CNA's Q3 2025 Earnings Call: Contradictions Emerge on Net Written Premium Growth, Pension Risk Transfer, and Life & Group Strategy

Guidance:

• Q4 2025 P&C expense ratio expected roughly in the range of the two most recent quarters (~29.1%–29.7%).
• Fixed income and other investment income expected to be about $570 million in Q4 2025.
• Regular quarterly dividend of $0.46 per share to be paid Dec 4, 2025 (record Nov 17, 2025).

Business Commentary:

* Record Core Income and Underwriting Gains: - CNA Financial Corporation reported record core income of $409 million in Q3 2025, driven by very strong underwriting gains. - The growth was primarily due to benign catastrophe losses and higher net investment income.

• Improved Combined Ratios and Expense Management:
• The P&C all-in combined ratio was 92.8%, including $41 million in catastrophe losses, and the P&C underlying combined ratio was 91.3%.

• Effective expense management resulted in a quarterly expense ratio of 29.1%.

• Segment Performance and Strategic Renewal Tactics:

• The Commercial segment's all-in combined ratio improved to 92.7%, with a record low underlying combined ratio of 90.0%.

• Lower retention rates were due to tailored renewal strategies and the company walking away from opportunities where appropriate pricing could not be obtained.

• Investment Income Growth:

• Net investment income increased to $638 million, up 2% year over year, driven by higher fixed income results.

• Growth was supported by favorable reinvestment rates and strong cash flow from operations.

• International Segment Growth:

• The International segment's net written premiums were up 15%, with net written premiums excluding currency fluctuations up 12%.
• Growth was driven by favorable true-ups on reinsurance costs and capitalizing on niche opportunities despite competitive market conditions.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted "record core income of $409 million" and year-to-date core income exceeding $1 billion for the first time; record underlying underwriting gain of $235 million; P&C all-in combined ratio improved to 92.8% with underlying combined ratio 91.3%; net investment income up to $638 million.

Contradiction Point 1

Net Written Premium Growth

It directly impacts the analysis of financial performance and growth strategies, as the reasons for the difference between net written and gross premium growth were not consistent.

Did Douglas Worman discuss CNA's Q3 2025 financial performance? - Douglas Worman(CNA Financial Corporation)

20251103-2025 Q3: Net written premiums were generally impacted by rate increases across all segments as well as retention and new business. The growth in net written premiums was primarily due to higher net retention across all three segments. - Douglas Worman(CFO)

Why is net written premium growth higher than gross written premium growth (excluding captives) across all three segments? - Unknown Analyst

2024Q4: The higher net written premium growth in all segments can be attributed to several factors. In Commercial and Specialty, the mix of business played a role, while in the International segment, favorable adjustments on prior year reinsurance treaties contributed to the growth. - Unknown Executive

Contradiction Point 2

Pension Risk Transfer Transaction and Expense Impact

It involves the impact of a pension risk transfer transaction on expenses, which is crucial for understanding the company's financial health and outlook.

How was CNA's financial performance for Q3 2025? - Douglas Worman (CNA Financial Corporation)

20251103-2025 Q3: We closed on a pension risk transfer transaction several weeks ago for about 60% of our $1.7 billion defined benefit pension obligation. We previously disclosed that we will incur a one-time, non-cash charge of approximately $290 million (after-tax) in our fourth quarter earnings, which will be outside of core income. ... If you look at Note H of our third quarter 2024 financials in our 10-Q, you will see our net pension expense is minimal for the year, excluding settlement charges. Each component of the pension expense would be reduced by roughly 60% into 2025 (as we've now reduced the assets supporting the pension, the pension obligation and actuarial loss by roughly 60%) so we expect the impact on expenses to continue to be insignificant going forward, all else equal. - Douglas Worman(CEO)

What is the impact of the pension risk transfer transaction on run-rate expenses? - Unknown Analyst

2024Q3: We expect the pretax expense savings next year to be approximately $10 million, with a material portion of this near year-end as we lap the current higher pension premium rates. The net interest expense savings due to the reduction in pension liability will be slightly ahead of the $10 million in expense savings and will increase each year thereafter. Our future pension contributions will decrease by approximately $12 million annually from 2025 to 2030. - Unknown Executive

Contradiction Point 3

Life & Group Segment Financial Allocation and Strategy

It involves the company's financial strategy and allocation within its Life & Group segment, which impacts investor perceptions of CNA's financial management.

