- Net income was $313 million
versus $312 million in the prior year
quarter, core income was up 20% to $316 million versus $263
million in the prior year quarter.
- The P&C combined ratio was 91.9%, the lowest in over five
years, compared with 98.1% in the prior year quarter, including 1.0
point of catastrophe loss impact compared with 6.8 points in the
prior year quarter.
- The underlying combined ratio was 91.4% compared with 91.9% in
the prior year quarter. The underlying loss ratio was 60.1%
and the expense ratio was 31.0%.
- P&C segments, excluding third party captives, generated
gross written premium growth of 8%. Net written premium
growth was 4% in the quarter.
- P&C written rate of +7% and earned rate of +9% for the
quarter.
- Net investment income of $448
million pretax includes $8
million of income from limited partnerships and common stock
compared with $504 million of pretax
net investment income which included $61
million of income from limited partnerships and common stock
in the prior year quarter.
- Book value per share excluding AOCI of $44.67, a 2% increase from year-end 2021
adjusting for $2.40 of dividends per
share; book value per share of $39.87
was also impacted by a decrease in AOCI reflecting the effect of
higher interest rates on fixed income net unrealized gains and
losses.
- Board of Directors declares regular quarterly cash dividend of
$0.40 per share.
CHICAGO, May 2,
2022 /PRNewswire/ -- CNA Financial Corporation
(NYSE: CNA) today announced first quarter 2022 net income of
$313 million, or $1.15 per share, versus $312 million, or $1.14 per share, in the prior year quarter.
Core income for the quarter was $316
million, or $1.16 per share,
versus $263 million, or $0.96 per share, in the prior year quarter.
Net investment losses for the quarter were $3 million, versus
net investment gains of $49 million in the prior year
quarter.
Our Property & Casualty segments produced core income of
$321 million for the first quarter of
2022, an increase of $58 million, or
22%, compared to the prior year quarter due to lower catastrophe
losses and improved non-catastrophe current accident year
underwriting results partially offset by lower net investment
income driven by limited partnership and common stock
returns. Property & Casualty segments, excluding third
party captives, generated gross written premium growth of 8% and
net written premium growth of 4%, driven by written rate of +7% for
the quarter and new business growth of 14%.
Our Life & Group and Corporate & Other segments produced
core income (loss) for the first quarter of 2022 of $23 million and $(28)
million, respectively.
CNA Financial declared a quarterly dividend of $0.40 per share, payable June 2, 2022 to
stockholders of record on May 16, 2022.
|
Results for the
Three months ended March 31
|
($ millions, except per
share data)
|
2022
|
|
2021
|
Net income
|
$
313
|
|
$
312
|
Core income
(a)
|
316
|
|
263
|
|
|
|
|
Net income per diluted
share
|
$
1.15
|
|
$
1.14
|
Core income per diluted
share
|
1.16
|
|
0.96
|
|
March 31,
2022
|
|
December 31,
2021
|
Book value per
share
|
$
|
39.87
|
|
$
|
47.20
|
Book value per share
excluding AOCI
|
|
44.67
|
|
|
46.02
|
(a)
|
Management utilizes
the core income (loss) financial measure to monitor the Company's
operations. Please refer herein to the Reconciliation of GAAP
Measures to Non-GAAP Measures section of this press release for
further discussion of this non-GAAP measure.
|
"We are off to a good start in 2022 with a 20% increase in core
income resulting from improved underlying P&C underwriting
income and lower catastrophe losses. Our combined ratio of
91.9% was the lowest quarterly combined ratio in over five
years. Gross written premium growth ex captives was 8% in the
quarter. Earned rate increase of 9% remains comfortably above loss
cost trends and a positive gap should persist through year-end as
written rate increases, which were 7% in the quarter, are
moderating at a measured pace and remain robust where needed
most. With significant rate achievement over the last several
years and improved terms and conditions, we remain optimistic about
the market conditions and our growth opportunities for the
remainder of 2022," said Dino E.
Robusto, Chairman & Chief Executive Officer of CNA
Financial Corporation.
