CNA Financial Corporation Q2 FY2025 earnings call

• Strong investment income and excellent underwriting gain: Underwriting gain of $150 million was up 21% from prior year second quarter, underlying underwriting gain of $213 million was ninth consecutive quarter of $200 million or more
• P&C all-in combined ratio: 94.1% in second quarter, underlying combined ratio: 91.7%
• Gross written premiums excluding captives grew 5%, net written premiums grew 6%
• New business growth: 8% in the quarter to $645 million with positive growth in all three operating segments
• Recently announced launch of Cardinal E&S, a CNA Brand, furthering dedication to serving excess and surplus market
• Successful renewal of property reinsurance treaties on June 1st, achieving favorable terms, conditions, and pricing
• Net investment income: $662 million, increased $44 million year over year, driven by fixed income portfolio growth and strong limited partnership and common stock performance

Commercial Segment

• All-in combined ratio: 94.8%, underlying combined ratio: 90.6%
• Gross written premiums excluding captives grew by 6%, net written premium growth was 7%
• New business: $420 million, up 4% from prior year quarter
• Rate increase: 5% in the quarter, renewal premium change: 6%, each down a point compared to first quarter
• Exposure change: 1% in aggregate with variation by line, e.g., 3% in workers' compensation and 4% in primary general liability, down 2% in excess casualty
• Retention: 81% in second quarter, lower in commercial auto but higher in workers’ compensation

Specialty Segment

• All-in and underlying combined ratios: 93.6%
• Expense ratio: 33.2%, underlying loss ratio: 60.1%
• Gross written premiums excluding captives grew by 3%, net written premiums grew by 4%
• Rate increased by 3%, new business grew 3% to $122 million
• Retention: 86% but down three points compared to last quarter, lower by five points in financial institutions and management liability

International Segment

• All-in combined ratio: 92.8%, including $5 million or 1.4 points of catastrophe loss
• Underlying combined ratio: 91.4%, underlying loss ratio: 58.5%, expense ratio: 32.9%
• Gross written premiums were up 5% and 4% excluding currency fluctuations, net written premiums were up 9% and 7% excluding currency fluctuations
• New business: $103 million, up 43%
• Retention: 86% as we hold on to our consistently profitable portfolio which has produced twenty consecutive quarters of underwriting profitability

Life & Group

• Core income: $1 million for the second quarter compared to a $1 million core loss in the prior year quarter
• Results benefited from favorable persistency, somewhat offset by lower investment income

Corporate Segment

• Core loss: $114 million in the second quarter compared to a $53 million loss in the prior year quarter
• Included an $88 million after-tax charge related to unfavorable prior period development associated with legacy mass tort abuse reserves

• Expect income from fixed income and other investments to be about $565 million in the third quarter
• For full year, expect income from fixed income and other investments to be about $2,250 million, a 3% increase compared to full year 2024
• Expect P&C expense ratio to continue to track at approximately 30% for the balance of 2025
• Announced regular quarterly dividend of $0.46 per share to be paid on September 4, 2025 to stockholders of record on August 18, 2025

• Market overall is rational, but certain small pockets within individual lines and geographies where external loss cost environment is not being appropriately reflected, and we will not trade bottom line profit for growth
• Social inflation has impacted the U.S. market, with rates in U.S. consistent with last quarter at 5% but facing pricing pressure in some areas
• International market faces competition impacting rates, but retention remains strong