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CNA Financial (CNA) Q2 Earnings Beat, Premiums Rise Y/Y

Zacks Equity Research

CNA Financial Corporation CNA reported second-quarter 2019 core earnings of $1.08 per share, which beat the Zacks Consensus Estimate of $1.01. Also, the bottom line increased 9.1% year over year.
The improvement stemmed from better underlying loss ratio, increase in new business and higher rate increases.

Behind Second-Quarter Headlines

Net written premiums at Property & Casualty Operations improved 6% year over year to $1.9 billion driven by rate increase and higher new business.

Net investment income inched up 1% year over year to $420 million driven by fixed income securities.

Combined ratio deteriorated 190 basis points year over year to 95.7%.

Book value as of Jun 30, 2019 was $44.08 per share, down 1.1% from Dec 31, 2018.

Core return on equity was 9.9%, up 80 basis points (bps).

CNA Financial Corporation Price, Consensus and EPS Surprise

CNA Financial Corporation Price, Consensus and EPS Surprise

CNA Financial Corporation price-consensus-eps-surprise-chart | CNA Financial Corporation Quote

Segment Results

Specialty’s net written premiums rose nearly 4% year over year to $713 million, driven by higher new business, strong retention and favorable rate.  Combined ratio deteriorated 390 bps to 90.7%.

Commercial’s net written premiums increased 13% year over year to $912 million, driven by higher new business and favorable rate. Combined ratio deteriorated 310 bps to 99.7%.

International’s net written premiums dropped 8% year over year to $249 million attributable to strategic exit from certain Hardy business classes in the fourth quarter of 2018. Combined ratio improved 720 bps to 97.5%.

Life & Group’s total operating revenues were $335 million, up 1.8% year over year. Core income of $7 million rebounded from the year-ago loss of $10 million.

Corporate & Other’s core loss of $11 million was substantially narrower than a loss of $39 million in the prior-year period.
Dividend Update

CNA Financial’s board of directors approved a quarterly dividend of 35 cents to be paid out on Sep 5, 2019 to stockholders of record as of Aug 19.

Zacks Rank    

CNA Financial 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 P&C Insurers

Second-quarter earnings of The Progressive Corporation PGR and RLI Corp. RLI beat the respective Zacks Consensus Estimate while that of The Travelers Companies, Inc. TRV missed expectations.

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