Future Policy Benefits Reserves

6 Months Ended

Jun. 30, 2026

Future policy benefits reserves are associated with CNA’s run-off long-term care business, which is included in Other Insurance Operations, and relate to policyholders that are currently receiving benefits, including claims that have been incurred but are not yet reported, as well as policyholders that are not yet receiving benefits. Future policy benefits reserves are comprised of the liability for future policyholder benefits (“LFPB”) which is reflected as Insurance reserves: Future policy benefits on the Consolidated Condensed Balance Sheets.

The determination of Future policy benefits reserves requires management to make estimates and assumptions about expected policyholder experience over the remaining life of the policy. Since policies may be in force for several decades, these assumptions are subject to significant estimation risk. As a result of this variability, CNA’s future policy benefits reserves may be subject to material increases if actual experience develops adversely to its expectations.

For further information on the long-term care reserving process see Note 1 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

The following table summarizes balances and changes in the LFPB:


	2026		2025
(In millions)

Present value of future net premiums
Balance, January 1	$	3,363	$	3,425
Effect of changes in discount rate	(71)		(7)
Balance, January 1, at original locked in discount rate	3,292		3,418
Effect of changes in cash flow assumptions (a)
Effect of actual variances from expected experience (a)	(8)		(1)
Adjusted balance, January 1	3,284		3,417
Interest accrual	84		88
Net premiums: earned during period	(199)		(203)
Balance, end of period at original locked in discount rate	3,169		3,302
Effect of changes in discount rate	14		50
Balance, June 30	$	3,183	$	3,352

Present value of future benefits & expenses
Balance, January 1	$	16,811	$	16,583
Effect of changes in discount rate	173		440
Balance, January 1, at original locked in discount rate	16,984		17,023
Effect of changes in cash flow assumptions (a)
Effect of actual variances from expected experience (a)	36		22
Adjusted balance, January 1	17,020		17,045
Interest accrual	454		458
Benefit & expense payments	(573)		(574)
Balance, end of period at original locked in discount rate	16,901		16,929
Effect of changes in discount rate	(456)		(248)
Balance, June 30	$	16,445	$	16,681


Net LFPB, June 30	$	13,262	$	13,329


(a)			As of June 30, 2026 and 2025, the re-measurement loss of $44 million and $23 million presented parenthetically on the Consolidated Condensed Statement of Operations is comprised of the effect of changes in cash flow assumptions and the effect of actual variances from expected experience.

The following table presents earned premiums and interest accretion associated with the long-term care business recognized on the Consolidated Condensed Statement of Operations.


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2026		2025		2026		2025

(In millions)

Earned premiums	$	103	$	106	$	206	$	212
Interest accretion	185		185		370		370

The following table presents undiscounted expected future benefit and expense payments and undiscounted expected future gross premiums.


	June 30,
	2026		2025

(In millions)

Expected future benefit and expense payments	$	30,814	$	31,141
Expected future gross premiums	4,713		4,971

Discounted expected future gross premiums at the upper-medium grade fixed income instrument yield discount rate were $3.3 billion and $3.5 billion as of June 30, 2026 and 2025.

The weighted average effective duration of the LFPB calculated using the original locked in discount rate was 11 years as of June 30, 2026 and 2025.

The weighted average interest rates in the table below are calculated based on the rate used to discount all future cash flows.


	June 30,				December 31,
	2026		2025		2025


Original locked in discount rate	5.14	%	5.18	%	5.16	%
Upper-medium grade fixed income instrument discount rate	5.48		5.39		5.32

For the three and six months ended June 30, 2026, immediate charges to net income resulting from adverse development in certain cohorts where the net premium ratio (“NPR”) exceeded 100% were $26 million and $49 million. For the three and six months ended June 30, 2025, immediate charges to net income resulting from adverse development in certain cohorts where the NPR exceeded 100% were $14 million and $28 million.

For the three and six months ended June 30, 2026, favorable reversals through net income of loss recognized in prior periods for cohorts with NPRs exceeding 100% were $5 million and $13 million. For the three and six months ended June 30, 2025, favorable reversals through net income of loss recognized in prior periods for cohorts with NPRs exceeding 100% were $5 million and $11 million.