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CNA FINANCIAL ANNOUNCES Q4 2023 NET INCOME OF $1.35 PER SHARE AND RECORD CORE INCOME OF $1.33 PER SHARE FULL YEAR 2023 NET INCOME OF $4.43 PER SHARE AND RECORD CORE INCOME OF $4.71 PER SHARE REGU

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  • Net incomeup54%to$367millionversus $239millionintheprioryearquarter; coreincomeup37%toa record $362 million versus $265 million in the prior year quarter.
  • P&Ccoreincomeof$434million versus$342million, reflectshigherinvestmentincomeandhigher underwriting income.
  • Life & Group core income of $4 million versus core loss of $25 million in the prior year quarter reflects higher investment income.
  • Corporate & Other core loss of $76 million versus core loss of $52 million in the prior year quarter reflects a $19million after-taxchargerelated toofficeconsolidation.
  • Net investment income up 21% to $611 million pretax, includes a $58 million increase from limitedpartnerships and common stock to $78 million and a $50 million increase from fixed income securities and other investments to $533 million.
  • P&C combined ratio of 92.1%, compared with 93.7% in the prior year quarter, including 1.0 point of catastrophe loss impact compared with 3.6 points in the prior year quarter and 0.3 points of favorable prior period developmentimpact comparedwith 1.1 points in the prioryear quarter.P&C underlying combined ratio was 91.4%, compared with 91.2% in the prior year quarter.P&C underlying loss ratio was 59.9% and the expense ratio was 31.2%.
  • P&C segments, excluding third party captives, generated gross written premium and net written premium growth of 10% in the quarter.P&C renewal premium change of +5%, with written rate of +4% and exposure change of +1%.

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  • Net income up 77% to a record $1,205 million versus $682 million in the prior year; core income up 54% to a record $1,284 million versus $836 million in the prior year.
  • P&C core income of $1,505 million versus $1,240 million, reflects higher investment income and record high underwriting income.
  • Life & Group core loss of $48 million versus core loss of $221 million in the prior year reflects higher investment income and an unfavorable after-tax impact of $143 million in the prior year as a result of the annual reserve reviews.
  • Net investment income up 25% to $2,264 million pretax, includes a $233 million increase from limited partnerships and common stock to $202 million and a $226 million increase from fixed income securities and other investments to $2,062 million.
  • P&C combined ratio of 93.5%, compared with 93.2% in the prior year, including 2.6 points of catastrophe loss impact compared with 3.0 points in the prior year and no impact from prior period development compared with 1.0 point of favorability in the prior year.P&C underlying combined ratio was a record low 90.9% compared with 91.2% in the prior year.P&C underlying loss ratio was 59.9% and the expense ratio was 30.7%.
  • P&Csegments,excludingthirdpartycaptives,generatedgrosswrittenpremium growthof 10%andnetwritten premium growth of 9% in the year.P&C renewal premium change of +7%, with written rate of +5% and exposure change of 2%.

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  • Book value per share of $36.52; book value per share excludingAOCI of $46.39, a 10% increase from year- end 2022 adjusting for $2.88 of dividends per share.
  • Increased quarterly dividend 5% to $0.44 per share; special dividend of $2.00 per share.

CHICAGO, Feb. 5, 2024 /PRNewswire/ -- CNA Financial Corporation (NYSE: CNA) today announced fourth quarter 2023 net income of $367 million, or $1.35 per share, versus $239 million, or $0.87 per share, in the prior year quarter. Net investment gains for the quarter were $5 million compared to net investment losses of $26million in the prior year quarter.Core income for the quarter was $362 million, or $1.33 per share,versus $265 million, or $0.97 per share, in the prior year quarter.

Our Property & Casualty segments produced core income of $434 million for the fourth quarter of 2023, an increase of $92 million compared to the prior year quarter driven by higher investment income and higher underwriting income.P&C segments, excluding third party captives, generated gross written premium and net written premium growth of 10%, driven by new business growth of 16%, retention of 85% and renewal premium change of +5%.

Our Life& Group segment producedcore incomeof $4 million for the fourth quarter of 2023 versus core loss of $25 million in the prior year quarter driven by higher net investment income.

Our Corporate & Other segment produced a core loss of $76 million for the fourth quarter of 2023, an increase of $24 million compared to the prior year quarter, which reflects a $19 million after-tax charge related to office consolidation.

