Fourth Quarter
- Net income of $248 million versus
$266 million in the prior year
quarter; core income of $274 million
versus $265 million in the prior year
quarter
- P&C core income of $342
million versus $353 million,
reflects lower investment income from limited partnerships and
common stock, as well as lower underwriting income from a
$36 million increase in pretax
catastrophe losses to $76
million.
- Life & Group core loss of $(16)
million versus core income of $6
million in the prior year quarter reflects lower investment
income from limited partnerships.
- Corporate & Other core loss of $(52)
million versus $(94) million
in the prior year quarter, includes a non-economic charge related
to asbestos and environmental pollution of $28 million after-tax versus $48 million in the prior year quarter.
- P&C combined ratio of 93.7%, compared with 92.9% in the
prior year quarter, including 3.6 points of catastrophe loss impact
compared with 2.0 points in the prior year quarter. The underlying
combined ratio was 91.2%, consistent with the prior year quarter.
The underlying loss ratio was 59.9% compared with 60.1% in the
prior year quarter.
- P&C segments, excluding third party captives, generated
gross written premium growth of 8%, or 9% excluding foreign
currency fluctuations. Net written premium growth of 5% in the
quarter, or 7% excluding foreign currency fluctuations. P&C
renewal premium change of +7%, with written rate of +4% and
exposure change of +3%.
Full Year
- Net income of $894 million versus
$1,202 million in the prior year;
core income of $1,048 million versus
$1,106 million in the prior year
- P&C core income of $1,240
million versus $1,184 million,
reflects record high underwriting income of $559 million as well as higher investment income
from fixed income securities, partially offset by lower investment
income from limited partnerships and common stock.
- Life & Group core loss of $(9)
million versus core income of $126
million in the prior year reflects lower investment income
from limited partnerships.
- P&C record low combined ratio of 93.2%, compared with 96.2%
in the prior year, including 3.0 points of catastrophe loss impact
compared with 5.1 points in the prior year. The underlying combined
ratio was a record low 91.2% compared with 91.4% in the prior year.
The underlying loss ratio was 60.0%, consistent with the prior
year.
- P&C segments, excluding third party captives, generated
gross written premium growth of 10%, or 11% excluding foreign
currency fluctuations. Net written premium growth of 9% in the
year, or 10% excluding foreign currency fluctuations. P&C
renewal premium change of +8%, with written rate of +5% and
exposure change of 3%.
Shareholders' Equity
- Book value per share of $32.58;
book value per share excluding AOCI of $45.71, a 7% increase from year-end 2021
adjusting for $3.60 of dividends per
share.
- Increased quarterly dividend 5% to $0.42 per share; special dividend of $1.20 per share.
CHICAGO, Feb. 6, 2023
/PRNewswire/ -- CNA Financial Corporation (NYSE: CNA) today
announced fourth quarter 2022 net income of $248 million, or $0.91 per share, versus $266 million, or $0.98 per share, in the prior year quarter.
Net investment losses for the quarter were $26 million compared to net investment gains of
$1 million in the prior year quarter. Core income for
the quarter was $274 million, or
$1.01 per share, versus $265 million, or $0.97 per share, in the prior year
quarter.
Net income for the full year 2022 was $894 million, or $3.28 per share, versus $1,202 million, or $4.41 per share, in the prior year. Net
investment losses for the full year were $154 million compared to net investment gains of
$96 million in the prior year.
Core income for the full year 2022 was $1,048 million, or $3.84 per share, versus $1,106 million, or $4.06 per share, in the prior year.
Our Property & Casualty segments produced core income of
$342 million for the fourth quarter
of 2022, a decrease of $11 million
compared to the prior year quarter driven by lower investment
income from limited partnerships and common stock, as well as lower
underwriting income, including a $36
million increase in pretax catastrophe losses to
$76 million. Property &
Casualty segments, excluding third party captives, generated gross
written premium growth of 8%, or 9% excluding currency
fluctuations, and net written premium growth of 5%, or 7% excluding
currency fluctuations, driven by retention of 86% and renewal
premium change of +7%.
