CNA - Earnings call transcript Q3 2020 | CNA Financial Corporation

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Operator

Good morning and welcome to the CNA's discussion of its 2020 Third Quarter Financial Results. CNA's third quarter earnings release, presentation and financial supplements were released this morning and are available via its website www.cna.com.

Speaking today will be Dino Robusto, CNA's Chairman and Chief Executive Officer; and Al Miralles CNA's Chief Financial Officer.

Following their prepared remarks, we will open the lines for questions. Today's call may include forward-looking statements and references to non-GAAP financial measures. risks materially that during from involved results cause the statements differ to the forward-looking and may uncertainties actual call. Any statements made release recent those in concerning risks contained the Information is CNA's filings. SEC earnings most in and

In during today, November addition, this any to call. XX, of any revise disclaims Monday, update expressly the or speak CNA forward-looking as statements obligation forward-looking only XXXX. statements made

This and call measures, Regarding being the the other measures information to GAAP in have reconciliations webcast. non-GAAP financial and comparable supplement. is recorded provided been most

During be the next accessed on week the call CNA's may website.

this If CEO, not please I will you the Dino are thus errors reading and a call for the the reviewed turn materially that transcript it may of to of intent transcript could With contain CNA's meaning Chairman transcription call, Robusto. that statements. the that, accuracy, over may note be alter or

Dino Robusto

as families today is with Thank hope you you, to our underlying by growth again continues CNA evidenced new good Rolando. your and as in overall effectively be ongoing coping very to Good higher improved performance It business. acceleration I as quarter achievement and unprecedented the this rate is times. are well. you morning. in once growth and as quite This business well operate

improved We a lower ratio an loss also expense had quarter. and underlying ratio for the

term includes of long our and analysis Group Life life the reserves. we growth review or annual have quarter we completed As the which in active previous importantly years, done premium our in GPV care evaluation

conservatively we a to rate we rate our the of action now year modifying lower compared assumptions. discount environment analysis part face As our to address ago by strong interest took

a basis the lowered to our year of year. expectations points XXX First reduction XX yield normative last we have for treasury from X.XX%,

to care up reflect capital with approach details our ongoing grade rate ongoing are to Second, and term environment. proven X long stead review. provide XX that more to normative GPV reserving extended the time interest rate year's in discounted will results from and reserve these years Al associated period to to low an years this earnings we much our protect fast in with changed you

improvement P&C to from ago The consisted the and half in ratio of years. in point by benefit of lower due of from year returned quarter improvement ratio driven last our improved our With efforts the lowest our to of Turning underlying business had the points last XX.X% to international a our operation a underlying economic the the re-underwriting ratio most is X London underlying over for months. combined result ongoing a as combined only CNA frequency downturn. loss steadily the which of XX by profitability XX

quarter expected that like time. to we're And but over higher is we continue severity and shelter casualty auto portfolio economy portion place the a As such of essentials earlier our I industries benefit mentioned, insured we the of impact for relatively frequency and in restored general liability substantial because a loss assume construction, as lines healthcare and not potential from last modest consists manufacturing restrictions. subject to

our the Below approximately contributed we base still points is largely expense trends. to the our X.X So react believe of it premium which our reflected favorably to improvement early growing P&C combined of XX.X% ratio in ratio. short-term underlying

of we and expense decrease the in. would prudent underwriting the quarter company for in our streamlining talent, the been position can technology us simultaneously clearly and sustained said steadily while to fashion success operation earned in expenses ratio Then As in this disciplined to you order our analytics overall calls flat. more to a which by see make investments strategy on I substantial has have growing growth our keep as prior in

achieved we cost, slightly in from pricing rate of point small our QX worker's positive points had to from very dynamics and P&C with up in this from the market overall hard X change rate programs quarter, excluding points Turning accelerate and a profitable second increase, as continued importantly XX% starting plus XX%, the which QX. to a affinity negative was rate plus X which up has the increases rate

rate Importantly, compares plus areas six apart essentially the a our of quarters slightly acceleration rate our were affinity long-run from to the X% increases rates. product assumptions unit all broad-based business in last these lines to as increases four led has more quarters now X%. at two each This and book. trend The excluding loss-cost higher achieved over earned our increases than

view call, did we our portfolio on not as XXXX quarter, In feel need them. comfortable view our social our on to in particular further and inflation continue our increase loss latest As Facilitatorcost aging our had increased of long-run portfolios. the auto the and previously last of services in mentioned with remained we we trends in to impact

