CNA FINANCIAL CORP
For the period ended Dec 31, 2023. Filed Feb 6, 2024.
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FY2023 · Filed Feb 6, 2024
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Commercial
Commercial works with a network of brokers and independent agents to market a broad range of property and casualty insurance products to all types of insureds targeting small business, construction, middle markets and other commercial customers. Property products include standard and excess property, marine and boiler and machinery coverages. Casualty products include standard casualty insurance products such as workers' compensation, general and product liability, commercial auto, umbrella, and excess and surplus coverages. Most insurance programs are provided on a guaranteed cost basis; however, we also offer specialized loss-sensitive insurance programs and total risk management services relating to claim and information services to the large commercial insurance marketplace.
The following table details the results of operations for Commercial.
| (In millions, except ratios, rate, renewal premium change and retention) | 2023 | 2022 |
|---|---|---|
| Gross written premiums | $6,120 | $5,170 |
| Gross written premiums excluding third-party captives | 5,994 | 5,056 |
| Net written premiums | 4,880 | 4,193 |
| Net earned premiums | 4,547 | 3,923 |
| Underwriting gain | 182 | 106 |
| Net investment income | 645 | 488 |
| Core income | 652 | 466 |
| Other performance metrics: | ||
| Loss ratio excluding catastrophes and development | 61.5% | 61.5% |
| Effect of catastrophe impacts | 4.5 | 5.6 |
| Effect of development-related items | (0.1) | (0.7) |
| Loss ratio | 65.9 | 66.4 |
| Expense ratio | 29.6 | 30.4 |
| Dividend ratio | 0.5 | 0.5 |
| Combined ratio | 96.0% | 97.3% |
| Combined ratio excluding catastrophes and development | 91.6% | 92.4% |
| Rate | 7% | 5% |
| Renewal premium change | 10 | 8 |
| Retention | 84 | 86 |
| New business | $1,297 | $1,009 |
Gross written premiums for Commercial increased $950 million in 2023 as compared with 2022 driven by higher new business and rate. Net written premiums for Commercial increased $687 million in 2023 as compared with 2022. The increase in net earned premiums was consistent with the trend in net written premiums.
Core income increased $186 million in 2023 as compared with 2022, driven by higher net investment income and improved current accident year underwriting results partially offset by lower favorable net prior year loss reserve development.
The combined ratio of 96.0% improved 1.3 points in 2023 as compared with 2022 due to a 0.8 point improvement in the expense ratio and a 0.5 improvement in the loss ratio. The improvement in the expense ratio was driven by higher net earned premiums partially offset by higher employee related costs. The improvement in the loss ratio was driven by lower catastrophe losses partially offset by lower favorable net prior year loss reserve development. Catastrophe losses were $207 million, or 4.5 points of the loss ratio, for 2023, as compared with $222 million, or 5.6 points of the loss ratio, for 2022.
Favorable net prior year loss reserve development of $22 million and $43 million was recorded in 2023 and 2022. Further information on net prior year loss reserve development is in Note E to the Consolidated Financial Statements included under Item 8.
The following table summarizes the gross and net carried reserves for Commercial.
| (In millions) | 2023 | 2022 |
|---|---|---|
| Gross case reserves | $3,291 | $3,156 |
| Gross IBNR reserves | 6,812 | 6,239 |
| Total gross carried claim and claim adjustment expense reserves | $10,103 | $9,395 |
| Net case reserves | $2,878 | $2,809 |
| Net IBNR reserves | 6,143 | 5,621 |
| Total net carried claim and claim adjustment expense reserves | $9,021 | $8,430 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.