CNA Financial Corp: Form 10-Q for the period ended Jun 30, 2026

OVERVIEW

The following discussion highlights significant factors affecting the Company. References to “we,” “our,” “us” or like terms refer to the business of CNA.

The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements included under Part I, Item 1 of this Form 10-Q, and Item 1A Risk Factors and Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations, which are included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2025.

We utilize the core income (loss) financial measure to monitor our operations. Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of net investment gains or losses and gains or losses resulting from pension settlement transactions. Net investment gains or losses are excluded from the calculation of core income (loss) because they are generally driven by economic factors that are not necessarily reflective of our primary operations. The calculation of core income (loss) excludes gains or losses resulting from pension settlement transactions as they result from decisions regarding our defined benefit pension plans which are unrelated to our primary operations. Presentation of consolidated core income (loss) is deemed to be a non-GAAP financial measure and management believes some investors may find this measure useful to evaluate our primary operations. See further discussion regarding how we manage our business in Note J to the Condensed Consolidated Financial Statements included under Part I, Item 1. For reconciliations of non-GAAP measures to the most comparable GAAP measures and other information, please refer herein and/or to our most recent Annual Report on Form 10-K on file with the Securities and Exchange Commission.

In evaluating the results of our Specialty, Commercial and International segments, we utilize the loss ratio, the underlying loss ratio, the expense ratio, the dividend ratio, the combined ratio and the underlying combined ratio. These ratios are calculated using GAAP financial results. The loss ratio is the percentage of net incurred claim and claim adjustment expenses to net earned premiums. The underlying loss ratio excludes the impact of catastrophe-related reinstatement premiums, catastrophe losses and development-related items from the loss ratio. Development-related items represent net prior year loss reserve and premium development, and include the effects of interest accretion and change in allowance for uncollectible reinsurance. 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 ratio, the expense ratio and the dividend ratio. The underlying combined ratio is the sum of the underlying loss ratio, the expense ratio and the dividend ratio. The underlying loss ratio and the underlying combined ratio are deemed to be non-GAAP financial measures, and management believes some investors may find these ratios useful to evaluate our underwriting performance since they remove the impact of catastrophes which are unpredictable as to timing and amount, and development-related items as they are not indicative of our current year underwriting performance.

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 within this MD&A. These changes can be favorable or unfavorable. Net prior year loss reserve development does not include the effect of any related acquisition expenses. Further information on our reserves is provided in Note E and Note F to the Condensed Consolidated Financial Statements included under Part I, Item 1.

In addition, we also utilize 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. The change in exposure represents the change in premium dollars on policies that renew as a result of the change in risk of the policy. Retention represents the percentage of premium dollars renewed, excluding rate and exposure changes, in comparison to the expiring premium dollars from policies available to renew. New business represents premiums from policies written with new customers and additional policies written with existing customers.

We use underwriting gain (loss) and underlying underwriting gain (loss), calculated using GAAP financial results, to monitor our insurance operations. Underwriting gain (loss) is deemed to be a non-GAAP financial measure and is calculated pretax as net earned premiums less total insurance expenses, which includes insurance claims and policyholders' benefits, amortization of deferred acquisition costs and insurance related administrative expenses. Net income (loss) is the most directly comparable GAAP measure. Management believes some investors may find this measure useful to evaluate the profitability, before tax, derived from our underwriting activities, which are managed separately from our investing activities. Underlying underwriting gain (loss) is also deemed to be a non-GAAP financial measure, and represents pretax underwriting gain (loss) excluding catastrophe-related reinstatement premiums, catastrophe losses and development-related items. Management believes some investors may find this measure useful to evaluate the profitability, before tax, derived from our underwriting activities, excluding the impact of catastrophes, which are unpredictable as to timing and amount, and development-related items as they are not indicative of our current year underwriting performance.

The following tables present reconciliations of net income to core income, underwriting gain and underlying underwriting gain for our Property & Casualty Operations:

(In millions)

(In millions)

46

(In millions)

(In millions)

The following table presents a reconciliation of net loss to core (loss) income for our Life & Group segment:

(In millions)

The following table presents a reconciliation of net loss to core loss for our Corporate & Other segment:

(In millions)

47

CRITICAL ACCOUNTING ESTIMATES

The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the amount of revenues and expenses reported during the period. Actual results may differ from those estimates.

