CNA FINANCIAL CORP - Quarter Report: 2024 September (Form 10-Q)

PART I

Item 1. Condensed Consolidated Financial Statements

CNA Financial Corporation

Condensed Consolidated Statements of Operations (Unaudited)


Periods ended September 30	Three Months		Nine Months
(In millions, except per share data)	2024	2023	2024	2023
Revenues
Net earned premiums	$	$	$	$
Net investment income
Net investment losses	()	()	()	()
Non-insurance warranty revenue
Other revenues
Total revenues
Claims, Benefits and Expenses
Insurance claims and policyholders’ benefits (re-measurement loss of $(), $(), $() and $())
Amortization of deferred acquisition costs
Non-insurance warranty expense
Other operating expenses
Interest
Total claims, benefits and expenses
Income before income tax
Income tax expense	()	()	()	()
Net income	$	$	$	$

Basic earnings per share	$	$	$	$

Diluted earnings per share	$	$	$	$

Weighted Average Outstanding Common Stock and Common Stock Equivalents
Basic
Diluted

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements (Unaudited).

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CNA Financial Corporation

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)


Periods ended September 30	Three Months			Nine Months
(In millions)	2024	2023		2024	2023
Comprehensive Income (Loss)
Net income	$	$		$	$
Other Comprehensive Income (Loss), net of tax
Changes in:
Net unrealized gains and losses on investments with an allowance for credit losses	()	()		()	()
Net unrealized gains and losses on other investments		()			()
Net unrealized gains and losses on investments		()			()
Impact of changes in discount rates used to measure long-duration contract liabilities	()			()
Foreign currency translation adjustment		()			()
Pension and postretirement benefits
Other comprehensive income (loss), net of tax		()			()
Total comprehensive income (loss)	$	$	()	$	$

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements (Unaudited).

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CNA Financial Corporation

Condensed Consolidated Balance Sheets

(In millions, except share data)

September 30, 2024 (Unaudited)

December 31, 2023

Assets

Investments:

Fixed maturity securities at fair value (amortized cost of $ and $, less allowance for credit loss of $ and $)

Equity securities at fair value (cost of $ and $)

Limited partnership investments

Other invested assets

Mortgage loans (less allowance for credit loss of $ and $)

Short-term investments

Total investments

Cash

Reinsurance receivables (less allowance for uncollectible receivables of $ and $)

Insurance receivables (less allowance for uncollectible receivables of $ and $)

Accrued investment income

Deferred acquisition costs

Deferred income taxes

Property and equipment at cost (less accumulated depreciation of $ and $)

Goodwill

Deferred non-insurance warranty acquisition expense

Other assets (includes $ and $ due from Loews Corporation)

Total assets

Liabilities

Insurance reserves:

Claim and claim adjustment expenses

Unearned premiums

Future policy benefits

Short-term debt

Long-term debt

Deferred non-insurance warranty revenue

Other liabilities (includes $ and $ due to Loews Corporation)

Total liabilities

Commitments and contingencies (Notes C and G)

par value; shares authorized; shares issued; and shares outstanding)

Additional paid-in capital

Retained earnings

Accumulated other comprehensive loss

()

Treasury stock ( and shares), at cost

()

Total stockholders’ equity

Total liabilities and stockholders' equity

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements (Unaudited).

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CNA Financial Corporation

Condensed Consolidated Statements of Cash Flows (Unaudited)


Nine months ended September 30
(In millions)	2024	2023
Cash Flows from Operating Activities
Net income	$	$
Adjustments to reconcile net income to net cash flows provided by operating activities:
Deferred income tax expense
Trading portfolio activity	()	()
Net investment losses
Equity method investees	()
Net amortization of investments	()	()
Depreciation and amortization
Changes in:
Receivables, net	()	()
Accrued investment income	()	()
Deferred acquisition costs	()	()
Insurance reserves
Other, net	()	()
Net cash flows provided by operating activities
Cash Flows from Investing Activities
Dispositions:
Fixed maturity securities - sales
Fixed maturity securities - maturities, calls and redemptions
Equity securities
Limited partnerships
Mortgage loans
Purchases:
Fixed maturity securities	()	()
Equity securities	()	()
Limited partnerships	()	()
Mortgage loans	()	()
Change in other investments	()
Change in short-term investments		()
Purchases of property and equipment	()	()
Other, net	()	()
Net cash flows used by investing activities	()	()
Cash Flows from Financing Activities
Dividends paid to common stockholders	()	()
Proceeds from the issuance of debt
Repayment of debt	()
Purchase of treasury stock	()	()
Other, net	()	()
Net cash flows used by financing activities	()	()
Effect of foreign exchange rate changes on cash
Net change in cash
Cash, beginning of year
Cash, end of period	$	$

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements (Unaudited).

