<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-Q
X Quarterly Report Under Section 13 or 15 (d) of the
- --------- Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 1997
- --------- Transition Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
-----------------------
Commission File Number 0-4604
CINCINNATI FINANCIAL CORPORATION
--------------------------------
(Exact name of registrant as specified in its charter)
An Ohio Corporation 31-0746871
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6200 South Gilmore Road
Fairfield, Ohio 45014-5141
(Address of principal executive offices)
Registrant's telephone number, including area code: 513/870-2000
*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 X . NO .
------- -------
Securities registered pursuant to Section 12(g) of the Act:
$2.00 Par Common--54,899,262 shares outstanding at September 30, 1997
$79,107,000 of 5-1/2% Convertible Senior Debentures Due 2002
<PAGE> 2
<TABLE>
<CAPTION>
PART I
------
ITEM 1. FINANCIAL STATEMENTS
CINCINNATI FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
1997 1996
------------- -------------
ASSETS
<S> <C> <C>
Cash ....................................................................... $ 78,054,123 $ 59,933,485
Investments
Fixed Maturities (Cost: 1997--$2,576,561,850;
1996--$2,431,785,016) ................................................. 2,753,846,127 2,561,805,150
Equity Securities (Cost: 1997--$1,648,834,145;
1996--$1,537,188,704) ................................................. 5,158,711,975 3,740,180,384
Other Invested Assets .................................................... 55,790,927 53,003,602
Finance Receivables ........................................................ 30,860,479 26,864,459
Premiums Receivable ........................................................ 162,922,022 162,045,482
Reinsurance Receivable ..................................................... 100,261,134 115,906,385
Prepaid Reinsurance Premiums ............................................... 24,002,429 22,924,443
Investment Income Receivable ............................................... 73,303,619 70,446,495
Land, Buildings and Equipment for Company Use (at Cost
Less Accumulated Depreciation) ........................................... 40,921,964 39,486,095
Deferred Acquisition Costs Pertaining to Unearned
Premiums and to Life Policies in Force ................................... 133,150,352 127,587,814
Other Assets ............................................................... 28,828,114 65,330,026
--------------- ----------------
Total Assets ........................................................... $ 8,640,653,265 $ 7,045,513,820
=============== ===============
LIABILITIES
Insurance Reserves:
Life Policy Reserves ..................................................... $ 471,773,728 $ 440,280,714
Losses and Loss Expenses ................................................. 1,926,558,010 1,881,167,249
Unearned Premiums .......................................................... 440,375,781 425,750,431
Notes Payable .............................................................. 276,987,670 262,097,826
5-1/2% Convertible Senior Debentures Due 2002 ............................. 79,107,000 79,847,000
Federal Income Taxes
Current .................................................................. 24,922,619 13,408,903
Deferred ................................................................. 1,151,049,963 676,892,687
Other Liabilities .......................................................... 125,616,976 103,180,572
------------- -------------
Total Liabilities ...................................................... 4,496,391,747 3,882,625,382
------------- -------------
SHAREHOLDERS' EQUITY
Common Stock, $2 per Share; Authorized 80,000,000
Shares; Issued 1997--55,922,058; 1996--55,828,615
Shares; Outstanding 1997--54,899,262; 1996--55,636,476
Shares ................................................................... 111,844,116 111,657,230
Paid-In Capital ............................................................ 405,622,143 401,861,619
Retained Earnings .......................................................... 1,291,936,526 1,132,879,714
Unrealized Gain on Investments, Less Taxes ................................. 2,407,904,771 1,527,707,080
------------- -------------
4,217,307,556 3,174,105,643
Less Treasury Shares at Cost (1997--1,022,796 Shares;
1996--192,139 Shares) ................................................... (73,046,038) (11,217,205)
--------------- ---------------
Total Shareholders' Equity ............................................. 4,144,261,518 3,162,888,438
--------------- ---------------
Total Liabilities and Shareholders' Equity ........................... $ 8,640,653,265 $ 7,045,513,820
=============== ===============
</TABLE>
Accompanying notes are an integral part of these financial statements.