could I the social impact be as obfuscating mentioned quarter inflation the pandemic However also dynamic. of the last

rate repeatedly to picks. uncertainty long-run loss then out and cost is margin future is still net impacts trends into dynamics pressure play around market any gap quarters however, should to next continue strong of above all there the this expansion will increases we earned to acknowledge trends we which long-run cost of which in cautious rate some better a over as grow others the the XXXX else amply in being from couple see so that all well loss the levels. the be into and current should incorporate from added position that remain ratio equal our hard XXXX news, we trend great why the is allow loss margin So we have achieve us fueling to articulated the The benefit

X% that year. continued compared to than In down gross written a growth growth to and was premium Exposure X% premium as do was to handwritten ex-captives quarter growth our on of be the terms rate X higher third it second quarter. both the last points

loss about picture overall for I U.S. of from X.X X.X quarter quarter period quarter of last combined points was from to I profitability to series XXX.X% to the Completing evidences the activity our investments the which which lines the and favorable to have within previously. call growth on we ratio the first the made significant frames quarter. quarter of and fourth agents our remote points natural completed this dividends X spoken a operations actions pay be to new our business certain point than quarter quarter healthcare again second our improve indicated estimate. catastrophe this no second targeted there and of manufacturing very in included shorter loss development in of the last which the time the the to been as year paid XX% was the in were ability regulatory catastrophe claim In due declined quarter continued press service been quarter to little case efforts submissions to at in provide events. in working environment, our that release respond in has third the out. our will London The mentioned we Also quickly COVID-XX received the and the in was in environment. third notices modest As the the our the same end brokers essentially strong no Retention made in on and to to changes re-underwriting higher have change we that

slowly outcomes this from all time. knew the was event that out expectation claim as our we along over play course would Of

is result estimate of COVID-XX and remains that emerge our to all As from we in still million eventually the XXX ultimate appropriate will a established events loss our quarter all IBNR. previously loss claims which occur for third estimate believe virtually

is lower with is time quarter soon. P&C that continue investment us for rate watch a strong the the fueling due a reduction take LP the to to market key increasing the see we unrealized Moving our will hard investment believe position overall to from to offsetting and strong this to Despite in investments, as meaningfully net a portfolio in well in third unlikely again was industry the an driven environment by supporting increase fared it anytime perspective income. for income underwriting once our portfolio interest to This income fixed quarter, net income gain my change achieve in dynamic protracted we positions.

or income share it was over and $XXX quarter to per or million turn I'll for Al. share that our $X.XX per with net the million third income Finally, was $XXX core $X.XX

Al Miralles

Dino Thanks and good morning everyone. to

versus and third quarter of continued The expense partially of X% continued prior premium. XX.X% driven catastrophe losses. As and this The to quarter ratio to profitability The details is flat Dino provide starting this quarter. quarter. year's I net of especially Gross points earned and muting quarter and in business increase largely the XX% XX% commercial earned XX% improvement of quarter the Laura, ratio prior in XX.X% of %. to attributable of the which by loss reflecting of was growth expense ratio with plus ratio the combined year to especially loss plus this ratio net the our for premium combined ratio in was will rate X.X The the XXXX ratio a both which is last frequency X XX% and for development. is third XX.X% lower premium by compared derecho. points The Dino associated point growth lower expense volume net X.X X.X X The X.X X.X gross state by prior was improvement losses events prior. commercial period points premium favorable cat in combined X.X The severe results quarter expenses. and development XX% growth the higher offset the last the on was but Isaias primary year points related points weather was The quarter. growth at plus The X than a as with indicated was up this XX.X% combined Retention strong and are mentioned. combined quarter was prior ratio current XX% on point business quarter favorable quarter. of year underlying The of the fund now primarily basis for lower modest maturity growth The to is last period losses was in XXXX. compared for with assessment XX un-paidable XX%. strong quarter a for XX% quarter. third retention net expenses. and ratio over healthcare. X change X% quarter points points than was which quarter and expense ratio was was The Sally, the up premium impact quarter by this XXXX Rates was business to underlying underlying loss underlying favorable has higher The XXXX. XX.X%. in was especially Midwest to x-cap ex-cap due Hurricanes unfavorable and prior XXXX compared points from XX.X% improved benefit third XXX.X% segment, includes written that was development year-to-date The includes third compared catastrophe rate XX% The quarter plus ratio and quarter release the included was to development XX.X% commercial from from written

