CNA Financial reports net income of $233 million for Q1 2015

CNA Financial Corporation announced on Monday that its first quarter 2015 net operating income was US$225 million and its net income was US$233 million. Property & Casualty Operations combined ratio for the first quarter was 98.9%, or 96.7% excluding catastrophes and development.

Regarding its International segment, Chicago-based CNA Financial said in a media release that net written premiums decreased US$35 million for Q1 2015 (the three months ending March 31) compared with the prior year quarter. “The decrease was primarily driven by the unfavourable effect of foreign currency exchange rates, unfavorable premium development at Hardy and the 2014 termination of a managing general underwriter relationship in Canada,” the release said.

The company also reported P&C Operations’ net operating income was US$264 million for the first quarter of 2015, as compared with $219 million in the prior year quarter. This increase was driven by improved current accident year underwriting results as well as higher net investment income. Catastrophe losses for the first quarter of 2015 were US$19 million after tax as compared with US$48 million after tax in the prior year quarter, primarily due to U.S. weather-related events, the release noted. [click image below to enlarge]

“Our Property & Casualty operations continue to show improving accident year profitability,” said Thomas F. Motamed, chairman and CEO of CNA Financial, in the release. “While we are pleased that decreased catastrophe activity and strong investment income contributed positively to our results, our primary focus remains improving the underlying loss ratio.” 

The company’s International sector, which provides P&C insurance and specialty coverages in Canada, the United Kingdom and Continental Europe as well as globally through its operations at Lloyd’s of London, also showed a net operating income decrease of US$7 million for the first quarter of 2015, as compared with the prior year quarter, primarily due to the lower level of net earned premiums. The combined ratio increased 4.8 points for the first quarter of 2015 as compared with the prior year quarter. The loss ratio increased 6.5 points, due to the unfavourable effect of net prior year development and a higher current accident year loss ratio. Net operating loss increased $15 million for the first quarter of 2015 as compared with the prior year quarter. [click image below to enlarge]

CNA Financial is the United States’ eighth largest commercial insurance writer and the 13th largest P&C company. CNA’s insurance products include standard commercial lines, specialty lines, surety, marine and other P&C coverages and its services include risk management, information services, underwriting, risk control and claims administration.