CNA 10-K & 10-Q changes, risk factors and insider trading

Our business faces many risks and uncertainties. These risks and uncertainties could lead to events or circumstances that have a material adverse effect on our results of operations, equity, businessbusiness, financial condition and insurer financial strength and corporate debt ratings. We have described below material risks that we face. There may be additional risks that we do not yet know of or that we do not currently perceive to be material that may also affect our business. You should carefully consider and evaluate all of the information included in this report and any subsequent reports we may file with the SEC or make available to the public before investing in any securities we issue.

We are subject to the uncertain effects of emerging and potential claims and coverage issues that arise as industry practices and legal, judicial, geopolitical, social, economiceconomic, geopolitical and other environmental conditions change. Further, theThe impact of social inflation continues to be significantsignificant, and the trajectory of its future impact remains uncertain. Any imposition of significant tariffs by the U.S., as well as any related retaliatory tariffs, may result in considerable increases in certain costs that would increase the cost of claims. In addition, passage of reviver statutes that extend, or eliminate, the statute of limitations for the reporting of claims, including statutes passed in certain states with respect to sexual molestation and sexual abuse, increase the uncertainty of the frequency of claims, and the impact of social inflation has, and may continue to, increase the severity of these claims. Further, broader economic and geopolitical conditions, including the imposition of significant tariffs by the U.S., as well as any related retaliatory tariffs, may result in considerable increases in certain costs that would increase loss costs. These issues,issues have had, and may continue to have, a negative effect on our business, results of operations and financial condition by either extending coverage beyond the original underwriting intent or by increasing the number or size of claims, resulting in further increases in our reserves. The effects of unforeseen emerging or potential claim and coverage issues are extremely difficult to predict and may be material.

Our future policy benefit reserves for long-term care policies are based on our best estimate actuarial assumptions, which are assessed quarterly and updated at least annually. Key actuarial assumptions include morbidity, persistency, anticipated future premium rate increasesactions and expenses. The adequacy of the reserves is contingent upon actual experience and our future expectations related to these key assumptions. If actual or expected future experience differs from these assumptions, the reserves may not be adequate, requiring us to increase reserves. The required increase in reserves is recorded as a charge against our earnings in the period in which reserves are determined to be insufficient. These charges have been and in the future could be substantial. The reserves are discounted using upper-medium grade fixed income instrument yields as of each reporting date. Discount rates are subject to interest rate and market volatility. See the Life & Group Policyholder Reserves portion of Reserves - Estimates and Uncertainties section of MD&A in Item 7 for more information.

A prolonged period during which investment returns remain at low levels could result in shortfalls in investment income on assets supporting our obligations under long-term care policies. This risk may be more significant for our long-term care products when the long potential duration of the policy obligations exceeds the duration of the supporting investment assets. In addition, we may not receive regulatory approval for the level of premium rate increases we request. Any adverse deviation between the level of future premium rate increasesactions approved and the level included in our reserving assumptions may require an increase to our reserves. Further, and as noted in the previous risk factor, the increasingly adverse impact of social inflation, particularly with respect to legal activity and judicial decisions, may impact our long-term care portfolio and reserves.

Catastrophe losses are an inevitable part of our business. Various events can cause catastrophe losses. These events can be natural or man-made, and may include hurricanes, tornadoes, windstorms, earthquakes, hail, severe winter weather, droughts, fires, floods, riots, strikes, civil unrest, cyber-attacks, pandemics and acts of terrorism. The frequency and severity of these catastrophe events are inherently unpredictable. Exposure to cyber risk is increasing systematically due to greater digital dependence, which increases the potential for, and the potential losses due to, a catastrophic cyber event. Catastrophic cyber-attack scenarios are not bound by time or geographic limitations and cyber-related catastrophic perils don’t have well-established definitions or fundamental physical properties. In addition, longer-term natural catastrophe trends may be changing and new types ofof, and heightened, catastrophe losses may be developing due to climate change, its associated extreme weather events linked to rising temperatures and its effects on global weather patterns, greenhouse gases, sea, land and air temperatures, sea levels, rain, drought, hail and snow. Climate studies by government agencies, academic institutions, catastrophe modeling organizations and other groups indicate that climate change may be altering the frequency and/or severity of catastrophic weather events, such as hurricanes, tornadoes, windstorms, earthquakes, hail, severe winter weather, droughts, fires and floods.

The extent of our losses from catastrophes is a function of the total amount of our insured exposures in the affected areas, the frequency and severity of the events themselves, the level of our reinsurance coverage, reinsurance reinstatement premiums and state residual market assessments, if any. It can take a long time for the ultimate cost of any catastrophe losses to us to be finally determined, as a multitude of factors contribute to such costs, including evaluation of general liability and pollution exposures, infrastructure disruption, business interruption and reinsurance collectibility.collectability. Further, significant catastrophic events or a series of catastrophic events have the potential to impose financial stress on the reinsurance industry, which could impact our ability to collect amounts owed to us by reinsurers, thereby resulting in higher net incurred losses.

We are exposed to, and may face adverse developments related to, mass tort claims that could arise from, among other things, our insureds’ sale or use of potentially harmful products or substances, claims of sexual abuse and molestation against our insureds and changes to the social and legal environment, such as those related to abuse reviver statutes, issues related to altered interpretation of coverage and other new and emerging claim theories.

