CNA FINANCIAL CORP (Form: 8-K, Received: 02/07/2022 08:41:53)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) February 7, 2022

CNA FINANCIAL CORPORATION


(Exact name of registrant as specified in its charter)

Delaware

1-5823

36-6169860

(State or other jurisdiction

(Commission

(IRS Employer

of incorporation)

File Number)

Identification No.)

151 N. Franklin

Chicago, IL 60606

(Address of principal executive offices) (Zip Code)

(312) 822-5000

(Registrant's telephone number, including area code)


NOT APPLICABLE
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, Par value $2.50

"CNA"

New York Stock Exchange

Chicago Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On February 7, 2022, the registrant issued a press release and posted on its website (www.cna.com) a financial supplement providing information on its results of operations for the fourth quarter and year ended December 31, 2021. The press release is furnished as Exhibit 99.1 and the financial supplement is furnished as Exhibit 99.2 to this Form 8-K.

The information under Item 2.02 and in Exhibits 99.1 and 99.2 in this Current Report is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information under Item 2.02 and in Exhibits 99.1 and 99.2 in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits:

See Exhibit Index.

EXHIBIT INDEX


Exhibit No.						Description
99.1						CNA Financial Corporation press release, issued February 7, 2022, providing information on the fourth quarter and year ended December 31, 2021 results of operations.

99.2						CNA Financial Corporation financial supplement, posted on its website February 7, 2022, providing supplemental financial information on the fourth quarter and year ended December 31, 2021.

104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		CNA Financial Corporation
		(Registrant)

Date: February 7, 2022	By	/s/ Larry Haefner
		(Signature)
		Larry Haefner Interim Chief Financial Officer

FOR IMMEDIATE RELEASE

CNA FINANCIAL ANNOUNCES

Q4 2021 NET INCOME OF $0.98 PER SHARE AND CORE INCOME OF $0.97 PER SHARE
FULL YEAR 2021 NET INCOME OF $4.41 PER SHARE AND RECORD CORE INCOME OF $4.06 PER SHARE

SPECIAL DIVIDEND OF $2.00 PER SHARE

Fourth Quarter

•Net income was $266 million; core income of $265 million, includes a non-economic charge related to asbestos and environmental pollution of $48 million after-tax.

•P&C segments produced core income of $353 million, largely consistent with the prior year quarter. Higher catastrophe losses were offset by favorable non-catastrophe current accident year underwriting results.

•The P&C combined ratio was 92.9%, the lowest in five years, compared with 93.4% in the prior year quarter, including 2.0 points of catastrophe loss impact compared with 0.8 points in the prior year quarter.

•The underlying combined ratio was 91.2% compared with 92.6% in the prior year quarter. The underlying loss ratio was 60.1% compared with 60.4% in the prior year quarter and the expense ratio was 30.8% compared with 32.0% in the prior year quarter.

•Net catastrophe losses were $40 million pretax versus $14 million in the prior year quarter.

•P&C segments, excluding third party captives, generated gross written premium growth of 16% driven by rate and new business growth of 28%. Net written premium growth was 11% in the quarter.

•P&C written rate of +8% and earned rate of +10% for the quarter.

Full Year

•Net income was $1,202 million; core income was a record $1,106 million.

•The P&C combined ratio was 96.2%, the lowest in five years, compared with 100.1% in the prior year, including 5.1 points of catastrophe loss impact compared with 7.7% points in the prior year.

•The underlying combined ratio was a record low 91.4% compared with 93.1% in the prior year. The underlying loss ratio was 60.0% compared with 60.2% in the prior year and the expense ratio was 31.1% compared with 32.6% in the prior year.

•Net catastrophe losses were $397 million pretax versus $550 million in the prior year.

•P&C segments, excluding third party captives, generated gross written premium growth of 10% driven by rate and new business growth of 19%. Net written premium growth was 5% in the year.

•P&C written rate of +9% and earned rate of +11% for the year.

•Net investment income of $2,159 million pretax compared with $1,935 million in the prior year.

Shareholders' Equity

•Book value per share of $47.20; book value per share excluding AOCI of $46.02, a 10% increase from year-end 2020 adjusting for $2.27 of dividends per share.

•Increased quarterly dividend 5% to $0.40 per share; special dividend of $2.00 per share.

CHICAGO, February 7, 2022 --- CNA Financial Corporation (NYSE: CNA) today announced fourth quarter 2021 net income of $266 million, or $0.98 per share, versus $387 million, or $1.42 per share, in the prior year quarter. Net investment gains for the quarter were $1 million, versus $52 million in the prior year quarter. Core income for the quarter was $265 million, or $0.97 per share, versus $335 million, or $1.23 per share, in the prior year quarter. Net income for the full year 2021 was $1,202 million, or $4.41 per share, versus $690 million, or $2.53 per share, in the prior year. Net investment gains for the full year were $96 million, versus net investment losses of $45 million in the prior year. Core income for the full year 2021 was $1,106 million, or $4.06 per share, versus $735 million, or $2.70 per share, in the prior year.

Our Property & Casualty segments produced core income of $353 million for the fourth quarter of 2021, a decrease of $5 million compared to the prior year quarter primarily due to higher net catastrophe losses offset by improved non-catastrophe current accident year underwriting results. Property & Casualty segments, excluding third party captives, generated gross written premium growth of 16% and net written premium growth of 11%, led by strong written rate increases of 8% and new business growth of 28%.

Our Life & Group segment produced core income of $6 million for the fourth quarter of 2021, a decrease of $20 million compared to the prior year quarter. Our Corporate & Other segment produced a core loss of $94 million for the fourth quarter of 2021, an increase of $45 million compared to the prior year quarter driven by adverse development in legacy mass tort exposures, lower net investment income and a higher non-economic charge related to asbestos & environmental pollution.

CNA Financial declared a quarterly dividend of $0.40 per share and a special dividend of $2.00 per share, payable March 10, 2022 to stockholders of record on February 22, 2022.


	Results for the Three Months Ended December 31				Results for the Year Ended December 31
($ millions, except per share data)	2021		2020		2021		2020
Net income	$	266	$	387	$	1,202	$	690
Core income (a)	265		335		1,106		735

Net income per diluted share	$	0.98	$	1.42	$	4.41	$	2.53
Core income per diluted share	0.97		1.23		4.06		2.70


	December 31, 2021		December 31, 2020
Book value per share	$	47.20	$	46.82
Book value per share excluding AOCI		46.02		43.86

(a)Management utilizes the core income (loss) financial measure to monitor the Company's operations. Please refer herein to the Reconciliation of GAAP Measures to Non-GAAP Measures section of this press release for further discussion of this non-GAAP measure.

"We had a very strong fourth quarter topping off an excellent year in our property and casualty business. Gross written premium growth ex captives was 16% in the quarter and 10% for the year. New business growth was 28% in the quarter and 19% for the full year. Rates were stable with the third quarter at 8%, and for the full year we achieved 9%. We achieved the lowest quarterly and annual combined ratio in five years at 92.9% and 96.2%, respectively. We produced record core income of $1,106 million for the year that also included a record low underlying combined ratio of 91.4%. Given our strong performance on growth, rate, and profitability, we are optimistic about our opportunities and remain well positioned to capitalize on the favorable market conditions we anticipate in 2022," said Dino E. Robusto, Chairman & Chief Executive Officer of CNA Financial Corporation.

