AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” (Excellent) of the property/casualty (P/C) subsidiaries of CNA Financial Corporation (CNAF) [NYSE: CNA], collectively known as CNA Insurance Companies (CNA). Concurrently, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) and all existing Long-Term Issue Credit Ratings (Long-Term IR) of CNAF. Additionally, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) of the members of Western Surety Group. The outlook of these Credit Ratings (ratings) is stable. All above named companies are headquartered in Chicago, IL. (See below for a detailed listing of the companies and ratings.)
In addition, AM Best has also extended CNAF’s Long-Term IR of “bbb+” (Good) with a stable outlook to the company’s recently issued $100 million senior unsecured notes due 2033. The terms of this note are identical to the note issued on May 16, 2023 (see related press release).
The ratings of CNA, which is considered the lead rating unit in the CNAF enterprise, reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM). The ratings also acknowledge the historical financial support provided by CNA’s diversified 91.7%-shareholder ultimate parent, Loews Corporation.
The ratings of CNA Insurance Companies – whose lead member is Continental Casualty Company – recognize the company maintaining its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), the group’s consistently profitable operating results, and its well-established position as a leading U.S. writer of commercial and specialty lines. Additionally, the ratings recognize CNA’s favorable operating platform, which demonstrates considerable geographic and product line scope, strong service capabilities and its diversified distribution channel with well-established agency relationships. The group’s specialty insurance segment remains the primary engine of profitability and internal capital generation, but its commercial insurance operations have demonstrated steady improvement as significant underwriting and expense management initiatives have taken hold. The ratings also consider the group’s continued focus on ERM and the implicit and explicit financial and organizational support provided by the Loews Corporation.
Partially offsetting these positive rating factors are the intermittent adverse impacts of CNA’s discontinued long-term care program that serves as a drag on CNA’s overall profitability and exposes its surplus and risk-adjusted capitalization to potential volatility. Additional factors affecting the group’s credit profile is its moderate underwriting exposure to catastrophe losses, associated with its commercial property product lines (and notwithstanding the group’s overall emphasis on commercial and specialty casualty lines), and reserve uncertainties generally affecting litigation-sensitive casualty lines – which comprise the majority of CNA’s in-force business, cyber-related and other underwriting exposures.
The ratings of Western Surety Group reflect its balance sheet strength, which AM Best assess as strongest, as well as its strong operating performance, neutral business profile, and appropriate ERM.
Western Surety Group’s ratings reflect its strongest risk-adjusted capitalization, as measured by BCAR, its consistently favorable loss reserve position and its modest level of underwriting leverage. Western Surety Group maintains a strong market position in the contract and miscellaneous surety bond markets and has consistently reported profitable underwriting and operating performance. Partially offsetting these positive factors is Western Surety’s narrow product focus in the highly competitive surety market, which may put pressure on underwriting margins over the near term.
The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed with a stable outlook for the following P/C members of the CNA Insurance Companies:
- American Casualty Company of Reading, Pennsylvania
- Columbia Casualty Company
- Continental Casualty Company
- The Continental Insurance Company of New Jersey
- The Continental Insurance Company
- National Fire Insurance Company of Hartford
- North Rock Insurance Company Limited
- Transportation Insurance Company
- Valley Forge Insurance Company
and for the following members of the Western Surety Group:
- Surety Bonding Company of America
- Universal Surety of America
- Western Surety Company
The following Long-Term IRs have been affirmed with stable outlooks:
CNA Financial Corporation —
— “bbb+” (Good) on $243 million 7.25% senior unsecured debentures, due 2023
— “bbb+” (Good) on $550 million 3.95% senior unsecured notes, due 2024
— “bbb+” (Good) on $500 million 4.5% senior unsecured notes, due 2026
— “bbb+” (Good) on $500 million 3.45% senior unsecured notes, due 2027
— “bbb+” (Good) on $500 million 3.9% senior unsecured notes, due 2029
— “bbb+” (Good) on $500 million 2.05% senior unsecured notes, due 2030
— “bbb+” (Good) on $500 million 5.50% senior unsecured notes, due 2033
The following indicative Long-Term IRs on securities available under the shelf registration have been affirmed with stable outlooks:
CNA Financial Corporation —
—“bbb+” (Good) on senior unsecured debt
—“bbb” (Good) on senior subordinated debt
—“bbb-” (Good) on junior subordinated debt
—“bbb-” (Good) on preferred stock
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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