EX-99.2 3 q4-18exhibit992.htm EXHIBIT 99.2 Exhibit



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CNA Financial Corporation
Supplemental Financial Information


December 31, 2018



This report is for informational purposes only and includes consolidated financial statements and 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
Consolidated Results
 
Statements of Operations..................................................................................................................................................................................................
Components of Income (Loss), Per Share Data and Return on Equity.............................................................................................................................
Selected Balance Sheet Data and Statement of Cash Flows Data...................................................................................................................................
Results of Operations
 
Property & Casualty...........................................................................................................................................................................................................
Specialty............................................................................................................................................................................................................................
Commercial.......................................................................................................................................................................................................................
International.......................................................................................................................................................................................................................
Life & Group......................................................................................................................................................................................................................
Corporate & Other.............................................................................................................................................................................................................
Investment Information
 
Investment Summary - Consolidated................................................................................................................................................................................
Investment Summary - Property & Casualty and Corporate & Other................................................................................................................................
Investment Summary - Life & Group.................................................................................................................................................................................
Investments - Fixed Maturity Securities by Credit Rating..................................................................................................................................................
Components of Net Investment Income............................................................................................................................................................................
Other
 
Claim & Claim Adjustment Expense Reserve Rollforward................................................................................................................................................
Life & Group Policyholder Reserves..................................................................................................................................................................................
Definitions and Presentation..............................................................................................................................................................................................




Statements of Operations
Periods ended December 31
Three Months
 
 
Twelve Months
 
(In millions)
2018
 
2017
 
Change
 
 
2018
 
2017
 
Change
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earned premiums
$
1,859

 
$
1,803

 
3

%
 
$
7,312

 
$
6,988

 
5

%
Net investment income
334

 
505

 
(34
)
 
 
1,817

 
2,034

 
(11
)
 
Net realized investment gains (losses):
 
 
 
 
 
 
 
 
 
 
 
 
 
Other-than-temporary impairment (OTTI) losses
(12
)
 
(5
)
 


 
 
(21
)
 
(14
)
 

 
Other net realized investment gains (losses)
(65
)
 
36

 


 
 
(31
)
 
107

 


 
Net realized investment gains (losses)
(77
)

31

 


 
 
(52
)
 
93

 


 
Non-insurance warranty revenue
263

 
100

 
 
 
 
1,007

 
390

 
 
 
Other revenues
24

 
9

 


 
 
50

 
37

 

 
Total revenues
2,403

 
2,448

 
(2
)
 
 
10,134

 
9,542

 
6

 
Claims, Benefits and Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance claims and policyholders' benefits
1,594

 
1,257

 

 
 
5,572

 
5,310

 


 
Amortization of deferred acquisition costs
343

 
307

 

 
 
1,335

 
1,233

 


 
Non-insurance warranty expense
247

 
83

 
 
 
 
923

 
299

 
 
 
Other operating expenses
299

 
354

 

 
 
1,202

 
1,229

 


 
Interest
34

 
37

 

 
 
138

 
161

 


 
Total claims, benefits and expenses
2,517

 
2,038

 
(24
)
 
 
9,170

 
8,232

 
(11
)
 
Income (loss) before income tax
(114
)
 
410

 


 
 
964

 
1,310

 


 
Income tax (expense) benefit
30

 
(187
)
 


 
 
(151
)
 
(411
)
 


 
Net income (loss)
$
(84
)
 
$
223

 
N/M

%
 
$
813

 
$
899

 
(10
)
%

1




Components of Income (Loss), Per Share Data and Return on Equity
Periods ended December 31
Three Months
 
 
Twelve Months
 
(In millions, except per share data)
2018
 
2017
 
 
2018
 
2017
 
Components of Income (Loss)
 
 
 
 
 
 
 
 
 
Core income (loss)
$
(23
)
 
$
286

 
 
$
845

 
$
919

 
Net realized investment gains (losses)
(61
)
 
20

 
 
(38
)
 
63

 
Net deferred tax asset remeasurement
—

 
(83
)
 
 
6

 
(83
)
 
Net income (loss)
$
(84
)
 
$
223

 
 
$
813

 
$
899

 
 
 
 
 
 
 
 
 
 
 
Diluted Earnings (Loss) Per Common Share
 
 
 
 
 
 
 
 
 
Core income (loss)
$
(0.08
)
 
$
1.05

 
 
$
3.10

 
$
3.38

 
Net realized investment gains (losses)
(0.23
)
 
0.08

 
 
(0.14
)
 
0.23

 
Net deferred tax asset remeasurement
—

 
(0.31
)
 
 
0.02

 
(0.31
)
 
Diluted earnings (loss) per share
$
(0.31
)
 
$
0.82


 
$
2.98


$
3.30

 
 
 
 
 
 
 
 
 
 
 
Weighted Average Outstanding Common Stock and Common Stock Equivalents
 
 
 
 
 
 
 
 
 
Basic
271.6

 
271.3

 
 
271.5

 
271.1

 
Diluted
272.6

 
272.3

 
 
272.5

 
272.1

 
 
 
 
 
 
 
 
 
 
 
Return on Equity
 
 
 
 
 
 
 
 
 
Net income (loss) (1)
(3.0
)
%
7.3

%
 
6.9

%
7.4

%
Core income (loss) (2)
(0.7
)
 
9.4

 
 
7.0

 
7.5

 
(1) Annualized net income (loss) divided by the average stockholders' equity including accumulated other comprehensive income (loss) (AOCI) for the period. Average equity including AOCI is calculated using a simple average of the beginning and ending balances for the period.
(2) Annualized core income (loss) divided by the average stockholders' equity excluding AOCI for the period. Average equity excluding AOCI is calculated using a simple average of the beginning and ending balances for the period.


