10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number 1-5823

CNA FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	36-6169860
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

151 N. Franklin		60606
Chicago,	Illinois	(Zip Code)
(Address of principal executive offices)

(312) 822-5000

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par value $2.50	"CNA"	New York Stock Exchange
		Chicago Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 30, 2020, 271,376,098 shares of common stock were outstanding.

Item Number		Page Number
	PART I
1.	Condensed Consolidated Financial Statements:	3
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019 (Unaudited)	3
	Condensed Consolidated Statements of Comprehensive (Loss) Income for the three months ended March 31, 2020 and 2019 (Unaudited)	4
	Condensed Consolidated Balance Sheets as of March 31, 2020 (Unaudited) and December 31, 2019	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019 (Unaudited)	6
	Condensed Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2020 and 2019 (Unaudited)	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	39
3.	Quantitative and Qualitative Disclosures About Market Risk	59
4.	Controls and Procedures	59
	PART II
1.	Legal Proceedings	60
1A.	Risk Factors	60
2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
6.	Exhibits	62

2

PART I

Item 1. Condensed Consolidated Financial Statements

CNA Financial Corporation

Condensed Consolidated Statements of Operations (Unaudited)

Three months ended March 31
(In millions, except per share data)	2020			2019
Revenues
Net earned premiums	$	1,869		$	1,803
Net investment income	329			571
Net investment (losses) gains	(216		)	31
Non-insurance warranty revenue	301			281
Other revenues	8			9
Total revenues	2,291			2,695
Claims, Benefits and Expenses
Insurance claims and policyholders’ benefits	1,425			1,357
Amortization of deferred acquisition costs	344			342
Non-insurance warranty expense	281			260
Other operating expenses	299			283
Interest	31			34
Total claims, benefits and expenses	2,380			2,276
(Loss) income before income tax	(89		)	419
Income tax benefit (expense)	28			(77		)
Net (loss) income	$	(61	)	$	342
Basic (loss) earnings per share	$	(0.23	)	$	1.26
Diluted (loss) earnings per share	$	(0.23	)	$	1.25
Weighted Average Outstanding Common Stock and Common Stock Equivalents
Basic	271.5			271.6
Diluted	271.5			272.6

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements (Unaudited).

3

CNA Financial Corporation

Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited)

Three months ended March 31
(In millions)	2020			2019
Comprehensive (Loss) Income
Net (loss) income	$	(61	)	$	342
Other Comprehensive (Loss) Income, net of tax
Changes in:
Net unrealized gains and losses on investments with an allowance for credit losses	(11		)	—
Net unrealized gains and losses on other investments	(1,044		)	530
Net unrealized gains and losses on investments	(1,055		)	530
Foreign currency translation adjustment	(77		)	17
Pension and postretirement benefits	11			7
Other comprehensive (loss) income, net of tax	(1,121		)	554
Total comprehensive (loss) income	$	(1,182	)	$	896

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements (Unaudited).

4

CNA Financial Corporation

Condensed Consolidated Balance Sheets

(In millions, except share data)	March 31, 2020 (Unaudited)			December 31, 2019
Assets
Investments:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	$	40,098		$	42,207
Equity securities at fair value (cost of $936 and $820)	799			865
Limited partnership investments	1,509			1,752
Other invested assets	63			65
Mortgage loans (less allowance for uncollectible receivables of $20 and $-)	1,021			994
Short term investments	596			1,861
Total investments	44,086			47,744
Cash	857			242
Reinsurance receivables (less allowance for uncollectible receivables of $23 and $25)	4,328			4,179
Insurance receivables (less allowance for uncollectible receivables of $30 and $32)	2,502			2,449
Accrued investment income	402			395
Deferred acquisition costs	683			662
Deferred income taxes	518			199
Property and equipment at cost (less accumulated depreciation of $224 and $215)	271			282
Goodwill	145			147
Deferred non-insurance warranty acquisition expense	2,905			2,840
Other assets (includes $15 and $21 due from Loews Corporation)	1,708			1,473
Total assets	$	58,405		$	60,612
Liabilities
Insurance reserves:
Claim and claim adjustment expenses	$	21,872		$	21,720
Unearned premiums	4,745			4,583
Future policy benefits	11,734			12,311
Long term debt	2,680			2,679
Deferred non-insurance warranty revenue	3,848			3,779
Other liabilities (includes $7 and $21 due to Loews Corporation)	3,164			3,325
Total liabilities	48,043			48,397
Commitments and contingencies (Notes C and F)
Stockholders' Equity
Common stock ($2.50 par value; 500,000,000 shares authorized; 273,040,243 shares issued; 271,370,988 and 271,412,591 shares outstanding)	683			683
Additional paid-in capital	2,187			2,203
Retained earnings	8,634			9,348
Accumulated other comprehensive (loss) income	(1,070		)	51
Treasury stock (1,669,255 and 1,627,652 shares), at cost	(72		)	(70		)
Total stockholders’ equity	10,362			12,215
Total liabilities and stockholders' equity	$	58,405		$	60,612

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements (Unaudited).

5

CNA Financial Corporation

Condensed Consolidated Statements of Cash Flows (Unaudited)

Three months ended March 31
(In millions)	2020			2019
Cash Flows from Operating Activities
Net (loss) income	$	(61	)	$	342
Adjustments to reconcile net (loss) income to net cash flows provided by operating activities:
Deferred income tax (benefit) expense	(37		)	32
Trading portfolio activity	7			(3		)
Net investment losses (gains)	216			(31		)
Equity method investees	98			14
Net amortization of investments	(15		)	(25		)
Depreciation and amortization	16			19
Changes in:
Receivables, net	(229		)	44
Accrued investment income	(8		)	(15		)
Deferred acquisition costs	(27		)	(30		)
Insurance reserves	510			57
Other, net	(258		)	(117		)
Net cash flows provided by operating activities	212			287
Cash Flows from Investing Activities
Dispositions:
Fixed maturity securities - sales	823			2,259
Fixed maturity securities - maturities, calls and redemptions	799			576
Equity securities	98			64
Limited partnerships	204			186
Mortgage loans	15			35
Purchases:
Fixed maturity securities	(1,818		)	(2,447		)
Equity securities	(220		)	(36		)
Limited partnerships	(32		)	(114		)
Mortgage loans	(61		)	(59		)
Change in other investments	(6		)	(6		)
Change in short term investments	1,267			(177		)
Purchases of property and equipment	(3		)	(8		)
Other, net	21			16
Net cash flows provided by investing activities	1,087			289
Cash Flows from Financing Activities
Dividends paid to common stockholders	(649		)	(643		)
Purchase of treasury stock	(18		)	(14		)
Other, net	(8		)	(8		)
Net cash flows used by financing activities	(675		)	(665		)
Effect of foreign exchange rate changes on cash	(9		)	2
Net change in cash	615			(87		)
Cash, beginning of year	242			310
Cash, end of period	$	857		$	223

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements (Unaudited).

6

CNA Financial Corporation

Condensed Consolidated Statements of Stockholders' Equity (Unaudited)

Three months ended March 31
(In millions)	2020			2019
Common Stock
Balance, beginning of period	$	683		$	683
Balance, end of period	683			683
Additional Paid-in Capital
Balance, beginning of period	2,203			2,192
Stock-based compensation	(16		)	(8		)
Balance, end of period	2,187			2,184
Retained Earnings
Balance, beginning of period, as previously reported	9,348			9,277
Cumulative effect adjustments from changes in accounting guidance, net of tax	(5		)	—
Balance, beginning of period, as adjusted	9,343			9,277
Dividends to common stockholders ($2.37 and $2.35 per share)	(648		)	(643		)
Net (loss) income	(61		)	342
Balance, end of period	8,634			8,976
Accumulated Other Comprehensive (Loss) Income
Balance, beginning of period	51			(878		)
Other comprehensive (loss) income	(1,121		)	554
Balance, end of period	(1,070		)	(324		)
Treasury Stock
Balance, beginning of period	(70		)	(57		)
Stock-based compensation	16			7
Purchase of treasury stock	(18		)	(14		)
Balance, end of period	(72		)	(64		)
Total stockholders' equity	$	10,362		$	11,455

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements (Unaudited).

7

CNA Financial Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note A. General

Basis of Presentation

The Condensed Consolidated Financial Statements include the accounts of CNA Financial Corporation (CNAF) and its subsidiaries. Collectively, CNAF and its subsidiaries are referred to as CNA or the Company. Loews Corporation (Loews) owned approximately 89% of the outstanding common stock of CNAF as of March 31, 2020.

The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Intercompany amounts have been eliminated. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, including certain financial statement notes, is not required for interim reporting purposes and has been condensed or omitted. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in CNAF's Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2019, including the summary of significant accounting policies in Note A. The preparation of Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

The interim financial data as of March 31, 2020 and for the three months ended March 31, 2020 and 2019 is unaudited. However, in the opinion of management, the interim data includes all adjustments, including normal recurring adjustments, necessary for a fair statement of the Company's results for the interim periods. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.

Recently Adopted Accounting Standards Updates (ASU)

ASU 2016-13: In June 2016 the Financial Accounting Standards Board (FASB) issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The updated accounting guidance requires changes to the recognition of credit losses on financial instruments not accounted for at fair value through the Company’s results of operations. For financial assets measured at cost, the expected credit loss model requires immediate recognition of estimated credit losses over the life of the asset and presentation of the asset at the net amount expected to be collected. This new guidance applies to mortgage loan investments, reinsurance and insurance receivables and other financing receivables. For available-for-sale fixed maturity securities carried at fair value, estimated credit losses will continue to be measured at the present value of expected cash flows, however, the other than temporary impairment (OTTI) concept has been eliminated. Under the previous guidance, estimated credit impairments resulted in a write-down of amortized cost. Under the new guidance, estimated credit losses are recognized through an allowance and reversals of the allowance are permitted if the estimate of credit losses declines. For available-for-sale fixed maturity securities where the Company has an intent to sell, impairment will continue to result in a write-down of amortized cost.

On January 1, 2020, the Company adopted the updated guidance using a modified retrospective method with a cumulative effect adjustment recorded to beginning Retained earnings. Prior period amounts have not been adjusted and continue to be reported in accordance with the previous accounting guidance. A prospective transition approach is required for available-for-sale fixed maturity securities that were purchased with credit deterioration (PCD assets) or have recognized an OTTI write-down prior to the effective date. The cumulative effect of the accounting change resulted in a $5 million decrease in Retained earnings, with a corresponding $7 million allowance for credit losses recorded for Mortgage loans partially offset by a $2 million tax impact.

8

The allowance for uncollectible insurance and reinsurance receivables was unchanged as a result of adopting the new guidance. At adoption, an allowance for credit losses of $6 million was established for available-for-sale fixed maturity securities that were PCD assets, with a corresponding increase to amortized cost, resulting in no adjustment to the carrying value of the securities. Below is a summary of the significant accounting policies impacted by the adoption of ASU 2016-13.

The allowance for credit losses is a valuation account that is reported as a reduction of a financial asset’s cost basis and is measured on a pool basis when similar risk characteristics exist. Management estimates the allowance using relevant available information from both internal and external sources. Historical credit loss experience provides the basis for the estimation of expected credit losses and adjustments may be made to reflect current conditions and reasonable and supportable forecasts. Adjustments to historical loss information are made for any additional factors that come to the Company’s attention. This could include significant shifts in counterparty financial strength ratings, aging of past due receivables, amounts sent to collection agencies, or other underlying portfolio changes. Amounts are considered past due when payments have not been received according to contractual terms. The Company also considers current and forecast economic conditions, using a variety of economic metrics and forecast indices. The sensitivity of expected credit losses relative to changes to these forecast economic conditions can vary by financial asset class. The Company considers a reasonable and supportable forecast period to be up to 24 months from the balance sheet date. After the forecast period, the Company reverts to historical credit experience. The Company uses collateral arrangements such as letters of credit and amounts held in beneficiary trusts to mitigate credit risk, which are considered in the estimate of net amount expected to be collected.

The Company has made a policy election to present accrued interest balances separately from the amortized cost basis of assets and has elected the practical expedient to exclude the accrued interest from the tabular disclosures for mortgage loans and available-for-sale securities. The Company has elected not to estimate an allowance for credit losses on accrued interest receivable. The accrual of interest income is discontinued and the asset is placed on nonaccrual status in the quarter that payment becomes delinquent. Interest accrued but not received for assets on nonaccrual status is reversed through investment income. Interest received for assets that are on nonaccrual status is recognized as payment is received. The asset is returned to accrual status when the principal and interest amounts contractually due are brought current and future payments are expected. Interest receivable is presented as a component of accrued investment income on the Condensed Consolidated Balance Sheet.

See Note C and Note K to the Condensed Consolidated Financial Statements for additional information regarding credit losses.

Accounting Standards Pending Adoption

In August 2018, the FASB issued ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long Duration Contracts. The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts. The guidance requires entities to annually update cash flow assumptions, including morbidity and persistency, and update discount rate assumptions quarterly using an upper-medium grade fixed-income instrument yield. The effect of changes in cash flow assumptions will be recorded in the Company's results of operations and the effect of changes in discount rate assumptions will be recorded in Other comprehensive income. This guidance is effective for interim and annual periods beginning after December 15, 2021, and the Company will adopt it on January 1, 2022. The guidance requires restatement of prior periods presented. The Company is currently evaluating the method of adoption and the effect the updated guidance will have on its financial statements, including the increased disclosure requirements. The annual updating of cash flow assumptions is expected to increase income statement volatility. While the requirements of the new guidance represent a material change from existing GAAP, the underlying economics of the business and related cash flows will be unchanged.

9

Note B. Earnings (Loss) Per Share

Earnings (loss) per share is based on weighted average number of outstanding common shares. Basic earnings (loss) per share excludes the impact of dilutive securities and is computed by dividing Net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

For the three months ended March 31, 2020, approximately 1,015 thousand potential shares attributable to exercises or conversions into common stock under stock-based employee compensation plans were excluded from the calculation of diluted loss per share because the effect would have been antidilutive due to the net loss position of the Company. For the three months ended March 31, 2019, approximately 971 thousand potential shares attributable to exercises or conversions into common stock under stock-based employee compensation plans were included in the calculation of diluted earnings per share. For the three months ended March 31, 2019 there were no antidilutive shares.

The Company repurchased 435,376 and 317,508 shares of CNAF common stock at an aggregate cost of $18 million and $14 million during the three months ended March 31, 2020 and 2019.

10

Note C. Investments

The significant components of Net investment income are presented in the following table.

Three months ended March 31
(In millions)	2020			2019
Fixed maturity securities	$	438		$	455
Equity securities	(44		)	30
Limited partnership investments	(70		)	76
Mortgage loans	14			12
Short term investments	7			10
Trading portfolio	1			2
Other	—			2
Gross investment income	346			587
Investment expense	(17		)	(16		)
Net investment income	$	329		$	571

During the three months ended March 31, 2020 and 2019, $(45) million and $17 million of Net investment income was recognized due to the change in fair value of common stock still held as of March 31, 2020 and 2019. During the three months ended March 31, 2020 and 2019, $(2) million and less than $1 million of Net investment income was recognized due to the change in fair value of trading securities still held as of March 31, 2020 and 2019. 

Net investment gains (losses) are presented in the following table.

Three months ended March 31
(In millions)	2020			2019
Net investment gains (losses):
Fixed maturity securities:
Gross gains	$	29		$	36
Gross losses	(104		)	(42		)
Net investment gains (losses) on fixed maturity securities	(75		)	(6		)
Equity securities	(133		)	42
Derivatives	5			(5		)
Mortgage loans	(13		)	—
Short term investments and other	—			—
Net investment gains (losses)	$	(216	)	$	31

During the three months ended March 31, 2020 and 2019, $(133) million of losses and $42 million of gains were recognized in Net investment gains (losses) due to the change in fair value of non-redeemable preferred stock still held as of March 31, 2020 and 2019.

For available-for-sale fixed maturity securities, a credit loss exists if the present value of cash flows expected to be collected is less than the amortized cost basis. The allowance for credit loss related to available-for-sale fixed maturity securities is the difference between present value of cash flows expected to be collected and the amortized cost basis, limited by the amount that the fair value is less than the amortized cost basis. The Company considers all available evidence when determining whether an investment requires a credit loss write-down or allowance to be recorded. Examples of such evidence may include the financial condition and near term prospects of the issuer, whether the issuer is current with interest and principal payments, credit ratings on the security or changes in ratings over time, general market conditions and industry, sector or other specific factors and whether it is likely that the Company will recover its amortized cost through the collection of cash flows. Changes in the allowance are presented as a component of Net investment gains (losses) on the Condensed Consolidated Statements of Operations.

11

The following table presents the activity related to the allowance on available-for-sale securities with credit impairments and PCD assets for the three months ended March 31, 2020. Accrued interest receivable on available-for-sale fixed maturity securities totaled $390 million and is excluded from the estimate of expected credit losses and the amortized cost basis in the tables included within this Note.

Three months ended March 31
(in millions)	Corporate and other bonds
Allowance for credit losses:
Beginning balance	$	—
Additions to the allowance for credit losses:
Impact of adopting ASC 326	6
For securities for which credit losses were not previously recorded	48
For available-for-sale securities accounted for as PCD assets	1
Reductions to the allowance for credit losses:
Securities sold during the period (realized)	5
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis	1
Write-offs charged against the allowance	—
Recoveries of amounts previously written off	—
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period	—
Ending balance as of March 31, 2020	$	49

The components of available-for-sale impairment losses recognized in earnings by asset type are presented in the following table. The table includes losses on securities with an intention to sell and changes in the allowance for credit losses on securities since acquisition date.

Three Months ended March 31
(In millions)	2020		2019
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	91	$	6
Asset-backed	1		8
Impairment losses recognized in earnings	$	92	$	14

12

The following tables present a summary of fixed maturity securities.

March 31, 2020	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses(1)		Estimated Fair Value
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	20,181	$	1,419	$	817	$	49	$	20,734
States, municipalities and political subdivisions	8,957		1,536		2		—		10,491
Asset-backed:
Residential mortgage-backed	4,198		207		8		—		4,397
Commercial mortgage-backed	2,207		36		153		—		2,090
Other asset-backed	1,868		9		133		—		1,744
Total asset-backed	8,273		252		294		—		8,231
U.S. Treasury and obligations of government-sponsored enterprises	147		8		—		—		155
Foreign government	452		15		4		—		463
Redeemable preferred stock	9		—		—		—		9
Total fixed maturity securities available-for-sale	38,019		3,230		1,117		49		40,083
Total fixed maturity securities trading	15		—		—		—		15
Total fixed maturity securities	$	38,034	$	3,230	$	1,117	$	49	$	40,098

(1) As of January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The Unrealized OTTI Losses (Gains) column that tracked subsequent valuation changes on securities for which a credit loss had previously been recorded has been replaced with the Allowance for Credit Losses column.

December 31, 2019	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Unrealized OTTI Losses (Gains)
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	19,789	$	2,292	$	32	$	22,049	$	—
States, municipalities and political subdivisions	9,093		1,559		—		10,652		—
Asset-backed:
Residential mortgage-backed	4,387		133		1		4,519		(17		)
Commercial mortgage-backed	2,265		86		5		2,346		1
Other asset-backed	1,925		41		4		1,962		(3		)
Total asset-backed	8,577		260		10		8,827		(19		)
U.S. Treasury and obligations of government-sponsored enterprises	146		1		2		145		—
Foreign government	491		14		1		504		—
Redeemable preferred stock	10		—		—		10		—
Total fixed maturity securities available-for-sale	38,106		4,126		45		42,187		$	(19	)
Total fixed maturity securities trading	20		—		—		20
Total fixed maturity securities	$	38,126	$	4,126	$	45	$	42,207

The net unrealized gains on investments included in the tables above are recorded as a component of Accumulated other comprehensive income (AOCI). When presented in AOCI, these amounts are net of tax and any required Shadow Adjustments. 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, a related increase in Insurance reserves is recorded, net of tax, as a reduction of net unrealized gains through Other comprehensive income (loss) (Shadow Adjustments). As of March 31, 2020 and December 31, 2019, the net unrealized gains on investments included in AOCI were correspondingly reduced by Shadow Adjustments of $1,700 million and $2,198 million.

13

The following tables present the estimated fair value and gross unrealized losses of fixed maturity securities in a gross unrealized loss position for which an allowance for credit loss has not been recorded, by the length of time in which the securities have continuously been in that position.

	Less than 12 Months				12 Months or Longer				Total
March 31, 2020	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	7,036	$	804	$	44	$	13	$	7,080	$	817
States, municipalities and political subdivisions	82		2		—		—		82		2
Asset-backed:
Residential mortgage-backed	166		7		22		1		188		8
Commercial mortgage-backed	1,185		151		12		2		1,197		153
Other asset-backed	1,510		131		9		2		1,519		133
Total asset-backed	2,861		289		43		5		2,904		294
U.S. Treasury and obligations of government-sponsored enterprises	2		—		—		—		2		—
Foreign government	76		4		—		—		76		4
Redeemable preferred stock	9		—		—		—		9		—
Total	$	10,066	$	1,099	$	87	$	18	$	10,153	$	1,117

	Less than 12 Months				12 Months or Longer				Total
December 31, 2019	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	914	$	21	$	186	$	11	$	1,100	$	32
States, municipalities and political subdivisions	34		—		—		—		34		—
Asset-backed:
Residential mortgage-backed	249		1		30		—		279		1
Commercial mortgage-backed	381		3		20		2		401		5
Other asset-backed	449		3		33		1		482		4
Total asset-backed	1,079		7		83		3		1,162		10
U.S. Treasury and obligations of government-sponsored enterprises	62		2		2		—		64		2
Foreign government	59		1		1		—		60		1
Total	$	2,148	$	31	$	272	$	14	$	2,420	$	45

14

The following tables present the estimated fair value and gross unrealized losses of available-for-sale Corporate and other bonds in a gross unrealized loss position at March 31, 2020 across industry sectors and by rating distributions.

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Corporate and other bonds:
Basic Materials	$	727	$	78
Communications	349		27
Consumer, cyclical - Other	390		56
Consumer, non-cyclical - Other	401		27
Energy - Oil & Gas	575		191
Energy - Pipelines	523		112
Entertainment	148		23
Financial - Other	1,711		89
Financial - Real Estate/REITS	599		45
Industrial	468		55
Retail	150		18
Technology	290		30
Transportation	73		5
Travel & Related	269		37
Utilities	407		24
Total Corporate and other bonds	$	7,080	$	817

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Corporate and other bonds:
AAA	$	8	$	—
AA	134		4
A	608		17
BBB	4,987		516
Below investment grade	1,343		280
Total Corporate and other bonds	$	7,080	$	817

15

The following tables present the estimated fair value and gross unrealized losses of available-for-sale Commercial mortgage-backed securities in a gross unrealized loss position at March 31, 2020 by property type and by rating distributions.

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Commercial mortgage-backed:
Conduits (multi property, multi borrower pools)	$	211	$	11
Single asset, single borrower	986		142
Total Commercial mortgage-backed	$	1,197	$	153

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Commercial mortgage-backed:
US Government, Government agencies and Government sponsored enterprises	$	1	$	—
AAA	60		1
AA	245		17
A	214		22
BBB	484		78
Below investment grade	193		35
Total Commercial mortgage-backed	$	1,197	$	153

The following tables present the estimated fair value and gross unrealized losses of available-for-sale Other asset-backed securities in a gross unrealized loss position at March 31, 2020 by underlying collateral and by rating distributions.

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Other asset-backed:
Auto	$	290	$	6
Collateralized loan obligations	418		60
Franchise	414		39
Other	397		28
Total Other asset-backed	$	1,519	$	133

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Other asset-backed:
AAA	$	49	$	1
AA	83		2
A	821		74
BBB	566		56
Below investment grade	—		—
Total Other asset-backed	$	1,519	$	133

16

Based on current facts and circumstances, the Company believes the unrealized losses presented in the March 31, 2020 gross unrealized loss position tables above are not indicative of the ultimate collectibility of the current amortized cost of the securities. Rather, the Company believes the gross unrealized losses are attributable primarily to widening credit spreads over risk free rates beyond historic norms, as a result of market uncertainties stemming from the COVID-19 pandemic, as well as supply shocks in the energy sector coupled with demand shocks in multiple sectors from the COVID-19 pandemic, that originated during the first quarter of 2020. The Company has no current intent to sell securities with unrealized losses, nor is it more likely than not that it will be required to sell prior to recovery of amortized cost; accordingly, the Company has determined that there are no additional impairment losses to be recorded as of March 31, 2020.

Contractual Maturity

The following table presents available-for-sale fixed maturity securities by contractual maturity.

	March 31, 2020				December 31, 2019
(In millions)	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value
Due in one year or less	$	1,331	$	1,325	$	1,334	$	1,356
Due after one year through five years	11,554		11,812		9,746		10,186
Due after five years through ten years	13,078		13,069		14,892		15,931
Due after ten years	12,056		13,877		12,134		14,714
Total	$	38,019	$	40,083	$	38,106	$	42,187

Actual maturities may differ from contractual maturities because certain securities may be called or prepaid. Securities not due at a single date are allocated based on weighted average life.

Derivative Financial Instruments

The Company holds an embedded derivative on a funds withheld liability with a notional value of $196 million and $182 million as of March 31, 2020 and December 31, 2019 and a fair value of $(1) million and $(7) million as of March 31, 2020 and December 31, 2019. The embedded derivative on the funds withheld liability is accounted for separately and reported with the funds withheld liability in Other liabilities on the Condensed Consolidated Balance Sheets.

Investment Commitments

As part of its overall investment strategy, the Company invests in various assets which require future purchase, sale or funding commitments. These investments are recorded once funded, and the related commitments may include future capital calls from various third-party limited partnerships, signed and accepted mortgage loan applications, and obligations related to privately placed debt securities. As of March 31, 2020, the Company had commitments to purchase or fund approximately $1,025 million and sell approximately $85 million under the terms of these investments.

Mortgage Loans

The allowance for expected credit losses is developed by assessing the credit quality of pools of mortgage loans in good standing using debt service coverage ratios (DSCR) and loan-to-value ratios (LTV). The DSCR compares a property’s net operating income to its debt service payments, including principal and interest. The LTV ratio compares the current unpaid principal balance of the loan to the estimated fair value of the underlying property collateralizing the loan. The pools developed to measure the credit loss allowance use increments of DSCR and LTV to draw distinctions between risk levels. Changes in the allowance for mortgage loans are presented as a component of Net investment gains (losses) on the Condensed Consolidated Statements of Operations. The Company has adjusted the historical loss rate applied to mortgage loans over the forecast period to reflect higher expected credit losses based on observable economic forecasts, which increased the allowance by $13 million for the period ended March 31, 2020.

17

The following table presents the amortized cost basis of mortgage loans for each credit quality indicator by year of origination as of March 31, 2020:

	Mortgage Loans Amortized Cost Basis by Origination Year (1)
As of March 31, 2020	2020		2019		2018		2017		2016		Prior		Total
DSCR ≥1.6x
LTV less than 55%	$	60	$	32	$	19	$	92	$	41	$	130	$	374
LTV 55% to 65%	—		32		29		55		4		—		120
LTV greater than 65%	—		5		—		—		—		—		5
DSCR 1.2x - 1.6x
LTV less than 55%	—		33		10		13		16		126		198
LTV 55% to 65%	—		73		32		32		—		—		137
LTV greater than 65%	—		85		—		—		—		—		85
DSCR ≤1.2
LTV less than 55%	—		1		11		27		—		9		48
LTV 55% to 65%	—		14		14		—		—		—		28
LTV greater than 65%	—		22		—		—		24		—		46
Total	$	60	$	297	$	115	$	219	$	85	$	265	$	1,041

(1) The values in the table above reflect DSCR on a standardized amortization period and LTV based on the most recent appraised values trended forward using changes in a commercial real estate price index.

As of March 31, 2020, accrued interest receivable on mortgage loans totaled $4 million and is excluded from the amortized cost basis disclosed in the table above and the estimate of expected credit losses. There were no loans that were past due or placed in nonaccrual status as of March 31, 2020. No interest income was written off for the period ended March 31, 2020.

18

Note D. Fair Value

Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable.

Level 1 - Quoted prices for identical instruments in active markets.

Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are not observable.

Prices may fall within Level 1, 2 or 3 depending upon the methodology and inputs used to estimate fair value for each specific security. In general, the Company seeks to price securities using third-party pricing services. Securities not priced by pricing services are submitted to independent brokers for valuation and, if those are not available, internally developed pricing models are used to value assets using a methodology and inputs the Company believes market participants would use to value the assets. Prices obtained from third-party pricing services or brokers are not adjusted by the Company.

The Company performs control procedures over information obtained from pricing services and brokers to ensure prices received represent a reasonable estimate of fair value and to confirm representations regarding whether inputs are observable or unobservable. Procedures may include i) the review of pricing service methodologies or broker pricing qualifications, ii) back-testing, where past fair value estimates are compared to actual transactions executed in the market on similar dates, iii) exception reporting, where period-over-period changes in price are reviewed and challenged with the pricing service or broker based on exception criteria, and iv) deep dives, where the Company performs an independent analysis of the inputs and assumptions used to price individual securities.

19

Assets and Liabilities Measured at Fair Value

Assets and liabilities measured at fair value on a recurring basis are presented in the following tables. Corporate bonds and other includes obligations of the U.S. Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock.

March 31, 2020							Total Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3
Assets
Fixed maturity securities:
Corporate bonds and other	$	175	$	20,705	$	496	$	21,376
States, municipalities and political subdivisions	—		10,491		—		10,491
Asset-backed	—		8,034		197		8,231
Total fixed maturity securities	175		39,230		693		40,098
Equity securities:
Common stock	187		—		4		191
Non-redeemable preferred stock	59		538		11		608
Total equity securities	246		538		15		799
Short term and other	135		365		—		500
Total assets	$	556	$	40,133	$	708	$	41,397
Liabilities
Other liabilities	$	—	$	1	$	—	$	1
Total liabilities	$	—	$	1	$	—	$	1

December 31, 2019							Total Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3
Assets
Fixed maturity securities:
Corporate bonds and other	$	175	$	22,085	$	468	$	22,728
States, municipalities and political subdivisions	—		10,652		—		10,652
Asset-backed	—		8,662		165		8,827
Total fixed maturity securities	175		41,399		633		42,207
Equity securities:
Common stock	135		—		7		142
Non-redeemable preferred stock	54		658		11		723
Total equity securities	189		658		18		865
Short term and other	397		1,344		—		1,741
Total assets	$	761	$	43,401	$	651	$	44,813
Liabilities
Other liabilities	$	—	$	7	$	—	$	7
Total liabilities	$	—	$	7	$	—	$	7

20

The tables below present a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

Level 3 (In millions)	Corporate bonds and other			States, municipalities and political subdivisions		Asset-backed			Equity securities			Total
Balance as of January 1, 2020	$	468		$	—	$	165		$	18		$	651
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—			—		—			—			—
Reported in Net investment income	—			—		—			(3		)	(3		)
Reported in Other comprehensive income (loss)	(37		)	—		(9		)	—			(46		)
Total realized and unrealized investment gains (losses)	(37		)	—		(9		)	(3		)	(49		)
Purchases	67			—		45			—			112
Sales	—			—		—			—			—
Settlements	(2		)	—		(3		)	—			(5		)
Transfers into Level 3	—			—		—			—			—
Transfers out of Level 3	—			—		(1		)	—			(1		)
Balance as of March 31, 2020	$	496		$	—	$	197		$	15		$	708
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2020 recognized in Net income (loss) in the period	$	—		$	—	$	—		$	(3	)	$	(3	)
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2020 recognized in Other comprehensive income (loss) in the period	(35		)	—		(9		)	—			(44		)

Level 3 (In millions)	Corporate bonds and other			States, municipalities and political subdivisions		Asset-backed			Equity securities		Total
Balance as of January 1, 2019	$	222		$	—	$	197		$	18	$	437
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—			—		—			2		2
Reported in Net investment income	—			—		—			—		—
Reported in Other comprehensive income (loss)	8			—		3			—		11
Total realized and unrealized investment gains (losses)	8			—		3			2		13
Purchases	56			—		20			—		76
Sales	—			—		—			—		—
Settlements	(2		)	—		(4		)	—		(6		)
Transfers into Level 3	—			—		5			—		5
Transfers out of Level 3	(31		)	—		(37		)	—		(68		)
Balance as of March 31, 2019	$	253		$	—	$	184		$	20	$	457
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2019 recognized in Net income (loss) in the period	$	—		$	—	$	—		$	2	$	2
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2019 recognized in Other comprehensive income (loss) in the period	7			—		3			—		10

Securities may be transferred in or out of levels within the fair value hierarchy based on the availability of observable market information and quoted prices used to determine the fair value of the security. The availability of observable market information and quoted prices varies based on market conditions and trading volume.

