CNA FINANCIAL ANNOUNCES Q4 2023 NET INCOME OF $1.35 PER SHARE AND RECORD CORE INCOME OF $1.33 PER SHARE FULL YEAR 2023 NET INCOME OF $4.43 PER SHARE AND RECORD CORE INCOME OF $4.71 PER SHARE REGULAR QUARTERLY DIVIDEND INCREASED 5% TO $0.44 PER SHARE SPECIAL DIVIDEND OF $2.00 PER SHARE
- None.
- None.
Insights
The reported increase in net income and core income for CNA Financial Corporation signifies a robust financial performance, particularly in the Property & Casualty (P&C) sector. The growth in net written premiums and gross written premiums by 10% indicates a strong market presence and successful business acquisition strategies. Additionally, the P&C combined ratio improvement suggests enhanced efficiency in claims management and operational execution.
The dividend increase and special dividend declaration reflect a shareholder-friendly capital return policy, potentially increasing the attractiveness of CNA's stock to income-focused investors. The growth in book value per share, excluding Accumulated Other Comprehensive Income (AOCI), indicates a solid balance sheet and might be viewed positively by the market, signaling financial stability and potentially influencing the company's creditworthiness.
The reported results demonstrate CNA's ability to capitalize on favorable market conditions, such as the 'hard market,' where higher premiums can be charged due to lower supply of insurance coverage. The consistent renewal premium change and new business growth suggest effective customer retention and acquisition tactics. This is particularly important as the insurance industry faces competition and price sensitivity.
Furthermore, the P&C underlying combined ratio reaching a record low indicates CNA's strategic focus on profitable underwriting, which could serve as a competitive advantage in the industry. The consistent performance in the P&C segments, excluding third-party captives, underscores the company's core operational strength.
The reported increase in investment income, both from limited partnerships, common stock and fixed income securities, reflects a well-managed investment portfolio that has likely benefited from the broader economic environment and interest rate trends. This diversification of income streams is essential for the company's financial health, especially in times of economic uncertainty.
The impact of catastrophe losses on the combined ratio has decreased, which could be attributed to lesser occurrence of insured events or better risk management strategies. However, it is important to monitor how shifts in climate patterns and economic conditions might affect future loss expectations and reserve adequacy.
Fourth Quarter
- Net income up
54% to$367 million versus$239 million in the prior year quarter; core income up37% to a record$362 million $265 million - P&C core income of
$434 million versus$342 million , reflects higher investment income and higher underwriting income. - Life & Group core income of
$4 million $25 million - Corporate & Other core loss of
$76 million $52 million $19 million after-tax charge related to office consolidation. - Net investment income up
21% to$611 million $58 million $78 million $50 million $533 million - P&C combined ratio of
92.1% , compared with93.7% in the prior year quarter, including 1.0 point of catastrophe loss impact compared with 3.6 points in the prior year quarter and 0.3 points of favorable prior period development impact compared with 1.1 points in the prior year quarter. P&C underlying combined ratio was91.4% , compared with91.2% in the prior year quarter. P&C underlying loss ratio was59.9% and the expense ratio was31.2% . - P&C segments, excluding third party captives, generated gross written premium and net written premium growth of
10% in the quarter. P&C renewal premium change of +5% , with written rate of +4% and exposure change of +1% .
Full Year
- Net income up
77% to a record$1,205 million $682 million 54% to a record$1,284 million $836 million - P&C core income of
$1,505 million $1,240 million - Life & Group core loss of
$48 million $221 million $143 million - Net investment income up
25% to$2,264 million $233 million $202 million $226 million $2,062 million - P&C combined ratio of
93.5% , compared with93.2% in the prior year, including 2.6 points of catastrophe loss impact compared with 3.0 points in the prior year and no impact from prior period development compared with 1.0 point of favorability in the prior year. P&C underlying combined ratio was a record low90.9% compared with91.2% in the prior year. P&C underlying loss ratio was59.9% and the expense ratio was30.7% . - P&C segments, excluding third party captives, generated gross written premium growth of
10% and net written premium growth of9% in the year. P&C renewal premium change of +7% , with written rate of +5% and exposure change of2% .