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CNA Financial Corporation

Condensed Consolidated Statements of Stockholders' Equity (Unaudited)


Periods ended September 30	Three Months		Nine Months
(In millions)	2024	2023	2024	2023
Common Stock
Balance, beginning of period	$	$	$	$
Balance, end of period
Additional Paid-in Capital
Balance, beginning of year
Stock-based compensation				()
Balance, end of period
Retained Earnings
Balance, beginning of period, as previously reported
Cumulative effect adjustments from changes in accounting guidance, net of tax				()
Balance, beginning of period
Dividends to common stockholders ($, $, $ and $ per share)	()	()	()	()
Net income
Balance, end of period
Accumulated Other Comprehensive Loss
Balance, beginning of period, as previously reported	()	()	()	()
Cumulative effect adjustments from changes in accounting guidance, net of tax				()
Balance, beginning of period	()	()	()	()
Other comprehensive income (loss)		()		()
Balance, end of period	()	()	()	()
Treasury Stock
Balance, beginning of period	()	()	()	()
Stock-based compensation
Purchase of treasury stock			()	()
Balance, end of period	()	()	()	()
Total stockholders' equity	$	$	$	$

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements (Unaudited).

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CNA Financial Corporation

Notes to Condensed Consolidated Financial Statements

Note A.

% of the outstanding common stock of CNAF as of September 30, 2024.

Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, including certain financial statement notes, is not required for interim reporting purposes and has been condensed or omitted. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in CNAF's Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) for the year ended December 31, 2023, including the summary of significant accounting policies in Note A.

Accounting Standards Pending Adoption

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Note B.

$ $ $ Common Stock and Common Stock EquivalentsBasic Weighted average shares outstanding DilutedWeighted average shares outstanding Dilutive effect of stock-based awards under compensation plans Total Earnings (loss) per share Basic $ $ $ $ Diluted$ $ $ $

Excluded from the calculation of diluted earnings (loss) per share is the impact of potential shares attributable to exercises or conversions into common stock under stock-based employee compensation plans that would have been antidilutive during the respective periods.

and shares of CNAF common stock at an aggregate cost of $ million and $ million during the nine months ended September 30, 2024 and 2023.

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Note C.

$ $ $ Equity securities Limited partnership investments Mortgage loans Short-term investments Trading portfolio Other Gross investment income Investment expense()()()()Net investment income$ $ $ $

Net investment income (loss) recognized due to the change in fair value of common stock held as of September 30, 2024 and 2023

$ $()$ $ $ $ $ Gross losses()()()()Net investment gains (losses) on fixed maturity securities()()()()Equity securities ()Mortgage loans () ()Short-term investments and other() () Net investment gains (losses)$()$()$()$()

Net investment gains (losses) recognized due to the change in fair value of non-redeemable preferred stock held as of September 30, 2024 and 2023

$ $ $ $

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$ $ $ Asset-backed Impairment losses (gains) recognized in earnings$ $ $ $

There were losses recognized on mortgage loans during the three and nine months ended September 30, 2024. There were $ million and $ million of losses recognized on mortgage loans during the three and nine months ended September 30, 2023.

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$ $ $ $ States, municipalities and political subdivisions Asset-backed:Residential mortgage-backed Commercial mortgage-backed Other asset-backed Total asset-backed U.S. Treasury and obligations of government-sponsored enterprises Foreign government Total fixed maturity securities available-for-sale Total fixed maturity securities trading — — — Total fixed maturity securities$ $ $ $ $

) )) ) ) )) )) ))) )) ) ) )) )) ))

December 31, 2023

Cost or
Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Allowance for Credit Losses

Estimated
Fair
Value

(In millions)

Fixed maturity securities available-for-sale:

Corporate and other bonds

States, municipalities and political subdivisions

Asset-backed:

Residential mortgage-backed

Commercial mortgage-backed

Other asset-backed

Total asset-backed

U.S. Treasury and obligations of government-sponsored enterprises

Foreign government

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million and $ million of overseas deposits within Other invested assets, which can be redeemed at net asset value in 90 days or less. Overseas deposits are excluded from the fair value hierarchy because their fair value is recorded using the net asset value per share (or equivalent) practical expedient.

Other Liabilities

Level 2 securities include currency forward contracts valued using observable market forward rates.

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Discounted cash flowCredit spread

% - % (%)

December 31, 2023

Estimated Fair Value
(In millions)

Valuation Technique(s)

Unobservable Input(s)

Range
(Weighted Average)

Fixed maturity securities

Discounted cash flow

Credit spread

% - % (%)

For fixed maturity securities, an increase to the credit spread assumptions would result in a lower fair value measurement.

Financial Assets and Liabilities Not Measured at Fair Value

$ $ $ $ LiabilitiesShort-term debt$ $ $ $ $ Long-term debt

December 31, 2023

Carrying
Amount

Estimated Fair Value

(In millions)

Level 1

Level 2

Level 3

Total

Assets

Mortgage loans

Liabilities

Short-term debt

Long-term debt

The carrying amounts reported on the Condensed Consolidated Balance Sheets for Cash, Short-term investments not carried at fair value, Accrued investment income and certain Other assets and Other liabilities approximate fair value due to the short-term nature of these items. These assets and liabilities are not listed in the tables above.

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Note E.

million and $ million for the three and nine months ended September 30, 2024 primarily related to severe weather related events, including $ million for Hurricane Helene. The Company reported catastrophe losses, net of reinsurance, of $ million and $ million for the three and nine months ended September 30, 2023 primarily related to severe weather related events.

