cna-20230501

FOR IMMEDIATE RELEASE

CNA FINANCIAL ANNOUNCES FIRST QUARTER 2023

NET INCOME OF $1.09 PER SHARE AND CORE INCOME OF $1.19 PER SHARE

•Net income of $297 million versus $295 million in the prior year quarter; core income up 9% to $325 million versus $298 million in the prior year quarter.

•P&C core income of $346 million versus $321 million, reflects higher investment income and record high pretax underlying underwriting income of $197 million, partially offset by higher pretax catastrophe losses and unfavorable prior period development.

•Net investment income up 17% to $525 million pretax, includes a $57 million increase from fixed income securities and other investments to $497 million and a $20 million increase from limited partnerships and common stock to $28 million.

•P&C combined ratio of 93.9%, compared with 91.9% in the prior year quarter, including 2.4 points of catastrophe loss impact compared with 1.0 points in the prior year quarter. The underlying combined ratio was 90.8% compared with 91.4%, in the prior year quarter. The underlying loss ratio was 59.8% and the expense ratio was 30.7%.

•P&C segments, excluding third party captives, generated both gross written premium and net written premium growth of 11%, or 12% excluding foreign currency fluctuations for the first quarter of 2023. P&C renewal premium change of +7%, with written rate of +5%, up a point from the prior quarter, and exposure change of +2%.

•Book value per share of $32.00; book value per share excluding AOCI of $44.21, a 2% increase from year-end 2022 adjusting for $1.62 of dividends per share.

•Board of Directors declares regular quarterly cash dividend of $0.42 per share.

CHICAGO, May 1, 2023 --- CNA Financial Corporation (NYSE: CNA) today announced first quarter 2023 net income of $297 million, or $1.09 per share, versus $295 million, or $1.08 per share, in the prior year quarter. Net investment losses for the quarter were $28 million compared to $3 million in the prior year quarter. Core income for the quarter was up 9% to $325 million, or $1.19 per share, versus $298 million, or $1.09 per share, in the prior year quarter.

Our Property & Casualty segments produced core income of $346 million for the first quarter of 2023, an increase of $25 million compared to the prior year quarter driven by higher investment income and record high pretax underlying underwriting income of $197 million, partially offset by higher pretax catastrophe losses and unfavorable prior period development. P&C segments, excluding third party captives, generated both gross written premium and net written premium growth of 11%, or 12% excluding foreign currency fluctuations for the first quarter of 2023 driven by rate of +5%, up a point from prior quarter, new business growth of +12% as compared with the prior year quarter and continued strong retention of 86%.

Our Life & Group and Corporate & Other segments produced a core loss for the first quarter of 2023 of $3 million and $18 million, respectively.

CNA Financial declared a quarterly dividend of $0.42 per share, payable June 1, 2023 to stockholders of record on May 15, 2023.


	Results for the Three Months Ended March 31
($ millions, except per share data)	2023		2022 (a)
Net income	$	297	$	295
Core income (b)	325		298

Net income per diluted share	$	1.09	$	1.08
Core income per diluted share	1.19		1.09


	March 31, 2023		December 31, 2022 (a)
Book value per share	$	32.00	$	31.55
Book value per share excluding AOCI		44.21		44.83

(a)As of January 1, 2023, the Company adopted LDTI using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance.

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

"We had a great start to 2023 with strong production results across the business and core income up 9% to $325 million. Net investment income of $525 million increased $77 million over the first quarter of 2022 and our P&C underlying underwriting gain was up 19% to a record $197 million in the quarter.

Against a backdrop of yet another significantly elevated industry cat quarter, our pretax catastrophe losses were only $52 million or 2.4 points in the quarter, reflecting our disciplined underwriting of catastrophe exposures.

Net and gross written premium ex captives each grew by 11% and 12% excluding currency fluctuations. Our overall P&C rate increase rebounded to 5% in the quarter, up a point compared to the fourth quarter, and Commercial rates were up two points to 7% driven by strong Property pricing.

Given the strong start to 2023, the improved pricing in Commercial lines and the tailwind from higher fixed income yields, we are optimistic about our ability to leverage the continued favorable market conditions throughout the remainder of 2023," said Dino E. Robusto, Chairman & Chief Executive Officer of CNA Financial Corporation.

Property & Casualty Operations


	Results for the Three Months Ended March 31
($ millions)	2023			2022
Gross written premiums ex. 3rd party captives	$	2,724		$	2,454
GWP ex. 3rd party captives change (% year over year)	11		%
Net written premiums	$	2,247		$	2,023
NWP change (% year over year)	11		%
Net earned premiums	$	2,133		$	1,940
NEP change (% year over year)	10		%
Underwriting gain	$	130		$	156
Net investment income	$	301		$	235
Core income	$	346		$	321

Loss ratio excluding catastrophes and development	59.8		%	60.1		%
Effect of catastrophe impacts	2.4			1.0
Effect of development-related items	0.7			(0.5)
Loss ratio	62.9		%	60.6		%

Expense ratio	30.7		%	31.0		%

Combined ratio	93.9		%	91.9		%
Combined ratio excluding catastrophes and development	90.8		%	91.4		%

•The underlying combined ratio improved 0.6 points as compared with the prior year quarter. The expense ratio improved 0.3 points driven by net earned premium growth of 10%. The underlying loss ratio improved 0.3 points as compared with the prior year quarter.

•The combined ratio increased 2.0 points as compared with the prior year quarter. Catastrophe losses were $52 million, or 2.4 points of the loss ratio in the quarter compared with $19 million, or 1.0 point of the loss ratio, for the prior year quarter. Unfavorable net prior period development increased the loss ratio by 0.7 points in the current quarter as compared with 0.5 points of favorable development improving the loss ratio in the prior year quarter.