Stockholders' Equity
- Book value per share of
$36.52 $46.39 10% increase from year- end 2022 adjusting for$2.88 - Increased quarterly dividend
5% to$0.44 $2.00
Our Property & Casualty segments produced core income of
Our Life & Group segment produced core income of
Our Corporate & Other segment produced a core loss of
Net income for the full year 2023 was
Our Property & Casualty segments produced core income of
Our Life & Group segment produced a core loss of
Our Corporate & Other segment produced a core loss of
CNA Financial declared a quarterly dividend of
Results for the Three Months | Results for the Year Ended | ||||||
($ millions, except per share data) | 2023 | 2022 (a) | 2023 | 2022 (a) | |||
Net income | $ 367 | $ 239 | $ 1,205 | $ 682 | |||
Core income (b) | 362 | 265 | 1,284 | 836 | |||
Net income per diluted share | $ 1.35 | $ 0.87 | $ 4.43 | $ 2.51 | |||
Core income per diluted share | 1.33 | 0.97 | 4.71 | 3.07 | |||
December 31, 2023 | December 31, 2022 (a) | ||||
Book value per share | $ | 36.52 | $ | 31.55 | |
Book value per share excluding AOCI | 46.39 | 44.83 | |||
(a) | As of January 1, 2023, the Company adopted LDTI using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance. |
(b) | Management utilizes the core income (loss) financial measure to monitor the Company's operations. Please refer herein to the Reconciliation of GAAP Measures to Non-GAAP Measures section of this press release for further discussion of this non-GAAP measure. |
"We ended the year strong, with core income up
Net and gross written premiums ex. captives each grew by
In the quarter, renewal premium change was
We remain optimistic about our opportunities for this year given our broad-based profitability across our three operating segments and track record of double-digit growth levels in the last several years," said Dino E. Robusto, Chairman & Chief Executive Officer of CNA Financial Corporation.
Property & Casualty Operations
Results for the Three Months | Results for the Year Ended | ||||||||||
($ millions) | 2023 | 2022 | 2023 | 2022 | |||||||
Gross written premiums ex. 3rd party captives | $ 2,974 | $ 2,704 | $ 11,279 | $ 10,264 | |||||||
GWP ex. 3rd party captives change (% year over year) | 10 | % | 10 | % | |||||||
Net written premiums | $ 2,508 | $ 2,284 | $ 9,446 | $ 8,663 | |||||||
NWP change (% year over year) | 10 | % | 9 | % | |||||||
Net earned premiums | $ 2,368 | 2,116 | $ 9,030 | $ 8,196 | |||||||
NEP change (% year over year) | 12 | % | 10 | % | |||||||
Underwriting gain | $ 186 | $ 134 | $ 585 | $ 559 | |||||||
Net investment income | $ 355 | $ 290 | $ 1,306 | $ 982 | |||||||
Core income | 434 | 342 | 1,505 | 1,240 | |||||||
Loss ratio excluding catastrophes and development | 59.9 | % | 59.9 | % | 59.9 | % | 60.0 | % | |||
Effect of catastrophe impacts | 1.0 | 3.6 | 2.6 | 3.0 | |||||||
Effect of development-related items | (0.3) | (1.1) | — | (1.0) | |||||||
Loss ratio | 60.6 | % | 62.4 | % | 62.5 | % | 62.0 | % | |||
Expense ratio |
31.2 |
% |
31.1 |
% |
30.7 |
% |
30.9 |
% | |||
Combined ratio | 92.1 | % | 93.7 | % | 93.5 | % | 93.2 | % | |||
Combined ratio excluding catastrophes and development | 91.4 | % | 91.2 | % | 90.9 | % | 91.2 | % | |||
- The fourth quarter underlying combined ratio increased 0.2 points as compared with the prior year quarter. The expense ratio was largely consistent with the prior year quarter as net earned premium growth of
12% was offset by higher employee related costs. The underlying loss ratio was consistent with the prior year quarter. - The fourth quarter combined ratio improved 1.6 points as compared with the prior year quarter. Catastrophe losses were
$22 million $76 million , or 3.6 points of the loss ratio, for the prior year quarter. Favorable net prior period development improved the loss ratio by 0.3 points in the current quarter compared with 1.1 points of improvement in the prior year quarter. - In the fourth quarter, P&C segments, excluding third party captives, generated gross written premium and net written premium growth of
10% . - For the full year, the underlying combined ratio improved 0.3 points as compared with the prior year, reflecting the lowest underlying combined ratio on record. The expense ratio improved 0.2 points and the underlying loss ratio was largely consistent with the prior year.