Our Condensed Consolidated Financial Statements and accompanying notes have been prepared in accordance with GAAP applied on a consistent basis. We continually evaluate the accounting policies and estimates used to prepare the Condensed Consolidated Financial Statements. In general, our estimates are based on historical experience, evaluation of current trends, information from third-party professionals and various other assumptions that are believed to be reasonable under the known facts and circumstances.

The accounting estimates set forth below are considered by us to be critical to an understanding of our Condensed Consolidated Financial Statements as their application places the most significant demands on our judgment:

• Insurance Reserves
• Long-Term Care Reserves
• Valuation of Investments and Impairment of Securities

Due to the inherent uncertainties involved with these types of judgments, actual results could differ significantly from our estimates and may have a material adverse impact on our results of operations, financial condition, equity, business, and insurer financial strength and corporate debt ratings. See the Critical Accounting Estimates section of our Management's Discussion and Analysis of Financial Condition and Results of Operations included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025 for further information.

CATASTROPHES AND RELATED REINSURANCE

Various events can cause catastrophe losses. These events can be natural or man-made, including hurricanes, tornadoes, windstorms, earthquakes, hail, severe winter weather, droughts, fires, floods, riots, strikes, civil unrest, cyber-attacks, pandemics and acts of terrorism that produce unusually large aggregate losses.

Catastrophes are an inherent risk of the property and casualty insurance business and have contributed to material period-to-period fluctuations in our results of operations and/or equity. We use various analyses and methods, including using one of the industry standard natural catastrophe models, to estimate hurricane and earthquake losses at various return periods and to inform underwriting and reinsurance decisions designed to manage our exposure to catastrophic events. We also generally seek to manage our exposure through the purchase of catastrophe reinsurance and utilize various reinsurance programs to mitigate catastrophe losses, including excess-of-loss treaties covering property and workers’ compensation, a property quota share treaty and the Terrorism Risk Insurance Program Reauthorization Act of 2019 (TRIPRA), as well as individual risk agreements that reinsure from losses from specific classes or lines of business. We regularly review our risk and catastrophe reinsurance coverages and from time to time make changes as we deem appropriate.

In the second quarter of 2026, we renewed our excess-of-loss property catastrophe reinsurance as described below.

Group North American Property Treaty

We purchased corporate catastrophe excess-of-loss treaty reinsurance covering our U.S. states and territories and Canadian property exposures underwritten in our North American and European companies. The treaty has a term of June 1, 2026 to June 1, 2027 and provides coverage for the accumulation of covered losses from catastrophe occurrences above our per occurrence retention of $300 million up to $1.5 billion for all losses. Losses stemming from terrorism events are covered unless they are due to a nuclear, biological, chemical or radiation event. All layers of the treaty provide for one full reinstatement.

CONSOLIDATED OPERATIONS

Results of 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)

Three Month Comparison

Core income decreased $11 million for the three months ended June 30, 2026 as compared with the same period in 2025. Core income for our Property & Casualty Operations decreased $22 million primarily driven by lower underlying underwriting results partially offset by higher net investment income. Core results for our Life & Group segment decreased $11 million, while core loss for our Corporate & Other segment improved $22 million.

Catastrophe losses were $60 million and $62 million for the three months ended June 30, 2026 and 2025 driven by severe weather related events. There were no catastrophe-related reinsurance reinstatement premiums for the three months ended June 30, 2026 or 2025. Unfavorable net prior year loss reserve development of $91 million and $108 million was recorded for the three months ended June 30, 2026 and 2025 related to our Specialty, Commercial and Corporate & Other segments. Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.

Core income decreased $67 million for the six months ended June 30, 2026 as compared with the same period in 2025. Core income for our Property & Casualty Operations decreased $85 million primarily driven by lower underlying underwriting results and unfavorable net prior year loss reserve development partially offset by higher net investment income. Core results for our Life & Group segment decreased $26 million, while core loss for our Corporate & Other segment improved $44 million.

