CNA Financial Corporation CNA reported third-quarter 2024 core earnings of $1.08 per share, which beat the Zacks Consensus Estimate by 2.9%. The bottom line increased 1.9% year over year.
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The quarterly results of CNA reflected higher income from fixed-income securities, a larger invested asset base, improved retention and renewal premium change, partly offset by escalating expenses and poor underwriting results.
Behind Third-Quarter Headlines
Total operating revenues of CNA Financial were $3.2 billion, up 8.8% year over year due to higher premiums, net investment income and other revenues. The top line beat the Zacks Consensus Estimate by 2.3%.
CNA Financial Corporation Price, Consensus and EPS Surprise
CNA Financial Corporation price-consensus-eps-surprise-chart | CNA Financial Corporation Quote
Net written premiums of Property & Casualty Operations increased 8% year over year to $2.4 billion, driven by retention of 85% and renewal premium change of 5% with a written rate of 3%. New business grew 15%.
Net investment income rose 13.2% year over year to $626 million. The increase was driven by higher income from fixed income securities and increase from limited partnerships. Our estimate for net investment was $596.4 million. The Zacks Consensus Estimate was pegged at $596 million.
Total claims, benefits and expenses increased 8% to $3.3 billion, primarily due to higher insurance claims and policyholders' benefits, amortization of deferred acquisition costs, non-insurance warranty expense, other insurance-related expenses and other expenses. Our estimate was also $3.3 billion.
Catastrophe losses were $143 million, wider than a loss of $94 million in the year-ago quarter. Underwriting income declined 48% year over year to $68 million. Our estimate was $176 million.
The combined ratio deteriorated 290 basis points (bps) year over year to 97.2. The Zacks Consensus Estimate was pegged at 93, while our estimate was 93.1
Segment Results
Specialty’s net written premiums increased 4% year over year to $862 million. Our estimate was $919 million. The combined ratio deteriorated 290 bps to 93. The Zacks Consensus Estimate was pegged at 87.
Commercial’s net written premiums increased 14% year over year to $1.2 billion. Our estimate was $1.3 billion. The combined ratio deteriorated 130 bps to 100.2. The Zacks Consensus Estimate was pegged at 95.
International’s net written premiums increased 5% year over year to $311 million. Our estimate was $292.2 million. The combined ratio deteriorated 30 bps to 96.1. The Zacks Consensus Estimate was pegged at 107.
Life & Group’s net earned premiums were $110 million, down 1.8% year over year. Our estimate was $106.9 million. The core loss was $9 million, narrower than a loss of $29 million incurred in the year-ago quarter, primarily due to higher investment income.
Corporate & Other’s core loss of $44 million was wider than a loss of $33 million incurred in the year-earlier quarter.
Financial Update
The core return on equity remained flat year over year at 9.4%. Book value, excluding AOCI, as of Sept. 30 was $46.50 per share, up 0.2% from the 2023-end level.
Statutory capital and surplus for the Combined Continental Casualty Companies increased 3.6% from the 2023-end level to $11.3 billion at quarter end.
Net cash flow provided by operating activities decreased 9.7% to $748 million in the quarter.
Dividend Update
CNA Financial’s board of directors approved a quarterly dividend of 44 cents per share to be paid out on Dec. 5 to shareholders as of Nov. 18.
Zacks Rank
CNA 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 Insurers
The Travelers Companies TRV reported third-quarter 2024 core income of $5.24 per share, which beat the Zacks Consensus Estimate by 38.2%. Total revenues increased 10.7% from the year-ago quarter to $11.84 billion, primarily driven by higher premiums, net investment income, fee income and other revenues. The top-line figure beat the Zacks Consensus Estimate by 1.4%.
Travelers’ net written premiums increased 8% year over year to a record $11.31 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $10.5 billion. Travelers witnessed an underwriting gain of $685 million against a loss of $136 million incurred in the year-ago quarter. The consolidated underlying combined ratio of 85.6 improved 500 bps year over year.
The combined ratio improved 780 bps year over year to 93.2 due to an improvement in the underlying combined ratio and net favorable prior-year reserve development.
The Progressive Corporation’s PGR third-quarter 2024 earnings per share of $3.97 beat the Zacks Consensus Estimate of $3.40. The bottom line more than doubled year over year. Operating revenues of $19.5 billion improved 24.9% year over year and beat the consensus estimate by 2.6%.
Net premiums written were $19.5 billion in the quarter, up 25% from $15.6 billion a year ago. Combined ratio — the percentage of premiums paid out as claims and expenses — improved 340 bps from the prior-year quarter’s level to 89.
RLI Corp. RLI reported third-quarter 2024 operating earnings of $1.31 per share, beating the Zacks Consensus Estimate by 33.7%. The bottom line more than doubled year over year. Operating revenues for the reported quarter were $426 million, up 1.4% year over year. The top line beat the Zacks Consensus Estimate of $420 million.
Gross premiums written increased 13% year over year to $563.4 million. This uptick can be attributed to the solid performance of the Casualty (up 15.7%), Property (up 9.6%) and Surety segments (up 9%). Our estimate was $572.3 million. Underwriting income increased to $40.7 million from $4.2 million in the year-ago quarter. The combined ratio improved 910 bps year over year to 89.6. The Zacks Consensus Estimate for the metric was pegged at 96, while our estimate was 103.1.
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