We face potential exposure to various types of existing, new and emerging mass tort claims, including those related to exposure to potentially harmful products or substances, such as glyphosate, lead paint, per- and polyfluoroalkyl substances (PFAS) and opioids, sexual abuse and molestation claims, claims arising from changes that expand the right to sue, remove limitations on recovery, extend the statutes of limitations or otherwise repeal or weaken tort reforms, such as those related to abuse reviver statutes, including New York reviver statutes; and claims related to new and emerging theories of liability, such as those related to global warming and climate change. Evolving judicial interpretationsinterpretations, increased participation by plaintiff's lawyers in insurance claims, rising litigation activity, higher monetary verdicts, abusive litigation practices, the growth of third-party litigation financing and new legislation regarding the application of various tort theories and defenses, including application of various theories of joint and several liability, as well as the application of insurance coverage to these claims, give rise to new and potentially more severe claim activity. For example, we have recorded, and may continue to record, increases in our mass tort reserves, driven substantially by abuse reviver statutes that have resulted in increased claims. Similar and continuing mass tort claim activity, including activity based on changing judicial interpretations and recent and proposed legislation, could have a material adverse effect on our business, results of operations and financial condition.

Technological changes in the way insurance transactions are completed in the marketplace, and our ability to react effectively to such change, may present significant competitive risks. For example, more insurers are utilizing or may begin utilizing "big data" analytics or artificial intelligence (AI) to make underwriting or other decisions that impact product design and pricing. If such utilization by our industry peers is more effective than how we use our data and information, including through our own use of AI, we will be at a competitive disadvantage. There can be no assurance that we will continue to compete effectively with our industry peers due to technological changes; accordingly, this may have a material adverse effect on our business, results of operations and financial condition.

In addition, agents and brokers, technology companies, or other third parties may create alternate distribution channels for commercial business that may adversely impact product differentiation and pricing. For example, they may create a digitally enabled distribution channel that may adversely impact our competitive position. Our efforts or the efforts of agents and brokers with respect to new products or alternate distribution channels, as well as changes in the way agents and brokers utilize greater levels of data and technology, including artificial intelligence,AI, could adversely impact our business relationship with independent agents and brokers who currently market our products, resulting in a lower volume and/or profitability of business generated from these sources.

Loews beneficially owned approximately 92% of our outstanding shares of common stock as of December 31, 2024,2025, and is in a position to control actions that require the consent of stockholders, including the election of directors, amendment of our Restated Certificate of Incorporation and any merger or sale of substantially all of our assets. In addition, and as of January 1, 20252026 three officers of Loews, including the CEO of Loews (who is also a director of Loews), along with one additional director of Loews (who is also the Chairman of the Board of Loews) and one director emeritus of Loews, serve on our Board of Directors. We have also entered into services agreements and a registration rights agreement with Loews, and we may in the future enter into other agreements with Loews. It is possible that potential conflicts of interest could arise in the future for our directors who are also officers and/or directors of Loews with respect to a number of areas relating to the past and ongoing relationships of Loews and us, including tax and insurance matters, financial commitments and sales of common stock pursuant to registration rights or otherwise.

Our investment portfolio is exposed to various risks, such as interest rate, credit spread, issuer default, equity prices and foreign currency, which are unpredictable. Financial markets are highly sensitive to changes in economic conditions, monetary policies, tariff policies, tax policies, interest rates, domestic and international geopolitical issues and many other factors. Any imposition of significant tariffs by the U.S., as well as any related retaliatory tariffs, may adversely impact the general economy and the financial markets, and adversely affect the valuation of our investments. Changes in financial markets, including fluctuations in interest rates, credit, equity prices and foreign currency prices, and many other factors beyond our control can adversely affect the value of our investments, the realization of investment income and the rate at which we discount certain liabilities. Our investment portfolio is also subject to increased valuation uncertainties when investment markets are illiquid. The valuation of investments is more subjective when markets are illiquid, thereby increasing the risk that the estimated fair value (i.e., the carrying amount) of the portion of our investment portfolio that is carried at fair value in our financial statements is not reflective of the prices at which actual transactions could occur.

Our, or our vendors', facilities and systems could become unavailable, inoperable, or otherwise impaired from a variety of causes, including natural events, such as hurricanes, tornadoes, windstorms, earthquakes, severe winter weather and fires, or other events, such as explosions, terrorist attacks, computer security breaches or cyber-attacks, riots, hazardous material releases, medical epidemics or pandemics, utility outages, interruptions of data processing and storage systems or unavailability of communications facilities or systems. An interruption in our system availability occurred in March 2021 as a result of a cybersecurity attack we sustained. Please refer to the immediately following risk factor for further information regarding this incident. Likewise, we could experience a significant failure, interruption or corruption of one or more of our or our vendors' information technology, telecommunications, or other systems for various reasons, including significant failures or interruptions that might occur as existing systems are replaced or upgraded. The shut-down or unavailability of one or more of our or our vendors’ systems or facilities for these or any other reasons could significantly impair our ability to perform critical business functions inon a timely basis.

In addition, because our and our vendors' information technologytechnology, telecommunications and telecommunicationsother systems interface with and depend on third-party systems, we could experience service denials if demand for such service exceeds capacity or a third-party system fails or experiences an interruption. If sustained or repeated, such events could result in a deterioration of our ability to perform necessary business functions.

