Business Segments

3 Months Ended

Mar. 31, 2024

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, 2023. 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. 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, 2024	Specialty		Commercial		International		Life & Group		Corporate & Other
(In millions)											Eliminations		Total
Operating revenues
Net earned premiums	$	814	$	1,202	$	315	$	110	$	—	$	—	$	2,441
Net investment income	150		176		31		231		21		—		609
Non-insurance warranty revenue	407		—		—		—		—		—		407
Other revenues	1		8		—		—		3		(3)		9
Total operating revenues	1,372		1,386		346		341		24		(3)		3,466
Claims, benefits and expenses
Net incurred claims and benefits	477		828		189		312		(8)		—		1,798
Policyholders’ dividends	2		7		—		—		—		—		9
Amortization of deferred acquisition costs	178		200		66		—		—		—		444
Non-insurance warranty expense	394		—		—		—		—		—		394
Other insurance related expenses	81		138		39		29		—		—		287
Other expenses	15		12		2		—		59		(3)		85
Total claims, benefits and expenses	1,147		1,185		296		341		51		(3)		3,017
Core income (loss) before income tax	225		201		50		—		(27)		—		449
Income tax (expense) benefit on core income (loss)	(48)		(43)		(13)		5		5		—		(94)
Core income (loss)	$	177	$	158	$	37	$	5	$	(22)	$	—	355
Net investment gains (losses)													(22)
Income tax (expense) benefit on net investment gains (losses)													5
Net investment gains (losses), after tax													(17)
Net income (loss)													$	338

March 31, 2024
(In millions)
Reinsurance receivables	$	1,432	$	1,279	$	477	$	92	$	2,316	$	—	$	5,596
Insurance receivables	979		2,096		379		4		—		—		3,458
Deferred acquisition costs	401		394		132		—		—		—		927
Goodwill	117		—		29		—		—		—		146
Deferred non-insurance warranty acquisition expense	3,621		—		—		—		—		—		3,621
Insurance reserves
Claim and claim adjustment expenses	7,221		10,332		2,745		663		2,627		—		23,588
Unearned premiums	3,193		2,996		740		118		—		(1)		7,046
Future policy benefits	—		—		—		13,513		—		—		13,513
Deferred non-insurance warranty revenue	4,645		—		—		—		—		—		4,645

Three months ended March 31, 2023	Specialty		Commercial		International		Life & Group		Corporate & Other
(In millions)											Eliminations		Total
Operating revenues
Net earned premiums	$	797	$	1,046	$	290	$	115	$	—	$	—	$	2,248
Net investment income	129		149		23		214		10		—		525
Non-insurance warranty revenue	407		—		—		—		—		—		407
Other revenues	—		7		—		—		3		(3)		7
Total operating revenues	1,333		1,202		313		329		13		(3)		3,187
Claims, benefits and expenses
Net incurred claims and benefits	465		688		189		311		(7)		—		1,646
Policyholders’ dividends	1		6		—		—		—		—		7
Amortization of deferred acquisition costs	165		169		45		—		—		—		379
Non-insurance warranty expense	384		—		—		—		—		—		384
Other insurance related expenses	86		142		47		29		1		—		305
Other expenses	14		6		1		1		41		(3)		60
Total claims, benefits and expenses	1,115		1,011		282		341		35		(3)		2,781
Core income (loss) before income tax	218		191		31		(12)		(22)		—		406
Income tax (expense) benefit on core income (loss)	(47)		(40)		(7)		9		4		—		(81)
Core income (loss)	$	171	$	151	$	24	$	(3)	$	(18)	$	—	325
Net investment gains (losses)													(35)
Income tax (expense) benefit on net investment gains (losses)													7
Net investment gains (losses), after tax													(28)
Net income (loss)													$	297

December 31, 2023
(In millions)
Reinsurance receivables	$	1,281	$	1,218	$	468	$	93	$	2,374	$	—	$	5,434
Insurance receivables	1,053		2,024		388		5		—		—		3,470
Deferred acquisition costs	392		371		133		—		—		—		896
Goodwill	117		—		29		—		—		—		146
Deferred non-insurance warranty acquisition expense	3,661		—		—		—		—		—		3,661
Insurance reserves
Claim and claim adjustment expenses	7,131		10,103		2,709		675		2,686		—		23,304
Unearned premiums	3,227		2,858		749		99		—		—		6,933
Future policy benefits	—		—		—		13,959		—		—		13,959
Deferred non-insurance warranty revenue	4,694		—		—		—		—		—		4,694

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

Three months ended March 31
(In millions)	2024		2023
Specialty
Management & Professional Liability	$	729	$	705
Surety	182		168
Warranty & Alternative Risks	461		460
Specialty revenues	1,372		1,333
Commercial
Middle Market	432		398
Construction	455		385
Small Business	154		150
Other Commercial	345		269
Commercial revenues	1,386		1,202
International
Canada	98		93
Europe	143		127
Hardy	105		93
International revenues	346		313
Life & Group revenues	341		329
Corporate & Other revenues	24		13
Eliminations	(3)		(3)
Total operating revenues	3,466		3,187
Net investment gains (losses)	(22)		(35)
Total revenues	$	3,444	$	3,152