Cincinnati Financial did show an improvement in its quarterly operating income, which rose 20.6 percent to $97 million compared to $80 million in the 2002 first quarter.

The company noted that net premiums written by its p-c insurance affiliates--The Cincinnati Insurance Company, The Cincinnati Indemnity Company and The Cincinnati Casualty Company--grew 10.6 percent over 2002 first quarter, reaching $687 million.

The combined ratio for its p-c insurance operations also improved to 95.1 percent in its first quarter, compared to 98.8 percent from one year ago.

But the company saw a marked deterioration in its net realized investment losses, with $40 million in its first quarter, compared to only $5 million a year ago.

Cincinnati Financial's net income does not include its stock option expenses, although the company has been disclosing the estimated impact of stock options in a note to its consolidated financial statements.

If the stock option costs were incorporated, their impact on first-quarter net income would have been minimal, at less than two cents per share, according to the company spokesperson.

Since 1996, Cincinnati Financial has been disclosing the estimated impact of stock options on net income and earnings per share in a note to its consolidated financial statements, so investors can get a better sense of how much such options can cost.

But the company won't be adding option's impact to its formal net income figures anytime soon. During its annual shareholders' meeting last Saturday, shareholders turned down a proposal to expense the cost of stock options on the income statement.

"While we are willing to make a future accounting change, our shareholders agreed to wait for an accounting regulatory body to introduce planned new rules and mandate a standard methodology for all companies to follow," said John Schiff Jr., chairman and chief executive officer at Cincinnati Financial.

"We believe investors deserve to have the benefit of reliable and comparable information calculated more uniformly than current conditions allow," he said.

Based in Fairfield, Ohio, Cincinnati Financial is the parent company of Cincinnati Insurance, which includes Cincinnati Casualty and Cincinnati Indemnity.

Through its subsidiaries, Cincinnati Financial sells commercial property, liability, auto, bond and fire insurance, and its personal lines include homeowners and liability products. Last year, it posted $2.843 billion in overall sales.