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CNA Financial (CNA) Q4 Earnings Beat Estimates, Rise Y/Y

Zacks Equity Research

CNA Financial Corporation CNA reported fourth-quarter 2019 core earnings of 97 cents per share, which beat the Zacks Consensus Estimate by 6.6%. In the year-ago quarter the company incurred a loss of 8 cents per share.

The upside can be attributed to improved net written premiums, an increase in new business and favorable rates.

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 Fourth-Quarter Headlines

Net written premiums at Property & Casualty Operations improved 5.2% year over year to $1.7 billion.

Net investment income improved significantly year over year to $336 million.
Combined ratio improved 980 basis points (bps) year over year to 95.6%.

Book value as of Dec 31, 2019, was $45 per share, up 8.9% from Dec 31, 2018.

Core return on equity was 8.8%, up 950 bps.

Segmental Results

Specialty’s net written premiums rose 3.4% year over year to $705 million, driven by favorable rates. Combined ratio improved 300 bps to 88.2%.

Commercial’s net written premiums increased 8% year over year to $779 million, driven by higher new business, strong retention and favorable rates. Combined ratio improved 1270 bps to 100.6%.

International’s net written premiums increased 2.3% year over year to $262 million driven by strong growth in Canada and Europe. Combined ratio improved 1920 bps to 100.3%.

Life & Group’s total operating revenues were $334 million, down 0.9% year over year. Core loss was $4 million against the year-ago income of $7 million.

Corporate & Other’s core loss of $68 million was wider than the loss of $46 million incurred in the prior-year period.

Dividend Update

CNA Financial hiked its dividend to 37 cents per share, up from the prior payout of 35 cents. The dividend will be paid out on Mar 12, 2020, to stockholders of record as of Feb 24, 2020.

Zacks Rank & Peer Releases

The company currently carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other players from the insurance industry having reported fourth-quarter earnings so far, the bottom-line results of Brown & Brown, Inc. BRO and RLI Corp. RLI beat estimates, while that of Principal Financial PFG met the same.

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