Business Operating Highlights

Specialty


	Results for the Three Months Ended March 31
($ millions)	2023			2022
Gross written premiums ex. 3rd party captives	$	886		$	885
GWP ex. 3rd party captives change (% year over year)	—		%
Net written premiums	$	788		$	771
NWP change (% year over year)	2		%
Net earned premiums	$	797		$	772
NEP change (% year over year)	3		%


Underwriting gain	$	80		$	88

Loss ratio excluding catastrophes and development	58.4		%	58.9		%
Effect of catastrophe impacts	—			—
Effect of development-related items	—			(1.3)
Loss ratio	58.4		%	57.6		%

Expense ratio	31.4		%	30.9		%

Combined ratio	90.0		%	88.7		%
Combined ratio excluding catastrophes and development	90.0		%	90.0		%

•The underlying combined ratio was consistent with the prior year quarter. The underlying loss ratio improved 0.5 points as compared with the prior year quarter. The expense ratio increased 0.5 points primarily driven by employee related costs.

•The combined ratio increased 1.3 points as compared with the prior year quarter. There was no net prior period development in the current quarter compared with 1.3 points of favorable development improving the loss ratio in the prior year quarter.

•Gross written premiums, excluding third party captives, were largely consistent with prior year quarter and net written premiums grew 2% for the first quarter of 2023.

Commercial


	Results for the Three Months Ended March 31
($ millions)	2023			2022
Gross written premiums ex. 3rd party captives	$	1,440		$	1,206
GWP ex. 3rd party captives change (% year over year)	19		%
Net written premiums	$	1,188		$	1,001
NWP change (% year over year)	19		%
Net earned premiums	$	1,046		$	904
NEP change (% year over year)	16		%


Underwriting gain	$	41		$	48

Loss ratio excluding catastrophes and development	61.5		%	61.5		%
Effect of catastrophe impacts	4.2			1.8
Effect of development-related items	—			—
Loss ratio	65.7		%	63.3		%

Expense ratio	29.8		%	30.7		%

Combined ratio	96.0		%	94.5		%
Combined ratio excluding catastrophes and development	91.8		%	92.7		%

•The underlying combined ratio improved 0.9 points as compared with the prior year quarter due to an improvement in the expense ratio driven by net earned premium growth of 16%.

•The combined ratio increased 1.5 points as compared with the prior year quarter. Catastrophe losses were $44 million, or 4.2 points of the loss ratio in the quarter compared with $16 million, or 1.8 points of the loss ratio, for the prior year quarter.

•Gross written premiums, excluding third party captives and net written premiums both grew 19% for the first quarter of 2023.

International


	Results for the Three Months Ended March 31
($ millions)	2023			2022
Gross written premiums	$	398		$	363
GWP change (% year over year)	10		%
Net written premiums	$	271		$	251
NWP change (% year over year)	8		%
Net earned premiums	$	290		$	264
NEP change (% year over year)	10		%


Underwriting gain	$	9		$	20

Loss ratio excluding catastrophes and development	57.5		%	58.6		%
Effect of catastrophe impacts	2.8			1.2
Effect of development-related items	5.1			—
Loss ratio	65.4		%	59.8		%

Expense ratio	31.8		%	32.6		%

Combined ratio	97.2		%	92.4		%
Combined ratio excluding catastrophes and development	89.3		%	91.2		%

•The underlying combined ratio improved 1.9 points as compared with the prior year quarter. The underlying loss ratio improved 1.1 points as compared with the prior year quarter. The expense ratio improved 0.8 points driven by net earned premium growth of 10%.

•The combined ratio increased 4.8 points as compared with the prior year quarter. Catastrophe losses were $8 million, or 2.8 points of the loss ratio in the quarter compared with $3 million, or 1.2 points of the loss ratio, for the prior year quarter. Unfavorable net prior period development increased the loss ratio by 5.1 points in the current quarter compared with no net prior period development in the prior year quarter.

•Excluding currency fluctuations, gross written premiums grew 17% and net written premiums grew 16% for the first quarter of 2023.

Life & Group


	Results for the Three Months Ended March 31
($ millions)	2023		2022 (a)
Net earned premiums	$	115	$	120
Net investment income	214		212
Core (loss) income	(3)		5

(a) As of January 1, 2023, the Company adopted LDTI using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance.

Core results decreased $8 million for the first quarter of 2023 as compared with the prior year quarter primarily due to long term care policy buyouts.

Corporate & Other


	Results for the Three Months Ended March 31
($ millions)	2023		2022
Net investment income	$	10	$	1
Insurance claims and policyholders' benefits	(7)		(8)
Interest expense	28		28
Core loss	(18)		(28)

Core loss decreased $10 million for the first quarter of 2023 as compared with the prior year quarter driven by higher net investment income.

Net Investment Income


	Results for the Three Months Ended March 31
	2023		2022
Net investment income	$	525	$	448

Net investment income increased $77 million for the first quarter of 2023 as compared with the prior year quarter. The increase was driven by a $57 million increase in income from fixed income securities and other investments and a $20 million increase in income from limited partnership and common stock investments.

Stockholders' Equity

Stockholders’ equity of $8.7 billion improved 1% from year-end 2022 primarily due to net income and the effect of lower interest rates on the fair value of our fixed income securities partially offset by dividends paid to stockholders and the LDTI impact of a lower discount rate on policyholder benefit reserves.

Book value per share ex AOCI of $44.21 increased 2% from year-end 2022 adjusting for $1.62 of dividends per share.

As of March 31, 2023, statutory capital and surplus for the Combined Continental Casualty Companies was $10.5 billion.

