XML 39 R22.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Business Segments | 12 Months Ended
--- | ---
Dec. 31, 2017
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. Specialty provides a broad array of professional, financial and specialty property and casualty products and services through a network of independent agents, brokers and managing general underwriters. Commercial includes property and casualty coverages sold to small businesses and middle market entities and organizations primarily through an independent agency distribution system. Commercial also includes commercial insurance and risk management products sold to large corporations primarily through insurance brokers. International provides management and professional liability coverages as well as a broad range of other property and casualty insurance products and services abroad through a network of brokers, independent agencies and managing general underwriters, as well as the Lloyd’s of London marketplace. The Company's operations outside of Property & Casualty Operations are managed and reported in two segments: Life & Group and Corporate & Other. Life & Group primarily includes the results of the individual and group long term care businesses that are in run-off. Corporate & Other primarily includes certain corporate expenses, including interest on corporate debt, and the results of certain property and casualty business in run-off, including CNA Re and A&EP. The accounting policies of the segments are the same as those described in Note A to the Consolidated Financial Statements. 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 and Goodwill 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 Realized investment gains or losses are allocated primarily based on each segment's net carried insurance reserves, as adjusted. Significant intersegment income and expense has been eliminated. Income taxes have been allocated on the basis of the taxable income of the segments. Approximately 7.7%, 7.9% and 8.0% of the Company's direct written premiums were derived from outside the United States for the years ended December 31, 2017, 2016 and 2015. 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. What was previously referred to as net operating income (loss) in our public disclosures is now referred to as core income (loss). With this terminology change, "Non-Core" was removed from the titles of the Life & Group and Corporate & Other segments to avoid confusion. The fourth quarter 2017 net deferred tax asset remeasurement was excluded from core income (loss) for the year ended December 31, 2017. Otherwise, there were no changes to the calculation of these measures. Core income (loss), which is derived from certain income statement amounts, is used by management to monitor performance of the Company's insurance operations. 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 i) net realized investment gains (losses), ii) income or loss from discontinued operations, iii) any cumulative effects of changes in accounting guidance and iv) deferred tax asset and liability remeasurement as a result of an enacted U.S. Federal tax rate change. The calculation of core income (loss) excludes net realized investment gains or losses because net realized investment gains or losses are generally driven by economic factors that are not necessarily consistent with key drivers of underwriting performance, and are therefore not considered an indication of trends in insurance operations. The Company's results of operations and selected balance sheet items by segment are presented in the following tables.
