CNA Financial Corporation

11/02/2026 | Press release | Distributed by Public on 11/02/2026 05:23

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis (MD&A) of Financial Condition and Results of Operations
OVERVIEW
The following discussion highlights significant factors affecting the Company. References to "we," "our," "us" or like terms refer to the business of CNA.
The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements included under Part I, Item 1 of this Form 10-Q, and Item 1A Risk Factors and Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations, which are included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2025.
We utilize the core income (loss) financial measure to monitor our operations. Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of net investment gains or losses and gains or losses resulting from pension settlement transactions. Net investment gains or losses are excluded from the calculation of core income (loss) because they are generally driven by economic factors that are not necessarily reflective of our primary operations. The calculation of core income (loss) excludes gains or losses resulting from pension settlement transactions as they result from decisions regarding our defined benefit pension plans which are unrelated to our primary operations. 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 our primary operations. See further discussion regarding how we manage our business in Note J to the Condensed Consolidated Financial Statements included under Part I, Item 1. For reconciliations of non-GAAP measures to the most comparable GAAP measures and other information, please refer herein and/or to our most recent Annual Report on Form 10-K on file with the Securities and Exchange Commission.
In evaluating the results of our Specialty, Commercial and International segments, we utilize the loss ratio, the underlying loss ratio, the expense ratio, the dividend ratio, the combined ratio and the underlying combined ratio. These ratios are calculated using GAAP financial results. The loss ratio is the percentage of net incurred claim and claim adjustment expenses to net earned premiums. The underlying loss ratio excludes the impact of catastrophe-related reinstatement premiums, catastrophe losses and development-related items from the loss ratio. Development-related items represent net prior year loss reserve and premium development, and include the effects of interest accretion and change in allowance for uncollectible reinsurance. The expense ratio is the percentage of insurance underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums. The dividend ratio is the ratio of policyholders' dividends incurred to net earned premiums. The combined ratio is the sum of the loss ratio, the expense ratio and the dividend ratio. The underlying combined ratio is the sum of the underlying loss ratio, the expense ratio and the dividend ratio. The underlying loss ratio and the underlying combined ratio are deemed to be non-GAAP financial measures, and management believes some investors may find these ratios useful to evaluate our underwriting performance since they remove the impact of catastrophes which are unpredictable as to timing and amount, and development-related items as they are not indicative of our current year underwriting performance.
Changes in estimates of claim and claim adjustment expense reserves, net of reinsurance, for prior years are defined as net prior year loss reserve development within this MD&A. These changes can be favorable or unfavorable. Net prior year loss reserve development does not include the effect of any related acquisition expenses. Further information on our reserves is provided in Note E and Note F to the Condensed Consolidated Financial Statements included under Part I, Item 1.
In addition, we also utilize 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. 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.
We use underwriting gain (loss) and underlying underwriting gain (loss), calculated using GAAP financial results, to monitor our insurance operations. Underwriting gain (loss) is deemed to be a non-GAAP financial measure and is calculated pretax as net earned premiums less total insurance expenses, which includes insurance claims and policyholders' benefits, amortization of deferred acquisition costs and insurance related administrative expenses. Net income (loss) is the most directly comparable GAAP measure. Management believes some investors may find this measure useful to evaluate the profitability, before tax, derived from our underwriting activities, which are managed separately from our investing activities. Underlying underwriting gain (loss) is also deemed to be a non-GAAP financial measure, and represents pretax underwriting gain (loss) excluding catastrophe-related reinstatement premiums, catastrophe losses and development-related items. Management believes some investors may find this measure useful to evaluate the profitability, before tax, derived from our underwriting activities, excluding the impact of catastrophes, which are unpredictable as to timing and amount, and development-related items as they are not indicative of our current year underwriting performance.
The following tables present reconciliations of net income to core income, underwriting gain and underlying underwriting gain for our Property & Casualty Operations:
Three months ended September 30, 2026 Specialty Commercial International Property & Casualty
(In millions)
Net income $ 143 $ 160 $ 88 $ 391
Net investment losses, after tax 3 2 1 6
Core income $ 146 $ 162 $ 89 $ 397
Less:
Net investment income 150 204 48 402
Non-insurance warranty revenue (expense) 18 - - 18
Other revenue (expense), including interest expense (13) (5) 14 (4)
Income tax expense on core income (39) (40) (22) (101)
Underwriting gain 30 3 49 82
Catastrophe-related reinstatement premiums - - - -
Catastrophe losses - 70 8 78
Effect of unfavorable (favorable) development-related items - 35 (35) -
Underlying underwriting gain $ 30 $ 108 $ 22 $ 160
Three months ended September 30, 2025 Specialty Commercial International Property & Casualty
(In millions)
Net income $ 173 $ 229 $ 44 $ 446
Net investment losses, after tax 3 4 3 10
Core income $ 176 $ 233 $ 47 $ 456
Less:
Net investment income 162 192 42 396
Non-insurance warranty revenue (expense) 16 - - 16
Other revenue (expense), including interest expense (15) (3) 1 (17)
Income tax expense on core income (47) (62) (24) (133)
Underwriting gain 60 106 28 194
Catastrophe-related reinstatement premiums - - - -
Catastrophe losses - 39 2 41
Effect of development-related items - - - -
Underlying underwriting gain $ 60 $ 145 $ 30 $ 235
Nine months ended September 30, 2026 Specialty Commercial International Property & Casualty
(In millions)
Net income $ 395 $ 498 $ 160 $ 1,053
Net investment losses, after tax 7 8 3 18
Core income $ 402 $ 506 $ 163 $ 1,071
Less:
Net investment income 463 640 135 1,238
Non-insurance warranty revenue (expense) 47 - - 47