Accounting Standards Update

In August 2018, the FASB issued ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts. For the Company, this includes the run-off long term care business in the Life & Group segment. The Company adopted the new guidance effective January 1, 2023, using the modified retrospective method applied as of the transition date of January 1, 2021. All prior period amounts have been adjusted to reflect application of the new guidance. While the requirements of the new guidance represent a material change from legacy accounting, the new guidance does not impact capital and surplus under statutory accounting practices, cash flows or the underlying economics of the business. Additional information regarding the Company’s adoption of ASU 2018-12 and the impact to historical financial results is contained in the Company's Q1 2023 Financial Supplement, furnished on Form 8-K, on May 1, 2023 with the Securities and Exchange Commission.

About the Company

CNA is one of the largest U.S. commercial property and casualty insurance companies. Backed by more than 125 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:
Jennifer Vaupel, 847-224-2464						Ralitza Todorova, 312-822-3834

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 (844) 481-2830 (USA Toll Free) or +1 (412) 317-1850 (International). 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 that will provide additional insight into the results.

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

Definition of Reported Segments

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

•Commercial works with a network of brokers and independent agents to market a broad range of property and casualty insurance products 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 includes the individual and group run-off long term care businesses as well as structured settlement obligations not funded by annuities related to certain property and casualty claimants.

•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), a legacy portfolio of excess workers' compensation (EWC) policies and certain legacy mass tort reserves.

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 catastrophe losses and development-related items.

•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.

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.

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.

Development-related items represents net prior year loss reserve and premium development, and includes the effects of interest accretion and change in allowance for uncollectible reinsurance and deductible amounts.

Underwriting gain (loss) represents net earned premiums less total insurance expenses, which includes insurance claims and policyholders' benefits, amortization of deferred acquisition costs and other insurance related expenses, pre-tax.

Underlying underwriting gain (loss) represents underwriting results excluding catastrophe losses and development-related items.

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.

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. 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 March 31
($ millions)	2023		2022 (a)
Net income	$	297	$	295
Less: Net investment (losses) gains	(28)		(3)
Core income	$	325	$	298

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 March 31
	2023		2022 (a)
Net income per diluted share	$	1.09	$	1.08
Less: Net investment (losses) gains	(0.10)		(0.01)
Core income per diluted share	$	1.19	$	1.09

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.


	March 31, 2023		December 31, 2022 (a)
Book value per share	$	32.00	$	31.55
Less: Per share impact of AOCI	(12.21)		(13.28)
Book value per share excluding AOCI	$	44.21	$	44.83

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 March 31
($ millions)	2023			2022 (a)
Annualized net income	$	1,189		$	1,179
Average stockholders' equity including AOCI (b)	8,607			10,401
Return on equity	13.8		%	11.3		%

Annualized core income	$	1,299		$	1,191
Average stockholders' equity excluding AOCI (b)	12,060			12,271
Core return on equity	10.8		%	9.7		%

(b)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 © 2023 CNA. All rights reserved.

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CNA Financial Corporation

Supplemental Financial Information

March 31, 2023

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

Table of Contents


			Page
Consolidated Results
Statements of Operations			1
Components of Income (Loss), Per Share Data and Return on Equity			2
Prior Year Quarterly Components of Income (Loss), Per Share Data and Return on Equity, As Adjusted for LDTI			3
Selected Balance Sheet Data and Statemen t s of Cash Flows Data			4
Impacts of LDTI on Selected Balance Sheet Data			5
Results of Operations
Property & Casualty			6
Specialty			7
Commercial			8
International			9
Life & Group			10
Prior Year Quarterly Life & Group, As Adjusted for LDTI			11
Corporate & Other			12
Investment Information
Investment Summary - Consolidated			13
Investment Summary - Property & Casualty and Corporate & Other			14
Investment Summary - Life & Group			15
Investments - Fixed Maturity Securities by Credit Rating			16
Investments - Commercial Real Estate Exposure			17
Components of Net Investment Income			18
Net Investment Gains (Losses)			19
Other
Claim & Claim Adjustment Expense Reserve Rollforward			20
Life & Group Policyholder Reserves			21

Definitions and Presentation			22

Statements of Operations


Three months ended March 31
(In millions)	2023		2022 (1)		Change
Revenues:
Net earned premiums	$	2,248	$	2,059	9	%
Net investment income	525		448		17
Net investment (losses) gains	(35)		(11)
Non-insurance warranty revenue	407		382
Other revenues	7		7
Total revenues	3,152		2,885		9
Claims, Benefits and Expenses:
Insurance claims and policyholders' benefits (re-measurement gain (loss) of $1 and $5)	1,653		1,478
Amortization of deferred acquisition costs	379		344
Non-insurance warranty expense	384		354
Other operating expenses	337		326
Interest	28		28
Total claims, benefits and expenses	2,781		2,530		(10)
Income (loss) before income tax	371		355
Income tax (expense) benefit	(74)		(60)
Net income (loss)	$	297	$	295	1	%

(1) As of January 1, 2023, the Company adopted Accounting Standards Update (ASU) 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI), using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance.

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


Three months ended March 31
(In millions, except per share data)	2023			2022 (1)
Components of Income (Loss)
Core income (loss)	$	325		$	298
Net investment gains (losses)	(28)			(3)
Net income (loss)	$	297		$	295

Diluted Earnings (Loss) Per Common Share
Core income (loss)	$	1.19		$	1.09
Net investment gains (losses)	(0.10)			(0.01)
Diluted earnings (loss) per share	$	1.09		$	1.08

Weighted Average Outstanding Common Stock and Common Stock Equivalents
Basic	271.3			271.8
Diluted	272.3			272.9

Return on Equity
Net income (loss) (2)	13.8		%	11.3		%
Core income (loss) (3)	10.8			9.7

(1) As of January 1, 2023, the Company adopted LDTI using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance.

