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Claim and Claim Adjustment Expense Reserves
 12 Months Ended
Dec. 31, 2023
Insurance [Abstract]  
Claim and Claim Adjustment Expense Reserves Claim and Claim Adjustment Expense Reserves
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. Reserve projections are based primarily on detailed analysis of the facts in each case, 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, economic, medical and social 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. Claim and claim adjustment expense reserves are also maintained for structured settlement obligations. In developing the claim and claim adjustment expense reserve estimates for structured settlement obligations, actuaries review mortality experience on an annual basis. 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 ultimate cost for insurance losses will not exceed current estimates.

CNA’s commercial property and casualty insurance operations (“Property & Casualty Operations”) include its Specialty, Commercial and International lines of business. CNA’s Other Insurance Operations outside of Property & Casualty Operations include its long-term care business that is in run-off, certain corporate expenses, including interest on CNA’s corporate debt, and certain property and casualty businesses in run-off, including CNA Re, A&EP, a legacy portfolio of excess workers’ compensation policies and certain legacy mass tort reserves.
Liability for Unpaid Claim and Claim Adjustment Expenses

The table below reconciles the net liability for unpaid claim and claim adjustment expenses to the amount presented on the Consolidated Balance Sheets.

December 312023
(In millions) 
  
Net liability for unpaid claim and claim adjustment expenses: 
Property & Casualty Operations$17,213 
Other Insurance Operations (a)
950 
Total net claim and claim adjustment expenses18,163 
 
Reinsurance receivables: (b)
Property & Casualty Operations2,730 
Other Insurance Operations (c)
2,411 
Total reinsurance receivables5,141 
Total gross liability for unpaid claims and claims adjustment expenses$23,304 

(a)Other Insurance Operations amounts are related to unfunded structured settlements arising from short duration contracts.
(b)Reinsurance receivables presented are gross of the allowance for uncollectible reinsurance and do not include reinsurance receivables related to paid losses.
(c)The Other Insurance Operations reinsurance receivables are primarily related to A&EP claims covered under the A&EP loss portfolio transfer (“LPT”).
The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves.

Year Ended December 31
20232022 (a)2021 (a)
(In millions)   
    
Reserves, beginning of year:   
Gross$22,120 $21,269 $19,862 
Ceded5,191 4,969 4,005 
Net reserves, beginning of year16,929 16,300 15,857 
 
Reduction of net reserves due to the excess workers’ compensation loss portfolio transfer (632)
Net incurred claim and claim adjustment expenses:
Provision for insured events of current year5,667 5,181 5,021 
Increase (decrease) in provision for insured events of prior years48 (32)15 
Amortization of discount44 44 48 
Total net incurred (b)
5,759 5,193 5,084 
 
Net payments attributable to:
Current year events(922)(821)(933)
Prior year events(3,679)(3,481)(3,016)
Total net payments(4,601)(4,302)(3,949)
 
Foreign currency translation adjustment and other76 (262)(60)
 
Net reserves, end of year18,163 16,929 16,300 
Ceded reserves, end of year5,141 5,191 4,969 
Gross reserves, end of year$23,304 $22,120 $21,269 

(a)
In conjunction with the adoption of ASU 2018-12, at January 1, 2023, long-term care reserves for policyholders currently receiving benefits were reclassified from Claim and claim adjustment expenses into Future policy benefits and this change was applied retrospectively as of January 1, 2021. For additional information see Note 1.
(b)Total net incurred does not agree to Insurance claims and policyholders’ benefits as reflected on the Consolidated Statements of Operations due to amounts related to retroactive reinsurance deferred gain accounting, the loss on the excess workers’ compensation loss portfolio transfer and uncollectible reinsurance, which are not reflected in the table above.