What are CNA's financial and investment results for Q3 2025? - Scott Lindquist (CNA Financial Corporation)

20251103-2025 Q3: In the Life & Group segment, we recorded a core loss of $22 million for the third quarter... The combined ratio improved by 2.1 points to 87.7% primarily due to a decrease in net prior period development. However, this was offset by higher net earned premiums due to new business growth and an increase in the accident year combined ratio due to higher personal accident policy growth and a reduction in our loss reserve development assumptions. - Scott Lindquist(CFO)

According to CNA's Financial Supplement, you recently reallocated about half of the limited partnership balance from the Life & Group portfolio to Property & Casualty and Corporate & Other. Can you explain this allocation shift? - Unknown Analyst

2024Q3: During the second quarter we reduced the limited partnership allocation in our Life & Group portfolio by $500 million. These investments were redeployed in our P&C portfolio in exchange for high quality, long duration fixed income securities with attractive yields that will further aid our asset-liability management objectives. Over the past two years we have been able to take advantage of higher interest rates to extend the maturity of our Life & Group fixed income portfolio while also achieving yields that surpassed our reserving assumptions. The cumulative result of this activity has significantly reduced the level of reinvestment risk in this block, with the duration gap between our assets and liabilities now under one year. - Unknown Executive

Contradiction Point 4

Rate Increases and Market Conditions

It involves differing perspectives on market conditions and the company's approach to rate increases, which affect pricing strategies and potential profitability.

Can you clarify whether Douglas Worman discussed CNA’s financial performance for Q3 2025? - Douglas Worman(CNA Financial Corporation)

20251103-2025 Q3: P&C rate increase was 3% in the quarter... Commercial segment all-in combined ratio was 92.7%, and Specialty segment all-in and underlying combined ratios were 93.3%... International all-in combined ratio was 91.8%... Retention in the Commercial segment was 79%. - Douglas Worman(CEO)

How does the current market compare to years like 2004 or 2021? Is it more or less mixed? - Joshua Shanker(Bank of America)

2024Q1: The market is favorable, but nuanced with a mini-cycle approach. Strong rate increases in casualty and favorable opportunities in property. Management liability has too aggressive competition, so we're selective. We see opportunities for growth, especially in commercial and specialty lines. - Dino Robusto(CEO)

Contradiction Point 5

Underwriting Performance and Combined Ratio

It pertains to the company's underwriting performance and combined ratio, which are critical metrics for assessing an insurer's financial health and profitability.

Can you provide more details on CNA's financial performance for Q3 2025? - Douglas Worman(CNA Financial Corporation)

20251103-2025 Q3: Underwriting income was particularly strong this quarter at $194 million, nearly triple the prior year quarter. - Douglas Worman(CEO)