2




Selected Balance Sheet Data and Statement of Cash Flows Data
(In millions, except per share data)
December 31, 2018
 
December 31, 2017
Total investments
$
44,486

 
$
46,870

Reinsurance receivables, net of allowance for uncollectible receivables
4,426

 
4,261

Total assets
57,152

 
56,567

Insurance reserves
36,764

 
37,212

Debt
2,680

 
2,858

Total liabilities
45,935

 
44,323

Accumulated other comprehensive income (loss) (1)
(878
)
 
32

Total stockholders' equity
11,217

 
12,244

 
 
 
 
Book value per common share
$
41.32

 
$
45.15

Book value per common share excluding AOCI
$
44.55

 
$
45.02

 
 
 
 
Outstanding shares of common stock (in millions of shares)
271.5

 
271.2

 
 
 
 
Statutory capital and surplus - Combined Continental Casualty Companies (2)
$
10,411

 
$
10,726

Three months ended December 31
2018
 
2017
Net cash flows provided (used) by operating activities
$
359

 
$
360

Net cash flows provided (used) by investing activities
(257
)
 
(206
)
Net cash flows provided (used) by financing activities
(96
)
 
(82
)
Net cash flows provided (used) by operating, investing and financing activities
$
6

 
$
72

Twelve months ended December 31
2018
 
2017
Net cash flows provided (used) by operating activities
$
1,227

 
$
1,254

Net cash flows provided (used) by investing activities
(177
)
 
(424
)
Net cash flows provided (used) by financing activities
(1,085
)
 
(755
)
Net cash flows provided (used) by operating, investing and financing activities
$
(35
)
 
$
75

(1) As of December 31, 2018 and 2017, the net unrealized gains on investments included in AOCI were net of after-tax Shadow Adjustments of $1,078 million and $1,411 million. 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, an increase in Insurance reserves are recorded, net of tax, as a reduction of net unrealized gains through Other comprehensive income (loss) (Shadow Adjustments).
(2) Statutory capital and surplus as of December 31, 2018 is preliminary.

3




Property & Casualty - Results of Operations
Periods ended December 31
Three Months
 
 
Twelve Months
 
(In millions)
2018
 
2017
 
Change
 
 
2018
 
2017
 
Change
 
Gross written premiums
$
2,735

 
$
2,740

 
—

%
 
$
11,404

 
$
10,982

 
4

%
Net written premiums
1,659

 
1,601

 
4

 
 
6,822

 
6,534

 
4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earned premiums
1,727

 
1,668

 
4

 
 
6,783

 
6,450

 
5

 
Net investment income
127

 
305

 


 
 
996

 
1,232

 


 
Non-insurance warranty revenue
263

 
100

 
 
 
 
1,007

 
390

 
 
 
Other revenues
6

 
7

 


 
 
31

 
33

 


 
Total operating revenues
2,123

 
2,080

 
2

 
 
8,817

 
8,105

 
9

 
Insurance claims and policyholders' benefits
1,247

 
991

 

 
 
4,303

 
4,060

 


 
Amortization of deferred acquisition costs
343

 
307

 


 
 
1,335

 
1,233

 


 
Other insurance related expenses
229

 
269

 


 
 
919

 
971

 


 
Non-insurance warranty expense
247

 
83

 
 
 
 
923

 
299

 
 
 
Other expenses
32

 
41

 


 
 
103

 
93

 


 
Total claims, benefits and expenses
2,098

 
1,691

 
(24
)
 
 
7,583

 
6,656

 
(14
)
 
Core income (loss) before income tax
25

 
389

 


 
 
1,234

 
1,449

 


 
Income tax (expense) benefit on core income (loss)
(9
)
 
(126
)
 


 
 
(267
)
 
(490
)
 


 
Core income (loss)
$
16

 
$
263

 
(94
)
%
 
$
967

 
$
959

 
1

%
 
 
 
 
 


 
 
 
 
 
 


 
Other Performance Metrics
 
 
 
 


 
 
 
 
 
 


 
Underwriting gain (loss)
$
(92
)
 
$
101

 
N/M

%
 
$
226

 
$
186

 
22

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss & LAE ratio
71.8

%
58.9

%
(12.9
)
pts
 
63.1

%
62.6

%
(0.5
)
pts
Acquisition expense ratio
19.7

 
19.6

 
(0.1
)
 
 
19.8

 
19.5

 
(0.3
)
 
Underwriting expense ratio
13.5

 
15.0

 
1.5

 
 
13.4

 
14.7

 
1.3

 
Expense ratio
33.2

 
34.6

 
1.4

 
 
33.2

 
34.2

 
1.0

 
Dividend ratio
0.4

 
0.5

 
0.1

 
 
0.4

 
0.3

 
(0.1
)
 
Combined ratio
105.4

%
94.0

%
(11.4
)
pts
 
96.7

%
97.1

%
0.4

pts
Combined ratio excluding catastrophes and development
98.0

%
95.8

%
(2.2
)
pts
 
95.4

%
95.5

%
0.1

pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net accident year catastrophe losses incurred
$
146

 
$
38

 

 
 
$
252

 
$
380

 

 
Effect on loss & LAE ratio
8.6

%
2.3

%
(6.3
)
pts
 
3.7

%
6.0

%
2.3

pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net prior year development and other: (favorable) / unfavorable
$
(21
)
 
$
(69
)
 


 
 
$
(163
)
 
$
(284
)
 


 
Effect on loss & LAE ratio
(1.2
)
%
(4.1
)
%
(2.9
)
pts
 
(2.4
)
%
(4.4
)
%
(2.0
)
pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rate
3

