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CNA Financial Corporation (CNA - Free Report) reported second-quarter 2024 core earnings of $1.19 per share, which missed the Zacks Consensus Estimate by 1.6%. However, the bottom line increased 5.3% year over year.
The quarterly results of CNA reflected higher income from fixed income securities, larger invested asset base, improved retention and renewal premium change, partly offset by poor underwriting income and escalating expenses.
CNA Financial Corporation Price, Consensus and EPS Surprise
Total operating revenues of CNA Financial were $3.1 billion, up 6.7% year over year due to higher premiums, net investment income and other revenues. The top line beat the Zacks Consensus Estimate by 1.3%.
Net written premiums of Property & Casualty Operations increased 6% year over year to $2.6 billion, driven by retention of 85% and renewal premium change of 5% with a written rate of 4%.
Net investment income rose 7.4% year over year to $618 million. The increase was driven by higher income from fixed income securities as a result of favorable reinvestment rates and a larger invested asset base, as well as favorable limited partnership and common stock returns. Our estimate for net investment was $601.1 million. The Zacks Consensus Estimate was pegged at $592.3 million.
Total claims, benefits and expenses increased 7.3% to $2.6 billion, primarily due to higher insurance claims and policyholders' benefits, amortization of deferred acquisition costs, non-insurance warranty expense, other insurance related expenses and other expenses. Our estimate was $2.5 billion.
Catastrophe losses were $82 million, wider than a loss of $68 million in the year-ago quarter.
Underwriting income declined 10.1% year over year to $124 million. Our estimate was $175.3 million. The combined ratio deteriorated 100 basis points (bps) year over year to 94.8. The Zacks Consensus Estimate was pegged at 93.6 while our estimate was 92.8.
Segment Results
Specialty’s net written premiums increased 4% year over year to $857 million. Our estimate was $900 million. The combined ratio deteriorated 180 bps to 92.7. The Zacks Consensus Estimate was pegged at 85.1.
Commercial’s net written premiums increased 10% year over year to $1.4 billion. Our estimate was $1.3 billion. The combined ratio deteriorated 70 bps to 97. The Zacks Consensus Estimate was pegged at 94.8.
International’s net written premiums remained flat year over year at $359 million. Our estimate was $402.7 million. The combined ratio improved 30 bps to 91.9. The Zacks Consensus Estimate was pegged at 106.9.
Life & Group’s net earned premiums were $109 million, down 3.5% year over year. Our estimate was $105.9 million. The core loss was $1 million, narrower than a loss of $20 million incurred in the year-ago quarter, primarily due to a reduced impact from long-term care policy buyouts and higher net investment income.
Corporate & Other’s core loss of $53 million was wider than a loss of $46 million incurred in the year-earlier quarter.
Financial Update
The core return on equity expanded 40 bps to 10.6%. Book value, excluding AOCI, as of Jun 30 was $45.86 per share, down 1.1% from the 2023-end level. Statutory capital and surplus for the Combined Continental Casualty Companies increased 0.7% from the 2023-end level to $11 billion at quarter end.
Net cash flow provided by operating activities increased 23% to $616 million in the quarter.
Dividend Update
CNA Financial’s board of directors approved a quarterly dividend of 44 cents per share to be paid out on Aug 29 to shareholders as of Aug 12.
The Travelers Companies, Inc. (TRV - Free Report) reported second-quarter 2024 core income of $2.51 per share, which beat the Zacks Consensus Estimate by 25.5%. Travelers’ total revenues increased 12.4% from the year-ago quarter to $11.3 billion. The top-line figure, however, missed the Zacks Consensus Estimate by 1%. Net written premiums increased 8% year over year to a record $11.1 billion. The figure was higher than our estimate of $10.4 billion.
Net investment income increased 24.2% year over year to $885 million. The figure was higher than our estimate of $852.14 million. The Zacks Consensus Estimate was pegged at $861.2 million. Catastrophe loss was $1.51 billion, pre-tax, wider than a loss of $1.18 million, pre-tax, incurred in the year-ago quarter. Travelers witnessed an underwriting loss of $65 million, narrower than a loss of $640 million incurred in the year-ago quarter.