- For the full year, the combined ratio increased 0.3 points as compared with the prior year. Catastrophe losses were
$236 million $247 million , or 3.0 points of the loss ratio, for the prior year. There was no impact on the loss ratio from net prior period development in the current year compared with 1.0 point of improvement from favorable net prior period development in the prior year. - For the full year, P&C segments, excluding third party captives, generated gross written premium growth of
10% and net written premium growth of9% .
Business Operating Highlights
Specialty
Results for the Three Months | Results for the Year Ended | ||||||||||
($ millions) | 2023 | 2022 | 2023 | 2022 | |||||||
Gross written premiums ex. 3rd party captives | $ 1,004 | $ 998 | $ 3,800 | $ 3,814 | |||||||
GWP ex. 3rd party captives change (% year over year) | 1 | % | — | % | |||||||
Net written premiums | $ 891 | $ 863 | $ 3,329 | $ 3,306 | |||||||
NWP change (% year over year) | 3 | % | 1 | % | |||||||
Net earned premiums | $ 869 | $ 827 | $ 3,307 | $ 3,203 | |||||||
NEP change (% year over year) | 5 | % | 3 | % | |||||||
Underwriting gain | $ 80 | $ 93 | $ 317 | $ 366 | |||||||
Loss ratio excluding catastrophes and development | 58.6 | % | 58.4 | % | 58.5 | % | 58.6 | % | |||
Effect of catastrophe impacts | — | — | — | 0.1 | |||||||
Effect of development-related items | (0.6) | (0.6) | (0.3) | (1.3) | |||||||
Loss ratio | 58.0 | % | 57.8 | % | 58.2 | % | 57.4 | % | |||
Expense ratio |
32.5 |
% |
30.8 |
% |
32.0 |
% |
31.0 |
% | |||
Combined ratio | 90.8 | % | 88.8 | % | 90.4 | % | 88.6 | % | |||
Combined ratio excluding catastrophes and development | 91.4 | % | 89.4 | % | 90.7 | % | 89.8 | % | |||
- The fourth quarter underlying combined ratio increased 2.0 points as compared with the prior year quarter. The expense ratio increased 1.7 points as compared with the prior year quarter driven by higher acquisition and employee related costs. The underlying loss ratio increased 0.2 points as compared with the prior year quarter.
- The fourth quarter combined ratio increased 2.0 points as compared with the prior year quarter. Favorable net prior period development improved the loss ratio by 0.6 points in both the current and prior year quarters.
- In the fourth quarter, gross written premiums, excluding third party captives, grew
1% and net written premiums grew3% . - For the full year, the underlying combined ratio increased 0.9 points as compared with the prior year. The expense ratio increased 1.0 point driven by higher employee related and acquisition costs. The underlying loss ratio was largely consistent with the prior year.
- For the full year, the combined ratio increased 1.8 points as compared with the prior year. Favorable net prior period development improved the loss ratio by 0.3 points in the current year compared with 1.3 points of improvement in the prior year.
- For the full year, gross written premiums, excluding third party captives, were flat to the prior year and net written premiums grew
1% .
