CNA Overcame Cyber Attack to Finish Strong in Q2
CNA Financial Corp. (CNA) announced second quarter 2021 net income of $368 million versus $151 million in the prior year quarter.
The quarter saw improvement in the underlying combined ratio, very strong investment results and a lower level of catastrophe losses. The company also had to overcome the impact of a ransomware attack in March that limited business transactions for a period.
CNA’s Property & Casualty segments produced core income of $351 million for the second quarter of 2021, an increase of $226 million compared to the prior year quarter primarily due to lower net catastrophe losses and improved non-catastrophe current accident year underwriting results.
The company also recorded a rate increase of +10%, the fifth straight quarter of double digit rate increases.
“In the first part of the quarter transactional limitations resulting from the cyber incident had an impact on production. But we were able to quickly regain momentum and finish the quarter with a very strong June. This enabled us to grow our gross written premium by 8% and new business by 10% for the quarter. We are well positioned to continue capitalizing on the favorable market conditions we anticipate in the latter half of 2021,” said Dino E. Robusto, chairman and chief executive officer.
CNA reportedly paid $40 million in late March to regain control of its network after the ransomware attack. The company reported that the attack occurred on March 21. In an April 1 security update, the company said it was safe to conduct business and communicate with the insurer via email. By April 6, cna.com, including CNA Central and cnasurety.com, were back online.
For the second quarter, the Property & Casualty combined ratio was 94.0 compared with 109.2 in the prior year quarter, including 2.8 points of catastrophe loss impact compared with 17.5 points in the prior year quarter. Net catastrophe losses were $54 million versus $301 million in the prior year quarter. The underlying combined ratio was 91.4 compared with 93.2 in the prior year quarter.
Catastrophe losses in the second quarter of 2020 include $182 million related to COVID-19, $61 million related to civil unrest and $58 million related primarily to severe weather related events.
Property & Casualty generated gross written premium growth of 8%. P&C net written premiums decreased 1%.; however excluding the impact of a one-time catch-up related to a new property quota share reinsurance treaty, net written premiums grew 5%.
In Specialty, the combined ratio improved 12.3 points as compared with the prior year quarter. Gross written premiums, excluding third party captives, grew 11% and net written premiums grew 6% for the second quarter of 2021. Gross written premiums grew 2% while net written premiums decreased 1%.
Net investment income increased $57 million as compared with the prior year quarter.
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