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CNA FINANCIAL CORP - Quarter Report: 2025 March (Form 10-Q)

Dividends to common stockholders ($ and $ per share)
()()Net income  Balance, end of period  Accumulated Other Comprehensive LossBalance, beginning of year()()Other comprehensive income  Balance, end of period()()Treasury StockBalance, beginning of year()()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 March 31, 2025.
The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Intercompany amounts have been eliminated. 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, 2024, including the summary of significant accounting policies in Note A.
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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 per share      Basic $ $ Diluted$ $ 
Excluded from the calculation of diluted earnings 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.
The Company repurchased shares of CNAF common stock at an aggregate cost of $ million during the three months ended March 31, 2025. There were share repurchases during the three months ended March 31, 2024.
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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 March 31, 2025 and 2024
$()$  $ Gross losses()()Net investment gains (losses) on fixed maturity securities()()Equity securities  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 March 31, 2025 and 2024
$()$ 
The available-for-sale impairment losses (gains) recognized in earnings by asset type are presented in the following table.
 $ Asset-backed  Impairment losses (gains) recognized in earnings$ $ 
There were losses recognized on mortgage loans during the three months ended March 31, 2025 or 2024.
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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, 2024Cost or
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Allowance for Credit LossesEstimated
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     
Total fixed maturity securities available-for-sale     
Total fixed maturity securities trading — — —  
Total fixed maturity securities$ $ $ $ $ 
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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$ $ $ $ $ $ 
Less than 12 Months12 Months or LongerTotal
December 31, 2024Estimated
Fair Value		Gross
Unrealized
Losses		Estimated
Fair Value		Gross
Unrealized
Losses		Estimated
Fair Value		Gross
Unrealized
Losses
(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      
Total$ $ $ $ $ $ 

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 $ $ $ AAA    AA     A    BBB    Non-investment grade    Total$ $ $ $ 
Based on current facts and circumstances, the Company believes the unrealized losses presented in the March 31, 2025 securities in a gross unrealized loss position tables above are not indicative of the ultimate collectability of the current amortized cost of the securities, but rather are primarily attributable to changes in risk-free interest rates. In reaching this determination, the Company considered the volatility in risk-free rates and credit spreads as well as the fact that its unrealized losses are concentrated in investment grade issuers. Additionally, the Company has no current intent to sell securities with unrealized losses, nor is it more likely than not that it will be required to sell prior to recovery of amortized cost; accordingly, the Company has determined that there are no additional impairment losses to be recorded as of March 31, 2025.
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 million, $ million, and $ million as of March 31, 2025, December 31, 2024, and March 31, 2024 and is excluded from the estimate of expected credit losses and the amortized cost basis in the table included within this Note. $ $ Additions to the allowance for credit losses:Securities for which credit losses were not previously recorded   Available-for-sale securities accounted for as PCD assets   Reductions to the allowance for credit losses:Securities sold during the period (realized)   Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis   Write-offs charged against the allowance   Recoveries of amounts previously written off   Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period   
Balance as of March 31, 2025
$ $ $ 
(In millions)Corporate and other bondsAsset-backedTotal
Allowance for credit losses:
Balance as of January 1, 2024$ $ $ 
Additions to the allowance for credit losses:
Securities for which credit losses were not previously recorded   
Available-for-sale securities accounted for as PCD assets   
Reductions to the allowance for credit losses:
Securities sold during the period (realized)   
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis   
Write-offs charged against the allowance   
Recoveries of amounts previously written off   
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period   
Balance as of March 31, 2024
$ $ $ 

