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CNA Financial Corporation (CNA - Free Report) reported third-quarter 2021 core earnings of 87 cents per share, which beat the Zacks Consensus Estimate by 50%. The bottom line increased 22.5% year over year.
The quarterly performance reflects double-digit gross written premium growth across P&C business segments, rate increase, excellent new business growth of 24%, and favorable life and group results.
CNA Financial Corporation Price, Consensus and EPS Surprise
Total operating revenues of CNA Financial were nearly $2.6 billion, up 4.2% year over year on the back of higher premiums earned. The top line beat the Zacks Consensus Estimate by 0.7%.
Net written premiums at Property & Casualty Operations increased 5% year over year to $1.9 billion.
Pretax net investment income decreased 0.8% year over year to $513 million.
Total claims, benefits and expenses increased 3% to $2.6 billion, primarily due to lower insurance claims and policyholders' benefits, amortization of deferred acquisition costs, non-insurance warranty expense and other operating expenses.
Catastrophe losses of $178 million pretax widened from $160 million loss incurred in the year- ago quarter, largely attributable to Hurricane Ida.
The combined ratio improved 900 basis points (bps) year over year to 100.
Book value as of Sep 30, 2021 was $46.67 per share, down 0.3% from Dec 31, 2020.
The core return on equity was 7.7%, up 100 bps.
Segment Results
Specialty’s net written premiums rose 3% year over year to $822 million. The combined ratio improved 130 bps to 88.2 due to favorable net prior period development.
Commercial’s net written premiums increased 3% year over year to $831 million. The combined ratio deteriorated 30 bps to 111.6 due to higher catastrophe losses.
International’s net written premiums increased 15% year over year to $256 million. The combined ratio improved 260 bps to 95.5 due to higher catastrophe losses and unfavorable net prior period development.
Life & Group’s total operating revenues were $362 million, up 8.1% year over year. Core income of $41 million rebounded from the year-ago loss of $35 million, reflecting favorable impact from the reduction in long-term care claim reserves, resulting from the annual claim reserve review.
Corporate & Other’s core loss of $21 million was wider than the year-ago loss of $8 million due to lower net investment income.
Dividend Update
CNA Financial’s board of directors approved a quarterly dividend of 38 cents to be paid out on Dec 2, 2021 to stockholders of record as of Nov 15.
Among the insurance industry players, which have reported third-quarter earnings so far, the bottom line of RLI Corp. (RLI - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) beat the Zacks Consensus Estimate while that of The Progressive Corporation (PGR - Free Report) missed estimates.
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CNA Financial (CNA) Q3 Earnings & Revenues Top, Rise Y/Y
CNA Financial Corporation (CNA - Free Report) reported third-quarter 2021 core earnings of 87 cents per share, which beat the Zacks Consensus Estimate by 50%. The bottom line increased 22.5% year over year.
The quarterly performance reflects double-digit gross written premium growth across P&C business segments, rate increase, excellent new business growth of 24%, and favorable life and group results.
CNA Financial Corporation Price, Consensus and EPS Surprise
CNA Financial Corporation price-consensus-eps-surprise-chart | CNA Financial Corporation Quote
Behind Third-Quarter Headlines
Total operating revenues of CNA Financial were nearly $2.6 billion, up 4.2% year over year on the back of higher premiums earned. The top line beat the Zacks Consensus Estimate by 0.7%.
Net written premiums at Property & Casualty Operations increased 5% year over year to $1.9 billion.
Pretax net investment income decreased 0.8% year over year to $513 million.
Total claims, benefits and expenses increased 3% to $2.6 billion, primarily due to lower insurance claims and policyholders' benefits, amortization of deferred acquisition costs, non-insurance warranty expense and other operating expenses.
Catastrophe losses of $178 million pretax widened from $160 million loss incurred in the year- ago quarter, largely attributable to Hurricane Ida.
The combined ratio improved 900 basis points (bps) year over year to 100.
Book value as of Sep 30, 2021 was $46.67 per share, down 0.3% from Dec 31, 2020.
The core return on equity was 7.7%, up 100 bps.
Segment Results
Specialty’s net written premiums rose 3% year over year to $822 million. The combined ratio improved 130 bps to 88.2 due to favorable net prior period development.
Commercial’s net written premiums increased 3% year over year to $831 million. The combined ratio deteriorated 30 bps to 111.6 due to higher catastrophe losses.
International’s net written premiums increased 15% year over year to $256 million. The combined ratio improved 260 bps to 95.5 due to higher catastrophe losses and unfavorable net prior period development.
Life & Group’s total operating revenues were $362 million, up 8.1% year over year. Core income of $41 million rebounded from the year-ago loss of $35 million, reflecting favorable impact from the reduction in long-term care claim reserves, resulting from the annual claim reserve review.
Corporate & Other’s core loss of $21 million was wider than the year-ago loss of $8 million due to lower net investment income.
Dividend Update
CNA Financial’s board of directors approved a quarterly dividend of 38 cents to be paid out on Dec 2, 2021 to stockholders of record as of Nov 15.
Zacks Rank
CNA Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
Among the insurance industry players, which have reported third-quarter earnings so far, the bottom line of RLI Corp. (RLI - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) beat the Zacks Consensus Estimate while that of The Progressive Corporation (PGR - Free Report) missed estimates.