%
1

%
2

pts
 
2

%
—

%
2

pts
Renewal premium change
3

%
3

%
—

pts
 
4

%
3

%
1

pts
Retention
82

%
86

%
(4
)
pts
 
83

%
86

%
(3
)
pts
New business
$
251

 
$
269

 
(7
)
%
 
$
1,226

 
$
1,085

 
13

%

4




Specialty - Results of Operations
Periods ended December 31
Three Months
 
 
Twelve Months
 
(In millions)
2018
 
2017
 
Change
 
 
2018
 
2017
 
Change
 
Gross written premiums
$
1,682

 
$
1,748

 
(4
)
%
 
$
6,904

 
$
6,904

 
—

%
Net written premiums
682

 
665

 
3

 
 
2,744

 
2,731

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earned premiums
693

 
688

 
1

 
 
2,732

 
2,712

 
1

 
Net investment income
63

 
128

 


 
 
439

 
522

 


 
Non-insurance warranty revenue
263

 
100

 
 
 
 
1,007

 
390

 
 
 
Other revenues
1

 
(1
)
 


 
 
2

 
1

 


 
Total operating revenues
1,020

 
915

 
11

 
 
4,180

 
3,625

 
15

 
Insurance claims and policyholders' benefits
404

 
382

 

 
 
1,531

 
1,537

 


 
Amortization of deferred acquisition costs
152

 
150

 


 
 
599

 
590

 


 
Other insurance related expenses
77

 
76

 


 
 
279

 
279

 


 
Non-insurance warranty expense
247

 
83

 
 
 
 
923

 
299

 
 
 
Other expenses
12

 
11

 


 
 
46

 
43

 


 
Total claims, benefits and expenses
892

 
702

 
(27
)
 
 
3,378

 
2,748

 
(23
)
 
Core income (loss) before income tax
128

 
213

 


 
 
802

 
877

 


 
Income tax (expense) benefit on core income (loss)
(30
)
 
(72
)
 


 
 
(173
)
 
(295
)
 


 
Core income (loss)
$
98

 
$
141

 
(30
)
%
 
$
629

 
$
582

 
8

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Performance Metrics
 
 
 
 
 
 
 
 
 
 
 
 
 
Underwriting gain (loss)
$
60

 
$
80

 
(25
)
%
 
$
323

 
$
306

 
6

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss & LAE ratio
58.0

%
55.5

%
(2.5
)
pts
 
55.9

%
56.5

%
0.6

pts
Acquisition expense ratio
21.3

 
20.6

 
(0.7
)
 
 
20.8

 
20.1

 
(0.7
)
 
Underwriting expense ratio
11.7

 
12.3

 
0.6

 
 
11.3

 
11.9

 
0.6

 
Expense ratio
33.0

 
32.9

 
(0.1
)
 
 
32.1

 
32.0

 
(0.1
)
 
Dividend ratio
0.2

 
0.2

 
—

 
 
0.2
 %
 
0.2

 
—

 
Combined ratio
91.2

%
88.6

%
(2.6
)
pts
 
88.2

%
88.7

%
0.5

pts
Combined ratio excluding catastrophes and development
94.3

%
94.5

%
0.2

pts
 
92.7

%
93.8

%
1.1

pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net accident year catastrophe losses incurred
$
4

 
$
—

 


 
 
$
26

 
$
44

 


 
Effect on loss & LAE ratio
0.6

%
(0.1
)
%
(0.7
)
pts
 
1.0

%
1.6

%
0.6

pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net prior year development and other: (favorable) / unfavorable
$
(26
)
 
$
(41
)
 


 
 
$
(152
)
 
$
(187
)
 


 
Effect on loss & LAE ratio
(3.7
)
%
(5.8
)
%
(2.1
)
pts
 
(5.5
)
%
(6.7
)
%
(1.2
)
pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rate
2

%
1

%
1

pts
 
2

%
1

%
1

pts
Renewal premium change
2

%
2

%
—

pts
 
3

%
3

%
—

pts
Retention
84

%
87

%
(3
)
pts
 
84

%
89

%
(5
)
pts
New business
$
87

 
$
65

 
34

%
 
$
353

 
$
242

 
46

%

5




Commercial - Results of Operations
Periods ended December 31
Three Months
 
 
Twelve Months
 
(In millions)
2018
 
2017
 
Change
 
 
2018
 
2017
 
Change
 
Gross written premiums
$
787

 
$
766

 
3

%
 
$
3,350

 
$
3,119

 
7

%
Net written premiums
721

 
719

 
—

 
 
3,060

 
2,922

 
5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earned premiums
772

 
752

 
3

 
 
3,050

 
2,881

 
6

 
Net investment income
50

 
163

 


 
 
500

 
658

 


 
Other revenues
4

 
8

 


 
 
28

 
32

 


 
Total operating revenues
826

 
923

 
(11
)
 
 
3,578

 
3,571

 
—

 
Insurance claims and policyholders' benefits
624

 
478

 


 
 
2,073

 
1,948

 


 
Amortization of deferred acquisition costs
130

 
122

 


 
 
505

 
481

 


 
Other insurance related expenses
119

 
137

 


 
 
505

 
530

 


 
Other expenses
12

 
26

 


 
 
43

 
57

 


 
Total claims, benefits and expenses
885

 
763

 
(16
)
 
 
3,126

 
3,016

 
(4
)
 
Core income (loss) before income tax
(59
)
 
160

 


 
 
452

 
555

 


 
Income tax (expense) benefit on core income (loss)
13

 
(54
)
 


 
 
(95
)
 
(186
)
 


 
Core income (loss)
$
(46
)
 
