Ken Stecher - Chairman of the Board
Lisa Love - SVP, General Counsel and Corporate Secretary
Blake Slater - Cincinnati Insurance AVP
Steve Johnston - President & CEO
Cincinnati Financial Corp. (CINF) Annual Shareholder Meeting Call April 28, 2012 9:30 AM ET
Welcome everyone. It's an honor to be with you at Cincinnati Financial's Corporation's annual meeting of shareholders. I am Ken Stecher, Chairman of Cincinnati Financial Corporation. While I have attended many of these meetings, this is the first time I will be your host.
At this time I would like to formulate and call the meeting to order. If any registered shareholder wishes to turn in a proxy, please raise your hand and one of the inspectors of election will collect it. Also any registered shareholder wishing to vote in person can now come to see the inspectors of election here to my left to facilitate your voting in person. I will now ask Lisa Love, the Corporation's Secretary, General Counsel to read the notice of the meeting.
Thank you Mr. Chairman. I certify that on March 16th 2012 notice of the annual meeting of the shareholders was mailed to those persons who were shareholders of record of the company on March 1, 2012. That notice provided that the annual meeting be held at 9:30 AM on Saturday, April 28, 2012 at the Cincinnati Art Museum. And that the items of business to be considered at the meeting are; electing 10 directors for one-year terms; ratifying the selection of Deloitte & Touché LLP as the company's independent registered public accounting firm for 2012; voting on a non-binding proposal to approve compensation for the company's named executive officers, adopting the Cincinnati Financial Corporation 2012 stock compensation plan; and any other business that may properly come before the meeting. I will include a copy of the notice along with the minutes of the meeting in the company's records.
Thank you Lisa. Let me now introduce our appointed inspectors of elections. Molly Grimm, the Cincinnati Insurance Secretary; Chuck Hertlein, Dinsmore and Shohl LLP; Tom Hogan Cincinnati Insurance Associate Counsel; Todd Pendery, Cincinnati Insurance Vice President and Blake Slater, Cincinnati Insurance Assistant Vice President.
Inspectors please tabulate the shares represented in person or by proxy at this meeting. While inspectors tabulate the shares, let me follow with some introductions.
First I would like to introduce your company's directors. Please hold your applause until each of them have been announced. Please stand as your name is called. The nominees for election at this year's meeting are Bill Bahl; Steve Johnston; Ken Lichtendahl; Rodney McMullen; Gretchen Price; John Schiff, Jr.; Tom Schiff; John Steele, Jr,; and Tony Woods and I also am standing for reelection today.
Continue to serve as you directors are Greg Bier; Linda Clement-Holmes; Douglas Skidmore; and Larry Webb.
Thank you all for your efforts on behalf of the shareholders of Cincinnati Financial.
Next I will introduce the company officers accompanying me on stage. Jack Schiff, Jr., Chairman of the Executive Committee. And many of you know the number of years that he has served as our chairman, so thank you Jack; Steven Johnston, our President and Chief Executive Officer; Mike Sewell, our Chief Financial Officer, (inaudible), Executive Vice President of the Cincinnati Insurance Companies; Martin Hollenbeck, President of CFC Investment Company and Chief Investment Officer; Tom Joseph, President of Cincinnati Casualty Company; Dave Popplewell, President of The Cincinnati Life Insurance Company; and Lisa Love, Senior Vice President, General Counsel and Corporate Secretary.
We have many company officers in attendance today and I would ask each of those, each of you would stand please. And I wasn't to ask that all of you continue to stand while I also ask the rest of our associates to also stand for recognition. We have other associates, please stand. I would like to take a moment to just walk them a couple of other guests and then we have Phil Shepardson here from Beckman Weil and Shepardson. Phil? And Chuck Hertlein from Dinsmore & Shohl. They are both expected partners of our company and handle some legal affairs. From Deloitte & Touche Don (inaudible) is here. Don would like to introduce members of your team that are with you?
