Posted on 01 Nov 2011
Chicago-based commercial insurer CNA Financial Corp. on Monday posted a third-quarter profit, reversing a loss last year when it sold off asbestos and pollution risks at a loss.
But without that offset, the company said operating income fell, as more business could not offset a drop in investment income and increased claims.
For the three months ended Sept. 30, the company posted net income of $75 million, or 28 cents per share, compared with a net loss of $140 million, or 59 cents per share, in the year-ago quarter.
Adjusted for investment losses, CNA said its operating income for the quarter was 34 cents per share, compared with 69 cents per share a year ago.
Total revenue fell 8 percent to $2.18 billion, from $2.36 billion last year.
Analysts, on average, were expecting profit of 10 cents per share, on revenue of $1.79 billion, according to data provided by FactSet.
CNA said net earned premiums rose 5 percent to $1.73 billion. Chairman and CEO Thomas Motamed said the increase in part reflected rate increases across its businesses.
Net investment income plunged 32 percent to $394 million, as the markets experienced their worst performance since the financial crisis.
Insurance claims rose 4 percent to $1.4 billion, from $1.34 billion, reflecting larger catastrophe claims during the period.
The company said its combined ratio for its property and casualty operations was 99.1 percent, up from 98 percent last year.
Combined ratio is the sum of an insurance company's loss ratio and expense ratio and is used to indicate profitability. A ratio above 100 means that for every premium dollar taken in, more than a dollar went for losses, expenses and commissions. A figure below 100 indicates an underwriting profit.