$
106

 
N/M

%
 
$
357

 
$
369

 
(3
)
%
 
 
 
 
 


 
 
 
 
 
 


 
Other Performance Metrics
 
 
 
 


 
 
 
 
 
 


 
Underwriting gain (loss)
$
(101
)
 
$
15

 
N/M

%
 
$
(33
)
 
$
(78
)
 
58

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss & LAE ratio
80.3

%
62.6

%
(17.7
)
pts
 
67.3

%
67.0

%
(0.3
)
pts
Acquisition expense ratio
16.8

 
17.8

 
1.0

 
 
17.7

 
18.0

 
0.3

 
Underwriting expense ratio
15.5

 
16.9

 
1.4

 
 
15.4

 
17.1

 
1.7

 
Expense ratio
32.3

 
34.7

 
2.4

 
 
33.1

 
35.1

 
2.0

 
Dividend ratio
0.7

 
0.9

 
0.2

 
 
0.7

 
0.6

 
(0.1
)
 
Combined ratio
113.3

%
98.2

%
(15.1
)
pts
 
101.1

%
102.7

%
1.6

pts
Combined ratio excluding catastrophes and development
96.9

%
95.5

%
(1.4
)
pts
 
95.0

%
95.9

%
0.9

pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net accident year catastrophe losses incurred
$
120

 
$
34

 


 
 
$
193

 
$
272

 


 
Effect on loss & LAE ratio
15.7

%
4.7

%
(11.0
)
pts
 
6.4

%
9.5

%
3.1

pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net prior year development and other: (favorable) / unfavorable
$
5

 
$
(15
)
 


 
 
$
(7
)
 
$
(69
)
 


 
Effect on loss & LAE ratio
0.7

%
(2.0
)
%
(2.7
)
pts
 
(0.3
)
%
(2.7
)
%
(2.4
)
pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rate
2

%
—

%
2

pts
 
1

%
—

%
1

pts
Renewal premium change
3

%
3

%
—

pts
 
3

%
3

%
—

pts
Retention
84

%
86

%
(2
)
pts
 
85

%
86

%
(1
)
pts
New business
$
105

 
$
136

 
(23
)
%
 
$
566

 
$
568

 
—

%

6




International - Results of Operations
Periods ended December 31
Three Months
 
 
Twelve Months
 
(In millions)
2018
 
2017
 
Change
 
 
2018
 
2017
 
Change
 
Gross written premiums
$
266

 
$
226

 
18

%
 
$
1,150

 
$
959

 
20

%
Net written premiums
256

 
217

 
18

 
 
1,018

 
881

 
16

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earned premiums
262

 
228

 
15

 
 
1,001

 
857

 
17

 
Net investment income
14

 
14

 


 
 
57

 
52

 


 
Other revenues
1

 
—

 


 
 
1

 
—

 


 
Total operating revenues
277

 
242

 
14

 
 
1,059

 
909

 
17

 
Insurance claims and policyholders' benefits
219

 
131

 


 
 
699

 
575

 


 
Amortization of deferred acquisition costs
61

 
35

 


 
 
231

 
162

 


 
Other insurance related expenses
33

 
56

 


 
 
135

 
162

 


 
Other expenses
8

 
4

 


 
 
14

 
(7
)
 


 
Total claims, benefits and expenses
321

 
226

 
(42
)
 
 
1,079

 
892

 
(21
)
 
Core income (loss) before income tax
(44
)
 
16

 


 
 
(20
)
 
17

 


 
Income tax (expense) benefit on core income (loss)
8

 
—

 


 
 
1

 
(9
)
 


 
Core income (loss)
$
(36
)
 
$
16

 
N/M

%
 
$
(19
)
 
$
8

 
N/M

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Performance Metrics
 
 
 
 
 
 
 
 
 
 
 
 
 
Underwriting gain (loss)
$
(51
)
 
$
6

 
N/M

%
 
$
(64
)
 
$
(42
)
 
(52
)
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss & LAE ratio
83.3

%
57.2

%
(26.1
)
pts
 
69.8

%
67.0

%
(2.8
)
pts
Acquisition expense ratio
23.7

 
22.3

 
(1.4
)
 
 
23.2

 
22.4

 
(0.8
)
 
Underwriting expense ratio
12.5

 
17.2

 
4.7

 
 
13.5

 
15.4

 
1.9

 
Expense ratio
36.2

 
39.5

 
3.3

 
 
36.7

 
37.8

 
1.1

 
Dividend ratio
—

 
—

 
—

 
 
—

 
—

 
—

 
Combined ratio
119.5

%
96.7

%
(22.8
)
pts
 
106.5

%
104.8

%
(1.7
)
pts
Combined ratio excluding catastrophes and development
111.1

%
100.7

%
(10.4
)
pts
 
103.6

%
99.6

%
(4.0
)
pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net accident year catastrophe losses incurred
$
22

 
$
4

 


 
 
$
33

 
$
64

 


 
Effect on loss & LAE ratio
8.2

%
1.5

%
(6.7
)
pts
 
3.3

%
7.9

%
4.6

pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net prior year development and other: (favorable) / unfavorable
$
—

 
$
(13
)
 


 
 
$
(4
)
 
$
(28
)
 


 
Effect on loss & LAE ratio
0.2

%
(5.5
)
%
(5.7
)
pts
 
(0.4
)
%
(2.7
)
%
(2.3
)
pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rate
5

