- Net income of $258 million versus
net loss of $42 million in the prior
year quarter; core income of $289 million versus $43 million in the prior year quarter.
- Core income up 56% to $291
million versus $186 million in
the prior year quarter, excluding the results of the Life &
Group annual reserve reviews.
- P&C core income up 35% to $351
million versus $260 million in
the prior year quarter, reflects higher net investment income,
record high pretax underlying underwriting income and lower
catastrophe losses.
- Life & Group core loss of $29
million versus $192 million in
the prior year quarter, reflects an unfavorable after-tax impact of
$2 million in 2023 and $143 million in 2022 as a result of the annual
reserve reviews. Results for the prior year quarter have been
adjusted to reflect the application of the LDTI accounting
standard.
- Net investment income up 31% to $553
million pretax, includes a $72
million increase from limited partnerships and common stock
to $28 million and a $59 million increase from fixed income securities
and other investments to $525
million.
- P&C combined ratio of 94.3%, compared with 95.8% in the
prior year quarter, including 4.1 points of catastrophe loss impact
compared with 5.5 points in the prior year quarter. P&C
underlying combined ratio was 90.4% compared with 91.1%, in the
prior year quarter. P&C underlying loss ratio was 60.0% and the
expense ratio was 30.1%.
- P&C segments, excluding third party captives, generated
gross written premium growth of 7% and net written premium growth
of 6%. P&C renewal premium change of +6%, with written rate of
+5% and exposure change of +1%.
- Book value per share of $31.61;
book value per share excluding AOCI of $45.43, a 7% increase from year-end 2022
adjusting for $2.46 of dividends per
share.
- Board of Directors declares regular quarterly cash dividend of
$0.42 per share.
CHICAGO, Oct. 30,
2023 /PRNewswire/ -- CNA Financial Corporation (NYSE:
CNA) today announced third quarter 2023 net income of $258 million, or $0.95 per share, versus net loss of $42 million, or $(0.15) per share, in the prior year quarter. Net
investment losses for the quarter were $31
million compared to $85
million in the prior year quarter. Core income for the
quarter was $289 million, or
$1.06 per share, versus $43 million, or $0.16 per share, in the prior
year quarter.
Our Property & Casualty segments produced core income of
$351 million for the third quarter of
2023, an increase of $91 million compared to the prior year
quarter driven by higher net investment income, record high pretax
underlying underwriting income and lower catastrophe
losses. P&C segments, excluding third party captives,
generated gross written premium growth of 7% and net written
premium growth of 6% for the third quarter of 2023 driven
by renewal premium change of +6%, including rate of
+5% and exposure change of +1%.
Our Life & Group segment produced a core loss of
$29 million for the third quarter of
2023 versus $192 million in the prior
year quarter, which reflects an unfavorable after-tax impact of
$2 million in 2023 and
$143 million
in 2022 as a result of the annual reserve
reviews.
Our Corporate & Other segment produced a core loss of
$33 million for the third quarter of
2023 versus $25 million
in the prior year quarter.
CNA Financial declared a quarterly dividend of $0.42 per share, payable November 30, 2023 to stockholders of record on
November 13, 2023.
|
Results for the Three Months
Ended September 30
|
|
Results for the Nine Months
Ended September 30
|
($ millions, except per share
data)
|
2023
|
|
2022 (a)
|
|
2023
|
|
2022 (a)
|
Net income
(loss)
|
$
258
|
|
$
(42)
|
|
$
838
|
|
$
443
|
Core income
(b)
|
289
|
|
43
|
|
922
|
|
571
|
Net income (loss) per
diluted share
|
$
0.95
|
|
$
(0.15)
|
|
$
3.08
|
|
$
1.63
|
Core income per diluted share
|
1.06
|
|
0.16
|
|
3.39
|
|
2.10
|
|
|
September 30,
2023
|
|
December 31, 2022 (a)
|
Book value
per share
|
$
31.61
|
|
|
|
|
|
$
31.55
|
|
|
|
|
|
Book value per
share excluding AOCI
|
45.43
|
|
|
|
|
|
44.83
|
|
|
|
|
|
(a)
|
As of January 1,
2023, the Company adopted LDTI using the modified retrospective
method applied as of the transition date of January 1, 2021. Prior
period amounts have been adjusted to reflect application of the new
guidance.
|
|
|
(b)
|
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 continued to produce very strong results with a significant
increase in core income driven by a 31% increase in net investment
income, record levels of P&C underlying underwriting gain,
lower levels of catastrophe loss, and improved results in Life
& Group. Our annual Life and Group reserve assumption
review resulted in a neutral change this year compared to a
$143 million after-tax loss last
year. Excluding the impacts of the Life & Group reserve
review, our core income was still up by 56% this quarter.
