CNA FINANCIAL

CNA Financial Sustainability Scorecard (Download PDF)

CNA is one of the largest U.S. commercial property and casualty insurance companies. Backed by more than 120 years of experience, CNA provides a broad range of standard and specialized insurance products and services for businesses and professionals in the U.S., Canada and Europe.

The advancement of environment, social and governance (ESG) frameworks intended to promote sustainable and inclusive development of insurance markets has been an area of focus for standard setters and regulatory bodies at the state, federal and international level. CNA continues to monitor the expansion of policy in this area and has established an internal ESG Committee and Task Force to ensure compliance with future regulation, and assess and seek to implement best practices in response to the emerging guidance

GOVERNANCE

  • Loews holds an 89.6% ownership stake in CNA and therefore a number of Loews directors serve on CNA’s board. Representatives of Loews account for five out of the ten members of the CNA Board of Directors. Four directors are deemed “independent” and make up the entire membership of each of the Audit Committee and the Compensation Committee, and the chairs of such Committees acting in “Lead Director” role on a rotating annual basis. CNA’s Board consists of directors with a diverse range of experience and expertise.

HUMAN CAPITAL

  • As of December 31, 2021, CNA had approximately 5,600 employees. CNA seeks to create a culture of inclusion that challenges and engages its employees and offers them opportunities to learn, grow and achieve their career goals. The company believes this will facilitate its ability to continue to attract and retain a highly talented workforce.

    CNA focuses on the attraction, retention and development of a highly talented workforce. The company strives to maintain a robust talent pool to reflect the specialist nature of its business. CNA’s annual talent and succession planning process culminates in a review with leadership of key talent retention and promotion, as well as a review of its succession plans.

    CNA aims to continually build on the expertise of its workforce. At entry levels, CNA has implemented trainee and internship programs and continues to leverage relationships with colleges to attract new talent.

    The company’s approach to cultivating an engaging workplace and continuously improving the employee experience is designed to attract and retain top industry talent. CNA seeks employee feedback through a range of methods, including employee pulse surveys and routine dialogue with employee resource groups and leaders. In 2021, CNA refreshed its company flexible working program and implemented hybrid office/home working for most employees.

    CNA seeks to promote the development of employees, both to optimize current performance and to develop skills for future career growth. It offers eligible employees business unit specific curricula, tuition reimbursement opportunities, and mentoring programs. CNA focuses on leadership development with programs designed for new leaders as well as specialized learning for all leaders. In addition, its performance management cycle seeks to ensure that employees have goals and development plans refreshed at least annually and performance review conversations are held between managers and their direct reports throughout the annual performance period.

  • Diversity and Inclusion (D&I) is a strategic imperative. CNA’s D&I Vision is to cultivate an inclusive culture that celebrates individuals’ differences, attracts diverse talent, and inspires a work environment that enables all employees to do their best work.

    To act on its D&I Vision, the company seeks to bring together senior leaders, D&I subject matter experts and a diverse spectrum of colleagues across the company’s  global network. Its strategy is created and executed by the senior leaders that comprise the D&I Council and the employees that lead the employee resource groups. This structure facilitates D&I thought leadership and employee perspectives. Critical components of its D&I Vision include:

     • Skill building. In 2021, we launched a new D&I learning program aimed to build allyship across the global enterprise. It includes various forms of allyship training and education for our employees – providing them with opportunities to learn and practice new skills.

    • Leadership training. CNA requires every people leader and officer to complete inclusive leadership training. We also provide additional networking and learning opportunities for leaders to support the critical role they play in creating an inclusive workplace culture.

    • Talent development. In 2021, we launched a new talent sponsorship program that seeks to accelerate the development of high performing diverse employees, diversify our leadership ranks, and broadly build inclusive leadership skills.

    • Representation. We regularly monitor our representation of diverse talent and review our trends in relation to both the labor market generally and industry-specific competitors. We seek to increase diversity throughout our organization.

    • Partnerships. CNA has a commitment to certain organizations whose D&I objectives align with our own. In 2021, through these partnerships, we delivered training opportunities to employees, uncovered new sources of future talent, contributed to the development of college students from underserved communities, and encouraged our employees to be an ally in their communities through volunteering.

