February 9, 2015 by Canadian Underwriter
CNA Financial Corp. reported Monday a 3.2-point improvement in its combined ratio, a 1% increase in gross written premiums in property & casualty insurance and a 10% drop in net income, from the fourth quarter of 2013 to the same period last year.
In its financial results, CNA reported gross written premiums, in P&C, of $2.334 billion in the last quarter of 2014, up 1% from $2.301 billion in Q4 2013. All figures are in United States dollars.
The combined ratio for the final quarter was 91.8% in 2014, down 3.2 points from 95% in the same period in 2013.
“Catastrophe losses for the fourth quarter were $7 million after-tax as compared with $15 million after-tax in the prior year quarter,” Chicago-based CNA stated in a press release.
CNA’s insurance operations include Continental Casualty Company, The Continental Insurance Company, Western Surety Company and Hardy Underwriting Bermuda Ltd, which manages and provides capacity to Lloyd’s Syndicate 382. CNA Financial is majority-owned by Loews Corp.
In Canada, CNA writes commercial insurance for markets including manufacturing, construction and marine/cargo. Last month, CNA announced it is now offering specialty lines in Canada, including healthcare, directors & officers (D&O) liability, technology and telecommunications liability, employment practices liability, fiduciary liability, crime and miscellaneous professional liability.
In its financial results, CNA is including Canada in its international segment.
Of the $2.334 billion in gross written premiums reported in Q4 2014, $1.415 billion was in specialty, $714 million was in commercial and $205 million was in international.
Total revenues for CNA Financial were $2.378 billion in Q4 2014, down 7% from $2.569 billion in Q4 2013. Fourth-quarter net income dropped 10%, from $221 million in 2013 to $198 million last year.
For the full year, net income dropped 26%, from $937 million in 2013 to $691 million last year. Revenues dropped 2%, from $9.932 billion in all of 2013 to $9.692 billion in 2014. Gross written premiums in P&C increased 2%, from $9.355 billion in 2013 to $9.558 in 2014.
In specialty lines, the combined ratio deteriorated 9.3 points, from 79.1% in 2013 to 88.4% in 2014.
“The loss ratio increased 9.4 points, primarily due to lower favourable net prior year development and a higher current accident year loss ratio,” CNA stated. “The increase in the current accident year loss ratio was primarily driven by the favourable re-evaluation of the full year 2013 accident year in the fourth quarter of 2013. The full year 2014 current accident year loss ratio improved 1.9 points as compared to the prior year and reflected continued improvement throughout the year.”
In commercial lines, the combined ratio improved 17.3 points, from 114.1% in
Q4 2013 to 96.8% in the most recent quarter.
“The loss ratio improved 17.6 points, primarily due to the absence of unfavourable net prior year development, a lower level of catastrophes and an improvement of 2.5 points in the non-catastrophe current accident year loss ratio, reflecting our re-evaluation of the full year 2014 current accident year results,” CNA reported. “The full year 2014 current accident year loss ratio improved 1.5 points as compared to the prior year. Catastrophe losses were $4 million, or 0.6 points of the loss ratio, for the fourth quarter of 2014 as compared with $19 million, or 2.7 points of the loss ratio, for the prior year quarter.”
For the final quarter, claims and claims expenses dropped 8%, from $1.73 billion in 2013 to $1.59 billion last year. For the full year, claims and claims expenses were down 1%, from $6.857 billion in 2013 to $6.818 billion last year.