Business Segments

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Business Segments

Note J. Business Segments

The Company's core property and casualty commercial insurance operations are aggregated and reported in three business segments: Specialty, Commercial and International. The Company's non-core operations are managed in two segments: Life & Group Non-Core and Corporate & Other Non-Core.

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, 2014. 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 and Goodwill are readily identifiable for all 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 and Realized investment gains or losses are allocated primarily based on each segment's net carried insurance reserves, as adjusted. All significant intersegment income and expense has 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. Net operating income (loss), which is derived from certain income statement amounts, is used by management to monitor performance of the Company's insurance 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. Based on such analyses, the Company may recognize an OTTI loss on an investment security in accordance with its policy, or sell a security, which may produce realized gains and losses.

Net operating income (loss) is calculated by excluding from net income (loss) the after-tax effects of 1) net realized investment gains or losses, 2) income or loss from discontinued operations and 3) any cumulative effects of changes in accounting guidance. The calculation of net operating income excludes net realized investment gains (losses) because net realized investment gains (losses) are largely discretionary, except for some losses related to OTTI, and are generally driven by economic factors that are not necessarily consistent with key drivers of underwriting performance, and are therefore not considered an indication of trends in insurance operations.

The Company's results of continuing operations and selected balance sheet items by segment are presented in the following tables.

Three months ended March 31, 2015	Specialty			Commercial			International			Life & Group Non-Core			Corporate & Other Non-Core
(In millions)																Eliminations			Total
Operating revenues
Net earned premiums	$	680		$	678		$	191		$	138		$	—		$	—		$	1,687
Net investment income	155			204			14			179			6			—			558
Other revenues	78			9			—			9			2			(1		)	97
Total operating revenues	913			891			205			326			8			(1		)	2,342
Claims, Benefits and Expenses
Net incurred claims and benefits	429			454			116			340			(4		)	—			1,335
Policyholders’ dividends	1			3			—			—			—			—			4
Amortization of deferred acquisition costs	144			117			35			7			—			—			303
Other insurance related expenses	69			127			37			35			—			—			268
Other expenses	67			8			5			4			46			(1		)	129
Total claims, benefits and expenses	710			709			193			386			42			(1		)	2,039
Operating income (loss) before income tax	203			182			12			(60		)	(34		)	—			303
Income tax (expense) benefit on operating income (loss)	(68		)	(62		)	(3		)	43			12			—			(78		)
Net operating income (loss)	135			120			9			(17		)	(22		)	—			225
Net realized investment gains (losses)	4			4			1			1			—			—			10
Income tax (expense) benefit on net realized investment gains (losses)	(1		)	(3		)	—			2			—			—			(2		)
Net realized investment gains (losses), after tax	3			1			1			3			—			—			8
Net income (loss) from continuing operations	$	138		$	121		$	10		$	(14	)	$	(22	)	$	—		$	233

March 31, 2015
(In millions)
Reinsurance receivables	$	671	$	675	$	207	$	543	$	2,672	$	—		$	4,768
Insurance receivables	808		1,004		282		13		2		—			2,109
Deferred acquisition costs	307		225		84		—		—		—			616
Goodwill	117		—		34		—		—		—			151
Insurance reserves
Claim and claim adjustment expenses	6,352		9,441		1,377		3,237		2,841		—			23,248
Unearned premiums	1,794		1,329		449		139		—		(1		)	3,710
Future policy benefits	—		—		—		9,747		—		—			9,747

Three months ended March 31, 2014	Specialty			Commercial			International			Life & Group Non-Core			Corporate & Other Non-Core
(In millions)																Eliminations			Total
Operating revenues
Net earned premiums	$	692		$	735		$	241		$	139		$	—		$	(1	)	$	1,806
Net investment income	144			191			15			171			5			—			526
Other revenues	68			10			—			5			2			—			85
Total operating revenues	904			936			256			315			7			(1		)	2,417
Claims, Benefits and Expenses
Net incurred claims and benefits	442			568			130			306			(3		)	—			1,443
Policyholders’ dividends	1			2			—			—			—			—			3
Amortization of deferred acquisition costs	143			123			55			8			—			—			329
Other insurance related expenses	65			126			40			32			—			(1		)	262
Other expenses	61			8			7			1			51			—			128
Total claims, benefits and expenses	712			827			232			347			48			(1		)	2,165
Operating income (loss) before income tax	192			109			24			(32		)	(41		)	—			252
Income tax (expense) benefit on operating income (loss)	(63		)	(35		)	(8		)	30			14			—			(62		)
Net operating income (loss)	129			74			16			(2		)	(27		)	—			190
Net realized investment gains (losses)	11			10			3			16			6			—			46
Income tax (expense) benefit on net realized investment gains (losses)	(3		)	(2		)	(3		)	(6		)	(2		)	—			(16		)
Net realized investment gains (losses), after tax	8			8			—			10			4			—			30
Net income (loss) from continuing operations	$	137		$	82		$	16		$	8		$	(23	)	$	—		$	220

December 31, 2014
(In millions)
Reinsurance receivables	$	567	$	690	$	207	$	525	$	2,753	$	—	$	4,742
Insurance receivables	778		954		250		13		2		—		1,997
Deferred acquisition costs	304		213		83		—		—		—		600
Goodwill	117		—		35		—		—		—		152
Insurance reserves
Claim and claim adjustment expenses	6,229		9,514		1,441		3,183		2,904		—		23,271
Unearned premiums	1,763		1,273		431		125		—		—		3,592
Future policy benefits	—		—		—		9,490		—		—		9,490
Policyholders’ funds	9		18		—		—		—		—		27

The following table presents revenue by line of business for each reportable segment. Revenues are comprised of Operating revenues and Net realized investment gains and losses.

Three months ended March 31
(In millions)	2015			2014
Specialty
Management & Professional Liability	$	697		$	704
Surety	120			122
Warranty & Alternative Risks	100			89
Specialty revenues	917			915
Commercial
Middle Market	409			403
Small Business	165			184
Other Commercial Insurance	321			359
Commercial revenues	895			946
International
Canada	55			71
CNA Europe	77			88
Hardy	74			100
International revenues	206			259
Life & Group Non-Core revenues	327			331
Corporate & Other Non-Core revenues	8			13
Eliminations	(1		)	(1		)
Total revenues	$	2,352		$	2,463