Company Quick10K Filing
⚲
Cincinnati Financial
Financials
Price115.10 EPS5
Shares198 P/E25
MCap22,824 P/FCF26
Net Debt60 EBIT1,279
TEV22,884 TEV/EBIT18
TTM 2019-09-30, in MM, except price, ratios
Filings
10-Q 2020-03-31 Filed 2020-04-27
10-K 2019-12-31 Filed 2020-02-25
10-Q 2019-09-30 Filed 2019-10-25
10-Q 2019-06-30 Filed 2019-07-30
10-Q 2019-03-31 Filed 2019-04-24
10-K 2018-12-31 Filed 2019-02-22
10-Q 2018-09-30 Filed 2018-10-25
10-Q 2018-06-30 Filed 2018-07-26
10-Q 2018-03-31 Filed 2018-04-25
10-K 2017-12-31 Filed 2018-02-23
10-Q 2017-09-30 Filed 2017-10-26
10-Q 2017-06-30 Filed 2017-08-02
10-Q 2017-03-31 Filed 2017-04-26
10-K 2016-12-31 Filed 2017-02-24
10-Q 2016-09-30 Filed 2016-10-25
10-Q 2016-06-30 Filed 2016-07-26
10-Q 2016-03-31 Filed 2016-04-26
10-K 2015-12-31 Filed 2016-02-26
10-Q 2015-09-30 Filed 2015-10-27
10-Q 2015-06-30 Filed 2015-07-28
10-Q 2015-03-31 Filed 2015-04-28
10-K 2014-12-31 Filed 2015-02-27
10-Q 2014-09-30 Filed 2014-10-28
10-Q 2014-06-30 Filed 2014-07-29
10-Q 2014-03-31 Filed 2014-04-24
10-K 2013-12-31 Filed 2014-02-27
10-Q 2013-09-30 Filed 2013-10-24
10-Q 2013-06-30 Filed 2013-07-25
10-Q 2013-03-31 Filed 2013-04-25
10-K 2012-12-31 Filed 2013-02-27
10-Q 2012-09-30 Filed 2012-10-25
10-Q 2012-06-30 Filed 2012-07-26
10-Q 2012-03-31 Filed 2012-04-26
10-K 2011-12-31 Filed 2012-02-29
10-Q 2011-09-30 Filed 2011-10-27
10-Q 2011-06-30 Filed 2011-07-27
10-Q 2011-03-31 Filed 2011-04-27
10-K 2010-12-31 Filed 2011-02-25
10-Q 2010-09-30 Filed 2010-10-27
10-Q 2010-06-30 Filed 2010-07-29
10-Q 2010-03-31 Filed 2010-04-28
10-K 2009-12-31 Filed 2010-02-26
Reports
8-K 2020-05-18 Regulation FD, Exhibits
8-K 2020-05-02 Shareholder Vote, Regulation FD, Exhibits
8-K 2020-04-27 Earnings, Exhibits
8-K 2020-04-13 Regulation FD, Exhibits
8-K 2020-04-01 Regulation FD, Exhibits
8-K 2020-03-09 Regulation FD, Exhibits
8-K 2020-02-05 Earnings, Exhibits
8-K 2020-01-31 Regulation FD, Exhibits
8-K 2019-12-06 Off-BS Arrangement, Exhibits
8-K 2019-11-15 Officers, Regulation FD, Exhibits
8-K 2019-11-12 Regulation FD, Exhibits
8-K 2019-11-04 Off-BS Arrangement, Exhibits
8-K 2019-10-24 Earnings, Exhibits
8-K 2019-08-26 Regulation FD, Exhibits
8-K 2019-08-09 Officers, Regulation FD, Exhibits
8-K 2019-07-30 Earnings, Exhibits
8-K 2019-06-25 Officers
8-K 2019-05-13 Regulation FD, Exhibits
8-K 2019-04-27 Shareholder Vote, Regulation FD, Exhibits
8-K 2019-04-24 Earnings, Exhibits
8-K 2019-03-11 Regulation FD, Exhibits
8-K 2019-02-25 Enter Agreement, Off-BS Arrangement, Regulation FD, Exhibits
8-K 2019-02-06 Earnings, Off-BS Arrangement, Exhibits
8-K 2019-02-01 Regulation FD, Exhibits
8-K 2018-11-16 Regulation FD, Exhibits
8-K 2018-11-05 Regulation FD, Exhibits
8-K 2018-10-25 Earnings, Exhibits
8-K 2018-10-15 Off-BS Arrangement, Exhibits
8-K 2018-10-12 Earnings, Regulation FD, Exhibits
8-K 2018-10-11 Regulation FD, Exhibits
8-K 2018-09-04 Regulation FD, Exhibits
8-K 2018-08-20 Officers, Regulation FD, Exhibits
8-K 2018-08-10 Regulation FD, Exhibits
8-K 2018-07-26 Earnings, Exhibits
8-K 2018-05-05 Shareholder Vote, Regulation FD, Exhibits
8-K 2018-05-03 Regulation FD, Exhibits
8-K 2018-04-25 Earnings, Exhibits
8-K 2018-03-05 Regulation FD, Exhibits
8-K 2018-02-07 Earnings, Exhibits
8-K 2018-01-26 Regulation FD, Exhibits

