- Net income up 49% to $283 million
versus $190 million in the prior year
quarter; core income up 34% to $308
million versus $230 million in
the prior year quarter.
- P&C core income of $374
million versus $317 million in
the prior year quarter, reflects higher investment income and
record high pretax underlying underwriting income, partially offset
by higher catastrophe losses and lower favorable net prior year
development.
- Corporate & Other core loss of $46
million versus $78 million in
the prior year quarter.
- Net investment income up 33% to $575
million pretax, includes an $83
million increase from limited partnerships and common stock
to $68 million and a $60 million increase from fixed income securities
and other investments to $507
million.
- P&C combined ratio of 93.8%, compared with 91.0% in the
prior year quarter, including 3.1 points of catastrophe loss impact
compared with 1.8 points in the prior year quarter. The underlying
combined ratio was 91.1% compared with 90.8%, in the prior year
quarter. The underlying loss ratio was 59.9% and the expense ratio
was 30.9%.
- P&C segments, excluding third party captives, generated
gross written premium growth of 12% and net written premium growth
of 9%. Excluding currency fluctuations, gross written premiums grew
12% and net written premiums grew 10%. P&C renewal premium
change of +7%, with written rate of +5% and exposure change of
+2%.
- Book value per share of $32.22;
book value per share excluding AOCI of $44.86, a 5% increase from year- end 2022
adjusting for $2.04 of dividends per
share.
- Board of Directors declares regular quarterly cash dividend of
$0.42 per share.
CHICAGO, July 31,
2023 /PRNewswire/ -- CNA Financial Corporation (NYSE:
CNA) today announced second quarter 2023 net income of $283 million, or $1.04 per share, versus $190 million, or $0.69 per share, in the prior year quarter. Net
investment losses for the quarter were $25
million compared to $40
million in the prior year quarter. Core income for the
quarter was up 34% to $308 million,
or $1.13 per share, versus
$230 million, or $0.84 per share, in the prior year quarter.
Our Property & Casualty segments produced core income of
$374 million for the second quarter
of 2023, an increase of $57 million
compared to the prior year quarter driven by higher investment
income and record high pretax underlying underwriting income,
partially offset by higher catastrophe losses and lower favorable
net prior year development. P&C segments, excluding third party
captives, generated gross written premium growth of 12% and net
written premium growth of 9% for the second quarter of 2023 driven
by renewal premium change of +7%, including rate of +5%, exposure
change of +2% and new business growth of 11%. Excluding currency
fluctuations, gross written premiums grew 12% and net written
premiums grew 10%.
Our Life & Group segment produced a core loss of
$20 million for the second quarter of
2023 versus $9 million in the prior
year quarter primarily due to long term care policy buyouts.
Our Corporate & Other segment produced a core loss of
$46 million for the second quarter of
2023 versus $78 million in the prior
year quarter driven by lower net prior year loss reserve
development and higher net investment income.
CNA Financial declared a quarterly dividend of $0.42 per share, payable August 31, 2023 to stockholders of record on
August 14, 2023.
|
Results for the
Three Months
Ended June 30
|
|
Results for the Six
Months
Ended June 30
|
($ millions, except
per share data)
|
2023
|
|
2022 (a)
|
|
2023
|
|
2022 (a)
|
Net income
|
$
283
|
|
$
190
|
|
$
580
|
|
$
485
|
Core income
(b)
|
308
|
|
230
|
|
633
|
|
528
|
Net income per diluted
share
|
$
1.04
|
|
$
0.69
|
|
$
2.13
|
|
$
1.78
|
Core income per
diluted share
|
1.13
|
|
0.84
|
|
2.33
|
|
1.94
|
|
|
June 30, 2023
|
|
December 31, 2022 (a)
|
Book value per
share
|
$
|
32.22
|
|
$
|
31.55
|
Book value per share
excluding AOCI
|
|
44.86
|
|
|
44.83
|
|
|
(a)
|
As of January 1, 2023, the
Company adopted LDTI using the
modified retrospective method applied as of the
transition date of
January 1, 2021. Prior period
amounts have been adjusted to reflect application
of the new guidance.
|
|
|
(b)
|
Management utilizes the core income
(loss) financial measure to monitor
the Company's operations. Please refer herein
to the Reconciliation of GAAP Measures to
Non-GAAP Measures section
of this press release for further discussion of this non-GAAP
measure.
|
"We produced strong results in the quarter with double-digit
top-line growth and continued excellent profitability. Core income
increased by 34% in the quarter and net investment income was up
33% with significant increases in LPs, common stock, and the fixed
income portfolio.