Commercial
Results for the Three Months | Results for the Year Ended | ||||||||||
($ millions) | 2023 | 2022 | 2023 | 2022 | |||||||
Gross written premiums ex. 3rd party captives | $ 1,610 | $ 1,345 | $ 5,994 | $ 5,056 | |||||||
GWP ex. 3rd party captives change (% year over year) | 20 | % | 19 | % | |||||||
Net written premiums | $ 1,292 | $ 1,096 | $ 4,880 | $ 4,193 | |||||||
NWP change (% year over year) | 18 | % | 16 | % | |||||||
Net earned premiums | $ 1,211 | $ 1,022 | $ 4,547 | $ 3,923 | |||||||
NEP change (% year over year) | 18 | % | 16 | % | |||||||
Underwriting gain | $ 86 | $ 12 | $ 182 | $ 106 | |||||||
Loss ratio excluding catastrophes and development | 61.5 | % | 61.5 | % | 61.5 | % | 61.5 | % | |||
Effect of catastrophe impacts | 1.4 | 7.2 | 4.5 | 5.6 | |||||||
Effect of development-related items | (0.1) | (0.9) | (0.1) | (0.7) | |||||||
Loss ratio | 62.8 | % | 67.8 | % | 65.9 | % | 66.4 | % | |||
Expense ratio |
29.8 |
% |
30.8 |
% |
29.6 |
% |
30.4 |
% | |||
Combined ratio | 92.9 | % | 99.0 | % | 96.0 | % | 97.3 | % | |||
Combined ratio excluding catastrophes and development | 91.6 | % | 92.7 | % | 91.6 | % | 92.4 | % | |||
- The fourth quarter underlying combined ratio improved 1.1 points as compared with the prior year quarter. The expense ratio improved 1.0 point driven by net earned premium growth of
18% partially offset by higher employee related costs. The underlying loss ratio was consistent with the prior year quarter. - The fourth quarter combined ratio improved 6.1 points as compared with the prior year quarter. Catastrophe losses were
$17 million $74 million , or 7.2 points of the loss ratio, for the prior year quarter. Favorable net prior period development improved the loss ratio by 0.1 points in the current quarter compared with 0.9 points of improvement in the prior year quarter. - In the fourth quarter, gross written premiums, excluding third party captives, grew
20% and net written premiums grew18% . - For the full year, the underlying combined ratio improved 0.8 points as compared with the prior year, reflecting the lowest underlying combined ratio on record. The expense ratio improved 0.8 points driven by net earned premium growth of
16% partially offset by higher employee related costs. The underlying loss ratio was consistent with the prior year. - For the full year, the combined ratio improved 1.3 points as compared with the prior year. Catastrophe losses were
$207 million $222 million , or 5.6 points of the loss ratio, for the prior year. Favorable net prior period development improved the loss ratio by 0.1 points in the current year compared with 0.7 points of improvement in the prior year. - For the full year, gross written premiums, excluding third party captives, grew
19% and net written premiums grew16% .
International
Results for the Three Months | Results for the Year Ended | ||||||||||
($ millions) | 2023 | 2022 | 2023 | 2022 | |||||||
Gross written premiums | $ 360 | $ 361 | $ 1,485 | $ 1,394 | |||||||
GWP change (% year over year) | — | % | 7 | % | |||||||
Net written premiums | $ 325 | $ 325 | $ 1,237 | $ 1,164 | |||||||
NWP change (% year over year) | — | % | 6 | % | |||||||
Net earned premiums | $ 288 | $ 267 | $ 1,176 | $ 1,070 | |||||||
NEP change (% year over year) | 8 | % | 10 | % | |||||||
Underwriting gain | $ 20 | $ 29 | $ 86 | $ 87 | |||||||
Loss ratio excluding catastrophes and development | 57.7 | % | 58.1 | % | 57.8 | % | 58.5 | % | |||
Effect of catastrophe impacts | 1.8 | 0.9 | 2.5 | 2.2 | |||||||
Effect of development-related items | (0.6) | (3.0) | 1.1 | (1.2) | |||||||
Loss ratio | 58.9 | % | 56.0 | % | 61.4 | % | 59.5 | % | |||
Expense ratio |
34.1 |
% |
32.9 |
% |
31.2 |
% |
32.3 |
% | |||
Combined ratio | 93.0 | % | 88.9 | % | 92.6 | % | 91.8 | % | |||
Combined ratio excluding catastrophes and development | 91.8 | % | 91.0 | % | 89.0 | % | 90.8 | % | |||
- The fourth quarter underlying combined ratio increased 0.8 points as compared with the prior year quarter. The expense ratio increased 1.2 points driven by higher employee related costs partially offset by net earned premium growth of
8% . The underlying loss ratio improved 0.4 points as compared with the prior year quarter. - The fourth quarter combined ratio increased 4.1 points as compared with the prior year quarter. Catastrophe losses were
$5 million $2 million , or 0.9 points of the loss ratio, for the prior year quarter. Favorable net prior period development improved the loss ratio by 0.6 points in the current quarter compared with 3.0 points of improvement in the prior year quarter. - In the fourth quarter, excluding currency fluctuations, gross written premiums and net written premiums both declined
3% . - For the full year, the underlying combined ratio improved 1.8 points as compared with the prior year. The expense ratio improved 1.1 points driven by net earned premium growth of
10% and a favorable reinsurance acquisition catch-up adjustment in the third quarter of 2023, partially offset by higher employee related costs. The underlying loss ratio improved 0.7 points as compared with the prior year. - For the full year, the combined ratio increased 0.8 points as compared with the prior year. Catastrophe losses were
$29 million $23 million , or 2.2 points of the loss ratio, for the prior year. Unfavorable net prior period development increased the loss ratio by 1.1 points in the current year compared with 1.2 points of favorable development improving the loss ratio in the prior year. - For the full year, excluding currency fluctuations, gross written premiums grew
8% and net written premiums grew7% .