CINF 10Q Quarterly Report

Content
Part I - Financial Information
Item 1. Financial Statements (Unaudited)
Note 1 - Accounting Policies
Note 2 - Investments
Note 3 - Fair Value Measurements
Note 4 - Property Casualty Loss and Loss Expenses
Note 5 - Life Policy and Investment Contract Reserves
Note 6 - Deferred Policy Acquisition Costs
Note 7 - Accumulated Other Comprehensive Income
Note 8 - Reinsurance
Note 9 - Income Taxes
Note 10 - Net Income (Loss) per Common Share
Note 11 - Employee Retirement Benefits
Note 12 - Commitments and Contingent Liabilities
Note 13 - Segment Information
Item 2. Management's Discussion and Analysis of Financial Condition And
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
Exhibits
EX-31.A cinf-2020331xex31a.htm
EX-31.B cinf-2020331xex31b.htm
EX-32 cinf-2020331xex32.htm

Cincinnati Financial Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
25201510502012201420172020
Assets, Equity
 2.21.71.10.60.0-0.52012201420172020
Rev, G Profit, Net Income
 0.50.30.1-0.0-0.2-0.42012201420172020
Ops, Inv, Fin
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
 (Mark one)
☑       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. 
For the quarterly period ended March 31, 2020.
☐       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. 
For the transition period from _____________________ to _____________________.
Commission file number 0-4604
CINCINNATI FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Ohio
 
31-0746871
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
 
 
 
 
 
 
 
6200 S. Gilmore Road,
Fairfield,
Ohio
 
45014-5141
(Address of principal executive offices)
 
(Zip code)
Registrant's telephone number, including area code: (513) 870-2000
N/A
(Former name or former address, if changed since last report.)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common stock
 
CINF
 
Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 
☑Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☑Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, a smaller reporting company or an emerging growth company. See definition of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
☑ Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☐ Smaller reporting company
☐ Emerging growth company
☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):
☐Yes ☑ No
As of April 22, 2020, there were 160,801,531 shares of common stock outstanding.



CINCINNATI FINANCIAL CORPORATION AND SUBSIDIARIES
FORM 10-Q FOR THE QUARTER ENDED March 31, 2020
 
TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



Cincinnati Financial Corporation First-Quarter 2020 10-Q
Page 2


Part I – Financial Information
Item 1.    Financial Statements (unaudited)
 
Cincinnati Financial Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Dollars in millions, except per share data)
 
March 31,
 
December 31,
 
 
2020
 
2019
Assets
 
 

 
 

Investments
 
 

 
 

Fixed maturities, at fair value (amortized cost: 2020—$11,074; 2019—$11,108)
 
$
11,340

 
$
11,698

Equity securities, at fair value (cost: 2020—$3,702; 2019—$3,581)
 
6,225

 
7,752

Other invested assets
 
311

 
296

Total investments
 
17,876

 
19,746

Cash and cash equivalents
 
486

 
767

Investment income receivable
 
124

 
133

Finance receivable
 
76

 
77

Premiums receivable
 
1,900

 
1,777

Reinsurance recoverable
 
567

 
610

Prepaid reinsurance premiums
 
57

 
54

Deferred policy acquisition costs
 
827

 
774

Land, building and equipment, net, for company use (accumulated depreciation:
   2020—$281; 2019—$276)
 
208

 
207

Other assets
 
388

 
381

Separate accounts
 
858

 
882

Total assets
 
$
23,367

 
$
25,408

 
 