21

Valuation Methodologies and Inputs

The following section describes the valuation methodologies and relevant inputs used to measure different financial instruments at fair value, including an indication of the level in the fair value hierarchy in which the instruments are generally classified.

Fixed Maturity Securities

Level 1 securities include highly liquid government securities and exchange traded bonds, valued using quoted market prices. Level 2 securities include most other fixed maturity securities as the significant inputs are observable in the marketplace. All classes of Level 2 fixed maturity securities are valued using a methodology based on information generated by market transactions involving identical or comparable assets, a discounted cash flow methodology, or a combination of both when necessary. Common inputs for all classes of fixed maturity securities include prices from recently executed transactions of similar securities, marketplace quotes, benchmark yields, spreads off benchmark yields, interest rates and U.S. Treasury or swap curves. Specifically for asset-backed securities, key inputs include prepayment and default projections based on past performance of the underlying collateral and current market data. Fixed maturity securities are primarily assigned to Level 3 in cases where broker/dealer quotes are significant inputs to the valuation and there is a lack of transparency as to whether these quotes are based on information that is observable in the marketplace. Level 3 securities also include private placement debt securities whose fair value is determined using internal models with some inputs that are not market observable.

Equity Securities

Level 1 equity securities include publicly traded securities valued using quoted market prices. Level 2 securities are primarily valued using pricing for similar securities, recently executed transactions and other pricing models utilizing market observable inputs. Level 3 securities are primarily priced using broker/dealer quotes and internal models with some inputs that are not market observable.

Short Term and Other Invested Assets

Securities that are actively traded or have quoted prices are classified as Level 1. These securities include money market funds and treasury bills. Level 2 primarily includes commercial paper, for which all inputs are market observable. Fixed maturity securities purchased within one year of maturity are classified consistent with fixed maturity securities discussed above. Short term investments as presented in the tables above differ from the amounts presented on the Condensed Consolidated Balance Sheets because certain short term investments, such as time deposits, are not measured at fair value.

As of March 31, 2020 and December 31, 2019, there were $58 million and $60 million of overseas deposits within Other invested assets, which can be redeemed at net asset value in 90 days or less. Overseas deposits are excluded from the fair value hierarchy because their fair value is recorded using the net asset value per share (or equivalent) practical expedient.

Derivative Financial Investments

The embedded derivative on funds withheld liability is valued using the change in fair value of the assets supporting the funds withheld liability, which are fixed maturity securities primarily valued with observable inputs.

22

Significant Unobservable Inputs

The following tables present quantitative information about the significant unobservable inputs utilized by the Company in the fair value measurements of Level 3 assets. Valuations for assets and liabilities not presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to the Company. The weighted average rate is calculated based on fair value.

March 31, 2020	Estimated Fair Value (In millions)		Valuation Technique(s)	Unobservable Input(s)	Range  (Weighted Average)
Fixed maturity securities	$	583	Discounted cash flow	Credit spread	1% - 10% (4%)

December 31, 2019	Estimated Fair Value (In millions)		Valuation Technique(s)	Unobservable Input(s)	Range  (Weighted Average)
Fixed maturity securities	$	525	Discounted cash flow	Credit spread	1% - 6% (2%)

For fixed maturity securities, an increase to the credit spread assumptions would result in a lower fair value measurement.

Financial Assets and Liabilities Not Measured at Fair Value

The carrying amount and estimated fair value of the Company's financial assets and liabilities which are not measured at fair value on the Condensed Consolidated Balance Sheets are presented in the following tables.

March 31, 2020	Carrying Amount		Estimated Fair Value
(In millions)			Level 1		Level 2		Level 3		Total
Assets
Mortgage loans	$	1,021	$	—	$	—	$	1,036	$	1,036
Liabilities
Long term debt	$	2,680	$	—	$	2,730	$	—	$	2,730

December 31, 2019	Carrying Amount		Estimated Fair Value
(In millions)			Level 1		Level 2		Level 3		Total
Assets
Mortgage loans	$	994	$	—	$	—	$	1,025	$	1,025
Note receivable	21		—		—		21		21
Liabilities
Long term debt	$	2,679	$	—	$	2,906	$	—	$	2,906

The following methods and assumptions were used to estimate the fair value of these financial assets and liabilities.

The fair value of mortgage loans was based on the present value of the expected future cash flows discounted at the current interest rate for origination of similar quality loans, adjusted for specific loan risk.

The fair value of the note receivable was based on the present value of the expected future cash flows discounted at the current interest rate for origination of similar notes, adjusted for specific credit risk. During the three months ended March 31, 2020, the note receivable was repaid in full. As of December 31, 2019, the note receivable was included within Other assets on the Condensed Consolidated Balance Sheets.

The Company's senior notes and debentures were valued based on observable market prices. The fair value for other debt was estimated using discounted cash flows based on current incremental borrowing rates for similar borrowing arrangements.

The carrying amounts reported on the Condensed Consolidated Balance Sheets for Cash, Short term investments not carried at fair value, Accrued investment income and certain Other assets and Other liabilities approximate fair value due to the short term nature of these items. These assets and liabilities are not listed in the tables above.

23

Note E. Claim and Claim Adjustment Expense Reserves

Property and casualty insurance claim and claim adjustment expense reserves represent the estimated amounts necessary to resolve all outstanding claims, including incurred but not reported (IBNR) claims as of the reporting date. The Company's reserve projections are based primarily on detailed analysis of the facts in each case, the Company's experience with similar cases and various historical development patterns. Consideration is given to historical patterns such as claim reserving trends and settlement practices, loss payments, pending levels of unpaid claims and product mix, as well as court decisions and economic conditions, including inflation, and public attitudes. All of these factors can affect the estimation of claim and claim adjustment expense reserves.

Establishing claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves for catastrophic events that have occurred, is an estimation process. Many factors can ultimately affect the final settlement of a claim and, therefore, the necessary reserve. Changes in the law, results of litigation, medical costs, the cost of repair materials and labor rates can affect ultimate claim costs. In addition, time can be a critical part of reserving determinations since the longer the span between the incidence of a loss and the payment or settlement of the claim, the more variable the ultimate settlement amount can be. Accordingly, short-tail claims, such as property damage claims, tend to be more reasonably estimable than long-tail claims, such as workers' compensation, general liability and professional liability claims. Adjustments to prior year reserve estimates, if necessary, are reflected in the results of operations in the period that the need for such adjustments is determined. There can be no assurance that the Company's ultimate cost for insurance losses will not exceed current estimates.

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. The Company reported catastrophe losses, net of reinsurance, of $75 million and $58 million for the three months ended March 31, 2020 and 2019. Net catastrophe losses for the three months ended March 31, 2020 included $13 million related to the COVID-19 pandemic, with the remaining $62 million related primarily to U.S. weather related events. Net catastrophe losses for the three months ended March 31, 2019 related primarily to U.S. weather related events.

24

Liability for Unpaid Claim and Claim Adjustment Expenses

The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves of the Life & Group segment.

For the three months ended March 31
(In millions)	2020			2019
Reserves, beginning of year:
Gross	$	21,720		$	21,984
Ceded	3,835			4,019
Net reserves, beginning of year	17,885			17,965
Net incurred claim and claim adjustment expenses:
Provision for insured events of current year	1,355			1,309
Increase (decrease) in provision for insured events of prior years	(8		)	8
Amortization of discount	51			50
Total net incurred (1)	1,398			1,367
Net payments attributable to:
Current year events	(72		)	(100		)
Prior year events	(1,218		)	(1,309		)
Total net payments	(1,290		)	(1,409		)
Foreign currency translation adjustment and other	(88		)	13
Net reserves, end of period	17,905			17,936
Ceded reserves, end of period	3,967			3,900
Gross reserves, end of period	$	21,872		$	21,836

(1) Total net incurred above does not agree to Insurance claims and policyholders' benefits as reflected on the Condensed Consolidated Statements of Operations due to amounts related to retroactive reinsurance deferred gain accounting, uncollectible reinsurance and benefit expenses related to future policy benefits, which are not reflected in the table above.

Net Prior Year Development

Changes in estimates of claim and claim adjustment expense reserves, net of reinsurance, for prior years are defined as net prior year loss reserve development (development). These changes can be favorable or unfavorable. The following table presents development recorded for the Specialty, Commercial, International and Corporate & Other segments.

Three months ended March 31
(In millions)	2020			2019
Pretax (favorable) unfavorable development:
Specialty	$	(11	)	$	(20	)
Commercial	(4		)	(8		)
International	—			14
Corporate & Other	—			—
Total pretax (favorable) unfavorable development	$	(15	)	$	(14	)

25

Specialty

The following table presents further detail of the development recorded for the Specialty segment.

Three months ended March 31
(In millions)	2020			2019
Pretax (favorable) unfavorable development:
Medical Professional Liability	$	10		$	15
Other Professional Liability and Management Liability	3			(12		)
Surety	(30		)	(25		)
Warranty	—			—
Other	6			2
Total pretax (favorable) unfavorable development	$	(11	)	$	(20	)

2020

Unfavorable development in medical professional liability was primarily due to unfavorable outcomes on specific claims in accident years 2015 and 2016 in our aging services business.

Favorable development in surety was primarily due to lower than expected frequency for accident years 2017 and prior.

2019

Unfavorable development in medical professional liability was primarily due to higher than expected severity in accident year 2013 in our allied healthcare business.

Favorable development in other professional liability and management liability was primarily due to lower than expected claim frequency and favorable outcomes on individual claims in accident years 2017 and prior related to financial institutions. This was partially offset by unfavorable development in management liability in accident year 2014 due to large claim activity.

Favorable development in surety was due to lower than expected frequency for accident years 2016 and prior.

26

Commercial

The following table presents further detail of the development recorded for the Commercial segment.

Three months ended March 31
(In millions)	2020			2019
Pretax (favorable) unfavorable development:
Commercial Auto	$	9		$	(5	)
General Liability	—			(20		)
Workers' Compensation	(13		)	2
Property and Other	—			15
Total pretax (favorable) unfavorable development	$	(4	)	$	(8	)

2020

Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in accident years 2016 through 2018.

2019

Favorable development in general liability was primarily due to lower than expected frequency on latent construction defect claims in multiple accident years.

Unfavorable development in property and other was primarily due to higher than expected frequency and large loss activity in accident year 2018 in our marine business.

27

International

The following table presents further detail of the development recorded for the International segment.

Three months ended March 31
(In millions)	2020		2019
Pretax (favorable) unfavorable development:
Casualty	$	—	$	—
Property, Energy and Marine(1)	—		14
Specialty	—		—
Total pretax (favorable) unfavorable development	$	—	$	14

(1) Effective January 1, 2020 the Property and Energy and Marine lines of business have been combined in the International segment. Prior period information has been conformed to the new line of business presentation.

2019

Unfavorable development in property, energy and marine was driven by higher than expected claims in Hardy for 2018 accident year catastrophes.

28

Asbestos and Environmental Pollution (A&EP) Reserves

In 2010, Continental Casualty Company (CCC) together with several of the Company’s insurance subsidiaries completed a transaction with National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway Inc., under which substantially all of the Company’s legacy A&EP liabilities were ceded to NICO through a Loss Portfolio Transfer (LPT). At the effective date of the transaction, the Company ceded approximately $1.6 billion of net A&EP claim and allocated claim adjustment expense reserves to NICO under a retroactive reinsurance agreement with an aggregate limit of $4 billion. The $1.6 billion of claim and allocated claim adjustment expense reserves ceded to NICO was net of $1.2 billion of ceded claim and allocated claim adjustment expense reserves under existing third-party reinsurance contracts. The NICO LPT aggregate reinsurance limit also covers credit risk on the existing third-party reinsurance related to these liabilities. The Company paid NICO a reinsurance premium of $2 billion and transferred to NICO billed third-party reinsurance receivables related to A&EP claims with a net book value of $215 million, resulting in total consideration of $2.2 billion.

In years subsequent to the effective date of the LPT, the Company recognized adverse prior year development on its A&EP reserves resulting in additional amounts ceded under the LPT. As a result, the cumulative amounts ceded under the LPT have exceeded the $2.2 billion consideration paid, resulting in the NICO LPT moving into a gain position, requiring retroactive reinsurance accounting. Under retroactive reinsurance accounting, this gain is deferred and only recognized in earnings in proportion to actual paid recoveries under the LPT. Over the life of the contract, there is no economic impact as long as any additional losses incurred are within the limit of the LPT. In a period in which the Company recognizes a change in the estimate of A&EP reserves that increases or decreases the amounts ceded under the LPT, the proportion of actual paid recoveries to total ceded losses is affected and the change in the deferred gain is recognized in earnings as if the revised estimate of ceded losses was available at the effective date of the LPT. The effect of the deferred retroactive reinsurance benefit is recorded in Insurance claims and policyholders' benefits in the Condensed Consolidated Statements of Operations.

The impact of the LPT on the Condensed Consolidated Statements of Operations was the recognition of a retroactive reinsurance benefit of $14 million and $22 million for the three months ended March 31, 2020 and 2019. As of March 31, 2020 and December 31, 2019, the cumulative amounts ceded under the LPT were $3.2 billion. The unrecognized deferred retroactive reinsurance benefit was $378 million and $392 million as of March 31, 2020 and December 31, 2019 and is included within Other liabilities on the Condensed Consolidated Balance Sheets.

NICO established a collateral trust account as security for its obligations to the Company. The fair value of the collateral trust account was $2.7 billion and $3.7 billion as of March 31, 2020 and December 31, 2019. The decrease in the fair value of the trust was driven by overall declines in equity markets. As of March 31, 2020, the fair market value of the trust represented more than 150% of the gross LPT reserves. In addition, Berkshire Hathaway Inc. guaranteed the payment obligations of NICO up to the aggregate reinsurance limit as well as certain of NICO’s performance obligations under the trust agreement. NICO is responsible for claims handling and billing and collection from third-party reinsurers related to the majority of the Company’s A&EP claims.

29

Note F. Legal Proceedings, Contingencies and Guarantees

The Company is a party to various claims and litigation incidental to its business, which, based on the facts and circumstances currently known, are not material to the Company's results of operations or financial position.

Guarantees

As of March 31, 2020 and December 31, 2019, the Company had recorded liabilities of approximately $5 million related to guarantee and indemnification agreements. Management does not believe that any future indemnity claims will be significantly greater than the amounts recorded.

The Company has provided guarantees, if the primary obligor fails to perform, to holders of structured settlement annuities issued by a previously owned subsidiary. As of March 31, 2020, the potential amount of future payments the Company could be required to pay under these guarantees was approximately $1.7 billion, which will be paid over the lifetime of the annuitants. The Company does not believe any payment is likely under these guarantees, as the Company is the beneficiary of a trust that must be maintained at a level that approximates the discounted reserves for these annuities.

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Note G. Benefit Plans

The components of net periodic pension cost (benefit) are presented in the following table.

Three months ended March 31
(In millions)	2020			2019
Net periodic pension cost (benefit)
Interest cost on projected benefit obligation	$	20		$	25
Expected return on plan assets	(39		)	(36		)
Amortization of net actuarial (gain) loss	11			10
Settlement loss	1			—
Total net periodic pension cost (benefit)	$	(7	)	$	(1	)

For the three months ended March 31, 2020, the Company recognized $2 million of non-service benefit in Insurance claims and policyholders' benefits and $5 million of non-service benefit in Other operating expenses. For the three months ended March 31, 2019, the Company recognized less than $1 million of non-service benefit in Insurance claims and policyholders' benefits and $1 million of non-service benefit in Other operating expenses.

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Note H. Accumulated Other Comprehensive Income (Loss) by Component

The tables below display the changes in Accumulated other comprehensive income (loss) by component.

(In millions)	Net unrealized gains (losses) on investments with an allowance for credit losses(1)			Net unrealized gains (losses) on other investments(1)			Pension and postretirement benefits			Cumulative foreign currency translation adjustment			Total
Balance as of January 1, 2020	$	—		$	1,025		$	(833	)	$	(141	)	$	51
Other comprehensive income (loss) before reclassifications	(48		)	(1,066		)	1			(77		)	(1,190		)
Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $10, $6, $3, $- and $19	(37		)	(22		)	(10		)	—			(69		)
Other comprehensive income (loss) net of tax (expense) benefit of $3, $281, $(3), $- and $281	(11		)	(1,044		)	11			(77		)	(1,121		)
Balance as of March 31, 2020	$	(11	)	$	(19	)	$	(822	)	$	(218	)	$	(1,070	)

(1) As of January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The Net unrealized gains (losses) on investments with OTTI losses column that tracked the change in unrealized gains (losses) on investments with OTTI losses has been replaced with the Net unrealized gains (losses) on investments with an allowance for credit losses column. The balance as of January 1, 2020 in the Net unrealized gains (losses) on investments with OTTI losses column is now reported in the Net unrealized gains (losses) on other investments column.

(In millions)	Net unrealized gains (losses) on investments with OTTI losses		Net unrealized gains (losses) on other investments			Pension and postretirement benefits			Cumulative foreign currency translation adjustment			Total
Balance as of January 1, 2019	$	16	$	61		$	(775	)	$	(180	)	$	(878	)
Other comprehensive income (loss) before reclassifications	4		521			(1		)	17			541
Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $-, $1, $2, $- and $3	—		(5		)	(8		)	—			(13		)
Other comprehensive income (loss) net of tax (expense) benefit of $(1), $(141), $(2), $- and $(144)	4		526			7			17			554
Balance as of March 31, 2019	$	20	$	587		$	(768	)	$	(163	)	$	(324	)

Amounts reclassified from Accumulated other comprehensive income (loss) shown above are reported in Net income (loss) as follows:

Component of AOCI	Condensed Consolidated Statements of Operations Line Item Affected by Reclassifications
Net unrealized gains (losses) on investments with an allowance for credit losses, Net unrealized gains (losses) on investments with OTTI losses and Net unrealized gains (losses) on other investments	Net investment gains (losses)
Pension and postretirement benefits	Other operating expenses and Insurance claims and policyholders' benefits

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Note I. Business Segments

The Company's property and casualty commercial insurance operations are managed and reported in three business segments: Specialty, Commercial and International. These three segments are collectively referred to as Property & Casualty Operations. The Company's operations outside of Property & Casualty Operations are managed and reported in two segments: Life & Group and Corporate & Other.

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, 2019. 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, Goodwill and Deferred non-insurance warranty acquisition expense and revenue are readily identifiable for 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 Net investment gains or losses are allocated primarily based on each segment's net carried insurance reserves, as adjusted. All significant intersegment income and expense have 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.

The performance of the Company's insurance operations is monitored by management through core income (loss), which is derived from certain income statement amounts. 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.

Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of net investment gains or losses and any cumulative effects of changes in accounting guidance. The calculation of core income (loss) excludes net investment gains or losses because net investment gains or losses are generally driven by economic factors that are not necessarily reflective of our primary operations.

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

Three months ended March 31, 2020	Specialty			Commercial			International		Life & Group			Corporate & Other
(In millions)															Eliminations			Total
Operating revenues
Net earned premiums	$	685		$	818		$	239	$	127		$	—		$	—		$	1,869
Net investment income	56			47			15		208			3			—			329
Non-insurance warranty revenue	301			—			—		—			—			—			301
Other revenues	1			7			—		—			2			(2		)	8
Total operating revenues	1,043			872			254		335			5			(2		)	2,507
Claims, benefits and expenses
Net incurred claims and benefits	405			558			154		316			(14		)	—			1,419
Policyholders’ dividends	1			5			—		—			—			—			6
Amortization of deferred acquisition costs	151			144			49		—			—			—			344
Non-insurance warranty expense	281			—			—		—			—			—			281
Other insurance related expenses	69			127			36		26			—			—			258
Other expenses	13			6			13		3			39			(2		)	72
Total claims, benefits and expenses	920			840			252		345			25			(2		)	2,380
Core income (loss) before income tax	123			32			2		(10		)	(20		)	—			127
Income tax (expense) benefit on core income (loss)	(27		)	(8		)	—		14			2			—			(19		)
Core income (loss)	$	96		$	24		$	2	$	4		$	(18	)	$	—		108
Net investment gains (losses)																		(216		)
Income tax (expense) benefit on net investment gains (losses)																		47
Net investment gains (losses), after tax																		(169		)
Net income (loss)																		$	(61	)

March 31, 2020
(In millions)
Reinsurance receivables	$	793	$	883	$	233	$	370	$	2,072	$	—		$	4,351
Insurance receivables	953		1,267		302		8		2		—			2,532
Deferred acquisition costs	316		277		90		—		—		—			683
Goodwill	117		—		28		—		—		—			145
Deferred non-insurance warranty acquisition expense	2,905		—		—		—		—		—			2,905
Insurance reserves
Claim and claim adjustment expenses	5,472		8,704		1,818		3,712		2,166		—			21,872
Unearned premiums	2,363		1,751		495		137		—		(1		)	4,745
Future policy benefits	—		—		—		11,734		—		—			11,734
Deferred non-insurance warranty revenue	3,848		—		—		—		—		—			3,848

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Three months ended March 31, 2019	Specialty			Commercial			International		Life & Group			Corporate & Other
(In millions)															Eliminations			Total
Operating revenues
Net earned premiums	$	661		$	763		$	250	$	130		$	—		$	(1	)	$	1,803
Net investment income	155			190			15		204			7			—			571
Non-insurance warranty revenue	281			—			—		—			—			—			281
Other revenues	1			7			—		1			2			(2		)	9
Total operating revenues	1,098			960			265		335			9			(3		)	2,664
Claims, benefits and expenses
Net incurred claims and benefits	392			510			162		308			(21		)	—			1,351
Policyholders’ dividends	1			5			—		—			—			—			6
Amortization of deferred acquisition costs	147			127			68		—			—			—			342
Non-insurance warranty expense	260			—			—		—			—			—			260
Other insurance related expenses	70			130			25		28			(1		)	(1		)	251
Other expenses	12			11			4		2			39			(2		)	66
Total claims, benefits and expenses	882			783			259		338			17			(3		)	2,276
Core income (loss) before income tax	216			177			6		(3		)	(8		)	—			388
Income tax (expense) benefit on core income (loss)	(47		)	(38		)	—		13			2			—			(70		)
Core income (loss)	$	169		$	139		$	6	$	10		$	(6	)	$	—		318
Net investment gains (losses)																		31
Income tax (expense) benefit on net investment gains (losses)																		(7		)
Net investment gains (losses), after tax																		24
Net income (loss)																		$	342

December 31, 2019
(In millions)
Reinsurance receivables	$	575	$	855	$	247	$	385	$	2,142	$	—	$	4,204
Insurance receivables	971		1,210		284		16		—		—		2,481
Deferred acquisition costs	311		257		94		—		—		—		662
Goodwill	117		—		30		—		—		—		147
Deferred non-insurance warranty acquisition expense	2,840		—		—		—		—		—		2,840
Insurance reserves
Claim and claim adjustment expenses	5,238		8,656		1,876		3,716		2,234		—		21,720
Unearned premiums	2,337		1,626		495		125		—		—		4,583
Future policy benefits	—		—		—		12,311		—		—		12,311
Deferred non-insurance warranty revenue	3,779		—		—		—		—		—		3,779

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

Three months ended March 31
(In millions)	2020			2019
Specialty
Management & Professional Liability	$	568		$	636
Surety	138			139
Warranty & Alternative Risks	337			323
Specialty revenues	1,043			1,098
Commercial
Middle Market	335			357
Construction (1)	250			248
Small Business	112			131
Other Commercial	175			224
Commercial revenues	872			960
International
Canada	73			66
Europe	92			91
Hardy	89			108
International revenues	254			265
Life & Group revenues	335			335
Corporate & Other revenues	5			9
Eliminations	(2		)	(3		)
Total operating revenues	2,507			2,664
Net investment gains (losses)	(216		)	31
Total revenues	$	2,291		$	2,695

(1) Effective January 1, 2020, the Construction line of business is presented separately in the Commercial segment to better align with our underwriting expertise and the manner in which the products are sold. Prior period information has been conformed to the new line of business presentation.

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Note J. Non-Insurance Revenues from Contracts with Customers

The Company had $3.8 billion reported in Deferred non-insurance warranty revenue as of March 31, 2020 and December 31, 2019. For the three months ended March 31, 2020, the Company recognized $286 million of revenues that were included in the deferred revenue balance as of January 1, 2020. For the three months ended March 31, 2019, the Company recognized $265 million of revenues that were included in the deferred revenue balance as of January 1, 2019. For the three months ended March 31, 2020 and 2019, Non-insurance warranty revenue recognized from performance obligations related to prior periods due to a change in estimate was not material. The Company expects to recognize approximately $831 million of the deferred revenue in the remainder of 2020, $951 million in 2021, $735 million in 2022 and $1.3 billion thereafter.

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Note K. Expected Credit Losses - Uncollectible Reinsurance and Insurance Receivables

The Company has established an allowance for uncollectible reinsurance receivables which relates to both amounts already billed on ceded paid losses as well as ceded reserves that will be billed when losses are paid in the future. For assessing expected credit losses, the Company separates reinsurance receivables into two pools; voluntary reinsurance receivables and involuntary reinsurance exposures to mandatory pools. The Company has not recorded an allowance for involuntary pools as there is no perceived credit risk. The principal credit quality indicator used in the valuation of the allowance on voluntary reinsurance receivables is the financial strength rating of the reinsurer sourced from major rating agencies. If the reinsurer is unrated, an internal financial strength rating is assigned based on the Company’s historical loss experience and the Company’s assessment of reinsurance counterparty risk profile, which generally corresponds with a B rating. Changes in the allowance are presented as a component of Insurance claims and policyholders' benefits on the Condensed Consolidated Statements of Operations.

The following table summarizes the outstanding amount of voluntary reinsurance receivables, gross of any collateral arrangements, by financial strength rating as of March 31, 2020:

(In millions)	March 31, 2020
A- to A++	$	2,662
B- to B++	859
Insolvent	4
Total voluntary reinsurance outstanding balance(1)	$	3,525

(1) Expected credit losses for legacy A&EP receivables are ceded to NICO and the reinsurance limit on the LPT has not been exhausted, therefore no allowance is recorded for these receivables and they are excluded from the table above. Refer to Note E for information regarding the LPT. The Company has also excluded receivables from involuntary pools.

Voluntary reinsurance receivables within the B- to B++ rating distribution are primarily due from captive reinsurers and backed by collateral arrangements.

The Company has established an allowance for uncollectible insurance receivables. A loss rate methodology is used to determine expected credit losses for premium receivables. This methodology uses the Company’s historical annual credit losses relative to gross premium written to develop a range of credit loss rates for each dollar of gross written premium underwritten. The expected credit loss for loss sensitive business in good standing is calculated on a pool basis, using historical default rate data obtained from major rating agencies. Changes in the allowance are presented as a component of Other operating expenses on the Condensed Consolidated Statements of Operations.

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Item 2. Management's Discussion and Analysis (MD&A) of Financial Condition and Results of Operations

OVERVIEW

The following discussion highlights significant factors affecting the Company. References to “we,” “our,” “us” or like terms refer to the business of CNA.

The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements included under Part I, Item 1 of this Form 10-Q, as well as the supplemental risk factor regarding the COVID-19 pandemic disclosed under Part II, Item 1A of this Form 10-Q. The following discussion should also be read in conjunction with Item 1A Risk Factors and Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations, which are included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2019.

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 any cumulative effects of changes in accounting guidance. The calculation of core income (loss) excludes net investment gains or losses because net investment gains or losses are generally driven by economic factors that are not necessarily reflective of our primary operations. Management monitors core income (loss) for each business segment to assess segment performance. Presentation of consolidated core income (loss) is deemed to be a non-GAAP financial measure. See further discussion regarding how we manage our business in Note I to the Condensed Consolidated Financial Statements included under Part I, Item 1. For reconciliations of non-GAAP measures to the most comparable GAAP measures and other information, please refer herein and/or to CNA's most recent Annual Report on Form 10-K on file with the Securities and Exchange Commission.

In evaluating the results of our Specialty, Commercial and International segments, we utilize the loss ratio, the expense ratio, the dividend ratio and the 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 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, expense and dividend ratios. 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. For certain products within Small Business, where quantifiable, rate includes the influence of new business as well. Exposure represents the measure of risk used in the pricing of the insurance product. Retention represents the percentage of premium dollars renewed in comparison to the expiring premium dollars from policies available to renew. Renewal premium change, rate and retention presented for the prior year are updated to reflect subsequent activity on policies written in the period. 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 mostly ceded to third party captives, including business related to large warranty programs.

Changes in estimates of claim and claim adjustment expense reserves, net of reinsurance, for prior years are defined as net prior year loss reserve development within this MD&A. These changes can be favorable or unfavorable. Net prior year loss reserve development does not include the effect of any related acquisition expenses. Further information on our reserves is provided in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.

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CRITICAL ACCOUNTING ESTIMATES

The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the amount of revenues and expenses reported during the period. Actual results may differ from those estimates.

Our Condensed Consolidated Financial Statements and accompanying notes have been prepared in accordance with GAAP applied on a consistent basis. We continually evaluate the accounting policies and estimates used to prepare the Condensed Consolidated Financial Statements. In general, our estimates are based on historical experience, evaluation of current trends, information from third-party professionals and various other assumptions that are believed to be reasonable under the known facts and circumstances.

The accounting estimates discussed below are considered by us to be critical to an understanding of our Condensed Consolidated Financial Statements as their application places the most significant demands on our judgment:

• Insurance Reserves

• Long Term Care Reserves

• Reinsurance and Insurance Receivables

• Valuation of Investments and Impairment of Securities

• Income Taxes

Due to the inherent uncertainties involved with these types of judgments, actual results could differ significantly from our estimates and may have a material adverse impact on our results of operations, equity, business, and insurer financial strength and corporate debt ratings. See the Critical Accounting Estimates section of our Management's Discussion and Analysis of Financial Condition and Results of Operations included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2019 for further information.

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CONSOLIDATED OPERATIONS

Results of Operations

The COVID-19 pandemic and global, national, regional and local efforts to mitigate the spread of the virus have rapidly evolved and led to severely depressed economic conditions and financial market disruption, primarily beginning in the month of March. These conditions have had an impact across our enterprise during the first quarter of 2020. While the impact to our underwriting results was limited, we experienced significant declines in the value of our investment portfolio during the first quarter. Currently, we believe the future impact across our operations is likely to be reflected in continued volatility in our investment portfolio, and adverse effects on our underwriting results including decreased premiums, elevated expenses in the form of credit losses for uncollectible receivables, and increased claims reporting activity and related litigation, due to both the pandemic and depressed economic conditions. For more discussion of COVID-19 impacts on our underwriting results and detailed components of our business operations and a discussion of the core income (loss) financial measure, see the segment sections within this MD&A. For further discussion of Net investment income and Net investment gains or losses, see the Investments section of this MD&A. For further discussion of the risks to our business associated with COVID-19, see the Risk Factor included under Part II, Item 1A of this Form 10-Q.

The following table includes the consolidated results of our operations including our financial measure, core income (loss).

Three months ended March 31
(In millions)	2020			2019
Operating Revenues
Net earned premiums	$	1,869		$	1,803
Net investment income	329			571
Non-insurance warranty revenue	301			281
Other revenues	8			9
Total operating revenues	2,507			2,664
Claims, Benefits and Expenses
Net incurred claims and benefits	1,419			1,351
Policyholders' dividends	6			6
Amortization of deferred acquisition costs	344			342
Non-insurance warranty expense	281			260
Other insurance related expenses	258			251
Other expenses	72			66
Total claims, benefits and expenses	2,380			2,276
Core income before income tax	127			388
Income tax expense on core income	(19		)	(70		)
Core income	108			318
Net investment (losses) gains	(216		)	31
Income tax benefit (expense) on net investment (losses) gains	47			(7		)
Net investment (losses) gains, after tax	(169		)	24
Net (loss) income	$	(61	)	$	342

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Core income decreased $210 million for the three months ended March 31, 2020 as compared with the same period in 2019. Core income for our Property & Casualty Operations decreased $192 million primarily due to lower net investment income driven by limited partnership and common stock returns. Our underwriting results for the three months ended March 31, 2020 included a $15 million pretax ($12 million after-tax) loss related to COVID-19 comprised of claims activity included in catastrophe losses and an increase in our allowance for uncollectible insurance receivables. Core income for our Life & Group segment decreased $6 million while the core loss for our Corporate & Other segment increased $12 million.

