(Reuters) – Insurer CNA Financial missed second-quarter profit estimates on Monday, as wider catastrophe losses in its property and casualty (P&C) segment partially offset higher investment income.
Profits at insurers came under pressure from a rise in catastrophe-related claims due to severe storms and hail in several parts of the United States during the quarter.
Reinsurance broker Gallagher Re preliminarily pegged the insured losses from natural hazards in the first six months of 2023 at $52 billion. Weather and climate events alone were expected to have driven an insurance bill of $46 billion.
Catastrophe losses at Chicago-based CNA Financial’s P&C segment were $68 million, compared with $37 million a year earlier.
Its core income was $308 million, or $1.13 per share, in the quarter ended June 30, compared with $230 million, or $0.84 per share, a year earlier. Analysts’ on average estimated $1.17 per share, according to Refinitiv data.
Investment income for insurers rose on a rebound in markets this year after a tepid 2022 as investors shrugged off worries fueled by the banking crisis, and bet that the Federal Reserve could bring down inflation without letting the economy slide into a deep recession.
CNA Financial’s net investment income for the quarter was $575 million, compared with $432 million a year earlier.
The company reported an all-in combined ratio of 93.8%, compared with 91% a year earlier in its P&C segment. A ratio below 100% means the insurer earned more in premiums than it paid out in claims.
Its P&C segment reported 9% growth in net written premiums.
(Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Shilpi Majumdar)