We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
CNA Financial Corporation (CNA - Free Report) reported first-quarter 2023 core earnings of $1.19 per share, which missed the Zacks Consensus Estimate by 0.8%. The bottom line however increased 2.6% year over year and our estimate of $1.04.
The insurer’s results reflected solid top-line growth and strong underwriting profitability.
CNA Financial Corporation Price, Consensus and EPS Surprise
Total operating revenues of CNA Financial were $2.8 billion, up 10.6% year over year due to higher premiums and net investment income. The top line beat the Zacks Consensus Estimate by 0.9% and came in line with our estimate.
Net written premiums of Property & Casualty Operations improved 11% year over year to $2.2 billion, driven by a retention rate of 86% and renewal premium change of 7%.
Net investment income increased 17.2% year over year to $525 million, driven by an increase in income from fixed-income securities and other investments as well as an increase in income from limited partnership and common stock investments. Our estimate of $409.4 million.
Total claims, benefits and expenses decreased 2.8% to $2.8 billion, primarily due to Insurance claims and policyholders' benefits. Our estimate of $2.8 billion.
Catastrophe losses were $52 million, wider than losses of $19 million in the year-ago quarter.
The combined ratio deteriorated 200 basis points (bps) year over year to 93.9.
Segment Results
Specialty’s net written premiums increased 2% year over year to $788 million. Our estimate was $781.3 million. The combined ratio deteriorated 130 bps to 90.
Commercial’s net written premiums increased 19% year over year to $1.2 billion. Our estimate was $1.1 billion. The combined ratio deteriorated 150 bps to 96.
International’s net written premiums increased 8% year over year to $271 million. Our estimate was $271.8 million. The combined ratio deteriorated 480 bps to 97.2.
Life & Group’s net earned premiums were $115 million, down 4.2% year over year. Our estimate was $116.7 million. The core loss was $3 million against $5 million earned in the year-ago quarter, primarily due to long-term care policy buyouts.
Corporate & Other’s core loss of $18 million was narrower than a loss of $28 million in the year-earlier quarter.
Financial Update
The core return on equity was 10.8%, up 110 bps. Book value excluding AOCI as of Mar 31 was $44.21 per share, down 1.8% from Dec 31, 2022. Statutory surplus decreased 0.9% from 2021 end to $10.5 billion at quarter end. Leverage improved 20 basis points to 24.3 at quarter end.
Net cash flows provided by operating activities dropped 32.5% to $436 million at quarter end.
Dividend Update
CNA Financial’s board of directors approved a quarterly dividend of 42 cents per share to be paid out on Jun 1 to shareholders as of May 15.
The Travelers Companies (TRV - Free Report) reported first-quarter 2023 core income of $4.11 per share, which beat the Zacks Consensus Estimate of $3.64 and our estimate of $3.41. However, the bottom line decreased 2.6% year over year. Travelers’ total revenues increased 10% from the year-ago quarter to $9.7 billion, primarily driven by higher premiums. The top-line figure however missed the Zacks Consensus Estimate of $9.8 billion.
Net written premiums increased 12% year over year to a record $9.4 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $8.9 billion.
Catastrophe losses totaled $422 million, wider than $36 million pre-tax in the prior-year quarter. Catastrophe losses primarily resulted from severe wind and hail storms in multiple states. Travelers witnessed an underwriting gain of $501 million, down 12.9% year over year. The combined ratio deteriorated 410 bps year over year to 95.4.
The Progressive Corporation’s (PGR - Free Report) first-quarter 2023 earnings per share of 65 cents missed the Zacks Consensus Estimate of $1.44 as well as our estimate of $1.50. The bottom line declined 20.7% year over year.
Operating revenues were about $14.2 billion, up 15.8% year over year. This improvement was driven by a 15% increase in premiums, 18.5% higher fees and other revenues, a 7.1% increase in service revenues and a 73.2% higher investment income. The top line exceeded the Zacks Consensus Estimate of $14.1 billion and our estimate of $13.1 billion.
Net premiums earned grew 15% to $13.5 billion and beat our estimate of $12.6 billion. The combined ratio deteriorated 450 bps from the prior-year quarter’s level to 99.
RLI Corp. (RLI - Free Report) reported first-quarter 2023 operating earnings of $1.63 per share, beating the Zacks Consensus Estimate by 34.7%. The bottom line improved 14% from the prior-year quarter. Operating revenues for the reported quarter were $335 million, up 19.4% year over year, driven by 14.3% higher net premiums earned and 51.5% higher net investment income. The top line however missed the Zacks Consensus Estimate by 2.2%.
Gross premiums written increased 15.6% year over year to $415 million. This uptick can be attributed to the solid performance of the Casualty (up 1%), Property (up 45%) and Surety segments (up 13.6%). Underwriting income of $67.9 million increased 14.1%, primarily due to higher profitability in its Property and Casualty segment. Combined ratio remained flat year over year at 77.9.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
CNA Financial (CNA) Q1 Earnings Miss, Revenues Beat Estimates
CNA Financial Corporation (CNA - Free Report) reported first-quarter 2023 core earnings of $1.19 per share, which missed the Zacks Consensus Estimate by 0.8%. The bottom line however increased 2.6% year over year and our estimate of $1.04.
