|-------------------------------------------------------------------------------------------------|
| • | Underwriting and pricing methodologies that allow insurers to identify and flexibly price risks |

|         |                                 |
|---------|---------------------------------|
| • | Compensation provided to agents |

|         |                         |
|---------|-------------------------|
| • | Underwriting discipline |

----

|         |                                            |
|---------|--------------------------------------------|
| • | Terms and conditions of insurance coverage |

|         |                                                 |
|---------|-------------------------------------------------|
| • | Speed with which products are brought to market |

|         |                                                          |
|---------|----------------------------------------------------------|
| • | Product and marketing innovations, including advertising |

|         |                                         |
|---------|-----------------------------------------|
| • | Technological competence and innovation |

|         |                             |
|---------|-----------------------------|
| • | Ability to control expenses |

|         |                                                                                          |
|---------|------------------------------------------------------------------------------------------|
| • | Adequacy of financial strength ratings by independent ratings agencies such as A.M. Best |

|         |                                                                    |
|---------|--------------------------------------------------------------------|
| • | Quality of services and tools provided to agents and policyholders |

|         |                                    |
|---------|------------------------------------|
| • | Claims satisfaction and reputation |

----

----

----

----

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Source: Nasdaq Global Select Market) |   | 2014 |   | 2013 |
| Quarter:                              |   | 1st |   | 2nd |   | 3rd |   | 4th |   | 1st |   | 2nd |   | 3rd |   | 4th |
| High                                  |   | $ | 52.19 |  |   | $ | 49.73 |  |   | $ | 48.86 |  |   | $ | 55.35 |  |   | $ | 47.35 |  |   | $ | 50.60 |  |   | $ | 50.01 |  |   | $ | 53.74 |  |
| Low                                   |   | 44.90 |  |   | 47.00 |  |   | 45.69 |  |   | 45.09 |  |   | 39.60 |  |   | 44.53 |  |   | 43.62 |  |   | 46.61 |  |
| Period-end close                      |   | 48.66 |  |   | 48.04 |  |   | 47.05 |  |   | 51.83 |  |   | 47.22 |  |   | 45.92 |  |   | 47.16 |  |   | 52.37 |  |
| Cash dividends declared               |   | 0.44 |  |   | 0.44 |  |   | 0.44 |  |   | 0.44 |  |   | 0.4075 |  |   | 0.4075 |  |   | 0.42 |  |   | 0.42 |  |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                                   |
|-----------------------------------------------------------------------------------|
|                                                                                   |  |  |  |  |  |  |  |  |  |  |
| Plan category                                                                     |   | Number of securities to beissued upon exercise ofoutstanding options,warrants and rights atDecember 31, 2014 |   | Weighted-average exerciseprice of outstandingoptions, warrants and rights |   | Number of securities remainingavailable for future issuance underequity compensation plan (excludingsecurities reflected in column (a)) atDecember 31, 2014 |
|                                                                              |   | (a) |   | (b) |   | (c) |
| Equity compensation plans    approved by security holders     |   | 4,958,191 |  |   | $ | 39.10 |  |   | 6,199,048 |  |
| Equity compensation plans not    approved by security holders |   | — |  |   | — |  |   | — |  |
|     Total                                                     |   | 4,958,191 |  |   | $ | 39.10 |  |   | 6,199,048 |  |
|                                                                              |   |   |   |   |   |   |

----

|                      |
|----------------------|
|                      |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Period               |   | Total numberof sharespurchased |   | Averageprice paidper share |   | Total number of sharespurchased as part ofpublicly announcedplans or programs |   | Maximum number ofshares that may yet bepurchased under theplans or programs |
| January 1-31, 2014   |   | — |  |   | — |  |   | — |  |   | 5,549,493 |  |
| February 1-28, 2014  |   | — |  |   | — |  |   | — |  |   | 5,549,493 |  |
| March 1-31, 2014     |   | 150,000 |  |   | $ | 47.69 |  |   | 150,000 |  |   | 5,399,493 |  |
| April 1-30, 2014     |   | — |  |   | — |  |   | — |  |   | 5,399,493 |  |
| May 1-31, 2014       |   | — |  |   | — |  |   | — |  |   | 5,399,493 |  |
| June 1-30, 2014      |   | — |  |   | — |  |   | — |  |   | 5,399,493 |  |
| July 1-31, 2014      |   | 100,000 |  |   | 46.07 |  |   | 100,000 |  |   | 5,299,493 |  |
| August 1-31, 2014    |   | 200,000 |  |   | 46.11 |  |   | 200,000 |  |   | 5,099,493 |  |
| September 1-30, 2014 |   | — |  |   | — |  |   | — |  |   | 5,099,493 |  |
| October 1-31, 2014   |   | — |  |   | — |  |   | — |  |   | 5,099,493 |  |
| November 1-30, 2014  |   | — |  |   | — |  |   | — |  |   | 5,099,493 |  |
| December 1-31, 2014  |   | — |  |   | — |  |   | — |  |   | 5,099,493 |  |
| Totals               |   | 450,000 |  |   | 46.63 |  |   | 450,000 |  |   |   |  |
|                 |   |   |   |   |   |   |   |   |

----

----

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (In millions except per share data)            |   | Years ended December 31, |
|                                           |   | 2014 |   | 2013 |   | 2012 |   | 2011 |   | 2010 |
| Consolidated Income Statement Data             |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Earned premiums                                |   | $ | 4,243 |  |   | $ | 3,902 |  |   | $ | 3,522 |  |   | $ | 3,194 |  |   | $ | 3,082 |  |
| Investment income, net of expenses             |   | 549 |  |   | 529 |  |   | 531 |  |   | 525 |  |   | 518 |  |
| Realized investment gains, net*                |   | 133 |  |   | 83 |  |   | 42 |  |   | 70 |  |   | 159 |  |
| Total revenues                                 |   | 4,945 |  |   | 4,531 |  |   | 4,111 |  |   | 3,803 |  |   | 3,772 |  |
| Net income                                     |   | 525 |  |   | 517 |  |   | 421 |  |   | 164 |  |   | 375 |  |
| Net income per common share:                   |   |   |  |   |   |   |   |   |   |   |   |
| Basic                                          |   | $ | 3.21 |  |   | $ | 3.16 |  |   | $ | 2.59 |  |   | $ | 1.01 |  |   | $ | 2.30 |  |
| Diluted                                        |   | 3.18 |  |   | 3.12 |  |   | 2.57 |  |   | 1.01 |  |   | 2.30 |  |
| Cash dividends per common share:               |   |   |   |   |   |   |   |   |   |   |
| Declared                                       |   | 1.76 |  |   | 1.655 |  |   | 1.62 |  |   | 1.605 |  |   | 1.59 |  |
| Paid                                           |   | 1.74 |  |   | 1.6425 |  |   | 1.615 |  |   | 1.6025 |  |   | 1.585 |  |
| Diluted weighted average shares outstanding    |   | 165.1 |  |   | 165.4 |  |   | 163.7 |  |   | 163.3 |  |   | 163.3 |  |
| Consolidated Balance Sheet Data                |   |   |   |   |   |   |   |   |   |   |
| Total investments                              |   | $ | 14,386 |  |   | $ | 13,564 |  |   | $ | 12,534 |  |   | $ | 11,801 |  |   | $ | 11,508 |  |
| Net unrealized investment gains                |   | 2,719 |  |   | 2,335 |  |   | 1,875 |  |   | 1,489 |  |   | 1,250 |  |
| Deferred policy acquisition costs              |   | 578 |  |   | 565 |  |   | 470 |  |   | 477 |  |   | 458 |  |
| Total assets                                   |   | 18,753 |  |   | 17,662 |  |   | 16,548 |  |   | 15,635 |  |   | 15,065 |  |
| Gross loss and loss expense reserves           |   | 4,485 |  |   | 4,311 |  |   | 4,230 |  |   | 4,339 |  |   | 4,200 |  |
| Life policy reserves                           |   | 2,497 |  |   | 2,390 |  |   | 2,295 |  |   | 2,214 |  |   | 2,034 |  |
| Long-term debt                                 |   | 791 |  |   | 790 |  |   | 790 |  |   | 790 |  |   | 790 |  |
| Shareholders' equity                           |   | 6,573 |  |   | 6,070 |  |   | 5,453 |  |   | 5,033 |  |   | 5,012 |  |
| Book value per share                           |   | 40.14 |  |   | 37.21 |  |   | 33.48 |  |   | 31.03 |  |   | 30.79 |  |
| Shares outstanding                             |   | 163.7 |  |   | 163.1 |  |   | 162.9 |  |   | 162.2 |  |   | 162.8 |  |
| Value creation ratio                           |   | 12.6 | % |   | 16.1 | % |   | 12.6 | % |   | 6.0 | % |   | 11.1 | % |
| Consolidated Property Casualty Operations Data |   |   |   |   |   |   |   |   |   |   |
| Earned premiums                                |   | $ | 4,045 |  |   | $ | 3,713 |  |   | $ | 3,344 |  |   | $ | 3,029 |  |   | $ | 2,924 |  |
| Unearned premiums                              |   | 2,081 |  |   | 1,970 |  |   | 1,790 |  |   | 1,631 |  |   | 1,551 |  |
| Gross loss and loss expense reserves           |   | 4,438 |  |   | 4,241 |  |   | 4,169 |  |   | 4,280 |  |   | 4,137 |  |
| Investment income, net of expenses             |   | 358 |  |   | 348 |  |   | 351 |  |   | 350 |  |   | 348 |  |
| Loss and loss expense ratio                    |   | 65.0 | % |   | 61.9 | % |   | 63.9 | % |   | 77.0 | % |   | 68.9 | % |
| Underwriting expense ratio                     |   | 30.6 |  |   | 31.9 |  |   | 32.2 |  |   | 32.3 |  |   | 32.9 |  |
| Combined ratio                                 |   | 95.6 | % |   | 93.8 | % |   | 96.1 | % |   | 109.3 | % |   | 101.8 | % |
|                                           |   |   |   |   |   |   |   |   |   |   |

----

|                              |
|------------------------------|
|                              |  |  |  |  |  |  |  |  |  |
|                         |   | Oneyear |   | Three-year% average |   | Five-year% average |
| Value creation ratio:        |   |   |  |   |   |  |   |   |  |
| As of December 31, 2014      |   | 12.6 | % |   | 13.8 | % |   | 11.7 | % |
| As of December 31, 2013 |   | 16.1 |  |   | 11.6 |  |   | 13.1 |  |
| As of December 31, 2012 |   | 12.6 |  |   | 9.9 |  |   | 5.2 |  |
|                         |   |   |   |   |   |   |

----

|                                                                    |
|--------------------------------------------------------------------|
|                                                                    |  |  |  |  |  |  |  |  |  |
|                                                               |   | Years ended December 31, |
|                                                               |   | 2014 |   | 2013 |   | 2012 |
| Value creation ratio major components:                             |   |   |   |   |   |   |
| Net income before net realized gains                               |   | 7.2 |  % |   | 8.5 |  % |   | 7.7 |  % |
| Change in realized and unrealized gains, fixed-maturity securities |   | 1.2 |  |   | (4.5 | ) |   | 2.7 |  |
| Change in realized and unrealized gains, equity securities         |   | 4.3 |  |   | 10.9 |  |   | 2.8 |  |
| Other                                                              |   | (0.1 | ) |   | 1.2 |  |   | (0.6 | ) |
| Value creation ratio                                               |   | 12.6 |  % |   | 16.1 |  % |   | 12.6 |  % |
|                                                               |   |   |   |   |   |   |

|                                                                    |
|--------------------------------------------------------------------|
|                                                                    |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars are per share)                                            |   | Years ended December 31, |
|                                                               |   | 2014 |   | 2013 |   | 2012 |
| Book value change per share:                                       |   |   |   |   |   |   |
| End of period book value                                           |   | $ | 40.14 |  |   | $ | 37.21 |  |   | $ | 33.48 |  |
| Less beginning of period book value                                |   | 37.21 |  |   | 33.48 |  |   | 31.03 |  |
| Change in book value                                               |   | $ | 2.93 |  |   | $ | 3.73 |  |   | $ | 2.45 |  |
|                                                               |   |   |   |   |   |   |
| Change in book value:                                              |   |   |  |   |   |  |   |   |  |
| Net income before realized gains                                   |   | $ | 2.69 |  |   | $ | 2.84 |  |   | $ | 2.41 |  |
| Change in realized and unrealized gains, fixed-maturity securities |   | 0.43 |  |   | (1.50 | ) |   | 0.84 |  |
| Change in realized and unrealized gains, equity securities         |   | 1.61 |  |   | 3.64 |  |   | 0.86 |  |
| Dividend declared to shareholders                                  |   | (1.76 | ) |   | (1.66 | ) |   | (1.62 | ) |
| Other                                                              |   | (0.04 | ) |   | 0.41 |  |   | (0.04 | ) |
| Change in book value                                               |   | $ | 2.93 |  |   | $ | 3.73 |  |   | $ | 2.45 |  |
|                                                               |   |   |   |   |   |   |

----

|                                                                |
|----------------------------------------------------------------|
|                                                                |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars are per share)                                        |   | Years ended December 31, |
|                                                           |   | 2014 |   | 2013 |   | 2012 |
| Value creation ratio:                                          |   |   |  |   |   |  |   |   |  |
| End of year book value                                         |   | $ | 40.14 |  |   | $ | 37.21 |  |   | $ | 33.48 |  |
| Less beginning of year book value                              |   | 37.21 |  |   | 33.48 |  |   | 31.16 |  |
| Change in book value                                           |   | 2.93 |  |   | 3.73 |  |   | 2.32 |  |
| Dividend declared to shareholders                              |   | 1.76 |  |   | 1.655 |  |   | 1.62 |  |
| Total value creation ratio                                     |   | $ | 4.69 |  |   | $ | 5.385 |  |   | $ | 3.94 |  |
|                                                           |   |   |   |   |   |   |
| Value creation ratio from change in book value*                |   | 7.9 | % |   | 11.1 | % |   | 7.4 | % |
| Value creation ratio from dividends declared to shareholders** |   | 4.7 |  |   | 5.0 |  |   | 5.2 |  |
| Value creation ratio                                           |   | 12.6 | % |   | 16.1 | % |   | 12.6 | % |
|                                                           |   |   |   |   |   |   |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Premium growth – We believe over any five-year period our agency relationships and initiatives can lead to a property casualty written premium growth rate that exceeds the industry average. The compound annual growth rate of our net written premiums was 7.3 percent over the five-year period 2010 through 2014, approximately double the 3.4 percent estimated growth rate for the property casualty insurance industry. The industry’s growth rate excludes its mortgage and financial guaranty lines of business. Our long-term target for profitable premium growth, established in late 2011 for our property casualty and life insurance segments in aggregate, is to reach $5 billion of annual direct written premiums by the end of 2015. In 2014, our direct written premiums totaled $4.577 billion. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Combined ratio – We believe our underwriting philosophy and initiatives can drive performance to achieve our underwriting profitability target of a GAAP combined ratio over any five-year period that consistently averages within the range of 95 percent to 100 percent. Our GAAP combined ratio averaged 99.3 percent over the five-year period 2010 through 2014. Performance as measured by the combined ratio is discussed in Consolidated Property Casualty Insurance Results. Our statutory combined ratio averaged 98.8 percent over the five-year period 2010 through 2014 compared with an estimated 100.7 percent for the property casualty industry. The industry’s ratio again excludes its mortgage and financial guaranty lines of business. |

|         |                                                                                                                                                                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Investment contribution – We believe our investment philosophy and initiatives can drive investment income growth and lead to a total return on our equity investment portfolio over a five-year period that exceeds the five-year total return of the Standard & Poor’s 500 Index. |

|         |                                                                                                                                                                                                                                                 |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ◦ | Investment income growth, on a pretax basis, had a compound annual growth rate of 1.8 percent over the five-year period 2010 through 2014. It has grown every year since 2009, except for 2013 with its slight decrease of less than 1 percent. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ◦ | Over the five years ended December 31, 2014, our equity portfolio compound annual total return was 14.1 percent compared with a compound annual total return of 15.4 percent for the Index. By design, our equity portfolio is comprised of larger capitalization, high-quality dividend-growing stocks. Therefore we would generally expect its return to lag during the type of extended, lower-quality rally that has occurred since early 2009. For the year 2014, our annual equity portfolio total return was 12.3 percent, compared with 13.7 percent for the Index. |

----

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |
| (Dollars in millions except share data) |   | At December 31, |   | At December 31, |
|                                    |   | 2014 |   | 2013 |
| Balance sheet data:                     |   |   |  |   |   |  |
| Total investments                       |   | $ | 14,386 |  |   | $ | 13,564 |  |
| Total assets                            |   | 18,753 |  |   | 17,662 |  |
| Short-term debt                         |   | 49 |  |   | 104 |  |
| Long-term debt                          |   | 791 |  |   | 790 |  |
| Shareholders' equity                    |   | 6,573 |  |   | 6,070 |  |
| Book value per share                    |   | 40.14 |  |   | 37.21 |  |
| Debt-to-total-capital ratio             |   | 11.3 | % |   | 12.8 | % |
|                                    |   |   |   |   |

|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions except per share data) |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                        |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Net income and comprehensive income data:   |   |   |  |   |   |  |   |   |  |   |   |  |
| Earned premiums                             |   | $ | 4,243 |  |   | $ | 3,902 |  |   | $ | 3,522 |  |   | 9 |  |   | 11 |  |
| Investment income, net of expenses (pretax) |   | 549 |  |   | 529 |  |   | 531 |  |   | 4 |  |   | 0 |  |
| Realized investment gains, net (pretax)     |   | 133 |  |   | 83 |  |   | 42 |  |   | 60 |  |   | 98 |  |
| Total revenues                              |   | 4,945 |  |   | 4,531 |  |   | 4,111 |  |   | 9 |  |   | 10 |  |
| Net income                                  |   | 525 |  |   | 517 |  |   | 421 |  |   | 2 |  |   | 23 |  |
| Comprehensive income                        |   | 765 |  |   | 892 |  |   | 649 |  |   | (14 | ) |   | 37 |  |
| Net income - diluted                        |   | $ | 3.18 |  |   | $ | 3.12 |  |   | $ | 2.57 |  |   | 2 |  |   | 21 |  |
| Cash dividends declared                     |   | 1.76 |  |   | 1.655 |  |   | 1.62 |  |   | 6 |  |   | 2 |  |
| Diluted weighted average shares outstanding |   | 165.1 |  |   | 165.4 |  |   | 163.7 |  |   | 0 |  |   | 1 |  |
|                                        |   |   |   |   |   |   |   |   |   |   |

----

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                 |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Consolidated property casualty data: |   |   |   |   |   |   |   |   |   |   |
| Net written premiums                 |   | $ | 4,143 |  |   | $ | 3,893 |  |   | $ | 3,482 |  |   | 6 |  |   | 12 |  |
| Earned premiums                      |   | 4,045 |  |   | 3,713 |  |   | 3,344 |  |   | 9 |  |   | 11 |  |
| Underwriting profit                  |   | 186 |  |   | 233 |  |   | 137 |  |   | (20 | ) |   | 70 |  |
|                                 |   |   |   |   |   |   |   |   |   |   |
|                                 |   |       |  |   |       |  |   |       |  |   | Pt. Change |   | Pt. Change |
| GAAP combined ratio                  |   | 95.6 | % |   | 93.8 | % |   | 96.1 | % |   | 1.8 |  |   | (2.3 | ) |
| Statutory combined ratio             |   | 95.1 |  |   | 92.8 |  |   | 95.4 |  |   | 2.3 |  |   | (2.6 | ) |
| Written premium to statutory surplus |   | 0.9 |  |   | 0.9 |  |   | 0.9 |  |   | 0.0 |  |   | 0.0 |  |
|                                 |   |   |   |   |   |   |   |   |   |   |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Improve insurance profitability – Implementation of these initiatives is intended to enhance underwriting expertise and knowledge, thereby increasing our ability to manage our business while also gaining efficiency. Better profit margins can arise from additional information and more focused action on underperforming product lines, plus pricing capabilities we are expanding through the use of technology and analytics. Improved internal processes with additional performance metrics can help us be more efficient and effective. These initiatives also support the ability of the independent agencies that represent us to grow profitably by allowing them to serve clients faster and to more efficiently manage agency expenses. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Drive premium growth – Implementation of these initiatives is intended to further penetrate each market we serve through our independent agencies. Strategies aimed at specific market opportunities, along with service enhancements, can help our agents grow and increase our share of their business. Diversified growth also may reduce variability of losses from weather-related catastrophes. |

|         |                                                                                                                                                                                                                                                     |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We expect the insurance marketplace to remain competitive, which is likely to cause carriers to pursue strategies that they believe could lead to economies of scale, market share gains or the potential for an improved competitive posture. |

|         |                                                                                                                                                                                                                |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We expect the independent insurance agency system to remain strong, with continued agency consolidation. If soft insurance market conditions return in 2015, it will create additional risk for agencies. |

|         |                                                                                                                                                                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We expect initiatives that make it easier for agents to do business with us to continue to be a significant factor in agency relationships. Technology is a major driver, with policyholders increasingly demanding online services and access from agents or carriers. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The rally in financial markets during recent years had a favorable impact on our value creation ratio, offsetting the unfavorable impact of the sharp decline in financial markets during 2008. Financial markets continued to display volatility during 2014, and some predict more turbulence in 2015 from effects such as changes in government policy, growth challenges for emerging country economies or other geopolitical events that could also affect the U.S. economy and markets. Should financial markets decline during 2015, which could occur as part of typical market volatility patterns, the related book value component of our 2015 value creation ratio could also register a weak or negative result. |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | A return of soft insurance market pricing could significantly affect growth rates and earned premium levels into 2015 and for some time into the future, depending on insurance market conditions. After several years of market conditions that weakened loss ratios and hampered near-term profitability, conditions affecting property casualty insurance markets have improved since late 2011. In the future, economic factors, including inflation, may increase our claims and settlement expenses related to medical care, litigation and construction. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The slowly recovering economy continued to help increase the value of business and personal insurable assets owned by policyholders in 2014. If the economy falters, we may experience low or no premium growth for the property casualty industry. Property casualty written premium growth also may lag as some of our growth initiatives require more time to reach their full contribution. |

|         |                                                                                                                                                                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We will incur costs for continued investment in our business, including technology, geographic expansion and process initiatives to create long-term value. In addition, we will not see the full advantage of some of these investments for several years. |

----

|         |                        |
|---------|------------------------|
| • | type of claim involved |

|         |                                      |
|---------|--------------------------------------|
| • | circumstances surrounding each claim |

|         |                                            |
|---------|--------------------------------------------|
| • | policy provisions pertaining to each claim |

|         |                                                  |
|---------|--------------------------------------------------|
| • | potential for subrogation or salvage recoverable |

|         |                                       |
|---------|---------------------------------------|
| • | general insurance reserving practices |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | For events designated as natural catastrophes, we calculate bulk reserves directly as a result of an estimated IBNR claim count and an estimated average claim amount for each event. Once case reserves are established for a catastrophe event, we reduce the bulk reserves. Our claims department management coordinates the assessment of these events and prepares the related bulk reserve estimates. Such an assessment involves a comprehensive analysis of the nature of the event, of policyholder exposures within the affected geographic area and of available claims intelligence. Depending on the nature of the event, available claims intelligence could include surveys of field claims associates within the affected geographic area, feedback from a catastrophe claims team sent into the area, as well as data on claims reported as of the financial statement date. To determine whether an event is designated as a catastrophe, we generally use the catastrophe definition provided by Property Claims Service (PCS), a division of Insurance Services Office (ISO). PCS defines a catastrophe as an event that causes countrywide damage of $25 million or more in insured property losses and affects a significant number of policyholders and insureds. |

|         |                                                                                                                                                                                                                                                                                                                                                                           |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | For asbestos and environmental claims, we calculate IBNR reserves by deriving an actuarially-based estimate of total unpaid loss and loss expenses. We then reduce the estimate by total case reserves. We discuss the reserve analysis that applies to asbestos and environmental reserves in Liquidity and Capital Resources, Asbestos and Environmental Reserves. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | For loss expenses that pertain primarily to salaries and other costs related to our claims department associates, also referred to as adjusting and other expense or AOE, we calculate reserves based on an analysis of the relationship between paid losses and paid AOE. Reserves for AOE are allocated to company, line of business and accident year based on a claim count algorithm. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | For all other claims and events, IBNR reserves are calculated as the difference between an actuarial estimate of the ultimate cost of total loss and loss expenses incurred reduced by the sum of total loss and loss expense payments and total case reserves estimated for individual claims. We discuss below the development of actuarially based estimates of the ultimate cost of total loss and loss expenses incurred. |

|         |                                            |
|---------|--------------------------------------------|
| • | paid and reported loss development methods |

|         |                                                     |
|---------|-----------------------------------------------------|
| • | paid and reported loss Bornhuetter-Ferguson methods |

|         |                                                           |
|---------|-----------------------------------------------------------|
| • | individual and multiple probabilistic trend family models |

----

|         |                              |
|---------|------------------------------|
| • | company and industry pricing |

|         |                               |
|---------|-------------------------------|
| • | company and industry exposure |

|         |                                                  |
|---------|--------------------------------------------------|
| • | company and industry loss frequency and severity |

|         |                                           |
|---------|-------------------------------------------|
| • | past large loss events such as hurricanes |

|         |                              |
|---------|------------------------------|
| • | company and industry premium |

|         |                               |
|---------|-------------------------------|
| • | company in-force policy count |

|         |                                                |
|---------|------------------------------------------------|
| • | large loss activity and trends in large losses |

|         |                       |
|---------|-----------------------|
| • | new business activity |

|         |                    |
|---------|--------------------|
| • | judicial decisions |

|         |                                           |
|---------|-------------------------------------------|
| • | general economic trends such as inflation |

|         |                                            |
|---------|--------------------------------------------|
| • | trends in litigiousness and legal expenses |

|         |                                  |
|---------|----------------------------------|
| • | product and underwriting changes |

|         |                             |
|---------|-----------------------------|
| • | changes in claims practices |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Emergence of loss and defense and cost containment expenses, also referred to as DCCE, on an accident year basis. Historical paid loss, reported loss and paid DCCE data for the business lines we analyze contain patterns that reflect how unpaid losses, unreported losses and unpaid DCCE as of a financial statement date will emerge in the future on an accident year basis. Unless our actuarial staff or management identifies reasons or factors that invalidate the extension of historical patterns into the future, these patterns can be used to make projections necessary for estimating IBNR reserves. Our actuaries significantly rely on this assumption in the application of all methods and models mentioned above. |

|         |                                                                                                                                                                                                                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Calendar year inflation. For long-tail and mid-tail business lines, calendar year inflation trends for future paid losses and paid DCCE do not vary significantly from a stable, long-term average. Our actuaries base reserve estimates derived from probabilistic trend family models on this assumption. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Exposure levels. Historical earned premiums, when adjusted to reflect common levels of product pricing and loss cost inflation, can serve as a proxy for historical exposures. Our actuaries require this assumption to estimate expected loss ratios and expected DCCE ratios used by the Bornhuetter-Ferguson reserving methods. They may also use this assumption to establish exposure levels for recent accident years, characterized by “green” or immature data, when working with probabilistic trend family models. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Claims having atypical emergence patterns. Characteristics of certain subsets of claims, such as high frequency, high severity, or mass tort claims, have the potential to distort patterns contained in historical paid loss, reported loss and paid DCCE data. When testing indicates this to be the case for a particular subset of claims, our actuaries segregate these claims from the data and analyze them separately. Subsets of claims that could fall into this category include hurricane claims or claims for other weather events where total losses we incurred were very large, individual large claims and asbestos and environmental claims. |

----

|                       |
|-----------------------|
|                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions) |   | Net loss and loss expense range of reserves |   |   |
|                  |   | Carried reserves |   | Low point |   | High point |   | Standard error |   | Net incomeeffect |
|                  |   |   |   |   |   |
| At December 31, 2014  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Total                 |   | $ | 4,156 |  |   | $ | 3,922 |  |   | $ | 4,296 |  |   |   |  |   |   |  |
|                  |   |   |   |   |   |   |   |   |   |   |
| Commercial casualty   |   | $ | 1,647 |  |   | $ | 1,477 |  |   | $ | 1,779 |  |   | $ | 151 |  |   | $ | 98 |  |
| Commercial property   |   | 230 |  |   | 202 |  |   | 244 |  |   | 21 |  |   | 14 |  |
| Commercial auto       |   | 431 |  |   | 411 |  |   | 450 |  |   | 19 |  |   | 12 |  |
| Workers' compensation |   | 983 |  |   | 873 |  |   | 1,067 |  |   | 97 |  |   | 63 |  |
| Personal auto         |   | 214 |  |   | 204 |  |   | 223 |  |   | 9 |  |   | 6 |  |
| Homeowners            |   | 104 |  |   | 95 |  |   | 112 |  |   | 8 |  |   | 5 |  |
|                  |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2013  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Total                 |   | $ | 3,942 |  |   | $ | 3,727 |  |   | $ | 4,078 |  |   |   |  |   |   |  |
|                  |   |   |   |   |   |   |   |   |   |   |
| Commercial casualty   |   | $ | 1,532 |  |   | $ | 1,368 |  |   | $ | 1,643 |  |   | $ | 138 |  |   | $ | 90 |  |
| Commercial property   |   | 241 |  |   | 223 |  |   | 260 |  |   | 19 |  |   | 12 |  |
| Commercial auto       |   | 371 |  |   | 352 |  |   | 391 |  |   | 19 |  |   | 12 |  |
| Workers' compensation |   | 966 |  |   | 873 |  |   | 1,059 |  |   | 93 |  |   | 60 |  |
| Personal auto         |   | 198 |  |   | 189 |  |   | 207 |  |   | 9 |  |   | 6 |  |
| Homeowners            |   | 106 |  |   | 98 |  |   | 113 |  |   | 7 |  |   | 5 |  |
|                  |   |   |   |   |   |   |   |   |   |   |

----

----

----

----

|         |                            |
|---------|----------------------------|
| • | Commercial lines insurance |

|         |                          |
|---------|--------------------------|
| • | Personal lines insurance |

|         |                                    |
|---------|------------------------------------|
| • | Excess and surplus lines insurance |

|         |                |
|---------|----------------|
| • | Life insurance |

|         |             |
|---------|-------------|
| • | Investments |

----

|                                                                                                     |
|-----------------------------------------------------------------------------------------------------|
|                                                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                                                               |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                                                                                |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Earned premiums                                                                                     |   | $ | 4,045 |  |   | $ | 3,713 |  |   | $ | 3,344 |  |   | 9 |  |   | 11 |  |
| Fee revenues                                                                                        |   | 6 |  |   | 4 |  |   | 6 |  |   | 50 |  |   | (33 | ) |
| Total revenues                                                                                      |   | 4,051 |  |   | 3,717 |  |   | 3,350 |  |   | 9 |  |   | 11 |  |
| Loss and loss expenses from:                                                                        |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Current accident year before catastrophe losses                                                     |   | 2,495 |  |   | 2,249 |  |   | 2,160 |  |   | 11 |  |   | 4 |  |
| Current accident year catastrophe losses                                                            |   | 230 |  |   | 199 |  |   | 373 |  |   | 16 |  |   | (47 | ) |
| Prior accident years before catastrophe losses                                                      |   | (72 | ) |   | (120 | ) |   | (357 | ) |   | 40 |  |   | 66 |  |
| Prior accident years catastrophe losses                                                             |   | (26 | ) |   | (27 | ) |   | (39 | ) |   | 4 |  |   | 31 |  |
| Total loss and loss expenses                                                                        |   | 2,627 |  |   | 2,301 |  |   | 2,137 |  |   | 14 |  |   | 8 |  |
| Underwriting expenses                                                                               |   | 1,238 |  |   | 1,183 |  |   | 1,076 |  |   | 5 |  |   | 10 |  |
| Underwriting profit                                                                                 |   | $ | 186 |  |   | $ | 233 |  |   | $ | 137 |  |   | (20 | ) |   | 70 |  |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |
| Ratios as a percent of earned premiums:                                                             |   |   |   |   |   |   |   | Pt. Change |   | Pt. Change |
| Current accident year before catastrophe losses                                                     |   | 61.7 |  % |   | 60.6 |  % |   | 64.6 |  % |   | 1.1 |  |   | (4.0 | ) |
| Current accident year catastrophe losses                                                            |   | 5.7 |  |   | 5.4 |  |   | 11.1 |  |   | 0.3 |  |   | (5.7 | ) |
| Prior accident years before catastrophe losses                                                      |   | (1.8 | ) |   | (3.3 | ) |   | (10.7 | ) |   | 1.5 |  |   | 7.4 |  |
| Prior accident years catastrophe losses                                                             |   | (0.6 | ) |   | (0.8 | ) |   | (1.1 | ) |   | 0.2 |  |   | 0.3 |  |
| Total loss and loss expense                                                                         |   | 65.0 |  |   | 61.9 |  |   | 63.9 |  |   | 3.1 |  |   | (2.0 | ) |
| Underwriting expense                                                                                |   | 30.6 |  |   | 31.9 |  |   | 32.2 |  |   | (1.3 | ) |   | (0.3 | ) |
| Combined ratio                                                                                      |   | 95.6 |  % |   | 93.8 |  % |   | 96.1 |  % |   | 1.8 |  |   | (2.3 | ) |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |
| Combined ratio:                                                                                     |   | 95.6 |  % |   | 93.8 |  % |   | 96.1 |  % |   | 1.8 |  |   | (2.3 | ) |
| Contribution from catastrophe losses and prior years    reserve development     |   | 3.3 |  |   | 1.3 |  |   | (0.7 | ) |   | 2.0 |  |   | 2.0 |  |
| Combined ratio before catastrophe losses and prior years    reserve development |   | 92.3 |  % |   | 92.5 |  % |   | 96.8 |  % |   | (0.2 | ) |   | (4.3 | ) |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Premiums – Strong growth in renewal written premiums drove increases in earned premiums and net written premiums for both 2014 and 2013, rising in each of our property casualty segments. Higher and more precise pricing continues to benefit operating results and is further discussed by segment in the results sections below. New business written premiums in 2014 were down $40 million, compared with the record-high amount we reported in 2013. The year 2013 also represented the sixth straight year of higher new business premiums, reflecting our premium growth initiatives from recent years. Those initiatives also favorably affect growth in subsequent years, particularly as newer agency relationships mature over time. Agents appointed during 2014 or |

