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Claim and Claim Adjustment Expense Reserves

12 Months Ended

Dec. 31, 2024

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 31	2024
(In millions)

Net liability for unpaid claim and claim adjustment expenses:
Property & Casualty Operations	$	18,334
Other Insurance Operations (a)	929
Total net claim and claim adjustment expenses	19,263

Reinsurance receivables: (b)
Property & Casualty Operations	3,348
Other Insurance Operations (c)	2,365
Total reinsurance receivables	5,713
Total gross liability for unpaid claims and claims adjustment expenses	$	24,976


(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	2024		2023		2022
(In millions)

Reserves, beginning of year:
Gross	$	23,304	$	22,120	$	21,269
Ceded	5,141		5,191		4,969
Net reserves, beginning of year	18,163		16,929		16,300



Net incurred claim and claim adjustment expenses:
Provision for insured events of current year	6,330		5,667		5,181
Increase (decrease) in provision for insured events of prior years	42		48		(32)
Amortization of discount	39		44		44
Total net incurred (a)	6,411		5,759		5,193

Net payments attributable to:
Current year events	(1,093)		(922)		(821)
Prior year events	(4,096)		(3,679)		(3,481)
Total net payments	(5,189)		(4,601)		(4,302)

Foreign currency translation adjustment and other	(122)		76		(262)

Net reserves, end of year	19,263		18,163		16,929
Ceded reserves, end of year	5,713		5,141		5,191
Gross reserves, end of year	$	24,976	$	23,304	$	22,120


(a)			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 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, geopolitical, 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, 2024	Property and Casualty Operations		Other Insurance Operations		Total
(In millions)

Gross Case Reserves	$	6,589	$	1,813	$	8,402
Gross IBNR Reserves	15,093		1,481		16,574

Total Gross Carried Claim and Claim Adjustment Expense Reserves	$	21,682	$	3,294	$	24,976

Net Case Reserves	$	5,573	$	634	$	6,207
Net IBNR Reserves	12,761		295		13,056

Total Net Carried Claim and Claim Adjustment Expense Reserves	$	18,334	$	929	$	19,263

December 31, 2023

Gross Case Reserves	$	5,759	$	1,979	$	7,738
Gross IBNR Reserves	14,184		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 Reserves	12,235		265		12,500

Total Net Carried Claim and Claim Adjustment Expense Reserves	$	17,213	$	950	$	18,163

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	2024		2023		2022
(In millions)

Medical professional liability	$	(8)	$	5	$	18
Other professional liability and management liability	49		37		50
Surety	(68)		(43)		(83)
Warranty	20		(11)		(21)
Commercial auto	107		33		49
General liability	75		149		67
Workers’ compensation	(202)		(203)		(152)
Other property and casualty operations	(4)		10		(24)
Other insurance operations	79		71		64
Total pretax (favorable) unfavorable development	$	48	$	48	$	(32)

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 2023 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.

2024

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”) and cyber businesses.

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

Unfavorable development in warranty was primarily due to higher than expected frequency and severity in a recent accident year.

Unfavorable development in commercial auto was due to higher than expected claim severity in recent accident years.

Unfavorable development in general liability was due to higher than expected claim severity in multiple accident years going back to 2015.

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.

2023

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

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

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 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.

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 31	2024
(In millions)

Medical professional liability	$	1,425
Other professional liability and management liability	3,967
Surety	493
Warranty	46
Commercial auto	1,247
General liability	4,356
Workers’ compensation	3,543
Other property and casualty operations	3,257
Total net liability for unpaid claim and claim adjustment expenses	$	18,334

Medical Professional Liability


Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses																					December 31, 2024
December 31	2015 (a)		2016 (a)		2017 (a)		2018 (a)		2019 (a)		2020 (a)		2021 (a)		2022 (a)		2023 (a)		2024		IBNR		Cumulative Number of Claims
(In millions, except reported claims data)
Accident Year
2015	$	433	$	499	$	510	$	494	$	488	$	510	$	501	$	498	$	494	$	494	$	11	18,228
2016			427		487		485		499		508		510		508		514		513		16		16,195
2017					412		449		458		460		455		460		456		463		18		15,384
2018							404		429		431		448		470		495		499		28		15,331
2019									430		445		458		471		469		481		43		14,515
2020											477		476		455		447		419		100		11,289
2021													377		376		374		349		117		9,935
2022															329		329		333		143		9,965
2023																	340		350		162		10,424
2024																			343		278		8,561
																	Total		$	4,244	$	916

Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses
Accident Year
2015	$	22	$	101	$	230	$	313	$	384	$	420	$	444	$	458	$	463	$	471
2016			18		121		246		339		401		436		460		483		489
2017					19		107		235		308		355		388		417		427
2018							21		115		211		290		349		418		453
2019									17		91		183		280		349		395
2020											11		61		139		201		258
2021													11		49		118		170
2022															10		57		122
2023																	14		86
2024																			13
																	Total		$	2,884

Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented																			$	1,360
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2015																			33
Liability for unallocated claim adjustment expenses for accident years presented																			32
Total net liability for unpaid claim and claim adjustment expenses																			$	1,425

Net Strengthening (Releases) of Prior Accident Year Reserves

Years Ended December 31																					Total
Accident Year
2015			$	66	$	11	$	(16)	$	(6)	$	22	$	(9)	$	(3)	$	(4)	$	—	$	61
2016					60		(2)		14		9		2		(2)		6		(1)		86
2017							37		9		2		(5)		5		(4)		7		51
2018									25		2		17		22		25		4		95
2019											15		13		13		(2)		12		51
2020													(1)		(21)		(8)		(28)		(58)
2021															(1)		(2)		(25)		(28)
2022																	—		4		4
2023																			10		10
Total net development for the accident years presented above															13		11		(17)
Total net development for accident years prior to 2015															—		(6)		9
Total unallocated claim adjustment expense development															5		—		—
Total															$	18	$	5	$	(8)


(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 Expenses																					December 31, 2024
December 31	2015 (a)		2016 (a)		2017 (a)		2018 (a)		2019 (a)		2020 (a)		2021 (a)		2022 (a)		2023 (a)		2024		IBNR		Cumulative Number of Claims
(In millions, except reported claims data)
Accident Year
2015	$	888	$	892	$	877	$	832	$	807	$	813	$	836	$	855	$	858	$	865	$	21	17,457
2016			901		900		900		904		907		891		888		906		912		37		17,989
2017					847		845		813		791		775		758		746		752		51		18,215
2018							850		864		869		906		923		941		987		57		20,071
2019									837		845		856		876		939		970		96		19,548
2020											930		944		951		945		945		168		19,509
2021													1,037		1,038		1,009		965		311		18,377
2022															1,120		1,112		1,084		465		18,376
2023																	1,149		1,166		564		19,587
2024																			1,150		918		17,921
																	Total		$	9,796	$	2,688

Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses
Accident Year
2015	$	60	$	234	$	404	$	542	$	612	$	677	$	725	$	794	$	808	$	813
2016			64		248		466		625		701		736		784		826		856
2017					57		222		394		498		557		596		630		672
2018							54		282		473		599		706		779		847
2019									64		263		422		567		699		801
2020											67		248		400		523		660
2021													58		217		356		502
2022															64		225		453
2023																	64		302
2024																			77
																	Total		$	5,983

Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented																			$	3,813
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2015																			98
Liability for unallocated claim adjustment expenses for accident years presented																			56
Total net liability for unpaid claim and claim adjustment expenses																			$	3,967

Net Strengthening (Releases) of Prior Accident Year Reserves

Years Ended December 31																					Total
Accident Year
2015			$	4	$	(15)	$	(45)	$	(25)	$	6	$	23	$	19	$	3	$	7	$	(23)
2016					(1)		—		4		3		(16)		(3)		18		6		11
2017							(2)		(32)		(22)		(16)		(17)		(12)		6		(95)
2018									14		5		37		17		18		46		137
2019											8		11		20		63		31		133
2020													14		7		(6)		—		15
2021															1		(29)		(44)		(72)
2022																	(8)		(28)		(36)
2023																			17		17
Total net development for the accident years presented above															44		47		41
Total net development for accident years prior to 2015															6		(10)		3
Total unallocated claim adjustment expense development															—		—		5
Total															$	50	$	37	$	49


(a)			Data presented for these calendar years is required supplemental information, which is unaudited.

