NU Online News Service, Aug. 7, 2003, 5:38 p.m. EDT – CNA Financial Corp., Chicago, took a beating from rating agencies today because of an announcement that the company will have to beef up property-casualty insurance reserves.
But the company produced higher profits in the second quarter, despite a drop in revenue.
The company is reporting $70 million in net income for the quarter on $3.1 billion in revenue, compared with $31 million in net income on $3.3 billion in revenue for the second quarter of 2002.
The group benefits operation is reporting $39 million in net income on $329 million in premium revenue, compared with $7 million in net income on $820 million in revenue. CNA notes that revenue at the group benefits unit was down mainly because of the loss of one large group benefits contract.
The individual life unit is reporting $35 million in net income for the latest quarter on $263 million in revenue, up from a net loss of $8 million on $234 million in revenue.
CNA also has confirmed an earlier announcement that it will be reducing out new sales of individual long term care insurance because of worries about problems with unexpectedly high morbidity rates.