CNA Surety Corp CNA
Q4 2012 Earnings Call Transcript

Transcript Call Date 02/11/2013

Operator: Good day and welcome to the CNA Financial Corporation's Fourth Quarter and Year End 2012 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. James Anderson, Senior Vice President and Head of Investor Relations. Please go ahead, sir.

James Anderson - SVP and Head of IR: Thank you, Shannon. Good morning, everyone and welcome to CNA's discussion of our 2012 fourth quarter financial results. With us on this morning's call are Tom Motamed, our Chairman and Chief Executive Officer; and Craig Mense, our Chief Financial Officer. Following Tom's and Craig's remarks about the quarter and annual results, we will open it up for your questions.

Before turning it over to Tom, I would like to advise everyone that during this call there may be forward-looking statements made and references to non-GAAP financial measures. Any forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from the statements made during the call today. Information concerning those risks is contained in the earnings release and in CNA's most recent 10-K and 10-Q on file with the SEC.

In addition, the forward-looking statements speak only as of today, Monday, February 11, 2013. CNA expressly disclaims any obligation to update or revise any forward-looking statements made during this call. Regarding non-GAAP measures, reconciliations to the most comparable GAAP measures have also been provided in our most recent 10-K and 10-Q, as well as in the financial supplement released today. This call is being recorded and webcast. During the next week, the call may be accessed on CNA's website.

With that, I will turn the call over to CNA's Chairman and CEO, Tom Motamed.

Thomas F. Motamed - Chairman and CEO: Thank you, James. Good morning, everyone, and thank you for joining us today. Today CNA reported a fourth quarter net operating loss of $11 million and a net loss of $9 million, as compared with net operating income of $192 million and net income of $193 million in the fourth quarter of 2011. Storm Sandy had a $190 million after-tax impact on CNAs fourth quarter results, including reinstatement premiums. This compares to $11 million impact from catastrophes in the prior year period. The Sandy loss, while a significant event for us was not oversized given our market share in that region.

For the year, net operating income was $587 million and net income was $628 million as compared with a net operating income of $610 million and net income of $612 million in 2011. The 2012 full-year impact of catastrophes including reinstatement premiums was $217 million after-tax as compared with $144 million in 2011. We have been hearing for years that the Northeast was due for a major event and now we've had one. Loss estimates of as much as $25 billion put storm Sandy among the top five U.S. catastrophes on record. Numbers alone do not do justice to the devastation across the region nor do the courage of first responders and the resilience of those who are putting their lives back together as we speak. I am extremely proud of the CNA claim team, their tireless efforts on behalf of our policies and producers exemplifies CNA at its best.

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