CNA Financial Corp. said fourth-quarter 2021 net income decreased more than 30 percent to $266 million compared to the same period the prior year.

There was a drop in net investment income during the last three months of 2021 to $1 million versus $52 million in 2020.

Fourth-quarter core income in CNA’s property/casualty operations remained relatively steady at $353 million compared to $358 the prior year. Net written premiums increased 11 percent to $2.17 billion.

CEO Dino E. Robusto said, “We achieved the lowest quarterly and annual combined ratio in five years at 92.9 and 96.2, respectively.” In 2020, the fourth-quarter combined ratio came in at 93.4. It was 100.1 for all of 2020.

Net income for 2021 was over 74 percent higher than 2020—$1.2 billion versus $690 million.

Looking ahead during an earnings conference call, Robusto said CNA sees “pricing remaining favorable with overall rate increases persisting above long-run loss cost trends for most of 2022 in light of the oft-quoted headwinds of social inflation and economic inflation, and elevated [catastrophe] activity. The headwinds are still present, and there has been no significant change since last quarter.”

Uncertainty in future loss cost trends remains since court activity has not returned to pre-pandemic levels due to the Omicron variant of COVID-19, Robusto added.

If loss costs become higher, rate increases CNA has taken over the last 8-10 quarters may become insufficient. “And this is why we are focused on pushing for more rate and, where needed, additional improvements in terms and conditions,” Robusto said.

Rates are moving up noticeably in specialty financial lines and small commercial. Asked to elaborate, Robusto said financial lines includes cyber insurance, and CNA took triple-digit rate increases in the fourth quarter. “Other lines had some more stable sort of behavior,” he added.

Robusto said exposure change in commercial lines was over 2 percent in the fourth quarter “as a result of increases in payrolls and sales volumes as the economy continues to improve.”