2011 Q2 8K

0000021175-11-000030.txt : 20110801 0000021175-11-000030.hdr.sgml : 20110801 20110801121954 ACCESSION NUMBER: 0000021175-11-000030 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20110801 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20110801 DATE AS OF CHANGE: 20110801 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CNA FINANCIAL CORP CENTRAL INDEX KEY: 0000021175 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 366169860 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05823 FILM NUMBER: 11999708 BUSINESS ADDRESS: STREET 1: CNA STREET 2: 333 S. WABASH CITY: CHICAGO STATE: IL ZIP: 60604 BUSINESS PHONE: 3128225000 MAIL ADDRESS: STREET 1: CNA STREET 2: 333 S. WABASH CITY: CHICAGO STATE: IL ZIP: 60604 8-K 1 a2011q28k.htm 8-K 2011 Q2 8K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) August 1, 2011

CNA FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)



Delaware	1-5823	36-6169860
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)



333 S. Wabash, Chicago, Illinois		60604
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code (312) 822-5000

NOT APPLICABLE

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On August 1, 2011, the registrant issued a press release and posted on its website (www.cna.com) a financial supplement providing information on its results of operations for the second quarter 2011. The press release is furnished as Exhibit 99.1 and the financial supplement is furnished as Exhibit 99.2 to this Form 8-K.

The information under Item 2.02 and in Exhibits 99.1 and 99.2 in this Current Report is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information under Item 2.02 and in Exhibits 99.1 and 99.2 in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits:

See Exhibit Index.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



		CNA Financial Corporation
		(Registrant)

Date: August 1, 2011	By	/s/ D. Craig Mense
		(Signature)
		D. Craig Mense Executive Vice President and Chief Financial Officer

EXHIBIT INDEX



Exhibit No.		Description
99.1		CNA Financial Corporation press release, issued August 1, 2011, providing information on the second quarter 2011 results of operations.

99.2		CNA Financial Corporation financial supplement, posted on its website August 1, 2011, providing supplemental financial information on the second quarter 2011.

EX-99.1 2 q2exhibit991.htm EX 99.1 Q2 Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT:



MEDIA:		ANALYSTS:
Katrina W. Parker, 312/822-5167		Nancy M. Bufalino, 312/822-7757
Sarah J. Pang, 312/822-6394		Marie Hotza, 312/822-4278
		David C. Adams, 312/822-2183

CNA FINANCIAL ANNOUNCES SECOND QUARTER 2011 RESULTS:

NET OPERATING INCOME OF $116 MILLION, NET INCOME OF $126 MILLION,

NET WRITTEN PREMIUMS INCREASE OF 5%, P&C COMBINED RATIO OF 105.7%

BOOK VALUE PER COMMON SHARE OF $43.09,

AN INCREASE OF 3% FROM MARCH 31, 2011

QUARTERLY DIVIDEND OF $0.10 PER SHARE

CHICAGO, August 1, 2011 --- CNA Financial Corporation (NYSE: CNA) today announced second quarter 2011 results, which included net operating income of $116 million, or $0.43 per common share, and net income of $126 million, or $0.47 per common share. Property & Casualty Operations combined ratio for the second quarter was 105.7%. Book value per common share was $43.09 at June 30, 2011, as compared to $41.75 at March 31, 2011 and $40.70 at December 31, 2010.

CNA Financial also announced declaration of a quarterly dividend of $0.10 per share, payable August 31, 2011 to stockholders of record on August 15, 2011.



	Results for the Three Months Ended June 30 (a)				Results for the Six Months Ended June 30 (a)
($ millions)	2011		2010		2011			2010
Net operating income	$	116	$	269	$	332		$	492
Net realized investment gains	10		13		18			35
Net income from continuing operations	126		282		350			527
Net income (loss) from discontinued operations	—		1		(1		)	1
Net income	$	126	$	283	$	349		$	528

(a)

References to net operating income (loss), net realized investment gains (losses), net income (loss) from continuing operations and net income (loss) used in this press release reflect amounts attributable to CNA, unless otherwise noted. Management utilizes the net operating income financial measure to monitor the Company's operations. Please refer to Note N of the Consolidated Financial Statements within CNA's Annual Report on Form 10-K for the year ended December 31, 2010 for further discussion of this measure.



Earnings Per Share Attributable to Common Stockholders
	Results for the Three Months Ended June 30					Results for the Six Months Ended June 30
	2011		2010			2011		2010
Net operating income	$	0.43	$	1.00		$	1.23	$	1.83
2008 Senior Preferred dividend	—		(0.09		)	—		(0.19		)
Net operating income attributable to CNA common stockholders	0.43		0.91			1.23		1.64
Net realized investment gains	0.04		0.05			0.07		0.13
Net income from continuing operations	0.47		0.96			1.30		1.77
Net income (loss) from discontinued operations	—		—			—		0.01
Net income attributable to CNA common stockholders	$	0.47	$	0.96		$	1.30	$	1.78

Net operating income for the three months ended June 30, 2011 decreased $153 million as compared with the same period in 2010. Net operating income for our core Property & Casualty Operations decreased $140 million, primarily due to a lower level of favorable net prior year development and higher catastrophe losses. For the three months ended June 30, 2011, catastrophe losses were $65 million after-tax as compared to $31 million after-tax for the same period in 2010. Our Property & Casualty Operations produced second quarter combined ratios of 105.7% and 89.5% in 2011 and 2010. Excluding the impacts of favorable reserve development and catastrophe losses, our combined ratios were 103.6% and 104.6% for the same comparable periods. Net operating results decreased $13 million for our non-core segments.

“CNA continued to make progress toward our goal of becoming recognized as a winning company in the Property & Casualty industry,” said Thomas F. Motamed, Chairman and Chief Executive Officer of CNA Financial Corporation. “We achieved an overall net written premium increase of over 5% with growth across both our Specialty and Commercial segments, driven by new business and higher retention in our targeted customer segments. Rate improved for the third straight quarter. We completed our purchase of the minority shares of CNA Surety.”

Net investment income for the three months ended June 30, 2011 decreased $4 million as compared with the same period in 2010. The decrease was primarily driven by a decrease in fixed maturity security income, due to the effective income yield of the fixed maturity portfolio and a lower invested asset base, substantially offset by an increase in limited partnership investment income.

After-tax net realized investment gains decreased $3 million for the three months ended June 30, 2011 as compared with the same period in 2010. Other-than-temporary impairment losses of $40 million after-tax were recognized in earnings for the three months ended June 30, 2011 as compared to $37 million after-tax for the same period in 2010.