Net catastrophe losses were $75 million and $58 million for the three months ended March 31, 2020 and 2019. Catastrophe losses for the three months ended March 31, 2020 include $13 million related to COVID-19, which is being tracked as a separate catastrophe event. Favorable net prior year loss reserve development of $15 million and $14 million was recorded in the three months ended March 31, 2020 and 2019 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 Condensed Consolidated Financial Statements included under Part I, Item 1.

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SEGMENT RESULTS

The impact COVID-19 had on our insurance underwriting results was more limited in the first quarter of 2020 than we anticipate occurring in the second and third quarters of 2020, and possibly thereafter, as the situation continues to evolve. Currently, we believe the future impact on our underwriting results is likely to include declines in premium volume, driven by slower growth, especially for lines of business that are sensitive to rates of economic growth, as well as policy cancellations, refunds or return of premiums, as a result of decreased insured exposures for our current policyholders. In addition, many of our customers, across a broad spectrum of industries, are likely to be impacted by lost business, which may affect our ability to collect amounts owed to us, increasing our expenses for credit losses for uncollectible premiums. Lower premiums and higher expenses will result in an increase to our expense ratio. Further, while loss frequency may decrease related to lower exposures in certain lines, we expect an overall increase in insurance claims reporting activity and related litigation due to both the pandemic and depressed economic conditions. This includes increased frequency in claim submissions in lines that are implicated by the virus and the mitigating activities taken by our customers and governmental authorities in response to its spread. These include workers’ compensation, healthcare, commercial property coverage, and directors’ and officers’ liability and employment practices liability lines. In addition, our surety lines may experience increased losses, particularly in construction surety, where there is risk that contractors will be adversely impacted by general economic conditions. The costs associated with claims handling and defense, as well as the payment of claims for covered exposures, will likely increase our loss ratio. For further discussion of the risks to our business associated with COVID-19, see the Risk Factor included under Part II, Item 1A of this Form 10-Q.

The following discusses the results of operations for our business segments during the first quarter of 2020. 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. Our operations outside of Property & Casualty Operations are managed and reported in two segments: Life & Group and Corporate & Other.

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Specialty

The following table details the results of operations for Specialty.

Three months ended March 31
(In millions, except ratios, rate, renewal premium change and retention)	2020			2019
Gross written premiums	$	1,714		$	1,701
Gross written premiums excluding third party captives	741			730
Net written premiums	694			698
Net earned premiums	685			661
Net investment income	56			155
Core income	96			169
Other performance metrics:
Loss and loss adjustment expense ratio	59.1		%	59.3		%
Expense ratio	32.0			32.8
Dividend ratio	0.2			0.2
Combined ratio	91.3		%	92.3		%
Rate	9		%	3		%
Renewal premium change	9			6
Retention	84			89
New business	$	74		$	86

Gross written premiums, excluding third party captives, for Specialty increased $11 million for the three months ended March 31, 2020 as compared with the same period in 2019 driven by strong rate. Net written premiums for Specialty decreased $4 million for the three months ended March 31, 2020 as compared with the same period in 2019 driven by a higher level of ceded reinsurance. The increase in net earned premiums was consistent with the trend in net written premiums in recent quarters.

Core income decreased $73 million for the three months ended March 31, 2020 as compared with the same period in 2019 primarily due to lower net investment income driven by limited partnership and common stock returns partially offset by improved current accident year underwriting results.

The combined ratio of 91.3% improved 1.0 point for the three months ended March 31, 2020 as compared with the same period in 2019. The loss ratio improved 0.2 points driven by improved current accident year underwriting results largely offset by lower favorable net prior year loss reserve development in the current period. Net catastrophe losses were $8 million, or 1.1 points of the loss ratio, for the three months ended March 31, 2020, as compared with $12 million, or 1.8 points of the loss ratio, for the three months ended March 31, 2019. Net catastrophe losses for the three months ended March 31, 2020 included $6 million related to the COVID-19 pandemic. The expense ratio improved 0.8 points for the three months ended March 31, 2020 as compared with the same period in 2019 driven by higher net earned premiums.

Favorable net prior year loss reserve development of $11 million and $20 million was recorded for the three months ended March 31, 2020 and 2019. 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.

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The following table summarizes the gross and net carried reserves for Specialty.

(In millions)	March 31, 2020		December 31, 2019
Gross case reserves	$	1,527	$	1,481
Gross IBNR reserves	3,945		3,757
Total gross carried claim and claim adjustment expense reserves	$	5,472	$	5,238
Net case reserves	$	1,385	$	1,343
Net IBNR reserves	3,310		3,333
Total net carried claim and claim adjustment expense reserves	$	4,695	$	4,676

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Commercial

The following table details the results of operations for Commercial.

Three months ended March 31
(In millions, except ratios, rate, renewal premium change and retention)	2020			2019
Gross written premiums	$	1,062		$	941
Gross written premiums excluding third party captives	1,059			932
Net written premiums	950			849
Net earned premiums	818			763
Net investment income	47			190
Core income	24			139
Other performance metrics:
Loss and loss adjustment expense ratio	68.1		%	66.9		%
Expense ratio	33.2			33.8
Dividend ratio	0.6			0.6
Combined ratio	101.9		%	101.3		%
Rate	8		%	2		%
Renewal premium change	9			4
Retention	85			85
New business	$	198		$	163

Gross written premiums for Commercial increased $121 million for the three months ended March 31, 2020 as compared with the same period in 2019 driven by higher new business and rate. Net written premiums for Commercial increased $101 million for the three months ended March 31, 2020 as compared with the same period in 2019. The increase in net earned premium was consistent with the trend in net written premiums.

Core income decreased $115 million for the three months ended March 31, 2020 as compared with the same period in 2019, primarily due to lower net investment income driven by limited partnership and common stock returns.

The combined ratio of 101.9% increased 0.6 points for the three months ended March 31, 2020 as compared with the same period in 2019. The loss ratio increased 1.2 points driven by higher net catastrophe losses partially offset by lower claim handling expenses. Net catastrophe losses were $57 million, or 7.0 points of the loss ratio, for the three months ended March 31, 2020, as compared with $40 million, or 5.2 points of the loss ratio, for the three months ended March 31, 2019. Net catastrophe losses for three months ended March 31, 2020 included $5 million related to the COVID-19 pandemic. The expense ratio for the three months ended March 31, 2020 improved 0.6 point as compared with the same period in 2019 driven by higher net earned premiums.

Favorable net prior year loss reserve development of $4 million and $8 million was recorded for the three months ended March 31, 2020 and 2019. 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.

The following table summarizes the gross and net carried reserves for Commercial.

(In millions)	March 31, 2020		December 31, 2019
Gross case reserves	$	3,914	$	3,937
Gross IBNR reserves	4,790		4,719
Total gross carried claim and claim adjustment expense reserves	$	8,704	$	8,656
Net case reserves	$	3,477	$	3,543
Net IBNR reserves	4,414		4,306
Total net carried claim and claim adjustment expense reserves	$	7,891	$	7,849

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International

The following table details the results of operations for International.

Three months ended March 31
(In millions, except ratios, rate, renewal premium change and retention)	2020			2019
Gross written premiums	$	307		$	324
Net written premiums	219			259
Net earned premiums	239			250
Net investment income	15			15
Core income	2			6
Other performance metrics:
Loss and loss adjustment expense ratio	64.5		%	64.8		%
Expense ratio	35.4			37.1
Combined ratio	99.9		%	101.9		%
Rate	8		%	5		%
Renewal premium change	8			2
Retention	72			69
New business	$	68		$	80

Gross written premiums for International decreased $17 million for the three months ended March 31, 2020 as compared with the same period in 2019 driven by the continued impact of the strategic exit from certain Lloyd’s business classes, offset by growth in Canada. Net written premiums decreased $40 million for the three months ended March 31, 2020 as compared with the same period in 2019. The decrease in net earned premiums was consistent with the trend in net written premiums.

Core income decreased $4 million for the three months ended March 31, 2020 as compared with the same period in 2019 driven by current accident year underwriting results.

The combined ratio of 99.9% improved 2.0 points for the three months ended March 31, 2020 as compared with the same period in 2019. The loss ratio improved 0.3 points driven by the absence of unfavorable net prior year loss reserve development in the current period partially offset by lower current accident year underwriting results. Net catastrophe losses were $10 million, or 4.3 points of the loss ratio, for the three months ended March 31, 2020, as compared with $6 million, or 2.3 points of the loss ratio, for the three months ended March 31, 2019. Net catastrophe losses for the three months ended March 31, 2020 included $2 million related to the COVID-19 pandemic. The expense ratio improved 1.7 points for the three months ended March 31, 2020 as compared with the same period in 2019 driven by lower acquisition expenses and employee costs.

There was no prior year loss reserve development recorded for the three months ended March 31, 2020 as compared with unfavorable development of $14 million for the three months ended March 31, 2019. 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.

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The following table summarizes the gross and net carried reserves for International.

(In millions)	March 31, 2020		December 31, 2019
Gross case reserves	$	807	$	858
Gross IBNR reserves	1,011		1,018
Total gross carried claim and claim adjustment expense reserves	$	1,818	$	1,876
Net case reserves	$	719	$	759
Net IBNR reserves	864		869
Total net carried claim and claim adjustment expense reserves	$	1,583	$	1,628

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Life & Group

The following table summarizes the results of operations for Life & Group.

Three months ended March 31
(In millions)	2020			2019
Net earned premiums	$	127		$	130
Net investment income	208			204
Core loss before income tax	(10		)	(3		)
Income tax benefit on core loss	14			13
Core income	4			10

Due to the recognition of the active life reserve premium deficiency and resetting of actuarial assumptions in the third quarter of 2019, the operating results for our long term care business in 2020 now reflect the variance between actual experience and the expected results contemplated in our best estimate reserves. Core income of $4 million for the three months ended March 31, 2020 is in line with expectations.

Corporate & Other

The following table summarizes the results of operations for the Corporate & Other segment, including intersegment eliminations.

Three months ended March 31
(In millions)	2020			2019
Net investment income	$	3		$	7
Interest expense	31			34
Core loss	(18		)	(6		)

Core loss increased $12 million for the three months ended March 31, 2020 as compared with the same period in 2019 driven by lower amortization of the deferred gain related to the A&EP Loss Portfolio Transfer (LPT). The A&EP LPT is further discussed in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.

The following table summarizes the gross and net carried reserves for Corporate & Other.

(In millions)	March 31, 2020		December 31, 2019
Gross case reserves	$	1,185	$	1,137
Gross IBNR reserves	981		1,097
Total gross carried claim and claim adjustment expense reserves	$	2,166	$	2,234
Net case reserves	$	92	$	92
Net IBNR reserves	78		83
Total net carried claim and claim adjustment expense reserves	$	170	$	175

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INVESTMENTS

The financial market disruption in the first quarter of 2020 significantly impacted our investment portfolio during the period. Losses from our limited partnership and common and preferred equity portfolios, as well as the recognition of impairment losses on certain fixed maturity holdings, have negatively impacted our net income. Additionally, the overall fair value of our available for sale fixed maturity portfolio has declined, primarily as a result of credit spread widening. We currently expect some level of continued volatility in our investment portfolio as the situation continues to evolve.

Net Investment Income

The significant components of Net investment income are presented in the following table. Fixed income securities, as presented, include both fixed maturity securities and non-redeemable preferred stock.

Three months ended March 31
(In millions)	2020			2019
Fixed income securities:
Taxable fixed income securities	$	371		$	383
Tax-exempt fixed income securities	78			82
Total fixed income securities	449			465
Limited partnership investments	(70		)	76
Common stock	(55		)	20
Other, net of investment expense	5			10
Pretax net investment income	$	329		$	571
Fixed income securities, after tax	$	367		$	380
Net investment income, after tax	279			465
Effective income yield for the fixed income securities portfolio, pretax	4.6		%	4.8		%
Effective income yield for the fixed income securities portfolio, after tax	3.8		%	3.9		%
Limited partnership and common stock return	(7.0		)%	4.5		%

Net investment income, after tax, decreased $186 million for the three months ended March 31, 2020 as compared with the same period in 2019 driven by limited partnership and common stock returns. The limited partnership returns for the three months ended March 31, 2020 include limited partnerships representing 51% reporting on a current basis with no reporting lag and 49% reporting on a lag, primarily three months or less. Limited partnerships reporting on a current basis include substantially all of the Company's hedge funds.

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Net Investment Gains (Losses)

The components of Net investment gains (losses) are presented in the following table.

Three months ended March 31
(In millions)	2020			2019
Fixed maturity securities:
Corporate and other bonds	$	(79	)	$	—
States, municipalities and political subdivisions	—			8
Asset-backed	4			(14		)
Total fixed maturity securities	(75		)	(6		)
Non-redeemable preferred stock	(133		)	42
Short term and other	5			(5		)
Mortgage loans	(13		)	—
Net investment (losses) gains	(216		)	31
Income tax benefit (expense) on net investment (losses) gains	47			(7		)
Net investment (losses) gains, after tax	$	(169	)	$	24

Net investment results, after tax, decreased $193 million for the three months ended March 31, 2020 as compared with the same period in 2019. The decrease was driven by the unfavorable change in fair value of non-redeemable preferred stock and higher impairment losses for the quarter. Pretax impairment losses of $92 million were recognized in the current quarter, which includes $77 million related to the energy sector.

Further information on our investment gains and losses is set forth in Note C to the Condensed Consolidated Financial Statements included under Part 1, Item 1.

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Portfolio Quality

The following table presents the estimated fair value and net unrealized gains (losses) of our fixed maturity securities by rating distribution.

	March 31, 2020					December 31, 2019
(In millions)	Estimated Fair Value		Net Unrealized Gains (Losses)			Estimated Fair Value		Net Unrealized Gains (Losses)
U.S. Government, Government agencies and Government-sponsored enterprises	$	4,073	$	198		$	4,136	$	95
AAA	3,529		381			3,254		349
AA	6,328		747			6,663		801
A	8,751		819			9,062		1,051
BBB	15,284		255			16,839		1,684
Non-investment grade	2,133		(287		)	2,253		101
Total	$	40,098	$	2,113		$	42,207	$	4,081

As of March 31, 2020 and December 31, 2019, 1% of our fixed maturity portfolio was rated internally. AAA rated securities included $1.9 billion and $1.5 billion of pre-funded municipal bonds as of March 31, 2020 and December 31, 2019.

The following table presents available-for-sale fixed maturity securities in a gross unrealized loss position by ratings distribution.

	March 31, 2020
(In millions)	Estimated Fair Value		Gross Unrealized Losses
U.S. Government, Government agencies and Government-sponsored enterprises	$	6	$	—
AAA	196		4
AA	481		25
A	1,762		117
BBB	6,102		652
Non-investment grade	1,606		319
Total	$	10,153	$	1,117

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The following table presents the maturity profile for these available-for-sale fixed maturity securities. Securities not due to mature on a single date are allocated based on weighted average life.

	March 31, 2020
(In millions)	Estimated Fair Value		Gross Unrealized Losses
Due in one year or less	$	321	$	26
Due after one year through five years	2,780		199
Due after five years through ten years	5,418		632
Due after ten years	1,634		260
Total	$	10,153	$	1,117

The following table summarizes the available-for-sale Corporate and other bonds at March 31, 2020 across industry sectors.

March 31, 2020	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
(In millions)
Corporate and other bonds:
Basic Materials	$	1,615	$	95	$	78	$	—	$	1,632
Communications	1,429		193		27		—		1,595
Consumer, cyclical - Other	605		16		56		—		565
Consumer, non-cyclical - Other	1,641		195		27		—		1,809
Energy - Oil & Gas	1,170		40		191		37		982
Energy - Other	23		7		—		—		30
Energy - Pipelines	1,056		43		112		11		976
Entertainment	177		—		23		—		154
Financial - Other	5,748		308		89		—		5,967
Financial - Real Estate/REITS	1,455		30		45		—		1,440
Industrial	1,481		135		55		—		1,561
Retail	527		67		18		—		576
Technology	853		38		30		1		860
Transportation	331		35		5		—		361
Travel & Related	490		26		37		—		479
Utilities	1,580		191		24		—		1,747
Total Corporate and other bonds	$	20,181	$	1,419	$	817	$	49	$	20,734

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Duration

A primary objective in the management of the investment portfolio is to optimize return relative to the corresponding liabilities and respective liquidity needs. Our views on the current interest rate environment, tax regulations, asset class valuations, specific security issuer and broader industry segment conditions as well as domestic and global economic conditions, are some of the factors that enter into an investment decision. We also continually monitor exposure to issuers of securities held and broader industry sector exposures and may from time to time adjust such exposures based on our views of a specific issuer or industry sector.

A further consideration in the management of the investment portfolio is the characteristics of the corresponding liabilities and the ability to align the duration of the portfolio to those liabilities and to meet future liquidity needs, minimize interest rate risk and maintain a level of income sufficient to support the underlying insurance liabilities. For portfolios where future liability cash flows are determinable and typically long term in nature, we segregate investments for asset/liability management purposes. The segregated investments support the long term care and structured settlement liabilities in the Life & Group segment.

The effective durations of fixed income securities and short term investments are presented in the following table. Amounts presented are net of payable and receivable amounts for securities purchased and sold, but not yet settled.

	March 31, 2020			December 31, 2019
(In millions)	Estimated Fair Value		Effective Duration (In years)	Estimated Fair Value		Effective Duration (In years)
Investments supporting Life & Group	$	17,201	8.7	$	18,015	8.9
Other investments	24,237		4.1	26,813		4.1
Total	$	41,438	6.0	$	44,828	6.0

The investment portfolio is periodically analyzed for changes in duration and related price risk. Certain securities have duration characteristics that are variable based on market interest rates, credit spreads and other factors that may drive variability in the amount and timing of cash flows. Additionally, we periodically review the sensitivity of the portfolio to the level of foreign exchange rates and other factors that contribute to market price changes. A summary of these risks and specific analysis on changes is included in the Quantitative and Qualitative Disclosures About Market Risk included under Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2019.

Short Term Investments

The carrying value of the components of the Short term investments are presented in the following table.

(In millions)	March 31, 2020		December 31, 2019
Short term investments:
Commercial paper	$	326	$	1,181
U.S. Treasury securities	103		364
Other	167		316
Total short term investments	$	596	$	1,861

In addition to Short term investments, the Company held $857 million and $242 million of Cash as of March 31, 2020 and December 31, 2019.

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LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

Our primary operating cash flow sources are premiums and investment income from our insurance subsidiaries. Our primary operating cash flow uses are payments for claims, policy benefits and operating expenses, including interest expense on corporate debt. Additionally, cash may be paid or received for income taxes.

Related to the COVID-19 pandemic and efforts to mitigate the spread of the virus, cash flows may be adversely impacted by lower premium volumes, suspensions and cancellations of policies, return of premiums or premium refunds, and increased claim and defense cost payments in future quarters. At this time, we do not believe these impacts would give rise to a material liquidity concern given our overall liquid assets and anticipated future cash flows.

For the three months ended March 31, 2020, net cash provided by operating activities was $212 million as compared with $287 million for the same period in 2019. The decrease in cash provided by operating activities was driven by higher net claim payments and a lower level of distributions from limited partnerships partially offset by an increase in premiums collected.

Cash flows from investing activities include the purchase and disposition of financial instruments, excluding those held as trading, and may include the purchase and sale of businesses, equipment and other assets not generally held for resale.

Net cash provided by investing activities was $1,087 million for the three months ended March 31, 2020, as compared with $289 million for the same period in 2019. The cash flow from investing activities is affected by various factors such as the anticipated payment of claims, financing activity, asset/liability management and individual security buy and sell decisions made in the normal course of portfolio management.

Cash flows from financing activities may include proceeds from the issuance of debt and equity securities, and outflows for stockholder dividends, repayment of debt and purchases of treasury stock.

For the three months ended March 31, 2020, net cash used by financing activities was $675 million as compared with $665 million for the same period 2019. In the first quarter of 2020, we paid dividends of $649 million and repurchased 435,376 shares of our common stock at an aggregate cost of $18 million. In the first quarter of 2019, we paid dividends of $643 million and repurchased 317,508 shares of our common stock at an aggregate cost of $14 million.

Common Stock Dividends

A quarterly dividend of $0.37 per share and a special dividend of $2.00 per share of our common stock were declared and paid in the first quarter of 2020. On May 1, 2020, our Board of Directors declared a quarterly dividend of $0.37 per share, payable June 4, 2020 to stockholders of record on May 18, 2020. 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.

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Liquidity

We believe that our present cash flows from operating, investing and financing activities are sufficient to fund our current and expected working capital and debt obligation needs and we do not expect this to change in the near term. In addition, we held $5 billion of cash, short term investments and highly liquid securities issued by US government agencies as of March 31, 2020, of which $506 million was held at the CNAF holding company. There are currently no amounts outstanding under our $250 million senior unsecured revolving credit facility and no borrowings outstanding through our membership in the Federal Home Loan Bank of Chicago (FHLBC).

Dividends from 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 (the Department), 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 March 31, 2020, CCC was in a positive earned surplus position. The maximum allowable dividend CCC could pay during 2020 that would not be subject to the Department's prior approval is $1,078 million, less dividends paid during the preceding twelve months measured at that point in time. CCC paid dividends of $125 million during the three months ended June 30, 2019, $135 million during the three months ended September 30, 2019, $125 million during the three months ended December 31, 2019 and $670 million during the three months ended March 31, 2020. As of March 31, 2020, CCC is able to pay approximately $23 million of dividends that would not be subject to prior approval of the Department. 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.

We have an effective automatic shelf registration statement under which we may publicly issue debt, equity or hybrid securities from time to time.

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ACCOUNTING STANDARDS UPDATE

For a discussion of Accounting Standards Updates adopted in the current period and that will be adopted in the future, see Note A to the Condensed Consolidated Financial Statements included under Part I, Item 1.

FORWARD-LOOKING STATEMENTS

This report contains a number of forward-looking statements which relate to anticipated future events rather than actual present conditions or historical events. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and generally include words such as “believes,” “expects,” “intends,” “anticipates,” “estimates” and similar expressions. Forward-looking statements in this report include any and all statements regarding expected developments in our insurance business, including losses and loss reserves for long term care, A&EP and other mass tort claims which are more uncertain, and therefore more difficult to estimate than loss reserves respecting traditional property and casualty exposures; the impact of routine ongoing insurance reserve reviews we are conducting; our expectations concerning our revenues, earnings, expenses and investment activities; volatility in investment returns; and our proposed actions in response to trends in our business. Forward-looking statements, by their nature, are subject to a variety of inherent risks and uncertainties that could cause actual results to differ materially from the results projected in the forward-looking statement. We cannot control many of these risks and uncertainties. These risks and uncertainties include, but are not limited to, the following:

Company-Specific Factors

• the risks and uncertainties associated with our insurance reserves, as outlined in the Critical Accounting Estimates and the Reserves - Estimates and Uncertainties sections of our 2019 Annual Report on Form 10-K and this report, including the sufficiency of the reserves and the possibility for future increases, which would be reflected in the results of operations in the period that the need for such adjustment is determined;

• the risk that the other parties to the transaction in which, subject to certain limitations, we ceded our legacy A&EP liabilities will not fully perform their obligations to CNA, the uncertainty in estimating loss reserves for A&EP liabilities and the possible continued exposure of CNA to liabilities for A&EP claims that are not covered under the terms of the transaction;

• the performance of reinsurance companies under reinsurance contracts with us; and

• the risks and uncertainties associated with potential acquisitions and divestitures, including the consummation of such transactions, the successful integration of acquired operations and the potential for subsequent impairment of goodwill or intangible assets.

Industry and General Market Factors

• the COVID-19 pandemic, and actions seeking to mitigate the spread of the virus, have resulted in significant risk across our enterprise, as economic uncertainty and depressed business conditions brought on by the crisis may materially and adversely impact our business, driving significant decreases in our premium volume and resulting in significant losses in our investment portfolio, increased claim and litigation activity, and unfavorable regulatory outcomes.

• the impact of competitive products, policies and pricing and the competitive environment in which we operate, including changes in our book of business;

• product and policy availability and demand and market responses, including the level of ability to obtain rate increases and decline or non-renew underpriced accounts, to achieve premium targets and profitability and to realize growth and retention estimates;

• general economic and business conditions, including recessionary conditions that may decrease the size and number of our insurance customers and create additional losses to our lines of business, especially those that provide management and professional liability insurance, as well as surety bonds, to businesses engaged in real estate, financial services and professional services and inflationary pressures on medical care costs, construction costs and other economic sectors that increase the severity of claims;

• conditions in the capital and credit markets, including uncertainty and instability in these markets, as well as the overall economy, and their impact on the returns, types, liquidity and valuation of our investments;

• conditions in the capital and credit markets that may limit our ability to raise significant amounts of capital on favorable terms; and

57

• the possibility of changes in our ratings by ratings agencies, including the inability to access certain markets or distribution channels and the required collateralization of future payment obligations as a result of such changes, and changes in rating agency policies and practices.

Regulatory Factors

• regulatory and legal initiatives and compliance with governmental regulations and other legal requirements, including with respect to cyber security protocols, legal inquiries by state authorities, judicial interpretations within the regulatory framework, including interpretation of policy provisions, decisions regarding coverage and theories of liability, legislative actions that increase claimant activity, including those revising applicability of statutes of limitations, trends in litigation and the outcome of any litigation involving us and rulings and changes in tax laws and regulations;

• regulatory limitations, impositions and restrictions upon us, including with respect to our ability to increase premium rates, and the effects of assessments and other surcharges for guaranty funds and second-injury funds, other mandatory pooling arrangements and future assessments levied on insurance companies; and

• regulatory limitations and restrictions, including limitations upon our ability to receive dividends from our insurance subsidiaries, imposed by regulatory authorities, including regulatory capital adequacy standards.

Impact of Natural and Man-Made Disasters and Mass Tort Claims

• weather and other natural physical events, including the severity and frequency of storms, hail, snowfall and other winter conditions, natural disasters such as hurricanes and earthquakes, as well as climate change, including effects on global weather patterns, greenhouse gases, sea, land and air temperatures, sea levels, rain, hail and snow;

• regulatory requirements imposed by coastal state regulators in the wake of hurricanes or other natural disasters, including limitations on the ability to exit markets or to non-renew, cancel or change terms and conditions in policies, as well as mandatory assessments to fund any shortfalls arising from the inability of quasi-governmental insurers to pay claims;

• man-made disasters, including the possible occurrence of terrorist attacks, the unpredictability of the nature, targets, severity or frequency of such events, and the effect of the absence or insufficiency of applicable terrorism legislation on coverages;

• the occurrence of epidemics and pandemics; and

• mass tort claims, including those related to exposure to potentially harmful products or substances such as glyphosate, lead paint and opioids; and claims arising from changes that repeal or weaken tort reforms, such as those related to abuse reviver statutes.

Referendum on the United Kingdom's Membership in the European Union

• in 2016, the U.K. approved an exit from the E.U., commonly referred to as "Brexit.” While the withdrawal of the U.K. from the E.U. was official as of January 31, 2020, until the transition period ends, there remains a lack of specificity and detail regarding the long term relationship between the two sides and how businesses operating in both jurisdictions may be affected. In any event, effective January 1, 2019, our E.U. business is no longer handled out of our U.K.-domiciled subsidiary, but through our European subsidiary in Luxembourg, which was established specifically to address the departure of the U.K. from the E.U. and to seek to ensure the Company’s ability to operate effectively throughout the E.U. As a result, the complexity and cost of regulatory compliance of our European business has increased and will likely continue to result in elevated expenses.

Our forward-looking statements speak only as of the date of the filing of this Quarterly Report on Form 10-Q and we do not undertake any obligation to update or revise any forward-looking statement to reflect events or circumstances after the date of the statement, even if our expectations or any related events or circumstances change.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There were no material changes in our market risk components for the three months ended March 31, 2020. See the Quantitative and Qualitative Disclosures About Market Risk included in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2019 for further information. Additional information related to portfolio duration is discussed in the Investments section of our Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Part I, Item 2.

Item 4. Controls and Procedures

The Company maintains a system of disclosure controls and procedures which are designed to ensure that information required to be disclosed by the Company in reports that it files or submits to the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including this report, is recorded, processed, summarized and reported on a timely basis. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed under the Exchange Act is accumulated and communicated to the Company's management on a timely basis to allow decisions regarding required disclosure.

As of March 31, 2020, the Company's management, including the Company's Chief Executive Officer (CEO) and Chief Financial Officer (CFO), conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on this evaluation, the CEO and CFO have concluded that the Company's disclosure controls and procedures are effective as of March 31, 2020.

There has been no change in the Company’s internal control over financial reporting (as defined in Rules 13a-15 (f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2020 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. Other Information

Item 1. Legal Proceedings

Information on our legal proceedings is set forth in Note F to the Condensed Consolidated Financial Statements included under Part I, Item 1.

Item 1A. Risk Factors

Our Annual Report on Form 10-K for the year ended December 31, 2019, includes a detailed discussion of certain material risk factors facing us. The information presented below describes updates and additions to such risk factors and should be read in conjunction with the risk factors and information disclosed in our Form 10-K.

The COVID-19 pandemic and mitigating actions have resulted in significant risk across our enterprise, which may have a material adverse impact on our business, results of operations and financial condition, the extent of which cannot be determined with any certainty at this time.

The COVID-19 outbreak, and actions seeking to mitigate the spread of the virus, accelerated in both breadth and scope through the month of February, with the World Health Organization declaring it a pandemic on March 11, 2020. The situation has continued to evolve exponentially with implicated exposures increasing given sustained uncertainties across the global marketplace. Because of the extensiveness of the pandemic, all of the direct and indirect consequences and implications of COVID-19 are not yet known and may not emerge for some time.

Risks presented by the ongoing effects of COVID-19 that are known at this time include the following:

Broad economic impact

The economic effect of the pandemic has been broad in nature and has significantly impacted business operations across all industries, including ours. Depressed economic conditions may lead to decreased insured exposures causing us to experience declines in premium volume, especially for lines of business that are sensitive to rates of economic growth. Significant decreases in premium volume would also directly and adversely impact our underwriting expense ratio. In addition, many of our customers, representing a broad spectrum of industries and markets, may potentially be impacted by lost business, which may affect our ability to collect amounts owed to us by policyholders.

The COVID-19 pandemic has also significantly impacted the financial markets. As investors embark on a flight to quality, risk free rates have decreased. In addition, extreme market volatility due to liquidity concerns and overall uncertainties have driven widening credit spreads and declining equity markets. These conditions have impacted our investment portfolio results and valuations and may continue to do so, resulting in additional losses in our investment portfolio. The value of our fixed maturity investments is subject to risk that certain investments may default or become impaired due to deterioration in the financial condition of issuers of the investments we hold or in the underlying collateral of the security or loan, particularly in industries heavily impacted by COVID-19 and mitigating actions, including energy, retail, travel, entertainment, and real estate. Our municipal bond portfolio is also subject to risks of default by state and local governments and agencies that are under increased strain related to the pandemic.

These significant economic and financial market disruptions may have a material impact on our business, results of operations and financial condition, the extent of which cannot be determined with any certainty at this time.

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Claims activity

Another aspect is claim activity and related litigation, which may increase significantly in certain of our lines of business as a result of the pandemic and mitigating actions. We may experience increased frequency in claim submissions in lines that are implicated by the virus and the mitigating activities taken by our customers and governmental authorities in response to its spread, as well as potential regulatory or legislative actions that are further described below under Regulatory impact. These include workers’ compensation, healthcare, commercial property coverage, and directors’ and officers’ liability and employment practices liability lines. In addition, our surety lines may experience increased losses, particularly in construction surety, where there is significant risk that contractors will be adversely and materially impacted by general economic conditions. Increased frequency or severity in any or all of the foregoing lines, or others where the exposure has yet to emerge, may have a material effect on our business, results of operations and financial condition, the extent of which cannot be determined with any certainty at this time.

Regulatory impact

The regulatory environment is rapidly evolving in direct response to the pandemic and the mitigating actions being taken. Numerous regulatory authorities to which our business is subject have implemented or are contemplating broad and significant regulations restricting and governing insurance company operations during the pandemic crisis. Such actions include, but are not limited to, premium moratoriums, premium refunds and reductions, restrictions on policy cancellations and potential legislation-driven expansion of policy terms. To date, certain state authorities have ordered premium refunds and certain regulatory and legislative bodies have proposed requiring insurers to cover business interruption under policies that were not written to provide for such coverage under the current circumstances. In addition, certain states have directed expansion of workers’ compensation coverage through presumption of compensability of claims for a broad category of workers. This highly fluid and challenging regulatory environment, and the new regulations we are now, and may be, subject to may have a material impact on our business, results of operation and financial condition, the extent of which cannot be determined with any certainty at this time.

