CNA Net Off 37 Percent In Quarter

Blaming investment losses and lower operating income, CNA Financial Corp. reported first-quarter net income decreased 37 percent to $109 million compared with $296 million for the period last year.

The company said its net operating income, reported at $221 million compared to $307 million in 2007, was impacted by lower net investment income, decreased current accident-year underwriting results in property-casualty operations and increased catastrophe losses.

CNA reported that pretax net investment income decreased by $174 million compared to the first quarter of 2007, driven mainly by a $91 million decline in limited partnership results and “an $80 million unfavorable change in trading portfolio results,” which was “largely offset by a corresponding decrease in the policyholders' funds reserves supported by the trading portfolio.”

Net realized investment losses were reported at $33 million compared to a loss of $13 million in the first quarter of 2007.

For the company's p-c operations, net written premiums were reported at $1.6 billion for the first quarter of 2008, down from $1.7 billion in 2007. Net written premiums decreased by $96 million for standard lines, and decreased by $16 million for specialty lines compared to the first quarter of 2007.

The combined ratio for p-c operations in the first quarter of 2008 was 98.1, compared to 95.1 in the first quarter of 2007.

Stephen W. Lilienthal, chairman and chief executive officer of CNA, described the market as “increasingly competitive,” but pointed to a profitable sub-100 percent combined ratio for the ninth straight quarter as a sign of success.

“While our earnings were impacted by reduced investment income, CNA is well positioned operationally and financially to maintain our profitable course,” he said in a statement.