Book Value Per Share of $45.34,
an Increase of 2% from
March 31, 2012
Quarterly Dividend of $0.15 Per Share
CHICAGO--(BUSINESS WIRE)--
CNA Financial Corporation (NYSE: CNA) today announced second quarter
2012 results, which included net operating income of $152 million, or
$0.56 per share, and net income of $166 million, or $0.62 per share.
Property & Casualty Operations combined ratio for the second quarter was
101.7%. Book value per share was $45.34 at June 30, 2012, as compared
with $44.48 at March 31, 2012 and $42.66 at December 31, 2011.
CNA Financial also announced declaration of a quarterly dividend of
$0.15 per share, payable August 29, 2012 to stockholders of record on
August 13, 2012.
|
| Results for the Three Months |
| Results for the Six Months |
| | Ended June 30(a) | | Ended June 30(a) |
|
($ millions)
| | 2012 |
| 2011 (b) | | 2012 |
| 2011 (b) |
|
Net operating income
| |
$
|
152
| | |
$
|
114
| | |
$
|
378
| | |
$
|
327
| |
|
Net realized investment gains
| |
14
|
| |
10
|
| |
38
|
| |
18
|
|
|
Net income from continuing operations
| |
166
| | |
124
| | |
416
| | |
345
| |
|
Net loss from discontinued operations
| |
—
|
| |
—
|
| |
—
|
| |
(1
|
)
|
|
Net income
| |
$
|
166
|
| |
$
|
124
|
| |
$
|
416
|
| |
$
|
344
|
|
___________________
(a) |
| References to net operating income (loss), net realized
investment gains (losses), net income (loss) from continuing
operations and net income (loss) used in this press release
reflect amounts attributable to CNA, unless otherwise noted.
Management utilizes the net operating income financial measure to
monitor the Company's operations. Please refer to Note N of the
Consolidated Financial Statements within CNA's Annual Report on
Form 10-K for the year ended December 31, 2011 for further
discussion of this measure. |
(b) | | The Company has adjusted its previously reported financial
information included herein to reflect a retrospective change in
accounting guidance for deferred acquisition costs. Financial
information included herein gives effect to this adjustment. For
the three and six months ended June 30, 2011, the impacts of
adopting the new accounting standard were a $2 million and $5
million decrease in Net operating income and Net income, and a
$0.01 and $0.02 decrease in Earnings per share. Book value at
December 31, 2011 decreased $0.26. |
| |
|
| Diluted Earnings Per Share Attributable to Common Stockholders |
|
| Results for the Three Months |
| Results for the Six Months |
| | Ended June 30 | | Ended June 30 |
| | 2012 |
| 2011 | | 2012 |
| 2011 |
|
Net operating income
| |
$
|
0.56
| | |
$
|
0.42
| | |
$
|
1.40
| | |
$
|
1.21
|
|
Net realized investment gains
| |
0.06
|
| |
0.04
|
| |
0.14
|
| |
0.07
|
|
Net income from continuing operations
| |
0.62
| | |
0.46
| | |
1.54
| | |
1.28
|
|
Net loss from discontinued operations
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
Net income
| |
$
|
0.62
|
| |
$
|
0.46
|
| |
$
|
1.54
|
| |
$
|
1.28
|
| | | | | | | | | | | | | | |
|
Net operating income for the second quarter of 2012 increased $38
million as compared with the same period in 2011. Net operating income
for our core Property & Casualty Operations increased $12 million. These
results were driven by lower catastrophe losses and improved
non-catastrophe current accident year underwriting results, but offset
by lower net investment income. For the second quarter of 2012,
catastrophe losses were $44 million after-tax as compared with $65
million after-tax for the same period in 2011. Our Property & Casualty
Operations produced second quarter combined ratios of 101.7% and 106.0%
in 2012 and 2011. Excluding the impacts of catastrophe losses and
development, our combined ratio improved to 101.2% from 103.9% for the
same periods. Net operating results increased $26 million for our
non-core segments, primarily due to improved results in our long term
care and life settlement contracts businesses, as well as a favorable
change in estimate related to our allowance for uncollectible
reinsurance receivables.
“We are pleased to report continued progress on our strategies to drive
margin improvement and growth in our core Property & Casualty
Operations,” said Thomas F. Motamed, Chairman and Chief Executive
Officer of CNA Financial Corporation. “We achieved meaningful first half
rate increases across our P&C portfolio, which helped drive nearly three
points of improvement in our P&C combined ratio excluding catastrophes
and prior year development.