Business operational impact

Beginning on March 17, 2020, we instituted mandatory work from home for all of our employees, across the United States and globally, including Canada, the United Kingdom and Europe, and moved to teleconference meetings only across the enterprise. As of the date of this report, the work from home mandate remains in place across our global workforce. Mandatory work from home may impact the productivity of our workforce, and increases the risk of information security exposure. Disruptions to our employees’ productivity, as well as their health and welfare, especially in the context of accelerated contagion of the virus (which has not occurred across our employee population at this time), along with the heightened security risks presented by widespread remote access to our computer systems, may have a material impact on our business operations, the extent of which cannot be determined with any certainty at this time.

In addition, in virtually all cases, our critical vendors have also had to impose workplace restrictions or work from home mandates on their employees, which may result in interruption in service delivery or failure by vendors to properly perform required services, including delivery in a manner more susceptible to significant information security risk. Such vendor issues may result in a material impact on our business operations, the extent of which cannot be determined with any certainty at this time.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Items 2 (a) and (b) are not applicable.

(c) The table below details repurchases of our common stock made during the three months ended March 31, 2020.

Period	(a) Total number of shares purchased	(b) Average price paid per share		(c) Total number of shares purchased as part of publicly announced plans or programs	(d) Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs (in millions)
February 1, 2020 - February 29, 2020	88,848	$	45.24	N/A	N/A
March 1, 2020 - March 31, 2020	346,528	40.74		N/A	N/A
Total	435,376			N/A	N/A

Item 6. Exhibits

See Exhibit Index.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		CNA Financial Corporation
Dated: May 4, 2020	By	/s/ Albert J. Miralles
		Albert J. Miralles Executive Vice President and Chief Financial Officer (Duly authorized officer and principal financial and accounting officer)

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EXHIBIT INDEX

Description of Exhibit	Exhibit Number
Amended and Restated Incentive Compensation Plan, effective January 1, 2020 (Incorporated herein by reference to Proxy Statement filed March 20, 2020)	10.1
General Release and Separation Agreement, dated March 6, 2020, between CNA Financial Corporation and James Anderson	10.2
Certification of Chief Executive Officer	31.1
Certification of Chief Financial Officer	31.2
Written Statement of the Chief Executive Officer of CNA Financial Corporation Pursuant to 18 U.S.C. Section 1350 (As adopted by Section 906 of the Sarbanes-Oxley Act of 2002)	32.1
Written Statement of the Chief Financial Officer of CNA Financial Corporation Pursuant to 18 U.S.C. Section 1350 (As adopted by Section 906 of the Sarbanes-Oxley Act of 2002)	32.2
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document	101.INS
Inline XBRL Taxonomy Extension Schema	101.SCH
Inline XBRL Taxonomy Extension Calculation Linkbase	101.CAL
Inline XBRL Taxonomy Extension Definition Linkbase	101.DEF
Inline XBRL Taxonomy Label Linkbase	101.LAB
Inline XBRL Taxonomy Extension Presentation Linkbase	101.PRE
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)	104.1

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EX-10.2

EXHIBIT 10.2

GENERAL RELEASE AND SEPARATION AGREEMENT

This General Release and Separation Agreement ("Agreement") is entered into by James Anderson ("Employee" or "You") and CNA Financial Corporation in order to resolve all matters between Employee and CNA Financial Corporation relating to Employee's employment. For purposes of this Agreement, CNA Financial Corporation includes its past and present parents, subsidiaries, and affiliated companies; their respective predecessors, successors, and assigns; and their respective past and present shareholders, directors, trustees, officers, employees, agents, attorneys, benefit plans and insurers (collectively, the “Company”) (together Employee and Company shall be considered the "Parties"). Employee is advised to consult an attorney before signing this Agreement.

1.    Termination of Employment. Employee has resigned from the Company and his employment with the Company will end on March 15, 2020 ("Separation Date"). As of such date, You shall cease to be employed by the Company and by each and every subsidiary or affiliate of the Company in any capacity. This Agreement constitutes Your resignation on the Separation Date as an employee, officer, and/or director of, and from any other title or position with, the Company and each of the Company's subsidiaries and affiliates. February 25, 2020 shall be Employee's last day as the Company's Executive Vice President & Chief Financial Officer. From February 26, 2020 through and including the Separation Date, Employee's duties, responsibilities and authority will only be to assist in transition of his duties in connection with his role as Executive Vice President & Chief Financial Officer and/or to assist with special assignments, as directed by the Company's Chief Executive Officer or Chief Human Resources Officer. Notwithstanding the foregoing, through the Separation Date, Employee will remain an employee at will whose employment may be terminated by Employee or the Company for any reason (or without stated reason). If Employee's employment is terminated for any reason prior to the Separation Date, the date of termination will become the Separation Date for all purposes of this Agreement. If Your employment is terminated prior to the Separation Date by the Company without Cause (as defined below), Employee shall be entitled to the Settlement Payments described in, and in accordance with, Paragraph 2. For purposes of this Agreement, "Cause" shall mean the Employee engaged in (i) criminal activity, unless Employee had no reasonable cause to believe his conduct was criminal or (ii) material willful misconduct that, if capable of being cured, is not cured after five (5) business days' written notice from the Company of such misconduct. If Employee's employment is terminated prior to the Separation Date as defined above, either by Employee voluntarily or by the Company for Cause, Employee shall not be entitled to the Settlement Payment described in Paragraph 2.

2.    Consideration. In consideration of the covenants undertaken and releases given by Employee in this Agreement, the Company agrees to provide the following:

a.The Company shall pay Employee the gross amount of $3,250,000 (three million two hundred fifty thousand dollars), less statutory taxes and withholdings, no later than April 15, 2020.

b.The Company shall pay Employee 100% of Employee's 2019 Annual Incentive Bonus in the amount of $1,250,000 (one million two hundred fifty thousand dollars) pursuant to the terms of the relevant Plan, which shall be payable to Employee commensurate with other similarly situated employees of the Company.

c.The Company shall provide full vesting of Employee's 2017 Performance Share Plan pursuant to the terms of the relevant Plan.

d.The Company shall continue payment of Employee's base salary and benefits at the current rate through the Separation Date payable in the ordinary course of the Company's payroll schedule.

e.After the Employee's Separation Date, the Company will also provide Employee continued coverage under the Company's CNA Health and Group Benefits Program and the CNA Insured Health and Group Benefits Program ("the Plans"), including dental and vision coverage, Accidental Death & Disability, contributory life insurance, and dependent life insurance at the Employee's active rate for twelve (12) months following the Separation Date ("Benefit Period") if: (a) Employee was enrolled in that particular coverage on the Separation Date; (b) Employee elects to receive that continued coverage; and (c) Employee is not eligible for coverage under the plans of another employer, which is comparable to the terms and conditions of the plan Employee is enrolled in as of the Separation Date. Employee's separate eligibility for continuation of health insurance as provided by the federal law known as COBRA begins to run at the Separation Date. Employee agrees to notify the Company promptly if he becomes eligible for coverage under another employer's comparable plans.

f.The Company will arrange executive outplacement services for Employee through a provider of the Company's choice.

g.Employee shall not be required to mitigate the amount of any payment contemplated in Paragraph 2, nor will any earnings or benefits that Employee may receive from any other source reduce any such payment.

h.The total value of the pay and benefits described in Paragraph 2 constitutes the "Settlement Payment."

3.    Acknowledgement of Consideration. The Company is not obligated to pay the Settlement Payment described in the Consideration paragraph above. Rather, the Company agrees to provide these items of value only in return for Employee's acceptance of this Agreement and release of legal rights.

4.    Taxes. The Company shall withhold required federal and state tax amounts on the gross amount described in the Consideration paragraph above. Employee understands and agrees that the Company is not providing any tax or legal advice in connection with this Agreement, and that the Company makes no representations regarding tax obligations or consequences, if any, related to this Agreement. Employee agrees that Employee shall be exclusively responsible for the payment of all federal and state taxes that may be due as the result of the Settlement Payment under this Agreement. Employee hereby agrees to indemnify and hold harmless the Company and any other Releasee from payment of taxes, interest or penalties that may be required by any governmental agency at any time as the result of the Settlement Payment and continued insurance benefits to Employee as set forth herein. In addition, the Parties intend that any payments contemplated by this Agreement shall constitute "short-term deferral" and are not "deferred compensation” under Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"). In no event will the Company have any liability with respect to taxes for which Employee may become liable as a result of the application of Code Section 409A.

5.    Accrued Benefits. Whether or not Employee chooses to sign this Agreement, Employee will be paid all earned unused paid time off due to Employee as of the Separation Date under Company policy, which shall be payable to Employee on the next regularly scheduled payday following the Separation Date. All applicable federal, state, and local withholdings will be deducted from this amount.

6.    No Admission of Wrongdoing. This Agreement is not an admission that the Company has any liability to Employee, or of any wrongdoing by the Company. The Company denies any liability of any kind to Employee.

7.    Waiver and Release of All Claims. In return for the Settlement Payment, Employee agrees to waive and release all legal claims that Employee may have against the Company except as specifically stated below. This means that Employee gives up all legal rights to recover any additional amounts or obtain any additional relief from the Company. The additional amounts referred to in this paragraph include, but are not limited to, salary, bonus, long term incentive, annual incentive bonus, severance, SUB Pay, stock incentives, or other compensation or benefits other than the Consideration specified in this Agreement. By signing this Agreement, Employee is giving up all claims Employee may have on the date Employee signs this Agreement, whether or not Employee knows about those claims. The claims Employee is giving up include all claims based upon Employee's employment with the Company or the termination of Employee's employment, including, but not limited to, any and all claims for:

• any pay/compensation/benefits (whether under the federal Fair Labor Standards Act or otherwise) including backpay, front pay, bonuses, commissions, equity, expenses, incentives, insurance, paid/unpaid leave/time off, profit sharing, salary, or separation pay/benefits;

• compensatory/emotional/distress damages; punitive or liquidated damages, attorneys' fees, costs, interest or penalties;

• any violation of express or implied employment contracts, covenants, promises or duties, intellectual property or other proprietary rights;

• unlawful or tortious conduct such as assault or battery; background check violations; defamation; detrimental reliance; fiduciary breach; fraud; indemnification; intentional or negligent infliction of emotional distress; interference with contractual or other legal rights; invasion of privacy; loss of consortium; misrepresentation; negligence (including negligent hiring, retention or supervision); personal injury; promissory estoppel; public policy violation; retaliatory discharge; safety violations; posting or records-related violations; wrongful discharge; or other federal, state or local statutory or common law matters;

• any violation of any city, local, state, or federal laws, statutes, ordinances, executive orders, regulations, or constitutions, including but not limited to discrimination or harassment based on age (including Age Discrimination in Employment Act or "ADEA'' claims), ancestry, benefit entitlement, citizenship, color, concerted activity, disability, ethnicity, gender, gender identity, genetic information, harassment, immigration status, income source, jury duty, leave rights, marital status, military status, national origin, parental status, political affiliation, protected off­ duty conduct, race, religion, retaliation, sexual orientation, union activity, veteran status, whistleblower activity,

other legally protected status or activity; or any allegation that payment under this Agreement was affected by any such discrimination or harassment;

• any violation of any city, local, state, or federal laws, statutes, ordinances, executive orders, regulations, or constitutions, including but not limited to ADEA, Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq., the Civil Rights Act of 1866, 42 U.S.C. § 1981 , the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq., the Americans with Disabilities Act of 1990, as amended, 42 U.S.C. § 12101 et seq., the Equal Pay Act of 1963, as amended, 29 U.S.C. § 206(d), the Family and Medical Leave Act of 1993, as amended, 29 U.S.C. § 2601 et seq.; Illinois Human Rights Act, as amended; Illinois Whistleblower Act; Illinois Arrest History Discrimination Law; Illinois Employment Contract Act; Illinois Labor Dispute Act; the Illinois Constitution; Illinois common law, as well as any and all other applicable federal, state, county or local law, statute, ordinance or regulation; and;

• any participation in any class, collective, or representative action against the Company.

8.    Release Exclusions/Additional Employee Protections. Nothing in the Waiver and Release above or any other part of this Agreement limits Employee's right to make truthful statements or disclosures regarding alleged unlawful employment practices by the Company. In addition, neither the release provisions above nor anything else in this Agreement limit Employees right to: file a charge with an administrative agency such as the Equal Employment Opportunity Commission ("EEOC") or a state fair employment practices agency, or communicate directly with or provide information (including testimony) to an agency, self­regulatory authority, or state or federal regulatory authority, such as the Financial Industry Regulatory Authority ("FINRA") or the U.S. Securities and Exchange Commission ("SEC"), or otherwise participate in an agency proceeding; (ii) testify before the state legislature at the legislature's written request or in court pursuant to subpoena or court order; or (iii) communicate with law enforcement or Your attorney. However, Employee agrees not to accept any money or other individual relief that might be awarded to Employee. If relief is nonetheless awarded, Employee agrees that Employer shall be entitled to recover an amount equal to the Settlement Payment from any money awarded to Employee in connection with such proceedings minus $200. However, nothing in this Agreement limits Employee's right to receive money from the SEC as a reward for information.

9.    Agreement Not to Sue. Employee agrees not to sue the Company in any court with respect to any of the claims released in this Agreement except as specifically permitted in this paragraph below. If Employee, or anyone on Employee's behalf, breaks this promise, then Employee shall be required to repay the Settlement Payment except for $200; alternatively, at the Company's option, Employee shall be liable for the payment of all costs and attorneys' fees paid by the Company in connection with such a lawsuit. This Agreement not to sue does not prohibit Employee from bringing a lawsuit to challenge the enforceability of this Agreement as it relates to age discrimination claims. Employee will not be required to repay the Settlement Payment in order to challenge the validity or enforceability of this Agreement under the Age Discrimination in Employment Act, and will not be liable for the payment of costs and fees paid by the Company in connection with such a challenge. This does not mean that Employee retains the right to obtain relief for age discrimination after signing this Agreement. After signing this Agreement, Employee may obtain relief for age discrimination only if Employee obtains a court order stating that this Agreement is not enforceable.

10.     Effect on Other Claims. This Agreement does not apply to claims based upon conduct or injuries that occur after the date this Agreement is signed. It also does not apply to or affect (a) any insurance claims or workers' compensation claims filed before the date of this Agreement; (b) Employee's right to retirement benefits; or (c) any state unemployment compensation benefits to which Employee may be entitled as a result of the termination of Employee's employment with the Company.

11.    Confidentiality. Employee agrees to be bound by the Company's Confidentiality, Computer Responsibility and Professional Certification Agreement, a copy of which Employee acknowledges having previously received. Employee agrees that all Confidential Information as defined below is commercially valuable and is the property of the Company, and agrees not to reveal or use Confidential Information learned as a result of Employee's employment with the Company. Employee shall return all Confidential Information (whether it exists in written, electronic, computerized, or another form) to the Company before termination of Employee's employment. For purposes of this Agreement, "Confidential Information" includes all information, knowledge, or data not generally known outside the Company concerning the business of: (1) the Company; and (2) the Company's customers, employees, agents, brokers, and vendors.

Notwithstanding the foregoing, in accordance with the Defend Trade Secrets Act of 2016, You are hereby notified that You will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If You file a lawsuit for retaliation by the Company for reporting a suspected violation of law, You may disclose the Company's trade secrets to Your attorney and use the trade secret information

in the court proceeding if You (i) file any document containing the trade secret under seal: and (ii) do not disclose the trade secret, except pursuant to court order.

12.    Company Property. On or prior to the Separation Date, You shall return to the Company all Company property in Your possession or use, including, without limitation, all automobiles, printers, cell phones, credit cards, building-access cards and keys, other electronic equipment and related materials, and any records, software or other data from Your personal computer or laptops which are not themselves Company property, however stored, relating to the Company’s confidential information.

13.    Assistance with Claims. While employed at the Company and for six (6) months after the Separation Date, Employee will be available on a reasonable basis to assist the Company with any legal or regulatory proceedings involving Employee’s role as the Company’s Executive Vice President & Chief Financial Officer. Employee shall promptly inform the Company if Employee is requested: (a) to provide information or testimony in connection with or otherwise become involved in any claim against the Company; or (b) to assist with or participate in any investigation of the Company by others. For any assistance Employee provides under this paragraph, the Company will compensate Employee for reasonable time spent in providing such assistance at the rate of $200.00 per hour and for reasonable expenses incurred in connection with same. Employee shall invoice the Company for any such time and expenses, including a short description of the services rendered and expenses incurred, via email to Elizabeth.Aguinaga@cna.com, within 30 days of incurring such time and expenses. The Company shall have thirty (30) days from the date of invoice submission to remit payment.

14.    Defense and Indemnification. The Company agrees to indemnify and hold harmless Employee as provided in its articles, director and officer indemnification policies and any other indemnification policies or plans in effect, as well as any and all obligations applicable to Employee under relevant law, with respect to Employee’s actions, or inactions undertaken within the course and scope of his duties or behalf of the Company, except for acts involving Employee’s willful misconduct. If Employee reasonably determines that he should be represented by an attorney in connection with any such matter, claim, demand, or lawsuit related to actions undertaken by him within the course and scope of his duties on behalf of the Company, the Company will provide the Employee with legal representation at its cost consistent with the applicable policies.

15.    Non-Disparagement. You agree that You will not, and will not encourage or induce others to, make, publish or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments or statements concerning the Company, its subsidiaries, affiliates or shareholders or any of their respective past, present or future directors, officers, employees, agents, shareholders or members or any of their respective successors and assigns. The Company agrees to instruct Dino Robusto and Larry Haefner to not make, and to not encourage or induce others to make, or publish or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments or statements concerning Employee. The Company will issue internal and external announcements regarding Your separation stating that Employee has resigned as of the Separation Date. If the Company receives any external inquiry regarding Employee’s employment history at the Company, the Company will respond to the inquiry by providing Your dates of employment, Your job title and that You have resigned as of the Separation Date. Nothing in this Separation Agreement is intended to or shall prevent any person, including Employee, from providing, or limiting testimony in response to a valid subpoena, court order, regulatory request or other judicial, administrative or legal process or otherwise as required by law. Subject to the foregoing, Employee shall not be held liable by the Company for giving accurate and truthful information at any interviews and accurate and trustful testimony in any legal proceedings or actions. It is acknowledged that the Company will be required to file a Form 8-K with the SEC announcing Your registration and to file a copy of this Agreement with the SEC.

16.    Agreement Not To Solicit Employees. While employed at the Company and for 12 months after the Separation Date, Employee will not employ or engage as a consultant, or offer to employ or engage as a consultant, or solicit for employment or engagement as a consultant, any person who is then an employee of the Company, or assist any other person or company in doing so.

17.    Agreement Not to Interfere with Business Relationships. While employed at the Company and for 12 months after the Separation Date, Employee will not interfere, or try to interfere, with any business relationship between the Company and other person or entity, including customers, agents, suppliers, vendors, contractors, employees, and business partners. Employee further agrees that, for a period of 12 months after the Separation Date, he will not solicit, or direct others to solicit, Company customers. Employee further agrees that, for a period of 12 months after the Separation Date, he will not solicit agents or brokers, or direct others to solicit agents or brokers, to move Company business away from Company or to limit or otherwise affect the amount of business the agents or brokers do with the Company.

18.    Ownership of Claims. Employee states that he is not currently involved in a bankruptcy proceeding and that Employee has not given or transferred any claims Employee may have against the Company to any other person or entity.

19.    Time to Consider, Consult with Counsel, and Revoke. Employee will have up to 21 days after receiving this Agreement to consult with an attorney, sign it, and return it to Elizabeth Aguinaga, Executive Vice President, Chief Human Resources Officer, CNA, by mail to 151 N. Franklin, 18th Floor, Chicago, Illinois 60606, or by email to Elizabeth.Aguinaga@cna.com. Employee may sign this Agreement any time on or after the Separation Date. Employee will have up to seven days after signing this Agreement to change Employee's mind and revoke this Agreement. To revoke this Agreement, Employee must give written notice to Elizabeth Aguinaga at CNA so that it is received no later than the eighth day after Employee signs the Agreement.

20.    Severability; Enforcement. If any provision of this Agreement is held by a court of competent jurisdiction to be illegal, void or unenforceable, such provision shall have no effect; however, the remaining provisions shall be enforced to the maximum extent possible. Further, if a court should determine that any portion of this Agreement is overbroad or unreasonable, such provision shall be given effect to the maxim um extent possible by narrowing or enforcing in part that aspect of the provision found overbroad or unreasonable. In addition, you agree that your knowing failure to return Company property that relates to the maintenance of security of the Company Entities and Persons shall entitle the Company to injunctive and other equitable relief.

21.    Entire Agreement. This Agreement is the entire agreement between Employee and the Company concerning the subjects contained in it, and supersedes all other agreements and understandings, whether oral or written, regarding those subjects. In signing this Agreement, Employee has not relied on any promises or representations other than those set forth in this Agreement.

22.    Binding and Successors. The Parties agree that this Agreement shall be binding on, and inure to the benefit of, Employee’s and Company's successors, heirs and/or assigns whether by merger, consolidation, or transfer of all or substantially all of Company's assets.

23.    Choice of Law. This Separation Agreement shall be construed and enforced in accordance with the laws of the State of Illinois without regard to the principles of conflicts of law.

24.    Dispute. Should a dispute arise concerning this Agreement or its performance, such dispute shall be resolved at the election of the party seeking to enforce the Agreement, either by court action, or by binding arbitration administered by the American Arbitration Association under its commercial, dispute resolution rules. If arbitration is initiated, the arbitration shall be held in Chicago, Illinois, with each party bearing its own costs.

25.    Venue. The state and federal courts located in Chicago, Illinois shall have the exclusive jurisdiction to adjudicate any dispute arising out of or relating to the Agreement. Each party hereby consents to the jurisdiction of such courts and waives any right it may otherwise have to challenge the appropriateness of such forums, whether on the basis of the doctrine of forum non conveniens or otherwise.

26.    Modification Only by Written Agreement. This Agreement may not be changed in any way except in a written agreement signed by both Employee and an authorized representative of the Company.

27.    Knowing and Voluntary. Employee has carefully read and fully understands all of the provisions of this Agreement; knows and understands the rights Employee is giving up by signing this Agreement; and has entered into the Agreement knowingly and voluntarily.

28.    Counterparts. This Agreement may be executed in counterparts, and each counter shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

PLEASE READ CAREFULLY

1. THIS GENERAL RELEASE AND SETTLEMENT AGREEMENT IS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, INCLUDING CLAIMS OF AGE DISCRIMINATION. IT DOES NOT WAIVE CLAIMS WHICH MAY ARISE AFTER THE DATE IT IS SIGNED OR CLAIMS SPECIFICALLY EXCLUDED;

2. EMPLOYEE IS WAIVING CLAIMS IN EXCHNAGE FOR MONEY AND/OR BENEFITS TO WHICH HE IS NOT ALREADY ENTITLED;

3. EMPLOYEE IS ADVISED TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS GENERAL RELEASE AND SETTLEMENT AGREEMENT;

4. EMPLOYEE HAS 21 DAYS TO DECIDE WHETHER TO SIGN THIS GENERAL RELEASE AND SETTLEMENT AGREEMENT; AND

5. WITHIN SEVEN (7) DAYS AFTER SIGNING THIS GENERAL RELEASE AND SETTLEMENT AGREEMENT, EMPLOYEE MAY CHANGE HIS MIND AND REVOKE THIS GENERAL RELEASE AND SETTLEMENT AGREEMENT BY GIVING WRITTEN NOTICE TO THE COMPANY. THIS GENERAL RELEASE AND SETTLEMENT AGREEMENT SHALL NOT BECOME ENFORCEABLE UNTIL THIS SEVEN-DAY PERIOD HAS EXPIRED.

/s/ James Anderson		March 6, 2020
James Anderson, Employee		Date
/s/ Jose Gonzalez	By	March 6, 2020
Jose Gonzalez Executive Vice President and General Counsel for CNA Financial Corporation		Date

EX-31.1

EXHIBIT 31.1

SARBANES-OXLEY ACT SECTION 302

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Dino E. Robusto, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CNA Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	May 4, 2020	By	/s/ Dino E. Robusto
			Dino E. Robusto
			Chief Executive Officer

EX-31.2

EXHIBIT 31.2

SARBANES-OXLEY ACT SECTION 302

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Albert J. Miralles, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CNA Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	May 4, 2020	By	/s/ Albert J. Miralles
			Albert J. Miralles
			Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Written Statement of the Chief Executive Officer

of CNA Financial Corporation

Pursuant to 18 U.S.C. § 1350

(As adopted by Section 906 of the Sarbanes-Oxley Act of 2002)

The undersigned, the Chief Executive Officer of CNA Financial Corporation (the Company), hereby certifies that, to his knowledge:

• the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 filed on the date hereof with the Securities and Exchange Commission (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

• the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	May 4, 2020	By	/s/ Dino E. Robusto
			Dino E. Robusto
			Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

EXHIBIT 32.2

Written Statement of the Chief Financial Officer

of CNA Financial Corporation

Pursuant to 18 U.S.C. § 1350

(As adopted by Section 906 of the Sarbanes-Oxley Act of 2002)

The undersigned, the Chief Financial Officer of CNA Financial Corporation (the Company), hereby certifies that, to his knowledge:

• the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 filed on the date hereof with the Securities and Exchange Commission (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

• the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	May 4, 2020	By	/s/ Albert J. Miralles
			Albert J. Miralles
			Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Investments (Allowance on avaiable-for-sale securities with credit impairments and assets purchased with credit deterioration) (Details)	3 Months Ended
	Mar. 31, 2020 USD ($)
Reductions to the allowance for credit losses:
Balance end of period	$ 49,000,000
Corporate and other bonds
Allowance for credit losses:
Balance beginning of period	0
Additions to the allowance for credit losses:
Balance beginning of period	0
For securities for which credit losses were not previously recorded	48,000,000
For available-for-sale securities accounted for as PCD assets	1,000,000
Reductions to the allowance for credit losses:
Securities sold during the period (realized)	5,000,000
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis	1,000,000
Write-offs charged against the allowance	0
Recoveries of amounts previously written off	0
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period	0
Balance end of period	$ 49,000,000

XML

Investments (Summary of available-for-sale corproate and other bonds in gross unrealized loss position across industry and rating) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	$ 10,153	$ 2,420
Gross Unrealized Losses	1,117	45
Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	7,080	1,100
Gross Unrealized Losses	817	$ 32
AAA | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	8
Gross Unrealized Losses	0
AA | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	134
Gross Unrealized Losses	4
A | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	608
Gross Unrealized Losses	17
BBB | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	4,987
Gross Unrealized Losses	516
Below investment grade | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	1,343
Gross Unrealized Losses	280
Basic Materials | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	727
Gross Unrealized Losses	78
Communications | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	349
Gross Unrealized Losses	27
Consumer, cyclical - Other | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	390
Gross Unrealized Losses	56
Consumer, non-cyclical - Other | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	401
Gross Unrealized Losses	27
Energy - Oil & Gas | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	575
Gross Unrealized Losses	191
Energy - Pipelines | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	523
Gross Unrealized Losses	112
Entertainment | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	148
Gross Unrealized Losses	23
Financial - Other | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	1,711
Gross Unrealized Losses	89
Financial - Real Estate/REITS | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	599
Gross Unrealized Losses	45
Industrial | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	468
Gross Unrealized Losses	55
Retail | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	150
Gross Unrealized Losses	18
Technology | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	290
Gross Unrealized Losses	30
Transportation | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	73
Gross Unrealized Losses	5
Travel & Related | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	269
Gross Unrealized Losses	37
Utilities | Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	407
Gross Unrealized Losses	$ 24

XML

Non-Insurance Revenues from Contracts with Customers

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Non-Insurance Revenues from Contracts with Customers

Non-Insurance Revenues from Contracts with Customers

The Company had $3.8 billion reported in Deferred non-insurance warranty revenue as of March 31, 2020 and December 31, 2019. For the three months ended March 31, 2020, the Company recognized $286 million of revenues that were included in the deferred revenue balance as of January 1, 2020. For the three months ended March 31, 2019, the Company recognized $265 million of revenues that were included in the deferred revenue balance as of January 1, 2019. For the three months ended March 31, 2020 and 2019, Non-insurance warranty revenue recognized from performance obligations related to prior periods due to a change in estimate was not material. The Company expects to recognize approximately $831 million of the deferred revenue in the remainder of 2020, $951 million in 2021, $735 million in 2022 and $1.3 billion thereafter.

XML

Legal Proceedings, Contingencies and Guarantees

3 Months Ended

Mar. 31, 2020

Legal Proceedings, Commitments and Contingencies, and Guarantees [Abstract]

Legal Proceedings, Contingencies and Guarantees

Legal Proceedings, Contingencies and Guarantees

The Company is a party to various claims and litigation incidental to its business, which, based on the facts and circumstances currently known, are not material to the Company's results of operations or financial position.

Guarantees

As of March 31, 2020 and December 31, 2019, the Company had recorded liabilities of approximately $5 million related to guarantee and indemnification agreements. Management does not believe that any future indemnity claims will be significantly greater than the amounts recorded.

The Company has provided guarantees, if the primary obligor fails to perform, to holders of structured settlement annuities issued by a previously owned subsidiary. As of March 31, 2020, the potential amount of future payments the Company could be required to pay under these guarantees was approximately $1.7 billion, which will be paid over the lifetime of the annuitants. The Company does not believe any payment is likely under these guarantees, as the Company is the beneficiary of a trust that must be maintained at a level that approximates the discounted reserves for these annuities.

XML

Earnings (Loss) Per Share

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

Earnings (Loss) Per Share

Earnings (loss) per share is based on weighted average number of outstanding common shares. Basic earnings (loss) per share excludes the impact of dilutive securities and is computed by dividing Net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

For the three months ended March 31, 2020, approximately 1,015 thousand potential shares attributable to exercises or conversions into common stock under stock-based employee compensation plans were excluded from the calculation of diluted loss per share because the effect would have been antidilutive due to the net loss position of the Company. For the three months ended March 31, 2019, approximately 971 thousand potential shares attributable to exercises or conversions into common stock under stock-based employee compensation plans were included in the calculation of diluted earnings per share. For the three months ended March 31, 2019 there were no antidilutive shares.

The Company repurchased 435,376 and 317,508 shares of CNAF common stock at an aggregate cost of $18 million and $14 million during the three months ended March 31, 2020 and 2019.