RLI Corp. (RLI - Free Report) reported second-quarter 2024 operating earnings of $1.72 per share, beating the Zacks Consensus Estimate by 27.4%. The bottom line improved 48.3% year over year. Operating revenues for the reported quarter were $413 million, up 17.6% year over year, driven by 17.6% higher net premiums earned and 18% higher net investment income. The top line beat the Zacks Consensus Estimate of $403 million. Gross premiums written increased 11% year over year to $563.4 million. Our estimate was $664 million.
Net investment income increased 18% year over year to $34 million. Our estimate was $39.1 million. The Zacks Consensus Estimate was pegged at $37.4 million. Total expenses increased 9.5% year over year to $314.8 million. Our estimate was $331.7 million. Underwriting income increased 70% year over year to $70 million. The combined ratio improved 570 bps year over year to 81.5. The Zacks Consensus Estimate for the metric was pegged at 95.3, while our estimate was 89.9.
Cincinnati Financial Corporation (CINF - Free Report) reported second-quarter 2024 operating income of $1.29 per share, which surpassed the Zacks Consensus Estimate by 33%. The bottom line increased 7% year over year. Total operating revenues in the quarter under review were $2.4 billion, which improved 10.8% year over year. However, the top line missed the consensus mark by 1.5%.
Net written premiums climbed 14% year over year to $2.4 billion. Investment income, net of expenses, increased 10% year over year to $242 million and missed our estimate of $246.2 million. The Zacks Consensus Estimate was pegged at $252 million. Total benefits and expenses of Cincinnati Financial increased 11.2% year over year to $2.1 billion. Our estimate was $2.2 billion. In its P&C insurance business, CINF witnessed an underwriting income of $35 million, which decreased 26% from the year-ago period. Our estimate was pegged at an income of $1.5 million.
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CNA Financial (CNA) Q2 Earnings Miss, Revenues Rise Y/Y
CNA Financial Corporation (CNA - Free Report) reported second-quarter 2024 core earnings of $1.19 per share, which missed the Zacks Consensus Estimate by 1.6%. However, the bottom line increased 5.3% year over year.
The quarterly results of CNA reflected higher income from fixed income securities, larger invested asset base, improved retention and renewal premium change, partly offset by poor underwriting income and escalating expenses.
CNA Financial Corporation Price, Consensus and EPS Surprise
CNA Financial Corporation price-consensus-eps-surprise-chart | CNA Financial Corporation Quote
Behind Second-Quarter Headlines
Total operating revenues of CNA Financial were $3.1 billion, up 6.7% year over year due to higher premiums, net investment income and other revenues. The top line beat the Zacks Consensus Estimate by 1.3%.
Net written premiums of Property & Casualty Operations increased 6% year over year to $2.6 billion, driven by retention of 85% and renewal premium change of 5% with a written rate of 4%.
Net investment income rose 7.4% year over year to $618 million. The increase was driven by higher income from fixed income securities as a result of favorable reinvestment rates and a larger invested asset base, as well as favorable limited partnership and common stock returns. Our estimate for net investment was $601.1 million. The Zacks Consensus Estimate was pegged at $592.3 million.
Total claims, benefits and expenses increased 7.3% to $2.6 billion, primarily due to higher insurance claims and policyholders' benefits, amortization of deferred acquisition costs, non-insurance warranty expense, other insurance related expenses and other expenses. Our estimate was $2.5 billion.
Catastrophe losses were $82 million, wider than a loss of $68 million in the year-ago quarter.
Underwriting income declined 10.1% year over year to $124 million. Our estimate was $175.3 million. The combined ratio deteriorated 100 basis points (bps) year over year to 94.8. The Zacks Consensus Estimate was pegged at 93.6 while our estimate was 92.8.
Segment Results
Specialty’s net written premiums increased 4% year over year to $857 million. Our estimate was $900 million. The combined ratio deteriorated 180 bps to 92.7. The Zacks Consensus Estimate was pegged at 85.1.