Net income for the full year 2023 was $1,205 million, or $4.43 per share, versus $682 million, or $2.51 per share, in the prior year.Net investment losses for the full year were $79 million compared to $154 million in the prior year.Core income for the full year 2023 was $1,284 million, or $4.71 per share, versus $836 million, or $3.07 per share, in the prior year.Core income increased 31% to $1,286 million versus $979 million in the prior year quarter, excluding the results of the third quarter Life & Group annual reservereviews.

Our Property & Casualty segments produced core income of $1,505 million for the full year 2023, anincrease of $265 million compared to the prior year driven by higher investment income and record high underwriting income.P&C segments, excluding third party captives, generated gross written premiumgrowth of 10% and net written premium growth of 9%, driven by written rate of +5% and new businessgrowth of 11%.

Our Life & Group segment produced a core loss of$48 million for the full year 2023 versus $221 millionin the prior year, which reflects higher investment income andan unfavorable after-taximpact of $143 million in the prior year as a result of the annual reserve reviews.

Our Corporate & Other segment produced a core loss of $173 million for the full year 2023 versus $183 million in the prior year.

CNA Financial declared a quarterly dividend of $0.44 per share and a special dividend of $2.00 per share, payable March 7, 2024 to stockholders of record on February 20, 2024.


ResultsfortheThree Months
Ended December 31


ResultsfortheYear Ended
December 31

($millions,except persharedata)

2023


2022(a)


2023


2022(a)

Netincome

$ 367


$ 239


$ 1,205


$ 682

Coreincome (b)

362


265


1,284


836









Netincome perdilutedshare

$ 1.35


$ 0.87


$ 4.43


$ 2.51

Coreincomeperdilutedshare

1.33


0.97


4.71


3.07


December31, 2023


December31,2022(a)

Bookvalue pershare

$

36.52


$

31.55

BookvaluepershareexcludingAOCI


46.39



44.83



(a)

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

(b)

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



"We ended the year strong,with core income up 37% to a record high of $362 million in the fourth quarter capping off a record level for the year of $1,284 million, a 54% increase driven by a 25% increase in pretax net investment income and record levels of underlying and all-in underwriting income.

Net and gross written premiums ex. captives each grew by 10% in the quarter with new business growth of 16%, our strongest quarter of the year.2023 was also thethird year in arow of 10% gross written premiums ex. captives growth and included our highest level of new business of roughly $2.1 billion. Retentions remained strong in the quarter in the mid-80's and have been so throughout 2023 as we continue to lock in favorable terms and conditions from the hard market, which we feel will largely persist into 2024.

In the quarter, renewal premium change was 5% in the aggregate across all operating segments and geographies.In Commercial, renewal premium change was 9% in the quarter, consistent with the prior quarter, and excluding workers' compensation, renewal premium change was 11% continuing to exceed our loss cost trends which remained stable in the quarter.

We remain optimisticabout our opportunitiesforthis yeargivenour broad-basedprofitability acrossourthree operating segments and track record of double-digit growth levels in the last several years," said Dino E. Robusto, Chairman & Chief Executive Officer of CNA Financial Corporation.

Property & Casualty Operations


ResultsfortheThree Months
Ended December 31


ResultsfortheYear Ended
December 31

($millions)

2023


2022


2023


2022

Grosswrittenpremiumsex.3rdpartycaptives

$ 2,974



$ 2,704



$ 11,279



$ 10,264


GWPex.3rdpartycaptiveschange(%year overyear)

10

%





10

%




Netwritten premiums

$ 2,508


$ 2,284



$ 9,446



$ 8,663


NWPchange (%yearover year)

10

%





9

%




Netearned premiums

$ 2,368



2,116



$ 9,030



$ 8,196


NEPchange (%yearover year)

12

%





10

%




Underwriting gain

$ 186



$ 134



$ 585



$ 559


Netinvestmentincome

$ 355



$ 290



$ 1,306



$ 982


Coreincome

434



342



1,505



1,240














Lossratio excludingcatastrophesand development

59.9

%


59.9

%


59.9

%


60.0

%

Effectofcatastropheimpacts

1.0



3.6



2.6



3.0


Effectofdevelopment-relateditems

(0.3)



(1.1)





(1.0)