Unidentified Company Representative
Thank you. I know we also have some retired directors that I would like to acknowledge. Jim Benoski, John Shepherd and Alan Weiler. And we have (inaudible). And that Ted is here I see. Thank you for attending today. We also have quite a few first-time attendees of this meeting. Mark [McBath] is here. Gary [Grimm], Billy [Follick], Debbie and Judy Bradley, John (inaudible), Colleen McFerrin; Dan and Bernadine (inaudible), Bill and Carol Jameson, Leonard and Rochelle [Nurberg], Todd Hillgiman, Carlit Francis, Steve Stifel, Barry Anderson and Larry Woods.
And I want to thank you for your attendance in this meeting. The tradition we always do try to recognize the youngest shareholder. I believe that person today is Bill Schiff. I think he's six years old. And then we have one shareholder who came with our director Larry Webb. His name is Joe (inaudible) he is from (inaudible) China. He is a teacher, Chinese teacher at Lima Senior High School and his province is 4000 miles away. So I think we have the person has come the long distance to attend our meeting. So Mr. (inaudible) he's in the back.
So it's great to have a lot of first-time attendees. I think it shows that we have a lot of interest in our company. We hope today to give you an update on you know the past year course and we look forward to going in the future. This is our 29th consecutive year that we have had our Annual Shareholder meeting here at the Cincinnati Art Museum and we thank Aaron Betsky, Museum Director and the Museum staff for their gracious welcome. Is Aaron here? He is not okay thank you. At this time, inspectors may be ready with proxies. Mr. Slater, how many shares are represented in today's meeting?
Mr. Slater how many shares are represented in today's meeting?
Mr. Chairman, we the undersigned inspectors of election duly appointed to act at the annual meeting of shareholders of Cincinnati Financial Corporation held on the 28th day of April 2012, report as follows. Number of shares voted in person, 8349. Number of shares are presented by proxy, 137,378,115. Total number of shares represented 137,386,464. That is 85% of the shares outstanding, respectively submitted Chuck Hertlein, Molly Grimm, Tom Hogan, Todd Pendery and Blake Slater.
Thank you, Blake. We have a quorum present and the meeting may proceed. Is there a motion to waive the reading of the minutes of last year’s shareholder meeting of April 30, 2011?
Mr. Chairman, I move to waive the reading of the minutes of the last annual meeting of shareholders and to prove the minutes as written.
Thank you. Is there a second?
All in favor?
Opposed? Motion carried. Thank you. We have four items of business to present this year before our Inspectors tally the votes. I would like to also note that the polls are now open for each matter to be voted at this meeting. The first is the election of Directors. To nominate the slate of Directors and listed on the proxy statement, I called in Dennis McDaniel, Cincinnati Insurance Vice President and Investor Relations.
Good morning, Mr. Chairman. I hereby nominate William F. Bahl, Steven J. Johnston, Kenneth C. Lichtendahl, W. Rodney McMullen, Gretchen W. Price, John J. Schiff, Jr., Thomas R. Schiff, Kenneth W. Stecher, John S. Steele, Jr. and E. Anthony Woods for your election as Directors of the Company to serve for terms ending on the date of the annual meeting of shareholders in 2013 until their successors are elected.
Thank you, Dennis. Are there other nominations? Seeing none, I declare the nominations closed. The second order of business is to ratify the selection of Deloitte & Touche LLP as the company's independent registered public accounting firm for 2012. To present this proposal, I’ll call in Eric Matthews, Cincinnati Financial Vice President and Principal Accounting Officer.
Mr. Chairman, I propose that the shareholders ratify the selection of Deloitte & Touche LLP as the company’s independent registered public accounting firm in 2012.
Thank You, Eric. Is there any discussion at this time? Thank you. The third order of business is voting on a non-binding proposal to prove compensation for the company’s named executive officers to present. This present this proposal, I’ll call in Betsy Ertel, Cincinnati Insurance Assistant Secretary.
