CNA Financial’s first-quarter 2026 earnings included $106 million in unfavorable prior-period development, concentrated in excess casualty and affinity professional errors and omissions for recent accident years. The charge added 4.1 loss ratio points (up from 2.5 a year earlier) and pushed CNA’s P&C combined ratio to 102.2%. Two weeks later, Ryan Specialty’s chief revenue officer Brendan Mulshine called emerging reserve strengthening a “canary in the coalmine” for the broader excess casualty market at the E&S Insurer Conference, warning that the industry could be nearing an inflection point as social inflation and rising casualty losses compound.
CNA is not an outlier. Lockton’s May 2026 casualty analysis documented $7.3 billion in adverse development for other liability occurrence (OLO) in calendar year 2025, the largest single-line figure on record, with more than half concentrated in accident years 2021 through 2023. Commercial auto added another $1.8 billion, with $1.6 billion of that from accident years 2022 and 2023 alone. Across all commercial liability lines, adverse development has accumulated to roughly $62 billion over the past decade, with $14 billion added in 2024.
Who it affects
Self-insured employers, captives, and public entities buying excess workers’ comp, general liability, or auto liability above a retained layer. Mid-market and large self-insureds with $250,000 to $1 million retentions whose accident years 2021 through 2024 share the same claim environment that carriers are now correcting. Captive programs with excess towers placed through London or domestic E&S markets, where the reserve strengthening will feed directly into renewal pricing.
The reserve mechanism
When carriers strengthen reserves on recent accident years, the underlying claim trends that forced the adjustment (social inflation, attorney involvement rates, rising settlement values) are the same trends flowing through self-insured retained layers. CNA raised its loss cost trend assumption to slightly above 7% for its P&C portfolio, a signal that claim severity is outrunning earlier selections.
For self-insured programs, the signal works at two levels. First, case reserve adequacy on accident years 2021 through 2024 deserves a fresh look; if carriers with larger, more diversified books are finding their initial picks were too low, a smaller self-insured book with the same exposure is likely experiencing the same development lag. Second, excess program renewal pricing will absorb these charges. CNA’s commercial underlying loss ratio rose to 65.8% from 62.9% a year earlier, and Marsh’s Q1 data already shows US excess casualty rates running 18% higher. That cost flows through in attachment point pricing and excess layer premiums.
What this means for your next review
Ask your actuary whether IBNR selections for accident years 2021 through 2024 reflect the severity environment carriers are now pricing into their own reserves. CNA’s move to a 65.8% underlying loss ratio tells you what the market thinks about the claim cost trajectory.
Three questions for your next quarterly meeting:
- Have development factors on your GL and auto liability triangles been stress-tested against the adverse development carriers are reporting for the same accident years?
- Is your excess attachment point keeping pace with the severity shift, or has the real retention crept higher as claim costs outgrew the nominal SIR?
- Does your actuary’s trend pick for retained liability losses sit at or above the 7% loss cost trend CNA now assumes for its own book?