Lossratio

60.6

%


62.4

%


62.5

%


62.0

%













Expenseratio

31.2

%


31.1

%


30.7

%


30.9

%













Combinedratio

92.1

%


93.7

%


93.5

%


93.2

%

Combinedratioexcludingcatastrophesanddevelopment

91.4

%


91.2

%


90.9

%


91.2

%

  • The fourth quarter underlying combined ratio increased 0.2 points as compared with the prior year quarter.The expense ratio was largely consistent with the prior year quarter as net earned premium growthof12%wasoffsetbyhigher employeerelatedcosts. Theunderlyinglossratiowasconsistent with the prior year quarter.
  • The fourth quarter combined ratio improved 1.6 points as compared with the prior year quarter. Catastrophe losses were $22 million, or 1.0 point of the loss ratio in the quarter compared with$76million, or 3.6 points of the loss ratio, for the prior year quarter.Favorable net prior period development improved the loss ratio by 0.3 points in the current quarter compared with 1.1 points of improvement in the prior year quarter.
  • In the fourth quarter, P&C segments, excluding third party captives, generated gross written premium and net written premium growth of 10%.
  • For the full year, the underlying combined ratio improved 0.3 points as compared with the prior year, reflecting the lowest underlying combined ratio on record. The expense ratio improved 0.2 points and the underlying loss ratio was largely consistent with the prior year.
  • For the full year, the combined ratio increased 0.3 points as compared with the prior year. Catastrophe losses were $236 million, or 2.6 points of the loss ratio for the full year compared with $247million, or 3.0 points of the loss ratio, for the prior year.There was no impact on the loss ratio from net prior period development in the current year compared with 1.0 point of improvement from favorable net prior period development in the prior year.
  • For the full year, P&C segments, excluding third party captives, generated gross written premium growth of 10% and net written premium growth of 9%.

Business Operating Highlights
Specialty


ResultsfortheThree Months
Ended December 31


ResultsfortheYear Ended
December 31

($millions)

2023


2022


2023


2022

Grosswrittenpremiumsex.3rdpartycaptives

$ 1,004



$ 998



$ 3,800



$ 3,814


GWPex.3rdpartycaptiveschange(%year overyear)

1

%





%




Netwritten premiums

$ 891



$ 863



$ 3,329



$ 3,306


NWPchange (%yearover year)

3

%





1

%




Netearned premiums

$ 869



$ 827



$ 3,307



$ 3,203


NEPchange (%yearover year)

5

%





3

%
















Underwriting gain

$ 80



$ 93



$ 317



$ 366














Lossratio excludingcatastrophesand development

58.6

%


58.4

%


58.5

%


58.6

%

Effectofcatastropheimpacts







0.1


Effectofdevelopment-relateditems

(0.6)



(0.6)



(0.3)



(1.3)


Lossratio

58.0

%


57.8

%


58.2

%


57.4

%

Expenseratio

32.5

%


30.8

%


32.0

%


31.0

%













Combinedratio

90.8

%


88.8

%


90.4

%


88.6

%

Combinedratioexcludingcatastrophesanddevelopment

91.4

%


89.4

%


90.7

%


89.8

%

  • The fourth quarter underlying combined ratio increased 2.0 points as compared with the prior year quarter.The expense ratio increased 1.7 points as compared with the prior year quarter driven by higher acquisition and employee related costs. The underlying loss ratio increased 0.2 points as compared with the prior year quarter.
  • The fourth quarter combined ratio increased 2.0 points as compared with the prior year quarter. Favorable net prior period development improved the loss ratio by 0.6 points in both the current and prior year quarters.
  • In the fourth quarter, gross written premiums, excluding third party captives, grew 1% and net written premiums grew 3%.
  • For the full year, the underlying combined ratio increased 0.9 points as compared with the prior year. The expense ratio increased 1.0 point driven by higher employee related and acquisition costs.The underlying loss ratio was largely consistent with the prior year.
  • For the full year, the combined ratio increased 1.8 points as compared with the prior year. Favorable net prior period development improved the loss ratio by 0.3 points in the current year compared with 1.3points ofimprovement intheprioryear.
  • For the full year, gross written premiums, excluding third party captives, were flat to the prior year and net written premiums grew 1%.

Commercial


ResultsfortheThree Months
Ended December 31


ResultsfortheYear Ended
December 31

($millions)

2023


2022


2023


2022

Grosswrittenpremiumsex.3rdpartycaptives

$ 1,610



$ 1,345



$ 5,994



$ 5,056


GWPex.3rdpartycaptiveschange(%year overyear)

20

%





19

%




Netwritten premiums

$ 1,292



$ 1,096



$ 4,880


$ 4,193


NWPchange (%yearover year)

18

%





16

%




Netearned premiums

$ 1,211



$ 1,022



$ 4,547



$ 3,923


NEPchange (%yearover year)

18

%





16

%
















Underwriting gain

$ 86



$ 12



$ 182



$ 106














Lossratio excludingcatastrophesand development

61.5

%


61.5

%


61.5

%


61.5

%

Effectofcatastropheimpacts

1.4



7.2



4.5



5.6


Effectofdevelopment-relateditems

(0.1)



(0.9)



(0.1)



(0.7)


Lossratio

62.8

%


67.8

%


65.9

%


66.4

%

Expenseratio

29.8

%


30.8

%


29.6

%


30.4

%













Combinedratio

92.9

%


99.0

%


96.0

%


97.3

%

Combinedratioexcludingcatastrophesanddevelopment

91.6

%


92.7

%


91.6

%


92.4

%

  • The fourth quarter underlying combined ratio improved 1.1 points as compared with the prior year quarter.The expense ratio improved 1.0 point driven by net earned premium growth of 18% partially offset by higher employee related costs. The underlying loss ratio was consistent with the prior year quarter.
  • The fourth quarter combined ratio improved 6.1 points as compared with the prior year quarter. Catastrophe losses were $17 million, or 1.4 points of the loss ratio in the quarter compared with$74million, or 7.2 points of the loss ratio, for the prior year quarter.Favorable net prior period development improved the loss ratio by 0.1 points in the current quarter compared with 0.9 points of improvement in the prior year quarter.
  • Inthefourthquarter, gross writtenpremiums,excludingthirdpartycaptives, grew20%andnetwritten premiums grew 18%.
  • For the full year, the underlying combined ratio improved 0.8 points as compared with the prior year, reflecting the lowest underlying combined ratio on record.The expense ratio improved 0.8 points driven by net earned premium growth of 16% partially offset by higher employee related costs.The underlying loss ratio was consistent with the prior year.
  • For the full year, the combined ratio improved 1.3 points as compared with the prior year. Catastrophe losses were $207 million, or 4.5 points of the loss ratio for the full year compared with $222million, or 5.6 points of the loss ratio, for the prior year.Favorable net prior period development improved the loss ratio by 0.1 points in the current year compared with 0.7 points of improvement in the prior year.
  • For the full year, gross written premiums, excluding third party captives, grew 19% and net written premiums grew 16%.

International


Results for the Three Months
Ended December 31


ResultsfortheYear Ended
December 31

($millions)

2023


2022


2023


2022

Grosswrittenpremiums

$ 360



$ 361



$ 1,485



$ 1,394


GWPchange (%yearover year)

%





7

%




Netwritten premiums

$ 325



$ 325



$ 1,237



$ 1,164


NWPchange (%yearover year)

%





6

%




Netearned premiums

$ 288



$ 267



$ 1,176



$ 1,070


NEPchange (%yearover year)

8

%





10

%
















Underwriting gain

$ 20



$ 29



$ 86



$ 87














Lossratio excludingcatastrophesand development

57.7

%


58.1

%


57.8

%


58.5

%

Effectofcatastropheimpacts

1.8



0.9



2.5



2.2


Effectofdevelopment-relateditems

(0.6)



(3.0)



1.1



(1.2)


Lossratio

58.9

%


56.0

%


61.4

%


59.5

%

Expenseratio

34.1

%


32.9

%


31.2

%


32.3

%













Combinedratio

93.0

%


88.9

%


92.6

%


91.8

%

Combinedratioexcludingcatastrophesanddevelopment

91.8

%


91.0

%


89.0

%


90.8

%

  • The fourth quarter underlying combined ratio increased 0.8 points as compared with the prior year quarter.The expense ratio increased 1.2 points driven by higher employee related costs partially offset by net earned premium growth of 8%.The underlying loss ratio improved 0.4 points as compared with the prior year quarter.
  • The fourth quarter combined ratio increased 4.1 points as compared with the prior year quarter. Catastrophe losses were $5 million, or 1.8 points of the loss ratio in the quarter compared with $2million, or 0.9 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 3.0 points of improvement in the prior year quarter.
  • In the fourth quarter, excluding currency fluctuations, gross written premiums and net written premiums both declined 3%.
  • For the full year, the underlying combined ratio improved 1.8 points as compared with the prior year. The expense ratio improved 1.1 points driven by net earned premium growth of 10% and a favorable reinsurance acquisition catch-up adjustment in the third quarter of 2023, partially offset by higher employee related costs.The underlying loss ratio improved 0.7 points as compared with the prior year.
  • For the full year, the combined ratio increased 0.8 points as compared with the prior year. Catastrophe losses were $29 million, or 2.5 points of the loss ratio for the full year compared with $23million, or2.2pointsofthelossratio, fortheprioryear.Unfavorablenetpriorperiod development increased the loss ratio by 1.1 points in the current year compared with 1.2 points of favorable development improving the loss ratio in the prior year.
  • For the full year, excluding currency fluctuations, gross written premiums grew 8% and net written premiums grew 7%.

Life & Group


Results for the Three Months
Ended December 31


ResultsfortheYear Ended
December 31

($millions)

2023


2022(a)


2023


2022(a)

Netearned premiums

$ 111


$ 117


$ 451


$ 473

Claims,benefitsandexpenses

349


360


1,436


1,596

Netinvestmentincome

237


204


896


804

Coreincome(loss)

4


(25)


(48)


(221)


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


Core results improved $29 million for the fourth quarter of 2023 as compared with the prior year quarter primarily due to higher net investment income.

Core loss decreased $173 million for the full year as compared with the prior year primarily due to higher net investment income and an unfavorable after-tax impact of $143 million in the prior year as a result of the annual reserve reviews, partially offset by long-term care policy buyouts in 2023.Excluding the impact of policy buyouts, full year 2023 underwriting results are generally in line with reserving expectations.

Corporate & Other


Results for the Three Months
Ended December 31


Results for the Year Ended
December 31

($millions)

2023


2022


2023


2022

Insuranceclaims andpolicyholders'benefits

$ 50


$ 40


$ 82


$ 76

Interestexpense

33


28


126


112

Netinvestmentincome

19


9


62


19

Coreloss

(76)


(52)


(173)


(183)









Core loss increased $24 million for the fourth quarter of 2023 as compared with the prior year quarter. The current quarter includes a $19 million after-tax charge related to office consolidation and a$12 million after-tax charge related to unfavorable prior period development for legacy mass tort claims.

The application of retroactive reinsurance accounting to additional cessions to the asbestos and environmental pollution (A&EP) Loss PortfolioTransfer in bothperiodsresulted in after-taxnon-economic charges of $24million and $28million in 2023 and 2022, respectively.The additional cessions in those periods were $86 million and $87 million, respectively.

Core loss decreased $10 million for the full year as compared with the prior year. The current year includes higher net investment income, a $19 million after-tax charge related to office consolidation, and a $56 million after-tax charge related to unfavorable prior period development largely associated with legacy mass tort claims compared with a $51 million after-tax charge in the prior year.

Net Investment Income


Results for the Three Months
Ended December 31


ResultsfortheYear Ended
December 31


2023



2022


2023



2022

Fixedincome securitiesandother

$ 533



$ 483


$ 2,062



$ 1,836

Limitedpartnershipandcommonstock investments

78



20


202



(31)

Net investment income

$ 611



$ 503


$ 2,264



$ 1,805











Net investment income increased $108 million for the fourth quarter of 2023 and $459 million the full year driven by favorable limited partnership returns and higher income from fixed income securities as a result of the rising interest rate environment.

Stockholders' Equity

Stockholders' equity of $9.9 billion improved 16% from year-end 2022, primarily due to net incomeandan improvement in net unrealized investment losses, partially offset by dividends paid to stockholders.

BookvaluepershareexAOCIof$46.39increased10%fromyear-end 2022adjustingfor$2.88of dividends per share.

As of December 31, 2023, statutory capital and surplus for the Combined Continental Casualty Companies was $10.9 billion.

Accounting Standards Update

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

AbouttheCompany

CNA is one of the largest U.S. commercial property and casualty insurance companies.Backed by more than 125 years of experience, CNA provides a broad range of standard and specialized insurance products and services for businesses and professionals in the U.S., Canada and Europe.For more information, please visit CNAat

Contacts

Media:

Analysts:

KellySullivan|VicePresident,Marketing

RalitzaK.Todorova|Vice President,
Investor Relations & RatingAgencies

872-817-0350

312-822-3834



ConferenceCallandWebcast/PresentationInformation

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 CNAFinancial Corporation, Scott R. Lindquist, Executive Vice President and Chief Financial Officer of CNA Financial Corporation and other members of senior management. Participantscanaccessthecallbydialing(844)481-2830(USAToll Free)or+1(412)317-1850 (International).Thecallwillalso be broadcast live on the internet and may be accessed from the Investor Relations page of the CNAwebsite ().A presentation will be posted and available on the CNAwebsite that will provide additional insight into the results.

