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CNA Financial (CNA) Q3 Earnings Beat Estimates, Down Y/Y

Zacks Equity Research

CNA Financial Corporation CNA reported third-quarter 2019 core earnings of $1.16 per share, which beat the Zacks Consensus Estimate by 11.5%. However, the bottom line decreased 0.8% year over year.
 
The improvement stemmed from improved net written premiums, increase in new business and favorable rate.

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

Behind Third-Quarter Headlines

Net written premiums at Property & Casualty Operations improved 8% year over year to $1.7 billion driven by rate increase and higher new business.

Net investment income almost remained unchanged year over year at $399 million.

Combined ratio deteriorated 340 basis points year over year to 97.6%.

Book value as of Sep 30, 2019 was $44.66 per share, up 8.1% from Dec 31, 2018.

Core return on equity was 3.4%, down 710 basis points.

Segment Results

Specialty’s net written premiums rose nearly 6% year over year to $732 million, driven by strong retention and favorable rate. Combined ratio deteriorated 280 bps to 89.8%.

Commercial’s net written premiums increased 11% year over year to $775 million, driven by higher new business and favorable rate. Combined ratio deteriorated 420 bps to 101.6%.

International’s net written premiums increased 3% year over year to $201 million driven by change in the timing of ceded reinsurance contract renewals. Combined ratio deteriorated 350 bps to 107.4%.

Life & Group’s total operating revenues were $336 million, up 1.2% year over year. Core loss was $122 million against the year-ago income of $32 million.

Corporate & Other’s core loss of $17 million was narrower than loss of $20 million incurred 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 Dec 2, 2019 to stockholders of record as of Nov 11.

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.

Other Insurance Releases

Of the insurance industry players that have reported third-quarter results so far, Global Life GL, Arthur J. Gallagher AJG and RLI Corp. RLI beat the respective Zacks Consensus Estimate for earnings.

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