Group 1 - CNA Financial Corporation will report its first quarter 2025 results on May 5, 2025, before the market opens [1] - The earnings release will include a news release, earnings presentation, and financial supplement available on CNA's website [1] - A transcript of earnings remarks will feature commentary from the President and CEO, Douglas M. Worman, and CFO, Scott R. Lindquist [1] Group 2 - CNA invites shareholders and analysts to submit questions for management ahead of the earnings release, which may be addressed in the earnings remarks [2] - Questions can be submitted via email to a specified address [2] Group 3 - CNA is one of the largest U.S. commercial property and casualty insurance companies, with over 125 years of experience [3] - The company provides a wide range of standard and specialized insurance products and services for businesses and professionals in the U.S., Canada, and Europe [3]

Company Overview - CNA Financial Corporation (CNA) is positioned for growth due to business expansion across Specialty, Commercial, and International segments, an improving rate environment, financial flexibility, and effective capital deployment [1] Earnings History - CNA has a solid track record of beating earnings estimates in two of the last four quarters, with an average surprise of 2.18% [2] Growth Factors - Premiums are expected to grow due to strong retention, favorable renewal premium changes, and new business growth across various segments [3] - The improving rate environment is beneficial for the insurer, supported by a fixed-income investment strategy focused on diversified investment-grade corporates and highly rated municipal securities [3] Financial Position - CNA maintains a solid balance sheet with statutory capital and surplus of $11.2 billion, reflecting a 2% growth from the end of 2023 [4] - The company has a conservative capital structure and maintains liquidity through cash and short-term investments [4] Shareholder Returns - CNA's dividend history shows a 10-year CAGR of 6.3%, with a current dividend yield of 3.6%, significantly higher than the industry average of 0.2% [5] - The company has been increasing dividends and paying special dividends, demonstrating a commitment to returning value to shareholders [5] Return on Capital - CNA's trailing 12-month Return on Equity (ROE) is 3.66%, outperforming the industry average of 0.2%, with core ROE expanding to 10.5% in 2024 [6] Concerns - CNA faces exposure to catastrophe losses from natural disasters, reporting $358 million in catastrophe losses for 2024, an increase from $236 million in the previous year [7] - The company has been experiencing rising expenses due to increasing net incurred claims and benefits, which may impact overall profitability [8] Industry Comparison - Other industry players include The Progressive Corporation (PGR), Kingstone Companies, Inc. (KINS), and Palomar Holdings, Inc. (PLMR) [9] - Progressive has consistently surpassed earnings estimates, with an average surprise of 18.49%, driven by a compelling product portfolio and strong customer retention [9][10] - Kingstone Companies is focused on core business growth, expecting direct written premiums to increase by 15% to 25% in 2025 [11] - Palomar has also exceeded earnings estimates, with an average surprise of 16.64%, and aims to be a leader in the crop business with projections exceeding $200 million in premiums [12]

Core Insights - The CrickAnt serves as an actuary for an insurance company, leveraging extensive experience to analyze insurance and reinsurance sectors [1] - The Cash Flow Club, co-founded by The CrickAnt, focuses on company cash flows and capital access, offering features like a personal income portfolio targeting yields over 6%, community discussions, and a "Best Opportunities" List [1] Company and Industry Analysis - The Cash Flow Club covers various sectors including energy midstream, commercial mREITs, BDCs, and shipping, indicating a diverse investment focus [1]