Our Property & Casualty segments produced core income of
$1,240 million for the full year
2022, an increase of $56 million
compared to the prior year driven by record high underwriting
income of $559 million as well as
higher investment income from fixed income securities, partially
offset by lower investment income from limited partnerships and
common stock. Property & Casualty segments, excluding
third party captives, generated gross written premium growth of 10%
or 11% excluding foreign currency fluctuations, and net written
premium growth of 9% or 10% excluding foreign currency
fluctuations, driven by retention of 86%, new business growth of
13% and renewal premium change of +8%.
Our Life & Group segment produced a core loss of
$(16) million for the fourth quarter
of 2022 versus core income of $6
million in the prior year quarter driven by lower investment
income from limited partnerships. Our Corporate & Other
segment produced a core loss of $(52)
million for the fourth quarter of 2022, an improvement of
$42 million compared to the prior
year quarter driven by a lower non-economic charge related to
asbestos & environmental pollution and adverse development in
legacy mass tort exposures in the prior year quarter.
CNA Financial declared a quarterly dividend of $0.42 per share and a special dividend of
$1.20 per share, payable
March 9, 2023 to stockholders of record on February 21,
2023.
|
Results for the
Three Months
Ended December 31
|
|
Results for the Year
Ended
December 31
|
($ millions, except per
share data)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net income
|
$
248
|
|
$
266
|
|
$
894
|
|
$
1,202
|
Core income
(a)
|
274
|
|
265
|
|
1,048
|
|
1,106
|
|
|
|
|
|
|
|
|
Net income per diluted
share
|
$
0.91
|
|
$
0.98
|
|
$
3.28
|
|
$
4.41
|
Core income per diluted
share
|
1.01
|
|
0.97
|
|
3.84
|
|
4.06
|
|
December 31,
2022
|
|
December 31,
2021
|
Book value per
share
|
$
|
32.58
|
|
$
|
47.20
|
Book value per share
excluding AOCI
|
|
45.71
|
|
|
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 had another excellent quarter with solid top-line growth and
strong underwriting profitability which capped off an excellent
year of underwriting performance. Gross written premium growth ex
captives was 8% for the quarter and 10% for the year, marking two
straight years of double-digit growth. Overall P&C
renewal premium change was 7% in the quarter and 9% in Commercial
which is up 2 points from the third quarter. The combined
ratio was 93.7% for the quarter and a record low 93.2% for the
year. We produced core income of $274
million for the quarter and $1,048
million for the year. Core income was greater than
$1 billion for the second straight
year and represents our highest two-year total on record.
Given our strong results in 2022, we are optimistic about our
opportunities to capitalize on the continued favorable market
conditions, and achieve a meaningful benefit from the tailwind of
higher yields on our fixed maturity portfolio," said Dino E. Robusto, Chairman & Chief Executive
Officer of CNA Financial Corporation.
