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CNA Financial (CNA) Q3 Earnings Beat Estimates, Soar Y/Y

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CNA Financial Corporation (CNA - Free Report) reported third-quarter 2018 core income of $1.17 per share, beating the Zacks Consensus Estimate by 3.5%. Also, the bottom line increased by a whopping 101.7% from the year-ago quarter.

CNA Financial Corporation Price, Consensus and EPS Surprise


CNA Financial Corporation Price, Consensus and EPS Surprise | CNA Financial Corporation Quote

The company’s solid core income growth in the reported period marked its best quarterly performance since 2010. Moreover, the insurer witnessed a strong performance at its property and casualty (P&C) business in the quarter under review.

Including net realized investment gains as well as net deferred tax asset remeasurement, net income of $1.23 per share skyrocketed 132.1% year over year.

Behind Third-Quarter Headlines

Net investment income grew nearly 10.2% year over year to $400 million owing to lower tax rate.

Net written premiums at Property & Casualty Operations slipped 1.1% year over year to $1.6 billion. Core income soared 82.6% year over year to $305 million. Combined ratio improved 950 basis points (bps) on a year-over-year basis to 94.2%.

As of Sep 30, 2018, book value (excluding AOCI) was $45.20 per share, up 0.4% from the level on Dec 31, 2017.

Segment Results

Specialty net written premiums slid 1% year over year to $688 million. Combined ratio deteriorated 390 bps to 87%.

Commercial net written premiums remained flat year over year at $697 million. Combined ratio improved 1850 bps to 97.4%.

International net written premiums declined 5.3% year over year to $196 million. Combined ratio improved 2200 bps to 103.9%.

Life & Group Non-Core total operating revenues inched up 0.3% year over year to $332 million. Core income of $32 million skyrocketed 220% from the year-ago period. This upside was attributable to an after-tax reduction of long-term care claim reserves resulting from the annual claims experience study that amounted to $24 million.
Corporate & Other Non-Core loss of $20 million was slightly wider than the loss of $18 million in the prior-year period.
Dividend Update

CNA Financial’s board of directors approved a quarterly dividend amounting to 35 cents per share, payable Dec 5 to stockholders of record as of Nov 19, 2018.

Zacks Rank

CNA Financial carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other P&C Insurers

Among other players from the insurance industry, which have already reported third-quarter earnings, the bottom line of The Progressive Corporation (PGR - Free Report) and The Travelers Companies, Inc.’s (TRV - Free Report) outpaced the respective Zacks Consensus Estimate while that of RLI Corp.’s (RLI - Free Report) missed the same.

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