CNA Financial: A High-Quality Insurance Play Trading at a Material Discount

In the ever-evolving landscape of value investing, identifying companies that combine robust fundamentals with undervaluation is a rare but rewarding pursuit. CNA Financial Corporation (CNA) emerges as a compelling candidate in this regard. The insurance sector, often undervalued due to its cyclical nature and perceived volatility, has seen CNA demonstrate exceptional underwriting discipline, earnings resilience, and a commitment to shareholder returns. With a recent quarterly performance that outpaced expectations and a dividend growth trajectory that signals long-term confidence, CNA presents a unique opportunity for investors seeking a high-quality insurance play trading at a material discount to intrinsic value.

Earnings and Underwriting: A Foundation of Strength

CNA's third-quarter 2025 results underscore its operational excellence. The company reported core earnings of $1.50 per share, surpassing the Zacks Consensus Estimate by 20% and reflecting a 39% year-over-year increase according to Nasdaq. This outperformance was driven by a 6.3% year-over-year rise in total operating revenues to $3.4 billion, fueled by higher premiums, net investment income, and other revenues according to Nasdaq. Notably, the Property & Casualty (P&C) segment, which constitutes the core of CNA's business, saw net written premiums increase by 3.2% year over year to $2.4 billion, supported by a renewal premium change of over 4% and a written rate of more than 3% according to Nasdaq.

The underwriting story is equally compelling. Catastrophe losses for the quarter were $41 million pretax, a dramatic improvement from $143 million in the same period in 2024 according to Nasdaq. This reduction, coupled with a P&C combined ratio of 92.8% (down 440 basis points year over year), propelled underwriting income to $194 million, nearly tripling the prior-year figure according to Nasdaq. These metrics highlight CNA's ability to manage risk effectively and capitalize on favorable market conditions-a hallmark of high-quality insurers.

Dividend Growth: A Signal of Confidence

CNA's commitment to shareholder returns is evident in its 46-cent-per-share quarterly dividend, approved by the board and payable on December 4, 2025 according to Nasdaq. This represents a 17% increase from the previous dividend rate, signaling management's confidence in the company's financial health. With a core earnings per share of $1.50, the payout ratio remains conservative at approximately 30.7%, leaving ample room for future increases. For value investors, this disciplined approach to dividends-balancing growth with sustainability-is a critical differentiator.

Historically, CNA has maintained a trajectory of dividend growth, aligning with its long-term strategic goals. The current yield, while modest, is supported by a business model that generates consistent cash flows and prioritizes capital efficiency. As data from Reinsurance News indicates, CNA's P&C segment alone contributed $456 million in core income for the quarter according to Reinsurance News, further reinforcing the durability of its earnings base.

Valuation: A Material Discount to Book Value

While balance sheet details remain opaque in the latest filings, CNA's book value per share of $41.83 (excluding AOCI, $46.30) offers a proxy for intrinsic value according to CNA. This represents an 8% increase from year-end 2024 after adjusting for dividends according to CNA. For value investors, the absence of a clear price-to-book ratio is a limitation, but the broader context suggests a significant discount. If the stock trades at a multiple below book value-a common scenario for insurers during periods of market skepticism-CNA's strong capital position and consistent earnings growth could justify a re-rating.

The lack of detailed debt-to-equity metrics in recent filings does not detract from the case for CNA. Its underlying combined ratio of 91.3% and underlying loss ratio of 61.9% according to Seeking Alpha indicate a business that is not only profitable but also structurally sound. These metrics, combined with a record core income of $409 million for the quarter according to Reinsurance News, suggest that CNA's intrinsic value is being underappreciated by the market.

Conclusion: A Compelling Case for Value Investors

CNA Financial's Q3 2025 results exemplify the qualities of a high-quality insurance company: disciplined underwriting, resilient earnings, and a shareholder-friendly dividend policy. While the absence of granular balance sheet data introduces some uncertainty, the available metrics-particularly the surge in core income and the reduction in catastrophe losses-paint a picture of a company that is both operationally robust and financially disciplined.

For value investors, the key question is whether the market is pricing in CNA's long-term potential. Given its 39% year-over-year earnings growth, tripling underwriting income, and a dividend increase that reflects confidence in future performance, the current valuation appears to offer a meaningful margin of safety. In a sector where volatility is often mistaken for weakness, CNA stands out as a rare combination of quality and affordability-a high-conviction opportunity for those willing to look beyond short-term noise.