CNA Financial Corporation CNA reported first-quarter 2017 operating income of 87 cents per share, which beat the Zacks Consensus Estimate by 10.1%. Also, the bottom line improved 155.9% from the prior-year quarter.
The quarter witnessed higher net investment income alongside better performance by International, Life and Group Non-Core as well as Corporate & Other Non-Core segments.
Including net realized investment gains, net income of 96 cents per share skyrocketed 300% year over year.
Behind First-Quarter Headlines
Net investment income jumped 23.5% year over year to $389 million due to improved limited partnership returns in the quarter.
Net written premiums at Property & Casualty Operations declined 2.2% year over year to $1.6 billion. Net operating income improved 29.5% year over year to $268 million due to higher net investment income and lower underwriting expenses. Unfavorable premium development partially offset the downside. Combined ratio deteriorated 110 basis points (bps) on a year-over-year basis to 97.2%.
As of Mar 31, 2017, book value (excluding AOCI) was $43.49 per share, down 3.1% from Dec 31, 2016.
Segment Results
Specialty net written premiums dipped 0.7% year over year to $679 million. Lesser new business resulted in the downside. Retention was 88% in the reported quarter. Average rate for policies grew 1% year over year. Combined ratio deteriorated 80 bps to 90.2%.
Commercial net written premiums decreased 4.4% year over year to $715 million owing to unfavorable premium development on the back of premium adjustment within Small Business. However, higher new business within middle markets partially offset the downside. Retention was 83% in the quarter under review. Average rate for the policies was remained flat year over year. Combined ratio deteriorated 300 bps to 104.9%.
International net written premiums inched up 0.8% year over year to $238 million. The company achieved retention of 76% in the first quarter. Average rate on policies remained flat year over year. Combined ratio improved 390 bps to 95.1%.
Life & Group Non-Core operating revenues rose 4.1% year over year to $331 million. Net operating income of $4 million compared favorably with the year-ago loss of $2 million.
Corporate & Other Non-Core net operating loss of $37 million was significantly narrower than a loss of $114 million in the year-ago quarter.
Dividend Update
The board of directors of CNA Financial announced a quarterly dividend of 25 cents per share during the reported quarter. The dividend will be paid on May 31, to stockholders on record as of May 15, 2017.