CNA Financial Corporation Q3 FY2025 earnings call

• CNA produced record core income of $409M in Q3, with YTD core income exceeding $1B for the first time. Underwriting income was $194M, nearly triple prior year quarter. Net investment income was $638M, up $12M Y/Y.
• P&C all-in combined ratio: 92.8% (including $41M catastrophe losses), underlying combined ratio: 91.3%. Expense ratio: 29.1% in Q3.
• Commercial segment: All-in combined ratio 92.7%, underlying 90.0% (record low). Net written premiums grew 2%. Rate increase 5%, renewal 6%.
• Specialty segment: All-in and underlying combined ratio 93.3%. Net written premiums grew 1%. Rate increase 3%.
• International segment: All-in combined ratio 91.8%, underlying 91.2%. Net written premiums up 15% ex currency. Rates declined 6%. New business up 29%.
• Investment results: Net investment income $638M in Q3, up 2%. Fixed income and other investments generated $567M income, up 4% Y/Y. Expected fixed income and other investments income for Q4: ~$570M.
• Dividend announcement: Regular quarterly dividend of $0.46 per share to be paid on December 4, 2025.

Commercial

• All-in combined ratio: 92.7%, underlying combined ratio: 90.0% (record low), seventh straight quarter at 91% or below. Expense ratio: 26.1% (improvement of 1.6 points Y/Y). Net written premiums grew 2%, gross written premiums excluding captives grew 1%. Rate increase: 5%, renewal premium change: 6%. Net written premium: $324M.

Specialty

• All-in and underlying combined ratios: 93.3%. Expense ratio: 32.5%, underlying loss ratio: 60.6%. Net written premiums grew 1%, gross written premiums excluding captives grew 3%. Rate increase: 3%. New business: $131M. Retention: 86%.

International

• All-in combined ratio: 91.8%, underlying combined ratio: 91.2%. Underlying loss ratio: 58.5%. Net written premiums up 15% ex currency fluctuations, gross written premiums up 6% ex currency fluctuations. Rates declined 6%. New business: $94M (up 29%).

Corporate

• Core loss: $25M in Q3 vs $44M prior year quarter. Included a $17M after-tax charge related to legacy mass tort abuse reserves in prior year.

Life & Group

• Core loss: $22M in Q3 vs $9M prior year quarter. LTC reserve updates: revised morbidity assumptions, strengthened cost of care inflation assumptions, net impact slightly favorable but $7M unfavorable adjustment after deferral. Structured settlement reserve review: $2M unfavorable adjustment to GAAP reserves.

• Expect fourth quarter P&C expense ratio to be in the range of recent quarters.
• Anticipate fixed income and other investments income to be approximately $570 million for the fourth quarter.
• Declared regular quarterly dividend of $0.46 per share, payable on December 4, 2025, to stockholders of record on November 17, 2025.

• External loss cost environment not appropriately reflected in pricing in certain small pockets, leading to potential walking away from business if appropriate pricing not obtained.
• Social inflation impact on loss ratios, with prudent reserving philosophy maintained for lines impacted by social inflation.
• Rate declines in certain segments like International (down 6%) and Specialty's financial institutions and management liability portfolio (flat to negative rate).
• LTC reserve adjustments and structured settlement reserve changes impacting financial results.