CNA Financial — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net income was $196 million ($0.72 per diluted share) compared to $403 million ($1.48 per share) in the prior year quarter.
• Core income was $203 million ($0.75 per diluted share) compared to $409 million ($1.50 per share) in the prior year quarter.
• Net investment income was $635 million, a $3 million decrease from the prior year quarter, driven by a $23 million decrease in limited partnerships and common stock to $48 million, partially offset by a $20 million increase in fixed income securities and other investments to $587 million.
• Net investment losses were $7 million compared to $6 million in the prior year quarter.
• Book value per share was $37.80; book value per share excluding AOCI was $46.11, a 5% increase from year-end 2025 adjusting for $3.44 of dividends per share paid.
• Stockholders' equity was $10.2 billion, a 12% decrease from year-end 2025, primarily due to an increase in net unrealized investment losses from higher interest rates and dividends paid.
• Statutory capital and surplus for the Combined Continental Casualty Companies was $11.2 billion as of September 30, 2026.

Guidance and Future Outlook:

• Management remains committed to deliberate portfolio management and profitable growth.
• The company plans to selectively deploy capacity in the fourth quarter and into 2027 where market conditions provide attractive risk-adjusted returns.
• Management intends to maintain underwriting discipline and step back from opportunities where market conditions do not support appropriate pricing, terms, and conditions.

Business Segments and Product Lines:

• Property & Casualty (P&C):
  • P&C segments generated net written premium growth of 3% in the quarter, with renewal premium change of +3% and written rate of +2%.
  • P&C core income was $397 million, a decrease of $59 million from the prior year quarter, reflecting lower underlying underwriting results and higher catastrophe losses.
  • P&C combined ratio was 97.0% (including 2.8 points of catastrophe loss impact) compared to 92.8% in the prior year quarter; no net prior period development impact occurred.
  • P&C underlying combined ratio was 94.2% (expense ratio 29.7%) compared to 91.3% in the prior year quarter; underlying loss ratio was 64.1%, up 2.2 points.
  • Catastrophe losses were $78 million pretax versus $41 million in the prior year quarter.
• Specialty:
  • Net written premiums were $900 million (up 4% year-over-year); net earned premiums were $907 million (up 3%).
  • Underwriting gain was $30 million compared to $60 million in the prior year quarter.
  • Combined ratio was 96.8% compared to 93.3% in the prior year quarter; underlying combined ratio was 96.7% compared to 93.3%.
  • Underlying loss ratio was 62.8% (up 2.2 points); expense ratio was 33.6% (up 1.1 points).
• Commercial:
  • Net written premiums were $1,274 million (up 2% year-over-year); net earned premiums were $1,475 million (up 2%).
  • Underwriting gain was $3 million compared to $106 million in the prior year quarter.
  • Combined ratio was 99.7% compared to 92.7% in the prior year quarter.
  • Underlying combined ratio was 92.5% compared to 90.0% in the prior year quarter; underlying loss ratio was 65.8% (up 2.4 points).
  • Catastrophe losses were $70 million (4.8 points of loss ratio) compared to $39 million (2.7 points); unfavorable net prior period development increased the loss ratio by 2.4 points.
• International:
  • Net written premiums were $333 million (up 4% year-over-year); excluding currency fluctuations, growth was 6%.
  • Underwriting gain was $49 million compared to $28 million in the prior year quarter.
  • Combined ratio was 86.1% compared to 91.8% in the prior year quarter.
  • Underlying combined ratio was 94.1% compared to 91.2% in the prior year quarter; underlying loss ratio was 59.8% (up 1.3 points).
  • Favorable net prior period development improved the loss ratio by 10.1 points; catastrophe losses were $8 million (2.1 points).
• Life & Group:
  • Produced a core loss of $171 million versus a core loss of $22 million in the prior year quarter.
  • An unfavorable after-tax impact of $137 million from annual long-term care reserve assumption updates (driven by cost of care inflation and morbidity) was almost entirely offset by a favorable economic impact from recent investment portfolio actions.
  • Net earned premiums were $101 million; claims, benefits, and expenses were $547 million.
• Corporate & Other:
  • Reported a core loss of $23 million compared to $25 million in the prior year quarter.

Market and Competitive Landscape:

• Management noted stable retention at 83% and modest growth in new business.
• Substantial rate increases in casualty lines impacted by social inflation and higher rates in the Specialty segment offset rate decreases in property, workers' compensation, and the International segment.
• The company chose to walk away from certain portfolio areas where current market conditions do not support appropriate pricing, terms, and conditions.

Risks and Challenges:

• Catastrophe losses increased significantly to $78 million in the quarter compared to $41 million in the prior year quarter.
• Unfavorable long-term care reserve assumption updates impacted the Life & Group segment by $137 million after-tax.
• Higher interest rates contributed to an increase in net unrealized investment losses, reducing stockholders' equity.
• Unfavorable net prior period development increased the Commercial segment loss ratio by 2.4 points.

Management Commentary and Tone:

• Douglas M. Worman, Chairman & CEO, stated the company delivered "strong third quarter results with core income of $203 million reflecting disciplined growth, high-quality underwriting results and solid investment income."
• Management confirmed that the LTC assumption updates, coupled with recent fixed income duration extension trades, confirm their belief that the risk from the runoff block is contained.
• Management emphasized maintaining a conservative philosophy regarding loss picks and assumptions, noting the underlying loss ratio and expense ratio were consistent with the first half of 2026.

Other Key Points:

• The Board of Directors declared a regular quarterly cash dividend of $0.48 per share, payable December 3, 2026, to stockholders of record on November 16, 2026.
• The company utilizes "Core Income" as a non-GAAP measure to monitor operations, excluding net investment gains/losses and pension settlement transactions.
• The P&C underlying combined ratio increased 2.9 points year-over-year, primarily due to a 2.2 point increase in the underlying loss ratio.
• The International segment's combined ratio improved 5.7 points year-over-year, driven by favorable net prior period development.