(2) 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.

(3) 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.

Prior Year Quarterly Components of Income (Loss), Per Share Data and Return on Equity, As Adjusted for LDTI

As of January 1, 2023, the Company adopted LDTI using the modified retrospective method applied as of the transition date of January 1, 2021. All prior periods presented have been adjusted to reflect application of the new guidance.


	2022															2021
(In millions, except per share data)	Q1			Q2			Q3			Q4			Full Year			Full Year

Components of Income (Loss)
Core income (loss) (1)	$	298		$	230		$	43	(2)	$	265		$	836		$	1,088
Net investment gains (losses)	(3)			(40)			(85)			(26)			(154)			96
Net income (loss)	$	295		$	190		$	(42)		$	239		$	682		$	1,184

Diluted Earnings (Loss) Per Common Share
Core income (loss)	$	1.09		$	0.84		$	0.16		$	0.97		$	3.07		$	3.99
Net investment gains (losses)	(0.01)			(0.15)			(0.31)			(0.10)			(0.56)			0.35
Diluted earnings (loss) per share	$	1.08		$	0.69		$	(0.15)		$	0.87		$	2.51		$	4.34

Weighted Average Outstanding Common Stock and Common Stock Equivalents
Basic	271.8			271.7			271.4			271.3			271.6			271.8
Diluted	272.9			272.6			272.3			272.3			272.5			272.8

Return on Equity
Net income (loss) (3)	11.3		%	8.1		%	(2.0)		%	11.5		%	6.9		%	9.9		%
Core income (loss) (4)	9.7			7.6			1.4			8.8			6.8			8.9

(1) 2022 Core income decreased from what was previously reported generally driven by the cumulative effect of assumption differences and differences in reserving methodologies between legacy accounting guidance and LDTI.

(2) Q3 2022 Core income decreased $170 million from what was previously reported under legacy accounting guidance, primarily related to our Q3 2022 annual review of cash flow reserving assumptions. Under legacy accounting guidance, the Q3 2022 gross premium valuation assessment indicated a pretax margin of $125 million and no unlocking event occurred. Under LDTI favorable changes to the upper-medium grade (low credit risk) fixed income instrument discount rate were recorded through AOCI quarterly, while the net unfavorable impact of increased cost of care inflation offset by favorable premium rate action assumptions was recorded in income.

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

(4) 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)	March 31, 2023		December 31, 2022 (1)
Total investments	$	44,023	$	43,177
Reinsurance receivables, net of allowance for uncollectible receivables	5,484		5,416
Total assets	62,055		61,000
Insurance reserves:
Claim and claim adjustment expenses (2)	22,409		22,120
Unearned premiums	6,581		6,374
Future policy benefits (2)	13,976		13,480
Debt	2,782		2,781
Total liabilities	53,388		52,452
Accumulated other comprehensive income (loss) (3)	(3,308)		(3,598)
Total stockholders' equity	8,667		8,548

Book value per common share	$	32.00	$	31.55
Book value per common share excluding AOCI	$	44.21	$	44.83

Outstanding shares of common stock (in millions of shares)	270.9		270.9

Statutory capital and surplus - Combined Continental Casualty Companies (4)	$	10,453	$	10,572


Three months ended March 31	2023		2022
Net cash flows provided (used) by operating activities	$	436	$	645
Net cash flows provided (used) by investing activities	51		(129)
Net cash flows provided (used) by financing activities	(480)		(688)
Net cash flows provided (used) by operating, investing and financing activities	$	7	$	(172)

(2) In conjunction with the adoption of LDTI, at January 1, 2023, $3.0 billion of the long term care reserves for policyholders currently receiving benefits within the Life & Group segment were classified from Claim and claim adjustment expense to Future policy benefits. This change was applied retrospectively as of January 1, 2021.

(3) As of March 31, 2023 and December 31, 2022, AOCI included after-tax cumulative impacts of changes in discount rates used to measure long duration contracts of $(437) million and $(41) million.

(4) Statutory capital and surplus as of March 31, 2023 is preliminary.

Impacts of LDTI on Selected Balance Sheet Data



(In millions)	December 31, 2022		December 31, 2021

Total Assets
Prior to adoption	$	60,927	$	66,639
Effect of adoption	73		453
As reported	$	61,000	$	67,092

Insurance Reserves:
Claim and claim adjustment expenses
Prior to adoption	$	25,099	$	24,174
Effect of adoption	(2,979)		(2,905)
As reported	$	22,120	$	21,269

Future policy benefits
Prior to adoption	$	10,151	$	13,236
Effect of adoption	3,329		5,062
As reported	$	13,480	$	18,298

Total Liabilities
Prior to adoption	$	52,102	$	53,830
Effect of adoption	350		2,157
As reported	$	52,452	$	55,987

Accumulated other comprehensive income (loss)
Prior to adoption	$	(3,557)	$	320
Effect of adoption	(41)		(1,680)
As reported	$	(3,598)	$	(1,360)

Total stockholders' equity
Prior to adoption	$	8,825	$	12,809
Effect of adoption	(277)		(1,704)
As reported	$	8,548	$	11,105

Property & Casualty - Results of Operations


Three months ended March 31
(In millions)	2023			2022			Change
Gross written premiums	$	3,620		$	3,417		6	%
Gross written premiums ex. 3rd party captives	2,724			2,454			11
Net written premiums	2,247			2,023			11

Net earned premiums	2,133			1,940			10
Net investment income	301			235			28
Non-insurance warranty revenue	407			382
Other revenues	7			8
Total operating revenues	2,848			2,565			11
Insurance claims and policyholders' benefits	1,349			1,182
Amortization of deferred acquisition costs	379			344
Non-insurance warranty expense	384			354
Other insurance related expenses	275			258
Other expenses	21			21
Total claims, benefits and expenses	2,408			2,159			(12)
Core income (loss) before income tax	440			406
Income tax (expense) benefit on core income (loss)	(94)			(85)
Core income (loss)	$	346		$	321		8	%

Other Performance Metrics
Underwriting gain (loss)	$	130		$	156		(17)	%

Loss & LAE ratio	62.9		%	60.6		%	(2.3)	pts
Expense ratio	30.7			31.0			0.3
Dividend ratio	0.3			0.3			—
Combined ratio	93.9		%	91.9		%	(2.0)	pts
Combined ratio excluding catastrophes and development	90.8		%	91.4		%	0.6	pts

Net accident year catastrophe losses incurred	$	52		$	19
Effect on loss & LAE ratio	2.4		%	1.0		%	(1.4)	pts

Net prior year development and other: (favorable) / unfavorable	$	15		$	(10)
Effect on loss & LAE ratio	0.7		%	(0.5)		%	(1.2)	pts

Rate	5		%	7		%	(2)	pts
Renewal premium change	7		%	10		%	(3)	pts
Retention	86		%	84		%	2	pts
New business	$	503		$	451		12	%

Specialty - Results of Operations


Three months ended March 31
(In millions)	2023			2022			Change
Gross written premiums	$	1,780		$	1,846		(4)	%
Gross written premiums ex. 3rd party captives	886			885			—
Net written premiums	788			771			2

Net earned premiums	797			772			3
Net investment income	129			103			25
Non-insurance warranty revenue	407			382
Other revenues	—			1
Total operating revenues	1,333			1,258			6
Insurance claims and policyholders' benefits	466			446
Amortization of deferred acquisition costs	165			157
Non-insurance warranty expense	384			354
Other insurance related expenses	86			81
Other expenses	14			13
Total claims, benefits and expenses	1,115			1,051			(6)
Core income (loss) before income tax	218			207
Income tax (expense) benefit on core income (loss)	(47)			(44)
Core income (loss)	$	171		$	163		5	%

Other Performance Metrics
Underwriting gain (loss)	$	80		$	88		(9)	%

Loss & LAE ratio	58.4		%	57.6		%	(0.8)	pts
Expense ratio	31.4			30.9			(0.5)
Dividend ratio	0.2			0.2			—
Combined ratio	90.0		%	88.7		%	(1.3)	pts
Combined ratio excluding catastrophes and development	90.0		%	90.0		%	—	pts

Net accident year catastrophe losses incurred	$	—		$	—
Effect on loss & LAE ratio	—		%	—		%	—	pts

Net prior year development and other: (favorable) / unfavorable	$	—		$	(10)
Effect on loss & LAE ratio	—		%	(1.3)		%	(1.3)	pts

Rate	2		%	10		%	(8)	pts
Renewal premium change	4		%	11		%	(7)	pts
Retention	88		%	84		%	4	pts
New business	$	108		$	145		(26)	%

Commercial - Results of Operations


Three months ended March 31
(In millions)	2023			2022			Change
Gross written premiums	$	1,442		$	1,208		19	%
Gross written premiums ex. 3rd party captives	1,440			1,206			19
Net written premiums	1,188			1,001			19

Net earned premiums	1,046			904			16
Net investment income	149			118			26
Other revenues	7			8
Total operating revenues	1,202			1,030			17
Insurance claims and policyholders' benefits	694			578
Amortization of deferred acquisition costs	169			148
Other insurance related expenses	142			130
Other expenses	6			7
Total claims, benefits and expenses	1,011			863			(17)
Core income (loss) before income tax	191			167
Income tax (expense) benefit on core income (loss)	(40)			(35)
Core income (loss)	$	151		$	132		14	%

Other Performance Metrics
Underwriting gain (loss)	$	41		$	48		(15)	%

Loss & LAE ratio	65.7		%	63.3		%	(2.4)	pts
Expense ratio	29.8			30.7			0.9
Dividend ratio	0.5			0.5			—
Combined ratio	96.0		%	94.5		%	(1.5)	pts
Combined ratio excluding catastrophes and development	91.8		%	92.7		%	0.9	pts

Net accident year catastrophe losses incurred	$	44		$	16
Effect on loss & LAE ratio	4.2		%	1.8		%	(2.4)	pts

Net prior year development and other: (favorable) / unfavorable	$	—		$	—
Effect on loss & LAE ratio	—		%	—		%	—	pts

Rate	7		%	5		%	2	pts
Renewal premium change	9		%	8		%	1	pts
Retention	86		%	87		%	(1)	pts
New business	$	310		$	228		36	%

International - Results of Operations


Three months ended March 31
(In millions)	2023			2022			Change
Gross written premiums	$	398		$	363		10	%
Net written premiums	271			251			8
Net earned premiums	290			264			10
Net investment income	23			14			64
Other revenues	—			(1)
Total operating revenues	313			277			13
Insurance claims and policyholders' benefits	189			158
Amortization of deferred acquisition costs	45			39
Other insurance related expenses	47			47
Other expenses	1			1
Total claims, benefits and expenses	282			245			(15)
Core income (loss) before income tax	31			32
Income tax (expense) benefit on core income (loss)	(7)			(6)
Core income (loss)	$	24		$	26		(8)	%

Other Performance Metrics
Underwriting gain (loss)	$	9		$	20		(55)	%

Loss & LAE ratio	65.4		%	59.8		%	(5.6)	pts
Expense ratio	31.8			32.6			0.8
Dividend ratio	—			—			—
Combined ratio	97.2		%	92.4		%	(4.8)	pts
Combined ratio excluding catastrophes and development	89.3		%	91.2		%	1.9	pts

