CNA FINANCIAL CORP

Previous wording

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 losses and development-related items from the loss ratio. 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. 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 catastrophe losses which are unpredictable as to timing and amount, and development-related items as they are not indicative of our current year underwriting performance.

Current wording

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 represents net prior year loss reserve and premium development, and includes 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.

Previous wording

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. Gross written premiums, excluding third-party captives, excludes business which is ceded to third-party captives, including business related to large warranty programs.

Current wording

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.

Previous wording

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 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 catastrophe losses, which are unpredictable as to timing and amount, and development-related items as they are not indicative of our current year underwriting performance.

Current wording

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.

Previous wording

The following tables present reconciliations of net income to core income, underwriting gain and underlying underwriting gain for our Property & Casualty Operations:

Current wording

The following tables present reconciliations of net income to core income, underwriting (loss) gain and underlying underwriting gain for our Property & Casualty Operations:

Previous wording

The following table presents a reconciliation of net (loss) income to core loss for our Life & Group segment:

Current wording

The following table presents a reconciliation of net loss to core (loss) income for our Life & Group segment:

Previous wording

The following table present a reconciliation of net loss to core loss for our Corporate & Other segment:

Current wording

The following table presents a reconciliation of net loss to core loss for our Corporate & Other segment:

Previous wording

Core income increased $116 million for the three months ended September 30, 2025 as compared with the same period in 2024. Core income for our Property & Casualty Operations increased $110 million primarily driven by lower catastrophe losses, improved underlying underwriting results and higher net investment income. Core loss for our Life & Group segment increased $13 million, while core loss for our Corporate & Other segment improved $19 million.

Current wording

Core income decreased $56 million for the three months ended March 31, 2026 as compared with the same period in 2025. Core income for our Property & Casualty Operations decreased $63 million primarily driven by lower underlying underwriting results and unfavorable net prior year loss reserve development partially offset by higher net investment income. Core results for our Life & Group segment decreased $15 million, while core loss for our Corporate & Other segment improved $22 million.

Previous wording

Catastrophe losses were $41 million and $143 million for the three months ended September 30, 2025 and 2024 driven by severe weather related events. Catastrophe losses for three months ended September 30, 2024 included $55 million for Hurricane Helene. Favorable net prior year loss reserve development of $1 million was recorded for the three months ended September 30, 2025 compared to unfavorable net prior year loss reserve development of $17 million for the three months ended September 30, 2024 related to our 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.

Current wording

Catastrophe losses were $88 million and catastrophe-related reinsurance reinstatement premiums were $9 million for the three months ended March 31, 2026 driven by severe weather related events. Catastrophe losses were $97 million for the three months ended March 31, 2025 driven by severe weather related events, including $53 million for the California wildfires. There were no catastrophe-related reinsurance reinstatement premiums for the three months ended March 31, 2025. Unfavorable net prior year loss reserve development of $100 million and $83 million was recorded for the three months ended March 31, 2026 and 2025 related to our Specialty, Commercial 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.

Previous wording

Gross written premiums for International increased $17 million for the three months ended September 30, 2025 as compared with the same period in 2024. Excluding the effect of foreign currency exchange rates, gross written premiums increased $9 million driven by higher new business partially offset by lower rate. Net written premiums for International increased $42 million for the three months ended September 30, 2025 as compared with the same period in 2024. Excluding the effect of foreign currency exchange rates, net written premiums increased $33 million for the three months ended September 30, 2025 as compared with the same period in 2024 driven by a true-up due to a reduction in anticipated reinsurance costs for prior treaty terms in the third quarter of 2025. The increase in net earned premiums was consistent with the trend in net written premiums in recent quarters.

Current wording

Net written premiums for International increased $42 million for the three months ended March 31, 2026 as compared with the same period in 2025. Excluding the effect of foreign currency exchange rates, net written premiums increased $19 million as compared with the same period in 2025 driven by timing of reinsurance costs, partially offset by lower rate. The increase in net earned premiums was consistent with the trend in net written premiums.

Previous wording

The combined ratio of 94.0% increased 1.9 points for the nine months ended September 30, 2025 as compared with the same period in 2024 due to a 1.4 point increase in the loss ratio and a 0.5 point increase in the expense ratio. The increase in the loss ratio was due to unfavorable net prior year loss reserve development recorded in the current year period and an increase in the underlying loss ratio primarily driven by continued pricing pressure in management liability lines. The increase in the expense ratio was driven by higher employee related and acquisition costs partially offset by higher net earned premiums. There were no catastrophe losses for the nine months ended September 30, 2025 and 2024.

Current wording

The combined ratio of 95.9% increased 0.5 points for the three months ended March 31, 2026 as compared with the same period in 2025 due to a 1.6 point increase in the expense ratio, partially offset by a 1.1 point improvement in the loss ratio. The increase in the expense ratio was primarily driven by higher employee related costs and acquisition costs partially offset by higher net earned premiums. The improvement in the loss ratio was primarily driven by lower catastrophe losses partially offset by an increase in the underlying loss ratio driven by continued pricing pressure. Catastrophe losses were $4 million, or 1.2 points of the loss ratio, for the three months ended March 31, 2026, as compared with $11 million, or 3.6 points of the loss ratio, for the three months ended March 31, 2025.

Previous wording

Core loss improved $19 million for the three months ended September 30, 2025 as compared with the same period in 2024. The improvement was primarily due to no net prior year loss reserve development in the current year as compared with a $17 million after-tax charge in the prior year period related to unfavorable prior year loss reserve development largely associated with legacy mass tort abuse reserves. 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.

Current wording

Core loss improved $22 million for the three months ended March 31, 2026 as compared with the same period in 2025. The improvement was primarily due to no net prior year loss reserve development in the current year as compared with a $17 million after-tax charge in the prior year period related to unfavorable prior year loss reserve development largely associated with legacy mass tort abuse reserves. Insurance claims and policyholders' benefits also includes amortization of the deferred gain related to the asbestos and environmental pollution (A&EP) Loss Portfolio Transfer (LPT). 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.

Previous wording

Net investment income increased $12 million and $51 million for the three and nine months ended September 30, 2025 as compared with the same periods in 2024 driven by higher income from fixed income securities as a result of a larger invested asset base and favorable reinvestment rates.

Current wording

Net investment income increased $6 million for the three months ended March 31, 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 partially offset by lower common stock returns.

Previous wording

Pretax net investment losses increased $20 million for the nine months ended September 30, 2025 as compared with the same period in 2024 driven by a lower favorable change in the fair value of non-redeemable preferred stock and higher net losses on disposals of fixed maturity securities, partially offset by lower impairment losses.

Current wording

Pretax net investment losses increased $9 million for the three months ended March 31, 2026 as compared with the same period in 2025 driven by higher impairment losses and the unfavorable change in fair value of non-redeemable preferred stock.

Previous wording

As of September 30, 2025 and December 31, 2024, 1% of our fixed maturity portfolio was rated internally. Additionally, as of September 30, 2025 and December 31, 2024, we assigned a AAA rating to $653 million and $199 million of municipal bonds that were either pre-refunded or backed by mortgage loans guaranteed by a U.S. government agency or sponsored enterprise.

Current wording

As of March 31, 2026 and December 31, 2025, 1% of our fixed maturity portfolio was rated internally. Additionally, as of March 31, 2026 and December 31, 2025, we assigned a AAA rating to $688 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.

Previous wording

For the nine months ended September 30, 2025, net cash provided by operating activities was $1,920 million as compared with $1,868 million for the same period in 2024. The increase in cash provided by operating activities was driven by an increase in premiums collected and higher cash from investment earnings, partially offset by an increase in net claim payments and higher operating expenses.

Current wording

For the three months ended March 31, 2026, net cash provided by operating activities was $393 million as compared with $638 million for the same period in 2025. The decrease in cash provided by operating activities was impacted by payments related to specific reinsurance treaties, which occurred during the first quarter of 2026, with such similar amounts paid in the second quarter of 2025. In addition, the decrease quarter over quarter was attributable to an increase in net claim payments partially offset by increased investment earnings.

Previous wording

For the nine months ended September 30, 2025, net cash used by investing activities was $1,446 million as compared with $762 million for the same period in 2024. Net cash provided or used by investing activities is primarily driven by cash available from operations and by other factors, such as financing activities.

Current wording

For the three months ended March 31, 2026, net cash provided by investing activities was $444 million as compared with $88 million for the same period in 2025. Net cash provided or used by investing activities is primarily driven by cash available from operations and by other factors, such as financing activities.

Previous wording

For the nine months ended September 30, 2025, net cash used by financing activities was $478 million as compared with $998 million for the same period in 2024. Financing activities for the periods presented include:

Current wording

For the three months ended March 31, 2026, net cash used by financing activities was $736 million as compared with $722 million for the same period in 2025. Financing activities for the periods presented include:

Previous wording

•During the nine months ended September 30, 2024, we paid dividends of $906 million and repurchased 450,000 shares of common stock at an aggregate cost of $20 million.

Current wording

•In the first quarter of 2026, we paid dividends of $682 million and repurchased 755,000 shares of our common stock at an aggregate cost of $36 million.

Previous wording

•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.

Current wording

•In the first quarter of 2025, we paid dividends of $673 million and repurchased 700,000 shares of our common stock at an aggregate cost of $34 million.

Previous wording

Cash dividends of $3.38 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, 2025. On October 31, 2025, our Board of Directors declared a quarterly cash dividend of $0.46 per share, payable December 4, 2025 to stockholders of record on November 17, 2025. 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.

Current wording

Cash dividends of $2.48 per share on our common stock, including a special cash dividend of $2.00 per share, were declared and paid during the three months ended March 31, 2026. On May 1, 2026, our Board of Directors declared a quarterly cash dividend of $0.48 per share, payable June 4, 2026 to stockholders of record on May 18, 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.

Previous wording

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, 2025 CCC was in a positive earned surplus position. CCC paid dividends of $755 million and $635 million to CNAF during the nine months ended September 30, 2025 and 2024. 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.

Current wording

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 March 31, 2026, CCC was in a positive earned surplus position. CCC paid dividends of $585 million and $440 million to CNAF during the three months ended March 31, 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.

Previous wording

•the effect of changes in tariffs, as well as significant uncertainty surrounding U.S. tariff policy generally, may adversely impact the economic environment, inflation expectations and certain loss costs (that would increase the cost of claims) and may result in decreases in the size and number of our insurance customers, in addition to potentially adversely affecting the performance of our investments;

Current wording

•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;

Previous wording

•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, 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;

Current wording

•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;

Previous wording

•breaches of our or our vendors' data security infrastructure resulting in unauthorized access to systems and information, and/or interruption of operations; and

Current wording

•breaches of our or our vendors' data security infrastructure resulting in unauthorized access to systems and information, and/or interruption of operations.

Previous wording

•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 that repeal or weaken tort reforms.

Current wording

•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.