“As previously announced, we completed our acquisition of Hardy
Underwriting Bermuda Limited for approximately $230 million in early
July. A specialized underwriter in the Lloyd's marketplace, Hardy will
provide us with a key platform for international growth.”
Pretax net investment income for the second quarter of 2012 decreased
$47 million as compared with the same period in 2011, driven by a
significant decrease in limited partnership investment results.
Net operating income for the six months ended June 30, 2012 increased
$51 million as compared with the same period in 2011. Net operating
income for our core Property & Casualty Operations increased $25
million. This increase was primarily driven by lower catastrophe losses,
partially offset by lower net investment income. For the six months
ended June 30, 2012, catastrophe losses were $62 million after-tax as
compared with $101 million after-tax for the same period in 2011. Our
Property & Casualty Operations produced combined ratios of 101.8% and
104.0% for the six months ended June 30, 2012 and 2011. Excluding the
impacts of catastrophe losses and development, our combined ratio
improved to 101.7% from 102.1% for the same periods. Net operating
results increased $26 million for our non-core segments, due to the same
reasons discussed above in the three month comparison.
Pretax net investment income for the six months ended June 30, 2012
decreased $19 million as compared with the same period in 2011,
primarily due to a decrease in limited partnership results, partially
offset by higher fixed maturity securities income.
Business Operating Highlights
CNA Specialty provides professional and management liability,
surety and other property and casualty coverages and services, which
include warranty and service contracts. Specialty products are sold both
domestically and abroad, through brokers, independent agencies and
managing general underwriters.
-
Net written premiums increased $35 million, or 5%, for the second
quarter of 2012 as compared with the same period in 2011, driven by
increased rate. Average rate increased 5% for the second quarter of
2012, as compared with an increase of 1% for the same period in 2011
for the policies that renewed in each period. Retention of 86% was
achieved in each respective period.
-
Net income decreased $8 million and net operating income decreased $9
million for the second quarter of 2012 as compared with the same
period in 2011. The decrease in net operating income was primarily due
to lower favorable net prior year development and decreased net
investment income, partially offset by the inclusion of our Surety
business on a wholly-owned basis in 2012.
-
The combined ratio increased 2.2 points for the second quarter of 2012
as compared with the same period in 2011. The loss ratio increased 1.4
points, primarily due to the impact of lower favorable net prior year
development, partially offset by an improved current accident year
loss ratio.
-
CNA Specialty produced second quarter combined ratios of 94.4% and
92.2% in 2012 and 2011. Excluding the impacts of catastrophe losses
and development, the combined ratio in both periods was 99.3%.
CNA Commercial works with an independent agency distribution
system and brokers to market a broad range of property and casualty
insurance products and services to small, middle-market and large
businesses and organizations domestically and abroad.
-
Net written premiums increased $9 million, or 1% (5% excluding the
impact of First Insurance Company of Hawaii, which was sold in the
fourth quarter of 2011), for the second quarter of 2012 as compared
with the same period in 2011. Average rate increased 7% for the second
quarter of 2012, as compared with an increase of 2% for the second
quarter of 2011 for the policies that renewed in each period.
Retention of 77% and 79% was achieved in each respective period.
-
Net income and net operating income increased $21 million for the
second quarter of 2012 as compared with the same period in 2011. The
increase was due to lower catastrophe losses, improved non-catastrophe
current accident year underwriting results and increased favorable net
prior year development. These favorable impacts were partially offset
by decreased net investment income.
-
The combined ratio improved 10.2 points for the second quarter of 2012
as compared with the same period in 2011. The loss ratio improved 7.8
points, primarily due to the impacts of lower catastrophe losses, an
improved current accident year non-catastrophe loss ratio and
increased favorable net prior year development. The expense ratio
improved 2.4 points, primarily due to the impact of a higher net
earned premium base.
-
CNA Commercial produced second quarter combined ratios of 108.1% and
118.3% in 2012 and 2011. Excluding the impacts of catastrophe losses
and development, our combined ratios were 102.9% and 107.6% for the
same periods.
Life & Group Non-Core primarily includes the results of the
life and group lines of business that are in run-off. Net earned
premiums relate primarily to the individual and group long term care
businesses.