 
 
 
Liabilities
 
 

 
 

Insurance reserves
 
 

 
 

Loss and loss expense reserves
 
$
6,206

 
$
6,147

Life policy and investment contract reserves
 
2,861

 
2,835

Unearned premiums
 
2,922

 
2,788

Other liabilities
 
858

 
928

Deferred income tax
 
660

 
1,079

Note payable
 
114

 
39

Long-term debt and lease obligations
 
846

 
846

Separate accounts
 
858

 
882

Total liabilities
 
15,325

 
15,544

 
 
 
 
 
Commitments and contingent liabilities (Note 12)
 


 


 
 
 
 
 
Shareholders' Equity
 
 

 
 

Common stock, par value—$2 per share; (authorized: 2020 and 2019—500 million
   shares; issued: 2020 and 2019—198.3 million shares)
 
397

 
397

Paid-in capital
 
1,300

 
1,306

Retained earnings
 
7,932

 
9,257

Accumulated other comprehensive income
 
204

 
448

Treasury stock at cost (2020—37.5 million shares and 2019—35.4 million shares)
 
(1,791
)
 
(1,544
)
Total shareholders' equity
 
8,042

 
9,864

Total liabilities and shareholders' equity
 
$
23,367

 
$
25,408

 
 
 
 
 
 Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Cincinnati Financial Corporation First-Quarter 2020 10-Q
Page 3


Cincinnati Financial Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(Dollars in millions, except per share data)
Three months ended March 31,
 
2020
 
2019
Revenues
 

 
 

Earned premiums
$
1,456

 
$
1,333

Investment income, net of expenses
165

 
157

Investment gains and losses, net
(1,725
)
 
663

Fee revenues
3

 
4

Other revenues
2

 
2

Total revenues
(99
)
 
2,159

Benefits and Expenses
 

 
 

Insurance losses and contract holders' benefits
1,003

 
860

Underwriting, acquisition and insurance expenses
456

 
411

Interest expense
13

 
13

Other operating expenses
5

 
8

 Total benefits and expenses
1,477

 
1,292

Income (Loss) Before Income Taxes
(1,576
)
 
867

Provision (Benefit) for Income Taxes
 

 
 

Current
3

 
28

Deferred
(353
)
 
144

Total provision (benefit) for income taxes
(350
)
 
172

Net Income (Loss)
$
(1,226
)
 
$
695

Per Common Share
 

 
 

Net income (loss)—basic
$
(7.56
)
 
$
4.27

Net income (loss)—diluted
(7.56
)
 
4.22

 
 
 
 
Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Cincinnati Financial Corporation First-Quarter 2020 10-Q
Page 4


Cincinnati Financial Corporation and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(Dollars in millions)
 
Three months ended March 31,
 
 
2020
 
2019
Net Income (Loss)
 
$
(1,226
)
 
$
695

Other Comprehensive Income (Loss)
 
 

 
 

Change in unrealized gains on investments, net of tax (benefit) of $(68) and $50,
  respectively
 
(256
)
 
192

Amortization of pension actuarial loss and prior service cost, net of tax of $0 and $0,
   respectively
 
1

 
—

Change in life deferred acquisition costs, life policy reserves and other, net of tax (benefit) of $3 and $(1), respectively
 
11

 
(4
)
Other comprehensive income (loss)
 
(244
)
 
188

Comprehensive Income (Loss)
 
$
(1,470
)
 
$
883

 
 
 
 
 
Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.


Cincinnati Financial Corporation First-Quarter 2020 10-Q
Page 5


Cincinnati Financial Corporation and Subsidiaries
Condensed Consolidated Statements of Shareholders' Equity
(Dollars in millions)
 
Three months ended March 31,
 
 
2020

2019
Common Stock
 
 
 
 
   Beginning of year
 
$
397

 
$
397

   Share-based awards
 
—

 
—

   End of period
 
397

 
397

 
 
 
 
 
Paid-In Capital
 
 
 
 
   Beginning of year
 
1,306

 
1,281

   Share-based awards
 
(16
)
 
(14
)
   Share-based compensation
 
9

 
9

   Other
 
1

 
1

   End of period
 
1,300

 
1,277

 
 
 
 
 
Retained Earnings
 
 
 
 
   Beginning of year
 
9,257

 
7,625

Cumulative effect of change in accounting for credit losses as of January 1, 2020
 