The all-in combined ratio was very strong at 93.8%, with pretax
catastrophe losses of $68 million, or
3.1 points of the combined ratio, and 0.4 points of favorable prior
period development. The P&C underlying combined ratio of
91.1% generated a record $200 million of pretax
P&C underlying underwriting gain.
In the quarter, we achieved very strong production performance
with 12% growth in gross written premium ex captives and 9% growth
in net written premium. Renewal premium change was 7% for P&C
overall and 11% in Commercial, which was up 2 points from the first
quarter. Retention remained consistently high at 86% and new
business was up 11%, similar to the first quarter.
With the strong top-line and bottom-line results in the first
half of the year and improved investment returns, we
are optimistic about our opportunities through the remainder
of 2023," said Dino E. Robusto,
Chairman & Chief
Executive Officer of CNA Financial Corporation.
Property & Casualty Operations
|
Results for the
Three
Months Ended June 30
|
|
|
Results for the
Six
Months Ended June 30
|
($ millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Gross written premiums ex. 3rd party captives
|
$ 2,986
|
$ 2,676
|
|
|
$ 5,710
|
$ 5,130
|
|
GWP ex.
3rd party captives
change (% year over year)
|
12
|
%
|
|
|
|
|
11
|
%
|
|
|
|
Net written premiums
|
$ 2,513
|
$ 2,296
|
|
|
$ 4,760
|
$ 4,319
|
|
NWP change (%
year over year)
|
9
|
%
|
|
|
|
|
10
|
%
|
|
|
|
Net earned
premiums
|
$ 2,234
|
$ 2,037
|
|
|
$ 4,367
|
$ 3,977
|
|
NEP change
(% year over year)
|
10
|
%
|
|
|
|
|
10
|
%
|
|
|
|
Underwriting gain
|
$
138
|
$
185
|
|
|
$ 268
|
$ 341
|
|
Net investment income
|
$
332
|
$
227
|
|
|
$ 633
|
$ 462
|
|
Core income
|
$
374
|
$
317
|
|
|
$ 720
|
$ 638
|
|
Loss ratio
excluding catastrophes and development
|
59.9
|
%
|
|
60.0
|
%
|
|
59.9
|
%
|
|
60.0
|
%
|
Effect of catastrophe impacts
|
3.1
|
|
|
1.8
|
|
|
2.7
|
|
|
1.4
|
|
Effect of development-related items
|
(0.4)
|
|
|
(1.6)
|
|
|
0.2
|
|
|
(1.0)
|
|
Loss ratio
|
62.6
|
%
|
|
60.2
|
%
|
|
62.8
|
%
|
|
60.4
|
%
|
Expense ratio
|
30.9
|
%
|
|
30.5
|
%
|
|
30.8
|
%
|
|
30.7
|
%
|
Combined ratio
|
93.8
|
%
|
|
91.0
|
%
|
|
93.9
|
%
|
|
91.4
|
%
|
Combined ratio excluding catastrophes and development
|
91.1
|
%
|
|
90.8
|
%
|
|
91.0
|
%
|
|
91.0
|
%
|
- The underlying combined ratio increased 0.3 points as compared
with the prior year quarter. The expense ratio increased 0.4 points
driven by higher employee related costs. The underlying loss ratio
was largely consistent with the prior year quarter.