----

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                 |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Agency renewal written premiums      |   | $ | 3,794 |  |   | $ | 3,493 |  |   | $ | 3,138 |  |   | 9 |  |   | 11 |  |
| Agency new business written premiums |   | 503 |  |   | 543 |  |   | 501 |  |   | (7 | ) |   | 8 |  |
| Other written premiums               |   | (154 | ) |   | (143 | ) |   | (157 | ) |   | (8 | ) |   | 9 |  |
| Net written premiums                 |   | 4,143 |  |   | 3,893 |  |   | 3,482 |  |   | 6 |  |   | 12 |  |
| Unearned premium change              |   | (98 | ) |   | (180 | ) |   | (138 | ) |   | 46 |  |   | (30 | ) |
| Earned premiums                      |   | $ | 4,045 |  |   | $ | 3,713 |  |   | $ | 3,344 |  |   | 9 |  |   | 11 |  |
|                                 |   |   |   |   |   |   |   |   |   |   |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Combined ratio – The 2014 combined ratio rose 1.8 percentage points compared with 2013, as higher weather-related losses largely offset our recent-year initiatives to improve pricing precision and loss experience related to claims and loss control practices. Compared with 2013, the 2014 ratio for natural catastrophe losses rose 0.5 points while the ratio for noncatastrophe weather losses rose 1.0 points. In addition, higher estimates of incurred but not reported (IBNR) losses and loss expenses for our commercial casualty line of business increased our 2014 consolidated property casualty combined ratio by 1.5 points, compared with 2013. We further discuss those ratios and ones related to reserve development in the sections that follow our discussion below in Catastrophe Losses Incurred. |

----

|                                            |
|--------------------------------------------|
|                                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions, net of reinsurance)  |   |   |   |   |   |   | Excess |   |   |
|                                       |   |   |   | Commercial |   | Personal |   | and surplus |   |   |
| Dates                                      | Events | Regions |   | lines |   | lines |   | lines |   | Total |
| 2014                                       |   |   |   |   |  |   |   |  |   |   |  |   |   |  |
| Jan. 5-8                                   | Freezing, ice, snow, wind | Midwest, Northeast, South |   | $ | 45 |  |   | $ | 24 |  |   | $ | 1 |  |   | $ | 70 |  |
| Apr. 27-May 1                              | Flood, hail, wind | Midwest, Northeast, South |   | 4 |  |   | 9 |  |   | — |  |   | 13 |  |
| May 10-13                                  | Flood, hail, wind | Midwest |   | 6 |  |   | 7 |  |   | — |  |   | 13 |  |
| May 18-19                                  | Flood, hail, wind | Midwest, South, West |   | 23 |  |   | 19 |  |   | 1 |  |   | 43 |  |
| Jun. 3-4                                   | Flood, hail, wind | Midwest |   | 9 |  |   | 1 |  |   | — |  |   | 10 |  |
| All other 2014 catastrophes                |   |   | 48 |  |   | 32 |  |   | 1 |  |   | 81 |  |
| Development on 2013 and prior catastrophes |   | (15 | ) |   | (11 | ) |   | — |  |   | (26 | ) |
| Calendar year incurred total               |   |   | $ | 120 |  |   | $ | 81 |  |   | $ | 3 |  |   | $ | 204 |  |
|                                       |   |   |   |   |   |   |   |   |   |   |
| 2013                                       |   |   |   |   |  |   |   |  |   |   |  |   |   |  |
| Mar. 18-19                                 | Hail, wind | South |   | $ | 4 |  |   | $ | 7 |  |   | $ | — |  |   | $ | 11 |  |
| Apr. 7-11                                  | Hail, lightning, wind | Midwest, West |   | 12 |  |   | 10 |  |   | — |  |   | 22 |  |
| Apr. 16-19                                 | Hail, lightning, wind | Midwest |   | 5 |  |   | 6 |  |   | — |  |   | 11 |  |
| May. 18-20                                 | Hail, lightning, wind | Midwest, Northeast, South |   | 9 |  |   | 1 |  |   | — |  |   | 10 |  |
| May. 28-29                                 | Hail, lightning, wind | South |   | 8 |  |   | 2 |  |   | 1 |  |   | 11 |  |
| Jun. 24-26                                 | Hail, lightning, wind | Midwest, Northeast |   | 5 |  |   | 6 |  |   | — |  |   | 11 |  |
| Jul. 9-11                                  | Hail, lightning, wind | Midwest, Northeast |   | 5 |  |   | 6 |  |   | — |  |   | 11 |  |
| Jul. 23-24                                 | Hail, lightning, wind | Midwest, South |   | 14 |  |   | 4 |  |   | — |  |   | 18 |  |
| Aug. 6-7                                   | Hail, lightning, wind | Midwest |   | 6 |  |   | 9 |  |   | — |  |   | 15 |  |
| Nov. 17-18                                 | Hail, lightning, wind | Midwest, South |   | 18 |  |   | 17 |  |   | — |  |   | 35 |  |
| All other 2013 catastrophes                |   |   | 28 |  |   | 16 |  |   | — |  |   | 44 |  |
| Development on 2012 and prior catastrophes |   |   | (17 | ) |   | (10 | ) |   | — |  |   | (27 | ) |
| Calendar year incurred total               |   |   | $ | 97 |  |   | $ | 74 |  |   | $ | 1 |  |   | $ | 172 |  |
|                                       |   |   |   |   |   |   |   |   |   |   |
| 2012                                       |   |   |   |   |  |   |   |  |   |   |  |   |   |  |
| Feb. 28-29                                 | Hail, tornado, wind | Midwest |   | $ | 19 |  |   | $ | 6 |  |   | $ | — |  |   | $ | 25 |  |
| Mar. 2-3                                   | Hail, tornado, wind | Midwest, South |   | 30 |  |   | 48 |  |   | — |  |   | 78 |  |
| Apr. 28-29                                 | Hail, lightning, wind | Midwest, South |   | 53 |  |   | 26 |  |   | 1 |  |   | 80 |  |
| Jun. 28-Jul. 2                             | Hail, lightning, wind | Midwest, Northeast, South |   | 39 |  |   | 42 |  |   | — |  |   | 81 |  |
| Jul. 2-4                                   | Hail, lightning, wind | Midwest, Northeast |   | 7 |  |   | 5 |  |   | — |  |   | 12 |  |
| Oct. 28-31                                 | Sandy | Midwest, Northeast, South |   | 20 |  |   | 10 |  |   | — |  |   | 30 |  |
| All other 2012 catastrophes                |   |   | 43 |  |   | 23 |  |   | 1 |  |   | 67 |  |
| Development on 2011 and prior catastrophes |   |   | (17 | ) |   | (22 | ) |   | — |  |   | (39 | ) |
| Calendar year incurred total               |   |   | $ | 194 |  |   | $ | 138 |  |   | $ | 2 |  |   | $ | 334 |  |
|                                       |   |   |   |   |   |   |   |   |   |   |

----

|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Accident year loss and loss expenses incurred and ratios to earned premiums: |   |   |   |   |   |   |
| Accident year:                                                               |   | 2014 |   | 2013 |   | 2012 |   | 2014 |   | 2013 |   | 2012 |
| as of December 31, 2014                                                      |   | $ | 2,725 |  |   | $ | 2,391 |  |   | $ | 2,416 |  |   | 67.4 | % |   | 64.4 | % |   | 72.3 | % |
| as of December 31, 2013                                                 |   |   |  |   | 2,448 |  |   | 2,431 |  |   |   |  |   | 66.0 |  |   | 72.7 |  |
| as of December 31, 2012                                                 |   |   |  |   |   |  |   | 2,533 |  |   |   |  |   |   |  |   | 75.7 |  |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions, net of reinsurance)            |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                                 |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Current accident year losses greater than $5,000,000 |   | $ | 30 |  |   | $ | 23 |  |   | $ | 22 |  |   | 30 |  |   | 5 |  |
| Current accident year losses $1,000,000-$5,000,000   |   | 172 |  |   | 167 |  |   | 150 |  |   | 3 |  |   | 11 |  |
| Large loss prior accident year reserve development   |   | 7 |  |   | 44 |  |   | 9 |  |   | (84 | ) |   | nm |  |
| Total large losses incurred                          |   | 209 |  |   | 234 |  |   | 181 |  |   | (11 | ) |   | 29 |  |
| Losses incurred but not reported                     |   | 133 |  |   | 123 |  |   | (14 | ) |   | 8 |  |   | nm |  |
| Other losses excluding catastrophe losses            |   | 1,660 |  |   | 1,412 |  |   | 1,311 |  |   | 18 |  |   | 8 |  |
| Catastrophe losses                                   |   | 197 |  |   | 166 |  |   | 321 |  |   | 19 |  |   | (48 | ) |
| Total losses incurred                                |   | $ | 2,199 |  |   | $ | 1,935 |  |   | $ | 1,799 |  |   | 14 |  |   | 8 |  |
|                                                 |   |   |   |   |   |   |   |   |   |   |
| Ratios as a percent of earned premiums:              |   |   |  |   |   |  |   |   |  |   | Pt. Change |   | Pt. Change |
| Current accident year losses greater than $5,000,000 |   | 0.7 | % |   | 0.6 | % |   | 0.7 |  % |   | 0.1 |  |   | (0.1 | ) |
| Current accident year losses $1,000,000-$5,000,000   |   | 4.3 |  |   | 4.5 |  |   | 4.5 |  |   | (0.2 | ) |   | — |  |
| Large loss prior accident year reserve development   |   | 0.2 |  |   | 1.2 |  |   | 0.3 |  |   | (1.0 | ) |   | 0.9 |  |
| Total large loss ratio                               |   | 5.2 |  |   | 6.3 |  |   | 5.5 |  |   | (1.1 | ) |   | 0.8 |  |
| Losses incurred but not reported                     |   | 3.3 |  |   | 3.3 |  |   | (0.4 | ) |   | — |  |   | 3.7 |  |
| Other losses excluding catastrophe losses            |   | 41.0 |  |   | 38.0 |  |   | 39.1 |  |   | 3.0 |  |   | (1.1 | ) |
| Catastrophe losses                                   |   | 4.9 |  |   | 4.5 |  |   | 9.6 |  |   | 0.4 |  |   | (5.1 | ) |
| Total loss ratio                                     |   | 54.4 | % |   | 52.1 | % |   | 53.8 |  % |   | 2.3 |  |   | (1.7 | ) |
|                                                 |   |   |   |   |   |   |   |   |   |   |

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                   |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                    |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Commission expenses                     |   | $ | 744 |  |   | $ | 705 |  |   | $ | 635 |  |   | 6 |  |   | 11 |  |
| Other underwriting expenses             |   | 478 |  |   | 462 |  |   | 425 |  |   | 3 |  |   | 9 |  |
| Policyholder dividends                  |   | 16 |  |   | 16 |  |   | 16 |  |   | 0 |  |   | 0 |  |
| Total underwriting expenses             |   | $ | 1,238 |  |   | $ | 1,183 |  |   | $ | 1,076 |  |   | 5 |  |   | 10 |  |
|                                    |   |   |   |   |   |   |   |   |   |   |
| Ratios as a percent of earned premiums: |   |   |  |   |   |  |   |   |  |   | Pt. Change |   | Pt. Change |
| Commission expense                      |   | 18.4 | % |   | 19.0 | % |   | 19.0 | % |   | (0.6 | ) |   | 0.0 |  |
| Other underwriting expense              |   | 11.8 |  |   | 12.5 |  |   | 12.7 |  |   | (0.7 | ) |   | (0.2 | ) |
| Policyholder dividends                  |   | 0.4 |  |   | 0.4 |  |   | 0.5 |  |   | 0.0 |  |   | (0.1 | ) |
| Total underwriting expense ratio        |   | 30.6 | % |   | 31.9 | % |   | 32.2 | % |   | (1.3 | ) |   | (0.3 | ) |
|                                    |   |   |   |   |   |   |   |   |   |   |

----

----

|                                                                                                     |
|-----------------------------------------------------------------------------------------------------|
|                                                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                                                               |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                                                                                |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Earned premiums                                                                                     |   | $ | 2,856 |  |   | $ | 2,636 |  |   | $ | 2,383 |  |   | 8 |  |   | 11 |  |
| Fee revenues                                                                                        |   | 4 |  |   | 3 |  |   | 4 |  |   | 33 |  |   | (25 | ) |
| Total revenues                                                                                      |   | 2,860 |  |   | 2,639 |  |   | 2,387 |  |   | 8 |  |   | 11 |  |
| Loss and loss expenses from:                                                                        |   |   |  |   |   |  |   |   |  |   |   |  |   |   |
| Current accident year before catastrophe losses                                                     |   | 1,734 |  |   | 1,577 |  |   | 1,501 |  |   | 10 |  |   | 5 |  |
| Current accident year catastrophe losses                                                            |   | 135 |  |   | 114 |  |   | 211 |  |   | 18 |  |   | (46 | ) |
| Prior accident years before catastrophe losses                                                      |   | (42 | ) |   | (78 | ) |   | (275 | ) |   | 46 |  |   | 72 |  |
| Prior accident years catastrophe losses                                                             |   | (15 | ) |   | (17 | ) |   | (17 | ) |   | 12 |  |   | 0 |  |
| Total loss and loss expenses                                                                        |   | 1,812 |  |   | 1,596 |  |   | 1,420 |  |   | 14 |  |   | 12 |  |
| Underwriting expenses                                                                               |   | 902 |  |   | 857 |  |   | 786 |  |   | 5 |  |   | 9 |  |
| Underwriting profit                                                                                 |   | $ | 146 |  |   | $ | 186 |  |   | $ | 181 |  |   | (22 | ) |   | 3 |  |
| Ratios as a percent of earned premiums:                                                             |   |   |  |   |   |  |   |   |  |   | Pt. Change |   | Pt. Change |
| Current accident year before catastrophe losses                                                     |   | 60.7 |  % |   | 59.8 |  % |   | 62.9 |  % |   | 0.9 |  |   | (3.1 | ) |
| Current accident year catastrophe losses                                                            |   | 4.8 |  |   | 4.3 |  |   | 8.9 |  |   | 0.5 |  |   | (4.6 | ) |
| Prior accident years before catastrophe losses                                                      |   | (1.5 | ) |   | (3.0 | ) |   | (11.6 | ) |   | 1.5 |  |   | 8.6 |  |
| Prior accident years catastrophe losses                                                             |   | (0.5 | ) |   | (0.6 | ) |   | (0.7 | ) |   | 0.1 |  |   | 0.1 |  |
| Total loss and loss expense                                                                         |   | 63.5 |  |   | 60.5 |  |   | 59.5 |  |   | 3.0 |  |   | 1.0 |  |
| Underwriting expense                                                                                |   | 31.6 |  |   | 32.5 |  |   | 33.0 |  |   | (0.9 | ) |   | (0.5 | ) |
| Combined ratio                                                                                      |   | 95.1 |  % |   | 93.0 |  % |   | 92.5 |  % |   | 2.1 |  |   | 0.5 |  |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |
| Combined ratio:                                                                                     |   | 95.1 |  % |   | 93.0 |  % |   | 92.5 |  % |   | 2.1 |  |   | 0.5 |  |
| Contribution from catastrophe losses and prior years    reserve development                         |   | 2.8 |  |   | 0.7 |  |   | (3.4 | ) |   | 2.1 |  |   | 4.1 |  |
| Combined ratio before catastrophe losses and prior years    reserve development |   | 92.3 |  % |   | 92.3 |  % |   | 95.9 |  % |   | 0.0 |  |   | (3.6 | ) |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |

|         |                                                                                                                                                                                                                                                                                                                                                           |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Premiums – Earned premiums and net written premiums each rose again in 2014, primarily due to a $207 million increase in renewal written premiums, which continued to reflect improved pricing. New business written premiums in 2014 were down $31 million, or 8 percent, compared with the record-high amount we reported in 2013. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Combined ratio – The 2014 combined ratio rose 2.1 percentage points compared with 2013, largely reflecting a 0.6 percentage-point increase in the ratio for natural catastrophe losses and a 1.0 point increase for noncatastrophe weather losses. Those unfavorable weather effects somewhat offset benefits from higher pricing and from recent-year initiatives to improve pricing precision and loss experience related to claims and loss control practices. Development on prior accident years’ loss and loss expense reserves before catastrophes during 2014 was 1.5 percentage points less favorable than in 2013, including 0.7 points from re-estimates of IBNR reserves for losses and loss expenses. |

----

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                 |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Agency renewal written premiums      |   | $ | 2,678 |  |   | $ | 2,471 |  |   | $ | 2,229 |  |   | 8 |  |   | 11 |  |
| Agency new business written premiums |   | 360 |  |   | 391 |  |   | 352 |  |   | (8 | ) |   | 11 |  |
| Other written premiums               |   | (116 | ) |   | (102 | ) |   | (122 | ) |   | (14 | ) |   | 16 |  |
| Net written premiums                 |   | 2,922 |  |   | 2,760 |  |   | 2,459 |  |   | 6 |  |   | 12 |  |
| Unearned premium change              |   | (66 | ) |   | (124 | ) |   | (76 | ) |   | 47 |  |   | (63 | ) |
| Earned premiums                      |   | $ | 2,856 |  |   | $ | 2,636 |  |   | $ | 2,383 |  |   | 8 |  |   | 11 |  |
|                                 |   |   |   |   |   |   |   |   |   |   |

----

----

|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Accident year loss and loss expenses incurred and ratios to earned premiums: |   |   |   |   |   |
| Accident year:                                                               |   | 2014 |   | 2013 |   | 2012 |   | 2014 |   | 2013 |   | 2012 |
| as of December 31, 2014                                                      |   | $ | 1,869 |  |   | $ | 1,658 |  |   | $ | 1,639 |  |   | 65.5 | % |   | 62.9 | % |   | 68.8 | % |
| as of December 31, 2013                                                 |   |   |  |   | 1,691 |  |   | 1,646 |  |   |   |  |   | 64.1 |  |   | 69.1 |  |
| as of December 31, 2012                                                 |   |   |  |   |   |  |   | 1,712 |  |   |   |  |   |   |  |   | 71.8 |  |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions, net of reinsurance)            |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                                 |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Current accident year losses greater than $5,000,000 |   | $ | 30 |  |   | $ | 23 |  |   | $ | 22 |  |   | 30 |  |   | 5 |  |
| Current accident year losses $1,000,000-$5,000,000   |   | 149 |  |   | 132 |  |   | 117 |  |   | 13 |  |   | 13 |  |
| Large loss prior accident year reserve development   |   | 7 |  |   | 36 |  |   | 15 |  |   | (81 | ) |   | nm |  |
| Total large losses incurred                          |   | 186 |  |   | 191 |  |   | 154 |  |   | (3 | ) |   | 24 |  |
| Losses incurred but not reported                     |   | 90 |  |   | 125 |  |   | (7 | ) |   | (28 | ) |   | nm |  |
| Other losses excluding catastrophe losses            |   | 1,096 |  |   | 923 |  |   | 841 |  |   | 19 |  |   | 10 |  |
| Catastrophe losses                                   |   | 114 |  |   | 93 |  |   | 187 |  |   | 23 |  |   | (50 | ) |
| Total losses incurred                                |   | $ | 1,486 |  |   | $ | 1,332 |  |   | $ | 1,175 |  |   | 12 |  |   | 13 |  |
|                                                 |   |   |   |   |   |   |   |   |   |   |
| Ratios as a percent of earned premiums:              |   |   |  |   |   |  |   |   |  |   | Pt. Change |   | Pt. Change |
| Current accident year losses greater than $5,000,000 |   | 1.0 | % |   | 0.9 | % |   | 0.9 |  % |   | 0.1 |  |   | 0.0 |  |
| Current accident year losses $1,000,000-$5,000,000   |   | 5.2 |  |   | 5.0 |  |   | 4.9 |  |   | 0.2 |  |   | 0.1 |  |
| Large loss prior accident year reserve development   |   | 0.3 |  |   | 1.4 |  |   | 0.6 |  |   | (1.1 | ) |   | 0.8 |  |
| Total large loss ratio                               |   | 6.5 |  |   | 7.3 |  |   | 6.4 |  |   | (0.8 | ) |   | 0.9 |  |
| Losses incurred but not reported                     |   | 3.1 |  |   | 4.8 |  |   | (0.2 | ) |   | (1.7 | ) |   | 5.0 |  |
| Other losses excluding catastrophe losses            |   | 38.4 |  |   | 35.0 |  |   | 35.3 |  |   | 3.4 |  |   | (0.3 | ) |
| Catastrophe losses                                   |   | 4.0 |  |   | 3.5 |  |   | 7.8 |  |   | 0.5 |  |   | (4.3 | ) |
| Total loss ratio                                     |   | 52.0 | % |   | 50.6 | % |   | 49.3 |  % |   | 1.4 |  |   | 1.3 |  |
|                                                 |   |   |   |   |   |   |   |   |   |   |

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                   |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                    |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Commission expenses                     |   | $ | 526 |  |   | $ | 492 |  |   | $ | 442 |  |   | 7 |  |   | 11 |  |
| Other underwriting expenses             |   | 360 |  |   | 349 |  |   | 328 |  |   | 3 |  |   | 6 |  |
| Policyholder dividends                  |   | 16 |  |   | 16 |  |   | 16 |  |   | 0 |  |   | 0 |  |
| Total underwriting expenses             |   | $ | 902 |  |   | $ | 857 |  |   | $ | 786 |  |   | 5 |  |   | 9 |  |
| Ratios as a percent of earned premiums: |   |   |  |   |   |  |   |   |  |   | Pt. Change |   | Pt. Change |
| Commission expense                      |   | 18.4 | % |   | 18.7 | % |   | 18.6 | % |   | (0.3 | ) |   | 0.1 |  |
| Other underwriting expense              |   | 12.7 |  |   | 13.2 |  |   | 13.7 |  |   | (0.5 | ) |   | (0.5 | ) |
| Policyholder dividends                  |   | 0.5 |  |   | 0.6 |  |   | 0.7 |  |   | (0.1 | ) |   | (0.1 | ) |
| Total underwriting expense ratio        |   | 31.6 | % |   | 32.5 | % |   | 33.0 | % |   | (0.9 | ) |   | (0.5 | ) |
|                                    |   |   |   |   |   |   |   |   |   |   |

----

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                           |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                            |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Written premiums                                |   | $ | 969 |  |   | $ | 897 |  |   | $ | 793 |  |   | 8 |  |   | 13 |  |
| Earned premiums                                 |   | 938 |  |   | 856 |  |   | 767 |  |   | 10 |  |   | 12 |  |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Ratios as a percent of earned premiums:         |   |   |   |   |   |   |   | Pt. Change |   | Pt. Change |
| Current accident year before catastrophe losses |   | 59.4 | % |   | 56.0 |  % |   | 64.1 |  % |   | 3.4 |  |   | (8.1 | ) |
| Current accident year catastrophe losses        |   | — |  |   | — |  |   | — |  |   | 0.0 |  |   | 0.0 |  |
| Prior accident years before catastrophe losses  |   | 0.5 |  |   | (8.2 | ) |   | (23.1 | ) |   | 8.7 |  |   | 14.9 |  |
| Prior accident years catastrophe losses         |   | — |  |   | — |  |   | — |  |   | 0.0 |  |   | 0.0 |  |
| Total loss and loss expense ratio               |   | 59.9 | % |   | 47.8 |  % |   | 41.0 |  % |   | 12.1 |  |   | 6.8 |  |
|                                            |   |   |   |   |   |   |   |   |   |   |

----

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                           |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                            |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Written premiums                                |   | $ | 776 |  |   | $ | 673 |  |   | $ | 573 |  |   | 15 |  |   | 17 |  |
| Earned premiums                                 |   | 728 |  |   | 623 |  |   | 545 |  |   | 17 |  |   | 14 |  |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Ratios as a percent of earned premiums:         |   |   |   |   |   |   |   | Pt. Change |   | Pt. Change |
| Current accident year before catastrophe losses |   | 51.0 |  % |   | 50.7 |  % |   | 46.1 |  % |   | 0.3 |  |   | 4.6 |  |
| Current accident year catastrophe losses        |   | 14.3 |  |   | 14.9 |  |   | 31.7 |  |   | (0.6 | ) |   | (16.8 | ) |
| Prior accident years before catastrophe losses  |   | (2.9 | ) |   | (1.3 | ) |   | (3.1 | ) |   | (1.6 | ) |   | 1.8 |  |
| Prior accident years catastrophe losses         |   | (1.8 | ) |   | (2.3 | ) |   | (1.8 | ) |   | 0.5 |  |   | (0.5 | ) |
| Total loss and loss expense ratio               |   | 60.6 |  % |   | 62.0 |  % |   | 72.9 |  % |   | (1.4 | ) |   | (10.9 | ) |
|                                            |   |   |   |   |   |   |   |   |   |   |

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                           |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                            |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Written premiums                                |   | $ | 548 |  |   | $ | 507 |  |   | $ | 444 |  |   | 8 |  |   | 14 |  |
| Earned premiums                                 |   | 528 |  |   | 479 |  |   | 426 |  |   | 10 |  |   | 12 |  |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Ratios as a percent of earned premiums:         |   |   |   |   |   |   |   | Pt. Change |   | Pt. Change |
| Current accident year before catastrophe losses |   | 68.7 |  % |   | 67.8 |  % |   | 70.7 |  % |   | 0.9 |  |   | (2.9 | ) |
| Current accident year catastrophe losses        |   | 0.9 |  |   | 0.7 |  |   | 1.3 |  |   | 0.2 |  |   | (0.6 | ) |
| Prior accident years before catastrophe losses  |   | 7.4 |  |   | 0.4 |  |   | (0.1 | ) |   | 7.0 |  |   | 0.5 |  |
| Prior accident years catastrophe losses         |   | (0.1 | ) |   | (0.2 | ) |   | (0.2 | ) |   | 0.1 |  |   | 0.0 |  |
| Total loss and loss expense ratio               |   | 76.9 |  % |   | 68.7 |  % |   | 71.7 |  % |   | 8.2 |  |   | (3.0 | ) |
|                                            |   |   |   |   |   |   |   |   |   |   |

----

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                           |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                            |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Written premiums                                |   | $ | 365 |  |   | $ | 374 |  |   | $ | 341 |  |   | (2 | ) |   | 10 |  |
| Earned premiums                                 |   | 370 |  |   | 365 |  |   | 344 |  |   | 1 |  |   | 6 |  |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Ratios as a percent of earned premiums:         |   |   |   |   |   |   |   | Pt. Change |   | Pt. Change |
| Current accident year before catastrophe losses |   | 77.8 |  % |   | 78.0 |  % |   | 83.0 |  % |   | (0.2 | ) |   | (5.0 | ) |
| Current accident year catastrophe losses        |   | — |  |   | — |  |   | — |  |   | 0.0 |  |   | 0.0 |  |
| Prior accident years before catastrophe losses  |   | (13.9 | ) |   | (3.9 | ) |   | (21.5 | ) |   | (10.0 | ) |   | 17.6 |  |
| Prior accident years catastrophe losses         |   | — |  |   | — |  |   | — |  |   | 0.0 |  |   | 0.0 |  |
| Total loss and loss expense ratio               |   | 63.9 |  % |   | 74.1 |  % |   | 61.5 |  % |   | (10.2 | ) |   | 12.6 |  |
|                                            |   |   |   |   |   |   |   |   |   |   |

----

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                           |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                            |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Written premiums                                |   | $ | 264 |  |   | $ | 309 |  |   | $ | 308 |  |   | (15 | ) |   | 0 |  |
| Earned premiums                                 |   | 292 |  |   | 313 |  |   | 301 |  |   | (7 | ) |   | 4 |  |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Ratios as a percent of earned premiums:         |   |   |   |   |   |   |   | Pt. Change |   | Pt. Change |
| Current accident year before catastrophe losses |   | 53.4 |  % |   | 55.3 |  % |   | 56.8 |  % |   | (1.9 | ) |   | (1.5 | ) |
| Current accident year catastrophe losses        |   | 9.2 |  |   | 5.8 |  |   | 11.0 |  |   | 3.4 |  |   | (5.2 | ) |
| Prior accident years before catastrophe losses  |   | (4.8 | ) |   | 3.8 |  |   | (2.3 | ) |   | (8.6 | ) |   | 6.1 |  |
| Prior accident years catastrophe losses         |   | (0.7 | ) |   | (0.6 | ) |   | (2.3 | ) |   | (0.1 | ) |   | 1.7 |  |
| Total loss and loss expense ratio               |   | 57.1 |  % |   | 64.3 |  % |   | 63.2 |  % |   | (7.2 | ) |   | 1.1 |  |
|                                            |   |   |   |   |   |   |   |   |   |   |

----

----

|                                                                                 |
|---------------------------------------------------------------------------------|
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                                           |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                                                            |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Earned premiums                                                                 |   | $ | 1,041 |  |   | $ | 961 |  |   | $ | 868 |  |   | 8 |  |   | 11 |  |
| Fee revenues                                                                    |   | 2 |  |   | 1 |  |   | 2 |  |   | 100 |  |   | (50 | ) |
| Total revenues                                                                  |   | 1,043 |  |   | 962 |  |   | 870 |  |   | 8 |  |   | 11 |  |
| Loss and loss expenses from:                                                    |   |   |  |   |   |  |   |   |  |   |   |  |   |   |
| Current accident year before catastrophe losses                                 |   | 660 |  |   | 594 |  |   | 591 |  |   | 11 |  |   | 1 |  |
| Current accident year catastrophe losses                                        |   | 92 |  |   | 84 |  |   | 160 |  |   | 10 |  |   | (48 | ) |
| Prior accident years before catastrophe losses                                  |   | (1 | ) |   | (29 | ) |   | (77 | ) |   | 97 |  |   | 62 |  |
| Prior accident years catastrophe losses                                         |   | (11 | ) |   | (10 | ) |   | (22 | ) |   | (10 | ) |   | 55 |  |
| Total loss and loss expenses                                                    |   | 740 |  |   | 639 |  |   | 652 |  |   | 16 |  |   | (2 | ) |
| Underwriting expenses                                                           |   | 293 |  |   | 290 |  |   | 261 |  |   | 1 |  |   | 11 |  |
| Underwriting profit (loss)                                                      |   | $ | 10 |  |   | $ | 33 |  |   | $ | (43 | ) |   | (70 | ) |   | nm |  |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
| Ratios as a percent of earned premiums:                                         |   |   |   |   |   |   |   | Pt. Change |   | Pt. Change |
| Current accident year before catastrophe losses                                 |   | 63.4 |  % |   | 61.9 |  % |   | 68.2 |  % |   | 1.5 |  |   | (6.3 | ) |
| Current accident year catastrophe losses                                        |   | 8.8 |  |   | 8.8 |  |   | 18.4 |  |   | 0.0 |  |   | (9.6 | ) |
| Prior accident years before catastrophe losses                                  |   | (0.1 | ) |   | (3.0 | ) |   | (8.9 | ) |   | 2.9 |  |   | 5.9 |  |
| Prior accident years catastrophe losses                                         |   | (1.0 | ) |   | (1.1 | ) |   | (2.5 | ) |   | 0.1 |  |   | 1.4 |  |
| Total loss and loss expense                                                     |   | 71.1 |  |   | 66.6 |  |   | 75.2 |  |   | 4.5 |  |   | (8.6 | ) |
| Underwriting expense                                                            |   | 28.1 |  |   | 30.2 |  |   | 30.1 |  |   | (2.1 | ) |   | 0.1 |  |
| Combined ratio                                                                  |   | 99.2 |  % |   | 96.8 |  % |   | 105.3 |  % |   | 2.4 |  |   | (8.5 | ) |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
| Combined ratio:                                                                 |   | 99.2 |  % |   | 96.8 |  % |   | 105.3 |  % |   | 2.4 |  |   | (8.5 | ) |
| Contribution from catastrophe losses and prior years    reserve development     |   | 7.7 |  |   | 4.7 |  |   | 7.0 |  |   | 3.0 |  |   | (2.3 | ) |
| Combined ratio before catastrophe losses and prior years    reserve development |   | 91.5 |  % |   | 92.1 |  % |   | 98.3 |  % |   | (0.6 | ) |   | (6.2 | ) |
|                                                                            |   |   |   |   |   |   |   |   |   |   |

|         |                                                                                                                                                                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Premiums – Earned premiums and net written premiums continued to grow in 2014, primarily due to higher renewal written premiums that included price increases. Renewal written premiums rose 8 percent in 2014, following an increase of 11 percent in 2013. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Combined ratio – The 2014 combined ratio rose 2.4 percentage points compared with 2013, largely due to a 1.4 percentage-point increase in noncatastrophe weather losses that were not identified as part of designated catastrophe event for the property casualty industry. That unfavorable weather effect somewhat offset benefits from a 2.1 percentage-point improvement in the underwriting expense ratio, primarily from lower commission rates for selected personal lines insurance products. Development on prior accident years’ loss and loss expense reserves before catastrophes during 2014 was 2.9 percentage points less favorable than in 2013, primarily due to increased estimates of reserves for personal umbrella liability coverage. |

----

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                 |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Agency renewal written premiums      |   | $ | 1,005 |  |   | $ | 928 |  |   | $ | 836 |  |   | 8 |  |   | 11 |  |
| Agency new business written premiums |   | 92 |  |   | 110 |  |   | 111 |  |   | (16 | ) |   | (1 | ) |
| Other written premiums               |   | (29 | ) |   | (33 | ) |   | (29 | ) |   | 12 |  |   | (14 | ) |
| Net written premiums                 |   | 1,068 |  |   | 1,005 |  |   | 918 |  |   | 6 |  |   | 9 |  |
| Unearned premium change              |   | (27 | ) |   | (44 | ) |   | (50 | ) |   | 39 |  |   | 12 |  |
| Earned premiums                      |   | $ | 1,041 |  |   | $ | 961 |  |   | $ | 868 |  |   | 8 |  |   | 11 |  |
|                                 |   |   |   |   |   |   |   |   |   |   |

