cna-20220801

FOR IMMEDIATE RELEASE

CNA FINANCIAL ANNOUNCES SECOND QUARTER 2022

NET INCOME OF $0.75 PER SHARE AND CORE INCOME OF $0.90 PER SHARE

•Net income of $205 million, which includes $40 million of net investment losses, versus net income of $368 million, which includes $27 million of net investment gains in the prior year quarter. Core income of $245 million versus $341 million in the prior year quarter reflects lower investment income from LPs and common stock, partially offset by higher underwriting income and higher income from fixed income securities.

•P&C core income of $317 million versus $351 million in the prior year quarter reflects lower investment income from LPs and common stock, partially offset by pretax underwriting income of $185 million, up 64%, and higher income from fixed income securities.

•Life & Group core income of $6 million versus $43 million in the prior year quarter reflects lower investment income from LPs.

•Corporate & Other core loss of $(78) million versus core loss of $(53) million in the prior year quarter, includes a $51 million after-tax charge related to unfavorable prior period development largely associated with legacy mass tort abuse claims, including the recent Diocese of Rochester proposed settlement.

•Net investment income of $432 million pretax includes a $16 million increase from fixed income securities to $451 million, offset by a $171 million decline from LPs and common stock.

•The P&C combined ratio was 91.0%, the lowest in over five years, compared with 94.0% in the prior year quarter, including 1.8 points of catastrophe loss impact compared with 2.8 points in the prior year quarter.

•The underlying combined ratio was 90.8%,the lowest on record, compared with 91.4% in the prior year quarter. The underlying loss ratio was 60.0% and the expense ratio was 30.5%.

•P&C segments, excluding third party captives, generated gross written premium growth of 17%. Net written premium growth was 20% in the quarter. Excluding the one-time catch-up related to the addition of a property quota share reinsurance treaty in the prior period, net written premiums grew 13%.

•P&C written rate of +6% and earned rate of +8% for the quarter.

•Book value per share excluding AOCI of $45.06, a 4% increase from year-end 2021 adjusting for $2.80 of dividends per share; book value per share of $35.06 was also impacted by a decrease in AOCI reflecting the effect of higher interest rates on fixed income net unrealized gains and losses.

•Board of Directors declares regular quarterly cash dividend of $0.40 per share.

CHICAGO, August 1, 2022 --- CNA Financial Corporation (NYSE: CNA) today announced second quarter 2022 net income of $205 million, or $0.75 per share, versus $368 million, or $1.35 per share, in the prior year quarter. Core income for the quarter was $245 million, or $0.90 per share, versus $341 million, or $1.25 per share, in the prior year quarter. Net investment losses for the quarter were $40 million, which were primarily driven by mark to market losses on non-redeemable preferred stock, compared to net investment gains of $27 million in the prior year quarter.

Our Property & Casualty segments produced core income of $317 million for the second quarter of 2022, a decrease of $34 million compared to the prior year quarter driven by lower investment income from LPs and common stock, partially offset by much improved underwriting results which increased $72 million and higher income from fixed income securities. Property & Casualty segments, excluding third party captives, generated gross written premium growth of 17% and net written premium growth of 20% (13% adjusting for the impact of a one-time ceded premium catch-up related to the addition of a property quota share reinsurance treaty in the prior period), driven by strong retention of 85% and new business growth of 27%.

Our Life & Group and Corporate & Other segments produced core income (loss) for the second quarter of 2022 of $6 million and $(78) million, respectively. Corporate & Other includes a $51 million after-tax charge related to unfavorable prior period development largely associated with legacy mass tort abuse claims, including the recent Diocese of Rochester proposed settlement.

CNA Financial declared a quarterly dividend of $0.40 per share, payable September 1, 2022 to stockholders of record on August 15, 2022.


	Results for the Three Months Ended June 30				Results for the Six Months Ended June 30
($ millions, except per share data)	2022		2021		2022		2021
Net income	$	205	$	368	$	518	$	680
Core income (a)	245		341		561		604

Net income per diluted share	$	0.75	$	1.35	$	1.90	$	2.49
Core income per diluted share	0.90		1.25		2.06		2.21


	June 30, 2022		December 31, 2021
Book value per share	$	35.06	$	47.20
Book value per share excluding AOCI		45.06		46.02

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

"Core income of $245 million was down 28% this quarter due to a $171 million decline from LPs and common stock. Income from fixed income investments was up $16 million this quarter to $451 million and P&C underwriting gain was up 64%, reflecting higher underlying underwriting income, lower cats, and favorable prior period development. The underlying combined ratio of 90.8% is our lowest on record. And I am very pleased with our top-line P&C gross written premium growth ex captives of 17% in the quarter. This was driven by our strongest retention in nearly five years and very strong new business growth. Written rate change moderated only slightly this quarter to 6%, and Commercial rates have remained relatively stable at about 5%, moderating only one point from the third quarter of 2021, while earned rate of 8% remains above loss cost trends. We had fantastic P&C performance across the board in the second quarter, and we remain optimistic about the market conditions and our growth opportunities for the remainder of the year," said Dino E. Robusto, Chairman & Chief Executive Officer of CNA Financial Corporation.

Property & Casualty Operations


	Results for the Three Months Ended June 30						Results for the Six Months Ended June 30
($ millions)	2022			2021			2022			2021
Gross written premiums ex. 3rd party captives	$	2,676		$	2,296		$	5,130		$	4,566
GWP ex. 3rd party captives change (% year over year)	17		%				12		%
Net written premiums	$	2,296		$	1,909		$	4,319		$	3,846
NWP change (% year over year)	20		%				12		%
Net investment income	$	227		$	322		$	462		$	601
Core income	317			351			638			614

Loss ratio excluding catastrophes and development	60.0		%	59.5		%	60.0		%	59.8		%
Effect of catastrophe impacts	1.8			2.8			1.4			4.7
Effect of development-related items	(1.6)			(0.2)			(1.0)			(0.3)
Loss ratio	60.2		%	62.1		%	60.4		%	64.2		%

Expense ratio	30.5		%	31.6		%	30.7		%	31.5		%

Combined ratio	91.0		%	94.0		%	91.4		%	96.0		%
Combined ratio excluding catastrophes and development	90.8		%	91.4		%	91.0		%	91.6		%

•The underlying combined ratio improved 0.6 points as compared with the prior year quarter. The expense ratio improved 1.1 points compared to the prior year quarter driven by lower acquisition costs and net earned premium growth of 7%. The underlying loss ratio increased 0.5 points driven by a shift in mix of business in Commercial associated with the property quota share treaty purchased during June of 2021.

