Business Segments (Tables)

9 Months Ended

Sep. 30, 2018

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



Three months ended September 30, 2018	Specialty			Commercial			International			Life & Group			Corporate & Other
(In millions)																Eliminations			Total
Operating revenues
Net earned premiums	$	684		$	782		$	255		$	133		$	—		$	(1	)	$	1,853
Net investment income	124			144			14			200			5			—			487
Non-insurance warranty revenue	258			—			—			—			—			—			258
Other revenues	—			8			1			(1		)	2			—			10
Total operating revenues	1,066			934			270			332			7			(1		)	2,608
Claims, benefits and expenses
Net incurred claims and benefits	373			496			172			277			(12		)	—			1,306
Policyholders’ dividends	1			5			—			—			—			—			6
Amortization of deferred acquisition costs	153			127			57			—			—			—			337
Non-insurance warranty expense	235			—			—			—			—			—			235
Other insurance related expenses	68			133			36			31			(1		)	(1		)	266
Other expenses	11			10			3			2			44			—			70
Total claims, benefits and expenses	841			771			268			310			31			(1		)	2,220
Core income (loss) before income tax	225			163			2			22			(24		)	—			388
Income tax (expense) benefit on core income (loss)	(48		)	(36		)	(1		)	10			4			—			(71		)
Core income (loss)	$	177		$	127		$	1		$	32		$	(20	)	$	—		317
Net realized investment gains (losses)																			14
Income tax (expense) benefit on net realized investment gains (losses)																			(1		)
Net realized investment gains (losses), after tax																			13
Net deferred tax asset remeasurement⁽¹⁾																			6
Net income																			$	336


(1)	The net deferred tax asset remeasurement as of December 31, 2017 was updated based on the filed 2017 tax return resulting in a $6 million benefit for the three months ended September 30, 2018.



Three months ended September 30, 2017	Specialty			Commercial			International			Life & Group			Corporate & Other
(In millions)																Eliminations		Total
Operating revenues
Net earned premiums	$	692		$	752		$	226		$	136		$	—		$	—	$	1,806
Net investment income	129			166			13			195			6			—		509
Non-insurance warranty revenue	99			—			—			—			—			—		99
Other revenues	1			6			1			—			—			—		8
Total operating revenues	921			924			240			331			6			—		2,422
Claims, benefits and expenses
Net incurred claims and benefits	358			610			200			322			(15		)	—		1,475
Policyholders’ dividends	1			4			—			—			—			—		5
Amortization of deferred acquisition costs	151			122			36			—			—			—		309
Non-insurance warranty expense	74			—			—			—			—			—		74
Other insurance related expenses	65			136			48			32			—			—		281
Other expenses	11			6			(4		)	2			52			—		67
Total claims, benefits and expenses	660			878			280			356			37			—		2,211
Core income (loss) before income tax	261			46			(40		)	(25		)	(31		)	—		211
Income tax (expense) benefit on core income (loss)	(88		)	(14		)	2			35			13			—		(52		)
Core income (loss)	$	173		$	32		$	(38	)	$	10		$	(18	)	$	—	159
Net realized investment gains (losses)																		(24		)
Income tax (expense) benefit on net realized investment gains (losses)																		9
Net realized investment gains (losses), after tax																		(15		)
Net income																		$	144



Nine months ended September 30, 2018	Specialty			Commercial			International			Life & Group			Corporate & Other
(In millions)																Eliminations			Total
Operating revenues
Net earned premiums	$	2,039		$	2,278		$	739		$	398		$	—		$	(1	)	$	5,453
Net investment income	376			450			43			598			16			—			1,483
Non-insurance warranty revenue	744			—			—			—			—			—			744
Other revenues	1			24			—			—			2			(1		)	26
Total operating revenues	3,160			2,752			782			996			18			(2		)	7,706
Claims, benefits and expenses
Net incurred claims and benefits	1,124			1,434			480			907			15			—			3,960
Policyholders’ dividends	3			15			—			—			—			—			18
Amortization of deferred acquisition costs	447			375			170			—			—			—			992
Non-insurance warranty expense	676			—			—			—			—			—			676
Other insurance related expenses	202			386			102			91			(1		)	(1		)	779
Other expenses	34			31			6			5			153			(1		)	228
Total claims, benefits and expenses	2,486			2,241			758			1,003			167			(2		)	6,653
Core income (loss) before income tax	674			511			24			(7		)	(149		)	—			1,053
Income tax (expense) benefit on core income (loss)	(143		)	(108		)	(7		)	43			30			—			(185		)
Core income (loss)	$	531		$	403		$	17		$	36		$	(119	)	$	—		868
Net realized investment gains (losses)																			25
Income tax (expense) benefit on net realized investment gains (losses)																			(2		)
Net realized investment gains (losses), after tax																			23
Net deferred tax asset remeasurement ⁽¹⁾																			6
Net income																			$	897


(1)	The net deferred tax asset remeasurement as of December 31, 2017 was updated based on the filed 2017 tax return resulting in a $6 million benefit for the nine months ended September 30, 2018.



