CNA's fourth quarter profit down 10.4%

CNA Financial Corp. reported fourth-quarter net income of $198 million, down 10.4% from the same period a year earlier due to limited partnerships and lower net investment income.

Net written premiums decreased 7.7% to $1.56 billion in the fourth quarter, while net investment income fell 12.9% to $365 million, the Chicago-based insurer said Monday in a statement.

CNA said in the statement that the “decrease was primarily driven by limited partnerships, which produced a rate of return of 2.2% as compared with 5.3% in the prior year quarter.”

For the fourth quarter, CNA reported a combined ratio of 91.8% compared to 95.0% in the same period a year earlier.

“Our fourth quarter combined ratio of 91.8% was the result of strong underwriting performance across all three newly-defined (property and casualty) segments, commercial, specialty and international,” CNA Chairman and CEO Thomas F. Motamed said in a statement. “Our continued underwriting progress as well as the sustained financial strength and stability of CNA has given our board the confidence to declare a special dividend of $2.00 per share.”

The loss ratio increased 9.4 points, primarily due to lower favorable net prior year development and a higher current accident year loss ratio, according to the statement.

During a conference call announcing the results, Mr. Motamed said CNA is being picky about the risks it writes, adding that they’re paring back on both automobile and workers compensation in the construction sector.

Meanwhile, the company’s combined ratio for the full year improved slightly to 97.7% from 97.9%. Net written premiums for the full year decreased 3.9% to $6.53 billion and net income decreased 26.3% to $691 million.