Life & Group
Results for the Three Months | Results for the Year Ended | ||||||
($ millions) | 2023 | 2022 (a) | 2023 | 2022 (a) | |||
Net earned premiums | $ 111 | $ 117 | $ 451 | $ 473 | |||
Claims, benefits and expenses | 349 | 360 | 1,436 | 1,596 | |||
Net investment income | 237 | 204 | 896 | 804 | |||
Core income (loss) | 4 | (25) | (48) | (221) | |||
(a) As of January 1, 2023, the Company adopted LDTI using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance. |
Core results improved
Core loss decreased
Corporate & Other
Results for the Three Months | Results for the Year Ended | ||||||
($ millions) | 2023 | 2022 | 2023 | 2022 | |||
Insurance claims and policyholders' benefits | $ 50 | $ 40 | $ 82 | $ 76 | |||
Interest expense | 33 | 28 | 126 | 112 | |||
Net investment income | 19 | 9 | 62 | 19 | |||
Core loss | (76) | (52) | (173) | (183) | |||
Core loss increased
The application of retroactive reinsurance accounting to additional cessions to the asbestos and environmental pollution (A&EP) Loss Portfolio Transfer in both periods resulted in after-tax non-economic charges of
Core loss decreased
Net Investment Income
Results for the Three Months | Results for the Year Ended | ||||||||
2023 | 2022 | 2023 | 2022 | ||||||
Fixed income securities and other | $ 533 | $ 483 | $ 2,062 | $ 1,836 | |||||
Limited partnership and common stock investments | 78 | 20 | 202 | (31) | |||||
Net investment income | $ 611 | $ 503 | $ 2,264 | $ 1,805 | |||||
Net investment income increased
Stockholders' Equity
Stockholders' equity of
Book value per share ex AOCI of
As of December 31, 2023, statutory capital and surplus for the Combined Continental Casualty Companies was
Accounting Standards Update
In August 2018, the FASB issued ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI). The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts. For the Company, this includes the run-off long-term care business in the Life & Group segment. The Company adopted the new guidance effective January 1, 2023, using the modified retrospective method applied as of the transition date of January 1, 2021. All prior period amounts have been adjusted to reflect application of the new guidance. While the requirements of the new guidance represent a material change from legacy accounting, the new guidance does not impact capital and surplus under statutory accounting practices, cash flows or the underlying economics of the business. Additional information regarding the Company's adoption of ASU 2018-12 and the impact to historical financial results is contained in the Company's Q1 2023 Financial Supplement, furnished on Form 8-K, on May 1, 2023 with the Securities and Exchange Commission.
About the Company
CNA is one of the largest
Contacts
Media: | Analysts: |
Kelly Sullivan | Vice President, Marketing | Ralitza K. Todorova | Vice President, |
872-817-0350 | 312-822-3834 |
Conference Call and Webcast/Presentation Information
A conference call for investors and the professional investment community will be held at 8:00 a.m. (CT) today. On the conference call will be Dino E. Robusto, Chairman and Chief Executive Officer of CNA Financial Corporation, Scott R. Lindquist, Executive Vice President and Chief Financial Officer of CNA Financial Corporation and other members of senior management. Participants can access the call by dialing (844) 481-2830 (USA Toll Free) or +1 (412) 317-1850 (International). The call will also be broadcast live on the internet and may be accessed from the Investor Relations page of the CNA website (www.cna.com). A presentation will be posted and available on the CNA website that will provide additional insight into the results.
The call is available to the media, but questions will be restricted to investors and the professional investment community. An online replay will be available on CNA's website following the call. Financial supplement information related to the results is available on the investor relations pages of the CNA website or by contacting investor.relations@cna.com.