Year ended December 31, 2017 | Specialty |  | Commercial |  | International |  | Life & Group |  | Corporate & Other |  |  |  |
(In millions) |  |  |  |  |  | Eliminations |  | Total
Net written premiums | $ | 2,771 |  |  | $ | 2,882 |  |  | $ | 881 |  |  | $ | 536 |  |  | $ | — |  |  | $ | (1 | ) |  | $ | 7,069 |
Operating revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net earned premiums | $ | 2,753 |  |  | $ | 2,840 |  |  | $ | 857 |  |  | $ | 539 |  |  | $ | — |  |  | $ | (1 | ) |  | $ | 6,988 |
Net investment income | 538 |  |  | 642 |  |  | 52 |  |  | 782 |  |  | 20 |  |  | — |  |  | 2,034 |
Other revenues | 392 |  |  | 31 |  |  | — |  |  | 2 |  |  | 2 |  |  | — |  |  | 427 |
Total operating revenues | 3,683 |  |  | 3,513 |  |  | 909 |  |  | 1,323 |  |  | 22 |  |  | (1 | ) |  | 9,449 |
Claims, Benefits and Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net incurred claims and benefits | 1,535 |  |  | 1,928 |  |  | 575 |  |  | 1,269 |  |  | (19 | ) |  | — |  |  | 5,288 |
Policyholders’ dividends | 4 |  |  | 18 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 22 |
Amortization of deferred acquisition costs | 596 |  |  | 475 |  |  | 162 |  |  | — |  |  | — |  |  | — |  |  | 1,233 |
Other insurance related expenses | 286 |  |  | 523 |  |  | 162 |  |  | 129 |  |  | (1 | ) |  | (1 | ) |  | 1,098 |
Other expenses | 342 |  |  | 57 |  |  | (7 | ) |  | 7 |  |  | 192 |  |  | — |  |  | 591 |
Total claims, benefits and expenses | 2,763 |  |  | 3,001 |  |  | 892 |  |  | 1,405 |  |  | 172 |  |  | (1 | ) |  | 8,232 |
Core income (loss) before income tax | 920 |  |  | 512 |  |  | 17 |  |  | (82 | ) |  | (150 | ) |  | — |  |  | 1,217 |
Income tax (expense) benefit on core income (loss) | (310 | ) |  | (171 | ) |  | (9 | ) |  | 132 |  |  | 60 |  |  | — |  |  | (298 | )
Core income (loss) | $ | 610 |  |  | $ | 341 |  |  | $ | 8 |  |  | $ | 50 |  |  | $ | (90 | ) |  | $ | — |  |  | 919 |
Net realized investment gains (losses) |  |  |  |  |  |  |  |  |  |  |  |  | 93 |
Income tax (expense) benefit on net realized investment gains (losses) |  |  |  |  |  |  |  |  |  |  |  |  | (30 | )
Net realized investment gains (losses), after tax |  |  |  |  |  |  |  |  |  |  |  |  | 63 |
Net deferred tax asset remeasurement |  |  |  |  |  |  |  |  |  |  |  |  | (83 | )
Net income |  |  |  |  |  |  |  |  |  |  |  |  | $ | 899 |
December 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |  |
Reinsurance receivables | $ | 678 |  |  | $ | 647 |  |  | $ | 212 |  |  | $ | 438 |  |  | $ | 2,315 |  |  | $ | — |  |  | $ | 4,290 |
Insurance receivables | 984 |  |  | 1,088 |  |  | 254 |  |  | 8 |  |  | 2 |  |  | — |  |  | 2,336 |
Deferred acquisition costs | 319 |  |  | 222 |  |  | 93 |  |  | — |  |  | — |  |  | — |  |  | 634 |
Goodwill | 117 |  |  | — |  |  | 31 |  |  | — |  |  | — |  |  | — |  |  | 148 |
Insurance reserves |  |  |  |  |  |  |  |  |  |  |  |  |  |
Claim and claim adjustment expenses | 5,848 |  |  | 8,585 |  |  | 1,636 |  |  | 3,499 |  |  | 2,436 |  |  | — |  |  | 22,004 |
Unearned premiums | 2,035 |  |  | 1,394 |  |  | 472 |  |  | 128 |  |  | — |  |  | — |  |  | 4,029 |
Future policy benefits | — |  |  | — |  |  | — |  |  | 11,179 |  |  | — |  |  | — |  |  | 11,179 |