  • CNA offers comprehensive compensation and benefits packages to eligible employees including a 401k plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off and certain family assistance programs, including paid family leave, flexible work arrangements and adoption assistance plans. The company also offers stock-based compensation to certain management personnel as a way to attract and retain key talent.

  • CNA offers benefits that seek to support the overall wellbeing of its employees, including physical, mental, financial and social health. In 2021, it deployed a multitude of new benefits with an emphasis on wellbeing. These enhancements included the introduction of a new holistic wellbeing incentive program that provides tools and resources to help employees and their families achieve their overall wellbeing goals. CNA also continues to provide access to a variety of mental health resources, such as employee assistance programs and programming focused on stress management and resilience.

    The health and safety of its employees and the communities it serves are also a focus at CNA. In March 2020, CNA pivoted to a remote working environment for nearly all of its employees in response to the COVID-19 pandemic. As pandemic conditions persisted in 2021, remote working broadly remained in place while all of its offices were open for employee use throughout 2021 with enhanced safety protocols. CNA sought to provide its employees the opportunity to contribute productively and grow and develop, while also managing their physical and mental health.

ENTERPRISE RISK MANAGEMENT

  • SASB: FN-IN-550a.3

    CNA has a formalized risk governance structure that starts with the Board of Directors and cascades to underlying company committees, business units, and ultimately all employees. CNA promotes a strong risk management culture and the belief that effective risk management is the responsibility of all of its employees. Risk governance at CNA is integrated in a “Three Lines of Defense” approach for managing and mitigating risks.

    CNA has an Enterprise Risk Committee (“ERC”) that is chaired by the Chief Reinsurance and Risk Officer and meets quarterly. Membership includes senior executives from all relevant business and functional areas (e.g., Specialty, Commercial, Actuarial and Finance).

    The ERC is responsible for the oversight of the risk management framework of CNA on an enterprise-wide basis. Such oversight responsibilities include:

    • Identifying, quantifying and prioritizing risks viewed as being significantly material
    • Ensuring appropriate risk controls and monitoring are in place
    • Escalating key risk issues and ensuring appropriate actions are taken
    • Identifying emerging risks and ensuring appropriate actions are taken to mitigate or capitalize on opportunities

     

    At the ERC’s quarterly meetings, risk owners are expected to provide updates on their key risks and controls, as well as updates on Key Risk Indicators (“KRIs”). These updates form the basis of the Enterprise Risk Management (“ERM”) function’s quarterly Enterprise Risk Report. This quarterly report incorporates the following information:

    • The current status of KRIs against indicated thresholds / limits, as appropriate
    • Commentary on risks including, but not limited to:
      • Drivers of amber or red risk indicators and breaches
      • Control weaknesses or failures identified, and corresponding remediation plans to address issues
      • Other critical information deemed appropriate by risk owners
    • Updates on transformation and change management initiatives impacting enterprise risk

     

    The Chief Reinsurance and Risk Officer also reports quarterly to the Audit Committee of the Board of Directors. The report reflects the content and updates from the ERC and, specifically, may include:

    • The status of strategic ERM efforts that influence the risk management framework and related capabilities
    • An update including any changes to CNA’s risk profile and exposures
    • The current status of board-level KRI’s against established thresholds / limits
    • Key risks impacting the enterprise including any new or changing emerging risks
    • Status of ORSA reporting / efforts

    These committees meet regularly to monitor and develop mitigation plans for risks relating to investments, international operations and emerging hazards, among other significant risks.

     

  • SASB: FN-IN-450a.3 & FN-IN-550a.3

    ESG risks are considered and discussed through a variety of forums and escalated within the ERM Governance framework as appropriate. Examples of these forums include emerging risks discussions, risk and control assessments within the business and further considerations around climate change impacts to catastrophe risks.

    CNA's capital management approach focuses on preserving a level of capital that enables the company to execute on its strategic and financial plans, fulfill financial obligations and maintain desired financial ratings under both normal and stressed conditions. In order to manage its capital position, CNA conducts monthly stress testing on the investment portfolio to ensure that it is comfortable with the volatility of its market exposures with systemic non-insurance activities.

