CNA Financial Corporation CNA reported first-quarter 2025 core earnings of $1.03 per share, which missed the Zacks Consensus Estimate by 11.2%. The bottom line decreased 20.7% year over year.
The insurer’s results reflected poor underwriting income, escalating expenses, as well as wider catastrophe losses, offset by improved premiums. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Behind Q1 Headlines
Total operating revenues of CNA Financial were $3.2 billion, up 5.9% year over year, driven by higher premiums. The top line beat the Zacks Consensus Estimate by 5.5%.
Net written premiums of Property & Casualty Operations improved 9% year over year to $2.6 billion. Our estimate was pegged at $2.3 billion.
Net investment income decreased 0.8% year over year to $604 million. The increase reflected the largely offsetting impacts of lower common stock returns and higher income from fixed income securities. Our estimate was $698.2 million.
CNA Financial Corporation Price, Consensus and EPS Surprise
CNA Financial Corporation Price, Consensus and EPS Surprise
Total claims, benefits and expenses rose 8.6% to $3.3 billion, primarily due to higher insurance claims and policyholders' benefits, amortization of deferred acquisition costs and other operating expenses. Our estimate was pinned at $3 billion.
Underwriting income decreased 68.2% year over year to $40 million. Catastrophe losses were $97 million, including $53 million for the California wildfires, wider than a loss of $88 million in the year-ago quarter.
The combined ratio deteriorated 380 basis points (bps) year over year to 98.4. It included 3.8 points of catastrophe loss due to the California wildfires.
Segment Results
Specialty’s net written premiums increased 6% year over year to $842 million. Our estimate was $748 million. The combined ratio deteriorated 440 bps to 95.1.
Commercial’s net written premiums climbed 12% year over year to $1.5 billion. Our estimate was $1.3 billion. The combined ratio deteriorated 350 bps to 101.1.
International’s net written premiums increased 2% year over year to $266 million. Our estimate was $262 million. The combined ratio deteriorated 210 bps to 95.4.
Life & Group’s net earned premiums were $106 million, down 3.6% year over year. Our estimate was $105.3 million. The core income was $6 million, up 20% year over year, reflecting favorable persistency, partially offset by lower net investment income from limited partnerships.
Corporate & Other’s core loss of $36 million was wider than a loss of $22 million in the year-ago quarter. The loss was primarily due to a $17 million after-tax charge related to unfavorable prior-period development associated with legacy mass tort claims.
Financial Update
Total assets increased 1.2% from the end of 2024 to $67.6 billion. Stockholders' equity of $10.2 billion decreased 2.2% from the 2024-end level.
The core return on equity was 9.2%, which contracted 230 bps. Book value, excluding AOCI, was $44.58 per share, up 2% from the end of 2024.
Statutory surplus decreased 1.9% from the 2024-end level to $10.9 billion. Debt-to-capital deteriorated 40 bps to 22.4.
Net cash flows provided by operating activities increased 26.5% from the 2024-end level to $638 million.
Dividend Update
CNA Financial’s board of directors approved a quarterly dividend of 46 cents per share to be paid out on June 5 to shareholders as of May 19.
Zacks Rank
CNA Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other P&C Insurers
Arch Capital Group Ltd. ACGL reported first-quarter 2025 operating income of $1.54 per share, which beat the Zacks Consensus Estimate by 12.4%. The bottom line, however, declined 37.1% year over year. Gross premiums written improved 8.9% year over year to $6.4 billion. Net premiums written climbed 10.5% year over year to $4.5 billion on higher premiums written across its Insurance and Reinsurance segments.
Net investment income grew 15.6% year over year to $378 million and beat our estimate of $436.2 million. The Zacks Consensus Estimate was pegged at $415 million. Operating revenues of $4.5 billion rose 21.2% year over year, driven by higher net premiums earned and net investment income. It missed the Zacks Consensus Estimate by 0.9%.
RLI Corp. RLI reported first-quarter 2025 operating earnings of 92 cents per share, which beat the Zacks Consensus Estimate by 4.5%. The bottom line, however, decreased 9.2% from the prior-year quarter. Operating revenues for the reported quarter were $436 million, up 10.7% year over year, driven by higher net premiums earned and net investment income. The top line, however, missed the Zacks Consensus Estimate by 0.9%.
Gross premiums written increased 5% year over year to $491 million. This uptick can be attributed to the solid performance of the Casualty segment (up 13.5%). Our estimate was $577.9 million. Net investment income increased 12% year over year to $36.7 million. The Zacks Consensus Estimate was pegged at $38.6 million, while our estimate for the metric was $38.9 million. The investment portfolio’s total return was 1.3% in the quarter.
Palomar Holdings Inc. PLMR reported first-quarter 2025 operating income of $1.87 per share, which beat the Zacks Consensus Estimate by 17.6%. The bottom line increased 71.5% year over year. Total revenues improved 52.6% year over year to $177 million, mainly attributable to higher premiums and net investment income. The top line beat the Zacks Consensus Estimate by 2.9%.
Gross written premiums increased 20.1% year over year to $442.1 million. Our estimate was $530.9 million. Net earned premiums increased 52.1% year over year to $164 million. Our estimate was $161.7 million. The Zacks Consensus Estimate was pegged at $160 million. Net investment income increased 69.1% year over year to $12.1 million. The Zacks Consensus Estimate was pegged at $11.2 million. Our estimate was $8.5 million.
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