CNA Financial announces net operating income of US$269 million for 2013 Q3

CNA Financial Corporation has posted net operating income of US$269 million and net income of US$272 million for the third quarter of 2013.

Both figures increased over net operating income and net income for the third quarter of 2012, which were US$216 million and US$221 million, respectively, notes a statement from CNA Financial, the eighth largest commercial insurance writer and the 13th largest property and casualty company in the United States.

Third-quarter results for CNA Financial’s P&C Operations are promising, in part because of improved non-catastrophe current accident year underwriting results.

The results “reflect improved earnings and sustained progress in our core P&C business performance,” Thomas F. Motamed, chairman and CEO of CNA Financial Corporation, says in the statement. “We are pleased with these results and are encouraged by the margin improvement, the ongoing favourable rate trends, and the continued shift in our book of business toward focus customer segments,” Motamed adds.

Specifically, the net income for P&C Operations was US$330 million for 2013 Q3, up from US$264 million in the third quarter of 2012. “This increase was primarily due to improved non-catastrophe current accident year underwriting results and higher favourable net prior year development, partially offset by higher catastrophe losses. Net written premiums grew 2% year over year, driven by increases in CNA Specialty and Hardy,” notes the company statement.

Also for P&C Operations, CNA Financial numbers show net written premiums (NWP) increased from US$1.59 billion in 2012 Q3 to about US$1.62 billion in the third quarter of 2013. In addition, the effect of catastrophe impacts on results for the three months ended September 30, 2013 was minus 2.5 compared to minus 1.6 in the third quarter of 2012.

Business operating highlights of CNA Specialty indicate that NWP grew from US$723 million in the third quarter of 2012 to US$778 million in the third quarter of 2013. The US$55 million increase “was driven by increased rate. Average rate increased 6% for the third quarter of 2013 as compared with an increase of 5% for the prior year quarter of the policies that renewed in each period.”

The net operating income for CNA Specialty increased from US$136 million in 2012 Q3 to US$187 million in 2013 Q3, primarily due to improved underwriting results, notes the statement from CNA Financial.

For CNA Commercial, NWP decreased from US$811 million in the third quarter of 2012 to US$760 million in the third quarter of 2013. Net operating income, for its part, rose from US$125 million in 2012 Q3 to US$131 million in 2013 Q3. “This increase was primarily due to improved current accident year underwriting results,” the company statement adds.

And for Hardy, a specialized Lloyd’s of London underwriter acquired in July 2012, NWP was US$81 million for the third quarter of 2013, up from US$56 million in the same quarter in 2012. “This increase was driven by growth of non-marine property and a reduction in the amount of reinsurance purchased across several business units,” CNA Financial reports.

Net operating income for Hardy was US$12 million in 2013 Q3 compared to US$3 million in 2013 Q3. “This increase was primarily due to improved non-catastrophe underwriting results, partially offset by higher catastrophe losses.”