Core Insights - CNA Financial reported fourth-quarter 2024 core earnings of $1.25 per share, exceeding the Zacks Consensus Estimate by 12.6%, although it represented a 6% decrease year over year [1][2] Financial Performance - Total operating revenues reached $3.3 billion, marking a 7.4% increase year over year, driven by higher premiums, net investment income, and other revenues, surpassing the Zacks Consensus Estimate by 4.6% [3] - Net written premiums in Property & Casualty Operations rose 10% year over year to $2.8 billion, supported by an 86% retention rate and a 4% renewal premium change [3] - Net investment income increased by 5% year over year to $644 million, attributed to higher income from fixed-income securities and limited partnerships, slightly below the Zacks Consensus Estimate of $645 million [4] - Total claims, benefits, and expenses surged 20% to $3.7 billion, primarily due to increased insurance claims and policyholders' benefits [5] - Catastrophe losses amounted to $45 million, compared to $22 million in the prior year [5] - Underwriting income improved by 10% year over year to $222 million, exceeding the estimate of $188.5 million [5] Ratios and Capital - The combined ratio deteriorated by 100 basis points year over year to 93.1, slightly above the Zacks Consensus Estimate of 93 [6] - Core return on equity expanded by 10 basis points year over year to 9.4% [10] - Book value per share increased by 8% from year-end 2023 to $38.82 [10] - Statutory capital and surplus stood at $11.2 billion at the end of 2024, reflecting a 2% increase from the previous year [10] Dividend Information - The board approved a quarterly dividend of 46 cents per share, a 5% increase from the previous payout, along with a special dividend of $2.00 per share [11] Segment Performance - Specialty's net written premiums rose 5% year over year to $934 million, while the combined ratio deteriorated by 300 basis points to 93.8 [7] - Commercial's net written premiums increased by 12% year over year to $1.5 billion, with the combined ratio improving by 60 basis points to 92.3 [7] - International's net written premiums grew by 13% year over year to $366 million, with the combined ratio deteriorating by 180 basis points to 94.8 [8] - Life & Group's net earned premiums decreased by 2.7% year over year to $108 million, resulting in a core loss of $18 million [8] - Corporate & Other reported a core loss of $91 million, wider than the loss of $76 million in the previous year [9]

Company Overview - CNA Financial Corporation reported a significant presence in the property and casualty insurance market, with operations in the U.S., Canada, the U.K., and Continental Europe[12]. - As of December 31, 2024, CNA had approximately 6,500 employees, focusing on creating a culture of inclusion and talent development[27]. - The company operates under the Solvency II regulations in Europe, which govern capital adequacy and risk management[22]. - CNA's operations are managed in three segments: Specialty, Commercial, and International, with additional segments for Life & Group and Corporate & Other[15]. Regulatory Environment - The company is subject to comprehensive regulation, including oversight by the State of Illinois Department of Insurance and other international regulatory bodies[17]. - Regulatory changes, including the Group Capital Calculation (GCC), are being adopted to improve group-wide supervision and solvency monitoring[24]. - The insurance industry is heavily regulated, and any changes in regulations could impose significant burdens on the company[94]. - The company is subject to evolving regulations related to climate change, artificial intelligence, and cybersecurity, which may affect its operations[25]. - The National Association of Insurance Commissioners (NAIC) has developed a Group Capital Calculation (GCC) to quantify risk across insurance groups, which the company must adhere to[24]. - The company must comply with premium rate regulations to avoid excessive or unfairly discriminatory rates, which could lead to financial losses[97]. Financial Condition and Risks - The company maintains insurance reserves to cover estimated ultimate unpaid liabilities, which are subject to significant variability and judgment[38]. - Emerging