8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 21, 2021

CNA FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-5823	36-6169860
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

151 N. Franklin

Chicago, IL 60606

(Address of principal executive offices) (Zip Code)

(312) 822-5000

(Registrant's telephone number, including area code)

NOT APPLICABLE

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020, in the first quarter of 2021 and in connection with the ceding of certain legacy reserves under a retroactive reinsurance agreement executed in February 2021, the registrant changed the segment presentation of a legacy portfolio of excess workers’ compensation policies relating to business written in 2007 and prior. This business, which was previously reported as part of the Commercial business segment, is now reported as part of the Corporate & Other business segment. In addition, a determination was made to change the segment presentation of certain legacy mass tort reserves. Similar to the aforementioned excess workers’ compensation legacy business, these legacy mass tort reserves were previously reported in the Commercial business segment and are now reported as part of the Corporate & Other business segment.

These changes were made to better reflect the manner in which we are organized for purposes of making operating decisions and assessing performance. There was no change to the Specialty, International and Life & Group business segments. Segment data for prior reporting periods has been adjusted to reflect the new segment reporting.

The reclassification of historical segment information has no effect on the Company's previously reported consolidated results of operations, financial condition or cash flows.

On April 21, 2021, the registrant posted on its website (www.cna.com) a financial supplement providing quarterly and annual information for 2020 on its revised Commercial and Corporate & Other business segments as if the segment change occurred as of the beginning of the earliest period presented. The financial supplement is furnished as Exhibit 99.1 to this Form 8-K.

The information under Item 2.02 and in Exhibit 99.1 in this Current Report is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information under Item 2.02 and in Exhibit 99.1 in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits:

See Exhibit Index.

EXHIBIT INDEX

Exhibit No.	Description
99.1	CNA Financial Corporation financial supplement, posted on its website April 21, 2021, providing supplemental financial information on its revised Commercial and Corporate & Other business segments.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		CNA Financial Corporation
		(Registrant)
Date:  April 21, 2021	By	/s/ Albert J. Miralles
		(Signature)
		Albert J. Miralles Executive Vice President and Chief Financial Officer

EX-99.1

CNA Financial Corporation

Supplemental Financial Information

Property & Casualty, Commercial, and Corporate & Other Segments Results of Operations

Revised Quarterly and Annual Results for 2020

This report is for informational purposes only and includes financial exhibits that are unaudited. This report should be read in conjunction with documents filed with the U.S. Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Table of Contents

	Page
Results of Operations
Property & Casualty	1
Commercial	2
Corporate & Other	3
Definitions and Presentation	4

Segment Realignment

As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020, in the first quarter of 2021 and in connection with the ceding of certain legacy reserves under a retroactive reinsurance agreement executed in February 2021, CNA changed the segment presentation of a legacy portfolio of excess workers’ compensation policies relating to business written in 2007 and prior. This business, which was previously reported as part of the Commercial business segment, is now reported as part of the Corporate & Other business segment. In addition, a determination was made to change the segment presentation of certain legacy mass tort reserves. Similar to the aforementioned excess workers’ compensation legacy business, these legacy mass tort reserves were previously reported in the Commercial business segment and are now reported as part of the Corporate & Other business segment.

Claim and claim adjustment expense reserves of $791 million as of December 31, 2020 which were previously reported in the Commercial business segment are now reported as part of the Corporate & Other business segment.

These changes were made to better reflect the manner in which we are organized for purposes of making operating decisions and assessing performance. There was no change to the Specialty, International and Life & Group business segments. Segment data for prior reporting periods has been adjusted to reflect the new segment reporting.

The reclassification of historical segment information has no effect on the Company's previously reported consolidated results of operations, financial condition or cash flows.