好的，用户让我简化一个来自美股上市公司财报电话会议的问题。原问题是：“Are there any changes in reserve patterns for recent casualty lines?” 我需要确保在不改变原意的情况下，让问题更简洁、精准，去掉不必要的装饰词，同时符合美式英语习惯。首先，分析原问题的结构。"Are there any changes in reserve patterns for recent casualty lines?" 这里“reserve patterns”指的是保险准备金的模式，而“recent casualty lines”指的是最近的伤亡保险业务线。用户可能想知道是否有针对这些业务线的准备金模式变化。接下来，检查是否有冗余或可以简化的部分。原问题中的“for recent casualty lines”已经很直接，但或许可以更简洁。比如，“casualty lines”已经足够，因为上下文是保险行业，听众应该明白这是指的伤亡保险业务。另外，“changes in reserve patterns”是否可以更直接？比如“changes to reserve patterns”或者“changes in how reserves are set”？不过原问题中的“in”是正确的介词搭配，所以可能不需要改。再考虑是否可以省略“recent”，但保留“recent”能明确是最近的变化，所以最好保留。因此，简化后的版本可能是：“Have there been any changes in reserve patterns for recent casualty lines?” 但原问题已经用了“Are there any”，而“Have there been any”可能更强调已经发生的变化，但用户可能只是想问是否有变化存在，不论时间长短。所以原问题已经足够简洁，可能不需要进一步简化。不过用户要求的是精简，所以可能需要去掉“recent”如果上下文已经明确是在讨论最近的情况。但如果没有上下文，保留“recent”更准确。因此，原问题已经比较简洁，可能不需要太大改动。但用户可能希望更直接，比如：“Have there been changes in casualty line reserve patterns?” 但这样可能会改变原意，因为原问题问的是是否有变化存在，而不仅仅是是否有变化发生过。不过“Are there any changes”和“Have there been any changes”在口语中可能可以互换，但严格来说，前者是现在存在，后者是过去发生。不过在这个上下文中，可能都是询问是否有变化，所以可能可以接受。但用户给的例子中，原问题已经是一个简洁的版本，所以可能不需要太大改动。因此，最终简化后的问题可能是：“Have there been any changes in casualty line reserve patterns?” 但需要确认是否保留“recent”。如果原问题中的“recent”是必要的，那么可能需要保留，比如：“Have there been any changes in recent casualty line reserve patterns?” 但这样可能还是有点长。或者，考虑将“reserve patterns”简化为“reserves”，但“reserves”本身是准备金，而“patterns”指的是模式或方法。所以可能需要保留“patterns”。因此，原问题可能已经是最简洁的了，不需要进一步简化。但用户可能希望去掉“recent”以更简洁，所以最终简化为：“Are there any changes in casualty line reserve patterns?” 但原问题中的“recent casualty lines”可能更准确，所以需要保留。因此，可能原问题已经足够简洁，不需要改动。但用户可能希望更精简，比如：“Have casualty line reserve patterns changed?” 这样更直接，但可能改变了原问题的结构，从是否存在变化到是否发生了变化。不过这可能更符合口语化的提问方式。综合考虑，用户要求的是在不改变原意的情况下简化，所以可能最佳的简化是：“Have there been any changes in casualty line reserve patterns?” 但需要检查是否符合美式英语习惯。可能原问题已经正确，但用户可能希望更简洁，所以去掉“recent”如果上下文已经明确。因此，最终简化后的问题可能是：“Have there been any changes in casualty line reserve patterns?” 或者更简洁的：“Have casualty line reserve patterns changed?” 但需要确保不改变原意。原问题中的“recent”可能指的是最近的伤亡业务线，所以如果去掉“recent”，可能范围扩大到所有伤亡业务线，而不仅仅是最近的。因此，如果必须保留“recent”，则简化后的问题应为：“Have there been any changes in recent casualty line reserve patterns?” 但可能还是有点长。或者，可以调整结构，比如：“Are there any changes in reserve patterns for recent casualty lines?” 已经很简洁了，可能不需要进一步简化。用户可能希望去掉“any”吗？但“any”在这里是必要的，因为是在问是否存在变化。因此，原问题可能已经是最佳版本，不需要改动。因此，输出原问题本身可能就是正确的，但用户可能希望更精简，所以需要再检查是否有冗余。例如，“for recent casualty lines”是否可以替换为“in recent casualty lines”？但介词可能不影响。因此，可能原问题已经是正确的，不需要改动，所以输出原问题即可 - Meyer Shields(KBW)

2024Q1: Transparent with reserve strengthening efforts, especially for 2015-2019 blocks. Social inflation doubled loss cost trends in many casualty classes over the last 5 years. - Dino Robusto(CEO)