September 30, 2018
(In millions)
Reinsurance receivables	$	685	$	729	$	239	$	427	$	2,173	$	—	$	4,253
Insurance receivables	942		1,189		259		10		—		—		2,400
Deferred acquisition costs	315		240		99		—		—		—		654
Goodwill	117		—		30		—		—		—		147
Insurance reserves
Claim and claim adjustment expenses	5,509		8,584		1,689		3,551		2,271		—		21,604
Unearned premiums	2,129		1,520		510		130		—		—		4,289
Future policy benefits	—		—		—		10,605		—		—		10,605



Nine months ended September 30, 2017	Specialty			Commercial			International			Life & Group			Corporate & Other
(In millions)																Eliminations			Total
Operating revenues
Net earned premiums	$	2,024		$	2,129		$	629		$	404		$	—		$	(1	)	$	5,185
Net investment income	394			495			38			587			15			—			1,529
Non-insurance warranty revenue	290			—			—			—			—			—			290
Other revenues	2			24			—			1			1			—			28
Total operating revenues	2,710			2,648			667			992			16			(1		)	7,032
Claims, benefits and expenses
Net incurred claims and benefits	1,152			1,459			444			980			4			—			4,039
Policyholders’ dividends	3			11			—			—			—			—			14
Amortization of deferred acquisition costs	440			359			127			—			—			—			926
Non-insurance warranty expense	216			—			—			—			—			—			216
Other insurance related expenses	203			393			106			96			(1		)	(1		)	796
Other expenses	32			31			(11		)	5			146			—			203
Total claims, benefits and expenses	2,046			2,253			666			1,081			149			(1		)	6,194
Core income (loss) before income tax	664			395			1			(89		)	(133		)	—			838
Income tax (expense) benefit on core income (loss)	(223		)	(132		)	(9		)	108			51			—			(205		)
Core income (loss)	$	441		$	263		$	(8	)	$	19		$	(82	)	$	—		633
Net realized investment gains (losses)																			62
Income tax (expense) benefit on net realized investment gains (losses)																			(19		)
Net realized investment gains (losses), after tax																			43
Net income																			$	676



December 31, 2017
(In millions)
Reinsurance receivables	$	671	$	654	$	212	$	438	$	2,315	$	—	$	4,290
Insurance receivables	969		1,103		254		8		2		—		2,336
Deferred acquisition costs	318		223		93		—		—		—		634
Goodwill	117		—		31		—		—		—		148
Insurance reserves
Claim and claim adjustment expenses	5,669		8,764		1,636		3,499		2,436		—		22,004
Unearned premiums	2,020		1,409		472		128		—		—		4,029
Future policy benefits	—		—		—		11,179		—		—		11,179

The following table presents operating revenue by line of business for each reportable segment.



Periods ended September 30	Three Months						Nine Months
(In millions)	2018			2017			2018			2017
Specialty
Management & Professional Liability	$	616		$	638		$	1,867		$	1,896
Surety	153			143			427			403
Warranty & Alternative Risks⁽¹⁾	297			140			866			411
Specialty revenues	1,066			921			3,160			2,710
Commercial
Middle Market	530			513			1,555			1,450
Small Business	125			131			364			353
Other Commercial Insurance	279			280			833			845
Commercial revenues	934			924			2,752			2,648
International
Canada	66			61			187			164
CNA Europe	94			87			273			238
CNA Hardy	110			92			322			265
International revenues	270			240			782			667
Life & Group revenues	332			331			996			992
Corporate & Other revenues	7			6			18			16
Eliminations	(1		)	—			(2		)	(1		)
Total operating revenues	2,608			2,422			7,706			7,032
Net realized investment gains (losses)	14			(24		)	25			62
Total revenues	$	2,622		$	2,398		$	7,731		$	7,094


(1)	As of January 1, 2018, the Company adopted ASU 2014-09 Revenue Recognition (Topic 606): Revenue from Contracts with Customers. See Note A to the Condensed Consolidated Financial Statements for additional information.