CNA Financial Corp. lost $70 million in its 2015 fourth quarter, an outcome shaped in part by declining investments and its Life & Group results.
The Illinois-based property/casualty insurer disclosed a Q4 2015 net loss of $70 million, or $0.26 per share. That’s a big drop compared to the 2014 fourth quarter, when CNA generated $198 million in net income, or $0.73 per diluted share.
On top of that, CNA’s property/casualty combined ratio climbed to 98.9 in the fourth quarter compared to 91.8 over the same period in 2014.
CNA blamed the overall bottom-line results in part on its Life & Group noncore results, which included a $189 million after-tax charge connected to the recognition of a premium deficiency, plus a small deficiency in claim reserves in its long-term-care business. The division itself lost $241 million during the quarter compared to a $55 million loss a year ago. Lower net investment income, international catastrophe costs and less-favorable P/C underwriting results also hurt.
CNA Chairman and CEO Thomas Motamed said that specialty performed well relative to a tough insurance operating environment, as did CNA’s core P/C business. CNA’s results weren’t stellar, but Motamed noted in prepared remarks that “sustained progress” in its P/C business plus its “strong capital position” encouraged the board of directors to declare CNA’s third annual special dividend.
For the fourth quarter, CNA’s property/casualty operations produced $1.58 billion in net written premiums versus $1.56 billion in the 2014 fourth quarter. Specialty saw gains in net premiums ($704 million versus $689 million in Q4 2014), but the division still saw its net income decline to $98 million compared to $158 million over the same period a year ago.
Commercial saw similar gains in net written premiums and a drop in net income. International experienced a dip in net written premiums and also ended the fourth quarter in the red compared to last year. The division’s combined ratio nearly hit 110 versus 86.9 in the 2014 fourth quarter, a change driven in large part by catastrophe costs.
For the year, CNA produced $479 million in net income, or $1.77 per share. The company’s property/casualty combined ratio for 2015 landed at 95.4 versus 97.7 in 2014.