down X%, expense driven written acquisition by points quarter; New for this was The re-underwriting XXX.X% ratio which business premium losses written growth is the increase international quarter. points prior basis. XX% in by quarter compared the underlying [indiscernible] year. ratio was XXXX XX% The declined execution was points points Retention ratio due by to The international X% treaty. the up by comparison by increased The for third year-to-date for was was expense the of X.X underlying expenses. improved the prior and comparison ratio points X.X net an change %. premium to and XX.X underwriting was compared ratio both to in lower this X% versus up this The improvement of the The The catastrophe XXXX. prior includes period was insurance in was X XX.X% XX.X loss re-underwriting prior XX% year in in combined Rate progression ratio strategy. X net on the while growth The XX.X%. prior the line a loss ratio quarter from change with combined of of timing growth and quarter reflects combined quarter levels quarter. of XX% underlying international in impacted a quarter.

the while to We've proactively encompasses continued on made the and approach preemptive have CNA serving significant taking approach actions moment are Before presentation reserving would our reducing our life slides segment ago dimensions our I our reserve objectives in goal for and on and review on than a of commitment long-term earnings of and care policyholders. take commenced through to efforts the the to to from our annual investment block, of many a walk The achieving we've effectively of the active of address meaningful with actions our of XX the risk over including the taken the results I we as long-term reflective their years increases XXXX impacts we rate also group ask reviews actions progress XX risks. annual considerable review This to of through business commitment. the and this More group management assumptions. focused across care and and taken business these refer five reducing time. you I to life risk effectively the reserves including

our care, Gross long-term as the well reviews Valuation reserve GPV care a life life claim our group As and or active long-term reminder include as analysis. Premium of annual preserve reserves the

we review review is addition, completed the in associated the risk-free change yield In and future this we update settlements most from of detailed U.S. our block XX an as note with investment XX-year discount for yield changes assumptions. yields GPV the discount is is structured will the to reinvestment of also which Starting The that reinvestment care assumed as discount portfolio rate XX. the is function significant address. claim long-term rate review for treasury. investments. the a the slides I to resulting are the with These a in well the use important benchmark reference It rate reserve current

X.XX% by these reserve light reduced yield rate our we've benchmark paid would assume with normative points persisting In to two had taken rates of normative the rate conditions project XX-year for XXX that rate or intermediate importance critical our this XXXX we we interest the given of expectation short current the get previous rate the on the years long-term of discount and of our is term several basis In review risk-free liabilities.\ While environment actions over assuming XXXX. the duration treasury assumptions. by reviews, and expectations these critical

points three our lowered reduction the over accumulated from have XXX the for normative a we to First, expectation last points XXX rate last of basis X.XX% year years. and basis

to curve years projection grade the XX X.XX% normative to the we've extended it's normative grade. now the And finally means we we XXXX not of the are until period new using that years assume normative first that then X Second, we'll years. seven years. up the the time up for grade over remaining and rate that to the from forward This to three rate would

the on prudent normative unfavorable impacts rate million. significant to or These changes note prior to credit to part portfolio the $XXX in of pre-tax XX You extended discount years review. rates, million. of age future level curve we of also all reflects change get will a this the key inflation. are not experience and assumptions this move of and with our reduces morbidity, lowered for for time assumption decrease assumptions a pre-tax our all respect change With of should cost several increases the in XX. the $XX the on to including level rate, on reserving X% our not a these was of claims we highlighted we pre-tax change rates the increase and did XXXX; and frame With our had sum claim in for persistency of With on Persistency care, change morbidity rate in cohort. assumed our until and in key meaningfully as spread the mortality next changes slide This use persistency, reflective including normative meaningful will respect I slide also $XXX together assuming approach other impact a the back resulted to had interest get rate new older along expectation reinvestment liabilities. significant compared our to on assumption favorable the over to with of changes of other tenure investment forward morbidity the The not discount of impact will any an expectations. changes impacts favorable risk see the assumption policyholders million. to changes that assumption to make I rate for year quality

rate future increases. premium regarding Finally,

increase to rate as file the is reminder increases rate have we or but that to of plan our been a approved program. current approach part As approved, include that filed not

prior actual $XXX favorable our achievement impacts. Over year, the past our of rate contributing million exceeded has expectations