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$ Ceded Net reserves, beginning of year

For the three and nine months ended September 30, 2024, immediate charges to net income resulting from adverse development that caused the Net Premium Ratio (NPR) to exceed 100% for certain cohorts were $ million and $ million. For the three and nine months ended September 30, 2023, immediate charges to net income resulting from adverse development that caused the NPR to exceed 100% were $ million and $ million.

For the three and nine months ended September 30, 2024, the portion of losses recognized in a prior period due to NPR exceeding 100% for certain cohorts which, due to favorable development, was reversed through net income was $ million and $ million. For the three and nine months ended September 30, 2023, the portion of losses recognized in a prior period due to NPR exceeding 100% which, due to favorable development, was reversed through net income was $ million and $ million.

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Note G.

billion, which will be paid over the lifetime of the annuitants. The Company does not believe any payment is likely under these guarantees, as the Company is the beneficiary of a trust that must be maintained at a level that approximates the discounted reserves for these annuities.

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Note H.

$ $ $ Expected return on plan assets()()()()Amortization of net actuarial loss Pension settlement transaction loss (gain) Total net periodic pension cost (benefit)$ $ $ $

The following table indicates the line items in which the non-service cost (benefit) is presented in the Condensed Consolidated Statements of Operations.


Periods ended September 30	Three Months		Nine Months
(In millions)	2024	2023	2024	2023
Non-Service Cost (Benefit):
Insurance claims and policyholder's benefits	$	$	$	$
Other operating expenses
Total net periodic pension cost (benefit)	$	$	$	$

In the third quarter of 2024, a subsidiary of CNAF, as a sponsor of the CNA Canada Employee Pension Plan (the Canada Plan), purchased a nonparticipating single premium group annuity contract, under which the defined benefit pension obligation of the Canada Plan was transferred in full to an insurance company counterparty. As a result of the transaction, the Company recognized a one-time, non-cash, pretax pension settlement charge of $ million ($ million after-tax).

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Note I.

)$()$()$ $()$()Other comprehensive income (loss) before reclassifications() ()

Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $, $, $, $, $ and $

()()() ()

Other comprehensive income (loss) net of tax (expense) benefit of $, $(), $(), $, $ and $()

() ()

Balance as of September 30, 2024

$()$()$()$()$()$()

(In millions)

Net unrealized gains (losses) on investments with an allowance for credit losses

Net unrealized gains (losses) on other investments

Pension and postretirement benefits

Cumulative impact of changes in discount rates used to measure long duration contracts

Cumulative foreign currency translation adjustment

Total

Balance as of July 1, 2023

()

Other comprehensive income (loss) before reclassifications

()

Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $, $, $, $, $ and $

()

Other comprehensive income (loss) net of tax (expense) benefit of $, $, $(), $(), $ and $

()

Balance as of September 30, 2023

()

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)$()$()$()$()$()Other comprehensive income (loss) before reclassifications() ()

Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $, $, $, $, $ and $

()()() ()

Other comprehensive income (loss) net of tax (expense) benefit of $, $(), $(), $, $ and $()

() ()

Balance as of September 30, 2024

$()$()$()$()$()$()

)$()$()$ $()$()

Cumulative effect adjustment from changes in accounting guidance, net of tax (expense) benefit of $, $, $, $, $ and $

() ()

Balance as of January 1, 2023

()()()()()()Other comprehensive income (loss) before reclassifications()() ()()

Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $, $, $, $, $ and $

()()() ()

Other comprehensive income (loss) net of tax (expense) benefit of $, $, $(), $(), $ and $

()() ()()

Balance as of September 30, 2023

$()$()$()$ $()$()

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Note J.

business segments: Specialty, Commercial and International. These segments are collectively referred to as Property & Casualty Operations. The Company's operations outside of Property & Casualty Operations are managed and reported in segments: Life & Group and Corporate & Other.

The accounting policies of the segments are the same as those described in Note A to the Consolidated Financial Statements within CNAF's Annual Report on Form 10-K for the year ended December 31, 2023. The Company manages most of its assets on a legal entity basis, while segment operations are generally conducted across legal entities. As such, only Insurance and Reinsurance receivables, Insurance reserves, Deferred acquisition costs, Goodwill and Deferred non-insurance warranty acquisition expense and revenue are readily identifiable for individual segments. Distinct investment portfolios are not maintained for every individual segment; accordingly, allocation of assets to each segment is not performed. Therefore, a significant portion of Net investment income is allocated primarily based on each segment's net carried insurance reserves, as adjusted. All significant intersegment income and expense have been eliminated. Income taxes have been allocated on the basis of the taxable income of the segments.

In the following tables, certain financial measures are presented to provide information used by management to monitor the Company's operating performance. Management utilizes these financial measures to monitor the Company's insurance operations and investment portfolio.

The performance of the Company's insurance operations is monitored by management through core income (loss), which is derived from certain income statement amounts. The Company's investment portfolio is monitored by management through analysis of various factors including unrealized gains and losses on securities, portfolio duration and exposure to market and credit risk.

Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of net investment gains or losses and 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 the Company's primary operations. The calculation of core income (loss) excludes gains or losses resulting from pension settlement transactions as they result from decisions regarding the Company's defined benefit pension plans which are unrelated to the Company's primary operations.

