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CNA Financial Corporation (CNA - Free Report) reported second-quarter 2019 core earnings of $1.08 per share, which beat the Zacks Consensus Estimate of $1.01. Also, the bottom line increased 9.1% year over year.
The improvement stemmed from better underlying loss ratio, increase in new business and higher rate increases.
Behind Second-Quarter Headlines
Net written premiums at Property & Casualty Operations improved 6% year over year to $1.9 billion driven by rate increase and higher new business.
Net investment income inched up 1% year over year to $420 million driven by fixed income securities.
Combined ratio deteriorated 190 basis points year over year to 95.7%.
Book value as of Jun 30, 2019 was $44.08 per share, down 1.1% from Dec 31, 2018.
Core return on equity was 9.9%, up 80 basis points (bps).
CNA Financial Corporation Price, Consensus and EPS Surprise
Specialty’s net written premiums rose nearly 4% year over year to $713 million, driven by higher new business, strong retention and favorable rate. Combined ratio deteriorated 390 bps to 90.7%.
Commercial’s net written premiums increased 13% year over year to $912 million, driven by higher new business and favorable rate. Combined ratio deteriorated 310 bps to 99.7%.
International’s net written premiums dropped 8% year over year to $249 million attributable to strategic exit from certain Hardy business classes in the fourth quarter of 2018. Combined ratio improved 720 bps to 97.5%.
Life & Group’s total operating revenues were $335 million, up 1.8% year over year. Core income of $7 million rebounded from the year-ago loss of $10 million.
Corporate & Other’s core loss of $11 million was substantially narrower than a loss of $39 million in the prior-year period. Dividend Update
CNA Financial’s board of directors approved a quarterly dividend of 35 cents to be paid out on Sep 5, 2019 to stockholders of record as of Aug 19.
Second-quarter earnings of The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate while that of The Travelers Companies, Inc. (TRV - Free Report) missed expectations.
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CNA Financial (CNA) Q2 Earnings Beat, Premiums Rise Y/Y
CNA Financial Corporation (CNA - Free Report) reported second-quarter 2019 core earnings of $1.08 per share, which beat the Zacks Consensus Estimate of $1.01. Also, the bottom line increased 9.1% year over year.
The improvement stemmed from better underlying loss ratio, increase in new business and higher rate increases.
Behind Second-Quarter Headlines
Net written premiums at Property & Casualty Operations improved 6% year over year to $1.9 billion driven by rate increase and higher new business.
Net investment income inched up 1% year over year to $420 million driven by fixed income securities.
Combined ratio deteriorated 190 basis points year over year to 95.7%.
Book value as of Jun 30, 2019 was $44.08 per share, down 1.1% from Dec 31, 2018.
Core return on equity was 9.9%, up 80 basis points (bps).
CNA Financial Corporation Price, Consensus and EPS Surprise
CNA Financial Corporation price-consensus-eps-surprise-chart | CNA Financial Corporation Quote
Segment Results
Specialty’s net written premiums rose nearly 4% year over year to $713 million, driven by higher new business, strong retention and favorable rate. Combined ratio deteriorated 390 bps to 90.7%.
Commercial’s net written premiums increased 13% year over year to $912 million, driven by higher new business and favorable rate. Combined ratio deteriorated 310 bps to 99.7%.
International’s net written premiums dropped 8% year over year to $249 million attributable to strategic exit from certain Hardy business classes in the fourth quarter of 2018. Combined ratio improved 720 bps to 97.5%.
Life & Group’s total operating revenues were $335 million, up 1.8% year over year. Core income of $7 million rebounded from the year-ago loss of $10 million.
Corporate & Other’s core loss of $11 million was substantially narrower than a loss of $39 million in the prior-year period.
Dividend Update
CNA Financial’s board of directors approved a quarterly dividend of 35 cents to be paid out on Sep 5, 2019 to stockholders of record as of Aug 19.
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
Second-quarter earnings of The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate while that of The Travelers Companies, Inc. (TRV - Free Report) missed expectations.
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.
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