10Q/sa
<PAGE> 3
<TABLE>
<CAPTION>
CINCINNATI FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Nine Months Ended Sept. 30, Three Months Ended Sept. 30,
--------------------------- ----------------------------
1997 1996 1997 1996
Revenues: ---- ---- ---- ----
<S> <C> <C> <C> <C>
Premiums Earned:
Property and Casualty .............. $ 1,082,563,400 $ 1,014,604,868 $ 365,579,157 $ 343,761,384
Life ............................... 41,117,697 37,527,566 13,680,243 12,484,097
Accident and Health ................ 6,057,542 5,696,378 2,103,836 1,938,550
--------------- --------------- --------------- ---------------
Net Premiums Earned .............. 1,129,738,639 1,057,828,812 381,363,236 358,184,031
Investment Income, Less Expenses ..... 259,166,563 242,451,646 88,245,573 79,929,131
Realized Gain on Investments ......... 64,598,644 40,939,681 20,307,656 15,050,236
Other Income ......................... 6,474,074 8,301,379 2,121,940 2,517,977
--------------- --------------- --------------- ---------------
Total Revenues ..................... 1,459,977,920 1,349,521,518 492,038,405 455,681,375
--------------- --------------- --------------- ---------------
Benefits & Expenses:
Ins. Losses and Policyholder Ben ..... 790,049,819 825,923,896 264,359,740 285,994,824
Commissions .......................... 214,142,867 191,965,072 73,264,195 67,755,020
Other Operating Expenses ............. 101,502,008 83,253,361 34,337,174 28,269,464
Taxes, Licenses & Fees ............... 37,162,621 32,678,364 12,208,254 10,971,913
Increase in Deferred Acquisition
Costs Pertaining to Unearned
Premiums and to Life Policies
in Force ........................... (5,562,538) (5,301,048) (3,149,137) (2,631,647)
Interest Expense ..................... 15,314,595 13,885,007 5,536,084 4,763,461
Other Expenses ....................... 6,784,884 4,987,529 3,517,977 1,899,951
--------------- --------------- --------------- ---------------
Total Expenses ..................... 1,159,394,256 1,147,392,181 390,074,287 397,022,986
--------------- --------------- --------------- ---------------
Income Before Income Taxes ............ 300,583,664 202,129,337 101,964,118 58,658,389
--------------- --------------- --------------- ---------------
Provision (Ben.) for Inc. Taxes:
Current .............................. 72,922,376 48,031,937 26,976,070 13,999,560
Deferred ............................. 784,284 (6,695,743) (2,011,669) (2,289,871)
--------------- --------------- --------------- ---------------
Total .............................. 73,706,660 41,336,194 24,964,401 11,709,689
--------------- --------------- --------------- ---------------
Net Income ............................ $ 226,877,004 $ 160,793,143 $ 76,999,717 $ 46,948,700
=============== =============== =============== ===============
Weighted Avg. Shares Outstanding ...... 57,427,112 57,807,728 56,654,574 57,799,697
=============== =============== =============== ===============
Per Common Share:
Total Net Income ................... $3.99 $2.82 $1.37 $.82
===== ===== ===== ======
Cash Dividends Declared ............... $1.23 $1.09 $.41 $.37
===== ===== ===== ======
</TABLE>
Accompanying notes are an integral part of these financial statements.
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<PAGE> 4
<TABLE>
<CAPTION>
CINCINNATI FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
---------------------------------------------
Common Stock Treasury Paid-In Retained Unrealized
Shares Amount Stock Capital Earnings Capital Gains
------ ------ ----- ------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bal. Dec. 31,
1995 53,084,081 $ 106,168,162 $ (1,383,492) $ 237,171,509 $1,156,626,751 $1,159,388,263
Net Income 160,793,143
Change in Unreal.
Gains Net of
Inc. Taxes of
$87,824,988 163,103,550
Div. Declared (60,913,179)
5% Stock Div
at Market 2,652,110 5,304,220 160,452,655 (166,008,726)*
Purchase/Issuance of
Treasury Shares (4,566,516) 744,299
Stock Options
Exercised 75,818 151,636 2,748,335
-------------- -------------- -------------- -------------- -------------- --------------
Bal. Sept. 30,
l996 55,812,009 $ 111,624,018 $ (5,950,008) $ 401,116,798 $1,090,497,989 $1,322,491,813
============== ============== ============== ============== ============== ==============
Bal. Dec. 31,
l996 55,828,615 $ 111,657,230 $ (11,217,205) $ 401,861,619 $1,132,879,714 $1,527,707,080
Net Income 226,877,004
Change in Unreal
Gains Net of
Inc. Taxes of
$473,952,603 880,197,691
Div. Declared (67,819,877)
Purchase/Issuance of
Treasury Shares (61,828,833) 21,346
Stock Options
Exercised 76,865 153,730 3,032,334
Conversion of
Debentures 16,578 33,156 706,844 (315)
-------------- -------------- -------------- -------------- -------------- --------------
Bal. Sept. 30,
l997 55,922,058 $ 111,844,116 $ (73,046,038) $ 405,622,143 $1,291,936,526 $2,407,904,771
============== ============== ============== ============== ============== ==============
Accompanying notes are an integral part of these financial statements.
