CNA FINANCIAL (CNA)·Q4 2025 Earnings Summary

CNA Financial Q4 2025: Record Year Caps with AM Best Upgrade and $2 Special Dividend

February 09, 2026 · by Fintool AI Agent

CNA Financial delivered a record year in 2025, posting best-ever core income of $1.342 billion (+2% YoY) despite a softer fourth quarter. The company capped the year with an AM Best upgrade to A+ and announced a 4% dividend increase plus a $2.00 special dividend, underscoring management confidence in the capital position.

Did CNA Beat Earnings?

Q4 2025 core EPS of $1.16 came in 7% below the prior year's $1.25, reflecting lower underlying underwriting results in the quarter. However, the full year tells a different story:

Source: CNA Q4 2025 Earnings Slides

The dramatic net income improvement ($302M vs $21M) reflects the absence of pension settlement losses that burdened Q4 2024 with a $290M after-tax charge.

What Did Management Say?

CEO Douglas Worman struck a confident tone:

"In the fourth quarter we produced excellent results with $317 million of core income, capping off a best on record core income of $1,342 million for the full year, which is the third consecutive year of record results."

Key management themes:

• Third consecutive year of record results — Underlying underwriting and investment income both reached record highs
• AM Best upgrade to A+ — Recognition of "consistently strong operating performance, sophisticated risk management and the strength of our balance sheet"
• Expense discipline — Full year expense ratio of 29.7% improved 0.5 points while investing in "talent, technology and artificial intelligence"
• Selective underwriting — "We continue to lean into profitable opportunities while being highly selective in pockets where the market will not let us achieve appropriate risk-adjusted returns"

AI & Technology Strategy

CEO Worman provided notable commentary on CNA's AI investments:

"AI is becoming part of the fabric of how we run CNA. Our approach is pragmatic and driven by the return on investment. We automate what matters, equip our people with better tools, and improve broker and customer experience."

Key AI initiatives:

• Deployed AI solutions across underwriting, claims, and back office
• Rolled out generative AI tools to every CNA employee company-wide
• Results: "faster triage, better submission responsiveness and measurable time savings"

How Did the Stock React?

CNA shares closed at $49.83 on the day before earnings, hovering near 52-week highs ($51.34). The stock has gained approximately 6% year-to-date, supported by the steady dividend profile and financial strength ratings.

Source: Market data as of February 6, 2026

P&C Segment Performance

Property & Casualty Overview

P&C core income was essentially flat at $449M vs $451M, with lower underlying underwriting results largely offset by higher net investment income.

Source: CNA Q4 2025 Earnings Slides

Segment Highlights

Specialty — Combined ratio deteriorated to 99.0% (vs 93.8%) driven by 3.0 points of unfavorable prior period development and a non-recurring technology charge that pushed the expense ratio up 1.7 points. Rate remains healthy at +4% with 85% retention.

Commercial — Delivered record-low full year combined ratio of 95.2%, with Q4 at 92.5%. Strong expense discipline (26.4% expense ratio, down 0.6 pts) and 5% NEP growth drove results despite social inflation pressures pushing underlying loss ratio higher.

International — Standout performer with 85.3% combined ratio (vs 94.8%) benefiting from 7.5 points of favorable prior period development and lower catastrophe losses. Full year combined ratio of 91.2% was record low.

What Changed From Last Quarter?

Investment Portfolio

Net investment income reached $653M in Q4, up from $644M a year ago.

Source: CNA Q4 2025 Earnings Slides

Portfolio composition: 87% fixed income, average credit rating "A", with duration well-matched to insurance liabilities. Net unrealized losses improved from year-end 2024 driven by lower risk-free rates.

Capital & Dividend

CNA's balance sheet remains fortress-like:

Source: CNA Q4 2025 Earnings Slides

Capital Actions:

• Quarterly dividend increased 4% to $0.48 per share
• $2.00 special dividend declared — combined with regular dividend yields ~8% on recent stock price
• Redeemed $500M senior notes in December ahead of March 2026 maturity
• Next debt maturity: $500M due August 2027
• Operating cash flow: $2.5 billion for full year 2025

Rating Upgrade: AM Best upgraded CNA's financial strength rating to A+ with stable outlook in Q4 2025. "We view AM Best's actions as recognition of the significant progress we have made in the performance of the business in recent years." Moody's maintains a positive outlook; S&P and Fitch maintain stable outlooks.

Life & Group Inforce Management: Since launching their policy buyout program in 2020, CNA has bought out approximately 12,000 policies, releasing nearly $400 million of statutory reserves.

Risks & Concerns

1. Social Inflation — Commercial segment underlying loss ratio increased 1.0 point for the full year "attributed to social inflation impacted lines"

2. Specialty Segment Pressure — Q4 combined ratio of 99.0% and 5.2 pts deterioration YoY raises questions about reserve adequacy and pricing power

3. Rate Deceleration — Written rate fell to +2% in Q4 from +4% at start of 2025, though remains positive

4. Life & Group Losses — Core loss increased to $29M from $18M in Q4, primarily from unfavorable persistency experience in the run-off long-term care book

5. Legacy Mass Tort — Full year included $106M after-tax charge related to unfavorable prior period development associated with legacy mass tort (vs $62M prior year)

What Did Management Guide for 2026?

CFO Scott Lindquist provided specific 2026 expectations:

Reinsurance Renewals: "A majority of our third-party treaties came up for renewal on January 1st. All of the renewals were successful. Most treaties were oversubscribed and renewed with favorable terms."

Forward Catalysts

Key Takeaways

Positives:

• Third consecutive year of record core income demonstrates consistent execution
• AM Best upgrade to A+ validates balance sheet strength
• Commercial segment delivering record profitability with disciplined expense management
• Strong investment income growth from fixed income portfolio
• Generous capital return with 4% dividend raise and $2 special dividend

Watch Items:

• Specialty segment deterioration and unfavorable development
• Social inflation pressure on commercial lines loss ratios
• Rate deceleration from +4% to +2% through 2025
• Legacy mass tort and LTC run-off losses in Corporate & Other

CNA enters 2026 with momentum, financial strength, and management credibility intact. The question is whether specialty segment pressures and social inflation headwinds are transitory or signal more fundamental challenges ahead.

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View CNA company profile | Q4 2025 Transcript | Prior Earnings