Other revenue (expense), including interest expense (39) (10) 12 (37)
Income tax expense on core income (107) (128) (57) (292)
Underwriting gain 38 4 73 115
Catastrophe-related reinstatement premiums - 9 - 9
Catastrophe losses - 207 19 226
Effect of unfavorable (favorable) development-related items 50 92 (35) 107
Underlying underwriting gain $ 88 $ 312 $ 57 $ 457
Nine months ended September 30, 2025 Specialty Commercial International Property & Casualty
(In millions)
Net income $ 487 $ 552 $ 135 $ 1,174
Net investment losses, after tax 16 23 2 41
Core income $ 503 $ 575 $ 137 $ 1,215
Less:
Net investment income 483 575 114 1,172
Non-insurance warranty revenue (expense) 42 - - 42
Other revenue (expense), including interest expense (40) (10) 12 (38)
Income tax expense on core income (137) (153) (55) (345)
Underwriting gain 155 163 66 384
Catastrophe-related reinstatement premiums - - - -
Catastrophe losses - 182 18 200
Effect of unfavorable development-related items 10 54 - 64
Underlying underwriting gain $ 165 $ 399 $ 84 $ 648
The following table presents a reconciliation of net loss to core loss for our Life & Group segment:
Periods ended September 30 Three Months Nine Months
(In millions) 2026 2025 2026 2025
Net loss $ (173) $ (17) $ (196) $ (22)
Net investment losses (gains), after tax 2 (5) 6 7
Core loss $ (171) $ (22) $ (190) $ (15)
The following table presents a reconciliation of net loss to core loss for our Corporate & Other segment:
Periods ended September 30 Three Months Nine Months
(In millions) 2026 2025 2026 2025
Net loss $ (22) $ (26) $ (129) $ (176)
Net investment (gains) losses, after tax (1) 1 - 1
Core loss $ (23) $ (25) $ (129) $ (175)
CRITICAL ACCOUNTING ESTIMATES
The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the amount of revenues and expenses reported during the period. Actual results may differ from those estimates.
Our Condensed Consolidated Financial Statements and accompanying notes have been prepared in accordance with GAAP applied on a consistent basis. We continually evaluate the accounting policies and estimates used to prepare the Condensed Consolidated Financial Statements. In general, our estimates are based on historical experience, evaluation of current trends, information from third-party professionals and various other assumptions that are believed to be reasonable under the known facts and circumstances.
The accounting estimates set forth below are considered by us to be critical to an understanding of our Condensed Consolidated Financial Statements as their application places the most significant demands on our judgment:
•Insurance Reserves
•Long-Term Care Reserves
•Valuation of Investments and Impairment of Securities
Due to the inherent uncertainties involved with these types of judgments, actual results could differ significantly from our estimates and may have a material adverse impact on our results of operations, financial condition, equity, business, and insurer financial strength and corporate debt ratings. See the Critical Accounting Estimates section of our Management's Discussion and Analysis of Financial Condition and Results of Operations included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025 for further information.
CONSOLIDATED OPERATIONS
Results of Operations
The following table includes the consolidated results of our operations including our financial measure, core income (loss). For more detailed components of our business operations and a discussion of the core income (loss) financial measure, see the Segment Results section within this MD&A. For further discussion of Net investment income and Net investment gains or losses, see the Investments section of this MD&A.
Periods ended September 30 Three Months Nine Months
(In millions) 2026 2025 2026 2025
Operating Revenues
Net earned premiums $ 2,831 $ 2,783 $ 8,291 $ 8,103
Net investment income 635 638 1,946 1,904
Non-insurance warranty revenue 357 393 1,098 1,188
Other revenues 7 10 24 28
Total operating revenues 3,830 3,824 11,359 11,223
Claims, Benefits and Expenses
Net incurred claims and benefits (re-measurement loss of $222, $36, $266 and $59)
2,336 2,023 6,659 6,115
Policyholders' dividends 11 9 32 29
Amortization of deferred acquisition costs 492 483 1,449 1,423
Non-insurance warranty expense 339 377 1,051 1,146
Insurance related administrative expenses 349 324 1,024 982
Interest expense 32 36 98 99
Other expenses 25 52 105 125
Total claims, benefits and expenses 3,584 3,304 10,418 9,919
Income tax expense on core income (43) (111) (189) (279)
Core income 203 409 752 1,025
Net investment losses (9) (7) (32) (62)
Income tax benefit on net investment losses 2 1 8 13
Net investment losses, after tax (7) (6) (24) (49)
Net income $ 196 $ 403 $ 728 $ 976
Three Month Comparison
Core income decreased $206 million for the three months ended September 30, 2026 as compared with the same period in 2025. Core income for our Property & Casualty Operations decreased $59 million primarily driven by lower underlying underwriting results and higher catastrophe losses. Core results for our Life & Group segment decreased $149 million as a result of the annual reserve review, while core loss for our Corporate & Other segment improved $2 million.
Catastrophe losses were $78 million and $41 million for the three months ended September 30, 2026 and 2025 driven by severe weather related events. There were no catastrophe-related reinsurance reinstatement premiums for the three months ended September 30, 2026 or 2025. Favorable net prior year loss reserve development of $1 million was recorded for the three months ended September 30, 2026 and 2025 related to our Commercial and International segments. Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.
Nine Month Comparison
Core income decreased $273 million for the nine months ended September 30, 2026 as compared with the same period in 2025. Core income for our Property & Casualty Operations decreased $144 million primarily driven by lower underlying underwriting results, higher unfavorable net prior year loss reserve development and higher catastrophe losses, partially offset by higher net investment income. Core results for our Life & Group segment decreased $175 million as a result of the annual reserve review, while core loss for our Corporate & Other segment improved $46 million.
Catastrophe losses were $226 million and catastrophe-related reinsurance reinstatement premiums were $9 million for the nine months ended September 30, 2026 driven by severe weather related events. Catastrophe losses were $200 million for the nine months ended September 30, 2025 driven by severe weather related events. There were no catastrophe-related reinsurance reinstatement premiums for the nine months ended September 30, 2025. Unfavorable net prior year loss reserve development of $190 million was recorded for each of the nine months ended September 30, 2026 and 2025 related to our Specialty, Commercial, International and Corporate & Other segments. Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.