<FN>
*Includes $251,851 for fractional shares on March 15, 1996.
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
CINCINNATI FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended Sept. 30,
---------------------------
1997 1996
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income ................................................................ $ 226,877,004 $ 160,793,143
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation and amortization ........................................... 7,603,620 3,079,669
Increase in net unearned premiums ....................................... 13,547,364 12,722,602
Increase in net life policy reserves .................................... 31,493,014 25,999,690
Increase in net loss and loss expense reserves .......................... 61,036,012 104,470,512
(Increase) Decrease in net premiums receivable .......................... (876,540) 6,628,615
Increase in deferred acquisition costs .................................. (5,562,538) (5,301,048)
Increase in other liabilities ........................................... 20,497,853 7,637,661
Increase in investment income receivable ................................ (2,857,124) (2,974,250)
(Increase) Decrease in accounts receivable .............................. (119,280) 490,827
Decrease in other assets ................................................ 36,621,192 3,136,142
Increase (Decrease) in deferred income taxes ............................ 204,673 (6,695,743)
Increase in current income taxes ........................................ 11,513,716 4,031,939
Realized gain on investments ............................................ (64,598,644) (40,939,681)
Other ................................................................... 530,970 (248,523)
------------- -------------
Net cash provided by operating activities ............................. 335,911,292 272,831,555
------------- -------------
Cash flows from investing activities:
Sale of fixed maturities investments .................................... 142,167,546 114,996,810
Called and maturity of fixed maturities investments ..................... 233,396,586 163,806,962
Sale of equity securities investments ................................... 212,163,651 210,796,170
Collection of finance receivables ....................................... 4,745,904 7,584,116
Purchase of fixed maturities investments ................................ (506,316,593) (398,394,012)
Purchase of equity securities investments ............................... (271,335,022) (281,615,680)
Investment in land, buildings and equipment ............................. (10,819,751) (12,055,474)
Investment in finance receivables ....................................... (8,746,781) (12,214,273)
Investment in other invested assets ..................................... (3,432,974) (2,915,505)
------------- -------------
Net cash used in investing activities ................................. (208,177,434) (210,010,886)
------------- -------------
Cash flows from financing activities:
Proceeds from stock options exercised ................................... 3,186,064 2,899,971
Purchase of treasury shares ............................................. (61,807,487) (3,822,217)
Increase in notes payable ............................................... 14,889,844 31,769,909
Payment of cash dividends to shareholders ............................... (65,881,641) (58,317,239)
------------- -------------
Net cash used in financing activities ................................. (109,613,220) (27,469,576)
------------- -------------
Net increase in cash ........................................................ 18,120,638 35,351,093
Cash at beginning of period ................................................. 59,933,485 20,019,459
------------- -------------
Cash at end of period ....................................................... $ 78,054,123 $ 55,370,552
============= =============
Supplemental disclosures of cash flow information
Interest paid ............................................................. $ 15,673,319 $ 12,481,950
============= =============
Income taxes paid ......................................................... $ 61,988,270 $ 44,000,000
============= =============
Accompanying notes are an integral part of these financial statements.
</TABLE>
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<PAGE> 6
CINCINNATI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE I - ACCOUNTING POLICIES
The consolidated financial statements include the accounts of the Company and
all of its subsidiaries, each of which is wholly owned, and are presented in
conformity with generally accepted accounting principles. All significant
inter-company investments and transactions have been eliminated in
consolidation. The December 31, 1996 consolidated balance sheet amounts are
derived from the audited financial statements but do not include all disclosures
required by generally accepted accounting principles.
INVESTMENTS--Fixed maturities and equity securities have been classified as
available for sale and are carried at fair values at September 30, 1997 and
December 31, 1996.
