CNA Financial Corporation (NYSE:CNA) reported first-quarter 2018 core income of $1.03 per share, beating the Zacks Consensus Estimate by 14.4%. Also, the bottom line improved 18.4% 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
CNA Financial’s delivery of strong results bears evidence to a solid start of the year. The company grossed a significant amount of core income, driven by pre-tax underlying underwriting income, marking the highest level in over a decade. Moreover, the company generated core income growth in its run-off long-term care business.
This apart, the quarter witnessed improved premiums across its segments, namely Specialty, Commercial and International.
Including net realized investment gains, net income of $1.07 per share improved 11.5% year over year.
Behind First-Quarter Headlines
Net investment income grew about 4.1% year over year to $405 million owing to stable fixed income returns and lower tax rate.
Net written premiums at Property & Casualty Operations increased 11.1% year over year to $1.8 billion. Core income jumped 22% year over year to $327 million. Combined ratio improved 410 basis points (bps) on a year-over-year basis to 93.1%.
As of Mar 31, 2018, book value (excluding AOCI) was $43.57 per share, down 3.2% from Dec 31, 2017.
Segment Results
Specialty net written premiums rose 2.4% year over year to $686 million owing to increase in new business and a positive renewal change. Combined ratio improved 570 bps to 87.5%.
Commercial net written premiums improved 14.9% year over year to $832 million. Combined ratio improved 460 bps to 97.1%.
International net written premiums increased 23.9% year over year to $295 million, fueled by broad based growth across all the company’s platforms, driven by a higher new business, retention and positive renewal premium change. Combined ratio deteriorated 150 bps to 96.6%.
Life & Group Non-Core total operating revenues nudged up 1.2% year over year to $335 million. Core income skyrocketed 250% year over year to $14 million owing to favorable persistency as well as rising rates.
Corporate & Other Non-Core core loss of $60 million was considerably wider than the loss of $37 million in the year-ago quarter.
Dividend Update
The board of directors of CNA Financial announced a dividend of 30 cents per share, payable May 30 to stockholders of record as of May 14, 2018.
Zacks Rank
CNA Financial carries a Zacks Rank #3 (Hold). 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 insurance industry, which have already reported first-quarter earnings, the bottom line of The Progressive Corporation (NYSE:PGR) and RLI Corp. (NYSE:RLI) outpaced the respective Zacks Consensus Estimate while that of The Travelers Companies, Inc. (NYSE:TRV) missed the same.
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RLI Corp. (RLI): Free Stock Analysis Report
The Travelers Companies, Inc. (TRV): Free Stock Analysis Report
The Progressive Corporation (PGR): Free Stock Analysis Report
CNA Financial Corporation (CNA): Free Stock Analysis Report
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