CNA FINANCIAL CORP
For the period ended Dec 31, 2023. Filed Feb 6, 2024.
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FY2023 · Filed Feb 6, 2024
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Consolidated Operations
The following table includes the consolidated results of our operations including our financial measure, core income (loss). For more detailed components of our business operations and a discussion of the core income (loss) financial measure, see the Segment Results section within this MD&A. For further discussion of Net investment income and Net investment gains or losses, see the Investments section of this MD&A.
| (In millions) | 2023 | 2022 (1) | 2021 (1) | ||
|---|---|---|---|---|---|
| Operating Revenues | |||||
| Net earned premiums | $9,480 | $8,667 | $8,175 | ||
| Net investment income | 2,264 | 1,805 | 2,159 | ||
| Non-insurance warranty revenue | 1,624 | 1,574 | 1,430 | ||
| Other revenues | 30 | 32 | 24 | ||
| Total operating revenues | 13,398 | 12,078 | 11,788 | ||
| Claims, Benefits and Expenses | |||||
| Net incurred claims and benefits (re-measurement (loss) of $(88), $(214), and $(8)) | 7,039 | 6,628 | 6,349 | ||
| Policyholders' dividends | 29 | 25 | 22 | ||
| Amortization of deferred acquisition costs | 1,644 | 1,490 | 1,443 | ||
| Non-insurance warranty expense | 1,544 | 1,471 | 1,328 | ||
| Other insurance related expenses | 1,251 | 1,160 | 1,062 | ||
| Other expenses | 274 | 291 | 242 | ||
| Total claims, benefits and expenses | 11,781 | 11,065 | 10,446 | ||
| Core income before income tax | 1,617 | 1,013 | 1,342 | ||
| Income tax expense on core income | (333) | (177) | (254) | ||
| Core income | 1,284 | 836 | 1,088 | ||
| Net investment (losses) gains | (99) | (199) | 120 | ||
| Income tax benefit (expense) on net investment (losses) gains | 20 | 45 | (24) | ||
| Net investment (losses) gains, after tax | (79) | (154) | 96 | ||
| Net income | $1,205 | $682 | $1,184 | ||
(1) As of January 1, 2023, we adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts presented in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Consolidated Financial Statements for additional information.
Core income increased $448 million in 2023 as compared with 2022. Core income for our Property & Casualty Operations increased $265 million driven by higher net investment income and improved underwriting results. Core loss for our Life & Group segment decreased $173 million, while core loss for our Corporate & Other segment decreased $10 million.
Catastrophe losses were $236 million in 2023, primarily driven by severe weather related events. Catastrophe losses were $247 million in 2022, primarily related to Winter Storm Elliott and Hurricane Ian. Unfavorable net prior year loss reserve development of $48 million was recorded in 2023 as compared with favorable net prior year loss reserve development of $32 million in 2022 related to our Specialty, Commercial, International and Corporate & Other segments. Further information on net prior year loss reserve development is in Note E to the Consolidated Financial Statements included under Item 8.
Core income decreased $252 million in 2022 as compared with 2021. Core income for our Property & Casualty Operations increased $56 million primarily due to improved underwriting results and higher net investment income from fixed income securities partially offset by lower investment income from limited partnerships and common stock. Core results for our Life & Group segment decreased $329 million, while core loss for our Corporate & Other segment decreased $21 million.
Catastrophe losses were $247 million in 2022 as compared with $397 million in 2021. Catastrophe losses for the years ended December 31, 2022 and 2021 were driven by severe weather related events, primarily Winter Storm Elliott and Hurricane Ian for 2022 and Hurricane Ida and Winter Storms Uri and Viola for 2021.
Favorable net prior year loss reserve development of $32 million was recorded in 2022 as compared with unfavorable net prior year loss reserve development of $11 million in 2021 related to our Specialty, Commercial, International and Corporate & Other segments. Further information on net prior year loss reserve development is in Note E to the Consolidated Financial Statements included under Item 8.
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