%
1

%
4

pts
 
3

%
—

%
3

pts
Renewal premium change
5

%
3

%
2

pts
 
7

%
2

%
5

pts
Retention
68

%
83

%
(15
)
pts
 
76

%
80

%
(4
)
pts
New business
$
59

 
$
68

 
(13
)
%
 
$
307

 
$
275

 
12

%

7




Life & Group - Results of Operations
Periods ended December 31
Three Months
 
 
Twelve Months
 
(In millions)
2018
 
2017
 
Change
 
 
2018
 
2017
 
Change
 
Net earned premiums
$
132

 
$
135

 
(2
)
%
 
$
530

 
$
539

 
(2
)
%
Net investment income
203

 
195

 


 
 
801

 
782

 


 
Other revenues
2

 
1

 


 
 
2

 
2

 


 
Total operating revenues
337

 
331

 
2

 
 
1,333

 
1,323

 
1

 
Insurance claims and policyholders' benefits
311

 
289

 


 
 
1,218

 
1,269

 


 
Amortization of deferred acquisition costs
—

 
—

 


 
 
—

 
—

 


 
Other insurance related expenses
31

 
33

 


 
 
122

 
129

 


 
Other expenses
2

 
2

 


 
 
7

 
7

 


 
Total claims, benefits and expenses
344

 
324

 
(6
)
 
 
1,347

 
1,405

 
4

 
Core income (loss) before income tax
(7
)
 
7

 


 
 
(14
)
 
(82
)
 


 
Income tax (expense) benefit on core income (loss)
14

 
24

 


 
 
57

 
132

 


 
Core income (loss)
$
7

 
$
31

 
(77
)
%
 
$
43

 
$
50

 
(14
)
%


8




Corporate & Other - Results of Operations
Periods ended December 31
Three Months
 
 
Twelve Months
 
(In millions)
2018
 
2017
 
Change
 
 
2018
 
2017
 
Change
 
Net earned premiums
$
—

 
$
—

 

 
 
$
(1
)
 
$
(1
)
 


 
Net investment income
4

 
5

 
 
 
 
20

 
20

 


 
Other revenues
16

 
1

 

 
 
17

 
2

 


 
Total operating revenues
20

 
6

 
N/M
%
 
36

 
21

 
71

%
Insurance claims and policyholders' benefits
36

 
(23
)
 

 
 
51

 
(19
)
 


 
Amortization of deferred acquisition costs
—

 
—

 

 
 
—

 
—

 


 
Other insurance related expenses
—

 
—

 

 
 
(2
)
 
(2
)
 


 
Other expenses
39

 
46

 

 
 
191

 
192

 


 
Total claims, benefits and expenses
75

 
23

 
N/M
 
 
240

 
171

 
(40
)
 
Core income (loss) before income tax
(55
)
 
(17
)
 

 
 
(204
)
 
(150
)
 


 
Income tax (expense) benefit on core income (loss)
9

 
9

 

 
 
39

 
60

 


 
Core income (loss)
$
(46
)
 
$
(8
)
 
N/M
%
 
$
(165
)
 
$
(90
)
 
(83
)
%


9




Investment Summary - Consolidated
 
December 31, 2018

September 30, 2018

December 31, 2017
(In millions)
Carrying Value
 
Net Unrealized Gains (Losses)
 
Carrying Value
 
Net Unrealized Gains (Losses)
 
Carrying Value
 
Net Unrealized Gains (Losses)
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
Corporate and other bonds
$
19,164

 
$
396

 
$
19,021

 
$
672

 
$
18,810

 
$
1,597

States, municipalities and political subdivisions:
 
 
 
 
 
 
 
 
 
 
 
Tax-exempt
7,874

 
733

 
8,335

 
676

 
11,130

 
1,136

Taxable
2,874

 
334

 
2,810

 
298

 
2,897

 
413

Total states, municipalities and political subdivisions
10,748

 
1,067

 
11,145

 
974

 
14,027

 
1,549

Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
RMBS
4,826

 
11

 
4,971

 
(53
)
 
5,120

 
77

CMBS
2,196

 
(4
)
 
2,152

 
(13
)
 
1,872

 
32

Other ABS
1,962

 
(13
)
 
1,729

 
(3
)
 
1,094

 
11

Total asset-backed
8,984

 
(6
)
 
8,852

 
(69
)
 
8,086

 
120

U.S. Treasury and obligations of government-sponsored enterprises
159

 
3

 
145

 
—

 
109

 
(2
)
Foreign government
481

 
1

 
455

 
(2
)
 
444

 
7

Redeemable preferred stock
10

 
—

 
10

 
1

 
11

 
1

Total fixed maturity securities
39,546

 
1,461

 
39,628

 
1,576

 
41,487

 
3,272

Equities:
 
 
 
 
 
 
 
 
 
 
 
Common stock
148

 
—

 
105

 
—

 
27

 
6

Non-redeemable preferred stock
632

 
—

 
690

 
—

 
668

 
30

Total equities
780

 
—

 
795


—


695


36

Limited partnership investments
1,982

 
—

 
2,297

 
—

 
2,369

 
—

Other invested assets
53

 
—

 
51

 
—

 
44

 
—

Mortgage loans
839

 
—

 
868

 
—

 
839

 
—

Short term investments
1,286

 
(1
)
 
1,290

 
—

 
1,436

 
(1
)
Total investments
$
44,486


$
1,460


$
44,929


$
1,576


$
46,870


$
3,307

 
 
 
 
 
 
 
 
 
 
 
 
Net receivable/(payable) on investment activity
$
176

 
 
 
$
(46
)
 
 
 
$
23

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective duration (in years)
6.0

 
 
 
5.9

 
 
 
5.9

 
 
Weighted average rating
 A

 
 
 
A

 
 
 
A

 
 
RMBS - Residential mortgage-backed securities
CMBS - Commercial mortgage-backed securities
Other ABS - Other asset-backed securities

