Cna Financial Corporation · NYSE:CNA
Cna Financial — Q3 2024 Earnings Presentation
26 slides from Cna Financial's earnings presentation, Nov 4, 2024
Slide 1: CNA Financial Corporation Third Quarter 2024 Results
CNA Financial Corporation Third Quarter 2024 Results November 4, 2024
Slide 2: Notices and Disclaimers
Notices and Disclaimers Forward Looking Statements The statements made in the course of this presentation and/or contained in the presentation materials may include statements that relate to anticipated future events (forward-looking statements) rather than actual present conditions or historical ev
Slide 3: Third Quarter Overview
Third Quarter Overview • Net income up 10% to $283 million versus $258 million in the prior year quarter; core income of $293 million versus $289 million in the prior year quarter. Year to date core income up 6% to a record $974 million. • P&C core income of $346 million versus $351 million, reflect
Slide 4: Financial Performance
Financial Performance 4 Continued strong growth in earnings resulting in record core income year to date (In millions, except ratios and per share data) Third Quarter Year to Date 2024 2023 Change 2024 2023 Change Revenues $3,618 $3,336 8 % $10,581 $9,792 8 % Core income 293 289 1 % 974 922 6 % Net
Slide 5: Property & Casualty Operations
Highest growth quarter of the year and underlying combined ratio below 92% for 15 consecutive quarters Property & Casualty Operations 5 (In millions, except ratios) Third Quarter Year to Date 2024 2023 2024 2023 GWP ex. 3rd party captives $2,825 $2,595 $8,964 $8,305 GWP change (% year over year) 9 %
Slide 6: Property & Casualty Production Metrics
Property & Casualty Production Metrics Double-digit new business growth, and stable retention and renewal premium change 6 Property & Casualty Rate & Retention 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 5% 5% 5% 4% 4% 4% 3% 7% 7% 6% 5% 6% 5% 5% 86% 86% 84% 85% 85% 85% 85% Retention Renewal Premium Change Rate G
Slide 7: Specialty
Specialty Continued strong profitability 7 (In millions, except ratios) Third Quarter Year to Date 2024 2023 2024 2023 GWP ex. 3rd party captives $982 $949 $2,846 $2,796 GWP change (% year over year) 3 % 2 % Net written premium $862 $825 $2,511 $2,438 NWP change (% year over year) 4 % 3 % Net earned
Slide 8: Specialty Production Metrics
Specialty Production Metrics Consistently strong retention and growth in new business 8 Specialty Rate & Retention 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2% (1)% 1% —% 2% —% —% 4% —% 2% —% 3% 1% 2% 88% 89% 87% 89% 88% 90% 89%Retention Renewal Premium Change Rate GWP ex. 3rd party captives $886 $961 $949 $1,
Slide 9: Commercial
Commercial 9 (In millions, except ratios) Third Quarter Year to Date 2024 2023 2024 2023 GWP ex. 3rd party captives $1,538 $1,340 $5,022 $4,384 GWP change (% year over year) 15 % 15 % Net written premium $1,221 $1,071 $4,017 $3,588 NWP change (% year over year) 14 % 12 % Net earned premium $1,325 $1
Slide 10: Commercial Production Metrics
Commercial Production Metrics 10 Commercial Rate & Retention 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 7% 8% 8% 7% 6% 7% 6% 9% 11% 9% 9% 8% 7% 8% 86% 85% 83% 83% 85% 84% 84%Retention Renewal Premium Change Rate GWP ex. 3rd party captives $1,440 $1,604 $1,340 $1,610 $1,682 $1,802 $1,538 New Business ($M) $310 $
Slide 11: International
International Consistently profitable results 11 (In millions, except ratios) Third Quarter Year to Date 2024 2023 2024 2023 Gross written premium $305 $306 $1,096 $1,125 GWP change (% year over year)1 — % (3) % Net written premium $277 $282 $896 $912 NWP change (% year over year)1 (2) % (2) % Net e
Slide 12: Life & Group
Life & Group Core results reflect higher investment income 12 (In millions) Third Quarter Year to Date 2024 2023 2024 2023 Net earned premiums $110 $112 $329 $340 Net investment income 240 216 710 659 Other revenues — — — — Total operating revenues $350 $328 $1,039 $999 Total claims, benefits and ex
Slide 13: 2024 L&G Reserve Review
2024 L&G Reserve Review Favorable impact from assumption updates, which are deferred into future periods under LDTI (In millions) Change to GAAP Liability for Future Policy Benefits (LFPB) from Changes in Underlying Cash Flow Assumptions 2024 Economic Assumptions ▪ Additional cost of care inflation
