CNA Q1 results hampered by higher cat losses

CNA Financial Corp. Monday reported net income of $274 million, compared with $338 million in last year’s first quarter, due in part to higher catastrophe losses.

The Chicago-based property/casualty insurer posted first-quarter core income of $281 million, down 21% from $355 million in the first quarter of 2024.

Property/casualty net written premiums rose 9% to $2.61 billion, and the insurer’s property/casualty combined ratio deteriorated to 98.4%, 3.8 percentage points worse than the 94.6% in the prior-year quarter, according to the company’s earnings statement released before markets opened.

Catastrophe losses were $97 million, versus $88 million in the prior-year period, including $53 million for the California wildfires and $44 million for other events, most related to March severe storm activity.

Douglas M. Worman, president and CEO, said in a prepared statement that new business was up 7% in the quarter to $565 million, with growth in all three operating segments.

In the U.S., which has been more significantly impacted by social inflation, rates were up a point to 5%, the highest level in six quarters. The increase was fueled by excess casualty, which was up three points to 14%, and commercial auto, which was up one point to 18%, Mr. Worman said.

Retention continued to be strong at 86% in total, similar to the fourth quarter even with the higher rate increase, he said.

In the commercial segment, net written premiums rose 12% to $1.498 billion, and the combined ratio worsened 3.5 points to 101%. Unfavorable prior period development of $53 million added 3.8 points to the combined ratio, driven by commercial auto.

“We continue to observe elevated bodily injury loss cost trends in commercial auto in recent periods,” Mr. Worman said. In response, CNA is pushing for more rate and obtained a rate increase of 18% in the quarter.