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

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” 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+” 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+” of Western Surety Company and its subsidiaries, Surety Bonding Company of America and Universal Surety of America, collectively referred to as 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.)

The ratings of CNA, which is considered the lead rating unit in the CNAF enterprise, reflect its balance sheet strength, which AM Best categorizes 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 ultimate parent, Loews Corporation.

The ratings of CNA Insurance companies recognize the excellent level of risk-adjusted capitalization the company maintains, consistent and steady operating results, and established position as a leading writer within the U.S. commercial lines segment. In addition, the ratings recognize CNA’s favorable operating platform, which demonstrates considerable geographic and product line scope, strong service capabilities and diversified distribution channel with well-established agency relationships. The ratings also consider the group’s continued focus on ERM. The ratings also acknowledge the historical financial support provided by CNA’s ultimate parent, Loews Corporation. Partially offsetting these positive rating factors is the adverse impact of CNA’s discontinued long-term care program that continues to serve as a drag on CNAF’s overall profitability, and exposes its surplus and risk-adjusted capitalization to significant potential volatility. Additionally, occasional catastrophe losses may impact underwriting margins over the near term.

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

Western Surety Group’s ratings reflect its risk-adjusted capitalization at the strongest level, consistently favorable loss reserve position and modest levels of underwriting leverage. Additionally, Western Surety Group has reported consistent profitable underwriting and operating performance, and a strong market position in the contract and miscellaneous surety bond markets. Slightly offsetting these positive rating factors are Western Surety Group’s narrow product focus in the highly competitive surety market environment, which may put pressure on underwriting margins over the near term.

The FSR of A (Excellent) and the Long-Term ICRs of “a+” have been affirmed with stable outlooks 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

The following Long-Term IRs have been affirmed with stable outlooks:

CNA Financial Corporation—

-- “bbb+” on $400 million 5.75% senior unsecured notes, due 2021

-- “bbb+” on $243 million 7.25% senior unsecured debentures, due 2023

-- “bbb+” on $550 million 3.95% senior unsecured notes, due 2024

-- “bbb+” on $500 million 4.5% senior unsecured notes, due 2026

-- “bbb+” on $500 million 3.45% senior unsecured notes, due 2027

-- “bbb+” on $500 million 3.9% senior unsecured notes, due 2029

The following indicative Long-Term IRs on securities available under the shelf registration have been affirmed with stable outlooks:

CNA Financial Corporation—

--“bbb+” on senior unsecured debt

--“bbb” on senior subordinated debt

--“bbb-” on junior subordinated debt

--“bbb-” 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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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