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Total claims, benefits and expenses (1)

() Core income (loss) before income tax ()() Income tax (expense) benefit on core income (loss)()()() ()Core income (loss) $ $ $ $()$()$ Net investment gains (losses)()Income tax (expense) benefit on net investment gains (losses) Net investment gains (losses), after tax()Pension settlement transaction gains (losses)()Income tax (expense) benefit on pension settlement transaction gains (losses) Pension settlement transaction gains (losses), after tax()Net income (loss)$

(1) Excludes the impact of pension settlement transaction gains (losses). See Note H to the Condensed Consolidated Financial Statements for additional information.

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$ $ $ $ $()$ Net investment income Non-insurance warranty revenue Other revenues () () Total operating revenues () Claims, benefits and expenses Net incurred claims and benefits Policyholders’ dividends Amortization of deferred acquisition costs Non-insurance warranty expense Other insurance related expenses () Other expenses () () Total claims, benefits and expenses () Core income (loss) before income tax ()() Income tax (expense) benefit on core income (loss)()()() ()Core income (loss)$ $ $ $()$()$ Net investment gains (losses)()Income tax (expense) benefit on net investment gains (losses) Net investment gains (losses), after tax()Net income (loss)$

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Total claims, benefits and expenses (1)

September 30, 2024

(In millions)

Reinsurance receivables

Insurance receivables

Deferred acquisition costs

Goodwill

Deferred non-insurance warranty acquisition expense

Insurance reserves

Claim and claim adjustment expenses

Unearned premiums

Future policy benefits

Deferred non-insurance warranty revenue

(1) Excludes the impact of pension settlement transaction gains (losses). See Note H to the Condensed Consolidated Financial Statements for additional information.

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$ $ $ $ $()$ Net investment income Non-insurance warranty revenue Other revenues () Total operating revenues () Claims, benefits and expenses Net incurred claims and benefits Policyholders’ dividends Amortization of deferred acquisition costs Non-insurance warranty expense Other insurance related expenses () Other expenses () Total claims, benefits and expenses () Core income (loss) before income tax ()() Income tax (expense) benefit on core income (loss)()()() ()Core income (loss)$ $ $ $()$()$ Net investment gains (losses)()Income tax (expense) benefit on net investment gains (losses) Net investment gains (losses), after tax()Net income (loss)$

December 31, 2023

(In millions)

Reinsurance receivables

Insurance receivables

Deferred acquisition costs

Goodwill

Deferred non-insurance warranty acquisition expense

Insurance reserves

Claim and claim adjustment expenses

Unearned premiums

Future policy benefits

Deferred non-insurance warranty revenue

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$ $ $ Surety Warranty & Alternative Risks Specialty revenues CommercialMiddle Market Construction Small Business Other Commercial Commercial revenues InternationalCanada Europe Hardy International revenues Life & Group revenues Corporate & Other revenues Eliminations()()()()Total operating revenues Net investment gains (losses)()()()()Total revenues$ $ $ $

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Note K.

billion and $ billion reported under Liabilities as of September 30, 2024 and December 31, 2023. For the three and nine months ended September 30, 2024, the Company recognized $ billion and $ billion of revenues in each period that were included in the deferred revenue balance as of January 1, 2024. For the three and nine months ended September 30, 2023, the Company recognized $ billion and $ billion of revenues that were included in the deferred revenue balance as of January 1, 2023. For the three and nine months ended September 30, 2024 and 2023, non-insurance warranty revenue recognized from performance obligations related to prior periods due to a change in estimate was not material. The Company expects to recognize approximately $ billion of the deferred revenue in the remainder of 2024, $ billion in 2025, $ billion in 2026 and $ billion thereafter.

Note L.

million of the Plan’s defined benefit pension obligations. The group annuity contract covers approximately Plan participants and beneficiaries (the Transferred Participants), representing approximately % of the Plan’s obligations. Under the group annuity contract, the Insurer has made an irrevocable commitment, and will be solely responsible, to pay the pension benefits of each Transferred Participant that are due on and after January 1, 2025. The purchase of the group annuity contract was funded directly by assets of the Plan and required no cash or asset contributions of the Company. As a result of the transaction, the Company will recognize a one-time, non-cash, pretax pension settlement charge of approximately $ million ($ million after-tax) in the fourth quarter of 2024. This charge is largely driven by the accelerated recognition of the Company’s actuarial pension loss from accumulated other comprehensive income into net income, which does not impact stockholder’s equity. This charge will not impact the Company’s fourth quarter or full year 2024 core income (loss) or cash flow.

Fourth Quarter 2024 Hurricane Milton Estimates

million to $ million, and are anticipated to be reflected in the Company's fourth quarter 2024 results.

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Item 2. Management's Discussion and Analysis (MD&A) of Financial Conditions 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, 2023.

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 CNA's 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 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 and deductible amounts. The expense ratio is the percentage of insurance underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums. The dividend ratio is the ratio of policyholders' dividends incurred to net earned premiums. The combined ratio is the sum of the loss, expense and dividend ratios. 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.

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

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We use underwriting gain (loss), calculated using GAAP financial results, to monitor our insurance operations. Underwriting gain (loss) is deemed to be a non-GAAP 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 other insurance related 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 deemed to be a non-GAAP measure that represents pretax underwriting gain (loss) excluding catastrophe losses and development-related items. Management believes some investors may find this measure useful to evaluate profitability, before tax, of 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.

