cna-20210503

FOR IMMEDIATE RELEASE

CNA FINANCIAL ANNOUNCES FIRST QUARTER 2021

NET INCOME OF $1.14 PER SHARE AND CORE INCOME OF $0.96 PER SHARE

•Net income was $312 million versus net loss of $61 million in the prior year quarter; core income was $263 million versus $108 million in the prior year quarter.

•The P&C combined ratio was 98.1% compared with 97.3% in the prior year quarter, including 6.8 points of catastrophe loss impact compared with 4.3 points in the prior year quarter.

•Net catastrophe losses were $125 million pretax versus $75 million in the prior year quarter. Net catastrophe losses in the current quarter were primarily driven by Winter Storms Uri and Viola.

•The underlying combined ratio was 91.9% compared with 93.7% in the prior year quarter. The underlying loss ratio was 60.1% compared with 60.2% in the prior year quarter and the expense ratio was 31.5% compared with 33.1% in the prior year quarter.

•P&C segments, excluding third party captives, generated gross written premium growth of 8% and net written premium growth of 4%.

•Rate of +11% consistent with full year 2020.

•Net investment income of $504 million pretax includes $61 million of income from limited partnerships and common stock compared with $329 million of pretax net investment income which included $125 million of losses from limited partnerships and common stock in the prior year quarter.

•Book value per share of $44.50; book value per share excluding AOCI of $43.81, a 2% increase from year-end 2020 adjusting for $1.13 of dividends per share.

•Board of Directors declares regular quarterly cash dividend of $0.38 per share.

CHICAGO, May 3, 2021 --- CNA Financial Corporation (NYSE: CNA) today announced first quarter 2021 net income of $312 million, or $1.14 per share, versus net loss of $61 million, or $(0.23) per share, in the prior year quarter. Core income for the quarter was $263 million, or $0.96 per share, versus $108 million, or $0.40 per share, in the prior year quarter.

Our Property & Casualty segments produced core income of $263 million for the first quarter of 2021, an increase of $142 million compared to the prior year quarter primarily due to higher net investment income driven by limited partnership and common stock returns and improved non-catastrophe current accident year underwriting results. These results were partially offset by higher net catastrophe losses.

Our Life & Group and Corporate & Other segments produced core income (loss) for the first quarter of 2021 of $36 million and $(36) million, respectively.

CNA Financial declared a quarterly dividend of $0.38 per share, payable June 3, 2021 to stockholders of record on May 17, 2021.


	Results for the Three Months Ended March 31
($ millions, except per share data)	2021		2020
Net income (loss)	$	312	$	(61)
Core income (a)	263		108

Net income (loss) per diluted share	$	1.14	$	(0.23)
Core income per diluted share	0.96		0.40


	March 31, 2021		December 31, 2020
Book value per share	$	44.50	$	46.82
Book value per share excluding AOCI		43.81		43.86

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

“I am very pleased with our results as we achieved the best underlying combined ratio in over 12 years, offsetting substantially elevated catastrophes in the first quarter, as well as continued double-digit rate increases and strong new business growth. We remain bullish about our growth opportunities for the remainder of the year as we expect favorable market conditions to persist," said Dino E. Robusto, Chairman & Chief Executive Officer of CNA Financial Corporation.

Property & Casualty Operations


	Results for the Three Months Ended March 31
($ millions)	2021			2020
Gross written premiums ex. 3rd party captives	$	2,270		$	2,107
GWP ex. 3rd party captives change (% year over year)	8		%
Net written premiums	$	1,937		$	1,863
NWP change (% year over year)	4		%
Net investment income	$	279		$	113
Core income	263			121

Loss ratio excluding catastrophes and development	60.1		%	60.2		%
Effect of catastrophe impacts	6.8			4.3
Effect of development-related items	(0.6)			(0.7)
Loss ratio	66.3		%	63.8		%

Expense ratio	31.5		%	33.1		%

Combined ratio	98.1		%	97.3		%
Combined ratio excluding catastrophes and development	91.9		%	93.7		%

•The combined ratio excluding catastrophes and development improved 1.8 points as compared with the prior year quarter. The expense ratio improved 1.6 points driven by net earned premium growth of 6%. The underlying loss ratio was largely consistent with the prior year quarter.

