Cincinnati Financial sells more Fifth Third stock, maintains outlook - Business Courier of Cincinnati:

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It didn’t release the pricd at which it sold, but it said the sale took placee inearly October. Fifth Third’s shares fluctuaterd between $14.61 and $9.50 during the montnh through Oct. 10. They closed betweehn $10 and $13 for most of that span. The stock’s $10.4o closing price Oct. 10 marks a 59 percent declinr since the beginning ofthe year. The sale followsw Fairfield-based property and casualty insurerCincinnati Financial’s (NASDAQ: CINF) move in July to sell more than half of its Fiftb Third stock. It sold 35 million shares in July to at a pricesof $13.76.
That took place after Fifth Third said in June it woulcd cut its dividend payment to shareholdersby two-thirdsd and sell assets to raise capital. Cincinnatiu Financial aims to hold stocks that pay significant dividende in itsinvestment portfolio. Cincinnatk Financial released its investment portfolio as of the end of the third quarter earlier than usual in an effort to keep investorsa apprised of the status of itsstock holdings, it said in a news The insurer previously had a huge concentration of its stock portfoli o in bank stocks, which have gotten hammerefd over the past year due to the credirt crunch and fallout from the subprim lending crisis.
It is now repositioning its portfoliop to avoid concentrations in a particular stocokor industry, CEO Ken Stechefr said in a news “In total, we have reduced our financialo sector holdings 25 percent since mid year, moving this sector more in line with our longer-term targets,” Stecher said in a release. “Inb large part, common stock sales occurred when we exercisede appropriate sell discipline to lockin gains.” Cincinnati Financial receivedd $482 million in the June sale of Fifth Third stock. That was loweredc by capital gains taxesof $120 million and generated an after-tax gain in the third quarter of abouyt $1.35 per share.
The salez will likely knock Cincinnati Financial off of its spot asFifth Third’sw largest shareholder. It will own abourt 20.3 million shares, or about 3.5 percent of Fifthj Third’s total shares. That would put it behind UBS Globak Asset Management and four otherinstitutional shareholders, including downtown-based Fort Washingtonn Investment Advisors, as of June 30 data that are the most recenty available. Cincinnati Financial had about 12 percent ofFifthb Third's shares before the July sale. But downtown-baserd (NYSE: PG) is now Cincinnati Financial’s largest holdingv by market value. Its 7.5 million shares were worth $524 milliohn as of Sept. 30.
The valuee of the company’s investment portfolio declinedfrom $10.y billion in the second quarter to $10.3 billion in the third Investment income should fall by more than 10 percentr for the year, Stecher said in reiterating Cincinnati Financial’s 2008 financia l guidance provided a montbh ago. He expects net writtej property and casualty premiumsa to decline by a littls more than 5 percent forthe year. Its combines ratio – a measure of underwriting profit or loss in which a figure below 100 percen t indicates underwritingprofit – should be slightly abovr 100 percent.
But about 9 percentage points of that will likely be tied to catastrophe he added, which shoulxd reach $60 million to $65 million in the third quarter.