CNA says commercial casualty rate increases accelerated to 10% in Q4

By David Bull

Feb 10 - (The Insurer) - CNA's Q4 rate increases of 17 percent in commercial auto and 11 percent in excess casualty were ahead of long-term loss cost trends and contributed to a 10 percent uptick in commercial casualty.

In prepared remarks released with Q4 and full-year earnings on Monday morning, the Chicago-based carrier’s newly appointed president and CEO Doug Worman highlighted metrics he said supported “very strong results”.

This included record underlying underwriting gain of $222mn, the highest level of net investment income of the year, and the highest quarterly net written premium growth of the year at 10 percent.

“We achieved continued rate improvement in the classes of business most impacted by social inflation where rates in our commercial casualty classes of business were up a point to 10 percent, which continues to exceed loss cost trends,” he added.

Worman – who took over from Dino Robusto, executive chairman at CNA – said that he expects a “dynamic market with disciplined pricing in most business classes”.

“Our relentless commitment to underwriting excellence and best-in-class execution ensures that CNA is well-positioned to navigate these dynamics to reinforce our market leadership and deliver sustained profitable growth,” he continued.

Overall P&C rate change at CNA was 3 percent in the quarter, consistent with the third quarter of last year, although there was variation by segment and class of business.

The commercial rate increase of 6 percent overall was in line with Q3 2024 and was at 8 percent stripping out workers’ compensation.

Worman reported that commercial auto rates were up 17 percent and excess casualty rates climbed 11 percent, each representing the biggest quarterly rate increase of the year “and exceeding long-run loss cost trends that remained unchanged from last quarter”.

The executive said that property rates remain strong with mid single-digit increases, but are down from the double-digit range seen in 2023 and the high single-digit increases the carrier was able to secure in the first half of last year.

He added that workers’ compensation rates were down in the low to mid single-digits range, which was consistent with the “historical profitability of that line, offset by a roughly equal amount of exposure increase, resulting in flat renewal premium change”.

In specialty, meanwhile, CNA reported that overall rate change was back in positive territory in Q4 2024, with an average increase of 1 percent, compared to flat in the previous two quarters of the year.

Healthcare saw rate increases average 9 percent, accelerating from 7 percent in Q3 2024, and ahead of loss cost trends.

Rates increased by 3 percent in affinity, but were still in negative territory in management liability lines at down 4 percent overall, including financial institutions.

Worman added: “But in public D&O and cyber, rate change was much closer to flat compared to more substantial rate declines in prior quarters.”

In the carrier’s international segment, rates turned “slightly negative” for the second half of 2024.

“But the performance of our international business remains fundamentally strong,” said the executive.

Overall, he said new business growth was 8 percent, with double-digit growth in commercial and international driving that expansion.

Retention was at 86 percent, up a point on the previous quarter, and the highest quarterly retention rate of the year as the carrier continued to retain its profitable portfolio of accounts, said Worman.

In commercial, the carrier reported that exposure change was up 1 percent for the quarter.

“In areas such as general liability and workers’ compensation, we continue to see the benefit of exposure change that acts like rate,” said the CNA CEO.

“Conversely, exposures were down in national accounts from reductions in participation on shared and layered property accounts and changes in limits and deductibles on casualty accounts as we continue to seek to optimise terms and conditions,” he revealed.