CNA Financial's Q1 profit declines on weaker underwriting

Overview

• U.S. commercial insurer's Q1 net and core income declined yr/yr

• Core EPS for Q1 fell to $0.83 from $1.03 last year

• Lower underwriting results and unfavorable prior period development weighed on earnings

Outlook

• CNA Financial says it will prioritize underwriting discipline for the rest of the year

Result Drivers

• UNDERWRITING PRESSURE - Lower underlying underwriting results and unfavorable prior period development, especially in excess casualty and professional E&O lines, weighed on P&C core income

• HIGHER LOSS RATIOS - Underlying loss ratios rose across segments, reflecting loss cost trends exceeding rate increases in certain lines and additional reserve strengthening

• INVESTMENT INCOME OFFSET - Higher net investment income from fixed income securities partially offset weaker underwriting results

Company press release: ID:nPnRfGNga

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 1 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the property & casualty insurance peer group is "buy."

• Wall Street's median 12-month price target for CNA Financial Corp is $25.00, about 48% below its May 1 closing price of $48.04

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