Reserving Methodology

In developing claim and claim adjustment expense reserve estimates, CNA’s actuaries perform detailed reserve analyses that are staggered throughout the year. The data is organized at a reserve group level. Every reserve group is reviewed at least once during the year, but most are reviewed more frequently. The analyses generally review losses gross of ceded reinsurance and apply the ceded reinsurance terms to the gross estimates to establish estimates net of reinsurance. Factors considered include, but are not limited to, the historical pattern and volatility of the actuarial indications, the sensitivity of the actuarial indications to changes in paid and incurred loss patterns, the consistency of claims handling processes, the consistency of case reserving practices, changes in CNA’s pricing and underwriting, pricing and underwriting trends in the insurance market and legal, judicial, social and economic trends. In addition to the detailed analyses, CNA reviews actual loss emergence for all products each quarter.

In developing the loss reserve estimates for property and casualty contracts, CNA generally projects ultimate losses using several common actuarial methods as listed below. CNA reviews the indications from the various methods and applies
judgment to select an actuarial point estimate. The carried reserve may differ from the actuarial point estimate as a result of CNA’s consideration of the factors noted above as well as the potential volatility of the projections associated with the specific product being analyzed and other factors affecting claims costs that may not be quantifiable through traditional actuarial analysis. The indicated required reserve is the difference between the selected ultimate loss and the inception-to-date paid losses. The difference between the selected ultimate loss and the case incurred or reported loss is IBNR. IBNR includes a provision for development on known cases as well as a provision for late reported incurred claims.

The most frequently utilized methods to project ultimate losses include the following:

•Paid development: The paid development method estimates ultimate losses by reviewing paid loss patterns and applying them to accident years with further expected changes in paid losses.

•Incurred development: The incurred development method is similar to the paid development method, but it uses case incurred losses instead of paid losses.

•Loss ratio: The loss ratio method multiplies premiums by an expected loss ratio to produce ultimate loss estimates for each accident year.

•Bornhuetter-Ferguson paid loss: The Bornhuetter-Ferguson paid loss method is a combination of the paid development approach and the loss ratio approach. This method normally determines expected loss ratios similar to the approach used to estimate the expected loss ratio for the loss ratio method.

•Bornhuetter-Ferguson incurred loss: The Bornhuetter-Ferguson incurred loss method is similar to the Bornhuetter-Ferguson using premiums and paid loss method except that it uses case incurred losses.

•Frequency times severity: The frequency times severity method multiplies a projected number of ultimate claims by an estimated ultimate average loss for each accident year to produce ultimate loss estimates.

•Stochastic modeling: The stochastic modeling method produces a range of possible outcomes based on varying assumptions related to the particular product being modeled.

For many exposures, especially those that can be considered long-tail, a particular accident or policy year may not have a sufficient volume of paid losses to produce a statistically reliable estimate of ultimate losses. In such a case, CNA’s actuaries typically assign more weight to the incurred development method than to the paid development method. As claims continue to settle and the volume of paid loss increases, the actuaries may assign additional weight to the paid development method. For most of CNA’s products, even the incurred losses for accident or policy years that are early in the claim settlement process will not be of sufficient volume to produce a reliable estimate of ultimate losses. In these cases, CNA may not assign much, if any weight to the paid and incurred development methods. CNA may use the loss ratio, Bornhuetter-Ferguson and/or frequency times severity methods. For short-tail exposures, the paid and incurred development methods can often be relied on sooner, primarily because CNA’s history includes a sufficient number of years to cover the entire period over which paid and incurred losses are expected to change. However, CNA may also use the loss ratio, Bornhuetter-Ferguson and/or frequency times severity methods for short-tail exposures. For other more complex reserve groups where the above methods may not produce reliable indications, CNA uses additional methods tailored to the characteristics of the specific situation.

CNA’s reserving methodologies for mass tort and A&EP are similar as both are based on detailed reviews of large accounts with estimates of ultimate payments based on the facts in each case and CNA’s view of applicable law and coverage litigation.
Gross and Net Carried Reserves

The following tables present the gross and net carried reserves:

December 31, 2023Property and Casualty OperationsOther Insurance Operations (a)Total
(In millions)   
    
Gross Case Reserves$5,759 $1,979 $7,738 
Gross IBNR Reserves14,184 1,382 15,566 
 
Total Gross Carried Claim and Claim Adjustment Expense Reserves$19,943 $3,361 $23,304 
 
