It has been about a month since the last earnings report for CNA Financial (CNA Quick QuoteCNA - Free Report) . Shares have added about 4.1% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is CNA Financial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

CNA Financial Q3 Earnings, Revenues Top Estimates, Rise Y/Y

CNA Financial reported third-quarter 2024 core earnings of $1.08 per share, which beat the Zacks Consensus Estimate by 2.9%. The bottom line increased 1.9% year over year.

The quarterly results of CNA reflected higher income from fixed-income securities, a larger invested asset base, improved retention and renewal premium change, partly offset by escalating expenses and poor underwriting results.

Behind Third-Quarter Headlines

Total operating revenues of CNA Financial were $3.2 billion, up 8.8% year overyear due to higher premiums, net investment income and other revenues. The top line beat the Zacks Consensus Estimate by 2.3%.

Net written premiums of Property & Casualty Operations increased 8% year over year to $2.4 billion, driven by retention of 85% and renewal premium change of 5% with a written rate of 3%. New business grew 15%.

Net investment income rose 13.2% year over year to $626 million. The increase was driven by higher income from fixed income securities and increase from limited partnerships. Our estimate for net investment was $596.4 million. The Zacks Consensus Estimate was pegged at $596 million.

Total claims, benefits and expenses increased 8% to $3.3 billion, primarily due to higher insurance claims and policyholders' benefits, amortization of deferred acquisition costs, non-insurance warranty expense, other insurance-related expenses and other expenses. Our estimate was also $3.3 billion.

Catastrophe losses were $143 million, wider than a loss of $94 million in the year-ago quarter. Underwriting income declined 48% year over year to $68 million. Our estimate was $176 million.  

The combined ratio deteriorated 290 basis points (bps) year over year to 97.2. The Zacks Consensus Estimate was pegged at 93, while our estimate was 93.1

Segment Results

Specialty’s net written premiums increased 4% year over year to $862 million. Ourestimate was $919 million. The combined ratio deteriorated 290 bps to 93. The Zacks Consensus Estimate was pegged at 87.

Commercial’s net written premiums increased 14% year over year to $1.2 billion. Our estimate was $1.3 billion. The combined ratio deteriorated 130 bps to 100.2. The Zacks Consensus Estimate was pegged at 95.

International’s net written premiums increased 5% year over year to $311 million. Our estimate was $292.2 million. The combined ratio deteriorated 30 bps to 96.1. The Zacks Consensus Estimate was pegged at 107.

Life & Group’s net earned premiums were $110 million, down 1.8% year over year. Our estimate was $106.9 million. The core loss was $9 million, narrower than a loss of $29 million incurred in the year-ago quarter, primarily due to higher investment income.

Corporate & Other’s core loss of $44 million was wider than a loss of $33 million incurred in the year-earlier quarter.

Financial Update

The core return on equity remained flat year over year at 9.4%. Book value, excluding AOCI, as of Sept. 30 was $46.50 per share, up 0.2% from the 2023-end level. 

Statutory capital and surplus for the Combined Continental Casualty Companies increased 3.6% from the 2023-end level to $11.3 billion at quarter end.

Net cash flow provided by operating activities decreased 9.7% to $748 million in the quarter.

Dividend Update

CNA Financial’s board of directors approved a quarterly dividend of 44 cents per share to be paid out on Dec. 5 to shareholders as of Nov. 18.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -10.16% due to these changes.

VGM Scores

At this time, CNA Financial has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, CNA Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

CNA Financial is part of the Zacks Insurance - Property and Casualty industry. Over the past month, Axis Capital (AXS Quick QuoteAXS - Free Report) , a stock from the same industry, has gained 16.8%. The company reported its results for the quarter ended September 2024 more than a month ago.

Axis Capital reported revenues of $1.58 billion in the last reported quarter, representing a year-over-year change of +6.2%. EPS of $2.71 for the same period compares with $2.34 a year ago.

For the current quarter, Axis Capital is expected to post earnings of $2.63 per share, indicating a change of -10.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.3% over the last 30 days.

Axis Capital has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.