Definition of Reported Segments
- Specialty provides management and professional liability and other coverages through property and casualty products and services using a network of brokers, independent agencies and managing general underwriters.
- Commercial works with a network of brokers and independent agents to market a broad range of property and casualty insurance products to all types of insureds targeting small business, construction, middle markets and other commercial customers.
- International underwrites property and casualty coverages on a global basis through a branch operation in
Canada , a European business consisting of insurance companies based in the U.K and Luxembourg and Hardy, our Lloyd's Syndicate. - Life & Group includes the individual and group run-off long-term care businesses as well as structured settlement obligations not funded by annuities related to certain property and casualty claimants.
- Corporate & Other primarily includes certain corporate expenses, including interest on corporate debt, and the results of certain property and casualty business in run-off, including CNA Re, asbestos and environmental pollution (A&EP), a legacy portfolio of excess workers' compensation (EWC) policies and legacy mass tort reserves.
Financial Measures
Management utilizes the following metrics in their evaluation of the Property & Casualty Operations.
These ratios are calculated using financial results prepared in accordance with accounting principles generally accepted in t he
- Loss ratio is the percentage of net incurred claim and claim adjustment expenses to net earned premiums.
- Underlying loss ratio represents the loss ratio excluding catastrophe losses and development-related items.
- Expense ratio is the percentage of insurance underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums.
- Dividend ratio is the ratio of policyholders' dividends incurred to net earned premiums.
- Combined ratio is the sum of the loss, expense and dividend ratios.
- Underlying combined ratio is the sum of the underlying loss, expense and dividend ratios.
Renewal premium change represents the estimated change in average premium on policies that renew, including rate and exposure changes.
Rate represents the average change in price on policies that renew excluding exposure change. For certain products within Small Business, where quantifiable, rate includes the influence of new business as well.
Exposure represents the measure of risk used in the pricing of the insurance product. The change in exposure represents the change in premium dollars on policies that renew as a result of the change in risk of the policy.
Retention represents the percentage of premium dollars renewed, excluding rate and exposure changes, in comparison to the expiring premium dollars from policies available to renew.
New business represents premiums from policies written with new customers and additional policies written with existing customers.
Gross written premiums ex. 3rd party captives represents gross written premiums excluding business which is ceded to third party captives, including business related to large warranty programs.
Development-related items represents net prior year loss reserve and premium development, and includes the effects of interest accretion and change in allowance for uncollectible reinsurance and deductible amounts.
Underwriting gain (loss) represents net earned premiums less total insurance expenses, which includes insurance claims and policyholders' benefits, amortization of deferred acquisition costs and other insurance related expenses, pre-tax.
Underlying underwriting gain (loss) represents underwriting results excluding catastrophe losses and development-related items.
Statutory capital and surplus represents the excess of an insurance company's admitted assets over its liabilities, including loss reserves, as determined in accordance with statutory accounting practices. Statutory capital and surplus as of the current period is preliminary.
The Company's investment portfolio is monitored by management through analysis of various factors including unrealized gains and losses on securities, portfolio duration and exposure to market and credit risk.
Reconciliation of GAAP Measures to Non-GAAP Measures
This press release also contains financial measures that are not in accordance with GAAP. Management utilizes these financial measures to monitor the Company's insurance operations and investment portfolio. The Company believes the presentation of these measures provides investors with a better understanding of the significant factors that comprise the Company's operating performance. Reconciliations of these measures to the most comparable GAAP measures follow below.
Reconciliation of Net Income (Loss) to Core Income (Loss)
Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of net investment gains or losses. The calculation of core income (loss) excludes net investment gains or losses because net investment gains or losses are generally driven by economic factors that are not necessarily reflective of our primary operations. Management monitors core income (loss) for each business segment to assess segment performance. Presentation of consolidated core income (loss) is deemed to be a non-GAAP financial measure.