•The combined ratio improved 3.0 points as compared with the prior year quarter. Catastrophe losses were $37 million, or 1.8 points of the loss ratio in the quarter compared with $54 million, or 2.8 points of the loss ratio, for the prior year quarter. Favorable net prior period development improved the loss ratio by 1.6 points in the current quarter compared with 0.2 points of improvement in the prior year quarter.

•P&C segments, excluding third party captives, generated gross written premium growth of 17% and net written premium growth of 20%. Excluding the impact of a one-time catch-up related to the addition of a property quota share reinsurance treaty in the prior period, net written premiums grew 13%.

Business Operating Highlights

Specialty


	Results for the Three Months Ended June 30						Results for the Six Months Ended June 30
($ millions)	2022			2021			2022			2021
Gross written premiums ex. 3rd party captives	$	973		$	897		$	1,858		$	1,713
GWP ex. 3rd party captives change (% year over year)	8		%				8		%
Net written premiums	$	832		$	786		$	1,603		$	1,528
NWP change (% year over year)	6		%				5		%
Core income	$	161		$	188		$	324		$	358

Loss ratio excluding catastrophes and development	58.6		%	59.0		%	58.7		%	59.2		%
Effect of catastrophe impacts	0.1			—			0.1			0.3
Effect of development-related items	(1.2)			(1.3)			(1.3)			(1.6)
Loss ratio	57.5		%	57.7		%	57.5		%	57.9		%

Expense ratio	30.4		%	30.0		%	30.7		%	30.2		%

Combined ratio	88.1		%	87.9		%	88.4		%	88.3		%
Combined ratio excluding catastrophes and development	89.2		%	89.2		%	89.6		%	89.6		%

•The underlying combined ratio was consistent with the prior year quarter. The underlying loss ratio improved 0.4 points as compared with the prior year quarter. The expense ratio increased 0.4 points as compared with the prior year quarter driven by higher underwriting expenses.

•The combined ratio increased 0.2 points as compared with the prior year quarter. Favorable net prior period development improved the loss ratio by 1.2 points in the quarter compared with 1.3 points of improvement in the prior year quarter.

•Gross written premiums, excluding third party captives, grew 8% and net written premiums grew 6% for the second quarter of 2022.

Commercial


	Results for the Three Months Ended June 30						Results for the Six Months Ended June 30
($ millions)	2022			2021			2022			2021
Gross written premiums ex. 3rd party captives	$	1,321		$	1,060		$	2,527		$	2,171
GWP ex. 3rd party captives change (% year over year)	25		%				16		%
Net written premiums	$	1,134		$	831		$	2,135		$	1,791
NWP change (% year over year)	36		%				19		%
Core income	$	138		$	137		$	270		$	206

Loss ratio excluding catastrophes and development	61.5		%	60.1		%	61.5		%	60.4		%
Effect of catastrophe impacts	3.0			5.8			2.4			9.6
Effect of development-related items	(1.8)			0.8			(0.9)			0.7
Loss ratio	62.7		%	66.7		%	63.0		%	70.7		%

Expense ratio	30.0		%	32.3		%	30.3		%	31.8		%

Combined ratio	93.2		%	99.6		%	93.8		%	103.1		%
Combined ratio excluding catastrophes and development	92.0		%	93.0		%	92.3		%	92.8		%

•The underlying combined ratio improved 1.0 point as compared with the prior year quarter, reflecting the lowest underlying combined ratio on record. The expense ratio improved 2.3 points driven by lower acquisition costs and net earned premium growth of 11%. The underlying loss ratio increased 1.4 points primarily driven by a shift in mix of business associated with the property quota share treaty purchased during June of 2021. Our property coverages, which have a lower underlying loss ratio than most other commercial coverages, now represent a smaller proportion of net earned premiums.

•The combined ratio improved 6.4 points as compared with the prior year quarter. Catastrophe losses were $29 million, or 3.0 points of the loss ratio in the second quarter of 2022 compared with $51 million, or 5.8 points of the loss ratio, for the prior year quarter. Favorable net prior year development improved the loss ratio by 1.8 points in the quarter compared with 0.8 points of unfavorable development increasing the loss ratio in the prior year quarter.

•Gross written premiums, excluding third party captives, grew 25%. Excluding the impact of a one-time catch-up related to the addition of a property quota share reinsurance treaty in the prior period, net written premiums grew 20% for the second quarter of 2022.

International


	Results for the Three Months Ended June 30						Results for the Six Months Ended June 30
($ millions)	2022			2021			2022			2021
Gross written premiums	$	382		$	339		$	745		$	682
GWP change (% year over year)	13		%				9		%
Net written premiums	$	330		$	292		$	581		$	527
NWP change (% year over year)	13		%				10		%
Core income	$	18		$	26		$	44		$	50

Loss ratio excluding catastrophes and development	58.5		%	59.0		%	58.6		%	59.3		%
Effect of catastrophe impacts	2.8			0.8			2.0			1.4
Effect of development-related items	(1.8)			(0.3)			(1.0)			(0.2)
Loss ratio	59.5		%	59.5		%	59.6		%	60.5		%

Expense ratio	32.1		%	33.5		%	32.4		%	33.9		%

Combined ratio	91.6		%	93.0		%	92.0		%	94.4		%
Combined ratio excluding catastrophes and development	90.6		%	92.5		%	91.0		%	93.2		%

•The underlying combined ratio improved 1.9 points as compared with the prior year quarter. The expense ratio improved 1.4 points driven by lower acquisition costs. The underlying loss ratio improved 0.5 points.