Property & Casualty Operations


	Results for the Three Months Ended December 31						Results for the Year Ended December 31
($ millions)	2021			2020			2021			2020
Gross written premiums ex. 3rd party captives	$	2,513		$	2,169		$	9,303		$	8,422
GWP ex. 3rd party captives change (% year over year)	16		%				10		%
Net written premiums	$	2,166		$	1,952		$	7,921		$	7,566
NWP change (% year over year)	11		%				5		%
Net investment income	$	306		$	307		$	1,178		$	1,020
Core income	353			358			1,184			840

Loss ratio excluding catastrophes and development	60.1		%	60.4		%	60.0		%	60.2		%
Effect of catastrophe impacts	2.0			0.8			5.1			7.7
Effect of development-related items	(0.3)			—			(0.3)			(0.7)
Loss ratio	61.8		%	61.2		%	64.8		%	67.2		%

Expense ratio	30.8		%	32.0		%	31.1		%	32.6		%

Combined ratio	92.9		%	93.4		%	96.2		%	100.1		%
Combined ratio excluding catastrophes and development	91.2		%	92.6		%	91.4		%	93.1		%

•The fourth quarter underlying combined ratio improved 1.4 points as compared with the prior year quarter. The expense ratio improved 1.2 points driven by net earned premium growth of 8%. The underlying loss ratio improved 0.3 points.

•The fourth quarter combined ratio improved 0.5 points as compared with the prior year quarter. Net catastrophe losses were $40 million, or 2.0 points of the loss ratio in the quarter compared with $14 million, or 0.8 points of the loss ratio, for the prior year quarter. Favorable net prior period development improved the loss ratio by 0.3 in the current quarter compared with no impact on the loss ratio in the prior year quarter.

•In the fourth quarter, P&C segments, excluding third party captives, generated gross written premium growth of 16% and net written premium growth of 11%.

•For the full year, the underlying combined ratio improved 1.7 points as compared with the prior year. The expense ratio improved 1.5 points driven by net earned premium growth of 8%. The underlying loss ratio improved 0.2 points.

•For the full year, the combined ratio improved 3.9 points as compared with the prior year. Net catastrophe losses were $397 million, or 5.1 points of the loss ratio for the full year compared with $550 million, or 7.7 points of the loss ratio, for the prior year. Favorable net prior period development improved the loss ratio by 0.3 points in the current year compared with 0.7 points of improvement in the prior year.

•For the full year, P&C segments, excluding third party captives, generated gross written premium growth of 10% and net written premium growth of 5%.

Business Operating Highlights

Specialty


	Results for the Three Months Ended December 31						Results for the Year Ended December 31
($ millions)	2021			2020			2021			2020
Gross written premiums ex. 3rd party captives	$	1,016		$	883		$	3,672		$	3,296
GWP ex. 3rd party captives change (% year over year)	15		%				11		%
Net written premiums	$	875		$	809		$	3,225		$	3,040
NWP change (% year over year)	8		%				6		%
Core income	$	173		$	181		$	704		$	535

Loss ratio excluding catastrophes and development	59.1		%	60.0		%	59.1		%	59.9		%
Effect of catastrophe impacts	0.4			0.7			0.4			4.3
Effect of development-related items	(0.6)			(1.9)			(1.4)			(2.1)
Loss ratio	58.9		%	58.8		%	58.1		%	62.1		%

Expense ratio	30.9		%	30.4		%	30.5		%	31.3		%

Combined ratio	89.9		%	89.4		%	88.7		%	93.5		%
Combined ratio excluding catastrophes and development	90.1		%	90.6		%	89.7		%	91.3		%

•The underlying combined ratio improved 0.5 points for the fourth quarter of 2021 as compared with the prior year quarter primarily driven by a 0.9 point improvement in the underlying loss ratio. This was partially offset by a 0.5 point increase in the expense ratio driven by higher acquisition costs.

•The combined ratio increased 0.5 points for the fourth quarter of 2021 as compared with the prior year quarter. Favorable net prior period development improved the loss ratio by 0.6 points in the quarter compared with 1.9 points of improvement in the prior year quarter.

•Gross written premiums, excluding third party captives, grew 15% and net written premiums grew 8% for the fourth quarter of 2021.

Commercial


	Results for the Three Months Ended December 31						Results for the Year Ended December 31
($ millions)	2021			2020			2021			2020
Gross written premiums ex. 3rd party captives	$	1,158		$	975		$	4,334		$	3,993
GWP ex. 3rd party captives change (% year over year)	19		%				9		%
Net written premiums	$	973		$	862		$	3,595		$	3,565
NWP change (% year over year)	13		%				1		%
Core income	$	161		$	154		$	394		$	267

Loss ratio excluding catastrophes and development	61.4		%	60.7		%	61.0		%	60.4		%
Effect of catastrophe impacts	2.9			0.5			10.0			10.7
Effect of development-related items	(0.2)			1.7			0.5			0.5
Loss ratio	64.1		%	62.9		%	71.5		%	71.6		%

Expense ratio	30.4		%	32.7		%	31.1		%	33.0		%

Combined ratio	94.9		%	95.8		%	103.1		%	105.1		%
Combined ratio excluding catastrophes and development	92.2		%	93.6		%	92.6		%	93.9		%

•The underlying combined ratio improved 1.4 points for the fourth quarter of 2021 as compared with the prior year quarter. The expense ratio improved 2.3 points driven by net earned premium growth of 8% and lower acquisition costs. This was partially offset by a 0.7 point increase in the underlying loss ratio.

•The combined ratio improved 0.9 points for the fourth quarter of 2021 as compared with the prior year quarter. Net catastrophe losses were $26 million, or 2.9 points of the loss ratio in the fourth quarter of 2021 compared with $4 million, or 0.5 points of the loss ratio, for the prior year quarter. Favorable net prior period development improved the loss ratio by 0.2 points in the quarter compared with 1.7 points of unfavorable development increasing the loss ratio in the prior year quarter.

•Gross written premiums, excluding third party captives, grew 19% and net written premiums grew 13% for the fourth quarter of 2021.

International


	Results for the Three Months Ended December 31						Results for the Year Ended December 31
($ millions)	2021			2020			2021			2020
Gross written premiums	$	339		$	311		$	1,297		$	1,133
GWP change (% year over year)	9		%				14		%
Net written premiums	$	318		$	281		$	1,101		$	961
NWP change (% year over year)	13		%				15		%
Core income	$	19		$	23		$	86		$	38

Loss ratio excluding catastrophes and development	58.5		%	60.1		%	59.0		%	60.1		%
Effect of catastrophe impacts	4.1			2.1			2.6			7.1
Effect of development-related items	(0.2)			(0.3)			0.1			(0.3)
Loss ratio	62.4		%	61.9		%	61.7		%	66.9		%

Expense ratio	32.4		%	35.0		%	33.1		%	35.5		%

Combined ratio	94.8		%	96.9		%	94.8		%	102.4		%
Combined ratio excluding catastrophes and development	90.9		%	95.1		%	92.1		%	95.6		%

•The underlying combined ratio improved 4.2 points for the fourth quarter of 2021 as compared with the prior year quarter. The expense ratio improved 2.6 points driven by net earned premium growth of 11% and lower acquisition costs. The underlying loss ratio improved 1.6 points.