XML

Accumulated Other Comprehensive Income (Loss) by Component Schedule of Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Total stockholder's equity at beginning of period	$ 12,215
Other comprehensive income (loss) before reclassifications	(1,190)	$ 541
Amounts reclassified from accumulated other comprehensive income (loss) net of tax	(69)	(13)
Other comprehensive income (loss) after tax (expense) benefit	(1,121)	554
Total stockholder's equity at end of period	10,362	11,455
Reclassification from AOCI, tax	19	3
Tax (expense) benefit on other comprehensive income (loss)	281	(144)
Accumulated other comprehensive income (loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Total stockholder's equity at beginning of period	51	(878)
Total stockholder's equity at end of period	(1,070)	(324)
Net unrealized gains (losses) on investments with an allowance for credit losses(1)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Total stockholder's equity at beginning of period	0	16
Other comprehensive income (loss) before reclassifications	(48)	4
Amounts reclassified from accumulated other comprehensive income (loss) net of tax	(37)	0
Other comprehensive income (loss) after tax (expense) benefit	(11)	4
Total stockholder's equity at end of period	(11)	20
Reclassification from AOCI, tax	10	0
Tax (expense) benefit on other comprehensive income (loss)	3	(1)
Net unrealized gains (losses) on other investments(1)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Total stockholder's equity at beginning of period	1,025	61
Other comprehensive income (loss) before reclassifications	(1,066)	521
Amounts reclassified from accumulated other comprehensive income (loss) net of tax	(22)	(5)
Other comprehensive income (loss) after tax (expense) benefit	(1,044)	526
Total stockholder's equity at end of period	(19)	587
Reclassification from AOCI, tax	6	1
Tax (expense) benefit on other comprehensive income (loss)	281	(141)
Pension and postretirement benefits
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Total stockholder's equity at beginning of period	(833)	(775)
Other comprehensive income (loss) before reclassifications	1	(1)
Amounts reclassified from accumulated other comprehensive income (loss) net of tax	(10)	(8)
Other comprehensive income (loss) after tax (expense) benefit	11	7
Total stockholder's equity at end of period	(822)	(768)
Reclassification from AOCI, tax	3	2
Tax (expense) benefit on other comprehensive income (loss)	(3)	(2)
Cumulative foreign currency translation adjustment
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Total stockholder's equity at beginning of period	(141)	(180)
Other comprehensive income (loss) before reclassifications	(77)	17
Amounts reclassified from accumulated other comprehensive income (loss) net of tax	0	0
Other comprehensive income (loss) after tax (expense) benefit	(77)	17
Total stockholder's equity at end of period	(218)	(163)
Reclassification from AOCI, tax	0	0
Tax (expense) benefit on other comprehensive income (loss)	$ 0	$ 0

XML

Claim and Claim Adjustment Expense Reserves (International - Net Prior Year Claim and Allocated Claim Adjustment Expense Reserve Development) (Details) - International - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Liability for Claims and Claims Adjustment Expense [Line Items]
Casualty	$ 0	$ 0
Property, Energy and Marine	0	14
Specialty	0	0
Total pretax (favorable) unfavorable development	$ 0	$ 14

XML

Business Segments (Revenues by Line of Business) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Total revenues	$ 2,291	$ 2,695
Total operating revenues	2,507	2,664
Net investment gains (losses)	(216)	31
Operating Segments | Specialty
Total revenues	1,043	1,098
Operating Segments | Commercial
Total revenues	872	960
Operating Segments | International
Total revenues	254	265
Operating Segments | Life & Group
Total revenues	335	335
Operating Segments | Corporate & Other
Total revenues	5	9
Eliminations
Total revenues	(2)	(3)
Management & Professional Liability | Operating Segments | Specialty
Total revenues	568	636
Surety | Operating Segments | Specialty
Total revenues	138	139
Warranty & Alternative Risks | Operating Segments | Specialty
Total revenues	337	323
Middle Market | Operating Segments | Commercial
Total revenues	335	357
Construction | Operating Segments | Commercial
Total revenues	250	248
Small Business | Operating Segments | Commercial
Total revenues	112	131
Other Commercial | Operating Segments | Commercial
Total revenues	175	224
Canada | Operating Segments | International
Total revenues	73	66
Europe | Operating Segments | International
Total revenues	92	91
Hardy | Operating Segments | International
Total revenues	$ 89	$ 108

XML

Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Net (loss) income	$ (61)	$ 342
Other Comprehensive (Loss) Income, net of tax
Net unrealized gains and losses on investments	(1,055)	530
Foreign currency translation adjustment	(77)	17
Pension and postretirement benefits	11	7
Other comprehensive (loss) income, net of tax	(1,121)	554
Total comprehensive (loss) income	(1,182)	896
Net unrealized gains and losses on investments with an allowance for credit losses
Other Comprehensive (Loss) Income, net of tax
Net unrealized gains and losses on investments	(11)	0
Net unrealized gains and losses on other investments
Other Comprehensive (Loss) Income, net of tax
Net unrealized gains and losses on investments	$ (1,044)	$ 530

XML

Fair Value (Table of reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance, Beginning, Assets	$ 651	$ 437
Reported in Other comprehensive income (loss)	(46)	11
Total realized and unrealized investment gains (losses)	(49)	13
Purchases	112	76
Sales	0	0
Settlements	(5)	(6)
Transfers into Level 3	0	5
Transfers out of Level 3	(1)	(68)
Balance, Ending, Assets	708	457
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2020 recognized in Net income (loss) in the period	(3)	2
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2020 recognized in Other comprehensive income (loss) in the period	(44)	10
Corporate and other bonds
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance, Beginning, Assets	468	222
Reported in Other comprehensive income (loss)	(37)	8
Total realized and unrealized investment gains (losses)	(37)	8
Purchases	67	56
Sales	0	0
Settlements	(2)	(2)
Transfers into Level 3	0	0
Transfers out of Level 3	0	(31)
Balance, Ending, Assets	496	253
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2020 recognized in Net income (loss) in the period	0	0
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2020 recognized in Other comprehensive income (loss) in the period	(35)	7
States, municipalities and political subdivisions
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance, Beginning, Assets	0	0
Reported in Other comprehensive income (loss)	0	0
Total realized and unrealized investment gains (losses)	0	0
Purchases	0	0
Sales	0	0
Settlements	0	0
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Balance, Ending, Assets	0	0
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2020 recognized in Net income (loss) in the period	0	0
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2020 recognized in Other comprehensive income (loss) in the period	0	0
Asset-backed
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance, Beginning, Assets	165	197
Reported in Other comprehensive income (loss)	(9)	3
Total realized and unrealized investment gains (losses)	(9)	3
Purchases	45	20
Sales	0	0
Settlements	(3)	(4)
Transfers into Level 3	0	5
Transfers out of Level 3	(1)	(37)
Balance, Ending, Assets	197	184
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2020 recognized in Net income (loss) in the period	0	0
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2020 recognized in Other comprehensive income (loss) in the period	(9)	3
Equity securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance, Beginning, Assets	18	18
Reported in Other comprehensive income (loss)	0	0
Total realized and unrealized investment gains (losses)	(3)	2
Purchases	0	0
Sales	0	0
Settlements	0	0
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Balance, Ending, Assets	15	20
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2020 recognized in Net income (loss) in the period	(3)	2
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2020 recognized in Other comprehensive income (loss) in the period	0	0
Reported in Net investment gains (losses)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Reported in Net investment gains (losses)	0	2
Reported in Net investment gains (losses) | Corporate and other bonds
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Reported in Net investment gains (losses)	0	0
Reported in Net investment gains (losses) | States, municipalities and political subdivisions
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Reported in Net investment gains (losses)	0	0
Reported in Net investment gains (losses) | Asset-backed
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Reported in Net investment gains (losses)	0	0
Reported in Net investment gains (losses) | Equity securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Reported in Net investment gains (losses)	0	2
Reported in Net investment income
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Reported in Net investment income	(3)	0
Reported in Net investment income | Corporate and other bonds
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Reported in Net investment income	0	0
Reported in Net investment income | States, municipalities and political subdivisions
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Reported in Net investment income	0	0
Reported in Net investment income | Asset-backed
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Reported in Net investment income	0	0
Reported in Net investment income | Equity securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Reported in Net investment income	$ (3)	$ 0

XML

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Millions	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive (Loss) Income	Treasury Stock	Previously Reported Retained Earnings	Previously Reported Accumulated Other Comprehensive (Loss) Income
Total stockholder's equity at beginning of period at Dec. 31, 2018		$ 683	$ 2,192		$ (878)	$ (57)	$ 9,277	$ (878)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation			(8)			7
Dividends to common stockholders ($2.37 and $2.35 per share)				$ (643)
Net (loss) income	$ 342			342
Other comprehensive (loss) income	554				554
Purchase of treasury stock	(14)					(14)
Total stockholder's equity at end of period at Mar. 31, 2019	11,455	683	2,184	8,976	(324)	(64)
Total stockholder's equity at beginning of period at Dec. 31, 2019	12,215	683	2,203		51	(70)	$ 9,348	$ 51
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation			(16)			16
Dividends to common stockholders ($2.37 and $2.35 per share)				(648)
Net (loss) income	(61)			(61)
Other comprehensive (loss) income	(1,121)				(1,121)
Purchase of treasury stock	(18)					(18)
Total stockholder's equity at end of period at Mar. 31, 2020	$ 10,362	$ 683	$ 2,187	$ 8,634	$ (1,070)	$ (72)

XML

Claim and Claim Adjustment Expense Reserves (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2010
Liability for Claims and Claims Adjustment Expense [Line Items]
Retroactive reinsurance benefit recognized	$ 14	$ 22
Fair value of collateral trust account represented as percentage of gross loss portfolio transfer reserves	150.00%
Unusual or Infrequent Item, or Both, Net of Insurance Proceeds	$ 75	$ 58
Asbestos and Environmental Reserves
Liability for Claims and Claims Adjustment Expense [Line Items]
Liability for Asbestos and environmental claims, net				$ 1,600
Aggregate limit under AEP Loss Portfolio Transfer				4,000
Claim and allocated claim adjustment expense reserves under existing third party reinsurance contracts				1,200
Reinsurance premium paid to NICO under AEP Loss Portfolio Transfer				2,000
Net reinsurance receivables transferred to NICO under AEP Loss Portfolio Transfer				215
Total consideration paid to NICO under AEP Loss Portfolio Transfer				$ 2,200
Cumulative amounts ceded under AEP Loss Portfolio Transfer	3,200		$ 3,200
Deferred reinsurance benefit yet to be recognized	378		392
Fair value of collateral trust account established by NICO under AEP Loss Portfolio Transfer	2,700		$ 3,700
COVID-19
Liability for Claims and Claims Adjustment Expense [Line Items]
Unusual or Infrequent Item, or Both, Net of Insurance Proceeds	13
Weather Related Events
Liability for Claims and Claims Adjustment Expense [Line Items]
Unusual or Infrequent Item, or Both, Net of Insurance Proceeds	$ 62

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Business Segments (Tables)

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Significant components of the Company's continuing operations and selected balance sheet items

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

Three months ended March 31, 2020	Specialty			Commercial			International		Life & Group			Corporate & Other
(In millions)															Eliminations			Total
Operating revenues
Net earned premiums	$	685		$	818		$	239	$	127		$	—		$	—		$	1,869
Net investment income	56			47			15		208			3			—			329
Non-insurance warranty revenue	301			—			—		—			—			—			301
Other revenues	1			7			—		—			2			(2		)	8
Total operating revenues	1,043			872			254		335			5			(2		)	2,507
Claims, benefits and expenses
Net incurred claims and benefits	405			558			154		316			(14		)	—			1,419
Policyholders’ dividends	1			5			—		—			—			—			6
Amortization of deferred acquisition costs	151			144			49		—			—			—			344
Non-insurance warranty expense	281			—			—		—			—			—			281
Other insurance related expenses	69			127			36		26			—			—			258
Other expenses	13			6			13		3			39			(2		)	72
Total claims, benefits and expenses	920			840			252		345			25			(2		)	2,380
Core income (loss) before income tax	123			32			2		(10		)	(20		)	—			127
Income tax (expense) benefit on core income (loss)	(27		)	(8		)	—		14			2			—			(19		)
Core income (loss)	$	96		$	24		$	2	$	4		$	(18	)	$	—		108
Net investment gains (losses)																		(216		)
Income tax (expense) benefit on net investment gains (losses)																		47
Net investment gains (losses), after tax																		(169		)
Net income (loss)																		$	(61	)

March 31, 2020
(In millions)
Reinsurance receivables	$	793	$	883	$	233	$	370	$	2,072	$	—		$	4,351
Insurance receivables	953		1,267		302		8		2		—			2,532
Deferred acquisition costs	316		277		90		—		—		—			683
Goodwill	117		—		28		—		—		—			145
Deferred non-insurance warranty acquisition expense	2,905		—		—		—		—		—			2,905
Insurance reserves
Claim and claim adjustment expenses	5,472		8,704		1,818		3,712		2,166		—			21,872
Unearned premiums	2,363		1,751		495		137		—		(1		)	4,745
Future policy benefits	—		—		—		11,734		—		—			11,734
Deferred non-insurance warranty revenue	3,848		—		—		—		—		—			3,848

Three months ended March 31, 2019	Specialty			Commercial			International		Life & Group			Corporate & Other
(In millions)															Eliminations			Total
Operating revenues
Net earned premiums	$	661		$	763		$	250	$	130		$	—		$	(1	)	$	1,803
Net investment income	155			190			15		204			7			—			571
Non-insurance warranty revenue	281			—			—		—			—			—			281
Other revenues	1			7			—		1			2			(2		)	9
Total operating revenues	1,098			960			265		335			9			(3		)	2,664
Claims, benefits and expenses
Net incurred claims and benefits	392			510			162		308			(21		)	—			1,351
Policyholders’ dividends	1			5			—		—			—			—			6
Amortization of deferred acquisition costs	147			127			68		—			—			—			342
Non-insurance warranty expense	260			—			—		—			—			—			260
Other insurance related expenses	70			130			25		28			(1		)	(1		)	251
Other expenses	12			11			4		2			39			(2		)	66
Total claims, benefits and expenses	882			783			259		338			17			(3		)	2,276
Core income (loss) before income tax	216			177			6		(3		)	(8		)	—			388
Income tax (expense) benefit on core income (loss)	(47		)	(38		)	—		13			2			—			(70		)
Core income (loss)	$	169		$	139		$	6	$	10		$	(6	)	$	—		318
Net investment gains (losses)																		31
Income tax (expense) benefit on net investment gains (losses)																		(7		)
Net investment gains (losses), after tax																		24
Net income (loss)																		$	342

December 31, 2019
(In millions)
Reinsurance receivables	$	575	$	855	$	247	$	385	$	2,142	$	—	$	4,204
Insurance receivables	971		1,210		284		16		—		—		2,481
Deferred acquisition costs	311		257		94		—		—		—		662
Goodwill	117		—		30		—		—		—		147
Deferred non-insurance warranty acquisition expense	2,840		—		—		—		—		—		2,840
Insurance reserves
Claim and claim adjustment expenses	5,238		8,656		1,876		3,716		2,234		—		21,720
Unearned premiums	2,337		1,626		495		125		—		—		4,583
Future policy benefits	—		—		—		12,311		—		—		12,311
Deferred non-insurance warranty revenue	3,779		—		—		—		—		—		3,779

Revenues by line of business

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

Three months ended March 31
(In millions)	2020			2019
Specialty
Management & Professional Liability	$	568		$	636
Surety	138			139
Warranty & Alternative Risks	337			323
Specialty revenues	1,043			1,098
Commercial
Middle Market	335			357
Construction (1)	250			248
Small Business	112			131
Other Commercial	175			224
Commercial revenues	872			960
International
Canada	73			66
Europe	92			91
Hardy	89			108
International revenues	254			265
Life & Group revenues	335			335
Corporate & Other revenues	5			9
Eliminations	(2		)	(3		)
Total operating revenues	2,507			2,664
Net investment gains (losses)	(216		)	31
Total revenues	$	2,291		$	2,695

(1)

Effective January 1, 2020, the Construction line of business is presented separately in the Commercial segment to better align with our underwriting expertise and the manner in which the products are sold. Prior period information has been conformed to the new line of business presentation.

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Fair Value (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Assets and liabilities measured at fair value on a recurring basis

Assets and liabilities measured at fair value on a recurring basis are presented in the following tables. Corporate bonds and other includes obligations of the U.S. Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock.

March 31, 2020							Total Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3
Assets
Fixed maturity securities:
Corporate bonds and other	$	175	$	20,705	$	496	$	21,376
States, municipalities and political subdivisions	—		10,491		—		10,491
Asset-backed	—		8,034		197		8,231
Total fixed maturity securities	175		39,230		693		40,098
Equity securities:
Common stock	187		—		4		191
Non-redeemable preferred stock	59		538		11		608
Total equity securities	246		538		15		799
Short term and other	135		365		—		500
Total assets	$	556	$	40,133	$	708	$	41,397
Liabilities
Other liabilities	$	—	$	1	$	—	$	1
Total liabilities	$	—	$	1	$	—	$	1

December 31, 2019							Total Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3
Assets
Fixed maturity securities:
Corporate bonds and other	$	175	$	22,085	$	468	$	22,728
States, municipalities and political subdivisions	—		10,652		—		10,652
Asset-backed	—		8,662		165		8,827
Total fixed maturity securities	175		41,399		633		42,207
Equity securities:
Common stock	135		—		7		142
Non-redeemable preferred stock	54		658		11		723
Total equity securities	189		658		18		865
Short term and other	397		1,344		—		1,741
Total assets	$	761	$	43,401	$	651	$	44,813
Liabilities
Other liabilities	$	—	$	7	$	—	$	7
Total liabilities	$	—	$	7	$	—	$	7

Table of reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs

The tables below present a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

Level 3 (In millions)	Corporate bonds and other			States, municipalities and political subdivisions		Asset-backed			Equity securities			Total
Balance as of January 1, 2020	$	468		$	—	$	165		$	18		$	651
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—			—		—			—			—
Reported in Net investment income	—			—		—			(3		)	(3		)
Reported in Other comprehensive income (loss)	(37		)	—		(9		)	—			(46		)
Total realized and unrealized investment gains (losses)	(37		)	—		(9		)	(3		)	(49		)
Purchases	67			—		45			—			112
Sales	—			—		—			—			—
Settlements	(2		)	—		(3		)	—			(5		)
Transfers into Level 3	—			—		—			—			—
Transfers out of Level 3	—			—		(1		)	—			(1		)
Balance as of March 31, 2020	$	496		$	—	$	197		$	15		$	708
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2020 recognized in Net income (loss) in the period	$	—		$	—	$	—		$	(3	)	$	(3	)
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2020 recognized in Other comprehensive income (loss) in the period	(35		)	—		(9		)	—			(44		)

Level 3 (In millions)	Corporate bonds and other			States, municipalities and political subdivisions		Asset-backed			Equity securities		Total
Balance as of January 1, 2019	$	222		$	—	$	197		$	18	$	437
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—			—		—			2		2
Reported in Net investment income	—			—		—			—		—
Reported in Other comprehensive income (loss)	8			—		3			—		11
Total realized and unrealized investment gains (losses)	8			—		3			2		13
Purchases	56			—		20			—		76
Sales	—			—		—			—		—
Settlements	(2		)	—		(4		)	—		(6		)
Transfers into Level 3	—			—		5			—		5
Transfers out of Level 3	(31		)	—		(37		)	—		(68		)
Balance as of March 31, 2019	$	253		$	—	$	184		$	20	$	457
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2019 recognized in Net income (loss) in the period	$	—		$	—	$	—		$	2	$	2
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2019 recognized in Other comprehensive income (loss) in the period	7			—		3			—		10

Quantitative information about significant unobservable inputs in the fair value measurement of level 3 assets

The following tables present quantitative information about the significant unobservable inputs utilized by the Company in the fair value measurements of Level 3 assets. Valuations for assets and liabilities not presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to the Company. The weighted average rate is calculated based on fair value.

March 31, 2020	Estimated Fair Value (In millions)		Valuation Technique(s)	Unobservable Input(s)	Range  (Weighted Average)
Fixed maturity securities	$	583	Discounted cash flow	Credit spread	1% - 10% (4%)

December 31, 2019	Estimated Fair Value (In millions)		Valuation Technique(s)	Unobservable Input(s)	Range  (Weighted Average)
Fixed maturity securities	$	525	Discounted cash flow	Credit spread	1% - 6% (2%)

Carrying amount and estimated fair value of financial instrument assets and liabilities not measured at fair value

The carrying amount and estimated fair value of the Company's financial assets and liabilities which are not measured at fair value on the Condensed Consolidated Balance Sheets are presented in the following tables.

March 31, 2020	Carrying Amount		Estimated Fair Value
(In millions)			Level 1		Level 2		Level 3		Total
Assets
Mortgage loans	$	1,021	$	—	$	—	$	1,036	$	1,036
Liabilities
Long term debt	$	2,680	$	—	$	2,730	$	—	$	2,730

December 31, 2019	Carrying Amount		Estimated Fair Value
(In millions)			Level 1		Level 2		Level 3		Total
Assets
Mortgage loans	$	994	$	—	$	—	$	1,025	$	1,025
Note receivable	21		—		—		21		21
Liabilities
Long term debt	$	2,679	$	—	$	2,906	$	—	$	2,906

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Non-Insurance Revenues from Contracts with Customers (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Revenue from Contract with Customer [Abstract]
Deferred non-insurance warranty revenue	$ 3,848		$ 3,779
Contract with customer, liability, revenue recognized	$ 286	$ 265

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues
Net earned premiums	$ 1,869	$ 1,803
Net investment income	329	571
Net investment (losses) gains	(216)	31
Non-insurance warranty revenue	301	281
Other revenues	8	9
Total revenues	2,291	2,695
Claims, Benefits and Expenses
Insurance claims and policyholders’ benefits	1,425	1,357
Amortization of deferred acquisition costs	344	342
Non-insurance warranty expense	281	260
Other operating expenses	299	283
Interest	31	34
Total claims, benefits and expenses	2,380	2,276
(Loss) income before income tax	(89)	419
Income tax benefit (expense)	28	(77)
Net (loss) income	$ (61)	$ 342
Basic earnings per share (in usd per share)	$ (0.23)	$ 1.26
Diluted earnings per share (in usd per share)	$ (0.23)	$ 1.25
Weighted Average Outstanding Common Stock and Common Stock Equivalents
Basic (loss) earnings per share (in shares)	271.5	271.6
Diluted (loss) earnings per share (in shares)	271.5	272.6

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Fair Value (Assets and liabilities measured at fair value on a recurring basis) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Fixed maturity securities:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	$ 40,098	$ 42,207
Equity securities:
Equity securities	799	865
Short term and other	500	1,741
Total assets	41,397	44,813
Other liabilities	1	7
Total liabilities	1	7
Corporate and other bonds
Fixed maturity securities:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	21,376	22,728
States, municipalities and political subdivisions
Fixed maturity securities:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	10,491	10,652
Asset-backed
Fixed maturity securities:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	8,231	8,827
Common Stock
Equity securities:
Equity securities	191	142
Non-redeemable preferred stock
Equity securities:
Equity securities	608	723
Level 1
Fixed maturity securities:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	175	175
Equity securities:
Equity securities	246	189
Short term and other	135	397
Total assets	556	761
Other liabilities	0	0
Total liabilities	0	0
Level 1 | Corporate and other bonds
Fixed maturity securities:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	175	175
Level 1 | States, municipalities and political subdivisions
Fixed maturity securities:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	0	0
Level 1 | Asset-backed
Fixed maturity securities:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	0	0
Level 1 | Common Stock
Equity securities:
Equity securities	187	135
Level 1 | Non-redeemable preferred stock
Equity securities:
Equity securities	59	54
Level 2
Fixed maturity securities:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	39,230	41,399
Equity securities:
Equity securities	538	658
Short term and other	365	1,344
Total assets	40,133	43,401
Other liabilities	1	7
Total liabilities	1	7
Level 2 | Corporate and other bonds
Fixed maturity securities:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	20,705	22,085
Level 2 | States, municipalities and political subdivisions
Fixed maturity securities:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	10,491	10,652
Level 2 | Asset-backed
Fixed maturity securities:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	8,034	8,662
Level 2 | Common Stock
Equity securities:
Equity securities	0	0
Level 2 | Non-redeemable preferred stock
Equity securities:
Equity securities	538	658
Level 3
Fixed maturity securities:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	693	633
Equity securities:
Equity securities	15	18
Short term and other	0	0
Total assets	708	651
Other liabilities	0	0
Total liabilities	0	0
Level 3 | Corporate and other bonds
Fixed maturity securities:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	496	468
Level 3 | States, municipalities and political subdivisions
Fixed maturity securities:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	0	0
Level 3 | Asset-backed
Fixed maturity securities:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	197	165
Level 3 | Common Stock
Equity securities:
Equity securities	4	7
Level 3 | Non-redeemable preferred stock
Equity securities:
Equity securities	$ 11	$ 11

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash Flows from Operating Activities
Net (loss) income	$ (61)	$ 342
Adjustments to reconcile net (loss) income to net cash flows provided by operating activities:
Deferred Income Tax Expense (Benefit)	(37)	32
Trading portfolio activity	7	(3)
Net investment losses (gains)	216	(31)
Equity method investees	98	14
Net amortization of investments	(15)	(25)
Depreciation and amortization	16	19
Changes in:
Receivables, net	(229)	44
Accrued investment income	(8)	(15)
Deferred acquisition costs	(27)	(30)
Insurance reserves	510	57
Other, net	(258)	(117)
Net cash flows provided by operating activities	212	287
Dispositions:
Fixed maturity securities - sales	823	2,259
Fixed maturity securities - maturities, calls and redemptions	799	576
Equity securities	98	64
Limited partnerships	204	186
Mortgage loans	15	35
Purchases:
Fixed maturity securities	(1,818)	(2,447)
Equity securities	(220)	(36)
Limited partnerships	(32)	(114)
Mortgage loans	61	59
Change in other investments	(6)	(6)
Change in short term investments	1,267	(177)
Purchases of property and equipment	(3)	(8)
Other, net	21	16
Net cash flows provided by investing activities	1,087	289
Cash Flows from Financing Activities
Dividends paid to common stockholders	(649)	(643)
Purchase of treasury stock	(18)	(14)
Other, net	(8)	(8)
Net cash flows used by financing activities	(675)	(665)
Effect of foreign exchange rate changes on cash	(9)	2
Net change in cash	615	(87)
Cash, beginning of year	242	310
Cash, end of period	$ 857	$ 223

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Fair Value (Carrying amount and estimated fair value of financial instrument assets and liabilities which are not measured at fair value) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Financial Assets [Abstract]
Mortgage loans	$ 1,021	$ 994
Financial Liabilities [Abstract]
Long term debt	2,680	2,679
Carrying Amount
Financial Assets [Abstract]
Mortgage loans	1,021	994
Note receivable		21
Financial Liabilities [Abstract]
Long term debt	2,680	2,679
Estimated Fair Value
Financial Assets [Abstract]
Mortgage loans	1,036	1,025
Note receivable		21
Financial Liabilities [Abstract]
Long term debt	2,730	2,906
Level 1 | Estimated Fair Value
Financial Assets [Abstract]
Mortgage loans	0	0
Note receivable		0
Financial Liabilities [Abstract]
Long term debt	0	0
Level 2 | Estimated Fair Value
Financial Assets [Abstract]
Mortgage loans	0	0
Note receivable		0
Financial Liabilities [Abstract]
Long term debt	2,730	2,906
Level 3 | Estimated Fair Value
Financial Assets [Abstract]
Mortgage loans	1,036	1,025
Note receivable		21
Financial Liabilities [Abstract]
Long term debt	$ 0	$ 0

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Expected Credit Losses - Uncollectible Reinsurance and Insurance Receivables (Tables)

3 Months Ended

Mar. 31, 2020

Credit Loss [Abstract]

Reinsurance Recoverable, Credit Quality Indicator [Table Text Block]

The following table summarizes the outstanding amount of voluntary reinsurance receivables, gross of any collateral arrangements, by financial strength rating as of March 31, 2020:

(In millions)	March 31, 2020
A- to A++	$	2,662
B- to B++	859
Insolvent	4
Total voluntary reinsurance outstanding balance(1)	$	3,525

(1)

Expected credit losses for legacy A&EP receivables are ceded to NICO and the reinsurance limit on the LPT has not been exhausted, therefore no allowance is recorded for these receivables and they are excluded from the table above. Refer to Note E for information regarding the LPT. The Company has also excluded receivables from involuntary pools.

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Claim and Claim Adjustment Expense Reserves (Tables)

3 Months Ended

Mar. 31, 2020

Net Incurred Claim and Claim Adjustment Expense [Line Items]

Schedule of liability for unpaid claims and claims adjustment expense

The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves of the Life & Group segment.

For the three months ended March 31
(In millions)	2020			2019
Reserves, beginning of year:
Gross	$	21,720		$	21,984
Ceded	3,835			4,019
Net reserves, beginning of year	17,885			17,965
Net incurred claim and claim adjustment expenses:
Provision for insured events of current year	1,355			1,309
Increase (decrease) in provision for insured events of prior years	(8		)	8
Amortization of discount	51			50
Total net incurred (1)	1,398			1,367
Net payments attributable to:
Current year events	(72		)	(100		)
Prior year events	(1,218		)	(1,309		)
Total net payments	(1,290		)	(1,409		)
Foreign currency translation adjustment and other	(88		)	13
Net reserves, end of period	17,905			17,936
Ceded reserves, end of period	3,967			3,900
Gross reserves, end of period	$	21,872		$	21,836

(1)

Total net incurred above does not agree to Insurance claims and policyholders' benefits as reflected on the Condensed Consolidated Statements of Operations due to amounts related to retroactive reinsurance deferred gain accounting, uncollectible reinsurance and benefit expenses related to future policy benefits, which are not reflected in the table above.

Net prior year development

The following table presents development recorded for the Specialty, Commercial, International and Corporate & Other segments.

Three months ended March 31
(In millions)	2020			2019
Pretax (favorable) unfavorable development:
Specialty	$	(11	)	$	(20	)
Commercial	(4		)	(8		)
International	—			14
Corporate & Other	—			—
Total pretax (favorable) unfavorable development	$	(15	)	$	(14	)

Specialty

Net Incurred Claim and Claim Adjustment Expense [Line Items]

Net prior year claim and allocated claim adjustment expense reserve development

The following table presents further detail of the development recorded for the Specialty segment.

Three months ended March 31
(In millions)	2020			2019
Pretax (favorable) unfavorable development:
Medical Professional Liability	$	10		$	15
Other Professional Liability and Management Liability	3			(12		)
Surety	(30		)	(25		)
Warranty	—			—
Other	6			2
Total pretax (favorable) unfavorable development	$	(11	)	$	(20	)

Commercial

Net Incurred Claim and Claim Adjustment Expense [Line Items]

Net prior year claim and allocated claim adjustment expense reserve development

The following table presents further detail of the development recorded for the Commercial segment.

Three months ended March 31
(In millions)	2020			2019
Pretax (favorable) unfavorable development:
Commercial Auto	$	9		$	(5	)
General Liability	—			(20		)
Workers' Compensation	(13		)	2
Property and Other	—			15
Total pretax (favorable) unfavorable development	$	(4	)	$	(8	)

International

Net Incurred Claim and Claim Adjustment Expense [Line Items]

Net prior year claim and allocated claim adjustment expense reserve development

The following table presents further detail of the development recorded for the International segment.

Three months ended March 31
(In millions)	2020		2019
Pretax (favorable) unfavorable development:
Casualty	$	—	$	—
Property, Energy and Marine(1)	—		14
Specialty	—		—
Total pretax (favorable) unfavorable development	$	—	$	14

(1)

Effective January 1, 2020 the Property and Energy and Marine lines of business have been combined in the International segment. Prior period information has been conformed to the new line of business presentation.

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Investments (Net realized investment gains (losses)) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Fixed maturity securities:
Gross gains	$ 29	$ 36
Gross losses	(104)	(42)
Net investment gains (losses) on fixed maturity securities	(75)	(6)
Equity securities	(133)	42
Derivatives	5	(5)
Mortgage loans	(13)	0
Short term investments and other	0	0
Net investment gains (losses)	$ (216)	$ 31

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Investments (Securities in a gross unrealized loss position) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value, Less than 12 months	$ 10,066	$ 2,148
Gross Unrealized Losses, Less than 12 Months	1,099	31
Estimated Fair Value, 12 Months or Longer	87	272
Gross Unrealized Losses, 12 Months or Longer	18	14
Estimated Fair Value, Total	10,153	2,420
Gross Unrealized Losses, Total	1,117	45
Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value, Less than 12 months	7,036	914
Gross Unrealized Losses, Less than 12 Months	804	21
Estimated Fair Value, 12 Months or Longer	44	186
Gross Unrealized Losses, 12 Months or Longer	13	11
Estimated Fair Value, Total	7,080	1,100
Gross Unrealized Losses, Total	817	32
States, municipalities and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value, Less than 12 months	82	34
Gross Unrealized Losses, Less than 12 Months	2	0
Estimated Fair Value, 12 Months or Longer	0	0
Gross Unrealized Losses, 12 Months or Longer	0	0
Estimated Fair Value, Total	82	34
Gross Unrealized Losses, Total	2
Residential mortgage-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value, Less than 12 months	166	249
Gross Unrealized Losses, Less than 12 Months	7	1
Estimated Fair Value, 12 Months or Longer	22	30
Gross Unrealized Losses, 12 Months or Longer	1	0
Estimated Fair Value, Total	188	279
Gross Unrealized Losses, Total	8	1
Commercial mortgage-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value, Less than 12 months	1,185	381
Gross Unrealized Losses, Less than 12 Months	151	3
Estimated Fair Value, 12 Months or Longer	12	20
Gross Unrealized Losses, 12 Months or Longer	2	2
Estimated Fair Value, Total	1,197	401
Gross Unrealized Losses, Total	153	5
Other asset-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value, Less than 12 months	1,510	449
Gross Unrealized Losses, Less than 12 Months	131	3
Estimated Fair Value, 12 Months or Longer	9	33
Gross Unrealized Losses, 12 Months or Longer	2	1
Estimated Fair Value, Total	1,519	482
Gross Unrealized Losses, Total	133	4
Asset-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value, Less than 12 months	2,861	1,079
Gross Unrealized Losses, Less than 12 Months	289	7
Estimated Fair Value, 12 Months or Longer	43	83
Gross Unrealized Losses, 12 Months or Longer	5	3
Estimated Fair Value, Total	2,904	1,162
Gross Unrealized Losses, Total	294	10
U.S. Treasury and obligations of government-sponsored enterprises
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value, Less than 12 months	2	62
Gross Unrealized Losses, Less than 12 Months	0	2
Estimated Fair Value, 12 Months or Longer	0	2
Gross Unrealized Losses, 12 Months or Longer	0	0
Estimated Fair Value, Total	2	64
Gross Unrealized Losses, Total	0	2
Foreign government
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value, Less than 12 months	76	59
Gross Unrealized Losses, Less than 12 Months	4	1
Estimated Fair Value, 12 Months or Longer	0	1
Gross Unrealized Losses, 12 Months or Longer	0	0
Estimated Fair Value, Total	76	60
Gross Unrealized Losses, Total	4	$ 1
Redeemable preferred stock
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value, Less than 12 months	9
Gross Unrealized Losses, Less than 12 Months	0
Estimated Fair Value, 12 Months or Longer	0
Gross Unrealized Losses, 12 Months or Longer	0
Estimated Fair Value, Total	9
Gross Unrealized Losses, Total	$ 0

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Benefit Plans

3 Months Ended

Mar. 31, 2020

Retirement Benefits [Abstract]

Benefit Plans

Benefit Plans

The components of net periodic pension cost (benefit) are presented in the following table.

