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CNA Q3 Earnings Miss on Higher LTC Reserves, Catastrophe Losses
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Key Takeaways
CNA's core earnings fell 50% to 75 cents per share, missing estimates by 35.3% amid higher cat losses.
P&C underwriting gain dropped 57.7%, while the combined ratio worsened 420 basis points to 97%.
International core income rose to $89 million, but Life & Group recorded a $171 million core loss.
CNA Financial Corporation (CNA - Free Report) reported third-quarter 2026 core earnings of 75 cents per share, missing the Zacks Consensus Estimate of $1.16 by 35.3%. The bottom line declined 50% year over year.
Revenues of $3.47 billion missed the consensus estimate of $3.53 billion by 1.7%. Unfavorable long-term care reserve assumption updates, higher catastrophe losses, and weaker underwriting results adversely impacted the quarterly results. Property & Casualty net written premiums increased 3% year over year.
CNA Financial Corporation Price, Consensus and EPS Surprise
Property & Casualty net written premiums increased 2.9% year over year to $2.51 billion. The figure was lower than our estimate of $2.54 billion. Net earned premiums rose 2% to $2.73 billion, supported by new business growth of 1% to $555 million and a 3% renewal premium change. The figure was lower than our estimate of $2.74 billion.
Retention improved to 83% from 81% a year earlier, while the rate change was 2% compared with 3% in the prior-year quarter. Management noted that rate increases in casualty lines affected by social inflation and Specialty partly offset pricing pressure in property, workers' compensation and International.
CNA Financial's Underwriting Margins Narrow
P&C underwriting gain declined 57.7% year over year to $82 million. The figure was lower than our estimate of $102.6 million. The combined ratio deteriorated 420 basis points to 97%, reflecting a 350-basis-point increase in the loss ratio to 66.9%.
The underlying combined ratio deteriorated 290 basis points to 94.2%. The underlying loss ratio increased 220 basis points to 64.1%, while the expense ratio rose 60 basis points to 29.7%. Catastrophe losses increased to $78 million from $41 million, primarily reflecting severe storm activity.
CNA's Specialty and Commercial Performance
Specialty net written premiums grew 4% year over year to $900 million. The figure was higher than our estimate of $878.6 million. Net earned premiums increased 3% to $907 million. The figure was higher than our estimate of $878.6 million. Its combined ratio deteriorated 350 basis points to 96.8%, reflecting higher underlying losses across various lines and increased acquisition costs. Our estimate was pegged at 98.8%.
Commercial net written premiums advanced 2% to $1.27 billion. The figure was lower than our estimate of $1.35 billion. Net earned premiums rose 2% to $1.48 billion. The figure was lower than our estimate of $1.51 billion. The combined ratio deteriorated 700 basis points to 99.7%, reflecting higher catastrophe losses and unfavorable prior-period reserve development. Our estimate was pegged at 96.2%.
Commercial underwriting gain declined to $3 million from $106 million. The figure was higher than our estimate of $63.1 million. The segment recorded $35 million of unfavorable reserve development, primarily related to excess casualty, partially offset by favorable development in workers' compensation and property.
CNA Financial's International Results Improve
International net written premiums increased 4% year over year to $333 million. The figure was higher than our estimate of $319.9 million. Net earned premiums rose 1% to $349 million. The figure was lower than our estimate of $352 million. Excluding currency fluctuations, net written premiums grew 6%, despite continued competitive pricing pressure.
The segment's combined ratio improved 570 basis points to 86.1%, benefiting from favorable prior-period reserve development of $35 million. Our estimate was pegged at 92.7%. However, the underlying combined ratio deteriorated 290 basis points to 94.1%, reflecting higher underlying losses and acquisition costs.
International core income increased to $89 million from $47 million in the prior-year quarter, supported by improved reported underwriting results.
CNA's Investment Income and Life & Group Results
Net investment income declined marginally to $635 million from $638 million. The Zacks Consensus Estimate was pegged at $682 million. Our estimate was pegged at $681.6 million. Fixed-income securities and other investments generated $587 million, up from $567 million, supported by a larger invested asset base and favorable reinvestment rates.
Limited partnership and common stock investment income declined to $48 million from $71 million, primarily due to weaker hedge fund returns.
Life & Group reported a core loss of $171 million compared with a loss of $22 million a year earlier. The results included a $137 million after-tax charge from annual long-term care reserve assumption updates, primarily reflecting higher cost-of-care inflation and morbidity assumptions.
Management expects higher future investment income from recent portfolio actions to almost entirely offset the unfavorable economic impact of these assumption changes over time.
CNA Financial's Costs and Capital Position
Total claims, benefits and expenses increased 8.5% year over year to $3.58 billion. The figure was higher than our estimate of $3.46 billion. Insurance claims and policyholders' benefits rose to $2.35 billion from $2.03 billion.
Net income declined 51.4% year over year to $196 million, or 72 cents per share. Core return on equity deteriorated 670 basis points to 6.5%.