•The combined ratio improved 1.4 points as compared with the prior year quarter. Catastrophe losses were $7 million, or 2.8 points of the loss ratio in the second quarter of 2022, compared with $2 million, or 0.8 points of the loss ratio, for the prior year quarter. Favorable net prior year development improved the loss ratio by 1.8 points in the quarter compared with a 0.3 point improvement in the prior year quarter.

•Excluding currency fluctuations, gross and net written premiums grew 18% for the second quarter of 2022.

Life & Group


	Results for the Three Months Ended June 30				Results for the Six Months Ended June 30
($ millions)	2022		2021		2022		2021
Net earned premiums	$	118	$	126	$	238	$	246
Net investment income	201		265		413		484
Core income	6		43		29		79

Core income decreased $37 million for the second quarter of 2022 as compared with the prior year quarter primarily due to lower net investment income.

Corporate & Other


	Results for the Three Months Ended June 30				Results for the Six Months Ended June 30
($ millions)	2022		2021		2022		2021
Net investment income	$	4	$	4	$	5	$	10
Insurance claims and policyholders' benefits	57		31		49		29
Interest expense	28		28		56		56
Core loss	(78)		(53)		(106)		(89)

Core loss increased $25 million for the second quarter of 2022 as compared with the prior year quarter. The current quarter includes a $51 million after-tax charge related to unfavorable prior period development largely associated with legacy mass tort abuse claims, including the recent Diocese of Rochester proposed settlement, compared with a $32 million after-tax charge in the second quarter of 2021.

Net Investment Income


	Results for the Three Months Ended June 30				Results for the Six Months Ended June 30
	2022		2021		2022		2021
Net investment income	$	432	$	591	$	880	$	1,095

Net investment income decreased $159 million as compared with the prior year quarter. The decrease was driven by lower LP and common stock investments, which lost (0.7)%, or $(15) million for the second quarter of 2022 compared with a return of 8.3%, or $156 million in the prior year quarter.

Stockholders' Equity

Stockholders’ equity of $9.5 billion decreased 26% from year-end 2021, primarily due to net unrealized investment losses compared to net unrealized investment gains at year-end 2021, resulting from the effect of higher interest rates on the fair value of the fixed income portfolio and dividends paid to stockholders, partially offset by net income. Net unrealized investment gains decreased $3.0 billion after-tax driven by a decrease in unrealized investment gains of $6.3 billion, partially offset by Shadow Adjustments of $2.5 billion and tax of $0.8 billion. Book value per share of $35.06 likewise decreased 26% from year-end 2021.

Book value per share ex AOCI of $45.06 increased 4% from year-end 2021 adjusting for $2.80 of dividends per share.

As of June 30, 2022, statutory capital and surplus for the Combined Continental Casualty Companies was $10,625.

About the Company

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

Contact


Media:						Analysts:
Cara McCall, 312-822-1309						Ralitza Todorova, 312-822-3834
						Amy C. Adams, 312-822-5533

Conference Call and Webcast/Presentation Information

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

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

Definition of Reported Segments

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

•Commercial works with a network of brokers and independent agents to market a broad range of property and casualty insurance products to all types of insureds targeting small business, construction, middle markets and other commercial customers.

•International 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.

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

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

Financial Measures

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

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

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

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

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

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

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

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

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

•Retention represents the percentage of premium dollars renewed, excluding rate and exposure changes, in comparison to the expiring premium dollars from policies available to renew.

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

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

Statutory capital and surplus represents the excess of an insurance company's admitted assets over its liabilities, including loss reserves, as determined in accordance with statutory accounting practices. Statutory capital and surplus as of the current period is preliminary.

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

To the extent that unrealized gains on fixed income securities supporting the reserves of certain products within the Life & Group segment would result in a premium deficiency, or would impact the reserve balance if realized, a related increase in Insurance reserves is recorded, net of tax, as a reduction of net unrealized gains (losses) through Other comprehensive income (loss) (Shadow Adjustments).

Reconciliation of GAAP Measures to Non-GAAP Measures

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

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

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


	Results for the Three Months Ended June 30				Results for the Six Months Ended June 30
($ millions)	2022		2021		2022		2021
Net income	$	205	$	368	$	518	$	680
Less: Net investment gains (losses)	(40)		27		(43)		76
Core income	$	245	$	341	$	561	$	604

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

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


	Results for the Three Months Ended June 30				Results for the Six Months Ended June 30
	2022		2021		2022		2021
Net income per diluted share	$	0.75	$	1.35	$	1.90	$	2.49
Less: Net investment (losses) gains	(0.15)		0.10		(0.16)		0.28
Core income per diluted share	$	0.90	$	1.25	$	2.06	$	2.21

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

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


	June 30, 2022		December 31, 2021
Book value per share	$	35.06	$	47.20
Less: Per share impact of AOCI	(10.00)		1.18
Book value per share excluding AOCI	$	45.06	$	46.02

Calculation of Return on Equity and Core Return on Equity

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


	Results for the Three Months Ended June 30						Results for the Six Months Ended June 30
($ millions)	2022			2021			2022			2021
Annualized net income	$	820		$	1,473		$	1,036		$	1,360
Average stockholders' equity including AOCI (a)	10,165			12,379			11,160			12,688
Return on equity	8.1		%	11.9		%	9.3		%	10.7		%

Annualized core income	$	982		$	1,364		$	1,123		$	1,209
Average stockholders' equity excluding AOCI (a)	12,172			12,030			12,356			12,031
Core return on equity	8.1		%	11.3		%	9.1		%	10.0		%

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

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

Forward-Looking Statements

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

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

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

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

# # #

CNA Financial Corporation

Supplemental Financial Information

June 30, 2022

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

Table of Contents


			Page
Consolidated Results
Statements of Operations			1
Components of Income (Loss), Per Share Data and Return on Equity			2
Selected Balance Sheet Data and Statemen t s of Cash Flows Data			3
Results of Operations
Property & Casualty			4
Specialty			5
Commercial			6
International			7
Life & Group			8
Corporate & Other			9
Investment Information
Investment Summary - Consolidated			10
Investment Summary - Property & Casualty and Corporate & Other			11
Investment Summary - Life & Group			12
Investments - Fixed Maturity Securities by Credit Rating			13
Components of Net Investment Income			14
Net Investment Gains (Losses)			15
Other
Claim & Claim Adjustment Expense Reserve Rollforward			16
Life & Group Policyholder Reserves			17

Definitions and Presentation			18

Statements of Operations


Periods ended June 30	Three Months						Six Months
(In millions)	2022		2021		Change		2022		2021		Change
Revenues:
Net earned premiums	$	2,155	$	2,035	6	%	$	4,214	$	3,997	5	%
Net investment income	432		591		(27)		880		1,095		(20)
Net investment (losses) gains	(59)		38				(70)		95
Non-insurance warranty revenue	392		359				774		697
Other revenues	6		6				13		11
Total revenues	2,926		3,029		(3)		5,811		5,895		(1)
Claims, Benefits and Expenses:
Insurance claims and policyholders' benefits	1,583		1,546				3,038		3,052
Amortization of deferred acquisition costs	374		357				718		716
Non-insurance warranty expense	367		332				721		643
Other operating expenses	329		303				655		587
Interest	28		29				56		57
Total claims, benefits and expenses	2,681		2,567		(4)		5,188		5,055		(3)
Income (loss) before income tax	245		462				623		840
Income tax (expense) benefit	(40)		(94)				(105)		(160)
Net income (loss)	$	205	$	368	(44)	%	$	518	$	680	(24)	%

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


Periods ended June 30	Three Months						Six Months
(In millions, except per share data)	2022			2021			2022			2021
Components of Income (Loss)
Core income (loss)	$	245		$	341		$	561		$	604
Net investment gains (losses)	(40)			27			(43)			76
Net income (loss)	$	205		$	368		$	518		$	680

Diluted Earnings (Loss) Per Common Share
Core income (loss)	$	0.90		$	1.25		$	2.06		$	2.21
Net investment gains (losses)	(0.15)			0.10			(0.16)			0.28
Diluted earnings (loss) per share	$	0.75		$	1.35		$	1.90		$	2.49

Weighted Average Outstanding Common Stock and Common Stock Equivalents
Basic	271.7			271.9			271.8			271.9
Diluted	272.6			272.8			272.7			272.9

Return on Equity
Net income (loss) (1)	8.1		%	11.9		%	9.3		%	10.7		%
Core income (loss) (2)	8.1			11.3			9.1			10.0

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

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

Selected Balance Sheet Data and Statements of Cash Flows Data


(In millions, except per share data)	June 30, 2022		December 31, 2021
Total investments	$	44,280	$	50,328
Reinsurance receivables, net of allowance for uncollectible receivables	5,753		5,463
Total assets	62,229		66,639
Insurance reserves	41,774		43,171
Debt	2,780		2,779
Total liabilities	52,717		53,830
Accumulated other comprehensive income (loss) (1)	(2,713)		320
Total stockholders' equity	9,512		12,809

Book value per common share	$	35.06	$	47.20
Book value per common share excluding AOCI	$	45.06	$	46.02

Outstanding shares of common stock (in millions of shares)	271.3		271.4

Statutory capital and surplus - Combined Continental Casualty Companies (2)	$	10,625	$	11,321


Three Months Ended June 30	2022		2021
Net cash flows provided (used) by operating activities	$	608	$	603
Net cash flows provided (used) by investing activities	(302)		(610)
Net cash flows provided (used) by financing activities	(98)		(120)
Net cash flows provided (used) by operating, investing and financing activities	$	208	$	(127)


Six Months Ended June 30	2022		2021
Net cash flows provided (used) by operating activities	$	1,253	$	685
Net cash flows provided (used) by investing activities	(431)		(202)
Net cash flows provided (used) by financing activities	(786)		(441)
Net cash flows provided (used) by operating, investing and financing activities	$	36	$	42

(1) As of June 30, 2022 and December 31, 2021, the net unrealized gains on investments included in AOCI were net of after-tax Shadow Adjustments of $482 million and $2,477 million. To the extent that unrealized gains on fixed income securities supporting the reserves of certain products within the Life & Group segment would result in a premium deficiency, or would impact the reserve balance if realized, a related increase in Insurance reserves are recorded, net of tax, as a reduction of net unrealized gains (losses) through Other comprehensive income (loss) (Shadow Adjustments).

(2) Statutory capital and surplus as of June 30, 2022 is preliminary.

Property & Casualty - Results of Operations


Periods ended June 30	Three Months								Six Months
(In millions)	2022			2021			Change		2022			2021			Change
Gross written premiums	$	3,715		$	3,403		9	%	$	7,132		$	6,653		7	%
Gross written premiums ex. 3rd party captives	2,676			2,296			17		5,130			4,566			12
Net written premiums	2,296			1,909			20		4,319			3,846			12

Net earned premiums	2,037			1,909			7		3,977			3,751			6
Net investment income	227			322					462			601
Non-insurance warranty revenue	392			359					774			697
Other revenues	5			6					13			11
Total operating revenues	2,661			2,596			3		5,226			5,060			3
Insurance claims and policyholders' benefits	1,233			1,193					2,415			2,420
Amortization of deferred acquisition costs	374			357					718			716
Non-insurance warranty expense	367			332					721			643
Other insurance related expenses	245			246					503			466
Other expenses	36			20					57			35
Total claims, benefits and expenses	2,255			2,148			(5)		4,414			4,280			(3)
Core income (loss) before income tax	406			448					812			780
Income tax (expense) benefit on core income (loss)	(89)			(97)					(174)			(166)
Core income (loss)	$	317		$	351		(10)	%	$	638		$	614		4	%

Other Performance Metrics
Underwriting gain (loss)	$	185		$	113		64	%	$	341		$	149		129	%

Loss & LAE ratio	60.2		%	62.1		%	1.9	pts	60.4		%	64.2		%	3.8	pts
Expense ratio	30.5			31.6			1.1		30.7			31.5			0.8
Dividend ratio	0.3			0.3			—		0.3			0.3			—
Combined ratio	91.0		%	94.0		%	3.0	pts	91.4		%	96.0		%	4.6	pts
Combined ratio excluding catastrophes and development	90.8		%	91.4		%	0.6	pts	91.0		%	91.6		%	0.6	pts

Net accident year catastrophe losses incurred	$	37		$	54				$	57		$	179
Effect on loss & LAE ratio	1.8		%	2.8		%	1.0	pts	1.4		%	4.7		%	3.3	pts

Net prior year development and other: (favorable) / unfavorable	$	(31)		$	(1)				$	(41)		$	(12)
Effect on loss & LAE ratio	(1.6)		%	(0.2)		%	1.4	pts	(1.0)		%	(0.3)		%	0.7	pts

Rate	6		%	10		%	(4)	pts	6		%	10		%	(4)	pts
Renewal premium change	8		%	11		%	(3)	pts	9		%	11		%	(2)	pts
Retention	85		%	81		%	4	pts	84		%	82		%	2	pts
New business	$	500		$	393		27	%	$	951		$	786		21	%

Specialty - Results of Operations


Periods ended June 30	Three Months								Six Months
(In millions)	2022			2021			Change		2022			2021			Change
Gross written premiums	$	1,904		$	1,903		—	%	$	3,750		$	3,697		1	%
Gross written premiums ex. 3rd party captives	973			897			8		1,858			1,713			8
Net written premiums	832			786			6		1,603			1,528			5

Net earned premiums	794			762			4		1,566			1,497			5
Net investment income	100			134					203			251
Non-insurance warranty revenue	392			359					774			697
Other revenues	—			—					1			—
Total operating revenues	1,286			1,255			2		2,544			2,445			4
Insurance claims and policyholders' benefits	458			440					904			868
Amortization of deferred acquisition costs	162			159					319			313
Non-insurance warranty expense	367			332					721			643
Other insurance related expenses	81			71					162			141
Other expenses	12			12					25			23
Total claims, benefits and expenses	1,080			1,014			(7)		2,131			1,988			(7)
Core income (loss) before income tax	206			241					413			457
Income tax (expense) benefit on core income (loss)	(45)			(53)					(89)			(99)
Core income (loss)	$	161		$	188		(14)	%	$	324		$	358		(9)	%

Other Performance Metrics
Underwriting gain (loss)	$	93		$	92		1	%	$	181		$	175		3	%

Loss & LAE ratio	57.5		%	57.7		%	0.2	pts	57.5		%	57.9		%	0.4	pts
Expense ratio	30.4			30.0			(0.4)		30.7			30.2			(0.5)
Dividend ratio	0.2			0.2			—		0.2			0.2			—
Combined ratio	88.1		%	87.9		%	(0.2)	pts	88.4		%	88.3		%	(0.1)	pts
Combined ratio excluding catastrophes and development	89.2		%	89.2		%	—	pts	89.6		%	89.6		%	—	pts

Net accident year catastrophe losses incurred	$	1		$	1				$	1		$	6
Effect on loss & LAE ratio	0.1		%	—		%	(0.1)	pts	0.1		%	0.3		%	0.2	pts

Net prior year development and other: (favorable) / unfavorable	$	(10)		$	(10)				$	(20)		$	(25)
Effect on loss & LAE ratio	(1.2)		%	(1.3)		%	(0.1)	pts	(1.3)		%	(1.6)		%	(0.3)	pts

Rate	7		%	12		%	(5)	pts	8		%	11		%	(3)	pts
Renewal premium change	8		%	12		%	(4)	pts	9		%	12		%	(3)	pts
Retention	85		%	85		%	—	pts	85		%	86		%	(1)	pts
New business	$	132		$	121		9	%	$	277		$	224		24	%

Commercial - Results of Operations


Periods ended June 30	Three Months								Six Months
(In millions)	2022			2021			Change		2022			2021			Change
Gross written premiums	$	1,429		$	1,161		23	%	$	2,637		$	2,274		16	%
Gross written premiums ex. 3rd party captives	1,321			1,060			25		2,527			2,171			16
Net written premiums	1,134			831			36		2,135			1,791			19

Net earned premiums	974			881			11		1,878			1,736			8
Net investment income	113			174					231			322
Other revenues	4			5					12			10
Total operating revenues	1,091			1,060			3		2,121			2,068			3
Insurance claims and policyholders' benefits	615			594					1,193			1,238
Amortization of deferred acquisition costs	156			148					304			301
Other insurance related expenses	134			136					264			251
Other expenses	11			11					18			20
Total claims, benefits and expenses	916			889			(3)		1,779			1,810			2
Core income (loss) before income tax	175			171					342			258
Income tax (expense) benefit on core income (loss)	(37)			(34)					(72)			(52)
Core income (loss)	$	138		$	137		1	%	$	270		$	206		31	%

Other Performance Metrics
Underwriting gain (loss)	$	69		$	3		N/M	%	$	117		$	(54)		N/M	%

Loss & LAE ratio	62.7		%	66.7		%	4.0	pts	63.0		%	70.7		%	7.7	pts
Expense ratio	30.0			32.3			2.3		30.3			31.8			1.5
Dividend ratio	0.5			0.6			0.1		0.5			0.6			0.1
Combined ratio	93.2		%	99.6		%	6.4	pts	93.8		%	103.1		%	9.3	pts
Combined ratio excluding catastrophes and development	92.0		%	93.0		%	1.0	pts	92.3		%	92.8		%	0.5	pts

Net accident year catastrophe losses incurred	$	29		$	51				$	45		$	166
Effect on loss & LAE ratio	3.0		%	5.8		%	2.8	pts	2.4		%	9.6		%	7.2	pts

Net prior year development and other: (favorable) / unfavorable	$	(16)		$	10				$	(16)		$	14
Effect on loss & LAE ratio	(1.8)		%	0.8		%	2.6	pts	(0.9)		%	0.7		%	1.6	pts