of addition, updates programs. in assumptions million. Updating additional impact file rate the we our reflect addition for to programs our are that duration total In long-term XX highlighted I to had average pre-tax increases years. increase for future continuing existing achievement GPV is to a to our $XXX the under [$XX] note should and reserves a rate actual charged in existing pre-tax favorable of care, Overall approvals weighted of slide million and earning on deficiency X.X annual the only on that's reserve consumed rate [indiscernible] basis. analysis

discount with and are proactively risk notably approach change While address our they and rate to these this prudently associated on business. reflect continued significant, changes the the

concluded in impact the lower In to the validation a covering review is claim review specifically by assumption the setting. severity reserves which of notably recoveries. from a row, of responsible a The a higher addition the is with this note approach our plan of actual is reserve annual review should claimed driven million the by favorable which favorable closure to GPV year this long-term claim observed reserves $XX I rates our sufficiency release also we claim the claim analysis, of our most result have review is driven we fifth expected care of is that operation.

slide and the agreements to impact historic had approximately a periodic payments structured for fixed provide associated P&C settlement's indicated plan with $XXX settlement as to XX unfavorable with reserve quarter. as on block discount value structured are block in of in an thus bottom and rates end sheet were changes block. these Finally, Total assumptions. changes associated on many we have balance for impacted of contingencies on present These policies of a to our third structured a claimants long-term are settlements basis the life and million reserves are subject to the a review claims. thus by Similar held reserves mortality are well the at assumed care these

part As and rate made strengthening million we a adjustments reserve reserve both a this of pre-tax mortality to discount our basis. assumptions review the $XX of including year on

structured XX, our Group of quarter. tax. million core segment primarily or for care the overall both reserve loss of were and a from income of to blocks reviews million current operations of driven $XX $XX from impacts results covering million $XX the With there long-term Turning third favorable slide some $XX after the reserve million a expectations settlement the Life produced changes these by These and charge quarter. pre-tax is the experience. core segment in Effect for and produced of morbidity

terminations usual, higher the severity and new Specifically continue effects claim lower favorable experience COVID-XX. claim more claim amid we of than frequency,

cautious a holding recognition As IBNR level and taken an reserves. the perspective trends approach the we quarter from referenced previous a income higher of given have in these then uncertainty of

as recent these term assumption to continue efforts. deem In short GPV more temporary incorporate addition in this into and not our we setting as did experience nature trends we

$XX million core segment corporate of in produced a Our quarter. third the loss

to in Pre-tax turn quarter. portfolio which fixed quarter pre-tax to income common quarter. the portfolio prior me third period Pre-tax to gain prior portfolios limited our effective Pre-tax to impacted is which maturity results holdings and net net million primarily compared income the to The of the $X higher quarter the this lower million period. preferred for pre-tax from loss the partially P&C were of on net year on the million the primarily X.X% million our as income on net of $XX decrease yield realized $XX our same continued redemption $XX under $XXX reflected that's and compared A equity driven offset been the in compared investments. fixed $XXX last returns income investment investment the million our investments investment prior for of $XXX by compared to mentioned favorable during notes is XXXX. recovery quarter. has august by mark-to-market a income The gain with reinvestment the produced year. $XXX gains our from quarter rates. year by securities, $XXX million non-redeemable a was investment partnership Dino million stock fixed The gains million let in is of senior Now in million

during provide investment game portfolio driven XX position up The the of our change remain At while or $XX.X quarter-end the Shareholders that nine earnings is Life quarter billion $XX.XX the share to is sheet billion quarter other you per per equity credit presentation end Slides in of strong. income low. the with is investment that be in liabilities by comprehensive the billion of of quarter. at duration at income unrealized continues billion of the $XX.XX income the will in results details XX quarter. Fixed position unrealized quarter-end. fixed extremely at $XX years Group shareholders assets balance of the of the Our accumulated equity The our on composition additional share. spread liabilities from The X.X unrealized years driven gain across increase and excluding by assets portfolio. and or second $X.X $X rates support support stood market with income effective fixed portfolio during targets. the our risk-free effective had line and an P&C in our duration tightening

a structure leverage well-balanced conservative a low ratio capital with We maturity and schedule. continue debt a to maintain

million target low August, and our our of metrics all will coupon net third annual a paper subsequently a in nearly we flow interest of at our reduce ratings. paid capital adequacy XXXX driven at $XX premiums and I cash noted above our quarter to demand debt operating and extent and lesser for quarter, $XXX $XXX end credit redeemed lower the million the at by expense our losses. of X.XX% which strong tremendous As supporting million remain by record we notes issued levels of credit with was the higher In senior