Three months ended March 31
(In millions)	2020			2019
Net periodic pension cost (benefit)
Interest cost on projected benefit obligation	$	20		$	25
Expected return on plan assets	(39		)	(36		)
Amortization of net actuarial (gain) loss	11			10
Settlement loss	1			—
Total net periodic pension cost (benefit)	$	(7	)	$	(1	)

For the three months ended March 31, 2020, the Company recognized $2 million of non-service benefit in Insurance claims and policyholders' benefits and $5 million of non-service benefit in Other operating expenses. For the three months ended March 31, 2019, the Company recognized less than $1 million of non-service benefit in Insurance claims and policyholders' benefits and $1 million of non-service benefit in Other operating expenses.

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Investments

3 Months Ended

Mar. 31, 2020

Investments [Abstract]

Investments

Investments

The significant components of Net investment income are presented in the following table.

Three months ended March 31
(In millions)	2020			2019
Fixed maturity securities	$	438		$	455
Equity securities	(44		)	30
Limited partnership investments	(70		)	76
Mortgage loans	14			12
Short term investments	7			10
Trading portfolio	1			2
Other	—			2
Gross investment income	346			587
Investment expense	(17		)	(16		)
Net investment income	$	329		$	571

During the three months ended March 31, 2020 and 2019, $(45) million and $17 million of Net investment income was recognized due to the change in fair value of common stock still held as of March 31, 2020 and 2019. During the three months ended March 31, 2020 and 2019, $(2) million and less than $1 million of Net investment income was recognized due to the change in fair value of trading securities still held as of March 31, 2020 and 2019. 

Net investment gains (losses) are presented in the following table.

Three months ended March 31
(In millions)	2020			2019
Net investment gains (losses):
Fixed maturity securities:
Gross gains	$	29		$	36
Gross losses	(104		)	(42		)
Net investment gains (losses) on fixed maturity securities	(75		)	(6		)
Equity securities	(133		)	42
Derivatives	5			(5		)
Mortgage loans	(13		)	—
Short term investments and other	—			—
Net investment gains (losses)	$	(216	)	$	31

During the three months ended March 31, 2020 and 2019, $(133) million of losses and $42 million of gains were recognized in Net investment gains (losses) due to the change in fair value of non-redeemable preferred stock still held as of March 31, 2020 and 2019.

For available-for-sale fixed maturity securities, a credit loss exists if the present value of cash flows expected to be collected is less than the amortized cost basis. The allowance for credit loss related to available-for-sale fixed maturity securities is the difference between present value of cash flows expected to be collected and the amortized cost basis, limited by the amount that the fair value is less than the amortized cost basis. The Company considers all available evidence when determining whether an investment requires a credit loss write-down or allowance to be recorded. Examples of such evidence may include the financial condition and near term prospects of the issuer, whether the issuer is current with interest and principal payments, credit ratings on the security or changes in ratings over time, general market conditions and industry, sector or other specific factors and whether it is likely that the Company will recover its amortized cost through the collection of cash flows. Changes in the allowance are presented as a component of Net investment gains (losses) on the Condensed Consolidated Statements of Operations.

The following table presents the activity related to the allowance on available-for-sale securities with credit impairments and PCD assets for the three months ended March 31, 2020. Accrued interest receivable on available-for-sale fixed maturity securities totaled $390 million and is excluded from the estimate of expected credit losses and the amortized cost basis in the tables included within this Note.

Three months ended March 31
(in millions)	Corporate and other bonds
Allowance for credit losses:
Beginning balance	$	—
Additions to the allowance for credit losses:
Impact of adopting ASC 326	6
For securities for which credit losses were not previously recorded	48
For available-for-sale securities accounted for as PCD assets	1
Reductions to the allowance for credit losses:
Securities sold during the period (realized)	5
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis	1
Write-offs charged against the allowance	—
Recoveries of amounts previously written off	—
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period	—
Ending balance as of March 31, 2020	$	49

The components of available-for-sale impairment losses recognized in earnings by asset type are presented in the following table. The table includes losses on securities with an intention to sell and changes in the allowance for credit losses on securities since acquisition date.

Three Months ended March 31
(In millions)	2020		2019
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	91	$	6
Asset-backed	1		8
Impairment losses recognized in earnings	$	92	$	14

The following tables present a summary of fixed maturity securities.

March 31, 2020	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses(1)		Estimated Fair Value
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	20,181	$	1,419	$	817	$	49	$	20,734
States, municipalities and political subdivisions	8,957		1,536		2		—		10,491
Asset-backed:
Residential mortgage-backed	4,198		207		8		—		4,397
Commercial mortgage-backed	2,207		36		153		—		2,090
Other asset-backed	1,868		9		133		—		1,744
Total asset-backed	8,273		252		294		—		8,231
U.S. Treasury and obligations of government-sponsored enterprises	147		8		—		—		155
Foreign government	452		15		4		—		463
Redeemable preferred stock	9		—		—		—		9
Total fixed maturity securities available-for-sale	38,019		3,230		1,117		49		40,083
Total fixed maturity securities trading	15		—		—		—		15
Total fixed maturity securities	$	38,034	$	3,230	$	1,117	$	49	$	40,098

(1) As of January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The Unrealized OTTI Losses (Gains) column that tracked subsequent valuation changes on securities for which a credit loss had previously been recorded has been replaced with the Allowance for Credit Losses column.

December 31, 2019	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Unrealized OTTI Losses (Gains)
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	19,789	$	2,292	$	32	$	22,049	$	—
States, municipalities and political subdivisions	9,093		1,559		—		10,652		—
Asset-backed:
Residential mortgage-backed	4,387		133		1		4,519		(17		)
Commercial mortgage-backed	2,265		86		5		2,346		1
Other asset-backed	1,925		41		4		1,962		(3		)
Total asset-backed	8,577		260		10		8,827		(19		)
U.S. Treasury and obligations of government-sponsored enterprises	146		1		2		145		—
Foreign government	491		14		1		504		—
Redeemable preferred stock	10		—		—		10		—
Total fixed maturity securities available-for-sale	38,106		4,126		45		42,187		$	(19	)
Total fixed maturity securities trading	20		—		—		20
Total fixed maturity securities	$	38,126	$	4,126	$	45	$	42,207

The net unrealized gains on investments included in the tables above are recorded as a component of Accumulated other comprehensive income (AOCI). When presented in AOCI, these amounts are net of tax and any required Shadow Adjustments. 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, a related increase in Insurance reserves is recorded, net of tax, as a reduction of net unrealized gains through Other comprehensive income (loss) (Shadow Adjustments). As of March 31, 2020 and December 31, 2019, the net unrealized gains on investments included in AOCI were correspondingly reduced by Shadow Adjustments of $1,700 million and $2,198 million.

The following tables present the estimated fair value and gross unrealized losses of fixed maturity securities in a gross unrealized loss position for which an allowance for credit loss has not been recorded, by the length of time in which the securities have continuously been in that position.

	Less than 12 Months				12 Months or Longer				Total
March 31, 2020	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	7,036	$	804	$	44	$	13	$	7,080	$	817
States, municipalities and political subdivisions	82		2		—		—		82		2
Asset-backed:
Residential mortgage-backed	166		7		22		1		188		8
Commercial mortgage-backed	1,185		151		12		2		1,197		153
Other asset-backed	1,510		131		9		2		1,519		133
Total asset-backed	2,861		289		43		5		2,904		294
U.S. Treasury and obligations of government-sponsored enterprises	2		—		—		—		2		—
Foreign government	76		4		—		—		76		4
Redeemable preferred stock	9		—		—		—		9		—
Total	$	10,066	$	1,099	$	87	$	18	$	10,153	$	1,117

	Less than 12 Months				12 Months or Longer				Total
December 31, 2019	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	914	$	21	$	186	$	11	$	1,100	$	32
States, municipalities and political subdivisions	34		—		—		—		34		—
Asset-backed:
Residential mortgage-backed	249		1		30		—		279		1
Commercial mortgage-backed	381		3		20		2		401		5
Other asset-backed	449		3		33		1		482		4
Total asset-backed	1,079		7		83		3		1,162		10
U.S. Treasury and obligations of government-sponsored enterprises	62		2		2		—		64		2
Foreign government	59		1		1		—		60		1
Total	$	2,148	$	31	$	272	$	14	$	2,420	$	45

The following tables present the estimated fair value and gross unrealized losses of available-for-sale Corporate and other bonds in a gross unrealized loss position at March 31, 2020 across industry sectors and by rating distributions.

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Corporate and other bonds:
Basic Materials	$	727	$	78
Communications	349		27
Consumer, cyclical - Other	390		56
Consumer, non-cyclical - Other	401		27
Energy - Oil & Gas	575		191
Energy - Pipelines	523		112
Entertainment	148		23
Financial - Other	1,711		89
Financial - Real Estate/REITS	599		45
Industrial	468		55
Retail	150		18
Technology	290		30
Transportation	73		5
Travel & Related	269		37
Utilities	407		24
Total Corporate and other bonds	$	7,080	$	817

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Corporate and other bonds:
AAA	$	8	$	—
AA	134		4
A	608		17
BBB	4,987		516
Below investment grade	1,343		280
Total Corporate and other bonds	$	7,080	$	817

The following tables present the estimated fair value and gross unrealized losses of available-for-sale Commercial mortgage-backed securities in a gross unrealized loss position at March 31, 2020 by property type and by rating distributions.

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Commercial mortgage-backed:
Conduits (multi property, multi borrower pools)	$	211	$	11
Single asset, single borrower	986		142
Total Commercial mortgage-backed	$	1,197	$	153

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Commercial mortgage-backed:
US Government, Government agencies and Government sponsored enterprises	$	1	$	—
AAA	60		1
AA	245		17
A	214		22
BBB	484		78
Below investment grade	193		35
Total Commercial mortgage-backed	$	1,197	$	153

The following tables present the estimated fair value and gross unrealized losses of available-for-sale Other asset-backed securities in a gross unrealized loss position at March 31, 2020 by underlying collateral and by rating distributions.

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Other asset-backed:
Auto	$	290	$	6
Collateralized loan obligations	418		60
Franchise	414		39
Other	397		28
Total Other asset-backed	$	1,519	$	133

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Other asset-backed:
AAA	$	49	$	1
AA	83		2
A	821		74
BBB	566		56
Below investment grade	—		—
Total Other asset-backed	$	1,519	$	133

Based on current facts and circumstances, the Company believes the unrealized losses presented in the March 31, 2020 gross unrealized loss position tables above are not indicative of the ultimate collectibility of the current amortized cost of the securities. Rather, the Company believes the gross unrealized losses are attributable primarily to widening credit spreads over risk free rates beyond historic norms, as a result of market uncertainties stemming from the COVID-19 pandemic, as well as supply shocks in the energy sector coupled with demand shocks in multiple sectors from the COVID-19 pandemic, that originated during the first quarter of 2020. The Company has no current intent to sell securities with unrealized losses, nor is it more likely than not that it will be required to sell prior to recovery of amortized cost; accordingly, the Company has determined that there are no additional impairment losses to be recorded as of March 31, 2020.

Contractual Maturity

The following table presents available-for-sale fixed maturity securities by contractual maturity.

	March 31, 2020				December 31, 2019
(In millions)	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value
Due in one year or less	$	1,331	$	1,325	$	1,334	$	1,356
Due after one year through five years	11,554		11,812		9,746		10,186
Due after five years through ten years	13,078		13,069		14,892		15,931
Due after ten years	12,056		13,877		12,134		14,714
Total	$	38,019	$	40,083	$	38,106	$	42,187

Actual maturities may differ from contractual maturities because certain securities may be called or prepaid. Securities not due at a single date are allocated based on weighted average life.

Derivative Financial Instruments

The Company holds an embedded derivative on a funds withheld liability with a notional value of $196 million and $182 million as of March 31, 2020 and December 31, 2019 and a fair value of $(1) million and $(7) million as of March 31, 2020 and December 31, 2019. The embedded derivative on the funds withheld liability is accounted for separately and reported with the funds withheld liability in Other liabilities on the Condensed Consolidated Balance Sheets.

Investment Commitments

As part of its overall investment strategy, the Company invests in various assets which require future purchase, sale or funding commitments. These investments are recorded once funded, and the related commitments may include future capital calls from various third-party limited partnerships, signed and accepted mortgage loan applications, and obligations related to privately placed debt securities. As of March 31, 2020, the Company had commitments to purchase or fund approximately $1,025 million and sell approximately $85 million under the terms of these investments.

Mortgage Loans

The allowance for expected credit losses is developed by assessing the credit quality of pools of mortgage loans in good standing using debt service coverage ratios (DSCR) and loan-to-value ratios (LTV). The DSCR compares a property’s net operating income to its debt service payments, including principal and interest. The LTV ratio compares the current unpaid principal balance of the loan to the estimated fair value of the underlying property collateralizing the loan. The pools developed to measure the credit loss allowance use increments of DSCR and LTV to draw distinctions between risk levels. Changes in the allowance for mortgage loans are presented as a component of Net investment gains (losses) on the Condensed Consolidated Statements of Operations. The Company has adjusted the historical loss rate applied to mortgage loans over the forecast period to reflect higher expected credit losses based on observable economic forecasts, which increased the allowance by $13 million for the period ended March 31, 2020.

The following table presents the amortized cost basis of mortgage loans for each credit quality indicator by year of origination as of March 31, 2020:

	Mortgage Loans Amortized Cost Basis by Origination Year (1)
As of March 31, 2020	2020		2019		2018		2017		2016		Prior		Total
DSCR ≥1.6x
LTV less than 55%	$	60	$	32	$	19	$	92	$	41	$	130	$	374
LTV 55% to 65%	—		32		29		55		4		—		120
LTV greater than 65%	—		5		—		—		—		—		5
DSCR 1.2x - 1.6x
LTV less than 55%	—		33		10		13		16		126		198
LTV 55% to 65%	—		73		32		32		—		—		137
LTV greater than 65%	—		85		—		—		—		—		85
DSCR ≤1.2
LTV less than 55%	—		1		11		27		—		9		48
LTV 55% to 65%	—		14		14		—		—		—		28
LTV greater than 65%	—		22		—		—		24		—		46
Total	$	60	$	297	$	115	$	219	$	85	$	265	$	1,041

(1) The values in the table above reflect DSCR on a standardized amortization period and LTV based on the most recent appraised values trended forward using changes in a commercial real estate price index.

As of March 31, 2020, accrued interest receivable on mortgage loans totaled $4 million and is excluded from the amortized cost basis disclosed in the table above and the estimate of expected credit losses. There were no loans that were past due or placed in nonaccrual status as of March 31, 2020. No interest income was written off for the period ended March 31, 2020.

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Expected Credit Losses - Uncollectible Reinsurance and Insurance Receivables Expected Credit Losses - Uncollectible Reinsurance and Insurance Receivables

3 Months Ended

Mar. 31, 2020

Credit Loss [Abstract]

Expected Credit Losses - Uncollectible Reinsurance and Insurance Receivables

Expected Credit Losses - Uncollectible Reinsurance and Insurance Receivables

The Company has established an allowance for uncollectible reinsurance receivables which relates to both amounts already billed on ceded paid losses as well as ceded reserves that will be billed when losses are paid in the future. For assessing expected credit losses, the Company separates reinsurance receivables into two pools; voluntary reinsurance receivables and involuntary reinsurance exposures to mandatory pools. The Company has not recorded an allowance for involuntary pools as there is no perceived credit risk. The principal credit quality indicator used in the valuation of the allowance on voluntary reinsurance receivables is the financial strength rating of the reinsurer sourced from major rating agencies. If the reinsurer is unrated, an internal financial strength rating is assigned based on the Company’s historical loss experience and the Company’s assessment of reinsurance counterparty risk profile, which generally corresponds with a B rating. Changes in the allowance are presented as a component of Insurance claims and policyholders' benefits on the Condensed Consolidated Statements of Operations.

The following table summarizes the outstanding amount of voluntary reinsurance receivables, gross of any collateral arrangements, by financial strength rating as of March 31, 2020:

(In millions)	March 31, 2020
A- to A++	$	2,662
B- to B++	859
Insolvent	4
Total voluntary reinsurance outstanding balance(1)	$	3,525

(1) Expected credit losses for legacy A&EP receivables are ceded to NICO and the reinsurance limit on the LPT has not been exhausted, therefore no allowance is recorded for these receivables and they are excluded from the table above. Refer to Note E for information regarding the LPT. The Company has also excluded receivables from involuntary pools.

Voluntary reinsurance receivables within the B- to B++ rating distribution are primarily due from captive reinsurers and backed by collateral arrangements.

The Company has established an allowance for uncollectible insurance receivables. A loss rate methodology is used to determine expected credit losses for premium receivables. This methodology uses the Company’s historical annual credit losses relative to gross premium written to develop a range of credit loss rates for each dollar of gross written premium underwritten. The expected credit loss for loss sensitive business in good standing is calculated on a pool basis, using historical default rate data obtained from major rating agencies. Changes in the allowance are presented as a component of Other operating expenses on the Condensed Consolidated Statements of Operations.

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Business Segments (Narrative) (Details)	3 Months Ended
	Mar. 31, 2020 segment
Core Segments - Specialty, Commercial and International
Segment Reporting Information [Line Items]
Number of operating segments	3
Non-Core Segments - Life & Group and Corporate & Other
Segment Reporting Information [Line Items]
Number of operating segments	2

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Legal Proceedings, Contingencies and Guarantees (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Guarantee Obligations
Legal Proceedings, Commitments and Contingencies, and Guarantees [Line Items]
Guarantor obligations, maximum exposure, undiscounted	$ 1,700
Guarantee and Indemnification
Legal Proceedings, Commitments and Contingencies, and Guarantees [Line Items]
Guarantor obligations, current carrying value	$ 5	$ 5

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Investments (Contractual maturity) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Investments [Abstract]
Due in one year or less, cost or amortized cost	$ 1,331	$ 1,334
Due after one year through five years, cost or amortized cost	11,554	9,746
Due after five years through ten years, cost or amortized cost	13,078	14,892
Due after ten years, cost or amortized cost	12,056	12,134
Cost or Amortized Cost	38,019	38,106
Due in one year or less, estimated fair value	1,325	1,356
Due after one year through five years, estimated fair value	11,812	10,186
Due after five years through ten years, estimated fair value	13,069	15,931
Due after ten years, estimated fair value	13,877	14,714
Total Estimated Fair Value	$ 40,083	$ 42,187

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Fair Value (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Fair Value Disclosures [Abstract]
Other invested assets overseas deposit	$ 58	$ 60

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Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Investments:
Fixed maturity securities at fair value (amortized cost of $38,034 and $38,126, less allowance for credit loss of $49 and $-)	$ 40,098	$ 42,207
Equity securities at fair value (cost of $936 and $820)	799	865
Limited partnership investments	1,509	1,752
Other invested assets	63	65
Mortgage loans (less allowance for uncollectible receivables of $20 and $-)	1,021	994
Short term investments	596	1,861
Total investments	44,086	47,744
Cash	857	242
Reinsurance receivables (less allowance for uncollectible receivables of $23 and $25)	4,328	4,179
Insurance receivables (less allowance for uncollectible receivables of $30 and $32)	2,502	2,449
Accrued investment income	402	395
Deferred acquisition costs	683	662
Deferred income taxes	518	199
Property and equipment at cost (less accumulated depreciation of $224 and $215)	271	282
Goodwill	145	147
Deferred non-insurance warranty acquisition expense	2,905	2,840
Other assets (includes $15 and $21 due from Loews Corporation)	1,708	1,473
Total assets	58,405	60,612
Insurance reserves:
Claim and claim adjustment expenses	21,872	21,720
Unearned premiums	4,745	4,583
Future policy benefits	11,734	12,311
Long term debt	2,680	2,679
Deferred non-insurance warranty revenue	3,848	3,779
Other liabilities (includes $7 and $21 due to Loews Corporation)	3,164	3,325
Total liabilities	48,043	48,397
Commitments and contingencies (Notes C and F)
Stockholders' Equity
Common stock ($2.50 par value; 500,000,000 shares authorized; 273,040,243 shares issued; 271,370,988 and 271,412,591 shares outstanding)	683	683
Additional paid-in capital	2,187	2,203
Retained earnings	8,634	9,348
Accumulated other comprehensive (loss) income	(1,070)	51
Treasury stock (1,669,255 and 1,627,652 shares), at cost	(72)	(70)
Total stockholders’ equity	10,362	12,215
Total liabilities and stockholders' equity	$ 58,405	$ 60,612

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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement of Stockholders' Equity [Abstract]
Dividends declared per share (usd per share)	$ 2.37	$ 2.35

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Claim and Claim Adjustment Expense Reserves (Reconciliation of Claim and Claim Adjustment Expense Reserves) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Reserves, beginning of year: [Abstract]
Gross	$ 21,720	$ 21,984
Ceded	3,835	4,019
Net reserves, beginning of year	17,885	17,965
Net incurred claim and claim adjustment expenses:
Provision for insured events of current year	1,355	1,309
Increase (decrease) in provision for insured events of prior years	(8)	8
Amortization of discount	51	50
Total net incurred	1,398	1,367
Net payments attributable to:
Current year events	(72)	(100)
Prior year events	(1,218)	(1,309)
Total net payments	(1,290)	(1,409)
Foreign currency translation adjustment and other	(88)	13
Net reserves, end of period	17,905	17,936
Ceded reserves, end of period	3,967	3,900
Gross reserves, end of period	$ 21,872	$ 21,836

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Expected Credit Losses - Uncollectible Reinsurance and Insurance Receivables (Summary of Outstanding Amount of Voluntary Reinsuranece Receivables) (Details) $ in Millions	Mar. 31, 2020 USD ($)
Financing Receivable, Credit Quality Indicator [Line Items]
Reinsurance receivables	$ 3,525
A- to A
Financing Receivable, Credit Quality Indicator [Line Items]
Reinsurance receivables	2,662
B- to B
Financing Receivable, Credit Quality Indicator [Line Items]
Reinsurance receivables	859
Insolvent
Financing Receivable, Credit Quality Indicator [Line Items]
Reinsurance receivables	$ 4

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Earnings (Loss) Per Share (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Earnings Per Share [Abstract]
Incremental common shares attributable to dilutive effect of share-based payment arrangements (in shares)	1,015,000	971,000
Antidilutive securities excluded from computation of earnings (in shares)		0
Treasury stock, shares, acquired (in shares)	435,376	317,508
Purchase of treasury stock	$ 18	$ 14

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Accumulated Other Comprehensive Income (Loss) by Component (Tables)

3 Months Ended

Mar. 31, 2020

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss) by Component

The tables below display the changes in Accumulated other comprehensive income (loss) by component.

(In millions)	Net unrealized gains (losses) on investments with an allowance for credit losses(1)			Net unrealized gains (losses) on other investments(1)			Pension and postretirement benefits			Cumulative foreign currency translation adjustment			Total
Balance as of January 1, 2020	$	—		$	1,025		$	(833	)	$	(141	)	$	51
Other comprehensive income (loss) before reclassifications	(48		)	(1,066		)	1			(77		)	(1,190		)
Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $10, $6, $3, $- and $19	(37		)	(22		)	(10		)	—			(69		)
Other comprehensive income (loss) net of tax (expense) benefit of $3, $281, $(3), $- and $281	(11		)	(1,044		)	11			(77		)	(1,121		)
Balance as of March 31, 2020	$	(11	)	$	(19	)	$	(822	)	$	(218	)	$	(1,070	)

(1) As of January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The Net unrealized gains (losses) on investments with OTTI losses column that tracked the change in unrealized gains (losses) on investments with OTTI losses has been replaced with the Net unrealized gains (losses) on investments with an allowance for credit losses column. The balance as of January 1, 2020 in the Net unrealized gains (losses) on investments with OTTI losses column is now reported in the Net unrealized gains (losses) on other investments column.

(In millions)	Net unrealized gains (losses) on investments with OTTI losses		Net unrealized gains (losses) on other investments			Pension and postretirement benefits			Cumulative foreign currency translation adjustment			Total
Balance as of January 1, 2019	$	16	$	61		$	(775	)	$	(180	)	$	(878	)
Other comprehensive income (loss) before reclassifications	4		521			(1		)	17			541
Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $-, $1, $2, $- and $3	—		(5		)	(8		)	—			(13		)
Other comprehensive income (loss) net of tax (expense) benefit of $(1), $(141), $(2), $- and $(144)	4		526			7			17			554
Balance as of March 31, 2019	$	20	$	587		$	(768	)	$	(163	)	$	(324	)

Reclassification out of Accumulated Other Comprehensive Income

Amounts reclassified from Accumulated other comprehensive income (loss) shown above are reported in Net income (loss) as follows:

Component of AOCI	Condensed Consolidated Statements of Operations Line Item Affected by Reclassifications
Net unrealized gains (losses) on investments with an allowance for credit losses, Net unrealized gains (losses) on investments with OTTI losses and Net unrealized gains (losses) on other investments	Net investment gains (losses)
Pension and postretirement benefits	Other operating expenses and Insurance claims and policyholders' benefits

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Investments (Tables)

3 Months Ended

Mar. 31, 2020

Investments [Abstract]

Net investment income

The significant components of Net investment income are presented in the following table.

Three months ended March 31
(In millions)	2020			2019
Fixed maturity securities	$	438		$	455
Equity securities	(44		)	30
Limited partnership investments	(70		)	76
Mortgage loans	14			12
Short term investments	7			10
Trading portfolio	1			2
Other	—			2
Gross investment income	346			587
Investment expense	(17		)	(16		)
Net investment income	$	329		$	571

Net realized investment gains (losses)

Net investment gains (losses) are presented in the following table.

Three months ended March 31
(In millions)	2020			2019
Net investment gains (losses):
Fixed maturity securities:
Gross gains	$	29		$	36
Gross losses	(104		)	(42		)
Net investment gains (losses) on fixed maturity securities	(75		)	(6		)
Equity securities	(133		)	42
Derivatives	5			(5		)
Mortgage loans	(13		)	—
Short term investments and other	—			—
Net investment gains (losses)	$	(216	)	$	31

Debt securities, available-for-sale, allowance for credit loss

Accrued interest receivable on available-for-sale fixed maturity securities totaled $390 million and is excluded from the estimate of expected credit losses and the amortized cost basis in the tables included within this Note.

Three months ended March 31
(in millions)	Corporate and other bonds
Allowance for credit losses:
Beginning balance	$	—
Additions to the allowance for credit losses:
Impact of adopting ASC 326	6
For securities for which credit losses were not previously recorded	48
For available-for-sale securities accounted for as PCD assets	1
Reductions to the allowance for credit losses:
Securities sold during the period (realized)	5
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis	1
Write-offs charged against the allowance	—
Recoveries of amounts previously written off	—
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period	—
Ending balance as of March 31, 2020	$	49

Components of net other than temporary impairment losses recognized in earnings by asset type

The table includes losses on securities with an intention to sell and changes in the allowance for credit losses on securities since acquisition date.

Three Months ended March 31
(In millions)	2020		2019
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	91	$	6
Asset-backed	1		8
Impairment losses recognized in earnings	$	92	$	14

Summary of fixed maturity and equity securities

The following tables present a summary of fixed maturity securities.

March 31, 2020	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses(1)		Estimated Fair Value
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	20,181	$	1,419	$	817	$	49	$	20,734
States, municipalities and political subdivisions	8,957		1,536		2		—		10,491
Asset-backed:
Residential mortgage-backed	4,198		207		8		—		4,397
Commercial mortgage-backed	2,207		36		153		—		2,090
Other asset-backed	1,868		9		133		—		1,744
Total asset-backed	8,273		252		294		—		8,231
U.S. Treasury and obligations of government-sponsored enterprises	147		8		—		—		155
Foreign government	452		15		4		—		463
Redeemable preferred stock	9		—		—		—		9
Total fixed maturity securities available-for-sale	38,019		3,230		1,117		49		40,083
Total fixed maturity securities trading	15		—		—		—		15
Total fixed maturity securities	$	38,034	$	3,230	$	1,117	$	49	$	40,098

(1) As of January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The Unrealized OTTI Losses (Gains) column that tracked subsequent valuation changes on securities for which a credit loss had previously been recorded has been replaced with the Allowance for Credit Losses column.

December 31, 2019	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Unrealized OTTI Losses (Gains)
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	19,789	$	2,292	$	32	$	22,049	$	—
States, municipalities and political subdivisions	9,093		1,559		—		10,652		—
Asset-backed:
Residential mortgage-backed	4,387		133		1		4,519		(17		)
Commercial mortgage-backed	2,265		86		5		2,346		1
Other asset-backed	1,925		41		4		1,962		(3		)
Total asset-backed	8,577		260		10		8,827		(19		)
U.S. Treasury and obligations of government-sponsored enterprises	146		1		2		145		—
Foreign government	491		14		1		504		—
Redeemable preferred stock	10		—		—		10		—
Total fixed maturity securities available-for-sale	38,106		4,126		45		42,187		$	(19	)
Total fixed maturity securities trading	20		—		—		20
Total fixed maturity securities	$	38,126	$	4,126	$	45	$	42,207

Securities in a gross unrealized loss position

The following tables present the estimated fair value and gross unrealized losses of fixed maturity securities in a gross unrealized loss position for which an allowance for credit loss has not been recorded, by the length of time in which the securities have continuously been in that position.

	Less than 12 Months				12 Months or Longer				Total
March 31, 2020	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	7,036	$	804	$	44	$	13	$	7,080	$	817
States, municipalities and political subdivisions	82		2		—		—		82		2
Asset-backed:
Residential mortgage-backed	166		7		22		1		188		8
Commercial mortgage-backed	1,185		151		12		2		1,197		153
Other asset-backed	1,510		131		9		2		1,519		133
Total asset-backed	2,861		289		43		5		2,904		294
U.S. Treasury and obligations of government-sponsored enterprises	2		—		—		—		2		—
Foreign government	76		4		—		—		76		4
Redeemable preferred stock	9		—		—		—		9		—
Total	$	10,066	$	1,099	$	87	$	18	$	10,153	$	1,117

	Less than 12 Months				12 Months or Longer				Total
December 31, 2019	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	914	$	21	$	186	$	11	$	1,100	$	32
States, municipalities and political subdivisions	34		—		—		—		34		—
Asset-backed:
Residential mortgage-backed	249		1		30		—		279		1
Commercial mortgage-backed	381		3		20		2		401		5
Other asset-backed	449		3		33		1		482		4
Total asset-backed	1,079		7		83		3		1,162		10
U.S. Treasury and obligations of government-sponsored enterprises	62		2		2		—		64		2
Foreign government	59		1		1		—		60		1
Total	$	2,148	$	31	$	272	$	14	$	2,420	$	45

Debt securities, available-for-sale

The following tables present the estimated fair value and gross unrealized losses of available-for-sale Corporate and other bonds in a gross unrealized loss position at March 31, 2020 across industry sectors and by rating distributions.

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Corporate and other bonds:
Basic Materials	$	727	$	78
Communications	349		27
Consumer, cyclical - Other	390		56
Consumer, non-cyclical - Other	401		27
Energy - Oil & Gas	575		191
Energy - Pipelines	523		112
Entertainment	148		23
Financial - Other	1,711		89
Financial - Real Estate/REITS	599		45
Industrial	468		55
Retail	150		18
Technology	290		30
Transportation	73		5
Travel & Related	269		37
Utilities	407		24
Total Corporate and other bonds	$	7,080	$	817

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Corporate and other bonds:
AAA	$	8	$	—
AA	134		4
A	608		17
BBB	4,987		516
Below investment grade	1,343		280
Total Corporate and other bonds	$	7,080	$	817

The following tables present the estimated fair value and gross unrealized losses of available-for-sale Commercial mortgage-backed securities in a gross unrealized loss position at March 31, 2020 by property type and by rating distributions.