Net operating income for the six months ended June 30, 2011 decreased $160 million as compared with the same period in 2010. Net operating income for our core Property & Casualty Operations decreased $105 million, primarily due to the same reasons as discussed above in the three month comparison, partially offset by decreased expenses. For the six months ended June 30, 2011, catastrophe losses were $101 million after-tax as compared to $57 million after-tax for the same period in 2010. Our Property & Casualty Operations produced year-to-date combined ratios of 103.8% and 95.8% in 2011 and 2010. Excluding the impacts of favorable reserve development and catastrophe losses, our combined ratios were 101.9% and 103.4% for the same comparable periods. Net operating results decreased $55 million for our non-core segments.

Net investment income for the six months ended June 30, 2011 increased $26 million as compared with the same period in 2010. The increase was primarily driven by improved results from limited partnership investments, partially offset by a decrease in investment income from fixed maturity and short term investments due primarily to a decrease in the effective income yield of the fixed maturity portfolio and a lower invested asset base.

After-tax net realized investment gains decreased $17 million for the six months ended June 30, 2011 as compared with the same period in 2010. Results in 2011 include a $6 million after-tax loss on the early extinguishment of debt. Other-than-temporary impairment losses of $67 million after-tax were recognized in earnings for the six months ended June 30, 2011 as compared to $76 million after-tax for the same period in 2010.

Business Operating Highlights

CNA Specialty provides professional and management liability as well as surety and other property and casualty coverages and services, which include warranty and service contracts. Specialty products are sold both domestically and abroad, through a network of brokers, independent agencies and managing general underwriters.


•	Net written premiums increased $36 million for the second quarter of 2011 as compared with the same period in 2010. The increase in net written premiums was primarily driven by new business. Average rate was flat for the second quarter of 2011, as compared to a decrease of 2% for the same period in 2010 for the policies that renewed in each period. Retention of 85% was achieved in each period.


•	Net income decreased $70 million and net operating income decreased $54 million for the second quarter of 2011 as compared with the same period in 2010. The decrease in net operating income was primarily due to a lower level of favorable net prior year development.

•

The combined ratio increased 13.2 points for the second quarter of 2011 as compared with the same period in 2010. The loss ratio increased 12.6 points, primarily due to a lower level of favorable net prior year development and the impact of a higher current accident year loss ratio. The expense ratio increased 1.2 points, primarily due to higher underwriting expenses as we continued our investments across this business segment.


•	CNA Specialty produced second quarter combined ratios of 92.2% and 79.0% in 2011 and 2010. Excluding the impacts of favorable reserve development and catastrophe losses, our combined ratios were 99.3% and 97.1% for the same comparable periods.

CNA Commercial works with an independent agency distribution system and network of brokers to market a broad range of property and casualty insurance products and services to small, middle-market and large businesses and organizations domestically and abroad.

•

Net written premiums increased $42 million for the second quarter of 2011 as compared with the same period in 2010. This increase was primarily driven by new business across several lines of business as well as continued positive rate impacts. Average rate increased 2% for the second quarter of 2011 and 2010 for the policies that renewed in each period. Retention of 78% was achieved in each period.


•	Net income decreased $64 million and net operating income decreased $86 million for the second quarter of 2011 as compared with the same period in 2010. The decrease in net operating income was primarily due to a lower level of favorable net prior year development and higher catastrophe losses, partially offset by improved non-catastrophe current accident year underwriting results.


•	The combined ratio increased 19.3 points for the second quarter of 2011 as compared with the same period in 2010. The loss ratio increased 19.8 points, primarily due to a lower level of favorable net prior year development and increased catastrophe losses, partially offset by an improved non-catastrophe current accident year loss ratio.


•	CNA Commercial produced second quarter combined ratios of 117.7% and 98.4% in 2011 and 2010. Excluding the impacts of favorable reserve development and catastrophe losses, our combined ratios were 107.0% and 110.7% for the same comparable periods.

Life & Group Non-Core primarily includes the results of the life and group lines of business that are in run-off. Net earned premiums relate primarily to the individual and group long term care businesses.


•	Net loss decreased $1 million for the second quarter of 2011 as compared with the same period in 2010. This improvement was primarily due to lower expenses and improved investment results, substantially offset by unfavorable claim experience in our long term care business and less favorable performance on our remaining pension deposit business.

Corporate & Other Non-Core primarily includes certain corporate expenses, including interest on corporate debt, and the results of certain property and casualty business in run-off, including CNA Re and asbestos and environmental pollution (A&EP). In 2010, substantially all of our legacy A&EP liabilities were transferred to National Indemnity Company through a loss portfolio transfer reinsurance treaty.

•

Net results decreased $23 million for the second quarter of 2011 as compared with the same period in 2010, driven by lower net investment income partially offset by lower net incurred claims, both resulting from the Loss Portfolio Transfer consummated in the third quarter of 2010. Under the Loss Portfolio Transfer, approximately $1.6 billion of net A&EP claim and claim adjustment expense reserves were ceded under a retroactive reinsurance agreement. As a result of that transaction, the investment income allocated to the Corporate & Other Non-Core segment decreased because of the lower net reserve base and associated risk capital. Claim adjustment expenses are lower because the counterparty to the Loss Portfolio Transfer is responsible for the A&EP claims handling. Additionally, the decrease in net results was driven by decreased net realized investment results and higher interest expense. The increase in interest expense primarily relates to the use of debt to fund a portion of the 2010 redemption of our preferred stock. These unfavorable impacts were partially offset by increased favorable net prior year development.