Year ended December 31, 2016 | Specialty |  | Commercial |  | International |  | Life & Group |  | Corporate & Other |  |  |  |
(In millions) |  |  |  |  | Eliminations |  | Total
Net written premiums | $ | 2,780 |  |  | $ | 2,841 |  |  | $ | 821 |  |  | $ | 547 |  |  | $ | — |  |  | $ | (1 | ) |  | $ | 6,988 |
Operating revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net earned premiums | $ | 2,779 |  |  | $ | 2,804 |  |  | $ | 806 |  |  | $ | 536 |  |  | $ | — |  |  | $ | (1 | ) |  | $ | 6,924 |
Net investment income | 516 |  |  | 638 |  |  | 51 |  |  | 767 |  |  | 16 |  |  | — |  |  | 1,988 |
Other revenues | 362 |  |  | 32 |  |  | — |  |  | (2 | ) |  | 12 |  |  | — |  |  | 404 |
Total operating revenues | 3,657 |  |  | 3,474 |  |  | 857 |  |  | 1,301 |  |  | 28 |  |  | (1 | ) |  | 9,316 |
Claims, Benefits and Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net incurred claims and benefits | 1,467 |  |  | 1,927 |  |  | 492 |  |  | 1,286 |  |  | 98 |  |  | — |  |  | 5,270 |
Policyholders’ dividends | 4 |  |  | 9 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 13 |
Amortization of deferred acquisition costs | 591 |  |  | 470 |  |  | 174 |  |  | — |  |  | — |  |  | — |  |  | 1,235 |
Other insurance related expenses | 301 |  |  | 560 |  |  | 133 |  |  | 132 |  |  | (3 | ) |  | (1 | ) |  | 1,122 |
Other expenses | 312 |  |  | 36 |  |  | 24 |  |  | 8 |  |  | 209 |  |  | — |  |  | 589 |
Total claims, benefits and expenses | 2,675 |  |  | 3,002 |  |  | 823 |  |  | 1,426 |  |  | 304 |  |  | (1 | ) |  | 8,229 |
Core income (loss) before income tax | 982 |  |  | 472 |  |  | 34 |  |  | (125 | ) |  | (276 | ) |  | — |  |  | 1,087 |
Income tax (expense) benefit on core income (loss) | (332 | ) |  | (161 | ) |  | (13 | ) |  | 145 |  |  | 98 |  |  | — |  |  | (263 | )
Core income (loss) | $ | 650 |  |  | $ | 311 |  |  | $ | 21 |  |  | $ | 20 |  |  | $ | (178 | ) |  | $ | — |  |  | 824 |
Net realized investment gains (losses) |  |  |  |  |  |  |  |  |  |  |  |  | 50 |
Income tax (expense) benefit on net realized investment gains (losses) |  |  |  |  |  |  |  |  |  |  |  |  | (15 | )
Net realized investment gains (losses), after tax |  |  |  |  |  |  |  |  |  |  |  |  | 35 |
Net income |  |  |  |  |  |  |  |  |  |  |  |  | $ | 859 |
December 31, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |  |
Reinsurance receivables | $ | 760 |  |  | $ | 621 |  |  | $ | 131 |  |  | $ | 462 |  |  | $ | 2,479 |  |  | $ | — |  |  | $ | 4,453 |
Insurance receivables | 982 |  |  | 1,021 |  |  | 233 |  |  | 17 |  |  | 2 |  |  | — |  |  | 2,255 |
Deferred acquisition costs | 310 |  |  | 214 |  |  | 76 |  |  | — |  |  | — |  |  | — |  |  | 600 |
Goodwill | 117 |  |  | — |  |  | 28 |  |  | — |  |  | — |  |  | — |  |  | 145 |
Insurance reserves |  |  |  |  |  |  |  |  |  |  |  |  |  |
Claim and claim adjustment expenses | 6,149 |  |  | 8,894 |  |  | 1,328 |  |  | 3,358 |  |  | 2,614 |  |  | — |  |  | 22,343 |
Unearned premiums | 1,911 |  |  | 1,323 |  |  | 396 |  |  | 132 |  |  | — |  |  | — |  |  | 3,762 |
Future policy benefits | — |  |  | — |  |  | — |  |  | 10,326 |  |  | — |  |  | — |  |  | 10,326 |
Year ended December 31, 2015 | Specialty |  | Commercial |  |  |  | Life & Group |  | Corporate & Other |  |  |  |
(In millions) |  |  | International |  |  |  | Eliminations |  | Total
Net written premiums | $ | 2,781 |  |  | $ | 2,818 |  |  | $ | 822 |  |  | $ | 542 |  |  | $ | 1 |  |  | $ | (2 | ) |  | $ | 6,962 |
