Second Quarter 2017: Selective vs. CNA
Last week Selective and CNA reported their financial results for Q2, 2017. Each told separately. So Coverager compared…
Selective:
– Net premiums written grew 6%
– GAAP combined ratio was 94.7%
– Annualized return on average equity (“ROE”) was 10.2% and operating ROE was 9.9%
– Retention of 83%
CNA:
– Net premiums written grew 3.49%
– Property & Casualty Operations’ combined ratio was 93.5%.
– Annualized return on average equity (“ROE”) was 9.2% and operating ROE was 8%
– Retention of 78%
Worth Noting. Effective July 1, Selective began quoting new business in Arizona and New Hampshire, where their respective 16 and 9 appointed agents control about 25% of the available commercial lines premium. Also according to Chairman and CEO Gregory E. Murphy, the insurer is investing in its relationship with “ivy-league” distribution partners; implementing sophisticated underwriting tools and technologies. Meanwhile, CNA is talking, talking, talking. No really, I counted ‘talking’ three times in one response to one question. This was the question asked by Cliff Gallant of Philadelphia Financial: “I was curious about, as you go on the road and you talk to distribution with your agents, what kind of things are you hearing from them? Are there any consistent demands on their part or concerns that you could share with us?” This was the response from CNA’s Chairman and CEO Dino Robusto: “No. I don’t think it’s really about concerns. I think they are clearly happy that they are seeing a reenergized CNA. And I believe I have referenced it before. Agents and brokers always want to have the largest number or the product cadre of underwriting specialists, right. That sort of bring tailored products and services to whatever target segments they go after. And so as we go out there, our underwriters but also the executives talking about the appetite, talking about our capabilities, talking about our performance. In fact, you know, one of the things we do when we are out traveling to them is, we give them specific examples of the types of businesses that we insure and do because one of the things that can happen or both it’s potentially happened, after a sort of protracted period of reunderwriting and retrenchment, what ends up happening is, agents and brokers can lose sight of what it is that we all can do. And so they might know what’s for one segment like healthcare or technology, but the reality is, these are very sort of multi-segment large agents and brokers that have a lot more potential for us. So they are clearly welcoming of the opportunity and there is always business that gets remarketed, even quality of business for a host of different reasons and so they welcome the opportunity to have CNA come to the table. And that’s really what the dialogue is mainly about.” Thank you Seeking Alpha.
Bottom Line: before you know it, the Coverager platform will include financial data on US-based P&C insurers. Because we have to start somewhere.
