Chicago-based insurer CNA Financial Corporation has reported an improved net income of $213 million for the third quarter of 2020 despite clocking an elevated $160 million of catastrophe losses for the period.
Top line growth and higher investment income helped the company to beat an income figure of $107 million for Q3 2019, as well as improved non-catastrophe underwriting results in its P&C segments.
CNA Financial’s P&C business produced core income of $247 million last quarter, representing an increase of $6 million on the previous year.
But Life & Group and Corporate & Other segments fared less well, producing core losses of $35 million and $19 million, respectively.
Higher catastrophe losses also contributed to a 3.3 point increase in the combined ratio, which stood at 100.9% at the end of Q3 2020, versus 97.6% in Q3 2019.
Catastrophe impacts accounted for 8.7 percentage points of the total combined ratio, which would have improved from 94.6% to 92.6% excluding the impact of catastrophes.
The P&C segments generated gross written premium growth of 9% and net written premium growth of 7% driven by higher rate and new business.
And P&C investment income similarly improved from $274 million last year to $306 million.
“CNA continued to execute effectively during these unprecedented times as evidenced by the ongoing acceleration in our P&C rate achievement, higher overall premium growth and a significantly improved underlying loss ratio and expense ratio in the third quarter,” said Dino E. Robusto, Chairman & Chief Executive Officer of CNA Financial Corporation.
“And, with our annual reserve review of our runoff Long Term Care business, we took significant actions on our discount rate assumptions intended to further protect our capital and earnings in the face of what can very well be a protracted low interest rate environment.”
Looking at the first nine months of the year, CNA Financial’s net income comes to $303 million, which is well below the $727 million it turned last year.
This is reflected in its P&C business, where core income has reduced from $853 million to $465 million and net investment income is down from $937 million to $748 million.
Similarly, the 9M combined ratio has deteriorated from 97.1% to 103.5%, but once again there is an improvement if the impact of catastrophes is excluded.