Property & Casualty Operations
|
Results for the
Three Months
Ended December 31
|
|
Results for the Year
Ended
December 31
|
($ millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Gross written premiums
ex. 3rd party captives
|
$
2,704
|
|
|
$
2,513
|
|
|
$
10,264
|
|
|
$
9,303
|
|
GWP ex. 3rd
party captives change (% year over year)
|
8
|
%
|
|
|
|
|
10
|
%
|
|
|
|
Net written
premiums
|
$
2,284
|
|
|
$
2,166
|
|
|
$
8,663
|
|
|
$
7,921
|
|
NWP change (% year
over year)
|
5
|
%
|
|
|
|
|
9
|
%
|
|
|
|
Net earned
premiums
|
$
2,116
|
|
|
1,997
|
|
|
$
8,196
|
|
|
$
7,685
|
|
NEP change (% year
over year)
|
6
|
%
|
|
|
|
|
7
|
%
|
|
|
|
Underwriting
gain
|
$
134
|
|
|
$
142
|
|
|
$
559
|
|
|
$
290
|
|
Net investment
income
|
$
290
|
|
|
$
306
|
|
|
$
982
|
|
|
$
1,178
|
|
Core income
|
342
|
|
|
353
|
|
|
1,240
|
|
|
1,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio excluding
catastrophes and development
|
59.9
|
%
|
|
60.1
|
%
|
|
60.0
|
%
|
|
60.0
|
%
|
Effect of catastrophe
impacts
|
3.6
|
|
|
2.0
|
|
|
3.0
|
|
|
5.1
|
|
Effect of
development-related items
|
(1.1)
|
|
|
(0.3)
|
|
|
(1.0)
|
|
|
(0.3)
|
|
Loss ratio
|
62.4
|
%
|
|
61.8
|
%
|
|
62.0
|
%
|
|
64.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense
ratio
|
31.1
|
%
|
|
30.8
|
%
|
|
30.9
|
%
|
|
31.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined
ratio
|
93.7
|
%
|
|
92.9
|
%
|
|
93.2
|
%
|
|
96.2
|
%
|
Combined ratio
excluding catastrophes and development
|
91.2
|
%
|
|
91.2
|
%
|
|
91.2
|
%
|
|
91.4
|
%
|
- The fourth quarter underlying combined ratio was consistent
with the prior year quarter. The expense ratio increased 0.3 points
largely offset by 0.2 points of improvement in the underlying loss
ratio, as compared with the prior year quarter.
- The fourth quarter combined ratio increased 0.8 points as
compared with the prior year quarter. Catastrophe losses were
$76 million, or 3.6 points of the
loss ratio in the quarter compared with $40
million, or 2.0 points of the loss ratio, for the prior year
quarter. Catastrophe losses for the fourth quarter of 2022 were
primarily driven by Winter Storm
Elliott. Favorable net prior period development improved the
loss ratio by 1.1 points in the current quarter compared with 0.3
points of improvement in the prior year quarter.
- In the fourth quarter, P&C segments, excluding third party
captives, generated gross written premium growth of 8%, or 9%
excluding foreign currency fluctuations, and net written premium
growth of 5%, or 7% excluding foreign currency fluctuations.
- For the full year, the underlying combined ratio improved 0.2
points as compared with the prior year, reflecting the lowest
underlying combined ratio on record. The expense ratio improved 0.2
points and the underlying loss ratio was largely consistent with
the prior year.
- For the full year, the combined ratio improved 3.0 points as
compared with the prior year, reflecting the lowest combined ratio
on record. Catastrophe losses were $247
million, or 3.0 points of the loss ratio for the full year
compared with $397 million, or 5.1
points of the loss ratio, for the prior year. Catastrophe losses
for the full year were primarily driven by Winter Storm Elliott and Hurricane Ian.
Favorable net prior period development improved the loss ratio by
1.0 points in the current year compared with 0.3 points of
improvement in the prior year.
- For the full year, P&C segments, excluding third party
captives, generated gross written premium growth of 10% or 11%
excluding foreign currency fluctuations, and net written premium
growth of 9% or 10% excluding foreign currency fluctuations.