The insurer’s results reflected solid top-line growth and strong underwriting profitability.
CNA Financial Corporation Price, Consensus and EPS Surprise
CNA Financial Corporation price-consensus-eps-surprise-chart | CNA Financial Corporation Quote
Behind First-Quarter Headlines
Total operating revenues of CNA Financial were $2.8 billion, up 10.6% year over year due to higher premiums and net investment income. The top line beat the Zacks Consensus Estimate by 0.9% and came in line with our estimate.
Net written premiums of Property & Casualty Operations improved 11% year over year to $2.2 billion, driven by a retention rate of 86% and renewal premium change of 7%.
Net investment income increased 17.2% year over year to $525 million, driven by an increase in income from fixed-income securities and other investments as well as an increase in income from limited partnership and common stock investments. Our estimate of $409.4 million.
Total claims, benefits and expenses decreased 2.8% to $2.8 billion, primarily due to Insurance claims and policyholders' benefits. Our estimate of $2.8 billion.
Catastrophe losses were $52 million, wider than losses of $19 million in the year-ago quarter.
The combined ratio deteriorated 200 basis points (bps) year over year to 93.9.
Segment Results
Specialty’s net written premiums increased 2% year over year to $788 million. Our estimate was $781.3 million. The combined ratio deteriorated 130 bps to 90.
Commercial’s net written premiums increased 19% year over year to $1.2 billion. Our estimate was $1.1 billion. The combined ratio deteriorated 150 bps to 96.
International’s net written premiums increased 8% year over year to $271 million. Our estimate was $271.8 million. The combined ratio deteriorated 480 bps to 97.2.
Life & Group’s net earned premiums were $115 million, down 4.2% year over year. Our estimate was $116.7 million. The core loss was $3 million against $5 million earned in the year-ago quarter, primarily due to long-term care policy buyouts.
Corporate & Other’s core loss of $18 million was narrower than a loss of $28 million in the year-earlier quarter.
Financial Update
The core return on equity was 10.8%, up 110 bps. Book value excluding AOCI as of Mar 31 was $44.21 per share, down 1.8% from Dec 31, 2022. Statutory surplus decreased 0.9% from 2021 end to $10.5 billion at quarter end. Leverage improved 20 basis points to 24.3 at quarter end.
Net cash flows provided by operating activities dropped 32.5% to $436 million at quarter end.
Dividend Update
CNA Financial’s board of directors approved a quarterly dividend of 42 cents per share to be paid out on Jun 1 to shareholders as of May 15.
Zacks Rank
CNA Financial currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
The Travelers Companies (TRV - Free Report) reported first-quarter 2023 core income of $4.11 per share, which beat the Zacks Consensus Estimate of $3.64 and our estimate of $3.41. However, the bottom line decreased 2.6% year over year. Travelers’ total revenues increased 10% from the year-ago quarter to $9.7 billion, primarily driven by higher premiums. The top-line figure however missed the Zacks Consensus Estimate of $9.8 billion.
Net written premiums increased 12% year over year to a record $9.4 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $8.9 billion.
Catastrophe losses totaled $422 million, wider than $36 million pre-tax in the prior-year quarter. Catastrophe losses primarily resulted from severe wind and hail storms in multiple states. Travelers witnessed an underwriting gain of $501 million, down 12.9% year over year. The combined ratio deteriorated 410 bps year over year to 95.4.
The Progressive Corporation’s (PGR - Free Report) first-quarter 2023 earnings per share of 65 cents missed the Zacks Consensus Estimate of $1.44 as well as our estimate of $1.50. The bottom line declined 20.7% year over year.
Operating revenues were about $14.2 billion, up 15.8% year over year. This improvement was driven by a 15% increase in premiums, 18.5% higher fees and other revenues, a 7.1% increase in service revenues and a 73.2% higher investment income. The top line exceeded the Zacks Consensus Estimate of $14.1 billion and our estimate of $13.1 billion.
Net premiums earned grew 15% to $13.5 billion and beat our estimate of $12.6 billion. The combined ratio deteriorated 450 bps from the prior-year quarter’s level to 99.
RLI Corp. (RLI - Free Report) reported first-quarter 2023 operating earnings of $1.63 per share, beating the Zacks Consensus Estimate by 34.7%. The bottom line improved 14% from the prior-year quarter. Operating revenues for the reported quarter were $335 million, up 19.4% year over year, driven by 14.3% higher net premiums earned and 51.5% higher net investment income. The top line however missed the Zacks Consensus Estimate by 2.2%.
Gross premiums written increased 15.6% year over year to $415 million. This uptick can be attributed to the solid performance of the Casualty (up 1%), Property (up 45%) and Surety segments (up 13.6%). Underwriting income of $67.9 million increased 14.1%, primarily due to higher profitability in its Property and Casualty segment. Combined ratio remained flat year over year at 77.9.