Posted on 31 Jul 2012
CNA Financial Corp.'s top executive said he is optimistic about the commercial market.
"We are getting rate increases in every line and we see the momentum continuing," Thomas F. Motamed, chairman and chief executive officer of CNA Financial Corp., said during the company's second-quarter earnings conference call.
The company is now achieving rate increases of 6% on average, he said, up from 4% in the first quarter and up from 1% increases in the second quarter 2011.
"We continue to be optimistic about the pricing environment," Motamed said.
The company posted second-quarter net income of $166 million, up 33.9% from the same quarter a year ago.
CNA's combined ratio for the quarter improved to 101.7 from 106 for the second quarter 2011.
Rate increases drove a 5% jump in net written premiums for CNA Specialty, which writes professional liability, surety and other lines. The segment posted net premiums written of $35 million for the quarter.
CNA Commercial, which works with independent agents and brokers to market property/casualty products, saw its net premiums increase rise 1% to $9 million. Excluding the impact of First Insurance Company of Hawaii, which was sold in the fourth quarter, CNA commercial would have had a 5% increase in net premiums written.
Motamed said the company plans to continue to grow, especially in some segments where CNA is small compared with its competitors.
"We don't think we have an expense ratio issue. We think we have a scale issue," Motamed said.
Also, company will continue to look for bolt-on acquisitions, he said. "We have spent a lot of time, energy, human capital, and dollars to make us a better underwriting company and to improve margins...so the reality is that's first and foremost our goal. At the same time, we have our eyes and ears open," Motamed said.
Earlier this summer, CNA bought Lloyd's underwriter Hardy Underwriting Bermuda Ltd. for $227 million in cash. When the transaction was announced in March, Motamed said the two companies share similar underwriting and management philosophies.