Segment Results for the Three Months Ended June 30, 2011
($ millions)	CNA Specialty		CNA Commercial		Total P&C Operations		Life & Group Non-Core			Corporate & Other Non-Core			Total
Net operating income (loss)	$	114	$	39	$	153	$	(19	)	$	(18	)	$	116
Net realized investment gains (losses)	5		8		13		1			(4		)	10
Net income (loss) from continuing operations	$	119	$	47	$	166	$	(18	)	$	(22	)	$	126



Segment Results for the Three Months Ended June 30, 2010
($ millions)	CNA Specialty		CNA Commercial			Total P&C Operations		Life & Group Non-Core			Corporate & Other Non-Core			Total
Net operating income (loss)	$	168	$	125		$	293	$	(18	)	$	(6	)	$	269
Net realized investment gains (losses)	21		(14		)	7		(1		)	7			13
Net income (loss) from continuing operations	$	189	$	111		$	300	$	(19	)	$	1		$	282



Segment Results for the Six Months Ended June 30, 2011
($ millions)	CNA Specialty		CNA Commercial		Total P&C Operations		Life & Group Non-Core			Corporate & Other Non-Core			Total
Net operating income (loss)	$	244	$	170	$	414	$	(37	)	$	(45	)	$	332
Net realized investment gains (losses)	10		18		28		(2		)	(8		)	18
Net income (loss) from continuing operations	$	254	$	188	$	442	$	(39	)	$	(53	)	$	350



Segment Results for the Six Months Ended June 30, 2010
($ millions)	CNA Specialty		CNA Commercial		Total P&C Operations		Life & Group Non-Core			Corporate & Other Non-Core			Total
Net operating income (loss)	$	296	$	223	$	519	$	(17	)	$	(10	)	$	492
Net realized investment gains (losses)	30		—		30		(5		)	10			35
Net income (loss) from continuing operations	$	326	$	223	$	549	$	(22	)	$	—		$	527



Property & Casualty Operations Gross Written Premiums
	Three Months Ended June 30				Six Months Ended June 30
($ millions)	2011		2010		2011		2010
CNA Specialty	$	1,079	$	1,043	$	2,209	$	2,093
CNA Commercial	965		936		1,858		1,848
Total P&C Operations	$	2,044	$	1,979	$	4,067	$	3,941



Property & Casualty Operations Net Written Premiums
	Three Months Ended June 30				Six Months Ended June 30
($ millions)	2011		2010		2011		2010
CNA Specialty	$	683	$	647	$	1,422	$	1,303
CNA Commercial	880		838		1,708		1,667
Total P&C Operations	$	1,563	$	1,485	$	3,130	$	2,970



Property & Casualty Calendar Year Loss Ratios
	Three Months Ended June 30				Six Months Ended June 30
	2011		2010		2011		2010
CNA Specialty	60.8	%	48.2	%	62.5	%	54.8	%
CNA Commercial	80.7	%	60.9	%	77.9	%	67.6	%
Total P&C Operations	71.3	%	55.1	%	70.8	%	61.8	%



Property & Casualty Calendar Year Combined Ratios
	Three Months Ended June 30				Six Months Ended June 30
	2011		2010		2011		2010
CNA Specialty	92.2	%	79.0	%	93.5	%	85.7	%
CNA Commercial	117.7	%	98.4	%	112.6	%	104.1	%
Total P&C Operations	105.7	%	89.5	%	103.8	%	95.8	%



CNA Specialty Effect of Catastrophe Impacts and Development-Related Items
	Three Months Ended June 30				Six Months Ended June 30
	2011		2010		2011		2010
Combined ratio excluding the effect of catastrophe impacts and development-related items	99.3	%	97.1	%	98.4	%	96.8	%
Effect of catastrophe impacts	0.6	%	0.5	%	0.5	%	0.4	%
Effect of development-related items	(7.7	)%	(18.6	)%	(5.4	)%	(11.5	)%
Combined ratio	92.2	%	79.0	%	93.5	%	85.7	%



CNA Commercial Effect of Catastrophe Impacts and Development-Related Items
	Three Months Ended June 30				Six Months Ended June 30
	2011		2010		2011		2010
Combined ratio excluding the effect of catastrophe impacts and development-related items	107.0	%	110.7	%	104.7	%	108.5	%
Effect of catastrophe impacts	12.5	%	5.7	%	9.5	%	5.2	%
Effect of development-related items	(1.8	)%	(18.0	)%	(1.6	)%	(9.6	)%
Combined ratio	117.7	%	98.4	%	112.6	%	104.1	%



Property & Casualty Operations Effect of Catastrophe Impacts and Development-Related Items
	Three Months Ended June 30				Six Months Ended June 30
	2011		2010		2011		2010
Combined ratio excluding the effect of catastrophe impacts and development-related items	103.6	%	104.6	%	101.9	%	103.4	%
Effect of catastrophe impacts	6.9	%	3.3	%	5.3	%	3.0	%
Effect of development-related items	(4.8	)%	(18.4	)%	(3.4	)%	(10.6	)%
Combined ratio	105.7	%	89.5	%	103.8	%	95.8	%

About the Company

Serving businesses and professionals since 1897, CNA is the country's seventh largest commercial insurance writer and the 13^th largest property and casualty company. CNA's insurance products include standard commercial lines, specialty lines, surety, marine and other property and casualty coverages. CNA's services include risk management, information services, underwriting, risk control and claims administration. For more information, please visit CNA at www.cna.com. CNA is a registered trademark of CNA Financial Corporation.

Conference Call and Webcast Information:

A conference call for investors and the professional investment community will be held at 10:00 a.m. (ET) today. On the conference call will be Thomas F. Motamed, Chairman and Chief Executive Officer of CNA Financial Corporation, and other members of senior management. Participants can access the call by dialing (888) 312-9865, or for international callers, (719) 325-2336. The call will also be broadcast live on the internet at http://investor.cna.com or you may go to the investor relations pages of the CNA website (www.cna.com) for further details.

The call is available to the media, but questions will be restricted to investors and the professional investment community. A taped replay of the call will be available through August 8, 2011 by dialing (888) 203-1112, or for international callers, (719) 457-0820. The replay passcode is 8154398. The replay will also be available on CNA's website. Financial supplement information related to the results is available on the investor relations pages of the CNA website or by contacting David Adams at (312) 822-2183.

Financial Measures

In evaluating the results of CNA Specialty and CNA Commercial, management utilizes the combined ratio, the loss ratio, the expense ratio and the dividend ratio. These ratios are calculated using accounting principles generally accepted in the United States of America (GAAP) financial results. The loss ratio is the percentage of net incurred claim and claim adjustment expenses to net earned premiums. The expense ratio is the percentage of insurance underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums. The dividend ratio is the ratio of policyholders' dividends incurred to net earned premiums. The combined ratio is the sum of the loss, expense and dividend ratios.

This press release may also reference or contain financial measures that are not in accordance with GAAP. For reconciliations of non-GAAP measures to the most comparable GAAP measures, please refer herein and/or to CNA's most recent 10-K on file with the Securities and Exchange Commission, as well as the financial supplement, available at www.cna.com.