(2
)
 
—

Adjusted beginning of year
 
9,255

 
7,625

   Net income (loss)
 
(1,226
)
 
695

Dividends declared
 
(97
)
 
(91
)
   End of period
 
7,932

 
8,229

 
 
 
 
 
Accumulated Other Comprehensive Income (Loss)
 
 
 
 
   Beginning of year
 
448

 
22

   Other comprehensive income (loss)
 
(244
)
 
188

   End of period
 
204

 
210

 
 
 
 
 
Treasury Stock
 
 
 
 
   Beginning of year
 
(1,544
)
 
(1,492
)
   Share-based awards
 
11

 
13

   Shares acquired - share repurchase authorization
 
(256
)
 
—

   Shares acquired - share-based compensation plans
 
(3
)
 
(5
)
   Other
 
1

 
1

   End of period
 
(1,791
)
 
(1,483
)
 
 
 
 
 
      Total Shareholders' Equity
 
$
8,042

 
$
8,630

 
 
 
 
 
(In millions, except per common share)
 
 
 
 
Common Stock - Shares Outstanding
 
 
 
 
   Beginning of year
 
162.9

 
162.8

   Share-based awards
 
0.4

 
0.4

   Shares acquired - share repurchase authorization
 
(2.5
)
 
—

   End of period
 
160.8

 
163.2

 
 
 
 
 
   Dividends declared per common share
 
$
0.60

 
$
0.56

 
 
 
 
 
Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Cincinnati Financial Corporation First-Quarter 2020 10-Q
Page 6


Cincinnati Financial Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
 (Dollars in millions)
 
Three months ended March 31,
 
 
2020
 
2019
Cash Flows From Operating Activities
 
 

 
 

Net income
 
$
(1,226
)
 
$
695

Adjustments to reconcile net income to net cash provided by operating activities:
 
 

 
 

Depreciation and amortization
 
22

 
19

Investment gains and losses, net
 
1,729

 
(660
)
Share-based compensation
 
9

 
9

Interest credited to contract holders'
 
11

 
11

Deferred income tax expense
 
(353
)
 
144

Changes in:
 
 

 
 

Investment income receivable
 
9

 
4

Premiums and reinsurance receivable
 
(86
)
 
(95
)
Deferred policy acquisition costs
 
(31
)
 
(24
)
Other assets
 
(11
)
 
(25
)
Loss and loss expense reserves
 
59

 
(40
)
Life policy and investment contract reserves
 
27

 
22

Unearned premiums
 
134

 
113

Other liabilities
 
(123
)
 
(93
)
Current income tax receivable/payable
 
(3
)
 
120

Net cash provided by operating activities
 
167

 
200

Cash Flows From Investing Activities
 
 

 
 

Sale of fixed maturities
 
21

 
1

Call or maturity of fixed maturities
 
321

 
269

Sale of equity securities
 
7

 
31

Purchase of fixed maturities
 
(336
)
 
(289
)
Purchase of equity securities
 
(132
)
 
(26
)
Investment in finance receivables
 
(6
)
 
(8
)
Collection of finance receivables
 
7

 
7

Investment in building and equipment
 
(4
)
 
(5
)
Change in other invested assets, net
 
(14
)
 
(36
)
Net cash used in investing activities
 
(136
)
 
(56
)
Cash Flows From Financing Activities
 
 

 
 

Payment of cash dividends to shareholders
 
(90
)
 
(85
)
Shares acquired - share repurchase authorization
 
(256
)
 
—

Changes in note payable
 
75

 
—

Proceeds from stock options exercised
 
4

 
3

Contract holders' funds deposited
 
21

 
19

Contract holders' funds withdrawn
 
(40
)
 
(44
)
Other
 
(26
)
 
(19
)
Net cash used in financing activities
 
(312
)
 
(126
)
Net change in cash and cash equivalents
 
(281
)
 
18

Cash and cash equivalents at beginning of year
 
767

 
784

Cash and cash equivalents at end of period
 
$
486

 
$
802

Supplemental Disclosures of Cash Flow Information:
 
 

 
 

Income taxes paid
 
—

 
94

Noncash Activities
 
 

 
 

Equipment acquired under finance lease obligations
 
$
6

 
$
3

Cashless exercise of stock options
 
3

 
5

Other assets and other liabilities
 
77

 
23

 
 
 
 
 
 Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Cincinnati Financial Corporation First-Quarter 2020 10-Q
Page 7


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
NOTE 1 — Accounting Policies
The condensed consolidated financial statements include the accounts of Cincinnati Financial Corporation and its consolidated subsidiaries, each of which is wholly owned. These statements are presented in conformity with accounting principles generally accepted in the United States of America (GAAP). All intercompany balances and transactions have been eliminated in consolidation.
 