•The combined ratio improved 2.1 points for the fourth quarter of 2021 as compared with the prior year quarter. Net catastrophe losses were $11 million, or 4.1 points of the loss ratio in the fourth quarter of 2021, compared with $5 million, 2.1 points of the loss ratio, for the prior year quarter.

•Gross written premiums grew 9%, or 7% excluding currency fluctuations, and net written premiums grew 13%, or 10% excluding currency fluctuations, for the fourth quarter of 2021.

Life & Group


	Results for the Three Months Ended December 31				Results for the Year Ended December 31
($ millions)	2021		2020		2021		2020
Net earned premiums	$	122	$	124	$	491	$	504
Net investment income	242		229		966		851
Core income (loss)	6		26		126		9

Core income decreased $20 million in 2021 as compared with the prior year quarter driven by unfavorable morbidity partially offset by higher net investment income.

Corporate & Other


	Results for the Three Months Ended December 31				Results for the Year Ended December 31
($ millions)	2021		2020		2021		2020
Net investment income	$	3	$	19	$	15	$	64
Interest expense	28		28		112		122
Core loss	(94)		(49)		(204)		(114)

Core loss increased $45 million for the fourth quarter of 2021 as compared with the prior year quarter. Results for the current quarter include a $16 million after-tax impact from unfavorable development related to legacy mass tort exposures in the current quarter compared with no development in the fourth quarter of 2020 and a decrease in net investment income. The application of retroactive reinsurance accounting to additional cessions to the A&EP Loss Portfolio Transfer in both periods resulted in after-tax non-economic charges of $48 million and $39 million in 2021 and 2020, respectively. The additional cessions in those periods were $138 million and $100 million, respectively.

Net Investment Income


	Results for the Three Months Ended December 31				Results for the Year Ended December 31
	2021		2020		2021		2020
Net investment income	$	551	$	555	$	2,159	$	1,935

Net investment income decreased $4 million for the fourth quarter of 2021 as compared with the prior year quarter, while net investment income increased $224 million as compared with the prior year.

About the Company

CNA is one of the largest U.S. commercial property and casualty insurance companies. Backed by more than 120 years of experience, CNA provides a broad range of standard and specialized insurance products and services for businesses and professionals in the U.S., Canada and Europe. For more information, please visit CNA at www.cna.com.

Contact


Media:						Analysts:
Cara McCall, 312-822-1309						Amy C. Adams, 312-822-5533

Conference Call and Webcast/Presentation Information

A conference call for investors and the professional investment community will be held at 8:00 a.m. (CT) today. On the conference call will be Dino E. Robusto, Chairman and Chief Executive Officer of CNA Financial Corporation, Larry Haefner, Interim Chief Financial Officer of CNA Financial Corporation and other members of senior management. Participants can access the call by dialing (800) 289-0571, or for international callers, +1 (720) 543-0206. The call will also be broadcast live on the internet and may be accessed from the Investor Relations page of the CNA website (www.cna.com). A presentation will be posted and available on the CNA website and will provide additional insight into the results.

The call is available to the media, but questions will be restricted to investors and the professional investment community. An online replay will be available on CNA's website following the call. Financial supplement information related to the results is available on the investor relations pages of the CNA website or by contacting investor.relations@cna.com.

Definition of Reported Segments

•Specialty provides management and professional liability and other coverages through property and casualty products and services using a network of brokers, independent agencies and managing general underwriters.

•Commercial works with a network of brokers and independent agents to market a broad range of property and casualty insurance products and services to small, middle-market and large businesses.

•International underwrites property and casualty coverages on a global basis through two insurance companies based in the U.K. and Luxembourg, a branch operation in Canada as well as through our Lloyd's Syndicate.

•Life & Group primarily includes the results of the individual and group long term care businesses that are in run off.

•Corporate & Other primarily includes certain corporate expenses, including interest on corporate debt, and the results of certain property and casualty business in run-off, including CNA Re, asbestos and environmental pollution (A&EP), excess workers' compensation and legacy mass tort.

Financial Measures

Management utilizes the following metrics in their evaluation of the Property & Casualty Operations. These ratios are calculated using financial results prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).

•Loss ratio is the percentage of net incurred claim and claim adjustment expenses to net earned premiums.

•Underlying loss ratio represents the loss ratio excluding catastrophes and development.

•Expense ratio is the percentage of insurance underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums.

•Dividend ratio is the ratio of policyholders' dividends incurred to net earned premiums.

•Combined ratio is the sum of the loss, expense and dividend ratios.

•Underlying combined ratio is the sum of the underlying loss, expense and dividend ratios.

•Renewal premium change represents the estimated change in average premium on policies that renew, including rate and exposure changes.

•Rate represents the average change in price on policies that renew excluding exposure change. For certain products within Small Business, where quantifiable, rate includes the influence of new business as well.

•Retention represents the percentage of premium dollars renewed in comparison to the expiring premium dollars from policies available to renew.

•New business represents premiums from policies written with new customers and additional policies written with existing customers.

Gross written premiums ex. 3rd party captives represents gross written premiums excluding business which is ceded to third party captives, including business related to large warranty programs.

The Company's investment portfolio is monitored by management through analysis of various factors including unrealized gains and losses on securities, portfolio duration and exposure to market and credit risk.

Reconciliation of GAAP Measures to Non-GAAP Measures

This press release also contains financial measures that are not in accordance with GAAP. Management utilizes these financial measures to monitor the Company's insurance operations and investment portfolio. The Company believes the presentation of these measures provides investors with a better understanding of the significant factors that comprise the Company's operating performance. Reconciliations of these measures to the most comparable GAAP measures follow below.

Reconciliation of Net Income (Loss) to Core Income (Loss)

Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of net investment gains or losses and any cumulative effects of changes in accounting guidance. The calculation of core income (loss) excludes net investment gains or losses because net investment gains or losses are generally driven by economic factors that are not necessarily reflective of our primary operations. Management monitors core income (loss) for each business segment to assess segment performance. Presentation of consolidated core income (loss) is deemed to be a non-GAAP financial measure.


	Results for the Three Months Ended December 31				Results for the Year Ended December 31
($ millions)	2021		2020		2021		2020
Net income	$	266	$	387	$	1,202	$	690
Less: Net investment gains (losses)	1		52		96		(45)
Core income	$	265	$	335	$	1,106	$	735

Reconciliation of Net Income (Loss) per Diluted Share to Core Income (Loss) per Diluted Share

Core income (loss) per diluted share provides management and investors with a valuable measure of the Company's operating performance for the same reasons applicable to its underlying measure, core income (loss). Core income (loss) per diluted share is core income (loss) on a per diluted share basis.