Net Case Reserves$4,978 $685 $5,663 
Net IBNR Reserves12,235 265 12,500 
 
Total Net Carried Claim and Claim Adjustment Expense Reserves$17,213 $950 $18,163 
December 31, 2022
Gross Case Reserves$5,502 $2,075 $7,577 
Gross IBNR Reserves13,174 1,369 14,543 
Total Gross Carried Claim and Claim Adjustment Expense Reserves$18,676 $3,444 $22,120 
Net Case Reserves$4,805 $704 $5,509 
Net IBNR Reserves11,191 229 11,420 
Total Net Carried Claim and Claim Adjustment Expense Reserves$15,996 $933 $16,929 

(a)
In conjunction with the adoption of ASU 2018-12, at January 1, 2023, long-term care reserves for policyholders currently receiving benefits were reclassified from Claim and claim adjustment expenses into Future policy benefits and this change was applied retrospectively as of January 1, 2021. For additional information see Note 1.

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. These changes can be favorable or unfavorable.
The following table and discussion present details of the net prior year loss reserve development in Property & Casualty Operations and Other Insurance Operations:

Year Ended December 31
202320222021
(In millions)   
    
Medical professional liability$5 $18 $23 
Other professional liability and management liability37 50 24 
Surety(43)(83)(73)
Warranty(11)(21)(14)
Commercial auto33 49 53 
General liability149 67 15 
Workers’ compensation(203)(152)(82)
Other property and casualty operations10 (24)5 
Other insurance operations71 64 60 
Total pretax (favorable) unfavorable development$48 $(32)$11 

Development Tables

For CNA’s Property & Casualty Operations, the following tables present further detail and commentary on the development reflected in the financial statements for each of the periods presented. Also presented are loss reserve development tables that illustrate the change over time of reserves established for claim and allocated claim adjustment expenses arising from short-duration insurance contracts for certain lines of business within CNA’s Property & Casualty Operations. Not all lines of business are presented based on their context to CNA’s overall loss reserves, calendar year reserve development, or calendar year net earned premiums. Insurance contracts are considered to be short-duration contracts when the contracts are not expected to remain in force for an extended period of time.

The Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses tables, reading across, show the cumulative net incurred claim and allocated claim adjustment expenses relating to each accident year at the end of the stated calendar year. Changes in the cumulative amount across time are the result of CNA’s expanded awareness of additional facts and circumstances that pertain to the unsettled claims. The Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses tables, reading across, show the cumulative amount paid for claims for each accident year as of the end of the stated calendar year. The Net Strengthening or (Releases) of Prior Accident Year Reserves tables, reading across, show the net increase or decrease in the cumulative net incurred accident year claim and allocated claim adjustment expenses during each stated calendar year and indicates whether the reserves for that accident year were strengthened or released.

The information in the tables is reported on a net basis after reinsurance and does not include the effects of discounting. The information contained in calendar years 2022 and prior is unaudited. To the extent CNA enters into a commutation, the transaction is reported on a prospective basis. To the extent that CNA enters into a disposition, the effects of the disposition are reported on a retrospective basis by removing the balances associated with it.

The amounts reported for the cumulative number of reported claims include direct and assumed open and closed claims by accident year at the claimant level. The number excludes claim counts for claims within a policy deductible where the insured is responsible for payment of losses in the deductible layer. Claim count data for certain assumed reinsurance contracts is unavailable.

In the loss reserve development tables, IBNR includes reserves for incurred but not reported losses and expected development on case reserves. CNA does not establish case reserves for allocated loss adjusted expenses (“ALAE”), therefore ALAE reserves are also included in the estimate of IBNR.

2023

Unfavorable development in other professional liability and management liability was primarily due to higher than expected claim severity and frequency in CNA’s professional errors and omissions (“E&O”) businesses in multiple accident years.
Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in multiple accident years.

Unfavorable development in commercial auto was due to higher than expected claim severity in CNA’s construction business in a recent accident year.

Unfavorable development in general liability was due to higher than expected claim severity in the CNA’s construction and middle market businesses across multiple accident years.

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

Unfavorable development in other insurance operations was largely associated with legacy mass tort abuse claims.