10




Investment Summary - Property & Casualty and Corporate & Other
 
December 31, 2018
 
September 30, 2018
 
December 31, 2017
(In millions)
Carrying Value
 
Net Unrealized Gains (Losses)
 
Carrying Value
 
Net Unrealized Gains (Losses)
 
Carrying Value
 
Net Unrealized Gains (Losses)
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
Corporate and other bonds
$
12,844

 
$
(180
)
 
$
13,098

 
$
(38
)
 
$
12,938

 
$
447

States, municipalities and political subdivisions:
 
 
 
 
 
 
 
 
 
 
 
Tax-exempt
661

 
25

 
781

 
22

 
2,827

 
112

Taxable
1,198

 
68

 
1,187

 
60

 
1,247

 
102

Total states, municipalities and political subdivisions
1,859

 
93

 
1,968

 
82

 
4,074

 
214

Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
RMBS
4,671

 
8

 
4,816

 
(54
)
 
4,951

 
72

CMBS
2,093

 
(4
)
 
2,050

 
(12
)
 
1,761

 
30

Other ABS
1,840

 
(11
)
 
1,601

 
(3
)
 
981

 
7

Total asset-backed
8,604

 
(7
)
 
8,467

 
(69
)
 
7,693

 
109

U.S. Treasury and obligations of government-sponsored enterprises
133

 
3

 
120

 
(1
)
 
82

 
(4
)
Foreign government
481

 
1

 
455

 
(2
)
 
444

 
7

Redeemable preferred stock
5

 
—

 
5

 
1

 
5

 
1

Total fixed maturity securities
23,926

 
(90
)
 
24,113

 
(27
)
 
25,236

 
774

Equities:
 
 
 
 
 
 
 
 
 
 
 
Common stock
148

 
—

 
105

 
—

 
27

 
6

Non-redeemable preferred stock
164

 
—

 
175

 
—

 
237

 
7

Total equities
312

 
—

 
280

 
—

 
264

 
13

Limited partnership investments
1,982

 
—

 
2,297

 
—

 
2,369

 
—

Other invested assets
53

 
—

 
51

 
—

 
44

 
—

Mortgage loans
631

 
—

 
659

 
—

 
639

 
—

Short term investments
1,232

 
(1
)
 
1,170

 
—

 
1,354

 
(1
)
Total investments
$
28,136


$
(91
)

$
28,570


$
(27
)

$
29,906


$
786

 
 
 
 
 
 
 
 
 
 
 
 
Net receivable/(payable) on investment activity
$
106

 
 
 
$
(51
)
 
 
 
$
(10
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective duration (in years)
4.4

 
 
 
4.5

 
 
 
4.4

 
 
Weighted average rating
 A-

 
 
 
A-

 
 
 
A

 
 

11




Investment Summary - Life & Group
 
December 31, 2018
 
September 30, 2018
 
December 31, 2017
(In millions)
Carrying Value
 
Net Unrealized Gains (Losses)
 
Carrying Value
 
Net Unrealized Gains (Losses)
 
Carrying Value
 
Net Unrealized Gains (Losses)
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
Corporate and other bonds
$
6,320

 
$
576

 
$
5,923

 
$
710

 
$
5,872

 
$
1,150

States, municipalities and political subdivisions:
 
 
 
 
 
 
 
 
 
 
 
Tax-exempt
7,213

 
708

 
7,554

 
654

 
8,303

 
1,024

Taxable
1,676

 
266

 
1,623

 
238

 
1,650

 
311

Total states, municipalities and political subdivisions
8,889

 
974

 
9,177

 
892

 
9,953

 
1,335

Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
RMBS
155

 
3

 
155

 
1

 
169

 
5

CMBS
103

 
—

 
102

 
(1
)
 
111

 
2

Other ABS
122

 
(2
)
 
128

 
—

 
113

 
4

Total asset-backed
380

 
1

 
385

 
—

 
393

 
11

U.S. Treasury and obligations of government-sponsored enterprises
26

 
—

 
25

 
1

 
27

 
2

Foreign government
—

 
—

 
—

 
—

 
—

 
—

Redeemable preferred stock
5

 
—

 
5

 
—

 
6

 
—

Total fixed maturity securities
15,620

 
1,551

 
15,515

 
1,603

 
16,251

 
2,498

Equities:
 
 
 
 
 
 
 
 
 
 
 
Common stock
—

 
—

 
—

 
—

 
—

 
—

Non-redeemable preferred stock
468

 
—

 
515

 
—

 
431

 
23

Total equities
468


—


515


—


431


23

Limited partnership investments
—

 
—

 
—

 
—

 
—

 
—

Other invested assets
—

 
—

 
—

 
—

 
—

 
—

Mortgage loans
208

 
—

 
209

 
—

 
200

 
—

Short term investments
54

 
—

 
120

 
—

 
82

 
—

Total investments
$
16,350


$
1,551


$
16,359


$
1,603


$
16,964


$
2,521

 
 
 
 
 
 
 
 
 
 
 
 
Net receivable/(payable) on investment activity
$
70

 
 
 
$
5

 
 
 
$
33

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective duration (in years)
8.4

 
 
 
8.2

 
 
 
8.4

 
 
Weighted average rating
 A

 
 
 
A

 
 
 
A

 
 

12




Investments - Fixed Maturity Securities by Credit Rating  
December 31, 2018
U.S. Government, Government agencies and Government-sponsored enterprises
 
AAA
 
AA
 
A
 
BBB
 
Non-investment grade
 
Total
(In millions)
Fair Value
 
Net Unrealized Gains (Losses)
 
Fair Value
 
Net Unrealized Gains (Losses)
 