	Results for the Three Months Ended December 31				Results for the Year Ended December 31
	2021		2020		2021		2020
Net income per diluted share	$	0.98	$	1.42	$	4.41	$	2.53
Less: Net investment gains (losses)	0.01		0.19		0.35		(0.17)
Core income per diluted share	$	0.97	$	1.23	$	4.06	$	2.70

Reconciliation of Book Value per Share to Book Value per Share Excluding AOCI

Book value per share excluding AOCI allows management and investors to analyze the amount of the Company's net worth primarily attributable to the Company's business operations. The Company believes this measurement is useful as it reduces the effect of items that can fluctuate significantly from period to period, primarily based on changes in interest rates.


	December 31, 2021		December 31, 2020
Book value per share	$	47.20	$	46.82
Less: Per share impact of AOCI	1.18		2.96
Book value per share excluding AOCI	$	46.02	$	43.86

Calculation of Return on Equity and Core Return on Equity

Core return on equity provides management and investors with a measure of how effectively the Company is investing the portion of the Company's net worth that is primarily attributable to its business operations.


	Results for the Three Months Ended December 31						Results for the Year Ended December 31
($ millions)	2021			2020			2021			2020
Annualized net income	$	1,067		$	1,546		$	1,202		$	690
Average stockholders' equity including AOCI (a)	12,637			12,364			12,658			12,461
Return on equity	8.4		%	12.5		%	9.5		%	5.5		%

Annualized core income	$	1,060		$	1,340		$	1,106		$	735
Average stockholders' equity excluding AOCI (a)	12,403			11,757			12,196			12,033
Core return on equity	8.5		%	11.4		%	9.1		%	6.1		%

(a)Average stockholders' equity is calculated using a simple average of the beginning and ending balances for the period.

For additional information, please refer to CNA's most recent 10-K on file with the Securities and Exchange Commission, as well as the financial supplement, available at www.cna.com.

Forward-Looking Statements

This press release includes statements that relate to anticipated future events (forward-looking statements) rather than actual present conditions or historical events. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and generally include words such as “believes,” “expects,” “intends,” “anticipates,” “estimates” and similar expressions. Forward-looking statements, by their nature, are subject to a variety of inherent risks and uncertainties that could cause actual results to differ materially from the results projected. Many of these risks and uncertainties cannot be controlled by CNA. For a detailed description of these risks and uncertainties please refer to CNA’s filings with the Securities and Exchange Commission, available at www.cna.com.

Any forward-looking statements made in this press release are made by CNA as of the date of this press release. Further, CNA does not have any obligation to update or revise any forward-looking statement contained in this press release, even if CNA’s expectations or any related events, conditions or circumstances change.

Any descriptions of coverage under CNA policies or programs in this press release are provided for convenience only and are not to be relied upon with respect to questions of coverage, exclusions or limitations. With regard to all such matters, the terms and provisions of relevant insurance policies are primary and controlling. In addition, please note that all coverages may not be available in all states.

“CNA" is a registered trademark of CNA Financial Corporation. Certain CNA Financial Corporation subsidiaries use the "CNA" trademark in connection with insurance underwriting and claims activities. Copyright © 2022 CNA. All rights reserved.

# # #

CNA Financial Corporation

Supplemental Financial Information

December 31, 2021

This report is for informational purposes only and includes consolidated financial statements and financial exhibits that are unaudited. This report should be read in conjunction with documents filed with the U.S. Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Table of Contents


			Page
Consolidated Results
Statements of Operations			1
Components of Income (Loss), Per Share Data and Return on Equity			2
Selected Balance Sheet Data and Statements of Cash Flows Data			3
Results of Operations
Property & Casualty			4
Specialty			5
Commercial			6
International			7
Life & Group			8
Corporate & Other			9
Investment Information
Investment Summary - Consolidated			10
Investment Summary - Property & Casualty and Corporate & Other			11
Investment Summary - Life & Group			12
Investments - Fixed Maturity Securities by Credit Rating			13
Components of Net Investment Income			14
Other
Claim & Claim Adjustment Expense Reserve Rollforward			15
Life & Group Policyholder Reserves			16

Definitions and Presentation			17

Statements of Operations


Periods ended December 31	Three Months						Twelve Months
(In millions)	2021		2020		Change		2021		2020		Change
Revenues:
Net earned premiums	$	2,119	$	1,977	7	%	$	8,175	$	7,649	7	%
Net investment income	551		555		(1)		2,159		1,935		12
Net investment gains (losses)	3		66				120		(54)
Non-insurance warranty revenue	376		326				1,430		1,252
Other revenues	5		7				24		26
Total revenues	3,054		2,931		4		11,908		10,808		10
Claims, Benefits and Expenses:
Insurance claims and policyholders' benefits	1,665		1,487				6,349		6,170
Amortization of deferred acquisition costs	359		364				1,443		1,410
Non-insurance warranty expense	355		300				1,328		1,159
Other operating expenses	317		274				1,191		1,126
Interest	28		28				113		122
Total claims, benefits and expenses	2,724		2,453		(11)		10,424		9,987		(4)
Income (loss) before income tax	330		478				1,484		821
Income tax (expense) benefit	(64)		(91)				(282)		(131)
Net income (loss)	$	266	$	387	(31)	%	$	1,202	$	690	74	%

Components of Income (Loss), Per Share Data and Return on Equity


Periods ended December 31	Three Months						Twelve Months
(In millions, except per share data)	2021			2020			2021			2020
Components of Income (Loss)
Core income (loss)	$	265		$	335		$	1,106		$	735
Net investment gains (losses)	1			52			96			(45)
Net income (loss)	$	266		$	387		$	1,202		$	690

Diluted Earnings (Loss) Per Common Share
Core income (loss)	$	0.97		$	1.23		$	4.06		$	2.70
Net investment gains (losses)	0.01			0.19			0.35			(0.17)
Diluted earnings (loss) per share	$	0.98		$	1.42		$	4.41		$	2.53

Weighted Average Outstanding Common Stock and Common Stock Equivalents
Basic	271.7			271.7			271.8			271.6
Diluted	272.9			272.6			272.8			272.4

Return on Equity
Net income (loss) (1)	8.4		%	12.5		%	9.5		%	5.5		%
Core income (loss) (2)	8.5			11.4			9.1			6.1

(1) Annualized net income (loss) divided by the average stockholders' equity including accumulated other comprehensive income (loss) (AOCI) for the period. Average equity including AOCI is calculated using a simple average of the beginning and ending balances for the period.

(2) Annualized core income (loss) divided by the average stockholders' equity excluding AOCI for the period. Average equity excluding AOCI is calculated using a simple average of the beginning and ending balances for the period.

