U.S. Markets close in 2 hrs 27 mins
  • S&P 500

    3,672.62
    +3.61 (+0.10%)
     
  • Dow 30

    30,028.16
    +144.37 (+0.48%)
     
  • Nasdaq

    12,407.62
    +58.26 (+0.47%)
     
  • Russell 2000

    1,858.74
    +20.71 (+1.13%)
     
  • Crude Oil

    45.72
    +0.44 (+0.97%)
     
  • Gold

    1,834.80
    +9.10 (+0.50%)
     
  • Silver

    24.14
    +0.06 (+0.25%)
     
  • EUR/USD

    1.2140
    +0.0025 (+0.2064%)
     
  • 10-Yr Bond

    0.9210
    -0.0270 (-2.85%)
     
  • Vix

    21.09
    -0.08 (-0.38%)
     
  • GBP/USD

    1.3470
    +0.0095 (+0.7072%)
     
  • USD/JPY

    103.9230
    -0.5010 (-0.4798%)
     
  • BTC-USD

    19,371.84
    +422.94 (+2.23%)
     
  • CMC Crypto 200

    381.01
    +6.60 (+1.76%)
     
  • FTSE 100

    6,490.27
    +26.88 (+0.42%)
     
  • Nikkei 225

    26,809.37
    +8.39 (+0.03%)
     

CNA Financial (CNA) Estimates Q2 Catastrophe Loss of $301M

Zacks Equity Research
·3 min read

CNA Financial Corporation CNA estimates second-quarter catastrophe loss of $301 million pre-tax. The loss estimate can be attributed to COVID-19 pandemic, severe weather-related events in the United States, as well as civil unrest-related losses in the United States.

While COVID-19 pandemic losses are expected to amount to $182 million, natural catastrophe losses are likely to be $58 million. Civil unrest-related losses are expected to be $61 million.

Concurrently, as part of its annual review of mass tort exposures, CNA Financial anticipates to recognize unfavorable prior period development of $50 million pretax, mainly attributable to New York reviver statute-related claims.

The Zacks Consensus Estimate for CNA Financial’s second-quarter earnings is currently pegged at 92 cents, indicating a decline of 14.8% from the year-ago quarter reported figure. We expect estimates to move further south once analysts start incorporating loss estimates into their numbers.

Being one of the largest property and casualty insurer in the United States, CNA Financial has substantial exposure to loss from natural disasters, man-made catastrophes and other catastrophic events. Pretax underwriting loss is expected to be $210 million in the second quarter of 2020.  Including the favorable impact from limited partnerships, common stock and non-redeemable preferred stock investments and taking into account the equity market rebound during the period, CNA Financial projects net income of $151 million and core income of $99 million for the soon-to-be-reported quarter.

Nonetheless, this Zacks Rank #3 (Hold) insurer has a history of maintaining combined ratio, a measure of underwriting profitability, at favorable levels — even in a tough operating environment — which along with sustained better pricing indicates its superior underwriting discipline. CNA Financial has been able to maintain underlying combined ratio below 95% for straight seven quarters.

Shares of CNA Financial have lost 27.6% year to date compared with the industry’s decrease of 16.6%. Solid underwriting discipline and effective capital deployment should help shares bounce back.

 

Several property and casualty insurers are coming up with their second-quarter catastrophe loss estimates. Chubb Limited CB estimates global net catastrophe loss of about $1.51 billion, net of reinsurance including reinstatement premiums. The Travelers Companies TRV estimates catastrophe losses of $673 million after-tax, net of reinsurance while W. R. Berkley Corporation WRB expects net catastrophe losses of about $145 million.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


 


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
 
W.R. Berkley Corporation (WRB) : Free Stock Analysis Report
 
CNA Financial Corporation (CNA) : Free Stock Analysis Report
 
Chubb Limited (CB) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.