Fourth Quarter
Net income up 54% to $367 million versus $239 million in the prior year quarter; core income up 37% to a record $362 million versus $265 million in the prior year quarter.
P&C core income of $434 million versus $342 million, reflects higher investment income and higher underwriting income.
Life & Group core income of $4 million versus core loss of $25 million in the prior year quarter reflects higher investment income.
Corporate & Other core loss of $76 million versus core loss of $52 million in the prior year quarter reflects a $19 million after-tax charge related to office consolidation.
Net investment income up 21% to $611 million pretax, includes a $58 million increase from limited partnerships and common stock to $78 million and a $50 million increase from fixed income securities and other investments to $533 million.
P&C combined ratio of 92.1%, compared with 93.7% in the prior year quarter, including 1.0 point of catastrophe loss impact compared with 3.6 points in the prior year quarter and 0.3 points of favorable prior period development impact compared with 1.1 points in the prior year quarter. P&C underlying combined ratio was 91.4%, compared with 91.2% in the prior year quarter. P&C underlying loss ratio was 59.9% and the expense ratio was 31.2%.
P&C segments, excluding third party captives, generated gross written premium and net written premium growth of 10% in the quarter. P&C renewal premium change of +5%, with written rate of +4% and exposure change of +1%.
Full Year
Net income up 77% to a record $1,205 million versus $682 million in the prior year; core income up 54% to a record $1,284 million versus $836 million in the prior year.
P&C core income of $1,505 million versus $1,240 million, reflects higher investment income and record high underwriting income.
Life & Group core loss of $48 million versus core loss of $221 million in the prior year reflects higher investment income and an unfavorable after-tax impact of $143 million in the prior year as a result of the annual reserve reviews.
Net investment income up 25% to $2,264 million pretax, includes a $233 million increase from limited partnerships and common stock to $202 million and a $226 million increase from fixed income securities and other investments to $2,062 million.
P&C combined ratio of 93.5%, compared with 93.2% in the prior year, including 2.6 points of catastrophe loss impact compared with 3.0 points in the prior year and no impact from prior period development compared with 1.0 point of favorability in the prior year. P&C underlying combined ratio was a record low 90.9% compared with 91.2% in the prior year. P&C underlying loss ratio was 59.9% and the expense ratio was 30.7%.
P&C segments, excluding third party captives, generated gross written premium growth of 10% and net written premium growth of 9% in the year. P&C renewal premium change of +7%, with written rate of +5% and exposure change of 2%.
Stockholders’ Equity
Book value per share of $36.52; book value per share excluding AOCI of $46.39, a 10% increase from year- end 2022 adjusting for $2.88 of dividends per share.
Increased quarterly dividend 5% to $0.44 per share; special dividend of $2.00 per share.
CHICAGO, Feb. 5, 2024 /PRNewswire/ — CNA Financial Corporation (NYSE:CNA) today announced fourth quarter 2023 net income of $367 million, or $1.35 per share, versus $239 million, or $0.87 per share, in the prior year quarter. Net investment gains for the quarter were $5 million compared to net investment losses of $26 million in the prior year quarter. Core income for the quarter was $362 million, or $1.33 per share, versus $265 million, or $0.97 per share, in the prior year quarter.
Our Property & Casualty segments produced core income of $434 million for the fourth quarter of 2023, an increase of $92 million compared to the prior year quarter driven by higher investment income and higher underwriting income. P&C segments, excluding third party captives, generated gross written premium and net written premium growth of 10%, driven by new business growth of 16%, retention of 85% and renewal premium change of +5%.
Our Life & Group segment produced core income of $4 million for the fourth quarter of 2023 versus core loss of $25 million in the prior year quarter driven by higher net investment income.
Our Corporate & Other segment produced a core loss of $76 million for the fourth quarter of 2023, an increase of $24 million compared to the prior year quarter, which reflects a $19 million after-tax charge related to office consolidation.
Net income for the full year 2023 was $1,205 million, or $4.43 per share, versus $682 million, or $2.51 per share, in the prior year. Net investment losses for the full year were $79 million compared to $154 million in the prior year. Core income for the full year 2023 was $1,284 million, or $4.71 per share, versus $836 million, or $3.07 per share, in the prior year. Core income increased 31% to $1,286 million versus $979 million in the prior year quarter, excluding the results of the third quarter Life & Group annual reserve reviews.
Our Property & Casualty segments produced core income of $1,505 million for the full year 2023, an increase of $265 million compared to the prior year driven by higher investment income and record high underwriting income. P&C segments, excluding third party captives, generated gross written premium growth of 10% and net written premium growth of 9%, driven by written rate of +5% and new business growth of 11%.
Our Life & Group segment produced a core loss of $48 million for the full year 2023 versus $221 million in the prior year, which reflects higher investment income and an unfavorable after-tax impact of $143 million in the prior year as a result of the annual reserve reviews.
Our Corporate & Other segment produced a core loss of $173 million for the full year 2023 versus $183 million in the prior year.
CNA Financial declared a quarterly dividend of $0.44 per share and a special dividend of $2.00 per share, payable March 7, 2024 to stockholders of record on February 20, 2024.