Selected Balance Sheet Data and Statements of Cash Flows Data


(In millions, except per share data)	December 31, 2021		December 31, 2020
Total investments	$	50,328	$	50,293
Reinsurance receivables, net of allowance for uncollectible receivables	5,463		4,457
Total assets	66,639		64,026
Insurance reserves	43,171		41,143
Debt	2,779		2,776
Total liabilities	53,830		51,319
Accumulated other comprehensive income (loss) (1)	320		803
Total stockholders' equity	12,809		12,707

Book value per common share	$	47.20	$	46.82
Book value per common share excluding AOCI	$	46.02	$	43.86

Outstanding shares of common stock (in millions of shares)	271.4		271.4

Statutory capital and surplus - Combined Continental Casualty Companies (2)	$	11,321	$	10,708


Three months ended December 31	2021		2020
Net cash flows provided (used) by operating activities	$	643	$	367
Net cash flows provided (used) by investing activities	(631)		(298)
Net cash flows provided (used) by financing activities	(103)		(101)
Net cash flows provided (used) by operating, investing and financing activities	$	(91)	$	(32)


Twelve months ended December 31	2021		2020
Net cash flows provided (used) by operating activities	$	1,997	$	1,775
Net cash flows provided (used) by investing activities	(1,228)		(705)
Net cash flows provided (used) by financing activities	(648)		(902)
Net cash flows provided (used) by operating, investing and financing activities	$	121	$	168

(1) As of December 31, 2021 and 2020, the net unrealized gains on investments included in AOCI were net of after-tax Shadow Adjustments of $2,477 million and $2,773 million. To the extent that unrealized gains on fixed income securities supporting certain products within the Life & Group segment would result in a premium deficiency if realized, an increase in Insurance reserves are recorded, net of tax, as a reduction of net unrealized gains through Other comprehensive income (loss) (Shadow Adjustments).

(2) Statutory capital and surplus as of December 31, 2021 is preliminary.

Property & Casualty - Results of Operations


Periods ended December 31	Three Months								Twelve Months
(In millions)	2021			2020			Change		2021			2020			Change
Gross written premiums	$	3,515		$	3,143		12	%	$	13,407		$	12,399		8	%
Gross written premiums ex. 3rd party captives	2,513			2,169			16		9,303			8,422			10
Net written premiums	2,166			1,952			11		7,921			7,566			5

Net earned premiums	1,997			1,853			8		7,685			7,146			8
Net investment income	306			307					1,178			1,020
Non-insurance warranty revenue	376			326					1,430			1,252
Other revenues	5			7					24			26
Total operating revenues	2,684			2,493			8		10,317			9,444			9
Insurance claims and policyholders' benefits	1,239			1,134					5,001			4,817
Amortization of deferred acquisition costs	359			364					1,443			1,410
Non-insurance warranty expense	355			300					1,328			1,159
Other insurance related expenses	257			229					951			922
Other expenses	23			12					83			77
Total claims, benefits and expenses	2,233			2,039			(10)		8,806			8,385			(5)
Core income (loss) before income tax	451			454					1,511			1,059
Income tax (expense) benefit on core income (loss)	(98)			(96)					(327)			(219)
Core income (loss)	$	353		$	358		(1)	%	$	1,184		$	840		41	%

Other Performance Metrics
Underwriting gain (loss)	$	142		$	126		13	%	$	290		$	(3)		N/M	%

Loss & LAE ratio	61.8		%	61.2		%	(0.6)	pts	64.8		%	67.2		%	2.4	pts
Expense ratio	30.8			32.0			1.2		31.1			32.6			1.5
Dividend ratio	0.3			0.2			(0.1)		0.3			0.3			—
Combined ratio	92.9		%	93.4		%	0.5	pts	96.2		%	100.1		%	3.9	pts
Combined ratio excluding catastrophes and development	91.2		%	92.6		%	1.4	pts	91.4		%	93.1		%	1.7	pts

Net accident year catastrophe losses incurred	$	40		$	14				$	397		$	550
Effect on loss & LAE ratio	2.0		%	0.8		%	(1.2)	pts	5.1		%	7.7		%	2.6	pts

Net prior year development and other: (favorable) / unfavorable	$	(5)		$	5				$	(22)		$	(39)
Effect on loss & LAE ratio	(0.3)		%	—		%	0.3	pts	(0.3)		%	(0.7)		%	(0.4)	pts

Rate	8		%	13		%	(5)	pts	9		%	11		%	(2)	pts
Renewal premium change	10		%	12		%	(2)	pts	10		%	11		%	(1)	pts
Retention	83		%	85		%	(2)	pts	82		%	83		%	(1)	pts
New business	$	478		$	372		28	%	$	1,667		$	1,395		19	%

Specialty - Results of Operations


Periods ended December 31	Three Months								Twelve Months
(In millions)	2021			2020			Change		2021			2020			Change
Gross written premiums	$	2,015		$	1,849		9	%	$	7,665		$	7,180		7	%
Gross written premiums ex. 3rd party captives	1,016			883			15		3,672			3,296			11
Net written premiums	875			809			8		3,225			3,040			6

Net earned premiums	806			759			6		3,076			2,883			7
Net investment income	130			134					497			449
Non-insurance warranty revenue	376			326					1,430			1,252
Other revenues	—			—					1			1
Total operating revenues	1,312			1,219			8		5,004			4,585			9
Insurance claims and policyholders' benefits	476			447					1,790			1,795
Amortization of deferred acquisition costs	165			159					643			621
Non-insurance warranty expense	355			300					1,328			1,159
Other insurance related expenses	84			72					296			280
Other expenses	11			13					47			50
Total claims, benefits and expenses	1,091			991			(10)		4,104			3,905			(5)
Core income (loss) before income tax	221			228					900			680
Income tax (expense) benefit on core income (loss)	(48)			(47)					(196)			(145)
Core income (loss)	$	173		$	181		(4)	%	$	704		$	535		32	%

Other Performance Metrics
Underwriting gain (loss)	$	81		$	81		—	%	$	347		$	187		86	%

Loss & LAE ratio	58.9		%	58.8		%	(0.1)	pts	58.1		%	62.1		%	4.0	pts
Expense ratio	30.9			30.4			(0.5)		30.5			31.3			0.8
Dividend ratio	0.1			0.2			0.1		0.1			0.1			—
Combined ratio	89.9		%	89.4		%	(0.5)	pts	88.7		%	93.5		%	4.8	pts
Combined ratio excluding catastrophes and development	90.1		%	90.6		%	0.5	pts	89.7		%	91.3		%	1.6	pts

Net accident year catastrophe losses incurred	$	3		$	5				$	12		$	125
Effect on loss & LAE ratio	0.4		%	0.7		%	0.3	pts	0.4		%	4.3		%	3.9	pts

Net prior year development and other: (favorable) / unfavorable	$	(5)		$	(14)				$	(43)		$	(59)
Effect on loss & LAE ratio	(0.6)		%	(1.9)		%	(1.3)	pts	(1.4)		%	(2.1)		%	(0.7)	pts

Rate	11		%	13		%	(2)	pts	11		%	12		%	(1)	pts
Renewal premium change	11		%	14		%	(3)	pts	11		%	13		%	(2)	pts
Retention	83		%	87		%	(4)	pts	83		%	86		%	(3)	pts
New business	$	180		$	114		58	%	$	551		$	389		42	%

Commercial - Results of Operations


Periods ended December 31	Three Months								Twelve Months
(In millions)	2021			2020			Change		2021			2020			Change
Gross written premiums	$	1,161		$	983		18	%	$	4,445		$	4,086		9	%
Gross written premiums ex. 3rd party captives	1,158			975			19		4,334			3,993			9
Net written premiums	973			862			13		3,595			3,565			1

Net earned premiums	923			853			8		3,552			3,323			7
Net investment income	161			159					624			513
Other revenues	6			7					23			25
Total operating revenues	1,090			1,019			7		4,199			3,861			9
Insurance claims and policyholders' benefits	596			538					2,559			2,393
Amortization of deferred acquisition costs	145			151					594			592
Other insurance related expenses	135			127					511			506
Other expenses	10			9					38			34
Total claims, benefits and expenses	886			825			(7)		3,702			3,525			(5)
Core income (loss) before income tax	204			194					497			336
Income tax (expense) benefit on core income (loss)	(43)			(40)					(103)			(69)
Core income (loss)	$	161		$	154		5	%	$	394		$	267		48	%

Other Performance Metrics
Underwriting gain (loss)	$	47		$	37		27	%	$	(112)		$	(168)		33	%

Loss & LAE ratio	64.1		%	62.9		%	(1.2)	pts	71.5		%	71.6		%	0.1	pts
Expense ratio	30.4			32.7			2.3		31.1			33.0			1.9
Dividend ratio	0.4			0.2			(0.2)		0.5			0.5			—
Combined ratio	94.9		%	95.8		%	0.9	pts	103.1		%	105.1		%	2.0	pts
Combined ratio excluding catastrophes and development	92.2		%	93.6		%	1.4	pts	92.6		%	93.9		%	1.3	pts

Net accident year catastrophe losses incurred	$	26		$	4				$	358		$	358
Effect on loss & LAE ratio	2.9		%	0.5		%	(2.4)	pts	10.0		%	10.7		%	0.7	pts

Net prior year development and other: (favorable) / unfavorable	$	—		$	19				$	19		$	23
Effect on loss & LAE ratio	(0.2)		%	1.7		%	1.9	pts	0.5		%	0.5		%	—	pts

Rate	5		%	10		%	(5)	pts	7		%	10		%	(3)	pts
Renewal premium change	8		%	10		%	(2)	pts	8		%	10		%	(2)	pts
Retention	84		%	84		%	—	pts	82		%	84		%	(2)	pts
New business	$	228		$	197		16	%	$	843		$	761		11	%

International - Results of Operations


Periods ended December 31	Three Months								Twelve Months
(In millions)	2021			2020			Change		2021			2020			Change
Gross written premiums	$	339		$	311		9	%	$	1,297		$	1,133		14	%
Net written premiums	318			281			13		1,101			961			15
Net earned premiums	268			241			11		1,057			940			12
Net investment income	15			14					57			58
Other revenues	(1)			—					—			—
Total operating revenues	282			255			11		1,114			998			12
Insurance claims and policyholders' benefits	167			149					652			629
Amortization of deferred acquisition costs	49			54					206			197
Other insurance related expenses	38			30					144			136
Other expenses	2			(10)					(2)			(7)
Total claims, benefits and expenses	256			223			(15)		1,000			955			(5)
Core income (loss) before income tax	26			32					114			43
Income tax (expense) benefit on core income (loss)	(7)			(9)					(28)			(5)
Core income (loss)	$	19		$	23		(17)	%	$	86		$	38		126	%

Other Performance Metrics
Underwriting gain (loss)	$	14		$	8		75	%	$	55		$	(22)		N/M	%

Loss & LAE ratio	62.4		%	61.9		%	(0.5)	pts	61.7		%	66.9		%	5.2	pts
Expense ratio	32.4			35.0			2.6		33.1			35.5			2.4
Dividend ratio	—			—			—		—			—			—
Combined ratio	94.8		%	96.9		%	2.1	pts	94.8		%	102.4		%	7.6	pts
Combined ratio excluding catastrophes and development	90.9		%	95.1		%	4.2	pts	92.1		%	95.6		%	3.5	pts

Net accident year catastrophe losses incurred	$	11		$	5				$	27		$	67
Effect on loss & LAE ratio	4.1		%	2.1		%	(2.0)	pts	2.6		%	7.1		%	4.5	pts

Net prior year development and other: (favorable) / unfavorable	$	—		$	—				$	2		$	(3)
Effect on loss & LAE ratio	(0.2)		%	(0.3)		%	(0.1)	pts	0.1		%	(0.3)		%	(0.4)	pts

Rate	13		%	18		%	(5)	pts	13		%	14		%	(1)	pts
Renewal premium change	14		%	16		%	(2)	pts	13		%	12		%	1	pts
Retention	82		%	81		%	1	pts	78		%	73		%	5	pts
New business	$	70		$	61		15	%	$	274		$	245		12	%

Life & Group - Results of Operations


Periods ended December 31	Three Months				Twelve Months
(In millions)	2021		2020		2021		2020
Net earned premiums	$	122	$	124	$	491	$	504
Net investment income	242		229		966		851
Other revenues	1		—		—		—
Total operating revenues	365		353		1,457		1,355
Insurance claims and policyholders' benefits	340		303		1,239		1,286
Other insurance related expenses	26		30		103		109
Other expenses	5		1		10		7
Total claims, benefits and expenses	371		334		1,352		1,402
Core income (loss) before income tax	(6)		19		105		(47)
Income tax (expense) benefit on core income (loss)	12		7		21		56
Core income (loss)	$	6	$	26	$	126	$	9

Corporate & Other - Results of Operations


Periods ended December 31	Three Months				Twelve Months
(In millions)	2021		2020		2021		2020
Net earned premiums	$	—	$	—	$	(1)	$	(1)
Net investment income	3		19		15		64
Other revenues	(1)		—		—		—
Total operating revenues	2		19		14		63
Insurance claims and policyholders' benefits	86		50		109		67
Other insurance related expenses	—		—		8		(3)
Other expenses	34		30		149		136
Total claims, benefits and expenses	120		80		266		200
Core income (loss) before income tax	(118)		(61)		(252)		(137)
Income tax (expense) benefit on core income (loss)	24		12		48		23
Core income (loss)	$	(94)	$	(49)	$	(204)	$	(114)

Investment Summary - Consolidated


	December 31, 2021				September 30, 2021				December 31, 2020
(In millions)	Carrying Value		Net Unrealized Gains (Losses)		Carrying Value		Net Unrealized Gains (Losses)		Carrying Value		Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	24,139	$	2,699	$	24,532	$	2,925	$	24,352	$	3,556
States, municipalities and political subdivisions:
Tax-exempt	7,781		1,119		7,953		1,117		8,499		1,311
Taxable	4,162		466		4,026		478		3,093		552
Total states, municipalities and political subdivisions	11,943		1,585		11,979		1,595		11,592		1,863
Asset-backed:
RMBS	2,956		63		3,259		83		3,587		145
CMBS	2,031		44		2,116		69		1,967		51
Other ABS	2,598		44		2,497		72		2,251		72
Total asset-backed	7,585		151		7,872		224		7,805		268
U.S. Treasury and obligations of government-sponsored enterprises	130		(2)		136		(3)		338		(1)
Foreign government	583		13		538		17		544		32
Redeemable preferred stock	—		—		12		—		—		—
Total fixed maturity securities	44,380		4,446		45,069		4,758		44,631		5,718
Equities:
Common stock	233		—		228		—		195		—
Non-redeemable preferred stock	802		—		817		—		797		—
Total equities	1,035		—		1,045		—		992		—
Limited partnership investments	1,859		—		1,874		—		1,619		—
Other invested assets	91		—		82		—		76		—
Mortgage loans	973		—		1,031		—		1,068		—
Short term investments	1,990		—		1,135		1		1,907		—
Total investments	$	50,328	$	4,446	$	50,236	$	4,759	$	50,293	$	5,718