-
Net results increased $24 million for the second quarter of 2012 as
compared with the same period in 2011. This increase was primarily due
to favorable experience in our long term care business and a
significant gain related to a benefit on a life settlement contract.
Corporate & Other Non-Core primarily includes certain
corporate expenses, including interest on corporate debt, and the
results of certain property and casualty business in run-off, including
CNA Re and asbestos and environmental pollution.
-
Net loss decreased $5 million for the second quarter of 2012 as
compared with the same period in 2011, primarily due to the $13
million impact of a release of a previously established allowance for
uncollectible reinsurance receivables. This favorable impact was
partially offset by increased expenses, including expenses related to
the Hardy acquisition.
| Segment Results for the Three Months Ended June 30, 2012 |
|
| |
| |
| |
| |
| Corporate & |
| |
| | | | CNA | | Total P&C | | Life & Group | | Other Non- | | |
|
($ millions)
| | CNA Specialty | | Commercial | | Operations | | Non-Core | | Core | | Total |
|
Net operating income (loss)
| |
$
|
106
| | |
$
|
57
| | |
$
|
163
| | |
$
|
3
| | |
$
|
(14
|
)
| |
$
|
152
|
|
Net realized investment gains (losses)
| |
6
|
| |
8
|
| |
14
|
| |
3
|
| |
(3
|
)
| |
14
|
|
Net income (loss) from continuing operations
| |
$
|
112
|
| |
$
|
65
|
| |
$
|
177
|
| |
$
|
6
|
| |
$
|
(17
|
)
| |
$
|
166
|
| | | | | | | | | | | | | | | | | | | | | | |
|
| Segment Results for the Three Months Ended June 30, 2011 |
|
| |
| |
| |
| |
| Corporate & |
| |
| | | | CNA | | Total P&C | | Life & Group | | Other Non- | | |
|
($ millions)
| | CNA Specialty | | Commercial | | Operations | | Non-Core | | Core | | Total |
|
Net operating income (loss)
| |
$
|
115
| | |
$
|
36
| | |
$
|
151
| | |
$
|
(19
|
)
| |
$
|
(18
|
)
| |
$
|
114
|
|
Net realized investment gains (losses)
| |
5
|
| |
8
|
| |
13
|
| |
1
|
| |
(4
|
)
| |
10
|
|
Net income (loss) from continuing operations
| |
$
|
120
|
| |
$
|
44
|
| |
$
|
164
|
| |
$
|
(18
|
)
| |
$
|
(22
|
)
| |
$
|
124
|
| | | | | | | | | | | | | | | | | | | | | | |
|
| Segment Results for the Six Months Ended June 30, 2012 |
|
| |
| |
| |
| |
| Corporate & |
| |
| | | | CNA | | Total P&C | | Life & Group | | Other Non- | | |
|
($ millions)
| | CNA Specialty | | Commercial | | Operations | | Non-Core | | Core | | Total |
|
Net operating income (loss)
| |
$
|
238
| | |
$
|
196
| | |
$
|
434
| | |
$
|
(16
|
)
| |
$
|
(40
|
)
| |
$
|
378
|
|
Net realized investment gains (losses)
| |
12
|
| |
15
|
| |
27
|
| |
11
|
| |
—
|
| |
38
|
|
Net income (loss) from continuing operations
| |
$
|
250
|
| |
$
|
211
|
| |
$
|
461
|
| |
$
|
(5
|
)
| |
$
|
(40
|
)
| |
$
|
416
|
| | | | | | | | | | | | | | | | | | | | | | |
|
| Segment Results for the Six Months Ended June 30, 2011 |
|
| |
| |
| |
| |
| Corporate & |
| |
| | | | CNA | | Total P&C | | Life & Group | | Other Non- | | |
|
($ millions)
| | CNA Specialty | | Commercial | | Operations | | Non-Core | | Core | | Total |
|
Net operating income (loss)
| |
$
|
243
| | |
$
|
166
| | |
$
|
409
| | |
$
|
(37
|
)
| |
$
|
(45
|
)
| |
$
|
327
|
|
Net realized investment gains (losses)
| |
10
|
| |
18
|
| |
28
|
| |
(2
|
)
| |
(8
|
)
| |
18
|
|
Net income (loss) from continuing operations
| |
$
|
253
|
| |
$
|
184
|
| |
$
|
437
|
| |
$
|
(39
|
)
| |
$
|
(53
|
)
| |
$
|
345
|
| | | | | | | | | | | | | | | | | | | | | | |
|
| Property & Casualty Operations Gross Written Premiums |
|
| Three Months Ended June 30 |
| Six Months Ended June 30 |
|
($ millions)
| | 2012 |
| 2011 | | 2012 |
| 2011 |
|
CNA Specialty
| |
$
|
1,186
| | |
$
|
1,079