    CNA also engages in active liquidity management with the goal of maintaining sufficient liquidity to enable the company to execute on its strategic and financial plans and fulfill financial obligations under both normal and stressed conditions. As part of its liquidity management process, CNA monitors its liquidity position monthly and conducts annual liquidity stress testing to ensure the company is able to adequately fulfill its financial obligations in stressed conditions.

  • CNA works across key components of the supplier lifecycle (planning and selection, risk due diligence, contracting, procure to pay, and ongoing monitoring) to ensure that the right suppliers are selected to deliver best value and product for CNA and its insured. Key stakeholders in Procurement, Law, Finance, and Technology provide advisory support to supplier relationship owners in the business in each stage of the supplier lifecycle.

    CNA leverages a technology solution to help automate sourcing, diligence, contracting, and procure to pay activities which ultimately provide increased transparency and insight. The implementation of a Third Party Risk Management program further delivers insights on supplier’s capability to protect CNA/CNA insured data, provide continuity of service, and adhere to relevant laws and regulations.

  • CNA maintains an information security program designed to address the goals of confidentiality, integrity and availability. The program provides guidance for information security decision-making and effective risk management and includes standards to promote understanding and compliance with applicable laws and regulations. In particular, CNA’s information security program includes administrative and technical safeguards for protecting the Company assets and customers’ information from accidental or malicious access disclosure, modification or destruction.

    The CNA Information Security Group is responsible for oversight, implementation, leadership, policy setting, compliance monitoring, incident management and liaison with management and third parties in relation to information security. The Chief Information Security Officer (CISO) is responsible for seeking approval for any material changes to the supporting Information Security Policies and Standards. The Policies and Standards are reviewed periodically or as needed for significant events. The CISO is responsible for ensuring that changes to the Information Security Policies and Standards are implemented. Formal security policies are published and available on the intranet and are updated on a regular basis. The CISO is also designated as the HIPAA Security Officer responsible for the management of information security policies, procedures and technical systems subject to HIPAA regulations within CNA.

    CNA employees and other users are required to complete information security and privacy training annually. This training covers relevant policies and users are informed noncompliance may result in disciplinary actions up to and including termination.

STRATEGY

  • CNA’s main strategic objective is to perform consistently as a top quartile underwriting company. In order to achieve that objective, it is crucial that CNA is able to attract, retain and develop top-tier talent. CNA’s underwriting focused culture empowers top-tier talent, technical expertise and collaboration across the value chain in order to deliver expert risk solutions for CNA’s customers and distribution partners. CNA’s commitment to diversity and inclusion in day-to-day business operations is integral to recruiting and retaining top-tier talent.

    In order to remain a profitable underwriter, it is also crucial for CNA to continuously monitor risks associated with natural catastrophes and climate change. Environmental and catastrophe risks are incorporated into CNA’s enterprise capital model, which is used to establish the amount of required capital needed to insulate CNA against severe events. CNA’s assessment of natural catastrophe and climate change related risk also drives a variety of business decisions, including its underwriting and pricing approach and its strategic purchasing of reinsurance.

    Additionally, in order to maintain its relevance with its customers, CNA must ensure that it meets their needs and acts as a good corporate citizen. CNA ensures that it tailors its products to its customers’ needs and carefully monitors its customers’ satisfaction with its performance by tracking metrics such as the complaints to claims metric, which measures how many complaints CNA receives as a proportion of the claims it processes.

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    CNA’s investment evaluation approach considers ESG factors as part of the assessment of potential risks associated with an investment. CNA assesses the risk to its investment portfolio in light of emerging trends and their potential impact on specific sectors, as well as individual holdings. These risks may include climate-change related impacts such as the direct impacts of climate related weather events, energy prices, litigation exposure, public perception of corporate social responsibility and the cost of compliance with legal requirements. All of these risks may create a negative impact on an entity’s performance and, therefore, the value of its issued securities. CNA provides disclosure regarding its investments by asset class.

    Additionally, CNA can carefully focus on objectives and constraints, including managing portfolio book yield and capital considerations. The goal is to create stable and growing investment income through a balanced risk-return approach.