----

|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Accident year loss and loss expenses incurred and ratios to earned premiums: |   |   |   |   |   |
| Accident year:                                                               |   | 2014 |   | 2013 |   | 2012 |   | 2014 |   | 2013 |   | 2012 |
| as of December 31, 2014                                                      |   | $ | 752 |  |   | $ | 664 |  |   | $ | 723 |  |   | 72.2 | % |   | 69.1 | % |   | 83.4 | % |
| as of December 31, 2013                                                 |   |   |  |   | 678 |  |   | 723 |  |   |   |  |   | 70.7 |  |   | 83.4 |  |
| as of December 31, 2012                                                 |   |   |  |   |   |  |   | 751 |  |   |   |  |   |   |  |   | 86.6 |  |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions, net of reinsurance)            |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                                 |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Current accident year losses greater than $5,000,000 |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | nm |  |   | nm |  |
| Current accident year losses $1,000,000-$5,000,000   |   | 20 |  |   | 32 |  |   | 31 |  |   | (38 | ) |   | 3 |  |
| Large loss prior accident year reserve development   |   | 1 |  |   | 7 |  |   | (5 | ) |   | (86 | ) |   | nm |  |
| Total large losses incurred                          |   | 21 |  |   | 39 |  |   | 26 |  |   | (46 | ) |   | 50 |  |
| Losses incurred but not reported                     |   | 19 |  |   | (22 | ) |   | (23 | ) |   | nm |  |   | (4 | ) |
| Other losses excluding catastrophe losses            |   | 539 |  |   | 466 |  |   | 441 |  |   | 16 |  |   | 6 |  |
| Catastrophe losses                                   |   | 79 |  |   | 72 |  |   | 132 |  |   | 10 |  |   | (45 | ) |
| Total losses incurred                                |   | $ | 658 |  |   | $ | 555 |  |   | $ | 576 |  |   | 19 |  |   | (4 | ) |
|                                                 |   |   |   |   |   |   |   |   |   |   |
| Ratios as a percent of earned premiums:              |   |   |   |   |   |   |   | Pt. Change |   | Pt. Change |
| Current accident year losses greater than $5,000,000 |   | 0.0 | % |   | 0.0 |  % |   | 0.0 |  % |   | 0.0 |  |   | 0.0 |  |
| Current accident year losses $1,000,000-$5,000,000   |   | 1.9 |  |   | 3.4 |  |   | 3.6 |  |   | (1.5 | ) |   | (0.2 | ) |
| Large loss prior accident year reserve development   |   | 0.1 |  |   | 0.7 |  |   | (0.6 | ) |   | (0.6 | ) |   | 1.3 |  |
| Total large loss ratio                               |   | 2.0 |  |   | 4.1 |  |   | 3.0 |  |   | (2.1 | ) |   | 1.1 |  |
| Losses incurred but not reported                     |   | 1.8 |  |   | (2.3 | ) |   | (2.7 | ) |   | 4.1 |  |   | 0.4 |  |
| Other losses excluding catastrophe losses            |   | 51.9 |  |   | 48.5 |  |   | 50.9 |  |   | 3.4 |  |   | (2.4 | ) |
| Catastrophe losses                                   |   | 7.6 |  |   | 7.5 |  |   | 15.2 |  |   | 0.1 |  |   | (7.7 | ) |
| Total loss ratio                                     |   | 63.3 | % |   | 57.8 |  % |   | 66.4 |  % |   | 5.5 |  |   | (8.6 | ) |
|                                                 |   |   |   |   |   |   |   |   |   |   |

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                   |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                    |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Commission expenses                     |   | $ | 191 |  |   | $ | 192 |  |   | $ | 176 |  |   | (1 | ) |   | 9 |  |
| Other underwriting expenses             |   | 102 |  |   | 98 |  |   | 85 |  |   | 4 |  |   | 15 |  |
| Total underwriting expenses             |   | $ | 293 |  |   | $ | 290 |  |   | $ | 261 |  |   | 1 |  |   | 11 |  |
| Ratios as a percent of earned premiums: |   |   |   |   |   |   |   | Pt. Change |   | Pt. Change |
| Commission expense                      |   | 18.3 | % |   | 20.0 | % |   | 20.3 | % |   | (1.7 | ) |   | (0.3 | ) |
| Other underwriting expense              |   | 9.8 |  |   | 10.2 |  |   | 9.8 |  |   | (0.4 | ) |   | 0.4 |  |
| Total underwriting expense ratio        |   | 28.1 | % |   | 30.2 | % |   | 30.1 | % |   | (2.1 | ) |   | 0.1 |  |
|                                    |   |   |   |   |   |   |   |   |   |   |

----

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                           |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                            |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Written premiums                                |   | $ | 489 |  |   | $ | 460 |  |   | $ | 425 |  |   | 6 |  |   | 8 |  |
| Earned premiums                                 |   | 476 |  |   | 443 |  |   | 404 |  |   | 7 |  |   | 10 |  |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Ratios as a percent of earned premiums:         |   |   |   |   |   |   |   | Pt. Change |   | Pt. Change |
| Current accident year before catastrophe losses |   | 76.0 |  % |   | 74.3 |  % |   | 72.8 |  % |   | 1.7 |  |   | 1.5 |  |
| Current accident year catastrophe losses        |   | 1.3 |  |   | 1.1 |  |   | 2.8 |  |   | 0.2 |  |   | (1.7 | ) |
| Prior accident years before catastrophe losses  |   | 0.0 |  |   | 0.0 |  |   | (4.1 | ) |   | 0.0 |  |   | 4.1 |  |
| Prior accident years catastrophe losses         |   | (0.2 | ) |   | (0.3 | ) |   | (0.5 | ) |   | 0.1 |  |   | 0.2 |  |
| Total loss and loss expenses ratio              |   | 77.1 |  % |   | 75.1 |  % |   | 71.0 |  % |   | 2.0 |  |   | 4.1 |  |
|                                            |   |   |   |   |   |   |   |   |   |   |

----

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                           |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                            |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Written premiums                                |   | $ | 456 |  |   | $ | 428 |  |   | $ | 378 |  |   | 7 |  |   | 13 |  |
| Earned premiums                                 |   | 443 |  |   | 403 |  |   | 353 |  |   | 10 |  |   | 14 |  |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Ratios as a percent of earned premiums:         |   |   |   |   |   |   |   | Pt. Change |   | Pt. Change |
| Current accident year before catastrophe losses |   | 54.0 |  % |   | 49.9 |  % |   | 67.4 |  % |   | 4.1 |  |   | (17.5 | ) |
| Current accident year catastrophe losses        |   | 18.3 |  |   | 18.6 |  |   | 38.8 |  |   | (0.3 | ) |   | (20.2 | ) |
| Prior accident years before catastrophe losses  |   | (0.9 | ) |   | (2.8 | ) |   | (9.7 | ) |   | 1.9 |  |   | 6.9 |  |
| Prior accident years catastrophe losses         |   | (2.2 | ) |   | (2.0 | ) |   | (5.1 | ) |   | (0.2 | ) |   | 3.1 |  |
| Total loss and loss expense ratio               |   | 69.2 |  % |   | 63.7 |  % |   | 91.4 |  % |   | 5.5 |  |   | (27.7 | ) |
|                                            |   |   |   |   |   |   |   |   |   |   |

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                           |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                            |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Written premiums                                |   | $ | 123 |  |   | $ | 117 |  |   | $ | 115 |  |   | 5 |  |   | 2 |  |
| Earned premiums                                 |   | 122 |  |   | 115 |  |   | 111 |  |   | 6 |  |   | 4 |  |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Ratios as a percent of earned premiums:         |   |   |   |   |   |   |   | Pt. Change |   | Pt. Change |
| Current accident year before catastrophe losses |   | 48.3 |  % |   | 55.7 |  % |   | 53.8 |  % |   | (7.4 | ) |   | 1.9 |  |
| Current accident year catastrophe losses        |   | 4.0 |  |   | 3.6 |  |   | 10.1 |  |   | 0.4 |  |   | (6.5 | ) |
| Prior accident years before catastrophe losses  |   | 2.5 |  |   | (15.4 | ) |   | (23.5 | ) |   | 17.9 |  |   | 8.1 |  |
| Prior accident years catastrophe losses         |   | (0.2 | ) |   | (0.9 | ) |   | (1.4 | ) |   | 0.7 |  |   | 0.5 |  |
| Total loss and loss expense ratio               |   | 54.6 |  % |   | 43.0 |  % |   | 39.0 |  % |   | 11.6 |  |   | 4.0 |  |
|                                            |   |   |   |   |   |   |   |   |   |   |

----

----

|                                                                                                     |
|-----------------------------------------------------------------------------------------------------|
|                                                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                                                               |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                                                                                |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Earned premiums                                                                                     |   | $ | 148 |  |   | $ | 116 |  |   | $ | 93 |  |   | 28 |  |   | 25 |  |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |
| Loss and loss expenses from:                                                                        |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Current accident year before catastrophe losses                                                     |   | 101 |  |   | 78 |  |   | 68 |  |   | 29 |  |   | 15 |  |
| Current accident year catastrophe losses                                                            |   | 3 |  |   | 1 |  |   | 2 |  |   | 200 |  |   | (50 | ) |
| Prior accident years before catastrophe losses                                                      |   | (29 | ) |   | (13 | ) |   | (5 | ) |   | (123 | ) |   | (160 | ) |
| Prior accident years catastrophe losses                                                             |   | — |  |   | — |  |   | — |  |   | nm |  |   | nm |  |
| Total loss and loss expenses                                                                        |   | 75 |  |   | 66 |  |   | 65 |  |   | 14 |  |   | 2 |  |
| Underwriting expenses                                                                               |   | 43 |  |   | 36 |  |   | 29 |  |   | 19 |  |   | 24 |  |
| Underwriting profit (loss)                                                                          |   | $ | 30 |  |   | $ | 14 |  |   | $ | (1 | ) |   | 114 |  |   | nm |  |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |
| Ratios as a percent of earned premiums:                                                             |   |   |   |   |   |   |   | Pt. Change |   | Pt. Change |
| Current accident year before catastrophe losses                                                     |   | 68.1 |  % |   | 67.1 |  % |   | 72.8 |  % |   | 1.0 |  |   | (5.7 | ) |
| Current accident year catastrophe losses                                                            |   | 1.8 |  |   | 0.7 |  |   | 2.1 |  |   | 1.1 |  |   | (1.4 | ) |
| Prior accident years before catastrophe losses                                                      |   | (19.6 | ) |   | (11.2 | ) |   | (5.6 | ) |   | (8.4 | ) |   | (5.6 | ) |
| Prior accident years catastrophe losses                                                             |   | 0.2 |  |   | 0.1 |  |   | 0.1 |  |   | 0.1 |  |   | 0.0 |  |
| Total loss and loss expense                                                                         |   | 50.5 |  |   | 56.7 |  |   | 69.4 |  |   | (6.2 | ) |   | (12.7 | ) |
| Underwriting expense                                                                                |   | 28.9 |  |   | 31.1 |  |   | 31.6 |  |   | (2.2 | ) |   | (0.5 | ) |
| Combined ratio                                                                                      |   | 79.4 |  % |   | 87.8 |  % |   | 101.0 |  % |   | (8.4 | ) |   | (13.2 | ) |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |
| Combined ratio:                                                                                     |   | 79.4 |  % |   | 87.8 |  % |   | 101.0 |  % |   | (8.4 | ) |   | (13.2 | ) |
| Contribution from catastrophe losses and prior years    reserve development     |   | (17.6 | ) |   | (10.4 | ) |   | (3.4 | ) |   | (7.2 | ) |   | (7.0 | ) |
| Combined ratio before catastrophe losses and prior years    reserve development |   | 97.0 |  % |   | 98.2 |  % |   | 104.4 |  % |   | (1.2 | ) |   | (6.2 | ) |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Premiums – Earned premiums continued to rise in 2014, a result of strong growth in net written premiums, similar to recent years. Growth of net written premiums in 2014 was driven by higher renewal written premiums that included average renewal price increases in a mid-single-digit range. New business written premiums for 2014 again rose, compared with the prior year, largely reflecting strong agency relationships and premium growth initiatives. |

|         |                                                                                                                                                                   |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Combined ratio – The combined ratio improved 8.4 percentage points in 2014, due to larger amounts of favorable reserve development on prior accident years. |

----

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                 |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Agency renewal written premiums      |   | $ | 111 |  |   | $ | 94 |  |   | $ | 73 |  |   | 18 |  |   | 29 |  |
| Agency new business written premiums |   | 51 |  |   | 42 |  |   | 38 |  |   | 21 |  |   | 11 |  |
| Other written premiums               |   | (9 | ) |   | (8 | ) |   | (6 | ) |   | (13 | ) |   | (33 | ) |
| Net written premiums                 |   | 153 |  |   | 128 |  |   | 105 |  |   | 20 |  |   | 22 |  |
| Unearned premium change              |   | (5 | ) |   | (12 | ) |   | (12 | ) |   | 58 |  |   | 0 |  |
| Earned premiums                      |   | $ | 148 |  |   | $ | 116 |  |   | $ | 93 |  |   | 28 |  |   | 25 |  |
|                                 |   |   |   |   |   |   |   |   |   |   |

|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Accident year loss and loss expenses incurred and ratios to earned premiums: |   |   |   |   |   |
| Accident year:                                                               |   | 2014 |   | 2013 |   | 2012 |   | 2014 |   | 2013 |   | 2012 |
| as of December 31, 2014                                                      |   | $ | 104 |  |   | $ | 69 |  |   | $ | 54 |  |   | 69.9 | % |   | 59.7 | % |   | 57.4 | % |
| as of December 31, 2013                                                 |   |   |  |   | 79 |  |   | 62 |  |   |   |  |   | 67.8 |  |   | 65.9 |  |
| as of December 31, 2012                                                 |   |   |  |   |   |  |   | 70 |  |   |   |  |   |   |  |   | 74.9 |  |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions, net of reinsurance)            |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                                 |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Current accident year losses greater than $5,000,000 |   | — |  |   | $ | — |  |   | $ | — |  |   | nm |  |   | nm |  |
| Current accident year losses $1,000,000-$5,000,000   |   | 3 |  |   | 3 |  |   | 2 |  |   | — |  |   | nm |  |
| Large loss prior accident year reserve development   |   | (1 | ) |   | 1 |  |   | (1 | ) |   | nm |  |   | nm |  |
| Total large losses incurred                          |   | 2 |  |   | 4 |  |   | 1 |  |   | (50 | ) |   | nm |  |
| Losses incurred but not reported                     |   | 24 |  |   | 20 |  |   | 16 |  |   | 20 |  |   | 25 |  |
| Other losses excluding catastrophe losses            |   | 25 |  |   | 23 |  |   | 29 |  |   | 9 |  |   | (21 | ) |
| Catastrophe losses                                   |   | 4 |  |   | 1 |  |   | 2 |  |   | nm |  |   | (50 | ) |
| Total losses incurred                                |   | $ | 55 |  |   | $ | 48 |  |   | $ | 48 |  |   | 15 |  |   | — |  |
|                                                 |   |   |   |   |   |   |   |   |   |   |
| Ratios as a percent of earned premiums:              |   |   |   |   |   |   |   | Pt. Change |   | Pt. Change |
| Current accident year losses greater than $5,000,000 |   | 0.0 |  % |   | 0.0 | % |   | 0.0 |  % |   | 0.0 |  |   | 0.0 |  |
| Current accident year losses $1,000,000-$5,000,000   |   | 2.3 |  |   | 2.7 |  |   | 2.2 |  |   | (0.4 | ) |   | 0.5 |  |
| Large loss prior accident year reserve development   |   | (0.9 | ) |   | 0.8 |  |   | (0.9 | ) |   | (1.7 | ) |   | 1.7 |  |
| Total large loss ratio                               |   | 1.4 |  |   | 3.5 |  |   | 1.3 |  |   | (2.1 | ) |   | 2.2 |  |
| Losses incurred but not reported                     |   | 16.4 |  |   | 16.8 |  |   | 16.8 |  |   | (0.4 | ) |   | — |  |
| Other losses excluding catastrophe losses            |   | 17.2 |  |   | 20.3 |  |   | 31.3 |  |   | (3.1 | ) |   | (11.0 | ) |
| Catastrophe losses                                   |   | 1.8 |  |   | 0.7 |  |   | 2.1 |  |   | 1.1 |  |   | (1.4 | ) |
| Total loss ratio                                     |   | 36.8 |  % |   | 41.3 | % |   | 51.5 |  % |   | (4.5 | ) |   | (10.2 | ) |
|                                                 |   |   |   |   |   |   |   |   |   |   |

----

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                   |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                    |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Commission expenses                     |   | $ | 27 |  |   | $ | 21 |  |   | $ | 17 |  |   | 29 |  |   | 24 |  |
| Other underwriting expenses             |   | 16 |  |   | 15 |  |   | 12 |  |   | 7 |  |   | 25 |  |
| Total underwriting expenses             |   | $ | 43 |  |   | $ | 36 |  |   | $ | 29 |  |   | 19 |  |   | 24 |  |
| Ratios as a percent of earned premiums: |   |   |   |   |   |   |   | Pt. Change |   | Pt. Change |
| Commission expense                      |   | 18.3 | % |   | 18.6 | % |   | 18.2 | % |   | (0.3 | ) |   | 0.4 |  |
| Other underwriting expense              |   | 10.6 |  |   | 12.5 |  |   | 13.4 |  |   | (1.9 | ) |   | (0.9 | ) |
| Total underwriting expense ratio        |   | 28.9 | % |   | 31.1 | % |   | 31.6 | % |   | (2.2 | ) |   | (0.5 | ) |
|                                    |   |   |   |   |   |   |   |   |   |   |

----

|                                                  |
|--------------------------------------------------|
|                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                            |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                             |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Earned premiums                                  |   | $ | 198 |  |   | $ | 189 |  |   | $ | 178 |  |   | 5 |  |   | 6 |  |
| Separate account investment management fees      |   | 6 |  |   | 4 |  |   | 1 |  |   | 50 |  |   | 300 |  |
| Total revenues                                   |   | 204 |  |   | 193 |  |   | 179 |  |   | 6 |  |   | 8 |  |
| Contract holders' benefits incurred              |   | 229 |  |   | 204 |  |   | 185 |  |   | 12 |  |   | 10 |  |
| Investment interest credited to contract holders |   | (83 | ) |   | (80 | ) |   | (82 | ) |   | (4 | ) |   | 2 |  |
| Underwriting expenses incurred                   |   | 63 |  |   | 60 |  |   | 79 |  |   | 5 |  |   | (24 | ) |
| Total benefits and expenses                      |   | 209 |  |   | 184 |  |   | 182 |  |   | 14 |  |   | 1 |  |
| Life insurance segment (loss) profit             |   | $ | (5 | ) |   | $ | 9 |  |   | $ | (3 | ) |   | nm |  |   | nm |  |
|                                             |   |   |   |   |   |   |   |   |   |   |

|         |                                                                                                                                                                                                                                                                                                                                                    |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Revenues – Earned premiums rose 5 percent for the year 2014, as shown in the table below. The largest life insurance product line, term life insurance, rose 7 percent. Net in-force policy face amounts rose 5 percent to $50.356 billion at year-end 2014 from $48.063 billion at year-end 2013 and $45.126 billion at year-end 2012. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Profitability – The life insurance segment frequently reports only a small profit or loss because most of its investment income is included in investments segment results. We include only investment income credited to contract holders (interest assumed in life insurance policy reserve calculations) in life insurance segment results. The segment reported a $5 million loss in 2014, following $9 million of profit in 2013 and a $3 million loss in 2012. It has averaged a $1 million profit over the past five years. |

|                                                                               |
|-------------------------------------------------------------------------------|
|                                                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                                         |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                                                          |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Term life insurance                                                           |   | $ | 131 |  |   | $ | 122 |  |   | $ | 115 |  |   | 7 |   | 6 |
| Universal life insurance                                                      |   | 35 |  |   | 35 |  |   | 34 |  |   | 0 |   | 3 |
| Other life insurance, annuity and disability   income products |   | 32 |  |   | 32 |  |   | 29 |  |   | 0 |   | 10 |
| Net earned premiums                                                           |   | $ | 198 |  |   | $ | 189 |  |   | $ | 178 |  |   | 5 |   | 6 |
|                                                                          |   |   |   |   |   |   |   |   |   |   |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Contract holders’ benefits incurred, related to traditional life and interest-sensitive products, accounted for 78.4 percent of 2014 total benefits and expenses compared with 77.3 percent in 2013 and 70.1 percent in 2012. Total contract holders’ benefits increased as life policy reserves and net death claims were higher in 2014 compared with 2013. Net death claims increased over 2013, exceeding our projections while remaining within our range of pricing expectations. |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Underwriting expenses incurred, net of deferred acquisition costs, accounted for 21.6 percent of 2014 total benefits and expenses compared with 22.7 percent in 2013 and 29.9 percent in 2012. Expenses in 2014 increased 5 percent, matching the percentage increase in earned premiums. In 2013, expenses decreased, primarily due to the impact of unlocking of actuarial assumptions for our universal life insurance contracts. |

----

|                                                   |
|---------------------------------------------------|
|                                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                             |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                              |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
|                                              |   |   |   |   |   |   |   |   |   |   |
| Total investment income, net of expenses          |   | $ | 549 |  |   | $ | 529 |  |   | $ | 531 |  |   | 4 |  |   | 0 |  |
| Investment interest credited to contract holders' |   | (83 | ) |   | (80 | ) |   | (82 | ) |   | (4 | ) |   | 2 |  |
| Realized investment gains, net                    |   | 133 |  |   | 83 |  |   | 42 |  |   | 60 |  |   | 98 |  |
| Investments profit, pretax                        |   | $ | 599 |  |   | $ | 532 |  |   | $ | 491 |  |   | 13 |  |   | 8 |  |
|                                              |   |   |   |   |   |   |   |   |   |   |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Investment income – Pretax investment income rose 4 percent in 2014, primarily due to higher dividend income. Dividend income reflected rising dividend rates and net purchases of equity securities from available funds. Interest income rose modestly, as net purchases of fixed-maturity securities offset the continuing effects on bond yields of the low interest rate environment. Pretax investment income decreased less than 1 percent in 2013, as lower interest income essentially offset higher dividend income. Average yields in the investment income table below are based on the average invested asset and cash amounts indicated in the table, using fixed-maturity securities valued at amortized cost and all other securities at fair value. |

|         |                                                                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Realized investment gains and losses – We reported realized investment gains in all three years, largely due to investment sales that were discretionary in timing and amount. Those gains were somewhat offset by OTTI charges. |

----

|                                                  |
|--------------------------------------------------|
|                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                            |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                             |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Invested assets beginning balance:               |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Fixed maturities                                 |   | $ | 9,121 |  |   | $ | 9,093 |  |   | $ | 8,779 |  |   | 0 |  |   | 4 |  |
| Equity securities                                |   | 4,375 |  |   | 3,373 |  |   | 2,956 |  |   | 30 |  |   | 14 |  |
| Other invested assets                            |   | 68 |  |   | 68 |  |   | 66 |  |   | 0 |  |   | 3 |  |
| Invested assets beginning balance                |   | 13,564 |  |   | 12,534 |  |   | 11,801 |  |   | 8 |  |   | 6 |  |
| Average acquisitions (dispositions), net         |   | 224 |  |   | 288 |  |   | 187 |  |   | (22 | ) |   | 54 |  |
| Annual average invested assets                   |   | $ | 13,788 |  |   | $ | 12,822 |  |   | $ | 11,988 |  |   | 8 |  |   | 7 |  |
|                                             |   |   |   |   |   |   |   |   |   |   |
| Total investment return:                         |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Total investment income, net of expenses         |   | $ | 549 |  |   | $ | 529 |  |   | $ | 531 |  |   | 4 |  |   | 0 |  |
| Total realized investment gains and losses       |   | 133 |  |   | 83 |  |   | 42 |  |   | 60 |  |   | 98 |  |
| Total invested assets change in unrealized gains |   | 391 |  |   | 459 |  |   | 391 |  |   | (15 | ) |   | 17 |  |
| Total                                            |   | $ | 1,073 |  |   | $ | 1,071 |  |   | $ | 964 |  |   | 0 |  |   | 11 |  |
|                                             |   |   |   |   |   |   |   |   |   |   |
| Total return on invested assets before tax       |   | 7.8 | % |   | 8.4 | % |   | 8.0 | % |   |   |  |   |   |  |
|                                             |   |   |   |   |   |   |   |   |   |   |

|         |                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Interest income rose $4 million or 1 percent in 2014. The average fixed-maturity pretax yield declined by approximately 14 basis points but was offset by a larger fixed-maturity portfolio that rose 3 percent on an amortized cost basis. Interest income declined in 2013 when that yield declined by approximately 25 basis points while the portfolio rose 5 percent on an amortized cost basis. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Dividend income rose $16 million or 13 percent in 2014, after rising 6 percent in 2013. Increases in dividend payment rates for most of the holdings in our common stock portfolio during both 2014 and 2013, plus a net increase in funds invested in that portfolio for both years, drove the increases in dividend income. In addition, several of our common stock holdings, in total, issued an additional $5 million in 2012 dividends not typically paid in the fourth quarter, as a result of anticipated dividend tax rate changes effective for 2013. |

----

|                                                        |
|--------------------------------------------------------|
|                                                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                  |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                                   |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Investment income:                                     |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Interest                                               |   | $ | 417 |  |   | $ | 413 |  |   | $ | 420 |  |   | 1 |  |   | (2 | ) |
| Dividends                                              |   | 138 |  |   | 122 |  |   | 115 |  |   | 13 |  |   | 6 |  |
| Other                                                  |   | 2 |  |   | 3 |  |   | 3 |  |   | (33 | ) |   | 0 |  |
| Less investment expenses                               |   | 8 |  |   | 9 |  |   | 7 |  |   | (11 | ) |   | 29 |  |
| Total investment income, net of expenses, pretax       |   | 549 |  |   | 529 |  |   | 531 |  |   | 4 |  |   | 0 |  |
| Less income taxes                                      |   | 130 |  |   | 128 |  |   | 129 |  |   | 2 |  |   | (1 | ) |
| Total investment income, net of expenses, after-tax    |   | $ | 419 |  |   | $ | 401 |  |   | $ | 402 |  |   | 4 |  |   | 0 |  |
|                                                   |   |   |   |   |   |   |   |   |   |   |
| Effective tax rate                                     |   | 23.7 | % |   | 24.1 | % |   | 24.2 | % |   |   |  |   |   |  |
|                                                   |   |   |   |   |   |   |   |   |   |   |
| Average invested assets plus cash and cash equivalents |   | $ | 13,951 |  |   | $ | 12,832 |  |   | $ | 11,847 |  |   |   |  |   |   |  |
| Average yield pretax                                   |   | 3.94 | % |   | 4.12 | % |   | 4.48 | % |   |   |  |   |   |  |
| Average yield after-tax                                |   | 3.00 |  |   | 3.13 |  |   | 3.39 |  |   |   |  |   |   |  |
|                                                   |   |   |   |   |   |   |   |   |   |   |
| Effective fixed-maturity tax rate                      |   | 27.0 | % |   | 27.1 | % |   | 26.9 | % |   |   |  |   |   |  |
|                                                   |   |   |   |   |   |   |   |   |   |   |
| Average fixed-maturity at amortized cost               |   | $ | 8,755 |  |   | $ | 8,430 |  |   | $ | 8,153 |  |   |   |  |   |   |  |
| Average fixed-maturity yield pretax                    |   | 4.76 | % |   | 4.90 | % |   | 5.15 | % |   |   |  |   |   |  |
| Average fixed-maturity yield after-tax                 |   | 3.48 |  |   | 3.57 |  |   | 3.77 |  |   |   |  |   |   |  |
|                                                   |   |   |   |   |   |   |   |   |   |   |

|                                                              |
|--------------------------------------------------------------|
|                                                              |  |  |  |  |  |
| At December 31, 2014                                         | Yield |   | % of fixed-maturities |
| Fixed-maturity yield profile:                                |   |   |   |
| Maturing within one year                                     | 4.37 | % |   | 9.2 | % |
| Maturing within one to two years                             | 4.44 |  |   | 7.0 |  |
| Maturing within two to three years                           | 4.89 |  |   | 7.7 |  |
| Three year average and total maturing                        | 4.57 |  |   | 23.9 |  |
| Maturing greater than three years                            | 4.91 |  |   | 76.1 |  |
| Weighted average yield to amortized cost of fixed-maturities | 4.76 |  |   | 100.0 | % |
|                                                         |   |   |   |

----

|                                                    |
|----------------------------------------------------|
|                                                    |  |  |  |  |  |
|                                               |   |   |   | Year ended December 31, |
|                                               |   |   |   | 2014 |
| Average pretax book yield on new fixed-maturities: |   |   |   |   |
| Acquired taxable fixed-maturities                  |   |   |   | 4.43 | % |
| Acquired tax-exempt fixed-maturities               |   |   |   | 3.21 |  |
| Total fixed-maturities acquired                    |   |   |   | 3.88 |  |
|                                               |   |   |   |   |

|         |                                                                |
|---------|----------------------------------------------------------------|
| • | $136 million in net realized gains from equity security sales. |

|         |                                                                                 |
|---------|---------------------------------------------------------------------------------|
| • | $18 million in net realized gains from fixed-maturity security sales and calls. |

|         |                                         |
|---------|-----------------------------------------|
| • | $3 million in other net realized gains. |

|         |                                                                                                 |
|---------|-------------------------------------------------------------------------------------------------|
| • | $24 million in OTTI charges to write down six holdings of equity and fixed-maturity securities. |

----

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                |   | Years ended December 31, |
|                                                 |   | 2014 |   | 2013 |   | 2012 |
| Taxable fixed maturities:                            |   |   |  |   |   |  |   |   |  |
| Impairment amount                                    |   | $ | 15 |  |   | $ | 1 |  |   | $ | 1 |  |
| New amortized cost                                   |   | $ | 22 |  |   | $ | 4 |  |   | $ | — |  |
| Percent to total amortized cost owned                |   | — | % |   | — | % |   | — | % |
| Number of securities other-than-temporarily impaired |   | 1 |  |   | 3 |  |   | 1 |  |
| Percent to number of securities owned                |   | — | % |   | — | % |   | — | % |
|                                                 |   |   |   |   |   |   |
| Tax-exempt fixed maturities:                         |   |   |  |   |   |  |   |   |  |
| Impairment amount                                    |   | $ | — |  |   | $ | 1 |  |   | $ | — |  |
| New amortized cost                                   |   | $ | — |  |   | $ | 5 |  |   | $ | — |  |
| Percent to total amortized cost owned                |   | — | % |   | — | % |   | — | % |
| Number of securities other-than-temporarily impaired |   | 1 |  |   | 4 |  |   | 1 |  |
| Percent to number of securities owned                |   | — | % |   | — | % |   | — | % |
|                                                 |   |   |   |   |   |   |
| Common equities:                                     |   |   |  |   |   |  |   |   |  |
| Impairment amount                                    |   | $ | 9 |  |   | $ | — |  |   | $ | 32 |  |
| New cost                                             |   | $ | 79 |  |   | $ | — |  |   | $ | 153 |  |
| Percent to total cost owned                          |   | 3 | % |   | — | % |   | 7 | % |
| Number of securities other-than-temporarily impaired |   | 4 |  |   | — |  |   | 11 |  |
| Percent to number of securities owned                |   | 6 | % |   | — | % |   | 15 | % |
|                                                 |   |   |   |   |   |   |
| Totals:                                              |   |   |  |   |   |  |   |   |  |
| Impairment amount                                    |   | $ | 24 |  |   | $ | 2 |  |   | $ | 33 |  |
| New cost or amortized cost                           |   | $ | 101 |  |   | $ | 9 |  |   | $ | 153 |  |
| Percent to total cost or amortized cost owned        |   | 1 | % |   | — | % |   | 1 | % |
| Number of securities other-than-temporarily impaired |   | 6 |  |   | 7 |  |   | 13 |  |
| Percent to number of securities owned                |   | — | % |   | — | % |   | — | % |
|                                                 |   |   |   |   |   |   |

|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)  |   | Years ended December 31, |
|                   |   | 2014 |   | 2013 |   | 2012 |
| Fixed maturities:      |   |   |  |   |   |  |   |   |  |
| Basic industry         |   | $ | 15 |  |   | $ | — |  |   | $ | — |  |
| Municipal              |   | — |  |   | 1 |  |   | — |  |
| Utilities              |   | — |  |   | 1 |  |   | — |  |
| Services cyclical      |   | — |  |   | — |  |   | 1 |  |
| Total fixed maturities |   | 15 |  |   | 2 |  |   | 1 |  |
|                   |   |   |   |   |   |   |
| Common equities:       |   |   |  |   |   |  |   |   |  |
| Consumer Staples       |   | 6 |  |   | — |  |   | — |  |
| Consumer discretionary |   | — |  |   | — |  |   | 14 |  |
| Industrials            |   | — |  |   | — |  |   | 8 |  |
| Material               |   | — |  |   | — |  |   | 7 |  |
| Energy                 |   | 3 |  |   | — |  |   | 2 |  |
| Health                 |   | — |  |   | — |  |   | 1 |  |
| Total common equities  |   | 9 |  |   | — |  |   | 32 |  |
| Total                  |   | $ | 24 |  |   | $ | 2 |  |   | $ | 33 |  |
|                   |   |   |   |   |   |   |

----

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                 |   | Years ended December 31, |   | 2014-2013 |   | 2013-2012 |
|                                  |   | 2014 |   | 2013 |   | 2012 |   | Change % |   | Change % |
| Interest and fees on loans and leases |   | $ | 6 |  |   | $ | 7 |  |   | $ | 7 |  |   | (14 | ) |   | 0 |  |
| Other revenues                        |   | 2 |  |   | 2 |  |   | 2 |  |   | 0 |  |   | 0 |  |
| Total revenues                        |   | 8 |  |   | 9 |  |   | 9 |  |   | (11 | ) |   | 0 |  |
| Interest expense                      |   | 53 |  |   | 54 |  |   | 54 |  |   | (2 | ) |   | 0 |  |
| Operating expenses                    |   | 14 |  |   | 15 |  |   | 14 |  |   | (7 | ) |   | 7 |  |
| Total expenses                        |   | 67 |  |   | 69 |  |   | 68 |  |   | (3 | ) |   | 1 |  |
| Other loss                            |   | $ | (59 | ) |   | $ | (60 | ) |   | $ | (59 | ) |   | 2 |  |   | (2 | ) |
|                                  |   |   |   |   |   |   |   |   |   |   |

----

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                   |   | Years ended December 31, |
|                                    |   | 2014 |   | 2013 |   | 2012 |
| Sources of liquidity:                   |   |   |   |   |   |   |
| Insurance subsidiary dividends received |   | $ | 400 |  |   | $ | 350 |  |   | $ | 285 |  |
| Proceeds from stock options exercised   |   | 22 |  |   | 25 |  |   | 9 |  |
| Investment income received              |   | 46 |  |   | 41 |  |   | 42 |  |
| Uses of liquidity:                      |   |   |  |   |   |  |   |   |  |
| Debt interest payments                  |   | $ | 52 |  |   | $ | 53 |  |   | $ | 53 |  |
| Short-term debt repayment               |   | 55 |  |   | — |  |   | — |  |
| Pension contribution                    |   | 5 |  |   | 15 |  |   | 14 |  |
| Shareholders' dividend payments         |   | 278 |  |   | 263 |  |   | 256 |  |
| Purchase of treasury shares             |   | 21 |  |   | 52 |  |   | — |  |
|                                    |   |   |   |   |   |   |