Business Operating Highlights
Specialty
|
Results for the
Three Months
Ended December 31
|
|
Results for the Year
Ended
December 31
|
($ millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Gross written premiums
ex. 3rd party captives
|
$
998
|
|
|
$
1,016
|
|
|
$
3,814
|
|
|
$
3,672
|
|
GWP ex. 3rd
party captives change (% year over year)
|
(2)
|
%
|
|
|
|
|
4
|
%
|
|
|
|
Net written
premiums
|
$
863
|
|
|
$
875
|
|
|
$
3,306
|
|
|
$
3,225
|
|
NWP change (% year
over year)
|
(1)
|
%
|
|
|
|
|
3
|
%
|
|
|
|
Net earned
premiums
|
$
827
|
|
|
$
806
|
|
|
$
3,203
|
|
|
$
3,076
|
|
NEP change (% year
over year)
|
3
|
%
|
|
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting
gain
|
$
93
|
|
|
$
81
|
|
|
$
366
|
|
|
$
347
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio excluding
catastrophes and development
|
58.4
|
%
|
|
59.1
|
%
|
|
58.6
|
%
|
|
59.1
|
%
|
Effect of catastrophe
impacts
|
—
|
|
|
0.4
|
|
|
0.1
|
|
|
0.4
|
|
Effect of
development-related items
|
(0.6)
|
|
|
(0.6)
|
|
|
(1.3)
|
|
|
(1.4)
|
|
Loss ratio
|
57.8
|
%
|
|
58.9
|
%
|
|
57.4
|
%
|
|
58.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense
ratio
|
30.8
|
%
|
|
30.9
|
%
|
|
31.0
|
%
|
|
30.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined
ratio
|
88.8
|
%
|
|
89.9
|
%
|
|
88.6
|
%
|
|
88.7
|
%
|
Combined ratio
excluding catastrophes and development
|
89.4
|
%
|
|
90.1
|
%
|
|
89.8
|
%
|
|
89.7
|
%
|
- The fourth quarter underlying combined ratio improved 0.7
points as compared with the prior year quarter. The underlying loss
ratio improved 0.7 points, reflecting the lowest underlying loss
ratio on record, and the expense ratio was largely consistent with
the prior year quarter.
- The fourth quarter combined ratio improved 1.1 points as
compared with the prior year quarter. Favorable net prior period
development improved the loss ratio by 0.6 points in the current
and prior year quarters.
- In the fourth quarter, gross written premiums, excluding third
party captives, declined (2)% and net written premiums declined
(1)%.
- For the full year, the underlying combined ratio was largely
consistent with the prior year. The expense ratio increased 0.5
points driven by higher underwriting expenses. The underlying loss
ratio improved 0.5 points as compared with the prior year,
reflecting the lowest underlying loss ratio on record.
- For the full year, the combined ratio was largely consistent
with the prior year. Favorable net prior period development
improved the loss ratio by 1.3 points in the current year compared
with 1.4 points of improvement in the prior year.
- For the full year, gross written premiums, excluding third
party captives, grew 4% and net written premiums grew 3%.
Commercial
|
Results for the
Three Months
Ended December 31
|
|
Results for the Year
Ended
December 31
|
($ millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Gross written premiums
ex. 3rd party captives
|
$
1,345
|
|
|
$
1,158
|
|
|
$
5,056
|
|
|
$
4,334
|
|
GWP ex. 3rd
party captives change (% year over year)
|
16
|
%
|
|
|
|
|
17
|
%
|
|
|
|
Net written
premiums
|
$
1,096
|
|
|
$
973
|
|
|
$
4,193
|
|
|
$
3,595
|
|
NWP change (% year
over year)
|
13
|
%
|
|
|
|
|
17
|
%
|
|
|
|
Net earned
premiums
|
$
1,022
|
|
|
$
923
|
|
|
$
3,923
|
|
|
$
3,552
|
|
NEP change (% year
over year)
|
11
|
%
|
|
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting gain
(loss)
|
$
12
|
|
|
$
47
|
|
|
$
106
|
|
|
$
(112)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio excluding
catastrophes and development
|
61.5
|
%
|
|
61.4
|
%
|
|
61.5
|
%
|
|
61.0
|
%
|
Effect of catastrophe
impacts
|
7.2
|
|
|
2.9
|
|
|
5.6
|
|
|
10.0
|
|
Effect of
development-related items
|
(0.9)
|
|
|
(0.2)
|
|
|
(0.7)
|
|
|
0.5
|
|
Loss ratio
|
67.8
|
%
|
|
64.1
|
%
|
|
66.4
|
%
|
|
71.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense
ratio
|
30.8
|
%
|
|
30.4
|
%
|
|
30.4
|
%
|
|
31.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined
ratio
|
99.0
|
%
|
|
94.9
|
%
|
|
97.3
|
%
|
|
103.1
|
%
|
Combined ratio
excluding catastrophes and development
|
92.7
|
%
|
|
92.2
|
%
|
|
92.4
|
%
|
|
92.6
|
%
|
- The fourth quarter underlying combined ratio increased 0.5
points as compared with the prior year quarter. The expense ratio
increased 0.4 points and the underlying loss ratio was largely
consistent with the prior year quarter.