Rate	5		%	8		%	(3)	pts	5		%	9		%	(4)	pts
Renewal premium change	8		%	10		%	(2)	pts	8		%	11		%	(3)	pts
Retention	86		%	80		%	6	pts	86		%	81		%	5	pts
New business	$	280		$	201		39	%	$	508		$	412		23	%

International - Results of Operations


Periods ended June 30	Three Months								Six Months
(In millions)	2022			2021			Change		2022			2021			Change
Gross written premiums	$	382		$	339		13	%	$	745		$	682		9	%
Net written premiums	330			292			13		581			527			10

Net earned premiums	269			266			1		533			518			3
Net investment income	14			14					28			28
Other revenues	1			1					—			1
Total operating revenues	284			281			1		561			547			3
Insurance claims and policyholders' benefits	160			159					318			314
Amortization of deferred acquisition costs	56			50					95			102
Other insurance related expenses	30			39					77			74
Other expenses	13			(3)					14			(8)
Total claims, benefits and expenses	259			245			(6)		504			482			(5)
Core income (loss) before income tax	25			36					57			65
Income tax (expense) benefit on core income (loss)	(7)			(10)					(13)			(15)
Core income (loss)	$	18		$	26		(31)	%	$	44		$	50		(12)	%

Other Performance Metrics
Underwriting gain (loss)	$	23		$	18		28	%	$	43		$	28		54	%

Loss & LAE ratio	59.5		%	59.5		%	—	pts	59.6		%	60.5		%	0.9	pts
Expense ratio	32.1			33.5			1.4		32.4			33.9			1.5
Dividend ratio	—			—			—		—			—			—
Combined ratio	91.6		%	93.0		%	1.4	pts	92.0		%	94.4		%	2.4	pts
Combined ratio excluding catastrophes and development	90.6		%	92.5		%	1.9	pts	91.0		%	93.2		%	2.2	pts

Net accident year catastrophe losses incurred	$	7		$	2				$	11		$	7
Effect on loss & LAE ratio	2.8		%	0.8		%	(2.0)	pts	2.0		%	1.4		%	(0.6)	pts

Net prior year development and other: (favorable) / unfavorable	$	(5)		$	(1)				$	(5)		$	(1)
Effect on loss & LAE ratio	(1.8)		%	(0.3)		%	1.5	pts	(1.0)		%	(0.2)		%	0.8	pts

Rate	7		%	14		%	(7)	pts	8		%	14		%	(6)	pts
Renewal premium change	10		%	14		%	(4)	pts	10		%	13		%	(3)	pts
Retention	85		%	77		%	8	pts	79		%	76		%	3	pts
New business	$	88		$	71		24	%	$	166		$	150		11	%

Life & Group - Results of Operations


Periods ended June 30	Three Months				Six Months
(In millions)	2022		2021		2022		2021
Net earned premiums	$	118	$	126	$	238	$	246
Net investment income	201		265		413		484
Other revenues	1		(1)		—		—
Total operating revenues	320		390		651		730
Insurance claims and policyholders' benefits	293		322		574		603
Other insurance related expenses	29		25		60		50
Other expenses	2		2		5		4
Total claims, benefits and expenses	324		349		639		657
Core income (loss) before income tax	(4)		41		12		73
Income tax (expense) benefit on core income (loss)	10		2		17		6
Core income (loss)	$	6	$	43	$	29	$	79

Corporate & Other - Results of Operations


Periods ended June 30	Three Months				Six Months
(In millions)	2022		2021		2022		2021
Net earned premiums	$	—	$	—	$	(1)	$	—
Net investment income	4		4		5		10
Other revenues	—		1		—		—
Total operating revenues	4		5		4		10
Insurance claims and policyholders' benefits	57		31		49		29
Other insurance related expenses	1		—		3		10
Interest expense	28		28		56		56
Other expenses	16		11		27		23

Total claims, benefits and expenses	102		70		135		118
Core income (loss) before income tax	(98)		(65)		(131)		(108)
Income tax (expense) benefit on core income (loss)	20		12		25		19
Core income (loss)	$	(78)	$	(53)	$	(106)	$	(89)

Investment Summary - Consolidated


	June 30, 2022				March 31, 2022				December 31, 2021
(In millions)	Carrying Value		Net Unrealized Gains (Losses)		Carrying Value		Net Unrealized Gains (Losses)		Carrying Value		Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	21,665	$	(941)	$	22,786	$	791	$	24,139	$	2,699
States, municipalities and political subdivisions:
Tax-exempt	5,635		88		7,091		485		7,781		1,119
Taxable	4,003		(272)		3,968		58		4,162		466
Total states, municipalities and political subdivisions	9,638		(184)		11,059		543		11,943		1,585
Asset-backed:
RMBS	2,743		(291)		2,848		(135)		2,956		63
CMBS	1,837		(158)		1,940		(68)		2,031		44
Other ABS	2,842		(216)		2,623		(82)		2,598		44
Total asset-backed	7,422		(665)		7,411		(285)		7,585		151
U.S. Treasury and obligations of government-sponsored enterprises	109		(6)		120		(5)		130		(2)
Foreign government	548		(29)		549		(10)		583		13
Redeemable preferred stock	3		—		20		—		—		—
Total fixed maturity securities	39,385		(1,825)		41,945		1,034		44,380		4,446
Equities:
Common stock	222		—		220		—		233		—
Non-redeemable preferred stock	676		—		761		—		802		—
Total equities	898		—		981		—		1,035		—
Limited partnership investments:
Hedge funds	465		—		512		—		595		—
Private equity funds	1,398		—		1,328		—		1,264		—
Total limited partnership investments	1,863		—		1,840		—		1,859		—

Other invested assets	71		—		97		—		91		—
Mortgage loans	949		—		942		—		973		—
Short term investments	1,114		1		1,301		—		1,990		—
Total investments	$	44,280	$	(1,824)	$	47,106	$	1,034	$	50,328	$	4,446

Net receivable/(payable) on investment activity	$	(134)			$	(94)			$	201

Effective duration (in years)	6.8				6.5				6.6
Weighted average rating	A				A				A