Net accident year catastrophe losses incurred	$	8		$	3
Effect on loss & LAE ratio	2.8		%	1.2		%	(1.6)	pts

Net prior year development and other: (favorable) / unfavorable	$	15		$	—
Effect on loss & LAE ratio	5.1		%	—		%	(5.1)	pts

Rate	4		%	9		%	(5)	pts
Renewal premium change	8		%	12		%	(4)	pts
Retention	83		%	73		%	10	pts
New business	$	85		$	78		9	%

Life & Group - Results of Operations


Three months ended March 31
(In millions)	2023		2022 (1)
Net earned premiums	$	115	$	120
Net investment income	214		212
Other revenues	—		(1)
Total operating revenues	329		331
Insurance claims and policyholders' benefits	311		304
Other insurance related expenses	29		31
Other expenses	1		3
Total claims, benefits and expenses	341		338
Core income (loss) before income tax	(12)		(7)
Income tax (expense) benefit on core income (loss)	9		12
Core income (loss)	$	(3)	$	5

Prior Year Quarterly Life & Group - Results of Operations, As Adjusted for LDTI


	2022											2021
(In millions)	Q1		Q2		Q3			Q4		Full Year		Full Year
Net earned premiums	$	120	$	118	$	118		$	117	$	473	$	491
Net investment income	212		201		187			204		804		966
Other revenues	(1)		1		—			(1)		(1)		—
Total operating revenues	331		320		305			320		1,276		1,457
Insurance claims and policyholders' benefits	304		311		525			329		1,469		1,261
Other insurance related expenses	31		29		29			29		118		103
Other expenses	3		2		2			2		9		10
Total claims, benefits and expenses	338		342		556			360		1,596		1,374
Core income (loss) before income tax	(7)		(22)		(251)			(40)		(320)		83
Income tax (expense) benefit on core income (loss)	12		13		59			15		99		25
Core income (loss) (1)	$	5	$	(9)	$	(192)	(2)	$	(25)	$	(221)	$	108

(2) Q3 2022 Core income decreased $170 million from what was previously reported under legacy accounting guidance, primarily related to our Q3 2022 annual review of cash flow reserving assumptions. Under legacy accounting guidance, the Q3 2022 gross premium valuation assessment indicated a pretax margin of $125 million and no unlocking event occurred. Under LDTI favorable changes to the upper-medium grade fixed income instrument discount rate were recorded through AOCI quarterly, while the net unfavorable impact of increased cost of care inflation offset by favorable premium rate action assumptions was recorded in income.

Corporate & Other - Results of Operations


Three months ended March 31
(In millions)	2023		2022
Net earned premiums	$	—	$	(1)
Net investment income	10		1
Other revenues	—		—
Total operating revenues	10		—
Insurance claims and policyholders' benefits	(7)		(8)
Other insurance related expenses	1		2
Other expenses	38		39


Total claims, benefits and expenses	32		33
Core income (loss) before income tax	(22)		(33)
Income tax (expense) benefit on core income (loss)	4		5
Core income (loss)	$	(18)	$	(28)

Investment Summary - Consolidated


	March 31, 2023				December 31, 2022
(In millions)	Carrying Value		Net Unrealized Gains (Losses)			Carrying Value		Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	22,915	$	(1,238)		$	21,429	$	(1,708)
States, municipalities and political subdivisions:
Tax-exempt	4,383		71			4,633		(45)
Taxable	3,618		(402)			3,684		(556)
Total states, municipalities and political subdivisions	8,001		(331)			8,317		(601)
Asset-backed:
RMBS	2,659		(407)			2,631		(442)
CMBS	1,631		(237)			1,635		(251)
Other ABS	3,165		(298)			2,927		(359)
Total asset-backed	7,455		(942)			7,193		(1,052)
U.S. Treasury and obligations of government-sponsored enterprises	124		(2)			110		(1)
Foreign government	609		(38)			575		(42)
Redeemable preferred stock	3		—			3		—
Total fixed maturity securities	39,107		(2,551)			37,627		(3,404)
Equities:
Common stock	206		—			185		—
Non-redeemable preferred stock	476		—			489		—
Total equities	682		—			674		—
Limited partnership investments:
Hedge funds	434		—			456		—
Private equity funds	1,548		—			1,470		—
Total limited partnership investments	1,982		—			1,926		—
Other invested assets	79		—			78		—
Mortgage loans	1,006		—			1,040		—
Short term investments	1,167		—			1,832		1
Total investments	$	44,023	$	(2,551)		$	43,177	$	(3,403)

Net receivable/(payable) on investment activity	$	(1)				$	8

Effective duration (in years)	6.8					6.6
Weighted average rating	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


	March 31, 2023				December 31, 2022
(In millions)	Carrying Value		Net Unrealized Gains (Losses)			Carrying Value		Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	13,881	$	(1,056)		$	13,165	$	(1,260)
States, municipalities and political subdivisions:
Tax-exempt	1,200		(175)			1,197		(211)
Taxable	1,955		(405)			1,986		(486)
Total states, municipalities and political subdivisions	3,155		(580)			3,183		(697)
Asset-backed:
RMBS	2,645		(407)			2,617		(442)
CMBS	1,602		(234)			1,606		(248)
Other ABS	2,564		(235)			2,374		(276)
Total asset-backed	6,811		(876)			6,597		(966)
U.S. Treasury and obligations of government-sponsored enterprises	123		(2)			109		(1)
Foreign government	580		(30)			546		(34)
Redeemable preferred stock	3		—			3		—
Total fixed maturity securities	24,553		(2,544)			23,603		(2,958)
Equities:
Common stock	206		—			185		—
Non-redeemable preferred stock	62		—			73		—
Total equities	268		—			258		—
Limited partnership investments:
Hedge funds	240		—			252		—
Private equity funds	857		—			814		—
Total limited partnership investments	1,097		—			1,066		—
Other invested assets	79		—			78		—
Mortgage loans	797		—			830		—
Short term investments	1,148		—			1,772		1
Total investments	$	27,942	$	(2,544)		$	27,607	$	(2,957)