----

|                                                  |
|--------------------------------------------------|
|                                                  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                            |   | Years ended December 31, |
|                                             |   | 2014 |   | 2013 |   | 2012 |
| Premiums collected                               |   | $ | 4,147 |  |   | $ | 3,866 |  |   | $ | 3,451 |  |
| Loss and loss expenses paid                      |   | (2,413 | ) |   | (2,172 | ) |   | (2,229 | ) |
| Commissions and other underwriting expenses paid |   | (1,239 | ) |   | (1,164 | ) |   | (1,035 | ) |
| Cash flow from underwriting                      |   | 495 |  |   | 530 |  |   | 187 |  |
| Investment income received                       |   | 371 |  |   | 355 |  |   | 360 |  |
| Cash flow from operations                        |   | $ | 866 |  |   | $ | 885 |  |   | $ | 547 |  |
|                                             |   |   |   |   |   |   |

|         |                                                                              |
|---------|------------------------------------------------------------------------------|
| • | $391 million aggregate principal amount of 6.92% senior debentures due 2028. |

|         |                                                                            |
|---------|----------------------------------------------------------------------------|
| • | $28 million aggregate principal amount of 6.9% senior debentures due 2028. |

|         |                                                                               |
|---------|-------------------------------------------------------------------------------|
| • | $374 million aggregate principal amount of 6.125% senior debentures due 2034. |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Dividends to shareholders –The ability of our company to continue paying cash dividends is subject to factors the board of directors deem relevant. While the board and management believe there is merit to sustaining the company’s long record of dividend increases, our first priority is the company’s financial strength. Over the past 10 years, the company has paid an average of 60 percent of net income as dividends. Through 2014, the board had increased our cash dividend for 54 consecutive years. The board decision in January 2015 to increase the dividend demonstrated confidence in the company’s strong capital, liquidity, financial flexibility and initiatives to grow earnings. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Common stock repurchase – Generally, our board believes that share repurchases can help fulfill our commitment to enhancing shareholder value. Consequently, the board has authorized the repurchase of outstanding shares, giving management discretion to purchase shares at reasonable prices in light of circumstances at the time of purchase. Our approach since mid-2008 has been to hold capital adequate to support future growth of our insurance operations and repurchase a minimal amount of shares. Those repurchases were intended to partially offset the issuance of shares through equity compensation plans, primarily due to vesting of service-based restricted stock units of equity awards granted in the past. Our corporate Code of Conduct restricts repurchases during certain time periods. The details of the repurchase authorizations and activity are described in Item 5, Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |

----

|                                                        |
|--------------------------------------------------------|
|                                                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                  |   | Year |   | Years |   | Years |   | There- |   |   |
| Payment due by period                                  |   | 2015 |   | 2016-2017 |   | 2018-2019 |   | after |   | Total |
| Gross property casualty loss and loss expense payments |   | $ | 1,439 |  |   | $ | 1,438 |  |   | $ | 620 |  |   | $ | 941 |  |   | $ | 4,438 |  |
| Gross life policyholder obligations                    |   | 101 |  |   | 136 |  |   | 166 |  |   | 4,373 |  |   | 4,776 |  |
| Interest on long-term debt                             |   | 52 |  |   | 104 |  |   | 104 |  |   | 578 |  |   | 838 |  |
| Long-term debt                                         |   | — |  |   | — |  |   | — |  |   | 793 |  |   | 793 |  |
| Short-term debt                                        |   | 49 |  |   | — |  |   | — |  |   | — |  |   | 49 |  |
| Profit-sharing commissions                             |   | 121 |  |   | — |  |   | — |  |   | — |  |   | 121 |  |
| Operating property                                     |   | 1 |  |   | 1 |  |   | — |  |   | — |  |   | 2 |  |
| Capital lease obligations                              |   | 18 |  |   | 12 |  |   | 5 |  |   | 1 |  |   | 36 |  |
| Computer software                                      |   | 13 |  |   | 3 |  |   | 1 |  |   | — |  |   | 17 |  |
| Qualified pension plan contribution                    |   | 5 |  |   | — |  |   | — |  |   | — |  |   | 5 |  |
| Other invested assets                                  |   | 5 |  |   | 9 |  |   | 6 |  |   | — |  |   | 20 |  |
| Total                                                  |   | $ | 1,804 |  |   | $ | 1,703 |  |   | $ | 902 |  |   | $ | 6,686 |  |   | $ | 11,095 |  |
|                                                   |   |   |   |   |   |   |   |   |   |   |

|         |                                                                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Interest on long-term debt – We expect total interest expense to be $52 million in 2015. We discuss outstanding debt in Additional Sources of Liquidity. |

|         |                                                                                                                                                                                                                                   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Computer software – We expect to spend approximately $16 million over the next three years for current material commitments for computer software, including maintenance contracts on hardware and other known obligations. |

|         |                                                                                             |
|---------|---------------------------------------------------------------------------------------------|
| • | Commissions – We expect commission payments to generally track with written premiums. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Other operating expenses – Many of our operating expenses are not contractual obligations but reflect the ongoing expenses of our business. In addition to contractual obligations for software disclosed above, we anticipate capitalizing approximately $5 million in spending for key technology initiatives in 2015. Capitalized development costs related to key technology initiatives totaled $5 million in 2014 and $4 million in 2013. These activities are conducted at our discretion, and we have no material contractual obligations for activities planned as part of these projects. |

----

----

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)       |   | Loss reserves |   | Loss |   | Total |   |   |
|                        |   | Case |   | IBNR |   | expense |   | gross |   | Percent |
|                        |   | reserves |   | reserves |   | reserves |   | reserves |   | of total |
| At December, 31 2014        |   |   |   |   |   |   |   |   |   |   |
| Commercial lines insurance: |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Commercial casualty         |   | $ | 794 |  |   | $ | 470 |  |   | $ | 520 |  |   | $ | 1,784 |  |   | 40.2 | % |
| Commercial property         |   | 203 |  |   | (4 | ) |   | 39 |  |   | 238 |  |   | 5.4 |  |
| Commercial auto             |   | 298 |  |   | 58 |  |   | 77 |  |   | 433 |  |   | 9.8 |  |
| Workers' compensation       |   | 412 |  |   | 550 |  |   | 94 |  |   | 1,056 |  |   | 23.8 |  |
| Other commercial            |   | 188 |  |   | 11 |  |   | 87 |  |   | 286 |  |   | 6.4 |  |
| Subtotal                    |   | 1,895 |  |   | 1,085 |  |   | 817 |  |   | 3,797 |  |   | 85.6 |  |
| Personal lines insurance:   |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Personal auto               |   | 195 |  |   | (21 | ) |   | 63 |  |   | 237 |  |   | 5.3 |  |
| Homeowner                   |   | 74 |  |   | 12 |  |   | 23 |  |   | 109 |  |   | 2.5 |  |
| Other personal              |   | 45 |  |   | 43 |  |   | 5 |  |   | 93 |  |   | 2.0 |  |
| Subtotal                    |   | 314 |  |   | 34 |  |   | 91 |  |   | 439 |  |   | 9.8 |  |
| Excess and surplus lines    |   | 77 |  |   | 79 |  |   | 46 |  |   | 202 |  |   | 4.6 |  |
| Total                       |   | $ | 2,286 |  |   | $ | 1,198 |  |   | $ | 954 |  |   | $ | 4,438 |  |   | 100.0 | % |
|                        |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2013        |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance: |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Commercial casualty         |   | $ | 790 |  |   | $ | 393 |  |   | $ | 496 |  |   | $ | 1,679 |  |   | 39.6 | % |
| Commercial property         |   | 189 |  |   | 30 |  |   | 37 |  |   | 256 |  |   | 6.0 |  |
| Commercial auto             |   | 264 |  |   | 40 |  |   | 69 |  |   | 373 |  |   | 8.8 |  |
| Workers' compensation       |   | 421 |  |   | 522 |  |   | 95 |  |   | 1,038 |  |   | 24.5 |  |
| Other commercial            |   | 211 |  |   | 15 |  |   | 95 |  |   | 321 |  |   | 7.6 |  |
| Subtotal                    |   | 1,875 |  |   | 1,000 |  |   | 792 |  |   | 3,667 |  |   | 86.5 |  |
| Personal lines insurance:   |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Personal auto               |   | 178 |  |   | (18 | ) |   | 61 |  |   | 221 |  |   | 5.2 |  |
| Homeowner                   |   | 80 |  |   | 9 |  |   | 24 |  |   | 113 |  |   | 2.7 |  |
| Other personal              |   | 46 |  |   | 32 |  |   | 5 |  |   | 83 |  |   | 1.9 |  |
| Subtotal                    |   | 304 |  |   | 23 |  |   | 90 |  |   | 417 |  |   | 9.8 |  |
| Excess and surplus lines    |   | 65 |  |   | 55 |  |   | 37 |  |   | 157 |  |   | 3.7 |  |
| Total                       |   | $ | 2,244 |  |   | $ | 1,078 |  |   | $ | 919 |  |   | $ | 4,241 |  |   | 100.0 | % |
|                        |   |   |   |   |   |   |   |   |   |   |

----

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Section A shows our total property casualty loss and loss expense reserves recorded at the balance sheet date for each of the indicated calendar years on a gross and net basis. Those reserves represent the estimated amount of unpaid loss and loss expenses for claims arising in the indicated calendar year and all prior accident years at the balance sheet date, including losses that were incurred but not yet reported to the company. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Section B shows the cumulative net amount paid with respect to the previously recorded reserve as of the end of each succeeding year. For example, as of December 31, 2014, we had paid $2.355 billion of loss and loss expenses in calendar years 2005 through 2014 for losses that occurred in accident years 2004 and prior. An estimated $330 million of losses remained unpaid as of year-end 2014 (net re-estimated reserves of $2.685 billion from Section C less cumulative net paid loss and loss expenses of $2.355 billion). |

|         |                                                                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Section C shows the re-estimated amount of the previously reported reserves based on experience as of the end of each succeeding year. The estimate is increased or decreased as we learn more about the development of the related claims. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Section D, cumulative net reserve development, represents the aggregate change in the estimates for all years subsequent to the year the reserves were initially established. For example, reserves established at December 31, 2004, had developed favorably by $292 million over 10 years, net of reinsurance, which was reflected in income over the 10 years. The table shows favorable reserve development as a negative number. Favorable reserve development on prior accident years, which represents a negative expense, is favorable to income. The “One year later” line in the table shows the effects on income before income taxes in 2014, 2013 and 2012 of changes in estimates of the reserves for loss and loss expenses for all accident years. The effect was favorable to pretax income for those three years by $98 million, $147 million, and $396 million, respectively. |

----

|                                                                          |
|--------------------------------------------------------------------------|
|                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollar in millions)                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                     |   | 2004 |   | 2005 |   | 2006 |   | 2007 |   | 2008 |   | 2009 |   | 2010 |   | 2011 |   | 2012 |   | 2013 |   | 2014 |
| A.  Originally reported reserves for unpaid loss and loss expenses: |
| Gross of reinsurance                                                     |   | $ | 3,514 |  |   | $ | 3,629 |  |   | $ | 3,860 |  |   | $ | 3,925 |  |   | $ | 4,040 |  |   | $ | 4,096 |  |   | $ | 4,137 |  |   | $ | 4,280 |  |   | $ | 4,169 |  |   | $ | 4,241 |  |   | $ | 4,438 |  |
| Reinsurance recoverable                                                  |   | 537 |  |   | 518 |  |   | 504 |  |   | 528 |  |   | 542 |  |   | 435 |  |   | 326 |  |   | 375 |  |   | 356 |  |   | 299 |  |   | 282 |  |
| Net of reinsurance                                                       |   | $ | 2,977 |  |   | $ | 3,111 |  |   | $ | 3,356 |  |   | $ | 3,397 |  |   | $ | 3,498 |  |   | $ | 3,661 |  |   | $ | 3,811 |  |   | $ | 3,905 |  |   | $ | 3,813 |  |   | $ | 3,942 |  |   | $ | 4,156 |  |
|                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| B.  Cumulative net paid as of:                                      |
| One year later                                                           |   | $ | 907 |  |   | $ | 944 |  |   | $ | 1,006 |  |   | $ | 979 |  |   | $ | 994 |  |   | $ | 926 |  |   | $ | 1,035 |  |   | $ | 1,106 |  |   | $ | 1,127 |  |   | $ | 1,201 |  |   |   |
| Two years later                                                          |   | 1,426 |  |   | 1,502 |  |   | 1,547 |  |   | 1,523 |  |   | 1,529 |  |   | 1,511 |  |   | 1,663 |  |   | 1,717 |  |   | 1,822 |  |   |   |  |   |   |  |
| Three years later                                                        |   | 1,758 |  |   | 1,845 |  |   | 1,896 |  |   | 1,857 |  |   | 1,912 |  |   | 1,921 |  |   | 2,052 |  |   | 2,170 |  |   |   |   |   |   |   |
| Four years later                                                         |   | 1,963 |  |   | 2,059 |  |   | 2,096 |  |   | 2,102 |  |   | 2,174 |  |   | 2,188 |  |   | 2,330 |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Five years later                                                         |   | 2,096 |  |   | 2,176 |  |   | 2,247 |  |   | 2,264 |  |   | 2,343 |  |   | 2,359 |  |   |   |   |   |   |   |   |   |   |   |
| Six years later                                                          |   | 2,163 |  |   | 2,282 |  |   | 2,360 |  |   | 2,371 |  |   | 2,455 |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Seven years later                                                        |   | 2,238 |  |   | 2,355 |  |   | 2,437 |  |   | 2,443 |  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Eight years later                                                        |   | 2,291 |  |   | 2,402 |  |   | 2,484 |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Nine years later                                                         |   | 2,328 |  |   | 2,439 |  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ten years later                                                          |   | 2,355 |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
|                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| C.  Net reserves re-estimated as of:                                |
| One year later                                                           |   | $ | 2,817 |  |   | $ | 2,995 |  |   | $ | 3,112 |  |   | $ | 3,074 |  |   | $ | 3,310 |  |   | $ | 3,357 |  |   | $ | 3,526 |  |   | $ | 3,509 |  |   | $ | 3,666 |  |   | $ | 3,844 |  |   |   |  |
| Two years later                                                          |   | 2,743 |  |   | 2,871 |  |   | 2,893 |  |   | 3,042 |  |   | 3,197 |  |   | 3,251 |  |   | 3,283 |  |   | 3,464 |  |   | 3,624 |  |   |   |   |   |
| Three years later                                                        |   | 2,657 |  |   | 2,724 |  |   | 2,898 |  |   | 3,005 |  |   | 3,124 |  |   | 3,076 |  |   | 3,279 |  |   | 3,437 |  |   |   |  |   |   |  |   |   |  |
| Four years later                                                         |   | 2,578 |  |   | 2,776 |  |   | 2,907 |  |   | 2,957 |  |   | 3,043 |  |   | 3,121 |  |   | 3,270 |  |   |   |   |   |   |   |   |   |
| Five years later                                                         |   | 2,645 |  |   | 2,788 |  |   | 2,900 |  |   | 2,925 |  |   | 3,073 |  |   | 3,115 |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Six years later                                                          |   | 2,662 |  |   | 2,790 |  |   | 2,890 |  |   | 2,949 |  |   | 3,069 |  |   |   |   |   |   |   |   |   |   |   |   |   |
| Seven years later                                                        |   | 2,665 |  |   | 2,792 |  |   | 2,918 |  |   | 2,955 |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Eight years later                                                        |   | 2,657 |  |   | 2,821 |  |   | 2,918 |  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nine years later                                                         |   | 2,684 |  |   | 2,818 |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Ten years later                                                          |   | 2,685 |  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| D.  Cumulative net redundancy as of:                                |
| One year later                                                           |   | $ | (160 | ) |   | $ | (116 | ) |   | $ | (244 | ) |   | $ | (323 | ) |   | $ | (188 | ) |   | $ | (304 | ) |   | $ | (285 | ) |   | $ | (396 | ) |   | $ | (147 | ) |   | $ | (98 | ) |   |   |
| Two years later                                                          |   | (234 | ) |   | (240 | ) |   | (463 | ) |   | (355 | ) |   | (301 | ) |   | (410 | ) |   | (528 | ) |   | (441 | ) |   | (189 | ) |   |   |  |   |   |  |
| Three years later                                                        |   | (320 | ) |   | (387 | ) |   | (458 | ) |   | (392 | ) |   | (374 | ) |   | (585 | ) |   | (532 | ) |   | (468 | ) |   |   |   |   |   |   |
| Four years later                                                         |   | (399 | ) |   | (335 | ) |   | (449 | ) |   | (440 | ) |   | (455 | ) |   | (540 | ) |   | (541 | ) |   |   |  |   |   |  |   |   |  |   |   |  |
| Five years later                                                         |   | (332 | ) |   | (323 | ) |   | (456 | ) |   | (472 | ) |   | (425 | ) |   | (546 | ) |   |   |   |   |   |   |   |   |   |   |
| Six years later                                                          |   | (315 | ) |   | (321 | ) |   | (466 | ) |   | (448 | ) |   | (429 | ) |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Seven years later                                                        |   | (312 | ) |   | (319 | ) |   | (438 | ) |   | (442 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Eight years later                                                        |   | (320 | ) |   | (290 | ) |   | (438 | ) |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Nine years later                                                         |   | (293 | ) |   | (293 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ten years later                                                          |   | (292 | ) |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |   |   |
|                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net reserves re-estimated—latest                                   |   | $ | 2,685 |  |   | $ | 2,818 |  |   | $ | 2,918 |  |   | $ | 2,955 |  |   | $ | 3,069 |  |   | $ | 3,115 |  |   | $ | 3,270 |  |   | $ | 3,437 |  |   | $ | 3,624 |  |   | $ | 3,844 |  |   |   |
| Re-estimated recoverable—latest                                    |   | 526 |  |   | 500 |  |   | 492 |  |   | 480 |  |   | 517 |  |   | 422 |  |   | 351 |  |   | 413 |  |   | 366 |  |   | 307 |  |   |   |
| Gross liability re-estimated—latest                                |   | $ | 3,211 |  |   | $ | 3,318 |  |   | $ | 3,410 |  |   | $ | 3,435 |  |   | $ | 3,586 |  |   | $ | 3,537 |  |   | $ | 3,621 |  |   | $ | 3,850 |  |   | $ | 3,990 |  |   | $ | 4,151 |  |   |   |
|                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative gross redundancy                                              |   | $(303) |   | $(311) |   | $(450) |   | $(490) |   | $(454) |   | $(559) |   | $(516) |   | $(430) |   | $(179) |   | $(90) |   |   |
|                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)         |   | Commercial |   | Personal |   | E&S |   |   |
|                          |   | lines |   | lines |   | lines |   | Totals |
| As of December 31, 2014       |
| 2013 accident year            |   | $ | (33 | ) |   | $ | (15 | ) |   | $ | (10 | ) |   | $ | (58 | ) |
| 2012 accident year            |   | (7 | ) |   | — |  |   | (8 | ) |   | (15 | ) |
| 2011 accident year            |   | (9 | ) |   | (1 | ) |   | (6 | ) |   | (16 | ) |
| 2010 accident year            |   | — |  |   | 2 |  |   | (5 | ) |   | (3 | ) |
| 2009 accident year            |   | (3 | ) |   | — |  |   | — |  |   | (3 | ) |
| 2008 accident year            |   | (9 | ) |   | — |  |   | — |  |   | (9 | ) |
| 2007 and prior accident years |   | 4 |  |   | 2 |  |   | — |  |   | 6 |  |
| (Favorable)/unfavorable       |   | $ | (57 | ) |   | $ | (12 | ) |   | $ | (29 | ) |   | $ | (98 | ) |
|                          |   |   |   |   |   |   |   |   |
| As of December 31, 2013  |
| 2012 accident year            |   | $ | (67 | ) |   | $ | (27 | ) |   | $ | (9 | ) |   | $ | (103 | ) |
| 2011 accident year            |   | (25 | ) |   | (13 | ) |   | (3 | ) |   | (41 | ) |
| 2010 accident year            |   | (48 | ) |   | 1 |  |   | (1 | ) |   | (48 | ) |
| 2009 accident year            |   | 13 |  |   | 2 |  |   | — |  |   | 15 |  |
| 2008 accident year            |   | 9 |  |   | (1 | ) |   | — |  |   | 8 |  |
| 2007 accident year            |   | (5 | ) |   | — |  |   | — |  |   | (5 | ) |
| 2006 and prior accident years |   | 28 |  |   | (1 | ) |   | — |  |   | 27 |  |
| (Favorable)/unfavorable       |   | $ | (95 | ) |   | $ | (39 | ) |   | $ | (13 | ) |   | $ | (147 | ) |
|                          |   |   |   |   |   |   |   |   |
| As of December 31, 2012  |
| 2011 accident year            |   | $ | (93 | ) |   | $ | (60 | ) |   | $ | — |  |   | $ | (153 | ) |
| 2010 accident year            |   | (49 | ) |   | (16 | ) |   | (3 | ) |   | (68 | ) |
| 2009 accident year            |   | (80 | ) |   | (11 | ) |   | (2 | ) |   | (93 | ) |
| 2008 accident year            |   | (45 | ) |   | (5 | ) |   | — |  |   | (50 | ) |
| 2007 accident year            |   | (18 | ) |   | (3 | ) |   | — |  |   | (21 | ) |
| 2006 accident year            |   | (12 | ) |   | (1 | ) |   | — |  |   | (13 | ) |
| 2005 and prior accident years |   | 5 |  |   | (3 | ) |   | — |  |   | 2 |  |
| (Favorable)/unfavorable       |   | $ | (292 | ) |   | $ | (99 | ) |   | $ | (5 | ) |   | $ | (396 | ) |
|                          |   |   |   |   |   |   |   |   |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Commercial casualty adverse development for prior accident years – During 2014, we experienced unanticipated claims development on prior accident years, especially for umbrella liability coverage. That included an increase in aggregate paid losses or loss expenses for accident years three or more years old. Those payments emerged at levels higher than we expected, particularly for accident years 2005 and 2007. Considering that new data, our actuaries responded cautiously, and we increased our estimates for IBNR losses and loss expenses for all prior accident years in total. Our products liability coverage within commercial casualty experienced a higher-than-anticipated 2014 increase in paid losses or loss expenses, primarily for more recent prior accident years. That increase, plus an approximately equal increase in reserves, resulted in net unfavorable or adverse development on prior accident years for products liability. In 2014, our medical professional liability coverage within commercial casualty experienced net favorable development on prior accident years, but less so than in 2013, when it was more than twice the annual average of years 2010 through 2012. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Commercial auto loss emergence – Commercial auto continued to develop unfavorably during calendar year 2014. This line of business has been troublesome for the industry as a whole in recent years. As part of the U.S. economic recession of a few years ago, slowing business activity influenced our estimates of reserves for ultimate losses and loss expenses during that period. As the economy slowly recovered, we believe we were slow to recognize some of the higher loss cost effects in current accident year reserve estimates for at least part of that period. As claims that occurred during that period have become more mature, paid and reported loss cost trends resulted in us increasing our reserve estimates. Initiatives to improve profitability of our commercial auto line of business are discussed in Commercial Lines Insurance Results, Commercial Lines of Business Analysis. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Workers’ compensation – We continue to see favorable reserve development, for all prior accident years in aggregate. During 2014, the trend for estimated payments to be made in future calendar years was down slightly. However, we continue to monitor this line closely, as a sudden increase in trend for future payments has a highly leveraged effect. During 2013, paid loss amounts were higher than we expected for several older accident years, and we increased our reserve estimates accordingly. Initiatives to improve profitability of our workers’ compensation line of business are discussed in Commercial Lines Insurance Results, Commercial Lines of Business Analysis. |

----

----

|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)            | RMS Model | AIR Model |
|                             |   |   | Percent |   |   | Percent |
|                             | Gross | Net | of total | Gross | Net | of total |
| Probability at December 31, 2014 | losses | losses | equity | losses | losses | equity |
| 2.0% (1 in 50 year event)        | $ | 366 |  | $ | 74 |  | 1.1 | % | $ | 333 |  | $ | 73 |  | 1.1 | % |
| 1.0% (1 in 100 year event)       | 563 |  | 80 |  | 1.2 |  | 453 |  | 76 |  | 1.2 |  |
| 0.4% (1 in 250 year event)       | 912 |  | 284 |  | 4.3 |  | 722 |  | 161 |  | 2.4 |  |
| 0.2% (1 in 500 year event)       | 1,254 |  | 507 |  | 7.7 |  | 883 |  | 265 |  | 4.0 |  |

----

|                                          |
|------------------------------------------|
|                                          |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                    |   | 2014 |   | 2013 |
| Name of reinsurer                        |   | Totalreceivable |   | A.M. BestRating |   | Totalreceivable |   | A.M. BestRating |
| USAIG                                    |   | $ | 98 |  |   | NA |   | $ | 105 |  |   | NA |
| Swiss Reinsurance America Corporation    |   | 57 |  |   | A+ |   | 57 |  |   | A+ |
| Munich Reinsurance America               |   | 35 |  |   | A+ |   | 37 |  |   | A+ |
| Michigan Catastrophic Claims Association |   | 32 |  |   | NA |   | 28 |  |   | NA |
| General Reinsurance Corporation          |   | 28 |  |   | A++ |   | 30 |  |   | A++ |
|                                     |   |   |   |   |   |   |   |   |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Property per risk treaty – The primary purpose of the property treaty is to provide capacity up to $25 million, adequate for the majority of the risks we write. It also includes protection for extra-contractual liability coverage losses. We retain the first $10 million of each loss. Losses between $10 million and $25 million are reinsured at 100 percent. The ceded premium is estimated at $19 million for 2015, compared with $28 million for 2014 and $38 million for 2013. Lower 2015 rates and a $2 million increase in our retention per loss offset the effect of estimates of increased direct written premiums that are subject to the treaty. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Property excess treaty – For 2015, we again purchased a property reinsurance treaty that provides an additional $10 million in protection for property losses. Effective February 1, 2015, we purchased an additional $15 million of coverage. These treaties, along with the property per risk treaty, provides a total of $50 million of protection. The ceded premium is estimated at approximately $6 million for 2015, compared with $4 million for both 2014 and 2013, when the coverage amount was $10 million. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Casualty per occurrence treaty – The casualty treaty provides capacity up to $25 million. Similar to the property treaty, it provides sufficient capacity to cover the vast majority of casualty accounts we insure and also includes protection for extra-contractual liability coverage losses. We retain the first $10 million of each loss. Losses between $10 million and $25 million are reinsured at 100 percent. The ceded premium is estimated at $13 million for 2015, compared with $23 million for 2014 and $30 million for 2013. Lower 2015 rates and a $2 million increase in our retention per loss offset the effect of estimates of increased direct written premiums that are subject to the treaty. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Casualty excess treaty – We purchase a casualty reinsurance treaty that provides an additional $45 million in protection for certain casualty losses. This treaty, along with the casualty per occurrence treaty, provides a total of $70 million of protection for workers’ compensation, extra-contractual liability coverage and clash coverage losses, which would apply when a single occurrence involves multiple policyholders of The Cincinnati Insurance Companies or multiple coverages for one insured. The ceded premium is estimated at approximately $3 million for 2015, similar to the premium for both 2014 and 2013. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Property catastrophe treaty – To protect against catastrophic events such as wind and hail, hurricanes or earthquakes, we purchased property catastrophe reinsurance with a limit up to $600 million. Losses from the same occurrence can now be aggregated into one limit over an 120 hour period and applied to the treaty towards recovery. This is an expansion in coverage over the previous treaty’s 96-hour limitation. The treaty contains one reinstatement provision. For the 2015 treaty, ceded premiums are estimated at $42 million, down from $50 million for 2014, reflecting a $25 million increase in our retention per event, lower rates and minor changes in our share of losses described below. We retain the first $100 million of any loss, and a share of losses up to $600 million, as indicated below: |

|         |                                                                  |
|---------|------------------------------------------------------------------|
| ◦ | 5.0 percent of losses between $100 million and $200 million |

|         |                                                                  |
|---------|------------------------------------------------------------------|
| ◦ | 5.0 percent of losses between $200 million and $300 million |

|         |                                                                  |
|---------|------------------------------------------------------------------|
| ◦ | 5.0 percent of losses between $300 million and $400 million |

|         |                                                                  |
|---------|------------------------------------------------------------------|
| ◦ | 5.0 percent of losses between $400 million and $600 million |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Beginning in 2013 we added an alternative reinsurance structure to protect against certain catastrophic events, and a similar structure is in place for 2014 through 2016. For certain exposures in the United States, we arranged for the purchase of collateralized reinsurance funded through the issuance of collateralized risk-linked securities, known as catastrophe bonds. The catastrophe bond arrangements generally provide reinsurance coverage for specific types of losses in specific geographic locations. They are generally designed to supplement coverage provided under the property catastrophe treaty. Effective January 2014, we have a catastrophe bond arrangement providing up to $100 million in reinsurance protection. It expires in January 2017 and provides coverage for severe convective storm losses in certain key core regions as well as supplemental coverage in the event of an earthquake occurring along the New Madrid fault line and faults occurring in the states of Utah, Washington and Oregon. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                   |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Property per risk treaty – The property treaty provides limits up to $5 million, which is adequate capacity for the risk profile we insure. It also includes protection for extra-contractual liability coverage losses. Cincinnati Specialty Underwriters retains the first $500,000 of any policy loss. Losses between $500,000 and $5 million are reinsured at 100 percent by Cincinnati Insurance. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Casualty treaties – The casualty treaty is written on an excess of loss basis and provide limits up to $6 million, which is adequate capacity for the risk profile we insure. A second treaty layer of $5 million excess of $6 million is written to provide coverage for extra contractual obligations or clash exposures. The maximum retention for any one casualty loss is $1 million by Cincinnati Specialty Underwriters. Losses between $1 million and $6 million are reinsured at 100 percent by Cincinnati Insurance. |

----

|         |                                                                                                                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Basket retention – Cincinnati Specialty Underwriters has purchased this coverage to limit our retention to $1 million in the event that the same occurrence results in both a property and a casualty loss. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Property catastrophe treaty – As a subsidiary of Cincinnati Insurance, Cincinnati Specialty Underwriters is a named insured under our corporate property catastrophe treaty, and for our collateralized reinsurance funded through the issuance of catastrophe bonds. All terms and conditions of this reinsurance coverage apply to policies underwritten by Cincinnati Specialty Underwriters. |

|                                           |
|-------------------------------------------|
|                                           |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                     |   | 2014 |   | 2013 |
| Name of reinsurer                         |   | Totalreceivable |   | A.M. BestRating |   | Totalreceivable |   | A.M. BestRating |
| Swiss Re Life & Health America, Inc.  |   | $ | 90 |  |   | A+ |   | $ | 89 |  |   | A+ |
| Lincoln National Life Insurance Company   |   | 43 |  |   | A+ |   | 42 |  |   | A+ |
| Security Life of Denver Insurance Company |   | 30 |  |   | A |   | 28 |  |   | A |
| General Re Life Corporation               |   | 30 |  |   | A++ |   | 27 |  |   | A++ |
| Employers Reassurance Corporation         |   | 15 |  |   | A- |   | 14 |  |   | A- |
|                                      |   |   |   |   |   |   |   |   |

----

|         |                                                                                                                                                                          |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | 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 or assumptions used for critical accounting estimates |

|         |                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------|
| • | Declines in overall stock market values negatively affecting the company’s equity portfolio and book value |

|         |                                                                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | 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 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 |

|         |                                                                                                                                                                                                                                                                                                                                     |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | 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 |

|         |                                                                                                                                 |
|---------|---------------------------------------------------------------------------------------------------------------------------------|
| • | 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 and our relationships with agents, policyholders and others |

|         |                                                                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Disruption of the insurance market caused by technology innovations such as driverless cars that could decrease consumer demand for insurance products |

|         |                                                                                                                                                                                                                                                                                                                   |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Delays 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 reinsurance on acceptable terms, amount of reinsurance 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 insurance related 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 |

----

|         |                                                                                                                                         |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------|
| • | Political – the potential for a decrease in value due to the real or perceived impact of governmental policies or conditions |

|         |                                                                                                                                       |
|---------|---------------------------------------------------------------------------------------------------------------------------------------|
| • | Regulatory – the potential for a decrease in value due to the impact of legislative proposals or changes in laws or regulations |

|         |                                                                                                                                           |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------|
| • | Economic – the potential for a decrease in value due to changes in general economic factors (recession, inflation, deflation, etc.) |

|         |                                                                                                                                                                              |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Revaluation – the potential for a decrease in value due to a change in relative value (change in market multiple) of the market brought on by general economic factors |

|         |                                                                                                                                                                                          |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Interest-rate – the potential for a decrease in value of a security or portfolio due to its sensitivity to changes (increases or decreases) in the general level of interest rates |

|         |                                                                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Company-specific risk – the potential for a particular issuer to experience a decline in value due to the impact of sector or market risk on the holding or because of issues specific to the firm |

|         |                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Fraud – the potential for a negative impact on an issuer’s performance due to actual or alleged illegal or improper activity of individuals it employs |

|         |                                                                                                                                                                                                    |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Credit – the potential for deterioration in an issuer’s financial profile due to specific company issues, problems it faces in the course of its operations or industry-related issues |

|         |                                                                                                                                                                                                                                                                              |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Default – the possibility that an issuer will not make a required payment (interest payment or return of principal) on its debt. Generally this occurs after its financial profile has deteriorated (credit risk) and it no longer has the means to make its payments. |

|               |
|---------------|
|               |  |  |  |  |  |  |  |  |
|          |   | Taxablefixed maturities |   | Tax-exemptfixed maturities |   | Commonequities |   | Nonredeemable preferredequities |
| Political     |   | A |   | H |   | A |   | A |
| Regulatory    |   | A |   | A |   | A |   | A |
| Economic      |   | A |   | A |   | H |   | A |
| Revaluation   |   | A |   | A |   | H |   | A |
| Interest rate |   | H |   | H |   | A |   | H |
| Fraud         |   | A |   | L |   | A |   | A |
| Credit        |   | A |   | L |   | A |   | A |
| Default       |   | A |   | L |   | A |   | A |
|          |   |   |   |   |   |   |   |   |