Forward-Looking Statement

This press release may include statements which relate to anticipated future events (forward-looking statements) rather than actual present conditions or historical events. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and generally include words such as “believes”, “expects”, “intends”, “anticipates”, “estimates” and similar expressions. Forward-looking statements, by their nature, are subject to a variety of inherent risks and uncertainties that could cause actual results to differ materially from the results projected. Many of these risks and uncertainties cannot be controlled by CNA. For a detailed description of these risks and uncertainties affecting CNA, please refer to CNA's most recent 10-K on file with the Securities and Exchange Commission available at www.cna.com.

Any forward-looking statements made in this press release are made by CNA as of the date of this press release. Further, CNA does not have any obligation to update or revise any forward-looking statement contained in this press release, even if CNA's expectations or any related events, conditions or circumstances change.

# # #

EX-99.2 3 q2exhibit992.htm EX 99.2 Q2 Exhibit 99.2

CNA Financial Corporation

Supplemental Financial Information

June 30, 2011

This report is for informational purposes only and includes consolidated financial statements and financial exhibits that are unaudited. This report should be read in conjunction with documents filed with the U.S. Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

CNA Financial Corporation

Table of Contents

June 30, 2011



	Page
Definitions and Presentation	i
Statements of Operations	1
Components of Income (Loss) Attributable to CNA Common Stockholders, Per Share Data and Return on Equity	2
Selected Balance Sheets Data and Statements of Cash Flows Data	3
Claim & Claim Adjustment Expense Reserve Rollforward	4
Investment Summary - Consolidated	5
Investment Summary - Property & Casualty and Corporate & Other Non-Core	6
Investment Summary - Life & Group Non-Core	7
Investments - Fixed Maturity Securities by Credit Rating	8
Property & Casualty Results of Operations (Three Months Ended)	9
Life & Group Non-Core and Corporate & Other Non-Core Segments Results of Operations (Three Months Ended)	10
Property & Casualty Results of Operations (Six Months Ended)	11
Life & Group Non-Core and Corporate & Other Non-Core Segments Results of Operations (Six Months Ended)	12
Components of Pretax Net Investment Income	13
Statutory Data - Preliminary	14
Property & Casualty Operations Loss & LAE Ratio Analysis	15

CNA Financial Corporation

Definitions and Presentation


•	Collectively, CNA Financial Corporation (CNAF) and its controlled subsidiaries are referred to as CNA or the Company.


•	P&C Operations includes CNA Specialty and CNA Commercial.


•	Life & Group Non-Core segment primarily includes the results of the life and group lines of business that are in run-off.


•	Corporate & Other Non-Core segment primarily includes certain corporate expenses including interest on corporate debt and the results of certain property and casualty business in run-off, including CNA Re and asbestos and environmental pollution (A&EP). Intersegment eliminations are also included in this segment.


•	Management utilizes the net operating income financial measure to monitor the Company’s operations. Please refer to Note N of the Consolidated Financial Statements within the 2010 Form 10-K for further discussion of this measure.

•

In evaluating the results of CNA Specialty and CNA Commercial, management utilizes the combined ratio, the loss ratio, the expense ratio and the dividend ratio. These ratios are calculated using financial results prepared in accordance with accounting principles generally accepted in the United States of America. The loss ratio is the percentage of net incurred claim and claim adjustment expenses to net earned premiums. The expense ratio is the percentage of insurance underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums. The dividend ratio is the ratio of policyholders' dividends incurred to net earned premiums. The combined ratio is the sum of the loss, expense and dividend ratios. The statutory expense ratio reported on page 14 is the percentage of acquisition and underwriting expenses to net written premiums in accordance with statutory accounting practices.

•

Limited partnerships are a relatively small portion of CNA's overall investment portfolio. The majority of our limited partnership investments employ strategies that generate returns through investing in securities that are marketable while engaging in various management techniques primarily in public fixed income and equity markets. The risks associated with limited partnership investments may include losses due to leveraging, short-selling, derivatives or other speculative investment practices. The use of leverage increases volatility generated by the underlying investment strategies.


•	Certain immaterial differences are due to rounding.


•	N/M = Not Meaningful


•	FY = Full Year

CNA FINANCIAL CORPORATION

Financial Supplement

Statements of Operations



PERIODS ENDED JUNE 30	Three Months						Fav / (Unfav)			Six Months						Fav / (Unfav)
(In millions)	2011			2010			% Change			2011			2010			% Change
STATEMENTS OF OPERATIONS
Revenues:
Net earned premiums	$	1,595		$	1,608		(1	)	%	$	3,210		$	3,223		—		%
Net investment income	517			521			(1	)		1,137			1,111			2
Net realized investment gains (losses), net of participating policyholders' interests:
Other-than-temporary impairment (OTTI) losses	(41		)	(58		)	29			(61		)	(148		)	59
Portion of OTTI recognized in Other comprehensive income (loss)	(21		)	1			N/M			(42		)	31			N/M
Net OTTI losses recognized in earnings	(62		)	(57		)	(9	)		(103		)	(117		)	12
Other net realized investment gains (losses)	77			86			(10	)		131			180			(27	)
Net realized investment gains (losses), net of participating policyholders' interests	15			29			(48	)		28			63			(56	)
Other revenues	71			75			(5	)		138			151			(9	)
Total revenues	2,198			2,233			(2	)		4,513			4,548			(1	)
Claims, Benefits and Expenses:
Insurance claims and policyholders' benefits	1,367			1,147			(19	)		2,731			2,455			(11	)
Amortization of deferred acquisition costs	350			345			(1	)		695			687			(1	)
Other operating expenses	259			258			—			484			530			9
Interest	43			37			(16	)		89			73			(22	)
Total claims, benefits and expenses	2,019			1,787			(13	)		3,999			3,745			(7	)
Income (loss) from continuing operations before income tax	179			446			(60	)		514			803			(36	)
Income tax (expense) benefit	(47		)	(145		)	68			(149		)	(247		)	40
Income (loss) from continuing operations, net of tax	132			301			(56	)		365			556			(34	)
Income (loss) from discontinued operations, net of tax	—			1			N/M			(1		)	1			N/M
Net income (loss)	132			302			(56	)		364			557			(35	)
Net (income) loss attributable to noncontrolling interests	(6		)	(19		)	68			(15		)	(29		)	48
Net income (loss) attributable to CNA	$	126		$	283		(55	)	%	$	349		$	528		(34	)	%

CNA FINANCIAL CORPORATION

Financial Supplement

Components of Income (Loss) Attributable to CNA Common Stockholders, Per Share Data and Return on Equity