Net receivable/(payable) on investment activity	$	(4)				$	(3)

Effective duration (in years)	4.8					4.7
Weighted average rating	A					A

Investment Summary - Life & Group


	March 31, 2023				December 31, 2022
(In millions)	Carrying Value		Net Unrealized Gains (Losses)			Carrying Value		Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	9,034	$	(182)		$	8,264	$	(448)
States, municipalities and political subdivisions:
Tax-exempt	3,183		246			3,436		166
Taxable	1,663		3			1,698		(70)
Total states, municipalities and political subdivisions	4,846		249			5,134		96
Asset-backed:
RMBS	14		—			14		—
CMBS	29		(3)			29		(3)
Other ABS	601		(63)			553		(83)
Total asset-backed	644		(66)			596		(86)
U.S. Treasury and obligations of government-sponsored enterprises	1		—			1		—
Foreign government	29		(8)			29		(8)
Redeemable preferred stock	—		—			—		—
Total fixed maturity securities	14,554		(7)			14,024		(446)
Equities:
Common stock	—		—			—		—
Non-redeemable preferred stock	414		—			416		—
Total equities	414		—			416		—
Limited partnership investments:
Hedge funds	194		—			204		—
Private equity funds	691		—			656		—
Total limited partnership investments	885		—			860		—
Other invested assets	—		—			—		—
Mortgage loans	209		—			210		—
Short term investments	19		—			60		—
Total investments	$	16,081	$	(7)		$	15,570	$	(446)

Net receivable/(payable) on investment activity	$	3				$	11

Effective duration (in years)	10.1					9.9
Weighted average rating	A-					A

Investments - Fixed Maturity Securities by Credit Rating


March 31, 2023	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)	$	480		$	(28)	$	6,150		$	(221)	$	14,714		$	(852)	$	1,541		$	(136)	$	22,915		$	(1,238)
States, municipalities and political subdivisions	—			—		1,220			(3)		4,748			(291)		1,738			20		294			(57)		1			—		8,001			(331)
Asset-backed:
RMBS	2,357			(298)		249			(112)		—			—		10			—		13			—		30			3		2,659			(407)
CMBS	—			—		367			(29)		630			(97)		214			(34)		283			(51)		137			(26)		1,631			(237)
Other ABS	—			—		383			(9)		227			(39)		1,219			(95)		1,174			(128)		162			(27)		3,165			(298)
Total asset-backed	2,357			(298)		999			(150)		857			(136)		1,443			(129)		1,470			(179)		329			(50)		7,455			(942)
U.S. Treasury and obligations of government-sponsored enterprises	124			(2)		—			—		—			—		—			—		—			—		—			—		124			(2)
Foreign government	—			—		171			(6)		325			(18)		82			(12)		31			(2)		—			—		609			(38)
Redeemable preferred stock	—			—		—			—		—			—		—			—		—			—		3			—		3			—
Total fixed maturity securities	$	2,481		$	(300)	$	2,420		$	(160)	$	6,410		$	(473)	$	9,413		$	(342)	$	16,509		$	(1,090)	$	1,874		$	(186)	$	39,107		$	(2,551)

Percentage of total fixed maturity securities	6		%			6		%			16		%			25		%			42		%			5		%			100		%

Investments - Commercial Real Estate Exposure

Fixed Income and Direct Mortgage Loans


	March 31, 2023						March 31, 2023
(In millions)	Estimated Fair Value		Net Unrealized Gains (Losses)			(In millions)	Estimated Fair Value		Net Unrealized Gains (Losses)
Commercial mortgage-backed:						Corporate and other bonds - REITs:
Single asset, single borrower:						Retail	$	452	$	(43)
Office	$	323	$	(67)		Office	261		(30)
Retail	304		(40)			Industrial	85		(3)
Lodging	201		(22)			Other (1)	418		(34)
Industrial	84		(7)			Total corporate and other bonds - REITs (2)	$	1,216	$	(110)
Multifamily	53		(4)
Total single asset, single borrower	965		(140)
Conduits (multi property, multi borrower pools)	666		(97)
Total commercial mortgage-backed	$	1,631	$	(237)


	March 31, 2023						March 31, 2023
(In millions)	Estimated Fair Value		Net Unrealized Gains (Losses)			(In millions)	Estimated Fair Value		Net Unrealized Gains (Losses)
Commercial mortgage-backed:						Corporate and other bonds - REITs:
AAA	$	367	$	(29)		AA	$	11	$	(1)
AA	630		(97)			A	239		(10)
A	214		(34)			BBB	948		(97)
BBB	283		(51)			Non-investment grade	18		(2)
Non-investment grade	137		(26)			Total corporate and other bonds - REITs (2)	$	1,216	$	(110)
Total commercial mortgage-backed	$	1,631	$	(237)


	March 31, 2023
(In millions)	Carrying Value		Percentage of Total
Mortgage loans:
Retail	$	461	44		%
Office	263		26		%
Industrial	119		12		%
Other	187		18		%
Total mortgage loans	$	1,030	100		%	(1) Other includes a diversified mix of property type strategies including self-storage, healthcare and apartments.
Less: Allowance for expected credit losses	(24)
Total mortgage loans - net of allowance	$	1,006				(2) REITs - Real estate investment trusts

