Why Is CNA Financial (CNA) Down 8.1% Since Last Earnings Report?

It has been about a month since the last earnings report for CNA Financial (CNA). Shares have lost about 8.1% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is CNA Financial due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

CNA Q2 Earnings Beat on Improved Investment Income, Premium Growth

CNA Financial Corporation reported second-quarter 2026 core earnings of $1.19 per share, which beat the Zacks Consensus Estimate of $1.04 by 14.4%. The bottom line decreased 3.3% year over year. Revenues rose 3% year over year to $3.46 billion and surpassed the consensus estimate of $3.34 billion by 3.6%. Higher investment income and premium growth supported the top line, while the Property & Casualty combined ratio deteriorated.

CNA’s Premium Growth Supports Results

Property & Casualty net written premiums increased 4% year over year to $2.97 billion. Net earned premiums rose 3% to $2.66 billion, aided by 11% new business growth to a record $718 million and a 2% renewal premium change.
Retention remained 83%, while the rate change was flat. Management noted that rate increases in casualty lines affected by social inflation and in Specialty offset property declines, workers’ compensation and International.

CNA Financial’s Underwriting Margin Narrows

P&C underwriting gain fell 39% year over year to $92 million. The combined ratio worsened 240 basis points to 96.5%, reflecting a 250-basis-point increase in the loss ratio to 66.4%.

The underlying combined ratio deteriorated 250 basis points to 94.2%. The underlying loss ratio increased 260 basis points to 64.1%, while the expense ratio improved 10 basis points to 29.7%. Catastrophe losses were $60 million, down from $62 million a year earlier.

CNA’s Specialty and Commercial Trends

Specialty net written premiums grew 5% year over year to $937 million, while net earned premiums increased 2% to $878 million. Our estimate for net written premiums was $875.8 million. Its combined ratio deteriorated 290 basis points to 96.5%, as the underlying loss ratio rose across various lines. 

Commercial net written premiums advanced 5% to $1.64 billion, and net earned premiums rose 3% to $1.44 billion. Our estimate for net written premiums was $1.57 billion. The combined ratio deteriorated 170 basis points to 96.5%. Higher losses in excess casualty and workers’ compensation were partly offset by a 60-basis-point improvement in the expense ratio.

CNA Financial’s International Results Weaken

International net written premiums declined 2% year over year to $385 million, though net earned premiums increased 4% to $337 million. Excluding currency fluctuations, net written premiums fell 3%. Our estimate for net written premiums was $352.6 million. 

The segment’s combined ratio deteriorated 410 basis points to 96.9%. The expense ratio increased 200 basis points due to investments in talent and technology and higher acquisition costs, while catastrophe losses rose to $7 million from $5 million.

CNA’s Investment Income Provides Support

Net investment income increased 6% year over year to $701 million. The increase was driven by higher returns on limited partnerships and common stock, as well as higher income from fixed-income securities, resulting from a larger invested asset base and favorable reinvestment rates. Our estimate for net investment income was $705.2 million. The Zacks Consensus Estimate was pegged at $705 million.

Limited partnership and common stock income rose to $131 million from $100 million. Hedge funds and common stocks generated strong returns, while private equity remained a positive contributor. P&C core income nevertheless declined 5% to $426 million as lower underwriting results outweighed stronger investment income.

CNA Financial’s Costs and Other Segments

Total claims, benefits and expenses increased 3% year over year to $3.42 billion. Insurance claims and policyholders’ benefits rose to $2.17 billion from $2.09 billion, while amortization of deferred acquisition costs increased to $481 million from $469 million. Our estimate was $3.34 billion. Life & Group posted a core loss of $10 million versus core income of $1 million a year earlier, reflecting lower investment income. Net earned premiums in Life & Group were $103 million, down 2.8% year over year. Our estimate was $102.7 million. Corporate & Other recorded a core loss of $92 million, narrower than $114 million, including a $77 million after-tax legacy mass tort charge.

CNA’s Capital Position and Dividend

Net income increased 7% year over year to $321 million, or $1.18 per share. Core return on equity declined 50 basis points to 10.5%. Book value per share was $41.34 as of June 30, 2026, declining 3.7% from 2025 end. Book value excluding accumulated other comprehensive income was $45.83, up 4% from year-end after adjusting for $2.96 per share of dividends paid. As of June 30, 2026, statutory capital and surplus stood at $11.2 billion. The board declared a quarterly dividend of 48 cents per share, payable Sept. 3, 2026, to shareholders of record as of Aug. 17.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

Currently, CNA Financial has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock has a score of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, CNA Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

CNA Financial belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, RLI Corp. (RLI), has gained 2.5% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

RLI Corp. reported revenues of $463.14 million in the last reported quarter, representing a year-over-year change of +4.9%. EPS of $0.83 for the same period compares with $0.84 a year ago.

For the current quarter, RLI Corp. is expected to post earnings of $0.54 per share, indicating a change of -34.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.9% over the last 30 days.

RLI Corp. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.

Research Chief Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research