- The combined ratio increased 2.8 points as compared with the
prior year quarter. Catastrophe losses were $68 million, or 3.1 points of the loss ratio in
the quarter compared with $37
million, or 1.8 points of the loss ratio, for the prior
year quarter. Favorable net prior year development improved
the loss ratio by 0.4 points in the current quarter as
compared with 1.6 points of improvement in the prior
year quarter.
- P&C segments,
excluding third party captives, generated
gross written premium
growth of 12% and net written premium
growth of 9%. Excluding currency
fluctuations, gross written
premiums grew 12% and net written premiums
grew 10%.
Business Operating Highlights
Specialty
|
Results for the
Three
Months Ended June 30
|
|
Results for the
Six
Months Ended June 30
|
($ millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Gross written premiums ex. 3rd party captives
|
$
961
|
|
|
$
973
|
|
|
$ 1,847
|
|
|
$ 1,858
|
|
GWP ex.
3rd party captives
change (% year over year)
|
(1)
|
%
|
|
|
|
|
(1)
|
%
|
|
|
|
Net written premiums
|
$
825
|
|
|
$
832
|
|
|
$ 1,613
|
|
|
$ 1,603
|
|
NWP change
(% year over year)
|
(1)
|
%
|
|
|
|
|
1
|
%
|
|
|
|
Net earned
premiums
|
$
812
|
|
|
$
794
|
|
|
$ 1,609
|
|
|
$ 1,566
|
|
NEP change
(% year over year)
|
2
|
%
|
|
|
|
|
3
|
%
|
|
|
|
Underwriting gain
|
$
74
|
|
|
$
93
|
|
|
$
154
|
|
|
$
181
|
|
Loss ratio
excluding catastrophes and development
|
58.6
|
%
|
|
58.6
|
%
|
|
58.5
|
%
|
|
58.7
|
%
|
Effect of catastrophe impacts
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
Effect of development-related items
|
(0.3)
|
|
|
(1.2)
|
|
|
(0.2)
|
|
|
(1.3)
|
|
Loss ratio
|
58.3
|
%
|
|
57.5
|
%
|
|
58.3
|
%
|
|
57.5
|
%
|
Expense ratio
|
32.4
|
%
|
|
30.4
|
%
|
|
31.9
|
%
|
|
30.7
|
%
|
Combined ratio
|
90.9
|
%
|
|
88.1
|
%
|
|
90.4
|
%
|
|
88.4
|
%
|
Combined ratio excluding catastrophes and development
|
91.2
|
%
|
|
89.2
|
%
|
|
90.6
|
%
|
|
89.6
|
%
|
- The underlying combined ratio increased 2.0 points as compared
with the prior year quarter due to an increase in the expense ratio
driven by higher employee related and acquisition costs.
- The combined ratio increased 2.8 points as compared with the
prior year quarter. Favorable net prior year development
improved the loss ratio by 0.3 points in the quarter compared with
1.2 points of improvement in
the prior year quarter.
- Gross written premiums, excluding third party captives and net
written premiums both declined 1% for the second
quarter of 2023.
Commercial
|
Results for the
Three
Months Ended June 30
|
|
Results for the
Six
Months Ended June 30
|
($
millions)
|
2023
|
|
2022
|
|
|
2023
|
|
2022
|
Gross written premiums ex. 3rd party captives
|
$
1,604
|
|
|
$
1,321
|
|
|
|
$ 3,044
|
|
|
$ 2,527
|
|
GWP ex.