Catastrophe losses were $148 million and catastrophe-related reinsurance reinstatement premiums were $9 million for the six months ended June 30, 2026 driven by severe weather related events. Catastrophe losses were $159 million for the six months ended June 30, 2025 driven by severe weather related events. There were no catastrophe-related reinsurance reinstatement premiums for the six months ended June 30, 2025. Unfavorable net prior year loss reserve development of $191 million was recorded for each of the six months ended June 30, 2026 and 2025 related to our Specialty, Commercial and Corporate & Other segments. Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.

SEGMENT RESULTS

The following discusses the results of operations for our business segments. Our property and casualty commercial insurance operations are managed and reported in three business segments: Specialty, Commercial and International, which we refer to collectively as Property & Casualty Operations. Our operations outside of Property & Casualty Operations are managed and reported in two segments: Life & Group and Corporate & Other.

Specialty

The following table details the results of operations for Specialty and provides the components to reconcile the combined ratio and loss ratio to the underlying combined ratio and underlying loss ratio.

(In millions, except ratios, rate, renewal premium change and retention)

Three Month Comparison

Net written premiums for Specialty increased $45 million for the three months ended June 30, 2026 as compared with the same period in 2025 driven by higher new business and rate. The increase in net earned premiums was consistent with the trend in net written premiums.

Core income decreased $20 million for the three months ended June 30, 2026 as compared with the same period in 2025 primarily due to lower underlying underwriting results.

The combined ratio of 96.5% increased 2.9 points for the three months ended June 30, 2026 as compared with the same period in 2025 primarily due to a 2.7 point increase in the loss ratio. The increase in the loss ratio reflected a higher underlying loss ratio across various lines. The expense ratio was generally consistent with the same period in 2025. There were no catastrophe losses for the three months ended June 30, 2026 or 2025.

Favorable net prior year loss reserve development of $1 million was recorded for the three months ended June 30, 2026 compared with no net prior year loss reserve development recorded for the three months ended June 30, 2025. Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included in Part I, Item 1.

Net written premiums for Specialty increased $37 million for the six months ended June 30, 2026 as compared with the same period in 2025 driven by higher new business and rate partially offset by lower retention. The increase in net earned premiums was consistent with the trend in net written premiums.

Core income decreased $71 million for the six months ended June 30, 2026 as compared with the same period in 2025 primarily due to lower underlying underwriting results and higher unfavorable net prior year loss reserve development.

The combined ratio of 99.5% increased 5.2 points for the six months ended June 30, 2026 as compared with the same period in 2025 primarily due to a 5.0 point increase in the loss ratio. The increase in the loss ratio reflected both a higher underlying loss ratio across various lines and higher unfavorable net prior year loss reserve development. The expense ratio was generally consistent with the same period in 2025. There were no catastrophe losses for the six months ended June 30, 2026 or 2025.

Unfavorable net prior year loss reserve development of $44 million and $10 million was recorded for the six months ended June 30, 2026 and 2025. Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.

The following table summarizes the gross and net carried reserves for Specialty.

(In millions)

54

Commercial

The following table details the results of operations for Commercial and provides the components to reconcile the combined ratio and loss ratio to the underlying combined ratio and underlying loss ratio.

(In millions, except ratios, rate, renewal premium change and retention)

Three Month Comparison

Net written premiums for Commercial increased $80 million for the three months ended June 30, 2026 as compared with the same period in 2025 driven by favorable renewal premium change and higher new business. The increase in net earned premiums was consistent with the trend in net written premiums.

Core income increased $14 million for the three months ended June 30, 2026 as compared with the same period in 2025 driven by higher net investment income partially offset by lower underlying underwriting results.

