July 31, 2017 by Canadian Underwriter
CNA Financial Corporation saw both net income and net operating income increase in the second quarter of 2017 compared to the corresponding quarter of 2016, an improvement matched by the company’s Property & Casualty combined ratio.
Net income increased to US$272 million in 2017 Q2 from US$209 million in 2016 Q2, notes a statement Monday from CNA Financial, which also has operations in Canada. The increase was even more dramatic for the first half of 2017, for which net income was US$532 million compared to US$275 million.
With regard to net operating income, again that was up for both the second quarter of 2017 and for the first half of 2017. Specifically, net operating income was US$239 million in 2017 Q2 compared to US$201 million in 2016 Q2; for the first six months ended June 30, 2017, it was US$474 million compared to US$292 million.
At US$261 million for the second quarter of 2017, compared to US$229 million in the second quarter of 2016, Property & Casualty Operations made up the lion’s share of the company’s total net operating income.
“This increase was driven by improved current accident year underwriting results which more than offset lower net investment income,” the statement notes.
While less dramatic than the increases in net income and net operating income, net written premium (NWP) increased in 2017 Q2 compared to 2016 Q2. NWP amounted to US$1,702 million compared to US$1,625 million.
For the first six months of 2017 compared to the first half of 2016, NWP was US$3,334 million compared to US$3,293 million.
Combined ratio, for its part, improved to 93.5% in the second quarter of 2017 compared to 97.4% in the second quarter of 2016. For the six months of each year, combined ratio amounted to 95.3% in 2017 and 96.8% in 2016.
CNA Financial reports that catastrophe losses for 2017 Q2 were US$24 million, after tax, as compared to US$58 million, after tax, in 2016 Q2.
Those results had an impact on combined ratio, excluding Cats and development. This amounted to 94.6% in the second quarter of 2017 compared to 98.3% in the corresponding quarter of 2016. For the first half, it was 95.9% compared to 97.8%.
For non-core segments, net operating loss improved US$6 million for 2017 Q2 compared to 2016 Q2. “The improvement was primarily due to a US$9 million improvement in the Life & Group Non-Core segment driven by the Long Term Care business,” the company explains.
“Improvement in both our underlying loss ratio and expense ratio created one of our best underwriting quarters in the past decade,” Robusto points out.
Other CNA Financial results for 2017 Q2 compared to 2016 Q2 include the following: