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What changed in CNA FINANCIAL CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CNA FINANCIAL CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+236 added−256 removedSource: 10-K (2025-02-11) vs 10-K (2024-02-06)

Top changes in CNA FINANCIAL CORP's 2024 10-K

236 paragraphs added · 256 removed · 210 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe believe this will facilitate our ability to continue to attract and retain a highly talented workforce. 4 Table of Contents Talent, Recruitment and Development We focus on attracting, developing and retaining top-tier talent to reflect the specialist nature of our business. We aim to continually build on the expertise of our workforce.
Biggest changeTalent, Recruitment and Development We focus on attracting, developing and retaining top-tier talent to reflect the specialist nature of our business. We aim to continually build on the expertise of our workforce. At entry levels, we have implemented trainee and internship programs and we continue to leverage relationships with colleges to attract new and diverse talent.
We also make available free of charge on or through our internet website at www.cna.com our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. 6 Table of Contents
We also make available free of charge on or through our internet website at www.cna.com our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. 5 Table of Contents
CNA's property and casualty and remaining life and group insurance operations are primarily conducted by Continental Casualty Company (CCC), The Continental Insurance Company, Western Surety Company, CNA Insurance Company Limited, Hardy Underwriting Bermuda Limited and its subsidiaries (Hardy), and CNA Insurance Company (Europe) S.A. Loews Corporation (Loews) owned approximately 92% of our outstanding common stock as of December 31, 2023.
CNA's property and casualty and remaining life and group insurance operations are primarily conducted by Continental Casualty Company (CCC), The Continental Insurance Company, Western Surety Company, CNA Insurance Company Limited, Hardy Underwriting Bermuda Limited and its subsidiaries (Hardy), and CNA Insurance Company (Europe) S.A. Loews Corporation (Loews) owned approximately 92% of our outstanding common stock as of December 31, 2024.
Alongside the GCC, the NAIC has also developed the Aggregation Method (AM) approach to assessing group capital as an alternative to the Insurance Capital Standard (ICS) developed by the IAIS. The AM is influenced by the GCC and calculated in a similar manner.
Alongside the GCC, the NAIC has also developed the Aggregation Method (AM) approach to assessing group capital as an alternative to the Insurance Capital Standard (ICS) developed by the IAIS. The AM is influenced by the GCC and calculated in a similar manner. In 2024, the IAIS concluded that the AM provides comparable outcomes to the ICS.
In addition, the U.S. and foreign regulatory environment in which we operate is continuously evolving, with both existing and prospective regulations that implicate aspects of our corporate governance, risk management practices, public disclosures, environmental, social and governance (ESG) related issues, artificial intelligence and cybersecurity. Human Capital As of December 31, 2023, we had approximately 6,300 employees.
In addition, the U.S. and foreign regulatory environment in which we operate is continuously evolving, with both existing and prospective regulations that implicate aspects of our corporate governance, public disclosures and risk management, climate change, artificial intelligence and cybersecurity practices. 4 Table of Contents Human Capital As of December 31, 2024, we had approximately 6,500 employees.
The GCC was adopted by the NAIC along with model legislative language and attendant regulations, which have been adopted in a number of U.S. states where IAIGs are domiciled, including Illinois.
While historically the U.S. regulatory regime was primarily based on legal entity regulation, the GCC quantifies risk across the insurance group. The GCC was adopted by the NAIC along with model legislative language and attendant regulations, which have been adopted in a number of U.S. states where IAIGs are domiciled, including Illinois.
We seek to create a culture of inclusion that engages our employees and offers them opportunities to learn, grow and achieve their career goals.
We seek to create a culture of inclusion that engages our employees and offers them opportunities to learn, grow and achieve their career goals. We believe this will facilitate our ability to continue to attract and retain a highly talented workforce.
Employee Benefits We offer comprehensive compensation and benefits packages to eligible employees including a 401k plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off and certain family assistance programs, including paid family leave, flexible work arrangements and surrogacy and adoption assistance plans.
Employee Benefits We offer comprehensive compensation and benefits packages to eligible employees including a 401k plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off and certain family assistance programs. We provide certain benefits to eligible employees that are geared toward enhancing physical, mental, financial and social health.
Our performance management cycle seeks to ensure that employees have goals and development plans refreshed at least annually and performance review conversations are held between managers and their direct reports throughout the annual performance period.
Our performance management cycle seeks to ensure that employees have goals and development plans refreshed regularly and performance review conversations are held between managers and their direct reports throughout the annual performance period. We believe that employing individuals with different backgrounds and experiences helps meet the diverse needs of our stakeholders.
We have implemented programs designed for our employees to grow their technical expertise, collaborate with one another and achieve their career goals. We offer a wide range of learning and development opportunities, including mentorship and reverse mentorship programs, apprenticeship and sponsorship programs, tuition reimbursement, technical training and specialized leadership development programs.
We offer a wide range of learning and development opportunities, including mentorship and reverse mentorship programs, apprenticeship and sponsorship programs, tuition reimbursement, technical training and specialized leadership development programs. CNA leaders engage regularly with our employees on their performance and professional development.
Our annual talent and succession planning process culminates in a review with leadership of key talent retention and promotion, as well as a review of our succession plans.
We gather employee feedback through pulse surveys and routine dialogue with our employee resource groups and leaders from across the enterprise. Our annual talent and succession planning process culminates in a review with leadership of key talent retention and promotion, as well as a review of our succession plans.
Regulation Outlook The IAIS has adopted a Common Framework (ComFrame) for the supervision of Internationally Active Insurance Groups (IAIGs), which is focused on the group-wide supervision of IAIGs, such as CNA. As part of ComFrame, the IAIS has developed a global capital standard that, if adopted in the U.S., would be applicable to U.S.-based IAIGs.
Regulation Outlook The IAIS has adopted a Common Framework (ComFrame) for the supervision of Internationally Active Insurance Groups (IAIGs), which is focused on the group-wide supervision of IAIGs, such as CNA. Elements of ComFrame have been incorporated into regulatory guidelines issued by the National Association of Insurance Commissioners (NAIC) for application by regulators in the U.S.
At entry levels, we have implemented trainee and internship programs and we continue to leverage relationships with colleges to attract new and diverse talent. We seek to promote the development of employees, both to optimize current performance and to develop skills for future career growth.
We seek to promote the development of employees, both to optimize current performance and to develop skills for future career growth. We have implemented programs designed for our employees to grow their technical expertise, collaborate with one another and achieve their career goals.
Certain elements of ComFrame were incorporated into regulatory guidelines issued by the National Association of Insurance Commissioners (NAIC) for application by regulators beginning in 2023. These additions were adopted for the purpose of streamlining group-wide supervision, further leveraging existing risk and solvency measures and applying them on a group-wide basis.
These additions were adopted for the purpose of streamlining group-wide supervision, further leveraging existing risk and solvency measures and applying them on a group-wide basis. The NAIC developed an approach to group capital regulation and solvency-monitoring activities using the Group Capital Calculation (GCC).
Our employees are encouraged to participate in a wide array of volunteer activities and we support their charitable giving by matching employee contributions to qualified nonprofit organizations. Available Information We file annual, quarterly and current reports, proxy statements and other documents with the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934 (Exchange Act).
These include a holistic well-being incentive program with resources for both employees and their families, employee mental health assistance programs, and stress management and resilience programs. Available Information We file annual, quarterly and current reports, proxy statements and other documents with the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934 (Exchange Act).
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The NAIC developed an approach to group capital regulation and solvency-monitoring activities using the Group Capital Calculation (GCC). While historically the U.S. regulatory regime was primarily based on legal entity regulation, the GCC quantifies risk across the insurance group.
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While the AM will undergo further refinement as a part of the implementation process, the finding of comparability by the IAIS represents recognition of existing U.S. solvency regulation.
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A decision by the IAIS on whether the AM provides comparable outcomes to the ICS is expected in 2024.
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CNA leaders engage regularly with our employees on their performance and professional development. We gather employee feedback through pulse surveys and routine dialogue with our employee resource groups and leaders from across the enterprise.
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We provide certain benefits to eligible employees that are geared toward enhancing physical, mental, financial and social health. These include a holistic well-being incentive program with resources for both employees and their families, employee mental health assistance programs, and stress management and resilience programs. CNA also offers remote working options and a hybrid-working environment for eligible employees.
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Diversity, Equity and Inclusion Diversity, Equity and Inclusion (DEI) is a strategic imperative. Our DEI Vision is to cultivate an inclusive culture grounded in equity that celebrates individuals’ differences, attracts diverse talent, and fosters an environment that enables employees to do their best work.
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To act on our DEI Vision, CNA has appointed senior leaders to an executive DEI Council, and our Chairman and CEO serves as the Executive Sponsor. The DEI Council works closely with internal DEI subject matter experts and with our eight employee resource groups to create and drive strategic DEI initiatives.
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Critical components of our DEI Vision include: • Skill building. CNA offers DEI learning programs to all employees. After expanding our focus on allyship and equity, we refreshed our new hire onboarding, manager training and leadership development programs, and launched interactive workshops designed to provide opportunities to learn and practice new skills. • Leadership training.
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CNA requires every people leader and officer to complete inclusive leadership training. We also provide additional networking and learning opportunities for leaders to support the critical role they play in creating an inclusive workplace culture. • Talent development.
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CNA has a talent sponsorship program that seeks to accelerate the development of high performing diverse employees, diversify our leadership ranks and broadly build inclusive leadership skills. In addition, we offer mentoring and reverse mentoring program opportunities to employees. • Representation. We seek to increase the representation of diverse talent throughout the organization.
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We monitor our representation of diverse talent and review our trends in relation to the labor market 5 Table of Contents and industry to understand how we can increase it. We also report this information regularly to our Board of Directors. • Partnerships.
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CNA has established new partnerships, and expanded several existing partnerships, with organizations whose DEI values and objectives align with our own. Through these partnerships, we uncover new sources of talent, support minority owned businesses, contribute to the development of students from underserved communities and provide opportunities for our employees to volunteer in their local communities. • Policies and benefits.
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We regularly review our workplace policies and employee benefits and seek to adapt them to the changing needs of our employees. We also have a corporate social responsibility strategy with a focus on four core areas: DEI, protecting the environment, science, technology, engineering and mathematics (STEM) education, and disaster preparedness and recovery.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

56 edited+7 added−6 removed96 unchanged
Biggest changeOur insurance subsidiaries, upon whom we depend for dividends in order to fund our corporate obligations, are limited by insurance regulators in their ability to pay dividends. We are a holding company and are dependent upon dividends, loans and other sources of cash from our subsidiaries in order to meet our obligations.
Biggest changeWe may be limited in our ability to raise significant amounts of capital on favorable terms or at all. Our insurance subsidiaries, upon whom we depend for dividends in order to fund our corporate obligations, are limited by insurance regulators in their ability to pay dividends.
Strategic Risks We face intense competition in our industry; we may be adversely affected by the cyclical nature of the property and casualty business and the evolving landscape of our distribution network. All aspects of the insurance industry are highly competitive and we must continuously allocate resources to refine and improve our insurance products and services to remain competitive.
Strategic Risks We face intense competition in our industry; we may be adversely affected by the cyclical nature of the property and casualty business and by the evolving landscape of our distribution network. All aspects of the insurance industry are highly competitive and we must continuously allocate resources to refine and improve our insurance products and services to remain competitive.
Our business is highly dependent upon our ability to perform, in an efficient and uninterrupted manner, through our employees or vendor relationships and using our and their facilities and systems, necessary business functions, such as internet support and 24-hour call centers, processing new and renewal business, providing customer service, processing and paying claims and other obligations and issuing financial statements.
Our business is highly dependent upon our ability to perform, in an efficient and uninterrupted manner, through our employees or vendor relationships and using our and their facilities and systems, necessary business functions, such as providing internet support and 24-hour call centers, processing new and renewal business, providing customer service, processing and paying claims and other obligations and issuing financial statements.
Our, or our vendors', facilities and systems could become unavailable, inoperable, or otherwise impaired from a variety of causes, including natural events, such as hurricanes, tornadoes, windstorms, earthquakes, severe winter weather and fires, or other events, such as explosions, terrorist attacks, computer security breaches or cyber-attacks, riots, hazardous material releases, medical epidemics or pandemics, utility outages, interruptions of data processing and storage systems or unavailability of communications facilities.
Our, or our vendors', facilities and systems could become unavailable, inoperable, or otherwise impaired from a variety of causes, including natural events, such as hurricanes, tornadoes, windstorms, earthquakes, severe winter weather and fires, or other events, such as explosions, terrorist attacks, computer security breaches or cyber-attacks, riots, hazardous material releases, medical epidemics or pandemics, utility outages, interruptions of data processing and storage systems or unavailability of communications facilities or systems.
Any significant breach in our data security infrastructure or our vendors’ facilities and systems could disrupt business, cause financial losses and damage our reputation, and insurance coverage may not be available for claims related to a breach.
Any significant breach in our data security infrastructure or our vendors’ facilities or systems could disrupt business, cause financial losses and damage our reputation, and insurance coverage may not be available for claims related to a breach.
We may suffer operational impairments and financial losses associated with transferring business to a new vendor, assisting a vendor with rectifying operational difficulties, failure by vendors to properly perform service functions or assuming previously outsourced operations ourselves.
We may suffer operational impairments and financial losses associated with failure by vendors to properly perform service functions, transferring business to a new vendor, assisting a vendor with rectifying operational difficulties or assuming previously outsourced operations ourselves.
State jurisdictions ensure compliance with such regulations through market conduct exams, which may result in losses to the extent non-compliance is ascertained, either as a result of failure to document transactions properly or failure to comply with internal guidelines, or otherwise.
State jurisdictions ensure compliance with such regulations through market conduct exams, which may result in losses to the extent non-compliance is ascertained, either as a result of failure to document transactions properly, failure to comply with internal guidelines or otherwise.
Catastrophe losses are an inevitable part of our business. Various events can cause catastrophe losses. These events can be natural or man-made, and may include hurricanes, tornadoes, windstorms, earthquakes, hail, severe winter weather, fires, floods, riots, strikes, civil unrest, cyber-attacks, pandemics and acts of terrorism. The frequency and severity of these catastrophe events are inherently unpredictable.
Catastrophe losses are an inevitable part of our business. Various events can cause catastrophe losses. These events can be natural or man-made, and may include hurricanes, tornadoes, windstorms, earthquakes, hail, severe winter weather, droughts, fires, floods, riots, strikes, civil unrest, cyber-attacks, pandemics and acts of terrorism. The frequency and severity of these catastrophe events are inherently unpredictable.
We have experienced, and may continue to experience, increased claim submissions and litigation related to denial of claims based on policy coverage or the facts of the claim, in certain lines of business that are implicated by the COVID-19 pandemic and mitigating actions taken by our customers and governmental authorities in response to its spread.
We have experienced, and may continue to experience, claim submissions and litigation related to denial of claims based on policy coverage or the facts of the claim, in certain lines of business that are implicated by the COVID-19 pandemic and mitigating actions taken by our customers and governmental authorities in response to its spread.
Our or our third-party service providers' controls may not be able to detect all possible circumstances of such noncompliant activity and the internal structures in place to prevent this activity may not be effective in all cases. Any losses relating to such non-compliant activity could adversely affect our business, results of operations and financial condition.
Our or our third-party service providers' controls may not be able to detect all possible circumstances of such noncompliant activity and the internal structures in place to prevent this activity may not be effective in all cases. Any losses relating to such non-compliant activity could materially adversely affect our business, results of operations and financial condition.
The risks relating to future breaches in our, or our vendors', data security infrastructure, including in connection with cyber incidents, could have a material adverse effect on our business, results of operations or financial condition or may result in operational impairments and financial losses, as well as significant harm to our reputation.
The risks relating to future breaches in our, or our vendors', data security infrastructure or systems, including in connection with cyber incidents, could have a material adverse effect on our business, results of operations or financial condition or may result in significant operational impairments and financial losses, as well as significant harm to our reputation.
In addition, longer-term natural catastrophe trends may be changing and new types of catastrophe losses may be developing due to climate change, its associated extreme weather events linked to rising temperatures and its effects on global weather patterns, greenhouse gases, sea, land and air temperatures, sea levels, rain, hail and snow.
In addition, longer-term natural catastrophe trends may be changing and new types of catastrophe losses may be developing due to climate change, its associated extreme weather events linked to rising temperatures and its effects on global weather patterns, greenhouse gases, sea, land and air temperatures, sea levels, rain, drought, hail and snow.
Any change in our relationships with our distribution network agents, brokers or managing general underwriters, including as a result of consolidation or their increased promotion and distribution of our competitors' products, could adversely affect our ability to sell our products. As a result, our business volume and results of operations could be materially adversely impacted.
Any change in our relationships with our distribution network agents, brokers or managing general underwriters, including as a result of consolidation or their increased promotion and distribution of our competitors' or their own products, could adversely affect our ability to sell our products. As a result, our business volume and results of operations could be materially adversely impacted.
We are subject to the uncertain effects of emerging and potential claims and coverage issues that arise as industry practices and legal, judicial, social, economic and other environmental conditions change. Further, the impact of social inflation continues to be significant and the trajectory of its future impact remains uncertain.
We are subject to the uncertain effects of emerging and potential claims and coverage issues that arise as industry practices and legal, judicial, geopolitical, social, economic and other environmental conditions change. Further, the impact of social inflation continues to be significant and the trajectory of its future impact remains uncertain.
It is possible that potential conflicts of interest could arise in the future for our directors who are also officers and/or directors of Loews with respect to a number of areas relating to the past and ongoing relationships of Loews and us, including tax and insurance matters, financial commitments and sales of common stock pursuant to registration rights or otherwise. 11 Table of Contents Financial Risks We may incur significant realized and unrealized investment losses and volatility in net investment income arising from changes in the financial markets.
It is possible that potential conflicts of interest could arise in the future for our directors who are also officers and/or directors of Loews with respect to a number of areas relating to the past and ongoing relationships of Loews and us, including tax and insurance matters, financial commitments and sales of common stock pursuant to registration rights or otherwise. 10 Table of Contents Financial Risks We may incur significant realized and unrealized investment losses and volatility in net investment income arising from changes in the financial markets.
We face potential exposure to various types of existing, new and emerging mass tort claims, including those related to exposure to potentially harmful products or substances, such as glyphosate, lead paint, per- and polyfluoroalkyl substances (PFAS) and opioids; claims arising from changes that expand the right to sue, remove limitations on recovery, extend the statutes of limitations or otherwise repeal or weaken tort reforms, such as those related to abuse reviver statutes, including New York reviver statutes; and claims related to new and emerging theories of liability, such as those related to global warming and climate change.
We face potential exposure to various types of existing, new and emerging mass tort claims, including those related to exposure to potentially harmful products or substances, such as glyphosate, lead paint, per- and polyfluoroalkyl substances (PFAS) and opioids, sexual abuse and molestation claims, claims arising from changes that expand the right to sue, remove limitations on recovery, extend the statutes of limitations or otherwise repeal or weaken tort reforms, such as those related to abuse reviver statutes, including New York reviver statutes; and claims related to new and emerging theories of liability, such as those related to global warming and climate change.
The availability and cost of the reinsurance protection we purchase, which affects the volatility and profitability of our business, as well as the level and types of risk we retain, is determined by many factors, including general economic conditions and conditions in the reinsurance market, such as the occurrence of significant reinsured events or 10 Table of Contents unexpected adverse trends, including those associated with climate change.
The availability and cost of the reinsurance protection we purchase, which affects the volatility and profitability of our business, as well as the level and types of risk we retain, is determined by many factors, including general economic 9 Table of Contents conditions and conditions in the reinsurance market, such as the occurrence of significant reinsured events or unexpected adverse trends, including those associated with climate change.
Any significant interruption in the operation of our business functions, facilities and systems or our vendors' facilities and systems could result in a materially adverse effect on our operations.
Any significant interruption in the operation of our business functions, facilities or systems or our vendors' facilities or systems could result in a materially adverse effect on our operations.
However, such coverage is subject to a mandatory deductible and other limitations. It is also possible that future legislation could change 8 Table of Contents or eliminate the program, which could adversely affect our business by increasing our exposure to terrorism losses, or by lowering our business volume through efforts to avoid that exposure.
However, such coverage is subject to a mandatory deductible and other limitations. It is also possible that future legislation could change 7 Table of Contents or eliminate the program, which could adversely affect our business by increasing our exposure to terrorism losses, or by lowering our business volume through efforts to avoid that exposure.
Loews beneficially owned approximately 92% of our outstanding shares of common stock as of December 31, 2023, and is in a position to control actions that require the consent of stockholders, including the election of directors, amendment of our Restated Certificate of Incorporation and any merger or sale of substantially all of our assets.
Loews beneficially owned approximately 92% of our outstanding shares of common stock as of December 31, 2024, and is in a position to control actions that require the consent of stockholders, including the election of directors, amendment of our Restated Certificate of Incorporation and any merger or sale of substantially all of our assets.
These charges have been and in the future could be substantial. 7 Table of Contents Our actual experience could vary from the key assumptions used to determine future policy benefit reserves for long-term care policies.
These charges have been and in the future could be substantial. 6 Table of Contents Our actual experience could vary from the key assumptions used to determine future policy benefit reserves for long-term care policies.
Our efforts or the efforts of agents and brokers with respect to new products or alternate distribution channels, as well as changes in the way agents and brokers utilize greater levels of data and technology, could adversely impact our business relationship with independent agents and brokers who currently market our products, resulting in a lower volume and/or profitability of business generated from these sources.
Our efforts or the efforts of agents and brokers with respect to new products or alternate distribution channels, as well as changes in the way agents and brokers utilize greater levels of data and technology, including artificial intelligence, could adversely impact our business relationship with independent agents and brokers who currently market our products, resulting in a lower volume and/or profitability of business generated from these sources.
As a result, we would need to pursue other sources of capital which may be more expensive or may not be available at all. Rating agencies may downgrade their ratings of us, thereby adversely affecting our ability to write insurance at competitive rates or at all and increasing our cost of capital.
As a result, we would need to pursue other sources of capital which may be more expensive or may not be available at all. 14 Table of Contents Rating agencies may downgrade their ratings of us, thereby adversely affecting our ability to write insurance at competitive rates or at all and increasing our cost of capital.
Such a breach could affect our data framework or cause a failure to protect the personal information of our customers, claimants or employees, or sensitive and confidential information regarding our business or policyholders and may result in operational impairments and financial losses, significant harm to our reputation and the loss of business with existing or potential customers.
Breaches could affect our data framework or cause a failure to protect the personal information of our customers, claimants or employees, or sensitive and confidential information regarding our business or policyholders and may result in operational impairments and financial losses, significant harm to our reputation and the loss of business with existing or potential customers.
Portions of our insurance business is underwritten and serviced by third parties. With respect to underwriting, our contractual arrangements with third parties will typically grant them limited rights to write new and renewal policies, subject to contractual restrictions and obligations, including requiring them to underwrite within the terms of our licenses.
Portions of our insurance business is underwritten and serviced by third parties. With respect to underwriting, our contractual arrangements with third parties will typically grant them limited rights to write new and renewal policies, subject to contractual restrictions and obligations, including requiring them to underwrite within the 13 Table of Contents terms of our licenses.
On August 31, 2010, we completed a retroactive reinsurance transaction under which substantially all of our legacy A&EP liabilities were ceded to National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway Inc., subject to an aggregate limit of $4 billion (Loss Portfolio Transfer). The cumulative amount ceded under the Loss Portfolio Transfer as of December 31, 2023 was $3.6 billion.
On August 31, 2010, we completed a retroactive reinsurance transaction under which substantially all of our legacy A&EP liabilities were ceded to National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway Inc., subject to an aggregate limit of $4 billion (Loss Portfolio Transfer). The cumulative amount ceded under the Loss Portfolio Transfer as of December 31, 2024 was $3.7 billion.
Technological changes in the way insurance transactions are completed in the marketplace, and our ability to react effectively to such change, may present significant competitive risks. For example, more insurers are utilizing "big data" analytics to make underwriting and other decisions that impact product design and pricing.
Technological changes in the way insurance transactions are completed in the marketplace, and our ability to react effectively to such change, may present significant competitive risks. For example, more insurers are utilizing or may begin utilizing "big data" analytics or artificial intelligence to make underwriting or other decisions that impact product design and pricing.
The breach of confidential information also could 13 Table of Contents give rise to legal liability and regulatory action under data protection and privacy laws, as well as evolving regulation in this regard.
The breach of confidential information also could give rise to legal liability and regulatory action under data protection and privacy laws, as well as evolving regulation in this regard.
We cannot be certain that we will have access to these systems or that our information technology or application systems will continue to operate as intended. These risks could adversely impact our reputation and client relationships and have a material adverse effect on our business, results of operations and financial condition.
We have also licensed certain systems from third parties. We cannot be certain that we will have access to these systems or that our information technology or application systems will continue to operate as intended. These risks could adversely impact our reputation and client relationships and have a material adverse effect on our business, results of operations and financial condition.
A prolonged period during which investment returns remain at low levels could result in shortfalls in investment income on assets supporting our obligations under long-term care policies. This risk is more significant for our long-term care products because the long potential duration of the policy obligations exceeds the duration of the supporting investment assets.
A prolonged period during which investment returns remain at low levels could result in shortfalls in investment income on assets supporting our obligations under long-term care policies. This risk may be more significant for our long-term care products when the long potential duration of the policy obligations exceeds the duration of the supporting investment assets.
This includes agents, brokers and managing general underwriters who may increasingly compete with us to the extent that markets continue to provide them with direct access to providers of capital seeking exposure to insurance risk. Insurers compete on the basis of many factors, including products, price, services, ratings and financial strength.
This includes agents, brokers and managing general underwriters who may increasingly compete with us, including as a result of markets continuing to provide them with direct access to providers of capital seeking exposure to insurance risk. Insurers compete on the basis of many factors, including products, price, services, ratings and financial strength.
While we do not believe such notifications and resultant actions will have a material adverse effect on our business, this or similar incidents, or any other such breach of our or our vendors’ data security infrastructure could have a material adverse effect on our business, results of operations and financial condition.
While we do not believe such breaches that have occurred and resultant actions will have a material adverse effect on our business, these or similar incidents, or any other such breach of our or our vendors’ data security infrastructure could have a material adverse effect on our business, results of operations and financial condition.
Ratings reflect the rating agency's opinions of an insurance company's or insurance holding company's 15 Table of Contents financial strength, capital adequacy, enterprise risk management practices, operating performance, strategic position and ability to meet its obligations to policyholders and debt holders, and may also reflect opinions on other areas such as information security and climate risk, as well as ESG matters more broadly.
Ratings reflect the rating agency's opinions of an insurance company's or insurance holding company's financial strength, capital adequacy, enterprise risk management practices, operating performance, strategic position and ability to meet its obligations to policyholders and debt holders, and may also reflect opinions on other areas such as information security and climate risk.
Morbidity and persistency experience, inclusive of mortality, can be volatile and may be negatively affected by many factors including, but not limited to, policyholder behavior, judicial decisions regarding policy terms, socioeconomic factors, cost of care inflation, changes in health trends and advances in medical care.
Morbidity and persistency experience can be volatile and may be negatively affected by many factors including policyholder behavior, judicial decisions regarding policy terms, socioeconomic factors, cost of care inflation, changes in health trends and advances in medical care.
Climate studies by government agencies, academic institutions, catastrophe modeling organizations and other groups indicate that climate change may be altering the frequency and/or severity of catastrophic weather events, such as hurricanes, tornadoes, windstorms, floods and other natural disasters.
Climate studies by government agencies, academic institutions, catastrophe modeling organizations and other groups indicate that climate change may be altering the frequency and/or severity of catastrophic weather events, such as hurricanes, tornadoes, windstorms, earthquakes, hail, severe winter weather, droughts, fires and floods.
We are exposed to, and may face adverse developments related to, mass tort claims that could arise from, 9 Table of Contents among other things, our insureds’ sale or use of potentially harmful products or substances, changes to the social and legal environment, such as those related to abuse reviver statutes, issues related to altered interpretation of coverage and other new and emerging claim theories.
Any additional reinsurance premium or future claim handling costs would also reduce our earnings. 8 Table of Contents We are exposed to, and may face adverse developments related to, mass tort claims that could arise from, among other things, our insureds’ sale or use of potentially harmful products or substances, changes to the social and legal environment, such as those related to abuse reviver statutes, issues related to altered interpretation of coverage and other new and emerging claim theories.
In addition, passage of reviver statutes that extend, or eliminate, the statute of limitations for the reporting of claims, including statutes passed in certain states with respect to sexual molestation and sexual abuse, increase the uncertainty of the frequency of claims.
In addition, passage of reviver statutes that extend, or eliminate, the statute of limitations for the reporting of claims, including statutes passed in certain states with respect to sexual molestation and sexual abuse, increase the uncertainty of the frequency of claims, and the impact of social inflation has, and may continue to, increase the severity of these claims.
In response to climate change, regulators at the federal, state and international level also could impose new regulations requiring disclosure of underwriting or investment in certain industry sectors. Regulatory powers also extend to premium rate regulations which require that rates not be excessive, inadequate or unfairly discriminatory.
Regulators at the federal, state and international level have adopted or may adopt new regulations related to, among other matters, climate change and greenhouse emissions, and could impose new regulations requiring disclosure of underwriting or investment in certain industry sectors. Regulatory powers also extend to premium rate regulations which require that rates not be excessive, inadequate or unfairly discriminatory.
In addition, rules and regulations have recently been introduced, or are being considered, in the areas of information security and ESG, which may also affect our business. We also are subject to numerous regulations governing the protection of personal and confidential information of our clients and employees, including medical records, credit card data and financial information.
In addition, rules and regulations are being introduced, or are being considered, in the areas of artificial intelligence, information security and climate change, which may also affect our business. We also are subject to numerous regulations governing the protection of personal and confidential information of our customers and employees, including medical records, credit card data and financial information.
These charges could be substantial. Additionally, if the A&EP claims exceed the limit of the Loss Portfolio Transfer, we will need to assess whether to purchase additional limit or to reassume claim handling responsibility for A&EP claims from an affiliate of NICO. Any additional reinsurance premium or future claim handling costs would also reduce our earnings.
These charges could be substantial. Additionally, if the A&EP claims exceed the limit of the Loss Portfolio Transfer, we will need to assess whether to purchase additional limit or to reassume claim handling responsibility for A&EP claims from an affiliate of NICO.
If our business continuity plans or system security do not sufficiently address these risks, they could have a material adverse effect on our business, results of operations and financial condition.
We have made, and continue to make, investments to improve our security and infrastructure. If our business continuity plans or system security do not sufficiently address these risks, they could have a material adverse effect on our business, results of operations and financial condition.
Our future policy benefit reserves for long-term care policies are based on our best estimate actuarial assumptions, which are assessed quarterly and updated at least annually. Key actuarial assumptions include morbidity, persistency (inclusive of mortality), anticipated future premium rate increases and expenses.
Our future policy benefit reserves for long-term care policies are based on our best estimate actuarial assumptions, which are assessed quarterly and updated at least annually. Key actuarial assumptions include morbidity, persistency, anticipated future premium rate increases and expenses. The adequacy of the reserves is contingent upon actual experience and our future expectations related to these key assumptions.
Our share of these involuntary risks is mandatory and generally a function of our respective share of the voluntary market by line of insurance in each jurisdiction. 16 Table of Contents
Each jurisdiction dictates the types of insurance and the level of coverage that must be provided to such involuntary risks. Our share of these involuntary risks is mandatory and generally a function of our respective share of the voluntary market by line of insurance in each jurisdiction. 16 Table of Contents
Further, climate change may make modeled outcomes less certain or produce new, non-modeled risks. 12 Table of Contents In addition, the effectiveness of any model can be degraded by operational risks, including the improper use of the model, input errors, data errors and human error. As a result, actual results may differ materially from our modeled results.
In addition, the effectiveness of any model can be degraded by operational risks, including the improper use of the model, input errors, data errors and human error. As a result, actual results may differ materially from our modeled results.
Discount rates are subject to interest rate and market volatility. See the Life & Group Policyholder Reserves portion of Reserves - Estimates and Uncertainties section of MD&A in Item 7 for more information.
The reserves are discounted using upper-medium grade fixed income instrument yields as of each reporting date. Discount rates are subject to interest rate and market volatility. See the Life & Group Policyholder Reserves portion of Reserves - Estimates and Uncertainties section of MD&A in Item 7 for more information.
In the U.S., these standards apply specified risk factors to various asset, premium and reserve components of our legal entity statutory basis of accounting financial statements.
In the U.S., these standards apply specified risk factors to various asset, premium and reserve components of our legal entity statutory basis of accounting financial statements. For IAIGs, such as CNA, the standards also seek to quantify risk across the insurance group in order to assess group capital.
The jurisdictions in which we do business may also require us to provide coverage to persons whom we would not otherwise consider eligible or restrict us from withdrawing from unprofitable lines of business or unprofitable market areas. Each jurisdiction dictates the types of insurance and the level of coverage that must be provided to such involuntary risks.
The jurisdictions in which we do business may also require us to provide coverage to persons whom we would not otherwise 15 Table of Contents consider eligible or restrict us from withdrawing from unprofitable lines of business or unprofitable market areas.
We may lose business to competitors offering competitive insurance products at lower prices. As a result, our premium levels and expense ratio could be materially adversely impacted. We market our insurance products worldwide primarily through independent insurance agents, insurance brokers, and managing general underwriters who also promote and distribute the products of our competitors.
We may lose business to competitors offering competitive insurance products at lower prices. As a result, our premium levels and expense ratio could be materially adversely impacted.
The modeled outputs and related analyses from both proprietary models and third parties are subject to various assumptions, uncertainties, model design errors and the inherent limitations of any statistical analysis.
The modeled outputs and related analyses from both proprietary models and third parties are subject to various assumptions, uncertainties, model design errors and the inherent 11 Table of Contents limitations of any statistical analysis. Further, climate change may make modeled outcomes less certain or produce new, non-modeled risks.
In addition, four officers of Loews, along with the Co-Chairman of the Board of Loews, serve on our Board of Directors. We have also entered into services agreements and a registration rights agreement with Loews, and we may in the future enter into other agreements with Loews.
We have also entered into services agreements and a registration rights agreement with Loews, and we may in the future enter into other agreements with Loews.
We recorded significant losses during 2020, a significant portion of which remain classified as incurred but not reported (IBNR) reserves, in these areas and may experience continued losses, which could be material.
These lines include primarily commercial property related business interruption coverage, healthcare professional liability, management liability (directors and officers, employment practices and professional liability lines) and workers' compensation. We recorded significant losses during 2020, a portion of which remain classified as incurred but not reported (IBNR) reserves, in these areas and may experience continued losses, which could be material.
During the second quarter of 2023, we were notified of a breach in the file transfer software, MOVEit Transfer, used by a vendor of one of our third-party administrators. This incident resulted in required breach notifications to the Company's long-term care policyholders, with such notifications made by the subject vendor.
During the third quarter of 2024, we were notified of a data breach resulting from a ransomware attack that impacted a former vendor. This incident resulted in required breach notifications to our impacted long term care policyholders, with such notifications made by the subject vendor.
Ordinary dividend payments, or dividends that do not require prior approval by the insurance subsidiaries' domiciliary insurance regulator, are generally limited to amounts determined by formulas that vary by jurisdiction.
We are a holding company and are dependent upon dividends, loans and other sources of cash from our subsidiaries in order to meet our obligations. Ordinary dividend payments, or dividends that do not require prior approval by the insurance subsidiaries' domiciliary insurance regulator, are generally limited to amounts determined by formulas that vary by jurisdiction.
Additionally, we rely on certain third-party claims administrators, including the administrator of our long-term care claims, to handle policyholder services and perform significant claim administration and claim adjudication functions.
Additionally, we rely on certain third-party claims administrators, including the administrator of our long-term care claims, to handle policyholder services and perform significant claim administration and claim adjudication functions. Any failure by such administrator to properly perform service functions may result in losses as a result of over-payment of claims, legal claims against us and adverse regulatory enforcement exposure.
The required increase in reserves is recorded as a charge against our earnings in the period in which reserves are determined to be insufficient. These charges have been and in the future could be substantial. The reserves are discounted using upper-medium grade fixed income instrument yields as of each reporting date.
If actual or expected future experience differs from these assumptions, the reserves may not be adequate, requiring us to increase reserves. The required increase in reserves is recorded as a charge against our earnings in the period in which reserves are determined to be insufficient. These charges have been and in the future could be substantial.
Breaches have occurred, and may occur again, in our systems and in the systems of our vendors and third-party administrators.
Breaches have occurred, and may occur again, in our systems and in the systems of our vendors and third-party administrators, both current and 12 Table of Contents former, in that past vendors and third-party administrators may still retain certain confidential and sensitive information in their systems.
Removed
The adequacy of the reserves is contingent upon actual experience and our future expectations related to these key assumptions. If actual or expected future experience differs from these assumptions, the reserves may not be adequate, requiring us to increase reserves.
Added
Any imposition of significant tariffs by the U.S., as well as any related retaliatory tariffs, may result in considerable increases in certain costs that would increase the cost of claims.
Removed
These lines include primarily healthcare professional liability, workers' compensation, commercial property related business interruption coverage, management liability (directors and officers, employment practices and professional liability lines) and trade credit.
Added
We market our insurance products worldwide primarily through independent insurance agents, insurance brokers, and managing general underwriters who also promote and distribute the products of our competitors, and in certain cases their own products.
Removed
We have made, and continue to make, investments to improve our security and infrastructure. Some of these investments are a direct result of the March 2021 cybersecurity attack, described in the immediately following risk factor, which are not recoverable under existing insurance coverage.
Added
In addition, and as of January 1, 2025 three officers of Loews, including the CEO of Loews (who is also a director of Loews), along with one additional director of Loews (who is also the Chairman of the Board of Loews) and one director emeritus of Loews, serve on our Board of Directors.
Removed
Any failure by such administrator to properly perform service functions may result in losses as a result of over-payment of claims, legal claims against us and adverse regulatory enforcement exposure. 14 Table of Contents We have also licensed certain systems from third parties.
Added
Any imposition of significant tariffs by the U.S., as well as any related retaliatory tariffs, may adversely impact the general economy and the financial markets, and adversely affect the valuation of our investments.
Removed
We may be limited in our ability to raise significant amounts of capital on favorable terms or at all. The IAIS has adopted a ComFrame for the supervision of IAIGs and has developed a global capital standard that, if adopted in the U.S., would be applicable to U.S.-based IAIGs.
Added
The sophistication of cybersecurity threats continues to escalate, and the measures we take to mitigate the risk of cyber incidents and to safeguard our systems and data may be insufficient.
Removed
The NAIC also developed the GCC and AM approach to assessing group capital as an alternative to the ICS developed by the IAIS. The development and adoption of these capital standards could increase our prescribed capital requirement, the level at which regulatory scrutiny intensifies, as well as significantly increase our cost of regulatory compliance.
Added
Further, the increasing use of artificial intelligence, both within our systems to achieve operational efficiencies and within threat actors’ attack strategies, may further expose our systems to the risk of cyber-attacks.
Added
In the same quarter, we were notified of a data breach resulting from a ransomware attack that impacted a current vendor. This incident resulted in required breach notifications to impacted individuals, which included insurance claimants and their representatives, with such notifications made by the subject vendor.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThis group also analyzes unauthorized occurrences affecting CNA's or third parties’ IT systems or sensitive information, and directs the activities of CNA in responding to such incidents. 17 Table of Contents In addition, the group, under the leadership of the CCO, undertakes the appropriate internal notifications of any such occurrence, and responsive activities, to the General Counsel, Chief Executive Officer, Chief Financial Officer and Board of Directors.
Biggest changeThis group also analyzes unauthorized occurrences affecting CNA's or third parties’ IT systems or sensitive information, and directs the activities of CNA in responding to such incidents. 17 Table of Contents In addition, the group, under the leadership of the CCO, undertakes the appropriate internal notifications of any such occurrence, and responsive activities, to the General Counsel, Chief Executive Officer, Chief Financial Officer and Board of Directors, with executive management involvement in the same to the extent appropriate in the context of the nature of such occurrence.
Please refer to “Any significant interruption in the operation of our business functions, facilities and systems or our vendors' facilities and systems could result in a materially adverse effect on our operations“ and “Any significant breach in our data security infrastructure or our vendors’ facilities and systems could disrupt business, cause financial losses and damage our reputation, and insurance coverage may not be available for claims related to a breach” under Item 1A Risk Factors.
Please refer to “Any significant interruption in the operation of our business functions, facilities or systems or our vendors' facilities or systems could result in a materially adverse effect on our operations“ and “Any significant breach in our data security infrastructure or our vendors’ facilities or systems could disrupt business, cause financial losses and damage our reputation, and insurance coverage may not be available for claims related to a breach” under Item 1A Risk Factors.
Threats of security incidents and the impact of actual security incidents are initially assessed and managed by the CISO and CIO as described above. CNA has further implemented response plans that provide the basis for appropriate response to an unauthorized occurrence from a technical perspective, as well as from disclosure and regulatory perspectives.
Threats of security incidents and the impact of actual security incidents are initially assessed and managed by the CSO and CIO as described above. CNA has further implemented response plans that provide the basis for appropriate response to an unauthorized occurrence from a technical perspective, as well as from disclosure and regulatory perspectives.
These response plans also set forth the processes for internal reporting of a substantive unauthorized occurrence. The CISO reports such matters to the CIO and CCO, who is responsible for convening a team of cross-enterprise leaders to ensure comprehensive responsiveness to an occurrence.
These response plans also set forth the processes for internal reporting of a substantive unauthorized occurrence. The CSO reports such matters to the CIO and CCO, who is responsible for convening a team of cross-enterprise leaders to ensure comprehensive responsiveness to an occurrence.
This group includes a cybersecurity operations team that is responsible for information technology security monitoring and incident response activities, the latter covering the response coordination to cyber-attacks under the leadership and pursuant to the direction of the CISO.
This group includes a cybersecurity operations team that is responsible for information technology security monitoring and incident response activities, the latter covering the response coordination to cyber-attacks under the leadership and pursuant to the direction of the CSO.
The CISO and CIO together lead efforts to design, implement and operate controls deemed necessary, commensurate with the materiality and criticality of identified risks and the sensitivity of the information assets and systems used throughout the organization.
The CSO and CIO together lead efforts to design, implement and operate controls deemed necessary, commensurate with the materiality and criticality of identified risks and the sensitivity of the information assets and systems used throughout the organization.
At the senior management level, our Chief Information Security Officer (CISO) oversees CNA’s information security and data privacy programs and is responsible for establishing and implementing the security strategy alongside the Chief Information Officer (CIO), to whom the CISO reports directly. The CIO serves on the Enterprise Risk Committee, which is chaired by the CRRO.
At the senior management level, our Global Chief Security Officer (CSO) oversees CNA’s information security and data privacy programs and is responsible for establishing and implementing the security strategy alongside the Chief Information Officer (CIO), to whom the CSO reports directly. The CIO serves on the Enterprise Risk Committee, which is chaired by the CRRO.
The CISO leads the Information Security group within Information Technology, which manages the controls designed to identify, detect, protect against, respond to and recover from cybersecurity threats and cybersecurity incidents.
The CSO leads the Information Security group within Information Technology, which manages the controls designed to identify, detect, protect against, respond to and recover from cybersecurity threats and cybersecurity incidents.
Our current CISO has a bachelor’s degree in Computer Information Systems and a master’s degree in Cybersecurity, and has over 20 years of experience building and executing information and cybersecurity strategies.
Our current CSO has a bachelor’s degree in Computer Information Systems and a master’s degree in Cybersecurity, and has over 20 years of experience building and executing information and cybersecurity strategies.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES We lease our principal executive offices in Chicago, Illinois, as well as other offices throughout the U.S. We also lease offices in Canada, the U.K., Belgium, Denmark, France, Germany, Italy, Luxembourg and the Netherlands, primarily for branch and insurance business operations in those locations.
Biggest changeITEM 2. PROPERTIES We lease our principal executive offices in Chicago, Illinois, as well as other offices throughout the U.S, including in New York. We also lease offices in Canada, the U.K., Belgium, Denmark, France, Germany, Italy, Luxembourg and the Netherlands, primarily for branch and insurance business operations in those locations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed2 unchanged
Biggest changeCompany / Index Base Period 2019 2020 2021 2022 2023 CNA Financial Corporation $ 100.00 $ 109.48 $ 103.58 $ 123.26 $ 127.94 $ 137.05 S&P 500 Index 100.00 131.49 155.68 200.37 164.08 207.21 S&P 500 Property & Casualty Insurance Index 100.00 125.87 134.63 160.58 190.89 211.53 19 Table of Contents
Biggest changeCompany / Index Base Period 2020 2021 2022 2023 2024 CNA Financial Corporation $ 100.00 $ 94.61 $ 112.59 $ 116.86 $ 125.18 $ 155.21 S&P 500 Index 100.00 118.40 152.39 124.79 157.59 197.02 S&P 500 Property & Casualty Insurance Index 100.00 106.96 127.58 151.65 168.05 227.67 19 Table of Contents
Our Board of Directors has approved an authorization to purchase, in the open market or through privately negotiated transactions, our outstanding common stock, as our management deems appropriate. No repurchases of our common stock were made in the three months ended December 31, 2023.
Our Board of Directors has approved an authorization to purchase, in the open market or through privately negotiated transactions, our outstanding common stock, as our management deems appropriate. No repurchases of our common stock were made in the three months ended December 31, 2024.
The graph assumes that the value of the investment in our common stock and each index was $100 at the base period, January 1, 2019, and that dividends, if any, were reinvested in the stock or index.
The graph assumes that the value of the investment in our common stock and each index was $100 at the base period, January 1, 2020, and that dividends, if any, were reinvested in the stock or index.
As of February 2, 2024, we had 270,896,945 shares of common stock outstanding and approximately 92% of our outstanding common stock was owned by Loews. We had 756 stockholders of record as of February 2, 2024 according to the records maintained by our transfer agent.
As of February 7, 2025, we had 270,861,659 shares of common stock outstanding and approximately 92% of our outstanding common stock was owned by Loews. We had 730 stockholders of record as of February 7, 2025 according to the records maintained by our transfer agent.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

115 edited+18 added−28 removed134 unchanged
Biggest changeMaterial risks and uncertainties are addressed in Part I, Item IA Risk Factors and include, but are not limited to, the following: Company-Specific Factors • the risks and uncertainties associated with our insurance reserves, as outlined in the Critical Accounting Estimates and the Reserves - Estimates and Uncertainties sections of this report, including the sufficiency of the reserves and the possibility for future increases, which would be reflected in the results of operations in the period that the need for such adjustment is determined; • the risk that the other parties to the transactions in which, subject to certain limitations, we ceded our legacy A&EP and EWC liabilities, respectively, will not fully perform their respective obligations to CNA, the uncertainty in estimating loss reserves for A&EP and EWC liabilities and the possible continued exposure of CNA to liabilities for A&EP and EWC claims that are not covered under the terms of the respective transactions; and • the performance of reinsurance companies under reinsurance contracts with us. 54 Table of Contents Industry and General Market Factors • general economic and business conditions, including recessionary conditions that may decrease the size and number of our insurance customers and create losses to our lines of business and inflationary pressures on medical care costs, construction costs and other economic sectors; • the effects of social inflation, including frequency of nuclear verdicts and increased litigation activity, on the severity of claims; • the effects of reviver statutes that extend, or eliminate, the statute of limitations for the reporting of claims, including statutes passed in certain states with respect to sexual molestation and sexual abuse, on the frequency of claims; • the impact of competitive products, policies and pricing and the competitive environment in which we operate, including changes in our book of business; • product and policy availability and demand and market responses, including the level of ability to obtain rate increases; • the COVID-19 pandemic, including new or emerging variants, other potential pandemics and related measures to mitigate the spread of the foregoing may continue to result in increased claims and related litigation risk across our enterprise; • conditions in the capital and credit markets, including uncertainty and instability in these markets, as well as the overall economy, and their impact on the returns, types, liquidity and valuation of our investments; • conditions in the capital and credit markets that may limit our ability to raise significant amounts of capital on favorable terms; and • the possibility of changes in our ratings by ratings agencies, including the inability to access certain markets or distribution channels and the required collateralization of future payment obligations as a result of such changes, and changes in rating agency policies and practices.
Biggest changeIndustry and General Market Factors • general economic and business conditions, including recessionary conditions that may decrease the size and number of our insurance customers and create losses in our lines of business, and inflationary pressures (including with respect to the imposition of significant tariffs and any related retaliatory tariffs) on medical care costs, construction costs and other economic sectors; • the effects of social inflation, including frequency of nuclear verdicts and increased litigation activity, on the severity of claims; • the effects on the frequency of claims of reviver statutes that extend, or eliminate, the statute of limitations for the reporting of claims, including statutes passed in certain states with respect to sexual molestation and sexual abuse; • the impact of competitive products, policies and pricing and the competitive environment in which we operate, including changes in our book of business; • product and policy availability and demand and market responses, including the level of ability to obtain rate increases; • the COVID-19 pandemic, including new or emerging variants, other potential pandemics and related measures to mitigate the spread of the foregoing may continue to result in increased claims and related litigation risk across our enterprise; • conditions in the capital and credit markets, including uncertainty and instability in these markets, as well as the overall economy (including with respect to the imposition of significant tariffs and any related retaliatory tariffs), and their impact on the returns, types, liquidity and valuation of our investments; 52 Table of Contents • conditions in the capital and credit markets that may limit our ability to raise significant amounts of capital on favorable terms or at all; and • the possibility of changes in our ratings by ratings agencies, including the inability to access certain markets or distribution channels and the required collateralization of future payment obligations as a result of such changes, and changes in rating agency policies and practices.
As a result of this variability, our long-term care reserves may be subject to material increases if actual experience develops adversely to our expectations. 27 Table of Contents The table below summarizes the estimated pretax impact on our results of operations from various hypothetical revisions to our liability for future policyholder benefits (LFPB) reserve assumptions.
As a result of this variability, our long- 27 Table of Contents term care reserves may be subject to material increases if actual experience develops adversely to our expectations. The table below summarizes the estimated pretax impact on our results of operations from various hypothetical revisions to our liability for future policyholder benefits (LFPB) reserve assumptions.
Regulatory, Legal and Operational Factors • regulatory and legal initiatives and compliance with governmental regulations and other legal requirements, which are increasing in complexity and number, change frequently, sometimes conflict, and could expose us to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions, including regulations related to cybersecurity protocols (which continue to evolve in breadth, sophistication and maturity in response to an ever-evolving threat landscape), legal inquiries by state authorities, judicial interpretations within the regulatory framework, including interpretation of policy provisions, decisions regarding coverage and theories of liability, legislative actions that increase claimant activity, including those revising applicability of statutes of limitations, trends in litigation and the outcome of any litigation involving us and rulings and changes in tax laws and regulations; • regulatory limitations, impositions and restrictions upon us, including with respect to our ability to increase premium rates, and the effects of assessments and other surcharges for guaranty funds and second-injury funds, other mandatory pooling arrangements and future assessments levied on insurance companies; • regulatory limitations and restrictions, including limitations upon our ability to receive dividends from our insurance subsidiaries, imposed by regulatory authorities, including regulatory capital adequacy standards; • breaches of our or our vendors' data security infrastructure resulting in unauthorized access to systems and information, and/or interruption of operations; and • regulatory and legal implications relating to the sophisticated cyber incident sustained by the Company in March 2021 that may arise.
Regulatory, Legal and Operational Factors • regulatory and legal initiatives and compliance with governmental regulations and other legal requirements, which are increasing in complexity and number, change frequently, sometimes conflict, and could expose us to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions, including regulations related to cybersecurity protocols (which continue to evolve in breadth, sophistication and maturity in response to an ever-evolving threat landscape), or utilization of artificial intelligence, legal inquiries by state authorities, judicial interpretations within the regulatory framework, including interpretation of policy provisions, decisions regarding coverage and theories of liability, legislative actions that increase claimant activity, including those revising applicability of statutes of limitations, trends in litigation and the outcome of any litigation involving us and rulings and changes in tax laws and regulations; • regulatory limitations, impositions and restrictions upon us, including with respect to our ability to increase premium rates, and the effects of assessments and other surcharges for guaranty funds and second-injury funds, other mandatory pooling arrangements and future assessments levied on insurance companies; • regulatory limitations and restrictions, including limitations upon our ability to receive dividends from our insurance subsidiaries, imposed by regulatory authorities, including regulatory capital adequacy standards; • breaches of our or our vendors' data security infrastructure resulting in unauthorized access to systems and information, and/or interruption of operations; and • regulatory and legal implications relating to the sophisticated cyber incident sustained by the Company in March 2021 that may arise.
If an act of terrorism or acts of terrorism result in covered losses exceeding the $100 billion annual industry aggregate limit, Congress would be responsible for determining how additional losses in excess of $100 billion will be paid. 30 Table of Contents CONSOLIDATED OPERATIONS Results of Operations The following table includes the consolidated results of our operations including our financial measure, core income (loss).
If an act of terrorism or 29 Table of Contents acts of terrorism result in covered losses exceeding the $100 billion annual industry aggregate limit, Congress would be responsible for determining how additional losses in excess of $100 billion will be paid. 30 Table of Contents CONSOLIDATED OPERATIONS Results of Operations The following table includes the consolidated results of our operations including our financial measure, core income (loss).
Impact of Natural and Man-Made Disasters and Mass Tort Claims • weather and other natural physical events, including the severity and frequency of storms, hail, snowfall and other winter conditions, natural disasters such as hurricanes, tornados and earthquakes, as well as climate change, including effects on global weather patterns, greenhouse gases, sea, land and air temperatures, sea levels, wildfires, rain, hail and snow; • regulatory requirements imposed by coastal state regulators in the wake of hurricanes or other natural disasters, including limitations on the ability to exit markets or to non-renew, cancel or change terms and 55 Table of Contents conditions in policies, as well as mandatory assessments to fund any shortfalls arising from the inability of quasi-governmental insurers to pay claims; • man-made disasters, including the possible occurrence of terrorist attacks, the unpredictability of the nature, targets, severity or frequency of such events, and the effect of the absence or insufficiency of applicable terrorism legislation on coverages; • the occurrence of epidemics and pandemics; and • mass tort claims, including those related to exposure to potentially harmful products or substances such as glyphosate, lead paint, per- and polyfluoroalkyl substances (PFAS) and opioids; sexual abuse and molestation claims; and claims arising from changes that repeal or weaken tort reforms.
Impact of Natural and Man-Made Disasters and Mass Tort Claims • weather and other natural physical events, including the severity and frequency of storms, hail, snowfall and other winter conditions, natural disasters such as hurricanes, tornados and earthquakes, as well as climate change, including effects on global weather patterns, greenhouse gases, sea, land and air temperatures, sea levels, wildfires, rain, hail and snow; • regulatory requirements imposed by coastal state regulators in the wake of hurricanes or other natural disasters, including limitations on the ability to exit markets or to non-renew, cancel or change terms and conditions in policies, as well as mandatory assessments to fund any shortfalls arising from the inability of quasi-governmental insurers to pay claims; • man-made disasters, including the possible occurrence of terrorist attacks, the unpredictability of the nature, targets, severity or frequency of such events, and the effect of the absence or insufficiency of applicable terrorism legislation on coverages; • the occurrence of epidemics and pandemics; and • mass tort claims, including those related to exposure to potentially harmful products or substances such as glyphosate, lead paint, per- and polyfluoroalkyl substances (PFAS) and opioids, sexual abuse and molestation claims and claims arising from changes that repeal or weaken tort reforms.
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.
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 ratio, the expense ratio and the dividend ratio.
See the Reserves - Estimates and Uncertainties section of this MD&A for further information. (5) Does not include investment commitments of approximately $1,555 million related to future capital calls from various third-party limited partnerships, signed and accepted mortgage loan applications, and obligations related to private placement securities.
See the Reserves - Estimates and Uncertainties section of this MD&A for further information. (5) Does not include investment commitments of approximately $1,660 million related to future capital calls from various third-party limited partnerships, signed and accepted mortgage loan applications, and obligations related to private placement securities.
(3) The Claim and claim adjustment expense reserves reflected above are not discounted and represent our estimate of the amount and timing of the ultimate settlement and administration of gross claims based on our assessment of facts and circumstances known as of December 31, 2023. See the Reserves - Estimates and Uncertainties section of this MD&A for further information.
(3) The Claim and claim adjustment expense reserves reflected above are not discounted and represent our estimate of the amount and timing of the ultimate settlement and administration of gross claims based on our assessment of facts and circumstances known as of December 31, 2024. See the Reserves - Estimates and Uncertainties section of this MD&A for further information.
Further information on our commitments, contingencies and guarantees is provided in Notes A, B, E, F, G, I and M to the Consolidated Financial Statements included under Item 8. 52 Table of Contents Ratings Ratings are an important factor in establishing the competitive position of insurance companies.
Further information on our commitments, contingencies and guarantees is provided in Notes A, B, E, F, G, I and M to the Consolidated Financial Statements included under Item 8. 50 Table of Contents Ratings Ratings are an important factor in establishing the competitive position of insurance companies.
Our forward-looking statements speak only as of the date of the filing of this Annual Report on Form 10-K and we do not undertake any obligation to update or revise any forward-looking statement to reflect events or circumstances after the date of the filing of this Annual Report on Form 10-K, even if our expectations or any related events or circumstances change. 56 Table of Contents
Our forward-looking statements speak only as of the date of the filing of this Annual Report on Form 10-K and we do not undertake any obligation to update or revise any forward-looking statement to reflect events or circumstances after the date of the filing of this Annual Report on Form 10-K, even if our expectations or any related events or circumstances change. 53 Table of Contents
TRIPRA provides a U.S. government backstop for insurance-related losses resulting from any “act of terrorism,” which is certified by the Secretary of Treasury in consultation with the Secretary of Homeland Security for losses that exceed a threshold of $200 million industry-wide for the calendar year 2024.
TRIPRA provides a U.S. government backstop for insurance-related losses resulting from any “act of terrorism,” which is certified by the Secretary of Treasury in consultation with the Secretary of Homeland Security for losses that exceed a threshold of $200 million industry-wide for the calendar year 2025.
A summary of these risks and specific analysis on changes is included in the Quantitative and Qualitative Disclosures About Market Risk included under Item 7A. 50 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Cash Flows Our primary operating cash flow sources are premiums and investment income.
A summary of these risks and specific analysis on changes is included in the Quantitative and Qualitative Disclosures About Market Risk included under Item 7A. 48 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Cash Flows Our primary operating cash flow sources are premiums and investment income.
Long-Term Care Reserves Future policy benefits reserves for our long-term care policies are based on certain actuarial assumptions, including morbidity, persistency (inclusive of mortality), anticipated future premium rate increases, and expenses. The adequacy of the reserves is contingent upon actual experience and our future expectations related to these key assumptions.
Long-Term Care Reserves Future policy benefits reserves for our long-term care policies are based on certain actuarial assumptions, including morbidity, persistency, anticipated future premium rate increases and expenses. The adequacy of the reserves is contingent upon actual experience and our future expectations related to these key assumptions.
Additionally, our insurance companies may issue contractual liability insurance policies or guaranteed asset protection reimbursement insurance policies to cover the liabilities of these service contracts issued by affiliated entities or third parties. 35 Table of Contents The following table details the results of operations for Specialty.
Additionally, our insurance companies may issue contractual liability insurance policies or guaranteed asset protection reimbursement insurance policies to cover the liabilities of these service contracts issued by affiliated entities or third parties. 34 Table of Contents The following table details the results of operations for Specialty.
(4) The Future policy benefit reserves reflected above are not discounted, include maintenance costs, represent our estimate of the ultimate amount and timing of the settlement of benefits net of expected premiums, and are based on our assessment of facts and circumstances known as of December 31, 2023.
(4) The Future policy benefit reserves reflected above are not discounted, include maintenance costs, represent our estimate of the ultimate amount and timing of the settlement of benefits net of expected premiums, and are based on our assessment of facts and circumstances known as of December 31, 2024.
Further information on net prior year loss reserve development is in Note E to the Consolidated Financial Statements included under Item 8. 32 Table of Contents SEGMENT RESULTS The following discusses the results of operations for our business segments.
Further information on net prior year loss reserve development is in Note E to the Consolidated Financial Statements included under Item 8. 31 Table of Contents SEGMENT RESULTS The following discusses the results of operations for our business segments.
The table below reflects the Insurer Financial Strength Ratings of CNA's insurance company subsidiaries issued by A.M. Best, Moody's, S&P and Fitch. The table also includes the ratings for CNAF's senior debt. December 31, 2023 Insurer Financial Strength Ratings Senior Debt Ratings A.M. Best A bbb+ Moody's A2 Baa2 S&P A+ A- Fitch A+ BBB+ A.M.
The table below reflects the Insurer Financial Strength Ratings of CNA's insurance company subsidiaries issued by A.M. Best, Moody's, S&P and Fitch. The table also includes the ratings for CNAF's senior debt. December 31, 2024 Insurer Financial Strength Ratings Senior Debt Ratings A.M. Best A bbb+ Moody's A2 Baa2 S&P A+ A- Fitch A+ BBB+ A.M.
Gross written premiums, excluding third-party captives, excludes business which is ceded to third-party captives, including business related to large warranty programs. We use underwriting gain (loss), calculated using GAAP financial results, to monitor our insurance operations.
Gross written premiums, excluding third-party captives, excludes business which is ceded to third-party captives, including business related to large warranty programs. We use underwriting gain (loss) and underlying underwriting gain (loss), calculated using GAAP financial results, to monitor our insurance operations.
We conduct an ongoing review of our risk and catastrophe reinsurance coverages and from time to time make changes as we deem appropriate. The following discussion summarizes our most significant catastrophe reinsurance coverage at January 1, 2024.
We conduct an ongoing review of our risk and catastrophe reinsurance coverages and from time to time make changes as we deem appropriate. The following discussion summarizes our most significant catastrophe reinsurance coverage at January 1, 2025.
Further information on net prior year loss reserve development is in Note E to the Consolidated Financial Statements included under Item 8. The following table summarizes the gross and net carried reserves for Commercial.
Further information on net prior year loss reserve development is in Note E to the Consolidated Financial Statements included under Item 8. The following table summarizes the gross and net carried reserves for International.
As of December 31, 2023 the allowance for expected credit losses on our mortgage portfolio was $35 million, or 3.3% of our amortized cost basis. The following table presents the amortized cost basis of mortgage loans by property type.
As of December 31, 2024 and 2023 the allowance for expected credit losses on our mortgage portfolio was $35 million, or 3.3% of our amortized cost basis. The following table presents the amortized cost basis of mortgage loans by property type.
As of December 31, 2023, these holdings had an estimated fair value of $479 million and net unrealized losses of $87 million. We own other fixed maturity securities which have exposure to cell towers, data centers and other collateral types that could be viewed as having real estate characteristics.
As of December 31, 2024 and 2023, these holdings had an estimated fair value of $471 million and $479 million, and net unrealized losses of $118 million and $87 million. We own other fixed maturity securities which have exposure to cell towers, data centers and other collateral types that could be viewed as having real estate characteristics.
Best, Moody’s, S&P and Fitch maintain stable outlooks across the Company’s Financial Strength and Senior Debt Ratings. CNA Insurance Company Limited and CNA Insurance Company (Europe) S.A. are included within S&P’s Insurer Financial Strength Rating for the Company.
S&P and Fitch maintain stable outlooks across the Company’s Insurer Financial Strength and Senior Debt Ratings. CNA Insurance Company Limited and CNA Insurance Company (Europe) S.A. are included within S&P’s Insurer Financial Strength Rating for the Company.
AAA rated securities included $0.2 billion and $0.3 billion of prefunded municipal bonds as of December 31, 2023 and 2022. The following table presents available-for-sale fixed maturity securities in a gross unrealized loss position by ratings distribution. December 31, 2023 (In millions) Estimated Fair Value Gross Unrealized Losses U.S.
AAA rated securities included $0.2 billion of prefunded municipal bonds as of December 31, 2024 and 2023. The following table presents available-for-sale fixed maturity securities in a gross unrealized loss position by ratings distribution. December 31, 2024 (In millions) Estimated Fair Value Gross Unrealized Losses U.S.
Changes in estimates of claim and claim adjustment expense reserves, net of reinsurance, for prior years are defined as net prior year loss reserve development within this MD&A. These changes can be favorable or 33 Table of Contents unfavorable. Net prior year loss reserve development does not include the effect of any related acquisition expenses.
Changes in estimates of claim and claim adjustment expense reserves, net of reinsurance, for prior years are defined as net prior year loss reserve development within this MD&A. These changes can be favorable or unfavorable. Net prior year loss reserve development does not include the effect of any related acquisition expenses.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 2022 Compared with 2021 This section of this Form 10-K generally discusses 2023 and 2022 results and year-to-year comparisons between 2023 and 2022.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 2023 Compared with 2022 This section of this Form 10-K generally discusses 2024 and 2023 results and year-to-year comparisons between 2024 and 2023.
If the estimated claim severity for general liability increases by 6%, we estimate that our net reserves would increase by approximately $250 million. If the estimated claim severity for general liability decreases by 3%, we estimate that our net reserves would decrease by approximately $150 million.
If the estimated claim severity for general liability increases by 6%, we estimate that our net reserves would increase by approximately $300 million. If the estimated claim severity for general liability decreases by 3%, we estimate that our net reserves would decrease by approximately $150 million.
Statutory margin is the excess of carried reserves over best estimate reserves. As of September 30, 2023, statutory long-term care margin increased to $1.3 billion, primarily driven by a more favorable interest rate environment resulting in a higher yielding investment portfolio. 28 Table of Contents CATASTROPHES AND RELATED REINSURANCE Various events can cause catastrophe losses.
Statutory margin is the excess of carried reserves over best estimate reserves. As of September 30, 2024, statutory long-term care margin increased to $1.4 billion from $1.3 billion, primarily driven by a more favorable interest rate environment resulting in a higher yielding investment portfolio. 28 Table of Contents CATASTROPHES AND RELATED REINSURANCE Various events can cause catastrophe losses.
If estimated workers' compensation claim cost inflation decreases by 100 basis points for the entire period over which claim payments will be made, we estimate that our net reserves would decrease by approximately $250 million. Our net reserves for workers' compensation were approximately $3.6 billion as of December 31, 2023.
If estimated workers' compensation claim cost inflation decreases by 100 basis points for the entire period over which claim payments will be made, we estimate that our net reserves would decrease by approximately $250 million. Our net reserves for workers' compensation were approximately $3.5 billion as of December 31, 2024.
Our primary operating cash flow uses are payments for claims, policy benefits and operating expenses, including interest expense on corporate debt. Additionally, cash may be paid or received for income taxes. For 2023, net cash provided by operating activities was $2,285 million as compared with $2,502 million for 2022.
Our primary operating cash flow uses are payments for claims, policy benefits and operating expenses, including interest expense on corporate debt. Additionally, cash may be paid or received for income taxes. For 2024, net cash provided by operating activities was $2,571 million as compared with $2,285 million for 2023.
Syndicate 382 benefits from the Financial Strength Rating of Lloyd’s, which is rated AA- by S&P with a stable outlook and A by A.M. Best with a positive outlook. 53 Table of Contents ACCOUNTING STANDARDS UPDATE For a discussion of Accounting Standards, see Note A to the Consolidated Financial Statements included under Item 8.
Syndicate 382 benefits from the Insurer Financial Strength Rating of Lloyd’s, which is rated AA- by S&P with a stable outlook and A+ by A.M. Best with a stable outlook. 51 Table of Contents ACCOUNTING STANDARDS UPDATE For a discussion of Accounting Standards, see Note A to the Consolidated Financial Statements included under Item 8.
During the annual review, historical policyholder morbidity, persistency (inclusive of mortality), anticipated future premium rate increases and expense experience is reviewed and compared to the current best estimate actuarial assumption set for potential revision.
During the annual review, historical policyholder morbidity, persistency, anticipated future premium rate increases and expense experience is reviewed and compared to the current best estimate actuarial assumption set for potential revision.
Cash flows from investing activities include the purchase and disposition of financial instruments, excluding those held as trading, and may include the purchase and sale of businesses, equipment and other assets not generally held for resale. For 2023, net cash used by investing activities was $1,843 million as compared with $1,512 million for 2022.
Cash flows from investing activities include the purchase and disposition of financial instruments, excluding those held as trading, and may include the purchase and sale of businesses, equipment and other assets not generally held for resale. For 2024, net cash used by investing activities was $1,317 million as compared with $1,843 million for 2023.
We have assumed that revisions to such assumptions would occur in each policy type, age and duration within each policy group. The impact of each sensitivity is discrete and does not reflect the impact one factor may have on another or the mitigating impact from management actions, which may include additional future premium rate increases.
We have assumed that revisions to such assumptions would occur in each policy type, age and duration within each long-term care product. The impact of each sensitivity is discrete and does not reflect the impact one factor may have on another or the mitigating impact from management actions, which may include additional future premium rate increases.
Rate represents the average change in price on policies that renew excluding exposure change. Exposure represents the measure of risk used in the pricing of the insurance product. The change in exposure represents the change in premium dollars on policies that renew as a result of the change in risk of the policy.
Rate represents the average change in price on policies that renew excluding exposure change. Exposure represents the measure of risk used in the pricing of the insurance 32 Table of Contents product. The change in exposure represents the change in premium dollars on policies that renew as a result of the change in risk of the policy.
If the estimated claim severity increases by 9%, we estimate that net reserves would increase by approximately $500 million. If the estimated claim severity decreases by 3%, we estimate that net reserves would decrease by approximately $150 million. Our net reserves for these products were approximately $5.7 billion as of December 31, 2023.
If the estimated claim severity increases by 9%, we estimate that net reserves would increase by approximately $500 million. If the estimated claim severity decreases by 3%, we estimate that net reserves would decrease by approximately $150 million. Our net reserves for these products were approximately $5.8 billion as of December 31, 2024.
Under the current provisions of the program, in 2024, the federal government will reimburse 80% of our covered losses in excess of our applicable deductible up to a total industry program cap of $100 billion. Our deductible is based 29 Table of Contents on eligible commercial property and casualty earned premiums for the preceding calendar year.
Under the current provisions of the program, in 2025, the federal government will reimburse 80% of our covered losses in excess of our applicable deductible up to a total industry program cap of $100 billion. Our deductible is based on eligible commercial property and casualty earned premiums for the preceding calendar year.
Further information on our investment gains and losses as well as on our derivative financial instruments is set forth in Notes A and B to the Consolidated Financial Statements included under Item 8. 45 Table of Contents Portfolio Quality The following table presents the estimated fair value and net unrealized gains (losses) of our fixed maturity securities by rating distribution.
Further information on our investment gains and losses is set forth in Notes A and B to the Consolidated Financial Statements included under Item 8. 43 Table of Contents Portfolio Quality The following table presents the estimated fair value and net unrealized gains (losses) of our fixed maturity securities by rating distribution.
December 31 2023 2022 (In millions) Estimated Fair Value Net Unrealized Gains ( Losses) Estimated Fair Value Net Unrealized Gains ( Losses) U.S.
December 31 2024 2023 (In millions) Estimated Fair Value Net Unrealized Gains ( Losses) Estimated Fair Value Net Unrealized Gains ( Losses) U.S.
Intersegment eliminations are also included in this segment. We utilize the core income (loss) financial measure to monitor our operations. Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of net investment gains or losses.
Intersegment eliminations are also included in this segment. We utilize the core income (loss) financial measure to monitor our operations. Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of net investment gains or losses and gains or losses resulting from pension settlement transactions.
Estimated reduction to pretax income Hypothetical revisions (In millions) Morbidity: 2.5% increase in morbidity $ 275 5% increase in morbidity 600 Persistency: 5% decrease in active life mortality and lapse $ 150 10% decrease in active life mortality and lapse 300 Premium Rate Actions: 25% decrease in anticipated future premium rate increases $ 25 50% decrease in anticipated future premium rate increases 50 As part of the annual reserve review, statutory long-term care reserve adequacy is evaluated via premium deficiency testing, by comparing carried statutory reserves with our best estimate reserves, which incorporates best estimate discount rate and liability assumptions in its determination.
Estimated reduction to pretax income Hypothetical revisions (In millions) Morbidity: 2.5% increase in morbidity $ 290 5% increase in morbidity 590 Persistency: 5% decrease in active life mortality and lapse $ 160 10% decrease in active life mortality and lapse 310 Premium Rate Actions: 25% decrease in anticipated future premium rate increases $ 10 50% decrease in anticipated future premium rate increases 20 As part of the annual reserve review, statutory long-term care reserve adequacy is evaluated via premium deficiency testing, by comparing carried statutory reserves with our best estimate reserves, which incorporates best estimate discount rate and liability assumptions in its determination.
Both years are inclusive of cash flow assumption updates as a result of the annual reserve review completed in the third quarter of each year. Cash flow assumption updates for 2023 resulted in an $8 million pretax increase in long-term care reserves.
Both years are inclusive of assumption updates as a result of the annual reserve review completed in the third quarter of each year. The cash flow assumption updates from the annual reserve review for 2024 and 2023 resulted in a pretax increase in long-term care reserves of $15 million and $8 million.
Additionally, we do not have significant exposure through our limited partnership portfolio to funds whose primary strategy is real estate focused. 49 Table of Contents Duration A primary objective in the management of the investment portfolio is to optimize return relative to the corresponding liabilities and respective liquidity needs.
Additionally, we do not have significant real estate exposure through our limited partnership portfolio. 47 Table of Contents Duration A primary objective in the management of the investment portfolio is to optimize return relative to the corresponding liabilities and respective liquidity needs.
December 31, 2023 (In millions) Estimated Fair Value Net Unrealized Gains (Losses) Corporate and other bonds - REITs: AA $ 10 $ — A 285 (3) BBB 994 (64) Non-investment grade 27 (1) Total corporate and other bonds - REITs $ 1,316 $ (68) Mortgage loans are commercial in nature and are carried at unpaid principal balance, net of unamortized fees and an allowance for expected credit losses.
December 31, 2024 December 31, 2023 (In millions) Estimated Fair Value Net Unrealized Gains (Losses) Estimated Fair Value Net Unrealized Gains (Losses) Corporate and other bonds - REITs: AA $ 6 $ — $ 10 $ — A 310 (6) 285 (3) BBB 942 (40) 994 (64) Non-investment grade 37 (2) 27 (1) Total corporate and other bonds - REITs $ 1,295 $ (48) $ 1,316 $ (68) Mortgage loans are commercial in nature and are carried at unpaid principal balance, net of unamortized fees and an allowance for expected credit losses.
December 31, 2023 (In millions) Amortized Cost Percentage of Total Mortgage loans: Retail $ 520 48 % Office 245 23 % Industrial 124 12 % Other 181 17 % Total mortgage loans 1,070 100 % Less: Allowance for expected credit losses (35) Total mortgage loans - net of allowance $ 1,035 48 Table of Contents In addition to our mortgage loan portfolio, we invest in securitized credit tenant loans and ground lease financings that are classified as fixed maturity securities and are largely investment grade quality.
December 31, 2024 December 31, 2023 (In millions) Amortized Cost Percentage of Total Amortized Cost Percentage of Total Mortgage loans: Retail $ 527 50 % $ 520 48 % Office 239 22 % 245 23 % Industrial 123 12 % 124 12 % Other 165 16 % 181 17 % Total mortgage loans 1,054 100 % 1,070 100 % Less: Allowance for expected credit losses (35) (35) Total mortgage loans - net of allowance $ 1,019 $ 1,035 46 Table of Contents In addition to our mortgage loan portfolio, we invest in securitized credit tenant loans and ground lease financings that are classified as fixed maturity securities and are largely investment grade quality.
The treaty also provides $775 million of coverage for the accumulation of covered losses related to terrorism events above our per occurrence retention of $25 million. Of the $775 million in terrorism coverage, $200 million is provided for nuclear, biological chemical and radiation events.
The treaty also provides $775 million of coverage for the accumulation of covered losses related to terrorism events above our per occurrence retention of $25 million. Of the $775 million in terrorism coverage, $200 million is provided for nuclear, biological chemical and radiation events. All layers of the treaty provide for one full reinstatement.
Based on 2023 earned premiums, our estimated deductible under the program is $1.1 billion for 2024.
Based on 2024 earned premiums, our estimated deductible under the program is $1.2 billion for 2025.
The following table summarizes the gross and net carried reserves for International.
The following table summarizes the gross and net carried reserves for Commercial.
We have an effective shelf registration statement on file with the Securities and Exchange Commission under which we may publicly issue an unspecified amount of debt, equity or hybrid securities from time to time. 51 Table of Contents Common Stock Dividends Cash dividends of $2.88 per share on our common stock, including a special cash dividend of $1.20 per share, were declared and paid in 2023.
We have an effective shelf registration statement on file with the Securities and Exchange Commission under which we may publicly issue an unspecified amount of debt, equity or hybrid securities from time to time. 49 Table of Contents Common Stock Dividends Cash dividends of $3.76 per share on our common stock, including a special cash dividend of $2.00 per share, were declared and paid in 2024.
We view these securities to have risks more akin to operating enterprises that do not share the same risks as the broader commercial real estate market. We do not hold any direct investments in commercial real estate.
We view these securities to have risks more akin to operating enterprises that do not share the same risks as the broader commercial real estate market.
Group Workers' Compensation Treaty We also purchased corporate Workers' Compensation catastrophe excess-of-loss treaty reinsurance for the period January 1, 2024 to January 1, 2025 providing $275 million of coverage for the accumulation of covered losses related to natural catastrophes above our per occurrence retention of $25 million.
All layers of the treaty provide for one full reinstatement. Group Workers' Compensation Treaty We also purchased corporate Workers' Compensation catastrophe excess-of-loss treaty reinsurance for the period January 1, 2025 to January 1, 2026 providing $275 million of coverage for the accumulation of covered losses related to natural catastrophes above our per occurrence retention of $25 million.
Net written premiums for Specialty increased $23 million in 2023 as compared with 2022. The increase in net earned premiums was consistent with the trend in net written premiums.
Net written premiums for Specialty increased $116 million in 2024 as compared with 2023. The increase in net earned premiums was consistent with the trend in net written premiums.
Persistency is the percentage of policies remaining in force and can be affected by policy lapses, benefit reductions and death. Future premium rate increases are generally subject to regulatory approval, and therefore the exact timing and size of the approved rate increases are unknown.
Morbidity is the frequency and severity of injury, illness, sickness and diseases contracted. Persistency is the percentage of policies remaining in force and can be affected by policy lapses, benefit reductions and death. Future premium rate increases are generally subject to regulatory approval, and therefore the exact timing and size of the approved rate increases are unknown.
Overview 21 Critical Accounting Estimates 21 Reserves - Estimates and Uncertainties 23 Catastrophes and Related Reinsurance 29 Consolidated Operations 31 Segment Results 33 Specialty 35 Commercial 38 International 40 Life & Group 42 Corporate & Other 44 Investments 45 Net Investment Income 45 Net Investment Gains (Losses) 45 Portfolio Quality 46 Duration 50 Liquidity and Capital Resources 51 Cash Flows 51 Liquidity 51 Common Stock Dividends 52 Commitments, Contingencies and Guarantees 52 Ratings 53 Accounting Standards Updates 54 Recent Tax Legislation 54 Forward-Looking Statements 54 20 Table of Contents OVERVIEW The following discussion should be read in conjunction with Part I, Item 1A Risk Factors and Part II, Item 8 Financial Statements and Supplementary Data of this Form 10-K.
Overview 21 Critical Accounting Estimates 21 Reserves - Estimates and Uncertainties 23 Catastrophes and Related Reinsurance 29 Consolidated Operations 31 Segment Results 32 Specialty 34 Commercial 37 International 39 Life & Group 41 Corporate & Other 42 Investments 43 Net Investment Income 43 Net Investment Gains (Losses) 43 Portfolio Quality 44 Commercial Real Estate 45 Duration 48 Liquidity and Capital Resources 49 Cash Flows 49 Liquidity 49 Common Stock Dividends 50 Commitments, Contingencies and Guarantees 50 Ratings 51 Accounting Standards Updates 52 Forward-Looking Statements 52 20 Table of Contents OVERVIEW The following discussion should be read in conjunction with Part I, Item 1A Risk Factors and Part II, Item 8 Financial Statements and Supplementary Data of this Form 10-K.
For 2023, net cash used by financing activities was $577 million as compared with $1,032 million for 2022.
For 2024, net cash used by financing activities was $1,117 million as compared with $577 million for 2023.
On February 2, 2024, our Board of Directors declared a quarterly cash dividend of $0.44 per share and a special cash dividend of $2.00 per share, payable March 7, 2024 to stockholders of record on February 20, 2024.
On February 7, 2025, our Board of Directors declared a quarterly cash dividend of $0.46 per share and a special cash dividend of $2.00 per share, payable March 13, 2025 to stockholders of record on February 24, 2025.
December 31 (In millions) 2023 2022 Gross case reserves $ 864 $ 817 Gross IBNR reserves 1,845 1,586 Total gross carried claim and claim adjustment expense reserves $ 2,709 $ 2,403 Net case reserves $ 708 $ 686 Net IBNR reserves 1,568 1,317 Total net carried claim and claim adjustment expense reserves $ 2,276 $ 2,003 41 Table of Contents Life & Group The Life & Group segment includes our run-off long-term care business as well as structured settlement obligations not funded by annuities related to certain property and casualty claimants.
December 31 (In millions) 2024 2023 Gross case reserves $ 876 $ 864 Gross IBNR reserves 2,044 1,845 Total gross carried claim and claim adjustment expense reserves $ 2,920 $ 2,709 Net case reserves $ 741 $ 708 Net IBNR reserves 1,675 1,568 Total net carried claim and claim adjustment expense reserves $ 2,416 $ 2,276 40 Table of Contents Life & Group The Life & Group segment includes our run-off long-term care business as well as structured settlement obligations not funded by annuities related to certain property and casualty claimants.
Further information on net prior year loss reserve development is in Note E to the Consolidated Financial Statements included under Item 8. 36 Table of Contents The following table summarizes the gross and net carried reserves for Specialty.
Favorable net prior year loss reserve development of $9 million and $14 million was recorded in 2024 and 2023. Further information on net prior year loss reserve development is in Note E to the Consolidated Financial Statements included under Item 8. 35 Table of Contents The following table summarizes the gross and net carried reserves for Specialty.
December 31, 2023 (In millions) Estimated Fair Value Net Unrealized Gains (Losses) Commercial mortgage-backed: Single asset, single borrower: Office $ 306 $ (70) Retail 283 (28) Lodging 227 (23) Industrial 93 (4) Multifamily 59 (3) Total single asset, single borrower 968 (128) Conduits (multi property, multi borrower pools) 663 (95) Total commercial mortgage-backed $ 1,631 $ (223) December 31, 2023 (In millions) Estimated Fair Value Net Unrealized Gains (Losses) Commercial mortgage-backed: AAA $ 570 $ (27) AA 594 (95) A 202 (30) BBB 216 (45) Non-investment grade 49 (26) Total commercial mortgage-backed $ 1,631 $ (223) 47 Table of Contents The following tables present the estimated fair value and net unrealized gains (losses) of the REIT issuer exposure within our corporate and other bonds portfolio by property type and by ratings distribution.
December 31, 2024 December 31, 2023 (In millions) Estimated Fair Value Net Unrealized Gains (Losses) Estimated Fair Value Net Unrealized Gains (Losses) Commercial mortgage-backed: Single asset, single borrower: Office $ 339 $ (43) $ 306 $ (70) Lodging 271 (8) 227 (23) Retail 268 (10) 283 (28) Multifamily 50 (1) 59 (3) Industrial 42 (3) 93 (4) Total single asset, single borrower 970 (65) 968 (128) Conduits (multi property, multi borrower pools) 711 (66) 663 (95) Total commercial mortgage-backed $ 1,681 $ (131) $ 1,631 $ (223) December 31, 2024 December 31, 2023 (In millions) Estimated Fair Value Net Unrealized Gains (Losses) Estimated Fair Value Net Unrealized Gains (Losses) Commercial mortgage-backed: AAA $ 736 $ (14) $ 570 $ (27) AA 609 (60) 594 (95) A 163 (20) 202 (30) BBB 139 (20) 216 (45) Non-investment grade 34 (17) 49 (26) Total commercial mortgage-backed $ 1,681 $ (131) $ 1,631 $ (223) 45 Table of Contents The following tables present the estimated fair value and net unrealized gains (losses) of the REIT issuer exposure within our corporate and other bonds portfolio by property type and by ratings distribution.
Financing activities for the periods presented include: • In 2023, we paid dividends of $787 million and repurchased 550,000 shares of our common stock at an aggregate cost of $24 million. • In 2023, we issued $500 million of 5.50% senior notes due June 15, 2033 and repaid the $243 million outstanding aggregate principal balance of our 7.25% debenture which came due November 15, 2023. • In 2022, we paid dividends of $982 million and repurchased 890,000 shares of our common stock at an aggregate cost of $39 million.
Financing activities for the periods presented include: • In 2024, we issued $500 million of 5.125% notes due February 15, 2034 and repaid the $550 million outstanding aggregate principal balance of our 3.95% senior notes which came due May 15, 2024. • In 2024, we paid dividends of $1,025 million and repurchased 450,000 shares of our common stock at an aggregate cost of $20 million. • In 2023, we issued $500 million of 5.50% senior notes due June 15, 2033 and repaid the $243 million outstanding aggregate principal balance of our 7.25% debenture which came due November 15, 2023. • In 2023, we paid dividends of $787 million and repurchased 550,000 shares of our common stock at an aggregate cost of $24 million.
Group North American Property Treaty We purchased corporate catastrophe excess-of-loss treaty reinsurance covering our U.S. states and territories and Canadian property exposures underwritten in our North American and European companies. Exposures underwritten through Hardy are excluded and covered under a separate treaty.
Group North American Property Treaty We purchased corporate catastrophe excess-of-loss treaty reinsurance covering our U.S. states and territories and Canadian property exposures underwritten in our North American and European companies.
December 31 (In millions) 2023 2022 Gross case reserves $ 1,604 $ 1,529 Gross IBNR reserves 5,527 5,349 Total gross carried claim and claim adjustment expense reserves $ 7,131 $ 6,878 Net case reserves $ 1,392 $ 1,310 Net IBNR reserves 4,524 4,253 Total net carried claim and claim adjustment expense reserves $ 5,916 $ 5,563 37 Table of Contents Commercial Commercial works with a network of brokers and independent agents to market a broad range of property and casualty insurance products to all types of insureds targeting small business, construction, middle markets and other commercial customers.
December 31 (In millions) 2024 2023 Gross case reserves $ 2,023 $ 1,604 Gross IBNR reserves 5,403 5,527 Total gross carried claim and claim adjustment expense reserves $ 7,426 $ 7,131 Net case reserves $ 1,697 $ 1,392 Net IBNR reserves 4,282 4,524 Total net carried claim and claim adjustment expense reserves $ 5,979 $ 5,916 36 Table of Contents Commercial Commercial works with a network of brokers and independent agents to market a broad range of property and casualty insurance products to all types of insureds targeting small business, construction, middle markets and other commercial customers.
Our net reserves for general liability were approximately $4.2 billion as of December 31, 2023. 26 Table of Contents Given the factors described above, it is not possible to quantify precisely the ultimate exposure represented by claims and related litigation.
Our net reserves for commercial auto were approximately $1.2 billion as of December 31, 2024. Given the factors described above, it is not possible to quantify precisely the ultimate exposure represented by claims and related litigation.
December 31 (In millions) 2023 2022 Gross case reserves $ 3,291 $ 3,156 Gross IBNR reserves 6,812 6,239 Total gross carried claim and claim adjustment expense reserves $ 10,103 $ 9,395 Net case reserves $ 2,878 $ 2,809 Net IBNR reserves 6,143 5,621 Total net carried claim and claim adjustment expense reserves $ 9,021 $ 8,430 39 Table of Contents International The International segment underwrites property and casualty coverages on a global basis through a branch operation in Canada, a European business consisting of insurance companies based in the U.K. and Luxembourg and Hardy, our Lloyd's syndicate.
December 31 (In millions) 2024 2023 Gross case reserves $ 3,690 $ 3,291 Gross IBNR reserves 7,646 6,812 Total gross carried claim and claim adjustment expense reserves $ 11,336 $ 10,103 Net case reserves $ 3,135 $ 2,878 Net IBNR reserves 6,804 6,143 Total net carried claim and claim adjustment expense reserves $ 9,939 $ 9,021 38 Table of Contents International The International segment underwrites property and casualty coverages on a global basis through a branch operation in Canada, a European business consisting of insurance companies based in the U.K. and Luxembourg and Hardy, our Lloyd's syndicate.
One full reinstatement is available for the first $275 million above the retention, regardless of the covered peril. Terrorism Risk Insurance Program Reauthorization Act of 2019 Our principal reinsurance protection against large-scale terrorist attacks, including nuclear, biological, chemical or radiological attacks, is the coverage currently provided through TRIPRA which runs through the end of 2027.
Terrorism Risk Insurance Program Reauthorization Act of 2019 Our principal reinsurance protection against large-scale terrorist attacks, including nuclear, biological, chemical or radiological attacks, is the coverage currently provided through TRIPRA which runs through the end of 2027.
Years ended December 31 (In millions) 2023 2022 Fixed maturity securities: Corporate bonds and other $ (57) $ (89) States, municipalities and political subdivisions 10 26 Asset-backed (44) (34) Total fixed maturity securities (91) (97) Non-redeemable preferred stock 4 (116) Derivatives, short term and other (1) 22 Mortgage loans (11) (8) Net investment losses (99) (199) Income tax benefit on net investment losses 20 45 Net investment losses, after tax $ (79) $ (154) Pretax net investment losses decreased $100 million for 2023 as compared with 2022 driven by the favorable change in fair value of non-redeemable preferred stock.
Years ended December 31 (In millions) 2024 2023 Fixed maturity securities: Corporate bonds and other $ (57) $ (57) States, municipalities and political subdivisions 1 10 Asset-backed (46) (44) Total fixed maturity securities (102) (91) Non-redeemable preferred stock 21 4 Derivatives, short-term and other — (1) Mortgage loans — (11) Net investment losses (81) (99) Income tax benefit on net investment losses 17 20 Net investment losses, after tax $ (64) $ (79) Pretax net investment losses decreased $18 million for 2024 as compared with 2023 driven by the favorable change in fair value of non-redeemable preferred stock and lower net losses on disposals of fixed maturity securities, partially offset by higher impairment losses.
Core income increased $39 million in 2023 as compared with 2022 driven by higher net investment income, improved underlying underwriting results and a favorable impact from changes in foreign currency exchange rates, partially offset by unfavorable net prior year loss reserve development. 40 Table of Contents The combined ratio of 92.6% increased 0.8 points in 2023 as compared with 2022 due to a 1.9 point increase in the loss ratio partially offset by a 1.1 point improvement in the expense ratio.
Core income increased $8 million in 2024 as compared with 2023 driven by higher net investment income and favorable net prior year loss reserve development in the current year compared with unfavorable net prior year loss reserve development in the prior year, partially offset by lower underlying underwriting results and higher catastrophe losses. 39 Table of Contents The combined ratio of 94.0% increased 1.4 points in 2024 as compared with 2023 due to a 1.9 point increase in the expense ratio partially offset by a 0.5 point improvement in the loss ratio.
Years ended December 31 (In millions, except ratios, rate, renewal premium change and retention) 2023 2022 Gross written premiums $ 6,120 $ 5,170 Gross written premiums excluding third-party captives 5,994 5,056 Net written premiums 4,880 4,193 Net earned premiums 4,547 3,923 Underwriting gain 182 106 Net investment income 645 488 Core income 652 466 Other performance metrics: Loss ratio excluding catastrophes and development 61.5 % 61.5 % Effect of catastrophe impacts 4.5 5.6 Effect of development-related items (0.1) (0.7) Loss ratio 65.9 66.4 Expense ratio 29.6 30.4 Dividend ratio 0.5 0.5 Combined ratio 96.0 % 97.3 % Combined ratio excluding catastrophes and development 91.6 % 92.4 % Rate 7 % 5 % Renewal premium change 10 8 Retention 84 86 New business $ 1,297 $ 1,009 2023 Compared with 2022 Gross written premiums for Commercial increased $950 million in 2023 as compared with 2022 driven by higher new business and rate.
Years ended December 31 (In millions, except ratios, rate, renewal premium change and retention) 2024 2023 Gross written premiums $ 6,964 $ 6,120 Gross written premiums excluding third-party captives 6,816 5,994 Net written premiums 5,469 4,880 Net earned premiums 5,158 4,547 Underwriting gain 171 182 Net investment income 733 645 Core income 702 652 Other performance metrics: Loss ratio 68.3 % 65.9 % Expense ratio 27.9 29.6 Dividend ratio 0.5 0.5 Combined ratio 96.7 % 96.0 % Less: Effect of catastrophe impacts 6.2 4.5 Less: Effect of favorable development-related items (0.1) (0.1) Underlying combined ratio 90.6 % 91.6 % Underlying loss ratio 62.2 % 61.5 % Rate 6 % 7 % Renewal premium change 7 10 Retention 84 84 New business $ 1,512 $ 1,297 2024 Compared with 2023 Gross written premiums for Commercial increased $844 million in 2024 as compared with 2023 driven by favorable renewal premium change, rate and higher new business.
December 31, 2023 (In millions) Estimated Fair Value Net Unrealized Gains (Losses) Corporate and other bonds - REITs: Retail $ 515 $ (25) Office 250 (20) Industrial 99 (1) Other (1) 452 (22) Total corporate and other bonds - REITs $ 1,316 $ (68) (1) Other includes a diversified mix of property type strategies including self-storage, healthcare and apartments.
December 31, 2024 December 31, 2023 (In millions) Estimated Fair Value Net Unrealized Gains (Losses) Estimated Fair Value Net Unrealized Gains (Losses) Corporate and other bonds - REITs: Retail $ 478 $ (18) $ 515 $ (25) Office 239 (12) 250 (20) Self-Storage 98 (5) 85 (6) Industrial 93 (3) 99 (1) Other (1) 387 (10) 367 (16) Total corporate and other bonds - REITs $ 1,295 $ (48) $ 1,316 $ (68) (1) Other includes a diversified mix of property type strategies including healthcare and apartments.
Years ended December 31 (In millions, except ratios, rate, renewal premium change and retention) 2023 2022 Gross written premiums $ 7,113 $ 7,514 Gross written premiums excluding third-party captives 3,800 3,814 Net written premiums 3,329 3,306 Net earned premiums 3,307 3,203 Underwriting gain 317 366 Net investment income 558 431 Core income 708 668 Other performance metrics: Loss ratio excluding catastrophes and development 58.5 % 58.6 % Effect of catastrophe impacts — 0.1 Effect of development-related items (0.3) (1.3) Loss ratio 58.2 57.4 Expense ratio 32.0 31.0 Dividend ratio 0.2 0.2 Combined ratio 90.4 % 88.6 % Combined ratio excluding catastrophes and development 90.7 % 89.8 % Rate — % 6 % Renewal premium change 1 7 Retention 88 86 New business $ 481 $ 548 2023 Compared with 2022 Gross written premiums, excluding third-party captives, for Specialty decreased $14 million in 2023 as compared with 2022 driven by lower new business partially offset by strong retention.
Years ended December 31 (In millions, except ratios, rate, renewal premium change and retention) 2024 2023 Gross written premiums $ 6,932 $ 7,113 Gross written premiums excluding third-party captives 3,895 3,800 Net written premiums 3,445 3,329 Net earned premiums 3,361 3,307 Underwriting gain 249 317 Net investment income 626 558 Core income 694 708 Other performance metrics: Loss ratio 59.5 % 58.2 % Expense ratio 32.8 32.0 Dividend ratio 0.3 0.2 Combined ratio 92.6 % 90.4 % Less: Effect of catastrophe impacts — — Less: Effect of favorable development-related items (0.3) (0.3) Underlying combined ratio 92.9 % 90.7 % Underlying loss ratio 59.8 % 58.5 % Rate 1 % — % Renewal premium change 2 1 Retention 89 88 New business $ 462 $ 481 2024 Compared with 2023 Gross written premiums, excluding third-party captives, for Specialty increased $95 million in 2024 as compared with 2023 driven by retention and favorable renewal premium change.
Catastrophe losses were $29 million, or 2.5 points of the loss ratio, for 2023, as compared with $23 million, or 2.2 points of the loss ratio, for 2022.
Catastrophe losses were $318 million, or 6.2 points of the loss ratio, for 2024, as compared with $207 million, or 4.5 points of the loss ratio, for 2023.
December 31 2023 2022 (In millions) Estimated Fair Value Effective Duration (In years) Estimated Fair Value Effective Duration (In years) Investments supporting Life & Group $ 15,137 10.2 $ 14,511 9.9 Other investments 27,981 4.5 25,445 4.7 Total $ 43,118 6.5 $ 39,956 6.6 The investment portfolio is periodically analyzed for changes in duration and related price risk.
December 31 2024 2023 (In millions) Estimated Fair Value Effective Duration (In years) Estimated Fair Value Effective Duration (In years) Life & Group $ 14,915 9.8 $ 15,137 10.2 Property & Casualty and Corporate & Other 28,779 4.3 27,981 4.5 Total $ 43,694 6.2 $ 43,118 6.5 The investment portfolio is periodically analyzed for changes in duration and related price risk.
Years ended December 31 (In millions, except ratios, rate, renewal premium change and retention) 2023 2022 Gross written premiums $ 1,485 $ 1,394 Net written premiums 1,237 1,164 Net earned premiums 1,176 1,070 Underwriting gain 86 87 Net investment income 103 63 Core income 145 106 Other performance metrics: Loss ratio excluding catastrophes and development 57.8 % 58.5 % Effect of catastrophe impacts 2.5 2.2 Effect of development-related items 1.1 (1.2) Loss ratio 61.4 59.5 Expense ratio 31.2 32.3 Combined ratio 92.6 % 91.8 % Combined ratio excluding catastrophes and development 89.0 % 90.8 % Rate 3 % 6 % Renewal premium change 6 11 Retention 83 81 New business $ 302 $ 319 2023 Compared with 2022 Gross written premiums for International increased $91 million in 2023 as compared with 2022.
Years ended December 31 (In millions, except ratios, rate, renewal premium change and retention) 2024 2023 Gross written premiums $ 1,483 $ 1,485 Net written premiums 1,262 1,237 Net earned premiums 1,256 1,176 Underwriting gain 76 86 Net investment income 131 103 Core income 153 145 Other performance metrics: Loss ratio 60.9 % 61.4 % Expense ratio 33.1 31.2 Combined ratio 94.0 % 92.6 % Less: Effect of catastrophe impacts 3.2 2.5 Less: Effect of (favorable) unfavorable development-related items (0.4) 1.1 Underlying combined ratio 91.2 % 89.0 % Underlying loss ratio 58.1 % 57.8 % Rate (1) % 3 % Renewal premium change — 6 Retention 82 83 New business $ 288 $ 302 2024 Compared with 2023 Gross written premiums for International decreased $2 million in 2024 as compared with 2023.
Years ended December 31 (In millions) 2023 2022 Net investment income $ 62 $ 19 Insurance claims and policyholders' benefits 82 76 Interest expense 126 112 Core loss (173) (183) 2023 Compared with 2022 Core loss decreased $10 million for 2023 as compared with 2022.