Results for the Three Months | Results for the Year Ended | ||||||
($ millions) | 2023 | 2022 (a) | 2023 | 2022 (a) | |||
Net income | $ 367 | $ 239 | $ 1,205 | $ 682 | |||
Less: Net investment (losses) gains | 5 | (26) | (79) | (154) | |||
Core income | $ 362 | $ 265 | $ 1,284 | $ 836 | |||
(a) | As of January 1, 2023, the Company adopted LDTI using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance. |
Reconciliation of Net Income (Loss) per Diluted Share to Core Income (Loss) per Diluted Share
Core income (loss) per diluted share provides management and investors with a valuable measure of the Company's operating performance for the same reasons applicable to its underlying measure, core income (loss). Core income (loss) per diluted share is core income (loss) on a per diluted share basis.
Results for the Three Months | Results for the Year Ended | ||||||
2023 | 2022 (a) | 2023 | 2022 (a) | ||||
Net income per diluted share | $ 1.35 | $ 0.87 | $ 4.43 | $ 2.51 | |||
Less: Net investment (losses) gains | 0.02 | (0.10) | (0.28) | (0.56) | |||
Core income per diluted share | $ 1.33 | $ 0.97 | $ 4.71 | $ 3.07 | |||
(a) | As of January 1, 2023, the Company adopted LDTI using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance. |
Reconciliation of Book Value per Share to Book Value per Share Excluding AOCI
Book value per share excluding AOCI allows management and investors to analyze the amount of the Company's net worth primarily attributable to the Company's business operations. The Company believes this measurement is useful as it reduces the effect of items that can fluctuate significantly from period to period, primarily based on changes in interest rates.
December 31, 2023 | December 31, 2022 (a) | ||
Book value per share | $ 36.52 | $ 31.55 | |
Less: Per share impact of AOCI | (9.87) | (13.28) | |
Book value per share excluding AOCI | $ 46.39 | $ 44.83 |
(a) | As of January 1, 2023, the Company adopted LDTI using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance. |
Calculation of Return on Equity and Core Return on Equity
Core return on equity provides management and investors with a measure of how effectively the Company is investing the portion of the Company's net worth that is primarily attributable to its business operations.
Results for the Three Months | Results for the Year Ended | ||||||||||
($ millions) | 2023 | 2022 (a) | 2023 | 2022 (a) | |||||||
Annualized net income | $ 1,468 | $ 954 | $ 1,205 | $ 682 | |||||||
Average stockholders' equity including AOCI (b) | 9,228 | 8,276 | 9,220 | 9,826 | |||||||
Return on equity | 15.9 | % | 11.5 | % |
13.1 | % | 6.9 | % | |||
Annualized core income |
$ 1,448 | $ 1,058 | $ 1,284 | $ 836 | |||||||
Average stockholders' equity excluding AOCI (b) | 12,435 | 12,076 | 12,355 | 12,305 | |||||||
Core return on equity | 11.6 | % | 8.8 | % | 10.4 | % | 6.8 | % | |||
(a) | As of January 1, 2023, the Company adopted LDTI using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance. |
(b) | Average stockholders' equity is calculated using a simple average of the beginning and ending balances for the period. |
For additional information, please refer to CNA's most recent 10-K on file with the Securities and Exchange Commission, as well as the financial supplement, available at www.cna.com.
Forward-Looking Statements
This press release includes statements that relate to anticipated future events (forward-looking statements) rather than actual present conditions or historical events. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and generally include words such as "believes," "expects," "intends," "anticipates," "estimates" and similar expressions. Forward-looking statements, by their nature, are subject to a variety of inherent risks and uncertainties that could cause actual results to differ materially from the results projected. Many of these risks and uncertainties cannot be controlled by CNA. For a detailed description of these risks and uncertainties, please refer to CNA's filings with the Securities and Exchange Commission, available at www.cna.com.
Any forward-looking statements made in this press release are made by CNA as of the date of this press release. Further, CNA does not have any obligation to update or revise any forward-looking statement contained in this press release, even if CNA's expectations or any related events, conditions or circumstances change.
Any descriptions of coverage under CNA policies or programs in this press release are provided for convenience only and are not to be relied upon with respect to questions of coverage, exclusions or limitations. With regard to all such matters, the terms and provisions of relevant insurance policies are primary and controlling. In addition, please note that all coverages may not be available in all states.
"CNA" is a registered trademark of CNA Financial Corporation. Certain CNA Financial Corporation subsidiaries use the "CNA" trademark in connection with insurance underwriting and claims activities. Copyright © 2024 CNA. All rights reserved.
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