The combined ratio of 96.5% increased 1.7 points for the three months ended June 30, 2026 as compared with the same period in 2025 primarily due to a 2.4 point increase in the loss ratio partially offset by a 0.6 point improvement in the expense ratio. The increase in the loss ratio was primarily driven by a higher underlying loss ratio in excess casualty and workers' compensation. The improvement in the expense ratio was primarily driven by a lower acquisition ratio. Catastrophe losses were $53 million, or 3.7 points of the loss ratio, for the three months ended June 30, 2026, as compared with $57 million, or 4.2 points of the loss ratio, for the three months ended June 30, 2025.

Favorable net prior year loss reserve development of $5 million and $4 million was recorded for the three months ended June 30, 2026 and 2025. Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.

Net written premiums for Commercial increased $62 million for the six months ended June 30, 2026 as compared with the same period in 2025 driven by rate and higher new business. The increase in net earned premiums was consistent with the trend in net written premiums.

Core income increased $2 million for the six months ended June 30, 2026 as compared with the same period in 2025 as higher net investment income was largely offset by lower underlying underwriting results.

The combined ratio of 99.9% increased 2.0 points for the six months ended June 30, 2026 as compared with the same period in 2025 due to a 2.8 point increase in the loss ratio partially offset by a 0.8 point improvement in the expense ratio. The increase in the loss ratio was primarily driven by a higher underlying loss ratio in excess casualty and workers' compensation. The improvement in the expense ratio was primarily driven by a lower acquisition ratio. Catastrophe losses were $137 million for the six months ended June 30, 2026 as compared with $143 million for the six months ended June 30, 2025. The current year also includes $9 million of catastrophe-related reinsurance reinstatement premiums. The effect of catastrophe impacts on the loss ratio was 5.1 points for the six months ended June 30, 2026 as compared with 5.2 points for the six months ended June 30, 2025.

Unfavorable net prior year loss reserve development of $50 million and $47 million was recorded for the six months ended June 30, 2026 and 2025. Further information on net prior year loss reserve development is in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.

The following table summarizes the gross and net carried reserves for Commercial.

(In millions)

56

International

The following table details the results of operations for International and provides the components to reconcile the combined ratio and loss ratio to the underlying combined ratio and underlying loss ratio.

(In millions, except ratios, rate, renewal premium change and retention)

Three Month Comparison

Net written premiums for International decreased $6 million for the three months ended June 30, 2026 as compared with the same period in 2025. Excluding the effect of foreign currency exchange rates, net written premiums decreased $11 million as compared with the same period in 2025 driven by lower rate and timing of reinsurance costs, partially offset by higher retention. The increase in net earned premiums was consistent with the trend in net written premiums in recent quarters.

Core income decreased $16 million for the three months ended June 30, 2026 as compared with the same period in 2025, driven by lower underlying underwriting results partially offset by higher net investment income. Additionally, the prior year period benefited from a favorable impact from changes in foreign currency exchange rates.

The combined ratio of 96.9% increased 4.1 points for the three months ended June 30, 2026 as compared with the same period in 2025 due to a 2.1 point increase in the loss ratio and a 2.0 point increase in the expense ratio. The increase in the loss ratio was due to an increase in the underlying loss ratio across most lines and higher catastrophe losses. Catastrophe losses were $7 million, or 2.2 points of the loss ratio, for the three months ended June 30, 2026, as compared with $5 million, or 1.4 points of the loss ratio, for the three months ended June 30, 2025. The increase in the expense ratio was primarily driven by continued investments in talent and technology and higher acquisition costs, partially offset by higher net earned premiums.

There was no net prior year loss reserve development recorded for the three months ended June 30, 2026 or 2025.

Net written premiums for International increased $36 million for the six months ended June 30, 2026 as compared with the same period in 2025. Excluding the effect of foreign currency exchange rates, net written premiums increased $8 million as compared with the same period in 2025 driven by higher retention partially offset by lower rate. The increase in net earned premiums was consistent with the trend in net written premiums.

Core income decreased $16 million for the six months ended June 30, 2026 as compared with the same period in 2025, driven by lower underlying underwriting results partially offset by higher net investment income. Additionally, the prior year period benefited from a favorable impact from changes in foreign currency exchange rates.