A significant breach of our data security infrastructure may result from actions by our employees, vendors, third-party administrators, or unknown third parties or through cyber-attacks. The risk of a breach can exist whether software services are in our or third party administered data centers or are cloud-based software services. The sophistication of cybersecurity threats continues to escalate, and the measures we take to mitigate the risk of cyber incidents and to safeguard our systems and data may be insufficient. Further, the increasing use of artificial intelligence, bothAI within our systems and those of our vendors and third-party administrators to achieve operational efficiencies and within threat actors’ attack strategies, may further expose our systems or those of our vendors and third-party administrators to the risk of cyber-attacks. Breaches have occurred, and may occur again, in our systems and in the systems of our vendors and third-party administrators, both current and former, in that past vendors and third-party administrators may still retain certain confidential and sensitive information in their systems. During the thirdfourth quarter of 2024,2025, we were notified of a data breach resulting fromimpacting a ransomwarevendor attackof a business associate of our current employee health insurance administrator. The breach was traced to compromised credentials leveraged by a threat actor, with the impacted vendor shutting down and rebuilding the affected environment upon discovery of the breach. Following a forensics analysis, it was determined that impacted a formersubstantial vendor.number Thisof incidentour resultedemployees in(and dependents of employees) were impacted. We understand that the subject vendor will be providing required breach notifications to ourall impacted long term care policyholders, with such notifications made by the subject vendor. In the same quarter, we were notified of a data breach resulting from a ransomware attack that impacted a current vendor. This incident resulted in required breach notifications to impacted individuals, which included insurance claimants and their representatives, with such notifications made by the subject vendor.individuals.

Breaches couldthat affect our data frameworksecurity infrastructure or our vendors' facilities or systems, may cause a failure to protect the personal information of our customers, claimants or employees, or sensitive and confidential information regarding our business or policyholders and may result in operational impairments and financial losses, significant harm to our reputation and the loss of business with existing or potential customers. The breach of confidential information also could give rise to legal liability and regulatory action under data protection and privacy laws, as well as evolving regulation in this regard. While we do not believe such breaches that have occurred and resultant actions will have a material adverse effect on our business, these or similar incidents, or any other such breach of our or our vendors’ data security infrastructure could have a material adverse effect on our business, results of operations and financial condition.

Although we maintain cybersecurity insurance coverage insuring against costs resulting from cyber-attacks (including the March 2021 attack),cyber-attacks, we do not expect the amount available under our coverage policy to cover all potential losses from cyber-attacks. In addition, potential disputes with our insurers about the availability of insurance coverage could occur. Further, should we experience future cyber incidents, or should industry trends drive rate increases resulting from growth in volume and significance of cyber incidents broadly, we may incur higher costs for cybersecurity insurance coverage.

We may incur losses which arise from employees or third-party service providers engaging in intentional, negligent or inadvertent misconduct, fraud, errors and omissions, failure to comply with internal guidelines, including with respect to underwriting authority, or failure to comply with regulatory requirements. Our or our third-party service providers' controls may not be able to detect all possible circumstances of such noncompliant activity and the internal structures in place to prevent this activity may not be effective in all cases. AnyWhen lossesnew relatingtechnologies, such as AI, are incorporated into our or our third-party service providers' processes, they may introduce additional complexity and present greater risk to suchthe non-complianteffectiveness activityof these controls. For example, generative AI systems may "hallucinate" producing inaccurate or misleading information, and model performance may degrade over time, leading to flawed recommendations. AI models may perpetuate or amplify biases present in underlying data, which could materiallyresult adverselyin affectdiscriminatory or unfair outcomes in areas such as underwriting and claims. The potential for employees or third-party service providers, through intentional or inadvertent actions, to enable AI models to be trained on our business,data resultsor our insureds' data introduces risks of operationsunauthorized use or disclosure of sensitive information and financialerosion condition.of data privacy. AI may also be used to perpetuate fraud, or to manipulate or evade monitoring and detection controls.

These rules and regulations relate to, among other things, the standards of solvency (including risk-based capital measures), government-supported backstops for certain catastrophic events (including terrorism), investment restrictions, accounting and reporting methodology, establishment of reserves and potential assessments of funds to settle covered claims against impaired, insolvent or failed private or quasi-governmental insurers. In addition, rules and regulations are being introduced, or are being considered, in the areas of artificial intelligence,AI, information security and climate change, which may also affect our business. We also are subject to numerous regulations governing the protection of personal and confidential information of our customers and employees, including medical records, credit card data and financial information. These laws and regulations, including regulations related to cybersecurity protocols (which continue to evolve in breadth, sophistication and maturity in response to an ever-evolving threat landscape), are increasing in complexity and number, change frequently, sometimes conflict, and could expose us to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions. Regulators at the federal, state and international level have adopted or may adopt new regulations related to, among other matters, climate change and greenhouse emissions, and could impose new regulations requiring disclosure of underwriting or investment in certain industry sectors.

Future policy benefits reserves for our long-term care policies are based on certain actuarial assumptions, including morbidity, persistency, anticipated future premium rate increasesactions and expenses. The adequacy of the reserves is contingent upon actual experience and our future expectations related to these key assumptions. If actual or expected future experience differs from these assumptions, the reserves may not be adequate, requiring us to increase reserves. The reserves are discounted using upper-medium grade fixed income instrument yields as of each reporting date. In addition, we may not receive regulatory approval for the level of premium rate increases we request. The reserving process is discussed in further detail in the Reserves - Estimates and Uncertainties section below.

The key assumptions fundamental to the reserving process are often differentvary for variousdifferent reserve groups and accident or policy years. Some of these assumptions are explicit assumptions that areand required ofby aspecific particularmethods, method, butwhile most of the assumptions are implicit and cannot be precisely quantified. An example of an explicit assumption is the pattern employedused in the paid or incurred development method. However, the assumedthis pattern is itself based on several implicit assumptionsassumptions, such as the impact of inflation on medicalclaim costs and the rate at which claim professionals make claim payments and close claims. As a result,Consequently, the effect of changes in assumptions on reserve estimates of a particular change in assumptions typically cannot be specifically quantified, and changes in these assumptionschanges cannot be tracked over time.