Mr. Chairman I proposed that shareholders approve the non-binding proposal to prove compensation for the company’s named Executive Officers.
Thank you, Betsy. Is there any discussion on this proposal? Seeing none, the fourth order of business is adopting the Cincinnati Financial Corporations 2012 Stock Compensation Plan. To present this proposal, I call in Teresa Cracas, Cincinnati Insurance Senior Vice President and Chief Risk Officer.
Mr. Chairman, I proposed that shareholders adopt the Cincinnati Financial Corporations 2012 Stock Compensation Plan.
Thank you, Teresa. Is there any discussion on this proposal? Seeing none, again I would like to invite any shareholders present who want to vote in person to come down and see the Inspectors of elections. Or raise your hand and we will come to you for your comments. Seeing and hearing none, if there is no further discussion on the proposals and no further business at this time, the polls are now closed for each matter voted on at this meeting.
While Inspectors of election are tallying the votes, Steve and I will talk about your company’s 2011 performance and the trends that may affect 2012 and beyond. You have an opportunity to ask questions at the end of the meeting. So please let us know if you want to hear more on any these subjects.
As we begin, let me remind you that some of the matters we discussed today are forward-looking and involve certain risk and uncertainties. You may refer to various filings with the SEC for factors that could cause results to differ materially from those discussed. You can find reconciliations for non-GAAP measures in our most recent quarterly earnings news release which is available on the Investors page of our website at www.cinfin.com.
We have a lot to be excited about at Cincinnati Financial. The company is moving in the right direction using our proven strengths of financial stability, agency relationships and claims excellence in working to add new strengths. We are confident in our ability to create future value.
I’ll like to pause for a moment, pay a tribute to a dear friend and Director of Cincinnati Financial, who passed away earlier this month. Bob Terry was instrumental in the development of Cincinnati Insurance Company and the formation of Cincinnati Financial as our holding company. We owe many of our competitive advantages to him and our other early company leaders.
Bob joined the company as a junior account in 1954 and retired in 1997 as our Chief Financial Officer. Though many of us remember him for creating our accounting and investment departments, he enjoyed telling stories about the many hats each company person wore in the early years. Bob did everything from keeping the first claims letter to picking up associates at the bus stop and taking out trash at the end of the day.
He started out the Key Punch area. That was our first informational technology effort. Personally, I remembered Bob most for modeling the values of hard work and resourcefulness to get the job done as well as loyalty, thrift and lack of ostentation. Well, that’s the spirit of doing whatever it takes to bring success to the company continues today. Our business is much larger and more complex. Four years ago, I started to work with the management team to focus our emphasis on a number of strategies to keep our company growing, including improving our technology and data management as well as developing and recruiting associates with specialized expertise.
Steve has continued work on these goals with great success since I moved to the Chairman role at this time last year. We also promoted several talented officers who are bringing their energy and expertise to accomplishing our shared goals. I like to update you now on their areas.
And his first year as President and CEO, Steve has unified the company behind a single vision and set a shared goal of reaching 5 billion in direct-written premium, profitably by 2015. He has clearly communicated his vision and goals for the company and listing support and updating progress for our agency sales meetings and for our associates at town hall meetings.
Every associate knows what to do to bring success to the company in one quarter, one year and in five years. Mike Sewell, our fifth CFO joined us in May of last year. Financial assessments are a part of every major business decision from reinsurance structures to expense control. Mikes accounting and financial statement expertise has supported our sales department in finding innovative alternatives to assist independent agencies in perpetuation, planning.
Uniting the positions of General Counsel and Corporate Secretary, Lisa Love facilitates the board’s communications with management, investors and others. She supports the board and management with timely and practical advice that continues to build the company’s reputation for good governance, ethical business practices and transparent financial disclosure.
Teresa Cracas, our company’s first Chief Risk Officer leaves new area combining our staff underwriting, actuarial and planning functions. These departments are providing the precise data and analysis we use to price our products and manage our business risks helping all business units make the right decisions and move us forward.