3rd party captives
change (% year over year)
|
21
|
%
|
|
|
|
|
|
20
|
%
|
|
|
|
Net written
premiums
|
$
1,329
|
|
|
$
1,134
|
|
|
|
$ 2,517
|
|
|
$ 2,135
|
|
NWP change
(% year over year)
|
17
|
%
|
|
|
|
|
|
18
|
%
|
|
|
|
Net earned
premiums
|
$
1,120
|
|
|
$
974
|
|
|
|
$ 2,166
|
|
|
$ 1,878
|
|
NEP change
(% year over year)
|
15
|
%
|
|
|
|
|
|
15
|
%
|
|
|
|
Underwriting gain
|
$
42
|
|
|
$
69
|
|
|
|
$
83
|
|
|
$
117
|
|
Loss ratio
excluding catastrophes and development
|
61.5
|
%
|
|
61.5
|
%
|
|
|
61.5
|
%
|
|
61.5
|
%
|
Effect of catastrophe impacts
|
5.2
|
|
|
3.0
|
|
|
|
4.7
|
|
|
2.4
|
|
Effect of development-related items
|
(0.5)
|
|
|
(1.8)
|
|
|
|
(0.3)
|
|
|
(0.9)
|
|
Loss ratio
|
66.2
|
%
|
|
62.7
|
%
|
|
|
65.9
|
%
|
|
63.0
|
%
|
Expense ratio
|
29.6
|
%
|
|
30.0
|
%
|
|
|
29.8
|
%
|
|
30.3
|
%
|
Combined ratio
|
96.3
|
%
|
|
93.2
|
%
|
|
|
96.2
|
%
|
|
93.8
|
%
|
Combined ratio excluding catastrophes and development
|
91.6
|
%
|
|
92.0
|
%
|
|
|
91.8
|
%
|
|
92.3
|
%
|
- The underlying combined ratio improved 0.4 points as compared
with the prior year quarter, reflecting the lowest underlying
combined ratio on record. The expense ratio improved 0.4 points
driven by net earned premium growth of 15%.
- The combined ratio increased 3.1 points as compared with the
prior year quarter. Catastrophe losses were $59 million, or 5.2 points of the loss ratio in
the quarter compared with $29
million, or 3.0
points of the loss ratio, for the prior year quarter.
Favorable net prior year development improved the loss ratio by 0.5 points
in the quarter compared with 1.8 points
of
improvement in the prior year quarter.
- Gross written premiums, excluding third party captives grew 21%
and net written premiums grew
17% for the second quarter of 2023.
International
|
Results for the
Three
Months Ended June 30
|
|
Results for the
Six
Months Ended June 30
|
($ millions)
|
2023
|
|
2022
|
|
|
2023
|
|
2022
|
Gross written premiums
|
$
421
|
|
|
$
382
|
|
|
|
$
819
|
|
|
$
745
|
|
GWP change
(% year over year)
|
10
|
%
|
|
|
|
|
|
10
|
%
|
|
|
|
Net written premiums
|
$
359
|
|
|
$
330
|
|
|
|
$
630
|
|
|
$
581
|
|
NWP change (%
year over year)
|
9
|
%
|
|
|
|
|
|
8
|
%
|
|
|
|
Net earned
premiums
|
$
302
|
|
|
$
269
|
|
|
|
$
592
|
|
|
$
533
|
|
NEP change
(% year over year)
|
12
|
%
|
|
|
|
|
|
11
|
%
|
|
|
|
Underwriting gain
|
$
22
|
|
|
$
23
|
|
|
|
$
31
|
|
|
$
43
|
|
Loss ratio
excluding catastrophes and development
|
57.9
|
%
|
|
58.5
|
%
|
|
|
57.7
|
%
|
|
58.6
|
%
|
Effect of catastrophe impacts
|
3.1
|
|
|
2.8
|
|
|
|
2.9
|
|
|
2.0
|
|
Effect of development-related items
|
—
|
|
|
(1.8)
|
|
|
|
2.5
|
|
|
(1.0)
|
|
Loss ratio
|
61.0
|
%
|
|
59.5
|
%
|
|
|
63.1
|
%
|
|
59.6
|
%
|
Expense ratio
|
31.2
|
%
|
|
32.1
|
%
|
|
|
31.5
|
%
|
|
32.4
|
%
|
Combined ratio
|
92.2
|
%
|
|
91.6
|
%
|
|
|
94.6
|
%
|
|
92.0
|
%
|
Combined ratio excluding catastrophes and development
|
89.1
|
%
|
|
90.6
|
%
|
|
|
89.2
|
%
|
|
91.0
|
%
|
- The underlying combined ratio improved 1.5 points as compared
with the prior year quarter. The expense ratio improved 0.9 points
driven by net earned premium growth of 12% and lower acquisition
costs. The underlying loss ratio improved 0.6 points as compared
with the prior year quarter.
