Earnings Document
FOR IMMEDIATE RELEASE
CNA FINANCIAL ANNOUNCES SECOND QUARTER 2022
NET INCOME OF
- Net income of
$205 million , which includes$40 million of net investment losses, versus net income of$368 million , which includes$27 million of net investment gains in the prior year quarter. Core income of$245 million versus$341 million in the prior year quarter reflects lower investment income from LPs and common stock, partially offset by higher underwriting income and higher income from fixed income securities. - P&C core income of
$317 million versus$351 million in the prior year quarter reflects lower investment income from LPs and common stock, partially offset by pretax underwriting income of$185 million , up 64%, and higher income from fixed income securities. Life & Group core income of$6 million versus$43 million in the prior year quarter reflects lower investment income from LPs.- Corporate & Other core loss of
$(78) million versus core loss of$(53) million in the prior year quarter, includes a$51 million after-tax charge related to unfavorable prior period development largely associated with legacy mass tort abuse claims, including the recentDiocese of Rochester proposed settlement. - Net investment income of
$432 million pretax includes a$16 million increase from fixed income securities to$451 million , offset by a$171 million decline from LPs and common stock. - The P&C combined ratio was 91.0%, the lowest in over five years, compared with 94.0% in the prior year quarter, including 1.8 points of catastrophe loss impact compared with 2.8 points in the prior year quarter.
- The underlying combined ratio was 90.8%,the lowest on record, compared with 91.4% in the prior year quarter. The underlying loss ratio was 60.0% and the expense ratio was 30.5%.
- P&C segments, excluding third party captives, generated gross written premium growth of 17%. Net written premium growth was 20% in the quarter. Excluding the one-timecatch-up related to the addition of a property quota share reinsurance treaty in the prior period, net written premiums grew 13%.
- P&C written rate of +6% and earned rate of +8% for the quarter.
- Book value per share excluding AOCI of
$45.06 , a 4% increase from year-end 2021 adjusting for$2.80 of dividends per share; book value per share of$35.06 was also impacted by a decrease in AOCI reflecting the effect of higher interest rates on fixed income net unrealized gains and losses. - Board of Directors declares regular quarterly cash dividend of
$0.40 per share.
1
Our Property & Casualty segments produced core income of
Our
Results for the Three Months |
Results for the Six Months |
|||||||||||||
Ended |
Ended |
|||||||||||||
($ millions, except per share data) |
2022 |
2021 |
2022 |
2021 |
||||||||||
Net income |
$ |
205 |
$ |
368 |
$ |
518 |
$ |
680 |
||||||
Core income (a) |
245 |
341 |
561 |
604 |
||||||||||
Net income per diluted share |
$ |
0.75 |
$ |
1.35 |
$ |
1.90 |
$ |
2.49 |
||||||
Core income per diluted share |
0.90 |
1.25 |
2.06 |
2.21 |
||||||||||
|
|
|||||||||||||
Book value per share |
$ |
35.06 |
$ |
47.20 |
||||||||||
Book value per share excluding AOCI |
45.06 |
46.02 |
- Management utilizes the core income (loss) financial measure to monitor the Company's operations. Please refer herein to the Reconciliation of GAAP Measures to Non-GAAP Measures section of this press release for further discussion of this non-GAAP measure.
"Core income of
2
Property & Casualty Operations
Results for the Three |
Results for the Six |
|||||||||||||||
Months Ended |
Months Ended |
|||||||||||||||
($ millions) |
2022 |
2021 |
2022 |
2021 |
||||||||||||
Gross written premiums ex. 3rd party captives |
$ |
2,676 |
$ |
2,296 |
$ |
5,130 |
$ |
4,566 |
||||||||
GWP ex. 3rd party captives change (% year over year) |
17 |
% |
12 |
% |
||||||||||||
Net written premiums |
$ |
2,296 |
$ |
1,909 |
$ |
4,319 |
$ |
3,846 |
||||||||
NWP change (% year over year) |
20 |
% |
12 |
% |
||||||||||||
Net investment income |
$ |
227 |
$ |
322 |
$ |
462 |
$ |
601 |
||||||||
Core income |
317 |
351 |
638 |
614 |
||||||||||||
Loss ratio excluding catastrophes and development |
60.0 |
% |
59.5 |
% |
60.0 |
% |
59.8 |
% |
||||||||
Effect of catastrophe impacts |
1.8 |
2.8 |
1.4 |
4.7 |
||||||||||||
Effect of development-related items |
(1.6) |
(0.2) |
(1.0) |
(0.3) |
||||||||||||
Loss ratio |
60.2 |
% |
62.1 |
% |
60.4 |
% |
64.2 |
% |
||||||||
Expense ratio |
30.5 |
% |
31.6 |
% |
30.7 |
% |
31.5 |
% |
||||||||
Combined ratio |
91.0 |
% |
94.0 |
% |
91.4 |
% |
96.0 |
% |
||||||||
Combined ratio excluding catastrophes and development |
90.8 |
% |
91.4 |
% |
91.0 |
% |
91.6 |
% |
- The underlying combined ratio improved 0.6 points as compared with the prior year quarter. The expense ratio improved 1.1 points compared to the prior year quarter driven by lower acquisition costs and net earned premium growth of 7%. The underlying loss ratio increased 0.5 points driven by a shift in mix of business in Commercial associated with the property quota share treaty purchased during June of 2021.