P&C core income was up 35% in the quarter driven by higher
investment income, and $220 million
of underlying underwriting income. The all-in combined ratio
was 94.3% with pretax catastrophe losses of $94 million or 4.1 points, and 0.2 points of
favorable prior period development. The P&C underlying
combined ratio was 90.4%.
We recorded 7% growth in gross written premium ex captives and
6% growth in net written premium. Our overall rate change remained
stable at 5%, and importantly, rates improved in our casualty lines
most impacted by social inflation, and rate turned positive in
Specialty as decreases in management liability pricing moderated in
the quarter. We are encouraged by these trends as we continue to
cover our long run loss cost trends from written rate increases
together with the exposure increases that act like rate, and we are
confident in our ability to continue to leverage the favorable
market conditions," said Dino E. Robusto, Chairman & Chief
Executive Officer of CNA Financial Corporation.
Property & Casualty Operations
|
Results for the
Three Months
Ended September 30
|
|
Results for the Nine Months
Ended September 30
|
($ millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Gross written premiums ex. 3rd party captives
|
$
2,595
|
|
|
$
2,430
|
|
|
$
8,305
|
|
|
$
7,560
|
|
GWP ex. 3rd party captives change (% year over year)
|
7
|
%
|
|
|
|
|
10
|
%
|
|
|
|
Net written
premiums
|
$
2,178
|
|
|
$
2,060
|
|
|
$
6,938
|
|
|
$
6,379
|
|
NWP change (%
year over year)
|
6
|
%
|
|
|
|
|
9
|
%
|
|
|
|
Net earned
premiums
|
$
2,295
|
|
|
$
2,103
|
|
|
$
6,662
|
|
|
$
6,080
|
|
NEP change
(% year over year)
|
9
|
%
|
|
|
|
|
10
|
%
|
|
|
|
Underwriting
gain
|
$
131
|
|
|
$
84
|
|
|
$
399
|
|
|
$
425
|
|
Net investment income
|
$
318
|
|
|
$
230
|
|
|
$
951
|
|
|
$
692
|
|
Core income
|
$
351
|
|
|
$
260
|
|
|
$
1,071
|
|
|
$
898
|
|
Loss ratio excluding
catastrophes and development
|
60.0
|
%
|
|
59.9
|
%
|
|
59.9
|
%
|
|
60.0
|
%
|
Effect of catastrophe impacts
|
4.1
|
|
|
5.5
|
|
|
3.2
|
|
|
2.8
|
|
Effect of development-related items
|
(0.2)
|
|
|
(0.8)
|
|
|
—
|
|
|
(0.9)
|
|
Loss ratio
|
63.9
|
%
|
|
64.6
|
%
|
|
63.1
|
%
|
|
61.9
|
%
|
Expense ratio
|
30.1
|
%
|
|
30.8
|
%
|
|
30.6
|
%
|
|
30.8
|
%
|
Combined
ratio
|
94.3
|
%
|
|
95.8
|
%
|
|
94.0
|
%
|
|
93.0
|
%
|
Combined ratio excluding catastrophes and development
|
90.4
|
%
|
|
91.1
|
%
|
|
90.8
|
%
|
|
91.1
|
%
|
- The underlying combined ratio improved 0.7 points as compared
with the prior year quarter. The expense ratio improved 0.7 points
driven by net earned premium growth of 9% and a favorable
International reinsurance acquisition related catch-up adjustment
partially offset by higher employee related costs. The underlying
loss ratio was largely consistent with the prior year quarter.
- The combined ratio improved 1.5 points as compared with the
prior year quarter. Catastrophe losses were $94 million, or 4.1 points of the loss ratio in
the quarter compared with $114
million, or 5.5 points of the loss ratio, for the prior year
quarter. Favorable net prior year development improved the loss
ratio by 0.2 points in the current quarter as compared with 0.8
points of improvement in the prior year quarter.