Surety


Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses																					December 31, 2024
December 31	2015 (a)		2016 (a)		2017 (a)		2018 (a)		2019 (a)		2020 (a)		2021 (a)		2022 (a)		2023 (a)		2024		IBNR		Cumulative Number of Claims
(In millions, except reported claims data)
Accident Year
2015	$	131	$	131	$	104	$	79	$	63	$	58	$	53	$	45	$	45	$	45	$	2	5,103
2016			124		124		109		84		67		64		58		43		43		3		5,577
2017					120		115		103		84		71		66		67		67		3		5,909
2018							114		108		91		62		56		51		49		6		6,297
2019									119		112		98		87		82		82		8		6,229
2020											128		119		81		67		57		3		4,827
2021													137		129		110		91		45		4,884
2022															155		158		132		74		4,893
2023																	175		169		138		4,378
2024																			171		145		2,940
																	Total		$	906	$	427

Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses
Accident Year
2015	$	7	$	26	$	38	$	40	$	42	$	44	$	42	$	42	$	43	$	43
2016			5		37		45		45		43		43		41		40		40
2017					23		37		41		46		49		62		62		63
2018							5		25		34		39		40		41		41
2019									12		34		44		59		70		74
2020											4		20		28		33		44
2021													5		20		35		42
2022															12		35		52
2023																	8		27
2024																			20
																	Total		$	446

Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented																			$	460
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2015																			14
Liability for unallocated claim adjustment expenses for accident years presented																			19
Total net liability for unpaid claim and claim adjustment expenses																			$	493

Net Strengthening (Releases) of Prior Accident Year Reserves

Years Ended December 31																					Total
Accident Year
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)		(2)		(65)
2019											(7)		(14)		(11)		(5)		—		(37)
2020													(9)		(38)		(14)		(10)		(71)
2021															(8)		(19)		(19)		(46)
2022																	3		(26)		(23)
2023																			(6)		(6)
Total net development for the accident years presented above															(82)		(54)		(63)
Total net development for accident years prior to 2015															(1)		11		(5)
Total unallocated claim adjustment expense development															—		—		—
Total															$	(83)	$	(43)	$	(68)


(a)			Data presented for these calendar years is required supplemental information, which is unaudited.

Commercial Auto


Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses																					December 31, 2024
December 31	2015 (a)		2016 (a)		2017 (a)		2018 (a)		2019 (a)		2020 (a)		2021 (a)		2022 (a)		2023 (a)		2024		IBNR		Cumulative Number of Claims
(In millions, except reported claims data)
Accident Year
2015	$	201	$	199	$	190	$	190	$	183	$	181	$	183	$	182	$	184	$	184	$	2	30,430
2016			198		186		186		186		190		195		200		197		195		1		30,457
2017					199		198		200		221		232		239		241		241		4		30,947
2018							229		227		227		245		254		255		260		2		34,333
2019									257		266		289		323		325		327		7		37,280
2020											310		303		304		298		303		14		29,182
2021													397		388		390		393		51		33,028
2022															437		465		496		90		37,230
2023																	554		620		202		42,345
2024																			726		447		40,718
																	Total		$	3,745	$	820

Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses
Accident Year
2015	$	52	$	96	$	130	$	153	$	172	$	175	$	178	$	179	$	180	$	182
2016			52		93		126		154		175		185		190		192		193
2017					58		107		150		178		203		225		232		235
2018							66		128		175		212		238		249		256
2019									77		147		203		257		295		312
2020											71		134		197		246		276
2021													83		168		240		305
2022															112		236		334
2023																	127		270
2024																			153
																	Total		$	2,516

Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented																			$	1,229
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2015																			1
Liability for unallocated claim adjustment expenses for accident years presented																			17
Total net liability for unpaid claim and claim adjustment expenses																			$	1,247