Property & Casualty Operations
|
Results for the
Three Months Ended March 31
|
($ millions)
|
2022
|
|
2021
|
Gross written premiums
ex. 3rd party captives
|
$
2,454
|
|
|
$
2,270
|
|
GWP
ex. 3rd party captives change (% year over
year)
|
8
|
%
|
|
|
|
Net written
premiums
|
$
2,023
|
|
|
$
1,937
|
|
NWP
change (% year over year)
|
4
|
%
|
|
|
|
Net investment
income
|
$
235
|
|
|
$
279
|
|
Core income
|
321
|
|
|
263
|
|
|
|
|
|
|
|
Loss ratio excluding
catastrophes and development
|
60.1
|
%
|
|
60.1
|
%
|
Effect of catastrophe
impacts
|
1.0
|
|
|
6.8
|
|
Effect of
development-related items
|
(0.5)
|
|
|
(0.6)
|
|
Loss ratio
|
60.6
|
%
|
|
66.3
|
%
|
|
|
|
|
|
|
Expense
ratio
|
31.0
|
%
|
|
31.5
|
%
|
|
|
|
|
|
|
Combined
ratio
|
91.9
|
%
|
|
98.1
|
%
|
Combined ratio
excluding catastrophes and development
|
91.4
|
%
|
|
91.9
|
%
|
- The underlying combined ratio improved 0.5 points as compared
with the prior year quarter due to an improvement in the expense
ratio primarily driven by net earned premium growth of 5% and lower
acquisition costs.
- The combined ratio improved 6.2 points as compared with the
prior year quarter. Catastrophe losses were $19 million, or 1.0 point of the loss ratio in
the quarter compared with $125
million, or 6.8 points of the loss ratio, for the prior year
quarter. Favorable net prior period development improved the
loss ratio by 0.5 points in the current quarter compared with 0.6
points of improvement in the prior year quarter.
- P&C segments, excluding third party captives, generated
gross written premium growth of 8% and net written premium growth
of 4%.
Business Operating Highlights
Specialty
|
Results for the
Three Months Ended March 31
|
($ millions)
|
2022
|
|
2021
|
Gross written premiums
ex. 3rd party captives
|
$
885
|
|
|
$
816
|
|
GWP
ex. 3rd party captives change (% year over
year)
|
8
|
%
|
|
|
|
Net written
premiums
|
$
771
|
|
|
$
742
|
|
NWP
change (% year over year)
|
4
|
%
|
|
|
|
Core income
|
$
163
|
|
|
$
170
|
|
|
|
|
|
|
|
Loss ratio excluding
catastrophes and development
|
58.9
|
%
|
|
59.4
|
%
|
Effect of catastrophe
impacts
|
—
|
|
|
0.7
|
|
Effect of
development-related items
|
(1.3)
|
|
|
(2.1)
|
|
Loss ratio
|
57.6
|
%
|
|
58.0
|
%
|
|
|
|
|
|
|
Expense
ratio
|
30.9
|
%
|
|
30.6
|
%
|
|
|
|
|
|
|
Combined
ratio
|
88.7
|
%
|
|
88.8
|
%
|
Combined ratio
excluding catastrophes and development
|
90.0
|
%
|
|
90.2
|
%
|
- The underlying combined ratio improved 0.2 points as compared
with the prior year quarter, driven by improvement in the
underlying loss ratio.
- The combined ratio improved 0.1 point as compared with the
prior year quarter. There were no catastrophe losses in the
first quarter of 2022 compared with $5
million, or 0.7 points of the loss ratio, for the prior year
quarter. Favorable net prior period development improved the
loss ratio by 1.3 points in the quarter compared with 2.1 points of
improvement in the prior year quarter.
- Gross written premiums, excluding third party captives, grew 8%
and net written premiums grew 4% for the first quarter of
2022.
Commercial
|
Results for the
Three Months Ended March 31
|
($ millions)
|
2022
|
|
2021
|
Gross written premiums
ex. 3rd party captives
|
$
1,206
|
|
|
$
1,111
|
|
GWP
ex. 3rd party captives change (% year over
year)
|
9
|
%
|
|
|
|
Net written
premiums
|
$
1,001
|
|
|
$
960
|
|
NWP
change (% year over year)
|
4
|
%
|
|
|
|
Core income
|
$
132
|
|
|
$
69
|
|
|
|
|
|
|
|
Loss ratio excluding
catastrophes and development
|
61.5
|
%
|
|
60.8
|
%
|
Effect of catastrophe
impacts
|
1.8
|
|
|
13.4
|
|
Effect of
development-related items
|
—
|
|
|
0.5
|
|
Loss ratio
|
63.3
|
%
|
|
74.7
|
%
|
|
|
|
|
|
|
Expense
ratio
|
30.7
|
%
|
|
31.4
|
%
|
|
|
|
|
|
|
Combined
ratio
|
94.5
|
%
|
|
106.7
|
%
|
Combined ratio
excluding catastrophes and development
|
92.7
|
%
|
|
92.8
|
%
|
- The underlying combined ratio improved 0.1 point as compared
with the prior year quarter. The expense ratio improved 0.7
points driven by net earned premium growth of 6% and lower
acquisition costs. The underlying loss ratio increased 0.7
points due to a shift in mix of business associated with the
property quota share treaty purchased during June of 2021.
