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CNA Stock Trading at a Discount to Industry at 1.11X: Time to Hold?
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Key Takeaways
CNA's P&C NWP rose 4%, while new business increased 11% to a record $718 million in Q2 2026.
CNA's net investment income reached $701 million, supported by fixed-income and other investments.
CNA's Specialty and Commercial NWP both grew 5%, with Specialty new business rising 43% to $175 million.
CNA Financial Corporation (CNA - Free Report) shares trade at a discount to the industry. Its trailing 12-month price-to-book value of 1.11X is lower than the industry average of 1.41X. The insurer has a Value Score of A. The insurer has a market capitalization of $12.75 billion. The average share volume over the last three months was 0.5 million.
Image Source: Zacks Investment Research
Shares of some of its other industry players like RenaissanceRe Holdings Ltd. (RNR - Free Report) , First American Financial Corporation (FAF - Free Report) and NMI Holdings Inc. (NMIH - Free Report) are also trading at a discount.
CNA’s Efficient Use of Shareholder Capital
Return on equity (ROE) for the trailing 12 months was 11.3%, which compared favorably with the industry’s 7.5%, reflecting its efficiency in utilizing shareholders’ funds.
CNA’s Price Performance
CNA Financial shares have lost 5.3% in the past three months compared with the industry's 0.9% decline.
Image Source: Zacks Investment Research
CNA shares have weakened as investors remain concerned that premium growth is not translating into stronger underwriting profitability, as reflected in the deterioration of the underlying combined ratio and lower core earnings. Weakness in Life & Group adds to the pressure. However, selective underwriting, rising investment income, technology discipline and shareholder returns support CNA’s long-term earnings.
CNA’s Growth Projection
The Zacks Consensus Estimate for CNA Financial’s 2026 revenues is pegged at $13.92 billion, implying a year-over-year improvement of 3.1%. The consensus estimate for earnings per share (EPS) indicates a year-over-year decrease of 15%. The consensus estimate for 2027 earnings and revenues indicates an increase of 14.1% and 3.7%, respectively, from the corresponding 2026 estimates.
Muted Analyst Sentiment on CNA
The Zacks Consensus Estimate for 2026 and 2027 earnings remained unchanged over the last 30 days.
Factors Favoring CNA
CNA Financial’s premiums should continue to grow, supported by solid retention, favorable renewal premium change and new business growth across Specialty, Commercial and International segments. In the second quarter of 2026, P&C net written premiums (NWP) increased 4% year over year, while new business grew 11% to a record $718 million. Retention remained solid at 83%, with a 2% renewal premium change. Continued premium growth should support future revenues and earnings.
Net investment income increased to $701 million in the second quarter, supported by higher income from fixed-income investments, limited partnerships and common stocks. More importantly, fixed-income reinvestment rates remained above 4.5%, providing an opportunity to reinvest maturing securities at attractive yields. CNA expects fixed-income and other investment income of approximately $2.3 billion in 2026, up 2% year over year.
CNA’s key businesses, Specialty and Commercial, continued to expand. In the second quarter of 2026, Speciality and Commercial NWP both increased 5%. Specialty was particularly strong, with new business rising 43% to $175 million, supported by opportunities in healthcare and financial lines. CNA is also benefiting from growth opportunities in areas such as data centers, healthcare and financial lines. At the same time, the company remains selective in areas where pricing has weakened.
Favorable reinsurance renewals also support CNA’s underwriting economics. CNA's second-quarter 2026 property treaty renewals were oversubscribed, with favorable terms and pricing consistent with its experience. Management said the renewals remained economically accretive. These protections support balance-sheet durability across long-tail and catastrophe exposures.
CNA is increasingly using AI to improve productivity and efficiency. While the benefits are likely to emerge gradually, greater use of AI could help lower expenses and support margins over the long term. Management continues to view an expense ratio of around 30% as a reasonable run-rate for full-year 2026.
CNA Financial maintains a strong balance sheet and conservative capital structure, with capital above target levels for all ratings. Its solid financial position supports shareholder-friendly actions, including dividend increases. The company delivered a 6.3% dividend CAGR from 2015-2025, while its 3.6% yield remains well above the industry average of 0.2%.
Risks for CNA
CNA remains exposed to higher claims costs in long-tail businesses. In the second quarter of 2026, the P&C underlying loss ratio rose to 64.1%, while unfavorable reserve development in casualty lines hurt results. A $77 million after-tax charge related largely to legacy mass tort claims and social inflation also weighed on results.
Competition remains strong across commercial lines, limiting pricing power. In the second quarter of 2026, P&C written rates were flat, while international rates fell 5%. Softer pricing in some businesses could pressure margins if claims costs remain high.
End Notes
CNA’s earnings are supported by premium growth in selected businesses, strong Specialty momentum, higher reinvestment yields, favorable reinsurance terms, disciplined underwriting and a strong capital position. However, elevated loss costs and softer pricing pose risks.