Book value per share was $37.80 as of Sept. 30, 2026, compared with $42.93 at 2025-end. Book value excluding accumulated other comprehensive income was $46.11, reflecting 5% growth from year-end after adjusting for dividends paid.
Operating cash flow totaled $654 million compared with $720 million a year earlier. Statutory capital and surplus stood at $11.2 billion. The board declared a quarterly dividend of 48 cents per share, payable Dec. 3, 2026, to shareholders of record as of Nov. 16.
Performance of Other Property and Casualty Insurers
Arch Capital Group Ltd. (ACGL - Free Report) reported third-quarter 2026 operating income of $2.67 per share, beating the Zacks Consensus Estimate by 24.2%. The bottom line declined 3.6% year over year. Operating revenues fell 5.2% year over year to $4.47 billion, mainly due to lower net premiums earned and net realized investment losses. Revenues beat the Zacks Consensus Estimate by 0.3%.
Gross premiums written decreased 0.4% year over year to $5.39 billion. Pre-tax net investment income increased 10.5% year over year to $451 million, reflecting growth in average investable assets. The figure was higher than our estimate of $432.2 million. Pre-tax current accident year catastrophic losses for the company’s Insurance and Reinsurance segments, net of reinsurance and reinstatement premiums, totaled $234 million.
Chubb Limited (CB - Free Report) reported third-quarter 2026 core operating earnings of $7.66 per share, which beat the Zacks Consensus Estimate of $6.53 by 17.3%. The bottom line increased 0.8% year over year. Revenues of $16.81 billion surpassed the consensus mark of $16.72 billion by 0.55%.
Consolidated net premiums earned rose 3.9% year over year to $14.92 billion. P&C underwriting income declined 8.8% year over year to $2.06 billion. The combined ratio deteriorated 230 basis points to 84.1%. The Zacks Consensus Estimate is pegged at 87.
W.R. Berkley Corporation (WRB - Free Report) reported third-quarter 2026 operating income of $1.17 per share, which beat the Zacks Consensus Estimate by 2.63%. The bottom line increased 6.4% year over year. Operating revenues of $3.76 billion rose 1.8% year over year but missed the consensus estimate by 1.19%. Net premiums earned jumped 1.8% year over year. W.R. Berkley’s net premiums written increased 1.3% year over year to $3.27 billion.
Net investment income grew 9.2% year over year to $383.5 million, supported by higher income from the core investment portfolio. Income from fixed-maturity securities increased 10.3%, while the core portfolio contributed $369.1 million, up 12% year over year. The Zacks Consensus Estimate was pegged at $398.2 million. Our estimate was pegged at $384.3 billion.
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CNA Q3 Earnings Miss on Higher LTC Reserves, Catastrophe Losses
Key Takeaways
CNA Financial Corporation (CNA - Free Report) reported third-quarter 2026 core earnings of 75 cents per share, missing the Zacks Consensus Estimate of $1.16 by 35.3%. The bottom line declined 50% year over year.
Revenues of $3.47 billion missed the consensus estimate of $3.53 billion by 1.7%. Unfavorable long-term care reserve assumption updates, higher catastrophe losses, and weaker underwriting results adversely impacted the quarterly results. Property & Casualty net written premiums increased 3% year over year.
CNA Financial Corporation Price, Consensus and EPS Surprise
CNA Financial Corporation price-consensus-eps-surprise-chart | CNA Financial Corporation Quote
CNA's Premium Growth Supports Results
Property & Casualty net written premiums increased 2.9% year over year to $2.51 billion. The figure was lower than our estimate of $2.54 billion. Net earned premiums rose 2% to $2.73 billion, supported by new business growth of 1% to $555 million and a 3% renewal premium change. The figure was lower than our estimate of $2.74 billion.
Retention improved to 83% from 81% a year earlier, while the rate change was 2% compared with 3% in the prior-year quarter. Management noted that rate increases in casualty lines affected by social inflation and Specialty partly offset pricing pressure in property, workers' compensation and International.
CNA Financial's Underwriting Margins Narrow
P&C underwriting gain declined 57.7% year over year to $82 million. The figure was lower than our estimate of $102.6 million. The combined ratio deteriorated 420 basis points to 97%, reflecting a 350-basis-point increase in the loss ratio to 66.9%.
The underlying combined ratio deteriorated 290 basis points to 94.2%. The underlying loss ratio increased 220 basis points to 64.1%, while the expense ratio rose 60 basis points to 29.7%. Catastrophe losses increased to $78 million from $41 million, primarily reflecting severe storm activity.
CNA's Specialty and Commercial Performance
Specialty net written premiums grew 4% year over year to $900 million. The figure was higher than our estimate of $878.6 million. Net earned premiums increased 3% to $907 million. The figure was higher than our estimate of $878.6 million. Its combined ratio deteriorated 350 basis points to 96.8%, reflecting higher underlying losses across various lines and increased acquisition costs. Our estimate was pegged at 98.8%.