PERIODS ENDED JUNE 30	Three Months							Six Months
(In millions, except per share data)	2011			2010				2011				2010
COMPONENTS OF INCOME (LOSS) ATTRIBUTABLE TO CNA COMMON STOCKHOLDERS
Net operating income (loss) from continuing operations attributable to CNA	$	116		$	269			$	332			$	492
Less: 2008 Senior Preferred dividend	—			(25		)		—				(50		)
Net operating income (loss) from continuing operations attributable to CNA common stockholders	116			244				332				442
Net realized investment gains (losses) attributable to CNA common stockholders	10			13				18				35
Income (loss) from continuing operations attributable to CNA common stockholders	126			257				350				477
Income (loss) from discontinued operations attributable to CNA common stockholders	—			1				(1		)		1
Income (loss) attributable to CNA common stockholders	$	126		$	258			$	349			$	478

BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE
Net operating income (loss) from continuing operations attributable to CNA	$	0.43		$	1.00			$	1.23			$	1.83
Less: 2008 Senior Preferred dividend	—			(0.09		)		—				(0.19		)
Net operating income (loss) from continuing operations attributable to CNA common stockholders	0.43			0.91				1.23				1.64
Net realized investment gains (losses) attributable to CNA common stockholders	0.04			0.05				0.07				0.13
Income (loss) from continuing operations attributable to CNA common stockholders	0.47			0.96				1.30				1.77
Income (loss) from discontinued operations attributable to CNA common stockholders	—			—				—				0.01
Basic and diluted earnings (loss) per share attributable to CNA common stockholders	$	0.47		$	0.96			$	1.30			$	1.78

WEIGHTED AVERAGE OUTSTANDING COMMON STOCK AND COMMON STOCK EQUIVALENTS
Basic	269.3			269.1				269.3				269.1
Diluted	269.6			269.3				269.6				269.3

RETURN ON EQUITY
Net income (loss) attributable to CNA ⁽¹⁾	4.4		%	9.8			%	6.2			%	9.4			%
Net operating income (loss) from continuing operations attributable to CNA ⁽²⁾	4.2			9.5				6.2				8.8

(1) Annualized net income (loss) attributable to CNA divided by the average CNA stockholders' equity including accumulated other comprehensive income/loss (AOCI) for the period. Average equity including AOCI is calculated using a simple average of the beginning and ending balances for the period.

(2) Annualized net operating income (loss) from continuing operations attributable to CNA divided by the average CNA stockholders' equity excluding AOCI for the period. Average equity excluding AOCI is calculated using a simple average of the beginning and ending balances for the period.

CNA FINANCIAL CORPORATION

Financial Supplement

Selected Balance Sheets Data and Statements of Cash Flows Data



(In millions, except share data)	June 30, 2011		December 31, 2010
Total assets	$	55,774	$	55,331
Insurance reserves	37,792		37,590
Debt	2,648		2,651
Total liabilities	44,025		43,807
Accumulated other comprehensive income (loss)	730		326
Noncontrolling interests	147		570
Total CNA stockholders' equity	11,602		10,954

Book value per common share	$	43.09	$	40.70
Book value per common share excluding AOCI	$	40.37	$	39.49

Outstanding shares of common stock (in millions of shares)	269.3		269.1



THREE MONTHS ENDED JUNE 30 (In millions)	2011			2010
Net cash flows provided (used) by operating activities ⁽¹⁾	$	300		$	217
Net cash flows provided (used) by investing activities	171			(154		)
Net cash flows provided (used) by financing activities	(468		)	(86		)
Net cash flows provided (used) by operating, investing and financing activities	$	3		$	(23	)



SIX MONTHS ENDED JUNE 30 (In millions)	2011			2010
Net cash flows provided (used) by operating activities ⁽¹⁾	$	412		$	581
Net cash flows provided (used) by investing activities	97			(523		)
Net cash flows provided (used) by financing activities	(504		)	(124		)
Net cash flows provided (used) by operating, investing and financing activities	$	5		$	(66	)

(1) Operating cash flows for the three and six months ended June 30, 2011 include $0 million and $(2) million related to discontinued operations. Operating cash flows for the three and six months ended June 30, 2010 include $(9) million and $(14) million related to discontinued operations.

CNA FINANCIAL CORPORATION

Financial Supplement

Claim & Claim Adjustment Expense Reserve Rollforward



THREE MONTHS ENDED JUNE 30, 2011 (In millions)	CNA Specialty			CNA Commercial			P&C Operations			Life & Group Non-Core			Corporate & Other Non-Core			Total Operations
Claim & claim adjustment expense reserves, beginning of period
Gross	$	6,888		$	12,383		$	19,271		$	2,757		$	3,324		$	25,352
Ceded	892			1,815			2,707			634			2,623			5,964
Net	5,996			10,568			16,564			2,123			701			19,388

Net incurred claim & claim adjustment expenses	418			622			1,040			159			(6		)	1,193
Net claim & claim adjustment expense payments	(369		)	(701		)	(1,070		)	(125		)	(21		)	(1,216		)
Foreign currency translation adjustment and other	6			7			13			—			(1		)	12

Claim & claim adjustment expense reserves, end of period
Net	6,051			10,496			16,547			2,157			673			19,377
Ceded	902			1,786			2,688			577			2,554			5,819
Gross	$	6,953		$	12,282		$	19,235		$	2,734		$	3,227		$	25,196



SIX MONTHS ENDED JUNE 30, 2011 (In millions)	CNA Specialty			CNA Commercial			P&C Operations			Life & Group Non-Core			Corporate & Other Non-Core			Total Operations
Claim & claim adjustment expense reserves, beginning of period
Gross	$	6,793		$	12,522		$	19,315		$	2,739		$	3,442		$	25,496
Ceded	875			1,881			2,756			642			2,724			6,122
Net	5,918			10,641			16,559			2,097			718			19,374

Net incurred claim & claim adjustment expenses	848			1,228			2,076			328			1			2,405
Net claim & claim adjustment expense payments	(738		)	(1,394		)	(2,132		)	(268		)	(46		)	(2,446		)
Foreign currency translation adjustment and other	23			21			44			—			—			44

Claim & claim adjustment expense reserves, end of period
Net	6,051			10,496			16,547			2,157			673			19,377
Ceded	902			1,786			2,688			577			2,554			5,819
Gross	$	6,953		$	12,282		$	19,235		$	2,734		$	3,227		$	25,196



