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CNA Financial (CNA) Q1 Earnings Miss on Higher Expenses
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CNA Financial Corporation (CNA - Free Report) reported first-quarter 2024 core earnings of $1.30 per share, which missed the Zacks Consensus Estimate by 5.1%. The bottom line, however, increased 9.2% year over year.
The insurer’s results reflected improved premiums and investment income, offset by higher catastrophe losses and expenses.
CNA Financial Corporation Price, Consensus and EPS Surprise
Total operating revenues of CNA Financial were $3 billion, up 10% year over year, driven by higher premiums, net investment income and other revenues. The top line beat the Zacks Consensus Estimate by 4.1%.
Net written premiums of Property & Casualty Operations improved 6.4% year over year to $2.3 billion. Our estimate was pegged at $2.4 billion.
Net investment income jumped 16% year over year to $609 million. The increase was driven by favorable limited partnership and common stock returns and higher income from fixed income securities as a result of favorable reinvestment rates. Our estimate was $585.7 million.
Total claims, benefits and expenses rose 5.4% to $3 billion, primarily due to higher insurance claims and policyholders' benefits, amortization of deferred acquisition costs, non-insurance warranty expense and interest. Our estimate was pinned at $2.8 billion.
Underwriting income decreased 3% year over year to $126 million. Catastrophe losses were $88 million, wider than a loss of $52 million in the year-ago quarter.
The combined ratio deteriorated 70 basis points (bps) year over year to 94.6.
Segment Results
Specialty’s net written premiums increased 1% year over year to $792 million. Our estimate was $774.6 million. The combined ratio deteriorated 70 bps to 90.7.
Commercial’s net written premiums climbed 13% year over year to $1.3 billion. The figure matched our estimate. The combined ratio deteriorated 160 bps to 96.
International’s net written premiums decreased 6% year over year to $260 million. Our estimate was $294.2 million. The combined ratio improved 390 bps to 93.3.
Life & Group’s net earned premiums were $110 million, down 4.3% year over year. Our estimate was $112.6 million. The core income was $5 million against a core loss of $3 million in the year-ago quarter, primarily due to higher net investment income.
Corporate & Other’s core loss of $22 million was wider than a loss of $18 million in the year-ago quarter. It reflected a $5 million after-tax charge related to office consolidation in the reported quarter.
Financial Update
Total assets increased 0.5% from the end of 2023 to $65 billion. Stockholders' equity of $9.7 billion decreased 2.3% from the 2023-end level.
The core return on equity was 11.5%, which expanded 70 bps. Book value, excluding AOCI, was $45.10 per share, down 2.7% from the previous quarter’s figure.
Statutory surplus remained flat at $10.9 billion quarter over quarter. Debt-to-capital deteriorated 320 bps to 26.7.
Net cash flows provided by operating activities increased 15.6% from the previous quarter’s level to $504 million.
Dividend Update
CNA Financial’s board of directors approved a quarterly dividend of 44 cents per share to be paid out on Jun 6 to shareholders as of May 20.
Cincinnati Financial Corporation (CINF - Free Report) reported first-quarter 2024 operating income of $1.72 per share, which beat the Zacks Consensus Estimate by 1.7%. The bottom line surged 93.2% year over year. Total operating revenues in the quarter under review were $2.3 billion, which missed the Zacks Consensus Estimate by 1.4%. The top line, however, improved 8.8% year over year. Net written premiums climbed 11% year over year to $2.2 billion.
Investment income, net of expenses, climbed 17% year over year to $245 million, as bond interest grew 21% and dividends from the equity portfolio jumped 9%. The figure was higher than our estimate of $227.7 million. Total benefits and expenses of Cincinnati Financial increased 0.4% year over year to $1.9 billion. The figure was lower than our estimate of $2 billion. In its property & casualty insurance business, Cincinnati Financial recorded an underwriting income of $131 million against the year-ago loss of $10 million. The figure was higher than our estimate of $60.7 million underwriting income.
AXIS Capital Holdings Limited (AXS - Free Report) posted first-quarter 2024 operating income of $2.57 per share, beating the Zacks Consensus Estimate by 1.2%. The bottom line increased 10.3% year over year. Total operating revenues of $1.4 billion missed the Zacks Consensus Estimate by 2.8%. The top line, however, rose 5% year over year. Net investment income jumped 25% year over year to $167 million. Our estimate was $164.8 million.
Total expenses in the quarter under review increased 0.7% year over year to $1.15 billion. Our estimate was $1.1 billion. Pre-tax catastrophe and weather-related losses, and net of reinsurance were $20 million. This compares favorably with the year-ago loss of $38 million. AXIS Capital’s underwriting income of $145.6 million increased 4.5% year over year. Our estimate was $141.5 million. The combined ratio deteriorated 20 bps to 91.1.
American Financial Group, Inc. (AFG - Free Report) reported first-quarter 2024 net operating earnings per share of $2.76, which missed the Zacks Consensus Estimate by 0.3%. The bottom line decreased 4.5% year over year. Total revenues of $1.8 billion increased 5.1% year over year in the quarter. The growth came on the back of higher P&C insurance net earned premiums and other income. The top line missed the Zacks Consensus Estimate by 0.2%.
P&C insurance net earned premiums of $1.5 billion climbed 7.5% year over year. Net investment income decreased 8.7% year over year to $198 million in the quarter under review. The figure was lower than our estimate of $226.8 million. Total cost and expenses increased 8.5% year over year to $1.6 billion due to higher P&C insurance losses & expenses and other expenses. The figure was lower than our estimate of $1.7 billion.
