Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 27, 2022 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-5823 | |
Entity Registrant Name | CNA FINANCIAL CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-6169860 | |
Entity Address, Address Line One | 151 N. Franklin | |
Entity Address, Postal Zip Code | 60606 | |
Entity Address, City or Town | Chicago, | |
Entity Address, State or Province | IL | |
City Area Code | 312 | |
Local Phone Number | 822-5000 | |
Title of 12(b) Security | Common Stock, Par value $2.50 | |
Trading Symbol | "CNA" | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 270,893,378 | |
Entity Central Index Key | 0000021175 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
New York Stock Exchange | ||
Entity Information [Line Items] | ||
Security Exchange Name | NYSE | |
Chicago Stock Exchange | ||
Entity Information [Line Items] | ||
Security Exchange Name | CHX |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues | ||||
Net earned premiums | $ 2,221 | $ 2,059 | $ 6,435 | $ 6,056 |
Net investment income | 422 | 513 | 1,302 | 1,608 |
Net investment (losses) gains | (96) | 22 | (166) | 117 |
Non-insurance warranty revenue | 399 | 357 | 1,173 | 1,054 |
Other revenues | 11 | 8 | 24 | 19 |
Total revenues | 2,957 | 2,959 | 8,768 | 8,854 |
Claims, Benefits and Expenses | ||||
Insurance claims and policyholders’ benefits | 1,665 | 1,632 | 4,703 | 4,684 |
Amortization of deferred acquisition costs | 383 | 368 | 1,101 | 1,084 |
Non-insurance warranty expense | 371 | 330 | 1,092 | 973 |
Other operating expenses | 346 | 287 | 1,001 | 874 |
Interest | 28 | 28 | 84 | 85 |
Total claims, benefits and expenses | 2,793 | 2,645 | 7,981 | 7,700 |
Income before income tax | 164 | 314 | 787 | 1,154 |
Income tax expense | (36) | (58) | (141) | (218) |
Net income | $ 128 | $ 256 | $ 646 | $ 936 |
Basic earnings per share (in usd per share) | $ 0.47 | $ 0.94 | $ 2.38 | $ 3.44 |
Diluted earnings per share (in usd per share) | $ 0.47 | $ 0.94 | $ 2.37 | $ 3.43 |
Weighted Average Outstanding Common Stock and Common Stock Equivalents | ||||
Weighted average shares outstanding (in shares) | 271.4 | 271.7 | 271.7 | 271.8 |
Diluted (in shares) | 272.3 | 272.7 | 272.6 | 272.8 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net income | $ 128 | $ 256 | $ 646 | $ 936 |
Other Comprehensive Loss, net of tax | ||||
Net unrealized gains and losses on investments | (1,329) | (138) | (4,292) | (465) |
Foreign currency translation adjustment | (103) | (33) | (185) | (19) |
Pension and postretirement benefits | 6 | 8 | 18 | 27 |
Other comprehensive loss, net of tax | (1,426) | (163) | (4,459) | (457) |
Total comprehensive (loss) income | (1,298) | 93 | (3,813) | 479 |
Investments | ||||
Other Comprehensive Loss, net of tax | ||||
Net unrealized gains and losses on investments | (2) | 0 | (8) | 0 |
Net unrealized gains and losses on other investments | ||||
Other Comprehensive Loss, net of tax | ||||
Net unrealized gains and losses on investments | $ (1,327) | $ (138) | $ (4,284) | $ (465) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Investments: | ||
Fixed maturity securities at fair value (amortized cost of $41,330 and $39,952, less allowance for credit loss of $3 and $18) | $ 37,251 | $ 44,380 |
Equity securities at fair value (cost of $989 and $964) | 891 | 1,035 |
Limited partnership investments | 1,895 | 1,859 |
Other invested assets | 73 | 91 |
Mortgage loans (less allowance for uncollectible receivables of $24 and $16) | 953 | 973 |
Short term investments | 1,074 | 1,990 |
Total investments | 42,137 | 50,328 |
Cash | 503 | 536 |
Reinsurance receivables (less allowance for uncollectible receivables of $21 and $21) | 5,700 | 5,463 |
Insurance receivables (less allowance for uncollectible receivables of $28 and $29) | 2,986 | 2,945 |
Accrued investment income | 411 | 377 |
Deferred acquisition costs | 787 | 737 |
Deferred income taxes | 1,298 | 142 |
Property and equipment at cost (less accumulated depreciation of $272 and $255) | 229 | 226 |
Goodwill | 142 | 148 |
Deferred non-insurance warranty acquisition expense | 3,653 | 3,476 |
Other assets (includes $25 and $— due from Loews Corporation) | 2,369 | 2,261 |
Total assets | 60,215 | 66,639 |
Insurance reserves: | ||
Claim and claim adjustment expenses | 24,700 | 24,174 |
Unearned premiums | 6,195 | 5,761 |
Future policy benefits | 10,454 | 13,236 |
Long term debt | 2,780 | 2,779 |
Deferred non-insurance warranty revenue | 4,706 | 4,503 |
Other liabilities (includes $19 and $56 due to Loews Corporation) | 3,286 | 3,377 |
Total liabilities | 52,121 | 53,830 |
Commitments and contingencies (Notes C and F) | ||
Stockholders' Equity | ||
Common stock ($2.50 par value; 500,000,000 shares authorized; 273,040,243 shares issued; 270,887,022 and 271,363,999 shares outstanding) | 683 | 683 |
Additional paid-in capital | 2,211 | 2,215 |
Retained earnings | 9,433 | 9,663 |
Accumulated other comprehensive (loss) income | (4,139) | 320 |
Treasury stock (2,153,221 and 1,676,244 shares), at cost | (94) | (72) |
Total stockholders’ equity | 8,094 | 12,809 |
Total liabilities and stockholders' equity | $ 60,215 | $ 66,639 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets - (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Fixed maturities securities at amortized cost | $ 41,330 | $ 39,952 |
Marketable securities fixed maturities allowance for credit loss | 3 | 18 |
Equity securities at cost | 989 | 964 |
Mortgage loans on real estate commercial and consumer allowance for credit loss | 24 | 16 |
Allowance for uncollectible reinsurance | 21 | 21 |
Allowance for uncollectible insurance receivables | 28 | 29 |
Accumulated depreciation on property and equipment | 272 | 255 |
Due from related parties | 25 | 0 |
Due to related parties | $ 19 | $ 56 |
Common stock, par value (in usd per share) | $ 2.50 | $ 2.50 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 273,040,243 | 273,040,243 |
Common stock, shares outstanding (in shares) | 270,887,022 | 271,363,999 |
Treasury stock, shares (in shares) | 2,153,221 | 1,676,244 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash Flows from Operating Activities | ||
Net income | $ 646 | $ 936 |
Adjustments to reconcile net income to net cash flows provided by operating activities: | ||
Deferred income tax (benefit) expense | (18) | 46 |
Trading portfolio activity | (5) | 13 |
Net investment losses (gains) | 166 | (117) |
Equity method investees | 235 | (106) |
Net amortization of investments | (89) | (58) |
Depreciation and amortization | 38 | 41 |
Changes in: | ||
Receivables, net | (390) | (1,076) |
Accrued investment income | (37) | (17) |
Deferred acquisition costs | (66) | (15) |
Insurance reserves | 1,743 | 1,891 |
Other, net | (233) | (184) |
Net cash flows provided by operating activities | 1,990 | 1,354 |
Dispositions: | ||
Fixed maturity securities - sales | 4,885 | 2,510 |
Fixed maturity securities - maturities, calls and redemptions | 2,095 | 3,360 |
Equity securities | 230 | 237 |
Limited partnerships | 124 | 178 |
Mortgage loans | 101 | 90 |
Purchases: | ||
Fixed maturity securities | (8,768) | (7,127) |
Equity securities | (245) | (242) |
Limited partnerships | (265) | (281) |
Mortgage loans | (90) | (63) |
Change in other investments | 9 | 3 |
Change in short term investments | 903 | 755 |
Purchases of property and equipment | (41) | (16) |
Other, net | (10) | (1) |
Net cash flows used by investing activities | (1,072) | (597) |
Cash Flows from Financing Activities | ||
Dividends paid to common stockholders | (874) | (518) |
Purchase of treasury stock | (39) | (18) |
Other, net | (11) | (9) |
Net cash flows used by financing activities | (924) | (545) |
Effect of foreign exchange rate changes on cash | (27) | (6) |
Net change in cash | (33) | 206 |
Cash, beginning of year | 536 | 419 |
Cash, end of period | $ 503 | $ 625 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Treasury Stock |
Total stockholder's equity at beginning of period at Dec. 31, 2020 | $ 683 | $ 2,211 | $ 9,081 | $ 803 | $ (71) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | (3) | 16 | ||||
Dividends to common stockholders ($0.40, $0.38, $3.20, $1.89 per share) | (517) | |||||
Net income | $ 936 | 936 | ||||
Other comprehensive loss | (457) | (457) | ||||
Purchase of treasury stock | (18) | (18) | ||||
Total stockholder's equity at end of period at Sep. 30, 2021 | 12,664 | 683 | 2,208 | 9,500 | 346 | (73) |
Total stockholder's equity at beginning of period at Jun. 30, 2021 | 683 | 2,201 | 9,348 | 509 | (73) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 7 | 0 | ||||
Dividends to common stockholders ($0.40, $0.38, $3.20, $1.89 per share) | (104) | |||||
Net income | 256 | 256 | ||||
Other comprehensive loss | (163) | (163) | ||||
Purchase of treasury stock | 0 | |||||
Total stockholder's equity at end of period at Sep. 30, 2021 | 12,664 | 683 | 2,208 | 9,500 | 346 | (73) |
Total stockholder's equity at beginning of period at Dec. 31, 2021 | 12,809 | 683 | 2,215 | 9,663 | 320 | (72) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | (4) | 17 | ||||
Dividends to common stockholders ($0.40, $0.38, $3.20, $1.89 per share) | (876) | |||||
Net income | 646 | 646 | ||||
Other comprehensive loss | (4,459) | (4,459) | ||||
Purchase of treasury stock | (39) | (39) | ||||
Total stockholder's equity at end of period at Sep. 30, 2022 | 8,094 | 683 | 2,211 | 9,433 | (4,139) | (94) |
Total stockholder's equity at beginning of period at Jun. 30, 2022 | 683 | 2,203 | 9,415 | (2,713) | (76) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 8 | 0 | ||||
Dividends to common stockholders ($0.40, $0.38, $3.20, $1.89 per share) | (110) | |||||
Net income | 128 | 128 | ||||
Other comprehensive loss | (1,426) | (1,426) | ||||
Purchase of treasury stock | (18) | |||||
Total stockholder's equity at end of period at Sep. 30, 2022 | $ 8,094 | $ 683 | $ 2,211 | $ 9,433 | $ (4,139) | $ (94) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared per share (in usd per share) | $ 0.40 | $ 0.38 | $ 3.20 | $ 1.89 |
General
General | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
General | General Basis of Presentation The Condensed Consolidated Financial Statements include the accounts of CNA Financial Corporation (CNAF) and its subsidiaries. Collectively, CNAF and its subsidiaries are referred to as CNA or the Company. Loews Corporation (Loews) owned approximately 90% of the outstanding common stock of CNAF as of September 30, 2022. The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Intercompany amounts have been eliminated. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, including certain financial statement notes, is not required for interim reporting purposes and has been condensed or omitted. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in CNAF's Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2021, including the summary of significant accounting policies in Note A. The preparation of Condensed Consolidated Financial Statements in conformity with GAAP requires management 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 reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. The interim financial data as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 is unaudited. However, in the opinion of management, the interim data includes all adjustments, including normal recurring adjustments, necessary for a fair statement of the Company's results for the interim periods. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Accounting Standards Pending Adoption In August 2018, the FASB issued ASU 2018-12 Targeted Improvements to the Accounting for Long-Duration Contracts . The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts. For the Company, this includes the long term care and fully-ceded single premium immediate annuity business. Entities will be required to review, and update if there is a change, cash flow assumptions (including morbidity and persistency) at least annually, and to update discount rate assumptions quarterly using an upper-medium grade fixed-income instrument yield. The effect of changes in cash flow assumptions will be recorded in the Company's results of operations and the effect of changes in discount rate assumptions will be recorded in Other comprehensive income. The guidance is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted, and may be applied using either a modified retrospective transition method or a full retrospective transition method. Financial statements for prior periods presented shall be adjusted to reflect the effects of applying the new accounting guidance. The Company will adopt the new guidance effective January 1, 2023, using the modified retrospective method applied as of the transition date of January 1, 2021. The Company will use a published spot rate curve constructed from A+, A and A- rated U.S. dollar denominated corporate bonds matched to the duration of the corresponding insurance liabilities, to calculate discount rates. The Company will group its long-duration contracts into calendar year cohorts based on the contract issue date and product line. Long term care contracts will be grouped separately from the Company’s fully-ceded single premium immediate annuity contracts. The most significant impact at the transition date will be the effect of updating the discount rate assumption to reflect an upper-medium grade fixed-income instrument yield, which will be partially offset by the de-recognition of Shadow Adjustments associated with long-duration contracts. The Company expects the net impact of these changes will be a decrease of approximately $2.3 billion in Accumulated other comprehensive income (AOCI) as of the transition date of January 1, 2021. There is a minimal transition impact expected to retained earnings. The requirement to review, and update if there is a change, cash flow assumptions at least annually is expected to change the pattern of earnings being recognized. Adoption will also significantly expand the Company’s disclosures, and will impact systems, processes, and controls. While the requirements of the new guidance represent a material change from existing GAAP, the new guidance will not impact capital and surplus under statutory accounting practices, cash flows, or the underlying economics of the business. The Company continues to make progress in connection with these matters and is in process of refining key accounting policy decisions, technology solutions and updates to internal controls associated with adoption of the new guidance. These in-progress activities include modifications of actuarial valuation systems, data sourcing, analytical procedures and reporting processes. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Earnings (loss) per share is based on weighted average number of outstanding common shares. Basic earnings (loss) per share excludes the impact of dilutive securities and is computed by dividing Net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The following table presents the income and share data used in the basic and diluted earnings per share computations. Periods ended September 30 Three Months Nine Months (In millions, except per share data) 2022 2021 2022 2021 Net income (loss) $ 128 $ 256 $ 646 $ 936 Common Stock and Common Stock Equivalents Basic Weighted average shares outstanding 271.4 271.7 271.7 271.8 Diluted Weighted average shares outstanding 271.4 271.7 271.7 271.8 Dilutive effect of stock-based awards under compensation plans 0.9 1.0 0.9 1.0 Total 272.3 272.7 272.6 272.8 Earnings (loss) per share Basic $ 0.47 $ 0.94 $ 2.38 $ 3.44 Diluted $ 0.47 $ 0.94 $ 2.37 $ 3.43 Excluded from the calculation of diluted earnings (loss) per share is the impact of potential shares attributable to exercises or conversions into common stock under stock-based employee compensation plans that would have been antidilutive during the respective periods. The Company repurchased 890,000 and 377,615 shares of CNAF common stock at an aggregate cost of $39 million and $18 million during the nine months ended September 30, 2022 and 2021. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2022 | |
Investments [Abstract] | |
Investments | Investments The significant components of Net investment income are presented in the following table. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Fixed maturity securities $ 454 $ 425 $ 1,324 $ 1,278 Equity securities 2 4 (7) 53 Limited partnership investments (35) 85 (11) 274 Mortgage loans 13 13 40 42 Short term investments 4 1 6 1 Trading portfolio 1 1 2 8 Other 1 (1) 1 — Gross investment income 440 528 1,355 1,656 Investment expense (18) (15) (53) (48) Net investment income $ 422 $ 513 $ 1,302 $ 1,608 Net investment income (loss) recognized due to the change in fair value of common stock held as of September 30, 2022 and 2021 $ (18) $ (7) $ (38) $ 11 Net investment gains (losses) are presented in the following table. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Net investment gains (losses): Fixed maturity securities: Gross gains $ 23 $ 50 $ 94 $ 159 Gross losses (134) (28) (222) (68) Net investment gains (losses) on fixed maturity securities (111) 22 (128) 91 Equity securities (2) (2) (111) 17 Derivatives 24 2 79 7 Mortgage loans (8) — (8) — Short term investments and other 1 — 2 2 Net investment gains (losses) $ (96) $ 22 $ (166) $ 117 Net investment gains (losses) recognized due to the change in fair value of non-redeemable preferred stock held as of September 30, 2022 and 2021 $ (2) $ (2) $ (109) $ 15 Net investment gains (losses) for the three months ended September 30, 2022 in the table above include a $35 million net loss related to the expected novation of a coinsurance agreement on the Company’s legacy annuity business, which was transacted on a funds withheld basis and gave rise to an embedded derivative. The net loss of $35 million is comprised of a $59 million loss on the fixed maturity securities supporting the funds withheld liability to recognize unrealized losses which had been included in AOCI since the inception of the coinsurance agreement, partially offset by a $24 million gain on the associated embedded derivative. Taken together, this net loss is the final recognition of changes in the valuation of the funds held assets and offsets previously recognized net investment gains on the associated embedded derivative. The components of available-for-sale impairment losses (gains) recognized in earnings by asset type are presented in the following table. The table includes losses (gains) on securities with an intention to sell and changes in the allowance for credit losses on securities since acquisition date. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Fixed maturity securities available-for-sale: Corporate and other bonds $ 24 $ — $ 53 $ 5 Asset-backed 1 11 2 11 Impairment losses (gains) recognized in earnings $ 25 $ 11 $ 55 $ 16 The Company also recognized $8 million of losses on mortgage loans during the three and nine months ended September 30, 2022 primarily due to changes in expected credit losses. There were no losses recognized on mortgage loans during the three and nine months ended September 30, 2021. The following tables present a summary of fixed maturity securities. September 30, 2022 Cost or Gross Gross Allowance for Credit Losses Estimated (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 23,082 $ 231 $ 2,398 $ — $ 20,915 States, municipalities and political subdivisions 9,244 259 1,080 — 8,423 Asset-backed: Residential mortgage-backed 3,153 6 470 — 2,689 Commercial mortgage-backed 1,921 4 237 — 1,688 Other asset-backed 3,264 2 349 3 2,914 Total asset-backed 8,338 12 1,056 3 7,291 U.S. Treasury and obligations of government-sponsored enterprises 107 3 1 — 109 Foreign government 544 2 48 — 498 Redeemable preferred stock 3 — — — 3 Total fixed maturity securities available-for-sale 41,318 507 4,583 3 37,239 Total fixed maturity securities trading 12 — — — 12 Total fixed maturity securities $ 41,330 $ 507 $ 4,583 $ 3 $ 37,251 December 31, 2021 Cost or Gross Gross Allowance for Credit Losses Estimated (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 21,444 $ 2,755 $ 56 $ 11 $ 24,132 States, municipalities and political subdivisions 10,358 1,599 14 — 11,943 Asset-backed: Residential mortgage-backed 2,893 71 8 — 2,956 Commercial mortgage-backed 1,987 63 19 — 2,031 Other asset-backed 2,561 54 10 7 2,598 Total asset-backed 7,441 188 37 7 7,585 U.S. Treasury and obligations of government-sponsored enterprises 132 1 3 — 130 Foreign government 570 15 2 — 583 Redeemable preferred stock — — — — — Total fixed maturity securities available-for-sale 39,945 4,558 112 18 44,373 Total fixed maturity securities trading 7 — — — 7 Total fixed maturity securities $ 39,952 $ 4,558 $ 112 $ 18 $ 44,380 The net unrealized gains and losses on investments included in the tables above are recorded as a component of AOCI. When presented in AOCI, these amounts are net of tax and any required Shadow Adjustments. To the extent there are unrealized gains on fixed income securities supporting the reserves of certain products within the Life & Group segment that would result in a premium deficiency, or would impact the reserve balance if realized, a related increase in Insurance reserves is recorded as a reduction of net unrealized gains (losses), net of tax, through Other comprehensive income (loss) (Shadow Adjustments). As of September 30, 2022 and December 31, 2021, the net unrealized gains and losses on investments included in AOCI were correspondingly reduced by Shadow Adjustments of $46 million and $2,477 million. The following tables present the estimated fair value and gross unrealized losses of fixed maturity securities in a gross unrealized loss position for which an allowance for credit loss has not been recorded, by the length of time in which the securities have continuously been in that position. Less than 12 Months 12 Months or Longer Total September 30, 2022 Estimated Gross Estimated Gross Estimated Gross (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 16,707 $ 2,117 $ 914 $ 281 $ 17,621 $ 2,398 States, municipalities and political subdivisions 4,793 1,029 128 51 4,921 1,080 Asset-backed: Residential mortgage-backed 2,582 462 17 8 2,599 470 Commercial mortgage-backed 1,372 194 233 43 1,605 237 Other asset-backed 2,433 307 233 42 2,666 349 Total asset-backed 6,387 963 483 93 6,870 1,056 U.S. Treasury and obligations of government-sponsored enterprises 61 1 — — 61 1 Foreign government 446 42 25 6 471 48 Total $ 28,394 $ 4,152 $ 1,550 $ 431 $ 29,944 $ 4,583 Less than 12 Months 12 Months or Longer Total December 31, 2021 Estimated Gross Estimated Gross Estimated Gross (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 2,389 $ 48 $ 136 $ 8 $ 2,525 $ 56 States, municipalities and political subdivisions 730 14 — — 730 14 Asset-backed: Residential mortgage-backed 1,043 8 — — 1,043 8 Commercial mortgage-backed 527 7 167 12 694 19 Other asset-backed 840 10 62 — 902 10 Total asset-backed 2,410 25 229 12 2,639 37 U.S. Treasury and obligations of government-sponsored enterprises 69 3 5 — 74 3 Foreign government 97 2 — — 97 2 Total $ 5,695 $ 92 $ 370 $ 20 $ 6,065 $ 112 The following table presents the estimated fair value and gross unrealized losses of fixed maturity securities in a gross unrealized loss position for which an allowance for credit loss has not been recorded, by ratings distribution. September 30, 2022 December 31, 2021 (In millions) Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses U.S. Government, Government agencies and Government-sponsored enterprises $ 2,360 $ 360 $ 898 $ 8 AAA 1,566 318 368 6 AA 4,430 917 875 17 A 6,548 838 1,516 23 BBB 13,394 1,902 1,812 42 Non-investment grade 1,646 248 596 16 Total $ 29,944 $ 4,583 $ 6,065 $ 112 Based on current facts and circumstances, the Company believes the unrealized losses presented in the September 30, 2022 securities in a gross unrealized loss position tables above are not indicative of the ultimate collectibility of the current amortized cost of the securities, but rather are primarily attributable to changes in risk-free interest rates and a general market widening of credit spreads. In reaching this determination, the Company considered the recent volatility in risk-free rates and credit spreads as well as the fact that its unrealized losses are concentrated in investment grade issuers. Additionally, the Company has no current intent to sell securities with unrealized losses, nor is it more likely than not that it will be required to sell prior to recovery of amortized cost; accordingly, the Company has determined that there are no additional impairment losses to be recorded as of September 30, 2022. The following tables present the activity related to the allowance on available-for-sale securities with credit impairments and purchased credit-deteriorated (PCD) assets. Accrued interest receivable on available-for-sale fixed maturity securities totaled $401 million, $369 million and $387 million as of September 30, 2022, December 31, 2021 and September 30, 2021 and is excluded from the estimate of expected credit losses and the amortized cost basis in the tables included within this Note. (In millions) Corporate and other bonds Asset-backed Total Allowance for credit losses: Balance as of July 1, 2022 $ — $ 5 $ 5 Additions to the allowance for credit losses: Securities for which credit losses were not previously recorded — — — Available-for-sale securities accounted for as PCD assets — — — Reductions to the allowance for credit losses: Securities sold during the period (realized) — — — Write-offs charged against the allowance — — — Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period — (2) (2) Balance as of September 30, 2022 $ — $ 3 $ 3 (In millions) Corporate and other bonds Asset-backed Total Allowance for credit losses: Balance as of July 1, 2021 $ 24 $ 21 $ 45 Additions to the allowance for credit losses: Securities for which credit losses were not previously recorded — — — Available-for-sale securities accounted for as PCD assets 2 — 2 Reductions to the allowance for credit losses: Securities sold during the period (realized) — — — Write-offs charged against the allowance 16 — 16 Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period — — — Balance as of September 30, 2021 $ 10 $ 21 $ 31 (In millions) Corporate and other bonds Asset-backed Total Allowance for credit losses: Balance as of January 1, 2022 $ 11 $ 7 $ 18 Additions to the allowance for credit losses: Securities for which credit losses were not previously recorded — — — Available-for-sale securities accounted for as PCD assets — 3 3 Reductions to the allowance for credit losses: Securities sold during the period (realized) — — — Write-offs charged against the allowance 12 — 12 Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period 1 (7) (6) Balance as of September 30, 2022 $ — $ 3 $ 3 (In millions) Corporate and other bonds Asset-backed Total Allowance for credit losses: Balance as of January 1, 2021 $ 23 $ 17 $ 40 Additions to the allowance for credit losses: Securities for which credit losses were not previously recorded 14 — 14 Available-for-sale securities accounted for as PCD assets 4 4 8 Reductions to the allowance for credit losses: Securities sold during the period (realized) 6 — 6 Write-offs charged against the allowance 16 — 16 Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period (9) — (9) Balance as of September 30, 2021 $ 10 $ 21 $ 31 Contractual Maturity The following table presents available-for-sale fixed maturity securities by contractual maturity. September 30, 2022 December 31, 2021 (In millions) Cost or Estimated Cost or Estimated Due in one year or less $ 952 $ 948 $ 1,603 $ 1,624 Due after one year through five years 9,487 9,000 10,637 11,229 Due after five years through ten years 14,323 12,765 13,294 14,338 Due after ten years 16,556 14,526 14,411 17,182 Total $ 41,318 $ 37,239 $ 39,945 $ 44,373 Actual maturities may differ from contractual maturities because certain securities may be called or prepaid. Securities not due at a single date are allocated based on weighted average life. Derivative Financial Instruments The Company holds an embedded derivative on a funds withheld liability with a notional value of $220 million and $270 million and a fair value of $1 million and $(12) million as of September 30, 2022 and December 31, 2021. The embedded derivative on the funds withheld liability is accounted for separately and reported with the funds withheld liability in Other liabilities on the Condensed Consolidated Balance Sheets. Investment Commitments As part of its overall investment strategy, the Company invests in various assets which require future purchase, sale or funding commitments. These investments are recorded once funded, and the related commitments may include future capital calls from various third-party limited partnerships, signed and accepted mortgage loan applications, and obligations related to private placement securities. As of September 30, 2022, the Company had commitments to purchase or fund approximately $1,595 million and sell approximately $100 million under the terms of these investments. Mortgage Loans The following table presents the amortized cost basis of mortgage loans for each credit quality indicator by year of origination. The primary credit quality indicators utilized are debt service coverage ratios (DSCR) and loan-to-value ratios (LTV). September 30, 2022 Mortgage Loans Amortized Cost Basis by Origination Year (1) (In millions) 2022 2021 2020 2019 2018 Prior Total DSCR ≥1.6x LTV less than 55% $ 9 $ 13 $ 112 $ 29 $ 54 $ 275 $ 492 LTV 55% to 65% — — — — — — — LTV greater than 65% 18 11 — — — — 29 DSCR 1.2x - 1.6x LTV less than 55% 5 49 18 56 10 42 180 LTV 55% to 65% 87 — 20 — — 8 115 LTV greater than 65% — — — — — — — DSCR ≤1.2 LTV less than 55% — — — 57 — — 57 LTV 55% to 65% — 21 — 44 — — 65 LTV greater than 65% 10 — — 22 — 7 39 Total $ 129 $ 94 $ 150 $ 208 $ 64 $ 332 $ 977 (1) The values in the table above reflect DSCR on a standardized amortization period and LTV based on the most recent appraised values trended forward using changes in a commercial real estate price index. As of September 30, 2022, accrued interest receivable on mortgage loans totaled $3 million and is excluded from the amortized cost basis disclosed in the table above and the estimate of expected credit losses. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable. Level 1 - Quoted prices for identical instruments in active markets. Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are not observable. Prices may fall within Level 1, 2 or 3 depending upon the methodology and inputs used to estimate fair value for each specific security. In general, the Company seeks to price securities using third-party pricing services. Securities not priced by pricing services are submitted to independent brokers for valuation and, if those are not available, internally developed pricing models are used to value assets using a methodology and inputs the Company believes market participants would use to value the assets. Prices obtained from third-party pricing services or brokers are not adjusted by the Company. The Company performs control procedures over information obtained from pricing services and brokers to ensure prices received represent a reasonable estimate of fair value and to confirm representations regarding whether inputs are observable or unobservable. Procedures may include i) the review of pricing service methodologies or broker pricing qualifications, ii) back-testing, where past fair value estimates are compared to actual transactions executed in the market on similar dates, iii) exception reporting, where period-over-period changes in price are reviewed and challenged with the pricing service or broker based on exception criteria, and iv) deep dives, where the Company performs an independent analysis of the inputs and assumptions used to price individual securities. Assets and Liabilities Measured at Fair Value Assets and liabilities measured at fair value on a recurring basis are presented in the following tables. Corporate bonds and other includes obligations of the U.S. Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock. September 30, 2022 Total (In millions) Level 1 Level 2 Level 3 Assets Fixed maturity securities: Corporate bonds and other $ 118 $ 20,617 $ 802 $ 21,537 States, municipalities and political subdivisions — 8,381 42 8,423 Asset-backed — 6,575 716 7,291 Total fixed maturity securities 118 35,573 1,560 37,251 Equity securities: Common stock 180 — 30 210 Non-redeemable preferred stock 56 625 — 681 Total equity securities 236 625 30 891 Short term and other 895 34 — 929 Total assets $ 1,249 $ 36,232 $ 1,590 $ 39,071 Liabilities Other liabilities $ — $ (1) $ — $ (1) Total liabilities $ — $ (1) $ — $ (1) December 31, 2021 Total (In millions) Level 1 Level 2 Level 3 Assets Fixed maturity securities: Corporate bonds and other $ 140 $ 23,775 $ 937 $ 24,852 States, municipalities and political subdivisions — 11,887 56 11,943 Asset-backed — 7,029 556 7,585 Total fixed maturity securities 140 42,691 1,549 44,380 Equity securities: Common stock 220 — 13 233 Non-redeemable preferred stock 65 721 16 802 Total equity securities 285 721 29 1,035 Short term and other 1,798 74 — 1,872 Total assets $ 2,223 $ 43,486 $ 1,578 $ 47,287 Liabilities Other liabilities $ — $ 12 $ — $ 12 Total liabilities $ — $ 12 $ — $ 12 The tables below present a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3). Level 3 (In millions) Corporate bonds and other States, municipalities and political subdivisions Asset-backed Equity securities Total Balance as of July 1, 2022 $ 846 $ 46 $ 641 $ 47 $ 1,580 Total realized and unrealized investment gains (losses): Reported in Net investment gains (losses) — — 2 (3) (1) Reported in Net investment income 1 — 5 (4) 2 Reported in Other comprehensive income (loss) (50) (4) (38) — (92) Total realized and unrealized investment gains (losses) (49) (4) (31) (7) (91) Purchases 9 — 116 — 125 Sales — — — — — Settlements (4) — (14) — (18) Transfers into Level 3 — — 47 — 47 Transfers out of Level 3 — — (43) (10) (53) Balance as of September 30, 2022 $ 802 $ 42 $ 716 $ 30 $ 1,590 Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2022 recognized in Net income (loss) in the period $ — $ — $ — $ (7) $ (7) Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2022 recognized in Other comprehensive income (loss) in the period (51) (4) (38) — (93) Level 3 (In millions) Corporate bonds and other States, municipalities and political subdivisions Asset-backed Equity securities Total Balance as of July 1, 2021 $ 883 $ 57 $ 410 $ 25 $ 1,375 Total realized and unrealized investment gains (losses): Reported in Net investment gains (losses) 1 — — (3) (2) Reported in Net investment income — — 1 1 2 Reported in Other comprehensive income (loss) 1 — 1 — 2 Total realized and unrealized investment gains (losses) 2 — 2 (2) 2 Purchases 55 — 83 1 139 Sales — — (9) (11) (20) Settlements (11) — (11) — (22) Transfers into Level 3 — — 41 11 52 Transfers out of Level 3 (52) — (38) — (90) Balance as of September 30, 2021 $ 877 $ 57 $ 478 $ 24 $ 1,436 Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2021 recognized in Net income (loss) in the period $ — $ — $ — $ (3) $ (3) Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2021 recognized in Other comprehensive income (loss) in the period 2 — — — 2 Level 3 (In millions) Corporate bonds and other States, municipalities and political subdivisions Asset-backed Equity securities Total Balance as of January 1, 2022 $ 937 $ 56 $ 556 $ 29 $ 1,578 Total realized and unrealized investment gains (losses): Reported in Net investment gains (losses) (2) — 7 (6) (1) Reported in Net investment income 1 — 11 (1) 11 Reported in Other comprehensive income (loss) (203) (14) (122) — (339) Total realized and unrealized investment gains (losses) (204) (14) (104) (7) (329) Purchases 127 — 348 12 487 Sales (5) — (2) (3) (10) Settlements (63) — (54) 9 (108) Transfers into Level 3 10 — 66 — 76 Transfers out of Level 3 — — (94) (10) (104) Balance as of September 30, 2022 $ 802 $ 42 $ 716 $ 30 $ 1,590 Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2022 recognized in Net income (loss) in the period $ — $ — $ — $ (8) $ (8) Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2022 recognized in Other comprehensive income (loss) in the period (203) (14) (121) — (338) Level 3 (In millions) Corporate bonds and other States, municipalities and political subdivisions Asset-backed Equity securities Total Balance as of January 1, 2021 $ 770 $ 46 $ 308 $ 27 $ 1,151 Total realized and unrealized investment gains (losses): Reported in Net investment gains (losses) (9) — — (2) (11) Reported in Net investment income — — 4 2 6 Reported in Other comprehensive income (loss) (23) — (4) — (27) Total realized and unrealized investment gains (losses) (32) — — — (32) Purchases 219 12 197 1 429 Sales (3) — (9) (15) (27) Settlements (35) (1) (38) — (74) Transfers into Level 3 10 — 71 11 92 Transfers out of Level 3 (52) — (51) — (103) Balance as of September 30, 2021 $ 877 $ 57 $ 478 $ 24 $ 1,436 Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2021 recognized in Net income (loss) in the period $ — $ — $ — $ (1) $ (1) Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2021 recognized in Other comprehensive income (loss) in the period (22) — (5) — (27) Valuation Methodologies and Inputs The following section describes the valuation methodologies and relevant inputs used to measure different financial instruments at fair value, including an indication of the level in the fair value hierarchy in which the instruments are generally classified. Fixed Maturity Securities Level 1 securities include highly liquid government securities and exchange traded bonds, valued using quoted market prices. Level 2 securities include most other fixed maturity securities as the significant inputs are observable in the marketplace. All classes of Level 2 fixed maturity securities are valued using a methodology based on information generated by market transactions involving identical or comparable assets, a discounted cash flow methodology, or a combination of both when necessary. Common inputs for all classes of fixed maturity securities include prices from recently executed transactions of similar securities, marketplace quotes, benchmark yields, spreads off benchmark yields, interest rates and U.S. Treasury or swap curves. Specifically for asset-backed securities, key inputs include prepayment and default projections based on past performance of the underlying collateral and current market data. Fixed maturity securities are primarily assigned to Level 3 in cases where broker/dealer quotes are significant inputs to the valuation and there is a lack of transparency as to whether these quotes are based on information that is observable in the marketplace. Level 3 securities also include private placement debt securities whose fair value is determined using internal models with some inputs that are not market observable. Equity Securities Level 1 equity securities include publicly traded securities valued using quoted market prices. Level 2 securities are primarily valued using pricing for similar securities, recently executed transactions and other pricing models utilizing market observable inputs. Level 3 securities are primarily priced using broker/dealer quotes and internal models with some inputs that are not market observable. Short Term and Other Invested Assets Securities that are actively traded or have quoted prices are classified as Level 1. These securities include money market funds and treasury bills. Level 2 primarily includes non-U.S. government securities, for which all inputs are market observable. Fixed maturity securities purchased within one year of maturity are classified consistent with fixed maturity securities discussed above. Short term investments as presented in the tables above differ from the amounts presented on the Condensed Consolidated Balance Sheets because certain short term investments, such as time deposits, are not measured at fair value. As of September 30, 2022 and December 31, 2021, there were $65 million and $74 million of overseas deposits within Other invested assets, which can be redeemed at net asset value in 90 days or less. Overseas deposits are excluded from the fair value hierarchy because their fair value is recorded using the net asset value per share (or equivalent) practical expedient. Derivative Financial Investments The embedded derivative on funds withheld liability is valued based on the unrealized gain or loss position of the assets supporting the funds withheld liability, which are fixed maturity securities primarily valued with observable inputs. Significant Unobservable Inputs The following tables present quantitative information about the significant unobservable inputs utilized by the Company in the fair value measurements of Level 3 assets. Valuations for assets and liabilities not presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to the Company. The weighted average rate is calculated based on fair value. September 30, 2022 Estimated Fair Value Valuation Technique(s) Unobservable Input(s) Range Fixed maturity securities $ 1,111 Discounted cash flow Credit spread 1% - 11% (3%) December 31, 2021 Estimated Fair Value Valuation Technique(s) Unobservable Input(s) Range Fixed maturity securities $ 1,225 Discounted cash flow Credit spread 1% - 7% (2%) For fixed maturity securities, an increase to the credit spread assumptions would result in a lower fair value measurement. Financial Assets and Liabilities Not Measured at Fair Value The carrying amount and estimated fair value of the Company's financial assets and liabilities which are not measured at fair value on the Condensed Consolidated Balance Sheets are presented in the following tables. September 30, 2022 Carrying Estimated Fair Value (In millions) Level 1 Level 2 Level 3 Total Assets Mortgage loans $ 953 $ — $ — $ 880 $ 880 Liabilities Long term debt $ 2,780 $ — $ 2,563 $ — $ 2,563 December 31, 2021 Carrying Estimated Fair Value (In millions) Level 1 Level 2 Level 3 Total Assets Mortgage loans $ 973 $ — $ — $ 1,018 $ 1,018 Liabilities Long term debt $ 2,779 $ — $ 2,978 $ — $ 2,978 The carrying amounts reported on the Condensed Consolidated Balance Sheets for Cash, Short term investments not carried at fair value, Accrued investment income and certain Other assets and Other liabilities approximate fair value due to the short term nature of these items. These assets and liabilities are not listed in the tables above. |
Claim and Claim Adjustment Expe
Claim and Claim Adjustment Expense Reserves and Future Policy Benefit Reserves | 9 Months Ended |
Sep. 30, 2022 | |
Liability for Claims and Claims Adjustment Expense [Abstract] | |
Claim and Claim Adjustment Expense Reserves and Future Policy Benefit Reserves | Claim and Claim Adjustment Expense Reserves and Future Policy Benefit Reserves Property and casualty insurance 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. The Company's reserve projections are based primarily on detailed analysis of the facts in each case, the Company's 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, as well as court decisions and economic conditions, including 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. 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 Company's ultimate cost for insurance losses will not exceed current estimates. 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. The Company reported catastrophe losses, net of reinsurance, of $114 million and $171 million for the three and nine months ended September 30, 2022 primarily related to severe weather related events. Catastrophe losses for the three and nine months ended September 30, 2022 included $87 million for Hurricane Ian. The Company reported catastrophe losses, net of reinsurance, of $178 million and $357 million for the three and nine months ended September 30, 2021. Catastrophe losses for the three months ended September 30, 2021 included $114 million for Hurricane Ida. Catastrophe losses for the nine months ended September 30, 2021 were driven by severe weather related events, primarily Hurricane Ida and Winter Storms Uri and Viola. Liability for Unpaid Claim and Claim Adjustment Expenses The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves of the Life & Group segment. For the nine months ended September 30 (In millions) 2022 2021 Reserves, beginning of year: Gross $ 24,174 $ 22,706 Ceded 4,969 4,005 Net reserves, beginning of year 19,205 18,701 Reduction of net reserves due to Excess Workers' Compensation Loss Portfolio Transfer — (632) Net incurred claim and claim adjustment expenses: Provision for insured events of current year 4,638 4,474 Increase (decrease) in provision for insured events of prior years (144) (130) Amortization of discount 131 137 Total net incurred (1) 4,625 4,481 Net payments attributable to: Current year events (523) (629) Prior year events (3,371) (2,874) Total net payments (3,894) (3,503) Foreign currency translation adjustment and other (383) (51) Net reserves, end of period 19,553 18,996 Ceded reserves, end of period 5,147 4,836 Gross reserves, end of period $ 24,700 $ 23,832 (1) Total net incurred above does not agree to Insurance claims and policyholders' benefits as reflected on the Condensed Consolidated Statements of Operations due to amounts related to retroactive reinsurance deferred gain accounting, the loss on the Excess Workers' Compensation Loss Portfolio Transfer, uncollectible reinsurance and benefit expenses related to future policy benefits, which are not reflected in the table above. 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 (development). These changes can be favorable or unfavorable. The following table presents development recorded for the Specialty, Commercial, International and Corporate & Other segments. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Pretax (favorable) unfavorable development: Specialty $ (15) $ (15) $ (35) $ (40) Commercial (2) 2 (26) 2 International — 3 (5) 2 Corporate & Other — — 64 40 Total pretax (favorable) unfavorable development $ (17) $ (10) $ (2) $ 4 Unfavorable development of $64 million was recorded within the Corporate & Other segment for the nine months ended September 30, 2022 largely associated with legacy mass tort abuse claims, including the recent Diocese of Rochester proposed settlement. Unfavorable development of $40 million was recorded within the Corporate & Other segment for the nine months ended September 30, 2021 due to legacy mass tort exposures, primarily related to abuse. Specialty The following table presents further detail of the development recorded for the Specialty segment. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Pretax (favorable) unfavorable development: Medical Professional Liability $ 8 $ 8 $ 17 $ 16 Other Professional Liability and Management Liability 9 — 22 10 Surety (20) (15) (48) (53) Warranty (13) (6) (22) (14) Other 1 (2) (4) 1 Total pretax (favorable) unfavorable development $ (15) $ (15) $ (35) $ (40) Three Months 2022 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. 2021 Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in recent accident years. Nine Months 2022 Unfavorable development in medical professional liability was due to higher than expected large loss activity in recent accident years. Unfavorable development in other professional liability and management liability was due to higher than expected claim severity and frequency in the Company’s cyber and professional errors and omissions 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. 2021 Unfavorable development in medical professional liability was due to higher than expected frequency of large losses in recent accident years. Unfavorable development in other professional liability and management liability was due to higher than expected claim severity and frequency in the Company’s cyber business in recent accident years. Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in recent accident years. Favorable development in warranty was due to lower than expected loss emergence in a recent accident year. Commercial The following table presents further detail of the development recorded for the Commercial segment. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Pretax (favorable) unfavorable development: Commercial Auto $ — $ — $ 21 $ 30 General Liability — — 41 — Workers' Compensation (2) 2 (86) (40) Property and Other — — (2) 12 Total pretax (favorable) unfavorable development $ (2) $ 2 $ (26) $ 2 Nine Months 2022 Unfavorable development in commercial auto was due to higher than expected claim severity in the Company’s construction business in multiple accident years. Unfavorable development in general liability was due to higher than expected claim severity in construction, middle market and small business across multiple accident years. Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in multiple accident years. 2021 Unfavorable development in commercial auto was due to higher than expected claim severity in the Company’s construction and middle market businesses in recent 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 property and other was primarily due to higher than expected large loss activity in the Company’s marine business in multiple accident years. International The following table presents further detail of the development recorded for the International segment. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 (1) 2022 2021 (1) Pretax (favorable) unfavorable development: Commercial $ — $ (21) $ (4) $ (24) Specialty — 23 (1) 25 Other — 1 — 1 Total pretax (favorable) unfavorable development $ — $ 3 $ (5) $ 2 (1) Effective December 31, 2021 the International lines of business were consolidated to align with domestic operations. Prior period information has been conformed to the new line of business presentation. Three Months 2021 Favorable development in commercial was due to lower than expected loss emergence across multiple accident years. Unfavorable development in specialty was due to higher than expected claim severity in the Company’s medical treatment business. Nine Months 2021 Favorable development in commercial was due to lower than expected loss emergence across multiple accident years. Unfavorable development in specialty was due to higher than expected claim severity in the Company’s medical treatment business. Asbestos & Environmental Pollution (A&EP) Reserves In 2010, Continental Casualty Company (CCC) together with several of the Company’s insurance subsidiaries completed a transaction with National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway Inc., under which substantially all of the Company’s legacy A&EP liabilities were ceded to NICO through a Loss Portfolio Transfer (LPT). At the effective date of the transaction, the Company ceded approximately $1.6 billion of net A&EP claim and allocated claim adjustment expense reserves to NICO under a retroactive reinsurance agreement with an aggregate limit of $4 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. The Company paid NICO a reinsurance premium of $2 billion and transferred to NICO billed third-party reinsurance receivables related to A&EP claims with a net book value of $215 million, resulting in total consideration of $2.2 billion. In years subsequent to the effective date of the LPT, the Company recognized adverse prior year development on its A&EP reserves 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 the Company recognizes a change in the estimate of A&EP reserves 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 Condensed Consolidated Statements of Operations. The impact of the LPT on the Condensed Consolidated Statements of Operations was the recognition of a retroactive reinsurance benefit of $17 million and $8 million for the three months ended September 30, 2022 and 2021 and $40 million and $30 million for the nine months ended September 30, 2022 and 2021. As of September 30, 2022 and December 31, 2021, the cumulative amounts ceded under the LPT were $3.4 billion. The unrecognized deferred retroactive reinsurance benefit was $389 million and $429 million as of September 30, 2022 and December 31, 2021 and is included within Other liabilities on the Condensed Consolidated Balance Sheets. NICO established a collateral trust account as security for its obligations to the Company. The fair value of the collateral trust account was $2.3 billion as of September 30, 2022. 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 the majority of the Company’s A&EP claims. Credit Risk for Ceded Reserves The majority of the Company’s outstanding voluntary reinsurance receivables are due from reinsurers with financial strength ratings of A- or higher. Receivables due from reinsurers with lower financial strength ratings are primarily due from captive reinsurers and are backed by collateral arrangements. Life & Group Policyholder Reserves The Company’s Life & Group segment includes its run-off long term care business as well as structured settlement obligations not funded by annuities related to certain property and casualty claimants. Long term care policies provide benefits for nursing homes, assisted living facilities and home health care subject to various daily and lifetime caps. Generally, policyholders must continue to make periodic premium payments to keep the policy in force and the Company has the ability to increase policy premiums, subject to state regulatory approval. The Company maintains both claim and claim adjustment expense reserves as well as future policy benefit reserves for policyholder benefits for the Life & Group segment. Claim and claim adjustment expense reserves consist of estimated reserves for long term care policyholders that are currently receiving benefits, including claims that have been incurred but are not yet reported. In developing the claim and claim adjustment expense reserve estimates for long term care policies, the Company’s actuaries perform a detailed claim reserve review on an annual basis. The review analyzes the sufficiency of existing reserves for policyholders currently on claim and includes an evaluation of expected benefit utilization and claim duration. In addition, claim and claim adjustment expense reserves are also maintained for the structured settlement obligations. In developing the claim and claim adjustment expense reserve estimates for structured settlement obligations, the Company's actuaries review mortality experience on an annual basis. The Company’s recorded claim and claim adjustment expense reserves reflect management's best estimate after incorporating the results of the most recent reviews. The Company's most recent annual claim reserve reviews were completed in the third quarter of 2022. The long term care claim reserve review resulted in a $25 million pretax reduction in reserves driven by a $107 million favorable impact from the release of all remaining IBNR reserves established during 2020 and 2021 in response to the COVID-19 pandemic partially offset by an $82 million unfavorable impact from higher claim severity, including utilization and cost of care inflation, than anticipated in the reserve estimates. The structured settlement claim reserve review resulted in a $5 million pretax reduction in reserves due to discount rate assumption changes. The Company's 2021 annual claim reserve reviews were completed in the third quarter of 2021 resulting in a $40 million pretax reduction in long term care reserves primarily due to lower claim severity than anticipated in the reserve estimates and a $2 million pretax increase in the structured settlement claim reserves primarily due to lower discount rate assumptions and mortality assumption changes. Future policy benefit reserves consist of active life reserves related to the Company’s long term care policies for policyholders that are not currently receiving benefits and represent the present value of expected future benefit payments and expenses less expected future premium. The determination of these reserves requires management to make estimates and assumptions about expected investment and policyholder experience over the life of the contract. Since many of these contracts may be in force for several decades, these assumptions are subject to significant estimation risk. The actuarial assumptions that management believes are subject to the most variability are morbidity, persistency, discount rates and anticipated future premium rate increases. Morbidity is the frequency and severity of injury, illness, sickness and diseases contracted. Persistency is the percentage of policies remaining in force and can be affected by policy lapses, benefit reductions and death. Discount rates are influenced by the investment yield on assets supporting long term care reserves which is subject to interest rate and market volatility and may also be affected by changes to the Internal Revenue Code. Future premium rate increases are generally subject to regulatory approval, and therefore the exact timing and size of the approved rate increases are unknown. As a result of this variability, the Company’s long term care reserves may be subject to material increases if actual experience develops adversely to the Company’s expectations. Annually, in the third quarter, management assesses the adequacy of its long term care future policy benefit reserves by performing a gross premium valuation (GPV) to determine if there is a premium deficiency. Under the GPV, management estimates required reserves using best estimate assumptions as of the date of the assessment without provisions for adverse deviation. The GPV required reserves are then compared to the existing recorded reserves. If the GPV required reserves are greater than the existing recorded reserves, the existing assumptions are unlocked and future policy benefit reserves are increased to the greater amount. Any such increase is reflected in the Company’s results of operations in the period in which the need for such |
Legal Proceedings, Contingencie
Legal Proceedings, Contingencies and Guarantees | 9 Months Ended |
Sep. 30, 2022 | |
Legal Proceedings, Commitments and Contingencies, and Guarantees [Abstract] | |
Legal Proceedings, Contingencies and Guarantees | Legal Proceedings, Contingencies and Guarantees The Company is a party to various claims and litigation incidental to its business, which, based on the facts and circumstances currently known, are not material to the Company's results of operations or financial position. Guarantees The Company has provided guarantees, if the primary obligor fails to perform, to holders of structured settlement annuities issued by a previously owned subsidiary. As of September 30, 2022, the potential amount of future payments the Company could be required to pay under these guarantees was approximately $1.6 billion, which will be paid over the lifetime of the annuitants. The Company does not believe any payment is likely under these guarantees, as the Company is the beneficiary of a trust that must be maintained at a level that approximates the discounted reserves for these annuities. |
Benefit Plans
Benefit Plans | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans The components of net periodic pension cost (benefit) are presented in the following table. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Net periodic pension cost (benefit) Interest cost on projected benefit obligation $ 17 $ 15 $ 50 $ 46 Expected return on plan assets (38) (38) (114) (115) Amortization of net actuarial (gain) loss 8 12 23 35 Settlement loss — — — 1 Total net periodic pension cost (benefit) $ (13) $ (11) $ (41) $ (33) The following table indicates the line items in which the non-service cost (benefit) is presented in the Condensed Consolidated Statements of Operations. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Non-Service Cost (Benefit): Insurance claims and policyholders' benefits $ (3) $ (3) $ (11) $ (9) Other operating expenses (10) (8) (30) (24) Total net periodic pension cost (benefit) $ (13) $ (11) $ (41) $ (33) |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) by Component | 9 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) by Component | Accumulated Other Comprehensive Income (Loss) by Component The tables below display the changes in Accumulated other comprehensive income (loss) by component. (In millions) Net unrealized gains (losses) on investments with an allowance for credit losses Net unrealized gains (losses) on other investments Pension and postretirement benefits Cumulative foreign currency translation adjustment Total Balance as of July 1, 2022 $ (8) $ (1,918) $ (592) $ (195) $ (2,713) Other comprehensive income (loss) before reclassifications — (1,429) — (103) (1,532) Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $—, $11, $2, $— and $13 2 (102) (6) — (106) Other comprehensive income (loss) net of tax (expense) benefit of $1, $370, $(2), $— and $369 (2) (1,327) 6 (103) (1,426) Balance as of September 30, 2022 $ (10) $ (3,245) $ (586) $ (298) $ (4,139) (In millions) Net unrealized gains (losses) on investments with an allowance for credit losses Net unrealized gains (losses) on other investments Pension and postretirement benefits Cumulative foreign currency translation adjustment Total Balance as of July 1, 2021 $ — $ 1,418 $ (829) $ (80) $ 509 Other comprehensive income (loss) before reclassifications — (121) (1) (33) (155) Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $—, $(5), $2, $— and $(3) — 17 (9) — 8 Other comprehensive income (loss) net of tax (expense) benefit of $—, $37, $(2), $— and $35 — (138) 8 (33) (163) Balance as of September 30, 2021 $ — $ 1,280 $ (821) $ (113) $ 346 (In millions) Net unrealized gains (losses) on investments with an allowance for credit losses Net unrealized gains (losses) on other investments Pension and postretirement benefits Cumulative foreign currency translation adjustment Total Balance as of January 1, 2022 $ (2) $ 1,039 $ (604) $ (113) $ 320 Other comprehensive income (loss) before reclassifications (5) (4,401) — (185) (4,591) Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $(1), $15, $5, $— and $19 3 (117) (18) — (132) Other comprehensive income (loss) net of tax (expense) benefit of $2, $1,150, $(5), $— and $1,147 (8) (4,284) 18 (185) (4,459) Balance as of September 30, 2022 $ (10) $ (3,245) $ (586) $ (298) $ (4,139) (In millions) Net unrealized gains (losses) on investments with an allowance for credit losses Net unrealized gains (losses) on other investments Pension and postretirement benefits Cumulative foreign currency translation adjustment Total Balance as of January 1, 2021 $ — $ 1,745 $ (848) $ (94) $ 803 Other comprehensive income (loss) before reclassifications (2) (391) (1) (19) (413) Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $1, $(20), $7, $— and $(12) (2) 74 (28) — 44 Other comprehensive income (loss) net of tax (expense) benefit of $—, $124, $(7), $— and $117 — (465) 27 (19) (457) Balance as of September 30, 2021 $ — $ 1,280 $ (821) $ (113) $ 346 Amounts reclassified from Accumulated other comprehensive income (loss) shown above are reported in Net income (loss) as follows: Component of AOCI Condensed Consolidated Statements of Operations Line Item Affected by Reclassifications Net unrealized gains (losses) on investments with an allowance for credit losses and Net unrealized gains (losses) on other investments Net investment gains (losses) Pension and postretirement benefits Other operating expenses and Insurance claims and policyholders' benefits |
