CNA FINANCIAL CORPCNA
CNA FINANCIAL CORP Income Taxes Disclosure
Income Taxes
The CNA Tax Group is included in the consolidated federal income tax return of Loews and its eligible subsidiaries. Loews and the Company have agreed that for each taxable year, the Company will 1) be paid by Loews the amount, if any, by which the Loews consolidated federal income tax liability is reduced by virtue of the inclusion of the CNA Tax Group in the Loews consolidated federal income tax return, or 2) pay to Loews an amount, if any, equal to the federal income tax that would have been payable by the CNA Tax Group filing a separate consolidated tax return. In the event that Loews should have a net operating loss in the future computed on the basis of filing a separate consolidated tax return without the CNA Tax Group, the Company may be required to repay tax recoveries previously received from Loews. This agreement may be canceled by either party upon 30 days written notice.
For the years ended December 31, 2025, 2024 and 2023, the Company paid $204 million, $186 million and $263 million to Loews related to federal income taxes.
For 2023 through 2025, Loews and the Company participate in the Internal Revenue Service (IRS) Compliance Assurance Process (CAP), which is a voluntary program for large corporations. Under CAP, the IRS conducts a real-time audit and works contemporaneously with the Company to resolve any issues prior to the filing of the tax return. For 2023, the Company was selected to participate in the phase of CAP reserved for taxpayers whose risk of noncompliance did not support use of IRS resources. The Company believes that participation in CAP should reduce tax-related uncertainties, if any.
As of December 31, 2025 and 2024, there were no unrecognized tax benefits.
The Company recognizes interest accrued related to unrecognized tax benefits and tax refund claims in Income tax (expense) benefit on the Consolidated Statements of Operations. The Company recognizes penalties (if any) in Income tax (expense) benefit on the Consolidated Statements of Operations. During 2025, 2024 and 2023 the Company recognized no interest and no penalties. There were no amounts accrued for interest or penalties as of December 31, 2025 or 2024.
The following table presents the Company's U.S. and foreign income before income tax.
| Years ended December 31 | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Income before income tax: | |||||||||||||||||
| U.S. | $ | 1,336 | $ | 1,009 | $ | 1,320 | |||||||||||
| Foreign | 284 | 202 | 198 | ||||||||||||||
| Total income before income tax | $ | 1,620 | $ | 1,211 | $ | 1,518 | |||||||||||
The following table presents the Company's federal, foreign and state and local income tax expense.
| Years ended December 31 | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Income tax expense: | |||||||||||||||||
| Federal | $ | (260) | $ | (174) | $ | (245) | |||||||||||
| Foreign | (69) | (63) | (52) | ||||||||||||||
| State and local | (13) | (15) | (16) | ||||||||||||||
| Total income tax expense | $ | (342) | $ | (252) | $ | (313) | |||||||||||
The following table presents a reconciliation between the Company's income tax expense at statutory rates and the recorded income tax expense.
| Years ended December 31 | ||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| (In millions, except percentages) | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||
| Income tax expense at statutory rates | $ | (340) | 21.0 | % | $ | (254) | 21.0 | % | $ | (319) | 21.0 | % | ||||||||||||||
State and local income taxes, net of federal income tax effect (1) | (10) | 0.6 | % | (12) | 1.0 | % | (13) | 0.8 | % | |||||||||||||||||
| Foreign tax effects | ||||||||||||||||||||||||||
| Canada | (22) | 1.4 | % | (32) | 2.6 | % | (23) | 1.5 | % | |||||||||||||||||
| Other foreign jurisdictions | (9) | 0.5 | % | (7) | 0.6 | % | (7) | 0.4 | % | |||||||||||||||||
| Effect of cross-border tax laws | (6) | 0.3 | % | — | — | % | (1) | — | % | |||||||||||||||||
| Tax credits | ||||||||||||||||||||||||||
| Foreign tax credits | 25 | (1.5) | % | 36 | (3.0) | % | 26 | (1.7) | % | |||||||||||||||||
| Nontaxable or nondeductible items | ||||||||||||||||||||||||||
| Tax exempt income | 30 | (1.8) | % | 26 | (2.1) | % | 31 | (2.0) | % | |||||||||||||||||
| Other nontaxable or nondeductible items | (10) | 0.6 | % | (9) | 0.8 | % | (7) | 0.5 | % | |||||||||||||||||
| Income tax expense | $ | (342) | 21.1 | % | $ | (252) | 20.9 | % | $ | (313) | 20.5 | % | ||||||||||||||
(1) State taxes in Illinois and Florida made up the majority (greater than 50%) of the tax effect in this category for the years ended December 31, 2025, 2024 and 2023.
As of December 31, 2025, no deferred taxes are required on the undistributed earnings of subsidiaries subject to tax.
The following table presents the current and deferred components of the Company's income tax expense.
| Years ended December 31 | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Current tax expense | $ | (267) | $ | (297) | $ | (311) | |||||||||||
| Deferred tax (expense) benefit | (75) | 45 | (2) | ||||||||||||||
| Total income tax expense | $ | (342) | $ | (252) | $ | (313) | |||||||||||
The deferred tax effects of the significant components of the Company's deferred tax assets and liabilities are presented in the following table.
| December 31 | |||||||||||
| (In millions) | 2025 | 2024 | |||||||||
| Deferred Tax Assets: | |||||||||||
| Insurance reserves: | |||||||||||
| Property and casualty claim and claim adjustment expense reserves | $ | 276 | $ | 234 | |||||||
| Unearned premium reserves | 227 | 225 | |||||||||
| Deferred non-insurance warranty revenue | 53 | 59 | |||||||||
| Employee benefits | 7 | 13 | |||||||||
| Deferred retroactive reinsurance benefit | 99 | 89 | |||||||||
| Net unrealized losses | 258 | 494 | |||||||||
| Other assets | 101 | 107 | |||||||||
| Gross deferred tax assets | 1,021 | 1,221 | |||||||||
| Deferred Tax Liabilities: | |||||||||||
| Investment valuation differences | 168 | 130 | |||||||||
| Deferred acquisition costs | 143 | 140 | |||||||||
| Policyholder reserves | 25 | 48 | |||||||||
| Software and hardware | 57 | 17 | |||||||||
| Other liabilities | 53 | 36 | |||||||||
| Gross deferred tax liabilities | 446 | 371 | |||||||||
| Net deferred tax asset | $ | 575 | $ | 850 | |||||||
As of December 31, 2025, the CNA Tax Group had no loss carryforwards and a tax credit carryforward of $6 million which expires in 2034. The foreign operations had loss carryforwards of $83 million, which have no expiration. The foreign operations had a tax credit carryforward of $13 million, which has no expiration.
Although realization of deferred tax assets is not assured, management believes it is more likely than not that the recognized net deferred tax asset will be realized through recoupment of ordinary and capital taxes paid in prior carryback years and through future earnings, reversal of existing temporary differences and available tax planning strategies. As a result, no valuation allowance was recorded as of December 31, 2025 or 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 10, 2026 | Showing above |
| 2024 | Feb 11, 2025 | |
| 2023 | Feb 6, 2024 | |
| 2022 | Feb 7, 2023 | |
| 2021 | Feb 8, 2022 | |
| 2020 | Feb 9, 2021 | |
| 2019 | Feb 11, 2020 | |
| 2018 | Feb 13, 2019 | |
| 2017 | Feb 14, 2018 | |
| 2016 | Feb 15, 2017 | |
| 2015 | Feb 17, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.