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CNA Financial (CNA) Q1 Earnings Miss on Higher Expenses
CNA Financial Corporation (CNA - Free Report) reported first-quarter 2024 core earnings of $1.30 per share, which missed the Zacks Consensus Estimate by 5.1%. The bottom line, however, increased 9.2% year over year.
The insurer’s results reflected improved premiums and investment income, offset by higher catastrophe losses and expenses.
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 $3 billion, up 10% year over year, driven by higher premiums, net investment income and other revenues. The top line beat the Zacks Consensus Estimate by 4.1%.
Net written premiums of Property & Casualty Operations improved 6.4% year over year to $2.3 billion. Our estimate was pegged at $2.4 billion.
Net investment income jumped 16% year over year to $609 million. The increase was driven by favorable limited partnership and common stock returns and higher income from fixed income securities as a result of favorable reinvestment rates. Our estimate was $585.7 million.
Total claims, benefits and expenses rose 5.4% to $3 billion, primarily due to higher insurance claims and policyholders' benefits, amortization of deferred acquisition costs, non-insurance warranty expense and interest. Our estimate was pinned at $2.8 billion.
Underwriting income decreased 3% year over year to $126 million. Catastrophe losses were $88 million, wider than a loss of $52 million in the year-ago quarter.
The combined ratio deteriorated 70 basis points (bps) year over year to 94.6.
Segment Results
Specialty’s net written premiums increased 1% year over year to $792 million. Our estimate was $774.6 million. The combined ratio deteriorated 70 bps to 90.7.
Commercial’s net written premiums climbed 13% year over year to $1.3 billion. The figure matched our estimate. The combined ratio deteriorated 160 bps to 96.
International’s net written premiums decreased 6% year over year to $260 million. Our estimate was $294.2 million. The combined ratio improved 390 bps to 93.3.
Life & Group’s net earned premiums were $110 million, down 4.3% year over year. Our estimate was $112.6 million. The core income was $5 million against a core loss of $3 million in the year-ago quarter, primarily due to higher net investment income.
Corporate & Other’s core loss of $22 million was wider than a loss of $18 million in the year-ago quarter. It reflected a $5 million after-tax charge related to office consolidation in the reported quarter.
Financial Update
Total assets increased 0.5% from the end of 2023 to $65 billion. Stockholders' equity of $9.7 billion decreased 2.3% from the 2023-end level.
The core return on equity was 11.5%, which expanded 70 bps. Book value, excluding AOCI, was $45.10 per share, down 2.7% from the previous quarter’s figure.
Statutory surplus remained flat at $10.9 billion quarter over quarter. Debt-to-capital deteriorated 320 bps to 26.7.
Net cash flows provided by operating activities increased 15.6% from the previous quarter’s level to $504 million.
Dividend Update
CNA Financial’s board of directors approved a quarterly dividend of 44 cents per share to be paid out on Jun 6 to shareholders as of May 20.
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 Insurers
Cincinnati Financial Corporation (CINF - Free Report) reported first-quarter 2024 operating income of $1.72 per share, which beat the Zacks Consensus Estimate by 1.7%. The bottom line surged 93.2% year over year. Total operating revenues in the quarter under review were $2.3 billion, which missed the Zacks Consensus Estimate by 1.4%. The top line, however, improved 8.8% year over year. Net written premiums climbed 11% year over year to $2.2 billion.
Investment income, net of expenses, climbed 17% year over year to $245 million, as bond interest grew 21% and dividends from the equity portfolio jumped 9%. The figure was higher than our estimate of $227.7 million. Total benefits and expenses of Cincinnati Financial increased 0.4% year over year to $1.9 billion. The figure was lower than our estimate of $2 billion. In its property & casualty insurance business, Cincinnati Financial recorded an underwriting income of $131 million against the year-ago loss of $10 million. The figure was higher than our estimate of $60.7 million underwriting income.
AXIS Capital Holdings Limited (AXS - Free Report) posted first-quarter 2024 operating income of $2.57 per share, beating the Zacks Consensus Estimate by 1.2%. The bottom line increased 10.3% year over year. Total operating revenues of $1.4 billion missed the Zacks Consensus Estimate by 2.8%. The top line, however, rose 5% year over year. Net investment income jumped 25% year over year to $167 million. Our estimate was $164.8 million.
Total expenses in the quarter under review increased 0.7% year over year to $1.15 billion. Our estimate was $1.1 billion. Pre-tax catastrophe and weather-related losses, and net of reinsurance were $20 million. This compares favorably with the year-ago loss of $38 million. AXIS Capital’s underwriting income of $145.6 million increased 4.5% year over year. Our estimate was $141.5 million. The combined ratio deteriorated 20 bps to 91.1.
American Financial Group, Inc. (AFG - Free Report) reported first-quarter 2024 net operating earnings per share of $2.76, which missed the Zacks Consensus Estimate by 0.3%. The bottom line decreased 4.5% year over year. Total revenues of $1.8 billion increased 5.1% year over year in the quarter. The growth came on the back of higher P&C insurance net earned premiums and other income. The top line missed the Zacks Consensus Estimate by 0.2%.
P&C insurance net earned premiums of $1.5 billion climbed 7.5% year over year. Net investment income decreased 8.7% year over year to $198 million in the quarter under review. The figure was lower than our estimate of $226.8 million. Total cost and expenses increased 8.5% year over year to $1.6 billion due to higher P&C insurance losses & expenses and other expenses. The figure was lower than our estimate of $1.7 billion.