Property & Casualty - Results of Operations

	2020
(In millions)	Full Year			Q4			Q3			Q2			Q1
Gross written premiums	$	12,399		$	3,143		$	3,008		$	3,165		$	3,083
Gross written premiums ex. 3rd party captives	8,422			2,169			2,014			2,132			2,107
Net written premiums	7,566			1,952			1,821			1,930			1,863
Net earned premiums	7,146			1,853			1,827			1,724			1,742
Net investment income	1,020			307			292			308			113
Non-insurance warranty revenue	1,252			326			317			308			301
Other revenues	26			7			5			5			9
Total operating revenues	9,444			2,493			2,441			2,345			2,165
Insurance claims and policyholders' benefits	4,817			1,134			1,259			1,304			1,120
Amortization of deferred acquisition costs	1,410			364			360			342			344
Non-insurance warranty expense	1,159			300			293			285			281
Other insurance related expenses	922			229			225			236			232
Other expenses	77			12			13			20			32
Total claims, benefits and expenses	8,385			2,039			2,150			2,187			2,009
Core income (loss) before income tax	1,059			454			291			158			156
Income tax (expense) benefit on core income (loss)	(219)			(96)			(55)			(33)			(35)
Core income (loss)	$	840		$	358		$	236		$	125		$	121
Other Performance Metrics
Underwriting gain (loss)	$	(3)		$	126		$	(17)		$	(158)		$	46
Loss & LAE ratio	67.2		%	61.2		%	68.8		%	75.3		%	63.8		%
Expense ratio	32.6			32.0			31.8			33.6			33.1
Dividend ratio	0.3			0.2			0.3			0.3			0.4
Combined ratio	100.1		%	93.4		%	100.9		%	109.2		%	97.3		%
Combined ratio excluding catastrophes and development	93.1		%	92.6		%	92.6		%	93.2		%	93.7		%
Net accident year catastrophe losses incurred	$	550		$	14		$	160		$	301		$	75
Effect on loss & LAE ratio	7.7		%	0.8		%	8.7		%	17.5		%	4.3		%
Net prior year development and other: (favorable) / unfavorable	$	(39)		$	5		$	(8)		$	(25)		$	(11)
Effect on loss & LAE ratio	(0.7)		%	—		%	(0.4)		%	(1.5)		%	(0.7)		%

1

Commercial - Results of Operations

	2020
(In millions)	Full Year			Q4			Q3			Q2			Q1
Gross written premiums	$	4,086		$	983		$	915		$	1,126		$	1,062
Gross written premiums ex. 3rd party captives	3,993			975			915			1,044			1,059
Net written premiums	3,565			862			804			949			950
Net earned premiums	3,323			853			857			795			818
Net investment income	513			159			151			161			42
Other revenues	25			7			5			5			8
Total operating revenues	3,861			1,019			1,013			961			868
Insurance claims and policyholders' benefits	2,393			538			676			619			560
Amortization of deferred acquisition costs	592			151			150			147			144
Other insurance related expenses	506			127			128			124			127
Other expenses	34			9			7			12			6
Total claims, benefits and expenses	3,525			825			961			902			837
Core income (loss) before income tax	336			194			52			59			31
Income tax (expense) benefit on core income (loss)	(69)			(40)			(11)			(10)			(8)
Core income (loss)	$	267		$	154		$	41		$	49		$	23
Other Performance Metrics
Underwriting gain (loss)	$	(168)		$	37		$	(97)		$	(95)		$	(13)
Loss & LAE ratio	71.6		%	62.9		%	78.4		%	77.4		%	67.8		%
Expense ratio	33.0			32.7			32.3			33.9			33.2
Dividend ratio	0.5			0.2			0.6			0.6			0.6
Combined ratio	105.1		%	95.8		%	111.3		%	111.9		%	101.6		%
Combined ratio excluding catastrophes and development	93.9		%	93.6		%	93.7		%	93.2		%	94.6		%
Net accident year catastrophe losses incurred	$	358		$	4		$	146		$	151		$	57
Effect on loss & LAE ratio	10.7		%	0.5		%	17.0		%	19.0		%	7.0		%
Net prior year development and other: (favorable) / unfavorable	$	23		$	19		$	6		$	(2)		$	—
Effect on loss & LAE ratio	0.5		%	1.7		%	0.6		%	(0.3)		%	—		%