SEGMENT RESULTS
The following discusses the results of operations for our business segments. Our property and casualty commercial insurance operations are managed and reported in three business segments: Specialty, Commercial and International, which we refer to collectively as Property & Casualty Operations. Our operations outside of Property & Casualty Operations are managed and reported in two segments: Life & Group and Corporate & Other.
Specialty
The following table details the results of operations for Specialty and provides the components to reconcile the combined ratio and loss ratio to the underlying combined ratio and underlying loss ratio.
Periods ended September 30 Three Months Nine Months
(In millions, except ratios, rate, renewal premium change and retention) 2026 2025 2026 2025
Net written premiums $ 900 $ 867 $ 2,671 $ 2,601
Net earned premiums 907 881 2,637 2,573
Underwriting gain 30 60 38 155
Net investment income 150 162 463 483
Core income 146 176 402 503
Other performance metrics:
Loss ratio 62.9 % 60.6 % 64.7 % 60.7 %
Expense ratio 33.6 32.5 33.5 33.0
Dividend ratio 0.3 0.2 0.4 0.3
Combined ratio 96.8 % 93.3 % 98.6 % 94.0 %
Less: Effect of catastrophe impacts 0.1 - - -
Less: Effect of unfavorable development-related items - - 1.9 0.4
Underlying combined ratio 96.7 % 93.3 % 96.7 % 93.6 %
Underlying loss ratio 62.8 % 60.6 % 62.8 % 60.3 %
Rate 4 % 3 % 4 % 3 %
Renewal premium change 5 4 5 4
Retention 83 86 84 87
New business $ 137 $ 131 $ 439 $ 365
Three Month Comparison
Net written premiums for Specialty increased $33 million for the three months ended September 30, 2026 as compared with the same period in 2025 driven by rate and higher new business. The increase in net earned premiums was consistent with the trend in net written premiums.
Core income decreased $30 million for the three months ended September 30, 2026 as compared with the same period in 2025 primarily due to lower underlying underwriting results and lower net investment income.
The combined ratio of 96.8% increased 3.5 points for the three months ended September 30, 2026 as compared with the same period in 2025 primarily due to a 2.3 point increase in the loss ratio and a 1.1 point increase in the expense ratio. The increase in the loss ratio reflected a higher underlying loss ratio across various lines. The underlying loss ratio was consistent with the first half of 2026. The increase in the expense ratio was primarily driven by higher acquisition costs. Catastrophe losses were less than $1 million, or 0.1 points of the loss ratio, for the three months ended September 30, 2026 as compared with no catastrophe losses for the three months ended September 30, 2025.
Nine Month Comparison
Net written premiums for Specialty increased $70 million for the nine months ended September 30, 2026 as compared with the same period in 2025 driven by higher new business and rate partially offset by lower retention. The increase in net earned premiums was consistent with the trend in net written premiums.
Core income decreased $101 million for the nine months ended September 30, 2026 as compared with the same period in 2025 primarily due to lower underlying underwriting results, higher unfavorable net prior year loss reserve development and lower net investment income.
The combined ratio of 98.6% increased 4.6 points for the nine months ended September 30, 2026 as compared with the same period in 2025 primarily due to a 4.0 point increase in the loss ratio and a 0.5 point increase in the expense ratio. The increase in the loss ratio reflected both a higher underlying loss ratio across various lines and higher unfavorable net prior year loss reserve development. The increase in the expense ratio was primarily driven by higher acquisition costs. Catastrophe losses were less than $1 million for the nine months ended September 30, 2026. There were no catastrophe losses for the nine months ended September 30, 2025.
Unfavorable net prior year loss reserve development of $44 million and $10 million was recorded for the nine months ended September 30, 2026 and 2025. Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.
The following table summarizes the gross and net carried reserves for Specialty.
(In millions) September 30, 2026 December 31, 2025
Gross case reserves $ 2,178 $ 2,166
Gross IBNR reserves 5,964 5,618
Total gross carried claim and claim adjustment expense reserves $ 8,142 $ 7,784
Net case reserves $ 1,816 $ 1,801
Net IBNR reserves 4,710 4,387
Total net carried claim and claim adjustment expense reserves $ 6,526 $ 6,188
Commercial
The following table details the results of operations for Commercial and provides the components to reconcile the combined ratio and loss ratio to the underlying combined ratio and underlying loss ratio.
Periods ended September 30 Three Months Nine Months
(In millions, except ratios, rate, renewal premium change and retention) 2026 2025 2026 2025
Net written premiums $ 1,274 $ 1,251 $ 4,397 $ 4,312
Net earned premiums 1,475 1,453 4,328 4,235
Underwriting gain 3 106 4 163
Net investment income 204 192 640 575
Core income 162 233 506 575
Other performance metrics:
Loss ratio 73.0 % 66.1 % 72.9 % 68.7 %
Expense ratio 26.2 26.1 26.5 26.9
Dividend ratio 0.5 0.5 0.5 0.5
Combined ratio 99.7 % 92.7 % 99.9 % 96.1 %
Less: Effect of catastrophe impacts 4.8 2.7 5.0 4.3
Less: Effect of unfavorable development-related items 2.4 - 2.1 1.3
Underlying combined ratio 92.5 % 90.0 % 92.8 % 90.5 %
Underlying loss ratio 65.8 % 63.4 % 65.8 % 63.1 %
Rate 2 % 5 % 1 % 5 %
Renewal premium change 3 6 3 7
Retention 83 79 81 82
New business $ 332 $ 324 $ 1,147 $ 1,114
Three Month Comparison
Net written premiums for Commercial increased $23 million for the three months ended September 30, 2026 as compared with the same period in 2025 driven by rate and higher new business. The increase in net earned premiums was consistent with the trend in net written premiums.