2022

Unfavorable development in medical professional liability was due to higher than expected large loss activity in multiple accident years.

Unfavorable development in other professional liability and management liability was due to higher than expected claim severity and frequency in CNA’s cyber and professional E&O businesses in multiple accident years.

Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in recent accident years.

Favorable development in warranty was due to lower than expected loss emergence in a recent accident year.

Unfavorable development in commercial auto and general liability was due to higher than expected claim severity across multiple accident years.

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

Unfavorable development in other insurance operations was largely associated with legacy mass tort abuse claims, including the Diocese of Rochester proposed settlement.

2021

Unfavorable development in medical professional liability was due to higher than expected large loss activity in recent accident years.

Unfavorable development in other professional liability and management liability was due to higher than expected frequency of large losses in multiple accident years and higher than expected claim severity and frequency in CNA’s cyber business in recent accident years.

Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in recent accident years.

Unfavorable development in commercial auto was due to higher than expected claim severity in CNA’s middle market and construction businesses in multiple accident years.

Unfavorable development in general liability was due to higher than expected claim severity in CNA’s construction and umbrella businesses in multiple accident years.

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

Unfavorable development in other insurance operations was largely associated with legacy mass tort abuse claims.
Property & Casualty Operations – Line of Business Composition

The table below presents the net liability for unpaid claim and claim adjustment expenses, by line of business for Property & Casualty Operations:

December 312023
(In millions) 
  
Medical professional liability$1,460 
Other professional liability and management liability3,897 
Surety468 
Warranty28 
Commercial auto926 
General liability3,780 
Workers’ compensation3,645 
Other property and casualty operations3,009 
Total net liability for unpaid claim and claim adjustment expenses$17,213 
Medical Professional Liability

Cumulative Net Incurred Claim and Allocated Claim Adjustment ExpensesDecember 31, 2023
December 312014 (a)2015 (a)2016 (a)2017 (a)2018 (a)2019 (a)2020 (a)2021 (a)2022 (a)2023 IBNRCumulative Number of Claims
(In millions, except reported claims data)
Accident Year            
2014$450 $489 $537 $530 $535 $529 $527 $524 $527 $525 $6 19,830 
2015433 499 510 494 488 510 501 498 494 15 18,218 
2016427 487 485 499 508 510 508 514 17 16,169 
2017412 449 458 460 455 460 456 20 15,345 
2018404 429 431 448 470 495 41 15,266 
2019430 445 458 471 469 62 14,409 
2020477 476 455 447 180 11,129 
2021377 376 374 193 9,523 
2022329 329 206 9,237 
2023340 281 8,240 
 Total$4,443 $1,021 
Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses
Accident Year
2014$23 $136 $258 $359 $417 $472 $489 $497 $504 $510 
201522 101 230 313 384 420 444 458 463 
201618 121 246 339 401 436 460 483 
201719 107 235 308 355 388 417 
201821 115 211 290 349 418 
201917 91 183 280 349 
202011 61 139 201 
202111 49 118 
202210 57 
202314 
Total$3,030 
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented$1,413 
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2014
22 
Liability for unallocated claim adjustment expenses for accident years presented25 
Total net liability for unpaid claim and claim adjustment expenses$1,460 
Net Strengthening (Releases) of Prior Accident Year Reserves
Years Ended December 31
Total
Accident Year
2014$39 $48 $(7)$5 $(6)$(2)$(3)$3 $(2)$75 
201566 11 (16)(6)22 (9)(3)(4)61 
201660 (2)14 9 2 (2)6 87 
201737 9 2 (5)5 (4)44 
201825 2 17 22 25 91 
201915 13 13 (2)39 
2020(1)(21)(8)(30)
2021(1)(2)(3)
2022— — 
Total net development for the accident years presented above14 16 9 
Total net development for accident years prior to 2014
2 (3)(4)
Total unallocated claim adjustment expense development7 5 — 
Total$23 $18 $5 
(a)Data presented for these calendar years is required supplemental information, which is unaudited.
Other Professional Liability and Management Liability

