CNA Financial Corporation (NYSE:CNA) incurred fourth-quarter 2018 core loss of 8 cents per share versus the Zacks Consensus Estimate of core income of 81 cents. Also, the bottom line came in against the year-ago quarter’s core income of $1.05 per share.
Limited partnership investment returns and catastrophe losses affected the fourth-quarter results.
Including net realized investment losses, net loss of 31 cents per share came in against the prior-year quarter’s net income of 82 cents.
Full-Year Highlights
For 2018, CNA Financial reported core income of $3.10 per share, missing the Zacks Consensus Estimate by 22.7%. Also, the bottom line declined 8.3% from the year-ago quarter.
Nonetheless, the company witnessed a significant progress in 2018. This property and casualty (P&C) insurer displayed improvement in both combined and underlying combined ratios while achieving considerable premium growth.
Behind Fourth-Quarter Headlines
Net investment income dropped 23.8% year over year to $279 million.
Net written premiums at Property & Casualty Operations improved 3.6% year over year to $1.7 billion. Core income plummeted nearly 94% year over year to $16 million. Combined ratio deteriorated 1140 basis points (bps) on a year-over-year basis to 105.4%.
As of Dec 31, 2018, book value (excluding AOCI) was $44.55 per share, dipping 1% from the level on Dec 31, 2017.
Segment Results
Specialty’s net written premiums rose 2.6% year over year to $682 million. Increase in new business and a positive renewal premium change were responsible for the upside. However, lower retention partially offset this improvement. Combined ratio deteriorated 260 bps to 91.2%.
Commercial’s net written premiums inched up 0.3% year over year to $721 million. Combined ratio improved 1510 bps to 113.3%.
International’s net written premiums increased nearly 18% year over year to $256 million, attributable to positive renewal premium change and a favorable change in estimate of ultimate premium. However, lower retention and new business partially offset this upside. Combined ratio improved 2280 bps to 119.5%.
Life & Group’s total operating revenues rose 1.8% year over year to $337 million. Core income of $7 million plunged 77.4% from the year-ago period.
Corporate & Other’s core loss of $46 million was substantially wider than the loss of $8 million in the prior-year period.
Dividend Update
CNA Financial’s board of directors approved a quarterly dividend of 35 cents and a special dividend of $2 per share. Both dividends will be paid on Mar 14, 2019 to stockholders of record as of Feb 25, 2019.
Zacks Rank
CNA Financial carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) 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 figures of MGIC Investment Corp. (NYSE:MTG) and RLI Corp. (NYSE:RLI) beat the respective Zacks Consensus Estimate while The Progressive Corp.’s (NYSE:PGR) metric missed the same.
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