Our recorded reserves are management's best estimate. InTo order to provide an indication ofindicate the variability associated with our netrecorded reserves, the following discussion provides a sensitivity analysis that showsshowing the approximate estimated impact of variations in significant factors affecting our reserve estimates for particular types of business. These significant factors are the ones thatthose we believe could most likely materially affect the reserves. This discussion covers the major types of business for which we believe a material deviation toin our reserves is reasonably possible. There can be no assurance that actual experience will be consistent with the current assumptions or with the variation indicated byin the discussion. In addition,Additionally, there can be no assurance that other factors and assumptions will not have a material impact on our reserves.

The areas for which we believe a significant deviation to our netrecorded reserves is reasonably possible are (i) professional liability, management liability (including medical professional liability) and surety products; (ii) workers'other compensationprofessional liability and management liability; (iii) general liability, andliability; (iv) workers' compensation, and (v) commercial autoautomobile liability.

Commercial autoautomobile liability is also considered long-tail; however, both the frequency of claims and severity of loss assumptions for the latest few accident years are significantly influenced by social inflation,and economic inflation, driving habits and attorney involvement. If these trends accelerate beyond expectations, there may be significant deviation in our netrecorded reserves. IfOur recorded reserves for commercial automobile liability were $1.6 billion as of December 31, 2025. The following table reflects the estimatedimpact autoon our recorded reserves of increasing the frequency and severity assumptions in the ultimate commercial automobile liability claim severity were to increase 5% and frequency were to increase 1%losses on the three most recent accident years, we estimate that our net reserves would increase by approximately $90 million. Our net reserves for commercial auto were approximately $1.2 billion as of December 31, 2024.years:

We maintain future policy benefit reserves for our long-term care policies. Future policy benefit reserves for long-term care policies relate to policyholders that are currently receiving benefits, including claims that have been incurred but are not yet reported, as well as policyholders that are not yet receiving benefits. In developing the future policy benefit reserves, our actuaries perform a reserve review on an annual basis. During the annual review, historical policyholder morbidity, persistency, anticipated future premium rate increasesactions and expense experience is reviewed and compared to the current best estimate actuarial assumption set for potential revision. On a quarterly basis, our actuaries perform experience studies that monitor the appropriateness of best estimate actuarial assumptions against emerging experience to assess whether any updates to those assumptions are warranted. The determination of these reserves requires management to make estimates and assumptions about expected policyholder experience over the remaining life of the policies. Since policies may be in force for several decades, these assumptions are subject to significant estimation risk. Future policy benefit reserves are discounted as discussed in Note A to the Consolidated Financial Statements included under Item 8.

The actuarial assumptions related to future policy benefit reserves for long-term care policies that management believes are subject to the most variability are morbidity, persistency and anticipated future premium rate increases.actions. Morbidity is the frequency and severity of injury, illness, sickness and diseases contracted. Persistency is the percentage of policies remaining in force and can be affected by policy lapses, benefit reductions and death. Future premiumPremium rate increasesactions are generally subject to regulatory approval, and therefore the exact timing and size of the approved rate increases are unknown. As a result of this variability, our long-term care reserves may be subject to material increases if actual experience develops adversely to our expectations.

The table below summarizes the estimated pretax impact on our results of operations from various hypothetical revisions to our liability for future policyholder benefits (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.actions. 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.

As part of the annual reserve review,review completed in the third quarter of each year, statutory long-term care reserve adequacy is evaluated via premium deficiency testing, by comparing carried statutory reserves with our best estimate reserves, which incorporates best estimate discount rate and liability assumptions in its determination. Statutory margin is the excess of carried reserves over best estimate reserves. As of September 30, 2024,2025, statutory long-term care margin increased to $1.4$1.5 billion from $1.3$1.4 billion, primarily driven by a more favorable interest rate environment resulting in a higher yielding investment portfolio.billion.

Catastrophes are an inherent risk of the property and casualty insurance business and have contributed to material period-to-period fluctuations in our results of operations and/or equity. We reported catastrophe losses, net of reinsurance, of $358$240 million and $236$358 million for the years ended December 31, 20242025 and 2023.2024. Catastrophe losses for the years ended December 31, 20242025 and 20232024 were driven by severe weather related events, including $64 million for the California wildfires in 2025 and $71 million for Hurricane Helene and $33 million for Hurricane Milton in 2024.

We purchased corporate catastrophe excess-of-loss treaty reinsurance covering our U.S. states and territories and Canadian property exposures underwritten in our North American and European companies. The treaty has a term of June 1, 20242025 to June 1, 20252026 and provides coverage for the accumulation of covered losses from catastrophe occurrences above our per occurrence retention of $250$275 million up to $1.4 billion for all losses. Losses stemming from terrorism events are covered unless they are due to a nuclear, biologicalbiological, chemical or chemicalradiation attack.event. All layers of the treaty provide for one full reinstatement.

We also purchased corporate Workers'workers' Compensationcompensation catastrophe excess-of-loss treaty reinsurance for the period January 1, 20252026 to January 1, 20262027 providing $275 million of coverage for the accumulation of covered losses related to natural catastrophes above our per occurrence retention of $25 million. The treaty also provides $775 million of coverage for the accumulation of covered losses related to terrorism events above our per occurrence retention of $25 million. Of the $775 million in terrorism coverage, $200 million is provided for nuclear, biologicalbiological, chemical and radiation events. All layers of the treaty provide for one full reinstatement.