Cumulative Net Incurred Claim and Allocated Claim Adjustment ExpensesDecember 31, 2023
December 312014 (a)2015 (a)2016 (a)2017 (a)2018 (a)2019 (a)2020 (a)2021 (a)2022 (a)2023 IBNRCumulative Number of Claims
(In millions, except reported claims data)
Accident Year            
2014$878 $898 $885 $831 $835 $854 $845 $841 $842 $838 $26 17,585 
2015888 892 877 832 807 813 836 855 858 18 17,454 
2016901 900 900 904 907 891 888 906 39 17,987 
2017847 845 813 791 775 758 746 69 18,199 
2018850 864 869 906 923 941 101 20,038 
2019837 845 856 876 939 100 19,515 
2020930 944 951 945 281 19,437 
20211,037 1,038 1,009 532 18,259 
20221,120 1,112 706 18,165 
20231,149 971 16,469 
        Total$9,443 $2,843  
Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses
Accident Year
2014$51 $223 $392 $515 $647 $707 $743 $787 $802 $806 
201560 234 404 542 612 677 725 794 808 
201664 248 466 625 701 736 784 826 
201757 222 394 498 557 596 630 
201854 282 473 599 706 779 
201964 263 422 567 699 
202067 248 400 523 
202158 217 356 
202264 225 
202364 
Total$5,716 
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented$3,727 
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2014
115 
Liability for unallocated claim adjustment expenses for accident years presented55 
Total net liability for unpaid claim and claim adjustment expenses$3,897 
Net Strengthening (Releases) of Prior Accident Year Reserves
Years Ended
December 31
Total
Accident Year
2014$20 $(13)$(54)$4 $19 $(9)$(4)$1 $(4)$(40)
20154 (15)(45)(25)6 23 19 3 (30)
2016(1)— 4 3 (16)(3)18 5 
2017(2)(32)(22)(16)(17)(12)(101)
201814 5 37 17 18 91 
20198 11 20 63 102 
202014 7 (6)15 
20211 (29)(28)
2022(8)(8)
Total net development for the accident years presented above49 45 43 
Total net development for accident years prior to 2014
(27)5 (6)
Total unallocated claim adjustment expense development2 — — 
Total$24 $50 $37 
(a)Data presented for these calendar years is required supplemental information, which is unaudited.
Surety
Cumulative Net Incurred Claim and Allocated Claim Adjustment ExpensesDecember 31, 2023
December 312014 (a)2015 (a)2016 (a)2017 (a)2018 (a)2019 (a)2020 (a)2021 (a)2022 (a)2023 IBNRCumulative Number of Claims
(In millions, except reported claims data)
Accident Year            
2014$123 $124 $94 $69 $60 $45 $45 $43 $42 $41 $2 5,135 
2015131 131 104 79 63 58 53 45 45 2 5,085 
2016124 124 109 84 67 64 58 43 3 5,565 
2017120 115 103 84 71 66 67 4 5,883 
2018114 108 91 62 56 51 10 6,249 
2019119 112 98 87 82 12 6,152 
2020128 119 81 67 34 4,678 
2021137 129 110 68 4,645 
2022155 158 116 4,350 
2023175 167 2,750 
 Total$839 $418 
Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses
Accident Year
2014$7 $30 $38 $36 $38 $38 $39 $39 $38 $38 
20157 26 38 40 42 44 42 42 43 
20165 37 45 45 43 43 41 40 
201723 37 41 46 49 62 62 
20185 25 34 39 40 41 
201912 34 44 59 70 
20204 20 28 33 
20215 20 35 
202212 35 
20238 
Total$405 
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented$434 
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2014
13 
Liability for unallocated claim adjustment expenses for accident years presented21 
Total net liability for unpaid claim and claim adjustment expenses$468 
Net Strengthening (Releases) of Prior Accident Year Reserves
Years Ended December 31
Total
Accident Year
2014$1 $(30)$(25)$(9)$(15)$— $(2)$(1)$(1)$(82)
2015— (27)(25)(16)(5)(5)(8)— (86)
2016— (15)(25)(17)(3)(6)(15)(81)
2017(5)(12)(19)(13)(5)1 (53)
2018(6)(17)(29)(6)(5)(63)
2019(7)(14)(11)(5)(37)
2020(9)(38)(14)(61)
2021(8)(19)(27)
20223 3 
Total net development for the accident years presented above(75)(83)(55)
Total net development for accident years prior to 2014
2 — 12 
Total unallocated claim adjustment expense development— — — 
Total$(73)$(83)$(43)
(a)Data presented for these calendar years is required supplemental information, which is unaudited.
Commercial Auto

