Slide 1: Third Quarter 2023 Results
CNA Financial Corporation Third Quarter 2023 Results October 30, 2023
Slide 2: Notices and Disclaimers
Notices and Disclaimers Forward Looking Statements The statements made in the course of this presentation and/or contained in the presentation materials may include statements that relate to anticipated future events (forward-looking statements) rather than actual present conditions or historical ev
Slide 3: Third Quarter Overview
Third Quarter Overview • Net income of $258 million versus net loss of $42 million in the prior year quarter; core income of $289 million versus $43 million in the prior year quarter. • Core income up 56% to $291 million versus $186 million in the prior year quarter, excluding the results of the Lif
Slide 4: Financial Performance
Financial Performance Core income1 up 56% after excluding impact of Life & Group reserve assumption update in 2023 and 2022 (In millions, except ratios and per share data) Third Quarter Year to Date 2023 2022 2 Change 2023 2022 1 Change Revenues $3,336 $2,957 13 % $9,792 $8,768 12 % Core income 1 28
Slide 5: Property & Casualty Operations
Property & Casualty Operations Continued strong profitability (In millions, except ratios) Third Quarter Year to Date 2023 2022 2023 2022 GWP ex. 3rd party captives $2,595 $2,430 $8,305 $7,560 GWP change (% year over year) 7% 10 % Net written premium $2,178 $2,060 $6,938 $6,379 NWP change (% year ov
Slide 6: Property & Casualty Production Metrics
Property & Casualty Production Metrics Continue to manage rate/retention dynamic effectively Property & Casualty Rate & Retention 2022 2023 Q1 Q2 Q3 Q4 Q1 Q2 Q3 84% 86% 86% 86% 86% 86% 84% Retention Renewal Premium Change 10% 8% 8% 7% 7% 7% 6% Rate 7% 6% 5% 4% 5% 5% 5% GWP ex. 3rd party captives ($M
Slide 7: Specialty
Specialty Continued excellent all-in and underlying combined ratio (In millions, except ratios) Third Quarter Year to Date 2023 2022 2023 2022 GWP ex. 3rd party captives $949 $958 $2,796 $2,816 GWP change (% year over year) (1)% (1)% Net written premium $825 $840 $2,438 $2,443 NWP change (% year ove
Slide 8: Specialty Production Metrics
Specialty Production Metrics Rate reductions moderated considerably in Financial Institutions and Management Liability Specialty Rate & Retention 2022 2023 Q1 Q2 Q3 Q4 Q1 Q2 Q3 88% 88% 88% 89% 87% 84% 85% Retention Renewal Premium Change 11% 9% 6% 3% 4% 2% Rate —% 10% 7% 5% 3% 2% 1% (1)% GWP ex. 3rd
Slide 9: Commercial
Commercial Continued double-digit growth and record underlying combined ratio (In millions, except ratios) Third Quarter Year to Date 2023 2022 2023 2022 GWP ex. 3rd party captives $1,340 $1,184 $4,384 $3,711 GWP change (% year over year) 13 % 18 % Net written premium $1,071 $962 $3,588 $3,097 NWP c
Slide 10: Commercial Production Metrics
Commercial Production Metrics New business growth of 19% and rate of 8% which remains above long-run loss cost trend Commercial Rate & Retention 2022 2023 Q1 Q2 Q3 Q4 Q1 Q2 Q3 87% 87% 86% 86% 86% 85% 83% Retention 11% Renewal Premium Change 8% 9% 9% 9% 7% 7% Rate 7% 8% 8% 5% 5% 4% 5% GWP ex. 3rd par
Slide 11: International
International International operations consistently contributing profitable growth (In millions, except ratios) Third Quarter Year to Date 2023 2022 2023 2022 Gross written premium $306 $288 $1,125 $1,033 GWP change (% year over year)1 6% 9% Net written premium $282 $258 $912 $839 NWP change (% year
Slide 12: Life & Group
Life & Group Core loss includes unfavorable reserve assumption updates (In millions) Third Quarter Year to Date 2023 2022 1 0 2023 2022 1 Net earned premiums $112 $118 $340 $356 Net investment income 216 187 659 600 Total operating revenues $328 $305 $999 $956 Total claims, benefits and expenses 371
Slide 13: 2023 L&G Reserve Review
2023 L&G Reserve Review Overall neutral impact on a GAAP basis (In millions) Change to GAAP Liability for Future Policy Benefits (LFPB) from Changes in Underlying Cash Flow Assumptions 2023 ▪ No change to inflation assumptions in 2023 following increase in 2022 Economic ▪ Effect of higher interest r
Slide 14: LTC Progress Focused on Active Management
LTC Progress Focused on Active Management Proactive approach to managing block across all dimensions of the business Significantly improved runoff Long Term Care business compared to 2015 • Individual LTC block closed in 2004; Group LTC block closed to new accounts in 2004 and closed to new enrollee
Slide 15: Individual LTC Block Characteristics
Individual LTC Block Characteristics More mature, richer benefit ILTC reserves have reached inflection point Actual & Projected GAAP Reserves ($b) 1, 2 Block Characteristics Individual Block Average Age 81 years old $9.7 Average Max Daily Benefit $277 Benefits % of policies with Lifetime Benefits 39
Slide 16: Group LTC Block Characteristics
Group LTC Block Characteristics Less rich benefit and better priced Group block peak reserves significantly below ILTC peak reserves Actual & Projected GAAP Reserves ($b) 1, 2 Block Characteristics Group Block Average Age 69 years old Average Max Daily Benefit $211 Benefits % of policies with Lifeti
Slide 17: Pretax Net Investment Income
Pretax Net Investment Income Higher yields on fixed income securities continues to be a significant earnings tailwind Total CNAF Highlights $M • Net investment income of $553M is up $131M year-over-year 575 • The effective income yield on fixed income 553 503 525 increased from 4.6% to 4.7% quarter-
Slide 18: Investment Portfolio
Investment Portfolio High quality, diversified and liquid investment portfolio Fixed Maturities by Rating % of Portfolio Highlights 1 AAA 13% • 88% of total invested assets are in fixed income AA 16% securities A 25% • High-quality portfolio with an average credit BBB 41% rating of “A” Investment Gr
Slide 19: Financial Strength
Financial Strength Conservative capital and debt profile support business objectives Sep 30, Dec 31, (In millions, except per share data) 2023 2022 1 Capital Debt $ 3,273 $ 2,781 Stockholders' equity 8,563 8,548 • Financial strength ratings from all four rating Total capital 11,836 11,329 agencies w