- The fourth quarter combined ratio increased 4.1 points as
compared with the prior year quarter. Catastrophe losses were
$74 million, or 7.2 points of the
loss ratio in the quarter compared with $26
million, or 2.9 points of the loss ratio, for the prior year
quarter. Favorable net prior period development improved the loss
ratio by 0.9 points in the current quarter compared with 0.2 points
of improvement in the prior year quarter.
- In the fourth quarter, gross written premiums, excluding third
party captives, grew 16% and net written premiums grew 13%.
- For the full year, the underlying combined ratio improved 0.2
points as compared with the prior year, reflecting the lowest
underlying combined ratio on record. The expense ratio improved 0.7
points driven by net earned premium growth of 10% and lower
acquisition costs, partially offset by higher underwriting
expenses. The underlying loss ratio increased 0.5 points as
compared with the prior year primarily driven by 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.
- For the full year, the combined ratio improved 5.8 points as
compared with the prior year. Catastrophe losses were $222 million, or 5.6 points of the loss ratio for
the full year compared with $358
million, or 10.0 points of the loss ratio, for the prior
year. Favorable net prior period development improved the loss
ratio by 0.7 points in the current year compared with 0.5 points of
unfavorable development increasing the loss ratio in the prior
year.
- For the full year, gross written premiums, excluding third
party captives, and net written premiums grew 17%.
International
|
Results for the
Three Months
Ended December 31
|
|
Results for the Year
Ended
December 31
|
($ millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Gross written
premiums
|
$
361
|
|
|
$
339
|
|
|
$
1,394
|
|
|
$
1,297
|
|
GWP change (% year
over year)
|
6
|
%
|
|
|
|
|
7
|
%
|
|
|
|
Net written
premiums
|
$
325
|
|
|
$
318
|
|
|
$
1,164
|
|
|
$
1,101
|
|
NWP change (% year
over year)
|
2
|
%
|
|
|
|
|
6
|
%
|
|
|
|
Net earned
premiums
|
$
267
|
|
|
$
268
|
|
|
$
1,070
|
|
|
$
1,057
|
|
NEP change (% year
over year)
|
—
|
%
|
|
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting
gain
|
$
29
|
|
|
$
14
|
|
|
$
87
|
|
|
$
55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio excluding
catastrophes and development
|
58.1
|
%
|
|
58.5
|
%
|
|
58.5
|
%
|
|
59.0
|
%
|
Effect of catastrophe
impacts
|
0.9
|
|
|
4.1
|
|
|
2.2
|
|
|
2.6
|
|
Effect of
development-related items
|
(3.0)
|
|
|
(0.2)
|
|
|
(1.2)
|
|
|
0.1
|
|
Loss ratio
|
56.0
|
%
|
|
62.4
|
%
|
|
59.5
|
%
|
|
61.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense
ratio
|
32.9
|
%
|
|
32.4
|
%
|
|
32.3
|
%
|
|
33.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined
ratio
|
88.9
|
%
|
|
94.8
|
%
|
|
91.8
|
%
|
|
94.8
|
%
|
Combined ratio
excluding catastrophes and development
|
91.0
|
%
|
|
90.9
|
%
|
|
90.8
|
%
|
|
92.1
|
%
|
- The fourth quarter underlying combined ratio was largely
consistent with the prior year quarter. The expense ratio increased
0.5 points driven by higher acquisition costs. The underlying loss
ratio improved 0.4 points as compared with the prior year
quarter.
