Earnings Document

FOR IMMEDIATE RELEASE

CNA FINANCIAL ANNOUNCES SECOND QUARTER 2023

NET INCOME OF $1.04 PER SHARE AND CORE INCOME OF $1.13 PER SHARE

Net income up 49% to $283 million versus $190 million in the prior year quarter; core income up 34% to $308 million versus $230 million in the prior year quarter.
P&C core income of $374 million versus $317 million in the prior year quarter, reflects higher investment income and record high pretax underlying underwriting income, partially offset by higher catastrophe losses and lower favorable net prior year development.
Corporate & Other core loss of $46 million versus $78 million in the prior year quarter.
Net investment income up 33% to $575 million pretax, includes an $83 million increase from limited partnerships and common stock to $68 million and a $60 million increase from fixed income securities and other investments to $507 million.
P&C combined ratio of 93.8%, compared with 91.0% in the prior year quarter, including 3.1 points of catastrophe loss impact compared with 1.8 points in the prior year quarter. The underlying combined ratio was 91.1% compared with 90.8%, in the prior year quarter. The underlying loss ratio was 59.9% and the expense ratio was 30.9%.
P&C segments, excluding third party captives, generated gross written premium growth of 12% and net written premium growth of 9%. Excluding currency fluctuations, gross written premiums grew 12% and net written premiums grew 10%. P&C renewal premium change of +7%, with written rate of +5% and exposure change of +2%.
Book value per share of $32.22; book value per share excluding AOCI of $44.86, a 5% increase from year-end 2022 adjusting for $2.04 of dividends per share.
Board of Directors declares regular quarterly cash dividend of $0.42 per share.

CHICAGO, July 31, 2023 --- CNA Financial Corporation (NYSE: CNA) today announced second quarter 2023 net income of $283 million, or $1.04 per share, versus $190 million, or $0.69 per share, in the prior year quarter. Net investment losses for the quarter were $25 million compared to $40 million in the prior year quarter. Core income for the quarter was up 34% to $308 million, or $1.13 per share, versus $230 million, or $0.84 per share, in the prior year quarter.

Our Property & Casualty segments produced core income of $374 million for the second quarter of 2023, an increase of $57 million compared to the prior year quarter driven by higher investment income and record high pretax underlying underwriting income, partially offset by higher catastrophe losses and lower favorable net prior year development. P&C segments, excluding third party captives, generated gross written premium growth of 12% and net written premium growth of 9% for the second quarter of 2023 driven by renewal premium change of +7%, including rate of +5%, exposure change of +2% and new business growth of 11%. Excluding currency fluctuations, gross written premiums grew 12% and net written premiums grew 10%.

Our Life & Group segment produced a core loss of $20 million for the second quarter of 2023 versus $9 million in the prior year quarter primarily due to long term care policy buyouts.

Our Corporate & Other segment produced a core loss of $46 million for the second quarter of 2023 versus $78 million in the prior year quarter driven by lower net prior year loss reserve development and higher net investment income.

CNA Financial declared a quarterly dividend of $0.42 per share, payable August 31, 2023 to stockholders of record on August 14, 2023.

	Results for the Three Months			Results for the Six Months
		Ended June 30			Ended June 30
($ millions, except per share data)		2023			2022 (a)			2023		2022 (a)
Net income	$	283		$	190		$	580	$	485
Core income (b)		308			230			633		528
Net income per diluted share	$	1.04	$	0.69	$	2.13	$	1.78
Core income per diluted share		1.13			0.84			2.33		1.94

		June 30, 2023		December 31, 2022 (a)
Book value per share	$	32.22	$	31.55
Book value per share excluding AOCI		44.86		44.83

As of January 1, 2023, the Company adopted LDTI using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance.
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.

"We produced strong results in the quarter with double-digittop-line growth and continued excellent profitability. Core income increased by 34% in the quarter and net investment income was up 33% with significant increases in LPs, common stock, and the fixed income portfolio.

The all-in combined ratio was very strong at 93.8%, with pretax catastrophe losses of $68 million, or 3.1 points of the combined ratio, and 0.4 points of favorable prior period development. The P&C underlying combined ratio of 91.1% generated a record $200 million of pretax P&C underlying underwriting gain.

In the quarter, we achieved very strong production performance with 12% growth in gross written premium ex captives and 9% growth in net written premium. Renewal premium change was 7% for P&C overall and 11% in Commercial, which was up 2 points from the first quarter. Retention remained consistently high at 86% and new business was up 11%, similar to the first quarter.

With the strong top-line and bottom-line results in the first half of the year and improved investment returns, we are optimistic about our opportunities through the remainder of 2023," said Dino E. Robusto, Chairman & Chief Executive Officer of CNA Financial Corporation.

