CNA Financial Reports 17.5% Jump in Q1 Net Income

April 30, 2019

CNA Financial Corp. reported first quarter 2019 net income of $342 million, up 17.5 percent over the $291 million reported for the same period in 2018.

The company saw a big improvement in its first quarter results over its Q4 2018 financials, when catastrophe claims and disappointing investment income drove an $84 million loss, compared to a net income of $223 million for Q4 2017.

Nevertheless, CNA’s Q1 2019 results again were negatively affected by natural catastrophes. The company reported a deterioration in its combined ratio for its Property & Casualty Operations of 97.8 percent, compared to 93.1 percent in Q1 2018 and 96.7 percent for the full year in 2018. (A combined ratio above 100 percent means an insurer is paying more in claims and expenses than it’s collecting in premiums).

Net catastrophe losses were $58 million, or 3.4 points of the Q1 2019 loss ratio, compared with $34 million, or 2.1 points of the loss ratio, for Q1 2018. Favorable net prior period development improved the loss ratio by 0.5 points in the quarter compared with a 2.2 point improvement in the prior year quarter.

CNA’s net investment income, after tax, was $465 million for the first quarter of 2019, a 14.8 percent increase from $405 million reported for Q1 2018.

Other Q1 2019 results for CNA include:

  • Property & casualty net written premiums were roughly level with Q1 2018 at $1.81 billion.
  • Specialty net written premiums rose 2 percent to $698 million in Q1 2019 from $686 million in the same period last year. The combined ratio for this segment deteriorated to 3 percent from 87.5 during the same period last year.
  • Commercial’s net written premiums of $849 million increased 2 percent in Q1 2019 from $832 million last year. The combined ratio for this segment increased 4.2 points to 101.3, compared with 97.1 during the prior year quarter. CNA blamed this deterioration on net catastrophe losses of $40 million, which was 5.2 points of the loss ratio, compared with $29 million, or 3.9 points of the loss ratio, for Q1 2018.
  • International’s net written premiums dropped 12 percent in Q1 2019 to $259 million from $295 million last year. The combined ratio for this segment increased 5.3 points to 101.9 percent from 96.6 percent in Q1 2018. CNA attributed the deterioration to net catastrophe losses of $6 million, or 2.3 points of the loss ratio, compared with $2 million, or 0.7 points in Q1 2018. Unfavorable net prior period development, resulting from fourth quarter 2018 catastrophe events, increased the loss ratio by 5.5 points, compared with a 0.2 point improvement in the prior year quarter.
  • Life & Group’s total operating revenues were level with last year at $335 million. Core income of $10 million dropped 28.6 percent from $14 million reported in Q1 2018.
  • Corporate & Other’s core loss of $6 million was substantially improved from the $60 million loss in the prior-year period. CNA said results for this segment in 2018 were negatively affected by a $32 million after-tax non-economic charge as a result of retroactive reinsurance accounting.

Source: CNA Financial

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