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Commercial mortgage-backed:
Conduits (multi property, multi borrower pools)	$	211	$	11
Single asset, single borrower	986		142
Total Commercial mortgage-backed	$	1,197	$	153

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Commercial mortgage-backed:
US Government, Government agencies and Government sponsored enterprises	$	1	$	—
AAA	60		1
AA	245		17
A	214		22
BBB	484		78
Below investment grade	193		35
Total Commercial mortgage-backed	$	1,197	$	153

The following tables present the estimated fair value and gross unrealized losses of available-for-sale Other asset-backed securities in a gross unrealized loss position at March 31, 2020 by underlying collateral and by rating distributions.

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Other asset-backed:
Auto	$	290	$	6
Collateralized loan obligations	418		60
Franchise	414		39
Other	397		28
Total Other asset-backed	$	1,519	$	133

March 31, 2020	Estimated Fair Value		Gross Unrealized Losses
(In millions)
Other asset-backed:
AAA	$	49	$	1
AA	83		2
A	821		74
BBB	566		56
Below investment grade	—		—
Total Other asset-backed	$	1,519	$	133

Contractual maturity

The following table presents available-for-sale fixed maturity securities by contractual maturity.

	March 31, 2020				December 31, 2019
(In millions)	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value
Due in one year or less	$	1,331	$	1,325	$	1,334	$	1,356
Due after one year through five years	11,554		11,812		9,746		10,186
Due after five years through ten years	13,078		13,069		14,892		15,931
Due after ten years	12,056		13,877		12,134		14,714
Total	$	38,019	$	40,083	$	38,106	$	42,187

Financing receivable credit quality indicators

The following table presents the amortized cost basis of mortgage loans for each credit quality indicator by year of origination as of March 31, 2020:

	Mortgage Loans Amortized Cost Basis by Origination Year (1)
As of March 31, 2020	2020		2019		2018		2017		2016		Prior		Total
DSCR ≥1.6x
LTV less than 55%	$	60	$	32	$	19	$	92	$	41	$	130	$	374
LTV 55% to 65%	—		32		29		55		4		—		120
LTV greater than 65%	—		5		—		—		—		—		5
DSCR 1.2x - 1.6x
LTV less than 55%	—		33		10		13		16		126		198
LTV 55% to 65%	—		73		32		32		—		—		137
LTV greater than 65%	—		85		—		—		—		—		85
DSCR ≤1.2
LTV less than 55%	—		1		11		27		—		9		48
LTV 55% to 65%	—		14		14		—		—		—		28
LTV greater than 65%	—		22		—		—		24		—		46
Total	$	60	$	297	$	115	$	219	$	85	$	265	$	1,041

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Business Segments

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Business Segments

Business Segments

The Company's property and casualty commercial insurance operations are managed and reported in three business segments: Specialty, Commercial and International. These three segments are collectively referred to as Property & Casualty Operations. The Company's operations outside of Property & Casualty Operations are managed and reported in two segments: Life & Group and Corporate & Other.

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, 2019. 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, Goodwill and Deferred non-insurance warranty acquisition expense and revenue are readily identifiable for 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 Net investment gains or losses are allocated primarily based on each segment's net carried insurance reserves, as adjusted. All significant intersegment income and expense have 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.

The performance of the Company's insurance operations is monitored by management through core income (loss), which is derived from certain income statement amounts. 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.

Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of net investment gains or losses and any cumulative effects of changes in accounting guidance. The calculation of core income (loss) excludes net investment gains or losses because net investment gains or losses are generally driven by economic factors that are not necessarily reflective of our primary operations.

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

Three months ended March 31, 2020	Specialty			Commercial			International		Life & Group			Corporate & Other
(In millions)															Eliminations			Total
Operating revenues
Net earned premiums	$	685		$	818		$	239	$	127		$	—		$	—		$	1,869
Net investment income	56			47			15		208			3			—			329
Non-insurance warranty revenue	301			—			—		—			—			—			301
Other revenues	1			7			—		—			2			(2		)	8
Total operating revenues	1,043			872			254		335			5			(2		)	2,507
Claims, benefits and expenses
Net incurred claims and benefits	405			558			154		316			(14		)	—			1,419
Policyholders’ dividends	1			5			—		—			—			—			6
Amortization of deferred acquisition costs	151			144			49		—			—			—			344
Non-insurance warranty expense	281			—			—		—			—			—			281
Other insurance related expenses	69			127			36		26			—			—			258
Other expenses	13			6			13		3			39			(2		)	72
Total claims, benefits and expenses	920			840			252		345			25			(2		)	2,380
Core income (loss) before income tax	123			32			2		(10		)	(20		)	—			127
Income tax (expense) benefit on core income (loss)	(27		)	(8		)	—		14			2			—			(19		)
Core income (loss)	$	96		$	24		$	2	$	4		$	(18	)	$	—		108
Net investment gains (losses)																		(216		)
Income tax (expense) benefit on net investment gains (losses)																		47
Net investment gains (losses), after tax																		(169		)
Net income (loss)																		$	(61	)

March 31, 2020
(In millions)
Reinsurance receivables	$	793	$	883	$	233	$	370	$	2,072	$	—		$	4,351
Insurance receivables	953		1,267		302		8		2		—			2,532
Deferred acquisition costs	316		277		90		—		—		—			683
Goodwill	117		—		28		—		—		—			145
Deferred non-insurance warranty acquisition expense	2,905		—		—		—		—		—			2,905
Insurance reserves
Claim and claim adjustment expenses	5,472		8,704		1,818		3,712		2,166		—			21,872
Unearned premiums	2,363		1,751		495		137		—		(1		)	4,745
Future policy benefits	—		—		—		11,734		—		—			11,734
Deferred non-insurance warranty revenue	3,848		—		—		—		—		—			3,848

Three months ended March 31, 2019	Specialty			Commercial			International		Life & Group			Corporate & Other
(In millions)															Eliminations			Total
Operating revenues
Net earned premiums	$	661		$	763		$	250	$	130		$	—		$	(1	)	$	1,803
Net investment income	155			190			15		204			7			—			571
Non-insurance warranty revenue	281			—			—		—			—			—			281
Other revenues	1			7			—		1			2			(2		)	9
Total operating revenues	1,098			960			265		335			9			(3		)	2,664
Claims, benefits and expenses
Net incurred claims and benefits	392			510			162		308			(21		)	—			1,351
Policyholders’ dividends	1			5			—		—			—			—			6
Amortization of deferred acquisition costs	147			127			68		—			—			—			342
Non-insurance warranty expense	260			—			—		—			—			—			260
Other insurance related expenses	70			130			25		28			(1		)	(1		)	251
Other expenses	12			11			4		2			39			(2		)	66
Total claims, benefits and expenses	882			783			259		338			17			(3		)	2,276
Core income (loss) before income tax	216			177			6		(3		)	(8		)	—			388
Income tax (expense) benefit on core income (loss)	(47		)	(38		)	—		13			2			—			(70		)
Core income (loss)	$	169		$	139		$	6	$	10		$	(6	)	$	—		318
Net investment gains (losses)																		31
Income tax (expense) benefit on net investment gains (losses)																		(7		)
Net investment gains (losses), after tax																		24
Net income (loss)																		$	342

December 31, 2019
(In millions)
Reinsurance receivables	$	575	$	855	$	247	$	385	$	2,142	$	—	$	4,204
Insurance receivables	971		1,210		284		16		—		—		2,481
Deferred acquisition costs	311		257		94		—		—		—		662
Goodwill	117		—		30		—		—		—		147
Deferred non-insurance warranty acquisition expense	2,840		—		—		—		—		—		2,840
Insurance reserves
Claim and claim adjustment expenses	5,238		8,656		1,876		3,716		2,234		—		21,720
Unearned premiums	2,337		1,626		495		125		—		—		4,583
Future policy benefits	—		—		—		12,311		—		—		12,311
Deferred non-insurance warranty revenue	3,779		—		—		—		—		—		3,779

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

Three months ended March 31
(In millions)	2020			2019
Specialty
Management & Professional Liability	$	568		$	636
Surety	138			139
Warranty & Alternative Risks	337			323
Specialty revenues	1,043			1,098
Commercial
Middle Market	335			357
Construction (1)	250			248
Small Business	112			131
Other Commercial	175			224
Commercial revenues	872			960
International
Canada	73			66
Europe	92			91
Hardy	89			108
International revenues	254			265
Life & Group revenues	335			335
Corporate & Other revenues	5			9
Eliminations	(2		)	(3		)
Total operating revenues	2,507			2,664
Net investment gains (losses)	(216		)	31
Total revenues	$	2,291		$	2,695

(1)

Effective January 1, 2020, the Construction line of business is presented separately in the Commercial segment to better align with our underwriting expertise and the manner in which the products are sold. Prior period information has been conformed to the new line of business presentation.

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Claim and Claim Adjustment Expense Reserves

3 Months Ended

Mar. 31, 2020

Liability for Claims and Claims Adjustment Expense [Abstract]

Claim and Claim Adjustment Expense Reserves

Claim and Claim Adjustment Expense Reserves

Property and casualty insurance claim and claim adjustment expense reserves represent the estimated amounts necessary to resolve all outstanding claims, including incurred but not reported (IBNR) claims as of the reporting date. The Company's reserve projections are based primarily on detailed analysis of the facts in each case, the Company's experience with similar cases and various historical development patterns. Consideration is given to historical patterns such as claim reserving trends and settlement practices, loss payments, pending levels of unpaid claims and product mix, as well as court decisions and economic conditions, including inflation, and public attitudes. All of these factors can affect the estimation of claim and claim adjustment expense reserves.

Establishing claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves for catastrophic events that have occurred, is an estimation process. Many factors can ultimately affect the final settlement of a claim and, therefore, the necessary reserve. Changes in the law, results of litigation, medical costs, the cost of repair materials and labor rates can affect ultimate claim costs. In addition, time can be a critical part of reserving determinations since the longer the span between the incidence of a loss and the payment or settlement of the claim, the more variable the ultimate settlement amount can be. Accordingly, short-tail claims, such as property damage claims, tend to be more reasonably estimable than long-tail claims, such as workers' compensation, general liability and professional liability claims. Adjustments to prior year reserve estimates, if necessary, are reflected in the results of operations in the period that the need for such adjustments is determined. There can be no assurance that the Company's ultimate cost for insurance losses will not exceed current estimates.

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. The Company reported catastrophe losses, net of reinsurance, of $75 million and $58 million for the three months ended March 31, 2020 and 2019. Net catastrophe losses for the three months ended March 31, 2020 included $13 million related to the COVID-19 pandemic, with the remaining $62 million related primarily to U.S. weather related events. Net catastrophe losses for the three months ended March 31, 2019 related primarily to U.S. weather related events.

Liability for Unpaid Claim and Claim Adjustment Expenses

The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves of the Life & Group segment.

For the three months ended March 31
(In millions)	2020			2019
Reserves, beginning of year:
Gross	$	21,720		$	21,984
Ceded	3,835			4,019
Net reserves, beginning of year	17,885			17,965
Net incurred claim and claim adjustment expenses:
Provision for insured events of current year	1,355			1,309
Increase (decrease) in provision for insured events of prior years	(8		)	8
Amortization of discount	51			50
Total net incurred (1)	1,398			1,367
Net payments attributable to:
Current year events	(72		)	(100		)
Prior year events	(1,218		)	(1,309		)
Total net payments	(1,290		)	(1,409		)
Foreign currency translation adjustment and other	(88		)	13
Net reserves, end of period	17,905			17,936
Ceded reserves, end of period	3,967			3,900
Gross reserves, end of period	$	21,872		$	21,836

(1) Total net incurred above does not agree to Insurance claims and policyholders' benefits as reflected on the Condensed Consolidated Statements of Operations due to amounts related to retroactive reinsurance deferred gain accounting, uncollectible reinsurance and benefit expenses related to future policy benefits, which are not reflected in the table above.

Net Prior Year Development

Changes in estimates of claim and claim adjustment expense reserves, net of reinsurance, for prior years are defined as net prior year loss reserve development (development). These changes can be favorable or unfavorable. The following table presents development recorded for the Specialty, Commercial, International and Corporate & Other segments.

Three months ended March 31
(In millions)	2020			2019
Pretax (favorable) unfavorable development:
Specialty	$	(11	)	$	(20	)
Commercial	(4		)	(8		)
International	—			14
Corporate & Other	—			—
Total pretax (favorable) unfavorable development	$	(15	)	$	(14	)

Specialty

The following table presents further detail of the development recorded for the Specialty segment.

Three months ended March 31
(In millions)	2020			2019
Pretax (favorable) unfavorable development:
Medical Professional Liability	$	10		$	15
Other Professional Liability and Management Liability	3			(12		)
Surety	(30		)	(25		)
Warranty	—			—
Other	6			2
Total pretax (favorable) unfavorable development	$	(11	)	$	(20	)

2020

Unfavorable development in medical professional liability was primarily due to unfavorable outcomes on specific claims in accident years 2015 and 2016 in our aging services business.

Favorable development in surety was primarily due to lower than expected frequency for accident years 2017 and prior.

2019

Unfavorable development in medical professional liability was primarily due to higher than expected severity in accident year 2013 in our allied healthcare business.

Favorable development in other professional liability and management liability was primarily due to lower than expected claim frequency and favorable outcomes on individual claims in accident years 2017 and prior related to financial institutions. This was partially offset by unfavorable development in management liability in accident year 2014 due to large claim activity.

Favorable development in surety was due to lower than expected frequency for accident years 2016 and prior.

Commercial

The following table presents further detail of the development recorded for the Commercial segment.

Three months ended March 31
(In millions)	2020			2019
Pretax (favorable) unfavorable development:
Commercial Auto	$	9		$	(5	)
General Liability	—			(20		)
Workers' Compensation	(13		)	2
Property and Other	—			15
Total pretax (favorable) unfavorable development	$	(4	)	$	(8	)

2020

Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in accident years 2016 through 2018.

2019

Favorable development in general liability was primarily due to lower than expected frequency on latent construction defect claims in multiple accident years.

Unfavorable development in property and other was primarily due to higher than expected frequency and large loss activity in accident year 2018 in our marine business.

International

The following table presents further detail of the development recorded for the International segment.

Three months ended March 31
(In millions)	2020		2019
Pretax (favorable) unfavorable development:
Casualty	$	—	$	—
Property, Energy and Marine(1)	—		14
Specialty	—		—
Total pretax (favorable) unfavorable development	$	—	$	14

(1) Effective January 1, 2020 the Property and Energy and Marine lines of business have been combined in the International segment. Prior period information has been conformed to the new line of business presentation.

2019

Unfavorable development in property, energy and marine was driven by higher than expected claims in Hardy for 2018 accident year catastrophes.

A&EP) Reserves

In 2010, Continental Casualty Company (CCC) together with several of the Company’s insurance subsidiaries completed a transaction with National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway Inc., under which substantially all of the Company’s legacy A&EP liabilities were ceded to NICO through a Loss Portfolio Transfer (LPT). At the effective date of the transaction, the Company ceded approximately $1.6 billion of net A&EP claim and allocated claim adjustment expense reserves to NICO under a retroactive reinsurance agreement with an aggregate limit of $4 billion. The $1.6 billion of claim and allocated claim adjustment expense reserves ceded to NICO was net of $1.2 billion of ceded claim and allocated claim adjustment expense reserves under existing third-party reinsurance contracts. The NICO LPT aggregate reinsurance limit also covers credit risk on the existing third-party reinsurance related to these liabilities. The Company paid NICO a reinsurance premium of $2 billion and transferred to NICO billed third-party reinsurance receivables related to A&EP claims with a net book value of $215 million, resulting in total consideration of $2.2 billion.

In years subsequent to the effective date of the LPT, the Company recognized adverse prior year development on its A&EP reserves resulting in additional amounts ceded under the LPT. As a result, the cumulative amounts ceded under the LPT have exceeded the $2.2 billion consideration paid, resulting in the NICO LPT moving into a gain position, requiring retroactive reinsurance accounting. Under retroactive reinsurance accounting, this gain is deferred and only recognized in earnings in proportion to actual paid recoveries under the LPT. Over the life of the contract, there is no economic impact as long as any additional losses incurred are within the limit of the LPT. In a period in which the Company recognizes a change in the estimate of A&EP reserves that increases or decreases the amounts ceded under the LPT, the proportion of actual paid recoveries to total ceded losses is affected and the change in the deferred gain is recognized in earnings as if the revised estimate of ceded losses was available at the effective date of the LPT. The effect of the deferred retroactive reinsurance benefit is recorded in Insurance claims and policyholders' benefits in the Condensed Consolidated Statements of Operations.

The impact of the LPT on the Condensed Consolidated Statements of Operations was the recognition of a retroactive reinsurance benefit of $14 million and $22 million for the three months ended March 31, 2020 and 2019. As of March 31, 2020 and December 31, 2019, the cumulative amounts ceded under the LPT were $3.2 billion. The unrecognized deferred retroactive reinsurance benefit was $378 million and $392 million as of March 31, 2020 and December 31, 2019 and is included within Other liabilities on the Condensed Consolidated Balance Sheets.

NICO established a collateral trust account as security for its obligations to the Company. The fair value of the collateral trust account was $2.7 billion and $3.7 billion as of March 31, 2020 and December 31, 2019. The decrease in the fair value of the trust was driven by overall declines in equity markets. As of March 31, 2020, the fair market value of the trust represented more than 150% of the gross LPT reserves. In addition, Berkshire Hathaway Inc. guaranteed the payment obligations of NICO up to the aggregate reinsurance limit as well as certain of NICO’s performance obligations under the trust agreement. NICO is responsible for claims handling and billing and collection from third-party reinsurers related to the majority of the Company’s A&EP claims.

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Investments (Net investment income) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Net Investment Income [Line Items]
Gross investment income	$ 346	$ 587
Investment expense	(17)	(16)
Net investment income	329	571
Fixed maturity securities
Net Investment Income [Line Items]
Gross investment income	438	455
Equity securities
Net Investment Income [Line Items]
Gross investment income	(44)	30
Limited partnership investments
Net Investment Income [Line Items]
Gross investment income	(70)	76
Mortgage loans
Net Investment Income [Line Items]
Gross investment income	14	12
Short term investments
Net Investment Income [Line Items]
Gross investment income	7	10
Trading portfolio
Net Investment Income [Line Items]
Gross investment income	1	2
Other
Net Investment Income [Line Items]
Gross investment income	$ 0	$ 2

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Investments (Components of other-than-temporary impairment losses recognized in earnings) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Total fixed maturity securities available-for-sale	$ 92	$ 14
Corporate and other bonds
Debt Securities, Available-for-sale [Line Items]
Total fixed maturity securities available-for-sale	91	6
Asset-backed
Debt Securities, Available-for-sale [Line Items]
Total fixed maturity securities available-for-sale	$ 1	$ 8

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Investments (Summary of available-for-sale commercial mortgage-backed securities in gross unrealized loss position by property type and rating) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	$ 10,153	$ 2,420
Gross Unrealized Losses	1,117	45
Commercial mortgage-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	1,197	401
Gross Unrealized Losses	153	$ 5
Conduits (multi property, multi borrower pools) | Commercial mortgage-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	211
Gross Unrealized Losses	11
Single asset, single borrower | Commercial mortgage-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	986
Gross Unrealized Losses	142
US Government, Government agencies and Government sponsored enterprises | Commercial mortgage-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	1
Gross Unrealized Losses	0
AAA | Commercial mortgage-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	60
Gross Unrealized Losses	1
AA | Commercial mortgage-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	245
Gross Unrealized Losses	17
A | Commercial mortgage-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	214
Gross Unrealized Losses	22
BBB | Commercial mortgage-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	484
Gross Unrealized Losses	78
Below investment grade | Commercial mortgage-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	193
Gross Unrealized Losses	$ 35

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Business Segments (Balance Sheet Information) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Segment Reporting Information [Line Items]
Reinsurance receivables	$ 4,351	$ 4,204
Insurance receivables	2,532	2,481
Deferred acquisition costs	683	662
Goodwill	145	147
Deferred non-insurance warranty acquisition expense	2,905	2,840
Insurance reserves
Claim and claim adjustment expenses	21,872	21,720
Unearned premiums	4,745	4,583
Future policy benefits	11,734	12,311
Deferred non-insurance warranty revenue	3,848	3,779
Operating Segments | Specialty
Segment Reporting Information [Line Items]
Reinsurance receivables	793	575
Insurance receivables	953	971
Deferred acquisition costs	316	311
Goodwill	117	117
Deferred non-insurance warranty acquisition expense	2,905	2,840
Insurance reserves
Claim and claim adjustment expenses	5,472	5,238
Unearned premiums	2,363	2,337
Future policy benefits	0	0
Deferred non-insurance warranty revenue	3,848	3,779
Operating Segments | Commercial
Segment Reporting Information [Line Items]
Reinsurance receivables	883	855
Insurance receivables	1,267	1,210
Deferred acquisition costs	277	257
Goodwill	0	0
Deferred non-insurance warranty acquisition expense	0	0
Insurance reserves
Claim and claim adjustment expenses	8,704	8,656
Unearned premiums	1,751	1,626
Future policy benefits	0	0
Deferred non-insurance warranty revenue	0	0
Operating Segments | International
Segment Reporting Information [Line Items]
Reinsurance receivables	233	247
Insurance receivables	302	284
Deferred acquisition costs	90	94
Goodwill	28	30
Deferred non-insurance warranty acquisition expense	0	0
Insurance reserves
Claim and claim adjustment expenses	1,818	1,876
Unearned premiums	495	495
Future policy benefits	0	0
Deferred non-insurance warranty revenue	0	0
Operating Segments | Life & Group
Segment Reporting Information [Line Items]
Reinsurance receivables	370	385
Insurance receivables	8	16
Deferred acquisition costs	0	0
Goodwill	0	0
Deferred non-insurance warranty acquisition expense	0	0
Insurance reserves
Claim and claim adjustment expenses	3,712	3,716
Unearned premiums	137	125
Future policy benefits	11,734	12,311
Deferred non-insurance warranty revenue	0	0
Operating Segments | Corporate & Other
Segment Reporting Information [Line Items]
Reinsurance receivables	2,072	2,142
Insurance receivables	2	0
Deferred acquisition costs	0	0
Goodwill	0	0
Deferred non-insurance warranty acquisition expense	0	0
Insurance reserves
Claim and claim adjustment expenses	2,166	2,234
Unearned premiums	0	0
Future policy benefits	0	0
Deferred non-insurance warranty revenue	0	0
Eliminations
Segment Reporting Information [Line Items]
Reinsurance receivables	0	0
Insurance receivables	0	0
Deferred acquisition costs	0	0
Goodwill	0	0
Deferred non-insurance warranty acquisition expense	0	0
Insurance reserves
Claim and claim adjustment expenses	0	0
Unearned premiums	(1)	0
Future policy benefits	0	0
Deferred non-insurance warranty revenue	$ 0	$ 0

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Benefit Plans (Narrative) (Details) - Pension Benefits - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Insurance Claims and Policyholder's Benefits, Including Policyholder's Dividends
Total non-service cost (benefit)	$ 2	$ 1
Other Expense
Total non-service cost (benefit)	$ 5	$ 1

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Claim and Claim Adjustment Expense Reserves (Commercial - Net Prior Year Claim and Allocated Claim Adjustment Expense Reserve Development) (Details) - Commercial - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Liability for Claims and Claims Adjustment Expense [Line Items]
Commercial Auto	$ 9	$ (5)
General Liability	0	(20)
Workers' Compensation	(13)	2
Property and Other	0	15
Total pretax (favorable) unfavorable development	$ (4)	$ (8)

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Accumulated Other Comprehensive Income (Loss) by Component

3 Months Ended

Mar. 31, 2020

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss) by Component

Accumulated Other Comprehensive Income (Loss) by Component

The tables below display the changes in Accumulated other comprehensive income (loss) by component.

(In millions)	Net unrealized gains (losses) on investments with an allowance for credit losses(1)			Net unrealized gains (losses) on other investments(1)			Pension and postretirement benefits			Cumulative foreign currency translation adjustment			Total
Balance as of January 1, 2020	$	—		$	1,025		$	(833	)	$	(141	)	$	51
Other comprehensive income (loss) before reclassifications	(48		)	(1,066		)	1			(77		)	(1,190		)
Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $10, $6, $3, $- and $19	(37		)	(22		)	(10		)	—			(69		)
Other comprehensive income (loss) net of tax (expense) benefit of $3, $281, $(3), $- and $281	(11		)	(1,044		)	11			(77		)	(1,121		)
Balance as of March 31, 2020	$	(11	)	$	(19	)	$	(822	)	$	(218	)	$	(1,070	)

(1) As of January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The Net unrealized gains (losses) on investments with OTTI losses column that tracked the change in unrealized gains (losses) on investments with OTTI losses has been replaced with the Net unrealized gains (losses) on investments with an allowance for credit losses column. The balance as of January 1, 2020 in the Net unrealized gains (losses) on investments with OTTI losses column is now reported in the Net unrealized gains (losses) on other investments column.

(In millions)	Net unrealized gains (losses) on investments with OTTI losses		Net unrealized gains (losses) on other investments			Pension and postretirement benefits			Cumulative foreign currency translation adjustment			Total
Balance as of January 1, 2019	$	16	$	61		$	(775	)	$	(180	)	$	(878	)
Other comprehensive income (loss) before reclassifications	4		521			(1		)	17			541
Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $-, $1, $2, $- and $3	—		(5		)	(8		)	—			(13		)
Other comprehensive income (loss) net of tax (expense) benefit of $(1), $(141), $(2), $- and $(144)	4		526			7			17			554
Balance as of March 31, 2019	$	20	$	587		$	(768	)	$	(163	)	$	(324	)

Amounts reclassified from Accumulated other comprehensive income (loss) shown above are reported in Net income (loss) as follows:

Component of AOCI	Condensed Consolidated Statements of Operations Line Item Affected by Reclassifications
Net unrealized gains (losses) on investments with an allowance for credit losses, Net unrealized gains (losses) on investments with OTTI losses and Net unrealized gains (losses) on other investments	Net investment gains (losses)
Pension and postretirement benefits	Other operating expenses and Insurance claims and policyholders' benefits

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Fair Value

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable.

Level 1 - Quoted prices for identical instruments in active markets.

Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are not observable.

Prices may fall within Level 1, 2 or 3 depending upon the methodology and inputs used to estimate fair value for each specific security. In general, the Company seeks to price securities using third-party pricing services. Securities not priced by pricing services are submitted to independent brokers for valuation and, if those are not available, internally developed pricing models are used to value assets using a methodology and inputs the Company believes market participants would use to value the assets. Prices obtained from third-party pricing services or brokers are not adjusted by the Company.

The Company performs control procedures over information obtained from pricing services and brokers to ensure prices received represent a reasonable estimate of fair value and to confirm representations regarding whether inputs are observable or unobservable. Procedures may include i) the review of pricing service methodologies or broker pricing qualifications, ii) back-testing, where past fair value estimates are compared to actual transactions executed in the market on similar dates, iii) exception reporting, where period-over-period changes in price are reviewed and challenged with the pricing service or broker based on exception criteria, and iv) deep dives, where the Company performs an independent analysis of the inputs and assumptions used to price individual securities.

Assets and Liabilities Measured at Fair Value

Assets and liabilities measured at fair value on a recurring basis are presented in the following tables. Corporate bonds and other includes obligations of the U.S. Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock.

March 31, 2020							Total Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3
Assets
Fixed maturity securities:
Corporate bonds and other	$	175	$	20,705	$	496	$	21,376
States, municipalities and political subdivisions	—		10,491		—		10,491
Asset-backed	—		8,034		197		8,231
Total fixed maturity securities	175		39,230		693		40,098
Equity securities:
Common stock	187		—		4		191
Non-redeemable preferred stock	59		538		11		608
Total equity securities	246		538		15		799
Short term and other	135		365		—		500
Total assets	$	556	$	40,133	$	708	$	41,397
Liabilities
Other liabilities	$	—	$	1	$	—	$	1
Total liabilities	$	—	$	1	$	—	$	1

December 31, 2019							Total Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3
Assets
Fixed maturity securities:
Corporate bonds and other	$	175	$	22,085	$	468	$	22,728
States, municipalities and political subdivisions	—		10,652		—		10,652
Asset-backed	—		8,662		165		8,827
Total fixed maturity securities	175		41,399		633		42,207
Equity securities:
Common stock	135		—		7		142
Non-redeemable preferred stock	54		658		11		723
Total equity securities	189		658		18		865
Short term and other	397		1,344		—		1,741
Total assets	$	761	$	43,401	$	651	$	44,813
Liabilities
Other liabilities	$	—	$	7	$	—	$	7
Total liabilities	$	—	$	7	$	—	$	7

The tables below present a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

Level 3 (In millions)	Corporate bonds and other			States, municipalities and political subdivisions		Asset-backed			Equity securities			Total
Balance as of January 1, 2020	$	468		$	—	$	165		$	18		$	651
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—			—		—			—			—
Reported in Net investment income	—			—		—			(3		)	(3		)
Reported in Other comprehensive income (loss)	(37		)	—		(9		)	—			(46		)
Total realized and unrealized investment gains (losses)	(37		)	—		(9		)	(3		)	(49		)
Purchases	67			—		45			—			112
Sales	—			—		—			—			—
Settlements	(2		)	—		(3		)	—			(5		)
Transfers into Level 3	—			—		—			—			—
Transfers out of Level 3	—			—		(1		)	—			(1		)
Balance as of March 31, 2020	$	496		$	—	$	197		$	15		$	708
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2020 recognized in Net income (loss) in the period	$	—		$	—	$	—		$	(3	)	$	(3	)
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2020 recognized in Other comprehensive income (loss) in the period	(35		)	—		(9		)	—			(44		)

Level 3 (In millions)	Corporate bonds and other			States, municipalities and political subdivisions		Asset-backed			Equity securities		Total
Balance as of January 1, 2019	$	222		$	—	$	197		$	18	$	437
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—			—		—			2		2
Reported in Net investment income	—			—		—			—		—
Reported in Other comprehensive income (loss)	8			—		3			—		11
Total realized and unrealized investment gains (losses)	8			—		3			2		13
Purchases	56			—		20			—		76
Sales	—			—		—			—		—
Settlements	(2		)	—		(4		)	—		(6		)
Transfers into Level 3	—			—		5			—		5
Transfers out of Level 3	(31		)	—		(37		)	—		(68		)
Balance as of March 31, 2019	$	253		$	—	$	184		$	20	$	457
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2019 recognized in Net income (loss) in the period	$	—		$	—	$	—		$	2	$	2
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2019 recognized in Other comprehensive income (loss) in the period	7			—		3			—		10

Securities may be transferred in or out of levels within the fair value hierarchy based on the availability of observable market information and quoted prices used to determine the fair value of the security. The availability of observable market information and quoted prices varies based on market conditions and trading volume.

Valuation Methodologies and Inputs

The following section describes the valuation methodologies and relevant inputs used to measure different financial instruments at fair value, including an indication of the level in the fair value hierarchy in which the instruments are generally classified.

Fixed Maturity Securities

Level 1 securities include highly liquid government securities and exchange traded bonds, valued using quoted market prices. Level 2 securities include most other fixed maturity securities as the significant inputs are observable in the marketplace. All classes of Level 2 fixed maturity securities are valued using a methodology based on information generated by market transactions involving identical or comparable assets, a discounted cash flow methodology, or a combination of both when necessary. Common inputs for all classes of fixed maturity securities include prices from recently executed transactions of similar securities, marketplace quotes, benchmark yields, spreads off benchmark yields, interest rates and U.S. Treasury or swap curves. Specifically for asset-backed securities, key inputs include prepayment and default projections based on past performance of the underlying collateral and current market data. Fixed maturity securities are primarily assigned to Level 3 in cases where broker/dealer quotes are significant inputs to the valuation and there is a lack of transparency as to whether these quotes are based on information that is observable in the marketplace. Level 3 securities also include private placement debt securities whose fair value is determined using internal models with some inputs that are not market observable.

Equity Securities

Level 1 equity securities include publicly traded securities valued using quoted market prices. Level 2 securities are primarily valued using pricing for similar securities, recently executed transactions and other pricing models utilizing market observable inputs. Level 3 securities are primarily priced using broker/dealer quotes and internal models with some inputs that are not market observable.

