Business Segments

3 Months Ended

Mar. 31, 2022

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, 2021. 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, 2022	Specialty		Commercial		International		Life & Group		Corporate & Other
(In millions)											Eliminations		Total
Operating revenues
Net earned premiums	$	772	$	904	$	264	$	120	$	(1)	$	—	$	2,059
Net investment income	103		118		14		212		1		—		448
Non-insurance warranty revenue	382		—		—		—		—		—		382
Other revenues	1		8		(1)		(1)		2		(2)		7
Total operating revenues	1,258		1,030		277		331		2		(2)		2,896
Claims, benefits and expenses
Net incurred claims and benefits	445		573		158		281		(8)		—		1,449
Policyholders’ dividends	1		5		—		—		—		—		6
Amortization of deferred acquisition costs	157		148		39		—		—		—		344
Non-insurance warranty expense	354		—		—		—		—		—		354
Other insurance related expenses	81		130		47		31		2		—		291
Other expenses	13		7		1		3		41		(2)		63
Total claims, benefits and expenses	1,051		863		245		315		35		(2)		2,507
Core income (loss) before income tax	207		167		32		16		(33)		—		389
Income tax (expense) benefit on core income (loss)	(44)		(35)		(6)		7		5		—		(73)
Core income (loss)	$	163	$	132	$	26	$	23	$	(28)	$	—	316
Net investment gains (losses)													(11)
Income tax (expense) benefit on net investment gains (losses)													8
Net investment gains (losses), after tax													(3)
Net income (loss)													$	313

March 31, 2022
(In millions)
Reinsurance receivables	$	1,291	$	947	$	360	$	399	$	2,530	$	—	$	5,527
Insurance receivables	1,055		1,503		359		4		(1)		—		2,920
Deferred acquisition costs	370		294		102		—		—		—		766
Goodwill	117		—		30		—		—		—		147
Deferred non-insurance warranty acquisition expense	3,504		—		—		—		—		—		3,504
Insurance reserves
Claim and claim adjustment expenses	6,623		8,934		2,316		3,712		2,763		—		24,348
Unearned premiums	3,029		2,161		624		128		—		—		5,942
Future policy benefits	—		—		—		11,938		—		—		11,938
Deferred non-insurance warranty revenue	4,528		—		—		—		—		—		4,528

Three months ended March 31, 2021	Specialty		Commercial		International		Life & Group		Corporate & Other
(In millions)											Eliminations		Total
Operating revenues
Net earned premiums	$	735	$	855	$	252	$	120	$	—	$	—	$	1,962
Net investment income	117		148		14		219		6		—		504
Non-insurance warranty revenue	338		—		—		—		—		—		338
Other revenues	—		5		—		1		1		(2)		5
Total operating revenues	1,190		1,008		266		340		7		(2)		2,809
Claims, benefits and expenses
Net incurred claims and benefits	427		639		155		281		(2)		—		1,500
Policyholders’ dividends	1		5		—		—		—		—		6
Amortization of deferred acquisition costs	154		153		52		—		—		—		359
Non-insurance warranty expense	311		—		—		—		—		—		311
Other insurance related expenses	70		115		35		25		10		—		255
Other expenses	11		9		(5)		2		42		(2)		57
Total claims, benefits and expenses	974		921		237		308		50		(2)		2,488
Core income (loss) before income tax	216		87		29		32		(43)		—		321
Income tax (expense) benefit on core income (loss)	(46)		(18)		(5)		4		7		—		(58)
Core income (loss)	$	170	$	69	$	24	$	36	$	(36)	$	—	263
Net investment gains (losses)													57
Income tax (expense) benefit on net investment gains (losses)													(8)
Net investment gains (losses), after tax													49
Net income (loss)													$	312

December 31, 2021
(In millions)
Reinsurance receivables	$	1,200	$	923	$	381	$	401	$	2,579	$	—	$	5,484
Insurance receivables	1,136		1,488		340		6		4		—		2,974
Deferred acquisition costs	363		278		96		—		—		—		737
Goodwill	117		—		31		—		—		—		148
Deferred non-insurance warranty acquisition expense	3,476		—		—		—		—		—		3,476
Insurance reserves
Claim and claim adjustment expenses	6,433		8,890		2,280		3,754		2,817		—		24,174
Unearned premiums	3,001		2,066		585		109		—		—		5,761
Future policy benefits	—		—		—		13,236		—		—		13,236
Deferred non-insurance warranty revenue	4,503		—		—		—		—		—		4,503

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

Three months ended March 31
(In millions)	2022		2021
Specialty
Management & Professional Liability	$	673	$	667
Surety	148		142
Warranty & Alternative Risks	437		381
Specialty revenues	1,258		1,190
Commercial
Middle Market	362		375
Construction	324		309
Small Business	138		126
Other Commercial	206		198
Commercial revenues	1,030		1,008
International
Canada	88		79
Europe	120		111
Hardy	69		76
International revenues	277		266
Life & Group revenues	331		340
Corporate & Other revenues	2		7
Eliminations	(2)		(2)
Total operating revenues	2,896		2,809
Net investment gains (losses)	(11)		57
Total revenues	$	2,885	$	2,866