Commercial’s net written premiums increased 10% year over year to $1.4 billion. Our estimate was $1.3 billion. The combined ratio deteriorated 70 bps to 97. The Zacks Consensus Estimate was pegged at 94.8.
International’s net written premiums remained flat year over year at $359 million. Our estimate was $402.7 million. The combined ratio improved 30 bps to 91.9. The Zacks Consensus Estimate was pegged at 106.9.
Life & Group’s net earned premiums were $109 million, down 3.5% year over year. Our estimate was $105.9 million. The core loss was $1 million, narrower than a loss of $20 million incurred in the year-ago quarter, primarily due to a reduced impact from long-term care policy buyouts and higher net investment income.
Corporate & Other’s core loss of $53 million was wider than a loss of $46 million incurred in the year-earlier quarter.
Financial Update
The core return on equity expanded 40 bps to 10.6%. Book value, excluding AOCI, as of Jun 30 was $45.86 per share, down 1.1% from the 2023-end level. Statutory capital and surplus for the Combined Continental Casualty Companies increased 0.7% from the 2023-end level to $11 billion at quarter end.
Net cash flow provided by operating activities increased 23% to $616 million in the quarter.
Dividend Update
CNA Financial’s board of directors approved a quarterly dividend of 44 cents per share to be paid out on Aug 29 to shareholders as of Aug 12.
Zacks Rank
CNA Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
The Travelers Companies, Inc. (TRV - Free Report) reported second-quarter 2024 core income of $2.51 per share, which beat the Zacks Consensus Estimate by 25.5%. Travelers’ total revenues increased 12.4% from the year-ago quarter to $11.3 billion. The top-line figure, however, missed the Zacks Consensus Estimate by 1%. Net written premiums increased 8% year over year to a record $11.1 billion. The figure was higher than our estimate of $10.4 billion.
Net investment income increased 24.2% year over year to $885 million. The figure was higher than our estimate of $852.14 million. The Zacks Consensus Estimate was pegged at $861.2 million. Catastrophe loss was $1.51 billion, pre-tax, wider than a loss of $1.18 million, pre-tax, incurred in the year-ago quarter. Travelers witnessed an underwriting loss of $65 million, narrower than a loss of $640 million incurred in the year-ago quarter.
RLI Corp. (RLI - Free Report) reported second-quarter 2024 operating earnings of $1.72 per share, beating the Zacks Consensus Estimate by 27.4%. The bottom line improved 48.3% year over year. Operating revenues for the reported quarter were $413 million, up 17.6% year over year, driven by 17.6% higher net premiums earned and 18% higher net investment income. The top line beat the Zacks Consensus Estimate of $403 million. Gross premiums written increased 11% year over year to $563.4 million. Our estimate was $664 million.
Net investment income increased 18% year over year to $34 million. Our estimate was $39.1 million. The Zacks Consensus Estimate was pegged at $37.4 million. Total expenses increased 9.5% year over year to $314.8 million. Our estimate was $331.7 million. Underwriting income increased 70% year over year to $70 million. The combined ratio improved 570 bps year over year to 81.5. The Zacks Consensus Estimate for the metric was pegged at 95.3, while our estimate was 89.9.
Cincinnati Financial Corporation (CINF - Free Report) reported second-quarter 2024 operating income of $1.29 per share, which surpassed the Zacks Consensus Estimate by 33%. The bottom line increased 7% year over year. Total operating revenues in the quarter under review were $2.4 billion, which improved 10.8% year over year. However, the top line missed the consensus mark by 1.5%.
Net written premiums climbed 14% year over year to $2.4 billion. Investment income, net of expenses, increased 10% year over year to $242 million and missed our estimate of $246.2 million. The Zacks Consensus Estimate was pegged at $252 million. Total benefits and expenses of Cincinnati Financial increased 11.2% year over year to $2.1 billion. Our estimate was $2.2 billion. In its P&C insurance business, CINF witnessed an underwriting income of $35 million, which decreased 26% from the year-ago period. Our estimate was pegged at an income of $1.5 million.