2011 activities include recruiting expert associates such as our experienced predictive analytics officer and making improvements to our planning and budgeting processes. We’ve found efficiencies by combining and consolidating our efforts in business insurance.
Under Jr. Scherer’s leadership commercial lines, target markets, excess of surplus lines and sales and marketing have enhanced our communication, coordination and collaboration. Just this week we added a highly experienced and accomplished marketing director. He will develop a strategic marketing plan and lead its implementation, focusing, integrating and energizing marketing activities across all areas of our company.
These changes should all contribute to the growth of our business helping agents convey the value received by using a trusted insurance professional to develop a strong insurance program to help Cincinnati’s policies and services.
I am thankful to our energetic group of executives including those I have named and many more. Their work is building on the core values that our company’s early leaders, people like Bob Driehaus and still into our corporate culture. We are moving forward with focus, evaluating the right mix of technical resources and human resources to make solid plans for the future and pursue those plans without hesitation.
Now I would like to invite Cincinnati Financial Corporation, President and CEO, Steve Johnston to continue our discussion on your company’s progress. Please welcome Steve.
Thank you Ken and I am very excited to be here. It’s so great to see so many shareholders, so many friends, so many first time guests; it’s great. I am going to talk about three things here this morning; first, we’re going to talk about 2011, a brief recap then we’re going to move into a series of three year’s slides show really good steady progress that we’re making and that continues into 2012 and then thirdly we’re going to close with why you should be optimistic about your company’s future.
2011, certainly did presented some challenges to our company. The weather presented the two largest catastrophe losses in the history of Cincinnati Insurance Company. Low interest rates made it hard for investment department to invest. But we stay focused on the fundamental tenets that make Cincinnati, Cincinnati.
As we’ve appoint the best agents. We support those agents with local field representation, with our representatives working out of their homes, with the ability and the authority to make decisions. We back it up with great financial strength, great claim service and investing for the long pull. Given our focus, 2011 was actually a very positive year.
If we move to the first slide where we look at underwriting results, the bar chart show our combine ratio for 2009, 2010, 2011 and the first quarter of 2012 and just as a reminder, if it’s over 100 that’s an underwriting loss, so we had three years here shown with a underwriting loss, we moved that to a profit in 2012.
The reason for the underwriting loss is unprecedented catastrophe losses; if we look at 2011 we had 13.3 points of the 109.2 in catastrophe losses. The previous largest year was 6.8 points, so nearly double. So what we focus on is the red line. What we can’t control the, non-CAT or core underwriting results.
Here we are seeing tremendous progress over the last three years as it’s declined from 98.8% to 96.7% to 95.9% and now down to 88% in the first quarter 2012, an overall profit of 99.1%.
Now hallmark is, our claims associates, they really got out there and delivered on the promise. We had over 33,000 claims of catastrophe nature last year, they settled over 90% of it. They did it in Cincinnati style. They did in such a way that we’re actually now seeing favorable development that I think comes from him and it always claims with your own associates.
So I would like right now for all the claims associates, he is current or retired, to please stand up, and let’s give him recognition. I particularly like to recognize Marty Mullen for his leadership. It was quite a year Marty and thank you.
The only thing better than underwriting profit is growth in underwriting profit. And here we see a nice trend in growth from where we were at minus 3% in 2009 up to plus 2%, up to plus 5%. That continues with plus 8% in the first quarter. That’s the most growth, highest percentage growth in the first quarter since 2006.
That has been fueled by new business. Here again you see three years of positive growth in new business, $437 million, and last year of 2011 is an all time record. That was fueled by $41 million in growth from new agents that were appointed since 2010. They contributed about $41 million of that $437 million.
Recognizing the importance of agency appointments, this chart shows the number of agency appointments. You can see that it’s going up; it continues into this year. So far this year, we have a goal of 130 and we have already appointed 56 new agencies just in the first quarter. Last year, a quarter of those new appointments came in the new states of Texas, Colorado, Wyoming, Connecticut and Oregon.