The combined ratio of 96.4% increased 2.4 points for the six months ended June 30, 2026 as compared with the same period in 2025 due to a 1.9 point increase in the expense ratio and a 0.5 point increase in the loss ratio. The increase in the expense ratio was primarily driven by continued investments in talent and technology and higher acquisition costs, partially offset by higher net earned premiums. The increase in the loss ratio was due to an increase in the underlying loss ratio across most lines partially offset by lower catastrophe losses. Catastrophe losses were $11 million, or 1.7 points of the loss ratio, for the six months ended June 30, 2026, as compared with $16 million, or 2.5 points of the loss ratio, for the six months ended June 30, 2025.

There was no net prior year loss reserve development recorded for the six months ended June 30, 2026 or 2025.

The following table summarizes the gross and net carried reserves for International.

(In millions)

58

Life & Group

The following table summarizes the results of operations for Life & Group.

(In millions)

Three Month Comparison

Core results decreased $11 million for the three months ended June 30, 2026 as compared with the same period in 2025, primarily driven by lower net investment income.

Results for the six months ended June 30, 2026 were generally consistent with the three month summary above.

Corporate & Other

The following table summarizes the results of operations for the Corporate & Other segment, including intersegment eliminations.

(In millions)

Three Month Comparison

Core loss improved $22 million for the three months ended June 30, 2026 as compared with the same period in 2025. The current quarter includes a $77 million after-tax charge related to unfavorable net prior year loss reserve development largely associated with legacy mass tort abuse reserves as compared with an $88 million after-tax charge in the prior year period. The current quarter also includes an increase of $13 million after-tax associated with the amortization of the deferred gain related to the asbestos and environmental pollution (A&EP) Loss Portfolio Transfer (LPT) as compared to the prior year period.

Six Month Comparison

Core loss improved $44 million for the six months ended June 30, 2026 as compared with the same period in 2025. The current period includes a $77 million after-tax charge related to unfavorable net prior year loss reserve development largely associated with legacy mass tort abuse reserves as compared with a $106 million after-tax charge in the prior year period. The current period also includes an increase of $17 million after-tax associated with the amortization of the deferred gain related to the A&EP LPT as compared to the prior year period.

Further information on the net prior year loss reserve development and the A&EP LPT is in Note E to the Condensed Consolidated Financial Statements included under Part I, Item 1.

The following table summarizes the gross and net carried reserves for Corporate & Other.

(In millions)

60

INVESTMENTS

Net Investment Income

The significant components of Net investment income are presented in the following table. Fixed income securities, as presented, include both fixed maturity securities and non-redeemable preferred stock.

(In millions)

Net investment income increased $39 million and $45 million for the three and six months ended June 30, 2026 as compared with the same periods in 2025 driven by higher limited partnership and common stock returns, as well as higher income from fixed income securities as a result of a larger invested asset base and favorable reinvestment rates.

Net Investment (Losses) Gains

The components of Net investment (losses) gains are presented in the following table.

(In millions)

Pretax net investment losses decreased $41 million and $32 million for the three and six months ended June 30, 2026 as compared with the same periods in 2025 driven by lower net losses on disposals of fixed maturity securities and lower impairment losses.

Further information on our investment gains and losses is set forth in Note C to the Condensed Consolidated Financial Statements included under Part I, Item 1.

Portfolio Quality

The following table presents the estimated fair value and net unrealized gains (losses) of our fixed maturity securities by rating distribution.

(In millions)

As of June 30, 2026 and December 31, 2025, 1% of our fixed maturity portfolio was rated internally. Additionally, as of June 30, 2026 and December 31, 2025, we assigned a AAA rating to $714 million and $661 million of municipal bonds that were either pre-refunded or backed by mortgage loans guaranteed by a U.S. government agency or sponsored enterprise.

The following table presents available-for-sale fixed maturity securities in a gross unrealized loss position by ratings distribution.

(In millions)

The following table presents the maturity profile for these available-for-sale fixed maturity securities. Securities not due to mature on a single date are allocated based on weighted average life.