2

Corporate & Other - Results of Operations

	2020
(In millions)	Full Year		Q4		Q3		Q2		Q1
Net earned premiums	$	(1)	$	—	$	(1)	$	—	$	—
Net investment income	64		19		17		20		8
Other revenues	—		—		1		—		(1)
Total operating revenues	63		19		17		20		7
Insurance claims and policyholders' benefits	67		50		(6)		34		(11)
Other insurance related expenses	(3)		—		(2)		(1)		—
Other expenses	136		30		34		35		37
Total claims, benefits and expenses	200		80		26		68		26
Core income (loss) before income tax	(137)		(61)		(9)		(48)		(19)
Income tax (expense) benefit on core income (loss)	23		12		1		8		2
Core income (loss)	$	(114)	$	(49)	$	(8)	$	(40)	$	(17)

3

Definitions and Presentation

•Collectively, CNA Financial Corporation (CNAF) and its subsidiaries are referred to as CNA or the Company.

•P&C Operations includes Specialty, Commercial and International.

•Corporate & Other segment primarily includes certain corporate expenses including interest on corporate debt and the results of certain property and casualty business in run-off, including CNA Re and asbestos and environmental pollution. Intersegment eliminations are also included in this segment.

•Management uses the core income (loss) financial measure to monitor the Company’s operations. Please refer to Note O to the Consolidated Financial Statements within the December 31, 2020 Form 10-K for further discussion of this non-GAAP financial measure.

•Management uses underwriting results to monitor insurance operations. Underwriting results are pretax and are calculated as net earned premiums less total insurance expenses, which includes insurance claims and policyholders' benefits, amortization of deferred acquisition costs and other insurance related expenses.

•In the evaluation of the results of Specialty, Commercial and International, management uses the loss ratio, the expense ratio, the dividend ratio and the combined ratio. These ratios are calculated using financial results prepared in accordance with accounting principles generally accepted in the United States of America. 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.

•This financial supplement may also reference or contain financial measures that are not in accordance with GAAP. Management utilizes these financial measures to monitor the Company's insurance operations and investment portfolio. Core income, which is derived from certain income statement amounts, is used by management to monitor performance of the Company's insurance operations. The Company's investment portfolio is monitored by management through analysis of various factors including unrealized gains and losses on securities, portfolio duration and exposure to market and credit risk.

•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. 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 10-K on file with the Securities and Exchange Commission, as well as the press release, available at www.cna.com.

•Gross written premiums ex. 3rd party captives represents gross written premiums excluding business which is ceded to third party captives, including business related to large warranty programs.

•Pretax net prior year development and other includes the effects of interest accretion and change in allowance for uncollectible reinsurance and deductible amounts.

•Certain immaterial differences are due to rounding.

4

XML

Cover Page Cover Page	Apr. 21, 2021
Entity Information [Line Items]
Document Type	8-K
Document Period End Date	Apr. 21, 2021
Entity Registrant Name	CNA FINANCIAL CORPORATION
Entity Incorporation, State or Country Code	DE
Entity File Number	1-5823
Entity Tax Identification Number	36-6169860
Entity Address, Address Line One	151 N. Franklin
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60606
City Area Code	312
Local Phone Number	822-5000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0000021175
Amendment Flag	false
New York Stock Exchange
Entity Information [Line Items]
Title of 12(b) Security	Common Stock, Par value $2.50
Trading Symbol	"CNA"
Security Exchange Name	NYSE
Chicago Stock Exchange
Entity Information [Line Items]
Title of 12(b) Security	Common Stock, Par value $2.50
Trading Symbol	"CNA"
Security Exchange Name	CHX