Property & Casualty Operations

		Results for the Three				Results for the Six
		Months Ended June 30			Months Ended June 30
($ millions)		2023				2022					2023		2022
Gross written premiums ex. 3rd party captives	$	2,986	$	2,676			$	5,710	$	5,130
GWP ex. 3rd party captives change (% year over year)		12	%								11	%
Net written premiums	$	2,513	$	2,296			$	4,760	$	4,319
NWP change (% year over year)		9	%								10	%
Net earned premiums	$	2,234	$	2,037			$	4,367	$	3,977
NEP change (% year over year)		10	%								10	%
Underwriting gain	$	138	$	185			$	268	$	341
Net investment income	$	332	$	227			$	633	$	462
Core income	$	374	$	317			$	720	$	638
Loss ratio excluding catastrophes and development		59.9	%			60.0		%			59.9	%	60.0	%
Effect of catastrophe impacts		3.1				1.8					2.7		1.4
Effect of development-related items		(0.4)				(1.6)					0.2		(1.0)
Loss ratio		62.6	%			60.2		%			62.8	%	60.4	%

Expense ratio		30.9	%			30.5		%			30.8	%	30.7	%
Combined ratio		93.8	%			91.0		%			93.9	%	91.4	%
Combined ratio excluding catastrophes and development		91.1	%			90.8		%			91.0	%	91.0	%

The underlying combined ratio increased 0.3 points as compared with the prior year quarter. The expense ratio increased 0.4 points driven by higher employee related costs. The underlying loss ratio was largely consistent with the prior year quarter.
The combined ratio increased 2.8 points as compared with the prior year quarter. Catastrophe losses were $68 million, or 3.1 points of the loss ratio in the quarter compared with $37 million, or 1.8 points of the loss ratio, for the prior year quarter. Favorable net prior year development improved the loss ratio by 0.4 points in the current quarter as compared with 1.6 points of improvement in the prior year quarter.
P&C segments, excluding third party captives, generated gross written premium growth of 12% and net written premium growth of 9%. Excluding currency fluctuations, gross written premiums grew 12% and net written premiums grew 10%.

Business Operating Highlights

Specialty

		Results for the Three			Results for the Six Months
		Months Ended June 30				Ended June 30
($ millions)		2023				2022					2023			2022
Gross written premiums ex. 3rd party captives	$	961			$	973				$	1,847		$	1,858
GWP ex. 3rd party captives change (% year over year)		(1) %								(1) %
Net written premiums	$	825	$	832			$	1,613	$	1,603
NWP change (% year over year)		(1) %								1	%
Net earned premiums	$	812	$	794			$	1,609	$	1,566
NEP change (% year over year)		2	%								3	%
Underwriting gain	$	74	$	93			$	154	$	181
Loss ratio excluding catastrophes and development		58.6	%			58.6		%			58.5	%		58.7	%
Effect of catastrophe impacts		-				0.1					-			0.1
Effect of development-related items		(0.3)				(1.2)					(0.2)			(1.3)
Loss ratio		58.3	%			57.5		%			58.3	%		57.5	%

Expense ratio		32.4	%			30.4		%			31.9	%		30.7	%
Combined ratio		90.9	%			88.1		%			90.4	%		88.4	%
Combined ratio excluding catastrophes and development		91.2	%			89.2		%			90.6	%		89.6	%

The underlying combined ratio increased 2.0 points as compared with the prior year quarter due to an increase in the expense ratio driven by higher employee related and acquisition costs.
The combined ratio increased 2.8 points as compared with the prior year quarter. Favorable net prior year development improved the loss ratio by 0.3 points in the quarter compared with 1.2 points of improvement in the prior year quarter.
Gross written premiums, excluding third party captives and net written premiums both declined 1% for the second quarter of 2023.

Commercial

		Results for the Three			Results for the Six Months
		Months Ended June 30				Ended June 30
($ millions)		2023				2022					2023			2022
Gross written premiums ex. 3rd party captives	$	1,604			$	1,321				$	3,044		$	2,527
GWP ex. 3rd party captives change (% year over year)		21	%								20	%
Net written premiums	$	1,329	$	1,134			$	2,517	$	2,135
NWP change (% year over year)		17	%								18	%
Net earned premiums	$	1,120	$	974			$	2,166	$	1,878
NEP change (% year over year)		15	%								15	%
Underwriting gain	$	42	$	69			$	83	$	117
Loss ratio excluding catastrophes and development		61.5	%			61.5		%			61.5	%		61.5	%
Effect of catastrophe impacts		5.2				3.0					4.7			2.4
Effect of development-related items		(0.5)				(1.8)					(0.3)			(0.9)
Loss ratio		66.2	%			62.7		%			65.9	%		63.0	%

Expense ratio		29.6	%			30.0		%			29.8	%		30.3	%
Combined ratio		96.3	%			93.2		%			96.2	%		93.8	%
Combined ratio excluding catastrophes and development		91.6	%			92.0		%			91.8	%		92.3	%

The underlying combined ratio improved 0.4 points as compared with the prior year quarter, reflecting the lowest underlying combined ratio on record. The expense ratio improved 0.4 points driven by net earned premium growth of 15%.
The combined ratio increased 3.1 points as compared with the prior year quarter. Catastrophe losses were $59 million, or 5.2 points of the loss ratio in the quarter compared with $29 million, or 3.0 points of the loss ratio, for the prior year quarter. Favorable net prior year development improved the loss ratio by 0.5 points in the quarter compared with 1.8 points of improvement in the prior year quarter.
Gross written premiums, excluding third party captives grew 21% and net written premiums grew 17% for the second quarter of 2023.

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CNA Financial Corporation published this content on 28 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 July 2023 10:11:37 UTC.