Net income fell 48.3% to $138.0 million as investment income declined and expenses rose at CNA Financial Corp., the company said in a statement Monday.

Net written premiums for the second quarter were off 1% to $1.64 billion while revenues declined 4.6% to $2.32 billion.

Second quarter net investment income fell 9.1% to $500.0 million as other operating expenses jumped 34.2% to $341.0 million for the quarter.

“Results in the current year quarter were negatively affected by a $54 million after-tax charge related to the application of retroactive reinsurance accounting to adverse reserve development ceded under the 2010 Asbestos and Environmental Pollution Loss Portfolio Transfer”, according to the statement.

The company's second quarter combined ratio improved to 98.4% from 101.3% in the year-ago period.

“Improved underwriting results were offset by lower net investment income,” according to the statement.

“Our property and casualty segment continues to show steady improvement,” said Thomas Motamed, chairman and CEO, on a call with analysts and investors Monday morning.

The company's specialty segment, he said, had a “solid” quarter as market conditions continue to get “more competitive,” added Mr. Motamed.

“Property and casualty underwriting results continue to improve,” said Craig Mense, executive vice president and chief financial officer, said on the call.

For the six months ended June 30, net income increased 32.5% to $371.0 million.

Six-month net premiums written slipped 3.3% to $3.31 billion as revenues were down 5.4% to $3.42 billion.

Net investment income declined 1.7% to $1.1 billion for the first half of the year while operating expenses rose 16.5% to $699.0 million.

The company's six-month combined ratio improved to 98.6% from 101.4% in the same period last year.

Turning his attention to mergers and acquisitions and talk of scale, Mr. Motamed said that CNA “continues to look for M&A opportunities,” but that such deals must make sense strategically, because the company is not interested in “just being bigger.”