In withstand addition will have variability. of flow back And form operating maintain to to our share. liquidity $X.XX positive our Dino. significant cash to and the that cash of regular short-term over in and to I liquidity business meet announce dividend and and turn investments per obligations sufficient With continue holdings we it are pleased to quarterly

Dino Robusto

Thanks of return correction advantage call. take before to of of a customer to to am I new duration widespread a and last as both responsibly this the we the industry business and underlying quarter risks stronger understood terms assume. in premium required achieve full customer allow the will interest high our portion loss catastrophe this levels year on as improving strength elevated developed I And this activity and Al. top years we pricing, we more of with ratios. few question of rate well hard emphasis and the happy be and of of the additional line is quarters awareness the achieve to One answer will therefore awareness have we'd take their of pricing increasingly of protect and social to able and increasing greater your because as that be dynamics the inflation protracted as take adverse period point move expense that market Each depressed optimistic to of environment, impact it growing of better our the quality low of industry to correction questions. confidence conditions, well than share

Operator

go first [Operator Shanker Instructions] of with Bank We'll Joshua Please from America. ahead. take question our

Joshua Shanker

everyone. you Yes. Good hope you can you'll indulge me me two more maybe cut with morning want. but I off if than

in question a need or going number. on about making to good is expenses the related Anything we P&C first low business; think great this absolutely the about in expense number G&E a forward? terms or of typically that think a to So COVID ratio

Dino Robusto

take to that? want you Al

Al Miralles

Joshua. It's Good question. Sure. Yes. morning a good

So right. from travel I modest impact say would

huge are a We not company. teeny spend

So modestly pickup really travel a I the driven expenses group. would little our largely from say benefited or in the our very not pickup less but are lot by

Joshua Shanker

you unreasonable. And so quarter be not that be about might going if useful but just think one it's might number forward a it obviously

Al Miralles

it's to don't to was hold you has holding saw try in I think flat. efforts unusual. we quarter Remember what expenses the and good the our flat just I strategy think while been that underwriting business in in invest

investing that continue talent, growth in showing path the on the in technology, we're on see see expense again but of path and our disciplines starting then of to written We analytics you really show through our and the earnings. spends our up our

Joshua Shanker

what the included future And need work? to that I exactly press expected. increases then exactly? I I'm that The reading is they was I $XXX in that assumptions are or not terms in rate XXXX were release guess the that how of long-term built care the it the came rate million to there when understand than increases understand through trying exactly. just is is thought they said I a numbers better should few and expectations into quickies, the does one

Al Miralles

Sure.

all this So of expenses gross and on a premiums, premium back is just remember it effectively of sheet all balance valuation discounts it cash your flows, form the what in then it future reserve. your it takes claims,

Okay.

perspective. premiums works a So it that's that how includes company from your just life and

increases approved that balance million has of is balance in not the have come approved would in perspective a or deem but $XXX but yet year as not okay. our is have process outstanding. premium yet. the be include that like our pursuant prudent program current from I we haven't $XXX to reserves that's to that The take that filed the through that what we we or rate rate Now increase what through actual filing said we've is we've that into Last gone increases sum we from a kicked gotten so yet already been reserves baked was approved million

in know long-term you out further out and a aggressive carriers terms on will assumptions. have see you but achieved we hear of is seeing what is speak bit little future I'm environment they not updated rate be based then go will what what was estimates achieve increases do had million they basically rate bulk different is a always perspective is have will into the of more basically that last is $XXX when think because uncertainty got the you actually what we is the we thought proven be saying outperformed, of on we year's So But in change that some than greater to philosophy our we go a very what bit you're we've the earn all $XXX anticipated. future have important earned taken rate our your that purely then versus million of that what there those you in will approach some the change ability actually an outperform and The what to with and we of we don't and could on have that and would achieved can approach about far so and assumptions. expectations we our other what we

Joshua Shanker

the rate at and some approvals increase ambivalent takes we over about rate some that you're whatnot point just policyholder of offer where on are return? Are happy because still getting or compensation a And cancels of you're we I companies other those was quite policyholders some but about a increase see are new the point You'll think to staggering. have getting looking you yours where power them we're and whether that? the rate not to gets where team should need? rate the How the the in you

Dino Robusto

should options equivalent put to about would weight is think we actuarial that we that basically is you the out way rates set The give benefit them where is on the what we reductions.

