[ The transcript was presubmitted by CNA Financial Corporation.
No live call was conducted for the second quarter earnings call.
]
Before providing remarks on our results for the second quarter, I would like to comment on the pending CEO transition that we announced on June 5, 2024 that takes effect January 1, 2025.
For the past eight years, it has been my honor and privilege to lead CNA on a journey to record levels of profitability and production results.
Doug Worman has been instrumental to the success achieved over the many years we have worked together, and he has been an outstanding partner in this journey as Global Head of Underwriting.
that to the performance. continued confidence drive successor absolute ever-forward CNA levels have he right is to I of top
am Board to Executive pleased Doug also new I as role as assume CEO. Chairman strategic and the the advisor, supporting of very
should second Board, and you continue strategies our been hallmark consecutive the underlying with that results or the of the in solid CNA produced excellent the the with increase rate. success of strong of million one-point income, of last Commercial quarter to very quarter we are have top-line profitability including unabated.
In we a Together same growth, greater, $XXX underwriting eight fifth over higher about investment level pretax and excited future and with expect prowess years gain the underwriting the
written Commercial for commercial and rate lines X% the and excluding our change be respective covers for loss is casualty, written change workers’ trend, auto cost casualty specifically covers Importantly, double-digit trend low and, rate like classes. for continues and cost to loss compensation, excess
recent on for our behind and so on down I set prior experienced continue current years extensively the some first we in year focus insight half accident in loss a loss and what the spoken I the begin based by primary us XXXX. wanted further have to will we reserve the development. be of have highlighting last that These have additional drilling quarter add experience Before about trends, picks, cost several how to we over philosophy the numbers, year our
commercial excess are trends auto actually the primary today indicated quarter, overall. general double-digit. And commercial and cost the and five doubled property slightly are the loss the In casualty cost malpractice several for social namely segment, the cost casualty overall low overall above excess and around liability, is auto, from casualty and medical average, unchanged long-run cost X.X% Primary is I our trends and have are Commercial. loss average last of -- programs years long-run But with in over the last inflation mid-single-digit overall lines slightly than trends Specialty is loss the impact as Our about below than affinity average general also our long-run average. the the our is average trend below compensation International lower mid-single-digit. loss liability segment, workers’ roughly higher average.
In
liability, in and meaningful favorable some point past then casualty, see to and We experienced which favorable made the we year in where excess emphasis entirely block liability auto on business for to the of almost of extent, reacted development commercial from lowered and commercial deteriorate compensation, of the development reserve we the experienced commented and lesser XXXX workers’ workers’ the general programs.
A and, have bears we Medical older what medical primary the the first saw we through affinity was we that strengthening at a concerns those the general malpractice development later actual liability, it years social reserves years; excess regarding our and XXXX, in the of trends years, severity future. might conservatively elevated point compensation favorable primary reserve in terms malpractice, and restating. years inclusive medical frequency reserve impact inflation in data, the in of general over because auto evidence incurred offset to of We of pressured surety the on also never one which development across We lines inflation lines previously instead, saw embedded commented of have as like had in began well of as was in we we casualty. in XXXX. accident
we our remains trends. impacting period, eventually even a for costs view start compensation protracted been loss though our workers’ approach medical costs higher workers’ long-run have to appropriate reserving compensation impact is because cost could that benign believe medical Now, our current
During cost inflation. the accident our was years was how year. social maintained in We We merely impact of believe historical expansion classes for obfuscating we we the activity the around impacted the auto. pandemic boded on for overall the implied as one well we right inflation, at results by that development being years against underlying pandemic prudence margin the actual with above most also to year those we be earned our for of the loss XXXX through because XX% XXXX, yet the that loss XXXX of ratio well to norms, commented from the abated years P&C each years accident best loss assumed felt those of treatment business relatively up rates trends strengthened it during selections.
Through social from initial mid-year commercial conservative continue loss the hold area ratio is aggregate
auto to the Although the a increased of X.X% double-digit economic in see loss low long-run commercial remained near a as trend lines impacts property where we result some recent offset of abatement little by inflation. that cost experience, loss over cost but mainly total, claims trends in was a point
raised commercial increase this cost loss for reserve rates for a to is loss written up in below with million management remain compared by of quarter.
In the the though in liability year pick lines. XXXX by $X over commercial auto, ratio million segment, As loss several noted trends half XXXX quarter, the long-run This XXXX mix for our loss of cost we stable. and reserves Specialty national cost we the underlying together auto increase, last loss This function years increased even in in shift the and line of accident we development a falling $XX underlying increase accident years. underlying point Commercial towards ratio accounts favorable strengthened we the in one pushed older ratio with half a last prior by trends point loss total year our first quarters result in trend of our
market we increases ratios have on we rate studies. period until in appropriately prudent development we over we hard information reacting the before and been our greater line, methodically above trends, our rate level the cumulative as at hard in how the we make look the accident well trends market.
Bottom are pricing cost achieved see believe reserve While current set conservatively discipline loss market, to unfolds the we movements reserve we how loss year our current remain and
catastrophe to our is second $XX million more P&C points increase income $XXX XX.X%, the $XX $XXX second line record of ratio, in X.X average prior combined X.X last our period of all-in in year our of a some points with from book years. points million points than and profitable ratio on of expense the the The provide portfolio underwriting results. over XX.X% or exemplify P&C increased Prior growth. in Core both was second same and period $XX quarter investment to continuing quarter discipline underlying losses quarter. and the to million, and X.X or of XX.X% five core income fixed for favorable million me the the for Net $XXX let loss combined the was underlying income the quarter income was XX.X%. higher The million, year specifics of in $XX development contributing by quarter. asset of half with million million, catastrophe the P&C high, loss X.X from the ratio The by ratio. compared Now $XX year our combined prior first last year combined year-over-year, with million yield increased ratio the growth is ratio was base.