Business Segments
Business Segments | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments The Company's property and casualty commercial insurance operations are managed and reported in three business segments: Specialty, Commercial and International. These three segments are collectively referred to as Property & Casualty Operations. The Company's operations outside of Property & Casualty Operations are managed and reported in two segments: Life & Group and Corporate & Other. The accounting policies of the segments are the same as those described in Note A to the Consolidated Financial Statements within CNAF's Annual Report on Form 10-K for the year ended December 31, 2021. The Company manages most of its assets on a legal entity basis, while segment operations are generally conducted across legal entities. As such, only Insurance and Reinsurance receivables, Insurance reserves, Deferred acquisition costs, Goodwill and Deferred non-insurance warranty acquisition expense and revenue are readily identifiable for individual segments. Distinct investment portfolios are not maintained for every individual segment; accordingly, allocation of assets to each segment is not performed. Therefore, a significant portion of Net investment income and Net investment gains or losses are allocated primarily based on each segment's net carried insurance reserves, as adjusted. All significant intersegment income and expense have been eliminated. Income taxes have been allocated on the basis of the taxable income of the segments. In the following tables, certain financial measures are presented to provide information used by management to monitor the Company's operating performance. Management utilizes these financial measures to monitor the Company's insurance operations and investment portfolio. The performance of the Company's insurance operations is monitored by management through core income (loss), which is derived from certain income statement amounts. The Company's investment portfolio is monitored by management through analysis of various factors including unrealized gains and losses on securities, portfolio duration and exposure to market and credit risk. Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of net investment gains or losses and any cumulative effects of changes in accounting guidance. The calculation of core income (loss) excludes net investment gains or losses because net investment gains or losses are generally driven by economic factors that are not necessarily reflective of our primary operations. The Company's results of operations and selected balance sheet items by segment are presented in the following tables. Three months ended September 30, 2022 Specialty Commercial International Life & Corporate (In millions) Eliminations Total Operating revenues Net earned premiums $ 810 $ 1,023 $ 270 $ 118 $ — $ — $ 2,221 Net investment income 102 112 16 187 5 — 422 Non-insurance warranty revenue 399 — — — — — 399 Other revenues (1) 13 — — 1 (2) 11 Total operating revenues 1,310 1,148 286 305 6 (2) 3,053 Claims, benefits and expenses Net incurred claims and benefits 459 733 169 310 (13) — 1,658 Policyholders’ dividends 2 5 — — — — 7 Amortization of deferred acquisition costs 169 163 51 — — — 383 Non-insurance warranty expense 371 — — — — — 371 Other insurance related expenses 88 145 35 29 1 (1) 297 Other expenses 15 3 11 2 47 (1) 77 Total claims, benefits and expenses 1,104 1,049 266 341 35 (2) 2,793 Core income (loss) before income tax 206 99 20 (36) (29) — 260 Income tax (expense) benefit on core income (loss) (45) (19) (1) 14 4 — (47) Core income (loss) $ 161 $ 80 $ 19 $ (22) $ (25) $ — 213 Net investment gains (losses) (96) Income tax (expense) benefit on net investment gains (losses) 11 Net investment gains (losses), after tax (85) Net income (loss) $ 128 Three months ended September 30, 2021 Specialty Commercial International Life & Corporate (In millions) Eliminations Total Operating revenues Net earned premiums $ 773 $ 893 $ 271 $ 123 $ — $ (1) $ 2,059 Net investment income 116 141 14 240 2 — 513 Non-insurance warranty revenue 357 — — — — — 357 Other revenues 1 7 — (1) 2 (1) 8 Total operating revenues 1,247 1,041 285 362 4 (2) 2,937 Claims, benefits and expenses Net incurred claims and benefits 446 720 171 296 (6) — 1,627 Policyholders’ dividends — 5 — — — — 5 Amortization of deferred acquisition costs 165 148 55 — — — 368 Non-insurance warranty expense 330 — — — — — 330 Other insurance related expenses 71 125 32 27 (1) (1) 253 Other expenses 13 8 4 1 37 (1) 62 Total claims, benefits and expenses 1,025 1,006 262 324 30 (2) 2,645 Core income (loss) before income tax 222 35 23 38 (26) — 292 Income tax (expense) benefit on core income (loss) (49) (8) (6) 3 5 — (55) Core income (loss) $ 173 $ 27 $ 17 $ 41 $ (21) $ — 237 Net investment gains (losses) 22 Income tax (expense) benefit on net investment gains (losses) (3) Net investment gains (losses), after tax 19 Net income (loss) $ 256 Nine months ended September 30, 2022 Specialty Commercial International Life & Corporate (In millions) Eliminations Total Operating revenues Net earned premiums $ 2,376 $ 2,901 $ 803 $ 356 $ (1) $ — $ 6,435 Net investment income 305 343 44 600 10 — 1,302 Non-insurance warranty revenue 1,173 — — — — — 1,173 Other revenues — 25 — — 4 (5) 24 Total operating revenues 3,854 3,269 847 956 13 (5) 8,934 Claims, benefits and expenses Net incurred claims and benefits 1,360 1,916 487 884 36 — 4,683 Policyholders’ dividends 5 15 — — — — 20 Amortization of deferred acquisition costs 488 467 146 — — — 1,101 Non-insurance warranty expense 1,092 — — — — — 1,092 Other insurance related expenses 250 409 112 89 4 (1) 863 Other expenses 40 21 25 7 133 (4) 222 Total claims, benefits and expenses 3,235 2,828 770 980 173 (5) 7,981 Core income (loss) before income tax 619 441 77 (24) (160) — 953 Income tax (expense) benefit on core income (loss) (134) (91) (14) 31 29 — (179) Core income (loss) $ 485 $ 350 $ 63 $ 7 $ (131) $ — 774 Net investment gains (losses) (166) Income tax (expense) benefit on net investment gains (losses) 38 Net investment gains (losses), after tax (128) Net income (loss) $ 646 September 30, 2022 (In millions) Reinsurance receivables $ 1,511 $ 952 $ 385 $ 453 $ 2,420 $ — $ 5,721 Insurance receivables 1,061 1,640 309 4 — — 3,014 Deferred acquisition costs 379 315 93 — — — 787 Goodwill 117 — 25 — — — 142 Deferred non-insurance warranty acquisition expense 3,653 — — — — — 3,653 Insurance reserves Claim and claim adjustment expenses 6,925 9,172 2,262 3,645 2,696 — 24,700 Unearned premiums 3,144 2,364 576 111 — — 6,195 Future policy benefits — — — 10,454 — — 10,454 Deferred non-insurance warranty revenue 4,706 — — — — — 4,706 Nine months ended September 30, 2021 Specialty Commercial International Life & Corporate (In millions) Eliminations Total Operating revenues Net earned premiums $ 2,270 $ 2,629 $ 789 $ 369 $ — $ (1) $ 6,056 Net investment income 367 463 42 724 12 — 1,608 Non-insurance warranty revenue 1,054 — — — — — 1,054 Other revenues 1 17 1 (1) 5 (4) 19 Total operating revenues 3,692 3,109 832 1,092 17 (5) 8,737 Claims, benefits and expenses Net incurred claims and benefits 1,312 1,947 485 899 23 — 4,666 Policyholders’ dividends 2 16 — — — — 18 Amortization of deferred acquisition costs 478 449 157 — — — 1,084 Non-insurance warranty expense 973 — — — — — 973 Other insurance related expenses 212 376 106 77 9 (1) 779 Other expenses 36 28 (4) 5 119 (4) 180 Total claims, benefits and expenses 3,013 2,816 744 981 151 (5) 7,700 Core income (loss) before income tax 679 293 88 111 (134) — 1,037 Income tax (expense) benefit on core income (loss) (148) (60) (21) 9 24 — (196) Core income (loss) $ 531 $ 233 $ 67 $ 120 $ (110) $ — 841 Net investment gains (losses) 117 Income tax (expense) benefit on net investment gains (losses) (22) Net investment gains (losses), after tax 95 Net income (loss) $ 936 December 31, 2021 (In millions) Reinsurance receivables $ 1,200 $ 923 $ 381 $ 401 $ 2,579 $ — $ 5,484 Insurance receivables 1,136 1,488 340 6 4 — 2,974 Deferred acquisition costs 363 278 96 — — — 737 Goodwill 117 — 31 — — — 148 Deferred non-insurance warranty acquisition expense 3,476 — — — — — 3,476 Insurance reserves Claim and claim adjustment expenses 6,433 8,890 2,280 3,754 2,817 — 24,174 Unearned premiums 3,001 2,066 585 109 — — 5,761 Future policy benefits — — — 13,236 — — 13,236 Deferred non-insurance warranty revenue 4,503 — — — — — 4,503 The following table presents operating revenues by line of business for each reportable segment. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Specialty Management & Professional Liability $ 688 $ 684 $ 2,041 $ 2,044 Surety 171 157 481 454 Warranty & Alternative Risks 451 406 1,332 1,194 Specialty revenues 1,310 1,247 3,854 3,692 Commercial Middle Market 397 363 1,133 1,119 Construction 372 345 1,046 978 Small Business 149 144 430 413 Other Commercial 230 189 660 599 Commercial revenues 1,148 1,041 3,269 3,109 International Canada 93 87 272 253 Europe 112 123 350 349 Hardy 81 75 225 230 International revenues 286 285 847 832 Life & Group revenues 305 362 956 1,092 Corporate & Other revenues 6 4 13 17 Eliminations (2) (2) (5) (5) Total operating revenues 3,053 2,937 8,934 8,737 Net investment gains (losses) (96) 22 (166) 117 Total revenues $ 2,957 $ 2,959 $ 8,768 $ 8,854 |
Non-Insurance Revenues from Con
Non-Insurance Revenues from Contracts with Customers | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Non-Insurance Revenues from Contracts with Customers | Non-Insurance Revenues from Contracts with CustomersThe Company had deferred non-insurance warranty revenue balances of $4.7 billion and $4.5 billion reported in Deferred non-insurance warranty revenue as of September 30, 2022 and December 31, 2021. For the three and nine months ended September 30, 2022, the Company recognized $0.3 billion and $1.0 billion of revenues that were included in the deferred revenue balance as of January 1, 2022. For the three and nine months ended September 30, 2021, the Company recognized $0.3 billion and $0.9 billion of revenues that were included in the deferred revenue balance as of January 1, 2021. For the three and nine months ended September 30, 2022 and 2021, Non-insurance warranty revenue recognized from performance obligations related to prior periods due to a change in estimate was not material. The Company expects to recognize approximately $0.5 billion of the deferred revenue in the remainder of 2022, $1.5 billion in 2023, $1.2 billion in 2024 and $1.5 billion thereafter. |
General (Policies)
General (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The Condensed Consolidated Financial Statements include the accounts of CNA Financial Corporation (CNAF) and its subsidiaries. Collectively, CNAF and its subsidiaries are referred to as CNA or the Company. Loews Corporation (Loews) owned approximately 90% of the outstanding common stock of CNAF as of September 30, 2022.The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Intercompany amounts have been eliminated |
Use of Estimates | The preparation of Condensed Consolidated Financial Statements in conformity with GAAP requires management 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 reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates |
Accounting Standards Pending Adoption | Accounting Standards Pending Adoption In August 2018, the FASB issued ASU 2018-12 Targeted Improvements to the Accounting for Long-Duration Contracts . The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts. For the Company, this includes the long term care and fully-ceded single premium immediate annuity business. Entities will be required to review, and update if there is a change, cash flow assumptions (including morbidity and persistency) at least annually, and to update discount rate assumptions quarterly using an upper-medium grade fixed-income instrument yield. The effect of changes in cash flow assumptions will be recorded in the Company's results of operations and the effect of changes in discount rate assumptions will be recorded in Other comprehensive income. The guidance is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted, and may be applied using either a modified retrospective transition method or a full retrospective transition method. Financial statements for prior periods presented shall be adjusted to reflect the effects of applying the new accounting guidance. The Company will adopt the new guidance effective January 1, 2023, using the modified retrospective method applied as of the transition date of January 1, 2021. The Company will use a published spot rate curve constructed from A+, A and A- rated U.S. dollar denominated corporate bonds matched to the duration of the corresponding insurance liabilities, to calculate discount rates. The Company will group its long-duration contracts into calendar year cohorts based on the contract issue date and product line. Long term care contracts will be grouped separately from the Company’s fully-ceded single premium immediate annuity contracts. The most significant impact at the transition date will be the effect of updating the discount rate assumption to reflect an upper-medium grade fixed-income instrument yield, which will be partially offset by the de-recognition of Shadow Adjustments associated with long-duration contracts. The Company expects the net impact of these changes will be a decrease of approximately $2.3 billion in Accumulated other comprehensive income (AOCI) as of the transition date of January 1, 2021. There is a minimal transition impact expected to retained earnings. |
Earnings (Loss) Per Share | Earnings (Loss) Per ShareEarnings (loss) per share is based on weighted average number of outstanding common shares. Basic earnings (loss) per share excludes the impact of dilutive securities and is computed by dividing Net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the income and share data used in the basic and diluted earnings per share computations. Periods ended September 30 Three Months Nine Months (In millions, except per share data) 2022 2021 2022 2021 Net income (loss) $ 128 $ 256 $ 646 $ 936 Common Stock and Common Stock Equivalents Basic Weighted average shares outstanding 271.4 271.7 271.7 271.8 Diluted Weighted average shares outstanding 271.4 271.7 271.7 271.8 Dilutive effect of stock-based awards under compensation plans 0.9 1.0 0.9 1.0 Total 272.3 272.7 272.6 272.8 Earnings (loss) per share Basic $ 0.47 $ 0.94 $ 2.38 $ 3.44 Diluted $ 0.47 $ 0.94 $ 2.37 $ 3.43 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Investments [Abstract] | |
Net investment income | The significant components of Net investment income are presented in the following table. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Fixed maturity securities $ 454 $ 425 $ 1,324 $ 1,278 Equity securities 2 4 (7) 53 Limited partnership investments (35) 85 (11) 274 Mortgage loans 13 13 40 42 Short term investments 4 1 6 1 Trading portfolio 1 1 2 8 Other 1 (1) 1 — Gross investment income 440 528 1,355 1,656 Investment expense (18) (15) (53) (48) Net investment income $ 422 $ 513 $ 1,302 $ 1,608 Net investment income (loss) recognized due to the change in fair value of common stock held as of September 30, 2022 and 2021 $ (18) $ (7) $ (38) $ 11 |
Net realized investment gains (losses) | Net investment gains (losses) are presented in the following table. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Net investment gains (losses): Fixed maturity securities: Gross gains $ 23 $ 50 $ 94 $ 159 Gross losses (134) (28) (222) (68) Net investment gains (losses) on fixed maturity securities (111) 22 (128) 91 Equity securities (2) (2) (111) 17 Derivatives 24 2 79 7 Mortgage loans (8) — (8) — Short term investments and other 1 — 2 2 Net investment gains (losses) $ (96) $ 22 $ (166) $ 117 Net investment gains (losses) recognized due to the change in fair value of non-redeemable preferred stock held as of September 30, 2022 and 2021 $ (2) $ (2) $ (109) $ 15 |
Components of net other than temporary impairment losses recognized in earnings by asset type | The table includes losses (gains) on securities with an intention to sell and changes in the allowance for credit losses on securities since acquisition date. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Fixed maturity securities available-for-sale: Corporate and other bonds $ 24 $ — $ 53 $ 5 Asset-backed 1 11 2 11 Impairment losses (gains) recognized in earnings $ 25 $ 11 $ 55 $ 16 |
Summary of fixed maturity securities | The following tables present a summary of fixed maturity securities. September 30, 2022 Cost or Gross Gross Allowance for Credit Losses Estimated (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 23,082 $ 231 $ 2,398 $ — $ 20,915 States, municipalities and political subdivisions 9,244 259 1,080 — 8,423 Asset-backed: Residential mortgage-backed 3,153 6 470 — 2,689 Commercial mortgage-backed 1,921 4 237 — 1,688 Other asset-backed 3,264 2 349 3 2,914 Total asset-backed 8,338 12 1,056 3 7,291 U.S. Treasury and obligations of government-sponsored enterprises 107 3 1 — 109 Foreign government 544 2 48 — 498 Redeemable preferred stock 3 — — — 3 Total fixed maturity securities available-for-sale 41,318 507 4,583 3 37,239 Total fixed maturity securities trading 12 — — — 12 Total fixed maturity securities $ 41,330 $ 507 $ 4,583 $ 3 $ 37,251 December 31, 2021 Cost or Gross Gross Allowance for Credit Losses Estimated (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 21,444 $ 2,755 $ 56 $ 11 $ 24,132 States, municipalities and political subdivisions 10,358 1,599 14 — 11,943 Asset-backed: Residential mortgage-backed 2,893 71 8 — 2,956 Commercial mortgage-backed 1,987 63 19 — 2,031 Other asset-backed 2,561 54 10 7 2,598 Total asset-backed 7,441 188 37 7 7,585 U.S. Treasury and obligations of government-sponsored enterprises 132 1 3 — 130 Foreign government 570 15 2 — 583 Redeemable preferred stock — — — — — Total fixed maturity securities available-for-sale 39,945 4,558 112 18 44,373 Total fixed maturity securities trading 7 — — — 7 Total fixed maturity securities $ 39,952 $ 4,558 $ 112 $ 18 $ 44,380 |