----

|                         |
|-------------------------|
|                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)   |   | Financial |   | Nonfinancial |   | Total |
|                    |   | Amortized |   | Fair |   | Amortized |   | Fair |   | Amortized |   | Fair |
|                    |   | cost |   | value |   | cost |   | value |   | cost |   | value |
| Great Britain           |   | $ | 36 |  |   | $ | 40 |  |   | $ | 83 |  |   | $ | 89 |  |   | $ | 119 |  |   | $ | 129 |  |
| Netherlands             |   | 35 |  |   | 36 |  |   | 26 |  |   | 29 |  |   | 61 |  |   | 65 |  |
| Switzerland             |   | 17 |  |   | 18 |  |   | 24 |  |   | 25 |  |   | 41 |  |   | 43 |  |
| Sweden                  |   | 19 |  |   | 19 |  |   | 13 |  |   | 13 |  |   | 32 |  |   | 32 |  |
| Belgium                 |   | — |  |   | — |  |   | 28 |  |   | 32 |  |   | 28 |  |   | 32 |  |
| France                  |   | 12 |  |   | 12 |  |   | 12 |  |   | 13 |  |   | 24 |  |   | 25 |  |
| Spain                   |   | 5 |  |   | 6 |  |   | 18 |  |   | 19 |  |   | 23 |  |   | 25 |  |
| Germany                 |   | 8 |  |   | 8 |  |   | 13 |  |   | 13 |  |   | 21 |  |   | 21 |  |
| Luxembourg              |   | — |  |   | — |  |   | 18 |  |   | 19 |  |   | 18 |  |   | 19 |  |
| Ireland                 |   | — |  |   | — |  |   | 12 |  |   | 14 |  |   | 12 |  |   | 14 |  |
| Italy                   |   | — |  |   | — |  |   | 11 |  |   | 12 |  |   | 11 |  |   | 12 |  |
| Total European exposure |   | $ | 132 |  |   | $ | 139 |  |   | $ | 258 |  |   | $ | 278 |  |   | $ | 390 |  |   | $ | 417 |  |
|                    |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)     |   | Effect from interest rate change in basis points |
|                      |   | -200 |   | -100 |   | — |   | 100 |   | 200 |
| At December 31, 2014 |   | $ | 10,321 |  |   | $ | 9,882 |  |   | $ | 9,460 |  |   | $ | 9,041 |  |   | $ | 8,628 |  |
| At December 31, 2013 |   | $ | 9,968 |  |   | $ | 9,545 |  |   | $ | 9,121 |  |   | $ | 8,708 |  |   | $ | 8,316 |  |
|                      |   |   |   |   |   |   |   |   |   |   |

|                       |
|-----------------------|
|                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions) | Effect from market price change in percent |
|                  |   | -30% |   | -20% |   | -10% |   | — |   | 10% |   | 20% |   | 30% |
| At December 31, 2014  |   | $ | 3,401 |  |   | $ | 3,886 |  |   | $ | 4,372 |  |   | $ | 4,858 |  |   | $ | 5,344 |  |   | $ | 5,830 |  |   | $ | 6,315 |  |
| At December 31, 2013  |   | $ | 3,063 |  |   | $ | 3,500 |  |   | $ | 3,938 |  |   | $ | 4,375 |  |   | $ | 4,813 |  |   | $ | 5,250 |  |   | $ | 5,688 |  |
|                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|         |                                                                                                                                                                                                                                                                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | 217 of these holdings were fair valued between 90 percent and 100 percent of cost or amortized cost. The value of these securities fluctuates primarily because of changes in interest rates. The fair value of these 217 securities was $815 million at year-end 2014, and they accounted for $19 million in unrealized losses. |

|         |                                                                                                                                                                                                                                        |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Six of these holdings were fair valued between 70 percent and 90 percent of cost or amortized cost. The fair value of these holdings was $24 million, and they accounted for $3 million in unrealized losses. |

|         |                                                                            |
|---------|----------------------------------------------------------------------------|
| • | No securities were trading below 70 percent of cost at year-end 2014. |

----

|                                                   |
|---------------------------------------------------|
|                                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                        |   | Less than 12 months |   | 12 months or more |   | Total |
| At December 31, 2014                              |   | Fairvalue |   | Unrealizedlosses |   | Fairvalue |   | Unrealizedlosses |   | Fairvalue |   | Unrealizedlosses |
| Fixed maturity securities:                        |
| Corporate                                         |   | $ | 261 |  |   | $ | 8 |  |   | $ | 90 |  |   | $ | 3 |  |   | $ | 351 |  |   | $ | 11 |  |
| States, municipalities and political subdivisions |   | 17 |  |   | — |  |   | 135 |  |   | 2 |  |   | 152 |  |   | 2 |  |
| Government-sponsored enterprises                  |   | 3 |  |   | — |  |   | 23 |  |   | — |  |   | 26 |  |   | — |  |
| Commercial mortgage-backed                        |   | 11 |  |   | — |  |   | 181 |  |   | 5 |  |   | 192 |  |   | 5 |  |
| Foreign government                                |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| United States government                          |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Subtotal                                          |   | 292 |  |   | 8 |  |   | 429 |  |   | 10 |  |   | 721 |  |   | 18 |  |
| Equity securities:                                |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Common equities                                   |   | 85 |  |   | 3 |  |   | — |  |   | — |  |   | 85 |  |   | 3 |  |
| Nonredeemable preferred equities                  |   | 16 |  |   | — |  |   | 17 |  |   | 1 |  |   | 33 |  |   | 1 |  |
| Subtotal                                          |   | 101 |  |   | 3 |  |   | 17 |  |   | 1 |  |   | 118 |  |   | 4 |  |
| Total                                             |   | $ | 393 |  |   | $ | 11 |  |   | $ | 446 |  |   | $ | 11 |  |   | $ | 839 |  |   | $ | 22 |  |
| At December 31, 2013                              |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Fixed maturity securities:                        |
| Corporate                                         |   | $ | 572 |  |   | $ | 20 |  |   | $ | 43 |  |   | $ | 2 |  |   | $ | 615 |  |   | $ | 22 |  |
| States, municipalities and political subdivisions |   | 490 |  |   | 18 |  |   | 42 |  |   | 3 |  |   | 532 |  |   | 21 |  |
| Commercial mortgage-backed                        |   | 125 |  |   | 5 |  |   | — |  |   | — |  |   | 125 |  |   | 5 |  |
| Government-sponsored enterprises                  |   | 199 |  |   | 27 |  |   | 1 |  |   | — |  |   | 200 |  |   | 27 |  |
| Foreign government                                |   | 10 |  |   | — |  |   | — |  |   | — |  |   | 10 |  |   | — |  |
| United States government                          |   | 1 |  |   | — |  |   | — |  |   | — |  |   | 1 |  |   | — |  |
| Subtotal                                          |   | 1,397 |  |   | 70 |  |   | 86 |  |   | 5 |  |   | 1,483 |  |   | 75 |  |
| Equity securities:                                |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Common equities                                   |   | 77 |  |   | 1 |  |   | — |  |   | — |  |   | 77 |  |   | 1 |  |
| Nonredeemable preferred equities                  |   | 42 |  |   | 3 |  |   | — |  |   | — |  |   | 42 |  |   | 3 |  |
| Subtotal                                          |   | 119 |  |   | 4 |  |   | — |  |   | — |  |   | 119 |  |   | 4 |  |
| Total                                             |   | $ | 1,516 |  |   | $ | 74 |  |   | $ | 86 |  |   | $ | 5 |  |   | $ | 1,602 |  |   | $ | 79 |  |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                |
|----------------------------------------------------------------|
|                                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                           |   | Numberof issues |   | Cost oramortizedcost |   | Fairvalue |   | Grossunrealizedgain/loss |   | Grossinvestmentincome |
| At December 31, 2014                                      |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Taxable fixed maturities:                                      |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Fair valued below 70% of amortized cost                        |   | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |
| Fair valued at 70% to less than 100% of amortized cost         |   | 114 |  |   | 589 |  |   | 572 |  |   | (17 | ) |   | 20 |  |
| Fair valued at 100% and above of amortized cost                |   | 1,283 |  |   | 5,293 |  |   | 5,758 |  |   | 465 |  |   | 271 |  |
| Securities sold in current year                                |   | — |  |   | — |  |   | — |  |   | — |  |   | 15 |  |
| Total                                                          |   | 1,397 |  |   | 5,882 |  |   | 6,330 |  |   | 448 |  |   | 306 |  |
|                                                           |   |   |   |   |   |   |   |   |   |   |
| Tax-exempt fixed maturities:                                   |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Fair valued below 70% of amortized cost                        |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Fair valued at 70% to less than 100% of amortized cost         |   | 100 |  |   | 150 |  |   | 149 |  |   | (1 | ) |   | 3 |  |
| Fair valued at 100% and above of amortized cost                |   | 1,418 |  |   | 2,839 |  |   | 2,981 |  |   | 142 |  |   | 99 |  |
| Securities sold in current year                                |   | — |  |   | — |  |   | — |  |   | — |  |   | 8 |  |
| Total                                                          |   | 1,518 |  |   | 2,989 |  |   | 3,130 |  |   | 141 |  |   | 110 |  |
|                                                           |   |   |   |   |   |   |   |   |   |   |
| Common equities:                                               |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Fair valued below 70% of cost                                  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Fair valued at 70% to less than 100% of cost                   |   | 4 |  |   | 88 |  |   | 85 |  |   | (3 | ) |   | 2 |  |
| Fair valued at 100% and above of cost                          |   | 68 |  |   | 2,495 |  |   | 4,594 |  |   | 2,099 |  |   | 120 |  |
| Securities sold in current year                                |   | — |  |   | — |  |   | — |  |   | — |  |   | 6 |  |
| Total                                                          |   | 72 |  |   | 2,583 |  |   | 4,679 |  |   | 2,096 |  |   | 128 |  |
|                                                           |   |   |   |   |   |   |   |   |   |   |
| Nonredeemable preferred equities:                              |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Fair valued below 70% of cost                                  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Fair valued at 70% to less than 100% of cost                   |   | 5 |  |   | 34 |  |   | 33 |  |   | (1 | ) |   | 2 |  |
| Fair valued at 100% and above of cost                          |   | 23 |  |   | 111 |  |   | 146 |  |   | 35 |  |   | 8 |  |
| Securities sold in current year                                |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Total                                                          |   | 28 |  |   | 145 |  |   | 179 |  |   | 34 |  |   | 10 |  |
|                                                           |   |   |   |   |   |   |   |   |   |   |
| Portfolio summary:                                             |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Fair valued below 70% of cost or amortized cost                |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Fair valued at 70% to less than 100% of cost or amortized cost |   | 223 |  |   | 861 |  |   | 839 |  |   | (22 | ) |   | 27 |  |
| Fair valued at 100% and above of cost or amortized cost        |   | 2,792 |  |   | 10,738 |  |   | 13,479 |  |   | 2,741 |  |   | 498 |  |
| Investment income on securities sold in current year           |   | — |  |   | — |  |   | — |  |   | — |  |   | 29 |  |
| Total                                                          |   | 3,015 |  |   | $ | 11,599 |  |   | $ | 14,318 |  |   | $ | 2,719 |  |   | $ | 554 |  |
|                                                           |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2013                                      |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Portfolio summary:                                             |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Fair valued below 70% of cost or amortized cost                |   | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |
| Fair valued at 70% to less than 100% of cost or amortized cost |   | 556 |  |   | 1,681 |  |   | 1,602 |  |   | (79 | ) |   | 41 |  |
| Fair valued at 100% and above of cost or amortized cost        |   | 2,323 |  |   | 9,480 |  |   | 11,894 |  |   | 2,414 |  |   | 471 |  |
| Investment income on securities sold in current year           |   | — |  |   | — |  |   | — |  |   | — |  |   | 23 |  |
| Total                                                          |   | 2,879 |  |   | $ | 11,161 |  |   | $ | 13,496 |  |   | $ | 2,335 |  |   | $ | 535 |  |
|                                                           |   |   |   |   |   |   |   |   |   |   |

----

----

|         |                                                                                                                                                                 |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; |

|         |                                                                                                                                                                                                                                                                                                            |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures of the company are being made only in accordance with authorizations of management and the directors of the company; and |

|         |                                                                                                                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. |

----

----

----

|                                                                                                                                                                                       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                       |  |  |  |  |  |  |  |  |
| (Dollars in millions except per share data)                                                                                                                                           |   | December 31, |   | December 31, |
|                                                                                                                                                                                  |   | 2014 |   | 2013 |
| Assets                                                                                                                                                                                |   |   |  |   |   |  |
|   Investments                                                                                                                                                               |   |   |  |   |   |  |
|     Fixed maturities, at fair value (amortized cost: 2014—$8,871; 2013—$8,638)                                                                        |   | $ | 9,460 |  |   | $ | 9,121 |  |
|     Equity securities, at fair value (cost: 2014—$2,728; 2013—$2,523)                                                                                 |   | 4,858 |  |   | 4,375 |  |
|     Other invested assets                                                                                                                                         |   | 68 |  |   | 68 |  |
|       Total investments                                                                                                                                 |   | 14,386 |  |   | 13,564 |  |
|   Cash and cash equivalents                                                                                                                                                 |   | 591 |  |   | 433 |  |
|   Investment income receivable                                                                                                                                              |   | 123 |  |   | 121 |  |
|   Finance receivable                                                                                                                                                        |   | 75 |  |   | 85 |  |
|   Premiums receivable                                                                                                                                                       |   | 1,405 |  |   | 1,346 |  |
|   Reinsurance recoverable                                                                                                                                                   |   | 545 |  |   | 547 |  |
|   Prepaid reinsurance premiums                                                                                                                                              |   | 29 |  |   | 26 |  |
|   Deferred policy acquisition costs                                                                                                                                         |   | 578 |  |   | 565 |  |
|   Land, building and equipment, net, for company use (accumulated depreciation:     2014—$446; 2013—$420)                              |   | 194 |  |   | 210 |  |
|   Other assets                                                                                                                                                              |   | 75 |  |   | 73 |  |
|   Separate accounts                                                                                                                                                         |   | 752 |  |   | 692 |  |
|     Total assets                                                                                                                                                  |   | $ | 18,753 |  |   | $ | 17,662 |  |
|                                                                                                                                                                                  |   |   |   |   |
| Liabilities                                                                                                                                                                           |   |   |  |   |   |  |
|   Insurance reserves                                                                                                                                                        |   |   |  |   |   |  |
|     Loss and loss expense reserves                                                                                                                                |   | $ | 4,485 |  |   | $ | 4,311 |  |
|     Life policy and investment contract reserves                                                                                                                  |   | 2,497 |  |   | 2,390 |  |
|   Unearned premiums                                                                                                                                                         |   | 2,082 |  |   | 1,976 |  |
|   Other liabilities                                                                                                                                                         |   | 648 |  |   | 611 |  |
|   Deferred income tax                                                                                                                                                       |   | 840 |  |   | 673 |  |
|   Note payable                                                                                                                                                              |   | 49 |  |   | 104 |  |
|   Long-term debt and capital lease obligations                                                                                                                              |   | 827 |  |   | 835 |  |
|   Separate accounts                                                                                                                                                         |   | 752 |  |   | 692 |  |
|     Total liabilities                                                                                                                                             |   | 12,180 |  |   | 11,592 |  |
|                                                                                                                                                                                  |   |   |   |   |
|   Commitments and contingent liabilities (Note 16)                                                                                                                          |   | — |  |   | — |  |
|                                                                                                                                                                                  |   |   |   |   |
| Shareholders' Equity                                                                                                                                                                  |   |   |  |   |   |  |
|   Common stock, par value—$2 per share; (authorized: 2014 and 2013—500 million shares;    issued: 2014 and 2013—198.3 million shares) |   | 397 |  |   | 397 |  |
| Paid-in capital                                                                                                                                                                       |   | 1,214 |  |   | 1,191 |  |
| Retained earnings                                                                                                                                                                     |   | 4,505 |  |   | 4,268 |  |
| Accumulated other comprehensive income                                                                                                                                                |   | 1,744 |  |   | 1,504 |  |
| Treasury stock at cost (2014—34.6 million shares and 2013—35.2 million shares)                                                                                            |   | (1,287 | ) |   | (1,290 | ) |
| Total shareholders' equity                                                                                                                                                            |   | 6,573 |  |   | 6,070 |  |
| Total liabilities and shareholders' equity                                                                                                                                            |   | $ | 18,753 |  |   | $ | 17,662 |  |
|                                                                                                                                                                                  |   |   |   |   |

----

|                                                  |
|--------------------------------------------------|
|                                                  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions except per share data)      |   | Years ended December 31, |
|                                             |   | 2014 |   | 2013 |   | 2012 |
| Revenues                                         |   |   |  |   |   |  |   |   |  |
| Earned premiums                                  |   | $ | 4,243 |  |   | $ | 3,902 |  |   | $ | 3,522 |  |
| Investment income, net of expenses               |   | 549 |  |   | 529 |  |   | 531 |  |
| Realized investment gains, net                   |   | 133 |  |   | 83 |  |   | 42 |  |
| Fee revenues                                     |   | 12 |  |   | 8 |  |   | 6 |  |
| Other revenues                                   |   | 8 |  |   | 9 |  |   | 10 |  |
| Total revenues                                   |   | 4,945 |  |   | 4,531 |  |   | 4,111 |  |
| Benefits and Expenses                            |   |   |  |   |   |  |   |   |  |
| Insurance losses and policyholder benefits       |   | 2,856 |  |   | 2,505 |  |   | 2,322 |  |
| Underwriting, acquisition and insurance expenses |   | 1,301 |  |   | 1,243 |  |   | 1,155 |  |
| Interest expense                                 |   | 53 |  |   | 54 |  |   | 54 |  |
| Other operating expenses                         |   | 14 |  |   | 15 |  |   | 14 |  |
| Total benefits and expenses                      |   | 4,224 |  |   | 3,817 |  |   | 3,545 |  |
| Income Before Income Taxes                       |   | 721 |  |   | 714 |  |   | 566 |  |
| Provision for Income Taxes                       |   |   |  |   |   |  |   |   |  |
| Current                                          |   | 159 |  |   | 178 |  |   | 119 |  |
| Deferred                                         |   | 37 |  |   | 19 |  |   | 26 |  |
| Total provision for income taxes                 |   | 196 |  |   | 197 |  |   | 145 |  |
| Net Income                                       |   | $ | 525 |  |   | $ | 517 |  |   | $ | 421 |  |
| Per Common Share                                 |   |   |  |   |   |  |   |   |  |
| Net income—basic                           |   | $ | 3.21 |  |   | $ | 3.16 |  |   | $ | 2.59 |  |
| Net income—diluted                         |   | 3.18 |  |   | 3.12 |  |   | 2.57 |  |
|                                             |   |   |   |   |   |   |

----

|                                                                                                                          |
|--------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                                                                                    |   | Years ended December 31, |
|                                                                                                                     |   | 2014 |   | 2013 |   | 2012 |
| Net Income                                                                                                               |   | $ | 525 |  |   | $ | 517 |  |   | $ | 421 |  |
| Other Comprehensive Income                                                                                               |   |   |  |   |   |  |   |   |  |
| Unrealized gains on investments, net of tax of $134, $161, and $135, respectively                                        |   | 250 |  |   | 299 |  |   | 251 |  |
| Amortization of pension actuarial loss and prior service cost, net of tax of $(6), $29, and $(4), respectively           |   | (12 | ) |   | 54 |  |   | (9 | ) |
| Change in life deferred acquisition costs, life policy reserves and other, net of tax of $2, $12, and $(7), respectively |   | 2 |  |   | 22 |  |   | (14 | ) |
| Other comprehensive income, net of tax                                                                                   |   | 240 |  |   | 375 |  |   | 228 |  |
| Comprehensive Income                                                                                                     |   | $ | 765 |  |   | $ | 892 |  |   | $ | 649 |  |
|                                                                                                                     |   |   |   |   |   |   |

----

|                                                               |
|---------------------------------------------------------------|
|                                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                          |   |   |   |   |   |   | AccumulatedOtherComprehensiveIncome |   |   |   | TotalShare-holders'Equity |
| (In millions)                                                 | Common Stock |   | Paid-InCapital |   | RetainedEarnings |   |   | TreasuryStock |   |
|                                                          | OutstandingShares |   | Amount |   |   |   |   |   |
| Balance, December 31, 2011                                    | 162.2 |  |   | $ | 393 |  |   | $ | 1,096 |  |   | $ | 3,863 |  |   | $ | 901 |  |   | $ | (1,220 | ) |   | $ | 5,033 |  |
| Net income                                                    | — |  |   | — |  |   | — |  |   | 421 |  |   | — |  |   | — |  |   | 421 |  |
| Other comprehensive income, net                               | — |  |   | — |  |   | — |  |   | — |  |   | 228 |  |   | — |  |   | 228 |  |
| Dividends declared                                            | — |  |   | — |  |   | — |  |   | (263 | ) |   | — |  |   | — |  |   | (263 | ) |
| Share-based awards exercised and vested                       | 0.7 |  |   | 1 |  |   | 19 |  |   | — |  |   | — |  |   | 2 |  |   | 22 |  |
| Share-based compensation                                      | — |  |   | — |  |   | 16 |  |   | — |  |   | — |  |   | — |  |   | 16 |  |
| Treasury shares acquired—share repurchase authorization | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Shares acquired under employee share-based compensation plans | (0.3 | ) |   | — |  |   | — |  |   | — |  |   | — |  |   | (12 | ) |   | (12 | ) |
| Other                                                         | 0.3 |  |   | — |  |   | 3 |  |   | — |  |   | — |  |   | 5 |  |   | 8 |  |
| Balance, December 31, 2012                               | 162.9 |  |   | $ | 394 |  |   | $ | 1,134 |  |   | $ | 4,021 |  |   | $ | 1,129 |  |   | $ | (1,225 | ) |   | $ | 5,453 |  |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2012                               | 162.9 |  |   | $ | 394 |  |   | $ | 1,134 |  |   | $ | 4,021 |  |   | $ | 1,129 |  |   | $ | (1,225 | ) |   | $ | 5,453 |  |
| Net income                                                    | — |  |   | — |  |   | — |  |   | 517 |  |   | — |  |   | — |  |   | 517 |  |
| Other comprehensive income, net                               | — |  |   | — |  |   | — |  |   | — |  |   | 375 |  |   | — |  |   | 375 |  |
| Dividends declared                                            | — |  |   | — |  |   | — |  |   | (270 | ) |   | — |  |   | — |  |   | (270 | ) |
| Share-based awards exercised and vested                       | 1.6 |  |   | 3 |  |   | 36 |  |   | — |  |   | — |  |   | 10 |  |   | 49 |  |
| Share-based compensation                                      | — |  |   | — |  |   | 18 |  |   | — |  |   | — |  |   | — |  |   | 18 |  |
| Treasury shares acquired—share repurchase authorization | (1.0 | ) |   | — |  |   | — |  |   | — |  |   | — |  |   | (52 | ) |   | (52 | ) |
| Shares acquired under employee share-based compensation plans | (0.6 | ) |   | — |  |   | — |  |   | — |  |   | — |  |   | (28 | ) |   | (28 | ) |
| Other                                                         | 0.2 |  |   | — |  |   | 3 |  |   | — |  |   | — |  |   | 5 |  |   | 8 |  |
| Balance, December 31, 2013                               | 163.1 |  |   | $ | 397 |  |   | $ | 1,191 |  |   | $ | 4,268 |  |   | $ | 1,504 |  |   | $ | (1,290 | ) |   | $ | 6,070 |  |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2013                               | 163.1 |  |   | $ | 397 |  |   | $ | 1,191 |  |   | $ | 4,268 |  |   | $ | 1,504 |  |   | $ | (1,290 | ) |   | $ | 6,070 |  |
| Net income                                                    | — |  |   | — |  |   | — |  |   | 525 |  |   | — |  |   | — |  |   | 525 |  |
| Other comprehensive income, net                               | — |  |   | — |  |   | — |  |   | — |  |   | 240 |  |   | — |  |   | 240 |  |
| Dividends declared                                            | — |  |   | — |  |   | — |  |   | (288 | ) |   | — |  |   | — |  |   | (288 | ) |
| Share-based awards exercised and vested                       | 1.3 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 37 |  |   | 37 |  |
| Share-based compensation                                      | — |  |   | — |  |   | 19 |  |   | — |  |   | — |  |   | — |  |   | 19 |  |
| Treasury shares acquired—share repurchase authorization | (0.5 | ) |   | — |  |   | — |  |   | — |  |   | — |  |   | (21 | ) |   | (21 | ) |
| Shares acquired under employee share-based compensation plans | (0.4 | ) |   | — |  |   | — |  |   | — |  |   | — |  |   | (19 | ) |   | (19 | ) |
| Other                                                         | 0.2 |  |   | — |  |   | 4 |  |   | — |  |   | — |  |   | 6 |  |   | 10 |  |
| Balance, December 31, 2014                                    | 163.7 |  |   | $ | 397 |  |   | $ | 1,214 |  |   | $ | 4,505 |  |   | $ | 1,744 |  |   | $ | (1,287 | ) |   | $ | 6,573 |  |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                   |
|-----------------------------------------------------------------------------------|
|                                                                                   |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                                        |   | Years ended December 31, |
|                                                                              |   | 2014 |   | 2013 |   | 2012 |
| Cash Flows From Operating Activities                                              |   |   |  |   |   |  |   |   |  |
| Net income                                                                        |   | $ | 525 |  |   | $ | 517 |  |   | $ | 421 |  |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |   |  |   |   |  |   |   |  |
| Depreciation and amortization                                                     |   | 51 |  |   | 50 |  |   | 44 |  |
| Realized investment gains, net                                                    |   | (133 | ) |   | (83 | ) |   | (42 | ) |
| Share-based compensation                                                          |   | 19 |  |   | 18 |  |   | 16 |  |
| Interest credited to contract holders                                             |   | 47 |  |   | 44 |  |   | 44 |  |
| Deferred income tax expense                                                       |   | 37 |  |   | 19 |  |   | 26 |  |
| Changes in:                                                                       |   |   |   |   |  |   |   |  |
| Investment income receivable                                                      |   | (2 | ) |   | (6 | ) |   | 4 |  |
| Premiums and reinsurance recoverable                                              |   | (60 | ) |   | (64 | ) |   | (122 | ) |
| Deferred policy acquisition costs                                                 |   | (20 | ) |   | (44 | ) |   | (28 | ) |
| Other assets                                                                      |   | 19 |  |   | (32 | ) |   | (4 | ) |
| Loss and loss expense reserves                                                    |   | 174 |  |   | 81 |  |   | (109 | ) |
| Life policy reserves                                                              |   | 119 |  |   | 84 |  |   | 72 |  |
| Unearned premiums                                                                 |   | 106 |  |   | 184 |  |   | 159 |  |
| Other liabilities                                                                 |   | (11 | ) |   | 77 |  |   | 78 |  |
| Current income tax receivable/payable                                             |   | 2 |  |   | (49 | ) |   | 79 |  |
| Net cash provided by operating activities                                         |   | 873 |  |   | 796 |  |   | 638 |  |
| Cash Flows From Investing Activities                                              |   |   |  |   |   |  |   |   |  |
| Sale of fixed maturities                                                          |   | 26 |  |   | 40 |  |   | 144 |  |
| Call or maturity of fixed maturities                                              |   | 1,019 |  |   | 930 |  |   | 927 |  |
| Sale of equity securities                                                         |   | 335 |  |   | 178 |  |   | 216 |  |
| Purchase of fixed maturities                                                      |   | (1,312 | ) |   | (1,381 | ) |   | (1,166 | ) |
| Purchase of equity securities                                                     |   | (392 | ) |   | (265 | ) |   | (425 | ) |
| Investment in finance receivables                                                 |   | (18 | ) |   | (39 | ) |   | (33 | ) |
| Collection of finance receivables                                                 |   | 31 |  |   | 30 |  |   | 34 |  |
| Investment in buildings and equipment, net                                        |   | (9 | ) |   | (7 | ) |   | (6 | ) |
| Change in other invested assets, net                                              |   | 9 |  |   | 5 |  |   | 5 |  |
| Net cash used in investing activities                                             |   | (311 | ) |   | (509 | ) |   | (304 | ) |
| Cash Flows From Financing Activities                                              |   |   |  |   |   |  |   |   |  |
| Payment of cash dividends to shareholders                                         |   | (278 | ) |   | (263 | ) |   | (256 | ) |
| Purchase of treasury shares                                                       |   | (21 | ) |   | (52 | ) |   | — |  |
| Payments on note payable                                                          |   | (55 | ) |   | — |  |   | — |  |
| Proceeds from stock options exercised                                             |   | 22 |  |   | 25 |  |   | 10 |  |
| Contract holders' funds deposited                                                 |   | 86 |  |   | 86 |  |   | 99 |  |
| Contract holders' funds withdrawn                                                 |   | (143 | ) |   | (128 | ) |   | (126 | ) |
| Excess tax benefits on share-based compensation                                   |   | 2 |  |   | 5 |  |   | 1 |  |
| Other                                                                             |   | (17 | ) |   | (14 | ) |   | (13 | ) |
| Net cash used in financing activities                                             |   | (404 | ) |   | (341 | ) |   | (285 | ) |
| Net change in cash and cash equivalents                                           |   | 158 |  |   | (54 | ) |   | 49 |  |
| Cash and cash equivalents at beginning of year                                    |   | 433 |  |   | 487 |  |   | 438 |  |
| Cash and cash equivalents at end of year                                          |   | $ | 591 |  |   | $ | 433 |  |   | $ | 487 |  |
| Supplemental Disclosures of Cash Flow Information:                                |   |   |  |   |   |  |   |   |  |
| Interest paid                                                                     |   | $ | 53 |  |   | $ | 53 |  |   | $ | 54 |  |
| Income taxes paid                                                                 |   | 154 |  |   | 222 |  |   | 38 |  |
| Noncash Activities:                                                               |   |   |   |   |  |   |   |  |
| Conversion of securities                                                          |   | $ | 7 |  |   | $ | — |  |   | $ | 26 |  |
| Equipment acquired under capital lease obligations                                |   | 12 |  |   | 28 |  |   | 23 |  |
| Cashless exercise of stock options                                                |   | 19 |  |   | 28 |  |   | 12 |  |
|                                                                              |   |   |   |   |   |   |

----

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|                                                   |
|---------------------------------------------------|
|                                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                             |   | Cost oramortizedcost |   | Gross unrealized |   |  Fairvalue |
| At December 31, 2014                              |   |   | gains |   | losses |   |
| Fixed-maturity securities:                        |   |   |  |   |   |  |   |   |  |   |   |  |
| Corporate                                         |   | $ | 5,117 |  |   | $ | 420 |  |   | $ | 11 |  |   | $ | 5,526 |  |
| States, municipalities and political subdivisions |   | 3,267 |  |   | 178 |  |   | 2 |  |   | 3,443 |  |
| Commercial mortgage-backed                        |   | 250 |  |   | 9 |  |   | — |  |   | 259 |  |
| Government-sponsored enterprises                  |   | 213 |  |   | — |  |   | 5 |  |   | 208 |  |
| Foreign government                                |   | 10 |  |   | — |  |   | — |  |   | 10 |  |
| Convertibles and bonds with warrants attached     |   | 7 |  |   | — |  |   | — |  |   | 7 |  |
| United States government                          |   | 7 |  |   | — |  |   | — |  |   | 7 |  |
| Subtotal                                          |   | 8,871 |  |   | 607 |  |   | 18 |  |   | 9,460 |  |
| Equity securities:                                |   |   |  |   |   |  |   |   |  |   |   |  |
| Common equities                                   |   | 2,583 |  |   | 2,099 |  |   | 3 |  |   | 4,679 |  |
| Nonredeemable preferred equities                  |   | 145 |  |   | 35 |  |   | 1 |  |   | 179 |  |
| Subtotal                                          |   | 2,728 |  |   | 2,134 |  |   | 4 |  |   | 4,858 |  |
| Total                                             |   | $ | 11,599 |  |   | $ | 2,741 |  |   | $ | 22 |  |   | $ | 14,318 |  |
|                                              |   |   |   |   |   |   |   |   |
| At December 31, 2013                              |   |   |  |   |   |  |   |   |  |   |   |  |
| Fixed-maturity securities:                        |   |   |  |   |   |  |   |   |  |   |   |  |
| Corporate                                         |   | $ | 5,122 |  |   | $ | 433 |  |   | $ | 22 |  |   | $ | 5,533 |  |
| States, municipalities and political subdivisions |   | 3,107 |  |   | 125 |  |   | 21 |  |   | 3,211 |  |
| Commercial mortgage-backed                        |   | 148 |  |   | — |  |   | 5 |  |   | 143 |  |
| Government-sponsored enterprises                  |   | 227 |  |   | — |  |   | 27 |  |   | 200 |  |
| Foreign government                                |   | 10 |  |   | — |  |   | — |  |   | 10 |  |
| Convertibles and bonds with warrants attached     |   | 17 |  |   | — |  |   | — |  |   | 17 |  |
| United States government                          |   | 7 |  |   | — |  |   | — |  |   | 7 |  |
| Subtotal                                          |   | 8,638 |  |   | 558 |  |   | 75 |  |   | 9,121 |  |
| Equity securities:                                |   |   |  |   |   |  |   |   |  |   |   |  |
| Common equities                                   |   | 2,396 |  |   | 1,818 |  |   | 1 |  |   | 4,213 |  |
| Nonredeemable preferred equities                  |   | 127 |  |   | 38 |  |   | 3 |  |   | 162 |  |
| Subtotal                                          |   | 2,523 |  |   | 1,856 |  |   | 4 |  |   | 4,375 |  |
| Total                                             |   | $ | 11,161 |  |   | $ | 2,414 |  |   | $ | 79 |  |   | $ | 13,496 |  |
|                                              |   |   |   |   |   |   |   |   |