- P&C segments, excluding third party captives, generated
gross written premium growth of 7% and net written premium growth
of 6%. Excluding currency fluctuations, gross written premiums grew
7% and net written premiums grew 5%.
Business Operating Highlights Specialty
|
Results for the
Three Months
Ended September 30
|
|
Results for the Nine Months
Ended September 30
|
($ millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Gross written premiums ex. 3rd party captives
|
$
949
|
|
|
$
958
|
|
|
$
2,796
|
|
|
$
2,816
|
|
GWP ex. 3rd party captives change (% year over year)
|
(1)
|
%
|
|
|
|
|
(1)
|
%
|
|
|
|
Net written
premiums
|
$
825
|
|
|
$
840
|
|
|
$
2,438
|
|
|
$
2,443
|
|
NWP change (%
year over year)
|
(2)
|
%
|
|
|
|
|
—
|
%
|
|
|
|
Net earned
premiums
|
$
829
|
|
|
$
810
|
|
|
$
2,438
|
|
|
$
2,376
|
|
NEP change
(% year over year)
|
2
|
%
|
|
|
|
|
3
|
%
|
|
|
|
Underwriting
gain
|
$
83
|
|
|
$
92
|
|
|
$
237
|
|
|
$
273
|
|
Loss ratio excluding
catastrophes and development
|
58.6
|
%
|
|
58.4
|
%
|
|
58.5
|
%
|
|
58.6
|
%
|
Effect of catastrophe impacts
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.1
|
|
Effect of development-related items
|
(0.6)
|
|
|
(1.9)
|
|
|
(0.3)
|
|
|
(1.4)
|
|
Loss ratio
|
58.0
|
%
|
|
56.7
|
%
|
|
58.2
|
%
|
|
57.3
|
%
|
Expense
ratio
|
31.8
|
%
|
|
31.7
|
%
|
|
31.9
|
%
|
|
31.0
|
%
|
Combined
ratio
|
90.1
|
%
|
|
88.7
|
%
|
|
90.3
|
%
|
|
88.5
|
%
|
Combined ratio excluding catastrophes and development
|
90.7
|
%
|
|
90.4
|
%
|
|
90.6
|
%
|
|
89.8
|
%
|
- The underlying combined ratio increased 0.3 points as compared
with the prior year quarter comprised of a 0.2 point increase in
the underlying loss ratio and a 0.1 point increase in the expense
ratio.
- The combined ratio increased 1.4 points as compared with the
prior year quarter. Favorable net prior year development improved
the loss ratio by 0.6 points in the quarter compared with 1.9
points of improvement in the prior year quarter.
- Gross written premiums, excluding third party captives declined
1% and net written premiums declined 2% for the third quarter of
2023.
Commercial
|
Results for the
Three Months
Ended September 30
|
|
Results for the Nine Months
Ended September 30
|
($ millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Gross written premiums ex. 3rd party captives
|
$
1,340
|
|
|
$
1,184
|
|
|
$
4,384
|
|
|
$
3,711
|
|
GWP ex. 3rd party captives change (% year over year)
|
13
|
%
|
|
|
|
|
18
|
%
|
|
|
|
Net written premiums
|
$
1,071
|
|
|
$
962
|
|
|
$
3,588
|
|
|
$
3,097
|
|
NWP change (%
year over year)
|
11
|
%
|
|
|
|
|
16
|
%
|
|
|
|
Net earned
premiums
|
$
1,170
|
|
|
$
1,023
|
|
|
$
3,336
|
|
|
$
2,901
|
|
NEP change
(% year over year)
|
14
|
%
|
|
|
|
|
15
|
%
|
|
|
|
Underwriting gain
(loss)
|
$
13
|
|
|
$
(23)
|
|
|
$
96
|
|
|
$
94
|
|
Loss ratio excluding
catastrophes and development
|
61.5
|
%
|
|
61.5
|
%
|
|
61.5
|
%
|
|
61.5
|
%
|
Effect of catastrophe impacts
|
7.4
|
|
|
10.0
|
|
|
5.7
|
|
|
5.0
|
|
Effect of development-related items
|
—
|
|
|
—
|
|
|
(0.2)
|
|
|
(0.5)
|
|
Loss ratio
|
68.9
|
%
|
|
71.5
|
%
|
|
67.0
|
%
|
|
66.0
|
%
|
Expense ratio
|
29.5
|
%
|
|
29.9
|
%
|
|
29.6
|
%
|
|
30.1
|
%
|
Combined
ratio
|
98.9
|
%
|
|
101.9
|
%
|
|
97.1
|
%
|
|
96.6
|
%
|
Combined ratio excluding catastrophes and development
|
91.5
|
%
|
|
91.9
|
%
|
|
91.6
|
%
|
|
92.1
|
%
|
- The underlying combined ratio improved 0.4 points as compared
with the prior year quarter, reflecting the lowest underlying
combined ratio on record. The expense ratio improved 0.4 points
driven by net earned premium growth of 14%.