UNREALIZED GAINS AND LOSSES--The increases (decreases) in unrealized gains for
fixed maturities and equity securities (net of income tax effect) for the
nine-month and three-month periods ended September 30 are as follows:
<TABLE>
<CAPTION>
Fixed Equity
Maturities Securities Total
---------- ---------- -----
<S> <C> <C> <C> <C>
Nine-Month Periods Ended
September 30, 1997 $ 30,721,693 $849,475,998 $880,197,691
September 30, 1996 $(36,115,931) $199,219,481 $163,103,550
Three-Month Periods Ended
September 30, 1997 $ 23,196,320 $342,463,411 $365,659,731
September 30, 1996 $ 11,657,602 $ 80,155,359 $ 91,812,961
</TABLE>
Such amounts are included as additions to and deductions from shareholders'
equity.
REINSURANCE--Premiums earned are net of premiums on ceded business, and
insurance losses and policyholder benefits are net of reinsurance recoveries in
the accompanying statements of income for the nine-month and three-month periods
ended September 30 as follows:
<TABLE>
<CAPTION>
Ceded Reinsurance
Premiums Recoveries
-------- ----------
<S> <C> <C>
Nine-Month-Periods Ended
September 30, 1997 $72,802,921 $20,211,551
September 30, 1996 $70,213,173 $30,009,990
Three-Month Periods Ended
September 30, 1997 $24,209,791 $ 6,897,238
September 30, 1996 $24,716,567 $11,233,535
</TABLE>
<PAGE> 7
NOTE II - STOCK OPTIONS
The Company has primarily qualified stock option plans under which options are
granted to employees of the Company at prices which are not less than market
price at the date of grant and which are exercisable over ten-year periods.
On September 30, 1997, outstanding options were as follows:
<TABLE>
<CAPTION>
Range of Number of
Stock Option Plan Exercise Prices Shares
----------------- --------------- ------
<S> <C> <C>
III $11.87 to $22.03 92,378
IV $22.38 to $79.88 975,570
V $61.43 to $79.25 298,175
</TABLE>
NOTE III RECENTLY ISSUED ACCOUNTING STANDARDS
The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Standards No. 128 "Earnings Per Share," which is effective for
financial statements for both interim and annual periods ending after December
15, 1997. Early adoption of the statement is not permitted. The Company has
applied this statement to the 1997 and 1996 third quarter and first nine-month
results and determined that the restated amounts are as follows:
<TABLE>
<CAPTION>
Third Quarter Nine-Month
------------- ----------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Income per Common Share $1.42 $ .84 $4.11 $2.88
===== ===== ===== =====
Net Income per Common Share--
Assuming Dilution $1.37 $ .82 $3.99 $2.82
===== ===== ===== =====
</TABLE>
The Financial Accounting Standards Board has issued Statements of Financial
Accounting Standards No. 130--Reporting Comprehensive Income ("FAS 130") and No.
131--Disclosures about Segments of an Enterprise and Related Information ("FAS
131"). FAS 130 and FAS 131, which must be adopted in 1998, will have no effect
on the Company's financial position but may require additional disclosure.
NOTE IV INTERIM ADJUSTMENTS
The preceding summary of financial information for Cincinnati Financial
Corporation and consolidated subsidiaries is unaudited, but the Company believes
that all adjustments (consisting only of normal recurring accruals) necessary
for fair presentation have been made. The results of operations for this interim
period is not necessarily an indication of results to be expected for the
remaining three months of the year.
10Q/sa
<PAGE> 8
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Premiums earned for the nine months ended September 30, 1997 have increased
$71,909,827 (7%) over the nine months ended September 30, 1996. Also, premiums
earned have increased $23,179,205 (6%) for the three months ended September 30,
1997 over the three months ended September 30, 1996. For the nine-month period
ended September 30, 1997, the growth rate of our property and casualty
subsidiaries is less than last year on both a gross written and earned premium
basis. For the three-month period ended September 30, 1997, the growth rate of
our property and casualty subsidiaries is less than last year on an earned
premium basis but slightly greater on a gross written basis. These growth rates
were less than last year because the increases in new business and some rate
increases on personal lines business were offset by the continued softness of
the commercial lines market and by lower premiums on workers' compensation
coverages. The premium growth of our life and health subsidiary has increased 9%
for the nine-month and three-month periods ended September 30, 1997 compared to
the comparable periods of 1996. The premium growth in our life subsidiary is
mainly attributable to increased sales of both traditional and
interest-sensitive products. For the nine-month and three-month periods ended
September 30, 1997, investment income, net of expenses, has increased
$16,714,917 (7%) and $8,316,442 (10%) when compared with the first nine months
and third three months of 1996, respectively. This increase is the result of the
growth of the investment portfolio because of investing cash flows from
operations and dividend increases from equity securities. The growth rate of our
investment earnings for the first nine months is less than usual because of the
one-time adjustment of $2.7 million related to accrual of discount that was
included in income for the first nine months of 1996.