----

|                                                   |
|---------------------------------------------------|
|                                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                             |   | Less than 12 months |   | 12 months or more |   | Total |
| At December 31, 2014                              |   | Fairvalue |   | Unrealizedlosses |   | Fairvalue |   | Unrealizedlosses |   | Fairvalue |   | Unrealizedlosses |
| Fixed maturity securities:                        |
| Corporate                                         |   | $ | 261 |  |   | $ | 8 |  |   | $ | 90 |  |   | $ | 3 |  |   | $ | 351 |  |   | $ | 11 |  |
| States, municipalities and political subdivisions |   | 17 |  |   | — |  |   | 135 |  |   | 2 |  |   | 152 |  |   | 2 |  |
| Commercial mortgage-backed                        |   | 3 |  |   | — |  |   | 23 |  |   | — |  |   | 26 |  |   | — |  |
| Government-sponsored enterprises                  |   | 11 |  |   | — |  |   | 181 |  |   | 5 |  |   | 192 |  |   | 5 |  |
| Subtotal                                          |   | 292 |  |   | 8 |  |   | 429 |  |   | 10 |  |   | 721 |  |   | 18 |  |
| Equity securities:                                |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Common equities                                   |   | 85 |  |   | 3 |  |   | — |  |   | — |  |   | 85 |  |   | 3 |  |
| Nonredeemable preferred equities                  |   | 16 |  |   | — |  |   | 17 |  |   | 1 |  |   | 33 |  |   | 1 |  |
| Subtotal                                          |   | 101 |  |   | 3 |  |   | 17 |  |   | 1 |  |   | 118 |  |   | 4 |  |
| Total                                             |   | $ | 393 |  |   | $ | 11 |  |   | $ | 446 |  |   | $ | 11 |  |   | $ | 839 |  |   | $ | 22 |  |
| At December 31, 2013                              |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Fixed maturity securities:                        |
| Corporate                                         |   | $ | 572 |  |   | $ | 20 |  |   | $ | 43 |  |   | $ | 2 |  |   | $ | 615 |  |   | $ | 22 |  |
| States, municipalities and political subdivisions |   | 490 |  |   | 18 |  |   | 42 |  |   | 3 |  |   | 532 |  |   | 21 |  |
| Commercial mortgage-backed                        |   | 125 |  |   | 5 |  |   | — |  |   | — |  |   | 125 |  |   | 5 |  |
| Government-sponsored enterprises                  |   | 199 |  |   | 27 |  |   | 1 |  |   | — |  |   | 200 |  |   | 27 |  |
| Foreign government                                |   | 10 |  |   | — |  |   | — |  |   | — |  |   | 10 |  |   | — |  |
| United States government                          |   | 1 |  |   | — |  |   | — |  |   | — |  |   | 1 |  |   | — |  |
| Subtotal                                          |   | 1,397 |  |   | 70 |  |   | 86 |  |   | 5 |  |   | 1,483 |  |   | 75 |  |
| Equity securities:                                |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Common equities                                   |   | 77 |  |   | 1 |  |   | — |  |   | — |  |   | 77 |  |   | 1 |  |
| Nonredeemable preferred equities                  |   | 42 |  |   | 3 |  |   | — |  |   | — |  |   | 42 |  |   | 3 |  |
| Subtotal                                          |   | 119 |  |   | 4 |  |   | — |  |   | — |  |   | 119 |  |   | 4 |  |
| Total                                             |   | $ | 1,516 |  |   | $ | 74 |  |   | $ | 86 |  |   | $ | 5 |  |   | $ | 1,602 |  |   | $ | 79 |  |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |

|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)     |   | Amortized cost |   | Fairvalue |   | % of fair value |
| At December 31, 2014      |   |   |   |
| Maturity dates occurring: |   |   |  |   |   |  |   |   |  |
| Less than 1 year          |   | $ | 502 |  |   | $ | 509 |  |   | 5.4 | % |
| Years 1 - 5               |   | 3,404 |  |   | 3,687 |  |   | 39.0 |  |
| Years 5 - 10              |   | 3,322 |  |   | 3,506 |  |   | 37.0 |  |
| Due after ten years       |   | 1,643 |  |   | 1,758 |  |   | 18.6 |  |
| Total                     |   | $ | 8,871 |  |   | $ | 9,460 |  |   | 100.0 | % |
|                      |   |   |   |   |   |   |

----

|                                                   |
|---------------------------------------------------|
|                                                   |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                             |   | Years ended December 31, |
|                                              |   | 2014 |   | 2013 |   | 2012 |
| Investment income:                                |   |   |  |   |   |  |   |   |  |
| Interest                                          |   | $ | 417 |  |   | $ | 413 |  |   | $ | 420 |  |
| Dividends                                         |   | 138 |  |   | 122 |  |   | 115 |  |
| Other                                             |   | 2 |  |   | 3 |  |   | 3 |  |
| Total                                             |   | 557 |  |   | 538 |  |   | 538 |  |
| Less investment expenses                          |   | 8 |  |   | 9 |  |   | 7 |  |
| Total                                             |   | $ | 549 |  |   | $ | 529 |  |   | $ | 531 |  |
|                                              |   |   |   |   |   |   |
| Realized investment gains and losses summary:     |   |   |  |   |   |  |   |   |  |
| Fixed maturities:                                 |   |   |  |   |   |  |   |   |  |
| Gross realized gains                              |   | $ | 21 |  |   | $ | 15 |  |   | $ | 36 |  |
| Gross realized losses                             |   | (3 | ) |   | — |  |   | — |  |
| Other-than-temporary impairments                  |   | (15 | ) |   | (2 | ) |   | (1 | ) |
| Equity securities:                                |   |   |   |   |   |   |  |
| Gross realized gains                              |   | 136 |  |   | 64 |  |   | 39 |  |
| Gross realized losses                             |   | — |  |   | — |  |   | (2 | ) |
| Other-than-temporary impairments                  |   | (9 | ) |   | — |  |   | (32 | ) |
| Other                                             |   | 3 |  |   | 6 |  |   | 2 |  |
| Total                                             |   | $ | 133 |  |   | $ | 83 |  |   | $ | 42 |  |
|                                              |   |   |   |   |   |   |
| Change in unrealized investment gains and losses: |   |   |  |   |   |  |   |   |  |
| Fixed maturities                                  |   | $ | 106 |  |   | $ | (387 | ) |   | $ | 176 |  |
| Equity securities                                 |   | 278 |  |   | 847 |  |   | 210 |  |
| Less income taxes                                 |   | 134 |  |   | 161 |  |   | 135 |  |
| Total                                             |   | $ | 250 |  |   | $ | 299 |  |   | $ | 251 |  |
|                                              |   |   |   |   |   |   |

----

|         |                                                                                                                                                                                                                                                                                                            |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Level 1 – Financial assets and liabilities for which inputs are observable and are obtained from reliable quoted prices for identical assets or liabilities in active markets. This is the most reliable fair value measurement and includes, for example, active exchange-traded equity securities. |

|         |                                                                                                                                                                                                                                                                                                               |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Level 2 – Financial assets and liabilities for which values are based on quoted prices in markets that are not active or for which values are based on similar assets and liabilities that are actively traded. This also includes pricing models for which the inputs are corroborated by market data. |

|         |                                                                                                                                                                                                                                                                |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Level 3 – Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Level 3 inputs include the following: |

|         |                                                                                |
|---------|--------------------------------------------------------------------------------|
| ◦ | Quotes from brokers or other external sources that are not considered binding; |

|         |                                                                                                                                                                                |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ◦ | Quotes from brokers or other external sources where it cannot be determined that market participants would in fact transact for the asset or liability at the quoted price; or |

|         |                                                                                           |
|---------|-------------------------------------------------------------------------------------------|
| ◦ | Quotes from brokers or other external sources where the inputs are not deemed observable. |

----

|                                                                                    |
|------------------------------------------------------------------------------------|
|                                                                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                                         |   | Quoted prices inactive markets foridentical assets(Level 1) |   |   |   | Significant unobservable inputs (Level 3) |   |   |
| At December 31, 2014                                                               |   |   | Significant otherobservable inputs(Level 2) |   |   | Total |
| Fixed maturities, available for sale:                                              |   |   |  |   |   |  |   |   |  |   |   |  |
| Corporate                                                                          |   | $ | — |  |   | $ | 5,508 |  |   | $ | 18 |  |   | $ | 5,526 |  |
| States, municipalities and political subdivisions                                  |   | — |  |   | 3,443 |  |   | — |  |   | 3,443 |  |
| Commercial mortgage-backed                                                         |   | — |  |   | 259 |  |   | — |  |   | 259 |  |
| Government-sponsored enterprises                                                   |   | — |  |   | 208 |  |   | — |  |   | 208 |  |
| Foreign government                                                                 |   | — |  |   | 10 |  |   | — |  |   | 10 |  |
| Convertibles and bonds with warrants attached                                      |   | — |  |   | 7 |  |   | — |  |   | 7 |  |
| United States government                                                           |   | 7 |  |   | — |  |   | — |  |   | 7 |  |
| Subtotal                                                                           |   | 7 |  |   | 9,435 |  |   | 18 |  |   | 9,460 |  |
| Common equities, available for sale                                                |   | 4,679 |  |   | — |  |   | — |  |   | 4,679 |  |
| Nonredeemable preferred equities,                    available for sale            |   | — |  |   | 177 |  |   | 2 |  |   | 179 |  |
| Separate accounts taxable fixed maturities                                         |   | — |  |   | 731 |  |   | — |  |   | 731 |  |
| Top Hat Savings Plan - mutual funds and common equities (included in Other assets) |   | 18 |  |   | — |  |   | — |  |   | 18 |  |
| Total                                                                              |   | $ | 4,704 |  |   | $ | 10,343 |  |   | $ | 20 |  |   | $ | 15,067 |  |
|                                                                               |   |   |   |   |   |   |   |   |
| At December 31, 2013                                                               |   |   |  |   |   |  |   |   |  |   |   |  |
| Fixed maturities, available for sale:                                              |   |   |  |   |   |  |   |   |  |   |   |  |
| Corporate                                                                          |   | $ | — |  |   | $ | 5,531 |  |   | $ | 2 |  |   | $ | 5,533 |  |
| States, municipalities and political subdivisions                                  |   | — |  |   | 3,211 |  |   | — |  |   | 3,211 |  |
| Commercial mortgage-backed                                                         |   | — |  |   | 143 |  |   | — |  |   | 143 |  |
| Government-sponsored enterprises                                                   |   | — |  |   | 200 |  |   | — |  |   | 200 |  |
| Foreign government                                                                 |   | — |  |   | 10 |  |   | — |  |   | 10 |  |
| Convertibles and bonds with warrants attached                                      |   | — |  |   | 17 |  |   | — |  |   | 17 |  |
| United States government                                                           |   | 7 |  |   | — |  |   | — |  |   | 7 |  |
| Subtotal                                                                           |   | 7 |  |   | 9,112 |  |   | 2 |  |   | 9,121 |  |
| Common equities, available for sale                                                |   | 4,213 |  |   | — |  |   | — |  |   | 4,213 |  |
| Nonredeemable preferred equities,                    available for sale            |   | — |  |   | 160 |  |   | 2 |  |   | 162 |  |
| Separate accounts taxable fixed maturities                                         |   | — |  |   | 682 |  |   | — |  |   | 682 |  |
| Top Hat Savings Plan - mutual funds and common equities (included in Other assets) |   | 14 |  |   | — |  |   | — |  |   | 14 |  |
| Total                                                                              |   | $ | 4,234 |  |   | $ | 9,954 |  |   | $ | 4 |  |   | $ | 14,192 |  |
|                                                                               |   |   |   |   |   |   |   |   |

----

|                                              |
|----------------------------------------------|
|                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                   | Asset fair value measurements using significant unobservable inputs (Level 3) |
|                                         |   | Corporatefixedmaturities |   | States, municipalities and political subdivisions fixed maturities |   | Nonredeemable preferred equities |   | Total |
| Beginning balance, January 1, 2014           |   | $ | 2 |  |   | $ | — |  |   | $ | 2 |  |   | $ | 4 |  |
| Total gains or losses (realized/unrealized): |   |   |  |   |   |  |   |   |  |   |   |  |
| Included in net income                       |   | — |  |   | — |  |   | — |  |   | — |  |
| Included in other comprehensive income       |   | — |  |   | — |  |   | — |  |   | — |  |
| Purchases                                    |   | — |  |   | — |  |   | — |  |   | — |  |
| Sales                                        |   | — |  |   | — |  |   | — |  |   | — |  |
| Transfers into Level 3                       |   | 16 |  |   | — |  |   | — |  |   | 16 |  |
| Transfers out of Level 3                     |   | — |  |   | — |  |   | — |  |   | — |  |
| Ending balance, December 31, 2014       |   | $ | 18 |  |   | $ | — |  |   | $ | 2 |  |   | $ | 20 |  |
|                                         |   |   |   |   |   |   |   |   |
| Beginning balance, January 1, 2013           |   | $ | 3 |  |   | $ | 1 |  |   | $ | 1 |  |   | $ | 5 |  |
| Total gains or losses (realized/unrealized): |   |   |  |   |   |  |   |   |  |   |   |  |
| Included in net income                       |   | — |  |   | — |  |   | — |  |   | — |  |
| Included in other comprehensive income       |   | — |  |   | — |  |   | — |  |   | — |  |
| Purchases                                    |   | — |  |   | — |  |   | 1 |  |   | 1 |  |
| Sales                                        |   | — |  |   | (1 | ) |   | — |  |   | (1 | ) |
| Transfers into Level 3                       |   | — |  |   | — |  |   | — |  |   | — |  |
| Transfers out of Level 3                     |   | (1 | ) |   | — |  |   | — |  |   | (1 | ) |
| Ending balance, December 31, 2013       |   | $ | 2 |  |   | $ | — |  |   | $ | 2 |  |   | $ | 4 |  |
|                                         |   |   |   |   |   |   |   |   |

|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)         |   | Quoted prices inactive markets for identical assets(Level 1) |   | Significant other observable inputs (Level 2) |   | Significantunobservableinputs(Level 3) |   | Total |
| At December 31, 2014               |   |   |   |   |
| Note payable                       |   | $ | — |  |   | $ | 49 |  |   | $ | — |  |   | $ | 49 |  |
| 6.900% senior debentures, due 2028 |   | — |  |   | 34 |  |   | — |  |   | 34 |  |
| 6.920% senior debentures, due 2028 |   | — |  |   | 496 |  |   | — |  |   | 496 |  |
| 6.125% senior notes, due 2034      |   | — |  |   | 449 |  |   | — |  |   | 449 |  |
| Total                              |   | $ | — |  |   | $ | 1,028 |  |   | $ | — |  |   | $ | 1,028 |  |
|                               |   |   |   |   |   |   |   |   |
| At December 31, 2013               |   |   |   |   |   |   |   |   |
| Note payable                       |   | $ | — |  |   | $ | 104 |  |   | $ | — |  |   | $ | 104 |  |
| 6.900% senior debentures, due 2028 |   | — |  |   | 30 |  |   | — |  |   | 30 |  |
| 6.920% senior debentures, due 2028 |   | — |  |   | 458 |  |   | — |  |   | 458 |  |
| 6.125% senior notes, due 2034      |   | — |  |   | 399 |  |   | — |  |   | 399 |  |
| Total                              |   | $ | — |  |   | $ | 991 |  |   | $ | — |  |   | $ | 991 |  |
|                               |   |   |   |   |   |   |   |   |

----

|                            |
|----------------------------|
|                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions) |   | Quoted prices inactive markets foridentical assets(Level 1) |   | Significant otherobservable inputs (Level 2) |   | Significant unobservable inputs(Level 3) |   | Total |
| At December 31, 2014       |   |   |   |   |
| Life policy loans          |   | $ | — |  |   | $ | — |  |   | $ | 39 |  |   | $ | 39 |  |
|                       |   |   |   |   |   |   |   |   |
| At December 31, 2013       |   |   |   |   |   |   |   |   |
| Life policy loans          |   | $ | — |  |   | $ | — |  |   | $ | 45 |  |   | $ | 45 |  |
|                       |   |   |   |   |   |   |   |   |

|                            |
|----------------------------|
|                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions) |   | Quoted prices inactive markets foridentical assets(Level 1) |   | Significant otherobservable inputs (Level 2) |   | Significantunobservableinputs(Level 3) |   | Total |
| At December 31, 2014       |   |   |   |   |
| Deferred annuities         |   | $ | — |  |   | $ | — |  |   | $ | 897 |  |   | $ | 897 |  |
| Structured settlements     |   | — |  |   | 217 |  |   | — |  |   | 217 |  |
| Total                      |   | $ | — |  |   | $ | 217 |  |   | $ | 897 |  |   | $ | 1,114 |  |
|                       |   |   |   |   |   |   |   |   |
| At December 31, 2013       |   |   |   |   |   |   |   |   |
| Deferred annuities         |   | $ | — |  |   | $ | — |  |   | $ | 911 |  |   | $ | 911 |  |
| Structured settlements     |   | — |  |   | 219 |  |   | — |  |   | 219 |  |
| Total                      |   | $ | — |  |   | $ | 219 |  |   | $ | 911 |  |   | $ | 1,130 |  |
|                       |   |   |   |   |   |   |   |   |

----

|                                                   |
|---------------------------------------------------|
|                                                   |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                             |   | Years ended December 31, |
|                                              |   | 2014 |   | 2013 |   | 2012 |
| Gross loss and loss expense reserves, January 1   |   | $ | 4,241 |  |   | $ | 4,169 |  |   | $ | 4,280 |  |
| Less reinsurance recoverable                      |   | 299 |  |   | 356 |  |   | 375 |  |
| Net loss and loss expense reserves, January 1     |   | 3,942 |  |   | 3,813 |  |   | 3,905 |  |
| Net incurred loss and loss expenses related to:   |   |   |  |   |   |  |   |   |  |
| Current accident year                             |   | 2,725 |  |   | 2,448 |  |   | 2,533 |  |
| Prior accident years                              |   | (98 | ) |   | (147 | ) |   | (396 | ) |
| Total incurred                                    |   | 2,627 |  |   | 2,301 |  |   | 2,137 |  |
| Net paid loss and loss expenses related to:       |   |   |  |   |   |  |   |   |  |
| Current accident year                             |   | 1,212 |  |   | 1,045 |  |   | 1,123 |  |
| Prior accident years                              |   | 1,201 |  |   | 1,127 |  |   | 1,106 |  |
| Total paid                                        |   | 2,413 |  |   | 2,172 |  |   | 2,229 |  |
|                                              |   |   |   |   |   |   |
| Net loss and loss expense reserves, December 31   |   | 4,156 |  |   | 3,942 |  |   | 3,813 |  |
| Plus reinsurance recoverable                      |   | 282 |  |   | 299 |  |   | 356 |  |
| Gross loss and loss expense reserves, December 31 |   | $ | 4,438 |  |   | $ | 4,241 |  |   | $ | 4,169 |  |
|                                              |   |   |   |   |   |   |

----

|                                                    |
|----------------------------------------------------|
|                                                    |  |  |  |  |  |  |  |  |
| (Dollars in millions)                              |   | At December 31, |
|                                               |   | 2014 |   | 2013 |
| Ordinary/traditional life                          |   | $ | 875 |  |   | $ | 815 |  |
| Deferred annuities                                 |   | 863 |  |   | 862 |  |
| Universal life                                     |   | 530 |  |   | 508 |  |
| Structured settlements                             |   | 182 |  |   | 189 |  |
| Other                                              |   | 47 |  |   | 16 |  |
| Total life policy and investment contract reserves |   | $ | 2,497 |  |   | $ | 2,390 |  |
|                                               |   |   |   |   |

----

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                |   | Years ended December 31, |
|                                                 |   | 2014 |   | 2013 |   | 2012 |
| Deferred policy acquisition costs asset, January 1   |   | $ | 565 |  |   | $ | 470 |  |   | $ | 477 |  |
| Capitalized deferred policy acquisition costs        |   | 827 |  |   | 802 |  |   | 734 |  |
| Amortized deferred policy acquisition costs          |   | (807 | ) |   | (758 | ) |   | (706 | ) |
| Amortized shadow deferred policy acquisition costs   |   | (7 | ) |   | 51 |  |   | (35 | ) |
| Deferred policy acquisition costs asset, December 31 |   | $ | 578 |  |   | $ | 565 |  |   | $ | 470 |  |
|                                                 |   |   |   |   |   |   |

|                       |
|-----------------------|
|                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions) |   |   |   | Book value |   | Principal amount |
|  Interest rate   |   |  Year of issue |   |   |   | December 31, |   | December 31, |   | December 31, |   | December 31, |
|                  |   |   |   | 2014 |   | 2013 |   | 2014 |   | 2013 |
| 6.900%                |   | 1998 |   | Senior debentures, due 2028 |   | $ | 28 |  |   | $ | 28 |  |   | $ | 28 |  |   | $ | 28 |  |
| 6.920%                |   | 2005 |   | Senior debentures, due 2028 |   | 391 |  |   | 391 |  |   | 391 |  |   | 391 |  |
| 6.125%                |   | 2004 |   | Senior notes, due 2034 |   | 372 |  |   | 371 |  |   | 374 |  |   | 374 |  |
|                  |   |   |   | Total |   | $ | 791 |  |   | $ | 790 |  |   | $ | 793 |  |   | $ | 793 |  |
|                  |   |   |   |   |   |   |   |   |   |   |   |   |

|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)     | Years ended December 31, |   |
|                      | 2015 |   | 2016 |   | 2017 |   | 2018 |   | 2019 | 2020 |
| Capital lease obligations | $ | 18 |  |   | $ | 9 |  |   | $ | 3 |  |   | $ | 2 |  |   | $ | 3 |  | $ | 1 |  |
|                      |   |   |   |   |   |   |   |   |   |   |

----

|                                                                     |
|---------------------------------------------------------------------|
|                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  (Dollars in millions)                                    |   | 2014 |   |   | 2013 |   |   | 2012 |
|                                                                |   | Beforetax |   | Incometax |   | Net |   |   | Beforetax |   | Incometax |   | Net |   |   | Beforetax |   | Incometax |   | Net |
| Investments:                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| AOCI, January 1                                                     |   | $ | 2,335 |  |   | $ | 808 |  |   | $ | 1,527 |  |   |   | $ | 1,875 |  |   | $ | 647 |  |   | $ | 1,228 |  |   |   | $ | 1,489 |  |   | $ | 512 |  |   | $ | 977 |  |
| OCI before realized gains recognized in net income                  |   | 514 |  |   | 181 |  |   | 333 |  |   |   | 537 |  |   | 188 |  |   | 349 |  |   |   | 426 |  |   | 149 |  |   | 277 |  |
| Realized gains recognized in net income                             |   | (130 | ) |   | (47 | ) |   | (83 | ) |   |   | (77 | ) |   | (27 | ) |   | (50 | ) |   |   | (40 | ) |   | (14 | ) |   | (26 | ) |
| OCI                                                                 |   | 384 |  |   | 134 |  |   | 250 |  |   |   | 460 |  |   | 161 |  |   | 299 |  |   |   | 386 |  |   | 135 |  |   | 251 |  |
| AOCI, December 31                                                   |   | $ | 2,719 |  |   | $ | 942 |  |   | $ | 1,777 |  |   |   | $ | 2,335 |  |   | $ | 808 |  |   | $ | 1,527 |  |   |   | $ | 1,875 |  |   | $ | 647 |  |   | $ | 1,228 |  |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pension Obligations:                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| AOCI, January 1                                                     |   | $ | (18 | ) |   | $ | (6 | ) |   | $ | (12 | ) |   |   | $ | (101 | ) |   | $ | (35 | ) |   | $ | (66 | ) |   |   | $ | (88 | ) |   | $ | (31 | ) |   | $ | (57 | ) |
| OCI before realized losses recognized in net income                 |   | (21 | ) |   | (7 | ) |   | (14 | ) |   |   | 83 |  |   | 29 |  |   | 54 |  |   |   | (13 | ) |   | (4 | ) |   | (9 | ) |
| Realized losses recognized in net income                            |   | 3 |  |   | 1 |  |   | 2 |  |   |   | — |  |   | — |  |   | — |  |   |   | — |  |   | — |  |   | — |  |
| OCI                                                                 |   | (18 | ) |   | (6 | ) |   | (12 | ) |   |   | 83 |  |   | 29 |  |   | 54 |  |   |   | (13 | ) |   | (4 | ) |   | (9 | ) |
| AOCI, December 31                                                   |   | $ | (36 | ) |   | $ | (12 | ) |   | $ | (24 | ) |   |   | $ | (18 | ) |   | $ | (6 | ) |   | $ | (12 | ) |   |   | $ | (101 | ) |   | $ | (35 | ) |   | $ | (66 | ) |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Life deferred acquisition costs, life policy reserves and other:    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| AOCI, January 1                                                     |   | $ | (16 | ) |   | $ | (5 | ) |   | $ | (11 | ) |   |   | $ | (50 | ) |   | $ | (17 | ) |   | $ | (33 | ) |   |   | $ | (29 | ) |   | $ | (10 | ) |   | $ | (19 | ) |
| OCI before realized gains recognized in net income                  |   | 7 |  |   | 3 |  |   | 4 |  |   |   | 40 |  |   | 14 |  |   | 26 |  |   |   | (19 | ) |   | (7 | ) |   | (12 | ) |
| Realized gains recognized in net income                             |   | (3 | ) |   | (1 | ) |   | (2 | ) |   |   | (6 | ) |   | (2 | ) |   | (4 | ) |   |   | (2 | ) |   | — |  |   | (2 | ) |
| OCI                                                                 |   | 4 |  |   | 2 |  |   | 2 |  |   |   | 34 |  |   | 12 |  |   | 22 |  |   |   | (21 | ) |   | (7 | ) |   | (14 | ) |
| AOCI, December 31                                                   |   | $ | (12 | ) |   | $ | (3 | ) |   | $ | (9 | ) |   |   | $ | (16 | ) |   | $ | (5 | ) |   | $ | (11 | ) |   |   | $ | (50 | ) |   | $ | (17 | ) |   | $ | (33 | ) |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Summary of AOCI:                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| AOCI, January 1                                                     |   | $ | 2,301 |  |   | $ | 797 |  |   | $ | 1,504 |  |   |   | $ | 1,724 |  |   | $ | 595 |  |   | $ | 1,129 |  |   |   | $ | 1,372 |  |   | $ | 471 |  |   | $ | 901 |  |
| Investments OCI                                                     |   | 384 |  |   | 134 |  |   | 250 |  |   |   | 460 |  |   | 161 |  |   | 299 |  |   |   | 386 |  |   | 135 |  |   | 251 |  |
| Pension obligations OCI                                             |   | (18 | ) |   | (6 | ) |   | (12 | ) |   |   | 83 |  |   | 29 |  |   | 54 |  |   |   | (13 | ) |   | (4 | ) |   | (9 | ) |
| Life deferred acquisition costs, life policy reserves and other OCI |   | 4 |  |   | 2 |  |   | 2 |  |   |   | 34 |  |   | 12 |  |   | 22 |  |   |   | (21 | ) |   | (7 | ) |   | (14 | ) |
| Total OCI                                                           |   | 370 |  |   | 130 |  |   | 240 |  |   |   | 577 |  |   | 202 |  |   | 375 |  |   |   | 352 |  |   | 124 |  |   | 228 |  |
| AOCI, December 31                                                   |   | $ | 2,671 |  |   | $ | 927 |  |   | $ | 1,744 |  |   |   | $ | 2,301 |  |   | $ | 797 |  |   | $ | 1,504 |  |   |   | $ | 1,724 |  |   | $ | 595 |  |   | $ | 1,129 |  |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                         |
|-------------------------|
|                         |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)   |   | Years ended December 31, |
|                    |   | 2014 |   | 2013 |   | 2012 |
| Direct earned premiums  |   | $ | 4,209 |  |   | $ | 3,903 |  |   | $ | 3,520 |  |
| Assumed earned premiums |   | 12 |  |   | 11 |  |   | 9 |  |
| Ceded earned premiums   |   | (176 | ) |   | (201 | ) |   | (185 | ) |
| Earned premiums         |   | $ | 4,045 |  |   | $ | 3,713 |  |   | $ | 3,344 |  |
|                    |   |   |   |   |   |   |

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                   |   | Years ended December 31, |
|                                    |   | 2014 |   | 2013 |   | 2012 |
| Direct incurred loss and loss expenses  |   | $ | 2,661 |  |   | $ | 2,323 |  |   | $ | 2,235 |  |
| Assumed incurred loss and loss expenses |   | 6 |  |   | 11 |  |   | 6 |  |
| Ceded incurred loss and loss expenses   |   | (40 | ) |   | (33 | ) |   | (104 | ) |
| Incurred loss and loss expenses         |   | $ | 2,627 |  |   | $ | 2,301 |  |   | $ | 2,137 |  |
|                                    |   |   |   |   |   |   |

|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)  |   | Years ended December 31, |
|                   |   | 2014 |   | 2013 |   | 2012 |
| Direct earned premiums |   | $ | 259 |  |   | $ | 248 |  |   | $ | 235 |  |
| Ceded earned premiums  |   | (61 | ) |   | (59 | ) |   | (57 | ) |
| Earned premiums        |   | $ | 198 |  |   | $ | 189 |  |   | $ | 178 |  |
|                   |   |   |   |   |   |   |

----

|                                            |
|--------------------------------------------|
|                                            |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                      |   | Years ended December 31, |
|                                       |   | 2014 |   | 2013 |   | 2012 |
| Direct contract holders' benefits incurred |   | $ | 299 |  |   | $ | 266 |  |   | $ | 232 |  |
| Ceded contract holders' benefits incurred  |   | (70 | ) |   | (62 | ) |   | (47 | ) |
| Contract holders' benefits incurred        |   | $ | 229 |  |   | $ | 204 |  |   | $ | 185 |  |
|                                       |   |   |   |   |   |   |

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |  |
| (Dollars in millions)             |   | At December 31, |
|                              |   | 2014 |   | 2013 |
| Deferred tax assets:              |   |   |  |   |   |  |
| Loss and loss expense reserves    |   | $ | 197 |  |   | $ | 206 |  |
| Unearned premiums                 |   | 145 |  |   | 137 |  |
| Investments                       |   | 16 |  |   | 19 |  |
| Other                             |   | 41 |  |   | 46 |  |
| Total                             |   | 399 |  |   | 408 |  |
| Deferred tax liabilities:         |   |   |  |   |   |  |
| Unrealized investment gains, net  |   | 937 |  |   | 807 |  |
| Deferred acquisition costs        |   | 183 |  |   | 178 |  |
| Life policy reserves              |   | 110 |  |   | 86 |  |
| Other                             |   | 9 |  |   | 10 |  |
| Total                             |   | 1,239 |  |   | 1,081 |  |
| Net deferred income tax liability |   | $ | 840 |  |   | $ | 673 |  |
|                              |   |   |   |   |

|                                        |
|----------------------------------------|
|                                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                  |   | Years ended December 31, |
|                                   |   | 2014 |   | 2013 |   | 2012 |
| Tax at statutory rate:                 |   | $ | 252 |  |   | 35.0 |  % |   | $ | 250 |  |   | 35.0 |  % |   | $ | 198 |  |   | 35.0 |  % |
| Increase (decrease) resulting from:    |   |   |  |   |   |  |   |   |   |   |  |   |   |  |   |   |  |
| Tax-exempt income from municipal bonds |   | (33 | ) |   | (4.6 | ) |   | (32 | ) |   | (4.5 | ) |   | (33 | ) |   | (5.9 | ) |
| Dividend received exclusion            |   | (29 | ) |   | (4.0 | ) |   | (26 | ) |   | (3.6 | ) |   | (24 | ) |   | (4.2 | ) |
| Other                                  |   | 6 |  |   | 0.8 |  |   | 5 |  |   | 0.7 |  |   | 4 |  |   | 0.7 |  |
| Provision for income taxes             |   | $ | 196 |  |   | 27.2 |  % |   | $ | 197 |  |   | 27.6 |  % |   | $ | 145 |  |   | 25.6 |  % |
|                                   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                  |
|--------------------------------------------------|
|                                                  |  |  |  |  |  |  |  |  |  |  |  |  |
| (In millions except per share data)              |   | Years ended December 31, |
|                                             | 2014 |   | 2013 |   | 2012 |
| Numerator:                                       |   |   |  |   |   |  |   |   |  |
| Net income—basic and diluted               |   | $ | 525 |  |   | $ | 517 |  |   | $ | 421 |  |
| Denominator:                                     |   |   |  |   |   |  |   |   |  |
| Basic weighted-average common shares outstanding |   | 163.5 |  |   | 163.5 |  |   | 162.5 |  |
| Effect of stock-based awards:                    |   |   |  |   |   |  |   |   |  |
| Stock options                                    |   | 1.0 |  |   | 1.2 |  |   | 0.5 |  |
| Nonvested shares                                 |   | 0.6 |  |   | 0.7 |  |   | 0.7 |  |
| Diluted weighted-average shares                  |   | 165.1 |  |   | 165.4 |  |   | 163.7 |  |
| Earnings per share:                              |   |   |  |   |   |  |   |   |  |
| Basic                                            |   | $ | 3.21 |  |   | $ | 3.16 |  |   | $ | 2.59 |  |
| Diluted                                          |   | 3.18 |  |   | 3.12 |  |   | 2.57 |  |
| Number of anti-dilutive stock-based awards       |   | 0.7 |  |   | 0.4 |  |   | 5.9 |  |
|                                             |   |   |   |   |   |   |

----

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |  |  |
|                          |   | Qualified Pension Plan |   | SERP |
|                          |   | 2014 |   | 2013 |   | 2014 |   | 2013 |
| Discount rate                 |   | 4.25 | % |   | 5.15 | % |   | 4.05 | % |   | 4.80 | % |
| Rate of compensation increase |   | 2.75-3.25 |  |   | 2.75-3.25 |  |   | 2.75-3.25 |  |   | 2.75-3.25 |  |
|                          |   |   |   |   |   |   |   |   |

|                                |
|--------------------------------|
|                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                           |   | Qualified Pension Plan |   | SERP |
|                           |   | 2014 |   | 2013 |   | 2012 |   | 2014 |   | 2013 |   | 2012 |
| Discount rate                  |   | 5.15 | % |   | 4.20 | % |   | 5.10 | % |   | 4.80 | % |   | 3.95 | % |   | 4.75 | % |
| Expected return on plan assets |   | 7.25 |  |   | 7.50 |  |   | 7.50 |  |   | n/a |  |   | n/a |  |   | n/a |  |
| Rate of compensation increase  |   | 2.75-3.25 |  |   | 2.75-3.25 |  |   | 3.50-5.50 |  |   | 2.75-3.25 |  |   | 2.75-3.25 |  |   | 3.50-5.50 |  |
|                           |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                           |
|-------------------------------------------|
|                                           |  |  |  |  |  |  |  |  |
| (Dollars in millions)                     |   | At December 31, |
|                                      |   | 2014 |   | 2013 |
| Change in projected benefit obligation:   |   |   |  |   |   |  |
| Benefit obligation, January 1             |   | $ | 284 |  |   | $ | 320 |  |
| Service cost                              |   | 10 |  |   | 13 |  |
| Interest cost                             |   | 15 |  |   | 13 |  |
| Actuarial loss (gain)                     |   | 35 |  |   | (34 | ) |
| Benefits paid                             |   | (27 | ) |   | (28 | ) |
| Other                                     |   | 2 |  |   | — |  |
| Projected benefit obligation, December 31 |   | $ | 319 |  |   | $ | 284 |  |
|                                      |   |   |   |   |
| Accumulated benefit obligation            |   | $ | 284 |  |   | $ | 257 |  |
|                                      |   |   |   |   |
| Change in plan assets:                    |   |   |  |   |   |  |
| Fair value of plan assets, January 1      |   | $ | 280 |  |   | $ | 238 |  |
| Actual return on plan assets              |   | 30 |  |   | 55 |  |
| Employer contribution                     |   | 5 |  |   | 15 |  |
| Benefits paid                             |   | (27 | ) |   | (28 | ) |
| Fair value of plan assets, December 31    |   | $ | 288 |  |   | $ | 280 |  |
|                                      |   |   |   |   |
| Funded status, December 31                |   | $ | (31 | ) |   | $ | (4 | ) |
|                                      |   |   |   |   |