So someone versus to that want essentially is doing equivalent. my use to I inflation, if reduce then don't I says accepting my rate daily the benefit so want

– see Now seen what and we've can we that

Joshua Shanker

well? as Canceling equivalent

Dino Robusto

benefits. Well, canceling giving basically they're their of up all

So forgoing premiums canceling they over years. what in they're paid would have the basically

same. at that wouldn't look I So the

Joshua Shanker

your foregoing the That's an benefit would not I option in use return cash benefits? exchange

Dino Robusto

have cash not do policies These value.

Joshua Shanker

Okay.

Dino Robusto

render value. the on So there not is

Joshua Shanker

did last is you them that in quarter? have benefit much and the had in partially okay can mortality, of question, there the Some COVID how persistency one you

Dino Robusto

mean operations in opposed You reserve our as to current use?

Joshua Shanker

million I There some of $XXX COVID that think related in benefit was it mortality. mortality persistency was assume I is

Dino Robusto

result is component. we call we are the operating lives more you mortality results impacts both as you well of have mortality there would of our coming lower should as what is severity more kind what that more claims think paid came holding And claim $XX our is have some permanent some really more level operations of and frequency as and population. million, had through healthy business that In the a which that our what would and we current cautious benefit is more we through the of the claimed of as of there in well being about be

Joshua Shanker

thank detailed well you Okay. all the I for answers. it. appreciate

Dino Robusto

welcome. You're

Operator

from up Partners. we'll Gary ahead. & Please Ransom hear with Dowling next And go

Gary Ransom

and hear changes rejiggering your as some entertainment I'd experience Yes. seven some have estate do permanent well. wanted question you of is is COVID real Good levels make you as what the and you Is can like of over at there maybe little might I'm yes past processes to morning. maybe home expense I the changes travel some how how with best work about make? and to ask thinking learned ask months? the a thoughts well the people on I bit just in might cause there expenses to wanted and

Dino Robusto

jump and I'll then can can in. you start Al you

part little and going a this be I say for forward well process work and the starting us is bit clearly to ability things are generate us There there with that second in going we travel for Gary. the less to think maybe the in probably remote to does environment ability think I expenses. an learning are overall

You will do continue to that.

have We locations. those operations. branch go with them to We'll

and meet agents those obviously will of are we our all valuing We that locations with and environment. brokers brokers virtual also in calls a our across the agents but make

gains efficiency that from Our generating also process. clients are some is everyone

there some I think potential will be So benefit.

talent had you standpoint talent are technology work positives a large Now that on mentioned that I by standpoint in our particular we a that process generated and point find as environment have a of them to work be some and a definitive bit Al want make easily just not continue that can a expenses get decisions anticipate careful effectively. that travel standpoint on from to secure component there our been little consumed the can from as but and analytics remote from we the talent numerator

big It'll premium but Of to and that because to other back it of into the of that have numerator has expenses a getting a want travel there continue components suggest less clearly some as all a going impact particular an little don't course out offices we're on that's XXXX. at large earned but for nevertheless I of all because issue looking continue the are forward to to juncture benefit. extent this getting bit I'll point the for benefits. growth going a in

Gary Ransom

out of it So grow. there that more I fair? sounds expenses the way this expense really guess reduce your Is dollars and keeping fare to was premium it like just I is was if and but parcel letting a trying to flat part

Dino Robusto

Yes.

operational just efficiencies. sure areas not also driver provide COVID a I in a We're think that's today. other keep I investments always it operational way a numerator you will to other underwriting in of I'm flat to it all efficiencies gain within you being related and put make to having circumstance that's Gary. we stand as the wanted the our are context areas as in fair big some expenses where

Gary Ransom

question you conditions. on Thank and All other right. and terms my was

either international and bit So in segments or need shifting little tightening in gears how here. been you've a that those it

just of overall get how how increment I'm from that might and the to have the terms You've had on of a and timing so an change conditions how view and top flow conditions the you big might contributes to past of changes? sense trying a coming of experience through? improvement might terms be cycles the with rates

Dino Robusto

Yes.