Operating revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net earned premiums | $ | 2,782 |  |  | $ | 2,788 |  |  | $ | 804 |  |  | $ | 548 |  |  | $ | 1 |  |  | $ | (2 | ) |  | $ | 6,921 |
Net investment income | 474 |  |  | 593 |  |  | 52 |  |  | 704 |  |  | 17 |  |  | — |  |  | 1,840 |
Other revenues | 356 |  |  | 37 |  |  | (1 | ) |  | 7 |  |  | 11 |  |  | (3 | ) |  | 407 |
Total operating revenues | 3,612 |  |  | 3,418 |  |  | 855 |  |  | 1,259 |  |  | 29 |  |  | (5 | ) |  | 9,168 |
Claims, Benefits and Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net incurred claims and benefits | 1,597 |  |  | 1,814 |  |  | 479 |  |  | 1,421 |  |  | 61 |  |  | — |  |  | 5,372 |
Policyholders’ dividends | 4 |  |  | 8 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 12 |
Amortization of deferred acquisition costs | 589 |  |  | 469 |  |  | 168 |  |  | 314 |  |  | — |  |  | — |  |  | 1,540 |
Other insurance related expenses | 278 |  |  | 538 |  |  | 138 |  |  | 142 |  |  | (1 | ) |  | (2 | ) |  | 1,093 |
Other expenses | 301 |  |  | 28 |  |  | 12 |  |  | 11 |  |  | 186 |  |  | (3 | ) |  | 535 |
Total claims, benefits and expenses | 2,769 |  |  | 2,857 |  |  | 797 |  |  | 1,888 |  |  | 246 |  |  | (5 | ) |  | 8,552 |
Core income (loss) before income tax | 843 |  |  | 561 |  |  | 58 |  |  | (629 | ) |  | (217 | ) |  | — |  |  | 616 |
Income tax (expense) benefit on core income (loss) | (283 | ) |  | (192 | ) |  | (21 | ) |  | 315 |  |  | 80 |  |  | — |  |  | (101 | )
Core income (loss) | $ | 560 |  |  | $ | 369 |  |  | $ | 37 |  |  | $ | (314 | ) |  | $ | (137 | ) |  | $ | — |  |  | 515 |
Net realized investment gains (losses) |  |  |  |  |  |  |  |  |  |  |  |  | (67 | )
Income tax (expense) benefit on net realized investment gains (losses) |  |  |  |  |  |  |  |  |  |  |  |  | 31 |
Net realized investment gains (losses), after tax |  |  |  |  |  |  |  |  |  |  |  |  | (36 | )
Net income |  |  |  |  |  |  |  |  |  |  |  |  | $ | 479 |
The following table presents operating revenue by line of business for each reportable segment.
Years ended December 31 |  |  |  |  |
(In millions) | 2017 |  | 2016 |  | 2015
Specialty |  |  |  |  |
Management & Professional Liability | $ | 2,591 |  |  | $ | 2,617 |  |  | $ | 2,647 |
Surety | 541 |  |  | 529 |  |  | 504 |
Warranty & Alternative Risks | 551 |  |  | 511 |  |  | 461 |
Specialty revenues | 3,683 |  |  | 3,657 |  |  | 3,612 |
Commercial |  |  |  |  |  |  |  |
Middle Market | 1,907 |  |  | 1,768 |  |  | 1,641 |
Small Business | 480 |  |  | 582 |  |  | 621 |
Other Commercial Insurance | 1,126 |  |  | 1,124 |  |  | 1,156 |
Commercial revenues | 3,513 |  |  | 3,474 |  |  | 3,418 |
International |  |  |  |  |  |  |  |
Canada | 224 |  |  | 203 |  |  | 213 |
CNA Europe | 326 |  |  | 314 |  |  | 311 |
Hardy | 359 |  |  | 340 |  |  | 331 |
International revenues | 909 |  |  | 857 |  |  | 855 |
Life & Group revenues | 1,323 |  |  | 1,301 |  |  | 1,259 |
Corporate & Other revenues | 22 |  |  | 28 |  |  | 29 |
Eliminations | (1 | ) |  | (1 | ) |  | (5 | )
Total operating revenues | 9,449 |  |  | 9,316 |  |  | 9,168 |
Net realized investment gains (losses) (1) | 93 |  |  | 50 |  |  | (67 | )
Total revenues | $ | 9,542 |  |  | $ | 9,366 |  |  | $ | 9,101 |
(1) | 2017 Net realized investment gains (losses) includes a $42 million loss on the early redemption of the Company's $350 million senior notes due November 2019.

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration