CNA Financial Corp. said it saw good retentions on fourth-quarter commercial business with a favorable outlook on rate trends.
Thomas F. Motamed, chairman and chief executive officer of CNA Financial Corp., said rates on speciality business rose 1% in the fourth quarter and 3% on commercial lines. He said the trend is expected to continue into 2012.
"While there is more work to do on our underwriting margins, we are encouraged by favorable rate trends and premium growth across both of our property/casualty segments," Motamed said in a conference call.
Net fourth-quarter income for the Chicago-based company was down 37% to $190 million, compared with $302 million a year ago. The company said it had a drop in property/casualty investment income and slightly lower catastrophe losses. It sustained a $157 million net loss in its life and group noncore business. Fourth-quarter catastrophe losses fell to $11 million from $14 million.
While small premium growth is good, Motamed said, rates "have a long way to go."
"We are pleased the market is accepting rate increases after a long period of negative rates," he said.
Motamed said he thinks overall market conditions will be similar to the past few years, with strong competition among insurance companies.
"We also expect overall rates to continue to rise," Motamed said. "Clearly the most significant increases will be in lines affected by catastrophes as well as in workers' compensation. Although specialty rates have begun to improve, they have a long way to go."
CNA Insurance Cos. currently has a Best's Financial Strength Rating of A (Excellent).
Motamed's outlook echoed other recent statements by insurance company leaders. Allstate Chairman, President and Chief Executive Officer Thomas J. Wilson said recently his company will continue to grow insurance premiums (Best's News Service, Feb. 2, 2012). Ace Group Chairman and CEO Evan Greenberg said rates for his company rose through the fourth quarter with December being the best month.
The top U.S. commercial multiple peril writers in 2010 based on direct premiums written, according to BestLink, were: Travelers Group, with market share of 9.4%; Liberty Mutual Insurance Cos., with 6.7%; Hartford Insurance Group, with 5.4%; Chubb Group of Insurance Cos., with 4.6%; and State Farm Group with 4.6%.