- The combined ratio improved 3.0 points as compared with the prior year quarter. Catastrophe losses were
$37 million , or 1.8 points of the loss ratio in the quarter compared with$54 million , or 2.8 points of the loss ratio, for the prior year quarter. Favorable net prior period development improved the loss ratio by 1.6 points in the current quarter compared with 0.2 points of improvement in the prior year quarter. - P&C segments, excluding third party captives, generated gross written premium growth of 17% and net written premium growth of 20%. Excluding the impact of a one-timecatch-up related to the addition of a property quota share reinsurance treaty in the prior period, net written premiums grew 13%.
3
Business Operating Highlights
Specialty
Results for the Three |
Results for the Six Months |
|||||||||||||||
Months Ended |
Ended |
|||||||||||||||
($ millions) |
2022 |
2021 |
2022 |
2021 |
||||||||||||
Gross written premiums ex. 3rd party captives |
$ |
973 |
$ |
897 |
$ |
1,858 |
$ |
1,713 |
||||||||
GWP ex. 3rd party captives change (% year over year) |
8 |
% |
8 |
% |
||||||||||||
Net written premiums |
$ |
832 |
$ |
786 |
$ |
1,603 |
$ |
1,528 |
||||||||
NWP change (% year over year) |
6 |
% |
5 |
% |
||||||||||||
Core income |
$ |
161 |
$ |
188 |
$ |
324 |
$ |
358 |
||||||||
Loss ratio excluding catastrophes and development |
58.6 |
% |
59.0 |
% |
58.7 |
% |
59.2 |
% |
||||||||
Effect of catastrophe impacts |
0.1 |
- |
0.1 |
0.3 |
||||||||||||
Effect of development-related items |
(1.2) |
(1.3) |
(1.3) |
(1.6) |
||||||||||||
Loss ratio |
57.5 |
% |
57.7 |
% |
57.5 |
% |
57.9 |
% |
||||||||
Expense ratio |
30.4 |
% |
30.0 |
% |
30.7 |
% |
30.2 |
% |
||||||||
Combined ratio |
88.1 |
% |
87.9 |
% |
88.4 |
% |
88.3 |
% |
||||||||
Combined ratio excluding catastrophes and development |
89.2 |
% |
89.2 |
% |
89.6 |
% |
89.6 |
% |
- The underlying combined ratio was consistent with the prior year quarter. The underlying loss ratio improved 0.4 points as compared with the prior year quarter. The expense ratio increased 0.4 points as compared with the prior year quarter driven by higher underwriting expenses.
- The combined ratio increased 0.2 points as compared with the prior year quarter. Favorable net prior period development improved the loss ratio by 1.2 points in the quarter compared with 1.3 points of improvement in the prior year quarter.
- Gross written premiums, excluding third party captives, grew 8% and net written premiums grew 6% for the second quarter of 2022.
4
Commercial
Results for the Three |
Results for the Six Months |
|||||||||||||||
Months Ended |
Ended |
|||||||||||||||
($ millions) |
2022 |
2021 |
2022 |
2021 |
||||||||||||
Gross written premiums ex. 3rd party captives |
$ |
1,321 |
$ |
1,060 |
$ |
2,527 |
$ |
2,171 |
||||||||
GWP ex. 3rd party captives change (% year over year) |
25 |
% |
16 |
% |
||||||||||||
Net written premiums |
$ |
1,134 |
$ |
831 |
$ |
2,135 |
$ |
1,791 |
||||||||
NWP change (% year over year) |
36 |
% |
19 |
% |
||||||||||||
Core income |
$ |
138 |
$ |
137 |
$ |
270 |
$ |
206 |
||||||||
Loss ratio excluding catastrophes and development |
61.5 |
% |
60.1 |
% |
61.5 |
% |
60.4 |
% |
||||||||
Effect of catastrophe impacts |
3.0 |
5.8 |
2.4 |
9.6 |
||||||||||||
Effect of development-related items |
(1.8) |
0.8 |
(0.9) |
0.7 |
||||||||||||
Loss ratio |
62.7 |
% |
66.7 |
% |
63.0 |
% |
70.7 |
% |
||||||||
Expense ratio |
30.0 |
% |
32.3 |
% |
30.3 |
% |
31.8 |
% |
||||||||
Combined ratio |
93.2 |
% |
99.6 |
% |
93.8 |
% |
103.1 |
% |
||||||||
Combined ratio excluding catastrophes and development |
92.0 |
% |
93.0 |
% |
92.3 |
% |
92.8 |
% |
- The underlying combined ratio improved 1.0 point as compared with the prior year quarter, reflecting the lowest underlying combined ratio on record. The expense ratio improved 2.3 points driven by lower acquisition costs and net earned premium growth of 11%. The underlying loss ratio increased 1.4 points primarily driven by a shift in mix of business associated with the property quota share treaty purchased during June of 2021. Our property coverages, which have a lower underlying loss ratio than most other commercial coverages, now represent a smaller proportion of net earned premiums.
- The combined ratio improved 6.4 points as compared with the prior year quarter. Catastrophe losses were
$29 million , or 3.0 points of the loss ratio in the second quarter of 2022 compared with$51 million , or 5.8 points of the loss ratio, for the prior year quarter. Favorable net prior year development improved the loss ratio by 1.8 points in the quarter compared with 0.8 points of unfavorable development increasing the loss ratio in the prior year quarter. - Gross written premiums, excluding third party captives, grew 25%. Excluding the impact of a one- time catch-up related to the addition of a property quota share reinsurance treaty in the prior period, net written premiums grew 20% for the second quarter of 2022.
5
Attachments
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