CNA(US:CNA)2022-10-31 19:40Financial Data and Key Metrics Changes - The company reported a combined ratio of 95.8%, an improvement from 100% in the same quarter last year [29][30] - Core income decreased by $24 million to $213 million, while pretax limited partnerships and common equity returns were lower by $121 million year-over-year [29] - Total pretax net investment income was $422 million, down from $513 million in the prior year quarter [16] Business Line Data and Key Metrics Changes - The Life & Group segment produced a core loss of $22 million in Q3 2022, compared to an income of $41 million in Q3 2021 [15] - The P&C all-in combined ratio improved to 95.8%, with an underlying combined ratio of 91.1% [30][31] - Specialty gross written premium ex captives and net written premium grew by 2% in Q3 2022 [35] - Commercial gross written premiums ex captives grew by 18% in Q3 2022, with net written premium growth of 16% [37] Market Data and Key Metrics Changes - International gross written premiums grew by 4% and 12% excluding currency fluctuations, while net written premiums grew by 1% or 8% excluding currency fluctuations [39] - Retention rates were strong at 82% for international operations [39] Company Strategy and Development Direction - The company is focused on disciplined re-underwriting and portfolio management strategies to mitigate losses from elevated industry catastrophes [30] - There is an expectation of a new level of price hardening in property lines based on early commentary from reinsurers going into 2023 [41] - The company plans to continue making investments in technology and talent to enhance underwriting capabilities [55][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the high-performing core underlying portfolio despite challenges in equity markets and elevated catastrophes [40] - The company anticipates that higher interest rates will positively impact investment income going forward into 2023 [42] Other Important Information - The company confirmed a regular quarterly dividend of $0.40 per share, payable on December 1 [26] - The estimated impact of adopting new GAAP accounting methodology (LDTI) will be a $2.3 billion decrease in stockholders' equity as of the transition date [13] Q&A Session Summary Question: Can you talk about your net cat exposure versus your gross cat exposure and how pricing of reinsurance changes might affect you? - Management highlighted that they benefited from their quota share relative to Hurricane Ian and emphasized their disciplined cat management strategy [48][49] Question: Do you expect a reacceleration of pricing from the current position we're in right now? - Management indicated that there may be an acceleration on the property lines based on feedback from reinsurers [51] Question: Can you provide more details about the technology and talent investments in the Specialty area? - Management confirmed substantial investments in technology and analytics to enhance underwriting decisions and attract talent [55][56] Question: How does higher interest rates and inflation impact regulatory responsiveness to file rate increases? - Management noted that they have been successful in their filings and regulators have generally been receptive to their rate increase requests [66] Question: What is the appetite for expanding exposure in catastrophe-exposed property if pricing improves significantly? - Management stated that they believe there is room to grow the property portfolio while maintaining a smart approach to risk [65]