claims and coverage issues, including social inflation, have a material impact on the company's financial condition and may lead to increased reserves[40]. - Catastrophe losses from natural and man-made disasters are unpredictable and could have a material adverse effect on the company's business, results of operations, financial condition, and liquidity[45][49]. - The company recorded significant losses during 2020 related to COVID-19, with ongoing claims and litigation that may continue to impact financial condition[50][52]. - The adequacy of future policy benefit reserves for long-term care policies is contingent upon key actuarial assumptions, including morbidity and persistency, which are assessed quarterly and updated at least annually[42]. - The company faces risks related to reinsurance, including obtaining coverage at acceptable costs and the credit risk of reinsurers, which could adversely impact underwriting strategies[58][59]. - The company is exposed to risks from natural and man-made disasters, with catastrophe losses being difficult to estimate and potentially leading to large financial impacts[45]. - The company may not earn adequate returns on investments, which could materially adversely affect business and financial condition[68]. Competition and Market Dynamics - The competitive landscape in the insurance industry has evolved, with significant consolidation and new entrants, increasing pressures on pricing and underwriting standards[55][56]. - The company faces intense competition in the insurance industry, with pressures from both traditional competitors and new insurtech entrants affecting pricing and market share[55]. - The cyclical nature of the property and casualty market may lead to periods of high price competition, impacting premium levels and expense ratios adversely[56]. - The company is vulnerable to material losses from mass tort claims, which may arise from changes in the legal environment and evolving judicial interpretations[54]. Operational and Cybersecurity Risks - Operational risks include reliance on analytical models for decision-making, which may lead to significant discrepancies between actual results and model outputs[69]. - Cybersecurity incidents, including a ransomware attack in March 2021, have previously disrupted operations and may lead to financial losses and reputational damage[80]. - Cybersecurity threats remain a concern, with past incidents resulting in data breaches that could harm reputation and lead to financial losses[78]. - The company maintains cybersecurity insurance, but coverage may not fully address losses from future cyber incidents[81]. - Reliance on third-party service providers for underwriting and claims administration poses risks, including potential regulatory penalties for contractual breaches[84]. Investment Risks - The investment portfolio is exposed to various risks, including interest rate, credit spread, and equity prices, which can lead to significant realized and unrealized investment losses[64]. - A decline in interest rates may reduce returns on new fixed maturity investments, potentially decreasing net investment income, while an increase in interest rates could increase net unrealized losses[65]. - Limited partnership investments are subject to greater market volatility and lower liquidity, contributing to variability in reported earnings[66]. - The portfolio of commercial mortgage loans is at risk due to potential declines in cash flows from underlying property leases and tenant creditworthiness[67]. Corporate Governance - The company is controlled by a single stockholder, Loews, which owns approximately 92% of outstanding shares, potentially leading to conflicts of interest[63]. - Loews beneficially owned approximately 92% of the company's outstanding shares as of December 31, 2024, allowing it to control significant corporate actions[63]. - The company is subject to capital adequacy requirements, and failure to maintain sufficient capital could restrict operations[89]. - Regulatory limitations on dividend payments from insurance subsidiaries may hinder the ability to meet corporate obligations[90]. - Rating agencies may downgrade the company's ratings, adversely affecting competitive positioning and increasing capital costs[91].