CNA FINANCIAL CORPORATION Financial Supplement Investment Summary - Consolidated



	June 30, 2011						March 31, 2011						December 31, 2010
(In millions)	Carrying Value			Net Unrealized Gains (Losses)			Carrying Value			Net Unrealized Gains (Losses)			Carrying Value			Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	20,879		$	1,666		$	20,964		$	1,512		$	21,031		$	1,533
States, municipalities and political subdivisions:
Tax-exempt	4,855			(53		)	4,585			(228		)	4,282			(218		)
Taxable	3,862			142			3,743			4			3,607			(50		)
Total states, municipalities and political subdivisions	8,717			89			8,328			(224		)	7,889			(268		)
Asset-backed:⁽¹⁾⁽²⁾
Agency RMBS	4,187			64			3,991			15			3,836			38
Prime RMBS	867			(79		)	1,022			(91		)	1,139			(128		)
Sub-prime RMBS	383			(27		)	435			(20		)	483			(44		)
Alt-A RMBS	576			(21		)	627			(22		)	632			(30		)
Total RMBS	6,013			(63		)	6,075			(118		)	6,090			(164		)
Agency CMBS	30			1			45			—			30			—
Other CMBS	1,007			25			1,065			32			963			(1		)
Total CMBS	1,037			26			1,110			32			993			(1		)
Other ABS	933			8			896			10			763			10
Total asset-backed	7,983			(29		)	8,081			(76		)	7,846			(155		)
U.S. Treasury and obligations of government-sponsored enterprises	244			13			134			14			137			15
Foreign government	677			18			645			14			620			18
Redeemable preferred stock	54			6			52			4			54			7
Total fixed maturity securities	38,554			1,763			38,204			1,244			37,577			1,150
Equities	346			26			356			26			440			18
Limited partnership investments	2,554			—			2,460			—			2,309			—
Other invested assets	16			—			15			—			27			1
Mortgage loans	198			—			118			—			87			—
Short term investments	1,709			—			1,677			3			2,215			2
Total investments	$	43,377		$	1,789		$	42,830		$	1,273		$	42,655		$	1,171

Net receivable/(payable)	$	(177	)	$	—		$	(32	)	$	—		$	(222	)	$	—

(1) Agency RMBS and CMBS include securities issued or guaranteed, or collateralized by assets or securities issued or guaranteed, by U.S. government agencies or government-sponsored enterprises.

(2) The exposure to sub-prime residential mortgage (sub-prime) collateral and Alternative A residential mortgages that have lower than normal standards of loan documentation (Alt-A) collateral is measured by the original deal structure.

RMBS - Residential mortgage-backed securities

CMBS - Commercial mortgage-backed securities

Other ABS - Other asset-backed securities

CNA FINANCIAL CORPORATION

Financial Supplement

Investment Summary - Property & Casualty and Corporate & Other Non-Core



	June 30, 2011						March 31, 2011						December 31, 2010
(In millions)	Carrying Value			Net Unrealized Gains (Losses)			Carrying Value			Net Unrealized Gains (Losses)			Carrying Value			Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	13,421		$	769		$	13,564		$	694		$	13,541		$	715
States, municipalities and political subdivisions:
Tax-exempt	2,118			45			2,199			12			2,116			10
Taxable	2,550			72			2,515			(12		)	2,438			(42		)
Total states, municipalities and political subdivisions	4,668			117			4,714			—			4,554			(32		)
Asset-backed:
Agency RMBS	3,996			58			3,818			8			3,680			30
Prime RMBS	770			(70		)	920			(79		)	1,012			(109		)
Sub-prime RMBS	365			(27		)	412			(23		)	461			(45		)
Alt-A RMBS	513			(18		)	562			(18		)	563			(29		)
Total RMBS	5,644			(57		)	5,712			(112		)	5,716			(153		)
Agency CMBS	30			1			45			—			30			—
Other CMBS	829			21			895			23			803			(2		)
Total CMBS	859			22			940			23			833			(2		)
Other ABS	886			4			847			6			712			5
Total asset-backed	7,389			(31		)	7,499			(83		)	7,261			(150		)
U.S. Treasury and obligations of government-sponsored enterprises	200			4			91			5			94			6
Foreign government	670			17			639			13			614			18
Redeemable preferred stock	3			—			3			—			5			3
Total fixed maturity securities	26,351			876			26,510			629			26,069			560
Equities	145			26			138			25			182			25
Limited partnership investments	2,553			—			2,459			—			2,307			—
Other invested assets	16			—			15			—			27			1
Mortgage loans	178			—			98			—			67			—
Short term investments	1,589			—			1,571			3			2,131			2
Total investments	$	30,832		$	902		$	30,791		$	657		$	30,783		$	588

Net receivable/(payable)	$	(163	)	$	—		$	(40	)	$	—		$	(197	)	$	—

CNA FINANCIAL CORPORATION

Financial Supplement

Investment Summary - Life & Group Non-Core



	June 30, 2011						March 31, 2011					December 31, 2010
(In millions)	Carrying Value			Net Unrealized Gains (Losses)			Carrying Value		Net Unrealized Gains (Losses)			Carrying Value			Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	7,458		$	897		$	7,400	$	818		$	7,490		$	818
States, municipalities and political subdivisions:
Tax-exempt	2,737			(98		)	2,386		(240		)	2,166			(228		)
Taxable	1,312			70			1,228		16			1,169			(8		)
Total states, municipalities and political subdivisions	4,049			(28		)	3,614		(224		)	3,335			(236		)
Asset-backed:
Agency RMBS	191			6			173		7			156			8
Prime RMBS	97			(9		)	102		(12		)	127			(19		)
Sub-prime RMBS	18			—			23		3			22			1
Alt-A RMBS	63			(3		)	65		(4		)	69			(1		)
Total RMBS	369			(6		)	363		(6		)	374			(11		)
Agency CMBS	—			—			—		—			—			—
Other CMBS	178			4			170		9			160			1
Total CMBS	178			4			170		9			160			1
Other ABS	47			4			49		4			51			5
Total asset-backed	594			2			582		7			585			(5		)
U.S. Treasury and obligations of government-sponsored enterprises	44			9			43		9			43			9
Foreign government	7			1			6		1			6			—
Redeemable preferred stock	51			6			49		4			49			4
Total fixed maturity securities	12,203			887			11,694		615			11,508			590
Equities	201			—			218		1			258			(7		)
Limited partnership investments	1			—			1		—			2			—
Other invested assets	—			—			—		—			—			—
Mortgage loans	20			—			20		—			20			—
Short term investments	120			—			106		—			84			—
Total investments	$	12,545		$	887		$	12,039	$	616		$	11,872		$	583

