CNA Financial Corporation
) reported second-quarter 2014 earnings of $1.00 per share,
outperforming the Zacks Consensus Estimate of 82 cents by 22%.
Results also improved 35% year over year, largely driven by better
results at CNA Specialty and Life & Group.
Cna Financial Corporation - Earnings Surprise |
Including income from discontinued operations, net income
increased 36.1% year over year to 98 cents per share in the
Net premiums written at CNA Financial fell 3.8% year over year to
$1.6 billion due lower premiums written at CNA Specialty, CNA
Commercial and Hardy segments.
CNA Financial's property & casualty operations' net operating
income came in at $236 million, down 8.5%year over year. This
decrease was owing to strengthening of reserves in the Commercial
Net investment income of CNA Financial increased 6.3% year over
year to $391 million, driven by better performance at limited
partnership and fixed maturity securities.
The loss ratio excluding catastrophes (CAT) and development of CNA
Financial improved by 170 basis points (bps) due to an enhanced
performance in the CNA Specialty and CNA Commercial segments.
Net written premium at
fell 2% year over year to $42 million. The decline stemmed from
termination of a MGA relationship that has not been performing
well. Net operating income increased 23% from the prior-year
quarter due to better underwriting results. Combined ratio improved
by 400 bps year over year due to improved current accident year
loss ratio and increased favorable net prior year development.
's net written premium of $779 million fell 5.7% year over year,
largely due to previous underwriting action taken in certain
business classes and lower new businesses, though rate increases
provided some cushion. Net operating income declined 47.3%
year over year due to rise in unfavorable net prior year
development, partially offset by improved current accident year
underwriting results. Combined ratio deteriorated 330 bps year over
year due to increase in loss ratio, stemming from higher
unfavorable net prior-year development. This was partly offset by
lower catastrophe losses and an improved non-catastrophe current
accident year loss ratio.
reported net premium of $133 million, down 3.6% year over year. Net
operating loss widened to $5 million from a loss of $2 million in
the year-ago quarter, largely due to weak underwriting results.
Combined ratio deteriorated by 450 bps year over year due to
deterioration in the current accident year loss ratio, including
higher catastrophe losses. This was partially offset by lower
unfavorable net prior year development.
Life and Group
reported improved net operating results by $50 million year over
year, driven by long-term care business and higher net investment
income. Net operating income in the reported quarter was $9
million, rebounding from a loss in the year-ago quarter.
Corporate & Other's
net operating results improved $45 million year over year in the
reported quarter. The results also include after-tax benefit
related to post-retirement plan curtailment of $56 million. Net
operating income in the reported quarter was $27 million against a
loss in the year-ago quarter.
CNA Financial closed the divestment of Continental Assurance
Company to Wilton Re. The property and casualty insurer made a 100%
reinsurance agreement with a Bermuda-based subsidiary to Wilton,
where CNA Financial will maintain the legal ownership of assets
related to the transaction and the economic risk will be absorbed
The completion of this transaction will result in disposition of
Life & Group Non-Core gross GAAP insurance reserves of $3.5
billion, representing a majority payout of annuity business.
The board of directors of CNA Financial declared a quarterly
dividend of 25 cents per share, payable on Sep 3 to shareholders of
record on Aug 18.
Book value per share of CNA Financial increased 4% from 2013
end-level to $48.43 as of Jun 30, 2014. Excluding accumulated other
comprehensive income, book value increased 2%.
Currently, CNA Financial has a Zacks Rank #3 (Hold).
Performance of Other Property and Casualty
Progressive Corp. (
) reported second-quarter operating earnings of 45 cents per share,
falling short of the Zacks Consensus Estimate by a couple of cents.
However, earnings improved 10% year over year.
RLI Corp.'s (
) second-quarter operating income of 66 cents per share came in
line with the Zacks Consensus Estimate. The figure also marked a
4.8% year-over-year increase.
Everest Re Group, Ltd. (
) posted second-quarter operating income of $5.41 per share,
lagging the Zacks Consensus Estimate by 6.3%. However, earnings
improved 6.1% year over year.
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