CNA Financial Corp. reported 2006 fourth-quarter net income of $329 million, reversing a loss of $217 million for the comparable 2005 period.
The company said the fourth-quarter combined ratio improved nearly four points to 95.
Chief Executive Officer Stephen Lilienthal noted that a fourth-quarter reinsurance commutation was the last in a series of such acts that effectively eliminated an interest cost drag on earnings that exceeded $300 million as recently as three years ago.
“Overall, CNA delivered in 2006 and is positioned for excellent and is positioned for consistent, sustainable performance going forward,” he told the NU Online News Service.
The CEO called today's earnings report a “milestone” in the company's reinvention of itself as pure play property-casualty primary insurer after years when it shed both its life and reinsurance business.
“We undertook a complicated and daunting task to make this happen which included a major reunderwriting of our book of business,” he said.
A new centralized structure helped with the reunderwriting task in that it moved the company away from the high-risks coverages it had taken on in recent years.
With a new stock and bond offerings providing relief from some of the heavy interest charges the company had been carrying, Mr. Lilienthal said CAN is well-position to provide a steady drumbeat of positive earnings reports in the coming years.
Among the earnings report highlights:
oGross written premiums for the quarter came in at $2.2 billion compared to $2.1 billion in the same 2005 period.
oThe combined ratio for p-c companies for the fourth quarter was 111 compared to 140 in the same period in 2005, when the company suffered losses from Hurricane Wilma. P-C companies included standard and specialty lines as well as p-c business in non-core operations such as life and reinsurance.
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