CLIMATE CHANGE & THE ENVIRONMENT

  • SASB: (FN-IN-450a.3)

    CNA’s process for identifying and assessing climate change-related risks is similar to its process for identifying any material risk in its organization. CNA identifies scenarios that could subject it to significant financial loss or disruption to its business, assesses the likelihood and impact of the risk, develops metrics that represent the maximum amount of risk it is willing to take and establishes appropriate controls and procedures to ensure it stays below that level of risk. Specifically, the company actively monitors and stress tests its insurance portfolio using software models to understand the impact of climate change on severe catastrophic events, including 1-in-250-year earthquakes and hurricanes.

    The purpose of these stress tests is to ensure that CNA has adequate capital and liquidity to execute on its strategic and financial plans, fulfill its obligations and maintain its desired financial ratings under both normal and stress conditions. The results of these stress tests inform CNA’s underwriting and reinsurance strategies. CNA recently expanded its property reinsurance program which will reduce earnings volatility going forward.

    Along with regular stress tests, CNA routinely contemplates the impact of climate change throughout the organization in its Emerging Risk Working Group, Emerging Hazards Committee, the Enterprise Risk Committee, the Enterprise Catastrophe Committee and in meetings of its Board of Directors. In addition to catastrophic events, CNA monitors the risk of its policyholders becoming liable for damages as greenhouse gas emitters or manufacturers that produce products that contribute to a changing climate. CNA also monitors state and federal proposals affecting natural catastrophes and responds in a way that best addresses CNA’s underwriting principles.

    CNA’s Enterprise Risk Management team continues to research aspects of climate change and educate others within the organization and its Board of Directors. CNA regularly engages its Board in decisions around the management of increased frequency and severity of weather-related events.

  • SASB: FN-IN-450a.2

    CNA reported catastrophe losses, net of reinsurance, of $397 million and $550 million for the years ended December 31, 2021 and 2020. Net catastrophe losses for the year ended December 31, 2021 were driven by severe weather related events, primarily Hurricane Ida and Winter Storms Uri and Viola. Net catastrophe losses for the year ended December 31, 2020 included $195 million related to COVID, $61 million related to civil unrest and $294 million from weather-related losses.

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    CNA utilizes catastrophe models and claims experience to assess and monitor environmental risks. CNA also monitors scientific advances to determine if its risks are expected to change materially over time. Catastrophe models allow CNA to assess the impact of changing weather assumptions, such as the frequency or severity of weather-related events. The integration of catastrophe modeling is fundamental to CNA’s underwriting and pricing approach at both the individual account level and portfolio management level. Authority and underwriting guidelines are in place to mitigate the potential for underwriters to issue a policy with a large exposure without scrutiny. Additionally, CNA has tools that mitigate the potential for underwriters to issue a policy that will breach its established risk tolerances.

    Environmental and catastrophe risks are also integrated into CNA’s enterprise capital model which is used to establish the amount of required capital needed to insulate against severe events.

  • As an insurer, CNA’s activities do not generate a significant amount of greenhouse gas emissions or waste. Nevertheless, sustainability takes many forms at CNA, and green practices have been a part of the company’s day-to-day operations for many years. Across its worldwide offices, the company has established a “good practice” campaign, which includes recycling reminders and a variety of energy-efficiency tips.

    CNA moved its headquarters in 2018 to the first WELL v1 Gold Certified Core & Shell high rise building in the United States. In order to meet these stringent certification standards, CNA’s headquarters has the following features, among others:

    • Electric fuel stations to promote alternative fuel vehicles
    • 15,000 square feet of vegetated roof
    • Water efficient landscaping using drip irrigation
    • Materials that incorporate recycled content
    • Nearly 75% of construction waste diverted from landfills through recycling and salvage programs
    • Up to 14.5% energy savings compared to the ASHRAE 90.1-2007 energy efficiency standards through the use of efficient HVAC systems and lighting controls
    • Refrigerant safety technology that minimizes the emissions of compounds that contribute to ozone depletion and global warming
    • Water fixtures that substantially reduce building water consumption
    • Battery and e-waste recycling available to all tenants

ETHICS & VALUES

  • CNA’s commitment to ethics, integrity and proper business conduct has been a cornerstone of the company since 1897. CNA believes that proper business conduct goes beyond the practice of avoiding wrong. It is also a matter of choosing to do right. Insurance is a business based on trust -- something that CNA earns every day with its customers and business partners.             