Core Insights - CNA Financial reported quarterly earnings of $1.25 per share, exceeding the Zacks Consensus Estimate of $1.11 per share, but down from $1.33 per share a year ago, representing an earnings surprise of 12.61% [1] - The company posted revenues of $3.33 billion for the quarter, surpassing the Zacks Consensus Estimate by 4.58% and up from $3.1 billion year-over-year [2] - The stock has added approximately 1.3% since the beginning of the year, underperforming the S&P 500's gain of 2.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.52 on revenues of $3.07 billion, and for the current fiscal year, it is $4.79 on revenues of $13.22 billion [7] - The estimate revisions trend for CNA Financial is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Insurance - Property and Casualty industry is currently ranked in the bottom 46% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8] - Skyward Specialty Insurance, another company in the same industry, is expected to report quarterly earnings of $0.75 per share, reflecting a year-over-year increase of 23% [9]

Financial Performance - Net earned premiums increased by 8% to $2,679 million for Q4 2024, compared to $2,479 million in Q4 2023, and for the full year, it rose to $10,211 million from $9,480 million, also an 8% increase [4]. - Net investment income grew by 5% to $644 million in Q4 2024, and for the full year, it increased by 10% to $2,497 million compared to $2,264 million in 2023 [4]. - Total revenues for Q4 2024 were $3,689 million, a 5% increase from $3,507 million in Q4 2023, while total revenues for the full year reached $14,270 million, up 7% from $13,299 million [4]. - Net income for Q4 2024 was $21 million, a significant decrease of 94% from $367 million in Q4 2023, and for the full year, net income fell by 20% to $959 million from $1,205 million [4]. - Core income for Q4 2024 was $342 million, slightly down from $362 million in Q4 2023, while for the full year, core income increased to $1,316 million from $1,284 million [6]. Assets and Investments - Total assets as of December 31, 2024, were $66,492 million, up from $64,711 million in 2023, reflecting a growth of approximately 2.8% [8]. - Total investments increased to $47,482 million in 2024 from $46,562 million in 2023, marking a growth of 2% [8]. - Total investments as of December 31, 2024, amounted to $47,482 million, with net unrealized losses of $2,325 million [20]. - Fixed maturity securities totaled $41,111 million, reflecting a decrease in carrying value of $2,325 million compared to the previous quarter [20]. - Corporate and other bonds within fixed maturity securities were valued at $24,944 million, with unrealized losses of $882 million [20]. Underwriting and Premiums - Gross written premiums increased by 5% to $3,970 million for the three months ended December 31, 2024, compared to $3,765 million in 2023 [10]. - Net written premiums rose by 10% to $2,752 million for the three months ended December 31, 2024, up from $2,508 million in 2023 [10]. - Core income increased by 4% to $451 million for the three months ended December 31, 2024, compared to $434 million in 2023 [10]. - The underwriting gain decreased by 4% to $178 million for the three months ended December 31, 2024, down from $186 million in 2023 [10]. - New business in the Property & Casualty segment increased by 8% to $591 million for the three months ended December 31, 2024, compared to $547 million in 2023 [10]. Ratios and Returns - The company reported a return on equity of 0.8% for Q4 2024, down from 15.9% in Q4 2023, while the full-year return on equity was 9.4%, compared to 13.1% in 2023 [6]. - The combined ratio for the Property & Casualty segment was 93.1% for the three months ended December 31, 2024, compared to 92.1% in 2023 [10]. - The loss & LAE ratio for the Property & Casualty segment was 62.8% for the three months ended December 31, 2024, compared to 60.6% in 2023 [10]. - The expense ratio for the Specialty segment increased to 33.4% for the three months ended December 31, 2024, compared to 32.5% in 2023 [12]. - The combined ratio for the Commercial segment improved to 92.3% in Q4 2024 from 92.9% in Q4 2023, indicating better underwriting performance [14]. Claims and Reserves - Claim and claim adjustment expense reserves at the end of the period totaled $19,263 million, with gross reserves of $24,976 million [33]. - The net incurred claim and claim adjustment expenses for the twelve months ended December 31, 2024, were $6,411 million, up from $6,163 million in 2023 [33]. - Incurred claims and policyholders' benefits for the three months ended December 31, 2024, were $335 million, with a decrease in total reserves to $13,699 million by the end of the period [34]. - The change in discount rate assumptions and other adjustments resulted in a decrease of $931 million in total reserves for the three months ended December 31, 2024 [34]. - The net claim and claim adjustment expense payments for the three months ended December 31, 2024, were $(1,345) million, compared to $(1,345) million in the previous year [33]. Management and Metrics - Management utilizes various metrics such as renewal premium change, rate, retention, and new business to evaluate operating trends [37]. - Underwriting gain (loss) is monitored using GAAP financial results, with net earned premiums less total insurance expenses as a key measure [37]. - The company reports core income (loss) to assess segment performance, excluding net investment gains or losses and pension settlement transaction effects [38]. - The loss ratio, expense ratio, and combined ratio are key metrics used to evaluate the performance of the Specialty, Commercial, and International segments [38]. - The underlying underwriting gain (loss) excludes catastrophe losses and development-related items, providing a clearer view of underwriting profitability [39].

Core Viewpoint - CNA Financial Corporation is set to report its fourth quarter 2024 results on February 10, 2025, before market opening, with related documents available on its website [1] Group 1: Earnings Release Information - The earnings release will include a news release, earnings presentation, and financial supplement [1] - A transcript of earnings remarks will feature commentary from the President and CEO, Douglas M. Worman, and CFO, Scott R. Lindquist [1] Group 2: Shareholder Engagement - CNA encourages shareholders and analysts to submit questions for management ahead of the earnings release, which may be addressed in the earnings remarks [2] Group 3: Company Overview - CNA is one of the largest U.S. commercial property and casualty insurance companies, with over 125 years of experience [3] - The company offers a wide range of standard and specialized insurance products and services for businesses and professionals in the U.S., Canada, and Europe [3]

CNA Financial Corporation (CNA) shares are trading at a discount to the Zacks Property and Casualty Insurance industry. Its price-to-book value of 1.21X is lower than the industry average of 1.53X.The company has a Value Score of A, which suggests that the stock is cheap and indicates a favorable valuation at this moment. This style score helps find the most attractive value stocks.Being one of the largest U.S. commercial lines insurers, CNA has a market capitalization of $13.1 billion. The average volume o ...

It has been about a month since the last earnings report for CNA Financial (CNA) . Shares have added about 4.1% in that time frame, underperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is CNA Financial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. CNA Financial Q3 Earnings, Revenues Top ...