- The combined ratio increased 0.6 points as compared with the
prior year quarter. Catastrophe losses were $9 million, or 3.1 points of the loss ratio in
the quarter compared with $7 million,
or 2.8 points of the loss ratio,
for the prior
year quarter. There was no net prior
year development in the current
quarter compared with 1.8 points of favorable
development improving the loss ratio
in the prior year quarter.
- Excluding currency fluctuations, gross written
premiums grew 12% and net written premiums
grew 10% for the second
quarter of 2023.
Life & Group
|
Results for the
Three
Months Ended June 30
|
|
Results for the
Six
Months Ended June 30
|
($ millions)
|
2023
|
|
2022 (a)
|
|
|
2023
|
|
2022 (a)
|
Net earned
premiums
|
$
113
|
|
$
118
|
|
|
$
228
|
|
$
238
|
Claims, benefits and expenses
|
375
|
|
342
|
|
|
716
|
|
680
|
Net investment income
|
229
|
|
201
|
|
|
443
|
|
413
|
Core loss
|
(20)
|
|
(9)
|
|
|
(23)
|
|
(4)
|
|
(a) As of January 1,
2023, the Company
adopted LDTI using the modified retrospective method applied as of the transition date of January
1, 2021. Prior period
amounts have been adjusted to reflect
application of the new guidance.
|
Excluding the impacts of long term care policy
buyouts, year to date 2023 underwriting results
are generally in line with expectations.
Corporate & Other
|
Results for the
Three
Months Ended June 30
|
|
Results for the
Six
Months Ended June 30
|
($ millions)
|
2023
|
|
2022
|
|
|
2023
|
|
2022
|
Insurance claims
and policyholders' benefits
|
$
29
|
|
$
57
|
|
|
$
22
|
|
$
49
|
Interest expense
|
30
|
|
28
|
|
|
58
|
|
56
|
Net investment income
|
14
|
|
4
|
|
|
24
|
|
5
|
Core loss
|
(46)
|
|
(78)
|
|
|
(64)
|
|
(106)
|
Core loss decreased $32 million
for the second quarter of 2023 as compared with the prior year
quarter driven by lower net prior year loss reserve
development and higher net investment income. The
current quarter includes a $28
million after-tax charge related to unfavorable prior year
development
largely associated with legacy mass tort claims
compared with a $51 million
after-tax charge in the second quarter of 2022.
Net Investment Income
|
Results for the
Three
Months Ended June 30
|
|
Results for the
Six
Months Ended June 30
|
|
2023
|
|
2022
|
|
|
2023
|
|
2022
|
Fixed income
securities and other
|
$
507
|
|
$
447
|
|
|
$ 1,004
|
|
$
887
|
Limited partnership and common stock
investments
|
68
|
|
(15)
|
|
|
96
|
|
(7)
|
Net investment income
|
$
575
|
|
$
432
|
|
|
$ 1,100
|
|
$
880
|
Net investment income increased $143
million for the second quarter of 2023 as compared with the
prior year quarter. The increase was driven by an $83 million increase in income from limited
partnership and common stock investments and a $60 million increase in income from fixed income
securities and other investments.
Stockholders' Equity
Stockholders' equity of $8.7
billion improved 2% from year-end 2022 primarily due to net
income partially offset by dividends paid to stockholders.
Book value per share ex AOCI of
$44.86 increased 5% from year-end
2022 adjusting for $2.04 of dividends
per share.
As of June 30, 2023, statutory
capital and surplus for the Combined Continental Casualty Companies
was $10.5 billion.