•The combined ratio increased 0.8 points as compared with the prior year quarter. Net catastrophe losses were $125 million, or 6.8 points of the loss ratio in the quarter compared with $75 million, or 4.3 points of the loss ratio, for the prior year quarter. Favorable net prior period development improved the loss ratio by 0.6 points in the current quarter compared with 0.7 points of improvement in the prior year quarter.

•P&C segments, excluding third party captives, generated gross written premium growth of 8% and net written premium growth of 4%.

Business Operating Highlights

Specialty


	Results for the Three Months Ended March 31
($ millions)	2021			2020
Gross written premiums ex. 3rd party captives	$	816		$	741
GWP ex. 3rd party captives change (% year over year)	10		%
Net written premiums	$	742		$	694
NWP change (% year over year)	7		%
Core income	$	170		$	96

Loss ratio excluding catastrophes and development	59.4		%	59.5		%
Effect of catastrophe impacts	0.7			1.1
Effect of development-related items	(2.1)			(1.5)
Loss ratio	58.0		%	59.1		%

Expense ratio	30.6		%	32.0		%

Combined ratio	88.8		%	91.3		%
Combined ratio excluding catastrophes and development	90.2		%	91.7		%

•The combined ratio excluding catastrophes and development improved 1.5 points as compared with the prior year quarter. The expense ratio improved 1.4 points driven by net earned premium growth of 7%. The underlying loss ratio was largely consistent with the prior year quarter.

•The combined ratio improved by 2.5 points as compared with the prior year quarter. Net catastrophe losses were $5 million, or 0.7 points of the loss ratio in the first quarter of 2021 compared with $8 million, or 1.1 points of the loss ratio, for the prior year quarter. Favorable net prior period development improved the loss ratio by 2.1 points in the quarter compared with 1.5 points of improvement in the prior year quarter.

•Gross written premiums, excluding third party captives, grew 10% and net written premiums grew 7% for the first quarter of 2021.

Commercial


	Results for the Three Months Ended March 31
($ millions)	2021			2020
Gross written premiums ex. 3rd party captives	$	1,111		$	1,059
GWP ex. 3rd party captives change (% year over year)	5		%
Net written premiums	$	960		$	950
NWP change (% year over year)	1		%
Core income	$	69		$	23

Loss ratio excluding catastrophes and development	60.8		%	60.8		%
Effect of catastrophe impacts	13.4			7.0
Effect of development-related items	0.5			—
Loss ratio	74.7		%	67.8		%

Expense ratio	31.4		%	33.2		%

Combined ratio	106.7		%	101.6		%
Combined ratio excluding catastrophes and development	92.8		%	94.6		%

•The combined ratio excluding catastrophes and development improved 1.8 points as compared with the prior year quarter due to an improvement in the expense ratio driven by net earned premium growth of 5%. The underlying loss ratio was consistent with the prior year quarter.

•The combined ratio increased 5.1 points as compared with the prior year quarter. Net catastrophe losses were $115 million, or 13.4 points of the loss ratio in the first quarter of 2021 compared with $57 million, or 7.0 points of the loss ratio, for the prior year quarter.

•Gross written premiums, excluding third party captives, grew 5% and net written premiums grew 1% for the first quarter of 2021.

International


	Results for the Three Months Ended March 31
($ millions)	2021			2020
Gross written premiums	$	343		$	307
GWP change (% year over year)	12		%
Net written premiums	$	235		$	219
NWP change (% year over year)	7		%
Core income	$	24		$	2

Loss ratio excluding catastrophes and development	59.6		%	60.3		%
Effect of catastrophe impacts	2.0			4.3
Effect of development-related items	(0.1)			(0.1)
Loss ratio	61.5		%	64.5		%

Expense ratio	34.4		%	35.4		%

Combined ratio	95.9		%	99.9		%
Combined ratio excluding catastrophes and development	94.0		%	95.7		%

•The combined ratio excluding catastrophes and development improved 1.7 points as compared with the prior year quarter. The expense ratio improved 1.0 point driven by net earned premium growth of 5%. The underlying loss ratio improved 0.7 points.

•The combined ratio improved 4.0 points as compared with the prior year quarter. Net catastrophe losses were $5 million, or 2.0 points of the loss ratio in the first quarter of 2021, compared with $10 million, or 4.3 points of the loss ratio, for the prior year quarter.

•Excluding currency fluctuations, gross written premiums for International increased 6% and net written premiums increased 1% for the first quarter of 2021 as compared with the prior year quarter driven by growth in Europe and Canada.

Life & Group


	Results for the Three Months Ended March 31
($ millions)	2021		2020
Net earned premiums	$	120	$	127
Net investment income	219		208
Core income	36		4

Core income improved $32 million for the first quarter of 2021 as compared with the same period in 2020 driven by better than expected morbidity in the long term care business and higher net investment income.

Corporate & Other


	Results for the Three Months Ended March 31
($ millions)	2021		2020
Net investment income	$	6	$	8
Interest expense	28		31
Core loss	(36)		(17)

Core loss increased $19 million for the first quarter of 2021 as compared with the prior year quarter driven by the recognition of a $12 million after-tax loss resulting from the cession of a legacy portfolio of excess workers' compensation policies under a retroactive reinsurance agreement.

Net Investment Income


	Results for the Three Months Ended March 31
	2021		2020
Net investment income	$	504	$	329

Net investment income increased $175 million as compared with the prior year quarter. The increase was driven by limited partnership and common stock investments, which returned 3.4%, or $61 million for the first quarter of 2021 compared with (7.0)%, or $(125) million in the prior year quarter.

About the Company

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

Contact


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

Conference Call and Webcast/Presentation Information

A conference call for investors and the professional investment community will be held at 8:00 a.m. (CT) today. On the conference call will be Dino E. Robusto, Chairman and Chief Executive Officer of CNA Financial Corporation, Al Miralles, 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 and services to small, middle-market and large businesses.

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

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

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

Financial Measures

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

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

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

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

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

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

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

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

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

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

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

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

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

Reconciliation of GAAP Measures to Non-GAAP Measures

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

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

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


	Results for the Three Months Ended March 31
($ millions)	2021		2020
Net income (loss)	$	312	$	(61)
Less: Net investment gains (losses)	49		(169)
Core income	$	263	$	108

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
	2021		2020
Net income (loss) per diluted share	$	1.14	$	(0.23)
Less: Net investment gains (losses)	0.18		(0.63)
Core income per diluted share	$	0.96	$	0.40

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, 2021		December 31, 2020
Book value per share	$	44.50	$	46.82
Less: Per share impact of AOCI	0.69		2.96
Book value per share excluding AOCI	$	43.81	$	43.86

Calculation of Return on Equity and Core Return on Equity

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


	Results for the Three Months Ended March 31
($ millions)	2021			2020
Annualized net income (loss)	$	1,247		$	(245)
Average stockholders' equity including AOCI (a)	12,398			11,288
Return on equity	10.1		%	(2.2)		%

Annualized core income	$	1,053		$	433
Average stockholders' equity excluding AOCI (a)	11,903			11,797
Core return on equity	8.8		%	3.7		%

(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 © 2021 CNA. All rights reserved.

# # #

CNA Financial Corporation

Supplemental Financial Information

March 31, 2021

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

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 Statement of Cash Flows Data			3
Results of Operations
Property & Casualty			4
Specialty			5
Commercial			6
International			7
Life & Group			8
Corporate & Other			9
Investment Information
Investment Summary - Consolidated			10
Investment Summary - Property & Casualty and Corporate & Other			11
Investment Summary - Life & Group			12
Investments - Fixed Maturity Securities by Credit Rating			13
Components of Net Investment Income			14
Other
Claim & Claim Adjustment Expense Reserve Rollforward			15
Life & Group Policyholder Reserves			16
Definitions and Presentation			17

Statements of Operations


Three months ended March 31
(In millions)	2021		2020		Change
Revenues:
Net earned premiums	$	1,962	$	1,869	5	%
Net investment income	504		329		53
Net investment gains (losses)	57		(216)
Non-insurance warranty revenue	338		301
Other revenues	5		8
Total revenues	2,866		2,291		25
Claims, Benefits and Expenses:
Insurance claims and policyholders' benefits	1,506		1,425
Amortization of deferred acquisition costs	359		344
Non-insurance warranty expense	311		281
Other operating expenses	284		299
Interest	28		31
Total claims, benefits and expenses	2,488		2,380		(5)
Income (loss) before income tax	378		(89)
Income tax (expense) benefit	(66)		28
Net income (loss)	$	312	$	(61)	N/M	%

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


Three months ended March 31
(In millions, except per share data)	2021			2020
Components of Income (Loss)
Core income (loss)	$	263		$	108
Net investment gains (losses)	49			(169)
Net income (loss)	$	312		$	(61)

Diluted Earnings (Loss) Per Common Share
Core income (loss)	$	0.96		$	0.40
Net investment gains (losses)	0.18			(0.63)
Diluted earnings (loss) per share	$	1.14		$	(0.23)

Weighted Average Outstanding Common Stock and Common Stock Equivalents
Basic	271.9			271.5
Diluted	272.9			271.5

Return on Equity
Net income (loss) (1)	10.1		%	(2.2)		%
Core income (loss) (2)	8.8			3.7

(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 Statement of Cash Flows Data


(In millions, except per share data)	March 31, 2021		December 31, 2020
Total investments	$	48,671	$	50,293
Reinsurance receivables, net of allowance for uncollectible receivables	5,111		4,457
Total assets	63,713		64,026
Insurance reserves	41,147		41,143
Debt	2,777		2,776
Total liabilities	51,624		51,319
Accumulated other comprehensive income (loss) (1)	187		803
Total stockholders' equity	12,089		12,707

Book value per common share	$	44.50	$	46.82
Book value per common share excluding AOCI	$	43.81	$	43.86

Outstanding shares of common stock (in millions of shares)	271.6		271.4

Statutory capital and surplus - Combined Continental Casualty Companies (2)	$	10,628	$	10,708


Three months ended March 31	2021		2020
Net cash flows provided (used) by operating activities	$	82	$	212
Net cash flows provided (used) by investing activities	408		1,087
Net cash flows provided (used) by financing activities	(321)		(675)
Net cash flows provided (used) by operating, investing and financing activities	$	169	$	624

(1) As of March 31, 2021 and December 31, 2020, the net unrealized gains on investments included in AOCI were net of after-tax Shadow Adjustments of $2,301 million and $2,773 million. To the extent that unrealized gains on fixed income securities supporting certain products within the Life & Group segment would result in a premium deficiency if realized, an increase in Insurance reserves are recorded, net of tax, as a reduction of net unrealized gains through Other comprehensive income (loss) (Shadow Adjustments).

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

Property & Casualty - Results of Operations


Three months ended March 31
(In millions)	2021			2020			Change
Gross written premiums	$	3,250		$	3,083		5	%
Gross written premiums ex. 3rd party captives	2,270			2,107			8
Net written premiums	1,937			1,863			4

Net earned premiums	1,842			1,742			6
Net investment income	279			113
Non-insurance warranty revenue	338			301
Other revenues	5			9
Total operating revenues	2,464			2,165			14
Insurance claims and policyholders' benefits	1,227			1,120
Amortization of deferred acquisition costs	359			344
Non-insurance warranty expense	311			281
Other insurance related expenses	220			232
Other expenses	15			32
Total claims, benefits and expenses	2,132			2,009			(6)
Core income (loss) before income tax	332			156
Income tax (expense) benefit on core income (loss)	(69)			(35)
Core income (loss)	$	263		$	121		117	%

Other Performance Metrics
Underwriting gain (loss)	$	36		$	46		(22)	%

Loss & LAE ratio	66.3		%	63.8		%	(2.5)	pts
Expense ratio	31.5			33.1			1.6
Dividend ratio	0.3			0.4			0.1
Combined ratio	98.1		%	97.3		%	(0.8)	pts
Combined ratio excluding catastrophes and development	91.9		%	93.7		%	1.8	pts

Net accident year catastrophe losses incurred	$	125		$	75
Effect on loss & LAE ratio	6.8		%	4.3		%	(2.5)	pts

Net prior year development and other: (favorable) / unfavorable	$	(11)		$	(11)
Effect on loss & LAE ratio	(0.6)		%	(0.7)		%	(0.1)	pts

Rate	11		%	9		%	2	pts
Renewal premium change	9		%	9		%	—	pts
Retention	83		%	82		%	1	pts
New business	$	394		$	340		16	%

Specialty - Results of Operations


Three months ended March 31
(In millions)	2021			2020			Change
Gross written premiums	$	1,794		$	1,714		5	%
Gross written premiums ex. 3rd party captives	816			741			10
Net written premiums	742			694			7

Net earned premiums	735			685			7
Net investment income	117			56
Non-insurance warranty revenue	338			301
Other revenues	—			1
Total operating revenues	1,190			1,043			14
Insurance claims and policyholders' benefits	428			406
Amortization of deferred acquisition costs	154			151
Non-insurance warranty expense	311			281
Other insurance related expenses	70			69
Other expenses	11			13
Total claims, benefits and expenses	974			920			(6)
Core income (loss) before income tax	216			123
Income tax (expense) benefit on core income (loss)	(46)			(27)
Core income (loss)	$	170		$	96		77	%

Other Performance Metrics
Underwriting gain (loss)	$	83		$	59		41	%

Loss & LAE ratio	58.0		%	59.1		%	1.1	pts
Expense ratio	30.6			32.0			1.4
Dividend ratio	0.2			0.2			—
Combined ratio	88.8		%	91.3		%	2.5	pts
Combined ratio excluding catastrophes and development	90.2		%	91.7		%	1.5	pts

Net accident year catastrophe losses incurred	$	5		$	8
Effect on loss & LAE ratio	0.7		%	1.1		%	0.4	pts

Net prior year development and other: (favorable) / unfavorable	$	(15)		$	(11)
Effect on loss & LAE ratio	(2.1)		%	(1.5)		%	0.6	pts

Rate	10		%	10		%	—	pts
Renewal premium change	9		%	11		%	(2)	pts
Retention	86		%	83		%	3	pts
New business	$	103		$	74		39	%

Commercial - Results of Operations


Three months ended March 31
(In millions)	2021			2020			Change
Gross written premiums	$	1,113		$	1,062		5	%
Gross written premiums ex. 3rd party captives	1,111			1,059			5
Net written premiums	960			950			1

Net earned premiums	855			818			5
Net investment income	148			42
Other revenues	5			8
Total operating revenues	1,008			868			16
Insurance claims and policyholders' benefits	644			560
Amortization of deferred acquisition costs	153			144
Other insurance related expenses	115			127
Other expenses	9			6
Total claims, benefits and expenses	921			837			(10)
Core income (loss) before income tax	87			31
Income tax (expense) benefit on core income (loss)	(18)			(8)
Core income (loss)	$	69		$	23		N/M	%

Other Performance Metrics
Underwriting gain (loss)	$	(57)		$	(13)		N/M	%

Loss & LAE ratio	74.7		%	67.8		%	(6.9)	pts
Expense ratio	31.4			33.2			1.8
Dividend ratio	0.6			0.6			—
Combined ratio	106.7		%	101.6		%	(5.1)	pts
Combined ratio excluding catastrophes and development	92.8		%	94.6		%	1.8	pts

Net accident year catastrophe losses incurred	$	115		$	57
Effect on loss & LAE ratio	13.4		%	7.0		%	(6.4)	pts

Net prior year development and other: (favorable) / unfavorable	$	4		$	—
Effect on loss & LAE ratio	0.5		%	—		%	(0.5)	pts

Rate	10		%	8		%	2	pts
Renewal premium change	8		%	9		%	(1)	pts
Retention	84		%	86		%	(2)	pts
New business	$	211		$	198		7	%

International - Results of Operations


Three months ended March 31
(In millions)	2021			2020			Change
Gross written premiums	$	343		$	307		12	%
Net written premiums	235			219			7
Net earned premiums	252			239			5
Net investment income	14			15
Other revenues	—			—
Total operating revenues	266			254			5
Insurance claims and policyholders' benefits	155			154
Amortization of deferred acquisition costs	52			49
Other insurance related expenses	35			36
Other expenses	(5)			13
Total claims, benefits and expenses	237			252			6
Core income (loss) before income tax	29			2
Income tax (expense) benefit on core income (loss)	(5)			—
Core income (loss)	$	24		$	2		N/M	%

Other Performance Metrics
Underwriting gain (loss)	$	10		$	—		N/M	%

Loss & LAE ratio	61.5		%	64.5		%	3.0	pts
Expense ratio	34.4			35.4			1.0
Dividend ratio	—			—			—
Combined ratio	95.9		%	99.9		%	4.0	pts
Combined ratio excluding catastrophes and development	94.0		%	95.7		%	1.7	pts

Net accident year catastrophe losses incurred	$	5		$	10
Effect on loss & LAE ratio	2.0		%	4.3		%	2.3	pts

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

Rate	14		%	9		%	5	pts
Renewal premium change	11		%	9		%	2	pts
Retention	74		%	70		%	4	pts
New business	$	80		$	68		18	%

Life & Group - Results of Operations


Three months ended March 31
(In millions)	2021		2020
Net earned premiums	$	120	$	127
Net investment income	219		208
Other revenues	1		—
Total operating revenues	340		335
Insurance claims and policyholders' benefits	281		316
Other insurance related expenses	25		26
Other expenses	2		3
Total claims, benefits and expenses	308		345
Core income (loss) before income tax	32		(10)
Income tax (expense) benefit on core income (loss)	4		14
Core income (loss)	$	36	$	4

Corporate & Other - Results of Operations


Three months ended March 31
(In millions)	2021		2020
Net earned premiums	$	—	$	—
Net investment income	6		8
Other revenues	(1)		(1)
Total operating revenues	5		7
Insurance claims and policyholders' benefits	(2)		(11)
Other insurance related expenses	10		—
Other expenses	40		37
Total claims, benefits and expenses	48		26
Core income (loss) before income tax	(43)		(19)
Income tax (expense) benefit on core income (loss)	7		2
Core income (loss)	$	(36)	$	(17)

Investment Summary - Consolidated


	March 31, 2021				December 31, 2020
(In millions)	Carrying Value		Net Unrealized Gains (Losses)		Carrying Value		Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	23,690	$	2,573	$	24,352	$	3,556
States, municipalities and political subdivisions:
Tax-exempt	8,273		1,161		8,499		1,311
Taxable	3,327		398		3,093		552
Total states, municipalities and political subdivisions	11,600		1,559		11,592		1,863
Asset-backed:
RMBS	3,283		68		3,587		145
CMBS	1,988		52		1,967		51
Other ABS	2,345		64		2,251		72
Total asset-backed	7,616		184		7,805		268
U.S. Treasury and obligations of government-sponsored enterprises	132		(6)		338		(1)
Foreign government	529		21		544		32
Redeemable preferred stock	12		—		—		—
Total fixed maturity securities	43,579		4,331		44,631		5,718
Equities:
Common stock	198		—		195		—
Non-redeemable preferred stock	786		—		797		—
Total equities	984		—		992		—
Limited partnership investments	1,654		—		1,619		—
Other invested assets	77		—		76		—
Mortgage loans	1,043		—		1,068		—
Short term investments	1,334		—		1,907		—
Total investments	$	48,671	$	4,331	$	50,293	$	5,718

Net receivable/(payable) on investment activity	$	(81)			$	22

Effective duration (in years)	6.5				6.3
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, 2021				December 31, 2020
(In millions)	Carrying Value		Net Unrealized Gains (Losses)		Carrying Value		Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	15,128	$	913	$	15,560	$	1,348
States, municipalities and political subdivisions:
Tax-exempt	1,667		85		1,711		114
Taxable	1,581		50		1,286		110
Total states, municipalities and political subdivisions	3,248		135		2,997		224
Asset-backed:
RMBS	3,221		64		3,507		140
CMBS	1,908		48		1,879		46
Other ABS	2,149		51		2,056		52
Total asset-backed	7,278		163		7,442		238
U.S. Treasury and obligations of government-sponsored enterprises	113		(3)		327		(1)
Foreign government	515		19		529		29
Redeemable preferred stock	12		—		—		—
Total fixed maturity securities	26,294		1,227		26,855		1,838
Equities:
Common stock	198		—		195		—
Non-redeemable preferred stock	188		—		202		—
Total equities	386		—		397		—
Limited partnership investments	915		—		896		—
Other invested assets	77		—		76		—
Mortgage loans	795		—		782		—
Short term investments	1,280		—		1,772		—
Total investments	$	29,747	$	1,227	$	30,778	$	1,838

Net receivable/(payable) on investment activity	$	(96)			$	10

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

Investment Summary - Life & Group


	March 31, 2021				December 31, 2020
(In millions)	Carrying Value		Net Unrealized Gains (Losses)		Carrying Value		Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	8,562	$	1,660	$	8,792	$	2,208
States, municipalities and political subdivisions:
Tax-exempt	6,606		1,076		6,788		1,197
Taxable	1,746		348		1,807		442
Total states, municipalities and political subdivisions	8,352		1,424		8,595		1,639
Asset-backed:
RMBS	62		4		80		5
CMBS	80		4		88		5
Other ABS	196		13		195		20
Total asset-backed	338		21		363		30
U.S. Treasury and obligations of government-sponsored enterprises	19		(3)		11		—
Foreign government	14		2		15		3
Redeemable preferred stock	—		—		—		—
Total fixed maturity securities	17,285		3,104		17,776		3,880
Equities:
Common stock	—		—		—		—
Non-redeemable preferred stock	598		—		595		—
Total equities	598		—		595		—
Limited partnership investments	739		—		723		—
Other invested assets	—		—		—		—
Mortgage loans	248		—		286		—
Short term investments	54		—		135		—
Total investments	$	18,924	$	3,104	$	19,515	$	3,880

Net receivable/(payable) on investment activity	$	15			$	12

Effective duration (in years)	9.1				9.2
Weighted average rating	A				A

Investments - Fixed Maturity Securities by Credit Rating


March 31, 2021	U.S. Government, Government agencies and Government-sponsored enterprises					AAA					AA					A					BBB					Non-investment grade					Total
(In millions)	Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)
Corporate and other bonds	$	—		$	—	$	48		$	—	$	478		$	28	$	5,109		$	605	$	15,866		$	1,830	$	2,189		$	110	$	23,690		$	2,573
States, municipalities and political subdivisions	—			—		3,009			364		5,539			727		2,675			417		363			50		14			1		11,600			1,559
Asset-backed:
RMBS	3,014			42		3			—		18			—		71			6		21			1		156			19		3,283			68
CMBS	3			—		307			16		790			35		271			5		469			(5)		148			1		1,988			52
Other ABS	—			—		74			1		128			2		1,169			19		945			42		29			—		2,345			64
Total asset-backed	3,017			42		384			17		936			37		1,511			30		1,435			38		333			20		7,616			184
U.S. Treasury and obligations of government-sponsored enterprises	132			(6)		—			—		—			—		—			—		—			—		—			—		132			(6)
Foreign government	—			—		148			4		268			10		85			5		28			2		—			—		529			21
Redeemable preferred stock	—			—		—			—		—			—		—			—		—			—		12			—		12			—
Total fixed maturity securities	$	3,149		$	36	$	3,589		$	385	$	7,221		$	802	$	9,380		$	1,057	$	17,692		$	1,920	$	2,548		$	131	$	43,579		$	4,331

Percentage of total fixed maturity securities	7		%			8		%			17		%			21		%			41		%			6		%			100		%

Components of Net Investment Income


Three months ended March 31	Consolidated
(In millions)	2021			2020
Taxable fixed income securities	$	359		$	371
Tax-exempt fixed income securities	80			78
Total fixed income securities	439			449
Limited partnership and common stock investments	61			(125)
Other, net of investment expense	4			5
Net investment income	$	504		$	329

Effective income yield for fixed income securities portfolio	4.4		%	4.6		%
Limited partnership and common stock return	3.4			(7.0)


	Property & Casualty and Corporate & Other
Three months ended March 31
(In millions)	2021			2020
Taxable fixed income securities	$	225		$	234
Tax-exempt fixed income securities	12			5
Total fixed income securities	237			239
Limited partnership and common stock investments	42			(125)
Other, net of investment expense	6			7
Net investment income	$	285		$	121

Effective income yield for fixed income securities portfolio	3.8		%	4.0		%


Three months ended March 31	Life & Group
(In millions)	2021			2020
Taxable fixed income securities	$	134		$	137
Tax-exempt fixed income securities	68			73
Total fixed income securities	202			210
Limited partnership and common stock investments	19			—
Other, net of investment expense	(2)			(2)
Net investment income	$	219		$	208

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

Claim & Claim Adjustment Expense Reserve Rollforward


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

Reduction of net reserves due to Excess Workers' Compensation Loss Portfolio Transfer	—		—		—		—		—		(632)		(632)
Net incurred claim & claim adjustment expenses	427		640		155		1,222		248		—		1,470
Net claim & claim adjustment expense payments	(329)		(459)		(114)		(902)		(244)		(6)		(1,152)
Foreign currency translation adjustment and other	(1)		1		(11)		(11)		(21)		—		(32)

Claim & claim adjustment expense reserves, end of period
Net	4,995		7,657		1,852		14,504		3,598		253		18,355
Ceded	921		792		290		2,003		128		2,570		4,701
Gross	$	5,916	$	8,449	$	2,142	$	16,507	$	3,726	$	2,823	$	23,056

Life & Group Policyholder Reserves


March 31, 2021
(In millions)	Claim and claim adjustment expenses		Future policy benefits		Total
Long term care	$	2,855	$	9,795	12,650
Structured settlement annuities	537		—		537
Other	9		—		9
Total	3,401		9,795		13,196
Shadow adjustments	197		2,716		2,913
Ceded reserves	128		261		389
Total gross reserves	$	3,726	$	12,772	16,498


December 31, 2020
(In millions)	Claim and claim adjustment expenses		Future policy benefits		Total
Long term care	$	2,844	$	9,762	$	12,606
Structured settlement annuities	543		—		543
Other	10		—		10
Total	3,397		9,762		13,159
Shadow adjustments	218		3,293		3,511
Ceded reserves	128		263		391
Total gross reserves	$	3,743	$	13,318	17,061

Definitions and Presentation

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

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

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

•Corporate & Other segment primarily includes certain corporate expenses including interest on corporate debt and the results of certain property and casualty business in run-off, including CNA Re, 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, 2020 Form 10-K for further discussion of this non-GAAP financial measure.

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

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

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

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

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

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

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

•Certain immaterial differences are due to rounding.

•N/M = Not Meaningful


Exhibit No.						Description
99.1						CNA Financial Corporation press release, issued May 3, 2021, providing information on the first quarter 2021 results of operations.

99.2						CNA Financial Corporation financial supplement, posted on its website May 3, 2021, providing supplemental financial information on the first quarter 2021.

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


		CNA Financial Corporation
		(Registrant)

Date: May 3, 2021	By	/s/ Albert J. Miralles
		(Signature)
		Albert J. Miralles 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)