CNA Financial Corporation has announced its financial results for the third quarter of 2023.
The commercial P&C insurer reported a net income of $258 million, equivalent to $0.95 per share. This marked a substantial turnaround from the prior year quarter's net loss of $42 million, amounting to $(0.15) per share.
While the net investment loss for this quarter was $31 million, it is still a significant improvement from $85 million during the same period in the prior year. The core income for the quarter stood at $289 million, equivalent to $1.06 per share, a notable surge from $43 million or $0.16 per share in the prior year quarter.
In the property and casualty (P&C) segments, core income for the third quarter of 2023 reached $351 million, reflecting a robust upswing of $91 million compared to the previous year’s quarter. This growth was primarily driven by escalated net investment income, a record high in pretax underlying underwriting income, and reduced catastrophe losses.
Notably, P&C segments, excluding third party captives, showcased considerable progress with a 7% growth in gross written premium and a 6% surge in net written premium. This advancement was primarily steered by a renewal premium change of +6%, which included a rate of +5% and an exposure change of +1%.
The P&C core income witnessed a substantial 35% surge in the quarter, propelled by increased investment income and $220 million in underlying underwriting income. The overall combined ratio stood at 94.3%, comprising pretax catastrophe losses of $94 million, equating to 4.1 points, along with a favourable prior period development of 0.2 points. The P&C underlying combined ratio registered at 90.4%.
Contrary to P&C’s results, the life and group segment experienced a core loss of $29 million for the third quarter of 2023. That said, this result sill signifies an improvement from the prior year quarter's loss of $192 million. This change reflects an unfavourable after-tax impact of $2 million in 2023 compared to $143 million in 2022, attributed to annual reserve reviews.
For the “corporate and other” segment, CNA reported a core loss of $33 million for the third quarter of 2023, as opposed to $25 million during the same period in the prior year. The increase in core loss by $8 million in 2023 was primarily due to unfavourable net prior year loss reserve development, offset to some extent by higher net investment income.
The quarter also included a $16 million after-tax charge associated with unfavourable prior year development, primarily linked to legacy mass tort claims, unlike the third quarter of 2022, which had no such charge.
“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 favourable market conditions,” CNA CEO and chairman Dino E. Robusto said.
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