Accounting Standards Update
In August 2018, the FASB issued
ASU 2018-12, Financial Services-Insurance (Topic 944):
Targeted Improvements to the Accounting for Long-Duration
Contracts (LDTI). The updated accounting guidance requires
changes to the measurement and disclosure of long-duration
contracts. For the Company, this includes the run-off long term
care business in the Life & Group segment. The Company adopted
the new guidance effective January 1,
2023, using the modified retrospective method applied as of
the transition date of January 1,
2021. All prior period amounts have been adjusted to reflect
application of the new guidance. While the requirements of the new
guidance represent a material change from legacy accounting, the
new guidance does not impact capital and surplus under statutory
accounting practices, cash flows or the underlying economics of the
business. Additional information regarding the Company's adoption
of ASU 2018-12 and the impact to historical financial results
is contained in the Company's Q1 2023 Financial Supplement,
furnished on Form 8-K, on May 1, 2023
with the Securities and Exchange Commission.
About the Company
CNA is one of the largest U.S. commercial property and casualty
insurance companies. Backed by more than 125 years
of experience, CNA provides a broad range of standard and
specialized insurance products and services for businesses
and professionals in the U.S., Canada and
Europe. For more information, please
visit CNA at www.cna.com.
Contact
Media:
|
Analysts:
|
Jennifer Vaupel, 847-224-2464
|
Ralitza Todorova, 312-822-3834
|
Conference Call and Webcast/Presentation Information
A conference call for investors and the professional investment community will be held at 8:00 a.m. (CT) today. On the conference call
will be Dino E. Robusto, Chairman
and Chief Executive Officer of CNA Financial Corporation,
Scott R. Lindquist,
Executive Vice President and Chief Financial Officer of CNA
Financial Corporation and other members of senior management.
Participants can access the call by dialing (844) 481-2830
(USA Toll Free) or +1 (412) 317-1850
(International). The call will also be broadcast live on the
internet and may be accessed from the Investor Relations page of
the CNA website (www.cna.com). A
presentation will be posted
and available on the CNA website
that will provide additional insight into the
results.
The call is available to the media, but questions will be
restricted to investors and the professional investment
community. An online replay will be available on CNA's
website following the call. Financial supplement information
related to the results is available on the investor relations pages
of the CNA website
or by contacting investor.relations@cna.com.
Definition of Reported Segments
- Specialty provides management and professional liability
and other coverages through property and casualty products and
services using a network of brokers, independent agencies and
managing general underwriters.
- Commercial works with a network of brokers and
independent agents to market a broad range of property and casualty
insurance products to all types of insureds targeting small
business, construction, middle markets and other commercial
customers.
- International underwrites property and casualty
coverages on a global basis through a branch operation in
Canada, a European business
consisting of insurance companies based in the U.K and Luxembourg and Hardy, our Lloyd's
Syndicate.
- Life & Group includes the individual and group
run-off long term care businesses as well as structured settlement
obligations not funded by annuities related to certain property and
casualty claimants.
- Corporate & Other primarily includes certain
corporate expenses, including interest on corporate debt, and the
results of certain property and casualty business in run-off,
including CNA Re, asbestos and environmental pollution (A&EP),
a legacy portfolio of excess workers' compensation (EWC) policies
and certain legacy mass tort reserves.
Financial Measures
Management utilizes the following metrics in their evaluation of
the Property & Casualty Operations.
These ratios are calculated using financial results prepared in
accordance with accounting principles generally accepted in
the United States of America (GAAP).
- Loss ratio is the percentage of net incurred claim and
claim adjustment expenses to net earned premiums.
- Underlying loss ratio represents the loss ratio
excluding catastrophe losses and development-related items.
- Expense ratio is the percentage of insurance
underwriting and acquisition expenses, including the amortization
of deferred acquisition costs, to net earned premiums.
- Dividend ratio is the ratio of policyholders' dividends
incurred to net earned premiums.
- Combined ratio is the sum of the loss, expense and
dividend ratios.
- Underlying combined ratio is the sum of the underlying
loss, expense and dividend ratios.
Renewal premium change represents the estimated change in
average premium on policies that renew, including rate
and exposure changes.
Rate represents the average change in price on
policies that renew excluding exposure change. For certain products
within Small Business, where quantifiable, rate includes the
influence of new business as well.
