CNA had a 23% increase in new business

CNA Insurance hosted its Q2’23 earnings call on Jul 31st, 2023. Select highlights:

• CNA achieved double-digit top-line growth.
• Gross growth was 12% and net growth was 10%, led by Commercial and International segments this quarter.
• Core income increased by 34% compared to last year, driven by a 33% increase in net investment income.
• P&C all-in combined ratio was at 93.8%, with $68 million in pretax catastrophe losses.
• Underlying combined ratio was 91.1%, resulting in a record $200 million of pretax P&C underlying underwriting gain.
• Renewal premium change was stable at 7%, accelerating to 11% in the commercial segment.
• Retention levels of 86% for P&C for 5 straight quarters.
• New business grew by 23%.
• Affinity programs show less pricing volatility and consistent rate increases in the low to mid-single digits over time.
• Healthcare business underwent significant re-underwriting and improved pricing and terms over the past 5 years.
• Continue to pursue additional rate increases for healthcare – rates were up mid-single digit in the second quarter.
• Commercial written rate change in Q2 was +8%, showing acceleration compared to the previous year’s Q3.
• Commercial rate increases, excluding work comp, were up +10% in Q2.
• Rate change increase was widespread across business units and lines of business.
• Work comp rates are flat to slightly negative, renewal price change remains strong at about mid-single digit due to exposure increases from rising payrolls. Medical trends are below long-run loss cost trend assumptions, which have not been lowered despite favorable trends in recent years.
• Leveraging favorable property market conditions to expand the property portfolio without major impact on the P&L.
• Optimizing the renewal book by adjusting layers and exposures for better risk-adjusted returns compared to certain renewals’ expiration.
• Letting go of accounts where improved pricing and terms can’t be achieved.
• Identifying great opportunities in the E&S channel for national accounts, though it remains a relatively small portfolio with excellent potential.