of that conditions continues pricing. beyond market you benefits clear a get and a harden as terms it's to within this the construct of lot So

a more restrictive. They lot policy terms. get get You

components I The better and exposure these conditions and clearly the You subside. XXXX have an a deductibles. beyond advantage market. XX we're doing at seen having get in opportunity certain it about exclusions of XX, that conditions -- the clearly this persist is in tend the that of think hard that you gotten and after terms think terms that the and mark very softer start way is changes right do can to that add increases XX expanded Clearly when to and rate take in the to I then rates, the

longer the little you deeper and persist as the on conditions and terms then pressure a into softer terms So conditions. first a moderate get get bit you rates cycle the and

we've we the particular areas. are In the in our United taking ability portfolio in like healthcare that of clearly in So been advantage all areas re-underwriting to do States.

property of us standpoint to from when is the of going start this clearly ways Some a bit serve again be which moderate beyond property there. large little to in of rates is to itself international and our some a of and even an going well out

Gary Ransom

So you changes? seeing and benefit conditions terms do already think meaningful from we're a

Dino Robusto

catastrophes a international are under catastrophes that made a year the considerable benefit, re-underwriting mean benefit notwithstanding the third States gone clearly quarter I point was I would in we a out in months in to the this re-underwriting big saw combined I a and we example our has hundred because I impact. would Gary out which that in in last only made efforts evidence activity has a is operation past has ratio a providing our would that United really, the the emanating aggregate catastrophe quarter in London the XX of calendar clearly our international the to use and prior you on say U.S. good

it it. already umbrella see put you the the of I start within underwriting to broader where So initiative can

we've you seen professional to like able you considerable before. healthcare have our think I see deductibles liability; that something get areas not it been on where also in

So broader having focused a for those we've been part it's think I re-underwriting while. are do impact. of Yes, meaningful on the the that a

Gary Ransom

you thoughts for I your all Thank it. Dino. appreciate

Dino Robusto

welcome. you're Yes,

Operator

Shields And up hear we'll from Please ahead. with Meyer KBW. go next

Meyer Shields

from a third to talk driving P&C portfolio morning. I Good know Thanks. Al. The question the quarter for that? hoping don't was what's quarter. can abruptly second seems be fixed risen, to to I I somewhat the within you it's guess income

Al Miralles

you mean the Sure the Meyer of portfolio? and value

Meyer Shields

No, the portfolio duration.

Al Miralles

Duration. say rates lower is modeling drop changes and that basically to of duration their the the with basically with recalibrated portfolio. that seeing than to lower sensitivity current with potential basically modeling low scenario lower could of lower higher any but a coupons has Yes rates, are floors rate our any prior the the now go go this modeling to rates environment recently Meyer now had durations so level in reduced lower aren't would in changing rates there could the and potential going lower they the not -- to those to the anything a correct. do and floors lot you the companies us nothing that more into rate reflect have that zero What up is you're that that low staying duration of Yes, is function in they with portfolio.

Meyer Shields

Okay.

or anything risk incremental that.? no is there So like

Dino Robusto

Correct.

Al Miralles

Correct. We change. modeling would essentially that quarter-over-quarter would have for been a but duration in flat

Meyer Shields

offsetting I surety Thank development quantify and guess you hoping I healthcare? could Within the specialty from Okay. reserve was you. patterns

Dino Robusto

repeat Okay. that you all. I'm not mind? understood I Do just sure that? Can you

Meyer Shields

mind at Yes. all. No

a understood down if within talks healthcare and you with reserve or about segment think or So surety releases charges you specialty would I within correctly offsetting those boiled could that? within developments I have some be where quantify Al offsetting medical

Dino Robusto

you jump there? Al do in want to

Al Miralles

the of the of book. seeing that and Meyer business profitability of that continuation and that's about Sure. bit obviously kind healthcare, see again and expect large that adverse the see as trend will really we've we been the conclude that by some would of obviously you development re-underwriting then kind of that to driven benefit million so a you're we activity business some a from exceptional really in comes $XX loss out, dissipate and the going we as the queue have of shortly

Meyer Shields

quarters out but favorable finally Okay. the That's how quarter? last compensation the just few through on within something have few third in had then or maybe than reserves you and of helpful that more could That's workers reserve talk development. that commercial, played

Dino Robusto

comp those you have on do the numbers? Al and favorable work

Al Miralles

Yes.

got of you've been hey going commercial. takes trends a puts continuation reflective comp there workers see again medical and favorable we've On you're comp that you've favorable work and experiencing. development really on couple So to of

Meyer Shields

Okay. Thank I appreciate. you very much.