    CNA recognizes what a valuable commodity trust is, how long it takes to be earned and how quickly it can be lost. Each employee is integral to upholding CNA’s reputation and therefore CNA requires that each employee personally attest to its code of conduct. Employees’ personal commitment to high standards of ethics, integrity, fairness and equal treatment will be more effective in achieving CNA’s standards than any penalties that might be imposed by the Company or by law.

    Specifically, CNA codified its ethical standards in two key policies, the Commitment to Professional Conduct and the Code of Business Conduct and Ethics. These policies are promoted internally and available to all employees across the company. These policies are also used publicly to drive external commitments.

    Additionally, CNA’s policies against bribery and corruption incorporates a global approach by encompassing the behaviors and expectations addressed in major anti-corruption laws and regulations rather than specific jurisdictional requirements. All of CNA’s global locations must adhere to the Global Anti-Corruption Policy, although affiliates may create more stringent policies to address local conditions. Each employee at CNA is required to annually attest to having read and understood the Global Anti-Corruption Policy during the Conflict of Interest process. Stand-alone anti-bribery training is also available to employees.

  • CNA is committed to providing a workplace free from unlawful discrimination, harassment and retaliation. CNA will not tolerate discrimination or harassment against any of its employees on the basis of race, color, age, gender, national origin, religion, disability, pregnancy status, sexual orientation, gender identity or expression, military or veteran status, genetic information, familial status or any other protected status under federal, state or local law. CNA also will not tolerate retaliation against any employee who exercises rights under this policy or the law.

  • CNA is committed to providing its employees with a safe, nurturing environment that ensures they can perform at their best. Harassment is not tolerated in any form and CNA provides harassment prevention training on an annual basis which all employees are required to complete. Managers are required to complete additional training and managers located in California and Connecticut are required to complete state-specific training.

BUSINESS CONTINUITY AND SECURITY

  • CNA takes an operational resilience program approach to disaster preparedness and response planning. Business Continuity, and Disaster Recovery come together to form a comprehensive strategy filtered through the lens of enterprise risk management. Operational Resilience is a sub-process of Operations in partnership with Physical Security.  All program components, initiatives and policies are globally applicable.

    CNA has invested in technology enabling its employees to securely work remotely in the event that they are not able to work from their physical offices. CNA also has processes in place to ensure claims are handled properly in the event that the claims handling centers are not usable. CNA is also able to move work geographically, if needed in the event of a localized disaster.

PUBLIC POLICY, ENGAGEMENT AND POLITICAL ACTIVITY

  • As CNA operates in a highly regulated industry, it monitors and engages in public policy activities to shape state and federal laws and regulations to align with its core business values. CNA addresses public policy issues by engaging directly with public officials and partnering with industry trade associations to share the positions that are important to its business, employees, policyholders and shareholders. CNA engages responsibly and is compliant with all state and federal laws governing advocacy.

    These activities are led by its Government Relations team, which partners with its business leaders to define its advocacy priorities.

CORPORATE SOCIAL RESPONSIBILITY

  • CNA has a corporate social responsibility strategy with a focus on four core areas: education, environment, inclusion and well-being. CNA has a long-standing commitment to the diverse communities where its employees live and work. Through partnerships, sustainability initiatives, volunteer efforts and more, CNA acts strategically to address societal challenges and make a positive impact.

    CNA’s employees are encouraged to participate in a wide array of volunteer activities and the company supports their charitable giving by matching employee contributions to qualified nonprofit organizations. CNA has three distinct charitable giving programs: Matching Gift Plan, Payroll Donation Program, and Corporate Donations. The company supports the charitable giving of its employees by matching contributions to qualified nonprofit organizations—dollar for dollar—up to $5,000 per year.

    Employees can submit matching gift requests, sign up for volunteer events and stay connected with CNA’s corporate social responsibility program. A major contributor to these efforts was CNA VOLUNTEER-A-THON, the company’s campaign to promote volunteering during the month of October.