Commercial net written premiums advanced 2% to $1.27 billion. The figure was lower than our estimate of $1.35 billion. Net earned premiums rose 2% to $1.48 billion. The figure was lower than our estimate of $1.51 billion. The combined ratio deteriorated 700 basis points to 99.7%, reflecting higher catastrophe losses and unfavorable prior-period reserve development. Our estimate was pegged at 96.2%.
Commercial underwriting gain declined to $3 million from $106 million. The figure was higher than our estimate of $63.1 million. The segment recorded $35 million of unfavorable reserve development, primarily related to excess casualty, partially offset by favorable development in workers' compensation and property.
CNA Financial's International Results Improve
International net written premiums increased 4% year over year to $333 million. The figure was higher than our estimate of $319.9 million. Net earned premiums rose 1% to $349 million. The figure was lower than our estimate of $352 million. Excluding currency fluctuations, net written premiums grew 6%, despite continued competitive pricing pressure.
The segment's combined ratio improved 570 basis points to 86.1%, benefiting from favorable prior-period reserve development of $35 million. Our estimate was pegged at 92.7%. However, the underlying combined ratio deteriorated 290 basis points to 94.1%, reflecting higher underlying losses and acquisition costs.
International core income increased to $89 million from $47 million in the prior-year quarter, supported by improved reported underwriting results.
CNA's Investment Income and Life & Group Results
Net investment income declined marginally to $635 million from $638 million. The Zacks Consensus Estimate was pegged at $682 million. Our estimate was pegged at $681.6 million. Fixed-income securities and other investments generated $587 million, up from $567 million, supported by a larger invested asset base and favorable reinvestment rates.
Limited partnership and common stock investment income declined to $48 million from $71 million, primarily due to weaker hedge fund returns.
Life & Group reported a core loss of $171 million compared with a loss of $22 million a year earlier. The results included a $137 million after-tax charge from annual long-term care reserve assumption updates, primarily reflecting higher cost-of-care inflation and morbidity assumptions.
Management expects higher future investment income from recent portfolio actions to almost entirely offset the unfavorable economic impact of these assumption changes over time.
CNA Financial's Costs and Capital Position
Total claims, benefits and expenses increased 8.5% year over year to $3.58 billion. The figure was higher than our estimate of $3.46 billion. Insurance claims and policyholders' benefits rose to $2.35 billion from $2.03 billion.
Net income declined 51.4% year over year to $196 million, or 72 cents per share. Core return on equity deteriorated 670 basis points to 6.5%.
Book value per share was $37.80 as of Sept. 30, 2026, compared with $42.93 at 2025-end. Book value excluding accumulated other comprehensive income was $46.11, reflecting 5% growth from year-end after adjusting for dividends paid.
Operating cash flow totaled $654 million compared with $720 million a year earlier. Statutory capital and surplus stood at $11.2 billion.
The board declared a quarterly dividend of 48 cents per share, payable Dec. 3, 2026, to shareholders of record as of Nov. 16.
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 Property and Casualty Insurers
Arch Capital Group Ltd. (ACGL - Free Report) reported third-quarter 2026 operating income of $2.67 per share, beating the Zacks Consensus Estimate by 24.2%. The bottom line declined 3.6% year over year. Operating revenues fell 5.2% year over year to $4.47 billion, mainly due to lower net premiums earned and net realized investment losses. Revenues beat the Zacks Consensus Estimate by 0.3%.
Gross premiums written decreased 0.4% year over year to $5.39 billion. Pre-tax net investment income increased 10.5% year over year to $451 million, reflecting growth in average investable assets. The figure was higher than our estimate of $432.2 million. Pre-tax current accident year catastrophic losses for the company’s Insurance and Reinsurance segments, net of reinsurance and reinstatement premiums, totaled $234 million.
Chubb Limited (CB - Free Report) reported third-quarter 2026 core operating earnings of $7.66 per share, which beat the Zacks Consensus Estimate of $6.53 by 17.3%. The bottom line increased 0.8% year over year. Revenues of $16.81 billion surpassed the consensus mark of $16.72 billion by 0.55%.
Consolidated net premiums earned rose 3.9% year over year to $14.92 billion. P&C underwriting income declined 8.8% year over year to $2.06 billion. The combined ratio deteriorated 230 basis points to 84.1%. The Zacks Consensus Estimate is pegged at 87.
W.R. Berkley Corporation (WRB - Free Report) reported third-quarter 2026 operating income of $1.17 per share, which beat the Zacks Consensus Estimate by 2.63%. The bottom line increased 6.4% year over year. Operating revenues of $3.76 billion rose 1.8% year over year but missed the consensus estimate by 1.19%. Net premiums earned jumped 1.8% year over year. W.R. Berkley’s net premiums written increased 1.3% year over year to $3.27 billion.
Net investment income grew 9.2% year over year to $383.5 million, supported by higher income from the core investment portfolio. Income from fixed-maturity securities increased 10.3%, while the core portfolio contributed $369.1 million, up 12% year over year. The Zacks Consensus Estimate was pegged at $398.2 million. Our estimate was pegged at $384.3 billion.