Results for the Three Months
Ended December 31
Results for the Year Ended
December 31
($ millions, except per share data)
2023
2022 (a)
2023
2022 (a)
Net income
$ 367
$ 239
$ 1,205
$ 682
Core income (b)
362
265
1,284
836
Net income per diluted share
$ 1.35
$ 0.87
$ 4.43
$ 2.51
Core income per diluted share
1.33
0.97
4.71
3.07
December 31, 2023
December 31, 2022 (a)
Book value per share
$
36.52
$
31.55
Book value per share excluding AOCI
46.39
44.83
(a)
As of January 1, 2023, the Company adopted LDTI using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance.
(b)
Management utilizes the core income (loss) financial measure to monitor the Company’s operations. Please refer herein to the Reconciliation of GAAP Measures to Non-GAAP Measures section of this press release for further discussion of this non-GAAP measure.
“We ended the year strong, with core income up 37% to a record high of $362 million in the fourth quarter capping off a record level for the year of $1,284 million, a 54% increase driven by a 25% increase in pretax net investment income and record levels of underlying and all-in underwriting income.
Net and gross written premiums ex. captives each grew by 10% in the quarter with new business growth of 16%, our strongest quarter of the year. 2023 was also the third year in a row of 10% gross written premiums ex. captives growth and included our highest level of new business of roughly $2.1 billion. Retentions remained strong in the quarter in the mid-80’s and have been so throughout 2023 as we continue to lock in favorable terms and conditions from the hard market, which we feel will largely persist into 2024.
In the quarter, renewal premium change was 5% in the aggregate across all operating segments and geographies. In Commercial, renewal premium change was 9% in the quarter, consistent with the prior quarter, and excluding workers’ compensation, renewal premium change was 11% continuing to exceed our loss cost trends which remained stable in the quarter.
We remain optimistic about our opportunities for this year given our broad-based profitability across our three operating segments and track record of double-digit growth levels in the last several years,” said Dino E. Robusto, Chairman & Chief Executive Officer of CNA Financial Corporation.
Property & Casualty Operations
Results for the Three Months
Ended December 31
Results for the Year Ended
December 31
($ millions)
2023
2022
2023
2022
Gross written premiums ex. 3rd party captives
$ 2,974
$ 2,704
$ 11,279
$ 10,264
GWP ex. 3rd party captives change (% year over year)
10
%
10
%
Net written premiums
$ 2,508
$ 2,284
$ 9,446
$ 8,663
NWP change (% year over year)
10
%
9
%
Net earned premiums
$ 2,368
2,116
$ 9,030
$ 8,196
NEP change (% year over year)
12
%
10
%
Underwriting gain
$ 186
$ 134
$ 585
$ 559
Net investment income
$ 355
$ 290
$ 1,306
$ 982
Core income
434
342
1,505
1,240
Loss ratio excluding catastrophes and development
59.9
%
59.9
%
59.9
%
60.0
%
Effect of catastrophe impacts
1.0
3.6
2.6
3.0
Effect of development-related items
(0.3)
(1.1)
—
(1.0)
Loss ratio
60.6
%
62.4
%
62.5
%
62.0
%
Expense ratio
31.2
%
31.1
%
30.7
%
30.9
%
Combined ratio
92.1
%
93.7
%
93.5
%
93.2
%
Combined ratio excluding catastrophes and development
91.4
%
91.2
%
90.9
%
91.2
%
The fourth quarter underlying combined ratio increased 0.2 points as compared with the prior year quarter. The expense ratio was largely consistent with the prior year quarter as net earned premium growth of 12% was offset by higher employee related costs. The underlying loss ratio was consistent with the prior year quarter.
The fourth quarter combined ratio improved 1.6 points as compared with the prior year quarter. Catastrophe losses were $22 million, or 1.0 point of the loss ratio in the quarter compared with $76 million, or 3.6 points of the loss ratio, for the prior year quarter. Favorable net prior period development improved the loss ratio by 0.3 points in the current quarter compared with 1.1 points of improvement in the prior year quarter.
In the fourth quarter, P&C segments, excluding third party captives, generated gross written premium and net written premium growth of 10%.
For the full year, the underlying combined ratio improved 0.3 points as compared with the prior year, reflecting the lowest underlying combined ratio on record. The expense ratio improved 0.2 points and the underlying loss ratio was largely consistent with the prior year.
For the full year, the combined ratio increased 0.3 points as compared with the prior year. Catastrophe losses were $236 million, or 2.6 points of the loss ratio for the full year compared with $247 million, or 3.0 points of the loss ratio, for the prior year. There was no impact on the loss ratio from net prior period development in the current year compared with 1.0 point of improvement from favorable net prior period development in the prior year.
For the full year, P&C segments, excluding third party captives, generated gross written premium growth of 10% and net written premium growth of 9%.
Business Operating Highlights
Specialty
Results for the Three Months
Ended December 31
Results for the Year Ended
December 31
($ millions)
2023
2022
2023
2022
Gross written premiums ex. 3rd party captives
$ 1,004
$ 998
$ 3,800
$ 3,814
GWP ex. 3rd party captives change (% year over year)
1
%
—
%
Net written premiums
$ 891
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