----

|                                                                |
|----------------------------------------------------------------|
|                                                                |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                          |   | At December 31, |
|                                                           |   | 2014 |   | 2013 |
| Pension amounts recognized in the consolidated balance sheets: |   |   |   |   |
| Other assets                                                   |   | $ | — |  |   | $ | 4 |  |
| Other liabilities                                              |   | (31 | ) |   | (8 | ) |
| Net amount recognized                                          |   | $ | (31 | ) |   | $ | (4 | ) |
|                                                           |   |   |   |   |
| Amounts recognized in accumulated other comprehensive income:  |   |   |  |   |   |  |
| Net actuarial loss                                             |   | $ | 34 |  |   | $ | 18 |  |
| Prior service cost                                             |   | 2 |  |   | — |  |
| Total                                                          |   | $ | 36 |  |   | $ | 18 |  |
|                                                           |   |   |   |   |

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                 |   | Years ended December 31, |
|                                                  |   | 2014 |   | 2013 |   | 2012 |
| Net periodic benefit cost:                            |   |   |   |   |   |   |
| Service cost                                          |   | $ | 10 |  |   | $ | 13 |  |   | $ | 12 |  |
| Interest cost                                         |   | 15 |  |   | 13 |  |   | 14 |  |
| Expected return on plan assets                        |   | (17 | ) |   | (17 | ) |   | (16 | ) |
| Amortization of actuarial loss and prior service cost |   | 2 |  |   | 9 |  |   | 8 |  |
| Other                                                 |   | 3 |  |   | 2 |  |   | — |  |
| Net periodic benefit cost                             |   | $ | 13 |  |   | $ | 20 |  |   | $ | 18 |  |
|                                                  |   |   |   |   |   |   |

|                                                                    |
|--------------------------------------------------------------------|
|                                                                    |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                              |   | Years ended December 31, |
|                                                               |   | 2014 |   | 2013 |   | 2012 |
| Other changes in plan assets and benefit obligations recognized in |   |   |   |   |   |   |
| other comprehensive income:                                        |   |   |   |   |   |   |
| Current year actuarial loss (gain)                                 |   | $ | 21 |  |   | $ | (72 | ) |   | $ | 20 |  |
| Amortization of actuarial loss                                     |   | (5 | ) |   | (10 | ) |   | (6 | ) |
| Current year prior service cost                                    |   | 2 |  |   | — |  |   | — |  |
| Amortization of prior service cost                                 |   | — |  |   | (1 | ) |   | (1 | ) |
| Total recognized in other comprehensive loss (income)              |   | $ | 18 |  |   | $ | (83 | ) |   | $ | 13 |  |
|                                                               |   |   |   |   |   |   |

----

|                                                   |
|---------------------------------------------------|
|                                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                             |   | Quoted prices inactive markets foridentical assets (Level 1) |   | Significant otherobservable inputs (Level 2) |   | Significantunobservableinputs (Level 3) |   | Total |
| At December 31, 2014                              |   |   |   |   |
| Fixed maturities, available for sale:             |   |   |  |   |   |  |   |   |  |   |   |  |
| States, municipalities and political subdivisions |   | $ | — |  |   | $ | 33 |  |   | $ | — |  |   | $ | 33 |  |
| Corporate securities                              |   | — |  |   | 19 |  |   | — |  |   | 19 |  |
| Total fixed maturities, available for sale        |   | — |  |   | 52 |  |   | — |  |   | 52 |  |
| Common equities, available for sale               |   | 225 |  |   | — |  |   | — |  |   | 225 |  |
| Total                                             |   | $ | 225 |  |   | $ | 52 |  |   | $ | — |  |   | $ | 277 |  |
|                                              |   |   |   |   |   |   |   |   |
| At December 31, 2013                              |   |   |   |   |   |   |   |   |
| Fixed maturities, available for sale:             |   |   |  |   |   |  |   |   |  |   |   |  |
| States, municipalities and political subdivisions |   | $ | — |  |   | $ | 32 |  |   | $ | — |  |   | $ | 32 |  |
| Corporate securities                              |   | — |  |   | 21 |  |   | — |  |   | 21 |  |
| Total fixed maturities, available for sale        |   | — |  |   | 53 |  |   | — |  |   | 53 |  |
| Common equities, available for sale               |   | 208 |  |   | — |  |   | — |  |   | 208 |  |
| Total                                             |   | $ | 208 |  |   | $ | 53 |  |   | $ | — |  |   | $ | 261 |  |
|                                              |   |   |   |   |   |   |   |   |

----

|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)            |   | Years ended December 31, |
|                             |   | 2015 |   | 2016 |   | 2017 |   | 2018 |   | 2019 |   | 2020 - 2024 |
| Expected future benefit payments |   | $ | 26 |  |   | $ | 32 |  |   | $ | 29 |  |   | $ | 23 |  |   | $ | 24 |  |   | $ | 142 |  |
|                             |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                         |
|---------------------------------------------------------|
|                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                                   |   | Net income (loss) |   | Capital and surplus |
|                                                    |   | Years ended December 31, |   | At December 31, |
|                                                    |   | 2014 |   | 2013 |   | 2012 |   | 2014 |   | 2013 |
| The Cincinnati Insurance Company                        |   | $ | 436 |  |   | $ | 418 |  |   | $ | 334 |  |   | $ | 4,472 |  |   | $ | 4,326 |  |
| The Cincinnati Casualty Company                         |   | 12 |  |   | 10 |  |   | 10 |  |   | 330 |  |   | 317 |  |
| The Cincinnati Indemnity Company                        |   | 3 |  |   | 2 |  |   | 2 |  |   | 86 |  |   | 82 |  |
| The Cincinnati Specialty Underwriters Insurance Company |   | 32 |  |   | 18 |  |   | 6 |  |   | 266 |  |   | 228 |  |
| The Cincinnati Life Insurance Company                   |   | (19 | ) |   | (20 | ) |   | 5 |  |   | 223 |  |   | 247 |  |
|                                                    |   |   |   |   |   |   |   |   |   |   |

----

|         |                                                                                                                                    |
|---------|------------------------------------------------------------------------------------------------------------------------------------|
| • | Weighted-average expected term is based on historical experience of similar awards with consideration for current exercise trends. |

|         |                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------|
| • | Expected volatility is based on our stock price over a historical period that approximates the expected term. |

|         |                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------|
| • | Dividend yield is determined by dividing the annualized per share dividend by the stock price on the date of grant. |

|         |                                                                                                                                                      |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Risk-free rates are the implied yield currently available on zero-coupon U.S. Treasury issues with a remaining term approximating the expected term. |

----

|                                                                  |
|------------------------------------------------------------------|
|                                                                  |  |  |  |  |  |  |
|                                                             |   | 2014 |   | 2013 |   | 2012 |
| Weighted-average expected term                                   |   | 8-9 years |   | 9-10 years |   | 8-10 years |
| Expected volatility                                              |   | 25.20-26.22% |   | 25.25-26.31% |   | 25.26-26.20% |
| Dividend yield                                                   |   | 3.76% |   | 3.65% |   | 4.51-4.52% |
| Risk-free rates                                                  |   | 2.42-2.62% |   | 1.82-2.00% |   | 1.58-2.00% |
| Weighted-average fair value of options granted during the period |   | $10.16 |   | $9.71 |   | $6.78 |
|                                                             |   |   |   |   |   |   |

|                                            |
|--------------------------------------------|
|                                            |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions, shares in thousands) |   | Shares |   | Weighted-average exercise price |   | Aggregateintrinsicvalue |
| Outstanding shares at January 1, 2014      |   | 6,332 |  |   | $ | 38.39 |  |   |   |  |
| Granted                                    |   | 401 |  |   | 46.81 |  |   |   |  |
| Exercised                                  |   | (1,086 | ) |   | 37.59 |  |   |   |  |
| Forfeited or expired                       |   | (689 | ) |   | 39.49 |  |   |   |  |
| Outstanding shares at December 31, 2014    |   | 4,958 |  |   | 39.10 |  |   | $ | 66 |  |
|                                       |   |   |   |   |   |   |
| Options exercisable at end of period       |   | 4,165 |  |   | $ | 38.17 |  |   | $ | 59 |  |
|                                       |   |   |   |   |   |   |

|                          |
|--------------------------|
|                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Shares in thousands)    |   | Options outstanding |   | Options exercisable |
| Range of exercise prices |   | Shares |   | Weighted-averageremaining contractuallife |   | Weighted-averageexercise price |   | Shares |   | Weighted-averageexercise price |
| $25.00 to $29.99         |   | 731 |  |   | 4.58 years |   | $ | 26.58 |  |   | 731 |  |   | $ | 26.58 |  |
| $30.00 to $34.99         |   | 675 |  |   | 6.01 years |   | 33.96 |  |   | 675 |  |   | 33.96 |  |
| $35.00 to $39.99         |   | 981 |  |   | 4.90 years |   | 37.31 |  |   | 824 |  |   | 37.63 |  |
| $40.00 to $44.99         |   | 1,258 |  |   | 3.09 years |   | 43.58 |  |   | 1,015 |  |   | 43.32 |  |
| $45.00 to $49.99         |   | 1,313 |  |   | 3.50 years |   | 45.73 |  |   | 920 |  |   | 45.26 |  |
| Total                    |   | 4,958 |  |   | 4.17 years |   | 39.10 |  |   | 4,165 |  |   | 38.17 |  |
|                     |   |   |   |   |   |   |   |   |   |   |

----

|         |                                                                                                                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Correlation coefficients are based upon the price data used to calculate the historical volatilities. The correlation coefficients are used to model the way each entity tends to move in relation to each other. |

|         |                                                                                                                                                                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Expected volatility is based on our stock price over a historical period that approximates the remainder of the performance period. We have used the historical volatilities of 2.88 percent for 2014 grants and 2.87 percent for 2013 grants. |

|         |                                                                                                                                                                                                                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Dividend yield has been modeled assuming dividends are reinvested in the issuing entity on a continuous basis and the holder of the award is not entitled to receive dividends paid during the performance period. Dividend yields of 3.74 percent for 2014 grants and 3.63 percent for 2013 grants were used. |

|         |                                                                                                                                                                                                                                                                   |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Risk-free rates are equal to the yield, as of the measurement date, of the zero-coupon U.S. Treasury bill that is commensurate with the performance measurement period. Risk-free rates used were 0.66 percent for 2014 and 0.40 percent for 2013 grants. |

|                                     |
|-------------------------------------|
|                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Shares in thousands)     |   | Service-basedshares |   | Weighted-average grantdate fair value |   | Performance-basedshares |   | Weighted-average grantdate fair value |
| Nonvested at January 1, 2014   |   | 936 |  |   | $ | 33.61 |  |   | 246 |  |   | $ | 37.66 |  |
| Granted                             |   | 331 |  |   | 41.84 |  |   | 99 |  |   | 36.03 |  |
| Vested                              |   | (271 | ) |   | 29.79 |  |   | (60 | ) |   | 30.91 |  |
| Forfeited or canceled               |   | (28 | ) |   | 36.28 |  |   | (2 | ) |   | 31.77 |  |
| Nonvested at December 31, 2014 |   | 968 |  |   | 37.42 |  |   | 283 |  |   | 38.55 |  |
|                                |   |   |   |   |   |   |   |   |

----

|         |                            |
|---------|----------------------------|
| • | Commercial lines insurance |

|         |                          |
|---------|--------------------------|
| • | Personal lines insurance |

|         |                                    |
|---------|------------------------------------|
| • | Excess and surplus lines insurance |

|         |                |
|---------|----------------|
| • | Life insurance |

|         |             |
|---------|-------------|
| • | Investments |

|         |                                                                                                                                                                           |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | All four insurance segments record revenues from insurance premiums earned. Life insurance segment revenues also include separate account investment management fees. |

|         |                                                                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Fee revenues for the commercial and personal insurance segments primarily represent installment fees. Fee revenues for the life insurance segment represent separate account investment management fees. |

|         |                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------|
| • | Our investments’ revenues consist of pretax net investment income and realized investment gains and losses. |

|         |                                              |
|---------|----------------------------------------------|
| • | Other revenues are primarily finance income. |

|         |                                                                                                  |
|---------|--------------------------------------------------------------------------------------------------|
| • | Income before income taxes for the insurance segments is defined as underwriting profit or loss. |

|         |                                                                                                                                                                                                                                    |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ◦ | For commercial lines, personal lines and excess and surplus lines insurance segments, we calculate underwriting profit or loss as premiums earned and fee revenue minus loss and loss expenses and underwriting expenses incurred. |

|         |                                                                                                                                                                                                                                                                   |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ◦ | For the life insurance segment, we calculate underwriting profit or loss as premiums earned and separate account investment management fees, minus contract holders’ benefits and expenses incurred, plus investment interest credited to contract holders. |

|         |                                                                                                                                                                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Income before income taxes for the investments segment is net investment income plus realized investment gains and losses for investments of the entire company, minus investment interest credited to contract holders of the life insurance segment. |

|         |                                                                                                                                                                  |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Loss before income taxes for the Other category is primarily due to interest expense from debt of the parent company and operating expenses of our headquarters. |

----

|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions)                       |   | Years ended December 31, |
|                                        |   | 2014 |   | 2013 |   | 2012 |
| Revenues:                                   |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                  |   |   |  |   |   |  |   |   |  |
| Commercial casualty                         |   | $ | 938 |  |   | $ | 856 |  |   | $ | 767 |  |
| Commercial property                         |   | 728 |  |   | 623 |  |   | 545 |  |
| Commercial auto                             |   | 528 |  |   | 479 |  |   | 426 |  |
| Workers' compensation                       |   | 370 |  |   | 365 |  |   | 344 |  |
| Other commercial lines                      |   | 292 |  |   | 313 |  |   | 301 |  |
| Commercial lines insurance premiums         |   | 2,856 |  |   | 2,636 |  |   | 2,383 |  |
| Fee revenues                                |   | 4 |  |   | 3 |  |   | 4 |  |
| Total commercial lines insurance            |   | 2,860 |  |   | 2,639 |  |   | 2,387 |  |
|                                        |   |   |   |   |   |   |
| Personal lines insurance                    |   |   |  |   |   |  |   |   |  |
| Personal auto                               |   | 476 |  |   | 443 |  |   | 404 |  |
| Homeowner                                   |   | 443 |  |   | 403 |  |   | 353 |  |
| Other personal lines                        |   | 122 |  |   | 115 |  |   | 111 |  |
| Personal lines insurance premiums           |   | 1,041 |  |   | 961 |  |   | 868 |  |
| Fee revenues                                |   | 2 |  |   | 1 |  |   | 2 |  |
| Total personal lines insurance              |   | 1,043 |  |   | 962 |  |   | 870 |  |
|                                        |   |   |   |   |   |   |
| Excess and surplus lines insurance          |   | 148 |  |   | 116 |  |   | 93 |  |
|                                        |   |   |   |   |   |   |
| Life insurance premiums                     |   | 198 |  |   | 189 |  |   | 178 |  |
| Separate account investment management fees |   | 6 |  |   | 4 |  |   | 1 |  |
| Total life insurance                        |   | 204 |  |   | 193 |  |   | 179 |  |
|                                        |   |   |   |   |   |   |
| Investments                                 |   |   |  |   |   |  |   |   |  |
| Investment income, net of expenses          |   | 549 |  |   | 529 |  |   | 531 |  |
| Realized investment gains, net              |   | 133 |  |   | 83 |  |   | 42 |  |
| Total investment revenue                    |   | 682 |  |   | 612 |  |   | 573 |  |
|                                        |   |   |   |   |   |   |
| Other                                       |   | 8 |  |   | 9 |  |   | 9 |  |
| Total revenues                              |   | $ | 4,945 |  |   | $ | 4,531 |  |   | $ | 4,111 |  |
|                                        |   |   |   |   |   |   |
| Income (loss) before income taxes:          |   |   |  |   |   |  |   |   |  |
| Insurance underwriting results:             |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                  |   | $ | 146 |  |   | $ | 186 |  |   | $ | 181 |  |
| Personal lines insurance                    |   | 10 |  |   | 33 |  |   | (43 | ) |
| Excess and surplus lines insurance          |   | 30 |  |   | 14 |  |   | (1 | ) |
| Life insurance                              |   | (5 | ) |   | 9 |  |   | (3 | ) |
| Investments                                 |   | 599 |  |   | 532 |  |   | 491 |  |
| Other                                       |   | (59 | ) |   | (60 | ) |   | (59 | ) |
| Total income before income taxes            |   | $ | 721 |  |   | $ | 714 |  |   | $ | 566 |  |
|                                        |   |   |   |   |   |   |
|                                        |   | December 31, |   | December 31, |   |   |
| Identifiable assets:                        |   | 2014 |   | 2013 |   |   |
| Property casualty insurance                 |   | $ | 2,656 |  |   | $ | 2,455 |  |   |   |  |
| Life insurance                              |   | 1,316 |  |   | 1,225 |  |   |   |
| Investments                                 |   | 14,441 |  |   | 13,618 |  |   |   |  |
| Other                                       |   | 340 |  |   | 364 |  |   |   |  |
| Total                                       |   | $ | 18,753 |  |   | $ | 17,662 |  |   |   |  |
|                                        |   |   |   |   |   |   |

----

|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions except per share data) |   | Quarter |   |   |
|                                        |   | 1st |   | 2nd |   | 3rd |   | 4th |   | Full year |
| 2014                                        |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Revenues                                    |   | $ | 1,189 |  |   | $ | 1,214 |  |   | $ | 1,280 |  |   | $ | 1,262 |  |   | $ | 4,945 |  |
| Income before income taxes                  |   | 119 |  |   | 107 |  |   | 259 |  |   | 236 |  |   | 721 |  |
| Net income                                  |   | 91 |  |   | 84 |  |   | 183 |  |   | 167 |  |   | 525 |  |
| Net income per common share—basic     |   | 0.56 |  |   | 0.51 |  |   | 1.12 |  |   | 1.03 |  |   | 3.21 |  |
| Net income per common share—diluted   |   | 0.55 |  |   | 0.51 |  |   | 1.11 |  |   | 1.02 |  |   | 3.18 |  |
|                                        |   |   |   |   |   |   |   |   |   |   |
| 2013                                        |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Revenues                                    |   | $ | 1,103 |  |   | $ | 1,104 |  |   | $ | 1,152 |  |   | $ | 1,172 |  |   | $ | 4,531 |  |
| Income before income taxes                  |   | 217 |  |   | 148 |  |   | 182 |  |   | 167 |  |   | 714 |  |
| Net income                                  |   | 154 |  |   | 110 |  |   | 131 |  |   | 122 |  |   | 517 |  |
| Net income per common share—basic     |   | 0.95 |  |   | 0.67 |  |   | 0.80 |  |   | 0.75 |  |   | 3.16 |  |
| Net income per common share—diluted   |   | 0.94 |  |   | 0.66 |  |   | 0.79 |  |   | 0.74 |  |   | 3.12 |  |
|                                        |   |   |   |   |   |   |   |   |   |   |

----

|         |                                                                                                                                                                                                                                                     |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | information required to be disclosed in the company’s reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and |

|         |                                                                                                                                                                                                                                           |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | such information is accumulated and communicated to the company’s management, including its chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosures. |

----

|                                          |
|------------------------------------------|
|                                          |  |  |  |  |
| Name and Age as ofFebruary 27, 2015 |   | Primary Title(s) and Business ResponsibilitiesSince February 2010 |   | ExecutiveOfficer Since |
| Teresa C. Cracas, Esq. (49)              |   | Chief risk officer and senior vice president of The Cincinnati Insurance Company; vice president and counsel until 2011. Responsible for strategic planning and risk management, including oversight of modeling for financial analysis, property casualty reserving, pricing and insurance regulatory filings. |   | 2011 |
| Donald J. Doyle, Jr., CPCU, AIM (48)     |   | Senior vice president of The Cincinnati Insurance Company. Responsible for excess and surplus lines underwriting and operations. |   | 2008 |
| Martin F. Hollenbeck, CFA, CPCU (55)     |   | President and chief operating officer of CFC Investment Company, a commercial lease and finance subsidiary. Chief investment officer and senior vice president, assistant secretary and assistant treasurer of Cincinnati Financial Corporation. Chief investment officer and senior vice president of The Cincinnati Insurance Company. Responsible for all investment operations. |   | 2008 |
| John S. Kellington (53)                  |   | Chief information officer and senior vice president of The Cincinnati Insurance Company. Responsible for enterprise strategic technology and oversight of all technology activities. Senior vice president of ACORD Corporation, a nonprofit group that develops global insurance standards until 2010. |   | 2010 |
| Lisa A. Love, Esq. (55)                  |   | Senior vice president, general counsel and corporate secretary of Cincinnati Financial Corporation and The Cincinnati Insurance Company. Senior counsel of The Cincinnati Insurance Company until 2011. Responsible for corporate legal, governance and compliance activities, including oversight of regulatory and consumer relations, shareholder services and contract administration. |   | 2011 |
| Eric N. Mathews, CPCU, AIAF (59)         |   | Principal accounting officer, vice president, assistant secretary and assistant treasurer of Cincinnati Financial Corporation. Senior vice president of The Cincinnati Insurance Company. Responsible for corporate accounting and SEC accounting. |   | 2001 |

----

|                                           |
|-------------------------------------------|
|                                           |  |  |  |  |
| Name and Age as ofFebruary 27, 2015  |   | Primary Title(s) and Business ResponsibilitiesSince February 2010 |   | ExecutiveOfficer Since |
| Martin J. Mullen, CPCU (59)               |   | Chief claims officer and senior vice president of The Cincinnati Insurance Company. Responsible for oversight of all headquarters and field claims operations, including special investigations and claims administration. |   | 2008 |
| David H. Popplewell, FALU, LLIF (71)      |   | President and chief operating officer of The Cincinnati Life Insurance Company. Responsible for life insurance underwriting and operations. |   | 1997 |
| Jacob F. Scherer, Jr. (62)                |   | Chief insurance officer and executive vice president of The Cincinnati Insurance Company. Responsible for executive oversight of business and personal property casualty insurance sales, marketing, underwriting, related field services, relationships with independent agents and reinsurance programs. Executive vice president of business insurance until 2012 and executive vice president of sales and marketing until 2011. |   | 1995 |
| Michael J. Sewell, CPA (51)               |   | Chief financial officer and senior vice president of Cincinnati Financial Corporation and The Cincinnati Insurance Company, and treasurer of Cincinnati Financial Corporation. Responsible for oversight of all accounting, finance, financial reporting, purchasing and investor relations. Partner at Deloitte & Touche LLP until 2011. |   | 2011 |
| Stephen M. Spray (48)                     |   | Senior vice president of The Cincinnati Insurance Company; vice president until 2012. Responsible for sales and marketing, including management of field underwriters and independent agency relationships; responsible from 2010 to 2011 for target markets commercial products. |   | 2012 |
| Charles P. Stoneburner II, CPCU, AIM (62) |   | Senior vice president of The Cincinnati Insurance Company. Responsible for commercial lines underwriting and operations, including oversight of management liability and surety insurance, machinery and equipment insurance, loss control and premium audit. |   | 2008 |
| Timothy L. Timmel, Esq. (66)              |   | Senior vice president of The Cincinnati Insurance Company. Responsible for operations including oversight of administrative services, corporate communications, facilities maintenance and security, government relations, human resources, learning and development and legal litigation. |   | 1997 |
| William H. Van Den Heuvel (48)            |   | Senior vice president of The Cincinnati Insurance Company. Responsible for personal lines underwriting and operations. Chief operating officer and executive vice president for U.S. and Canada personal lines insurance at AIG until 2014. Western Zone executive and senior vice president for AIG Private Client Group until 2012. |   | 2014 |

----

----

----

|                                                                    |
|--------------------------------------------------------------------|
|                                                                    |  |  |  |  |  |  |  |  |  |  |  |  |
| Cincinnati Financial Corporation and Subsidiaries                  |
| Summary of Investments - Other Than Investments in Related Parties |
| (Dollars in millions)                                              |   | At December 31, 2014 |
| Type of investment                                                 |   | Cost oramortized cost |   | Fairvalue |   | Balance sheet |
| Fixed maturities:                                                  |   |   |  |   |   |  |   |   |  |
| States, municipalities and political subdivisions:                 |   |   |  |   |   |  |   |   |  |
| The Cincinnati Insurance Company                                   |   | $ | 2,634 |  |   | $ | 2,759 |  |   | $ | 2,759 |  |
| The Cincinnati Casualty Company                                    |   | 136 |  |   | 143 |  |   | 143 |  |
| The Cincinnati Indemnity Company                                   |   | 39 |  |   | 41 |  |   | 41 |  |
| The Cincinnati Life Insurance Company                              |   | 187 |  |   | 213 |  |   | 213 |  |
| The Cincinnati Specialty Underwriters Insurance Company            |   | 270 |  |   | 286 |  |   | 286 |  |
| CSU Producer Resources Inc.                                        |   | 1 |  |   | 1 |  |   | 1 |  |
| Total                                                              |   | 3,267 |  |   | 3,443 |  |   | 3,443 |  |
| Convertibles and bonds with warrants attached:                     |   |   |  |   |   |  |   |   |  |
| The Cincinnati Insurance Company                                   |   | 7 |  |   | 7 |  |   | 7 |  |
| Total                                                              |   | 7 |  |   | 7 |  |   | 7 |  |
| United States government:                                          |   |   |  |   |   |  |   |   |  |
| The Cincinnati Insurance Company                                   |   | 1 |  |   | 1 |  |   | 1 |  |
| The Cincinnati Casualty Company                                    |   | 2 |  |   | 2 |  |   | 2 |  |
| The Cincinnati Indemnity Company                                   |   | 1 |  |   | 1 |  |   | 1 |  |
| The Cincinnati Life Insurance Company                              |   | 3 |  |   | 3 |  |   | 3 |  |
| Total                                                              |   | 7 |  |   | 7 |  |   | 7 |  |
| Government-sponsored enterprises:                                  |   |   |  |   |   |  |   |   |  |
| The Cincinnati Life Insurance Company                              |   | 209 |  |   | 204 |  |   | 204 |  |
| The Cincinnati Insurance Company                                   |   | 4 |  |   | 4 |  |   | 4 |  |
| Total                                                              |   | 213 |  |   | 208 |  |   | 208 |  |
| Foreign government:                                                |   |   |  |   |   |  |   |   |  |
| The Cincinnati Insurance Company                                   |   | 10 |  |   | 10 |  |   | 10 |  |
| Total                                                              |   | 10 |  |   | 10 |  |   | 10 |  |
| All other corporate bonds:                                         |   |   |  |   |   |  |   |   |  |
| The Cincinnati Insurance Company                                   |   | 2,507 |  |   | 2,706 |  |   | 2,706 |  |
| The Cincinnati Casualty Company                                    |   | 110 |  |   | 118 |  |   | 118 |  |
| The Cincinnati Indemnity Company                                   |   | 21 |  |   | 23 |  |   | 23 |  |
| The Cincinnati Specialty Underwriters Insurance Company            |   | 151 |  |   | 159 |  |   | 159 |  |
| The Cincinnati Life Insurance Company                              |   | 2,517 |  |   | 2,706 |  |   | 2,706 |  |
| CSU Producer Resources Inc.                                        |   | 4 |  |   | 4 |  |   | 4 |  |
| Cincinnati Financial Corporation                                   |   | 57 |  |   | 69 |  |   | 69 |  |
| Total                                                              |   | 5,367 |  |   | 5,785 |  |   | 5,785 |  |
| Total fixed maturities                                             |   | $ | 8,871 |  |   | $ | 9,460 |  |   | $ | 9,460 |  |
|                                                               |   |   |   |   |   |   |

----

|                                                                    |
|--------------------------------------------------------------------|
|                                                                    |  |  |  |  |  |  |  |  |  |  |  |  |
| Cincinnati Financial Corporation and Subsidiaries                  |
| Summary of Investments - Other Than Investments in Related Parties |
| (Dollars in millions)                                              |   | At December 31, 2014 |
| Type of investment                                                 |   | Cost oramortized cost |   | Fairvalue |   | Balance sheet |
| Equity securities:                                                 |   |   |  |   |   |  |   |   |  |
| Common equities:                                                   |   |   |  |   |   |  |   |   |  |
| The Cincinnati Insurance Company                                   |   | $ | 1,462 |  |   | $ | 2,831 |  |   | $ | 2,831 |  |
| The Cincinnati Casualty Company                                    |   | 45 |  |   | 91 |  |   | 91 |  |
| The Cincinnati Indemnity Company                                   |   | 12 |  |   | 22 |  |   | 22 |  |
| The Cincinnati Specialty Underwriters Insurance Company            |   | 51 |  |   | 85 |  |   | 85 |  |
| CSU Producer Resources Inc.                                        |   | 9 |  |   | 11 |  |   | 11 |  |
| Cincinnati Financial Corporation                                   |   | 1,004 |  |   | 1,639 |  |   | 1,639 |  |
| Total                                                              |   | 2,583 |  |   | 4,679 |  |   | 4,679 |  |
| Nonredeemable preferred equities:                                  |   |   |  |   |   |  |   |   |  |
| The Cincinnati Insurance Company                                   |   | 137 |  |   | 167 |  |   | 167 |  |
| The Cincinnati Life Insurance Company                              |   | 5 |  |   | 8 |  |   | 8 |  |
| Cincinnati Financial Corporation                                   |   | 3 |  |   | 4 |  |   | 4 |  |
| Total                                                              |   | 145 |  |   | 179 |  |   | 179 |  |
| Total equity securities                                            |   | $ | 2,728 |  |   | $ | 4,858 |  |   | $ | 4,858 |  |
| Other invested assets:                                             |   |   |  |   |   |  |   |   |  |
| Policy loans:                                                      |   |   |  |   |   |  |   |   |  |
| The Cincinnati Life Insurance Company                              |   | $ | 31 |  |   | — |  |   | $ | 31 |  |
| Private equity:                                                    |   |   |  |   |   |  |   |   |  |
| Cincinnati Financial Corporation                                   |   | 37 |  |   | — |  |   | 37 |  |
| Total other invested assets                                        |   | $ | 68 |  |   | — |  |   | $ | 68 |  |
| Total investments                                                  |   | $ | 11,667 |  |   | — |  |   | $ | 14,386 |  |
|                                                               |   |   |   |   |   |   |

----

|                                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------|
|                                                                                                                    |  |  |  |  |  |  |  |  |
| Cincinnati Financial Corporation (parent company only)                                                             |
| Condensed Balance Sheets                                                                                           |
| (Dollars in millions)                                                                                              |   | At December 31, |
|                                                                                                               |   | 2014 |   | 2013 |
| Assets                                                                                                             |   |   |  |   |   |  |
| Investments                                                                                                        |   |   |  |   |   |  |
| Fixed maturities, at fair value                                                                                    |   | $ | 69 |  |   | $ | 75 |  |
| Equity securities, at fair value                                                                                   |   | 1,643 |  |   | 1,366 |  |
| Other invested assets                                                                                              |   | 37 |  |   | 32 |  |
| Total investments                                                                                                  |   | 1,749 |  |   | 1,473 |  |
| Cash and cash equivalents                                                                                          |   | 72 |  |   | 91 |  |
| Equity in net assets of subsidiaries                                                                               |   | 5,627 |  |   | 5,351 |  |
| Investment income receivable                                                                                       |   | 6 |  |   | 5 |  |
| Land, building and equipment, net, for company use (accumulated depreciation:    2014—$112; 2013—$106) |   | 144 |  |   | 148 |  |
| Prepaid income tax                                                                                                 |   | — |  |   | 2 |  |
| Other assets                                                                                                       |   | 23 |  |   | 24 |  |
| Due from subsidiaries                                                                                              |   | 107 |  |   | 114 |  |
| Total assets                                                                                                       |   | $ | 7,728 |  |   | $ | 7,208 |  |
| Liabilities                                                                                                        |   |   |  |   |   |  |
| Dividends declared but unpaid                                                                                      |   | $ | 72 |  |   | $ | 68 |  |
| Deferred federal income tax                                                                                        |   | 216 |  |   | 185 |  |
| Long-term debt                                                                                                     |   | 791 |  |   | 790 |  |
| Other liabilities                                                                                                  |   | 76 |  |   | 95 |  |
| Total liabilities                                                                                                  |   | 1,155 |  |   | 1,138 |  |
| Shareholders' Equity                                                                                               |   |   |  |   |   |  |
| Common stock                                                                                                       |   | 397 |  |   | 397 |  |
| Paid-in capital                                                                                                    |   | 1,214 |  |   | 1,191 |  |
| Retained earnings                                                                                                  |   | 4,505 |  |   | 4,268 |  |
| Accumulated other comprehensive income                                                                             |   | 1,744 |  |   | 1,504 |  |
| Treasury stock at cost                                                                                             |   | (1,287 | ) |   | (1,290 | ) |
| Total shareholders' equity                                                                                         |   | 6,573 |  |   | 6,070 |  |
| Total liabilities and shareholders' equity                                                                         |   | $ | 7,728 |  |   | $ | 7,208 |  |
|                                                                                                               |   |   |   |   |

----

|                                                                |
|----------------------------------------------------------------|
|                                                                |  |  |  |  |  |  |  |  |  |  |  |  |
| Cincinnati Financial Corporation (parent company only)         |
| Condensed Statements of Income                                 |
| (Dollars in millions)                                          |   | Years ended December 31, |
|                                                           |   | 2014 |   | 2013 |   | 2012 |
| Revenues                                                       |   |   |  |   |   |  |   |   |  |
| Investment income, net of expenses                             |   | $ | 46 |  |   | $ | 41 |  |   | $ | 42 |  |
| Realized investment gains, net                                 |   | 34 |  |   | 21 |  |   | 34 |  |
| Other revenue                                                  |   | 16 |  |   | 15 |  |   | 15 |  |
| Total revenues                                                 |   | 96 |  |   | 77 |  |   | 91 |  |
| Expenses                                                       |   |   |  |   |   |  |   |   |  |
| Interest expense                                               |   | 52 |  |   | 53 |  |   | 53 |  |
| Other expenses                                                 |   | 28 |  |   | 29 |  |   | 27 |  |
| Total expenses                                                 |   | 80 |  |   | 82 |  |   | 80 |  |
| Income (Loss) Before Income Taxes and Earnings of Subsidiaries |   | 16 |  |   | (5 | ) |   | 11 |  |
| Benefit for income taxes                                       |   | (5 | ) |   | (11 | ) |   | (4 | ) |
| Net Income Before Earnings of Subsidiaries                     |   | 21 |  |   | 6 |  |   | 15 |  |
| Increase in equity of subsidiaries                             |   | 504 |  |   | 511 |  |   | 406 |  |
| Net Income                                                     |   | $ | 525 |  |   | $ | 517 |  |   | $ | 421 |  |
|                                                           |   |   |   |   |   |   |