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CNA Stock Trading at a Discount to Industry at 1.11X: Time to Hold?
Key Takeaways
CNA Financial Corporation (CNA - Free Report) shares trade at a discount to the industry. Its trailing 12-month price-to-book value of 1.11X is lower than the industry average of 1.41X. The insurer has a Value Score of A. The insurer has a market capitalization of $12.75 billion. The average share volume over the last three months was 0.5 million.
Image Source: Zacks Investment Research
Shares of some of its other industry players like RenaissanceRe Holdings Ltd. (RNR - Free Report) , First American Financial Corporation (FAF - Free Report) and NMI Holdings Inc. (NMIH - Free Report) are also trading at a discount.
CNA’s Efficient Use of Shareholder Capital
Return on equity (ROE) for the trailing 12 months was 11.3%, which compared favorably with the industry’s 7.5%, reflecting its efficiency in utilizing shareholders’ funds.
CNA’s Price Performance
CNA Financial shares have lost 5.3% in the past three months compared with the industry's 0.9% decline.
Image Source: Zacks Investment Research
CNA shares have weakened as investors remain concerned that premium growth is not translating into stronger underwriting profitability, as reflected in the deterioration of the underlying combined ratio and lower core earnings. Weakness in Life & Group adds to the pressure. However, selective underwriting, rising investment income, technology discipline and shareholder returns support CNA’s long-term earnings.
CNA’s Growth Projection
The Zacks Consensus Estimate for CNA Financial’s 2026 revenues is pegged at $13.92 billion, implying a year-over-year improvement of 3.1%. The consensus estimate for earnings per share (EPS) indicates a year-over-year decrease of 15%. The consensus estimate for 2027 earnings and revenues indicates an increase of 14.1% and 3.7%, respectively, from the corresponding 2026 estimates.
Muted Analyst Sentiment on CNA
The Zacks Consensus Estimate for 2026 and 2027 earnings remained unchanged over the last 30 days.
Factors Favoring CNA
CNA Financial’s premiums should continue to grow, supported by solid retention, favorable renewal premium change and new business growth across Specialty, Commercial and International segments. In the second quarter of 2026, P&C net written premiums (NWP) increased 4% year over year, while new business grew 11% to a record $718 million. Retention remained solid at 83%, with a 2% renewal premium change. Continued premium growth should support future revenues and earnings.
Net investment income increased to $701 million in the second quarter, supported by higher income from fixed-income investments, limited partnerships and common stocks. More importantly, fixed-income reinvestment rates remained above 4.5%, providing an opportunity to reinvest maturing securities at attractive yields. CNA expects fixed-income and other investment income of approximately $2.3 billion in 2026, up 2% year over year.
CNA’s key businesses, Specialty and Commercial, continued to expand. In the second quarter of 2026, Speciality and Commercial NWP both increased 5%. Specialty was particularly strong, with new business rising 43% to $175 million, supported by opportunities in healthcare and financial lines. CNA is also benefiting from growth opportunities in areas such as data centers, healthcare and financial lines. At the same time, the company remains selective in areas where pricing has weakened.
Favorable reinsurance renewals also support CNA’s underwriting economics. CNA's second-quarter 2026 property treaty renewals were oversubscribed, with favorable terms and pricing consistent with its experience. Management said the renewals remained economically accretive. These protections support balance-sheet durability across long-tail and catastrophe exposures.
CNA is increasingly using AI to improve productivity and efficiency. While the benefits are likely to emerge gradually, greater use of AI could help lower expenses and support margins over the long term. Management continues to view an expense ratio of around 30% as a reasonable run-rate for full-year 2026.
CNA Financial maintains a strong balance sheet and conservative capital structure, with capital above target levels for all ratings. Its solid financial position supports shareholder-friendly actions, including dividend increases. The company delivered a 6.3% dividend CAGR from 2015-2025, while its 3.6% yield remains well above the industry average of 0.2%.
Risks for CNA
CNA remains exposed to higher claims costs in long-tail businesses. In the second quarter of 2026, the P&C underlying loss ratio rose to 64.1%, while unfavorable reserve development in casualty lines hurt results. A $77 million after-tax charge related largely to legacy mass tort claims and social inflation also weighed on results.
Competition remains strong across commercial lines, limiting pricing power. In the second quarter of 2026, P&C written rates were flat, while international rates fell 5%. Softer pricing in some businesses could pressure margins if claims costs remain high.
End Notes
CNA’s earnings are supported by premium growth in selected businesses, strong Specialty momentum, higher reinvestment yields, favorable reinsurance terms, disciplined underwriting and a strong capital position. However, elevated loss costs and softer pricing pose risks.
Higher return on equity and attractive valuation also add to the upside. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.