Exposure represents the measure of risk used in the
pricing of the insurance product. The change in exposure
represents the change in premium dollars
on policies that renew as a result of
the change in risk of the policy.
Retention represents the percentage of premium dollars
renewed, excluding rate and exposure changes, in comparison to
the expiring premium dollars
from policies available to renew.
New business represents premiums from policies written
with new customers and additional policies written with
existing customers.
Gross written premiums ex. 3rd party
captives represents gross written premiums excluding business
which is ceded to third party captives, including
business related to large warranty programs.
Development-related items
represents net prior year loss reserve and premium development, and includes the effects of interest accretion and
change in
allowance for uncollectible reinsurance and deductible amounts.
Underwriting gain (loss) represents net earned premiums
less total insurance expenses, which includes insurance claims
and policyholders' benefits, amortization of
deferred acquisition costs and other insurance related
expenses, pre-tax.
Underlying underwriting gain (loss) represents
underwriting results excluding catastrophe losses and
development-related items.
Statutory capital and surplus represents the excess of an insurance company's admitted assets
over its liabilities, including loss reserves,
as determined in accordance with statutory accounting
practices. Statutory capital and surplus as of the current
period is preliminary.
The Company's investment portfolio is monitored by management
through analysis of various factors including unrealized
gains and losses on securities,
portfolio duration and exposure
to market and credit risk.
Reconciliation of GAAP Measures
to Non-GAAP Measures
This press release also contains financial measures that are not
in accordance with GAAP. Management utilizes these
financial measures to monitor the Company's insurance
operations and investment portfolio. The Company believes the
presentation of these measures provides investors with a
better understanding of the significant factors that comprise the
Company's
operating performance. Reconciliations of these measures
to the most comparable GAAP measures follow
below.
Reconciliation
of Net Income (Loss) to Core Income (Loss)
Core income (loss) is calculated by excluding from net
income (loss) the after-tax effects of net investment gains or
losses. The calculation of core income (loss) excludes net
investment gains or losses because net investment gains or losses
are generally driven by economic factors that are not necessarily
reflective of our primary operations. Management monitors core
income (loss) for each business segment to assess segment
performance. Presentation of consolidated core income (loss) is
deemed to be a non-GAAP financial measure.
|
Results for
the Three
Months Ended June 30
|
|
|
Results for the Six
Months Ended June 30
|
($ millions)
|
2023
|
|
2022 (a)
|
|
|
2023
|
|
2022 (a)
|
Net income
|
$
283
|
|
$
190
|
|
|
$
580
|
|
$
485
|
Less: Net investment (losses) gains
|
(25)
|
|
(40)
|
|
|
(53)
|
|
(43)
|
Core income
|
$
308
|
|
$
230
|
|
|
$
633
|
|
$
528
|
|
(a) As of January 1, 2023, the Company
adopted LDTI using the modified retrospective method applied
as of the transition date of January 1, 2021. Prior period amounts
have been adjusted to reflect application of the new
guidance.
|
Reconciliation of Net Income
(Loss) per Diluted Share to Core Income (Loss) per Diluted
Share
Core income (loss) per diluted
share provides management and investors with a valuable
measure of the Company's operating performance
for the same reasons applicable to its underlying measure, core
income (loss). Core income (loss) per diluted share is
core income (loss) on
a per diluted share basis.
|
Results for the
Three
Months Ended June 30
|
|
Results for the Six
Months Ended June 30
|
|
2023
|
|
2022 (a)
|
|
2023
|
|
2022 (a)
|
Net income
per diluted share
|
$
1.04
|
|
$
0.69
|
|
$
2.13
|
|
$
1.78
|
Less: Net investment (losses) gains
|
(0.09)
|
|
(0.15)
|
|
(0.20)
|
|
(0.16)
|
Core income
per diluted share
|
$
1.13
|
|
$
0.84
|
|
$
2.33
|
|
$
1.94
|
|
(a) As of January 1, 2023, the Company
adopted LDTI using the modified retrospective method applied
as of the transition date of January 1, 2021. Prior period amounts
have been adjusted to reflect application of the new
guidance.