And I think it’s also least to our expense and our service, we grew the number of field associates by 4% since 2009, but over that same period of time, we’ve actually reduced home office to our technology advancements and driving that we reduced the number of contractors we use by 30%.
All that culminated in written premium growth and we can see again, positive trends ending with over with over $3 billion of net written premium at the end of 2011. That also continues into 2012.
Life insurance also contributed. It’s very core; as you can see from the slide, we are now over $78.6 billion in life in force. They are core to our operations and in fact last year they were profitable position that could upload or upstream $25 million in dividends to the parent.
All the work in growth, all the work in frugality is resulted in a reduction in our expense ratio. We’ve always had a culture of frugality. You throw in that, the reduction and expense and we dropped the expense ratio from 32.8 in 2009 to 32.2 last year to 31.6; we’ve got a goal of getting that below 30 by the year 2015.
I think we have that history of frugality. We kind of have the same around here; that the only time we let loose of the nickel was to get a tighter grip on it. And if you think about the potential, one point on the loss ratio improves our operating earnings by $31 million, a 5% increase in investment income only generates $26 million, so every point that we can shave off of this expense ratio, goes right to the bottom line. We've taken the cash we've made and we've given it to the investment department to invest and boy have they done a great job with it.
You know it's been a tough market; it's been a low rate investment, world that they live in, that they have taken the cash and they have actually grown investment income each year starting 2009 with $501 million or up to $525 million. They have done it by investing in high quality investments particularly high quality dividend paying stocks with a propensity to grow that investment income, that investment income from dividends has grown by 5% which has offset a pretty flat level of investment income from investments, so a nice growth from the investment department.
And not only do they grow income, they invest in stocks that appreciate. This shows our end realized gains, another positive trend where we've grown the unrealized gains by nearly $700 million, just at the end of 2009 with $1.7 billion in unrealized gains. Think about it, that's almost enough to support a $3 billion company just with the unrealized gains. So good appreciation. And that is summarized in the consolidated assets also going up, a nice positive trend that is now over $12 billion in invested assets.
The Cincinnati Insurance Company has never been constrained for growth for lack of financial strength and that is continuing today with a strong growth in the investments. We have a rock solid balance sheet; the hallmark of any balance sheet is a reserve position. Here you can see we've continued to increase our reserves, we've increased them steadily. We have a very consistent approach to our reserving practices. It contributed 9.4 points in favorable development to the combined ratio in 2011 and if you look at our Form 10-K that we file with the SEC we’ve got 23 years in a row with favorable development. We think that that is unprecedented and is the foundation of our balance sheet.
That all drives our policy holder surplus. Here you can see good growth in the policy holder surplus. We’re up over $3.8 billion and that is after over this period of time contributing over a half a billion over $500 million up to the parent company. I think particularly impressive in a year when well particularly impressive that we’re able to grow with it in a such a strong catastrophe year.
If we look to the consolidated equity, here this is taking those dividends up from the public company. We have an additional one plus billion in cash and marketable securities there and again we’ve been able to grow that steadily from 4.7 billion at the end of 2009 to now over $5.2 billion.
We divide that by the shares, that's every shareholders' piece for every share. This is book value per share and I guess this is the point I was going to make even in a tough year when we had the two largest catastrophe losses in the history of the company we’re able to grow book value from year end 2010 at $30.79 to $31.03 at the end of 2011 and already 3.3% growth up to $32.07, a strong growth in our book value per share.
Alright, it took little while to get to this one, but it’s a good one. I’ll tell you this is the, our dividends. We are one of 10 companies that have increased their dividends every year for over 50 years, 51 years for us. We show that from 1980 on up and over that period of time, if you look at those ten companies, the compound annual growth rate in the dividends, we are the highest with 11.7% compound average growth rate.