Our property coverages, which have a lower underlying loss ratio
than most other commercial coverages, now represent a smaller
proportion of net earned premiums. On a mix adjusted basis,
there was no change in the underlying loss ratio.
- The combined ratio improved 12.2 points as compared with the
prior year quarter, reflecting the lowest combined ratio since
2008. Catastrophe losses were $16
million, or 1.8 points of the loss ratio in the first
quarter of 2022 compared with $115
million, or 13.4 points of the loss ratio, for the prior
year quarter.
- Gross written premiums, excluding third party captives, grew 9%
and net written premiums grew 4% for the first quarter of
2022.
International
|
Results for the
Three Months Ended March 31
|
($ millions)
|
2022
|
|
2021
|
Gross written
premiums
|
$
363
|
|
|
$
343
|
|
GWP
change (% year over year)
|
6
|
%
|
|
|
|
Net written
premiums
|
$
251
|
|
|
$
235
|
|
NWP
change (% year over year)
|
7
|
%
|
|
|
|
Core income
|
$
26
|
|
|
$
24
|
|
|
|
|
|
|
|
Loss ratio excluding
catastrophes and development
|
58.6
|
%
|
|
59.6
|
%
|
Effect of catastrophe
impacts
|
1.2
|
|
|
2.0
|
|
Effect of
development-related items
|
—
|
|
|
(0.1)
|
|
Loss ratio
|
59.8
|
%
|
|
61.5
|
%
|
|
|
|
|
|
|
Expense
ratio
|
32.6
|
%
|
|
34.4
|
%
|
|
|
|
|
|
|
Combined
ratio
|
92.4
|
%
|
|
95.9
|
%
|
Combined ratio
excluding catastrophes and development
|
91.2
|
%
|
|
94.0
|
%
|
- The underlying combined ratio improved 2.8 points as compared
with the prior year quarter. The expense ratio improved 1.8
points driven by lower acquisition costs and net earned premium
growth of 5%. The underlying loss ratio improved 1.0
point.
- The combined ratio improved 3.5 points as compared with the
prior year quarter. Catastrophe losses were $3 million, or 1.2 points of the loss ratio in
the first quarter of 2022, compared with $5
million, or 2.0 points of the loss ratio, for the prior year
quarter.
- Gross written premiums grew 6%, or 9% excluding currency
fluctuations, and net written premiums grew 7%, or 11% excluding
currency fluctuations, for the first quarter of 2022.
Life & Group
|
Results for the
Three Months Ended March 31
|
($ millions)
|
2022
|
|
2021
|
Net earned
premiums
|
$
120
|
|
|
$
120
|
|
Net investment
income
|
212
|
|
|
219
|
|
Core income
|
23
|
|
|
36
|
|
Core income decreased $13 million
for the first quarter of 2022 as compared with the same period in
2021 primarily due to lower net investment income and higher
expenses.
Corporate & Other
|
Results for the
Three Months Ended March 31
|
($ millions)
|
2022
|
|
2021
|
Net investment
income
|
$
1
|
|
|
$
6
|
|
Interest
expense
|
28
|
|
|
28
|
|
Core loss
|
(28)
|
|
|
(36)
|
|
Core loss improved $8 million for
the first quarter of 2022 as compared with the prior year
quarter. The prior year quarter included the recognition of a
$12 million after-tax loss resulting from the cession of a
legacy portfolio of excess workers' compensation policies under a
retroactive reinsurance agreement.
Net Investment Income
|
Results for the
Three Months Ended March 31
|
|
2022
|
|
2021
|
Net investment
income
|
$
448
|
|
|
$
504
|
|
|
|
|
|
|
|
Net investment income decreased $56
million as compared with the prior year quarter. The
decrease was driven by limited partnership and common stock
investments, which returned 0.4%, or $8
million for the first quarter of 2022 compared with 3.4%, or
$61 million in the prior year
quarter.
