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CNA's Q3: WC Current-Year Losses Rise as Prior Years Release

CNA's Q3 2026 release blames a 2.4-point rise in its Commercial underlying loss ratio partly on workers' compensation while management credits WC with favorable prior-year development. For a self-insured employer, the two are separate signals: raise the open-year expected claim ratio and release mature-year IBNR only on your own evidence.

By Sam, EditorNovember 2026 · 4 min read

On November 2, 2026, CNA Financial reported third-quarter results in an 8-K earnings release. Its Commercial segment underlying loss ratio (current accident year, excluding catastrophes and prior-year development) rose to 65.8% from 63.4%, a 2.4-point increase. The release says the increase was “primarily the result of increases in excess casualty and workers’ compensation.” The same quarter carried $35 million of net unfavorable prior period development, also 2.4 points. The earnings remarks say that came “primarily from reserve strengthening in excess casualty, partially offset by favorability in workers’ compensation and property.”

So workers’ compensation shows up on both sides: a worse current year and a better prior-year result. Neither disclosure gives a WC dollar figure. CNA did not break out WC development, and the release gives no WC rate percentage. It says only that rates declined in “property, workers’ compensation and our International segment.”

The Hartford shows the same split

A week earlier, The Hartford reported $61 million of net favorable prior-year development, versus $60 million a year earlier, with reductions in workers’ compensation and commercial property, per Insurance Journal. It also gave no WC-only amount. Two large carriers releasing WC reserves on old years is a real data point. It is not a measurement of your program.

Who it affects

Self-insured employers, group captives, and public-entity pools that carry WC retentions and benchmark their expected claim ratio (ECR) against carrier commentary. That is most heavily the case for those that set the open-year ECR from last year’s selection plus a trend.

The reserve mechanism

An ECR is the loss-to-payroll or loss-to-premium ratio you assume for the open accident year before your own claims have matured. Prior-year development is a different lever: it shows whether the older years’ reserves were too high or too low. The CNA disclosure points two ways:

  • Current year: higher ECR. A rising underlying loss ratio while rates fall means loss costs are rising faster than price. If your open-year ECR is flat to last year, you are assuming the opposite of what this carrier saw. The loss ratio was “consistent with the first half of 2026,” so this is a run of quarters, not one.
  • Mature years: possible redundancy. Favorable WC development on old years is consistent with the long-run pattern in the NCCI accident-year versus calendar-year gap, where recent years look more expensive than the calendar-year view suggests. A carrier release rests on pooled, rate-adequate books. Your own development depends on your claim handling, closure speed, and jurisdiction mix.

Do not net the two. A release on old years does not justify a lower ECR on the open year, and a higher open-year ECR does not mean your mature IBNR is wrong. Under a Bornhuetter-Ferguson method, the ECR carries the open-year signal. Under pure loss development, the old-year factors carry it, which is where a carrier-style release would leak in.

Where this shows up in your reserves

Open your last actuarial report to the exhibit that lists selected ECR by accident year, and to the development factor selections. Compare the open-year ECR with the prior year’s. Then check how much of the open-year ultimate comes from IBNR on the immature years, because that portion is exposed to a higher ECR. The five leading indicators piece covers the case-reserve and closure signals to compare against.

Our read

Expect a carrier-style WC release to continue on mature years through the next quarters, while open-year loss ratios keep rising until rate reductions stop. Oregon’s 2.1% pure premium increase for 2027 is one filing that has already turned. That is an inference from two carriers and one filing, not a trend proof; the line-level WC development tables in each carrier’s 10-Q, and the next NCCI State of the Line update, will confirm or contradict it.

What this means for your next review

Ask your actuary whether the open-year ECR rose, held, or fell against last year, and what evidence beyond carrier releases supports it. Ask for a scenario with no release on mature years. Confirm which method carries current-year severity in your payroll mix. See the workers’ compensation IBNR guide for the baseline method choices.

Sources

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