It has tailed off a little bit here in the more recent years, but we support a yield right now that is 4.5%. And if you think about it the ten year treasury, it is under 2%. Alright if you are going to see one slide, this is my favorite and I am sure why you are here. This shows total shareholder return for Cincinnati Financial, the S&P 500 and S&P’s index of P&C companies 27 of them in the index. This shows total shareholder return from each of the dates until yesterday. So this first block here shows it from the end of the year 2011, about a third of the year, four months, your company total shareholder return 18.8% and that is a higher than the S&P 500 and the S&P’s index of P&C companies.
If we go back another year, from year end 2010. So now we got a year and about a third and assuming that you reinvest the dividends, again we are in first place up 20.4% beating both the S&P and the S&P’s index of P&C companies. If you go back to 2009, same picture. We were up 53.5%, so $100 invested in Cincinnati would result in a $153.50 as more than you would have got from the S&P 500 or the S&P's index of P&C companies. And really want to put a clean in here. So I included 2008 here. Again we got a strong performance, up 47.9% beating the index of P&C companies but behind the S&P 500 which was at 66.7%.
I wanted to take a little longer approach, go back ten years in the third. Ten years in this stub year. I like that side, we are up 54.2% and again ahead of both the S&P 500 and the index and if we go back 15 years in the stub, you've tripled your money up a 199.8% with total shareholder return again far exceeding the S&P 500 and the S&P's index of P&C companies. So your company has performed well, it has been a top performer in terms of returning money to you and we think that you should be optimistic going forward that this will continue and the reason is one, we have got a nice short term trend.
The fourth quarter and the first quarter are going in the right direction. As Ken mentioned we have very well articulated goals. Every associate knows that our goals are to get to $5 billion in premium by 2015. Our goals are to do that profitably with the combined ratio of 95% or better. We are going to lower our expense ratio, that we are going to continue to invest in the S&P 500 and outperform the S&P with our own investment portfolio, that should generate a value creation ratio of 12% to 15%.
Those are our goals, we've had meetings, we have described them to every single associate. They all have goal cards. I am looking forward to this week. We are going to get out there and show them how we did in the first quarter on their goals and we will just continue to reinforce that. So well articulated goals. Everyone knows where we are going and we are all marching together. I think even more importantly than that, once we look at our management team and once you look at our business model. If you look at the business model it has been successful since our founding and is at the point the best agent, put our field representatives out in the field, give them the authority, the ability to make decisions, support them with great financial strength, great client service, invest for the long-term, it is a winning formula. And that is being executed by an experienced and superior management team that I can assure you is working feverishly every single day to improve.
With that, I thank you for your time, I thank you for your support and I thank you for your continued ownership of the Cincinnati Financial Corporation. Thank you very much.
Thank you, Steve. I think you see with Steve’s enthusiasm and that of the team why we believe the future is bright for our company. Before we hear from the Inspectors of Election I would like to remind shareholders, we can't provide for you. Shareholders of record can't choose to have their shares held in book entry form instead of tracking all your paper certificates, so please keep that in mind.
We want to make it easy for you to invest in our company. Also to make it easy to reinvest your dividends and compound your growth. And as Steve mentioned, you saw the chart on the 51-year history of our dividend increases. We’re so proud of the fact that we have been again in 2011 an S&P 500, Dividend Aristocrat, and a Mergent’s Dividend Achiever. Our record is matched by only a handful of the few companies.
Inspectors, do you have the preliminary results of the voting?
Mr. Chairman, we the undersigned Inspectors of Election duly appointed to act at the Annual Meeting of Shareholders of Cincinnati Financial Corporation held on the 28th day of April 2012 hereby submit our preliminary report on results of the voting.
For the first proposal, the Election of Directors, each of this year’s nominees received at least 87% of the shares present or represented and entitled to vote at the meeting.
For the second proposal, approximately 98% of the votes cast were voted in favor of ratification of the appointment Deloitte & Touche LLP as the company’s independent audit firm.