Our principal reinsurance protection against large-scale terrorist attacks, including nuclear, biological, chemical or radiologicalradiation attacks,events, is the coverage currently provided through TRIPRA which runs through the end of 2027. TRIPRA provides a U.S. government backstop for insurance-related losses resulting from any “act of terrorism,” which is certified by the Secretary of Treasury in consultation with the Secretary of Homeland Security and the U.S. Attorney General for losses that exceed a threshold of $200 million industry-wide for the calendar year 2025.2026. Under the current provisions of the program, in 2025,2026, the federal government will reimburse 80% of our covered losses in excess of our applicable deductible up to a total industry program cap of $100 billion. Our deductible is based on eligible commercial property and casualty earned premiums for the preceding calendar year. Based on 20242025 earned premiums, our estimated deductible under the program is $1.2$1.4 billion for 2025.2026. If an act of terrorism or acts of terrorism result in covered losses exceeding the $100 billion annual industry aggregate limit, Congress would be responsible for determining how additional losses in excess of $100 billion will be paid.

Net income was $1,278 million for 2025 as compared with $959 million for 2024, which includesincluded a $293 million after-tax loss from pension settlement transactions, as compared with $1,205 million for 2023.transactions. Pension settlement transactions are further discussed in Note J to the Consolidated Financial Statements included under Item 8. Core income increased $32$26 million in 20242025 as compared with 2023.2024. Core income for our Property & Casualty Operations increased $44$115 million driven by improved current accident year underwriting results and higher net investment income and improved underlying underwriting results partially offset by higher catastrophe losses and an unfavorable impactnet fromprior changesperiod in foreign currency exchange rates.development. Core loss for our Life & Group segment decreasedincreased $25$21 million, while core loss for our Corporate & Other segment increased $37$68 million.

Catastrophe losses were $358$240 million and $236$358 million for 20242025 and 2023,2024. primarilyCatastrophe losses for 2025 and 2024 were driven by severe weather related events, including $64 million for the California wildfires in 2025 and $71 million for Hurricane Helene and $33 million for Hurricane Milton in 2024. Unfavorable net prior year loss reserve development of $185 million and $48 million was recorded in each of 20242025 and 20232024 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 Consolidated Financial Statements included under Item 8.

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. Specialty provides management and professional liability and other coverages through property and casualty products and services using a network of retail and wholesale brokers, independent agenciesagents and managing general underwriters. Commercial works with a network of retail and wholesale brokers and independent agents to market a broad range of property and casualty insurance products to all types of insureds targeting small business, construction, middle marketsmarket and other commercial customers. The International segment underwrites property and casualty coverages on a global basis through a branch operation in Canada, a European business consisting of insurance companies based in the U.K. and Luxembourg and Hardy, our Lloyd's syndicate.

Our operations outside of Property & Casualty Operations are managed and reported in two segments: Life & Group and Corporate & Other. Life & Group primarily includes the results of our long-term care business that is in run-off. Corporate & Other primarily includes certain corporate expenses, including interest on corporate debt, and the results of certain property and casualty businesses in run-off, including CNA Re, A&EP, a legacy portfolio of excess workers' compensation (EWC) policies and certain legacy mass tort reserves. Intersegment eliminations are also included in this segment.

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 PN to the Consolidated Financial Statements included under Item 8. For reconciliations of non-GAAP measures to the most comparable GAAP measures and other information, please see below and in Note PN to the Consolidated Financial Statements included under Item 8.

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.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.

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.

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

Specialty provides management and professional liability and other coverages through property and casualty coverages, products and services using a network of retail and wholesale brokers, independent agencies and managing general underwriters. Specialty includes the following business groups:

•Directors and officers (D&O,O), errors and omissions (E&O,O), employment practices, fiduciary, fidelity and cyber coverages. Specific areas of focus include small and mid-size firms, public as well as privately held firms and not-for-profit organizations.

Warranty and Alternative Risks provides extended service contracts and related insurance products that provide protection from the financial burden associated withcovering mechanical breakdown and othersimilar related losses, primarilylosses for vehicles, portable electronic communication deviceselectronics and other consumer goods. ServiceThese service contracts are generallyprimarily distributed by commission-basedthrough independent representatives and sold by autoautomobile dealerships and retailers in North AmericaAmerica. toRevenue customersand inexpenses conjunctionfor withthese theservice purchasecontracts ofare areported newas orNon-insurance usedwarranty vehiclerevenue orand newexpense. consumer goods. Additionally, ourOur insurance companiessubsidiaries may issue contractual liabilityliability, insuranceinland policiesmarine, or guaranteed asset protection reimbursement insurance policies tosupporting coverthese thecontracts, liabilitiesa significant portion of which are reinsured through third-party captive programs. The net retained results of these serviceinsurance contractsproducts issuedare byreflected affiliatedwithin entitiesthe orunderwriting thirdgain parties.(loss) and combined ratio of our insurance operations.

Gross written premiums, excluding third-party captives, for Specialty increased $95 million in 2024 as compared with 2023 driven by retention and favorable renewal premium change. Net written premiums for Specialty increased $116$70 million in 20242025 as compared with 2023.2024 driven by rate partially offset by lower retention. The increase in net earned premiums was consistent with the trend in net written premiums.

Core income decreased $14$57 million in 20242025 as compared with 20232024 primarily due to unfavorable net prior year loss reserve development in 2025 compared with favorable net prior year loss reserve development in 2024 and 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 92.6%95.3% increased 2.22.7 points in 20242025 as compared with 2023 primarily2024 due to a 1.32.0 point increase in the loss ratio and a 0.80.7 point increase in the expense ratio. The increase in the loss ratio was primarily due to unfavorable net prior year loss reserve development recorded in 2025 and an increase in the underlying loss ratio, primarily driven by continued pricing pressure in management liability lines over the last several quarters.lines. The increase in the expense ratio was driven by lowerhigher employee related costs and a non-recurring technology charge partially offset by higher net earned premium growth.premiums. There were no catastrophe losses for 20242025 andor 2023.2024.

FavorableUnfavorable net prior year loss reserve development of $9 million and $14$37 million was recorded in 20242025 andcompared 2023.with $9 million of favorable net prior year loss reserve development recorded in 2024. Further information on net prior year loss reserve development is in Note E to the Consolidated Financial Statements included under Item 8.

Commercial works with a network of retail and wholesale brokers and independent agents to market a broad range of property and casualty insurance products to all types of insureds targeting small business, construction, middle marketsmarket and other commercial customers. Property products include standard and excess property, marine and boiler and machinery coverages. Casualty products include standard casualty insurance products such as workers' compensation, general and product liability, commercial auto, umbrella, and excess and surplus coverages. Most insurance programs are provided on a guaranteed cost basis; however, we also offer specialized loss-sensitive insurance programs and total risk management services relating to claim and information services to the large commercial insurance marketplace.

GrossNet written premiums for Commercial increased $844$352 million in 20242025 as compared with 20232024 driven by favorable renewal premium change, rateinclusive andof higherrate, newpartially business.offset Netby writtenlower premiums for Commercial increased $589 million in 2024 as compared with 2023.retention. The increase in net earned premiums was consistent with the trend in net written premiums.

Core income increased $50$118 million in 20242025 as compared with 2023,2024, driven by lower catastrophe losses, improved underlying underwriting results and higher net investment income partially offset by higherunfavorable catastrophenet losses.prior year loss reserve development.

FavorableUnfavorable net prior year loss reserve development of $16 million and $22$39 million was recorded in 20242025 andcompared 2023.with $16 million of favorable net prior year loss reserve development recorded in 2024. Further information on net prior year loss reserve development is in Note E to the Consolidated Financial Statements included under Item 8.

Gross written premiums for International decreased $2 million in 2024 as compared with 2023. Excluding the effect of foreign currency exchange rates, gross written premiums decreased $14 million driven by lower new business and rate. Net written premiums for International increased $25$85 million in 20242025 as compared with 2023.2024. Excluding the effect of foreign currency exchange rates, net written premiums increased $21$76 million as compared with 20232024 driven by favorablehigher adjustmentsnew onbusiness priorpartially yearoffset reinsuranceby treaties,lower in the current year.rate. The increase in net earned premiums was consistent with the trend in net written premiums.

Core income increased $8$54 million in 20242025 as compared with 20232024 driven by higher net investment incomeincome, anda favorable impact from changes in foreign currency exchange rates, higher favorable net prior year loss reserve development in the current year compared with unfavorable net prior year loss reserve development in the prior year, partially offset byand lower underlying underwriting results and higher catastrophe losses.

The combined ratio of 94.0%91.2% increasedimproved 1.42.8 points in 20242025 as compared with 20232024 due to a 1.9 point increase in the expense ratio partially offset by a 0.52.5 point improvement in the loss ratio.ratio Theand increasea 0.3 point improvement 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, partially offset by higher net earned premiums.ratio. The improvement in the loss ratio was primarily driven by higher favorable net prior year loss reserve development partiallyand offset by higherlower catastrophe losses. Catastrophe losses were $23 million, or 1.8 points of the loss ratio, for 2025, as compared with $40 million, or 3.2 points of the loss ratio, for 2024,2024. asThe comparedimprovement with $29 million, or 2.5 points ofin the lossexpense ratio,ratio forwas 2023.primarily driven by higher net earned premiums.

Favorable net prior year loss reserve development of $25 million and $6 million was recorded in 20242025 comparedand with unfavorable net prior year loss reserve development of $13 million recorded in 2023.2024. Further information on net prior year loss reserve development is in Note E to the Consolidated Financial Statements included under Item 8.

Core loss decreasedincreased $25$21 million in 20242025 as compared with 20232024 primarily due to higherlower net investment income.income from limited partnerships. Both years are inclusive of assumption updates as a result of the annual reserve review completed in the third quarter of each year.

The annual structured settlement reserve review resulted in a pretax increase in claim reserves of $2 million for 2025 and a reduction in claim reserves of $9 million and $6 million for 2024 and 2023.2024.

Corporate & Other primarily includes certain corporate expenses, including interest on corporate debt, and the results of certain property and casualty business in run-off, including CNA Re, A&EP, a legacy portfolio of EWC policies and certain legacy mass tort reserves.

Core loss increased $37$68 million for 20242025 as compared with 2023.2024. The current year includes higher corporate expenses as a result of continued investments in technology and an unfavorable non-economic impact related to the A&EP LPT. The current year also2025 includes a $62$106 million after-tax charge related to unfavorable net prior year loss reserve development forlargely associated with legacy mass tort claimsabuse reserves compared with a $56$62 million after-tax charge forin legacy2024. massThe tortcurrent claimsyear inalso includes an unfavorable non-economic impact related to the A&EP LPT. The prior year.year included $16 million of after-tax charges related to office consolidation.

The application of retroactive reinsurance accounting to additional cessions to the A&EP LPT resulted in an after-tax charge of $6$36 million in 2024 compared to an after-tax benefit ofand $6 million in 2023,2025 and 2024, both of which have no economic impact.

The A&EP LPT and net prior year loss reserve development isand A&EP LPT are further discussed in Note E to the Consolidated Financial Statements included under Item 8.

Net investment income increased $233$60 million in 20242025 as compared with 20232024 driven by favorable limited partnership and common stock returns, as well as higher income from fixed income securities as a result of a larger invested asset base and favorable reinvestment rates.rates partially offset by lower common stock returns.

Pretax net investment losses decreasedfor $182025 millionwere forconsistent with 2024 as comparedlower withimpairment 2023losses drivenwere offset by thea lower favorable change in the fair value of non-redeemable preferred stock and lowerhigher net losses on disposals of fixed maturity securities, partially offset by higher impairment losses.securities.

In evaluating the results of our Specialty, Commercial and International segments, we utilize the loss ratio, the underlying loss ratio, the expense ratio, the dividend ratio, the combined ratio and the underlying combined ratio. These ratios are calculated using GAAP financial results. The loss ratio is the percentage of net incurred claim and claim adjustment expenses to net earned premiums. The underlying loss ratio excludes the impact of catastrophe-related reinstatement premiums, catastrophe losses and development-related items from the loss ratio. Development-related items representsrepresent net prior year loss reserve and premium development, and includesinclude the effects of interest accretion and change in allowance for uncollectible reinsurance. The expense ratio is the percentage of insurance underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums. The dividend ratio is the ratio of policyholders' dividends incurred to net earned premiums. The combined ratio is the sum of the loss ratio, the expense ratio and the dividend ratio. The underlying combined ratio is the sum of the underlying loss ratio, the expense ratio and the dividend ratio. The underlying loss ratio and the underlying combined ratio are deemed to be non-GAAP financial measures, and management believes some investors may find these ratios useful to evaluate our underwriting performance since they remove the impact of catastrophes which are unpredictable as to timing and amount, and development-related items as they are not indicative of our current year underwriting performance.

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

Core income decreased $56$11 million for the three months ended MarchJune 31,30, 2026 as compared with the same period in 2025. Core income for our Property & Casualty Operations decreased $63$22 million primarily driven by lower underlying underwriting results and unfavorable net prior year loss reserve development partially offset by higher net investment income. Core results for our Life & Group segment decreased $15$11 million, while core loss for our Corporate & Other segment improved $22 million.

Catastrophe losses were $88$60 million and catastrophe-related reinsurance reinstatement premiums were $9$62 million for the three months ended MarchJune 31,30, 2026 driven by severe weather related events. Catastrophe losses were $97 million for the three months ended March 31,and 2025 driven by severe weather related events, including $53 million for the California wildfires.events. There were no catastrophe-related reinsurance reinstatement premiums for the three months ended MarchJune 31,30, 2026 or 2025. Unfavorable net prior year loss reserve development of $100$91 million and $83$108 million was recorded for the three months ended MarchJune 31,30, 2026 and 2025 related to our Specialty, Commercial and Corporate & Other segments. Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.

Net written premiums for Specialty decreasedincreased $8$45 million for the three months ended MarchJune 31,30, 2026 as compared with the same period in 2025 driven by lowerhigher retentionnew partially offset by ratebusiness and new business.rate. The increase in net earned premiums was consistent with the trend in net written premiums in recent quarters.premiums.

Core income decreased $51$20 million for the three months ended MarchJune 31,30, 2026 as compared with the same period in 2025 primarily due to higher unfavorable net prior year loss reserve development and lower underlying underwriting results.

The combined ratio of 102.7%96.5% increased 7.62.9 points for the three months ended MarchJune 31,30, 2026 as compared with the same period in 2025 primarily due to a 7.32.7 point increase in the loss ratio. The increase in the loss ratio wasreflected due toa higher unfavorable net prior year loss reserve development driven by our professional errors & omissions (E&O) business in recent accident years and an increase in the underlying loss ratio drivenacross byvarious loss cost trends exceeding rate for certain lines in recent quarters.lines. The expense ratio was generally consistent with the same period in 2025. There were no catastrophe losses for the three months ended MarchJune 31,30, 2026 or 2025.

UnfavorableFavorable net prior year loss reserve development of $45 million and $10$1 million was recorded for the three months ended MarchJune 31,30, 2026 andcompared with no net prior year loss reserve development recorded for the three months ended June 30, 2025. Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included underin Part I, Item 1.

Net written premiums for Commercial decreasedincreased $18$80 million for the three months ended MarchJune 31,30, 2026 as compared with the same period in 2025 driven by lowerfavorable retention.renewal premium change and higher new business. The increase in net earned premiums was consistent with the trend in net written premiums in recent quarters.premiums.

Core income decreasedincreased $12$14 million for the three months ended MarchJune 31,30, 2026 as compared with the same period in 2025,2025 driven by higher net investment income partially offset by lower underlying underwriting results partially offset by higher net investment income.results.

The combined ratio of 103.5%96.5% increased 2.41.7 points for the three months ended MarchJune 31,30, 2026 as compared with the same period in 2025 primarily due to a 3.22.4 point increase in the loss ratio partially offset by a 0.90.6 point improvement in the expense ratio. The increase in the loss ratio was primarily driven by a higher underlying loss ratio in excess casualty and workers' compensation. The improvement in the expense ratio was primarily driven by a lower acquisition ratio. Catastrophe losses were $84$53 millionmillion, or 3.7 points of the loss ratio, for the three months ended MarchJune 31,30, 20262026, as compared with $86$57 millionmillion, or 4.2 points of the loss ratio, for the three months ended MarchJune 31,30, 2025. The current quarter also includes $9 million of catastrophe-related reinsurance reinstatement premiums. The effect of catastrophe impacts on the loss ratio was 6.4 points for the three months ended March 31, 2026 as compared with 6.3 points for the three months ended March 31, 2025.