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 $ $ $ Due after one year through five years    Due after five years through ten years    Due after ten years    Total$ $ $ $ 
Actual maturities may differ from contractual maturities because certain securities may be called or prepaid. Securities not due at a single date are allocated based on weighted average life.
Investment Commitments
As part of its overall investment strategy, the Company invests in various assets which require future purchase, sale or funding commitments. These investments are recorded once funded, and the related commitments may include future capital calls from various third-party limited partnerships, signed and accepted mortgage loan applications, and obligations related to private placement securities. As of March 31, 2025, the Company had commitments to purchase or fund approximately $ million and sell approximately $ million under the terms of these investments.
Mortgage Loans
 $ $ $ $ $ $ LTV 55% to 65%      LTV greater than 65%      DSCR 1.2x - 1.6xLTV less than 55%      LTV 55% to 65%      LTV greater than 65%      DSCR ≤1.2LTV less than 55%      LTV 55% to 65%      LTV greater than 65%      Total$ $ $ $ $ $ $ 
(1) The values in the table above reflect DSCR on a standardized amortization period and LTV based on the most recent appraised values trended forward using changes in a commercial real estate price index.
As of March 31, 2025, accrued interest receivable on mortgage loans totaled $ million and is excluded from the amortized cost basis disclosed in the table above and the estimate of expected credit losses.

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Note D.

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 $ $ $ States, municipalities and political subdivisions    Asset-backed    Total fixed maturity securities     Equity securities:Common stock    Non-redeemable preferred stock    Total equity securities    Short-term and other    Total assets$ $ $ $ Total liabilities$ $ $ $ 

      )   ) )) )) ))
December 31, 2024   Total
Assets/Liabilities
at Fair Value
(In millions)Level 1Level 2Level 3
Assets    
Fixed maturity securities:    
Corporate bonds and other$ $ $ $ 
States, municipalities and political subdivisions    
Asset-backed    
Total fixed maturity securities     
Equity securities:
Common stock    
Non-redeemable preferred stock    
Total equity securities    
Short-term and other    
Total assets$ $ $ $ 
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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.

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 Discounted cash flowCredit spread
% - % (%)
December 31, 2024Estimated Fair Value
(In millions)		Valuation Technique(s)Unobservable Input(s)Range
 (Weighted Average)
Fixed maturity securities$ Discounted cash flowCredit 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, 2024Carrying
Amount		Estimated Fair Value
(In millions)Level 1Level 2Level 3Total
Assets
Mortgage loans$ $ $ $ $ 
 
The following table presents undiscounted expected future benefit and expense payments, and undiscounted expected future gross premiums.
As of March 31
(In millions)
20252024
Expected future benefit and expense payments$ $ 
Expected future gross premiums  
Discounted expected future gross premiums at the upper-medium grade fixed income instrument yield discount rate were $ million and $ million as of March 31, 2025 and 2024.
The weighted average effective duration of the LFPB calculated using the original locked in discount rate was years as of March 31, 2025 and 2024.
 % % %Upper-medium grade fixed income instrument discount rate   
For the three months ended March 31, 2025 and 2024, immediate charges to net income resulting from adverse development in certain cohorts where the Net Premium Ratio (NPR) exceeded 100% were $ million and $ million. For the three months ended March 31, 2025 and 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.














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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 (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.
Three months ended March 31
(In millions)20252024
Non-Service Cost (Benefit):
Insurance claims and policyholder's benefits$()$ 
Other operating expenses() 
Total net periodic pension cost (benefit)$()$ 

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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 March 31, 2025
$()$()$()$ $()$()
)$()$()$()$()$()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 March 31, 2024
$()$()$()$()$()$()

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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, 2024. 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). The Company's Chief Operating Decision Maker (CODM) is the Chief Executive Officer. For all segments, the CODM uses a multi-year trend of core income (loss) to assess the segments' operating performance and make decisions regarding the allocation of resources to each segment.
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.
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.
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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       Insurance related administrative expenses       Interest expense       
Other expenses (1)
  ()  () Total claims, benefits and expenses     () 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)$ 
(1) Other expenses for the Company's property and casualty commercial insurance segments reflects expenses not directly related to the Company's insurance operations, including certain expenses related to the Company's non-insurance warranty business within Specialty, claims services offerings within Commercial and foreign currency transaction gains and losses within International. Other expenses for the Corporate & Other segment reflects certain corporate expenses not attributable to the Company's ongoing property and casualty insurance operations.
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 $ $ $ $ $ $ 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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 $ $ $ $ $ $ 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       Insurance related administrative expenses       Interest expense       
Other expenses (1)
     () Total claims, benefits and expenses     () 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)$ 
(1) Other expenses for the Company's property and casualty commercial insurance segments reflects expenses not directly related to the Company's insurance operations, including certain expenses related to the Company's non-insurance warranty business within Specialty, claims services offerings within Commercial and foreign currency transaction gains and losses within International. Other expenses for the Corporate & Other segment reflects certain corporate expenses not attributable to the Company's ongoing property and casualty insurance operations.