The overall was invested our ratio of
X% written In with growth captives strong we growth written quarter, excluding continued premiums. the production achieve to in net gross X% premiums in and performance
premium X%, down Exposure the increases a by but variation and points been but they three down consecutive was was to at segment were first stable and was Renewal change quarters, exposure in Specialty overall for with two a in as was International point X%. quarter. to have Rate point stable close class, X%, down and Commercial. change from
change before, and of as changes changes revenues, deductibles in exposure and as in payrolls insured I participation impacts the limits metric such accounts. coverage well on also changes have shared value, the but premium on just total not from mentioned impact and measures As in our as layered
exposure are always conditions. quarter, change on accounts in most to This in decline and to the capacity optimize shared and we pricing reductions as by relative layered our impacted and participation terms seeking is property significantly
has P&C with worked was reflects last $XXX in this business continued New advantage we level X% that of high offer favorable Overall the over to this retention excellent quarter XX% hard been to of and Commercial right high continues quarter emphasis take strong a business market at record the several the we million growth around secure consecutive remained on retaining in ten our to up for our years a This opportunities. quarters. as accounts units.
quarters XX.X% the segments, grew underlying XX%. ratio the extending $XX of premiums the points in expense quarter, million X.X than this quarter. ratio Commercial was growth all-in Catastrophe in quarters. for prior loss double-digit X.X growth with XX.X% written ratio of premium quarter to combined Commercial of the the high.
Gross three was gain million was The underwriting underlying our XX.X%. combined to The $XXX to Net and record ratio. was XX.X%. the lower underlying of consecutive captives points nine was string ratio The Turning was added a losses excluding combined year XX% written
in certain quarter. largely point lower Rate construction accelerated business just retention a change retention in retention on what double-digit dropped is in Within and was catastrophe-exposed rate and our X underperforming increase competition units. impacted of and business middle New our Within by can quarter. increased last business in middle XX% we small accounts achieve national accounts in with be up this X%, small to Retentions national improved the business low to the we that last business driven the business.
Rate was and saw market we units consistent accounts exactly but portfolios property. and quarter in quarter commercial with our quarter. market. liability and and Within by took and XX% construction was grew small compared market business late continue Commercial in large the auto in was middle handful actions
auto this change compensation quarter renewal few to rates favorable due rising we to continue a with compensation basis, increase with to and achieve were due point Property increases a excess accounts.
On property XX% last range and national each coverages quarter line was competition on June levels by rate payrolls. Our the but treaties low where resulting this reinsurance rate covered by even chose single-digit rates the cases slightly to retention lower on be impacted negative increase, continue renewed accounts in was Workers’ loss pronounced accounts higher. impacts in rates to our and high to general and on the XX%, commercial in a increased the extent non-renew to were our casualty all single-digit.
We results, and points up in perils to some liability rate more consistent all layers. quarter exposure product ratio up treaties but in Xst. enhanced, rates Primary continue some workers’ increase We maintained, of increased some were of we the down quarter. mid-single-digit
the the coverage loss Our tower, billion pricing our as achieved the increase ratio provides more healthcare to attachment points point time.
Within our but net We on recent and over corporate the small including terms written purchased X% catastrophe reflective Specialty business prudent to this Specialty property was we XX.X%, of quarter, ratio prior new was we to protection expense XX.X%.
Gross X%. of written and was all-in was treaties grew also the capitalize this treaty The of to underlying with $XXX and ratio quarter an four Specialty, in second $X.X on combined year of premiums million risk excluding in catastrophe compared improvement ratio captives portfolio. showing average losses. underlying development. opportunities quarter up the premiums the conditions X.X strong continue XX.X% period at favorable is which for combined for now favorable XX.X% had top a growth of and within management Growth of in
a the quarters. in is from Within this But good of down due business were of Specialty quarter. the first to second aggregate within unit this a Specialty, portion between points rates flat decline two mix quarter, first simply different and by
points quarter. Our improve quarter, healthcare and X% last rates continue were this up to two over
basis in range, mid-single-digit beginning more produce institutions for quarterly on liability, to improvement to rate market a rates Even fluctuate Rates this strengthening quarter. since are full in up rate significantly.
Retention to were XX%. in with rates. quarter. Specialty our to years points low liability up points strong had in slightly and two the five Retention institutions and continue negative institutions in financial the liability our programs financial improved business affinity a Our healthcare an still And by the in change the stable hard been management with have point our extremely programs. the to retention management and stable cumulative by stretching affinity of this financial two nearly continue XX% in management declines for classes Retentions a two-point even low full XX’s improved and quarter. in
to ratio International the XX% be maintain we the and combined and strong our of in in quarter, two ratio The accounts profitability $X ratio quarter, with rate below the premiums. underlying environment, an XX.X% years.
Competition points we was quarter, in consecutive prepared catastrophe In only and very and the deem written For XX.X% our or in X% with segment premiums million for are conditions of The was International, International appropriate flat been can retention XX.X%. in International secure strong we get losses. gross in XX.X%, combined International was we level written ratio terms declining down the the very loss combined continues flat down to X.X three portfolio. enjoy from the underlying has underlying all-in expense where including ratio to this the a about were growth by net point points. was Rates lower in first with