Net receivable/(payable) on investment activity	$	201			$	(70)			$	22

Effective duration (in years)	6.6				6.7				6.3
Weighted average rating	A				A				A

RMBS - Residential mortgage-backed securities

CMBS - Commercial mortgage-backed securities

Other ABS - Other asset-backed securities

Investment Summary - Property & Casualty and Corporate & Other


	December 31, 2021				September 30, 2021				December 31, 2020
(In millions)	Carrying Value		Net Unrealized Gains (Losses)		Carrying Value		Net Unrealized Gains (Losses)		Carrying Value		Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	14,897	$	713	$	15,377	$	924	$	15,560	$	1,348
States, municipalities and political subdivisions:
Tax-exempt	1,604		92		1,625		83		1,711		114
Taxable	2,369		69		2,225		73		1,286		110
Total states, municipalities and political subdivisions	3,973		161		3,850		156		2,997		224
Asset-backed:
RMBS	2,899		60		3,198		80		3,507		140
CMBS	1,955		42		2,013		66		1,879		46
Other ABS	2,326		31		2,259		55		2,056		52
Total asset-backed	7,180		133		7,470		201		7,442		238
U.S. Treasury and obligations of government-sponsored enterprises	109		(2)		116		(2)		327		(1)
Foreign government	545		11		510		16		529		29
Redeemable preferred stock	—		—		12		—		—		—
Total fixed maturity securities	26,704		1,016		27,335		1,295		26,855		1,838
Equities:
Common stock	233		—		228		—		195		—
Non-redeemable preferred stock	179		—		179		—		202		—
Total equities	412		—		407		—		397		—
Limited partnership investments	1,029		—		1,037		—		896		—
Other invested assets	91		—		82		—		76		—
Mortgage loans	741		—		785		—		782		—
Short term investments	1,887		—		1,112		1		1,772		—
Total investments	$	30,864	$	1,016	$	30,758	$	1,296	$	30,778	$	1,838

Net receivable/(payable) on investment activity	$	145			$	(106)			$	10

Effective duration (in years)	4.9				5.1				4.5
Weighted average rating	A				A-				A

Investment Summary - Life & Group


	December 31, 2021				September 30, 2021				December 31, 2020
(In millions)	Carrying Value		Net Unrealized Gains (Losses)		Carrying Value		Net Unrealized Gains (Losses)		Carrying Value		Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	9,242	$	1,986	$	9,155	$	2,001	$	8,792	$	2,208
States, municipalities and political subdivisions:
Tax-exempt	6,177		1,027		6,328		1,034		6,788		1,197
Taxable	1,793		397		1,801		405		1,807		442
Total states, municipalities and political subdivisions	7,970		1,424		8,129		1,439		8,595		1,639
Asset-backed:
RMBS	57		3		61		3		80		5
CMBS	76		2		103		3		88		5
Other ABS	272		13		238		17		195		20
Total asset-backed	405		18		402		23		363		30
U.S. Treasury and obligations of government-sponsored enterprises	21		—		20		(1)		11		—
Foreign government	38		2		28		1		15		3
Redeemable preferred stock	—		—		—		—		—		—
Total fixed maturity securities	17,676		3,430		17,734		3,463		17,776		3,880
Equities:
Common stock	—		—		—		—		—		—
Non-redeemable preferred stock	623		—		638		—		595		—
Total equities	623		—		638		—		595		—
Limited partnership investments	830		—		837		—		723		—
Other invested assets	—		—		—		—		—		—
Mortgage loans	232		—		246		—		286		—
Short term investments	103		—		23		—		135		—
Total investments	$	19,464	$	3,430	$	19,478	$	3,463	$	19,515	$	3,880

Net receivable/(payable) on investment activity	$	56			$	36			$	12

Effective duration (in years)	9.2				9.3				9.2
Weighted average rating	A				A				A

Investments - Fixed Maturity Securities by Credit Rating


December 31, 2021	U.S. Government, Government agencies and Government-sponsored enterprises					AAA					AA					A					BBB					Non-investment grade					Total
(In millions)	Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)
Corporate and other bonds	$	—		$	—	$	32		$	—	$	481		$	43	$	5,414		$	624	$	16,254		$	1,953	$	1,958		$	79	$	24,139		$	2,699
States, municipalities and political subdivisions	—			—		2,870			345		5,920			742		2,606			441		534			56		13			1		11,943			1,585
Asset-backed:
RMBS	2,468			44		309			(2)		8			—		22			2		26			4		123			15		2,956			63
CMBS	2			—		328			14		830			32		279			4		430			(4)		162			(2)		2,031			44
Other ABS	—			—		86			—		146			1		1,077			12		1,183			33		106			(2)		2,598			44
Total asset-backed	2,470			44		723			12		984			33		1,378			18		1,639			33		391			11		7,585			151
U.S. Treasury and obligations of government-sponsored enterprises	130			(2)		—			—		—			—		—			—		—			—		—			—		130			(2)
Foreign government	—			—		159			3		280			5		113			4		31			1		—			—		583			13
Redeemable preferred stock	—			—		—			—		—			—		—			—		—			—		—			—		—			—
Total fixed maturity securities	$	2,600		$	42	$	3,784		$	360	$	7,665		$	823	$	9,511		$	1,087	$	18,458		$	2,043	$	2,362		$	91	$	44,380		$	4,446

Percentage of total fixed maturity securities	6		%			9		%			17		%			21		%			42		%			5		%			100		%

Components of Net Investment Income


	Consolidated
Periods ended December 31	Three Months						Twelve Months
(In millions)	2021			2020			2021			2020
Taxable fixed income securities	$	364		$	357		$	1,439		$	1,451
Tax-exempt fixed income securities	75			81			311			319
Total fixed income securities	439			438			1,750			1,770
Limited partnership and common stock investments	108			114			402			144
Other, net of investment expense	4			3			7			21
Net investment income	$	551		$	555		$	2,159		$	1,935

Effective income yield for fixed income securities portfolio	4.3		%	4.4		%	4.3		%	4.5		%
Limited partnership and common stock return	5.1			6.5			22.3			8.3


	Property & Casualty and Corporate & Other
Periods ended December 31	Three Months						Twelve Months
(In millions)	2021			2020			2021			2020
Taxable fixed income securities	$	226		$	221		$	892		$	904
Tax-exempt fixed income securities	11			12			48			34
Total fixed income securities	237			233			940			938
Limited partnership and common stock investments	68			89			240			119
Other, net of investment expense	4			4			13			27
Net investment income	$	309		$	326		$	1,193		$	1,084

Effective income yield for fixed income securities portfolio	3.6		%	3.7		%	3.7		%	3.9		%


