CNA Financial (CNA) risk factors, FY2025 10-K

Other

1. 01If we determine that our recorded insurance reserves are insufficient to cover our estimated ultimate unpaid liability for claim and claim adjustment expenses, we may need to increase our insurance reserves which would result in a charge to our earnings
2. 02Our actual experience could vary from the key assumptions used to determine future policy benefit reserves for long-term care policies
3. 03Morbidity and persistency experience can be volatile and may be negatively affected by many factors including policyholder behavior, judicial decisions regarding policy terms, socioeconomic factors, cost of care inflation, changes in health trends and advances in medical care35% rewritten
4. 04We are vulnerable to material losses from natural and man-made disasters24% rewritten
5. 05We have exposures related to asbestos and environmental pollution (A&EP) claims, which could result in material losses

Strategic Risks

1. 06We face intense competition in our industry; we may be adversely affected by the cyclical nature of the property and casualty business and by the evolving landscape of our distribution network
2. 07Our underwriting strategies currently rely on the effectiveness of reinsurance arrangements and we accordingly face risks relating to reinsurance, including obtaining reinsurance at a cost or on terms and conditions we deem acceptable, reinsurance counterparty risk and ineffective reinsurance coverage
3. 08We may be adversely affected by technological changes or disruptions in the insurance marketplace31% rewritten
4. 09We face considerable competition within our industry for qualified, specialized talent and any significant inability to attract and retain talent may adversely affect the execution of our business strategies
5. 10We are controlled by a single stockholder which could result in potential conflicts of interest

Financial Risks

1. 11We may incur significant realized and unrealized investment losses and volatility in net investment income arising from changes in the financial markets

Operational Risks

1. 12We use analytical models to assist our decision making in key areas such as pricing, reserving, catastrophe risks and capital modeling and may be adversely affected if actual results differ materially from the model outputs and related analyses51% rewritten
2. 13Any significant interruption in the operation of our business functions, facilities or systems or our vendors' facilities or systems could result in a materially adverse effect on our operations
3. 14Any significant breach in our data security infrastructure or our vendors’ facilities or systems could disrupt business, cause financial losses and damage our reputation, and insurance coverage may not be available for claims related to a breach62% rewritten
4. 15Further, should we experience future cyber incidents, or should industry trends drive rate increases resulting from growth in volume and significance of cyber incidents broadly, we may incur higher costs for cybersecurity insurance coverageNew
5. 16Inability to detect and prevent significant employee or third-party service provider misconduct, inadvertent errors and omissions, or exposure relating to functions performed on our behalf could result in a materially adverse effect on our business, results of operations and financial condition35% rewritten
6. 17Loss of key vendor relationships and issues relating to the transitioning of vendor relationships could compromise our ability to conduct business
7. 18We are subject to capital adequacy requirements and, if we are unable to maintain or raise sufficient capital to meet these requirements, regulatory agencies may restrict or prohibit us from operating our business
8. 19Our insurance subsidiaries, upon whom we depend for dividends in order to fund our corporate obligations, are limited by insurance regulators in their ability to pay dividends
9. 20Rating agencies may downgrade their ratings of us, thereby adversely affecting our ability to write insurance at competitive rates or at all and increasing our cost of capital
10. 21For further discussion of our ratings, see the Ratings subsection within the Liquidity and Capital Resources section of MD&A in Item 7