Stockholders' Equity
Stockholders' equity of $10.8
billion decreased 16% from year-end 2021, primarily due to a
decrease in net unrealized investment gains as a result of higher
interest rates and dividends paid to stockholders, partially offset
by net income. Net unrealized investment gains decreased
$1.6 billion after-tax driven by a
decrease in unrealized investment gains of $3.4 billion, partially offset by Shadow
Adjustments of $1.4 billion and tax
of $0.4 billion. Book value per
share of $39.87 likewise decreased
16% from year-end 2021.
Book value per share ex AOCI of $44.67 increased 2% from year-end 2021 adjusting
for $2.40 of dividends per share.
About the Company
CNA is one of the largest U.S. commercial property and casualty
insurance companies. Backed by more than 120 years of
experience, CNA provides a broad range of standard and specialized
insurance products and services for businesses and professionals in
the U.S., Canada and
Europe. For more information, please visit CNA at
www.cna.com.
Contact
Media:
|
|
Analysts:
|
Cara McCall,
312-822-1309
|
|
Amy C. Adams,
312-822-5533
|
Conference Call and Webcast/Presentation Information
A conference call for investors and the professional investment
community will be held at 8:00 a.m.
(CT) today. On the conference call will be
Dino E. Robusto, Chairman and Chief
Executive Officer of CNA Financial Corporation, Scott R. Lindquist, Executive Vice President and
Chief Financial Officer of CNA Financial Corporation and other
members of senior management. Participants can access the
call by dialing (800) 289-0571, or for international callers, +1
(720) 543-0206. The call will also be broadcast live on the
internet and may be accessed from the Investor Relations page of
the CNA website (www.cna.com). A presentation will be posted
and available on the CNA website and will provide additional
insight into the results.
The call is available to the media, but questions will be
restricted to investors and the professional investment community.
An online replay will be available on CNA's website following the
call. Financial supplement information related to the results
is available on the investor relations pages of the CNA website or
by contacting investor.relations@cna.com.
Definition of Reported Segments
- Specialty provides management and professional liability
and other coverages through property and casualty products and
services using a network of brokers, independent agencies and
managing general underwriters.
- Commercial works with a network of brokers and
independent agents to market a broad range of property and casualty
insurance products to all types of insureds targeting small
business, construction, middle markets and other commercial
customers.
- International underwrites property and casualty
coverages on a global basis through a branch operation in
Canada, a European business
consisting of insurance companies based in the U.K and Luxembourg and Hardy, our Lloyd's
Syndicate.
- Life & Group primarily includes the results of the
individual and group long term care businesses that are in run
off.
- Corporate & Other primarily includes certain
corporate expenses, including interest on corporate debt, and the
results of certain property and casualty business in run-off,
including CNA Re, asbestos and environmental pollution (A&EP),
excess workers' compensation (EWC) and legacy mass tort.
Financial Measures
Management utilizes the following metrics in their evaluation of
the Property & Casualty Operations. These ratios are
calculated using financial results prepared in accordance with
accounting principles generally accepted in the United States of America (GAAP).
- Loss ratio is the percentage of net incurred claim and
claim adjustment expenses to net earned premiums.
- Underlying loss ratio represents the loss ratio
excluding catastrophes and development.
- Expense ratio is the percentage of insurance
underwriting and acquisition expenses, including the amortization
of deferred acquisition costs, to net earned premiums.
- Dividend ratio is the ratio of policyholders' dividends
incurred to net earned premiums.
- Combined ratio is the sum of the loss, expense and
dividend ratios.
- Underlying combined ratio is the sum of the
underlying loss, expense and dividend ratios.
- Renewal premium change represents the estimated
change in average premium on policies that renew, including rate
and exposure changes.
- Rate represents the average change in price on policies
that renew excluding exposure change. For certain products
within Small Business, where quantifiable, rate includes the
influence of new business as well.
- Retention represents the percentage of premium dollars
renewed in comparison to the expiring premium dollars from policies
available to renew.
- New business represents premiums from policies
written with new customers and additional policies written with
existing customers.
Gross written premiums ex. 3rd party
captives represents gross written premiums excluding
business which is ceded to third party captives, including business
related to large warranty programs.
The Company's investment portfolio is monitored by management
through analysis of various factors including unrealized gains and
losses on securities, portfolio duration and exposure to market and
credit risk.
To the extent that unrealized gains on fixed income securities
supporting certain products within the Life & Group segment
would result in a premium deficiency, or would impact the reserve
balance if realized, a related increase in Insurance reserves is
recorded, net of tax, as a reduction of net unrealized gains
through Other comprehensive income (loss) (Shadow
Adjustments).