Net receivable/(payable)	$	(14	)	$	—		$	8	$	—		$	(25	)	$	—



CNA FINANCIAL CORPORATION Financial Supplement Investments - Fixed Maturity Securities by Credit Rating As of June 30, 2011 (In millions)



	U.S. Government, Government agencies and Government-sponsored enterprises					AAA						AA						A						BBB						Non-investment grade						Total
	Carrying Value			Net Unrealized Gains (Losses)		Carrying Value			Net Unrealized Gains (Losses)			Carrying Value			Net Unrealized Gains (Losses)			Carrying Value			Net Unrealized Gains (Losses)			Carrying Value			Net Unrealized Gains (Losses)			Carrying Value			Net Unrealized Gains (Losses)			Carrying Value			Net Unrealized Gains (Losses)
Corporate and other bonds	$	—		$	—	$	318		$	19		$	1,555		$	90		$	6,919		$	593		$	9,668		$	826		$	2,419		$	138		$	20,879		$	1,666
States, municipalities and political subdivisions:
Tax-exempt	—			—		1,129			32			2,747			(39		)	874			(40		)	90			(5		)	15			(1		)	4,855			(53		)
Taxable	—			—		670			18			2,543			91			635			32			—			—			14			1			3,862			142
Total states, municipalities and political subdivisions	—			—		1,799			50			5,290			52			1,509			(8		)	90			(5		)	29			—			8,717			89
Asset-backed:
Agency RMBS	4,187			64		—			—			—			—			—			—			—			—			—			—			4,187			64
Prime RMBS	—			—		171			(7		)	4			—			35			—			71			(22		)	586			(50		)	867			(79		)
Sub-prime RMBS	—			—		103			(3		)	104			(13		)	25			—			37			(7		)	114			(4		)	383			(27		)
Alt-A RMBS	—			—		338			(7		)	18			(1		)	55			—			93			(7		)	72			(6		)	576			(21		)
Total RMBS	4,187			64		612			(17		)	126			(14		)	115			—			201			(36		)	772			(60		)	6,013			(63		)
Agency CMBS	30			1		—			—			—			—			—			—			—			—			—			—			30			1
Other CMBS	—			—		203			6			200			(6		)	231			6			159			(1		)	214			20			1,007			25
Total CMBS	30			1		203			6			200			(6		)	231			6			159			(1		)	214			20			1,037			26
Other ABS	—			—		620			6			189			2			78			—			39			—			7			—			933			8
Total asset-backed	4,217			65		1,435			(5		)	515			(18		)	424			6			399			(37		)	993			(40		)	7,983			(29		)
U.S. Treasury and obligations of government-sponsored enterprises	244			13		—			—			—			—			—			—			—			—			—			—			244			13
Foreign government	—			—		460			12			128			3			89			3			—			—			—			—			677			18
Redeemable preferred stock	—			—		—			—			—			—			—			—			54			6			—			—			54			6
Total fixed maturity securities	$	4,461		$	78	$	4,012		$	76		$	7,488		$	127		$	8,941		$	594		$	10,211		$	790		$	3,441		$	98		$	38,554		$	1,763

Percentage of total fixed maturity securities	11.6		%			10.4		%				19.4		%				23.2		%				26.5		%				8.9		%				100.0		%

(1) The ratings presented are based on a ratings methodology that takes into account ratings from two major providers, Standard & Poor's and Moody's Investors Services, Inc., in that order of preference. If a security is not rated by these providers, an internal rating is formulated. For securities with credit support from third party guarantees, the rating reflects the greater of the underlying rating of the issuer or the insured rating.



CNA FINANCIAL CORPORATION Financial Supplement Property & Casualty Results of Operations



	CNA Specialty											CNA Commercial											P&C Operations
THREE MONTHS ENDED JUNE 30 (In millions)	2011				2010				Fav / (Unfav) % Change			2011				2010				Fav / (Unfav) % Change			2011				2010				Fav / (Unfav) % Change
Gross written premiums	$	1,079			$	1,043			3		%	$	965			$	936			3		%	$	2,044			$	1,979			3		%
Net written premiums	683				647				6			880				838				5			1,563				1,485				5
Operating revenues:
Net earned premiums	688				665				3			768				797				(4	)		1,456				1,462				—
Net investment income	126				125				1			193				184				5			319				309				3
Other revenues	54				53				2			12				16				(25	)		66				69				(4	)
Total operating revenues	868				843				3			973				997				(2	)		1,841				1,840				—
Claims, Benefits and Expenses:
Net incurred claims and benefits	418				320				(31	)		621				486				(28	)		1,039				806				(29	)
Policyholders' dividends	—				3				N/M			2				6				67			2				9				78
Amortization of deferred acquisition costs	164				154				(6	)		180				186				3			344				340				(1	)
Other insurance related expenses	52				47				(11	)		102				107				5			154				154				—
Other expenses	52				50				(4	)		11				11				—			63				61				(3	)
Total claims, benefits and expenses	686				574				(20	)		916				796				(15	)		1,602				1,370				(17	)
Operating income (loss) from continuing operations before income tax	182				269				(32	)		57				201				(72	)		239				470				(49	)
Income tax (expense) benefit on operating income (loss)	(64		)		(90		)		29			(16		)		(68		)		76			(80		)		(158		)		49
Net operating (income) loss, after-tax, attributable to noncontrolling interests	(4		)		(11		)		64			(2		)		(8		)		75			(6		)		(19		)		68
Net operating income (loss) from continuing operations attributable to CNA	114				168				(32	)		39				125				(69	)		153				293				(48	)
Net realized investment gains (losses), net of participating policyholders' interests	7				32				(78	)		11				(12		)		192			18				20				(10	)
Income tax (expense) benefit on net realized investment gains (losses)	(2		)		(11		)		82			(3		)		(2		)		(50	)		(5		)		(13		)		62
Net realized investment (gains) losses, after-tax, attributable to noncontrolling interests	—				—				N/M			—				—				N/M			—				—				N/M
Net realized investment gains (losses) attributable to CNA	5				21				(76	)		8				(14		)		157			13				7				86
Net income (loss) from continuing operations attributable to CNA	$	119			$	189			(37	)	%	$	47			$	111			(58	)	%	$	166			$	300			(45	)	%