Debt securities, available-for-sale, unrealized loss position, fair value | The following tables present the estimated fair value and gross unrealized losses of fixed maturity securities in a gross unrealized loss position for which an allowance for credit loss has not been recorded, by the length of time in which the securities have continuously been in that position. Less than 12 Months 12 Months or Longer Total September 30, 2022 Estimated Gross Estimated Gross Estimated Gross (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 16,707 $ 2,117 $ 914 $ 281 $ 17,621 $ 2,398 States, municipalities and political subdivisions 4,793 1,029 128 51 4,921 1,080 Asset-backed: Residential mortgage-backed 2,582 462 17 8 2,599 470 Commercial mortgage-backed 1,372 194 233 43 1,605 237 Other asset-backed 2,433 307 233 42 2,666 349 Total asset-backed 6,387 963 483 93 6,870 1,056 U.S. Treasury and obligations of government-sponsored enterprises 61 1 — — 61 1 Foreign government 446 42 25 6 471 48 Total $ 28,394 $ 4,152 $ 1,550 $ 431 $ 29,944 $ 4,583 Less than 12 Months 12 Months or Longer Total December 31, 2021 Estimated Gross Estimated Gross Estimated Gross (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 2,389 $ 48 $ 136 $ 8 $ 2,525 $ 56 States, municipalities and political subdivisions 730 14 — — 730 14 Asset-backed: Residential mortgage-backed 1,043 8 — — 1,043 8 Commercial mortgage-backed 527 7 167 12 694 19 Other asset-backed 840 10 62 — 902 10 Total asset-backed 2,410 25 229 12 2,639 37 U.S. Treasury and obligations of government-sponsored enterprises 69 3 5 — 74 3 Foreign government 97 2 — — 97 2 Total $ 5,695 $ 92 $ 370 $ 20 $ 6,065 $ 112 The following table presents the estimated fair value and gross unrealized losses of fixed maturity securities in a gross unrealized loss position for which an allowance for credit loss has not been recorded, by ratings distribution. September 30, 2022 December 31, 2021 (In millions) Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses U.S. Government, Government agencies and Government-sponsored enterprises $ 2,360 $ 360 $ 898 $ 8 AAA 1,566 318 368 6 AA 4,430 917 875 17 A 6,548 838 1,516 23 BBB 13,394 1,902 1,812 42 Non-investment grade 1,646 248 596 16 Total $ 29,944 $ 4,583 $ 6,065 $ 112 |
Debt securities, available-for-sale, allowance for credit loss | The following tables present the activity related to the allowance on available-for-sale securities with credit impairments and purchased credit-deteriorated (PCD) assets. Accrued interest receivable on available-for-sale fixed maturity securities totaled $401 million, $369 million and $387 million as of September 30, 2022, December 31, 2021 and September 30, 2021 and is excluded from the estimate of expected credit losses and the amortized cost basis in the tables included within this Note. (In millions) Corporate and other bonds Asset-backed Total Allowance for credit losses: Balance as of July 1, 2022 $ — $ 5 $ 5 Additions to the allowance for credit losses: Securities for which credit losses were not previously recorded — — — Available-for-sale securities accounted for as PCD assets — — — Reductions to the allowance for credit losses: Securities sold during the period (realized) — — — Write-offs charged against the allowance — — — Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period — (2) (2) Balance as of September 30, 2022 $ — $ 3 $ 3 (In millions) Corporate and other bonds Asset-backed Total Allowance for credit losses: Balance as of July 1, 2021 $ 24 $ 21 $ 45 Additions to the allowance for credit losses: Securities for which credit losses were not previously recorded — — — Available-for-sale securities accounted for as PCD assets 2 — 2 Reductions to the allowance for credit losses: Securities sold during the period (realized) — — — Write-offs charged against the allowance 16 — 16 Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period — — — Balance as of September 30, 2021 $ 10 $ 21 $ 31 (In millions) Corporate and other bonds Asset-backed Total Allowance for credit losses: Balance as of January 1, 2022 $ 11 $ 7 $ 18 Additions to the allowance for credit losses: Securities for which credit losses were not previously recorded — — — Available-for-sale securities accounted for as PCD assets — 3 3 Reductions to the allowance for credit losses: Securities sold during the period (realized) — — — Write-offs charged against the allowance 12 — 12 Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period 1 (7) (6) Balance as of September 30, 2022 $ — $ 3 $ 3 (In millions) Corporate and other bonds Asset-backed Total Allowance for credit losses: Balance as of January 1, 2021 $ 23 $ 17 $ 40 Additions to the allowance for credit losses: Securities for which credit losses were not previously recorded 14 — 14 Available-for-sale securities accounted for as PCD assets 4 4 8 Reductions to the allowance for credit losses: Securities sold during the period (realized) 6 — 6 Write-offs charged against the allowance 16 — 16 Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period (9) — (9) Balance as of September 30, 2021 $ 10 $ 21 $ 31 |
Contractual maturity | The following table presents available-for-sale fixed maturity securities by contractual maturity. September 30, 2022 December 31, 2021 (In millions) Cost or Estimated Cost or Estimated Due in one year or less $ 952 $ 948 $ 1,603 $ 1,624 Due after one year through five years 9,487 9,000 10,637 11,229 Due after five years through ten years 14,323 12,765 13,294 14,338 Due after ten years 16,556 14,526 14,411 17,182 Total $ 41,318 $ 37,239 $ 39,945 $ 44,373 |
Financing receivable credit quality indicators | The following table presents the amortized cost basis of mortgage loans for each credit quality indicator by year of origination. The primary credit quality indicators utilized are debt service coverage ratios (DSCR) and loan-to-value ratios (LTV). September 30, 2022 Mortgage Loans Amortized Cost Basis by Origination Year (1) (In millions) 2022 2021 2020 2019 2018 Prior Total DSCR ≥1.6x LTV less than 55% $ 9 $ 13 $ 112 $ 29 $ 54 $ 275 $ 492 LTV 55% to 65% — — — — — — — LTV greater than 65% 18 11 — — — — 29 DSCR 1.2x - 1.6x LTV less than 55% 5 49 18 56 10 42 180 LTV 55% to 65% 87 — 20 — — 8 115 LTV greater than 65% — — — — — — — DSCR ≤1.2 LTV less than 55% — — — 57 — — 57 LTV 55% to 65% — 21 — 44 — — 65 LTV greater than 65% 10 — — 22 — 7 39 Total $ 129 $ 94 $ 150 $ 208 $ 64 $ 332 $ 977 (1) The values in the table above reflect DSCR on a standardized amortization period and LTV based on the most recent appraised values trended forward using changes in a commercial real estate price index. |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis are presented in the following tables. Corporate bonds and other includes obligations of the U.S. Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock. September 30, 2022 Total (In millions) Level 1 Level 2 Level 3 Assets Fixed maturity securities: Corporate bonds and other $ 118 $ 20,617 $ 802 $ 21,537 States, municipalities and political subdivisions — 8,381 42 8,423 Asset-backed — 6,575 716 7,291 Total fixed maturity securities 118 35,573 1,560 37,251 Equity securities: Common stock 180 — 30 210 Non-redeemable preferred stock 56 625 — 681 Total equity securities 236 625 30 891 Short term and other 895 34 — 929 Total assets $ 1,249 $ 36,232 $ 1,590 $ 39,071 Liabilities Other liabilities $ — $ (1) $ — $ (1) Total liabilities $ — $ (1) $ — $ (1) December 31, 2021 Total (In millions) Level 1 Level 2 Level 3 Assets Fixed maturity securities: Corporate bonds and other $ 140 $ 23,775 $ 937 $ 24,852 States, municipalities and political subdivisions — 11,887 56 11,943 Asset-backed — 7,029 556 7,585 Total fixed maturity securities 140 42,691 1,549 44,380 Equity securities: Common stock 220 — 13 233 Non-redeemable preferred stock 65 721 16 802 Total equity securities 285 721 29 1,035 Short term and other 1,798 74 — 1,872 Total assets $ 2,223 $ 43,486 $ 1,578 $ 47,287 Liabilities Other liabilities $ — $ 12 $ — $ 12 Total liabilities $ — $ 12 $ — $ 12 |
Table of reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs | The tables below present a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3). Level 3 (In millions) Corporate bonds and other States, municipalities and political subdivisions Asset-backed Equity securities Total Balance as of July 1, 2022 $ 846 $ 46 $ 641 $ 47 $ 1,580 Total realized and unrealized investment gains (losses): Reported in Net investment gains (losses) — — 2 (3) (1) Reported in Net investment income 1 — 5 (4) 2 Reported in Other comprehensive income (loss) (50) (4) (38) — (92) Total realized and unrealized investment gains (losses) (49) (4) (31) (7) (91) Purchases 9 — 116 — 125 Sales — — — — — Settlements (4) — (14) — (18) Transfers into Level 3 — — 47 — 47 Transfers out of Level 3 — — (43) (10) (53) Balance as of September 30, 2022 $ 802 $ 42 $ 716 $ 30 $ 1,590 Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2022 recognized in Net income (loss) in the period $ — $ — $ — $ (7) $ (7) Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2022 recognized in Other comprehensive income (loss) in the period (51) (4) (38) — (93) Level 3 (In millions) Corporate bonds and other States, municipalities and political subdivisions Asset-backed Equity securities Total Balance as of July 1, 2021 $ 883 $ 57 $ 410 $ 25 $ 1,375 Total realized and unrealized investment gains (losses): Reported in Net investment gains (losses) 1 — — (3) (2) Reported in Net investment income — — 1 1 2 Reported in Other comprehensive income (loss) 1 — 1 — 2 Total realized and unrealized investment gains (losses) 2 — 2 (2) 2 Purchases 55 — 83 1 139 Sales — — (9) (11) (20) Settlements (11) — (11) — (22) Transfers into Level 3 — — 41 11 52 Transfers out of Level 3 (52) — (38) — (90) Balance as of September 30, 2021 $ 877 $ 57 $ 478 $ 24 $ 1,436 Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2021 recognized in Net income (loss) in the period $ — $ — $ — $ (3) $ (3) Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2021 recognized in Other comprehensive income (loss) in the period 2 — — — 2 Level 3 (In millions) Corporate bonds and other States, municipalities and political subdivisions Asset-backed Equity securities Total Balance as of January 1, 2022 $ 937 $ 56 $ 556 $ 29 $ 1,578 Total realized and unrealized investment gains (losses): Reported in Net investment gains (losses) (2) — 7 (6) (1) Reported in Net investment income 1 — 11 (1) 11 Reported in Other comprehensive income (loss) (203) (14) (122) — (339) Total realized and unrealized investment gains (losses) (204) (14) (104) (7) (329) Purchases 127 — 348 12 487 Sales (5) — (2) (3) (10) Settlements (63) — (54) 9 (108) Transfers into Level 3 10 — 66 — 76 Transfers out of Level 3 — — (94) (10) (104) Balance as of September 30, 2022 $ 802 $ 42 $ 716 $ 30 $ 1,590 Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2022 recognized in Net income (loss) in the period $ — $ — $ — $ (8) $ (8) Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2022 recognized in Other comprehensive income (loss) in the period (203) (14) (121) — (338) Level 3 (In millions) Corporate bonds and other States, municipalities and political subdivisions Asset-backed Equity securities Total Balance as of January 1, 2021 $ 770 $ 46 $ 308 $ 27 $ 1,151 Total realized and unrealized investment gains (losses): Reported in Net investment gains (losses) (9) — — (2) (11) Reported in Net investment income — — 4 2 6 Reported in Other comprehensive income (loss) (23) — (4) — (27) Total realized and unrealized investment gains (losses) (32) — — — (32) Purchases 219 12 197 1 429 Sales (3) — (9) (15) (27) Settlements (35) (1) (38) — (74) Transfers into Level 3 10 — 71 11 92 Transfers out of Level 3 (52) — (51) — (103) Balance as of September 30, 2021 $ 877 $ 57 $ 478 $ 24 $ 1,436 Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2021 recognized in Net income (loss) in the period $ — $ — $ — $ (1) $ (1) Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2021 recognized in Other comprehensive income (loss) in the period (22) — (5) — (27) |
Quantitative information about significant unobservable inputs in the fair value measurement of level 3 assets | The following tables present quantitative information about the significant unobservable inputs utilized by the Company in the fair value measurements of Level 3 assets. Valuations for assets and liabilities not presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to the Company. The weighted average rate is calculated based on fair value. September 30, 2022 Estimated Fair Value Valuation Technique(s) Unobservable Input(s) Range Fixed maturity securities $ 1,111 Discounted cash flow Credit spread 1% - 11% (3%) December 31, 2021 Estimated Fair Value Valuation Technique(s) Unobservable Input(s) Range Fixed maturity securities $ 1,225 Discounted cash flow Credit spread 1% - 7% (2%) |
Carrying amount and estimated fair value of financial instrument assets and liabilities not measured at fair value | The carrying amount and estimated fair value of the Company's financial assets and liabilities which are not measured at fair value on the Condensed Consolidated Balance Sheets are presented in the following tables. September 30, 2022 Carrying Estimated Fair Value (In millions) Level 1 Level 2 Level 3 Total Assets Mortgage loans $ 953 $ — $ — $ 880 $ 880 Liabilities Long term debt $ 2,780 $ — $ 2,563 $ — $ 2,563 December 31, 2021 Carrying Estimated Fair Value (In millions) Level 1 Level 2 Level 3 Total Assets Mortgage loans $ 973 $ — $ — $ 1,018 $ 1,018 Liabilities Long term debt $ 2,779 $ — $ 2,978 $ — $ 2,978 |
Claim and Claim Adjustment Ex_2
Claim and Claim Adjustment Expense Reserves and Future Policy Benefit Reserves (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Short-duration Insurance Contracts, Net Incurred Claim and Claim Adjustment Expenses [Line Items] | |
Schedule of liability for unpaid claims and claims adjustment expense | The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves of the Life & Group segment. For the nine months ended September 30 (In millions) 2022 2021 Reserves, beginning of year: Gross $ 24,174 $ 22,706 Ceded 4,969 4,005 Net reserves, beginning of year 19,205 18,701 Reduction of net reserves due to Excess Workers' Compensation Loss Portfolio Transfer — (632) Net incurred claim and claim adjustment expenses: Provision for insured events of current year 4,638 4,474 Increase (decrease) in provision for insured events of prior years (144) (130) Amortization of discount 131 137 Total net incurred (1) 4,625 4,481 Net payments attributable to: Current year events (523) (629) Prior year events (3,371) (2,874) Total net payments (3,894) (3,503) Foreign currency translation adjustment and other (383) (51) Net reserves, end of period 19,553 18,996 Ceded reserves, end of period 5,147 4,836 Gross reserves, end of period $ 24,700 $ 23,832 (1) Total net incurred above does not agree to Insurance claims and policyholders' benefits as reflected on the Condensed Consolidated Statements of Operations due to amounts related to retroactive reinsurance deferred gain accounting, the loss on the Excess Workers' Compensation Loss Portfolio Transfer, uncollectible reinsurance and benefit expenses related to future policy benefits, which are not reflected in the table above. |
Net prior year development | The following table presents development recorded for the Specialty, Commercial, International and Corporate & Other segments. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Pretax (favorable) unfavorable development: Specialty $ (15) $ (15) $ (35) $ (40) Commercial (2) 2 (26) 2 International — 3 (5) 2 Corporate & Other — — 64 40 Total pretax (favorable) unfavorable development $ (17) $ (10) $ (2) $ 4 |
Net prior year claim and allocated claim adjustment expense reserve development | The following table presents further detail of the development recorded for the International segment. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 (1) 2022 2021 (1) Pretax (favorable) unfavorable development: Commercial $ — $ (21) $ (4) $ (24) Specialty — 23 (1) 25 Other — 1 — 1 Total pretax (favorable) unfavorable development $ — $ 3 $ (5) $ 2 (1) Effective December 31, 2021 the International lines of business were consolidated to align with domestic operations. Prior period information has been conformed to the new line of business presentation. |
Specialty | |
Short-duration Insurance Contracts, Net Incurred Claim and Claim Adjustment Expenses [Line Items] | |
Net prior year claim and allocated claim adjustment expense reserve development | The following table presents further detail of the development recorded for the Specialty segment. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Pretax (favorable) unfavorable development: Medical Professional Liability $ 8 $ 8 $ 17 $ 16 Other Professional Liability and Management Liability 9 — 22 10 Surety (20) (15) (48) (53) Warranty (13) (6) (22) (14) Other 1 (2) (4) 1 Total pretax (favorable) unfavorable development $ (15) $ (15) $ (35) $ (40) |
Commercial | |
Short-duration Insurance Contracts, Net Incurred Claim and Claim Adjustment Expenses [Line Items] | |
Net prior year claim and allocated claim adjustment expense reserve development | The following table presents further detail of the development recorded for the Commercial segment. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Pretax (favorable) unfavorable development: Commercial Auto $ — $ — $ 21 $ 30 General Liability — — 41 — Workers' Compensation (2) 2 (86) (40) Property and Other — — (2) 12 Total pretax (favorable) unfavorable development $ (2) $ 2 $ (26) $ 2 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Components of net periodic cost (benefit) | The components of net periodic pension cost (benefit) are presented in the following table. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Net periodic pension cost (benefit) Interest cost on projected benefit obligation $ 17 $ 15 $ 50 $ 46 Expected return on plan assets (38) (38) (114) (115) Amortization of net actuarial (gain) loss 8 12 23 35 Settlement loss — — — 1 Total net periodic pension cost (benefit) $ (13) $ (11) $ (41) $ (33) The following table indicates the line items in which the non-service cost (benefit) is presented in the Condensed Consolidated Statements of Operations. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Non-Service Cost (Benefit): Insurance claims and policyholders' benefits $ (3) $ (3) $ (11) $ (9) Other operating expenses (10) (8) (30) (24) Total net periodic pension cost (benefit) $ (13) $ (11) $ (41) $ (33) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) by Component (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) by Component | The tables below display the changes in Accumulated other comprehensive income (loss) by component. (In millions) Net unrealized gains (losses) on investments with an allowance for credit losses Net unrealized gains (losses) on other investments Pension and postretirement benefits Cumulative foreign currency translation adjustment Total Balance as of July 1, 2022 $ (8) $ (1,918) $ (592) $ (195) $ (2,713) Other comprehensive income (loss) before reclassifications — (1,429) — (103) (1,532) Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $—, $11, $2, $— and $13 2 (102) (6) — (106) Other comprehensive income (loss) net of tax (expense) benefit of $1, $370, $(2), $— and $369 (2) (1,327) 6 (103) (1,426) Balance as of September 30, 2022 $ (10) $ (3,245) $ (586) $ (298) $ (4,139) (In millions) Net unrealized gains (losses) on investments with an allowance for credit losses Net unrealized gains (losses) on other investments Pension and postretirement benefits Cumulative foreign currency translation adjustment Total Balance as of July 1, 2021 $ — $ 1,418 $ (829) $ (80) $ 509 Other comprehensive income (loss) before reclassifications — (121) (1) (33) (155) Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $—, $(5), $2, $— and $(3) — 17 (9) — 8 Other comprehensive income (loss) net of tax (expense) benefit of $—, $37, $(2), $— and $35 — (138) 8 (33) (163) Balance as of September 30, 2021 $ — $ 1,280 $ (821) $ (113) $ 346 (In millions) Net unrealized gains (losses) on investments with an allowance for credit losses Net unrealized gains (losses) on other investments Pension and postretirement benefits Cumulative foreign currency translation adjustment Total Balance as of January 1, 2022 $ (2) $ 1,039 $ (604) $ (113) $ 320 Other comprehensive income (loss) before reclassifications (5) (4,401) — (185) (4,591) Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $(1), $15, $5, $— and $19 3 (117) (18) — (132) Other comprehensive income (loss) net of tax (expense) benefit of $2, $1,150, $(5), $— and $1,147 (8) (4,284) 18 (185) (4,459) Balance as of September 30, 2022 $ (10) $ (3,245) $ (586) $ (298) $ (4,139) (In millions) Net unrealized gains (losses) on investments with an allowance for credit losses Net unrealized gains (losses) on other investments Pension and postretirement benefits Cumulative foreign currency translation adjustment Total Balance as of January 1, 2021 $ — $ 1,745 $ (848) $ (94) $ 803 Other comprehensive income (loss) before reclassifications (2) (391) (1) (19) (413) Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $1, $(20), $7, $— and $(12) (2) 74 (28) — 44 Other comprehensive income (loss) net of tax (expense) benefit of $—, $124, $(7), $— and $117 — (465) 27 (19) (457) Balance as of September 30, 2021 $ — $ 1,280 $ (821) $ (113) $ 346 |
