Back to top

Image: Bigstock

CNA Financial (CNA) Q1 Earnings Top, Investment Income Up

Read MoreHide Full Article

CNA Financial Corporation CNA reported first-quarter 2019 core earnings of $1.17 per share, which beat the Zacks Consensus Estimate of $1.04. Also, the bottom line increased 13.6% year over year.
 
In the quarter, P&C segments generated modest gross premium growth. Premium rate increased across many major lines. Investment income rebounded favorably and long-term care generated positive core income.

Including net realized investment gain, net income was $1.25 per share, up from $1.07 in the year-ago quarter.

CNA Financial Corporation Price, Consensus and EPS Surprise

Behind First-Quarter Headlines

Net investment income improved 26.3% year over year to $360 million.

Net written premiums at Property & Casualty Operations declined 0.4% year over year to $1.8 billion.

Combined ratio deteriorated 470 basis points year over year to 97.8%.

Book value as of Mar 31, 2019 was $43.38 per share, down 2.6% from Dec 31, 2018.

Core return on equity was 10.7%, up 140 basis points (bps).

Segment Results

Specialty’s net written premiums rose nearly 2% year over year to $698 million, driven by strong retention, higher new business and positive renewal premium change.  Combined ratio deteriorated 200 bps to 93.5%, attributable to 180 bps-point increase in expense ratio driven by an unusually low acquisition ratio in the first quarter of 2018 and lower earned premium.

Commercial’s net written premiums increased nearly 2% year over year to $849 million, driven by positive renewal premium change, partially offset by a higher level of ceded reinsurance. Combined ratio deteriorated 260 bps to 96.5%.

International’s net written premiums dropped nearly 12% year over year to $259 million. Combined ratio improved 200 bps to 94.1% due to improvement in underlying loss ratio, partially offset by a 90 bps-point increase in expense ratio due to higher acquisition costs.

Life & Group’s total operating revenues were $335 million, flat year over year. Core income of $10 million plunged 28.6% from the year-ago period.
 
Corporate & Other’s core loss of $6 million was substantially narrower than a loss of $60 million in the prior-year period.
 
Dividend Update

CNA Financial’s board of directors approved a quarterly dividend of 35 cents to be paid on May 30, 2019 to stockholders of record as of May 14, 2019.

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 P&C Insurers

Among the other players from the same space that have reported first-quarter earnings so far, the bottom line of The Travelers Companies Inc. (TRV - Free Report) , The Progressive Corp.’s PGR and RLI Corp. RLI beat the respective Zacks Consensus Estimate.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


The Travelers Companies, Inc. (TRV) - free report >>