RMBS - Residential mortgage-backed securities

CMBS - Commercial mortgage-backed securities

Other ABS - Other asset-backed securities

Investment Summary - Property & Casualty and Corporate & Other


	June 30, 2022				March 31, 2022				December 31, 2021
(In millions)	Carrying Value		Net Unrealized Gains (Losses)		Carrying Value		Net Unrealized Gains (Losses)		Carrying Value		Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	13,466	$	(934)	$	14,296	$	(173)	$	14,897	$	713
States, municipalities and political subdivisions:
Tax-exempt	1,397		(182)		1,518		(80)		1,604		92
Taxable	2,132		(343)		2,268		(154)		2,369		69
Total states, municipalities and political subdivisions	3,529		(525)		3,786		(234)		3,973		161
Asset-backed:
RMBS	2,714		(290)		2,802		(135)		2,899		60
CMBS	1,781		(156)		1,871		(67)		1,955		42
Other ABS	2,388		(175)		2,328		(74)		2,326		31
Total asset-backed	6,883		(621)		7,001		(276)		7,180		133
U.S. Treasury and obligations of government-sponsored enterprises	94		—		102		(2)		109		(2)
Foreign government	520		(21)		515		(7)		545		11
Redeemable preferred stock	3		—		20		—		—		—
Total fixed maturity securities	24,495		(2,101)		25,720		(692)		26,704		1,016
Equities:
Common stock	222		—		220		—		233		—
Non-redeemable preferred stock	144		—		171		—		179		—
Total equities	366		—		391		—		412		—
Limited partnership investments:
Hedge funds	257		—		283		—		329		—
Private equity funds	774		—		735		—		700		—
Total limited partnership investments	1,031		—		1,018		—		1,029		—
Other invested assets	71		—		97		—		91		—
Mortgage loans	729		—		722		—		741		—
Short term investments	1,067		1		1,286		—		1,887		—
Total investments	$	27,759	$	(2,100)	$	29,234	$	(692)	$	30,864	$	1,016

Net receivable/(payable) on investment activity	$	(98)			$	(132)			$	145

Effective duration (in years)	5.0				5.0				4.9
Weighted average rating	A				A-				A

Investment Summary - Life & Group


	June 30, 2022				March 31, 2022				December 31, 2021
(In millions)	Carrying Value		Net Unrealized Gains (Losses)		Carrying Value		Net Unrealized Gains (Losses)		Carrying Value		Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	8,199	$	(7)	$	8,490	$	964	$	9,242	$	1,986
States, municipalities and political subdivisions:
Tax-exempt	4,238		270		5,573		565		6,177		1,027
Taxable	1,871		71		1,700		212		1,793		397
Total states, municipalities and political subdivisions	6,109		341		7,273		777		7,970		1,424
Asset-backed:
RMBS	29		(1)		46		—		57		3
CMBS	56		(2)		69		(1)		76		2
Other ABS	454		(41)		295		(8)		272		13
Total asset-backed	539		(44)		410		(9)		405		18
U.S. Treasury and obligations of government-sponsored enterprises	15		(6)		18		(3)		21		—
Foreign government	28		(8)		34		(3)		38		2
Redeemable preferred stock	—		—		—		—		—		—
Total fixed maturity securities	14,890		276		16,225		1,726		17,676		3,430
Equities:
Common stock	—		—		—		—		—		—
Non-redeemable preferred stock	532		—		590		—		623		—
Total equities	532		—		590		—		623		—
Limited partnership investments:
Hedge funds	208		—		229		—		266		—
Private equity funds	624		—		593		—		564		—
Total limited partnership investments	832		—		822		—		830		—
Other invested assets	—		—		—		—		—		—
Mortgage loans	220		—		220		—		232		—
Short term investments	47		—		15		—		103		—
Total investments	$	16,521	$	276	$	17,872	$	1,726	$	19,464	$	3,430

Net receivable/(payable) on investment activity	$	(36)			$	38			$	56

Effective duration (in years)	9.7				8.9				9.2
Weighted average rating	A				A				A

Investments - Fixed Maturity Securities by Credit Rating


June 30, 2022	U.S. Government, Government agencies and Government-sponsored enterprises					AAA					AA					A					BBB					Non-investment grade					Total
(In millions)	Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)
Corporate and other bonds	$	—		$	—	$	30		$	(1)	$	442		$	(19)	$	5,282		$	(132)	$	14,290		$	(606)	$	1,621		$	(183)	$	21,665		$	(941)
States, municipalities and political subdivisions	—			—		1,673			25		5,451			(208)		2,039			42		472			(43)		3			—		9,638			(184)
Asset-backed:
RMBS	2,344			(211)		276			(88)		2			—		15			—		14			1		92			7		2,743			(291)
CMBS	2			—		291			(15)		796			(68)		246			(24)		371			(38)		131			(13)		1,837			(158)
Other ABS	—			—		229			(6)		164			(29)		1,149			(68)		1,142			(95)		158			(18)		2,842			(216)
Total asset-backed	2,346			(211)		796			(109)		962			(97)		1,410			(92)		1,527			(132)		381			(24)		7,422			(665)
U.S. Treasury and obligations of government-sponsored enterprises	109			(6)		—			—		—			—		—			—		—			—		—			—		109			(6)
Foreign government	—			—		145			(2)		281			(11)		94			(13)		28			(3)		—			—		548			(29)
Redeemable preferred stock	—			—		—			—		—			—		—			—		—			—		3			—		3			—
Total fixed maturity securities	$	2,455		$	(217)	$	2,644		$	(87)	$	7,136		$	(335)	$	8,825		$	(195)	$	16,317		$	(784)	$	2,008		$	(207)	$	39,385		$	(1,825)

Percentage of total fixed maturity securities	6		%			7		%			18		%			23		%			41		%			5		%			100		%