- The combined ratio decreased 3.0 points as compared with the
prior year quarter. Catastrophe losses were $87 million, or 7.4 points of the loss ratio in
the quarter compared with $103
million, or 10.0 points of the loss ratio, for the
prior year quarter.
- Gross written premiums, excluding third party captives grew 13%
and net written premiums grew 11% for the third quarter of
2023.
International
|
Results for the
Three Months
Ended September 30
|
|
Results for the Nine Months
Ended September 30
|
($ millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Gross written
premiums
|
$
306
|
|
|
$
288
|
|
|
$
1,125
|
|
|
$
1,033
|
|
GWP change
(% year over year)
|
6
|
%
|
|
|
|
|
9
|
%
|
|
|
|
Net written
premiums
|
$
282
|
|
|
$
258
|
|
|
$
912
|
|
|
$
839
|
|
NWP change (%
year over year)
|
9
|
%
|
|
|
|
|
9
|
%
|
|
|
|
Net earned
premiums
|
$
296
|
|
|
$
270
|
|
|
$
888
|
|
|
$
803
|
|
NEP change
(% year over year)
|
10
|
%
|
|
|
|
|
11
|
%
|
|
|
|
Underwriting
gain
|
$
35
|
|
|
$
15
|
|
|
$
66
|
|
|
$
58
|
|
Loss ratio excluding
catastrophes and development
|
57.9
|
%
|
|
58.6
|
%
|
|
57.8
|
%
|
|
58.6
|
%
|
Effect of catastrophe impacts
|
2.3
|
|
|
4.1
|
|
|
2.7
|
|
|
2.7
|
|
Effect of development-related items
|
—
|
|
|
—
|
|
|
1.7
|
|
|
(0.6)
|
|
Loss ratio
|
60.2
|
%
|
|
62.7
|
%
|
|
62.2
|
%
|
|
60.7
|
%
|
Expense ratio
|
28.1
|
%
|
|
31.7
|
%
|
|
30.3
|
%
|
|
32.1
|
%
|
Combined
ratio
|
88.3
|
%
|
|
94.4
|
%
|
|
92.5
|
%
|
|
92.8
|
%
|
Combined ratio excluding catastrophes and development
|
86.0
|
%
|
|
90.3
|
%
|
|
88.1
|
%
|
|
90.7
|
%
|
- The underlying combined ratio improved 4.3 points as compared
with the prior year quarter. The expense ratio improved 3.6 points
driven by a favorable reinsurance acquisition related catch-up
adjustment and net earned premium growth of 10%. The underlying
loss ratio improved 0.7 points as compared with the prior year
quarter.
- The combined ratio improved 6.1 points as compared with the
prior year quarter. Catastrophe losses were $7 million, or 2.3 points of the loss ratio in
the quarter compared with $10
million, or 4.1 points of the loss ratio, for the prior year
quarter.
- Excluding currency fluctuations, gross written premiums grew 4%
and net written premiums grew 7% for the third quarter of
2023.
