CNA Financial Corp. doubled its 2020 Q3 net income, thanks in part to higher investment returns and rate hikes in the P/C insurance division that increased more than 12 percent on average. Net catastrophe losses soared, however, due to three hurricanes and severe Midwestern storms.
The insurer reported $213 million in net income during the quarter, or $0.79 per share. During the same, year-ago quarter, that number came in at $107 million, or $0.39 per share.
CNA said its COVID-19 costs remained unchanged from the previous quarter. The company booked $182 million in COVID-related costs in Q2.
Catastrophe losses in the 2020 third quarter still stung. CNA reported the loss figure hit $160 million pretax due to severe weather events including Hurricanes Laura, Isaias and Salla, as well as a deluge of intense and fast-moving Midwest windstorms and thunderstorm.
As well, CNA’s property/casualty insurance combined ratio nudged higher to 100.9 compared to 97.6 in the 20019 third quarter.
“CNA continued to execute effectively during these unprecedented times, as evidenced by the ongoing acceleration in our P/C rate achievement, higher overall premium growth, and a significantly improved underlying loss ratio and expense ratio in the third quarter,” CNA Chairman and CEO Dino Robusto said in prepared remarks.
He added that with the insurer’s “annual reserve review of our runoff long-term-care business, we took significant actions on our discount rate assumptions intended to further protect our capital and earnings in the face of what can very well be a protracted low-interest-rate environment.”
Here are additional Q3 result highlights:
- Property/casualty net written premiums, excluding third-party captives, reached $2 billion during the quarter compared to $1.85 billion in the 2019 third quarter.
- P/C net investment income hit $306 million versus $274 million the year before.
- CNA’s Specialty insurance arm reported $861 million in net premiums written excluding third-party captives compared to $778 million in the 2019 third quarter. The specialty insurance combined ratio was 89.5, about the same as 89.8 reported in Q3 2019.
- CNA Commercial insurance produced $915 million in net written premiums excluding third-party captives, up from $852 million the year before. The commercial insurance combined ratio landed at 111.5 compared to 101.6 in the 2019 third quarter.
Overall net investment was $517 million compared to $487 million last year. Limited partnership and common stock investments drove the improvement, CNA said.