- The fourth quarter combined ratio improved 5.9 points as
compared with the prior year quarter. Catastrophe losses were
$2 million, or 0.9 points of the loss
ratio in the quarter compared with $11
million, or 4.1 points of the loss ratio, for the prior year
quarter. Favorable net prior period development improved the loss
ratio by 3.0 points in the current quarter compared with 0.2 points
of improvement in the prior year quarter.
- In the fourth quarter, excluding currency fluctuations, gross
written premiums grew 16% and net written premiums grew 12%.
- For the full year, the underlying combined ratio improved 1.3
points as compared with the prior year. The expense ratio improved
0.8 points driven by lower acquisition costs. The underlying loss
ratio improved 0.5 points as compared with the prior year.
- For the full year, the combined ratio improved 3.0 points as
compared with the prior year. Catastrophe losses were $23 million, or 2.2 points of the loss ratio for
the full year compared with $27
million, or 2.6 points of the loss ratio, for the prior
year. Favorable net prior period development improved the loss
ratio by 1.2 points in the current year compared with 0.1 points of
unfavorable development increasing the loss ratio in the prior
year.
- For the full year, excluding currency fluctuations, gross
written premiums grew 14% and net written premiums grew 13%.
Life & Group
|
Results for the
Three Months
Ended December 31
|
|
Results for the
Year
Ended December 31
|
($ millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net earned
premiums
|
$
117
|
|
|
$
122
|
|
|
$
473
|
|
|
$
491
|
|
Net investment
income
|
204
|
|
|
242
|
|
|
804
|
|
|
966
|
|
Core (loss)
income
|
(16)
|
|
|
6
|
|
|
(9)
|
|
|
126
|
|
Core results decreased $22 million
for the fourth quarter of 2022 as compared with the prior year
quarter primarily due to a $40
million pretax decline in net investment income from limited
partnerships partially offset by improved morbidity.
Corporate & Other
|
Results for the
Three Months
Ended December 31
|
|
Results for the
Year
Ended December 31
|
($ millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net investment
income
|
$
9
|
|
|
$
3
|
|
|
$
19
|
|
|
$
15
|
|
Insurance claims and
policyholders' benefits
|
40
|
|
|
86
|
|
|
76
|
|
|
109
|
|
Interest
expense
|
28
|
|
|
28
|
|
|
112
|
|
|
112
|
|
Core loss
|
(52)
|
|
|
(94)
|
|
|
(183)
|
|
|
(204)
|
|
Core loss improved $42 million for
the fourth quarter of 2022 as compared with the prior year quarter.
The application of retroactive reinsurance accounting to
additional cessions to the A&EP Loss Portfolio Transfer in both
periods resulted in after-tax non-economic charges of
$28 million and $48 million in 2022 and 2021,
respectively. The additional cessions in those periods were
$87 million and $138 million, respectively. Results
for the prior year quarter include a $16 million after-tax
impact from unfavorable development related to legacy mass tort
exposures in the fourth quarter of 2021.
Net Investment Income
|
Results for the
Three Months
Ended December 31
|
|
Results for the
Year
Ended December 31
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net investment
income
|
$
503
|
|
|
$
551
|
|
|
$
1,805
|
|
|
$
2,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income decreased $48 million for the fourth
quarter of 2022 as compared with the prior year quarter. The
decrease was driven by a decline in income from limited partnership
and common stock investments, which returned 0.9%, or
$20 million for the fourth quarter of 2022 compared with a
return of 5.1%, or $108 million in the prior year
quarter. The decrease was partially offset by a
$33 million increase in income from fixed income
securities.
Stockholders' Equity
Stockholders' equity of $8.8 billion decreased 31% from year-end
2021, primarily due to net unrealized investment losses compared to
net unrealized investment gains at year-end 2021, resulting from
the effect of higher interest rates on the fair value of the fixed
income portfolio and dividends paid to stockholders, partially
offset by net income. Net unrealized investment gains
decreased $3.8 billion after-tax driven by a decrease in
unrealized investment gains of $7.8 billion, partially offset by Shadow
Adjustments of $3.1 billion and
tax of $1.0 billion. Book
value per share of $32.58 likewise
decreased 31% from year-end 2021.