Operator

go Ron Returns. we'll ahead. from And up hear with next Please Capital Bobman

Ron Bobman

have info bit in underwriting morning. sort the sort healthcare going of loss the give little us Dino, more sort of good more or what's of I'm activity if would you specialty as a sub on some wondering sort of claims a segments activity underwriting to of be environment in the you Hi might color area sort Please. various and interesting.

Dino Robusto

just or general? And segments healthcare that to of in to related related Okay. got to COVID all just sub the make I sure,

Ron Bobman

hospitals, the to COVID you're about it's I what of segments nursing be facilities, to learning. obviously got interesting hear seeing, challenges guess impact be various upheaval really on whether the create Thanks. what it's other Really specialties you're doctors, lot Yes. a and and

Dino Robusto

Yes.

at of the was the a medical the in And third side activity We've on we then not in And notice as did ultimate from portion as the and aging we services. although we overtime claim reserve was claim healthcare aging our that came what of up public the now the put that indicated this indicated indeed have in loss had and the I to to aging in some quarter. did loss we claims. than number just good ultimate we larger my insure the we portion services took set what within much time then took changed. information estimate what did a So what much of that when had we particular or malpractice a took additional limited in got of didn't of did percentage even what an facilities the claims looked relatively actual we standpoint an since we look was to we at and ultimate decks try services Rob fewer might remarks quarter in also indicated we at second prepare and turn healthcare

this is as third moving. So quarter again see but put going will was in subsuming that time. we things indicated that has the just we we possible some want essentially indicated that what I had end up slow which when These up it I is to it activity take caution, might be it ultimate to

we a up it's plain at which the is malpractices your juncture, feel limited Does notwithstanding notice activity I was appropriate. again So larger answer the ultimate that a portion of put still did question? this we medical think that relatively

Ron Bobman

would no Yes. And but come claim be approach know, You lot face a to you be claim light have obviously count do very how handle underwriting I the to those what's count do renewals? obviously writing maybe of accounts, presume interesting. you with and like due Thanks. renewals

Dino Robusto

rate can rate are Yes. respected going you and retention were the we need have terms the we last player led Sure. the to achieve market the going course to but we in we the the to rate and get because a said increases And increases started as the digit had on decided several was below was major we're had say particular at and for years and or embarked We of the get retention quarters saw we that. it fine. what and we is to let ratio double and multiple drop or and willingness in going now have we think CNA I you comfortably and conditions we overall are on had know healthcare we over we considerably have go increases the we're do services. early turn on what that drive It dropped aging ratios to

substantial able you're I of so seeing suit. the say players some actually up the third quarter been than had over simply broke to was take drive this of and following couple our us lead second retention; about in last healthcare XX increases our really to we're rate of course in all the being as was comforting it take into if is the XX increases to XX Now other follow in rate the particularly about quarter What increasing and combined second straw the substantial back actually quarters implication others the services increases rate aging In alone versus so was. quarter. you the maybe XX% points are COVID right camel's is generate that have going we We while proverbial continue getting we that direction. that higher

they years what know So if the and been loss that we the you XX remains are have appropriate is, and think then substantial it's give constraint. deem it experience terms plus we that of the and yes to needed? our we longer that higher and we we position get had sub same color conditions what a can't we after the problematic segments in what been prepared you Does have be should and walk away

Ron Bobman

assume I from benefits and I It's you they're Yes. of separate helpful are, and those which terms very apart that's condition rates significant that the and mentioned presume. changes

Dino Robusto

move get you get Correct. made kind although that claims and frankly quite needed. Because in the of above migration, vast and and so policy that's of you language to over our of continuing opinion deductibles, majority

Ron Bobman

Thanks That's Interesting. helpful. luck. a lot. Okay. Hope Good it continues.

Operator

or in further And there for I'll questions CEO the are queue. turn call closing no back Robusto over remarks. to Dino additional

Dino Robusto

Okay. chatting Thank you. we you much Thank next forward very to look you with and quarter.

Operator

this for call. and thank disconnect. may ladies you you concludes gentlemen We today's your And participation now and

CNA Financial (CNA) 2 Nov 202020 Q3 Earnings call transcript