Components of Net Investment Income


Periods ended June 30	Consolidated
	Three Months						Six Months
(In millions)	2022			2021			2022			2021
Taxable fixed income securities	$	385		$	356		$	753		$	715
Tax-exempt fixed income securities	66			79			139			159
Total fixed income securities	451			435			892			874
Common stock	(21)			10			(31)			28
Limited partnerships - hedge funds	(35)			43			(45)			49
Limited partnerships - private equity funds	41			103			69			140
Total limited partnership and common stock investments	(15)			156			(7)			217
Other, net of investment expense	(4)			—			(5)			4
Net investment income	$	432		$	591		$	880		$	1,095

Effective income yield for fixed income securities portfolio	4.3		%	4.3		%	4.3		%	4.4		%
Limited partnership and common stock return	(0.7)			8.3			(0.3)			12.1


	Property & Casualty and Corporate & Other
Periods ended June 30
	Three Months						Six Months
(In millions)	2022			2021			2022			2021
Taxable fixed income securities	$	237		$	220		$	462		$	445
Tax-exempt fixed income securities	12			13			23			25
Total fixed income securities	249			233			485			470
Common stock	(21)			10			(31)			28
Limited partnerships - hedge funds	(20)			24			(25)			27
Limited partnerships - private equity funds	23			57			38			78
Total limited partnership and common stock investments	(18)			91			(18)			133
Other, net of investment expense	—			2			—			8
Net investment income	$	231		$	326		$	467		$	611

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


Periods ended June 30	Life & Group
(In millions)	Three Months						Six Months
	2022			2021			2022			2021
Taxable fixed income securities	$	148		$	136		$	291		$	270
Tax-exempt fixed income securities	54			66			116			134
Total fixed income securities	202			202			407			404
Common stock	—			—			—			—
Limited partnerships - hedge funds	(15)			19			(20)			22
Limited partnerships - private equity funds	18			46			31			62
Total limited partnership and common stock investments	3			65			11			84
Other, net of investment expense	(4)			(2)			(5)			(4)
Net investment income	$	201		$	265		$	413		$	484

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

Net Investment Gains (Losses)


Periods ended June 30	Consolidated
	Three Months				Six Months
(In millions)	2022		2021		2022		2021
Fixed maturity securities:
Corporate and other bonds	$	(30)	$	43	$	(27)	$	79
States, municipalities and political subdivisions	19		—		22		(1)
Asset-backed	(4)		(12)		(12)		(9)
Total fixed maturity securities	(15)		31		(17)		69
Non-redeemable preferred stock	(71)		17		(109)		19
Short term and other	27		(10)		56		7
Net investment (losses) gains	(59)		38		(70)		95
Income tax benefit (expense) on net investment (losses) gains	19		(11)		27		(19)
Net investment (losses) gains, after tax	$	(40)	$	27	$	(43)	$	76

Claim & Claim Adjustment Expense Reserve Rollforward


Three months ended June 30, 2022 (In millions)	Specialty		Commercial		International		P&C Operations		Life & Group		Corporate & Other		Total Operations
Claim & claim adjustment expense reserves, beginning of period
Gross	$	6,623	$	8,934	$	2,316	$	17,873	$	3,712	$	2,763	$	24,348
Ceded	1,240		823		347		2,410		112		2,480		5,002
Net	5,383		8,111		1,969		15,463		3,600		283		19,346

Net incurred claim & claim adjustment expenses	456		611		160		1,227		250		68		1,545
Net claim & claim adjustment expense payments	(427)		(582)		(90)		(1,099)		(251)		(8)		(1,358)
Foreign currency translation adjustment and other	—		—		(90)		(90)		(40)		—		(130)

Claim & claim adjustment expense reserves, end of period
Net	5,412		8,140		1,949		15,501		3,559		343		19,403
Ceded	1,449		814		358		2,621		111		2,424		5,156
Gross	$	6,861	$	8,954	$	2,307	$	18,122	$	3,670	$	2,767	$	24,559


Six months ended June 30, 2022 (In millions)	Specialty		Commercial		International		P&C Operations		Life & Group		Corporate & Other		Total Operations
Claim & claim adjustment expense reserves, beginning of period
Gross	$	6,433	$	8,890	$	2,280	$	17,603	$	3,754	$	2,817	$	24,174
Ceded	1,168		825		340		2,333		113		2,523		4,969
Net	5,265		8,065		1,940		15,270		3,641		294		19,205


Net incurred claim & claim adjustment expenses	901		1,183		318		2,402		521		72		2,995
Net claim & claim adjustment expense payments	(754)		(1,108)		(192)		(2,054)		(498)		(23)		(2,575)
Foreign currency translation adjustment and other	—		—		(117)		(117)		(105)		—		(222)

Claim & claim adjustment expense reserves, end of period
Net	5,412		8,140		1,949		15,501		3,559		343		19,403
Ceded	1,449		814		358		2,621		111		2,424		5,156
Gross	$	6,861	$	8,954	$	2,307	$	18,122	$	3,670	$	2,767	$	24,559

Life & Group Policyholder Reserves


June 30, 2022
(In millions)	Claim and claim adjustment expenses		Future policy benefits		Total
Long term care	$	2,936	$	10,065	$	13,001
Structured settlement annuities and other	528		—		528
Total	3,464		10,065		13,529
Shadow adjustments	95		515		610
Ceded reserves	111		346		457
Total gross reserves	$	3,670	$	10,926	$	14,596


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

Definitions and Presentation

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

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

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

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

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

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

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

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

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

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

•Statutory capital and surplus represents the excess of an insurance company's admitted assets over its liabilities, including loss reserves, as determined in accordance with statutory accounting practices.

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

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

•Certain immaterial differences are due to rounding.

•N/M = Not Meaningful


Exhibit No.						Description
99.1						CNA Financial Corporation press release, issued August 1, 2022, providing information on the second quarter 2022 results of operations.

99.2						CNA Financial Corporation financial supplement, posted on its website August 1, 2022, providing supplemental financial information on the second quarter 2022.

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


		CNA Financial Corporation
		(Registrant)

Date: August 1, 2022	By	/s/ Scott R. Lindquist
		(Signature)
		Scott R. Lindquist Executive Vice President and Chief Financial Officer


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


(Exact name of registrant as specified in its charter)