Core income decreased $71 million for the three months ended September 30, 2026 as compared with the same period in 2025 driven by lower underlying underwriting results, unfavorable net prior year loss reserve development and higher catastrophe losses, partially offset by higher net investment income.
The combined ratio of 99.7% increased 7.0 points for the three months ended September 30, 2026 as compared with the same period in 2025 primarily due to a 6.9 point increase in the loss ratio. The increase in the loss ratio reflected a higher underlying loss ratio in excess casualty and workers' compensation, unfavorable net prior year loss reserve development and higher catastrophe losses. The underlying loss ratio was consistent with the first half of 2026. Catastrophe losses were $70 million, or 4.8 points of the loss ratio, for the three months ended September 30, 2026 as compared with $39 million, or 2.7 points of the loss ratio, for the three months ended September 30, 2025. The expense ratio was generally consistent with the same period in 2025.
Unfavorable net prior year loss reserve development of $34 million was recorded for the three months ended September 30, 2026 as compared with $1 million of favorable net prior year loss reserve development recorded for the three months ended September 30, 2025. Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.
Nine Month Comparison
Net written premiums for Commercial increased $85 million for the nine months ended September 30, 2026 as compared with the same period in 2025 driven by rate and higher new business. The increase in net earned premiums was consistent with the trend in net written premiums.
Core income decreased $69 million for the nine months ended September 30, 2026 as compared with the same period in 2025 due to lower underlying underwriting results, higher unfavorable net prior year loss reserve development and higher catastrophe losses, partially offset by higher net investment income.
The combined ratio of 99.9% increased 3.8 points for the nine months ended September 30, 2026 as compared with the same period in 2025 due to a 4.2 point increase in the loss ratio partially offset by a 0.4 point improvement in the expense ratio. The increase in the loss ratio was driven by a higher underlying loss ratio in excess casualty and workers' compensation, higher unfavorable net prior year loss reserve development and higher catastrophe losses. Catastrophe losses were $207 million for the nine months ended September 30, 2026 as compared with $182 million for the nine months ended September 30, 2025. The current year also includes $9 million of catastrophe-related reinsurance reinstatement premiums. The effect of catastrophe impacts on the loss ratio was 5.0 points for the nine months ended September 30, 2026 as compared with 4.3 points for the nine months ended September 30, 2025. The improvement in the expense ratio was primarily driven by lower acquisition costs.
Unfavorable net prior year loss reserve development of $84 million and $46 million was recorded for the nine months ended September 30, 2026 and 2025. Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.
The following table summarizes the gross and net carried reserves for Commercial.
(In millions) September 30, 2026 December 31, 2025
Gross case reserves $ 4,218 $ 4,093
Gross IBNR reserves 9,040 8,156
Total gross carried claim and claim adjustment expense reserves $ 13,258 $ 12,249
Net case reserves $ 3,662 $ 3,508
Net IBNR reserves 7,803 7,188
Total net carried claim and claim adjustment expense reserves $ 11,465 $ 10,696
International
The following table details the results of operations for International and provides the components to reconcile the combined ratio and loss ratio to the underlying combined ratio and underlying loss ratio.
Periods ended September 30 Three Months Nine Months
(In millions, except ratios, rate, renewal premium change and retention) 2026 2025 2026 2025
Net written premiums $ 333 $ 319 $ 1,026 $ 976
Net earned premiums 349 344 1,020 978
Underwriting gain 49 28 73 66
Net investment income 48 42 135 114
Core income 89 47 163 137
Other performance metrics:
Loss ratio 51.8 % 59.1 % 58.2 % 60.3 %
Expense ratio 34.3 32.7 34.7 32.9
Combined ratio 86.1 % 91.8 % 92.9 % 93.2 %
Less: Effect of catastrophe impacts 2.1 0.6 1.8 1.8
Less: Effect of favorable development-related items (10.1) - (3.4) -
Underlying combined ratio 94.1 % 91.2 % 94.5 % 91.4 %
Underlying loss ratio 59.8 % 58.5 % 59.8 % 58.5 %
Rate (4) % (6) % (5) % (4) %
Renewal premium change (2) (3) (2) (1)
Retention 87 83 86 85
New business $ 86 $ 94 $ 268 $ 280
Three Month Comparison
Net written premiums for International increased $14 million for the three months ended September 30, 2026 as compared with the same period in 2025. Excluding the effect of foreign currency exchange rates, net written premiums increased $18 million as compared with the same period in 2025 driven by higher retention partially offset by lower rate. The increase in net earned premiums was consistent with the trend in net written premiums.
Core income increased $42 million for the three months ended September 30, 2026 as compared with the same period in 2025, primarily driven by favorable net prior year loss reserve development in the current period compared with no net prior year loss reserve development in the prior year period.
The combined ratio of 86.1% improved 5.7 points for the three months ended September 30, 2026 as compared with the same period in 2025 due to a 7.3 point improvement in the loss ratio partially offset by a 1.6 point increase in the expense ratio. The improvement in the loss ratio was due to $35 million of favorable net prior year loss reserve development in the three months ended September 30, 2026 compared with no net prior year loss reserve development in the same period in 2025, partially offset by higher catastrophe losses and an increase in the underlying loss ratio across most lines. The underlying loss ratio was consistent with the first half of 2026. Catastrophe losses were $8 million, or 2.1 points of the loss ratio, for the three months ended September 30, 2026, as compared with $2 million, or 0.6 points of the loss ratio, for the three months ended September 30, 2025. The increase in the expense ratio reflects higher acquisition costs.
Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.
Nine Month Comparison
Net written premiums for International increased $50 million for the nine months ended September 30, 2026 as compared with the same period in 2025. Excluding the effect of foreign currency exchange rates, net written premiums increased $26 million as compared with the same period in 2025 driven by higher retention partially offset by lower rate. The increase in net earned premiums was consistent with the trend in net written premiums.
Core income increased $26 million for the nine months ended September 30, 2026 as compared with the same period in 2025, driven by favorable net prior year loss reserve development in the current period compared with no development in the prior year period and higher net investment income, partially offset by lower underlying underwriting results.
The combined ratio of 92.9% improved 0.3 points for the nine months ended September 30, 2026 as compared with the same period in 2025 due to a 2.1 point improvement in the loss ratio largely offset by a 1.8 point increase in the expense ratio. The improvement in the loss ratio was primarily due to $35 million of favorable net prior year loss reserve development in the nine months ended September 30, 2026 compared with no net prior year loss reserve development in the same period in 2025, partially offset by an increase in the underlying loss ratio across most lines. Catastrophe losses were $19 million, or 1.8 points of the loss ratio, for the nine months ended September 30, 2026, as compared with $18 million, or 1.8 points of the loss ratio, for the nine months ended September 30, 2025. The increase in the expense ratio was primarily driven by continued investments in talent and technology and higher acquisition costs, partially offset by higher net earned premiums.
Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.
The following table summarizes the gross and net carried reserves for International.
(In millions) September 30, 2026 December 31, 2025
Gross case reserves $ 1,108 $ 1,052
Gross IBNR reserves 2,441 2,324
Total gross carried claim and claim adjustment expense reserves $ 3,549 $ 3,376
Net case reserves $ 910 $ 880
Net IBNR reserves 2,072 1,961
Total net carried claim and claim adjustment expense reserves $ 2,982 $ 2,841
Life & Group
The following table summarizes the results of operations for Life & Group.
Periods ended September 30 Three Months Nine Months
(In millions) 2026 2025 2026 2025
Net earned premiums $ 101 $ 106 $ 307 $ 318
Claims, benefits and expenses 547 365 1,241 1,040
Net investment income 223 226 677 687
Core loss (171) (22) (190) (15)
Three Month Comparison
Core results decreased $149 million for the three months ended September 30, 2026 as compared with the same period in 2025. Both periods include assumption updates as a result of the annual reserve reviews.
The cash flow assumption updates from the annual reserve review for the three months ended September 30, 2026 resulted in a pretax increase in long-term care reserves of $173 million primarily driven by unfavorable cost of care inflation and morbidity impacts, partially offset by favorable premium rate actions. However, the unfavorable expected cash flows from the reserve assumption updates are almost entirely offset by a favorable economic impact from anticipated future investment cash flows from recent investment portfolio actions. Under GAAP accounting, the anticipated benefits of these portfolio actions are not immediately reflected in earnings, but instead are recognized through net investment income over time.
The cash flow assumption updates from the annual reserve review for the three months ended September 30, 2025 resulted in a pretax increase in long-term care reserves of $7 million.
Nine Month Comparison
Results for the nine months ended September 30, 2026 were generally consistent with the three month summary above.
Future Policy Benefit Reserves
Annually in the third quarter, an actuarial analysis is performed on policyholder morbidity, persistency, premium rate actions and expense experience. This analysis, combined with judgment, informs the setting of updated cash flow assumptions used to estimate the liability for future policyholder benefits (LFPB). See Note A to the Consolidated Financial Statements within CNAF's Annual Report on Form 10-K for the year ended December 31, 2025 for further information on the long-term care reserving process.
The table below summarizes the estimated pretax impact on our results of operations from various hypothetical revisions to our LFPB reserve assumptions. We have assumed that revisions to such assumptions would occur in each policy type, age and duration within each long-term care product. The impact of each sensitivity is discrete and does not reflect the impact one factor may have on another or the mitigating impact from management actions, which may include additional future premium rate increases. Although such hypothetical revisions are not currently required or anticipated, we believe they could occur based on past variances in experience and our expectations of the ranges of future experience that could reasonably occur. Any actual adjustment would be dependent on the specific policies affected and, therefore, may differ from the estimates summarized below. The estimated impacts to results of operations in the table below are after consideration of any net premium ratio impacts.
September 30, 2026
Estimated reduction to pretax income
Hypothetical revisions (In millions)
Morbidity:
2.5% increase in morbidity $ 320
5% increase in morbidity 640
Persistency:
5% decrease in active life mortality and lapse $ 190
10% decrease in active life mortality and lapse 380
Premium Rate Actions:
25% decrease in future unapproved rate increase premium $ 30
50% decrease in future unapproved rate increase premium 60
The following table summarizes policyholder reserves for Life & Group.
September 30, 2026
(In millions) Claim and claim adjustment expenses Future policy benefits Total
Long-term care $ - $ 12,437 $ 12,437
Structured settlements and other 486 - 486
Total 486 12,437 12,923
Ceded reserves 53 - 53
Total gross reserves $ 539 $ 12,437 $ 12,976
December 31, 2025
(In millions) Claim and claim adjustment expenses Future policy benefits Total
Long-term care $ - $ 13,448 $ 13,448
Structured settlements and other 535 - 535
Total 535 13,448 13,983
Ceded reserves 56 - 56
Total gross reserves $ 591 $ 13,448 $ 14,039
As part of the annual reserve review, statutory long-term care reserve adequacy is evaluated via premium deficiency testing, by comparing statutory policy level reserves on a carried basis with our best estimate reserves, which incorporates best estimate discount rate and liability assumptions in its determination. Statutory margin is the excess of policy level reserves on a carried basis over the corresponding reserves determined on a best estimate basis. As of September 30, 2026, our statutory long-term care margin was $1.3 billion.
Corporate & Other
The following table summarizes the results of operations for the Corporate & Other segment, including intersegment eliminations.
Periods ended September 30 Three Months Nine Months
(In millions) 2026 2025 2026 2025
Net investment income $ 10 $ 16 $ 31 $ 45
Insurance claims and policyholders' benefits (6) (10) 54 107
Interest expense 32 36 98 99
Core loss (23) (25) (129) (175)
Three Month Comparison
Core loss improved $2 million for the three months ended September 30, 2026 as compared with the same period in 2025.
Nine Month Comparison
Core loss improved $46 million for the nine months ended September 30, 2026 as compared with the same period in 2025. The current period includes a $77 million after-tax charge related to unfavorable net prior year loss reserve development largely associated with legacy mass tort abuse reserves as compared with a $106 million after-tax charge in the prior year period. The current period also includes an increase of $14 million after-tax associated with the amortization of the deferred gain related to the A&EP LPT as compared to the prior year period.
Further information on the net prior year loss reserve development and the A&EP LPT is in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.
The following table summarizes the gross and net carried reserves for Corporate & Other.
(In millions) September 30, 2026 December 31, 2025
Gross case reserves $ 1,215 $ 1,196
Gross IBNR reserves 1,214 1,403
Total gross carried claim and claim adjustment expense reserves $ 2,429 $ 2,599
Net case reserves $ 132 $ 119
Net IBNR reserves 261 238
Total net carried claim and claim adjustment expense reserves $ 393 $ 357
INVESTMENTS
Net Investment Income
The significant components of Net investment income are presented in the following table. Fixed income securities, as presented, include both fixed maturity securities and non-redeemable preferred stock.
Periods ended September 30 Three Months Nine Months
(In millions) 2026 2025 2026 2025
Fixed income securities:
Taxable fixed income securities $ 520 $ 506 $ 1,527 $ 1,510
Tax-exempt fixed income securities 55 44 162 114
Total fixed income securities 575 550 1,689 1,624
Limited partnership and common stock investments 48 71 221 225
Other, net of investment expense 12 17 36 55
Net investment income $ 635 $ 638 $ 1,946 $ 1,904
Effective income yield for the fixed income securities portfolio 5.0 % 4.8 % 4.9 % 4.8 %
Limited partnership and common stock return for the period 1.5 % 2.5 % 7.3 % 8.3 %
Net investment income decreased $3 million for the three months ended September 30, 2026 as compared with the same period in 2025 driven by lower limited partnership returns, partially offset by higher income from fixed income securities as a result of a larger invested asset base and favorable reinvestment rates, as well as higher common stock returns.
Net investment income increased $42 million for the nine months ended September 30, 2026 as compared with the same period in 2025 driven by higher income from fixed income securities as a result of a larger invested asset base and favorable reinvestment rates as well as higher common stock returns, partially offset by lower limited partnership returns.
Net Investment (Losses) Gains
The components of Net investment (losses) gains are presented in the following table.
Periods ended September 30 Three Months Nine Months
(In millions) 2026 2025 2026 2025
Fixed maturity securities:
Corporate bonds and other $ 6 $ (6) $ (4) $ (55)
States, municipalities and political subdivisions - 1 (1) -
Asset-backed (1) (5) (12) (12)
Total fixed maturity securities 5 (10) (17) (67)
Non-redeemable preferred stock (14) 4 (15) 10
Derivatives, short-term and other (1) (1) (1) -
Mortgage loans 1 - 1 (5)
Net investment losses (9) (7) (32) (62)
Income tax benefit on net investment losses 2 1 8 13
Net investment losses, after tax $ (7) $ (6) $ (24) $ (49)
Pretax net investment losses increased $2 million for the three months ended September 30, 2026 as compared with the same period in 2025, driven by the unfavorable change in fair value of non-redeemable preferred stock partially offset by net gains on disposals of fixed maturity securities in the current period compared with net losses in the prior year period.
Pretax net investment losses decreased $30 million for the nine months ended September 30, 2026, as compared with the same period in 2025, driven by net gains on disposals of fixed maturity securities in the current period
compared with net losses in the prior year period, as well as lower impairment losses, partially offset by the unfavorable change in fair value of non-redeemable preferred stock.
Further information on our investment gains and losses is set forth in Note C to the Condensed Consolidated Financial Statements included under Part I, Item 1.
Portfolio Quality
The following table presents the estimated fair value and net unrealized gains (losses) of our fixed maturity securities by rating distribution.
September 30, 2026 December 31, 2025
(In millions) Estimated Fair Value Net Unrealized Gains (Losses) Estimated Fair Value Net Unrealized Gains (Losses)
U.S. Government, Government agencies and Government-sponsored enterprises $ 3,225 $ (469) $ 3,274 $ (228)
AAA 4,048 (419) 3,997 (136)
AA 7,404 (998) 7,001 (428)
A 10,720 (753) 11,167 (140)
BBB 14,791 (1,087) 16,249 (223)
Non-investment grade 1,879 (155) 1,714 (42)
Total $ 42,067 $ (3,881) $ 43,402 $ (1,197)
As of September 30, 2026 and December 31, 2025, 2% and 1% of our fixed maturity portfolio was rated internally. Additionally, as of September 30, 2026 and December 31, 2025, we assigned a AAA rating to $741 million and $661 million of municipal bonds that were either pre-refunded or backed by mortgage loans guaranteed by a U.S. government agency or sponsored enterprise.
The following table presents available-for-sale fixed maturity securities in a gross unrealized loss position by ratings distribution.
September 30, 2026
(In millions) Estimated Fair Value Gross Unrealized Losses
U.S. Government, Government agencies and Government-sponsored enterprises $ 3,200 $ 469
AAA 3,437 448
AA 6,113 1,062
A 8,314 843
BBB 12,137 1,181
Non-investment grade 1,268 168
Total $ 34,469 $ 4,171
The following table presents the maturity profile for these available-for-sale fixed maturity securities. Securities not due to mature on a single date are allocated based on weighted average life.