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 $ $ $ $ $ $ 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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 $ Catastrophe losses  
(Favorable) unfavorable development (1)
 ()CommercialNon-catastrophe net incurred claim and claim adjustment expenses related to current year$ $ Catastrophe losses  
(Favorable) unfavorable development (1)
 ()InternationalNon-catastrophe net incurred claim and claim adjustment expenses related to current year$ $ Catastrophe losses  
(Favorable) unfavorable development (1)
  
(1) (Favorable) unfavorable development does not include the effects of interest accretion and change in allowance for uncollectible reinsurance.
 $ 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 reported under Liabilities as of March 31, 2025 and December 31, 2024. For the three months ended March 31, 2025 and 2024, the Company recognized $ billion of revenues in each period that were included in the deferred revenue balance as of January 1, 2025 and 2024. For the three months ended March 31, 2025 and 2024, 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 2025, $ billion in 2026, $ billion in 2027 and $ billion thereafter.
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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, 2024.
We utilize the core income (loss) financial measure to monitor our operations. Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of net investment gains or losses and gains or losses resulting from pension settlement transactions. Net investment gains or losses are excluded from the calculation of core income (loss) because they are generally driven by economic factors that are not necessarily reflective of our primary operations. The calculation of core income (loss) excludes gains or losses resulting from pension settlement transactions as they result from decisions regarding our defined benefit pension plans which are unrelated to our primary operations. Presentation of consolidated core income (loss) is deemed to be a non-GAAP financial measure and management believes some investors may find this measure useful to evaluate our primary operations. See further discussion regarding how we manage our business in Note J to the Condensed Consolidated Financial Statements included under Part I, Item 1. For reconciliations of non-GAAP measures to the most comparable GAAP measures and other information, please refer herein and/or to our most recent Annual Report on Form 10-K on file with the Securities and Exchange Commission.
In evaluating the results of our Specialty, Commercial and International segments, we utilize the loss ratio, the underlying loss ratio, the expense ratio, the dividend ratio, the combined ratio and the underlying combined ratio. These ratios are calculated using GAAP financial results. The loss ratio is the percentage of net incurred claim and claim adjustment expenses to net earned premiums. The underlying loss ratio excludes the impact of catastrophe 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.
Changes in estimates of claim and claim adjustment expense reserves, net of reinsurance, for prior years are defined as net prior year loss reserve development within this MD&A. These changes can be favorable or unfavorable. Net prior year loss reserve development does not include the effect of any related acquisition expenses. Further information on our reserves is provided in Note E and Note F to the Condensed Consolidated Financial Statements included under Part I, Item 1.
In addition, we also utilize renewal premium change, rate, retention and new business in evaluating operating trends. Renewal premium change represents the estimated change in average premium on policies that renew, including rate and exposure changes. Rate represents the average change in price on policies that renew excluding exposure change. Exposure represents the measure of risk used in the pricing of the insurance product. The change in exposure represents the change in premium dollars on policies that renew as a result of the change in risk of the policy. Retention represents the percentage of premium dollars renewed, excluding rate and exposure changes, in comparison to the expiring premium dollars from policies available to renew. New business represents premiums from policies written with new customers and additional policies written
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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.
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.
The following tables present a reconciliation of net income to underwriting gain (loss) and underlying underwriting gain (loss):
Three months ended March 31, 2025SpecialtyCommercialInternationalProperty & Casualty
(In millions)
Net income$149 $124 $38 $311 
Net investment losses (gains), after tax1 — (1)— 
Core income$150 $124 $37 $311 
Less:
Net investment income151 177 34 362 
Non-insurance warranty revenue (expense)12 — — 12 
Other revenue (expense), including interest expense(14)(2)1 (15)
Income tax expense on core income(41)(34)(13)(88)
Underwriting gain (loss)42 (17)15 40 
Effect of catastrophe losses— 86 11 97 
Effect of unfavorable development-related items10 53 — 63 
Underlying underwriting gain$52 $122 $26 $200 
Three months ended March 31, 2024SpecialtyCommercialInternationalProperty & Casualty
(In millions)
Net income$167 $144 $37 $348 
Net investment losses, after tax10 14 — 24 
Core income$177 $158 $37 $372 
Less:
Net investment income150 176 31 357 
Non-insurance warranty revenue (expense)13 — — 13 
Other revenue (expense), including interest expense(14)(4)(2)(20)
Income tax expense on core income(48)(43)(13)(104)
Underwriting gain76 29 21 126 
Effect of catastrophe losses— 82 6 88 
Effect of favorable development-related items(5)— — (5)
Underlying underwriting gain$71 $111 $27 $209 

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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, 2024 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.
Three months ended March 31
(In millions)20252024
Operating Revenues
Net earned premiums$2,626 $2,441 
Net investment income604 609 
Non-insurance warranty revenue397 407 
Other revenues9 9 
Total operating revenues3,636 3,466 
Claims, Benefits and Expenses
Net incurred claims and benefits (re-measurement loss of $8 and $15)
2,017 1,798 
Policyholders' dividends10 9 
Amortization of deferred acquisition costs471 444 
Non-insurance warranty expense385 394 
Insurance related administrative expenses321 287 
Interest expense32 35 
Other expenses42 50 
Total claims, benefits and expenses3,278 3,017 
Income tax expense on core income(77)(94)
Core income281 355 
Net investment losses(9)(22)
Income tax benefit on net investment losses2 5 
Net investment losses, after tax(7)(17)
Net income $274 $338 
Core income decreased $74 million for the three months ended March 31, 2025 as compared with the same period in 2024. Core income for our Property & Casualty Operations decreased $61 million primarily driven by lower underwriting results partially offset by higher net investment income. Core income for our Life & Group segment increased $1 million, while core loss for our Corporate & Other segment increased $14 million.
Catastrophe losses were $97 million and $88 million for the three months ended March 31, 2025 and 2024, primarily driven by severe weather related events, including $53 million for the California wildfires in 2025. Unfavorable net prior year loss reserve development of $83 million was recorded for the three months ended March 31, 2025 as compared with favorable net prior year loss reserve development of $7 million recorded for the three months ended March 31, 2024 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.
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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.
Three months ended March 31
(In millions, except ratios, rate, renewal premium change and retention)20252024
Gross written premiums$1,672 $1,682 
Gross written premiums excluding third-party captives930 880 
Net written premiums842 792 
Net earned premiums830 814 
Underwriting gain42 76 
Net investment income151 150 
Core income 150 177 
Other performance metrics:
Loss ratio61.4 %58.6 %
Expense ratio33.4 31.8 
Dividend ratio0.3 0.3 
Combined ratio95.1 %90.7 %
Less: Effect of catastrophe impacts— — 
Less: Effect of unfavorable (favorable) development-related items1.3 (0.6)
Underlying combined ratio93.8 %91.3 %
Underlying loss ratio60.1 %59.2 %
Rate3 %2 %
Renewal premium change4 3 
Retention89 88 
New business$112 $94 
Gross written premiums, excluding third-party captives, for Specialty increased $50 million for the three months ended March 31, 2025 as compared with the same period in 2024 driven by higher new business and favorable renewal premium change, inclusive of rate. Net written premiums for Specialty increased $50 million for the three months ended March 31, 2025 as compared with the same period in 2024. The increase in net earned premiums was consistent with the trend in net written premiums.
Core income decreased $27 million for the three months ended March 31, 2025 as compared with the same period in 2024 primarily due to lower underlying underwriting results and unfavorable net prior year loss reserve development in the current year period compared with favorable net prior year loss reserve development in the prior year period.
The combined ratio of 95.1% increased 4.4 points for the three months ended March 31, 2025 as compared with the same period in 2024 due to a 2.8 point increase in the loss ratio and a 1.6 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, driven by auto warranty in accident year 2024, 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 primarily driven by higher acquisition costs and employee related costs. There were no catastrophe losses for the three months ended March 31, 2025 and 2024.
Unfavorable net prior year loss reserve development of $10 million was recorded for the three months ended March 31, 2025 as compared with $5 million of favorable net prior year loss reserve development recorded for the three months ended March 31, 2024. 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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The following table summarizes the gross and net carried reserves for Specialty.
(In millions)March 31, 2025December 31, 2024
Gross case reserves$2,062 $2,023 
Gross IBNR reserves5,510 5,403 
Total gross carried claim and claim adjustment expense reserves$7,572 $7,426 
Net case reserves$1,734 $1,697 
Net IBNR reserves4,343 4,282 
Total net carried claim and claim adjustment expense reserves$6,077 $5,979 

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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.
Three months ended March 31
(In millions, except ratios, rate, renewal premium change and retention)20252024
Gross written premiums$1,853 $1,686 
Gross written premiums excluding third-party captives1,839 1,682 
Net written premiums1,498 1,338 
Net earned premiums1,380 1,202 
Underwriting (loss) gain(17)29 
Net investment income177 176 
Core income124 158 
Other performance metrics:
Loss ratio73.0 %68.8 %
Expense ratio27.6 28.2 
Dividend ratio0.5 0.6 
Combined ratio101.1 %97.6 %
Less: Effect of catastrophe impacts6.3 6.8 
Less: Effect of unfavorable development-related items3.8 — 
Underlying combined ratio91.0 %90.8 %
Underlying loss ratio62.9 %62.0 %
Rate6 %6 %
Renewal premium change7 8 
Retention84 85 
New business$370 $367 
Gross written premiums for Commercial increased $167 million for the three months ended March 31, 2025 as compared with the same period in 2024 driven by favorable renewal premium change, inclusive of rate. Net written premiums for Commercial increased $160 million for the three months ended March 31, 2025 as compared with the same period in 2024. The increase in net earned premiums was consistent with the trend in net written premiums.
Core income decreased $34 million for the three months ended March 31, 2025 as compared with the same period in 2024, primarily driven by unfavorable net prior year loss reserve development.
The combined ratio of 101.1% increased 3.5 points for the three months ended March 31, 2025 as compared with the same period in 2024 primarily due to a 4.2 point increase in the loss ratio partially offset by a 0.6 point improvement in the expense ratio. The increase in the loss ratio was due to unfavorable net prior year loss reserve development driven by commercial auto in accident year 2024, and an increase in the underlying loss ratio driven by the continuation of elevated loss cost trends in commercial auto. Catastrophe losses were $86 million, or 6.3 points of the loss ratio, for the three months ended March 31, 2025, as compared with $82 million, or 6.8 points of the loss ratio, for the three months ended March 31, 2024. The improvement in the expense ratio was primarily driven by higher net earned premiums.
Unfavorable net prior year loss reserve development of $51 million was recorded for the three months ended March 31, 2025 as compared with $2 million of favorable net prior year loss reserve development recorded for the three months ended March 31, 2024. 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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The following table summarizes the gross and net carried reserves for Commercial.
(In millions)March 31, 2025December 31, 2024
Gross case reserves$3,798 $3,690 
Gross IBNR reserves7,910 7,646 
Total gross carried claim and claim adjustment expense reserves$11,708 $11,336 
Net case reserves$3,218 $3,135 
Net IBNR reserves7,022 6,804 
Total net carried claim and claim adjustment expense reserves$10,240 $9,939 
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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.
Three months ended March 31
(In millions, except ratios, rate, renewal premium change and retention)20252024
Gross written premiums$373 $374 
Net written premiums266 260 
Net earned premiums310 315 
Underwriting gain15 21 
Net investment income34 31 
Core income37 37 
Other performance metrics:
Loss ratio62.1 %60.1 %
Expense ratio33.3 33.2 
Combined ratio95.4 %93.3 %
Less: Effect of catastrophe impacts3.6 2.0 
Less: Effect of (favorable) unfavorable development-related items— — 
Underlying combined ratio91.8 %91.3 %
Underlying loss ratio58.5 %58.1 %
Rate(2)%1 %
Renewal premium change1 3 
Retention85 82 
New business$83 $68 
Gross written premiums for International decreased $1 million for the three months ended March 31, 2025 as compared with the same period in 2024. Excluding the effect of foreign currency exchange rates, gross written premiums increased $14 million driven by higher new business. Net written premiums for International increased $6 million for the three months ended March 31, 2025 as compared with the same period in 2024. Excluding the effect of foreign currency exchange rates, net written premiums increased $19 million for the three months ended March 31, 2025 as compared with the same period in 2024. The decrease in net earned premiums was consistent with the trend in net written premiums in recent quarters.
Core income for the three months ended March 31, 2025 was consistent with the same period in 2024.
The combined ratio of 95.4% increased 2.1 points for the three months ended March 31, 2025 as compared with the same period in 2024 largely due to a 2.0 point increase in the loss ratio. The increase in the loss ratio was primarily driven by higher catastrophe losses. Catastrophe losses were $11 million, or 3.6 points of the loss ratio, for the three months ended March 31, 2025, as compared with $6 million, or 2.0 points of the loss ratio, for the three months ended March 31, 2024. The expense ratio was generally consistent with the same period in 2024.
There was no net prior year loss reserve development recorded for the three months ended March 31, 2025 or 2024. 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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The following table summarizes the gross and net carried reserves for International.
(In millions)March 31, 2025December 31, 2024
Gross case reserves$902 $876 
Gross IBNR reserves2,144 2,044 
Total gross carried claim and claim adjustment expense reserves$3,046 $2,920 
Net case reserves$767 $741 
Net IBNR reserves1,745 1,675 
Total net carried claim and claim adjustment expense reserves$2,512 $2,416 
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Life & Group
The following table summarizes the results of operations for Life & Group.
Three months ended March 31
(In millions)20252024
Net earned premiums$106 $110 
Claims, benefits and expenses330 341 
Net investment income226 231 
Core loss increased $14 million for three months ended March 31, 2025 as compared with the same period in 2024 primarily due to a $17 million after-tax charge related to unfavorable net prior year loss reserve development associated with legacy mass tort abuse claims. Our annual comprehensive review of legacy mass tort exposures is undertaken in the second quarter of each year, consistent with the recent historical timing of such review. 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 Corporate & Other.
(In millions)March 31, 2025December 31, 2024
Gross case reserves$1,253 $1,241 
Gross IBNR reserves1,386 1,431 
Total gross carried claim and claim adjustment expense reserves$2,639 $2,672 
Net case reserves$124 $120 
Net IBNR reserves276 268 
Total net carried claim and claim adjustment expense reserves$400 $388 
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INVESTMENTS
Net Investment Income
The significant components of Net investment income are presented in the following table. Fixed income securities, as presented, include both fixed maturity securities and non-redeemable preferred stock.
Three months ended March 31
(In millions)20252024
Fixed income securities:
Taxable fixed income securities$496 $472 
Tax-exempt fixed income securities34 38 
Total fixed income securities530 510 
Limited partnership and common stock investments54 68 
Other, net of investment expense20 31 
Net investment income$604 $609 
Effective income yield for the fixed income securities portfolio4.8 %4.7 %
Limited partnership and common stock return2.0 %2.9 %
Net investment income decreased $5 million for the three months ended March 31, 2025 as compared with the same period in 2024 reflecting the largely offsetting impacts of lower common stock returns and higher income from fixed income securities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
Net Investment (Losses) Gains
The components of Net investment (losses) gains are presented in the following table.
Three months ended March 31
(In millions)20252024
Fixed maturity securities:
Corporate bonds and other$(9)$(17)
States, municipalities and political subdivisions(1)— 
Asset-backed1 (15)
Total fixed maturity securities(9)(32)
Non-redeemable preferred stock— 11 
Derivatives, short-term and other— (1)
(d) Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs (in millions)
N/A
31.1
  
31.2
  
32.1
  
32.2
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document101.INS
Inline XBRL Taxonomy Extension Schema101.SCH
Inline XBRL Taxonomy Extension Calculation Linkbase101.CAL
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Inline XBRL Taxonomy Label Linkbase101.LAB
Inline XBRL Taxonomy Extension Presentation Linkbase101.PRE
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)104.1 
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