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CNA Financial Corporation (CNA - Free Report) reported fourth-quarter 2017 core income of $1.05 per share, beating the Zacks Consensus Estimate by 28%. Also, the bottom line improved 28% from the year-ago quarter.
CNA Financial Corporation Price, Consensus and EPS Surprise
Despite being the costliest year in terms of catastrophe loss, CNA Financial delivered a significant amount of core income that marked the highest level in almost a decade. Also, the figure was 12% higher than the same in 2016.
Moreover, the quarter witnessed improved premiums across its segments — Commercial and International.
Including net realized investment gains and net deferred tax asset remeasurement, net income of 82 cents per share declined 7.9% year over year.
Full-Year Highlights
For 2017, CNA Financial reported core income per share of $3.38, surpassing the consensus mark by 4.9% and also improving 11.2% year over year.
Behind Fourth-Quarter Headlines
Net investment income declined about 3.4% year over year to $366 million due to decrease in fixed income securities and limited partnership returns in the quarter.
Net written premiums at Property & Casualty Operations improved 4.9% year over year to $1.6 billion. Core income jumped about 21.2% year over year to $263 million, driven by higher favorable net prior-period loss reserve development and improved current accident year underwriting results.
Combined ratio improved 590 basis points (bps) on a year-over-year basis to 94%.
As of Dec 31, 2017, book value (excluding AOCI) was $45.02 per share, up 0.3% from Dec 31, 2016.
Segment Results
Specialty net written premiums dipped 0.1% year over year to $671million. Combined ratio deteriorated 400 bps to 89.6%.
Commercial net written premiums rose 6.6% year over year to $713 million, driven by higher new business within the Middle Markets as well as a positive renewal change. Retention came in at 86% in the quarter under review. Combined ratio deteriorated 2060 bps to 97.4%.
International net written premiums increased 17.9% year over year to $217 million, fueled by higher new business, retention and renewal premium change. Combined ratio deteriorated 1060 bps to 96.7%.
Life & Group Non-Core operating revenues slipped 0.9% year over year to $331 million. Core income soared 55% year over year to $31 million owing to higher release of long-term care claim reserves from the prior-year quarter.
Corporate & Other Non-Core core loss of $8 million was considerably narrower than the loss of $16 million in the year-ago quarter. A release of unallocated loss adjustment expense reserves in the reported quarter led to the improvement.
Dividend Update
The board of directors of CNA Financial announced a dividend of 30 cents per share and a special dividend of $2 during the reported quarter. Both the dividends will be paid on Mar 14 to stockholders of record as of Feb 26, 2018.
Among other players from the same space having reported fourth-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) exceeded the respective Zacks Consensus Estimate.
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CNA Financial (CNA) Q4 Earnings Beat Estimates, Increase Y/Y
CNA Financial Corporation (CNA - Free Report) reported fourth-quarter 2017 core income of $1.05 per share, beating the Zacks Consensus Estimate by 28%. Also, the bottom line improved 28% from the year-ago quarter.
CNA Financial Corporation Price, Consensus and EPS Surprise
CNA Financial Corporation Price, Consensus and EPS Surprise | CNA Financial Corporation Quote
Despite being the costliest year in terms of catastrophe loss, CNA Financial delivered a significant amount of core income that marked the highest level in almost a decade. Also, the figure was 12% higher than the same in 2016.
Moreover, the quarter witnessed improved premiums across its segments — Commercial and International.
Including net realized investment gains and net deferred tax asset remeasurement, net income of 82 cents per share declined 7.9% year over year.
Full-Year Highlights
For 2017, CNA Financial reported core income per share of $3.38, surpassing the consensus mark by 4.9% and also improving 11.2% year over year.
Behind Fourth-Quarter Headlines
Net investment income declined about 3.4% year over year to $366 million due to decrease in fixed income securities and limited partnership returns in the quarter.
Net written premiums at Property & Casualty Operations improved 4.9% year over year to $1.6 billion. Core income jumped about 21.2% year over year to $263 million, driven by higher favorable net prior-period loss reserve development and improved current accident year underwriting results.
Combined ratio improved 590 basis points (bps) on a year-over-year basis to 94%.
As of Dec 31, 2017, book value (excluding AOCI) was $45.02 per share, up 0.3% from Dec 31, 2016.
Segment Results
Specialty net written premiums dipped 0.1% year over year to $671million. Combined ratio deteriorated 400 bps to 89.6%.
Commercial net written premiums rose 6.6% year over year to $713 million, driven by higher new business within the Middle Markets as well as a positive renewal change. Retention came in at 86% in the quarter under review. Combined ratio deteriorated 2060 bps to 97.4%.
International net written premiums increased 17.9% year over year to $217 million, fueled by higher new business, retention and renewal premium change. Combined ratio deteriorated 1060 bps to 96.7%.
Life & Group Non-Core operating revenues slipped 0.9% year over year to $331 million. Core income soared 55% year over year to $31 million owing to higher release of long-term care claim reserves from the prior-year quarter.
Corporate & Other Non-Core core loss of $8 million was considerably narrower than the loss of $16 million in the year-ago quarter. A release of unallocated loss adjustment expense reserves in the reported quarter led to the improvement.
Dividend Update
The board of directors of CNA Financial announced a dividend of 30 cents per share and a special dividend of $2 during the reported quarter. Both the dividends will be paid on Mar 14 to stockholders of record as of Feb 26, 2018.
Zacks Rank
CNA Financial carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Other P&C Insurers
Among other players from the same space having reported fourth-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) exceeded the respective Zacks Consensus Estimate.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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