September 30, 2026
(In millions) Estimated Fair Value Gross Unrealized Losses
Due in one year or less $ 1,109 $ 14
Due after one year through five years 8,141 451
Due after five years through ten years 9,618 1,027
Due after ten years 15,601 2,679
Total $ 34,469 $ 4,171
Duration
A primary objective in the management of the investment portfolio is to optimize return relative to the corresponding liabilities and respective liquidity needs. Our views on the current interest rate environment, tax regulations, asset class valuations, specific security issuer and broader industry segment conditions as well as domestic and global economic conditions, are some of the factors that enter into an investment decision. We also continually monitor exposure to issuers of securities held and broader industry sector exposures and may from time to time adjust such exposures based on our views of a specific issuer or industry sector.
A further consideration in the management of the investment portfolio is the characteristics of the corresponding liabilities and the ability to align the duration of the portfolio to those liabilities and to meet future liquidity needs, minimize interest rate risk and maintain a level of income sufficient to support the underlying insurance liabilities. For portfolios where future liability cash flows are determinable and typically long-term in nature, we segregate investments for asset/liability management purposes. The segregated investments support the long-term care and structured settlement liabilities in the Life & Group segment.
The effective durations of fixed income securities and short-term investments are presented in the following table. Amounts presented are net of payable and receivable amounts for securities purchased and sold, but not yet settled.
September 30, 2026 December 31, 2025
(In millions) Estimated Fair Value Effective
Duration
(In years) 		Estimated Fair Value Effective
Duration
(In years)
Life & Group $ 14,181 9.8 $ 15,584 9.7
Property & Casualty and Corporate & Other 30,042 4.6 30,716 4.5
Total $ 44,223 6.3 $ 46,300 6.3
The effective duration of investments supporting Life & Group liabilities at September 30, 2026 lengthened slightly as compared with December 31, 2025, reflecting recent portfolio actions to reduce reinvestment risk partially offset by the impact of the increase in interest rates during the period.
The investment portfolio is periodically analyzed for changes in duration and related price risk. Certain securities have duration characteristics that are variable based on market interest rates, credit spreads and other factors that may drive variability in the amount and timing of cash flows. Additionally, we periodically review the sensitivity of the portfolio to the level of foreign exchange rates and other factors that contribute to market price changes. A summary of these risks and specific analysis on changes is included in the Quantitative and Qualitative Disclosures About Market Risk included under Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2025.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
Our primary operating cash flow sources are premiums and investment income. Our primary operating cash flow uses are payments for claims, policy benefits and operating expenses, including interest expense on corporate debt. Additionally, cash may be paid or received for income taxes.
For the nine months ended September 30, 2026, net cash provided by operating activities was $1,696 million as compared with $1,920 million for the same period in 2025. The decrease in cash provided by operating activities was driven by an increase in net claim payments partially offset by an increase in premiums collected.
Cash flows from investing activities include the purchase and disposition of financial instruments, excluding those held as trading, and may include the purchase and sale of businesses, equipment and other assets not generally held for resale.
For the nine months ended September 30, 2026, net cash used by investing activities was $752 million as compared with $1,446 million for the same period in 2025. Net cash used or provided by investing activities is primarily driven by cash available from operations and by other factors, such as financing activities.
Cash flows from financing activities may include proceeds from the issuance of debt and equity securities, and outflows for stockholder dividends, repayment of debt and purchases of our common stock.
For the nine months ended September 30, 2026, net cash used by financing activities was $1,001 million as compared with $478 million for the same period in 2025. Financing activities for the periods presented include:
•During the nine months ended September 30, 2026, we paid dividends of $943 million and repurchased 755,000 shares of our common stock at an aggregate cost of $36 million.
•During the nine months ended September 30, 2025, we paid dividends of $922 million and repurchased 700,000 shares of our common stock at an aggregate cost of $34 million.
•In the third quarter of 2025, we issued $500 million of 5.20% notes due August 15, 2035.
Common Stock Dividends
Cash dividends of $3.44 per share on our common stock, including a special cash dividend of $2.00 per share, were declared and paid during the nine months ended September 30, 2026. On October 30, 2026, our Board of Directors declared a quarterly cash dividend of $0.48 per share, payable December 3, 2026 to stockholders of record on November 16, 2026. The declaration and payment of future dividends to holders of our common stock will be at the discretion of our Board of Directors and will depend on many factors, including our earnings, financial condition, business needs and regulatory constraints.
Liquidity
We believe that our present cash flows from operating, investing and financing activities are sufficient to fund our current and expected working capital and debt obligation needs and we do not expect this to change in the near term. There are currently no amounts outstanding under our $250 million senior unsecured revolving credit facility and no borrowings outstanding through our membership in the Federal Home Loan Bank of Chicago (FHLBC).
Dividends from Continental Casualty Company (CCC) are subject to the insurance holding company laws of the State of Illinois, the domiciliary state of CCC. Under these laws, ordinary dividends, or dividends that do not require prior approval by the Illinois Department of Insurance, are determined based on the greater of the prior year's statutory net income or 10% of statutory surplus as of the end of the prior year, as well as timing and amount of dividends paid in the preceding twelve months. Additionally, ordinary dividends may only be paid from earned surplus, which is calculated by removing unrealized gains from unassigned surplus. As of September 30, 2026, CCC was in a positive earned surplus position. CCC paid dividends of $905 million and $755 million to CNAF during the nine months ended September 30, 2026 and 2025. The actual level of dividends paid in any year is determined after an assessment of available dividend capacity, holding company liquidity and cash needs as well as the impact the dividends will have on the statutory surplus of the applicable insurance company.
We have an effective shelf registration statement on file with the Securities and Exchange Commission under which we may publicly issue an unspecified amount of debt, equity or hybrid securities from time to time.
ACCOUNTING STANDARDS UPDATE
For a discussion of Accounting Standards, see Note A to the Condensed Consolidated Financial Statements included under Part I, Item 1.
