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

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CNA Financial Corporation CNA reported third-quarter 2018 core income of $1.17 per share, beating the Zacks Consensus Estimate by 3.5%. Also, the bottom line increased by a whopping 101.7% from the year-ago quarter.

CNA Financial Corporation Price, Consensus and EPS Surprise


CNA Financial Corporation Price, Consensus and EPS Surprise | CNA Financial Corporation Quote

The company’s solid core income growth in the reported period marked its best quarterly performance since 2010. Moreover, the insurer witnessed a strong performance at its property and casualty (P&C) business in the quarter under review.

Including net realized investment gains as well as net deferred tax asset remeasurement, net income of $1.23 per share skyrocketed 132.1% year over year.

Behind Third-Quarter Headlines

Net investment income grew nearly 10.2% year over year to $400 million owing to lower tax rate.

Net written premiums at Property & Casualty Operations slipped 1.1% year over year to $1.6 billion. Core income soared 82.6% year over year to $305 million. Combined ratio improved 950 basis points (bps) on a year-over-year basis to 94.2%.

As of Sep 30, 2018, book value (excluding AOCI) was $45.20 per share, up 0.4% from the level on Dec 31, 2017.

Segment Results

Specialty net written premiums slid 1% year over year to $688 million. Combined ratio deteriorated 390 bps to 87%.

Commercial net written premiums remained flat year over year at $697 million. Combined ratio improved 1850 bps to 97.4%.

International net written premiums declined 5.3% year over year to $196 million. Combined ratio improved 2200 bps to 103.9%.

Life & Group Non-Core total operating revenues inched up 0.3% year over year to $332 million. Core income of $32 million skyrocketed 220% from the year-ago period. This upside was attributable to an after-tax reduction of long-term care claim reserves resulting from the annual claims experience study that amounted to $24 million.
Corporate & Other Non-Core loss of $20 million was slightly wider than the loss of $18 million in the prior-year period.
Dividend Update

CNA Financial’s board of directors approved a quarterly dividend amounting to 35 cents per share, payable Dec 5 to stockholders of record as of Nov 19, 2018.

Zacks Rank

CNA Financial carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other P&C Insurers

Among other players from the insurance industry, which have already reported third-quarter earnings, the bottom line of The Progressive Corporation PGR and The Travelers Companies, Inc.’s TRV outpaced the respective Zacks Consensus Estimate while that of RLI Corp.’s RLI missed the same.

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