CNA Financial Corporation Supplemental Financial Information

CNA Financial Corporation

Supplemental Financial Information

September 30, 2021

This report is for informational purposes only and includes consolidated financial statements and financial exhibits that are unaudited. This report should be read in conjunction with documents filed with the U.S. Securities and Exchange Commission, including the most recent Annual Report on Form 10-K.

Table of Contents

	Page
Consolidated Results
Statements of Operations	1
Components of Income (Loss), Per Share Data and Return on Equity	2
Selected Balance Sheet Data and Statements of Cash Flows Data	3
Results of Operations
Property & Casualty	4
Specialty	5
Commercial	6
International	7
Life & Group	8
Corporate & Other	9
Investment Information
Investment Summary - Consolidated	10
Investment Summary - Property & Casualty and Corporate & Other	11
Investment Summary - Life & Group	12
Investments - Fixed Maturity Securities by Credit Rating	13
Components of Net Investment Income	14
Other
Claim & Claim Adjustment Expense Reserve Rollforward	15
Life & Group Policyholder Reserves	16
Definitions and Presentation	17

Statements of Operations

Periods ended September 30			Three Months						Nine Months
(In millions)		2021			2020		Change				2021			2020		Change
Revenues:
Net earned premiums	$	2,059	$	1,953		5	%	$	6,056	$	5,672		7 %
Net investment income		513			517		(1)				1,608			1,380		17
Net investment gains (losses)		22			27						117			(120)
Non-insurance warranty revenue		357			317						1,054			926
Other revenues		8			6						19			19
Total revenues		2,959			2,820		5				8,854			7,877		12
Claims, Benefits and Expenses:
Insurance claims and policyholders' benefits		1,632			1,616						4,684			4,683
Amortization of deferred acquisition costs		368			360						1,084			1,046
Non-insurance warranty expense		330			293						973			859
Other operating expenses		287			269						874			852
Interest		28			32						85			94
Total claims, benefits and expenses		2,645			2,570		(3)				7,700			7,534		(2)
Income (loss) before income tax		314			250						1,154			343
Income tax (expense) benefit		(58)			(37)						(218)			(40)
Net income (loss)	$	256		$	213		20	%		$	936		$	303		N/M %

1

Components of Income (Loss), Per Share Data and Return on Equity

Periods ended September 30		Three Months			Nine Months
(In millions, except per share data)		2021			2020			2021			2020
Components of Income (Loss)
Core income (loss)	$	237	$	193		$	841	$	400
Net investment gains (losses)		19			20			95			(97)
Net income (loss)	$	256		$	213		$	936		$	303
Diluted Earnings (Loss) Per Common Share
Core income (loss)	$	0.87	$	0.71		$	3.08	$	1.47
Net investment gains (losses)		0.07			0.08			0.35			(0.36)
Diluted earnings (loss) per share	$	0.94		$	0.79		$	3.43		$	1.11
Weighted Average Outstanding Common Stock and Common Stock Equivalents
Basic		271.7			271.7			271.8			271.6
Diluted		272.7			272.3			272.8			272.3
Return on Equity
Net income (loss) (1)		8.1	%		7.2	%		9.8	%		3.3	%
Core income (loss) (2)		7.7			6.7			9.3			4.5

1. Annualized net income (loss) divided by the average stockholders' equity including accumulated other comprehensive income (loss) (AOCI) for the period. Average equity including AOCI is calculated using a simple average of the beginning and ending balances for the period.
2. Annualized core income (loss) divided by the average stockholders' equity excluding AOCI for the period. Average equity excluding AOCI is calculated using a simple average of the beginning and ending balances for the period.

2

Selected Balance Sheet Data and Statement of Cash Flows Data

(In millions, except per share data)	September 30, 2021			December 31, 2020
Total investments	$	50,236		$	50,293
Reinsurance receivables, net of allowance for uncollectible receivables		5,328			4,457
Total assets		66,522			64,026
Insurance reserves		42,607			41,143
Debt		2,778			2,776
Total liabilities		53,858			51,319
Accumulated other comprehensive income (loss) (1)		346			803
Total stockholders' equity		12,664			12,707
Book value per common share	$	46.67	$	46.82
Book value per common share excluding AOCI	$	45.39	$	43.86
Outstanding shares of common stock (in millions of shares)		271.4			271.4
Statutory capital and surplus - Combined Continental Casualty Companies (2)	$	11,098	$	10,708
Three Months Ended September 30		2021			2020
Net cash flows provided (used) by operating activities	$	669		$	758
Net cash flows provided (used) by investing activities		(395)			(882)
Net cash flows provided (used) by financing activities		(104)			(25)
Net cash flows provided (used) by operating, investing and financing activities	$	170		$	(149)
Nine Months Ended September 30		2021			2020
Net cash flows provided (used) by operating activities	$	1,354		$	1,408
Net cash flows provided (used) by investing activities		(597)			(407)
Net cash flows provided (used) by financing activities		(545)			(801)
Net cash flows provided (used) by operating, investing and financing activities	$	212		$	200

1. As of September 30, 2021 and December 31, 2020, the net unrealized gains on investments included in AOCI were net of after-tax Shadow Adjustments of $2,481 million and $2,773 million. To the extent that unrealized gains on fixed income securities supporting certain products within the Life & Group segment would result in a premium deficiency if realized, an increase in Insurance reserves are recorded, net of tax, as a reduction of net unrealized gains through Other comprehensive income (loss) (Shadow Adjustments).
2. Statutory capital and surplus as of September 30, 2021 is preliminary.

3