Life & Group
|
Results for the
Three Months
Ended September 30
|
Results for
the Nine Months
Ended September 30
|
($ millions)
|
2023
|
|
2022 (a)
|
|
2023
|
|
2022 (a)
|
Net earned
premiums
|
$
112
|
|
$
118
|
|
$
340
|
|
$
356
|
Claims, benefits and expenses
|
371
|
|
556
|
|
1,087
|
|
1,236
|
Net investment income
|
216
|
|
187
|
|
659
|
|
600
|
Core loss
|
(29)
|
|
(192)
|
|
(52)
|
|
(196)
|
(a)
|
As of January 1, 2023,
the Company adopted LDTI using the modified retrospective method
applied as of the transition date of January 1,
2021. Prior period amounts have been adjusted to reflect
application of the new guidance.
|
Core loss improved $163 million
for the third quarter of 2023 as compared with the prior year
quarter. Both periods are inclusive of assumption updates as a
result of the annual reserve reviews. Results for the prior
year quarter have been adjusted to reflect the application of the
LDTI accounting standard and include an unfavorable impact from
reserve assumption updates in 2022.
The assumption updates in the third quarter of 2023 unfavorably
impacted core loss by $2 million
after- tax, which is comprised of an $8 million
increase in long term care reserves,
partially offset by a $6 million reduction
in structured settlement reserves.
Adjusted to reflect the application of the LDTI accounting
standard, assumption updates in the third quarter of 2022
unfavorably impacted core loss by $143
million after-tax. The 2022 assumption updates included
an $186 million increase in long term care reserves, primarily
driven by the unfavorable impact of increased cost of care
inflation offset by favorable premium rate action assumptions. In
addition, favorable assumption updates resulted in a $5 million reduction in structured settlement
reserves.
Corporate & Other
|
Results for the
Three Months
Ended September 30
|
Results for the Nine Months
Ended September 30
|
($ millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Insurance claims
and policyholders' benefits
|
$
10
|
|
$
(13)
|
|
$
32
|
|
$
36
|
Interest expense
|
35
|
|
28
|
|
93
|
|
84
|
Net investment income
|
19
|
|
5
|
|
43
|
|
10
|
Core loss
|
(33)
|
|
(25)
|
|
(97)
|
|
(131)
|
Core loss increased $8 million for the
third quarter of 2023 as compared with the prior
year quarter driven by unfavorable net prior year loss reserve
development partially offset by higher net investment income. The
current quarter includes a $16
million after-tax charge related to unfavorable prior year
development largely associated with legacy mass tort claims
compared with no charge in the third quarter of 2022.
Net Investment Income
|
Results for the
Three Months
Ended September 30
|
Results for the Nine Months
Ended September 30
|
|
2023
|
|
|
2022
|
|
2023
|
|
|
2022
|
Fixed income
securities and other
|
$
525
|
|
|
$
466
|
|
$
1,529
|
|
|
$ 1,353
|
Limited partnership and common stock
investments
|
28
|
|
|
(44)
|
|
124
|
|
|
(51)
|
Net investment income
|
$
553
|
|
|
$
422
|
|
$
1,653
|
|
|
$
1,302
|
Net investment income increased $131 million for the third
quarter of 2023 as compared with the prior year quarter. The
increase was driven by a $72 million
increase in income from limited partnership and common stock
investments and a $59 million increase in income from fixed
income securities and other investments.
Stockholders' Equity
Stockholders' equity of $8.6
billion was consistent with year-end 2022. Book value per
share ex AOCI of $45.43 increased
7% from year-end 2022 adjusting
for $2.46 of dividends per share. As of
September 30, 2023, statutory capital
and surplus for the Combined Continental Casualty Companies was
$10.6 billion.
Accounting Standards Update
In August 2018, the FASB issued
ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted
Improvements to the Accounting for Long-Duration Contracts
(LDTI). The updated accounting guidance requires changes to
the measurement and disclosure of long-duration contracts. For
the Company, this includes the run-off long term care business in
the Life & Group segment. The Company adopted the new
guidance effective January 1, 2023,
using the modified retrospective method applied as of the
transition date of January 1,
2021. All prior period amounts have been adjusted to reflect
application of the new guidance. While the requirements of the
new guidance represent a material change from legacy
accounting, the new guidance does not impact capital and surplus
under statutory accounting practices, cash flows or the underlying
economics of the business. Additional information regarding
the Company's adoption of ASU 2018-12 and the impact to historical
financial results is contained in the Company's Q1 2023 Financial
Supplement, furnished on Form 8-K, on May 1,
2023 with the Securities and Exchange Commission.