FORWARD-LOOKING STATEMENTS
This report contains a number of forward-looking statements which relate to anticipated future events 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 in this report include any and all statements regarding expected developments in our insurance business, including losses and loss reserves (note that loss reserves for long-term care, A&EP and other mass tort claims are more uncertain, and therefore more difficult to estimate than loss reserves respecting traditional property and casualty exposures); the impact of routine ongoing insurance reserve reviews we conduct; our expectations concerning our revenues, earnings, expenses and investment activities; volatility in investment returns; and our proposed actions in response to trends in our business. 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 in the forward-looking statements. We cannot control many of these risks and uncertainties. These risks and uncertainties include, but are not limited to, the following as well as those risks contained in the Risk Factors section of our 2025 Annual Report on Form 10-K:
Company-Specific Factors
•the risks and uncertainties associated with our insurance reserves, as outlined in the Critical Accounting Estimates sections of our 2025 Annual Report on Form 10-K and this report, and the Reserves - Estimates and Uncertainties section of our 2025 Annual Report on Form 10-K, including the sufficiency of the reserves and the possibility of future increases, which would be reflected in the results of operations in the period that the need for such adjustment is determined;
•the risk that the other parties to the transactions in which, subject to certain limitations, we ceded our legacy A&EP and excess workers' compensation (EWC) liabilities, respectively, will not fully perform their respective obligations to CNA, the uncertainty in estimating loss reserves for A&EP and EWC liabilities and the possible continued exposure of CNA to liabilities for A&EP and EWC claims that are not covered under the terms of the respective transactions; and
•the performance of reinsurance companies under reinsurance contracts with us.
Industry and General Market Factors
•general economic and business conditions, including potential recessionary conditions that may decrease the size and number of our insurance customers and create losses in our lines of business, and inflationary pressures on medical care costs, construction costs and other economic sectors;
•the effect of new tariffs and changes in tariffs, as well as significant uncertainty surrounding U.S. tariff policy generally, and any retaliatory tariffs, may adversely impact the economic environment, inflation expectations and certain loss costs, and may result in decreases in the size and number of our insurance customers;
•geopolitical tensions, including the effects of the conflict in the Middle East, that may adversely impact our operations;
•the effects of social inflation, including frequency of nuclear verdicts and increased litigation activity, on the severity of claims;
•the effects on the frequency of claims of reviver statutes that extend, or eliminate, the statute of limitations for the reporting of claims, including statutes passed in certain states with respect to sexual abuse;
•the impact of competitive products, policies and pricing and the competitive environment in which we operate, including changes in our book of business;
•product and policy availability and demand and market responses, including the level of ability to obtain rate increases;
•conditions in the capital and credit markets, including uncertainty and instability in these markets, as well as the overall economy, and their impact on the returns, types, liquidity and valuation of our investments;
•conditions in the capital and credit markets that may limit our ability to raise significant amounts of capital on favorable terms or at all; and
•the possibility of changes in our ratings by ratings agencies, including the inability to access certain markets or distribution channels and the required collateralization of future payment obligations as a result of such changes, and changes in rating agency policies and practices.
Regulatory, Legal and Operational Factors
•regulatory and legal initiatives and compliance with governmental regulations and other legal requirements, which are increasing in complexity and number, change frequently, sometimes conflict, and could expose us to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions, including regulations related to cybersecurity protocols (which continue to evolve in breadth, sophistication and maturity in response to an ever-evolving threat landscape) or utilization of artificial intelligence (AI), legal inquiries by state authorities, judicial interpretations within the regulatory framework, including interpretation of policy provisions, decisions regarding coverage and theories of liability, legislative actions that increase claimant activity, including those revising applicability of statutes of limitations, trends in litigation and the outcome of any litigation involving us and rulings and changes in tax laws and regulations;
•regulatory limitations, impositions and restrictions upon us, including with respect to our ability to increase premium rates, and the effects of assessments and other surcharges for guaranty funds and second-injury funds, other mandatory pooling arrangements and future assessments levied on insurance companies;
•regulatory limitations and restrictions, including limitations upon our ability to receive dividends from our insurance subsidiaries, imposed by regulatory authorities, including regulatory capital adequacy standards;
•additional complexities and greater risk to the effectiveness of controls with the incorporation of AI into our and our third-party service providers' operations, including the possibility of inaccurate or biased outputs, degradation in model performance, unauthorized use or disclosure of data used to train AI models, and the potential for AI to be misused to perpetrate fraud or evade monitoring controls; and
•breaches of our or our vendors' data security infrastructure resulting in unauthorized access to systems and information, and/or interruption of operations.
Impact of Natural and Man-Made Disasters and Mass Tort Claims
•weather and other natural physical events, including the severity and frequency of storms, hail, snowfall and other winter conditions, natural disasters such as hurricanes, tornados and earthquakes, as well as climate change, including effects on global weather patterns, greenhouse gases, sea, land and air temperatures, sea levels, wildfires, rain, hail and snow;
•regulatory requirements imposed by coastal state regulators in the wake of hurricanes or other natural disasters, including limitations on the ability to exit markets or to non-renew, cancel or change terms and conditions in policies, as well as mandatory assessments to fund any shortfalls arising from the inability of quasi-governmental insurers to pay claims;
•man-made disasters, including the possible occurrence of terrorist attacks, the unpredictability of the nature, targets, severity or frequency of such events, and the effect of the absence or insufficiency of applicable terrorism legislation on coverages;
•the occurrence of epidemics and pandemics; and
•mass tort claims, including those related to exposure to potentially harmful products or substances such as glyphosate, lead paint, per- and polyfluoroalkyl substances (PFAS) and opioids, sexual abuse and molestation claims and claims arising from changes in statutes of limitation and other changes that repeal or weaken tort reforms.
Our forward-looking statements speak only as of the date of the filing of this Quarterly Report on Form 10-Q and we do not undertake any obligation to update or revise any forward-looking statement to reflect events or circumstances after the date of the statement, even if our expectations or any related events or circumstances change.
CNA Financial Corporation published this content on November 02, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 02, 2026 at 11:24 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]