UnfavorableFavorable net prior year loss reserve development of $55$5 million and $51$4 million was recorded for the three months ended MarchJune 31,30, 2026 and 2025. 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.

Net written premiums for International increaseddecreased $42$6 million for the three months ended MarchJune 31,30, 2026 as compared with the same period in 2025. Excluding the effect of foreign currency exchange rates, net written premiums increaseddecreased $19$11 million as compared with the same period in 2025 driven by lower rate and timing of reinsurance costs, partially offset by lowerhigher rate.retention. The increase in net earned premiums was consistent with the trend in net written premiums.premiums in recent quarters.

There was no net prior year loss reserve development recorded for the three months ended MarchJune 31,30, 2026 or 2025.

Core results decreased $15$11 million for the three months ended MarchJune 31,30, 2026 as compared with the same period in 2025.2025, Resultsprimarily for the current period reflect unfavorable morbidity partially offsetdriven by favorablelower persistency.net Resultsinvestment for the prior year period reflected favorable persistency.income.

Core loss improved $22 million for the three months ended MarchJune 31,30, 2026 as compared with the same period in 2025. The improvement was primarily due to no net prior year loss reserve development in the current yearquarter as compared withincludes a $17$77 million after-tax charge in the prior year period related to unfavorable net prior year loss reserve development largely associated with legacy mass tort abuse reserves.reserves Insuranceas claimscompared andwith policyholders'an benefits$88 million after-tax charge in the prior year period. The current quarter also includes an increase of $13 million after-tax associated with the amortization of the deferred gain related to the asbestos and environmental pollution (A&EP) Loss Portfolio Transfer (LPT). Furtheras informationcompared onto the net prior year loss reserve development and the A&EP LPT is in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.period.

Net investment income increased $6$39 million and $45 million for the three and six months ended MarchJune 31,30, 2026 as compared with the same periodperiods in 2025 driven by higher limited partnership and common stock returns, as well as higher income from fixed income securities as a result of a larger invested asset base and favorable reinvestment rates partially offset by lower common stock returns.rates.

Pretax net investment losses increaseddecreased $9$41 million and $32 million for the three and six months ended MarchJune 31,30, 2026 as compared with the same periodperiods in 2025 driven by higherlower net losses on disposals of fixed maturity securities and lower impairment losses and the unfavorable change in fair value of non-redeemable preferred stock.losses.

As of MarchJune 31,30, 2026 and December 31, 2025, 1% of our fixed maturity portfolio was rated internally. Additionally, as of MarchJune 31,30, 2026 and December 31, 2025, we assigned a AAA rating to $688$714 million and $661 million of municipal bonds that were either pre-refunded or backed by mortgage loans guaranteed by a U.S. government agency or sponsored enterprise.

For the threesix months ended MarchJune 31,30, 2026, net cash provided by operating activities was $393$1,042 million as compared with $638$1,200 million for the same period in 2025. The decrease in cash provided by operating activities was impacteddriven by payments related to specific reinsurance treaties, which occurred during the first quarter of 2026, with such similar amounts paid in the second quarter of 2025. In addition, the decrease quarter over quarter was attributable to an increase in net claim payments partially offset by increasedan investmentincrease earnings.in premiums collected.

For the threesix months ended MarchJune 31,30, 2026, net cash providedused by investing activities was $444$255 million as compared with $88$471 million for the same period in 2025. Net cash providedused or usedprovided by investing activities is primarily driven by cash available from operations and by other factors, such as financing activities.

For the threesix months ended MarchJune 31,30, 2026, net cash used by financing activities was $736$867 million as compared with $722$847 million for the same period in 2025. Financing activities for the periods presented include:

•InDuring the firstsix quartermonths ofended June 30, 2026, we paid dividends of $682$812 million and repurchased 755,000 shares of our common stock at an aggregate cost of $36 million.

•InDuring the firstsix quartermonths ofended June 30, 2025, we paid dividends of $673$798 million and repurchased 700,000 shares of our common stock at an aggregate cost of $34 million.

Cash dividends of $2.48$2.96 per share on our common stock, including a special cash dividend of $2.00 per share, were declared and paid during the threesix months ended MarchJune 31,30, 2026. On MayJuly 1,31, 2026, our Board of Directors declared a quarterly cash dividend of $0.48 per share, payable JuneSeptember 4,3, 2026 to stockholders of record on MayAugust 18,17, 2026. The declaration and payment of future dividends to holders of our common stock will be at the discretion of our Board of Directors and will depend on many factors, including our earnings, financial condition, business needs and regulatory constraints.

Dividends from Continental Casualty Company (CCC) are subject to the insurance holding company laws of the State of Illinois, the domiciliary state of CCC. Under these laws, ordinary dividends, or dividends that do not require prior approval by the Illinois Department of Insurance, are determined based on the greater of the prior year's statutory net income or 10% of statutory surplus as of the end of the prior year, as well as timing and amount of dividends paid in the preceding twelve months. Additionally, ordinary dividends may only be paid from earned surplus, which is calculated by removing unrealized gains from unassigned surplus. As of MarchJune 31,30, 2026, CCC was in a positive earned surplus position. CCC paid dividends of $585$725 million and $440$610 million to CNAF during the threesix months ended MarchJune 31,30, 2026 and 2025. The actual level of dividends paid in any year is determined after an assessment of available dividend capacity, holding company liquidity and cash needs as well as the impact the dividends will have on the statutory surplus of the applicable insurance company.