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

DefinitionofReportedSegments

  • Specialty provides management and professional liability and other coverages through property and casualty products and services using a network of brokers, independent agencies and managing general underwriters.
  • Commercial works with a network of brokers and independent agents to market a broad range of property and casualty insurance products to all types of insureds targeting small business, construction, middle markets and other commercial customers.
  • International underwrites property and casualty coverages on a global basis through a branch operation in Canada, a Europeanbusiness consistingofinsurancecompaniesbasedintheU.KandLuxembourgandHardy,ourLloyd'sSyndicate.
  • Life & Group includes the individual and group run-off long-term care businesses as well as structured settlement obligations not funded by annuities related to certain property and casualty claimants.
  • Corporate & Other primarily includes certain corporate expenses, including interest on corporate debt, and the results of certain property and casualty business in run-off, includingCNARe, asbestos and environmental pollution (A&EP), a legacy portfolio of excess workers' compensation (EWC) policies and legacy mass tort reserves.

FinancialMeasures

Management utilizes the following metrics in their evaluation of the Property & Casualty Operations.

Theseratios are calculated using financial results prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).

  • Lossratioisthepercentageofnetincurred claimandclaimadjustmentexpenses tonetearnedpremiums.
  • Underlyinglossratiorepresentsthelossratioexcludingcatastrophelossesanddevelopment-relateditems.
  • Expense ratio is the percentage of insurance underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums.
  • Dividendratioistheratio ofpolicyholders'dividends incurredtonetearnedpremiums.
  • Combinedratio isthesumoftheloss,expenseanddividendratios.
  • Underlyingcombined ratiois thesumoftheunderlyingloss,expenseanddividendratios.

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

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

Exposure represents the measure of risk used in the pricing of the insurance product. The change in exposure represents the change in premium dollars on policies that renew as a result of the change in risk of the policy.

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

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

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

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

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

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

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

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

ReconciliationofGAAPMeasures toNon-GAAPMeasures

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.

ReconciliationofNetIncome(Loss) toCoreIncome (Loss)

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


Results for the Three Months
Ended December 31


ResultsfortheYear Ended
December 31

($millions)

2023


2022(a)


2023


2022(a)

Netincome

$ 367


$ 239


$ 1,205


$ 682

Less:Netinvestment(losses)gains

5


(26)


(79)


(154)

Coreincome

$ 362


$ 265


$ 1,284


$ 836



(a)

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



ReconciliationofNetIncome(Loss) perDilutedSharetoCoreIncome(Loss)perDiluted 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 December 31


ResultsfortheYear Ended
December 31


2023


2022(a)


2023


2022(a)

Netincome perdilutedshare

$ 1.35


$ 0.87


$ 4.43


$ 2.51

Less:Netinvestment(losses)gains

0.02


(0.10)


(0.28)


(0.56)

Coreincome perdilutedshare

$ 1.33


$ 0.97


$ 4.71


$ 3.07



(a)

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



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.


December31,

2023


December31,

2022(a)

Bookvalue pershare

$ 36.52


$ 31.55

Less:Pershareimpact ofAOCI

(9.87)


(13.28)

Bookvalue pershareexcludingAOCI

$ 46.39


$ 44.83



(a)

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



CalculationofReturnonEquity andCoreReturn onEquity

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 December 31


Results for the Year Ended
December 31

($millions)

2023

2022 (a)


2023

2022(a)

Annualized net income

$ 1,468


$ 954



$ 1,205


$ 682


Average stockholders' equity including AOCI (b)

9,228


8,276



9,220


9,826


Return on equity

15.9

%

11.5

%


13.1

%

6.9

%

Annualized core income

$ 1,448


$ 1,058



$ 1,284


$ 836


Average stockholders' equity excludingAOCI (b)

12,435


12,076



12,355


12,305


Corereturn onequity

11.6

%

8.8

%


10.4

%

6.8

%



(a)

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

(b)

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



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

Forward-LookingStatements

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

Any forward-looking statements made in this press release are made by CNAas 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 arenot 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 © 2024 CNA.All rights reserved.

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