	Life & Group
Periods ended December 31	Three Months						Twelve Months
(In millions)	2021			2020			2021			2020
Taxable fixed income securities	$	138		$	136		$	547		$	547
Tax-exempt fixed income securities	64			69			263			285
Total fixed income securities	202			205			810			832
Limited partnership and common stock investments	40			25			162			25
Other, net of investment expense	—			(1)			(6)			(6)
Net investment income	$	242		$	229		$	966		$	851

Effective income yield for fixed income securities portfolio	5.4		%	5.5		%	5.5		%	5.6		%

Claim & Claim Adjustment Expense Reserve Rollforward


Three months ended December 31, 2021 (In millions)	Specialty		Commercial		International		P&C Operations		Life & Group		Corporate & Other		Total Operations
Claim & claim adjustment expense reserves, beginning of period
Gross	$	6,293	$	8,856	$	2,251	$	17,400	$	3,703	$	2,729	$	23,832
Ceded	1,091		843		331		2,265		121		2,450		4,836
Net	5,202		8,013		1,920		15,135		3,582		279		18,996

Net incurred claim & claim adjustment expenses	475		592		167		1,234		300		25		1,559
Net claim & claim adjustment expense payments	(412)		(540)		(142)		(1,094)		(237)		(10)		(1,341)
Foreign currency translation adjustment and other	—		—		(5)		(5)		(4)		—		(9)

Claim & claim adjustment expense reserves, end of period
Net	5,265		8,065		1,940		15,270		3,641		294		19,205
Ceded	1,168		825		340		2,333		113		2,523		4,969
Gross	$	6,433	$	8,890	$	2,280	$	17,603	$	3,754	$	2,817	$	24,174


Twelve months ended December 31, 2021 (In millions)	Specialty		Commercial		International		P&C Operations		Life & Group		Corporate & Other		Total Operations
Claim & claim adjustment expense reserves, beginning of period
Gross	$	5,748	$	8,250	$	2,091	$	16,089	$	3,743	$	2,874	$	22,706
Ceded	850		775		269		1,894		128		1,983		4,005
Net	4,898		7,475		1,822		14,195		3,615		891		18,701

Net incurred claim & claim adjustment expenses	1,787		2,540		652		4,979		990		71		6,040
Net claim & claim adjustment expense payments	(1,420)		(1,950)		(492)		(3,862)		(946)		(36)		(4,844)
Reduction of net reserves due to Enstar Loss Portfolio Transfer	—		—		—		—		—		(632)		(632)
Foreign currency translation adjustment and other	—		—		(42)		(42)		(18)		—		(60)

Claim & claim adjustment expense reserves, end of period
Net	5,265		8,065		1,940		15,270		3,641		294		19,205
Ceded	1,168		825		340		2,333		113		2,523		4,969
Gross	$	6,433	$	8,890	$	2,280	$	17,603	$	3,754	$	2,817	$	24,174

Life & Group Policyholder Reserves


December 31, 2021
(In millions)	Claim and claim adjustment expenses		Future policy benefits		Total
Long term care	$	2,905	$	10,012	$	12,917
Structured settlement annuities and other	536		—		536
Total	3,441		10,012		13,453
Shadow adjustments	200		2,936		3,136
Ceded reserves	113		288		401
Total gross reserves	$	3,754	$	13,236	16,990


December 31, 2020
(In millions)	Claim and claim adjustment expenses		Future policy benefits		Total
Long term care	$	2,844	$	9,762	$	12,606
Structured settlement annuities and other	553		—		553
Total	3,397		9,762		13,159
Shadow adjustments	218		3,293		3,511
Ceded reserves	128		263		391
Total gross reserves	$	3,743	$	13,318	$	17,061

Definitions and Presentation

•Collectively, CNA Financial Corporation (CNAF) and its subsidiaries are referred to as CNA or the Company.

•P&C Operations includes Specialty, Commercial and International.

•Life & Group segment primarily includes the results of long term care businesses that are in run-off.

•Corporate & Other segment primarily includes certain corporate expenses including interest on corporate debt and the results of certain property and casualty business in run-off, including CNA Re and asbestos and environmental pollution. Intersegment eliminations are also included in this segment.

•Management uses the core income (loss) financial measure to monitor the Company’s operations. Please refer to Note O to the Consolidated Financial Statements within the December 31, 2021 Form 10-K for further discussion of this non-GAAP financial measure.

•Management uses underwriting results to monitor insurance operations. Underwriting results are pretax and are calculated as net earned premiums less total insurance expenses, which includes insurance claims and policyholders' benefits, amortization of deferred acquisition costs and other insurance related expenses.

•In the evaluation of the results of Specialty, Commercial and International, management uses the loss ratio, the expense ratio, the dividend ratio and the combined ratio. These ratios are calculated using financial results prepared in accordance with accounting principles generally accepted in the United States of America. The loss ratio is the percentage of net incurred claim and claim adjustment expenses to net earned premiums. The expense ratio is the percentage of insurance underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums. The dividend ratio is the ratio of policyholders' dividends incurred to net earned premiums. The combined ratio is the sum of the loss, expense and dividend ratios. In addition, management also utilizes renewal premium change, rate, retention and new business in evaluating operating trends. Renewal premium change represents the estimated change in average premium on policies that renew, including rate and exposure changes. Rate represents the average change in price on policies that renew excluding exposure change. For certain products within Small Business, where quantifiable, rate includes the influence of new business as well. Exposure represents the measure of risk used in the pricing of the insurance product. Retention represents the percentage of premium dollars renewed in comparison to the expiring premium dollars from policies available to renew. Rate, renewal premium change and retention presented for the prior year is updated to reflect subsequent activity on policies written in the period. New business represents premiums from policies written with new customers and additional policies written with existing customers.

•This financial supplement may also reference or contain financial measures that are not in accordance with GAAP. Management utilizes these financial measures to monitor the Company's insurance operations and investment portfolio. Core income, which is derived from certain income statement amounts, is used by management to monitor performance of the Company's insurance operations. The Company's investment portfolio is monitored by management through analysis of various factors including unrealized gains and losses on securities, portfolio duration and exposure to market and credit risk.

•Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of net investment gains or losses and any cumulative effects of changes in accounting guidance. The calculation of core income (loss) excludes net investment gains or losses because net investment gains or losses are generally driven by economic factors that are not necessarily reflective of our primary operations. Management monitors core income (loss) for each business segment to assess segment performance. Presentation of consolidated core income (loss) is deemed to be a non-GAAP financial measure. For reconciliations of non-GAAP measures to the most comparable GAAP measures and other information, please refer herein and/or to CNA's most recent 10-K on file with the Securities and Exchange Commission, as well as the press release, available at www.cna.com.

•Gross written premiums ex. 3rd party captives represents gross written premiums excluding business which is ceded to third party captives, including business related to large warranty programs.

•Pretax net prior year development and other includes the effects of interest accretion and change in allowance for uncollectible reinsurance and deductible amounts.

•Net investment income from fixed income securities, as presented, includes both fixed maturity securities and non-redeemable preferred stock.

•Certain immaterial differences are due to rounding.

•N/M = Not Meaningful