Realized gains on investments for the nine months ended September 30, 1997
amounted to $64,598,644 compared to $40,939,681 for the nine-month period ended
September 30, 1996, and $20,307,656 for the three-month period ended September
30, 1997 compared to $15,050,236 for the three-month period ended September 30,
1996. The realized gains are predominantly the result of the sale of equity
securities and management's decision to realize the gains and reinvest the
proceeds at higher yields.
Insurance losses and policyholder benefits (net of reinsurance recoveries)
decreased $35,874,077 (4%) for the first nine months of 1997 over the same
period in 1996 and decreased $21,635,084 (8%) for the third quarter when
compared to the third quarter of 1996. The losses and benefits of the property
and casualty companies have decreased $37,319,808 for the nine-month period and
decreased $21,050,322 for the third quarter of 1997 compared to the comparable
periods for 1996. The property and casualty losses for the first nine months and
for the third quarter of 1997 have decreased because of a decrease in
catastrophe losses and a lower incidence of claims that occur in the normal
course of business. Catastrophe losses were $23.5 million and $60.1 million,
respectively, for the first nine months of 1997 and 1996 and were $9.0 million
and $22.9 million, respectively, for the third quarter of 1997 and 1996. These
losses were substantially lower for the first nine months and the third quarter
of 1997 compared to the comparable periods of 1996 because of a lower incidence
and severity of these weather-related claims. Policyholder benefits of the life
insurance subsidiary increased $1,445,731 for the first nine months of 1997 over
the same period of 1996 and decreased $584,762 for the third quarter when
compared to the third quarter of 1996. The majority of the nine-month increase
is the result of an increase in life-related costs, and the decrease in the
third quarter is a result of lower incidence of death claims.
<PAGE> 9
Commission expenses increased $22,177,795 for the nine-month period ended
September 30, 1997 compared to the same period of 1996 and increased $5,509,175
for the third quarter of 1997 compared to the same period in 1996. The increase
is attributable to the increases in new business and higher contingency
commissions. Other operating expenses increased $18,248,647 for the nine-month
period ended September 30, 1997 compared to the same period for 1996 and
increased $6,067,710 for the third quarter of 1997 compared to the same period
in 1996. The increase is attributable to increases in staff and costs associated
to our investment in infrastructure to support future growth.
Provision for income taxes, current and deferred, have increased by $32,370,466
for the first nine months of 1997 compared to the first nine months of 1996 and
have increased $13,254,712 for the third quarter of 1997 compared to the third
quarter of 1996. The increase in federal taxes is primarily attributable to an
increase in the effective tax rate to 24.5% from 20.5% at September 30, 1997 and
1996, respectively, and an increase in the effective tax rate to 24.5% from
20.0% for the third quarter of 1997 and 1996, respectively.
Unrealized appreciation will fluctuate with changes in the overall fixed
maturities and equity securities markets. Changes in unrealized appreciation are
discussed in Note 1. The Company's equity investment portfolio continues to be
primarily investments in common stocks of public utility companies and financial
institutions.
On November 22, 1996, the Board authorized repurchase of up to three million of
the Company's outstanding shares as management deems appropriate, over an
unspecified period of time. As of September 30, 1997, the Company has
repurchased 930,541 shares.
10Q/sa
<PAGE> 10
PART II
OTHER INFORMATION
ITEM 1. Legal Proceedings
-----------------
The Company is involved in no material litigation other than routine litigation
incident to the nature of the insurance industry.
ITEM 2. Changes in Securities
---------------------
There have been no material changes in securities during the third quarter.
ITEM 3. Defaults Upon Senior Securities
-------------------------------
The Company has not defaulted on any interest or principal payment, and no
arrearage in the payment of dividends has occurred.
ITEM 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
No special matters were voted upon by security holders during the third quarter.
ITEM 5. Other Information
-----------------
No matters to report.
ITEM 6. Exhibits and Reports on Form 8-K
---------------------------------
(a) Exhibits included:
Exhibit 11--Statement re Computation of Per Share Earnings.