The following tables present a reconciliation of net income to underwriting gain (loss) and underlying underwriting gain (loss):


Results for the Three Months Ended September 30, 2024	Specialty		Commercial		International		Property & Casualty
(In millions)
Net income	$	167	$	132	$	34	$	333
Net investment losses, after tax	4		7		2		13

Core income	$	171	$	139	$	36	$	346

Net investment income	(157)		(183)		(32)		(372)
Non-insurance warranty (revenue) expense	(14)		—		—		(14)
Other (revenue) expense, including interest expense	12		3		(8)		7
Income tax expense on core income	47		38		16		101
Underwriting gain (loss)	59		(3)		12		68
Effect of catastrophe losses	—		127		16		143
Effect of favorable development-related items	—		—		(2)		(2)
Underlying underwriting gain	$	59	$	124	$	26	$	209


Results for the Three Months Ended September 30, 2023	Specialty		Commercial		International		Property & Casualty
(In millions)
Net income	$	165	$	117	$	40	$	322
Net investment losses, after tax	13		16		—		29

Core income	$	178	$	133	$	40	$	351

Net investment income	(136)		(156)		(26)		(318)
Non-insurance warranty (revenue) expense	(21)		—		—		(21)
Other (revenue) expense, including interest expense	13		2		7		22
Income tax expense on core income	49		34		14		97
Underwriting gain	83		13		35		131
Effect of catastrophe losses	—		87		7		94
Effect of favorable development-related items	(5)		—		—		(5)
Underlying underwriting gain	$	78	$	100	$	42	$	220

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Results for the Nine Months Ended September 30, 2024	Specialty		Commercial		International		Property & Casualty
(In millions)
Net income	$	498	$	436	$	116	$	1,050
Net investment losses, after tax	19		28		1		48

Core income	$	517	$	464	$	117	$	1,098

Net investment income	(461)		(534)		(95)		(1,090)
Non-insurance warranty (revenue) expense	(43)		—		—		(43)
Other (revenue) expense, including interest expense	40		10		(5)		45
Income tax expense on core income	142		125		41		308
Underwriting gain	195		65		58		318
Effect of catastrophe losses	—		285		28		313
Effect of favorable development-related items	(8)		—		(5)		(13)
Underlying underwriting gain	$	187	$	350	$	81	$	618


Results for the Nine Months Ended September 30, 2023	Specialty		Commercial		International		Property & Casualty
(In millions)
Net income	$	487	$	390	$	103	$	980
Net investment losses (gains), after tax	39		53		(1)		91

Core income	$	526	$	443	$	102	$	1,071

Net investment income	(407)		(470)		(74)		(951)
Non-insurance warranty (revenue) expense	(67)		—		—		(67)
Other (revenue) expense, including interest expense	39		5		2		46
Income tax expense on core income	146		118		36		300
Underwriting gain	237		96		66		399
Effect of catastrophe losses	—		190		24		214
Effect of (favorable) unfavorable development-related items	(7)		(4)		15		4
Underlying underwriting gain	$	230	$	282	$	105	$	617

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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 discussed 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

•Reinsurance and Insurance Receivables

•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, 2023 for further information.

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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)	2024		2023		2024		2023
Operating Revenues
Net earned premiums	$	2,593	$	2,406	$	7,532	$	7,001
Net investment income	626		553		1,853		1,653
Non-insurance warranty revenue	401		407		1,212		1,221
Other revenues	8		8		26		22
Total operating revenues	3,628		3,374		10,623		9,897
Claims, Benefits and Expenses
Net incurred claims and benefits (re-measurement loss of $(48), $(41), $(88) and $(75))	2,010		1,818		5,682		5,236
Policyholders' dividends	9		8		26		22
Amortization of deferred acquisition costs	457		426		1,336		1,208
Non-insurance warranty expense	387		386		1,169		1,154
Other insurance related expenses	321		294		937		917
Other expenses	69		78		237		197
Total claims, benefits and expenses	3,253		3,010		9,387		8,734
Core income before income tax	375		364		1,236		1,163
Income tax expense on core income	(82)		(75)		(262)		(241)
Core income	293		289		974		922
Net investment losses	(10)		(38)		(42)		(105)
Income tax benefit on net investment losses	3		7		9		21
Net investment losses, after tax	(7)		(31)		(33)		(84)
Pension settlement transaction losses	(4)		—		(4)		—
Income tax benefit on pension settlement transaction losses	1		—		1		—
Pension settlement transaction losses, after tax	(3)		—		(3)		—
Net income	$	283	$	258	$	938	$	838

Three Month Comparison

Core income increased $4 million for the three months ended September 30, 2024 as compared with the same period in 2023. Core income for our Property & Casualty Operations decreased $5 million primarily driven by the largely offsetting impacts of higher catastrophe losses and higher net investment income. Core loss for our Life & Group segment improved $20 million, while core loss for our Corporate & Other segment increased $11 million.

Catastrophe losses were $143 million and $94 million for the three months ended September 30, 2024 and 2023, primarily related to severe weather related events. Catastrophe losses for the three months ended September 30, 2024 included $55 million for Hurricane Helene. Unfavorable net prior year loss reserve development of $17 million and $13 million was recorded for the three months ended September 30, 2024 and 2023 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.

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Nine Month Comparison

Core income increased $52 million for the nine months ended September 30, 2024 as compared with the same period in 2023. Core income for our Property & Casualty Operations increased $27 million primarily driven by higher net investment income partially offset by higher catastrophe losses. Core loss for our Life & Group segment improved $47 million, while core loss for our Corporate & Other segment increased $22 million.

Catastrophe losses were $313 million and $214 million for the nine months ended September 30, 2024 and 2023, primarily related to severe weather related events. Catastrophe losses for the nine months ended September 30, 2024 included $55 million for Hurricane Helene. Unfavorable net prior year loss reserve development of $33 million and $44 million was recorded for the nine months ended September 30, 2024 and 2023 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.

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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.

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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)	2024			2023			2024			2023
Gross written premiums	$	1,743		$	1,775		$	5,153		$	5,324
Gross written premiums excluding third-party captives	982			949			2,846			2,796
Net written premiums	862			825			2,511			2,438
Net earned premiums	848			829			2,493			2,438
Underwriting gain	59			83			195			237
Net investment income	157			136			461			407
Core income	171			178			517			526

Other performance metrics:
Loss Ratio	60.1		%	58.0		%	59.3		%	58.2		%
Expense ratio	32.7			31.8			32.5			31.9
Dividend ratio	0.2			0.3			0.3			0.2
Combined ratio	93.0		%	90.1		%	92.1		%	90.3		%
Effect of catastrophe impacts	—			—			—			—
Effect of development-related items	—			0.6			0.3			0.3
Underlying combined ratio	93.0		%	90.7		%	92.4		%	90.6		%

Underlying loss ratio	60.1		%	58.6		%	59.6		%	58.5		%

Rate	—		%	1		%	1		%	1		%
Renewal premium change	2			2			2			2
Retention	89			87			89			88
New business	$	129		$	121		$	341		$	349

Three Month Comparison

Gross written premiums, excluding third-party captives, for Specialty increased $33 million for the three months ended September 30, 2024 as compared with the same period in 2023 driven by retention and higher new business. Net written premiums for Specialty increased $37 million for the three months ended September 30, 2024 as compared with the same period in 2023. The increase in net earned premiums was consistent with the trend in net written premiums.

Core income decreased $7 million for the three months ended September 30, 2024 as compared with the same period in 2023 primarily due to lower underlying underwriting results and higher claim costs in our non-insurance auto warranty business, partially offset by higher net investment income.

The combined ratio of 93.0% increased 2.9 points for the three months ended September 30, 2024 as compared with the same period in 2023 primarily due to a 2.1 point increase in the loss ratio and a 0.9 point increase in the expense ratio. The increase in the loss ratio was primarily due to an increase in the underlying loss ratio primarily driven by continued pricing pressure in management liability lines over the last several quarters. There was no net prior year loss reserve development recorded for three months ended September 30, 2024 compared to favorable net prior year loss reserve development of $5 million for the three months ended September 30, 2023. The increase in the expense ratio was primarily driven by higher employee related costs. There were no catastrophe losses for three months ended September 30, 2024 and 2023.

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.

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Nine Month Comparison

Gross written premiums, excluding third-party captives, for Specialty increased $50 million for the nine months ended September 30, 2024 as compared with the same period in 2023 driven by retention and favorable renewal premium change. Net written premiums for Specialty increased $73 million for the nine months ended September 30, 2024 as compared with the same period in 2023. The increase in net earned premiums was consistent with the trend in net written premiums.

Core income decreased $9 million for the nine months ended September 30, 2024 as compared with the same period in 2023 primarily due to lower underlying underwriting results and higher claim costs in our non-insurance auto warranty business partially offset by higher net investment income.

The combined ratio of 92.1% increased 1.8 points for the nine months ended September 30, 2024 as compared with the same period in 2023 primarily due to a 1.1 point increase in the loss ratio and a 0.6 point increase in the expense ratio. The increase in the loss ratio was due to an increase in the underlying loss ratio primarily driven by continued pricing pressure in management liability lines over the last several quarters. The increase in the expense ratio was driven by higher acquisition costs. There were no catastrophe losses for nine months ended September 30, 2024 and 2023.

Favorable net prior year loss reserve development of $8 million and $9 million was recorded for the nine months ended September 30, 2024 and 2023. 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, 2024		December 31, 2023
Gross case reserves	$	1,910	$	1,604
Gross IBNR reserves	5,418		5,527
Total gross carried claim and claim adjustment expense reserves	$	7,328	$	7,131
Net case reserves	$	1,608	$	1,392
Net IBNR reserves	4,325		4,524
Total net carried claim and claim adjustment expense reserves	$	5,933	$	5,916

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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)	2024			2023			2024			2023
Gross written premiums	$	1,547		$	1,343		$	5,160		$	4,504
Gross written premiums excluding third-party captives	1,538			1,340			5,022			4,384
Net written premiums	1,221			1,071			4,017			3,588
Net earned premiums	1,325			1,170			3,774			3,336
Underwriting (loss) gain	(3)			13			65			96
Net investment income	183			156			534			470
Core income	139			133			464			443

Other performance metrics:
Loss ratio	72.0		%	68.9		%	69.7		%	67.0		%
Expense ratio	27.7			29.5			28.1			29.6
Dividend ratio	0.5			0.5			0.5			0.5
Combined ratio	100.2		%	98.9		%	98.3		%	97.1		%
Effect of catastrophe impacts	(9.6)			(7.4)			(7.5)			(5.7)
Effect of development-related items	0.1			—			—			0.2
Underlying combined ratio	90.7		%	91.5		%	90.8		%	91.6		%
Underlying loss ratio	62.5		%	61.5		%	62.2		%	61.5		%

Rate	6		%	8		%	6		%	8		%
Renewal premium change	8			9			8			10
Retention	84			83			84			85
New business	$	345		$	292		$	1,117		$	945

Three Month Comparison

Gross written premiums for Commercial increased $204 million for the three months ended September 30, 2024 as compared with the same period in 2023 driven by favorable renewal premium change and higher new business. Net written premiums for Commercial increased $150 million for the three months ended September 30, 2024 as compared with the same period in 2023. The increase in net earned premiums was consistent with the trend in net written premiums.

Core income increased $6 million for the three months ended September 30, 2024 as compared with the same period in 2023, driven by higher net investment income and improved underlying underwriting results partially offset by higher catastrophe losses.

The combined ratio of 100.2% increased 1.3 points for the three months ended September 30, 2024 as compared with the same period in 2023 due to a 3.1 point increase in the loss ratio partially offset by a 1.8 point improvement in the expense ratio. The increase in the loss ratio was driven by higher catastrophe losses and an increase in the underlying loss ratio driven by continuation of elevated loss cost trends in commercial auto and mix of business. Catastrophe losses were $127 million, or 9.6 points of the loss ratio, for the three months ended September 30, 2024, as compared with $87 million, or 7.4 points of the loss ratio, for the three months ended September 30, 2023. The improvement in the expense ratio was primarily driven by higher net earned premiums.

Favorable net prior year loss reserve development of $3 million and $2 million was recorded for the three months ended September 30, 2024 and 2023. 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.

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Nine Month Comparison

Gross written premiums for Commercial increased $656 million for the nine months ended September 30, 2024 as compared with the same period in 2023 driven by favorable renewal premium change and higher new business. Net written premiums for Commercial increased $429 million for the nine months ended September 30, 2024 as compared with the same period in 2023. The increase in net earned premiums was consistent with the trend in net written premiums.

Core income increased $21 million for the nine months ended September 30, 2024 as compared with the same period in 2023, primarily driven by improved underlying underwriting results and higher net investment income partially offset by higher catastrophe losses.

The combined ratio of 98.3% increased 1.2 points for the nine months ended September 30, 2024 as compared with the same period in 2023 due to a 2.7 point increase in the loss ratio partially offset by a 1.5 point improvement in the expense ratio. The increase in the loss ratio was primarily driven by higher catastrophe losses. Catastrophe losses were $285 million, or 7.5 points of the loss ratio, for the nine months ended September 30, 2024, as compared with $190 million, or 5.7 points of the loss ratio, for the nine months ended September 30, 2023. The improvement in the expense ratio was primarily driven by higher net earned premiums.

Favorable net prior year loss reserve development of $11 million and $17 million was recorded for the nine months ended September 30, 2024 and 2023. 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, 2024		December 31, 2023
Gross case reserves	$	3,483	$	3,291
Gross IBNR reserves	7,535		6,812
Total gross carried claim and claim adjustment expense reserves	$	11,018	$	10,103
Net case reserves	$	3,029	$	2,878
Net IBNR reserves	6,703		6,143
Total net carried claim and claim adjustment expense reserves	$	9,732	$	9,021

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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)	2024			2023			2024			2023
Gross written premiums	$	305		$	306		$	1,096		$	1,125
Net written premiums	277			282			896			912
Net earned premiums	311			296			937			888
Underwriting gain	12			35			58			66
Net investment income	32			26			95			74
Core income	36			40			117			102

Other performance metrics:
Loss ratio	62.5		%	60.2		%	60.6		%	62.2		%
Expense ratio	33.6			28.1			33.1			30.3
Combined ratio	96.1		%	88.3		%	93.7		%	92.5		%
Effect of catastrophe impacts	(5.1)			(2.3)			(3.0)			(2.7)
Effect of development-related items	0.7			—			0.5			(1.7)
Underlying combined ratio	91.7		%	86.0		%	91.2		%	88.1		%
Underlying loss ratio	58.1		%	57.9		%	58.1		%	57.8		%

Rate	(2)		%	2		%	—		%	4		%
Renewal premium change	1			7			2			7
Retention	82			84			81			83
New business	$	73		$	62		$	213		$	239

Three Month Comparison

Gross written premiums and gross written premiums excluding the effect of foreign currency exchange rates for International, for the three months ended September 30, 2024, were largely consistent with the same period in 2023. Net written premiums for International decreased $5 million for the three months ended September 30, 2024 as compared with the same period in 2023. Excluding the effects of foreign currency exchange rates, net written premiums decreased $4 million for the three months ended September 30, 2024 as compared with the same period in 2023. The increase in net earned premiums was consistent with the trend in net written premiums in recent quarters.

Core income decreased $4 million for the three months ended September 30, 2024 as compared with the same period in 2023 primarily driven by lower current accident year underwriting results partially offset by a favorable impact from changes in foreign currency exchange rates.

The combined ratio of 96.1% increased 7.8 points for the three months ended September 30, 2024 as compared with the same period in 2023 due to a 5.5 point increase in the expense ratio and a 2.3 point increase in the loss ratio. The increase in the expense ratio was driven by a favorable reinsurance acquisition related catch-up adjustment recorded in the prior year quarter and higher employee related costs in the current quarter. The increase in the loss ratio was driven by higher catastrophe losses partially offset by favorable net prior year loss reserve development. Catastrophe losses were $16 million, or 5.1 points of the loss ratio, for the three months ended September 30, 2024, as compared with $7 million, or 2.3 points of the loss ratio, for the three months ended September 30, 2023.

Favorable net prior year loss reserve development of $2 million was recorded for the three months ended September 30, 2024 compared to no net prior year loss reserve development for the three months ended September 30, 2023. Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included under Part 1, Item 1.

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Nine Month Comparison

Gross written premiums for International decreased $29 million for the nine months ended September 30, 2024 as compared with the same period in 2023. Excluding the effect of foreign currency exchange rates, gross written premiums decreased $37 million driven by lower new business. Net written premiums for International decreased $16 million for the nine months ended September 30, 2024 as compared with the same period in 2023. Excluding the effect of foreign currency exchange rates, net written premiums decreased $20 million for the nine months ended September 30, 2024 as compared with the same period in 2023. The increase in net earned premiums was consistent with the trend in net written premiums in recent quarters.

Core income increased $15 million for the nine months ended September 30, 2024 as compared with the same period in 2023 driven by higher net investment income and favorable net prior year loss reserve development in the current year period compared with unfavorable development in the prior year period, partially offset by lower underlying underwriting results. Favorable net prior year loss reserve development of $5 million was recorded for the nine months ended September 30, 2024 compared to unfavorable net prior year loss reserve development of $15 million for the nine months ended September 30, 2023.

The combined ratio of 93.7% increased 1.2 points for the nine months ended September 30, 2024 as compared with the same period in 2023 due to a 2.8 point increase in the expense ratio partially offset by a 1.6 point improvement in the loss ratio. The increase in the expense ratio was driven by higher employee related costs and a favorable reinsurance acquisition related catch-up adjustment recorded in the prior year period. The improvement in the loss ratio was driven by favorable net prior year loss reserve development partially offset by higher catastrophe losses. Catastrophe losses were $28 million, or 3.0 points of the loss ratio, for the nine months ended September 30, 2024, as compared with $24 million, or 2.7 points of the loss ratio, for the nine months ended September 30, 2023.

Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included under Part 1, Item 1.

The following table summarizes the gross and net carried reserves for International.



(In millions)	September 30, 2024		December 31, 2023
Gross case reserves	$	899	$	864
Gross IBNR reserves	2,091		1,845
Total gross carried claim and claim adjustment expense reserves	$	2,990	$	2,709
Net case reserves	$	753	$	708
Net IBNR reserves	1,746		1,568
Total net carried claim and claim adjustment expense reserves	$	2,499	$	2,276

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Life & Group

The following table summarizes the results of operations for Life & Group.


Periods ended September 30	Three Months				Nine Months
(In millions)	2024		2023		2024		2023
Net earned premiums	$	110	$	112	$	329	$	340
Claims, benefits and expenses	367		371		1,063		1,087
Net investment income	240		216		710		659


Core loss	(9)		(29)		(5)		(52)

Three Month Comparison

Core loss improved $20 million for the three months ended September 30, 2024 as compared with the same period in 2023 primarily due to higher net investment income. Both periods are inclusive of assumption updates as a result of the annual reserve reviews completed in the third quarter of each year.

The cash flow assumption updates from the annual reserve review for the three months ended September 30, 2024 and 2023 resulted in a pretax increase in long-term care reserves of $15 million and $8 million.

The annual structured settlement reserve review resulted in a pretax reduction in claim reserves of $9 million and $6 million for the three months ended September 30, 2024 and 2023.

Nine Month Comparison

Results for the nine months ended September 30, 2024 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 increases 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, 2023 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.

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September 30, 2024
	Estimated reduction to pretax income
Hypothetical revisions (In millions)
Morbidity:
2.5% increase in morbidity	$	290
5% increase in morbidity	590
Persistency:
5% decrease in active life mortality and lapse	$	160
10% decrease in active life mortality and lapse	310
Premium Rate Actions:
25% decrease in anticipated future premium rate increases	$	10
50% decrease in anticipated future premium rate increases	20

The following table summarizes policyholder reserves for Life & Group.


September 30, 2024
(In millions)	Claim and claim adjustment expenses		Future policy benefits		Total
Long term care	$	—	$	14,047	$	14,047
Structured settlements and other	564		—		564
Total	564		14,047		14,611

Ceded reserves	86		—		86
Total gross reserves	$	650	$	14,047	$	14,697


December 31, 2023
(In millions)	Claim and claim adjustment expenses		Future policy benefits		Total
Long term care	$	—	$	13,959	$	13,959
Structured settlements and other	582		—		582
Total	582		13,959		14,541

CNA FINANCIAL CORP - Quarter Report: 2024 September (Form 10-Q)

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