CNA Financial Corporation has reported a rise in net income for both the fourth quarter and full year 2021, as the company’s property and casualty (P&C) segment produced its strongest combined ratio for five years.
Net income jumped significantly in the final quarter of 2021 to $266 million from $38 million in the prior year, while the full year result increased by more than 74%, year-on-year, to over $1.2 billion.
The insurer’s P&C operation had a positive 2021, reporting core income of roughly $1.2 billion for the year against $840 million a year earlier.
For the year, net catastrophe losses fell from $550 million to $397 million, as the loss ratio declined by 2.4 percentage points to 64.8%. Combined with a lower expense ratio of 31.1%, CNA’s P&C segment has produced a combined ratio of 96.2% for 2021, compared with 100.1% in 2020.
For the fourth quarter, the P&C segment actually saw its core income fall slightly to $353 million, as catastrophe losses increased from $14 million in Q4 2020 to $40 million in 2021. While the loss ratio increased in the quarter to 61.8%, the expense ratio fell to 30.8%, resulting in a Q4 2021 P&C combined ratio of 92.9%, compared with 93.4% a year earlier.
CNA notes that during Q4, higher catastrophe losses were offset by improved non-catastrophe current accident year underwriting results.
So, for both the quarter and the full year 2021, CNA’s P&C business has reported its strongest combined ratio for five years.
Additionally, the P&C segment grew in both periods, with gross written premiums (GWP) of $2.5 billion in Q4 and $9.3 billion in 2021, while net written premiums increased to $2.2 billion in the quarter and to $7.9 billion in 2021.
Dino E. Robusto, Chairman & Chief Executive Officer of CNA, commented: “We had a very strong fourth quarter topping off an excellent year in our property and casualty business. Gross written premium growth ex captives was 16% in the quarter and 10% for the year. New business growth was 28% in the quarter and 19% for the full year. Rates were stable with the third quarter at 8%, and for the full year we achieved 9%. We achieved the lowest quarterly and annual combined ratio in five years at 92.9% and 96.2%, respectively.
“We produced record core income of $1,106 million for the year that also included a record low underlying combined ratio of 91.4%. Given our strong performance on growth, rate, and profitability, we are optimistic about our opportunities and remain well positioned to capitalize on the favorable market conditions we anticipate in 2022.”
In the firm’s Life & Group business segment, core income fell by $20 million in the quarter to $6 million, driven by unfavourable morbidity partially offset by higher net investment income. However, for the full year, the segment has reported core income of $126 million compared with $9 million in 2020, as net investment income spiked to $966 million.
At the same time, the Life & Group division saw net earned premiums fall slightly in Q4 2021 to $122 million, and fall by $13 million annually, to $491 million.
On the asset side of the balance sheet, CNA has reported a $4 million dip in net investment income to $551 million for the quarter, and growth of $224 million for the full year 2021 to almost $2.2 billion.