|
Reconciliation of Book Value per
Share to Book Value per Share Excluding AOCI
Book value per share excluding AOCI allows management and
investors to analyze the amount of the Company's net worth
primarily attributable to the Company's business operations. The
Company believes this measurement is useful as it reduces the
effect of items that can fluctuate significantly from period to
period, primarily based on changes in interest rates.
|
June 30, 2023
|
|
December 31,
2022 (a)
|
Book value
per share
|
$
32.22
|
|
$
31.55
|
Less: Per share impact
of AOCI
|
(12.64)
|
|
(13.28)
|
Book value
per share excluding AOCI
|
$
44.86
|
|
$
44.83
|
|
(a) As of January 1, 2023, the Company
adopted LDTI using the modified
retrospective method applied
as of the transition date of January 1, 2021. Prior period
amounts have been adjusted to reflect application of the
new guidance.
|
Calculation of Return
on Equity and Core Return
on Equity
Core return on equity
provides management and investors with a measure of how effectively
the Company is investing the portion of the Company's net worth
that is primarily attributable to its business operations.
|
Results for the
Three Months
Ended June 30
|
|
Results for the Six
Months
Ended June 30
|
($ millions)
|
2023
|
|
|
2022 (a)
|
|
|
2023
|
|
|
2022 (a)
|
|
Annualized net
income
|
$
1,132
|
|
|
$
762
|
|
|
$
1,160
|
|
|
$
970
|
|
Average stockholders'
equity including AOCI (b)
|
8,696
|
|
|
9,352
|
|
|
8,637
|
|
|
10,055
|
|
Return on
equity
|
13.0
|
%
|
|
8.1
|
%
|
|
13.4
|
%
|
|
9.6
|
%
|
Annualized core
income
|
$
1,233
|
|
|
$
924
|
|
|
$
1,266
|
|
|
$
1,058
|
|
Average stockholders'
equity excluding AOCI (b)
|
12,063
|
|
|
12,122
|
|
|
12,148
|
|
|
12,316
|
|
Core return on
equity
|
10.2
|
%
|
|
7.6
|
%
|
|
10.4
|
%
|
|
8.6
|
%
|
|
|
(a)
|
As of January 1, 2023, the Company adopted LDTI
using the modified retrospective method applied as of the
transition date of January 1, 2021. Prior period amounts have been
adjusted to reflect application of the new
guidance.
|
|
|
(b)
|
Average stockholders' equity is calculated using a
simple average of the beginning and ending balances for the
period.
|
For additional information, please refer
to CNA's most recent 10-K on file with the Securities
and Exchange Commission, as well as the
financial supplement, available at www.cna.com.
Forward-Looking Statements
This press release includes statements that relate to
anticipated future events (forward-looking statements) rather than
actual present conditions or historical events. These statements
are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 and generally include
words such as "believes," "expects," "intends," "anticipates,"
"estimates" and similar expressions. Forward-looking statements, by
their nature, are subject to a variety of inherent risks and
uncertainties that could cause actual results to differ materially
from the results projected. Many of these risks and uncertainties
cannot be controlled by CNA. For a detailed description of these
risks and uncertainties, please refer to
CNA's filings with the Securities and Exchange Commission, available
at www.cna.com.
Any forward-looking statements made in this press release are
made by CNA as of the date of this press release. Further,
CNA does not have any obligation to update or revise any
forward-looking statement contained in this press release, even if
CNA's expectations or any related events,
conditions or circumstances change.
Any descriptions of coverage under
CNA policies or programs in this press
release are provided
for convenience only and are not to
be relied upon with respect to questions of coverage, exclusions or
limitations. With regard to all such matters, the terms
and provisions of relevant insurance policies are primary and
controlling. In addition, please note that all coverages may
not be available in all states.
"CNA" is a registered trademark of CNA Financial Corporation.
Certain CNA Financial Corporation subsidiaries use the "CNA"
trademark in connection with insurance underwriting and claims
activities. Copyright © 2023 CNA. All rights reserved.
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