Years ended December 31 (In millions) 2024 2023 Net investment income $ 67 $ 62 Insurance claims and policyholders' benefits 106 82 Interest expense 133 126 Core loss (210) (173) 2024 Compared with 2023 Core loss increased $37 million for 2024 as compared with 2023.
There are currently no amounts outstanding under our $250 million senior unsecured revolving credit facility, which was amended and restated during the fourth quarter of 2023, and no borrowings outstanding through our membership in the Federal Home Loan Bank of Chicago (FHLBC).
There are currently no amounts outstanding under our $250 million senior unsecured revolving credit facility and no borrowings outstanding through our membership in the Federal Home Loan Bank of Chicago (FHLBC). CCC paid dividends of $995 million and $1,055 million to CNAF during 2024 and 2023.
Years ended December 31 (In millions) 2023 2022 Fixed income securities: Taxable fixed income securities $ 1,798 $ 1,585 Tax-exempt fixed income securities 178 244 Total fixed income securities 1,976 1,829 Limited partnership and common stock investments 202 (31) Other, net of investment expense 86 7 Net investment income $ 2,264 $ 1,805 Effective income yield for the fixed income securities portfolio 4.7 % 4.4 % Limited partnership and common stock return 9.4 % (1.4) % Net investment income increased $459 million in 2023 as compared with 2022 driven by favorable limited partnership returns and higher income from fixed income securities as a result of the rising interest rate environment.
Years ended December 31 (In millions) 2024 2023 Fixed income securities: Taxable fixed income securities $ 1,940 $ 1,798 Tax-exempt fixed income securities 144 178 Total fixed income securities 2,084 1,976 Limited partnership and common stock investments 320 202 Other, net of investment expense 93 86 Net investment income $ 2,497 $ 2,264 Effective income yield for the fixed income securities portfolio 4.8 % 4.7 % Limited partnership and common stock return 13.3 % 9.4 % Net investment income increased $233 million in 2024 as compared with 2023 driven by favorable limited partnership and common stock returns, as well as higher income from fixed income securities as a result of a larger invested asset base and favorable reinvestment rates.
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.
Net investment gains or losses are excluded from the calculation of core income (loss) because they are generally driven by economic factors that are not necessarily reflective of our primary operations.
The current year includes higher net investment income, a $19 million after-tax charge related to office consolidation, and a $56 million after-tax charge related to unfavorable prior period development for legacy mass tort claims compared with a $51 million after-tax charge for legacy mass tort claims in the prior year.
The current year also includes a $62 million after-tax charge related to unfavorable net prior year loss reserve development for legacy mass tort claims compared with a $56 million after-tax charge for legacy mass tort claims in the prior year.
Favorable net prior year loss reserve development of $32 million was recorded in 2022 as compared with unfavorable net prior year loss reserve development of $11 million in 2021 related to our Specialty, Commercial, International and Corporate & Other segments.
Unfavorable net prior year loss reserve development of $48 million was recorded in each of 2024 and 2023 related to our Specialty, Commercial, International and Corporate & Other segments.
See further discussion regarding how we manage our business and reconciliations of non-GAAP measures to the most comparable GAAP measures and other information in Note P to the Consolidated Financial Statements included under Item 8.
For reconciliations of non-GAAP measures to the most comparable GAAP measures and other information, please see below and Note P to the Consolidated Financial Statements included under Item 8.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+0 added−0 removed12 unchanged
Biggest changeMarket Risk Scenario 2 December 31, 2023 Increase (Decrease) (In millions) Estimated Fair Value Interest Rate Risk Foreign Currency Risk Equity Price Risk Assets: Fixed maturity securities $ 40,425 $ (4,166) $ (638) $ — Equity securities 683 (22) — (48) Limited partnership investments 2,174 — (1) (217) Other invested assets 80 — (15) — Mortgage loans (1) 997 (51) — — Short-term investments 2,165 (4) (38) — Total assets 46,524 (4,243) (692) (265) Derivative financial instruments, included in Other liabilities (1) — 3 — Total $ 46,523 $ (4,243) $ (689) $ (265) Short-term debt (2) $ 546 $ (3) $ — $ — Long-term debt (2) 2,385 (165) — — Total debt $ 2,931 $ (168) $ — $ — December 31, 2022 Increase (Decrease) (In millions) Estimated Fair Value Interest Rate Risk Foreign Currency Risk Equity Price Risk Assets: Fixed maturity securities $ 37,627 $ (3,902) $ (532) $ — Equity securities 674 (26) — (46) Limited partnership investments 1,926 — — (193) Other invested assets 78 — (14) — Mortgage loans (1) 973 (57) — — Short-term investments 1,832 (3) (41) — Total assets 43,110 (3,988) (587) (239) Derivative financial instruments, included in Other liabilities (1) — 2 — Total $ 43,109 $ (3,988) $ (585) $ (239) Short-term debt (2) $ 248 $ (3) $ — $ — Long-term debt (2) 2,349 (138) — — Total debt $ 2,597 $ (141) $ — $ — (1) Reported at amortized value, less allowance for credit loss, in the Consolidated Balance Sheets included under Item 8 and not adjusted for fair value changes.
Biggest changeMarket Risk Scenario 2 December 31, 2024 Increase (Decrease) (In millions) Estimated Fair Value Interest Rate Risk Foreign Currency Risk Equity Price Risk Assets: Fixed maturity securities $ 41,111 $ (4,024) $ (651) $ — Equity securities 659 (23) — (45) Limited partnership investments 2,520 — (2) (252) Other invested assets 85 — (16) — Mortgage loans (1) 987 (45) — — Short-term investments 2,088 (2) (45) — Total assets 47,450 (4,094) (714) (297) Derivative financial instruments, included in Other liabilities — — — — Total $ 47,450 $ (4,094) $ (714) $ (297) Short-term debt (2) $ — $ — $ — $ — Long-term debt (2) 2,885 (188) — — Total debt $ 2,885 $ (188) $ — $ — December 31, 2023 Increase (Decrease) (In millions) Estimated Fair Value Interest Rate Risk Foreign Currency Risk Equity Price Risk Assets: Fixed maturity securities $ 40,425 $ (4,166) $ (638) $ — Equity securities 683 (22) — (48) Limited partnership investments 2,174 — (1) (217) Other invested assets 80 — (15) — Mortgage loans (1) 997 (51) — — Short-term investments 2,165 (4) (38) — Total assets 46,524 (4,243) (692) (265) Derivative financial instruments, included in Other liabilities (1) — 3 — Total $ 46,523 $ (4,243) $ (689) $ (265) Short-term debt (2) $ 546 $ (3) $ — $ — Long-term debt (2) 2,385 (165) — — Total debt $ 2,931 $ (168) $ — $ — (1) Reported at amortized value, less allowance for credit loss, in the Consolidated Balance Sheets included under Item 8 and not adjusted for fair value changes.
Equity price risk was measured assuming an instantaneous 10% and 25% decline in the S&P 500 from its level as of December 31, 2023 and 2022, with all other variables held constant. Our common stock holdings, which are included in equity securities, were assumed to be highly and positively correlated with the S&P 500 index.
Equity price risk was measured assuming an instantaneous 10% and 25% decline in the S&P 500 from its level as of December 31, 2024 and 2023, with all other variables held constant. Our common stock holdings, which are included in equity securities, were assumed to be highly and positively correlated with the S&P 500 index.
The sensitivity analysis estimates the decline in the fair value of our interest sensitive assets and liabilities that were held as of December 31, 2023 and 2022 due to an instantaneous change in the yield of the security at the end of the period of 100 and 150 basis points, with all other variables held constant.
The sensitivity analysis estimates the decline in the fair value of our interest sensitive assets and liabilities that were held as of December 31, 2024 and 2023 due to an instantaneous change in the yield of the security at the end of the period of 100 and 150 basis points, with all other variables held constant.
The sensitivity analysis also assumes an instantaneous 10% and 20% decline in the foreign currency exchange rates versus the United States dollar from their levels as of December 31, 2023 and 2022, with all other variables held constant.
The sensitivity analysis also assumes an instantaneous 10% and 20% decline in the foreign currency exchange rates versus the United States dollar from their levels as of December 31, 2024 and 2023, with all other variables held constant.
For our limited partnership holdings, the estimated change in value was largely derived from a beta analysis calculation of historical experience of our portfolio and indices with similar strategies relative to the S&P 500. 57 Table of Contents The following tables present the estimated effects on the fair value of our financial instruments as of December 31, 2023 and 2022 due to an increase in yield rates of 100 basis points, a 10% decline in foreign currency exchange rates and a 10% decline in the S&P 500, with all other variables held constant.
For our limited partnership holdings, the estimated change in value was largely derived from a beta analysis calculation of historical experience of our portfolio and indices with similar strategies relative to the S&P 500. 54 Table of Contents The following tables present the estimated effects on the fair value of our financial instruments as of December 31, 2024 and 2023 due to an increase in yield rates of 100 basis points, a 10% decline in foreign currency exchange rates and a 10% decline in the S&P 500, with all other variables held constant.
(2) Reported at amortized value in the Consolidated Balance Sheets included under Item 8 and not adjusted for fair value changes. 58 Table of Contents The following tables present the estimated effects on the fair value of our financial instruments as of December 31, 2023 and 2022 due to an increase in yield rates of 150 basis points, a 20% decline in foreign currency exchange rates and a 25% decline in the S&P 500, with all other variables held constant.
(2) Reported at amortized value in the Consolidated Balance Sheets included under Item 8 and not adjusted for fair value changes. 55 Table of Contents The following tables present the estimated effects on the fair value of our financial instruments as of December 31, 2024 and 2023 due to an increase in yield rates of 150 basis points, a 20% decline in foreign currency exchange rates and a 25% decline in the S&P 500, with all other variables held constant.
We have estimated the change in the carrying value of the LFPB due to interest rate changes by discounting the expected future cash flows using different interest rate scenarios. 59 Table of Contents
We have estimated the change in the carrying value of the LFPB due to interest rate changes by discounting the expected future cash flows using different interest rate scenarios. 56 Table of Contents
The estimated decrease in the carrying value of the LFPB as of December 31, 2023 and 2022 due to an increase in yield rates of 150 basis points was $2.1 billion.
The estimated decrease in the carrying value of the LFPB as of December 31, 2024 and 2023 due to an increase in yield rates of 150 basis points was $1.8 billion and $2.1 billion.
The carrying value of the LFPB was $14.0 billion and $13.5 billion as of December 31, 2023 and 2022. The estimated decrease in the carrying value of the LFPB as of December 31, 2023 and 2022 due to an increase in yield rates of 100 basis points was $1.5 billion.
The carrying value of the LFPB was $13.2 billion and $14.0 billion as of December 31, 2024 and 2023. The estimated decrease in the carrying value of the LFPB as of December 31, 2024 and 2023 due to an increase in yield rates of 100 basis points was $1.3 billion and $1.5 billion.
Market Risk Scenario 1 December 31, 2023 Increase (Decrease) (In millions) Estimated Fair Value Interest Rate Risk Foreign Currency Risk Equity Price Risk Assets: Fixed maturity securities $ 40,425 $ (2,779) $ (319) $ — Equity securities 683 (14) — (19) Limited partnership investments 2,174 — (1) (87) Other invested assets 80 — (7) — Mortgage loans (1) 997 (34) — — Short-term investments 2,165 (2) (19) — Total assets 46,524 (2,829) (346) (106) Derivative financial instruments, included in Other liabilities (1) — 1 — Total $ 46,523 $ (2,829) $ (345) $ (106) Short-term debt (2) $ 546 $ (2) $ — $ — Long-term debt (2) 2,385 (110) — — Total debt $ 2,931 $ (112) $ — $ — December 31, 2022 Increase (Decrease) (In millions) Estimated Fair Value Interest Rate Risk Foreign Currency Risk Equity Price Risk Assets: Fixed maturity securities $ 37,627 $ (2,603) $ (266) $ — Equity securities 674 (18) — (18) Limited partnership investments 1,926 — — (77) Other invested assets 78 — (7) — Mortgage loans (1) 973 (38) — — Short-term investments 1,832 (2) (21) — Total assets 43,110 (2,661) (294) (95) Derivative financial instruments, included in Other liabilities (1) — 1 — Total $ 43,109 $ (2,661) $ (293) $ (95) Short-term debt (2) $ 248 $ (2) $ — $ — Long-term debt (2) 2,349 (92) — — Total debt $ 2,597 $ (94) $ — $ — (1) Reported at amortized value, less allowance for credit loss, in the Consolidated Balance Sheets included under Item 8 and not adjusted for fair value changes.
Market Risk Scenario 1 December 31, 2024 Increase (Decrease) (In millions) Estimated Fair Value Interest Rate Risk Foreign Currency Risk Equity Price Risk Assets: Fixed maturity securities $ 41,111 $ (2,684) $ (326) $ — Equity securities 659 (15) — (18) Limited partnership investments 2,520 — (1) (101) Other invested assets 85 — (8) — Mortgage loans (1) 987 (30) — — Short-term investments 2,088 (1) (23) — Total assets 47,450 (2,730) (358) (119) Derivative financial instruments, included in Other liabilities — — — — Total $ 47,450 $ (2,730) $ (358) $ (119) Short-term debt (2) $ — $ — $ — $ — Long-term debt (2) 2,885 (125) — — Total debt $ 2,885 $ (125) $ — $ — December 31, 2023 Increase (Decrease) (In millions) Estimated Fair Value Interest Rate Risk Foreign Currency Risk Equity Price Risk Assets: Fixed maturity securities $ 40,425 $ (2,779) $ (319) $ — Equity securities 683 (14) — (19) Limited partnership investments 2,174 — (1) (87) Other invested assets 80 — (7) — Mortgage loans (1) 997 (34) — — Short-term investments 2,165 (2) (19) — Total assets 46,524 (2,829) (346) (106) Derivative financial instruments, included in Other liabilities (1) — 1 — Total $ 46,523 $ (2,829) $ (345) $ (106) Short-term debt (2) $ 546 $ (2) $ — $ — Long-term debt (2) 2,385 (110) — — Total debt $ 2,931 $ (112) $ — $ — (1) Reported at amortized value, less allowance for credit loss, in the Consolidated Balance Sheets included under Item 8 and not adjusted for fair value changes.

Other CNA 10-K year-over-year comparisons