Short Term and Other Invested Assets

Securities that are actively traded or have quoted prices are classified as Level 1. These securities include money market funds and treasury bills. Level 2 primarily includes commercial paper, for which all inputs are market observable. Fixed maturity securities purchased within one year of maturity are classified consistent with fixed maturity securities discussed above. Short term investments as presented in the tables above differ from the amounts presented on the Condensed Consolidated Balance Sheets because certain short term investments, such as time deposits, are not measured at fair value.

As of March 31, 2020 and December 31, 2019, there were $58 million and $60 million of overseas deposits within Other invested assets, which can be redeemed at net asset value in 90 days or less. Overseas deposits are excluded from the fair value hierarchy because their fair value is recorded using the net asset value per share (or equivalent) practical expedient.

Derivative Financial Investments

The embedded derivative on funds withheld liability is valued using the change in fair value of the assets supporting the funds withheld liability, which are fixed maturity securities primarily valued with observable inputs.

Significant Unobservable Inputs

The following tables present quantitative information about the significant unobservable inputs utilized by the Company in the fair value measurements of Level 3 assets. Valuations for assets and liabilities not presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to the Company. The weighted average rate is calculated based on fair value.

March 31, 2020	Estimated Fair Value (In millions)		Valuation Technique(s)	Unobservable Input(s)	Range  (Weighted Average)
Fixed maturity securities	$	583	Discounted cash flow	Credit spread	1% - 10% (4%)

December 31, 2019	Estimated Fair Value (In millions)		Valuation Technique(s)	Unobservable Input(s)	Range  (Weighted Average)
Fixed maturity securities	$	525	Discounted cash flow	Credit spread	1% - 6% (2%)

For fixed maturity securities, an increase to the credit spread assumptions would result in a lower fair value measurement.

Financial Assets and Liabilities Not Measured at Fair Value

The carrying amount and estimated fair value of the Company's financial assets and liabilities which are not measured at fair value on the Condensed Consolidated Balance Sheets are presented in the following tables.

March 31, 2020	Carrying Amount		Estimated Fair Value
(In millions)			Level 1		Level 2		Level 3		Total
Assets
Mortgage loans	$	1,021	$	—	$	—	$	1,036	$	1,036
Liabilities
Long term debt	$	2,680	$	—	$	2,730	$	—	$	2,730

December 31, 2019	Carrying Amount		Estimated Fair Value
(In millions)			Level 1		Level 2		Level 3		Total
Assets
Mortgage loans	$	994	$	—	$	—	$	1,025	$	1,025
Note receivable	21		—		—		21		21
Liabilities
Long term debt	$	2,679	$	—	$	2,906	$	—	$	2,906

The following methods and assumptions were used to estimate the fair value of these financial assets and liabilities.

The fair value of mortgage loans was based on the present value of the expected future cash flows discounted at the current interest rate for origination of similar quality loans, adjusted for specific loan risk.

The fair value of the note receivable was based on the present value of the expected future cash flows discounted at the current interest rate for origination of similar notes, adjusted for specific credit risk. During the three months ended March 31, 2020, the note receivable was repaid in full. As of December 31, 2019, the note receivable was included within Other assets on the Condensed Consolidated Balance Sheets.

The Company's senior notes and debentures were valued based on observable market prices. The fair value for other debt was estimated using discounted cash flows based on current incremental borrowing rates for similar borrowing arrangements.

The carrying amounts reported on the Condensed Consolidated Balance Sheets for Cash, Short term investments not carried at fair value, Accrued investment income and certain Other assets and Other liabilities approximate fair value due to the short term nature of these items. These assets and liabilities are not listed in the tables above.

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Investments (Summary of available-for-sale other asset-backed securities in gross unrealized loss position by collateral and rating) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	$ 10,153	$ 2,420
Gross Unrealized Losses	1,117	45
Other asset-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	1,519	482
Gross Unrealized Losses	133	$ 4
Auto | Other asset-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	290
Gross Unrealized Losses	6
Collateralized loan obligations | Other asset-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	418
Gross Unrealized Losses	60
Franchise | Other asset-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	414
Gross Unrealized Losses	39
Other | Other asset-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	397
Gross Unrealized Losses	28
AAA | Other asset-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	49
Gross Unrealized Losses	1
AA | Other asset-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	83
Gross Unrealized Losses	2
A | Other asset-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	821
Gross Unrealized Losses	74
BBB | Other asset-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	566
Gross Unrealized Losses	56
Below investment grade | Other asset-backed
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	0
Gross Unrealized Losses	$ 0

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Investments (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Gain (Loss) on Securities [Line Items]
Reduction of net unrealized gains on investments included in AOCI due to shadow adjustments	$ 1,700,000,000		$ 2,198,000,000
Notional value	196,000,000		182,000,000
Derivative liability, fair value, gross liability	(1,000,000)		$ (7,000,000)
Commitments to purchase or fund privately placed debt securities	1,025,000,000
Commitments to sell various privately placed debt securities	85,000,000
Common Stock
Gain (Loss) on Securities [Line Items]
Equity securities, FV-NI, gain (loss)	(45,000,000)	$ 17,000,000
Trading portfolio
Gain (Loss) on Securities [Line Items]
Equity securities, FV-NI, gain (loss)	(2,000,000)	1,000,000
Preferred stock
Gain (Loss) on Securities [Line Items]
Equity securities, FV-NI, gain (loss)	(133,000,000)	$ 42,000,000
Fixed maturity securities
Gain (Loss) on Securities [Line Items]
Interest Receivable	390,000,000
Mortgage loans
Gain (Loss) on Securities [Line Items]
Interest Receivable	4,000,000
Debt securities, available-for-sale, allowance for credit loss, period increase (decrease)	13,000,000
Financing receivable, allowance for credit loss, writeoff	$ 0

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Investments (Summary of fixed maturity and equity securities) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Fixed maturity securities available-for-sale:
Cost or Amortized Cost	$ 38,019	$ 38,106
Gross Unrealized Gains	3,230	4,126
Gross Unrealized Losses	1,117	45
Estimated Fair Value	40,083	42,187
Total fixed maturity securities trading
Debt securities, amortized cost	38,034	38,126
Debt securities	40,098	42,207
Allowance for Credit Losses	49
Corporate and other bonds
Fixed maturity securities available-for-sale:
Cost or Amortized Cost	20,181	19,789
Gross Unrealized Gains	1,419	2,292
Gross Unrealized Losses	817	32
Estimated Fair Value	20,734	22,049
Unrealized OTTI Losses (Gains)		0
Total fixed maturity securities trading
Debt securities	21,376	22,728
Allowance for Credit Losses	49	0
Asset-backed
Fixed maturity securities available-for-sale:
Cost or Amortized Cost	8,273	8,577
Gross Unrealized Gains	252	260
Gross Unrealized Losses	294	10
Estimated Fair Value	8,231	8,827
Unrealized OTTI Losses (Gains)		(19)
Total fixed maturity securities trading
Debt securities	8,231	8,827
Allowance for Credit Losses	0
States, municipalities and political subdivisions
Fixed maturity securities available-for-sale:
Cost or Amortized Cost	8,957	9,093
Gross Unrealized Gains	1,536	1,559
Gross Unrealized Losses	2	0
Estimated Fair Value	10,491	10,652
Unrealized OTTI Losses (Gains)		0
Total fixed maturity securities trading
Debt securities	10,491	10,652
Allowance for Credit Losses	0
Residential mortgage-backed
Fixed maturity securities available-for-sale:
Cost or Amortized Cost	4,198	4,387
Gross Unrealized Gains	207	133
Gross Unrealized Losses	8	1
Estimated Fair Value	4,397	4,519
Unrealized OTTI Losses (Gains)		(17)
Total fixed maturity securities trading
Allowance for Credit Losses	0
Commercial mortgage-backed
Fixed maturity securities available-for-sale:
Cost or Amortized Cost	2,207	2,265
Gross Unrealized Gains	36	86
Gross Unrealized Losses	153	5
Estimated Fair Value	2,090	2,346
Unrealized OTTI Losses (Gains)		1
Total fixed maturity securities trading
Allowance for Credit Losses	0
Other asset-backed
Fixed maturity securities available-for-sale:
Cost or Amortized Cost	1,868	1,925
Gross Unrealized Gains	9	41
Gross Unrealized Losses	133	4
Estimated Fair Value	1,744	1,962
Unrealized OTTI Losses (Gains)		(3)
Total fixed maturity securities trading
Allowance for Credit Losses	0
U.S. Treasury and obligations of government-sponsored enterprises
Fixed maturity securities available-for-sale:
Cost or Amortized Cost	147	146
Gross Unrealized Gains	8	1
Gross Unrealized Losses	0	2
Estimated Fair Value	155	145
Unrealized OTTI Losses (Gains)		0
Total fixed maturity securities trading
Allowance for Credit Losses	0
Foreign government
Fixed maturity securities available-for-sale:
Cost or Amortized Cost	452	491
Gross Unrealized Gains	15	14
Gross Unrealized Losses	4	1
Estimated Fair Value	463	504
Unrealized OTTI Losses (Gains)		0
Total fixed maturity securities trading
Allowance for Credit Losses	0
Redeemable preferred stock
Fixed maturity securities available-for-sale:
Cost or Amortized Cost	9	10
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Estimated Fair Value	9	10
Unrealized OTTI Losses (Gains)		0
Total fixed maturity securities trading
Allowance for Credit Losses	0
Fixed maturity securities
Fixed maturity securities available-for-sale:
Cost or Amortized Cost	38,019	38,106
Gross Unrealized Gains	3,230	4,126
Gross Unrealized Losses	1,117	45
Estimated Fair Value	40,083	42,187
Unrealized OTTI Losses (Gains)		(19)
Total fixed maturity securities trading
Allowance for Credit Losses	49
Fixed Maturities
Total fixed maturity securities trading
Cost or amortized cost, trading securities	15	20
Estimated fair value, trading securities	$ 15	$ 20

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Benefit Plans (Components of net periodic cost (benefit)) (Details) - Pension Benefits - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Defined Benefit Plan Disclosure [Line Items]
Interest cost on projected benefit obligation	$ 20	$ 25
Expected return on plan assets	(39)	(36)
Amortization of net actuarial (gain) loss	11	10
Settlement loss	1	0
Total net periodic pension cost (benefit)	$ (7)	$ (1)

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Claim and Claim Adjustment Expense Reserves (Specialty - Net Prior Year Claim and Allocated Claim Adjustment Expense Reserve Development) (Details) - Specialty - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Liability for Claims and Claims Adjustment Expense [Line Items]
Medical Professional Liability	$ 10	$ 15
Other Professional Liability and Management Liability	3	(12)
Surety	(30)	(25)
Warranty	0	0
Other	6	2
Total pretax (favorable) unfavorable development	$ (11)	$ (20)

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Label	Element	Value
Retained Earnings [Member]
Stockholders' Equity Attributable to Parent	us-gaap_StockholdersEquity	$ 9,343,000,000
Stockholders' Equity Attributable to Parent	us-gaap_StockholdersEquity	9,277,000,000
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(5,000,000)
Cumulative Effect, Period Of Adoption, Adjustment [Member] | Corporate Debt Securities [Member]
Debt Securities, Available-for-sale, Allowance for Credit Loss	us-gaap_DebtSecuritiesAvailableForSaleAllowanceForCreditLoss	$ 6,000,000

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Business Segments (Income Statement Information) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Operating revenues
Net earned premiums	$ 1,869	$ 1,803
Net investment income	329	571
Non-insurance warranty revenue	301	281
Other revenues	8	9
Total operating revenues	2,507	2,664
Claims, Benefits and Expenses
Net incurred claims and benefits	1,419	1,351
Policyholders’ dividends	6	6
Amortization of deferred acquisition costs	344	342
Non-insurance warranty expense	281	260
Other insurance related expenses	258	251
Other expenses	72	66
Total claims, benefits and expenses	2,380	2,276
Core income (loss) before income tax	127	388
Income tax (expense) benefit on core income (loss)	(19)	(70)
Core income (loss)	108	318
Net investment gains (losses)	(216)	31
Income tax (expense) benefit on net investment gains (losses)	47	(7)
Net investment gains (losses), after tax	(169)	24
Net income (loss)	(61)	342
Operating Segments | Specialty
Operating revenues
Net earned premiums	685	661
Net investment income	56	155
Non-insurance warranty revenue	301	281
Other revenues	1	1
Total operating revenues	1,043	1,098
Claims, Benefits and Expenses
Net incurred claims and benefits	405	392
Policyholders’ dividends	1	1
Amortization of deferred acquisition costs	151	147
Non-insurance warranty expense	281	260
Other insurance related expenses	69	70
Other expenses	13	12
Total claims, benefits and expenses	920	882
Core income (loss) before income tax	123	216
Income tax (expense) benefit on core income (loss)	(27)	(47)
Core income (loss)	96	169
Operating Segments | Commercial
Operating revenues
Net earned premiums	818	763
Net investment income	47	190
Non-insurance warranty revenue	0	0
Other revenues	7	7
Total operating revenues	872	960
Claims, Benefits and Expenses
Net incurred claims and benefits	558	510
Policyholders’ dividends	5	5
Amortization of deferred acquisition costs	144	127
Non-insurance warranty expense	0	0
Other insurance related expenses	127	130
Other expenses	6	11
Total claims, benefits and expenses	840	783
Core income (loss) before income tax	32	177
Income tax (expense) benefit on core income (loss)	(8)	(38)
Core income (loss)	24	139
Operating Segments | International
Operating revenues
Net earned premiums	239	250
Net investment income	15	15
Non-insurance warranty revenue	0	0
Other revenues	0	0
Total operating revenues	254	265
Claims, Benefits and Expenses
Net incurred claims and benefits	154	162
Policyholders’ dividends	0	0
Amortization of deferred acquisition costs	49	68
Non-insurance warranty expense	0	0
Other insurance related expenses	36	25
Other expenses	13	4
Total claims, benefits and expenses	252	259
Core income (loss) before income tax	2	6
Income tax (expense) benefit on core income (loss)	0	0
Core income (loss)	2	6
Operating Segments | Life & Group
Operating revenues
Net earned premiums	127	130
Net investment income	208	204
Non-insurance warranty revenue	0	0
Other revenues	0	1
Total operating revenues	335	335
Claims, Benefits and Expenses
Net incurred claims and benefits	316	308
Policyholders’ dividends	0	0
Amortization of deferred acquisition costs	0	0
Non-insurance warranty expense	0	0
Other insurance related expenses	26	28
Other expenses	3	2
Total claims, benefits and expenses	345	338
Core income (loss) before income tax	(10)	(3)
Income tax (expense) benefit on core income (loss)	14	13
Core income (loss)	4	10
Operating Segments | Corporate & Other
Operating revenues
Net earned premiums	0	0
Net investment income	3	7
Non-insurance warranty revenue	0	0
Other revenues	2	2
Total operating revenues	5	9
Claims, Benefits and Expenses
Net incurred claims and benefits	(14)	(21)
Policyholders’ dividends	0	0
Amortization of deferred acquisition costs	0	0
Non-insurance warranty expense	0	0
Other insurance related expenses	0	(1)
Other expenses	39	39
Total claims, benefits and expenses	25	17
Core income (loss) before income tax	(20)	(8)
Income tax (expense) benefit on core income (loss)	2	2
Core income (loss)	(18)	(6)
Eliminations
Operating revenues
Net earned premiums	0	(1)
Net investment income	0	0
Non-insurance warranty revenue	0	0
Other revenues	(2)	(2)
Total operating revenues	(2)	(3)
Claims, Benefits and Expenses
Net incurred claims and benefits	0	0
Policyholders’ dividends	0	0
Amortization of deferred acquisition costs	0	0
Non-insurance warranty expense	0	0
Other insurance related expenses	0	(1)
Other expenses	(2)	(2)
Total claims, benefits and expenses	(2)	(3)
Core income (loss) before income tax	0	0
Income tax (expense) benefit on core income (loss)	0	0
Core income (loss)	$ 0	$ 0

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General

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

General

General

Basis of Presentation

The Condensed Consolidated Financial Statements include the accounts of CNA Financial Corporation (CNAF) and its subsidiaries. Collectively, CNAF and its subsidiaries are referred to as CNA or the Company. Loews Corporation (Loews) owned approximately 89% of the outstanding common stock of CNAF as of March 31, 2020.

The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Intercompany amounts have been eliminated. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, including certain financial statement notes, is not required for interim reporting purposes and has been condensed or omitted. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in CNAF's Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2019, including the summary of significant accounting policies in Note A. The preparation of Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

The interim financial data as of March 31, 2020 and for the three months ended March 31, 2020 and 2019 is unaudited. However, in the opinion of management, the interim data includes all adjustments, including normal recurring adjustments, necessary for a fair statement of the Company's results for the interim periods. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.

Recently Adopted Accounting Standards Updates (ASU)

ASU 2016-13: In June 2016 the Financial Accounting Standards Board (FASB) issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The updated accounting guidance requires changes to the recognition of credit losses on financial instruments not accounted for at fair value through the Company’s results of operations. For financial assets measured at cost, the expected credit loss model requires immediate recognition of estimated credit losses over the life of the asset and presentation of the asset at the net amount expected to be collected. This new guidance applies to mortgage loan investments, reinsurance and insurance receivables and other financing receivables. For available-for-sale fixed maturity securities carried at fair value, estimated credit losses will continue to be measured at the present value of expected cash flows, however, the other than temporary impairment (OTTI) concept has been eliminated. Under the previous guidance, estimated credit impairments resulted in a write-down of amortized cost. Under the new guidance, estimated credit losses are recognized through an allowance and reversals of the allowance are permitted if the estimate of credit losses declines. For available-for-sale fixed maturity securities where the Company has an intent to sell, impairment will continue to result in a write-down of amortized cost.

On January 1, 2020, the Company adopted the updated guidance using a modified retrospective method with a cumulative effect adjustment recorded to beginning Retained earnings. Prior period amounts have not been adjusted and continue to be reported in accordance with the previous accounting guidance. A prospective transition approach is required for available-for-sale fixed maturity securities that were purchased with credit deterioration (PCD assets) or have recognized an OTTI write-down prior to the effective date. The cumulative effect of the accounting change resulted in a $5 million decrease in Retained earnings, with a corresponding $7 million allowance for credit losses recorded for Mortgage loans partially offset by a $2 million tax impact.

The allowance for uncollectible insurance and reinsurance receivables was unchanged as a result of adopting the new guidance. At adoption, an allowance for credit losses of $6 million was established for available-for-sale fixed maturity securities that were PCD assets, with a corresponding increase to amortized cost, resulting in no adjustment to the carrying value of the securities. Below is a summary of the significant accounting policies impacted by the adoption of ASU 2016-13.

The allowance for credit losses is a valuation account that is reported as a reduction of a financial asset’s cost basis and is measured on a pool basis when similar risk characteristics exist. Management estimates the allowance using relevant available information from both internal and external sources. Historical credit loss experience provides the basis for the estimation of expected credit losses and adjustments may be made to reflect current conditions and reasonable and supportable forecasts. Adjustments to historical loss information are made for any additional factors that come to the Company’s attention. This could include significant shifts in counterparty financial strength ratings, aging of past due receivables, amounts sent to collection agencies, or other underlying portfolio changes. Amounts are considered past due when payments have not been received according to contractual terms. The Company also considers current and forecast economic conditions, using a variety of economic metrics and forecast indices. The sensitivity of expected credit losses relative to changes to these forecast economic conditions can vary by financial asset class. The Company considers a reasonable and supportable forecast period to be up to 24 months from the balance sheet date. After the forecast period, the Company reverts to historical credit experience. The Company uses collateral arrangements such as letters of credit and amounts held in beneficiary trusts to mitigate credit risk, which are considered in the estimate of net amount expected to be collected.

The Company has made a policy election to present accrued interest balances separately from the amortized cost basis of assets and has elected the practical expedient to exclude the accrued interest from the tabular disclosures for mortgage loans and available-for-sale securities. The Company has elected not to estimate an allowance for credit losses on accrued interest receivable. The accrual of interest income is discontinued and the asset is placed on nonaccrual status in the quarter that payment becomes delinquent. Interest accrued but not received for assets on nonaccrual status is reversed through investment income. Interest received for assets that are on nonaccrual status is recognized as payment is received. The asset is returned to accrual status when the principal and interest amounts contractually due are brought current and future payments are expected. Interest receivable is presented as a component of accrued investment income on the Condensed Consolidated Balance Sheet.

See Note C and Note K to the Condensed Consolidated Financial Statements for additional information regarding credit losses.

Accounting Standards Pending Adoption

In August 2018, the FASB issued ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long Duration Contracts. The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts. The guidance requires entities to annually update cash flow assumptions, including morbidity and persistency, and update discount rate assumptions quarterly using an upper-medium grade fixed-income instrument yield. The effect of changes in cash flow assumptions will be recorded in the Company's results of operations and the effect of changes in discount rate assumptions will be recorded in Other comprehensive income. This guidance is effective for interim and annual periods beginning after December 15, 2021, and the Company will adopt it on January 1, 2022. The guidance requires restatement of prior periods presented. The Company is currently evaluating the method of adoption and the effect the updated guidance will have on its financial statements, including the increased disclosure requirements. The annual updating of cash flow assumptions is expected to increase income statement volatility. While the requirements of the new guidance represent a material change from existing GAAP, the underlying economics of the business and related cash flows will be unchanged.

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Claim and Claim Adjustment Expense Reserves (Net Prior Year Development) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Segment Reporting Information [Line Items]
Pretax (favorable) unfavorable premium development, excluding Life & Group	$ (15)	$ (14)
Specialty
Segment Reporting Information [Line Items]
Pretax (favorable) unfavorable premium development, excluding Life & Group	(11)	(20)
Commercial
Segment Reporting Information [Line Items]
Pretax (favorable) unfavorable premium development, excluding Life & Group	(4)	(8)
International
Segment Reporting Information [Line Items]
Pretax (favorable) unfavorable premium development, excluding Life & Group	0	14
Corporate & Other
Segment Reporting Information [Line Items]
Pretax (favorable) unfavorable premium development, excluding Life & Group	$ 0	$ 0

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Investments (Credit Quality Indicator) (Details) - Mortgage loans $ in Millions	Mar. 31, 2020 USD ($)
Financing Receivable, Credit Quality Indicator [Line Items]
2020	$ 60
2019	297
2018	115
2017	219
2016	85
Prior	265
Total	1,041
DSCR ≥1.6x | LTV less than 55%
Financing Receivable, Credit Quality Indicator [Line Items]
2020	60
2019	32
2018	19
2017	92
2016	41
Prior	130
Total	374
DSCR ≥1.6x | LTV 55% to 65%
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	32
2018	29
2017	55
2016	4
Prior	0
Total	120
DSCR ≥1.6x | LTV greater than 65%
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	5
2018	0
2017	0
2016	0
Prior	0
Total	5
DSCR 1.2x - 1.6x | LTV less than 55%
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	33
2018	10
2017	13
2016	16
Prior	126
Total	198
DSCR 1.2x - 1.6x | LTV 55% to 65%
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	73
2018	32
2017	32
2016	0
Prior	0
Total	137
DSCR 1.2x - 1.6x | LTV greater than 65%
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	85
2018	0
2017	0
2016	0
Prior	0
Total	85
DSCR ≤1.2 | LTV less than 55%
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	1
2018	11
2017	27
2016	0
Prior	9
Total	48
DSCR ≤1.2 | LTV 55% to 65%
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	14
2018	14
2017	0
2016	0
Prior	0
Total	28
DSCR ≤1.2 | LTV greater than 65%
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	22
2018	0
2017	0
2016	24
Prior	0
Total	$ 46

XML

Cover Page Cover Page - shares	3 Months Ended
	Mar. 31, 2020	Apr. 30, 2020
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	1-5823
Entity Registrant Name	CNA FINANCIAL CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	36-6169860
Entity Address, Address Line One	151 N. Franklin
Entity Address, Postal Zip Code	60606
Entity Address, City or Town	Chicago,
Entity Address, State or Province	IL
City Area Code	312
Local Phone Number	822-5000
Title of 12(b) Security	Common Stock, Par value $2.50
Trading Symbol	"CNA"
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		271,376,098
Entity Central Index Key	0000021175
Current Fiscal Year End Date	--03-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false
New York Stock Exchange
Entity Information [Line Items]
Security Exchange Name	NYSE
Chicago Stock Exchange
Entity Information [Line Items]
Security Exchange Name	CHX

XML

Fair Value (Quantitative information about significant unobservable inputs in the fair value measurement of level 3 assets) (Details) $ in Millions	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Estimated fair value	$ 41,397	$ 44,813
Fixed maturity securities | Income Approach Valuation Technique
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Estimated fair value	$ 583	$ 525
Measurement Input, Credit Spread | Income Approach Valuation Technique | Minimum
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Debt securities, available-for-sale, measurement Input	0.01	0.01
Measurement Input, Credit Spread | Income Approach Valuation Technique | Maximum
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Debt securities, available-for-sale, measurement Input	0.10	0.06
Measurement Input, Credit Spread | Income Approach Valuation Technique | Weighted Average
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Debt securities, available-for-sale, measurement Input	0.04	0.02

XML

Condensed Consolidated Balance Sheets - (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Fixed maturities securities at amortized cost	$ 38,034	$ 38,126
Marketable securities, fixed maturities, amortized cost	49	0
Equity securities at cost	936	820
Mortgage loans on real estate, commercial and consumer, allowance for credit loss	20	0
Allowance for uncollectible reinsurance	23	25
Allowance for uncollectible insurance receivables	30	32
Accumulated depreciation on property and equipment	224	215
Due to related parties	7	21
Due from related parties	$ 15	$ 21
Common stock, par value (in usd per share)	$ 2.50	$ 2.50
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	273,040,243	273,040,243
Common stock, shares outstanding (in shares)	271,370,988	271,412,591
Treasury stock, shares (in shares)	1,669,255	1,627,652

XML

Non-Insurance Revenues from Contracts with Customers (Performance Obligation) (Details) $ in Millions	Mar. 31, 2020 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Remaining performance obligation, amount	$ 831
Remaining performance obligation, expected timing of satisfaction, period	9 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Remaining performance obligation, amount	$ 951
Remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Remaining performance obligation, amount	$ 735
Remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Remaining performance obligation, amount	$ 1,300
Remaining performance obligation, expected timing of satisfaction, period

XML

Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2020

Retirement Benefits [Abstract]

Components of net periodic cost (benefit)

The components of net periodic pension cost (benefit) are presented in the following table.

Three months ended March 31
(In millions)	2020			2019
Net periodic pension cost (benefit)
Interest cost on projected benefit obligation	$	20		$	25
Expected return on plan assets	(39		)	(36		)
Amortization of net actuarial (gain) loss	11			10
Settlement loss	1			—
Total net periodic pension cost (benefit)	$	(7	)	$	(1	)

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General (Policies)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Basis of Presentation

The Condensed Consolidated Financial Statements include the accounts of CNA Financial Corporation (CNAF) and its subsidiaries. Collectively, CNAF and its subsidiaries are referred to as CNA or the Company. Loews Corporation (Loews) owned approximately 89% of the outstanding common stock of CNAF as of March 31, 2020.

The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Intercompany amounts have been eliminated.

Recently Adopted Accounting Standards Updates (ASUs) and Accounting Standards Pending Adoption

Recently Adopted Accounting Standards Updates (ASU)

ASU 2016-13: In June 2016 the Financial Accounting Standards Board (FASB) issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The updated accounting guidance requires changes to the recognition of credit losses on financial instruments not accounted for at fair value through the Company’s results of operations. For financial assets measured at cost, the expected credit loss model requires immediate recognition of estimated credit losses over the life of the asset and presentation of the asset at the net amount expected to be collected. This new guidance applies to mortgage loan investments, reinsurance and insurance receivables and other financing receivables. For available-for-sale fixed maturity securities carried at fair value, estimated credit losses will continue to be measured at the present value of expected cash flows, however, the other than temporary impairment (OTTI) concept has been eliminated. Under the previous guidance, estimated credit impairments resulted in a write-down of amortized cost. Under the new guidance, estimated credit losses are recognized through an allowance and reversals of the allowance are permitted if the estimate of credit losses declines. For available-for-sale fixed maturity securities where the Company has an intent to sell, impairment will continue to result in a write-down of amortized cost.

On January 1, 2020, the Company adopted the updated guidance using a modified retrospective method with a cumulative effect adjustment recorded to beginning Retained earnings. Prior period amounts have not been adjusted and continue to be reported in accordance with the previous accounting guidance. A prospective transition approach is required for available-for-sale fixed maturity securities that were purchased with credit deterioration (PCD assets) or have recognized an OTTI write-down prior to the effective date. The cumulative effect of the accounting change resulted in a $5 million decrease in Retained earnings, with a corresponding $7 million allowance for credit losses recorded for Mortgage loans partially offset by a $2 million tax impact.

The allowance for uncollectible insurance and reinsurance receivables was unchanged as a result of adopting the new guidance. At adoption, an allowance for credit losses of $6 million was established for available-for-sale fixed maturity securities that were PCD assets, with a corresponding increase to amortized cost, resulting in no adjustment to the carrying value of the securities. Below is a summary of the significant accounting policies impacted by the adoption of ASU 2016-13.

The allowance for credit losses is a valuation account that is reported as a reduction of a financial asset’s cost basis and is measured on a pool basis when similar risk characteristics exist. Management estimates the allowance using relevant available information from both internal and external sources. Historical credit loss experience provides the basis for the estimation of expected credit losses and adjustments may be made to reflect current conditions and reasonable and supportable forecasts. Adjustments to historical loss information are made for any additional factors that come to the Company’s attention. This could include significant shifts in counterparty financial strength ratings, aging of past due receivables, amounts sent to collection agencies, or other underlying portfolio changes. Amounts are considered past due when payments have not been received according to contractual terms. The Company also considers current and forecast economic conditions, using a variety of economic metrics and forecast indices. The sensitivity of expected credit losses relative to changes to these forecast economic conditions can vary by financial asset class. The Company considers a reasonable and supportable forecast period to be up to 24 months from the balance sheet date. After the forecast period, the Company reverts to historical credit experience. The Company uses collateral arrangements such as letters of credit and amounts held in beneficiary trusts to mitigate credit risk, which are considered in the estimate of net amount expected to be collected.

The Company has made a policy election to present accrued interest balances separately from the amortized cost basis of assets and has elected the practical expedient to exclude the accrued interest from the tabular disclosures for mortgage loans and available-for-sale securities. The Company has elected not to estimate an allowance for credit losses on accrued interest receivable. The accrual of interest income is discontinued and the asset is placed on nonaccrual status in the quarter that payment becomes delinquent. Interest accrued but not received for assets on nonaccrual status is reversed through investment income. Interest received for assets that are on nonaccrual status is recognized as payment is received. The asset is returned to accrual status when the principal and interest amounts contractually due are brought current and future payments are expected. Interest receivable is presented as a component of accrued investment income on the Condensed Consolidated Balance Sheet.

See Note C and Note K to the Condensed Consolidated Financial Statements for additional information regarding credit losses.

Accounting Standards Pending Adoption

In August 2018, the FASB issued ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long Duration Contracts. The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts. The guidance requires entities to annually update cash flow assumptions, including morbidity and persistency, and update discount rate assumptions quarterly using an upper-medium grade fixed-income instrument yield. The effect of changes in cash flow assumptions will be recorded in the Company's results of operations and the effect of changes in discount rate assumptions will be recorded in Other comprehensive income. This guidance is effective for interim and annual periods beginning after December 15, 2021, and the Company will adopt it on January 1, 2022. The guidance requires restatement of prior periods presented. The Company is currently evaluating the method of adoption and the effect the updated guidance will have on its financial statements, including the increased disclosure requirements. The annual updating of cash flow assumptions is expected to increase income statement volatility. While the requirements of the new guidance represent a material change from existing GAAP, the underlying economics of the business and related cash flows will be unchanged.

Earnings per share

Earnings (loss) per share is based on weighted average number of outstanding common shares. Basic earnings (loss) per share excludes the impact of dilutive securities and is computed by dividing Net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

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General (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Jan. 01, 2020	Dec. 31, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Retained earnings	$ 8,634		$ 9,348
Mortgage loans	1,021		994
Deferred income taxes	$ 518		$ 199
Accounts receivable, allowance for credit loss		$ 6
CNAF Consolidated | Loews
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Noncontrolling interest, ownership percentage by parent	89.00%
Accounting Standards Update 2016-13
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Retained earnings		5
Mortgage loans		7
Deferred income taxes		$ 2