For the third proposal, approximately 98% of the shares present are represented and entitled to vote at the meeting were voted in favor of the non-binding proposal to approve the compensation for the company’s named executive officers.
For the fourth proposal, approximately 95% of the shares present or represented and entitled to vote at the meeting were voted in favor of the adopting the Cincinnati Financial Corporation 2012 stock compensation plan. Respectfully submitted Molly Grimm, Chuck Hartline, Tom Hogan, Todd Pendery and Blake Slater.
Thank you, Molly. It appears all directors have been elected and all proposals have been approved. The Inspectors of Election will furnish this to the Secretary with a written report of the final vote count with respect to the matters voted on today and to being included in the minutes of this meeting. We’ll announce final results once they are certified early next week.
At this time, we’d like to welcome your questions and we want to learn more about your interest in our business. We have two microphones set-up in front, if anyone would like to ask any questions, I would appreciate if you will come up to the microphone so everyone can hear your question.
I would also like to ask Steve Johnston join me to respond.
Good morning. That was an excellent presentation; a lot of good news. My name is [Allen Dourly] I am an insured shareholder and a member of the Jones family.
My question is two part test with dividends. You’ve been paying them over a long-time; over there the history of the tax treatment of dividends has changed a lot. So do you have any expectation of a change in the way the dividends are taxed and what might you do differently in the way you pay the dividend?
The second one, second part of the question has to do with the attractiveness of the stock because of the dividend and perhaps more shorter term owners of the stock. And if the tax treatment is changed, do you think you will see more trading of the stock. Does my questions makes sense?
Yeah, I think, and we have done a lot of thinking of that either one to answer the question.
I’ll start it off. I think, first of all as you said the tax consequences of dividend payments have changed overtime. We believe that as a profitable company we need to return capital to our shareholders. There is multiple ways to do that. One is you can repurchase shares for the treasury. Secondly, you can return dividends to shareholders on a quarterly basis. We prefer to return to the shareholders.
We understand that this could change the dynamics of our investor, but I believe that we want to reward people that have an interest in our company which means you do that to shareholders on a quarterly dividend basis.
If we repurchase shares and sometimes, that is the right thing to do, especially if you can buy the stock at lower than book value. But if we have the choice, we prefer to pay the dividends because as I said earlier, paying them to current shareholders, not to people that want to sell our stock.
As far as changing the policy depending on how things go, whether we make it a different shareholder base, I mean, that’s a good question and I think we would have to see how that all plays out. I think at the end of the day, if there are changes, hopefully they are going to be temporary, because every corporation needs capital, every corporation needs to have interested in investors and you don’t want to take capital out of the industry by penalizing people toward a point where they say, I can afford or it’s not the right thing to do, to buy the stock. So I think that’s one thing that we’re just going to have to monitor.
We are so proud of our 51 year history and if you have seen Steve’s chart, we have done everything we can to increase the dividend on annual basis even though it is slowed because of the tough times we just experienced over the recession that we have been through. But that is something we are so proud of, we are going to do everything in our power to continue that and I think with what you’ve heard today with the plans we have for 2012, we believe we are going to be able to continue that and possibly pick that up at a little greater pace in the future. And Steve would you like to add to that?
I don’t think I can add anything to that that was a phenomenal answer. I guess the only thing I would just encourage you if you agree let your representatives know that that capital has already been taxed once; the dividend tax is the second tax and if you agree let them that and know them how you feel.
Any further questions?
Well, seeing none; I think, we thank you for coming to today’s meeting. We thank you for your interest. Now we request the motion to adjourn. We have a second thank you.
Before we stand adjourn, one thing to remind you about is that refreshments are still available and you are welcome to tour the museum’s exhibit Monet in Giverny, Landscapes of Reflection beginning at 10.30 this morning through the entire art museum, once it opens at 11 AM.
Thank you very much for your presence today. We really enjoyed it. And again, thank you for the interest in Cincinnati Financial.