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:
|
Heather
Giordano, 312-822-4319
|
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 that 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 includes the individual and group
run-off long term care businesses as well as structured settlement
obligations not funded by annuities related to certain property and
casualty claimants.
- 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),
a legacy portfolio of excess workers' compensation (EWC) policies
and certain legacy mass tort reserves.
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 t he 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 development-related items.
- 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.
Exposure represents the measure of risk used in the
pricing of the insurance product. The change in exposure
represents the change in premium dollars on policies that renew as
a result of the change in risk of the policy.
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.
Development-related items represents net prior year loss
reserve and premium development, and includes the effects of
interest accretion and change in allowance for uncollectible
reinsurance and deductible amounts.
Underwriting gain (loss) represents 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.
Underlying underwriting gain (loss) represents
underwriting results excluding catastrophe losses and
development-related items.
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.
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. The
calculation of core income (loss) excludes net investment
gains or losses because net investment gains or losses are
generall y 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 September 30
|
Results for the Nine Months
Ended September 30
|
($ millions)
|
2023
|
|
2022 (a)
|
|
2023
|
|
2022 (a)
|
Net income
|
$
258
|
|
$
(42)
|
|
$
838
|
|
$
443
|
Less: Net investment (losses) gains
|
(31)
|
|
(85)
|
|
(84)
|
|
(128)
|
Core income
|
$
289
|
|
$
43
|
|
$
922
|
|
$
571
|
(a)
|
As of January 1, 2023,
the Company adopted LDTI using the modified retrospective method
applied as of the transition date of January 1,
2021. Prior period amounts have been adjusted to reflect
application of the new guidance.
|
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 September 30
|
Results for the Nine Months
Ended September 30
|
|
2023
|
|
2022 (a)
|
|
2023
|
|
2022 (a)
|
Net income
per diluted share
|
$
0.95
|
|
$
(0.15)
|
|
$
3.08
|
|
$
1.63
|
Less: Net investment (losses) gains
|
(0.11)
|
|
(0.31)
|
|
(0.31)
|
|
(0.47)
|
Core income
per diluted share
|
$
1.06
|
|
$
0.16
|
|
$
3.39
|
|
$
2.10
|
(a)
|
As of January 1, 2023,
the Company adopted LDTI using the modified retrospective method
applied as of the transition date of January 1,
2021. Prior period amounts have been adjusted to reflect
application of the new guidance.
|
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.
|
September
30,
2023
|
|
December 31,
2022 (a)
|
Book value
per share
|
$
31.61
|
|
$
31.55
|
Less: Per share impact
of AOCI
|
(13.82)
|
|
(13.28)
|
Book value
per share excluding AOCI
|
$
45.43
|
|
$
44.83
|
(a)
|
As of January 1,
2023, the Company adopted LDTI using the modified retrospective
method applied as of the transition date of January 1,
2021. Prior period amounts have been adjusted to reflect
application of the new guidance.
|
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 September 30
|
Results for the Nine Months
Ended September 30
|
($ millions)
|
2023
|
2022 (a)
|
2023
|
2022 (a)
|
Annualized net income
|
$
1,033
|
|
$
(168)
|
|
$
1,118
|
|
$
591
|
|
Average stockholders' equity including AOCI (b)
|
8,644
|
|
8,505
|
|
8,555
|
|
9,554
|
|
Return on equity
|
11.9
|
%
|
(2.0)
|
%
|
13.1
|
%
|
6.2
|
%
|
Annualized core
income
|
$
1,154
|
|
$
169
|
|
$
1,229
|
|
$
761
|
|
Average stockholders' equity excluding AOCI (b)
|
12,228
|
|
12,087
|
|
12,225
|
|
12,235
|
|
Core return
on equity
|
9.4
|
%
|
1.4
|
%
|
10.1
|
%
|
6.2
|
%
|
(a)
|
As of January 1,
2023, the Company adopted LDTI using the modified retrospective
method applied as of the transition date of January 1,
2021. Prior period amounts have been adjusted to reflect
application of the new guidance.
|
|
|
(b)
|
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 uncertainti es
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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SOURCE CNA