Slide 14: LTC Progress Focused on Active Management
LTC Progress Focused on Active Management Proactive approach to managing block across all dimensions of the business 14 Material progress made recently • 35 rate increase approvals in 2024 with an average rate increase amount of 75% • Approximately 2,100 policy buyouts, totaling $67M in cash payment
Slide 15: Individual LTC Block Characteristics
Individual LTC Block Characteristics More mature, richer benefit ILTC reserves have reached inflection point 15 Commentary Block Characteristics • De-risking of the more mature ILTC block with richer policy benefits is well underway ◦ We believe the ILTC reserve balance is at peak levels and declini
Slide 16: Group LTC Block Characteristics
Total Inforce GLTC Policies 2 Group LTC Block Characteristics Less rich benefits, more appropriately priced and peak reserves significantly below ILTC peak reserves 16 Commentary Block Characteristics • We believe the projected GAAP GLTC reserves will peak in the mid-2030’s at substantially lower th
Slide 17: Pretax Net Investment Income
Pretax Net Investment Income 553 611 609 618 626 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Total CNAF Limited Partnership & Common Stock Highlights Fixed Income Securities 500 507 510 520 525 4.7% 4.7% 4.7% 4.8% 4.8% Fixed Income Effective Yield (Pretax) Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 28 78 6
Slide 18: Investment Portfolio
Investment Portfolio Effective Portfolio Duration Life & Group 10.1 yrs P&C and Corporate 4.4 yrs Total 6.4 yrs Fixed Maturities by Rating % of Portfolio AAA 1 14% AA 15% A 25% BBB 41% Investment Grade 95% Below Investment Grade 5% Total Fixed Maturities 100% 18 1 AAA includes obligations of the U.S
Slide 19: Capital
Capital • Financial strength ratings from all four rating agencies were affirmed in the past year with stable outlooks • Statutory surplus remains very strong • Adjusting for dividends, book value per share ex AOCI increased 7% Leverage • Debt maturity schedule is termed out to effectively manage re
Slide 20: Appendix
APPENDIX eNA
Slide 21: Core Income Reconciliation
Results for the Three Months Ended September 30 Results for the Nine Months Ended September 30 ($ millions) 2024 2023 2024 2023 Net income $283 $258 $938 $838 Less: Net investment losses (7) (31) (33) (84) Less: Pension settlement transaction losses (3) — (3) — Core income $293 $289 $974 $922 Core i
Slide 22: Reconciliation of GAAP Measures to Non-GAAP Measures
22 Reconciliation of GAAP Measures to Non-GAAP Measures Underwriting gain (loss) is deemed to be a non-GAAP measure and is calculated pretax as net earned premiums less total insurance expenses, which includes insurance claims and policyholders' benefits, amortization of deferred acquisition costs a
Slide 23: Reconciliation of GAAP Measures to Non-GAAP Measures
23 Reconciliation of GAAP Measures to Non-GAAP Measures Results for the Three Months Ended September 30, 2023 (In millions) Specialty Commercial International Property & Casualty Net income 165 117 40 322 Net investment losses, after tax 13 16 — 29 Core income $ 178 $ 133 $ 40 $ 351 Net investment i
Slide 24: Reconciliation of GAAP Measures to Non-GAAP Measures
23 Reconciliation of GAAP Measures to Non-GAAP Measures Results for the Nine Months Ended September 30, 2024 (In millions) Specialty Commercial International Property & Casualty Net income 498 436 116 1,050 Net investment losses, after tax 19 28 1 48 Core income $ 517 $ 464 $ 117 $ 1,098 Net investm
Slide 25: Reconciliation of GAAP Measures to Non-GAAP Measures
24 Reconciliation of GAAP Measures to Non-GAAP Measures Results for the Nine Months Ended September 30, 2023 (In millions) Specialty Commercial International Property & Casualty Net income 487 390 103 980 Net investment losses, after tax 39 53 (1) 91 Core income $ 526 $ 443 $ 102 $ 1,071 Net investm
Slide 26: Book Value per Share and Return on Equity
September 30, 2024 December 31, 2023 Book value per share $39.72 $36.52 Less: Per share impact of AOCI (6.78) (9.87) Book value per share excluding AOCI $46.50 $46.39 Book value per share excluding accumulated other comprehensive income (loss) (AOCI) allows management and investors to analyze the am