Reclassification out of Accumulated Other Comprehensive Income | Amounts reclassified from Accumulated other comprehensive income (loss) shown above are reported in Net income (loss) as follows: Component of AOCI Condensed Consolidated Statements of Operations Line Item Affected by Reclassifications Net unrealized gains (losses) on investments with an allowance for credit losses and Net unrealized gains (losses) on other investments Net investment gains (losses) Pension and postretirement benefits Other operating expenses and Insurance claims and policyholders' benefits |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Significant components of the Company's continuing operations and selected balance sheet items | The Company's results of operations and selected balance sheet items by segment are presented in the following tables. Three months ended September 30, 2022 Specialty Commercial International Life & Corporate (In millions) Eliminations Total Operating revenues Net earned premiums $ 810 $ 1,023 $ 270 $ 118 $ — $ — $ 2,221 Net investment income 102 112 16 187 5 — 422 Non-insurance warranty revenue 399 — — — — — 399 Other revenues (1) 13 — — 1 (2) 11 Total operating revenues 1,310 1,148 286 305 6 (2) 3,053 Claims, benefits and expenses Net incurred claims and benefits 459 733 169 310 (13) — 1,658 Policyholders’ dividends 2 5 — — — — 7 Amortization of deferred acquisition costs 169 163 51 — — — 383 Non-insurance warranty expense 371 — — — — — 371 Other insurance related expenses 88 145 35 29 1 (1) 297 Other expenses 15 3 11 2 47 (1) 77 Total claims, benefits and expenses 1,104 1,049 266 341 35 (2) 2,793 Core income (loss) before income tax 206 99 20 (36) (29) — 260 Income tax (expense) benefit on core income (loss) (45) (19) (1) 14 4 — (47) Core income (loss) $ 161 $ 80 $ 19 $ (22) $ (25) $ — 213 Net investment gains (losses) (96) Income tax (expense) benefit on net investment gains (losses) 11 Net investment gains (losses), after tax (85) Net income (loss) $ 128 Three months ended September 30, 2021 Specialty Commercial International Life & Corporate (In millions) Eliminations Total Operating revenues Net earned premiums $ 773 $ 893 $ 271 $ 123 $ — $ (1) $ 2,059 Net investment income 116 141 14 240 2 — 513 Non-insurance warranty revenue 357 — — — — — 357 Other revenues 1 7 — (1) 2 (1) 8 Total operating revenues 1,247 1,041 285 362 4 (2) 2,937 Claims, benefits and expenses Net incurred claims and benefits 446 720 171 296 (6) — 1,627 Policyholders’ dividends — 5 — — — — 5 Amortization of deferred acquisition costs 165 148 55 — — — 368 Non-insurance warranty expense 330 — — — — — 330 Other insurance related expenses 71 125 32 27 (1) (1) 253 Other expenses 13 8 4 1 37 (1) 62 Total claims, benefits and expenses 1,025 1,006 262 324 30 (2) 2,645 Core income (loss) before income tax 222 35 23 38 (26) — 292 Income tax (expense) benefit on core income (loss) (49) (8) (6) 3 5 — (55) Core income (loss) $ 173 $ 27 $ 17 $ 41 $ (21) $ — 237 Net investment gains (losses) 22 Income tax (expense) benefit on net investment gains (losses) (3) Net investment gains (losses), after tax 19 Net income (loss) $ 256 Nine months ended September 30, 2022 Specialty Commercial International Life & Corporate (In millions) Eliminations Total Operating revenues Net earned premiums $ 2,376 $ 2,901 $ 803 $ 356 $ (1) $ — $ 6,435 Net investment income 305 343 44 600 10 — 1,302 Non-insurance warranty revenue 1,173 — — — — — 1,173 Other revenues — 25 — — 4 (5) 24 Total operating revenues 3,854 3,269 847 956 13 (5) 8,934 Claims, benefits and expenses Net incurred claims and benefits 1,360 1,916 487 884 36 — 4,683 Policyholders’ dividends 5 15 — — — — 20 Amortization of deferred acquisition costs 488 467 146 — — — 1,101 Non-insurance warranty expense 1,092 — — — — — 1,092 Other insurance related expenses 250 409 112 89 4 (1) 863 Other expenses 40 21 25 7 133 (4) 222 Total claims, benefits and expenses 3,235 2,828 770 980 173 (5) 7,981 Core income (loss) before income tax 619 441 77 (24) (160) — 953 Income tax (expense) benefit on core income (loss) (134) (91) (14) 31 29 — (179) Core income (loss) $ 485 $ 350 $ 63 $ 7 $ (131) $ — 774 Net investment gains (losses) (166) Income tax (expense) benefit on net investment gains (losses) 38 Net investment gains (losses), after tax (128) Net income (loss) $ 646 September 30, 2022 (In millions) Reinsurance receivables $ 1,511 $ 952 $ 385 $ 453 $ 2,420 $ — $ 5,721 Insurance receivables 1,061 1,640 309 4 — — 3,014 Deferred acquisition costs 379 315 93 — — — 787 Goodwill 117 — 25 — — — 142 Deferred non-insurance warranty acquisition expense 3,653 — — — — — 3,653 Insurance reserves Claim and claim adjustment expenses 6,925 9,172 2,262 3,645 2,696 — 24,700 Unearned premiums 3,144 2,364 576 111 — — 6,195 Future policy benefits — — — 10,454 — — 10,454 Deferred non-insurance warranty revenue 4,706 — — — — — 4,706 Nine months ended September 30, 2021 Specialty Commercial International Life & Corporate (In millions) Eliminations Total Operating revenues Net earned premiums $ 2,270 $ 2,629 $ 789 $ 369 $ — $ (1) $ 6,056 Net investment income 367 463 42 724 12 — 1,608 Non-insurance warranty revenue 1,054 — — — — — 1,054 Other revenues 1 17 1 (1) 5 (4) 19 Total operating revenues 3,692 3,109 832 1,092 17 (5) 8,737 Claims, benefits and expenses Net incurred claims and benefits 1,312 1,947 485 899 23 — 4,666 Policyholders’ dividends 2 16 — — — — 18 Amortization of deferred acquisition costs 478 449 157 — — — 1,084 Non-insurance warranty expense 973 — — — — — 973 Other insurance related expenses 212 376 106 77 9 (1) 779 Other expenses 36 28 (4) 5 119 (4) 180 Total claims, benefits and expenses 3,013 2,816 744 981 151 (5) 7,700 Core income (loss) before income tax 679 293 88 111 (134) — 1,037 Income tax (expense) benefit on core income (loss) (148) (60) (21) 9 24 — (196) Core income (loss) $ 531 $ 233 $ 67 $ 120 $ (110) $ — 841 Net investment gains (losses) 117 Income tax (expense) benefit on net investment gains (losses) (22) Net investment gains (losses), after tax 95 Net income (loss) $ 936 December 31, 2021 (In millions) Reinsurance receivables $ 1,200 $ 923 $ 381 $ 401 $ 2,579 $ — $ 5,484 Insurance receivables 1,136 1,488 340 6 4 — 2,974 Deferred acquisition costs 363 278 96 — — — 737 Goodwill 117 — 31 — — — 148 Deferred non-insurance warranty acquisition expense 3,476 — — — — — 3,476 Insurance reserves Claim and claim adjustment expenses 6,433 8,890 2,280 3,754 2,817 — 24,174 Unearned premiums 3,001 2,066 585 109 — — 5,761 Future policy benefits — — — 13,236 — — 13,236 Deferred non-insurance warranty revenue 4,503 — — — — — 4,503 |
Revenues by line of business | The following table presents operating revenues by line of business for each reportable segment. Periods ended September 30 Three Months Nine Months (In millions) 2022 2021 2022 2021 Specialty Management & Professional Liability $ 688 $ 684 $ 2,041 $ 2,044 Surety 171 157 481 454 Warranty & Alternative Risks 451 406 1,332 1,194 Specialty revenues 1,310 1,247 3,854 3,692 Commercial Middle Market 397 363 1,133 1,119 Construction 372 345 1,046 978 Small Business 149 144 430 413 Other Commercial 230 189 660 599 Commercial revenues 1,148 1,041 3,269 3,109 International Canada 93 87 272 253 Europe 112 123 350 349 Hardy 81 75 225 230 International revenues 286 285 847 832 Life & Group revenues 305 362 956 1,092 Corporate & Other revenues 6 4 13 17 Eliminations (2) (2) (5) (5) Total operating revenues 3,053 2,937 8,934 8,737 Net investment gains (losses) (96) 22 (166) 117 Total revenues $ 2,957 $ 2,959 $ 8,768 $ 8,854 |
General (Narrative) (Details)
General (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2018-12 [Member] | |
Pro Forma | Accumulated Other Comprehensive (Loss) Income | Cumulative Effect, Period of Adoption, Adjustment | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Decrease in accumulated other comprehensive income | $ 2,300 | |
Loews | CNAF Consolidated | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Noncontrolling interest, ownership percentage by parent (as a percent) | 90% |
Earnings (Loss) Per Share (Comp
Earnings (Loss) Per Share (Computations) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 128 | $ 256 | $ 646 | $ 936 |
Basic | ||||
Weighted average shares outstanding (in shares) | 271.4 | 271.7 | 271.7 | 271.8 |
Diluted | ||||
Weighted average shares outstanding (in shares) | 271.4 | 271.7 | 271.7 | 271.8 |
Diluted effect of stock-based awards under compensation plans (in shares) | 0.9 | 1 | 0.9 | 1 |
Total (in shares) | 272.3 | 272.7 | 272.6 | 272.8 |
Earnings (loss) per share | ||||
Basic earnings (loss) per share (in usd per share) | $ 0.47 | $ 0.94 | $ 2.38 | $ 3.44 |
Diluted earnings (loss) per share (in usd per share) | $ 0.47 | $ 0.94 | $ 2.37 | $ 3.43 |
Earnings (Loss) Per Share (Narr
Earnings (Loss) Per Share (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||
Treasury stock, shares, acquired (in shares) | 890,000 | 377,615 |
Purchase of treasury stock | $ 39 | $ 18 |
Investments (Net investment inc
Investments (Net investment income) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net Investment Income [Line Items] | ||||
Gross investment income | $ 440 | $ 528 | $ 1,355 | $ 1,656 |
Investment expense | (18) | (15) | (53) | (48) |
Net investment income | 422 | 513 | 1,302 | 1,608 |
Fixed maturity securities | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 454 | 425 | 1,324 | 1,278 |
Equity securities | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 2 | 4 | (7) | 53 |
Limited partnership investments | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | (35) | 85 | (11) | 274 |
Mortgage loans | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 13 | 13 | 40 | 42 |
Short term investments | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 4 | 1 | 6 | 1 |
Trading portfolio | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 1 | 1 | 2 | 8 |
Other | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 1 | (1) | 1 | 0 |
Common Stock | ||||
Net Investment Income [Line Items] | ||||
Net investment income (loss) recognized due to the change in fair value of common stock held as of September 30, 2022 and 2021 | $ (18) | $ (7) | $ (38) | $ 11 |
Investments (Net realized inves
Investments (Net realized investment gains (losses)) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fixed maturity securities: | ||||
Gross gains | $ 23 | $ 50 | $ 94 | $ 159 |
Gross losses | (134) | (28) | (222) | (68) |
Net investment gains (losses) on fixed maturity securities | (111) | 22 | (128) | 91 |
Equity securities | (2) | (2) | (111) | 17 |
Derivatives | 24 | 2 | 79 | 7 |
Mortgage loans | (8) | 0 | (8) | 0 |
Short term investments and other | 1 | 0 | 2 | 2 |
Net investment gains (losses) | (96) | 22 | (166) | 117 |
Non-redeemable preferred stock | ||||
Fixed maturity securities: | ||||
Net investment income (loss) recognized due to the change in fair value of common stock held as of September 30, 2022 and 2021 | $ (2) | $ (2) | $ (109) | $ 15 |
Investments (Components of othe
Investments (Components of other-than-temporary impairment losses recognized in earnings) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Securities, Available-for-sale [Line Items] | ||||
Impairment losses (gains) recognized in earnings | $ 25 | $ 11 | $ 55 | $ 16 |
Corporate and other bonds | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Impairment losses (gains) recognized in earnings | 24 | 0 | 53 | 5 |
Asset-backed | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Impairment losses (gains) recognized in earnings | $ 1 | $ 11 | $ 2 | $ 11 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Gain (Loss) on Securities [Line Items] | |||||
Investment and derivative, realized gain (loss), coinsurance agreement | $ (35) | ||||
Debt securities, available-for-sale, realized loss | 134 | $ 28 | $ 222 | $ 68 | |
Embedded derivative, gain on embedded derivative | 24 | ||||
Financing receivable, credit loss, expense (reversal) | 8 | 0 | 8 | 0 | |
Impairment losses (gains) recognized in earnings | 25 | 11 | 55 | 16 | |
Reduction of net unrealized gains on investments included in AOCI due to shadow adjustments | 46 | 46 | $ 2,477 | ||
Notional value | 220 | 220 | 270 | ||
Other liabilities | 1 | 1 | (12) | ||
Commitments to purchase or fund privately placed debt securities | 1,595 | 1,595 | |||
Commitments to sell various privately placed debt securities | 100 | 100 | |||
Funds Withheld Liability Securities | |||||
Gain (Loss) on Securities [Line Items] | |||||
Debt securities, available-for-sale, realized loss | (59) | ||||
Mortgage loans | |||||
Gain (Loss) on Securities [Line Items] | |||||
Financing receivable, accrued interest, after allowance for credit loss | 3 | 3 | |||
Fixed maturity securities | |||||
Gain (Loss) on Securities [Line Items] | |||||
Debt securities, available-for-sale, accrued interest, after allowance for credit loss | $ 401 | $ 387 | $ 401 | $ 387 | $ 369 |
Investments (Summary of fixed m
Investments (Summary of fixed maturity and equity securities) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Fixed maturity securities available-for-sale: | ||||||
Gross Unrealized Gains | $ 507 | $ 4,558 | ||||
Gross Unrealized Losses | 4,583 | 112 | ||||
Allowance for Credit Losses | 3 | $ 5 | 18 | $ 31 | $ 45 | $ 40 |
Estimated Fair Value | 37,239 | 44,373 | ||||
Total fixed maturity securities trading | ||||||
Debt securities, amortized cost | 41,330 | 39,952 | ||||
Total fixed maturity securities | 37,251 | 44,380 | ||||
Corporate and other bonds | ||||||
Fixed maturity securities available-for-sale: | ||||||
Cost or Amortized Cost | 23,082 | 21,444 | ||||
Gross Unrealized Gains | 231 | 2,755 | ||||
Gross Unrealized Losses | 2,398 | 56 | ||||
Allowance for Credit Losses | 0 | 0 | 11 | 10 | 24 | 23 |
Estimated Fair Value | 20,915 | 24,132 | ||||
Total fixed maturity securities trading | ||||||
Total fixed maturity securities | 21,537 | 24,852 | ||||
States, municipalities and political subdivisions | ||||||
Fixed maturity securities available-for-sale: | ||||||
Cost or Amortized Cost | 9,244 | 10,358 | ||||
Gross Unrealized Gains | 259 | 1,599 | ||||
Gross Unrealized Losses | 1,080 | 14 | ||||
Allowance for Credit Losses | 0 | 0 | ||||
Estimated Fair Value | 8,423 | 11,943 | ||||
Total fixed maturity securities trading | ||||||
Total fixed maturity securities | 8,423 | 11,943 | ||||
Asset-backed | ||||||
Fixed maturity securities available-for-sale: | ||||||
Cost or Amortized Cost | 8,338 | 7,441 | ||||
Gross Unrealized Gains | 12 | 188 | ||||
Gross Unrealized Losses | 1,056 | 37 | ||||
Allowance for Credit Losses | 3 | $ 5 | 7 | $ 21 | $ 21 | $ 17 |
Estimated Fair Value | 7,291 | 7,585 | ||||
Total fixed maturity securities trading | ||||||
Total fixed maturity securities | 7,291 | 7,585 | ||||
Residential mortgage-backed | ||||||
Fixed maturity securities available-for-sale: | ||||||
Cost or Amortized Cost | 3,153 | 2,893 | ||||
Gross Unrealized Gains | 6 | 71 | ||||
Gross Unrealized Losses | 470 | 8 | ||||
Allowance for Credit Losses | 0 | 0 | ||||
Estimated Fair Value | 2,689 | 2,956 | ||||
Commercial mortgage-backed | ||||||
Fixed maturity securities available-for-sale: | ||||||
Cost or Amortized Cost | 1,921 | 1,987 | ||||
Gross Unrealized Gains | 4 | 63 | ||||
Gross Unrealized Losses | 237 | 19 | ||||
Allowance for Credit Losses | 0 | 0 | ||||
Estimated Fair Value | 1,688 | 2,031 | ||||
Other asset-backed | ||||||
Fixed maturity securities available-for-sale: | ||||||
Cost or Amortized Cost | 3,264 | 2,561 | ||||
Gross Unrealized Gains | 2 | 54 | ||||
Gross Unrealized Losses | 349 | 10 | ||||
Allowance for Credit Losses | 3 | 7 | ||||
Estimated Fair Value | 2,914 | 2,598 | ||||
Fixed maturity securities | ||||||
Fixed maturity securities available-for-sale: | ||||||
Cost or Amortized Cost | 41,318 | 39,945 | ||||
Gross Unrealized Gains | 507 | 4,558 | ||||
Gross Unrealized Losses | 4,583 | 112 | ||||
Allowance for Credit Losses | 3 | 18 | ||||
Estimated Fair Value | 37,239 | 44,373 | ||||
U.S. Treasury and obligations of government-sponsored enterprises | ||||||
Fixed maturity securities available-for-sale: | ||||||
Cost or Amortized Cost | 107 | 132 | ||||
Gross Unrealized Gains | 3 | 1 | ||||
Gross Unrealized Losses | 1 | 3 | ||||
Allowance for Credit Losses | 0 | 0 | ||||
Estimated Fair Value | 109 | 130 | ||||
Foreign government | ||||||
Fixed maturity securities available-for-sale: | ||||||
Cost or Amortized Cost | 544 | 570 | ||||
Gross Unrealized Gains | 2 | 15 | ||||
Gross Unrealized Losses | 48 | 2 | ||||
Allowance for Credit Losses | 0 | 0 | ||||
Estimated Fair Value | 498 | 583 | ||||
Redeemable preferred stock | ||||||
Fixed maturity securities available-for-sale: | ||||||
Cost or Amortized Cost | 3 | 0 | ||||
Gross Unrealized Gains | 0 | 0 | ||||
Gross Unrealized Losses | 0 | 0 | ||||
Allowance for Credit Losses | 0 | 0 | ||||
Estimated Fair Value | 3 | 0 | ||||
Total fixed maturity securities trading | ||||||
Total fixed maturity securities trading | ||||||
Cost or amortized cost, trading securities | 12 | 7 | ||||
Estimated fair value, trading securities | $ 12 | $ 7 |
Investments (Securities in a gr
Investments (Securities in a gross unrealized loss position) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | $ 28,394 | $ 5,695 |
Gross Unrealized Losses, Less than 12 Months | 4,152 | 92 |
Estimated Fair Value, 12 Months or Longer | 1,550 | 370 |
Gross Unrealized Losses, 12 Months or Longer | 431 | 20 |
Estimated Fair Value, Total | 29,944 | 6,065 |
Gross Unrealized Losses, Total | 4,583 | 112 |
Corporate and other bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | 16,707 | 2,389 |
Gross Unrealized Losses, Less than 12 Months | 2,117 | 48 |
Estimated Fair Value, 12 Months or Longer | 914 | 136 |
Gross Unrealized Losses, 12 Months or Longer | 281 | 8 |
Estimated Fair Value, Total | 17,621 | 2,525 |
Gross Unrealized Losses, Total | 2,398 | 56 |
States, municipalities and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | 4,793 | 730 |
Gross Unrealized Losses, Less than 12 Months | 1,029 | 14 |
Estimated Fair Value, 12 Months or Longer | 128 | 0 |
Gross Unrealized Losses, 12 Months or Longer | 51 | 0 |
Estimated Fair Value, Total | 4,921 | 730 |
Gross Unrealized Losses, Total | 1,080 | 14 |
Asset-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | 6,387 | 2,410 |
Gross Unrealized Losses, Less than 12 Months | 963 | 25 |
Estimated Fair Value, 12 Months or Longer | 483 | 229 |
Gross Unrealized Losses, 12 Months or Longer | 93 | 12 |
Estimated Fair Value, Total | 6,870 | 2,639 |
Gross Unrealized Losses, Total | 1,056 | 37 |
Residential mortgage-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | 2,582 | 1,043 |
Gross Unrealized Losses, Less than 12 Months | 462 | 8 |
Estimated Fair Value, 12 Months or Longer | 17 | 0 |
Gross Unrealized Losses, 12 Months or Longer | 8 | 0 |
Estimated Fair Value, Total | 2,599 | 1,043 |
Gross Unrealized Losses, Total | 470 | 8 |
Commercial mortgage-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | 1,372 | 527 |
Gross Unrealized Losses, Less than 12 Months | 194 | 7 |
Estimated Fair Value, 12 Months or Longer | 233 | 167 |
Gross Unrealized Losses, 12 Months or Longer | 43 | 12 |
Estimated Fair Value, Total | 1,605 | 694 |
Gross Unrealized Losses, Total | 237 | 19 |
Other asset-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | 2,433 | 840 |
Gross Unrealized Losses, Less than 12 Months | 307 | 10 |
Estimated Fair Value, 12 Months or Longer | 233 | 62 |
Gross Unrealized Losses, 12 Months or Longer | 42 | 0 |
Estimated Fair Value, Total | 2,666 | 902 |
Gross Unrealized Losses, Total | 349 | 10 |
U.S. Treasury and obligations of government-sponsored enterprises | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | 61 | 69 |
