Earnings Document

CHICAGO, May 1, 2023 --- CNA Financial Corporation (NYSE: CNA) today announced first quarter 2023 net income of $297 million, or $1.09 per share, versus $295 million, or $1.08 per share, in the prior year quarter. Net investment losses for the quarter were $28 million compared to $3 million in the prior year quarter. Core income for the quarter was up 9% to $325 million, or $1.19 per share, versus $298 million, or $1.09 per share, in the prior year quarter.

Our Property & Casualty segments produced core income of $346 million for the first quarter of 2023, an increase of $25 million compared to the prior year quarter driven by higher investment income and record high pretax underlying underwriting income of $197 million, partially offset by higher pretax catastrophe losses and unfavorable prior period development. P&C segments, excluding third party captives, generated both gross written premium and net written premium growth of 11%, or 12% excluding foreign currency fluctuations for the first quarter of 2023 driven by rate of +5%, up a point from prior quarter, new business growth of +12% as compared with the prior year quarter and continued strong retention of 86%.

Our Life & Group and Corporate & Other segments produced a core loss for the first quarter of 2023 of $3 million and $18 million, respectively.

CNA Financial declared a quarterly dividend of $0.42 per share, payable June 1, 2023 to stockholders of record on May 15, 2023.

1. As of January 1, 2023, the Company adopted LDTI using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance.
2. Management utilizes the core income (loss) financial measure to monitor the Company's operations. Please refer herein to the Reconciliation of GAAP Measures to Non-GAAP Measures section of this press release for further discussion of this non-GAAP measure.

"We had a great start to 2023 with strong production results across the business and core income up 9% to $325 million. Net investment income of $525 million increased $77 million over the first quarter of 2022 and our P&C underlying underwriting gain was up 19% to a record $197 million in the quarter.

Against a backdrop of yet another significantly elevated industry cat quarter, our pretax catastrophe losses were only $52 million or 2.4 points in the quarter, reflecting our disciplined underwriting of catastrophe exposures.

Net and gross written premium ex captives each grew by 11% and 12% excluding currency fluctuations. Our overall P&C rate increase rebounded to 5% in the quarter, up a point compared to the fourth quarter, and Commercial rates were up two points to 7% driven by strong Property pricing.

Given the strong start to 2023, the improved pricing in Commercial lines and the tailwind from higher fixed income yields, we are optimistic about our ability to leverage the continued favorable market conditions throughout the remainder of 2023," said Dino E. Robusto, Chairman & Chief Executive Officer of CNA

Financial Corporation.

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Property & Casualty Operations

• The underlying combined ratio improved 0.6 points as compared with the prior year quarter. The expense ratio improved 0.3 points driven by net earned premium growth of 10%. The underlying loss ratio improved 0.3 points as compared with the prior year quarter.
• The combined ratio increased 2.0 points as compared with the prior year quarter. Catastrophe losses were $52 million, or 2.4 points of the loss ratio in the quarter compared with $19 million, or 1.0 point of the loss ratio, for the prior year quarter. Unfavorable net prior period development increased the loss ratio by 0.7 points in the current quarter as compared with 0.5 points of favorable development improving the loss ratio in the prior year quarter.
• P&C segments, excluding third party captives, generated both gross written premium and net written premium growth of 11%, or 12% excluding foreign currency fluctuations for the first quarter of 2023.

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Business Operating Highlights

Specialty

• The underlying combined ratio was consistent with the prior year quarter. The underlying loss ratio improved 0.5 points as compared with the prior year quarter. The expense ratio increased 0.5 points primarily driven by employee related costs.
• The combined ratio increased 1.3 points as compared with the prior year quarter. There was no net prior period development in the current quarter compared with 1.3 points of favorable development improving the loss ratio in the prior year quarter.
• Gross written premiums, excluding third party captives, were largely consistent with prior year quarter and net written premiums grew 2% for the first quarter of 2023.

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Commercial

• The underlying combined ratio improved 0.9 points as compared with the prior year quarter due to an improvement in the expense ratio driven by net earned premium growth of 16%.
• The combined ratio increased 1.5 points as compared with the prior year quarter. Catastrophe losses were $44 million, or 4.2 points of the loss ratio in the quarter compared with $16 million, or 1.8 points of the loss ratio, for the prior year quarter.
• Gross written premiums, excluding third party captives and net written premiums both grew 19% for the first quarter of 2023.

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