| | |
$
|
2,459
| | |
$
|
2,209
|
|
CNA Commercial
| |
964
|
| |
965
|
| |
1,851
|
| |
1,858
|
|
Total P&C Operations
| |
$
|
2,150
|
| |
$
|
2,044
|
| |
$
|
4,310
|
| |
$
|
4,067
|
| | | | | | | | | | | | | | |
|
| Property & Casualty Operations Net Written Premiums |
|
| Three Months Ended June 30 |
| Six Months Ended June 30 |
|
($ millions)
| | 2012 |
| 2011 | | 2012 |
| 2011 |
|
CNA Specialty
| |
$
|
718
| | |
$
|
683
| | |
$
|
1,483
| | |
$
|
1,422
|
|
CNA Commercial
| |
889
|
| |
880
|
| |
1,732
|
| |
1,708
|
|
Total P&C Operations
| |
$
|
1,607
|
| |
$
|
1,563
|
| |
$
|
3,215
|
| |
$
|
3,130
|
| | | | | | | | | | | | | | |
|
| Property & Casualty Calendar Year Loss Ratios |
|
| Three Months Ended June 30 |
| Six Months Ended June 30 |
| | 2012 |
| 2011 | | 2012 |
| 2011 |
|
CNA Specialty
| |
62.2
|
%
| |
60.8
|
%
| |
64.2
|
%
| |
62.5
|
%
|
|
CNA Commercial
| |
72.9
|
%
| |
80.7
|
%
| |
71.8
|
%
| |
77.9
|
%
|
|
Total P&C Operations
| |
67.9
|
%
| |
71.3
|
%
| |
68.2
|
%
| |
70.8
|
%
|
| | | | | | | | | | | |
|
| Property & Casualty Calendar Year Combined Ratios |
|
| Three Months Ended June 30 |
| Six Months Ended June 30 |
| | 2012 |
| 2011 | | 2012 |
| 2011 |
|
CNA Specialty
| |
94.4
|
%
| |
92.2
|
%
| |
95.8
|
%
| |
93.6
|
%
|
|
CNA Commercial
| |
108.1
|
%
| |
118.3
|
%
| |
107.2
|
%
| |
113.0
|
%
|
|
Total P&C Operations
| |
101.7
|
%
| |
106.0
|
%
| |
101.8
|
%
| |
104.0
|
%
|
| | | | | | | | | | | |
|
| CNA Specialty Effect of Catastrophe Impacts and
Development-Related Items |
|
| Three Months Ended June 30 |
| Six Months Ended June 30 |
| | 2012 |
| 2011 | | 2012 |
| 2011 |
|
Combined ratio excluding the effect of catastrophe impacts and
development-related items
| |
99.3
|
%
| |
99.3
|
%
| |
99.1
|
%
| |
98.5
|
%
|
|
Effect of catastrophe impacts
| |
0.4
| | |
0.6
| | |
0.3
| | |
0.5
| |
|
Effect of development-related items
| |
(5.3
|
)
| |
(7.7
|
)
| |
(3.6
|
)
| |
(5.4
|
)
|
|
Combined ratio
| |
94.4
|
%
| |
92.2
|
%
| |
95.8
|
%
| |
93.6
|
%
|
| | | | | | | | | | | |
|
| CNA Commercial Effect of Catastrophe Impacts and
Development-Related Items |
|
| Three Months Ended June 30 |
| Six Months Ended June 30 |
| | 2012 |
| 2011 | | 2012 |
| 2011 |
|
Combined ratio excluding the effect of catastrophe impacts and
development-related items
| |
102.9
|
%
| |
107.6
|
%
| |
104.2
|
%
| |
105.1
|
%
|
|
Effect of catastrophe impacts
| |
8.0
| | |
12.5
| | |
5.6
| | |
9.5
| |
|
Effect of development-related items
| |
(2.8
|
)
| |
(1.8
|
)
| |
(2.6
|
)
| |
(1.6
|
)
|
|
Combined ratio
| |
108.1
|
%
| |
118.3
|
%
| |
107.2
|
%
| |
113.0
|
%
|
| | | | | | | | | | | |
|
| Property & Casualty Operations Effect of Catastrophe Impacts and
Development-Related Items |
|
| Three Months Ended June 30 |
| Six Months Ended June 30 |
| | 2012 |
| 2011 | | 2012 |
| 2011 |
|
Combined ratio excluding the effect of catastrophe impacts and
development-related items
| |
101.2
|
%
| |
103.9
|
%
| |
101.7
|
%
| |
102.1
|
%
|
|
Effect of catastrophe impacts
| |
4.4
| | |
6.9
| | |
3.2
| | |
5.3
| |
|
Effect of development-related items
| |
(3.9
|
)
| |
(4.8
|
)
| |
(3.1
|
)
| |
(3.4
|
)
|
|
Combined ratio
| |
101.7
|
%
| |
106.0
|
%
| |
101.8
|
%
| |
104.0
|
%
|
| | | | | | | | | | | |
|
About the Company
Serving businesses and professionals since 1897, CNA is the country's
seventh largest commercial insurance writer and the 13th
largest property and casualty company. CNA's insurance products include
standard commercial lines, specialty lines, surety, marine and other
property and casualty coverages. CNA's services include risk management,
information services, underwriting, risk control and claims
administration. For more information, please visit CNA at www.cna.com.
