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CNA Financial (CNA) Q1 Earnings & Revenues Lag Estimates

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·4 min read
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CNA Financial Corporation CNA reported first-quarter 2022 core earnings of $1.16 per share, which missed the Zacks Consensus Estimate by 0.8%. The bottom line however increased 20.8% year over year.

The insurer’s results reflect higher premiums, lower expenses and improved combined ratio, offset by lower net investment income. The quarter delivered the lowest combined ratio in over five years.

CNA Financial Corporation Price, Consensus and EPS Surprise

CNA Financial Corporation Price, Consensus and EPS Surprise
CNA Financial Corporation Price, Consensus and EPS Surprise

CNA Financial Corporation price-consensus-eps-surprise-chart | CNA Financial Corporation Quote

Behind First-Quarter Headlines

Total operating revenues of CNA Financial were nearly $2.5 billion, up 1.7% year over year on the back of higher net earned premiums and non-insurance warranty revenues. The top line however missed the Zacks Consensus Estimate by 3.7%.

Net written premiums at Property & Casualty Operations improved 4.4% year over year to about $2 billion, driven by a written rate of +7% and new business growth of 14%.

Net investment income decreased 11.1% year over year to $448 million. The decrease was driven by limited partnership and common stock investments, which returned 0.4% in the current quarter compared with 3.4% in the year-ago period.

Total claims, benefits and expenses increased 0.8% to $2.5 billion, primarily due to higher non-insurance warranty expense.

Pretax net catastrophe losses were $19 million, narrower than losses of $125 million in the year-ago quarter.

The combined ratio improved 620 basis points (bps) year over year to 91.9.

Core return on equity was 10.3%, expanded 150 bps.

Book value as of Mar 31, 2022 was $39.87 per share, down 15.5% from Dec 31, 2021.

Segment Results

Specialty’s net written premiums rose nearly 3.9% year over year to $771 million. The combined ratio improved 10 bps to 88.7.

Commercial’s net written premiums increased 4.3% year over year to $1 billion. The combined ratio improved 1220 bps to 94.5.

International’s net written premiums increased 6.8% year over year to $251 million. The combined ratio improved 350 bps to 92.4.

Life & Group’s net earned premiums were $120 million, unchanged year over year. Core income of $23 million decreased 36.1% year over year due to lower net investment income and higher expenses.

Corporate & Other’s core loss of $28 million was narrower than a loss of $36 million in the year-earlier quarter.

Dividend Update

CNA Financial’s board of directors approved a quarterly dividend of 40 cents to be paid out on Jun 2 to shareholders of May 16.

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 Some Other P&C Insurers

Of the insurance industry players that have reported first-quarter results so far, Cincinnati Financial Corporation CINF and Kinsale Capital Group KNSL beat the respective Zacks Consensus Estimate for earnings, while Arch Capital Group Ltd. ACGL missed the mark.

Cincinnati Financial reported first-quarter 2022 operating income of $1.58 per share, which outpaced the Zacks Consensus Estimate by 6.8%. The bottom line improved 15.3% year over year.

Net written premiums climbed 12% year over year to $1.9 billion. In its property & casualty (P&C) insurance business, Cincinnati Financial witnessed an underwriting profit of $165 million, which surged 24% year over year. The combined ratio improved 130 basis points (bps) year over year to 89.9.

Kinsale Capital delivered first-quarter 2022 net operating earnings of $1.63 per share, which outpaced the Zacks Consensus Estimate by 5.2%. The bottom line improved 46.8% year over year.

Gross written premiums of $245.5 million rose 45.4% year over year. Net written premiums climbed 50% year over year to $216.5 million in the quarter.

Arch Capital reported first-quarter 2022 operating income per share of $1.10, which missed the Zacks Consensus Estimate by 2.7%. The bottom line however increased 86.4% year over year.

Gross premiums written improved 11.9% year over year to $3.8 billion. Net premiums written climbed 5% year over year to $2.6 billion. Net investment income plunged 18.6% year over year to $80.4 million.


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Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report

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