Cumulative Net Incurred Claim and Allocated Claim Adjustment ExpensesDecember 31, 2023
December 312014 (a)2015 (a)2016 (a)2017 (a)2018 (a)2019 (a)2020 (a)2021 (a)2022 (a)2023 IBNR Cumulative
Number of Claims
(In millions, except reported claims data)
Accident Year            
2014$234 $223 $212 $205 $205 $201 $201 $202 $201 $201 $1 33,633 
2015201 199 190 190 183 181 183 182 184 4 30,430 
2016198 186 186 186 190 195 200 197 4 30,455 
2017199 198 200 221 232 239 241 4 30,947 
2018
229 227 227 245 254 255 1 34,333 
2019
257 266 289 323 325 10 37,258 
2020
310 303 304 298 21 29,142 
2021
397 388 390 93 32,918 
2022
437 465 137 36,777 
2023
554 347 34,211 
 Total$3,110 $622 
Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses
Accident Year
2014$64 $102 $137 $166 $187 $196 $198 $199 $199 $200 
201552 96 130 153 172 175 178 179 180 
201652 93 126 154 175 185 190 192 
201758 107 150 178 203 225 232 
201866 128 175 212 238 249 
201977 147 203 257 295 
202071 134 197 246 
202183 168 240 
2022112 236 
2023127 
Total$2,197 
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented$913 
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2014
4 
Liability for unallocated claim adjustment expenses for accident years presented9 
Total net liability for unpaid claim and claim adjustment expenses$926 
Net Strengthening (Releases) of Prior Accident Year Reserves
Years Ended December 31
Total
Accident Year
2014$(11)$(11)$(7)$— $(4)$— $1 $(1)$— $(33)
2015(2)(9)— (7)(2)2 (1)2 (17)
2016(12)— — 4 5 5 (3)(1)
2017(1)2 21 11 7 2 42 
2018(2)— 18 9 1 26 
20199 23 34 2 68 
2020(7)1 (6)(12)
2021(9)2 (7)
202228 28 
Total net development for the accident years presented above53 45 28 
Total net development for accident years prior to 2014
— 4 2 
Total unallocated claim adjustment expense development— — 3 
Total$53 $49 $33 
(a)Data presented for these calendar years is required supplemental information, which is unaudited.
General Liability

Cumulative Net Incurred Claim and Allocated Claim Adjustment ExpensesDecember 31, 2023
December 312014 (a)2015 (a)2016 (a)2017 (a)2018 (a)2019 (a)2020 (a)2021 (a)2022 (a)2023 IBNR Cumulative Number of Claims
(In millions, except reported claims data)
Accident Year            
2014$653 $658 $654 $631 $635 $658 $659 $659 $676 $679 $28 28,196 
2015581 576 574 589 600 602 617 625 639 28 24,261 
2016623 659 667 671 673 683 684 704 39 24,803 
2017632 632 632 634 630 652 690 36 22,471 
2018653 644 646 639 650 679 129 20,425 
2019680 682 682 691 720 174 19,647 
2020723 722 726 736 347 14,593 
2021782 784 793 401 15,121 
2022929 928 676 15,754 
20231,071 963 11,633 
 Total$7,639 $2,821 
Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses
Accident Year
2014$31 $119 $247 $376 $481 $547 $569 $607 $624 $642 
201519 110 230357 446 501 530 561 573 
201632 163279 407 481 524 582 620 
201723118 250 399 471 553 606 
201833 107 228 307 428 491 
201925 98 181 322 455 
202023 99 192 280 
202126 140 262 
202229 123 
202333 
Total$4,085 
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented$3,554 
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2014
162 
Liability for unallocated claim adjustment expenses for accident years presented64 
Total net liability for unpaid claim and claim adjustment expenses$3,780 