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Our actual results could differ from those estimates. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been condensed or omitted.
 
Our March 31, 2020, condensed consolidated financial statements are unaudited. We believe that we have made all adjustments, consisting only of normal recurring accruals, that are necessary for fair presentation. These condensed consolidated financial statements should be read in conjunction with our consolidated financial statements included in our 2019 Annual Report on Form 10-K. The results of operations for interim periods do not necessarily indicate results to be expected for the full year.

The World Health Organization declared the 2019 novel coronavirus (SARS-CoV-2 or COVID-19) outbreak a Public Health Emergency of International Concern on January 30, 2020, and a pandemic on March 11, 2020. The pandemic outbreak has caused an economic downturn on a global scale, including temporary closures of many businesses and reduced consumer spending due to shelter-in-place and other governmental regulations, as well as significant market disruption and volatility. The company continues to monitor the impact of the pandemic as it unfolds. The company cannot, at this time, predict the impact the pandemic will have on its future consolidated financial position, cash flows or results of operations, however the impact could be material. The company's future financial results and operations depends in part on the duration and severity of the pandemic and what actions are taken to mitigate the outbreak.

Adopted Accounting Updates
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as well as additional implementation related ASU's in 2018, 2019 and 2020. These ASU’s amend previous guidance on the impairment of financial instruments by adding an impairment model that allows an entity to recognize expected credit losses as an allowance rather than impairing as they are incurred. The new guidance is intended to reduce complexity of credit impairment models and result in a more timely recognition of expected credit losses. The standards require the company to consider all relevant information at the time of estimating the expected credit loss, including past events, the current environment, and reasonable and supportable forecasts over the life of the asset.

These ASU's also eliminated the other-than-temporary impairment model for available for sale fixed-maturity securities by requiring that credit related impairments be recognized through an allowance account. Changes in the allowance account are recorded in the period of change as a credit loss expense or reversal of credit loss expense. The measurement of credit losses is not impacted, except that credit losses recognized are limited to the amount by which fair value is below amortized cost and that the length of time that a security has been below amortized cost cannot be considered. These ASU's retain the guidance requiring that impaired securities intended to be sold have their amortized cost basis written down to fair value through net income.

The company adopted these ASU's on January 1, 2020 and applied them on a modified retrospective basis. As a result of this adoption, an after-tax cumulative effect decrease of $2 million was made to retained earnings representing an increase to the overall valuation allowances for financial instruments measured at amortized cost. These ASU's will be applied to available for sale fixed-maturity securities prospectively with no adjustments to the amortized cost basis of securities for which an other-than-temporary impairment had been previously recognized. The company has elected not to measure expected credit losses for accrued interest receivables related to its finance receivables and fixed-maturity securities.

Cincinnati Financial Corporation First-Quarter 2020 10-Q
Page 8


Pending Accounting Updates
ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts
In August 2018, the FASB issued ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. ASU 2018-12 is intended to improve the timeliness of recognizing changes in the liability for future policy benefits and modify the rate used to discount future cash flows. The ASU will simplify and improve the accounting for certain market-based options or guarantees associated with deposit or account balance contracts, simplify amortization of deferred acquisition costs while improving and expanding required disclosures. In November 2019, the FASB issued ASU 2019-09, Financial Services - Insurance (Topic 944): Effective Date. ASU 2019-09 delays the effective date of ASU 2018-12 by one year to interim and annual reporting periods beginning after December 15, 2021. These ASU's have not yet been adopted. Management is currently evaluating the impact on our company's consolidated financial position, cash flows and results of operations.



