CNA Financial Corp ((CNA)) has held its Q4 earnings call. Read on for the main highlights of the call.
CNA Financial Corp’s recent earnings call painted a picture of robust performance, underscored by record underwriting and investment income gains. Despite facing challenges such as increased catastrophe losses and foreign exchange impacts, the company showcased positive results in premium growth, core income, and improved expense ratios, suggesting a favorable outlook for the future.
Record Underlying Underwriting Gain
CNA Financial Corp achieved a record high underlying underwriting gain of $222 million in the fourth quarter, marking a 10% increase. This milestone demonstrates the company’s strong underwriting results, reinforcing its position as a leader in the industry.
Highest Quarterly Net Written Premium Growth
The company reported a net written premium growth of 10% for the fourth quarter, the highest of the year. This indicates strong production performance and a continued ability to capture market opportunities effectively.
Strong Investment Income Growth
CNA’s net investment income increased by 10% for the full year, reaching a record $2,497 million. This growth was driven by fixed income and limited partnerships, highlighting the company’s strategic investment approach.
Record Core Income for Full Year 2024
The company achieved record core income of $1,316 million for 2024, a $32 million increase over 2023. This reflects robust underwriting and investment performance, contributing to a strong financial foundation.
Improved Expense Ratio
CNA reported an improved expense ratio of 30.0% in Q4 and 30.2% for the full year, the lowest since 2008. This improvement benefits from higher net earned premiums and demonstrates effective cost management.
Strong Operating Cash Flow
Operating cash flow for the year increased by 13% to a record $2.6 billion. This reflects the company’s strong underwriting and investment results, providing a solid cash position.
Increased Dividends
CNA announced a 5% increase in its regular quarterly dividend and a special dividend of $2.00 per share. This move indicates strong financial health and confidence in future prospects.
Higher Catastrophe Losses
The company faced increased catastrophe losses, which rose to $45 million in Q4, impacting the combined ratio by 1.8 points. This was primarily due to Hurricane Milton, highlighting the inherent risks in the insurance industry.
Core Loss in Corporate Segment
The Corporate segment reported a core loss of $91 million in Q4, including charges related to asbestos and environmental pollution reserves. This underscores the ongoing challenges in managing legacy liabilities.
Foreign Exchange Loss in International Segment
CNA’s International segment experienced a $15 million foreign currency exchange loss in Q4, compared to a $6 million gain in the prior year quarter. This reflects the volatility in foreign exchange markets.
Decline in Life & Group Segment Performance
The Life & Group segment recorded a core loss of $18 million in Q4 due to unfavorable morbidity experience, down from a $4 million core income in the prior year quarter. This decline highlights challenges in this segment.
Forward-Looking Guidance
CNA Financial Corporation’s forward-looking guidance remains optimistic, with several record-setting metrics reported for fiscal year 2024. The company achieved a core income of $342 million in Q4, contributing to a full-year core income of $1,316 million, the highest on record. Net investment income for the quarter rose by 5% to $644 million, leading to a total of $2,497 million for the year. The P&C all-in combined ratio was 93.1% for the quarter, with an underlying combined ratio of 91.4%, marking sixteen consecutive quarters below 92%. The company also announced a 5% increase in its regular quarterly dividend to $0.46 per share, along with a special dividend of $2.00 per share, reflecting confidence in their financial stability and future prospects.
In summary, CNA Financial Corp’s earnings call highlights a strong performance with record gains in underwriting and investment income, despite some challenges. The company’s strategic focus on premium growth, cost management, and investment returns positions it well for future success. The positive sentiment expressed during the call reflects confidence in CNA’s ability to navigate market challenges and capitalize on opportunities.