CNA is a registered trademark of CNA Financial Corporation.
Conference Call and Webcast Information:
A conference call for investors and the professional investment
community will be held at 10:00 a.m. (ET) today. On the conference call
will be Thomas F. Motamed, Chairman and Chief Executive Officer of CNA
Financial Corporation, and other members of senior management.
Participants can access the call by dialing (800) 500-6404, or for
international callers, (719) 325-2409. The call will also be broadcast
live on the internet at http://investor.cna.com
or you may go to the investor relations pages of the CNA website (www.cna.com)
for further details.
The call is available to the media, but questions will be restricted to
investors and the professional investment community. A taped replay of
the call will be available through August 6, 2012 by dialing (888)
203-1112, or for international callers, (719) 457-0820. The replay
passcode is 3083042. The replay will also be available on CNA's website.
Financial supplement information related to the results is available on
the investor relations pages of the CNA website or by contacting David
Adams at (312) 822-2183.
Financial Measures
In evaluating the results of CNA Specialty and CNA Commercial,
management utilizes the combined ratio, the loss ratio, the expense
ratio and the dividend ratio. These ratios are calculated using
financial results prepared in accordance with accounting principles
generally accepted in the United States of America (GAAP). The loss
ratio is the percentage of net incurred claim and claim adjustment
expenses to net earned premiums. The expense ratio is the percentage of
insurance underwriting and acquisition expenses, including the
amortization of deferred acquisition costs, to net earned premiums. The
dividend ratio is the ratio of policyholders' dividends incurred to net
earned premiums. The combined ratio is the sum of the loss, expense and
dividend ratios.
This press release may also reference or contain financial measures that
are not in accordance with GAAP. For reconciliations of non-GAAP
measures to the most comparable GAAP measures, please refer herein
and/or to CNA's most recent 10-K on file with the Securities and
Exchange Commission, as well as the financial supplement, available at www.cna.com.
Forward-Looking Statement
This press release may include statements which relate to anticipated
future events (forward-looking statements) rather than actual present
conditions or historical events. These statements are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 and generally include words such as “believes”, “expects”,
“intends”, “anticipates”, “estimates” and similar expressions.
Forward-looking statements, by their nature, are subject to a variety of
inherent risks and uncertainties that could cause actual results to
differ materially from the results projected. Many of these risks and
uncertainties cannot be controlled by CNA. For a detailed description of
these risks and uncertainties affecting CNA, please refer to CNA's most
recent 10-K on file with the Securities and Exchange Commission
available at www.cna.com.
Any forward-looking statements made in this press release are made by
CNA as of the date of this press release. Further, CNA does not have any
obligation to update or revise any forward-looking statement contained
in this press release, even if CNA's expectations or any related events,
conditions or circumstances change.
CNA Financial Corporation
MEDIA:
Katrina Parker, 312/822-5167
Jennifer
Martinez, 312/822-4142
or
ANALYSTS:
Marie Hotza,
312/822-4278
David C. Adams, 312/822-2183
Source: CNA Financial Corporation