Fair Value
 
Net Unrealized Gains (Losses)
 
Fair Value
 
Net Unrealized Gains (Losses)
 
Fair Value
 
Net Unrealized Gains (Losses)
 
Fair Value
 
Net Unrealized Gains (Losses)
 
Fair Value
 
Net Unrealized Gains (Losses)
Corporate and other bonds
$
—

 
$
—

 
$
46

 
$
(1
)
 
$
490

 
$
19

 
$
4,113

 
$
236

 
$
12,593

 
$
247

 
$
1,922

 
$
(105
)
 
$
19,164

 
$
396

States, municipalities and political subdivisions:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax-exempt
—

 
—

 
1,850

 
210

 
3,150

 
291

 
2,608

 
194

 
261

 
38

 
5

 
—

 
7,874

 
733

Taxable
—

 
—

 
397

 
28

 
1,813

 
195

 
644

 
111

 
20

 
—

 
—

 
—

 
2,874

 
334

Total states, municipalities and political subdivisions
—

 
—

 
2,247

 
238

 
4,963

 
486

 
3,252

 
305

 
281

 
38

 
5

 
—

 
10,748

 
1,067

Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RMBS
4,133

 
(27
)
 
186

 
(1
)
 
12

 
—

 
71

 
—

 
20

 
(1
)
 
404

 
40

 
4,826

 
11

CMBS
42

 
—

 
353

 
8

 
625

 
7

 
268

 
(1
)
 
548

 
(11
)
 
360

 
(7
)
 
2,196

 
(4
)
Other ABS
—

 
—

 
48

 
—

 
160

 
(1
)
 
1,015

 
(13
)
 
728

 
2

 
11

 
(1
)
 
1,962

 
(13
)
Total asset-backed
4,175

 
(27
)
 
587

 
7

 
797

 
6

 
1,354

 
(14
)
 
1,296

 
(10
)
 
775

 
32

 
8,984

 
(6
)
U.S. Treasury and obligations of government-sponsored enterprises
159

 
3

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
159

 
3

Foreign government
—

 
—

 
147

 
1

 
260

 
1

 
49

 
—

 
25

 
(1
)
 
—

 
—

 
481

 
1

Redeemable preferred stock
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
10

 
—

 
—

 
—

 
10

 
—

Total fixed maturity securities
$
4,334

 
$
(24
)
 
$
3,027

 
$
245

 
$
6,510

 
$
512

 
$
8,768

 
$
527

 
$
14,205

 
$
274

 
$
2,702

 
$
(73
)
 
$
39,546

 
$
1,461

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of total fixed maturity securities
11
%
 
 
 
8
%
 
 
 
16
%
 
 
 
22
%
 
 
 
36
%
 
 
 
7
%
 
 
 
100
%
 
 

13




Components of Net Investment Income
 
Consolidated
 
Periods ended December 31
Three Months
 
Twelve Months
 
(In millions)
2018
 
2017
 
2018
 
2017
 
    Taxable fixed income securities
$
379

 
$
346

 
$
1,449

 
$
1,397

 
    Tax-exempt fixed income securities
86

 
107

 
384

 
427

 
Total fixed income securities
465

 
453

 
1,833

 
1,824

 
Limited partnership and common stock investments
(138
)
 
50

 
(42
)
 
207

 
Other, net of investment expense
7

 
2

 
26

 
3

 
Pretax net investment income
$
334

 
$
505

 
$
1,817

 
$
2,034

 
Fixed income securities, after tax
$
382

 
$
330

 
$
1,512

 
$
1,324

 
Net investment income, after tax
279

 
366

 
1,500

 
1,462

 
 
 
 
 
 
 
 
 
 
Effective income yield for fixed income securities, pretax
4.8

%
4.7

%
4.7

%
4.7

%
Effective income yield for fixed income securities, after tax
3.9

 
3.4

 
3.9

 
3.4

 
 
Property & Casualty and Corporate & Other
 
Periods ended December 31
Three Months
 
Twelve Months
 
(In millions)
2018
 
2017
 
2018
 
2017
 
    Taxable fixed income securities
$
256

 
$
235

 
$
977

 
$
942

 
    Tax-exempt fixed income securities
6

 
21

 
50

 
88

 
Total fixed income securities
262

 
256

 
1,027

 
1,030

 
Limited partnership and common stock investments
(138
)
 
50

 
(42
)
 
207

 
Other, net of investment expense
7

 
4

 
31

 
15

 
Pretax net investment income
$
131

 
$
310

 
$
1,016

 
$
1,252

 
Fixed income securities, after tax
$
209

 
$
175

 
$
821

 
$
703

 
Net investment income, after tax
105

 
212

 
812

 
849

 
 
 
 
 
 
 
 
 
 
Effective income yield for fixed income securities, pretax
4.3

%
4.1

%
4.2

%
4.2

%
Effective income yield for fixed income securities, after tax
3.4

 
2.8

 
3.4

 
2.9

 
 
Life & Group
 
Periods ended December 31
Three Months
 
Twelve Months
 
(In millions)
2018
 
2017
 
2018
 
2017
 
    Taxable fixed income securities
$
123

 
$
111

 
$
472

 
$
455

 
    Tax-exempt fixed income securities
80

 
86

 
334

 
339

 
Total fixed income securities
203

 
197

 
806

 
794

 
Limited partnership and common stock investments
—

 
—

 
—

 
—

 
Other, net of investment expense
—

 
(2
)
 
(5
)
 
(12
)
 
Pretax net investment income
$
203

 
$
195

 
$
801

 
$
782

 
Fixed income securities, after tax
$
173

 
$
155

 
$
691

 
$
621

 
Net investment income, after tax
174

 
154

 
688

 
613

 
 
 
 
 
 
 
 
 
 
Effective income yield for fixed income securities, pretax
5.6

%
5.6

%
5.6

%
5.7

%
Effective income yield for fixed income securities, after tax
4.8

 
4.4

 
4.8

 
4.4

 

14




Claim & Claim Adjustment Expense Reserve Rollforward
Three months ended December 31, 2018
(In millions)

Specialty
 

Commercial
 
International
 
P&C Operations
 
Life & Group
 
Corporate & Other
 
Total Operations
Claim & claim adjustment expense reserves, beginning of period
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross
$
5,509

 
$
8,584

 
$
1,689

 
$
15,782

 
$
3,551

 
$
2,271

 
$
21,604

Ceded
673

 
680

 
237

 
1,590

 
193

 
2,075

 
3,858

Net
4,836

 
7,904


1,452


14,192


3,358


196


17,746

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net incurred claim & claim adjustment expenses
402

 
620

 
219

 
1,241

 
284

 
1

 
1,526

Net claim & claim adjustment expense payments
(406
)
 
(524
)
 
(114
)
 
(1,044
)
 
(211
)
 
(3
)
 
(1,258
)
Foreign currency translation adjustment and other
(1
)
 
(2
)
 
(33
)
 
(36
)
 
(11
)
 
(2
)
 
(49
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Claim & claim adjustment expense reserves, end of period
 
 
 
 
 
 
 
 
 
 
 
 
 
Net
4,831

 
7,998

 
1,524

 
14,353

 
3,420

 
192

 
17,965

Ceded
634

 
745

 
226

 
1,605

 
181

 
2,233

 
4,019

Gross
$
5,465

 
$
8,743

 
$
1,750

 
$
15,958

 
$
3,601

 
$
2,425

 
$
21,984

Twelve months ended December 31, 2018
(In millions)

Specialty
 
 
Commercial
 
International
 
P&C Operations
 
Life & Group
 
Corporate & Other
 
Total Operations
Claim & claim adjustment expense reserves, beginning of period
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross
$
5,669

 
$
8,764

 
$
1,636

 
$
16,069

 
$
3,499

 
$
2,436

 
$
22,004

Ceded
662

 
628

 
204

 
1,494

 
209

 
2,231

 
3,934

Net
5,007

 
8,136

 
1,432

 
14,575

 
3,290

 
205


18,070

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net incurred claim & claim adjustment expenses
1,526

 
2,055

 
699

 
4,280

 
1,072

 
3

 
5,355

Net claim & claim adjustment expense payments
(1,701
)
 
(2,191
)
 
(534
)
 
(4,426
)
 
(890
)
 
(15
)
 
(5,331
)
Foreign currency translation adjustment and other
(1
)
 
(2
)
 
(73
)
 
(76
)
 
(52
)
 
(1
)
 
(129
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Claim & claim adjustment expense reserves, end of period
 
 
 
 
 
 
 
 
 
 
 
 
 
Net
4,831

 
7,998

 
1,524

 
14,353

 
3,420

 
192

 
17,965

Ceded
634

 
745

 
226

 
1,605

 
181

 
2,233

 
4,019

Gross
$
5,465

 
$
8,743

 
$
1,750

 
$
15,958

 
$
3,601

 
$
2,425


$
21,984


15




Life & Group Policyholder Reserves
December 31, 2018
 
 
 
 
 
(In millions)
Claim and claim adjustment expenses
 
Future policy benefits
 
Total
Long term care
$
2,761

 
$
9,113

 
$
11,874

Structured settlement annuities
530

 
—

 
530

Other
14

 
—

 
14

Total
3,305

 
9,113

 
12,418

Shadow adjustments
115

 
1,250

 
1,365

Ceded reserves
181

 
234

 
415

Total gross reserves
$
3,601

 
$
10,597

 
$
14,198

December 31, 2017
 
 
 
 
 
(In millions)
Claim and claim adjustment expenses
 
Future policy benefits
 
Total
Long term care
$
2,568

 
$
8,959

 
$
11,527

Structured settlement annuities
547

 
—

 
547

Other
16

 
—

 
16

Total
3,131

 
8,959

 
12,090

Shadow adjustments
159

 
1,990

 
2,149

Ceded reserves
209

 
230

 
439

Total gross reserves
$
3,499

 
$
11,179

 
$
14,678


16




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.
•
Life & Group segment primarily includes the results of long term care businesses that are in run-off.
•
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, 2018 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. In addition, management also utilizes 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. 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. Rate, renewal premium change and retention presented for the prior year is 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.
•
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.

17




•
Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of i) net realized investment gains or losses, ii) income or loss from discontinued operations, iii) any cumulative effects of changes in accounting guidance and iv) deferred tax asset and liability remeasurement as a result of an enacted U.S. Federal tax rate change. The calculation of core income (loss) excludes net realized investment gains or losses because net realized investment gains or losses are generally driven by economic factors that are not necessarily consistent with key drivers of underwriting performance, and are therefore not considered an indication of trends in insurance 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.
•
Pretax net prior year development and other includes the effects of interest accretion and change in allowance for uncollectible reinsurance and deductible amounts.
•
Net investment income from fixed income securities, as presented, includes both fixed maturity securities and non-redeemable preferred stock.
•
The majority of our limited partnership investments employ hedge fund strategies. While the Company generally does not invest in highly leveraged partnerships, there are risks inherent in limited partnership investments which may result in losses due to short-selling, derivatives or other speculative investment practices. The use of leverage increases volatility generated by the underlying investment strategies.
•
Certain immaterial differences are due to rounding.
•
N/M = Not Meaningful


18