(In millions)

62

Duration

A primary objective in the management of the investment portfolio is to optimize return relative to the corresponding liabilities and respective liquidity needs. Our views on the current interest rate environment, tax regulations, asset class valuations, specific security issuer and broader industry segment conditions as well as domestic and global economic conditions, are some of the factors that enter into an investment decision. We also continually monitor exposure to issuers of securities held and broader industry sector exposures and may from time to time adjust such exposures based on our views of a specific issuer or industry sector.

A further consideration in the management of the investment portfolio is the characteristics of the corresponding liabilities and the ability to align the duration of the portfolio to those liabilities and to meet future liquidity needs, minimize interest rate risk and maintain a level of income sufficient to support the underlying insurance liabilities. For portfolios where future liability cash flows are determinable and typically long term in nature, we segregate investments for asset/liability management purposes. The segregated investments support the long-term care and structured settlement liabilities in the Life & Group segment.

The effective durations of fixed income securities and short-term investments are presented in the following table. Amounts presented are net of payable and receivable amounts for securities purchased and sold, but not yet settled.

(In millions)

The effective duration of investments supporting Life & Group liabilities at June 30, 2026 lengthened as compared with December 31, 2025, reflecting repositioning to capitalize on higher rates and reduce reinvestment risk.

The investment portfolio is periodically analyzed for changes in duration and related price risk. Certain securities have duration characteristics that are variable based on market interest rates, credit spreads and other factors that may drive variability in the amount and timing of cash flows. Additionally, we periodically review the sensitivity of the portfolio to the level of foreign exchange rates and other factors that contribute to market price changes. A summary of these risks and specific analysis on changes is included in the Quantitative and Qualitative Disclosures About Market Risk included under Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2025.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

Our primary operating cash flow sources are premiums and investment income. Our primary operating cash flow uses are payments for claims, policy benefits and operating expenses, including interest expense on corporate debt. Additionally, cash may be paid or received for income taxes.

For the six months ended June 30, 2026, net cash provided by operating activities was $1,042 million as compared with $1,200 million for the same period in 2025. The decrease in cash provided by operating activities was driven by an increase in net claim payments partially offset by an increase in premiums collected.

Cash flows from investing activities include the purchase and disposition of financial instruments, excluding those held as trading, and may include the purchase and sale of businesses, equipment and other assets not generally held for resale.

For the six months ended June 30, 2026, net cash used by investing activities was $255 million as compared with $471 million for the same period in 2025. Net cash used or provided by investing activities is primarily driven by cash available from operations and by other factors, such as financing activities.

Cash flows from financing activities may include proceeds from the issuance of debt and equity securities, and outflows for stockholder dividends, repayment of debt and purchases of our common stock.

For the six months ended June 30, 2026, net cash used by financing activities was $867 million as compared with $847 million for the same period in 2025. Financing activities for the periods presented include:

• During the six months ended June 30, 2026, we paid dividends of $812 million and repurchased 755,000 shares of our common stock at an aggregate cost of $36 million.
• During the six months ended June 30, 2025, we paid dividends of $798 million and repurchased 700,000 shares of our common stock at an aggregate cost of $34 million.

Common Stock Dividends

Cash dividends of $2.96 per share on our common stock, including a special cash dividend of $2.00 per share, were declared and paid during the six months ended June 30, 2026. On July 31, 2026, our Board of Directors declared a quarterly cash dividend of $0.48 per share, payable September 3, 2026 to stockholders of record on August 17, 2026. The declaration and payment of future dividends to holders of our common stock will be at the discretion of our Board of Directors and will depend on many factors, including our earnings, financial condition, business needs and regulatory constraints.

Liquidity

We believe that our present cash flows from operating, investing and financing activities are sufficient to fund our current and expected working capital and debt obligation needs and we do not expect this to change in the near term. There are currently no amounts outstanding under our $250 million senior unsecured revolving credit facility and no borrowings outstanding through our membership in the Federal Home Loan Bank of Chicago (FHLBC).

Dividends from Continental Casualty Company (CCC) are subject to the insurance holding company laws of the State of Illinois, the domiciliary state of CCC. Under these laws, ordinary dividends, or dividends that do not require prior approval by the Illinois Department of Insurance, are determined based on the greater of the prior year's statutory net income or 10% of statutory surplus as of the end of the prior year, as well as timing and amount of dividends paid in the preceding twelve months. Additionally, ordinary dividends may only be paid from earned surplus, which is calculated by removing unrealized gains from unassigned surplus. As of June 30, 2026, CCC was in a positive earned surplus position. CCC paid dividends of $725 million and $610 million to CNAF during the six months ended June 30, 2026 and 2025. The actual level of dividends paid in any year is determined after an assessment of available dividend capacity, holding company liquidity and cash needs as well as the impact the dividends will have on the statutory surplus of the applicable insurance company.

We have an effective shelf registration statement on file with the Securities and Exchange Commission under which we may publicly issue an unspecified amount of debt, equity or hybrid securities from time to time.

ACCOUNTING STANDARDS UPDATE

For a discussion of Accounting Standards, see Note A to the Condensed Consolidated Financial Statements included under Part I, Item 1.

FORWARD-LOOKING STATEMENTS

This report contains a number of forward-looking statements which relate to anticipated future events rather than actual present conditions or historical events. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and generally include words such as “believes,” “expects,” “intends,” “anticipates,” “estimates” and similar expressions. Forward-looking statements in this report include any and all statements regarding expected developments in our insurance business, including losses and loss reserves (note that loss reserves for long-term care, A&EP and other mass tort claims are more uncertain, and therefore more difficult to estimate than loss reserves respecting traditional property and casualty exposures); the impact of routine ongoing insurance reserve reviews we conduct; our expectations concerning our revenues, earnings, expenses and investment activities; volatility in investment returns; and our proposed actions in response to trends in our business. Forward-looking statements, by their nature, are subject to a variety of inherent risks and uncertainties that could cause actual results to differ materially from the results projected in the forward-looking statements. We cannot control many of these risks and uncertainties. These risks and uncertainties include, but are not limited to, the following as well as those risks contained in the Risk Factors section of our 2025 Annual Report on Form 10-K:

Company-Specific Factors

• the risks and uncertainties associated with our insurance reserves, as outlined in the Critical Accounting Estimates sections of our 2025 Annual Report on Form 10-K and this report, and the Reserves - Estimates and Uncertainties section of our 2025 Annual Report on Form 10-K, including the sufficiency of the reserves and the possibility of future increases, which would be reflected in the results of operations in the period that the need for such adjustment is determined;
• the risk that the other parties to the transactions in which, subject to certain limitations, we ceded our legacy A&EP and excess workers' compensation (EWC) liabilities, respectively, will not fully perform their respective obligations to CNA, the uncertainty in estimating loss reserves for A&EP and EWC liabilities and the possible continued exposure of CNA to liabilities for A&EP and EWC claims that are not covered under the terms of the respective transactions; and
• the performance of reinsurance companies under reinsurance contracts with us.

Industry and General Market Factors

• general economic and business conditions, including potential recessionary conditions that may decrease the size and number of our insurance customers and create losses in our lines of business, and inflationary pressures on medical care costs, construction costs and other economic sectors;
• the effect of new tariffs and changes in tariffs, as well as significant uncertainty surrounding U.S. tariff policy generally, and any retaliatory tariffs, may adversely impact the economic environment, inflation expectations and certain loss costs, and may result in decreases in the size and number of our insurance customers;
• geopolitical tensions, including the effects of the conflict in the Middle East, that may adversely impact our operations;
• the effects of social inflation, including frequency of nuclear verdicts and increased litigation activity, on the severity of claims;
• the effects on the frequency of claims of reviver statutes that extend, or eliminate, the statute of limitations for the reporting of claims, including statutes passed in certain states with respect to sexual abuse;
• the impact of competitive products, policies and pricing and the competitive environment in which we operate, including changes in our book of business;
• product and policy availability and demand and market responses, including the level of ability to obtain rate increases;
• conditions in the capital and credit markets, including uncertainty and instability in these markets, as well as the overall economy, and their impact on the returns, types, liquidity and valuation of our investments;
• conditions in the capital and credit markets that may limit our ability to raise significant amounts of capital on favorable terms or at all; and
• the possibility of changes in our ratings by ratings agencies, including the inability to access certain markets or distribution channels and the required collateralization of future payment obligations as a result of such changes, and changes in rating agency policies and practices.

Regulatory, Legal and Operational Factors

• regulatory and legal initiatives and compliance with governmental regulations and other legal requirements, which are increasing in complexity and number, change frequently, sometimes conflict, and could expose us to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions, including regulations related to cybersecurity protocols (which continue to evolve in breadth, sophistication and maturity in response to an ever-evolving threat landscape) or utilization of artificial intelligence (AI), legal inquiries by state authorities, judicial interpretations within the regulatory framework, including interpretation of policy provisions, decisions regarding coverage and theories of liability, legislative actions that increase claimant activity, including those revising applicability of statutes of limitations, trends in litigation and the outcome of any litigation involving us and rulings and changes in tax laws and regulations;
• regulatory limitations, impositions and restrictions upon us, including with respect to our ability to increase premium rates, and the effects of assessments and other surcharges for guaranty funds and second-injury funds, other mandatory pooling arrangements and future assessments levied on insurance companies;
• regulatory limitations and restrictions, including limitations upon our ability to receive dividends from our insurance subsidiaries, imposed by regulatory authorities, including regulatory capital adequacy standards;
• additional complexities and greater risk to the effectiveness of controls with the incorporation of AI into our and our third-party service providers' operations, including the possibility of inaccurate or biased outputs, degradation in model performance, unauthorized use or disclosure of data used to train AI models, and the potential for AI to be misused to perpetrate fraud or evade monitoring controls; and
• breaches of our or our vendors' data security infrastructure resulting in unauthorized access to systems and information, and/or interruption of operations.

Impact of Natural and Man-Made Disasters and Mass Tort Claims

• weather and other natural physical events, including the severity and frequency of storms, hail, snowfall and other winter conditions, natural disasters such as hurricanes, tornados and earthquakes, as well as climate change, including effects on global weather patterns, greenhouse gases, sea, land and air temperatures, sea levels, wildfires, rain, hail and snow;
• regulatory requirements imposed by coastal state regulators in the wake of hurricanes or other natural disasters, including limitations on the ability to exit markets or to non-renew, cancel or change terms and conditions in policies, as well as mandatory assessments to fund any shortfalls arising from the inability of quasi-governmental insurers to pay claims;
• man-made disasters, including the possible occurrence of terrorist attacks, the unpredictability of the nature, targets, severity or frequency of such events, and the effect of the absence or insufficiency of applicable terrorism legislation on coverages;
• the occurrence of epidemics and pandemics; and
• mass tort claims, including those related to exposure to potentially harmful products or substances such as glyphosate, lead paint, per- and polyfluoroalkyl substances (PFAS) and opioids, sexual abuse and molestation claims and claims arising from changes in statutes of limitation and other changes that repeal or weaken tort reforms.

Our forward-looking statements speak only as of the date of the filing of this Quarterly Report on Form 10-Q and we do not undertake any obligation to update or revise any forward-looking statement to reflect events or circumstances after the date of the statement, even if our expectations or any related events or circumstances change.

There were no material changes in our market risk components for the three months ended June 30, 2026. See the Quantitative and Qualitative Disclosures About Market Risk included in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2025 for further information. Additional information related to portfolio duration is discussed in the Investments section of our Management's Discussion and Analysis of Financial Condition and Results of Operations included in Part I, Item 2.

The Company maintains a system of disclosure controls and procedures which are designed to ensure that information required to be disclosed by the Company in reports that it files or submits to the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including this report, is recorded, processed, summarized and reported on a timely basis. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed under the Exchange Act is accumulated and communicated to the Company's management on a timely basis to allow decisions regarding required disclosure.

As of June 30, 2026, the Company's management, including the Company's Chief Executive Officer (CEO) and Chief Financial Officer (CFO), conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on this evaluation, the CEO and CFO have concluded that the Company's disclosure controls and procedures are effective as of June 30, 2026.

There has been no change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2026 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.