AM Best Upgrades Credit Ratings of CNA Financial Corporation and Its Subsidiaries

AM Best has upgraded the Financial Strength Rating (FSR) to A+ (Superior) from A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) to "aa-" (Superior) from "a+" (Excellent) of the property/casualty (P/C) subsidiaries of CNA Financial Corporation (CNAF) (NYSE:CNA), collectively known as CNA Insurance Companies (CNA), and the members of Western Surety Group (WSG). Concurrently, AM Best has upgraded the Long-Term ICR to "a-" (Excellent) from "bbb+" (Good) and the Long-Term Issue Credit Ratings (Long-Term IRs) of CNAF. The outlook of these Credit Ratings (ratings) has been revised to stable from positive. All named companies are headquartered in Chicago, IL. (See below for a detailed listing of the companies and ratings.)

CNA is considered the lead rating unit in the CNAF enterprise. CNA's ratings reflect its balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM). CNA has had consistently positive operating performance over the most recent five-year period underpinned by its commercial casualty underwriting and its overall investment metrics, which compare favorably with its commercial casualty peers. Additionally, the supportive ownership by CNAF is viewed positively by AM Best. The ratings also acknowledge the historical financial support provided by CNA's diversified 92% shareholder ultimate parent, Loews Corporation.

The ratings of CNA—whose lead member is Continental Casualty Company—recognize the strongest level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), the group's consistently profitable operating results and its 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 commercial insurance operations have developed into a significant source of profitability and internal capital generation, attributable to the successful implementation of underwriting and expense management initiatives. The ratings also consider CNA's ERM structure, and the implicit and explicit financial and organizational support provided by the Loews Corporation.

Partially offsetting these positive factors are the intermittent adverse impacts of CNA's discontinued long-term care block of business, which at times has served as a drag on CNA's overall profitability and has exposed its surplus and risk-adjusted capitalization to potential volatility. Additional factors affecting the group's credit profile are its moderate underwriting exposures to catastrophe losses associated with its commercial property product lines, reserve uncertainties, which generally affect litigation-sensitive casualty lines, as well as cyber-related and other underwriting exposures.

The ratings of WSG reflect its balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, neutral business profile and appropriate ERM.

Additionally, WSG'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. WSG maintains a strong market position in contract and miscellaneous surety bond markets and has consistently reported profitable underwriting and operating performance. Partially offsetting these positive factors is WSG's narrow product focus in a highly competitive surety market, which may put pressure on underwriting margins over the near term.

The FSR has been upgraded to A+ (Superior) from A (Excellent) and the Long-Term ICRs to "aa-" (Superior) from "a+" (Excellent), with the outlooks revised to stable from positive, for the following members of 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

The FSR has been upgraded to A+ (Superior) from A (Excellent) and the Long-Term ICRs to "aa-" (Superior) from "a+" (Excellent), with the outlooks revised to stable from positive, for the following members of Western Surety Group:

• Surety Bonding Company of America
• Universal Surety of America
• Western Surety Company

The following Long-Term IRs have been upgraded, with the outlooks revised to stable from positive:

CNA Financial Corporation —

-- to "a-" (Excellent) from "bbb+" (Good) on $500 million, 3.45% senior unsecured notes, due 2027

-- to "a-" (Excellent) from "bbb+" (Good) on $500 million, 3.9% senior unsecured notes, due 2029

-- to "a-" (Excellent) from "bbb+" (Good) on $500 million, 2.05% senior unsecured notes, due 2030

-- to "a-" (Excellent) from "bbb+" (Good) on $500 million, 5.50% senior unsecured notes, due 2033

-- to "a-" (Excellent) from "bbb+" (Good) on $500 million, 5.125% senior unsecured notes, due 2034

-- to "a-" (Excellent) from "bbb+" (Good) on $500 million, 5.2% senior unsecured notes, due 2035

The following Long-Term IR with a positive outlook has been withdrawn:

CNA Financial Corporation —

-- "bbb+" (Good) on $500 million, 4.5% senior unsecured notes, due 2026

The following indicative Long-Term IRs on securities available under the shelf registration have been upgraded, with the outlooks revised to stable from positive:

CNA Financial Corporation —

-- to "a-" (Excellent) from "bbb+" (Good) on senior unsecured debt

-- to "bbb+" (Good) from "bbb" (Good) on senior subordinated debt

-- to "bbb" (Good) from "bbb-" (Good) on junior subordinated debt

-- to "bbb" (Good) from "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.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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