CNA cites ‘favourable market conditions’ in solid Q3 results
Chicago-based insurer CNA Financial Corporation has reported much-improved results for the third quarter compared with a year earlier, driven by better investment income and lower catastrophe losses.
The insurer reported a net income of $258 million for this third quarter of 2023, which compares to the net loss of $42 million reported in the same period last year.
Core income for the quarter was $289 million, versus $43 million in the prior year quarter, which according to CNA, was driven by a 31% increase in net investment income, record levels of P&C underlying underwriting gain, lower levels of catastrophe loss, and improved results in Life & Group.
Net investment losses for the quarter were $31 million, an improved figure when compared to $85 million the third quarter of 2022. Net investment income was up 31% to $553 million pretax, which includes a $72 million increase from limited partnerships and common stock to $28 million and a $59 million increase from fixed income securities and other investments to $525 million.
For the property & casualty (P&C) business, core income was $351 million for Q3 2023 an increase of $91 million compared to the prior year quarter driven by higher net investment income, record high pretax underlying underwriting income and lower catastrophe losses.
P&C segments, excluding third party captives, generated gross written premium growth of 7% and net written premium growth of 6% for the third quarter of 2023 driven by renewal premium change of +6%, including rate of +5% and exposure change of +1%.
The Life & Group segment produced a core loss of $29 million for the quarter, versus $192 million in the prior year quarter, which according to CNA reflects an unfavorable after-tax impact of $2 million in 2023 and $143 million in 2022 as a result of the annual reserve reviews.
CNA’s combined ratio for the quarter saw an improvement compared to last year’s Q3, from 95.8% to 94.3%. Catastrophe losses were $94 million compared with $114 million for Q3 2022.
Additionally, P&C segments, excluding third party captives, generated gross written premium growth of 7% and net written premium growth of 6%. Excluding currency fluctuations, gross written premiums grew 7% and net written premiums grew 5%.
Dino Robusto, chairman & CEO of CNA Financial Corporation, said: “Our annual Life and Group reserve assumption review resulted in a neutral change this year compared to a $143 million after-tax loss last year. Excluding the impacts of the Life & Group reserve review, our core income was still up by 56% this quarter.
“P&C core income was up 35% in the quarter driven by higher investment income, and $220 million of underlying underwriting income. The all-in combined ratio was 94.3% with pretax catastrophe losses of $94 million or 4.1 points, and 0.2 points of favorable prior period development. The P&C underlying combined ratio was 90.4%.”
He added: “We recorded 7% growth in gross written premium ex captives and 6% growth in net written premium. Our overall rate change remained stable at 5%, and importantly, rates improved in our casualty lines most impacted by social inflation, and rate turned positive in Specialty as decreases in management liability pricing moderated in the quarter.
“We are encouraged by these trends as we continue to cover our long run loss cost trends from written rate increases together with the exposure increases that act like rate, and we are confident in our ability to continue to leverage the favorable market conditions.”
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