Cincinnati Financial Corporation First-Quarter 2020 10-Q
Page 9


NOTE 2 – Investments
The following table provides amortized cost, gross unrealized gains, gross unrealized losses and fair value for our fixed-maturity securities:
(Dollars in millions)
 
Amortized
cost
 
Gross unrealized
 
Fair value
At March 31, 2020
 
 
gains
 
losses
 
Fixed maturity securities:
 
 

 
 

 
 

 
 

Corporate
 
$
6,134

 
$
180

 
$
181

 
$
6,133

States, municipalities and political subdivisions
 
4,445

 
272

 
6

 
4,711

Commercial mortgage-backed
 
290

 
2

 
8

 
284

United States government
 
96

 
6

 
—

 
102

Government-sponsored enterprises
 
86

 
1

 
—

 
87

Foreign government
 
23

 
—

 
—

 
23

Total
 
$
11,074

 
$
461

 
$
195

 
$
11,340

At December 31, 2019
 
 

 
 

 
 

 
 

Fixed maturity securities:
 
 

 
 

 
 

 
 

Corporate
 
$
6,074

 
$
332

 
$
5

 
$
6,401

States, municipalities and political subdivisions
 
4,477

 
252

 
1

 
4,728

Commercial mortgage-backed
 
290

 
11

 
—

 
301

United States government
 
102

 
2

 
—

 
104

Government-sponsored enterprises
 
137

 
—

 
1

 
136

Foreign government
 
28

 
—

 
—

 
28

Total
 
$
11,108

 
$
597

 
$
7

 
$
11,698

 
 
 
 
 
 
 
 
 
 
The net unrealized investment gains in our fixed-maturity portfolio at March 31, 2020, are primarily the result of the continued low interest rate environment that increased the fair value of our fixed-maturity portfolio. Our commercial mortgage-backed securities had an average rating of Aa1/AA+ at March 31, 2020, and December 31, 2019.


Cincinnati Financial Corporation First-Quarter 2020 10-Q
Page 10


The table below provides fair values and gross unrealized losses by investment category and by the duration of the securities' continuous unrealized loss positions:
(Dollars in millions)
 
Less than 12 months
 
12 months or more
 
Total
At March 31, 2020
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
Fixed maturity securities:
 
 

 
 

 
 

 
 

 
 

 
 

Corporate
 
$
2,168

 
$
176

 
$
52

 
$
5

 
$
2,220

 
$
181

States, municipalities and political subdivisions
 
76

 
5

 
3

 
1

 
79

 
6

Commercial mortgage-backed
 
163

 
8

 
—

 
—

 
163

 
8

United States government
 
—

 
—

 
—

 
—

 
—

 
—

Government-sponsored enterprises
 
—

 
—

 
—

 
—

 
—

 
—

Foreign government
 
15

 
—

 
—

 
—

 
15

 
—

Total
 
$
2,422

 
$
189

 
$
55

 
$
6

 
$
2,477

 
$
195

At December 31, 2019
 
 

 
 

 
 

 
 

 
 

 
 

Fixed maturity securities:
 
 

 
 

 
 

 
 

 
 

 
 

Corporate
 
$
199

 
$
2

 
$
118

 
$
3

 
$
317

 
$
5

States, municipalities and political subdivisions
 
98

 
1

 
10

 
—

 
108

 
1

Commercial mortgage-backed
 
6

 
—

 
—

 
—

 
6

 
—

United States government
 
—

 
—

 
4

 
—

 
4

 
—

Government-sponsored enterprises
 
26

 
1

 
51

 
—

 
77

 
1

Foreign government
 
11

 
—

 
—

 
—

 
11

 
—

Total
 
$
340

 
$
4

 
$
183

 
$
3

 
$
523

 
$
7

 
 
 
 
 
 
 
 
 
 
 
 
 

Contractual maturity dates for fixed-maturities investments were:
(Dollars in millions)
 
Amortized
cost
 
Fair
value
 
% of fair
value
At March 31, 2020
 
 
 
Maturity dates:
 
 

 
 

 
 

Due in one year or less
 
$
502

 
$
502

 
4.4
%
Due after one year through five years
 
3,132

 
3,137

 
27.7

Due after five years through ten years
 
3,833

 
3,874

 
34.2

Due after ten years
 
3,607

 
3,827

 
33.7

Total
 
$
11,074

 
$
11,340

 
100.0
%
 
 
 
 
 
 
 

Actual maturities may differ from contractual maturities when there is a right to call or prepay obligations with or without call or prepayment penalties.

Cincinnati Financial Corporation First-Quarter 2020 10-Q
Page 11


The following table provides investment income and investment gains and losses, net:
(Dollars in millions)
 
Three months ended March 31,
 
 
2020
 
2019
Investment income:
 
 
 
 
Interest