Gross Unrealized Losses, Less than 12 Months | 1 | 3 |
Estimated Fair Value, 12 Months or Longer | 0 | 5 |
Gross Unrealized Losses, 12 Months or Longer | 0 | 0 |
Estimated Fair Value, Total | 61 | 74 |
Gross Unrealized Losses, Total | 1 | 3 |
Foreign government | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | 446 | 97 |
Gross Unrealized Losses, Less than 12 Months | 42 | 2 |
Estimated Fair Value, 12 Months or Longer | 25 | 0 |
Gross Unrealized Losses, 12 Months or Longer | 6 | 0 |
Estimated Fair Value, Total | 471 | 97 |
Gross Unrealized Losses, Total | $ 48 | $ 2 |
Investments (Securities in a _2
Investments (Securities in a gross unrealized loss position by ratings) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | $ 29,944 | $ 6,065 |
Gross Unrealized Losses | 4,583 | 112 |
U.S. Government, Government agencies and Government-sponsored enterprises | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | 2,360 | 898 |
Gross Unrealized Losses | 360 | 8 |
AAA | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | 1,566 | 368 |
Gross Unrealized Losses | 318 | 6 |
AA | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | 4,430 | 875 |
Gross Unrealized Losses | 917 | 17 |
A | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | 6,548 | 1,516 |
Gross Unrealized Losses | 838 | 23 |
BBB | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | 13,394 | 1,812 |
Gross Unrealized Losses | 1,902 | 42 |
Non-investment grade | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | 1,646 | 596 |
Gross Unrealized Losses | $ 248 | $ 16 |
Investments (Allowance on avail
Investments (Allowance on available-for-sale securities with credit impairments and PCD assets activity) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Allowance for credit losses: | ||||
Balance, beginning of period | $ 5 | $ 45 | $ 18 | $ 40 |
Additions to the allowance for credit losses: | ||||
Securities for which credit losses were not previously recorded | 0 | 0 | 0 | 14 |
Available-for-sale securities accounted for as PCD assets | 0 | 2 | 3 | 8 |
Reductions to the allowance for credit losses: | ||||
Securities sold during the period (realized) | 0 | 0 | 0 | 6 |
Write-offs charged against the allowance | 0 | 16 | 12 | 16 |
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period | (2) | 0 | (6) | (9) |
Balance, end of period | 3 | 31 | 3 | 31 |
Corporate and other bonds | ||||
Allowance for credit losses: | ||||
Balance, beginning of period | 0 | 24 | 11 | 23 |
Additions to the allowance for credit losses: | ||||
Securities for which credit losses were not previously recorded | 0 | 0 | 0 | 14 |
Available-for-sale securities accounted for as PCD assets | 0 | 2 | 0 | 4 |
Reductions to the allowance for credit losses: | ||||
Securities sold during the period (realized) | 0 | 0 | 0 | 6 |
Write-offs charged against the allowance | 0 | 16 | 12 | 16 |
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period | 0 | 0 | 1 | (9) |
Balance, end of period | 0 | 10 | 0 | 10 |
Asset-backed | ||||
Allowance for credit losses: | ||||
Balance, beginning of period | 5 | 21 | 7 | 17 |
Additions to the allowance for credit losses: | ||||
Securities for which credit losses were not previously recorded | 0 | 0 | 0 | 0 |
Available-for-sale securities accounted for as PCD assets | 0 | 0 | 3 | 4 |
Reductions to the allowance for credit losses: | ||||
Securities sold during the period (realized) | 0 | 0 | 0 | 0 |
Write-offs charged against the allowance | 0 | 0 | 0 | 0 |
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period | (2) | 0 | (7) | 0 |
Balance, end of period | $ 3 | $ 21 | $ 3 | $ 21 |
Investments (Contractual maturi
Investments (Contractual maturity) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Investments [Abstract] | ||
Due in one year or less, cost or amortized cost | $ 952 | $ 1,603 |
Due after one year through five years, cost or amortized cost | 9,487 | 10,637 |
Due after five years through ten years, cost or amortized cost | 14,323 | 13,294 |
Due after ten years, cost or amortized cost | 16,556 | 14,411 |
Cost or Amortized Cost | 41,318 | 39,945 |
Due in one year or less, estimated fair value | 948 | 1,624 |
Due after one year through five years, estimated fair value | 9,000 | 11,229 |
Due after five years through ten years, estimated fair value | 12,765 | 14,338 |
Due after ten years, estimated fair value | 14,526 | 17,182 |
Estimated Fair Value | $ 37,239 | $ 44,373 |
Investments (Credit quality ind
Investments (Credit quality indicator) (Details) - Mortgage loans $ in Millions | Sep. 30, 2022 USD ($) |
Debt Securities, Available-for-sale [Line Items] | |
2022 | $ 129 |
2021 | 94 |
2020 | 150 |
2019 | 208 |
2018 | 64 |
Prior | 332 |
Total | 977 |
DSCR ≥1.6x | LTV less than 55% | |
Debt Securities, Available-for-sale [Line Items] | |
2022 | 9 |
2021 | 13 |
2020 | 112 |
2019 | 29 |
2018 | 54 |
Prior | 275 |
Total | 492 |
DSCR ≥1.6x | LTV 55% to 65% | |
Debt Securities, Available-for-sale [Line Items] | |
2022 | 0 |
2021 | 0 |
2020 | 0 |
2019 | 0 |
2018 | 0 |
Prior | 0 |
Total | 0 |
DSCR ≥1.6x | LTV greater than 65% | |
Debt Securities, Available-for-sale [Line Items] | |
2022 | 18 |
2021 | 11 |
2020 | 0 |
2019 | 0 |
2018 | 0 |
Prior | 0 |
Total | 29 |
DSCR 1.2x - 1.6x | LTV less than 55% | |
Debt Securities, Available-for-sale [Line Items] | |
2022 | 5 |
2021 | 49 |
2020 | 18 |
2019 | 56 |
2018 | 10 |
Prior | 42 |
Total | 180 |
DSCR 1.2x - 1.6x | LTV 55% to 65% | |
Debt Securities, Available-for-sale [Line Items] | |
2022 | 87 |
2021 | 0 |
2020 | 20 |
2019 | 0 |
2018 | 0 |
Prior | 8 |
Total | 115 |
DSCR 1.2x - 1.6x | LTV greater than 65% | |
Debt Securities, Available-for-sale [Line Items] | |
2022 | 0 |
2021 | 0 |
2020 | 0 |
2019 | 0 |
2018 | 0 |
Prior | 0 |
Total | 0 |
DSCR ≤1.2 | LTV less than 55% | |
Debt Securities, Available-for-sale [Line Items] | |
2022 | 0 |
2021 | 0 |
2020 | 0 |
2019 | 57 |
2018 | 0 |
Prior | 0 |
Total | 57 |
DSCR ≤1.2 | LTV 55% to 65% | |
Debt Securities, Available-for-sale [Line Items] | |
2022 | 0 |
2021 | 21 |
2020 | 0 |
2019 | 44 |
2018 | 0 |
Prior | 0 |
Total | 65 |
DSCR ≤1.2 | LTV greater than 65% | |
Debt Securities, Available-for-sale [Line Items] | |
2022 | 10 |
2021 | 0 |
2020 | 0 |
2019 | 22 |
2018 | 0 |
Prior | 7 |
Total | $ 39 |
Fair Value (Assets and liabilit
Fair Value (Assets and liabilities measured at fair value on a recurring basis) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Fixed maturity securities: | ||
Fixed maturity securities | $ 37,251 | $ 44,380 |
Equity securities: | ||
Equity securities | 891 | 1,035 |
Short term and other | 929 | 1,872 |
Total assets | 39,071 | 47,287 |
Other liabilities | (1) | 12 |
Total liabilities | (1) | 12 |
Corporate and other bonds | ||
Fixed maturity securities: | ||
Fixed maturity securities | 21,537 | 24,852 |
States, municipalities and political subdivisions | ||
Fixed maturity securities: | ||
Fixed maturity securities | 8,423 | 11,943 |
Asset-backed | ||
Fixed maturity securities: | ||
Fixed maturity securities | 7,291 | 7,585 |
Common Stock | ||
Equity securities: | ||
Equity securities | 210 | 233 |
Non-redeemable preferred stock | ||
Equity securities: | ||
Equity securities | 681 | 802 |
Level 1 | ||
Fixed maturity securities: | ||
Fixed maturity securities | 118 | 140 |
Equity securities: | ||
Equity securities | 236 | 285 |
Short term and other | 895 | 1,798 |
Total assets | 1,249 | 2,223 |
Other liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Level 1 | Corporate and other bonds | ||
Fixed maturity securities: | ||
Fixed maturity securities | 118 | 140 |
Level 1 | States, municipalities and political subdivisions | ||
Fixed maturity securities: | ||
Fixed maturity securities | 0 | 0 |
Level 1 | Asset-backed | ||
Fixed maturity securities: | ||
Fixed maturity securities | 0 | 0 |
Level 1 | Common Stock | ||
Equity securities: | ||
Equity securities | 180 | 220 |
Level 1 | Non-redeemable preferred stock | ||
Equity securities: | ||
Equity securities | 56 | 65 |
Level 2 | ||
Fixed maturity securities: | ||
Fixed maturity securities | 35,573 | 42,691 |
Equity securities: | ||
Equity securities | 625 | 721 |
Short term and other | 34 | 74 |
Total assets | 36,232 | 43,486 |
Other liabilities | (1) | 12 |
Total liabilities | (1) | 12 |
Level 2 | Corporate and other bonds | ||
Fixed maturity securities: | ||
Fixed maturity securities | 20,617 | 23,775 |
Level 2 | States, municipalities and political subdivisions | ||
Fixed maturity securities: | ||
Fixed maturity securities | 8,381 | 11,887 |
Level 2 | Asset-backed | ||
Fixed maturity securities: | ||
Fixed maturity securities | 6,575 | 7,029 |
Level 2 | Common Stock | ||
Equity securities: | ||
Equity securities | 0 | 0 |
Level 2 | Non-redeemable preferred stock | ||
Equity securities: | ||
Equity securities | 625 | 721 |
Level 3 | ||
Fixed maturity securities: | ||
Fixed maturity securities | 1,560 | 1,549 |
Equity securities: | ||
Equity securities | 30 | 29 |
Short term and other | 0 | 0 |
Total assets | 1,590 | 1,578 |
Other liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Level 3 | Corporate and other bonds | ||
Fixed maturity securities: | ||
Fixed maturity securities | 802 | 937 |
Level 3 | States, municipalities and political subdivisions | ||
Fixed maturity securities: | ||
Fixed maturity securities | 42 | 56 |
Level 3 | Asset-backed | ||
Fixed maturity securities: | ||
Fixed maturity securities | 716 | 556 |
Level 3 | Common Stock | ||
Equity securities: | ||
Equity securities | 30 | 13 |
Level 3 | Non-redeemable preferred stock | ||
Equity securities: | ||
Equity securities | $ 0 | $ 16 |
Fair Value (Table of reconcilia
Fair Value (Table of reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, Beginning, Assets | $ 1,580 | $ 1,375 | $ 1,578 | $ 1,151 |
Reported in Net investment gains (losses) | (1) | (2) | (1) | (11) |
Reported in Other comprehensive income (loss) | (92) | 2 | (339) | (27) |
Total realized and unrealized investment gains (losses) | (91) | 2 | (329) | (32) |
Purchases | 125 | 139 | 487 | 429 |
Sales | 0 | (20) | (10) | (27) |
Settlements | (18) | (22) | (108) | (74) |
Transfers into Level 3 | 47 | 52 | 76 | 92 |
Transfers out of Level 3 | (53) | (90) | (104) | (103) |
Balance, Ending, Assets | 1,590 | 1,436 | 1,590 | 1,436 |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Net income (loss) in the period | (7) | (3) | (8) | (1) |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Other comprehensive income (loss) in the period | (93) | 2 | (338) | (27) |
Corporate and other bonds | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, Beginning, Assets | 846 | 883 | 937 | 770 |
Reported in Net investment gains (losses) | 0 | 1 | (2) | (9) |
Reported in Other comprehensive income (loss) | (50) | 1 | (203) | (23) |
Total realized and unrealized investment gains (losses) | (49) | 2 | (204) | (32) |
Purchases | 9 | 55 | 127 | 219 |
Sales | 0 | 0 | (5) | (3) |
Settlements | (4) | (11) | (63) | (35) |
Transfers into Level 3 | 0 | 0 | 10 | 10 |
Transfers out of Level 3 | 0 | (52) | 0 | (52) |
Balance, Ending, Assets | 802 | 877 | 802 | 877 |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Net income (loss) in the period | 0 | 0 | 0 | 0 |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Other comprehensive income (loss) in the period | (51) | 2 | (203) | (22) |
States, municipalities and political subdivisions | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, Beginning, Assets | 46 | 57 | 56 | 46 |
Reported in Net investment gains (losses) | 0 | 0 | 0 | 0 |
Reported in Other comprehensive income (loss) | (4) | 0 | (14) | 0 |
Total realized and unrealized investment gains (losses) | (4) | 0 | (14) | 0 |
Purchases | 0 | 0 | 0 | 12 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | (1) |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Balance, Ending, Assets | 42 | 57 | 42 | 57 |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Net income (loss) in the period | 0 | 0 | 0 | 0 |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Other comprehensive income (loss) in the period | (4) | 0 | (14) | 0 |
Asset-backed | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, Beginning, Assets | 641 | 410 | 556 | 308 |
Reported in Net investment gains (losses) | 2 | 0 | 7 | 0 |
Reported in Other comprehensive income (loss) | (38) | 1 | (122) | (4) |
Total realized and unrealized investment gains (losses) | (31) | 2 | (104) | 0 |
Purchases | 116 | 83 | 348 | 197 |
Sales | 0 | (9) | (2) | (9) |
Settlements | (14) | (11) | (54) | (38) |
Transfers into Level 3 | 47 | 41 | 66 | 71 |
Transfers out of Level 3 | (43) | (38) | (94) | (51) |
Balance, Ending, Assets | 716 | 478 | 716 | 478 |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Net income (loss) in the period | 0 | 0 | 0 | 0 |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Other comprehensive income (loss) in the period | (38) | 0 | (121) | (5) |
Equity securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, Beginning, Assets | 47 | 25 | 29 | 27 |
Reported in Net investment gains (losses) | (3) | (3) | (6) | (2) |
Reported in Other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Total realized and unrealized investment gains (losses) | (7) | (2) | (7) | 0 |
Purchases | 0 | 1 | 12 | 1 |
Sales | 0 | (11) | (3) | (15) |
Settlements | 0 | 0 | 9 | 0 |
Transfers into Level 3 | 0 | 11 | 0 | 11 |
Transfers out of Level 3 | (10) | 0 | (10) | 0 |
Balance, Ending, Assets | 30 | 24 | 30 | 24 |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Net income (loss) in the period | (7) | (3) | (8) | (1) |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Other comprehensive income (loss) in the period | 0 | 0 | 0 | 0 |
Reported in Net investment income | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Reported in Net investment income | 2 | 2 | 11 | 6 |
Reported in Net investment income | Corporate and other bonds | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Reported in Net investment income | 1 | 0 | 1 | 0 |
Reported in Net investment income | States, municipalities and political subdivisions | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Reported in Net investment income | 0 | 0 | 0 | 0 |
Reported in Net investment income | Asset-backed | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Reported in Net investment income | 5 | 1 | 11 | 4 |
Reported in Net investment income | Equity securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Reported in Net investment income | $ (4) | $ 1 | $ (1) | $ 2 |
Fair Value (Narrative) (Details
Fair Value (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Other invested assets overseas deposit | $ 65 | $ 74 |
Fair Value (Quantitative inform
Fair Value (Quantitative information about significant unobservable inputs in the fair value measurement of level 3 assets) (Details) $ in Millions | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Estimated fair value | $ 39,071 | $ 47,287 |
Fixed maturity securities | Discounted cash flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Estimated fair value | $ 1,111 | $ 1,225 |
Credit spread | Discounted cash flow | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt securities, available-for-sale, measurement Input | 0.01 | 0.01 |
Credit spread | Discounted cash flow | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt securities, available-for-sale, measurement Input | 0.11 | 0.07 |
Credit spread | Discounted cash flow | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt securities, available-for-sale, measurement Input | 0.03 | 0.02 |
Fair Value (Carrying amount and
Fair Value (Carrying amount and estimated fair value of financial instrument assets and liabilities which are not measured at fair value) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Mortgage loans | $ 953 | $ 973 |
Liabilities | ||
Long term debt | 2,780 | 2,779 |
Carrying Amount | ||
Assets | ||
Mortgage loans | 953 | 973 |
Liabilities | ||
Long term debt | 2,780 | 2,779 |
Estimated Fair Value | ||
Assets | ||
Mortgage loans | 880 | 1,018 |
Liabilities | ||
Long term debt | 2,563 | 2,978 |
Level 1 | Estimated Fair Value | ||
Assets | ||
Mortgage loans | 0 | 0 |
Liabilities | ||
Long term debt | 0 | 0 |
Level 2 | Estimated Fair Value | ||
Assets | ||
Mortgage loans | 0 | 0 |
Liabilities | ||
Long term debt | 2,563 | 2,978 |
Level 3 | Estimated Fair Value | ||
Assets | ||
Mortgage loans | 880 | 1,018 |
Liabilities | ||
Long term debt | $ 0 | $ 0 |
Claim and Claim Adjustment Ex_3
Claim and Claim Adjustment Expense Reserves and Future Policy Benefit Reserves (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2010 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Unusual or infrequent item, or both, net of insurance proceeds | $ 114 | $ 178 | $ 171 | $ 357 | ||
Pretax (favorable) unfavorable premium development, excluding Life & Group | (17) | (10) | (2) | 4 | ||
Retroactive reinsurance benefit recognized | 17 | 8 | 40 | 30 | ||
Hurricane Ian | ||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Unusual or infrequent item, or both, net of insurance proceeds | 87 | 87 | ||||
Hurricane Ida | ||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Unusual or infrequent item, or both, net of insurance proceeds | 114 | |||||
Corporate & Other | ||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Pretax (favorable) unfavorable premium development, excluding Life & Group | 0 | $ 0 | 64 | $ 40 | ||
Asbestos and Environmental Reserves | ||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Net A&EP claim and allocated claim adjustment expense reserves ceded to NICO | $ 1,600 | |||||
Aggregate limit under A&EP Loss Portfolio Transfer | 4,000 | |||||
A&EP claim and allocated claim adjustment expense reserves ceded under existing third party reinsurance contracts transferred to NICO under A&EP Loss Portfolio Transfer | 1,200 | |||||
Reinsurance premium paid to NICO under A&EP Loss Portfolio Transfer | 2,000 | |||||
Net reinsurance receivables transferred to NICO under A&EP Loss Portfolio Transfer | 215 | |||||
Total consideration paid to NICO under AEP Loss Portfolio Transfer | $ 2,200 | |||||
Cumulative amounts ceded under AEP Loss Portfolio Transfer | 3,400 | 3,400 | $ 3,400 | |||
Deferred reinsurance benefit yet to be recognized | 389 | 389 | $ 429 | |||
Fair value of collateral trust account established by NICO under A&EP Loss Portfolio Transfer | $ 2,300 | $ 2,300 |
Claim and Claim Adjustment Ex_4
Claim and Claim Adjustment Expense Reserves and Future Policy Benefit Reserves (Reconciliation of claim and claim adjustment expense reserves) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Reserves, beginning of year: | ||
Gross | $ 24,174 | $ 22,706 |
Ceded | 4,969 | 4,005 |
Net reserves, beginning of year | 19,205 | 18,701 |
Reduction of net reserves due to Excess Workers' Compensation Loss Portfolio Transfer | 0 | (632) |
Net incurred claim and claim adjustment expenses: | ||
Provision for insured events of current year | 4,638 | 4,474 |
Increase (decrease) in provision for insured events of prior years | (144) | (130) |
Amortization of discount | 131 | 137 |
Total net incurred | 4,625 | 4,481 |
Net payments attributable to: | ||
Current year events | (523) | (629) |
Prior year events | (3,371) | (2,874) |
Total net payments | (3,894) | (3,503) |
Foreign currency translation adjustment and other | (383) | (51) |
Net reserves, end of period | 19,553 | 18,996 |
Ceded reserves, end of period | 5,147 | 4,836 |
Gross reserves, end of period | $ 24,700 | $ 23,832 |
Claim and Claim Adjustment Ex_5
Claim and Claim Adjustment Expense Reserves and Future Policy Benefit Reserves (Net prior year development) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Pretax (favorable) unfavorable premium development, excluding Life & Group | $ (17) | $ (10) | $ (2) | $ 4 |
Specialty | ||||
Segment Reporting Information [Line Items] | ||||
Pretax (favorable) unfavorable premium development, excluding Life & Group | (15) | (15) | (35) | (40) |
Commercial | ||||
Segment Reporting Information [Line Items] | ||||
Pretax (favorable) unfavorable premium development, excluding Life & Group | (2) | 2 | (26) | 2 |
International | ||||
Segment Reporting Information [Line Items] | ||||
Pretax (favorable) unfavorable premium development, excluding Life & Group | 0 | 3 | (5) | 2 |
Corporate & Other | ||||
Segment Reporting Information [Line Items] | ||||
Pretax (favorable) unfavorable premium development, excluding Life & Group | $ 0 | $ 0 | $ 64 | $ 40 |
Claim and Claim Adjustment Ex_6