Net Strengthening (Releases) of Prior Accident Year Reserves

Years Ended December 31
         
Total
Accident Year          
2014$5 $(4)$(23)$4 $23 $1 $— $17 $3 $26 
2015 (5)(2)15 11 2 15 8 14 58  
2016 36 8 4 2 10 1 20 81  
2017 — — 2 (4)22 38 58  
2018 (9)2 (7)11 29 26  
2019 2 — 9 29 40  
2020 (1)4 10 13  
2021 2 9 11  
2022(1)(1) 
Total net development for the accident years presented above 1374151  
Total net development for accident years prior to 2014
— (7)(2)  
Total unallocated claim adjustment expense development 2 ——  
Total $15 $67 $149   
(a)Data presented for these calendar years is required supplemental information, which is unaudited.
Workers’ Compensation

Cumulative Net Incurred Claim and Allocated Claim Adjustment ExpensesDecember 31, 2023
December 312014 (a)2015 (a)2016 (a)2017 (a)2018 (a)2019 (a)2020 (a)2021 (a)2022 (a)2023 IBNRCumulative Number of Claims
(In millions, except reported claims data)
Accident Year            
2014$467 $480 $479 $452 $450 $446 $439 $448 $430 $419 $70 33,550 
2015422 431 406 408 394 382 372 353 334 59 31,904 
2016426 405 396 382 366 355 331 308 56 31,994 
2017440 432 421 400 402 399 398 78 33,142 
2018450 440 428 415 415 404 74 34,886 
2019452 449 437 436 419 78 34,349 
2020477 466 446 414 135 29,454 
2021468 454 432 146 30,066 
2022497 489 198 33,229 
2023555 344 31,549 
        Total$4,172 $1,238  

Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses
Accident Year          
2014$61 $159 $215 $258 $282 $290 $297 $306 $312 $319 
201551 131 180 212 231 243 251 256 259 
201653 129 169 198 219 227 234 235 
201763 151 207 243 265 279 287 
201868 163 229 259 280 298 
201971 169 223 262 291 
202065 147 200 228 
202167 164 222 
202279 192 
202387 
 Total$2,418 
  
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented$1,754 
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2014
1,842 
Other (b)(23)
Liability for unallocated claim adjustment expenses for accident years presented72 
Total net liability for unpaid claim and claim adjustment expenses $3,645 

Net Strengthening (Releases) of Prior Accident Year Reserves

Years Ended December 31
         
Total
Accident Year          
2014$13 $(1)$(27)$(2)$(4)$(7)$9 $(18)$(11)$(48)
2015 9 (25)2 (14)(12)(10)(19)(19)(88) 
2016 (21)(9)(14)(16)(11)(24)(23)(118) 
2017 (8)(11)(21)2 (3)(1)(42) 
2018 (10)(12)(13)— (11)(46) 
2019 (3)(12)(1)(17)(33) 
2020 (11)(20)(32)(63) 
2021 (14)(22)(36) 
2022(8)(8) 
Total net development for the accident years presented above (46)(99)(144)  
Adjustment for development on a discounted basis 2 (3)(2)  
Total net development for accident years prior to 2014
(38)(60)(63)  
Total unallocated claim adjustment expense development — 10 6   
Total $(82)$(152)$(203)  
(a)Data presented for these calendar years is required supplemental information, which is unaudited.
(b)Other includes the effect of discounting lifetime claim reserves.
The table below presents information about average historical claims duration as of December 31, 2023 and is presented as required supplementary information, which is unaudited.