Reconciliation of GAAP Measures to Non-GAAP Measures
This press release also contains financial measures that are not
in accordance with GAAP. Management utilizes these financial
measures to monitor the Company's insurance operations and
investment portfolio. The Company believes the presentation
of these measures provides investors with a better understanding of
the significant factors that comprise the Company's operating
performance. Reconciliations of these measures to the most
comparable GAAP measures follow below.
Reconciliation of Net Income (Loss) to Core Income
(Loss)
Core income (loss) is calculated by excluding from
net income (loss) the after-tax effects of net investment gains or
losses and any cumulative effects of changes in accounting
guidance. The calculation of core income (loss) excludes net
investment gains or losses because net investment gains or losses
are generally driven by economic factors that are not necessarily
reflective of our primary operations. Management monitors
core income (loss) for each business segment to assess segment
performance. Presentation of consolidated core income (loss)
is deemed to be a non-GAAP financial measure.
|
Results for the
Three months ended March 31
|
($ millions)
|
2022
|
|
2021
|
Net income
|
$
313
|
|
$
312
|
Less: Net investment
gains (losses)
|
(3)
|
|
49
|
Core income
|
$
316
|
|
$
263
|
Reconciliation of Net Income (Loss) per Diluted Share to
Core Income (Loss) per Diluted Share
Core income (loss) per diluted share provides management
and investors with a valuable measure of the Company's operating
performance for the same reasons applicable to its underlying
measure, core income (loss). Core income (loss) per diluted
share is core income (loss) on a per diluted share basis.
|
Results for the
Three months ended March 31
|
|
2022
|
|
2021
|
Net income per diluted
share
|
$
1.15
|
|
$
1.14
|
Less: Net investment
gains (losses)
|
(0.01)
|
|
0.18
|
Core income per diluted
share
|
$
1.16
|
|
$
0.96
|
Reconciliation of Book Value per Share to Book Value per
Share Excluding AOCI
Book value per share excluding AOCI allows management and
investors to analyze the amount of the Company's net worth
primarily attributable to the Company's business operations.
The Company believes this measurement is useful as it reduces the
effect of items that can fluctuate significantly from period to
period, primarily based on changes in interest rates.
|
March 31,
2022
|
|
December 31,
2021
|
Book value per
share
|
$
39.87
|
|
$
47.20
|
Less: Per share impact
of AOCI
|
(4.80)
|
|
1.18
|
Book value per share
excluding AOCI
|
$
44.67
|
|
$
46.02
|
Calculation of Return on Equity and Core Return on
Equity
Core return on equity provides management and investors
with a measure of how effectively the Company is investing the
portion of the Company's net worth that is primarily attributable
to its business operations.
|
Results for the
Three months ended March 31
|
|
($ millions)
|
2022
|
|
2021
|
|
Annualized net
income
|
$
1,251
|
|
$
1,247
|
|
Average stockholders'
equity including AOCI (a)
|
11,813
|
|
12,398
|
|
Return on
equity
|
10.6
|
%
|
10.1
|
%
|
|
|
|
|
|
Annualized core
income
|
$
1,263
|
|
$
1,053
|
|
Average stockholders'
equity excluding AOCI (a)
|
12,304
|
|
11,903
|
|
Core return on
equity
|
10.3
|
%
|
8.8
|
%
|
(a)
|
Average
stockholders' equity is calculated using a simple average of the
beginning and ending balances for the period.
|
For additional information, please refer to CNA's most recent
10-K on file with the Securities and Exchange Commission, as well
as the financial supplement, available at www.cna.com.
Forward-Looking Statements
This press release includes statements that relate to
anticipated future events (forward-looking statements) rather than
actual present conditions or historical events. These statements
are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 and generally include
words such as "believes," "expects," "intends," "anticipates,"
"estimates" and similar expressions. Forward-looking statements, by
their nature, are subject to a variety of inherent risks and
uncertainties that could cause actual results to differ materially
from the results projected. Many of these risks and uncertainties
cannot be controlled by CNA. For a detailed description of these
risks and uncertainties please refer to CNA's filings with the
Securities and Exchange Commission, available at www.cna.com.
Any forward-looking statements made in this press release are
made by CNA as of the date of this press release. Further, CNA does
not have any obligation to update or revise any forward-looking
statement contained in this press release, even if CNA's
expectations or any related events, conditions or circumstances
change.
Any descriptions of coverage under CNA policies or programs in
this press release are provided for convenience only and are not to
be relied upon with respect to questions of coverage, exclusions or
limitations. With regard to all such matters, the terms and
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SOURCE CNA