CNA Financial Corp. reported it swung to a second-quarter profit, able to raise prices on many of its policies.
CNA, which is 87 percent-owned by holding concern Loews Corp., posted net income of $35 million, or 16 cents a share, compared with a net loss of $1.76 billion, or $9.61 a share, a year earlier, when the company surprised investors with a $1.7 billion charge related to boosting its claims reserves.
Excluding the impact of its investment portfolio from both periods, CNA reported it had operating earnings of $140 million, or 62 cents a share, compared with an operating loss of $2.08 billion, or $11.32 a share in the 2001 quarter. CNA said its investment portfolio registered a loss of $105 million in the quarter, compared with a gain of $312 million a year earlier.
The company had write downs of $84 million related to WorldCom Inc., $48 million for Adelphia Communications Corp. and $58 million for other troubled credits, primarily in telecommunications.
The insurer’s property-casualty segment saw net premiums written rise 10 percent to $1.79 billion in the quarter. The segment posted operating income of $106 million, compared with a loss of $1.25 billion a year earlier.
Net written premiums in the standard lines business rose to $1.05 billion from $375 million while operating income was $37 million, compared with a loss of $574 million a year ago.
Average rate increases were in excess of 25 percent in the quarter, with strong increases in the property and excess and surplus lines of business, the company said. The combined ratio—a measure of underwriting losses and expenses per premium dollar earned—was 109.4 percent.
The specialty lines business witnessed net written premiums increase to $578 million from $516 million as operating income was $42 million, compared with a loss of $303 million.
Average rate increases were in excess of 20 percent, including strong rate increases in long-term care and institutions lines and in the European and Canadian markets, the company said. The combined ratio was 102.7 percent.
Net written premiums in the CNA Re business increased to $160 million in the second quarter, from $69 million while operating income was $27 million, compared with a loss of $369 million.
The average rate increase in the reinsurance business was in excess of 30 percent, while the combined ratio was 106.8 percent.
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