Average Annual Percentage Payout of Ultimate Net Incurred Claim and Allocated Claim Adjustment Expenses in Year:
 12345678910
           
Medical professional liability3.7 %16.4 %22.1 %17.2 %12.4 %9.1 %4.8 %2.9 %1.2 %1.1 %
Other professional liability and management liability6.5 19.8 19.3 14.9 10.9 6.3 4.9 6.0 1.7 0.5 
Surety (a)17.7 46.6 17.7 3.4 2.2 5.2 (1.7)(0.8)(0.1)— 
Commercial auto25.2 22.2 18.2 14.3 10.6 4.9 2.0 0.7 0.3 0.5 
General liability3.6 12.8 16.3 17.4 14.4 9.1 5.9 5.3 2.2 2.7 
Workers’ compensation16.0 22.9 13.8 8.8 6.0 3.2 2.1 1.3 1.2 1.7 

(a)Due to the nature of the Surety business, average annual percentage payout of ultimate net incurred claim and allocated claim adjustment expenses has been calculated using only the payouts of mature accident years presented in the loss reserve development tables.

A&EP Reserves

In 2010, Continental Casualty Company (“CCC”) together with several insurance subsidiaries completed a transaction with National Indemnity Company (“NICO”), a subsidiary of Berkshire Hathaway Inc., under which substantially all of their legacy A&EP liabilities were ceded to NICO through a loss portfolio transfer (“LPT”). At the effective date of the transaction, approximately $1.6 billion of net A&EP claim and allocated claim adjustment expense reserves were ceded to NICO under a retroactive reinsurance agreement with an aggregate limit of $4.0 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. NICO was paid a reinsurance premium of $2.0 billion and billed third party reinsurance receivables related to A&EP claims with a net book value of $215 million were transferred to NICO, resulting in total consideration of $2.2 billion.

In years subsequent to the effective date of the LPT, adverse prior year development on A&EP reserves was recognized 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 a change in the estimate of A&EP reserves is recognized 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 on the Consolidated Statements of Operations.

The following table presents the impact of the Loss Portfolio Transfer on the Consolidated Statements of Operations.

Year Ended December 31
202320222021
(In millions)   
    
Additional amounts ceded under LPT:   
Net A&EP adverse development before consideration of LPT$86 $92 $143 
Provision for uncollectible third-party reinsurance on A&EP(5)(5)
Total additional amounts ceded under LPT86 87 138 
Retroactive reinsurance benefit recognized(94)(91)(107)
Pretax impact of deferred retroactive reinsurance$(8)$(4)$31 
Net unfavorable prior year development of $86 million, $92 million and $143 million was recognized before consideration of cessions to the LPT for the years ended December 31, 2023, 2022 and 2021. The unfavorable development in 2023, 2022 and 2021 was primarily driven by higher than anticipated defense and indemnity costs on known direct asbestos and environmental accounts and a reduction in estimated reinsurance recoverable. Additionally, in both 2022 and 2021, $5 million of the provision for uncollectible third-party reinsurance was released. None of the provision for uncollectible third-party reinsurance was released in 2023.

As of December 31, 2023 and 2022, the cumulative amounts ceded under the LPT were $3.6 billion and $3.5 billion. The unrecognized deferred retroactive reinsurance benefit was $417 million and $425 million as of December 31, 2023 and 2022 and is included within Other liabilities on the Consolidated Balance Sheets.

NICO established a collateral trust account as security for its obligations under the LPT. The fair value of the collateral trust account was $2.5 billion as of December 31, 2023. 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 A&EP claims.

Excess Workers’ Compensation LPT

On February 5, 2021, CNA completed a transaction with Cavello Bay Reinsurance Limited (“Cavello”), a subsidiary of Enstar Group Limited, under which certain legacy excess workers’ compensation (“EWC”) liabilities were ceded to Cavello. Under the terms of the transaction, based on reserves in place as of January 1, 2020, approximately $690 million of net EWC claim and allocated claim adjustment expense reserves were ceded to Cavello under a loss portfolio transfer (“EWC LPT”) with an aggregate limit of $1.0 billion. Cavello was paid a reinsurance premium of $697 million, less claims paid between January 1, 2020 and the closing date of the agreement of $64 million. After transaction costs, a loss of approximately $11 million (after tax and noncontrolling interest) was recognized in Other Insurance Operations in the first quarter of 2021 related to the EWC LPT.

As of December 31, 2023, the cumulative amount ceded under the EWC LPT was $690 million.

Cavello established a collateral trust as security for its obligations. The fair value of the collateral trust was $440 million as of December 31, 2023.