CNA reports Q3 2024 results

CNA Insurance reported its Q3 2024 earnings on November 4, 2024. Key highlights:

• The Property & Casualty (P&C) division had a combined ratio of 97.2%, which includes $143 million in catastrophe losses, adding 5.8 points to the ratio—similar to the average for the past five years. The underlying combined ratio was 91.6%, marking the fifteenth straight quarter below 92%. Selective aims to keep combined ratios at 95% or better.
• P&C retention stayed strong at 85% this quarter, alongside a 1% increase in renewal premiums in the US. New business grew by 15% to $547 million, marking the highest quarterly growth this year, with all segments adding to this increase. “Our retention remains very strong at 85%, and our new business production growth in the quarter was the highest of any quarter this year.” – CEO Dino Robusto.
• Competition remained strong in CNA’s International segment, leading to flat growth in gross written premiums. Net written premiums declined by 2%, or 1% when adjusted for currency fluctuations. Overall rates for the International segment saw a slight decrease. However, varying levels of pricing and competition across regions and products enabled CNA to grow new business by 18% during the quarter and improve retention by two points, reaching 82%.
• CNA’s Individual block has been closed since 2004, and the Group block has been closed since 2016. Since then, CNA has significantly reduced policy exposure and secured notable rate increases and benefit reductions through active management, including an ongoing policy buyout program. On the investment side, favorable interest rates since early 2022 have strengthened the business’s financials by allowing CNA to invest in high-quality, long-term securities with attractive yields that match its liabilities. This approach has contributed to a nearly $300 million increase in statutory margin since 2022.
• The Individual block is more mature, with an average policyholder age of 82, and typically offers richer benefits, including inflation protection on most policies and lifetime benefits on some. CNA has continued to reduce risk in this block through active management, decreasing the number of policies by 46% since 2015, while the number of open claims has remained stable. Looking ahead, CNA expects policy counts to drop by 65% over the next decade. The company believes that reserves for the Individual long-term care (LTC) block have reached a turning point and are now beginning to decline based on set discount rate assumptions.
• CNA CEO Dino Robusto announced that he will transition to Executive Chairman on January 1, 2025, with Doug Worman stepping in as CEO.