Claim and Claim Adjustment Expense Reserves and Future Policy Benefit Reserves (Specialty - Net prior year claim and allocated claim adjustment expense reserve development) (Details) - Specialty - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Medical Professional Liability | $ 8 | $ 8 | $ 17 | $ 16 |
Other Professional Liability and Management Liability | 9 | 0 | 22 | 10 |
Surety | (20) | (15) | (48) | (53) |
Warranty | (13) | (6) | (22) | (14) |
Other | 1 | (2) | (4) | 1 |
Total pretax (favorable) unfavorable development | $ (15) | $ (15) | $ (35) | $ (40) |
Claim and Claim Adjustment Ex_7
Claim and Claim Adjustment Expense Reserves and Future Policy Benefit Reserves (Commercial - Net prior year claim and allocated claim adjustment expense reserve development) (Details) - Commercial - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Commercial Auto | $ 0 | $ 0 | $ 21 | $ 30 |
General Liability | 0 | 0 | 41 | 0 |
Workers' Compensation | (2) | 2 | (86) | (40) |
Property and Other | 0 | 0 | (2) | 12 |
Total pretax (favorable) unfavorable development | $ (2) | $ 2 | $ (26) | $ 2 |
Claim and Claim Adjustment Ex_8
Claim and Claim Adjustment Expense Reserves and Future Policy Benefit Reserves (International - Net prior year claim and allocated claim adjustment expense reserve development) (Details) - International - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Commercial | $ 0 | $ (21) | $ (4) | $ (24) |
Specialty | 0 | 23 | (1) | 25 |
Other | 0 | 1 | 0 | 1 |
Total pretax (favorable) unfavorable development | $ 0 | $ 3 | $ (5) | $ 2 |
Claim and Claim Adjustment Ex_9
Claim and Claim Adjustment Expense Reserves (Life & Group Policyholder Reserves) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Liability for Claims and Claims Adjustment Expense [Abstract] | ||
Liability for unpaid claims and claims adjustment expense, long term care policies, period decrease | $ 25 | $ 40 |
Liability for unpaid claims and claims adjustment expense, incurred but not reported (IBNR) claims, amount | 107 | |
Liability for unpaid claims and claims adjustment expense, claim severity adjustment, period decrease | 82 | |
Liability for unpaid claims and claims adjustment expense structured settlement obligations period increase (decrease) | 5 | (2) |
Liability for future policy benefits gross premium valuation pretax margin | $ 125 | $ 72 |
Legal Proceedings, Contingenc_2
Legal Proceedings, Contingencies and Guarantees (Narrative) (Details) $ in Billions | Sep. 30, 2022 USD ($) |
Guarantee Obligations | |
Legal Proceedings, Commitments and Contingencies, and Guarantees [Line Items] | |
Guarantor obligations, maximum exposure, undiscounted | $ 1.6 |
Benefit Plans (Components of ne
Benefit Plans (Components of net periodic cost (benefit)) (Details) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost on projected benefit obligation | $ 17 | $ 15 | $ 50 | $ 46 |
Expected return on plan assets | (38) | (38) | (114) | (115) |
Amortization of net actuarial (gain) loss | 8 | 12 | 23 | 35 |
Settlement loss | 0 | 0 | 0 | 1 |
Total net periodic pension cost (benefit) | $ (13) | $ (11) | $ (41) | $ (33) |
Benefit Plans (Summary of non-s
Benefit Plans (Summary of non-service cost (benefit) in the condensed consolidated statements of operations (Details) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Total net periodic pension cost (benefit) | $ (13) | $ (11) | $ (41) | $ (33) |
Insurance claims and policyholders' benefits | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Non-Service Cost (Benefit) | (3) | (3) | (11) | (9) |
Other operating expenses | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Non-Service Cost (Benefit) | $ (10) | $ (8) | $ (30) | $ (24) |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) by Component (Schedule of accumulated other comprehensive income (loss) by component) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Total stockholder's equity at beginning of period | $ 12,809 | |||
Other comprehensive income (loss) before reclassifications | $ (1,532) | $ (155) | (4,591) | $ (413) |
Amounts reclassified from accumulated other comprehensive income (loss) net of tax | (106) | 8 | (132) | 44 |
Other comprehensive income (loss) after tax (expense) benefit | (1,426) | (163) | (4,459) | (457) |
Total stockholder's equity at end of period | 8,094 | 12,664 | 8,094 | 12,664 |
Reclassification from AOCI, tax | 13 | (3) | 19 | (12) |
Tax (expense) benefit on other comprehensive income (loss) | 369 | 35 | 1,147 | 117 |
Accumulated other comprehensive income (loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Total stockholder's equity at beginning of period | (2,713) | 509 | 320 | 803 |
Total stockholder's equity at end of period | (4,139) | 346 | (4,139) | 346 |
Net unrealized gains (losses) on investments with an allowance for credit losses | Net unrealized gains (losses) on investments with an allowance for credit losses | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Total stockholder's equity at beginning of period | (8) | 0 | (2) | 0 |
Other comprehensive income (loss) before reclassifications | 0 | 0 | (5) | (2) |
Amounts reclassified from accumulated other comprehensive income (loss) net of tax | 2 | 0 | 3 | (2) |
Other comprehensive income (loss) after tax (expense) benefit | (2) | 0 | (8) | 0 |
Total stockholder's equity at end of period | (10) | 0 | (10) | 0 |
Reclassification from AOCI, tax | 0 | 0 | (1) | 1 |
Tax (expense) benefit on other comprehensive income (loss) | 1 | 0 | 2 | 0 |
Net unrealized gains (losses) on investments with an allowance for credit losses | Net unrealized gains (losses) on other investments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Total stockholder's equity at beginning of period | (1,918) | 1,418 | 1,039 | 1,745 |
Other comprehensive income (loss) before reclassifications | (1,429) | (121) | (4,401) | (391) |
Amounts reclassified from accumulated other comprehensive income (loss) net of tax | (102) | 17 | (117) | 74 |
Other comprehensive income (loss) after tax (expense) benefit | (1,327) | (138) | (4,284) | (465) |
Total stockholder's equity at end of period | (3,245) | 1,280 | (3,245) | 1,280 |
Reclassification from AOCI, tax | 11 | (5) | 15 | (20) |
Tax (expense) benefit on other comprehensive income (loss) | 370 | 37 | 1,150 | 124 |
Pension and postretirement benefits | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Total stockholder's equity at beginning of period | (592) | (829) | (604) | (848) |
Other comprehensive income (loss) before reclassifications | 0 | (1) | 0 | (1) |
Amounts reclassified from accumulated other comprehensive income (loss) net of tax | (6) | (9) | (18) | (28) |
Other comprehensive income (loss) after tax (expense) benefit | 6 | 8 | 18 | 27 |
Total stockholder's equity at end of period | (586) | (821) | (586) | (821) |
Reclassification from AOCI, tax | 2 | 2 | 5 | 7 |
Tax (expense) benefit on other comprehensive income (loss) | (2) | (2) | (5) | (7) |
Cumulative foreign currency translation adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Total stockholder's equity at beginning of period | (195) | (80) | (113) | (94) |
Other comprehensive income (loss) before reclassifications | (103) | (33) | (185) | (19) |
Amounts reclassified from accumulated other comprehensive income (loss) net of tax | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) after tax (expense) benefit | (103) | (33) | (185) | (19) |
Total stockholder's equity at end of period | (298) | (113) | (298) | (113) |
Reclassification from AOCI, tax | 0 | 0 | 0 | 0 |
Tax (expense) benefit on other comprehensive income (loss) | $ 0 | $ 0 | $ 0 | $ 0 |
Business Segments (Narrative) (
Business Segments (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Core Segments - Specialty, Commercial and International | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 3 |
Non-Core Segments - Life & Group and Corporate & Other | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 2 |
Business Segments (Income state
Business Segments (Income statement information) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Operating revenues | ||||
Net earned premiums | $ 2,221 | $ 2,059 | $ 6,435 | $ 6,056 |
Net investment income | 422 | 513 | 1,302 | 1,608 |
Non-insurance warranty revenue | 399 | 357 | 1,173 | 1,054 |
Other revenues | 11 | 8 | 24 | 19 |
Total operating revenues | 3,053 | 2,937 | 8,934 | 8,737 |
Claims, Benefits and Expenses | ||||
Net incurred claims and benefits | 1,658 | 1,627 | 4,683 | 4,666 |
Policyholders’ dividends | 7 | 5 | 20 | 18 |
Amortization of deferred acquisition costs | 383 | 368 | 1,101 | 1,084 |
Non-insurance warranty expense | 371 | 330 | 1,092 | 973 |
Other insurance related expenses | 297 | 253 | 863 | 779 |
Other expenses | 77 | 62 | 222 | 180 |
Total claims, benefits and expenses | 2,793 | 2,645 | 7,981 | 7,700 |
Core income (loss) before income tax | 260 | 292 | 953 | 1,037 |
Income tax (expense) benefit on core income (loss) | (47) | (55) | (179) | (196) |
Core income (loss) | 213 | 237 | 774 | 841 |
Net investment gains (losses) | (96) | 22 | (166) | 117 |
Income tax (expense) benefit on net investment gains (losses) | 11 | (3) | 38 | (22) |
Net investment gains (losses), after tax | (85) | 19 | (128) | 95 |
Net income (loss) | 128 | 256 | 646 | 936 |
Operating Segments | Specialty | ||||
Operating revenues | ||||
Net earned premiums | 810 | 773 | 2,376 | 2,270 |
Net investment income | 102 | 116 | 305 | 367 |
Non-insurance warranty revenue | 399 | 357 | 1,173 | 1,054 |
Other revenues | (1) | 1 | 0 | 1 |
Total operating revenues | 1,310 | 1,247 | 3,854 | 3,692 |
Claims, Benefits and Expenses | ||||
Net incurred claims and benefits | 459 | 446 | 1,360 | 1,312 |
Policyholders’ dividends | 2 | 0 | 5 | 2 |
Amortization of deferred acquisition costs | 169 | 165 | 488 | 478 |
Non-insurance warranty expense | 371 | 330 | 1,092 | 973 |
Other insurance related expenses | 88 | 71 | 250 | 212 |
Other expenses | 15 | 13 | 40 | 36 |
Total claims, benefits and expenses | 1,104 | 1,025 | 3,235 | 3,013 |
Core income (loss) before income tax | 206 | 222 | 619 | 679 |
Income tax (expense) benefit on core income (loss) | (45) | (49) | (134) | (148) |
Core income (loss) | 161 | 173 | 485 | 531 |
Operating Segments | Commercial | ||||
Operating revenues | ||||
Net earned premiums | 1,023 | 893 | 2,901 | 2,629 |
Net investment income | 112 | 141 | 343 | 463 |
Non-insurance warranty revenue | 0 | 0 | 0 | 0 |
Other revenues | 13 | 7 | 25 | 17 |
Total operating revenues | 1,148 | 1,041 | 3,269 | 3,109 |
Claims, Benefits and Expenses | ||||
Net incurred claims and benefits | 733 | 720 | 1,916 | 1,947 |
Policyholders’ dividends | 5 | 5 | 15 | 16 |
Amortization of deferred acquisition costs | 163 | 148 | 467 | 449 |
Non-insurance warranty expense | 0 | 0 | 0 | 0 |
Other insurance related expenses | 145 | 125 | 409 | 376 |
Other expenses | 3 | 8 | 21 | 28 |
Total claims, benefits and expenses | 1,049 | 1,006 | 2,828 | 2,816 |
Core income (loss) before income tax | 99 | 35 | 441 | 293 |
Income tax (expense) benefit on core income (loss) | (19) | (8) | (91) | (60) |
Core income (loss) | 80 | 27 | 350 | 233 |
Operating Segments | International | ||||
Operating revenues | ||||
Net earned premiums | 270 | 271 | 803 | 789 |
Net investment income | 16 | 14 | 44 | 42 |
Non-insurance warranty revenue | 0 | 0 | 0 | 0 |
Other revenues | 0 | 0 | 0 | 1 |
Total operating revenues | 286 | 285 | 847 | 832 |
Claims, Benefits and Expenses | ||||
Net incurred claims and benefits | 169 | 171 | 487 | 485 |
Policyholders’ dividends | 0 | 0 | 0 | 0 |
Amortization of deferred acquisition costs | 51 | 55 | 146 | 157 |
Non-insurance warranty expense | 0 | 0 | 0 | 0 |
Other insurance related expenses | 35 | 32 | 112 | 106 |
Other expenses | 11 | 4 | 25 | (4) |
Total claims, benefits and expenses | 266 | 262 | 770 | 744 |
Core income (loss) before income tax | 20 | 23 | 77 | 88 |
Income tax (expense) benefit on core income (loss) | (1) | (6) | (14) | (21) |
Core income (loss) | 19 | 17 | 63 | 67 |
Operating Segments | Life & Group | ||||
Operating revenues | ||||
Net earned premiums | 118 | 123 | 356 | 369 |
Net investment income | 187 | 240 | 600 | 724 |
Non-insurance warranty revenue | 0 | 0 | 0 | 0 |
Other revenues | 0 | (1) | 0 | (1) |
Total operating revenues | 305 | 362 | 956 | 1,092 |
Claims, Benefits and Expenses | ||||
Net incurred claims and benefits | 310 | 296 | 884 | 899 |
Policyholders’ dividends | 0 | 0 | 0 | 0 |
Amortization of deferred acquisition costs | 0 | 0 | 0 | 0 |
Non-insurance warranty expense | 0 | 0 | 0 | 0 |
Other insurance related expenses | 29 | 27 | 89 | 77 |
Other expenses | 2 | 1 | 7 | 5 |
Total claims, benefits and expenses | 341 | 324 | 980 | 981 |
Core income (loss) before income tax | (36) | 38 | (24) | 111 |
Income tax (expense) benefit on core income (loss) | 14 | 3 | 31 | 9 |
Core income (loss) | (22) | 41 | 7 | 120 |
Operating Segments | Corporate & Other | ||||
Operating revenues | ||||
Net earned premiums | 0 | 0 | (1) | 0 |
Net investment income | 5 | 2 | 10 | 12 |
Non-insurance warranty revenue | 0 | 0 | 0 | 0 |
Other revenues | 1 | 2 | 4 | 5 |
Total operating revenues | 6 | 4 | 13 | 17 |
Claims, Benefits and Expenses | ||||
Net incurred claims and benefits | (13) | (6) | 36 | 23 |
Policyholders’ dividends | 0 | 0 | 0 | 0 |
Amortization of deferred acquisition costs | 0 | 0 | 0 | 0 |
Non-insurance warranty expense | 0 | 0 | 0 | 0 |
Other insurance related expenses | 1 | (1) | 4 | 9 |
Other expenses | 47 | 37 | 133 | 119 |
Total claims, benefits and expenses | 35 | 30 | 173 | 151 |
Core income (loss) before income tax | (29) | (26) | (160) | (134) |
Income tax (expense) benefit on core income (loss) | 4 | 5 | 29 | 24 |
Core income (loss) | (25) | (21) | (131) | (110) |
Eliminations | ||||
Operating revenues | ||||
Net earned premiums | 0 | (1) | 0 | (1) |
Net investment income | 0 | 0 | 0 | 0 |
Non-insurance warranty revenue | 0 | 0 | 0 | 0 |
Other revenues | (2) | (1) | (5) | (4) |
Total operating revenues | (2) | (2) | (5) | (5) |
Claims, Benefits and Expenses | ||||
Net incurred claims and benefits | 0 | 0 | 0 | 0 |
Policyholders’ dividends | 0 | 0 | 0 | 0 |
Amortization of deferred acquisition costs | 0 | 0 | 0 | 0 |
Non-insurance warranty expense | 0 | 0 | 0 | 0 |
Other insurance related expenses | (1) | (1) | (1) | (1) |
Other expenses | (1) | (1) | (4) | (4) |
Total claims, benefits and expenses | (2) | (2) | (5) | (5) |
Core income (loss) before income tax | 0 | 0 | 0 | 0 |
Income tax (expense) benefit on core income (loss) | 0 | 0 | 0 | 0 |
Core income (loss) | $ 0 | $ 0 | $ 0 | $ 0 |
Business Segments (Balance shee
Business Segments (Balance sheet information) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Segment Reporting Information [Line Items] | ||
Reinsurance receivables | $ 5,721 | $ 5,484 |
Insurance receivables | 3,014 | 2,974 |
Deferred acquisition costs | 787 | 737 |
Goodwill | 142 | 148 |
Deferred non-insurance warranty acquisition expense | 3,653 | 3,476 |
Insurance reserves | ||
Claim and claim adjustment expenses | 24,700 | 24,174 |
Unearned premiums | 6,195 | 5,761 |
Future policy benefits | 10,454 | 13,236 |
Deferred non-insurance warranty revenue | 4,706 | 4,503 |
Operating Segments | Specialty | ||
Segment Reporting Information [Line Items] | ||
Reinsurance receivables | 1,511 | 1,200 |
Insurance receivables | 1,061 | 1,136 |
Deferred acquisition costs | 379 | 363 |
Goodwill | 117 | 117 |
Deferred non-insurance warranty acquisition expense | 3,653 | 3,476 |
Insurance reserves | ||
Claim and claim adjustment expenses | 6,925 | 6,433 |
Unearned premiums | 3,144 | 3,001 |
Future policy benefits | 0 | 0 |
Deferred non-insurance warranty revenue | 4,706 | 4,503 |
Operating Segments | Commercial | ||
Segment Reporting Information [Line Items] | ||
Reinsurance receivables | 952 | 923 |
Insurance receivables | 1,640 | 1,488 |
Deferred acquisition costs | 315 | 278 |
Goodwill | 0 | 0 |
Deferred non-insurance warranty acquisition expense | 0 | 0 |
Insurance reserves | ||
Claim and claim adjustment expenses | 9,172 | 8,890 |
Unearned premiums | 2,364 | 2,066 |
Future policy benefits | 0 | 0 |
Deferred non-insurance warranty revenue | 0 | 0 |
Operating Segments | International | ||
Segment Reporting Information [Line Items] | ||
Reinsurance receivables | 385 | 381 |
Insurance receivables | 309 | 340 |
Deferred acquisition costs | 93 | 96 |
Goodwill | 25 | 31 |
Deferred non-insurance warranty acquisition expense | 0 | 0 |
Insurance reserves | ||
Claim and claim adjustment expenses | 2,262 | 2,280 |
Unearned premiums | 576 | 585 |
Future policy benefits | 0 | 0 |
Deferred non-insurance warranty revenue | 0 | 0 |
Operating Segments | Life & Group | ||
Segment Reporting Information [Line Items] | ||
Reinsurance receivables | 453 | 401 |
Insurance receivables | 4 | 6 |
Deferred acquisition costs | 0 | 0 |
Goodwill | 0 | 0 |
Deferred non-insurance warranty acquisition expense | 0 | 0 |
Insurance reserves | ||
Claim and claim adjustment expenses | 3,645 | 3,754 |
Unearned premiums | 111 | 109 |
Future policy benefits | 10,454 | 13,236 |
Deferred non-insurance warranty revenue | 0 | 0 |
Operating Segments | Corporate & Other | ||
Segment Reporting Information [Line Items] | ||
Reinsurance receivables | 2,420 | 2,579 |
Insurance receivables | 0 | 4 |
Deferred acquisition costs | 0 | 0 |
Goodwill | 0 | 0 |
Deferred non-insurance warranty acquisition expense | 0 | 0 |
Insurance reserves | ||
Claim and claim adjustment expenses | 2,696 | 2,817 |
Unearned premiums | 0 | 0 |
Future policy benefits | 0 | 0 |
Deferred non-insurance warranty revenue | 0 | 0 |
Eliminations | ||
Segment Reporting Information [Line Items] | ||
Reinsurance receivables | 0 | 0 |
Insurance receivables | 0 | 0 |
Deferred acquisition costs | 0 | 0 |
Goodwill | 0 | 0 |
Deferred non-insurance warranty acquisition expense | 0 | 0 |
Insurance reserves | ||
Claim and claim adjustment expenses | 0 | 0 |
Unearned premiums | 0 | 0 |
Future policy benefits | 0 | 0 |
Deferred non-insurance warranty revenue | $ 0 | $ 0 |
Business Segments (Revenues by
Business Segments (Revenues by line of business) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Total revenues | $ 2,957 | $ 2,959 | $ 8,768 | $ 8,854 |
Total operating revenues | 3,053 | 2,937 | 8,934 | 8,737 |
Net investment gains (losses) | (96) | 22 | (166) | 117 |
Operating Segments | Specialty | ||||
Total revenues | 1,310 | 1,247 | 3,854 | 3,692 |
Operating Segments | Commercial | ||||
Total revenues | 1,148 | 1,041 | 3,269 | 3,109 |
Operating Segments | International | ||||
Total revenues | 286 | 285 | 847 | 832 |
Operating Segments | Life & Group | ||||
Total revenues | 305 | 362 | 956 | 1,092 |
Operating Segments | Corporate & Other | ||||
Total revenues | 6 | 4 | 13 | 17 |
Eliminations | ||||
Total revenues | (2) | (2) | (5) | (5) |
Management & Professional Liability | Operating Segments | Specialty | ||||
Total revenues | 688 | 684 | 2,041 | 2,044 |
Surety | Operating Segments | Specialty | ||||
Total revenues | 171 | 157 | 481 | 454 |
Warranty & Alternative Risks | Operating Segments | Specialty | ||||
Total revenues | 451 | 406 | 1,332 | 1,194 |
Middle Market | Operating Segments | Commercial | ||||
Total revenues | 397 | 363 | 1,133 | 1,119 |
Construction | Operating Segments | Commercial | ||||
Total revenues | 372 | 345 | 1,046 | 978 |
Small Business | Operating Segments | Commercial | ||||
Total revenues | 149 | 144 | 430 | 413 |
Other Commercial | Operating Segments | Commercial | ||||
Total revenues | 230 | 189 | 660 | 599 |
Canada | Operating Segments | International | ||||
Total revenues | 93 | 87 | 272 | 253 |
Europe | Operating Segments | International | ||||
Total revenues | 112 | 123 | 350 | 349 |
Hardy | Operating Segments | International | ||||
Total revenues | $ 81 | $ 75 | $ 225 | $ 230 |
Non-Insurance Revenues from C_2
Non-Insurance Revenues from Contracts with Customers (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |||||
Deferred non-insurance warranty revenue | $ 4,706 | $ 4,706 | $ 4,503 | ||
Contract with customer, liability, revenue recognized | $ 300 | $ 300 | $ 1,000 | $ 900 |
Non-Insurance Revenues from C_3
Non-Insurance Revenues from Contracts with Customers (Performance obligation) (Details) $ in Billions | Sep. 30, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 0.5 |
Remaining performance obligation, expected timing of satisfaction, period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 1.5 |
Remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 1.2 |
Remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 1.5 |
Remaining performance obligation, expected timing of satisfaction, period |