Components of Net Investment Income


Three months ended March 31	Consolidated

(In millions)	2023			2022
Taxable fixed income securities	$	430		$	368
Tax-exempt fixed income securities	49			73
Total fixed income securities	479			441
Common stock	3			(10)
Limited partnerships - hedge funds	14			(10)
Limited partnerships - private equity funds	11			28
Total limited partnership and common stock investments	28			8
Other, net of investment expense	18			(1)
Net investment income	$	525		$	448

Effective income yield for fixed income securities portfolio	4.6		%	4.3		%
Limited partnership and common stock return	1.3			0.4


	Property & Casualty and Corporate & Other
Three months ended March 31

(In millions)	2023			2022
Taxable fixed income securities	$	261		$	225
Tax-exempt fixed income securities	11			11
Total fixed income securities	272			236
Common stock	3			(10)
Limited partnerships - hedge funds	8			(5)
Limited partnerships - private equity funds	6			15
Total limited partnership and common stock investments	17			—
Other, net of investment expense	22			—
Net investment income	311			236

Effective income yield for fixed income securities portfolio	4.0		%	3.6		%


Three months ended March 31	Life & Group

(In millions)	2023			2022
Taxable fixed income securities	$	169		$	143
Tax-exempt fixed income securities	38			62
Total fixed income securities	207			205
Common stock	—			—
Limited partnerships - hedge funds	6			(5)
Limited partnerships - private equity funds	5			13
Total limited partnership and common stock investments	11			8
Other, net of investment expense	(4)			(1)
Net investment income	$	214		$	212

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

Net Investment Gains (Losses)


Three months ended March 31	Consolidated

(In millions)	2023		2022
Fixed maturity securities:
Corporate and other bonds	$	(23)	$	3
States, municipalities and political subdivisions	10		3
Asset-backed	(9)		(8)
Total fixed maturity securities	(22)		(2)
Non-redeemable preferred stock	(14)		(38)
Derivatives, short term and other	1		29

Net investment gains (losses)	(35)		(11)
Income tax benefit (expense) on net investment gains (losses)	7		8
Net investment gains (losses), after tax	$	(28)	$	(3)

Claim & Claim Adjustment Expense Reserve Rollforward


Three months ended March 31, 2023 (In millions)	Specialty		Commercial		International		P&C Operations		Life & Group (1)		Corporate & Other		Total Operations
Claim & claim adjustment expense reserves, beginning of period
Gross	$	6,878	$	9,395	$	2,403	$	18,676	$	695	$	2,749	$	22,120
Ceded	1,315		965		400		2,680		101		2,410		5,191
Net	5,563		8,430		2,003		15,996		594		339		16,929

Net incurred claim & claim adjustment expenses	465		687		189		1,341		8		1		1,350
Net claim & claim adjustment expense payments	(388)		(594)		(110)		(1,092)		(12)		(10)		(1,114)
Foreign currency translation adjustment and other	—		2		21		23		12		—		35

Claim & claim adjustment expense reserves, end of period
Net	5,640		8,525		2,103		16,268		602		330		17,200
Ceded	1,336		1,003		399		2,738		102		2,369		5,209
Gross	$	6,976	$	9,528	$	2,502	$	19,006	$	704	$	2,699	$	22,409

(1) In conjunction with the adoption of LDTI, at January 1, 2023, the Company reclassified $3.0 billion of the long term care reserves for policyholders currently receiving benefits from Claim and claim adjustment expense to Future policy benefits. This change was applied retrospectively as of January 1, 2021.

Life & Group Policyholder Reserves


March 31, 2023
(In millions)	Claim and claim adjustment expenses		Future policy benefits		Total
Long term care	$	—	$	13,976	$	13,976
Structured settlement annuities and other	602		—		602
Total	602		13,976		14,578

Ceded reserves	102		—		102
Total gross reserves	$	704	$	13,976	$	14,680


December 31, 2022
(In millions)	Claim and claim adjustment expenses		Future policy benefits		Total
Long term care, as previously reported	$	2,979	$	10,151	$	13,130
Reclassification of reserves for policyholders currently receiving benefits to Future policy benefits (1)	(2,979)		2,979		—
Impact of LDTI	—		350		350
Long term care, as adjusted	$	—	$	13,480	$	13,480
Structured settlement annuities and other	594		—		594
Total	594		13,480		14,074

Ceded reserves	101		—		101
Total gross reserves	$	695	$	13,480	$	14,175

(1) In conjunction with the adoption of LDTI, at January 1, 2023 the Company reclassified the long term care reserves for policyholders currently receiving benefits from Claim and claim adjustment expense to Future policy benefits. This change was applied retrospectively as of January 1, 2021.

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 includes the individual and group run-off long term care businesses as well as structured settlement obligations not funded by annuities related to certain property and casualty claimants.

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

•Management uses the core income (loss) financial measure to monitor the Company’s operations for the Specialty, Commercial and International segments. Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of net investment gains or losses. 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 and management believes some investors may find this measure useful to evaluate the Company's primary operations. Please refer to Note O to the Consolidated Financial Statements within the December 31, 2022 Form 10-K for further discussion regarding how the Company manages its business.

•This financial supplement may also reference or contain financial measures utilized to monitor the Company's investment portfolio that are not in accordance with GAAP. 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.

•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.

•In evaluating the results of the Specialty, Commercial and International segments, 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. 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. 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.

•Management uses underwriting gain (loss), calculated using GAAP financial results, to monitor insurance operations of our Specialty, Commercial and International segments. Underwriting gain (loss) is pretax and 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.

•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 represents net prior year loss reserve and premium development, and 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 May 1, 2023, providing information on the first quarter 2023 results of operations.

99.2						CNA Financial Corporation financial supplement, posted on its website May 1, 2023, providing supplemental financial information on the first quarter 2023.

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


		CNA Financial Corporation
		(Registrant)

Date: May 1, 2023	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)