Exhibit 27--Financial Data Schedule
(b) The Company was not required to file any reports on Form 8-K
during the quarter ended September 30, 1997.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CINCINNATI FINANCIAL CORPORATION
--------------------------------
(Registrant)
Date November 10, 1997
-------------------------
By/s/ T.F. Elchynski
---------------------------------
T.F. Elchynski
Senior Vice President and Chief
Financial Officer
(Principal Financial Officer)
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<PAGE> 1
<TABLE>
<CAPTION>
EXHIBIT 11
CINCINNATI FINANCIAL CORPORATION
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(in thousands except for per share amounts)
Nine Months Ended Three Months Ended
September 30, September 30,
---------------------- ----------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average shares outstanding 55,230 55,753 54,375 55,769
Equivalent shares assumed to be outstanding for:
Stock options 424 263 507 239
Convertible debentures 1,773 1,792 1,773 1,792
-------- -------- -------- --------
Number of shares for primary
computation 57,427 57,808 56,655 57,800
Other dilutive equivalent shares--
stock options 88 -0- 88 -0-
-------- -------- -------- --------
Number of shares assuming full
dilution 57,515 57,808 56,743 57,800
======== ======== ======== ========
Net income $226,877 $160,793 $ 77,000 $ 46,949
Interest on convertible debentures--
net of tax 2,128 2,145 707 715
-------- -------- -------- --------
Net income for per share computation $229,005 $162,938 $ 77,707 $ 47,664
======== ======== ======== ========
Earnings per share:
Total Primary $ 3.99 $ 2.82 $ 1.37 $ .82
======== ======== ======== ========
Fully Diluted $ 3.98 $ 2.82 $ 1.37 $ .82
======== ======== ======== ========
</TABLE>
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<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF INCOME AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<DEBT-HELD-FOR-SALE> 2,753,846,127
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 5,158,711,975
<MORTGAGE> 10,656,581
<REAL-ESTATE> 15,133,761
<TOTAL-INVEST> 7,968,349,029<F1>
<CASH> 78,054,123
<RECOVER-REINSURE> 2,422,405
<DEFERRED-ACQUISITION> 133,150,352
<TOTAL-ASSETS> 8,640,653,265
<POLICY-LOSSES> 2,353,051,865<F2>
<UNEARNED-PREMIUMS> 440,375,781
<POLICY-OTHER> 41,882,353<F2>
<POLICY-HOLDER-FUNDS> 14,089,508
<NOTES-PAYABLE> 356,094,670<F3>
0
0
<COMMON> 111,844,116<F4>
<OTHER-SE> 4,032,417,402<F4>
<TOTAL-LIABILITY-AND-EQUITY> 8,640,653,265
1,129,738,639
<INVESTMENT-INCOME> 259,166,563
<INVESTMENT-GAINS> 64,598,644
<OTHER-INCOME> 6,474,074
<BENEFITS> 790,049,819
<UNDERWRITING-AMORTIZATION> 234,635,066<F5>
<UNDERWRITING-OTHER> 134,709,371<F5>
<INCOME-PRETAX> 300,583,664
<INCOME-TAX> 73,706,660
<INCOME-CONTINUING> 226,877,004
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 226,877,004
<EPS-PRIMARY> 3.99
<EPS-DILUTED> 3.98
<RESERVE-OPEN> 1,702,415,290<F6>
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 1,771,278,532<F7>
<CUMULATIVE-DEFICIENCY> 0
<FN>
<F1>Equals the sum of Fixed Maturities, Equity Securities and Other Invested Assets
<F2>Equals the sum of Life Policy Reserves and Losses and Loss Expenses less the
Life Company liability for Supplementary Contracts without Life Contingencies
of $3,397,520 which is classified as Other Policyholder Funds
<F3>Equals the sum of Notes Payable and the 5-1/2% Convertible Senior Debenture
<F4>Equals the Total Shareholders Equity
<F5>Equals the Sum of Commissions, Other Operating Expenses, Taxes licenses and
Fees, Increase in deferred acquisition costs, Interest expense and Other
expenses
<F6>Equals the net reserve for unpaid claims for the property casualty subsidiaries
less loss checks payable as of December 31, 1996
<F7>Equals the net reserve for unpaid claims for the property casualty subsidiaries
less loss checks payable as of September 30, 1997
</FN>
</TABLE>