----

|                                                                                                |
|------------------------------------------------------------------------------------------------|
|                                                                                                |  |  |  |  |  |  |  |  |  |  |  |  |
| Cincinnati Financial Corporation (parent company only)                                         |
| Condensed Statements of Comprehensive Income                                                   |
| (Dollars in millions)                                                                          |   | Years ended December 31, |
|                                                                                           |   | 2014 |   | 2013 |   | 2012 |
| Net Income                                                                                     |   | $ | 525 |  |   | $ | 517 |  |   | $ | 421 |  |
| Other Comprehensive Income, Before Tax                                                         |   |   |  |   |   |  |   |   |  |
| Unrealized gains on investments available-for-sale                                             |   | 150 |  |   | 303 |  |   | 67 |  |
| Unrealized gains on investments held by subsidiaries                                           |   | 367 |  |   | 240 |  |   | 361 |  |
| Reclassification adjustment for (gains) included in net income                                 |   | (34 | ) |   | (21 | ) |   | (34 | ) |
| Reclassification adjustment for (gains) included in net income on subsidiaries                 |   | (99 | ) |   | (62 | ) |   | (8 | ) |
| Unrealized gains (losses) on other                                                             |   | 7 |  |   | (1 | ) |   | 5 |  |
| Unrealized (losses) gains on other subsidiaries                                                |   | (3 | ) |   | 35 |  |   | (26 | ) |
| Unrealized gains on investments available-for-sale, investments held by subsidiaries and other |   | 388 |  |   | 494 |  |   | 365 |  |
| Amortization of pension actuarial (loss) gain and prior service cost                           |   | (18 | ) |   | 83 |  |   | (13 | ) |
| Other comprehensive income before tax                                                          |   | 370 |  |   | 577 |  |   | 352 |  |
| Income taxes on above of other comprehensive income                                            |   | 130 |  |   | 202 |  |   | 124 |  |
| Other comprehensive income, net of tax                                                         |   | 240 |  |   | 375 |  |   | 228 |  |
| Comprehensive Income                                                                           |   | $ | 765 |  |   | $ | 892 |  |   | $ | 649 |  |
|                                                                                           |   |   |   |   |   |   |

----

|                                                                                   |
|-----------------------------------------------------------------------------------|
|                                                                                   |  |  |  |  |  |  |  |  |  |  |  |  |
| Cincinnati Financial Corporation (parent company only)                            |
| Condensed Statements of Cash Flows                                                |
| (Dollars in millions)                                                             |   | Years ended December 31, |
|                                                                              |   | 2014 |   | 2013 |   | 2012 |
| Cash Flows From Operating Activities                                              |   |   |  |   |   |  |   |   |  |
| Net income                                                                        |   | $ | 525 |  |   | $ | 517 |  |   | $ | 421 |  |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |   |  |   |   |  |   |   |  |
| Depreciation and amortization                                                     |   | 7 |  |   | 7 |  |   | 7 |  |
| Realized investment gains, net                                                    |   | (34 | ) |   | (21 | ) |   | (34 | ) |
| Dividends from subsidiaries                                                       |   | 400 |  |   | 378 |  |   | 300 |  |
| Changes in:                                                                       |   |   |  |   |   |  |   |   |  |
| Increase in equity of subsidiaries                                                |   | (504 | ) |   | (511 | ) |   | (406 | ) |
| Investment income receivable                                                      |   | (1 | ) |   | (2 | ) |   | 1 |  |
| Current federal income taxes                                                      |   | 3 |  |   | 12 |  |   | (24 | ) |
| Deferred income tax                                                               |   | (6 | ) |   | (6 | ) |   | 18 |  |
| Other assets                                                                      |   | 20 |  |   | (30 | ) |   | (2 | ) |
| Other liabilities                                                                 |   | (14 | ) |   | 39 |  |   | 7 |  |
| Intercompany receivable for operations                                            |   | 22 |  |   | (39 | ) |   | — |  |
| Net cash provided by operating activities                                         |   | 418 |  |   | 344 |  |   | 288 |  |
|                                                                              |   |   |   |   |   |   |
| Cash Flows From Investing Activities                                              |   |   |  |   |   |  |   |   |  |
| Sale of fixed maturities                                                          |   | — |  |   | — |  |   | 114 |  |
| Call or maturity of fixed maturities                                              |   | 4 |  |   | 23 |  |   | 13 |  |
| Sale of equity securities                                                         |   | 112 |  |   | 75 |  |   | 111 |  |
| Purchase of fixed maturities                                                      |   | — |  |   | — |  |   | (1 | ) |
| Purchase of equity securities                                                     |   | (225 | ) |   | (179 | ) |   | (212 | ) |
| Investment in buildings and equipment, net                                        |   | (2 | ) |   | (1 | ) |   | (1 | ) |
| Change in other invested assets, net                                              |   | 4 |  |   | 4 |  |   | 4 |  |
| Return of capital from subsidiaries                                               |   | — |  |   | 22 |  |   | — |  |
| Net cash (used) provided by investing activities                                  |   | (107 | ) |   | (56 | ) |   | 28 |  |
|                                                                              |   |   |   |   |   |   |
| Cash Flows From Financing Activities                                              |   |   |  |   |   |  |   |   |  |
| Payments on notes payable                                                         |   | (55 | ) |   | — |  |   | — |  |
| Payment of cash dividends to shareholders                                         |   | (278 | ) |   | (263 | ) |   | (256 | ) |
| Purchase of treasury shares                                                       |   | (21 | ) |   | (52 | ) |   | — |  |
| Proceeds from stock options exercised                                             |   | 22 |  |   | 25 |  |   | 9 |  |
| Net transfers to subsidiaries                                                     |   | — |  |   | — |  |   | (2 | ) |
| Other                                                                             |   | 2 |  |   | 3 |  |   | 3 |  |
| Net cash used in financing activities                                             |   | (330 | ) |   | (287 | ) |   | (246 | ) |
| Net change in cash and cash equivalents                                           |   | (19 | ) |   | 1 |  |   | 70 |  |
| Cash and cash equivalents at beginning of year                                    |   | 91 |  |   | 90 |  |   | 20 |  |
| Cash and cash equivalents at end of year                                          |   | $ | 72 |  |   | $ | 91 |  |   | $ | 90 |  |
|                                                                              |   |   |   |   |   |   |

----

|                                                                  |
|------------------------------------------------------------------|
|                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |
| Cincinnati Financial Corporation and Subsidiaries                |
| Supplementary Insurance Information                              |
| (Dollars in millions)                                            |   | Years ended December 31, |
|                                                             |   | 2014 |   | 2013 |   | 2012 |
| Deferred policy acquisition costs:                               |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                       |   | $ | 257 |  |   | $ | 251 |  |   | $ | 235 |  |
| Personal lines insurance                                         |   | 108 |  |   | 104 |  |   | 93 |  |
| Excess and surplus lines insurance                               |   | 14 |  |   | 11 |  |   | 9 |  |
| Total property casualty insurance                                |   | 379 |  |   | 366 |  |   | 337 |  |
| Life insurance                                                   |   | 199 |  |   | 199 |  |   | 133 |  |
| Total                                                            |   | $ | 578 |  |   | $ | 565 |  |   | $ | 470 |  |
|                                                             |   |   |   |   |   |   |
| Gross future policy benefits, losses, claims and expense losses: |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                       |   | $ | 3,797 |  |   | $ | 3,667 |  |   | $ | 3,645 |  |
| Personal lines insurance                                         |   | 439 |  |   | 417 |  |   | 398 |  |
| Excess and surplus lines insurance                               |   | 202 |  |   | 157 |  |   | 126 |  |
| Total property casualty insurance                                |   | 4,438 |  |   | 4,241 |  |   | 4,169 |  |
| Life insurance                                                   |   | 2,519 |  |   | 2,441 |  |   | 2,341 |  |
| Total (1)                                                        |   | $ | 6,957 |  |   | $ | 6,682 |  |   | $ | 6,510 |  |
|                                                             |   |   |   |   |   |   |
| Gross unearned premiums:                                         |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                       |   | $ | 1,441 |  |   | $ | 1,372 |  |   | $ | 1,246 |  |
| Personal lines insurance                                         |   | 562 |  |   | 535 |  |   | 490 |  |
| Excess and surplus lines insurance                               |   | 78 |  |   | 67 |  |   | 54 |  |
| Total property casualty insurance                                |   | 2,081 |  |   | 1,974 |  |   | 1,790 |  |
| Life insurance                                                   |   | 1 |  |   | 2 |  |   | 2 |  |
| Total (1)                                                        |   | $ | 2,082 |  |   | $ | 1,976 |  |   | $ | 1,792 |  |
|                                                             |   |   |   |   |   |   |
| Other policy claims and benefits payable:                        |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                       |   | $ | — |  |   | $ | — |  |   | $ | — |  |
| Personal lines insurance                                         |   | — |  |   | — |  |   | — |  |
| Excess and surplus lines insurance                               |   | — |  |   | — |  |   | — |  |
| Total property casualty insurance                                |   | — |  |   | — |  |   | — |  |
| Life insurance                                                   |   | 25 |  |   | 19 |  |   | 15 |  |
| Total (1)                                                        |   | $ | 25 |  |   | $ | 19 |  |   | $ | 15 |  |
|                                                             |   |   |   |   |   |   |
| Earned premiums:                                                 |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                       |   | $ | 2,856 |  |   | $ | 2,636 |  |   | $ | 2,383 |  |
| Personal lines insurance                                         |   | 1,041 |  |   | 961 |  |   | 868 |  |
| Excess and surplus lines insurance                               |   | 148 |  |   | 116 |  |   | 93 |  |
| Total property casualty insurance                                |   | 4,045 |  |   | 3,713 |  |   | 3,344 |  |
| Life insurance                                                   |   | 198 |  |   | 189 |  |   | 178 |  |
| Total                                                            |   | $ | 4,243 |  |   | $ | 3,902 |  |   | $ | 3,522 |  |
|                                                             |   |   |   |   |   |   |

----

|                                                    |
|----------------------------------------------------|
|                                                    |  |  |  |  |  |  |  |  |  |  |  |  |
| Cincinnati Financial Corporation and Subsidiaries  |
| Supplementary Insurance Information                |
| (Dollars in millions)                              |   | Years ended December 31, |
|                                               |   | 2014 |   | 2013 |   | 2012 |
| Investment income, net of expenses:                |   |   |   |   |   |   |
| Commercial lines insurance                         |   | $ | — |  |   | $ | — |  |   | $ | — |  |
| Personal lines insurance                           |   | — |  |   | — |  |   | — |  |
| Excess and surplus lines insurance                 |   | — |  |   | — |  |   | — |  |
| Total property casualty insurance (2)              |   | 358 |  |   | 348 |  |   | 351 |  |
| Life insurance                                     |   | 144 |  |   | 140 |  |   | 137 |  |
| Total                                              |   | $ | 502 |  |   | $ | 488 |  |   | $ | 488 |  |
|                                               |   |   |   |   |   |   |
| Benefits, claims losses and settlement expenses:   |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                         |   | $ | 1,812 |  |   | $ | 1,596 |  |   | $ | 1,420 |  |
| Personal lines insurance                           |   | 740 |  |   | 639 |  |   | 652 |  |
| Excess and surplus lines insurance                 |   | 75 |  |   | 66 |  |   | 65 |  |
| Total property casualty insurance                  |   | 2,627 |  |   | 2,301 |  |   | 2,137 |  |
| Life insurance                                     |   | 229 |  |   | 204 |  |   | 185 |  |
| Total                                              |   | $ | 2,856 |  |   | $ | 2,505 |  |   | $ | 2,322 |  |
|                                               |   |   |   |   |   |   |
| Amortization of deferred policy acquisition costs: |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                         |   | $ | 537 |  |   | $ | 514 |  |   | $ | 462 |  |
| Personal lines insurance                           |   | 209 |  |   | 192 |  |   | 183 |  |
| Excess and surplus lines insurance                 |   | 24 |  |   | 21 |  |   | 17 |  |
| Total property casualty insurance                  |   | 770 |  |   | 727 |  |   | 662 |  |
| Life insurance                                     |   | 37 |  |   | 31 |  |   | 45 |  |
| Total (3)                                          |   | $ | 807 |  |   | $ | 758 |  |   | $ | 707 |  |
|                                               |   |   |   |   |   |   |
| Underwriting, acquisition and insurance expenses:  |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                         |   | $ | 365 |  |   | $ | 343 |  |   | $ | 324 |  |
| Personal lines insurance                           |   | 84 |  |   | 98 |  |   | 78 |  |
| Excess and surplus lines insurance                 |   | 19 |  |   | 15 |  |   | 12 |  |
| Total property casualty insurance                  |   | 468 |  |   | 456 |  |   | 414 |  |
| Life insurance                                     |   | 26 |  |   | 29 |  |   | 34 |  |
| Total (3)                                          |   | $ | 494 |  |   | $ | 485 |  |   | $ | 448 |  |
|                                               |   |   |   |   |   |   |
| Net written premiums:                              |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                         |   | $ | 2,922 |  |   | $ | 2,760 |  |   | $ | 2,459 |  |
| Personal lines insurance                           |   | 1,068 |  |   | 1,005 |  |   | 918 |  |
| Excess and surplus lines insurance                 |   | 153 |  |   | 128 |  |   | 105 |  |
| Total property casualty insurance                  |   | 4,143 |  |   | 3,893 |  |   | 3,482 |  |
| Accident health insurance                          |   | 3 |  |   | 2 |  |   | 3 |  |
| Total                                              |   | $ | 4,146 |  |   | $ | 3,895 |  |   | $ | 3,485 |  |
|                                               |   |   |   |   |   |   |

----

|                                                   |
|---------------------------------------------------|
|                                                   |  |  |  |  |  |  |  |  |  |  |  |  |
| Cincinnati Financial Corporation and Subsidiaries |
| Reinsurance                                       |
| (Dollars in millions)                             |   | Years ended December 31, |
|                                              |   | 2014 |   | 2013 |   | 2012 |
| Gross amounts:                                    |   |   |  |   |   |  |   |   |  |
| Life insurance in force                           |   | $ | 88,045 |  |   | $ | 85,015 |  |   | $ | 81,467 |  |
| Earned premiums                                   |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                        |   | $ | 2,973 |  |   | $ | 2,777 |  |   | $ | 2,524 |  |
| Personal lines insurance                          |   | 1,080 |  |   | 1,002 |  |   | 897 |  |
| Excess and surplus lines insurance                |   | 156 |  |   | 124 |  |   | 99 |  |
| Total property casualty insurance                 |   | 4,209 |  |   | 3,903 |  |   | 3,520 |  |
| Life insurance                                    |   | 259 |  |   | 248 |  |   | 235 |  |
| Total                                             |   | $ | 4,468 |  |   | $ | 4,151 |  |   | $ | 3,755 |  |
|                                              |   |   |   |   |   |   |
| Ceded amounts to other companies:                 |   |   |  |   |   |  |   |   |  |
| Life insurance in force                           |   | $ | 37,689 |  |   | $ | 36,952 |  |   | $ | 36,340 |  |
| Earned premiums                                   |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                        |   | $ | 128 |  |   | $ | 151 |  |   | $ | 149 |  |
| Personal lines insurance                          |   | 40 |  |   | 42 |  |   | 30 |  |
| Excess and surplus lines insurance                |   | 8 |  |   | 8 |  |   | 6 |  |
| Total property casualty insurance                 |   | 176 |  |   | 201 |  |   | 185 |  |
| Life insurance                                    |   | 61 |  |   | 59 |  |   | 57 |  |
| Total                                             |   | $ | 237 |  |   | $ | 260 |  |   | $ | 242 |  |
|                                              |   |   |   |   |   |   |
| Assumed amounts from other companies:             |   |   |  |   |   |  |   |   |  |
| Life insurance in force                           |   | $ | — |  |   | $ | — |  |   | $ | — |  |
| Earned premiums                                   |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                        |   | $ | 11 |  |   | $ | 10 |  |   | $ | 8 |  |
| Personal lines insurance                          |   | 1 |  |   | 1 |  |   | 1 |  |
| Excess and surplus lines insurance                |   | — |  |   | — |  |   | — |  |
| Total property casualty insurance                 |   | 12 |  |   | 11 |  |   | 9 |  |
| Life insurance                                    |   | — |  |   | — |  |   | — |  |
| Total                                             |   | $ | 12 |  |   | $ | 11 |  |   | $ | 9 |  |
|                                              |   |   |   |   |   |   |
| Net amounts:                                      |   |   |  |   |   |  |   |   |  |
| Life insurance in force                           |   | $ | 50,356 |  |   | $ | 48,063 |  |   | $ | 45,126 |  |
| Earned premiums                                   |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                        |   | $ | 2,856 |  |   | $ | 2,636 |  |   | $ | 2,383 |  |
| Personal lines insurance                          |   | 1,041 |  |   | 961 |  |   | 868 |  |
| Excess and surplus lines insurance                |   | 148 |  |   | 116 |  |   | 93 |  |
| Total property casualty insurance                 |   | 4,045 |  |   | 3,713 |  |   | 3,344 |  |
| Life insurance                                    |   | 198 |  |   | 189 |  |   | 178 |  |
| Total                                             |   | $ | 4,243 |  |   | $ | 3,902 |  |   | $ | 3,522 |  |
|                                              |   |   |   |   |   |   |
| Percentage of amounts assumed to net:             |   |   |  |   |   |  |   |   |  |
| Life insurance in force                           |   | — | % |   | — | % |   | — | % |
| Earned premiums                                   |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                        |   | 0.4 | % |   | 0.4 | % |   | 0.3 | % |
| Personal lines insurance                          |   | 0.1 |  |   | 0.1 |  |   | 0.1 |  |
| Excess and surplus lines insurance                |   | — |  |   | — |  |   | — |  |
| Total property casualty insurance                 |   | 0.5 |  |   | 0.5 |  |   | 0.3 |  |
| Life insurance                                    |   | — |  |   | — |  |   | — |  |
| Total                                             |   | 0.5 |  |   | 0.5 |  |   | 0.3 |  |
|                                              |   |   |   |   |   |   |

----

|                                                   |
|---------------------------------------------------|
|                                                   |  |  |  |  |  |  |  |  |  |  |  |  |
| Cincinnati Financial Corporation and Subsidiaries |
| Valuation and Qualifying Accounts                 |
| (Dollars in millions)                             |   | At December 31, |
|                                              |   | 2014 |   | 2013 |   | 2012 |
| Allowance for doubtful receivables:               |   |   |  |   |   |  |   |   |  |
| Balance at beginning of year                      |   | $ | 2 |  |   | $ | 2 |  |   | $ | 2 |  |
| Additions charged to costs and expenses           |   | 2 |  |   | 1 |  |   | 1 |  |
| Deductions                                        |   | (1 | ) |   | (1 | ) |   | (1 | ) |
| Balance at end of year                            |   | $ | 3 |  |   | $ | 2 |  |   | $ | 2 |  |
|                                              |   |   |   |   |   |   |

----

|                                                                             |
|-----------------------------------------------------------------------------|
|                                                                             |  |  |  |  |  |  |  |  |  |  |  |  |
| Cincinnati Financial Corporation and Subsidiaries                           |
| Supplementary Information Concerning Property Casualty Insurance Operations |
| (Dollars in millions)                                                       |   | Years ended December 31, |
|                                                                        |   | 2014 |   | 2013 |   | 2012 |
| Deferred policy acquisition costs:                                          |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                                  |   | $ | 257 |  |   | $ | 251 |  |   | $ | 235 |  |
| Personal lines insurance                                                    |   | 108 |  |   | 104 |  |   | 93 |  |
| Excess and surplus lines insurance                                          |   | 14 |  |   | 11 |  |   | 9 |  |
| Total                                                                       |   | $ | 379 |  |   | $ | 366 |  |   | $ | 337 |  |
|                                                                        |   |   |   |   |   |   |
| Reserves for unpaid claims and claim adjustment expenses:                   |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                                  |   | $ | 3,797 |  |   | $ | 3,667 |  |   | $ | 3,645 |  |
| Personal lines insurance                                                    |   | 439 |  |   | 417 |  |   | 398 |  |
| Excess and surplus lines insurance                                          |   | 202 |  |   | 157 |  |   | 126 |  |
| Total                                                                       |   | $ | 4,438 |  |   | $ | 4,241 |  |   | $ | 4,169 |  |
|                                                                        |   |   |   |   |   |   |
| Reserve discount deducted                                                   |   | $ | — |  |   | $ | — |  |   | $ | — |  |
|                                                                        |   |   |   |   |   |   |
| Unearned premiums:                                                          |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                                  |   | $ | 1,441 |  |   | $ | 1,370 |  |   | $ | 1,246 |  |
| Personal lines insurance                                                    |   | 562 |  |   | 534 |  |   | 490 |  |
| Excess and surplus lines insurance                                          |   | 78 |  |   | 66 |  |   | 54 |  |
| Total                                                                       |   | $ | 2,081 |  |   | $ | 1,970 |  |   | $ | 1,790 |  |
|                                                                        |   |   |   |   |   |   |
| Earned premiums:                                                            |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                                  |   | $ | 2,856 |  |   | $ | 2,636 |  |   | $ | 2,383 |  |
| Personal lines insurance                                                    |   | 1,041 |  |   | 961 |  |   | 868 |  |
| Excess and surplus lines insurance                                          |   | 148 |  |   | 116 |  |   | 93 |  |
| Total                                                                       |   | $ | 4,045 |  |   | $ | 3,713 |  |   | $ | 3,344 |  |
|                                                                        |   |   |   |   |   |   |
| Investment income:                                                          |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                                  |   | $ | — |  |   | $ | — |  |   | $ | — |  |
| Personal lines insurance                                                    |   | — |  |   | — |  |   | — |  |
| Excess and surplus lines insurance                                          |   | — |  |   | — |  |   | — |  |
| Total (1)                                                                   |   | $ | 358 |  |   | $ | 348 |  |   | $ | 351 |  |
|                                                                        |   |   |   |   |   |   |
| Loss and loss expenses incurred related to current accident year:           |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                                  |   | $ | 1,869 |  |   | $ | 1,691 |  |   | $ | 1,712 |  |
| Personal lines insurance                                                    |   | 752 |  |   | 678 |  |   | 751 |  |
| Excess and surplus lines insurance                                          |   | 104 |  |   | 79 |  |   | 70 |  |
| Total                                                                       |   | $ | 2,725 |  |   | $ | 2,448 |  |   | $ | 2,533 |  |
|                                                                        |   |   |   |   |   |   |
| Loss and loss expenses incurred related to prior accident years:            |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                                  |   | $ | (57 | ) |   | $ | (95 | ) |   | $ | (292 | ) |
| Personal lines insurance                                                    |   | (12 | ) |   | (39 | ) |   | (99 | ) |
| Excess and surplus lines insurance                                          |   | (29 | ) |   | (13 | ) |   | (5 | ) |
| Total                                                                       |   | $ | (98 | ) |   | $ | (147 | ) |   | $ | (396 | ) |
|                                                                        |   |   |   |   |   |   |
| Amortization of deferred policy acquisition costs:                          |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                                  |   | $ | 537 |  |   | $ | 514 |  |   | $ | 461 |  |
| Personal lines insurance                                                    |   | 209 |  |   | 192 |  |   | 183 |  |
| Excess and surplus lines insurance                                          |   | 24 |  |   | 21 |  |   | 17 |  |
| Total                                                                       |   | $ | 770 |  |   | $ | 727 |  |   | $ | 661 |  |
|                                                                        |   |   |   |   |   |   |
| Paid loss and loss expenses:                                                |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                                  |   | $ | 1,666 |  |   | $ | 1,498 |  |   | $ | 1,546 |  |
| Personal lines insurance                                                    |   | 717 |  |   | 639 |  |   | 659 |  |
| Excess and surplus lines insurance                                          |   | 30 |  |   | 35 |  |   | 24 |  |
| Total                                                                       |   | $ | 2,413 |  |   | $ | 2,172 |  |   | $ | 2,229 |  |
|                                                                        |   |   |   |   |   |   |
| Net written premiums:                                                       |   |   |  |   |   |  |   |   |  |
| Commercial lines insurance                                                  |   | $ | 2,922 |  |   | $ | 2,760 |  |   | $ | 2,459 |  |
| Personal lines insurance                                                    |   | 1,068 |  |   | 1,005 |  |   | 918 |  |
| Excess and surplus lines insurance                                          |   | 153 |  |   | 128 |  |   | 105 |  |
| Total                                                                       |   | $ | 4,143 |  |   | $ | 3,893 |  |   | $ | 3,482 |  |
|                                                                        |   |   |   |   |   |   |

----

|                             |
|-----------------------------|
|                             |  |  |
| Signature                   | Title | Date |
| /S/ Kenneth W. Stecher      | Chairman of the Board | February 27, 2015 |
| Kenneth W. Stecher          |
| /S/ Steven J. Johnston      | President, Chief Executive Officer and Director | February 27, 2015 |
| Steven J. Johnston          |
| /S/ Michael J. Sewell       | Chief Financial Officer, Senior Vice President and Treasurer | February 27, 2015 |
| Michael J. Sewell           |
| /S/ William F. Bahl         | Director | February 27, 2015 |
| William F. Bahl             |
| /S/ Gregory T. Bier         | Director | February 27, 2015 |
| Gregory T. Bier             |
| /S/ Dirk J. Debbink         | Director | February 27, 2015 |
| Dirk J. Debbink             |
| /S/ Linda W. Clement-Holmes | Director | February 27, 2015 |
| Linda W. Clement-Holmes     |
| /S/ Kenneth C. Lichtendahl  | Director | February 27, 2015 |
| Kenneth C. Lichtendahl      |
| /S/ W. Rodney McMullen      | Director | February 27, 2015 |
| W. Rodney McMullen          |
| /S/ David P. Osborn         | Director | February 27, 2015 |
| David P. Osborn             |
| /S/ Gretchen W. Price       | Director | February 27, 2015 |
| Gretchen W. Price           |
| /S/ John J. Schiff, Jr.     | Director | February 27, 2015 |
| John J. Schiff, Jr.         |
| /S/ Thomas R. Schiff        | Director | February 27, 2015 |
| Thomas R. Schiff            |
| /S/ Douglas S. Skidmore     | Director | February 27, 2015 |
| Douglas S. Skidmore         |
| /S/ John F. Steele, Jr.     | Director | February 27, 2015 |
| John F. Steele, Jr.         |
| /S/ Larry R. Webb           | Director | February 27, 2015 |
| Larry R. Webb               |

----

|             |
|-------------|
|             |  |
| Exhibit No. | Exhibit Description |
| 3.1         | Amended and Restated Articles of Incorporation of Cincinnati Financial Corporation (incorporated by reference to the company’s 2010 Annual Report on Form 10-K dated February 25, 2011, Exhibit 3.1) |
| 3.2         | Regulations of Cincinnati Financial Corporation (incorporated by reference to the company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, Exhibit 3.2) (File No. 000-04604) |
| 4.1         | Indenture with The Bank of New York Trust Company (incorporated by reference to the company’s Current Report on Form 8-K dated November 2, 2004, filed with respect to the issuance of the company’s 6.125% Senior Notes due November 1, 2034) |
| 4.2         | Supplemental Indenture with The Bank of New York Trust Company (incorporated by reference to the company’s Current Report on Form 8-K dated November 2, 2004, filed with respect to the issuance of the company’s 6.125% Senior Notes due November 1, 2034) |
| 4.3         | Second Supplemental Indenture with The Bank of New York Trust Company (incorporated by reference to the company’s Current Report on Form 8-K dated May 9, 2005, filed with respect to the completion of the company’s exchange offer and rescission offer for its 6.90% senior debentures due 2028) |
| 4.4         | Form of 6.125% Exchange Note Due 2034 (included in Exhibit 4.2) |
| 4.5         | Form of 6.92% Debentures Due 2028 (included in Exhibit 4.3) |
| 4.6         | Indenture with the First National Bank of Chicago (subsequently assigned to The Bank of New York Trust Company) (incorporated by reference to the company’s registration statement on Form S-3 effective May 22, 1998 (File No. 333-51677)) |
| 4.7         | Form of 6.90% Debentures Due 2028 (included in Exhibit 4.6) |
| 10.1        | Cincinnati Financial Corporation Directors’ Stock Plan of 2009 (incorporated by reference to the company’s definitive Proxy Statement dated March 20, 2009) |
| 10.2        | Cincinnati Financial Corporation Stock Option Plan No. VI (incorporated by reference to the company’s definitive Proxy Statement dated March 1, 1999) (File No. 000-04604) |
| 10.3        | Cincinnati Financial Corporation Stock Option Plan No. VII (incorporated by reference to the company’s definitive Proxy Statement dated March 8, 2002) (File No. 000-04604) |
| 10.4        | Cincinnati Financial Corporation Annual Incentive Compensation Plan of 2009, as amended January 31, 2014 (incorporated by reference to Exhibit 10.1 filed with the company’s Current Report on Form 8-K dated February 3, 2014) |
| 10.5        | Cincinnati Financial Corporation 2006 Stock Compensation Plan (incorporated by reference to the company’s definitive Proxy Statement dated March 30, 2007) |
| 10.6        | Cincinnati Financial Corporation 2012 Stock Compensation Plan (incorporated by reference to the company’s definitive Proxy Statement dated March 16, 2012) |
| 10.7        | Amended and Restated Cincinnati Financial Corporation Supplemental Retirement Plan dated January 1, 2009 (incorporated by reference to Exhibit 10.7 filed with the company’s Annual Report on Form 10-K dated February 27, 2013) |
| 10.8        | Form of Incentive Stock Option Agreement for Stock Option Plan VII (incorporated by reference to Exhibit 10.1 filed with the company’s Current Report on Form 8-K dated October 20, 2006) |
| 10.9        | Form of Nonqualified Stock Option Agreement for Stock Option Plan VII (incorporated by reference to Exhibit 10.2 filed with the company’s Current Report on Form 8-K dated October 20, 2006) |
| 10.10       | Form of Incentive Stock Option Agreement for the 2006 Stock Compensation Plan (incorporated by reference to Exhibit 10.3 filed with the company’s Current Report on Form 8-K dated October 20, 2006) |
| 10.11       | Form of Nonqualified Stock Option Agreement for the 2006 Stock Compensation Plan (incorporated by reference to Exhibit 10.4 filed with the company’s Current Report on Form 8-K dated October 20, 2006) |
| 10.12       | Form of Restricted Stock Unit Agreement for use under the Cincinnati Financial Corporation 2006 Stock Compensation Plan (performance-based) (incorporated by reference to Exhibit 10.1 filed with the company’s Current Report on Form 8-K dated November 18, 2008) |
| 10.13       | Form of Incentive Compensation Agreement for the Cincinnati Financial Corporation Incentive Compensation Plan of 2009 (incorporated by reference to Exhibit 10.1 filed with the company’s Current Report on Form 8-K dated March 16, 2009) |
| 10.14       | Form of Incentive Stock Option Agreement for the Cincinnati Financial Corporation 2012 Stock Compensation Plan (incorporated by reference to Exhibit 10.1 filed with the company’s Current Report on Form 8-K dated February 21, 2013) |
| 10.15       | Form of Nonqualified Stock Option Agreement for the Cincinnati Financial Corporation 2012 Stock Compensation Plan (incorporated by reference to Exhibit 10.2 filed with the company’s Current Report on Form 8-K dated February 21, 2013) |

----

|             |
|-------------|
|             |  |
| Exhibit No. | Exhibit Description |
| 10.16       | Form of Restricted Stock Unit Agreement (service based) for the Cincinnati Financial Corporation 2012 Stock Compensation Plan (incorporated by reference to Exhibit 10.3 filed with the company’s Current Report on Form 8-K dated February 21, 2013) |
| 10.17       | Form of Restricted Stock Unit Agreement (performance based) for the Cincinnati Financial Corporation 2012 Stock Compensation Plan (incorporated by reference to Exhibit 10.4 filed with the company’s Current Report on Form 8-K dated February 21, 2013) |
| 10.18       | Amended and Restated Cincinnati Financial Corporation Top Hat Savings Plan dated January 1, 2011 (incorporated by reference to Exhibit 10.14 filed with the company’s Annual Report on Form 10-K dated February 27, 2013) |
| 10.19       | Cincinnati Financial Corporation Executive Deferred Compensation Agreement by and between the Cincinnati Financial Corporation and Michael J. Sewell, dated as of October 25, 2011 (incorporated by reference to Exhibit 10.2 filed with the company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011) |
| 10.20       | Amended and Restated Credit Agreement by and among Cincinnati Financial Corporation, CFC Investment Company, PNC Bank, N.A. as Administrative Agent, PNC Capital Markets LLC, as Sole Bookrunner and Joint Lead Arranger, Fifth Third Bank, N.A., as Joint Lead Arranger and Syndication Agent, The Huntington National Bank and U.S. Bank, N.A., as Documentation Agents, dated May 13, 2014 (incorporated by reference to the company’s Current Report on Form 8-K dated May 13, 2014, Exhibit 10.1) |
| 10.21       | Agreement by and between The Cincinnati Insurance Company and its affiliated and subsidiary companies and Thomas A. Joseph dated October 19, 2012 (incorporated by reference Exhibit 10.1 filed with the company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012) |
| 11          | Statement re: Computation of per share earnings for the years ended December 31, 2014, 2013, and 2012, contained in Part II, Item 8, Note 12, to the Consolidated Financial Statements |
| 14          | Cincinnati Financial Corporation Code of Ethics for Senior Financial Officers (incorporated by reference to the company’s definitive Proxy Statement dated March 18, 2004 (File No. 000-04604)) |
| 21          | Cincinnati Financial Corporation subsidiaries contained in Part I, Item 1, of this report |
| 23          | Consent of Independent Registered Public Accounting Firm |
| 31A         | Certification pursuant to Section 302 of the Sarbanes Oxley Act of 2002 – Chief Executive Officer |
| 31B         | Certification pursuant to Section 302 of the Sarbanes Oxley Act of 2002 – Chief Financial Officer |
| 32          | Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002 |
| 101.INS     | XBRL Instance Document |
| 101.SCH     | XBRL Taxonomy Extension Schema Document |
| 101.CAL     | XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF     | XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB     | XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE     | XBRL Taxonomy Extension Presentation Linkbase Document |