Book value per share ex AOCI of $45.71 increased 7% from year-end 2021 adjusting
for $3.60 of dividends per share.
As of December 31, 2022, statutory capital and surplus for
the Combined Continental Casualty Companies was $10.6 billion.
About the Company
CNA is one of the largest U.S. commercial property and casualty
insurance companies. Backed by more than 125 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
|
|
Ralitza Todorova,
312-822-3834
|
|
|
|
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 (844) 481-2830 (USA
Toll Free) or +1 (412) 317-1850
(International). 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 catastrophe losses and net prior year loss reserve and
premium 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, excluding rate and exposure changes, 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.
Underwriting results represent net earned premiums less
total insurance expenses, which includes insurance claims and
policyholders' benefits, amortization of deferred acquisition costs
and other insurance related expenses, pre-tax.
Statutory capital and surplus represents the excess
of an insurance company's admitted assets over its liabilities,
including loss reserves, as determined in accordance with statutory
accounting practices. Statutory capital and surplus as of the
current period is preliminary.
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 long term care reserves would result in a premium
deficiency if realized, a related increase in Insurance reserves is
recorded, net of tax, as a reduction of net unrealized gains
(losses), through Other comprehensive income (loss). To the
extent that unrealized gains or losses on fixed income securities
supporting structured settlements not funded by annuities would
impact the reserve balance if realized, a related increase or
decrease in Insurance reserves is recorded, net of tax, as a
reduction or increase of net unrealized gains (losses), through
Other comprehensive income (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 December 31
|
|
Results for the Year
Ended
December 31
|
($ millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net income
|
$
248
|
|
$
266
|
|
$
894
|
|
$
1,202
|
Less: Net investment
(losses) gains
|
(26)
|
|
1
|
|
(154)
|
|
96
|
Core income
|
$
274
|
|
$
265
|
|
$
1,048
|
|
$
1,106
|
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 December 31
|
|
Results for the Year
Ended
December 31
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net income per diluted
share
|
$
0.91
|
|
$
0.98
|
|
$
3.28
|
|
$
4.41
|
Less: Net investment
(losses) gains
|
(0.10)
|
|
0.01
|
|
(0.56)
|
|
0.35
|
Core income per diluted
share
|
$
1.01
|
|
$
0.97
|
|
$
3.84
|
|
$
4.06
|
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.
|
December 31,
2022
|
|
December 31,
2021
|
Book value per
share
|
$
32.58
|
|
$
47.20
|
Less: Per share impact
of AOCI
|
(13.13)
|
|
1.18
|
Book value per share
excluding AOCI
|
$
45.71
|
|
$
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 December 31
|
|
Results for the Year
Ended
December 31
|
|
($ millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Annualized net
income
|
$
992
|
|
$
1,067
|
|
$
894
|
|
$
1,202
|
|
Average stockholders'
equity including AOCI (a)
|
8,459
|
|
12,637
|
|
10,817
|
|
12,658
|
|
Return on
equity
|
11.7
|
%
|
8.4
|
%
|
8.3
|
%
|
9.5
|
%
|
|
|
|
|
|
|
|
|
|
Annualized core
income
|
$
1,096
|
|
$
1,060
|
|
$
1,048
|
|
$
1,106
|
|
Average stockholders'
equity excluding AOCI (a)
|
12,308
|
|
12,403
|
|
12,435
|
|
12,196
|
|
Core return on
equity
|
8.9
|
%
|
8.5
|
%
|
8.4
|
%
|
9.1
|
%
|
(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
provisions of relevant insurance policies are primary and
controlling. In addition, please note that all coverages may
not be available in all states.
"CNA" is a registered trademark of CNA Financial
Corporation. Certain CNA Financial Corporation subsidiaries
use the "CNA" trademark in connection with insurance underwriting
and claims activities. Copyright © 2023 CNA. All rights
reserved.
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