Net Strengthening (Releases) of Prior Accident Year Reserves

Years Ended December 31																					Total
Accident Year
2015			$	(2)	$	(9)	$	—	$	(7)	$	(2)	$	2	$	(1)	$	2	$	—	$	(17)
2016					(12)		—		—		4		5		5		(3)		(2)		(3)
2017							(1)		2		21		11		7		2		—		42
2018									(2)		—		18		9		1		5		31
2019											9		23		34		2		2		70
2020													(7)		1		(6)		5		(7)
2021															(9)		2		3		(4)
2022																	28		31		59
2023																			66		66
Total net development for the accident years presented above															46		28		110
Total net development for accident years prior to 2015															3		2		(3)
Total unallocated claim adjustment expense development															—		3		—
Total															$	49	$	33	$	107


(a)			Data presented for these calendar years is required supplemental information, which is unaudited.

General Liability


Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses																					December 31, 2024
December 31	2015 (a)		2016 (a)		2017 (a)		2018 (a)		2019 (a)		2020 (a)		2021 (a)		2022 (a)		2023 (a)		2024		IBNR		Cumulative Number of Claims
(In millions, except reported claims data)
Accident Year
2015	$	581	$	576	$	574	$	589	$	600	$	602	$	617	$	625	$	639	$	656	$	39	24,309
2016			623		659		667		671		673		683		684		704		712		27		24,901
2017					632		632		632		634		630		652		690		713		16		22,544
2018							653		644		646		639		650		679		665		83		20,553
2019									680		682		682		691		720		727		129		19,907
2020											723		722		726		736		702		237		14,964
2021													782		784		793		814		299		15,952
2022															929		928		930		515		17,527
2023																	1,071		1,106		726		17,037
2024																			1,271		1,144		14,632
																	Total		$	8,296	$	3,215

Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses
Accident Year
2015	$	19	$	110	$	230	$	357	$	446	$	501	$	530	$	561	$	573	$	581
2016			32		163		279		407		481		524		582		620		652
2017					23		118		250		399		471		553		606		657
2018							33		107		228		307		428		491		546
2019									25		98		181		322		455		532
2020											23		99		192		280		367
2021													26		140		262		391
2022															29		123		260
2023																	33		153
2024																			34
																	Total		$	4,173

Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented																			$	4,123
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2015																			171
Liability for unallocated claim adjustment expenses for accident years presented																			62
Total net liability for unpaid claim and claim adjustment expenses																			$	4,356

Net Strengthening (Releases) of Prior Accident Year Reserves


Years Ended December 31																			Total
Accident Year
2015	$	(5)	$	(2)	$	15	$	11	$	2	$	15	$	8	$	14	$	17	$	75
2016			36		8		4		2		10		1		20		8		89
2017					—		—		2		(4)		22		38		23		81
2018							(9)		2		(7)		11		29		(14)		12
2019									2		—		9		29		7		47
2020											(1)		4		10		(34)		(21)
2021													2		9		21		32
2022															(1)		2		1
2023																	35		35
Total net development for the accident years presented above													57		148		65
Total net development for accident years prior to 2015													10		1		10
Total unallocated claim adjustment expense development													—		—		—
Total													$	67	$	149	$	75


(a)			Data presented for these calendar years is required supplemental information, which is unaudited.

Workers’ Compensation


Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses																					December 31, 2024
December 31	2015 (a)		2016 (a)		2017 (a)		2018 (a)		2019 (a)		2020 (a)		2021 (a)		2022 (a)		2023 (a)		2024		IBNR		Cumulative Number of Claims
(In millions, except reported claims data)
Accident Year
2015	$	422	$	431	$	406	$	408	$	394	$	382	$	372	$	353	$	334	$	324	$	45	31,916
2016			426		405		396		382		366		355		331		308		293		45		32,000
2017					440		432		421		400		402		399		398		383		65		33,156
2018							450		440		428		415		415		404		399		65		34,914
2019									452		449		437		436		419		416		67		34,377
2020											477		466		446		414		393		107		29,481
2021													468		454		432		421		116		30,126
2022															497		489		478		148		33,428
2023																	555		551		233		36,822
2024																			574		325		34,332
																	Total		$	4,232	$	1,216


Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses
Accident Year
2015	$	51	$	131	$	180	$	212	$	231	$	243	$	251	$	256	$	259	$	261
2016			53		129		169		198		219		227		234		235		238
2017					63		151		207		243		265		279		287		293
2018							68		163		229		259		280		298		307
2019									71		169		223		262		291		310
2020											65		147		200		228		246
2021													67		164		222		256
2022															79		192		258
2023																	87		209
2024																			111
																	Total		$	2,489

Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented																			$	1,743
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2015																			1,757
Other (b)																			(22)
Liability for unallocated claim adjustment expenses for accident years presented																			65
Total net liability for unpaid claim and claim adjustment expenses																			$	3,543

Net Strengthening (Releases) of Prior Accident Year Reserves


Years Ended December 31																			Total
Accident Year
2015	$	9	$	(25)	$	2	$	(14)	$	(12)	$	(10)	$	(19)	$	(19)	$	(10)	$	(98)
2016			(21)		(9)		(14)		(16)		(11)		(24)		(23)		(15)		(133)
2017					(8)		(11)		(21)		2		(3)		(1)		(15)		(57)
2018							(10)		(12)		(13)		—		(11)		(5)		(51)
2019									(3)		(12)		(1)		(17)		(3)		(36)
2020											(11)		(20)		(32)		(21)		(84)
2021													(14)		(22)		(11)		(47)
2022															(8)		(11)		(19)
2023																	(4)		(4)
Total net development for the accident years presented above													(81)		(133)		(95)
Adjustment for development on a discounted basis													(3)		(2)		(2)
Total net development for accident years prior to 2015													(78)		(74)		(105)
Total unallocated claim adjustment expense development													10		6		—
Total													$	(152)	$	(203)	$	(202)


(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, 2024 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:
	1		2		3		4		5		6		7		8		9		10

Medical professional liability	3.6	%	16.3	%	21.8	%	16.6	%	12.7	%	8.9	%	5.7	%	3.2	%	1.1	%	1.6	%
Other professional liability and management liability	6.5		19.6		19.2		14.7		10.5		6.9		5.6		6.1		2.5		0.6
Surety (a)	17.3		41.0		16.4		8.1		3.9		6.2		(2.3)		(0.3)		1.1		—
Commercial auto	23.7		22.3		18.4		14.6		10.5		5.1		2.4		0.9		0.5		1.1
General liability	3.4		12.5		15.7		16.8		13.8		9.2		7.1		5.7		3.2		1.2
Workers’ compensation	16.8		23.4		14.2		8.8		5.9		3.8		2.3		1.2		1.0		0.6

(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	2024		2023		2022
(In millions)

Additional amounts ceded under LPT:
Net A&EP adverse development before consideration of LPT	$	103	$	86	$	92
Provision for uncollectible third-party reinsurance on A&EP					(5)
Total additional amounts ceded under LPT	103		86		87
Retroactive reinsurance benefit recognized	(95)		(94)		(91)
Pretax impact of deferred retroactive reinsurance	$	8	$	(8)	$	(4)

Net unfavorable prior year development of $103 million, $86 million and $92 million was recognized before consideration of cessions to the LPT for the years ended December 31, 2024, 2023 and 2022. The unfavorable development in 2024, 2023 and 2022 was primarily driven by higher than anticipated defense and indemnity costs on known direct asbestos and environmental accounts. Additionally, in 2022, $5 million of the provision for uncollectible third-party reinsurance was released. None of the provision for uncollectible third-party reinsurance was released in 2024 or 2023.

As of December 31, 2024 and 2023, the cumulative amounts ceded under the LPT were $3.7 billion and $3.6 billion. The unrecognized deferred retroactive reinsurance benefit was $425 million and $417 million as of December 31, 2024 and 2023 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 $2.3 billion as of December 31, 2024. 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, 2024, 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 $298 million as of December 31, 2024.