FINANCIAL RATIOS
Loss & LAE	60.8			%	48.2			%				80.7			%	60.9			%				71.3			%	55.1			%
Acquisition expense	19.9				19.4							18.3				17.9							19.1				18.5
Underwriting expense	11.6				10.9							18.3				18.8							15.1				15.3
Expense	31.5				30.3							36.6				36.7							34.2				33.8
Dividend	(0.1		)		0.5							0.4				0.8							0.2				0.6
Combined ratio	92.2			%	79.0			%				117.7			%	98.4			%				105.7			%	89.5			%

RATIO IMPACTS
Impact of catastrophes
Pretax net accident year catastrophe losses incurred	$	4			$	3						$	96			$	45						$	100			$	48
Impact on loss & LAE ratio	0.6			%	0.5			%				12.5			%	5.7			%				6.9			%	3.3			%

Impact of development & other
Pretax net development: (favorable) / unfavorable
Prior year loss & ALAE reserve development	$	(52	)		$	(125	)					$	(50	)		$	(175	)					$	(102	)		$	(300	)
Prior year premium development	(1		)		1							40				35							39				36
Other ⁽¹⁾	—				—							4				5							4				5
Total development & other	$	(53	)		$	(124	)					$	(6	)		$	(135	)					$	(59	)		$	(259	)
Impact of development & other on loss & LAE ratio	(7.7		)	%	(18.6		)	%				(1.8		)	%	(18.0		)	%				(4.8		)	%	(18.4		)	%

(1) Other includes the impacts of interest accretion and change in allowance for uncollectible reinsurance and deductible amounts.



CNA FINANCIAL CORPORATION Financial Supplement Life & Group Non-Core and Corporate & Other Non-Core Segments Results of Operations



	P&C Operations						Life & Group Non-Core									Corporate & Other Non-Core									Total Operations
THREE MONTHS ENDED JUNE 30 (In millions)	2011			2010			2011			2010			Fav / (Unfav) % Change			2011			2010			Fav / (Unfav) % Change			2011			2010			Fav / (Unfav) % Change
Operating revenue:
Net earned premiums	$	1,456		$	1,462		$	141		$	146		(3	)	%	$	(2	)	$	—		N/M		%	$	1,595		$	1,608		(1	)	%
Net investment income	319			309			189			174			9			9			38			(76	)		517			521			(1	)
Other revenues	66			69			2			2			—			3			4			(25	)		71			75			(5	)
Total operating revenues	1,841			1,840			332			322			3			10			42			(76	)		2,183			2,204			(1	)
Claims, Benefits and Expenses:
Net incurred claims and benefits	1,039			806			330			314			(5	)		(6		)	17			135			1,363			1,137			(20	)
Policyholders' dividends	2			9			2			1			(100	)		—			—			N/M			4			10			60
Amortization of deferred acquisition costs	344			340			6			5			(20	)		—			—			N/M			350			345			(1	)
Other insurance related expenses	154			154			34			45			24			2			(2		)	N/M			190			197			4
Other expenses	63			61			6			—			N/M			43			37			(16	)		112			98			(14	)
Total claims, benefits and expenses	1,602			1,370			378			365			(4	)		39			52			25			2,019			1,787			(13	)
Operating income (loss) from continuing operations before income tax	239			470			(46		)	(43		)	(7	)		(29		)	(10		)	(190	)		164			417			(61	)
Income tax (expense) benefit on operating income (loss)	(80		)	(158		)	27			25			8			11			4			175			(42		)	(129		)	67
Net operating (income) loss, after-tax, attributable to noncontrolling interests	(6		)	(19		)	—			—			N/M			—			—			N/M			(6		)	(19		)	68
Net operating income (loss) from continuing operations attributable to CNA	153			293			(19		)	(18		)	(6	)		(18		)	(6		)	N/M			116			269			(57	)
Net realized investment gains (losses), net of participating policyholders' interests	18			20			1			(1		)	N/M			(4		)	10			(140	)		15			29			(48	)
Income tax (expense) benefit on net realized investment gains (losses)	(5		)	(13		)	—			—			N/M			—			(3		)	N/M			(5		)	(16		)	69
Net realized investment (gains) losses, after-tax, attributable to noncontrolling interests	—			—			—			—			N/M			—			—			N/M			—			—			N/M
Net realized investment gains (losses) attributable to CNA	13			7			1			(1		)	N/M			(4		)	7			(157	)		10			13			(23	)
Net income (loss) from continuing operations attributable to CNA	$	166		$	300		$	(18	)	$	(19	)	5		%	$	(22	)	$	1		N/M		%	$	126		$	282		(55	)	%



CNA FINANCIAL CORPORATION Financial Supplement Property & Casualty Results of Operations



	CNA Specialty											CNA Commercial											P&C Operations
SIX MONTHS ENDED JUNE 30 (In millions)	2011				2010				Fav / (Unfav) % Change			2011				2010				Fav / (Unfav) % Change			2011				2010				Fav / (Unfav) % Change
Gross written premiums	$	2,209			$	2,093			6		%	$	1,858			$	1,848			1		%	$	4,067			$	3,941			3		%
Net written premiums	1,422				1,303				9			1,708				1,667				2			3,130				2,970				5
Operating revenues:
Net earned premiums	1,357				1,319				3			1,570				1,613				(3	)		2,927				2,932				—
Net investment income	286				272				5			454				405				12			740				677				9
Other revenues	108				105				3			26				34				(24	)		134				139				(4	)
Total operating revenues	1,751				1,696				3			2,050				2,052				—			3,801				3,748				1
Claims, Benefits and Expenses:
Net incurred claims and benefits	848				722				(17	)		1,224				1,090				(12	)		2,072				1,812				(14	)
Policyholders' dividends	—				4				N/M			2				7				71			2				11				82
Amortization of deferred acquisition costs	325				309				(5	)		358				369				3			683				678				(1	)
Other insurance related expenses	96				94				(2	)		185				214				14			281				308				9
Other expenses	92				94				2			27				28				4			119				122				2
Total claims, benefits and expenses	1,361				1,223				(11	)		1,796				1,708				(5	)		3,157				2,931				(8	)
Operating income (loss) from continuing operations before income tax	390				473				(18	)		254				344				(26	)		644				817				(21	)
Income tax (expense) benefit on operating income (loss)	(134		)		(158		)		15			(82		)		(111		)		26			(216		)		(269		)		20
Net operating (income) loss, after-tax, attributable to noncontrolling interests	(12		)		(19		)		37			(2		)		(10		)		80			(14		)		(29		)		52
Net operating income (loss) from continuing operations attributable to CNA	244				296				(18	)		170				223				(24	)		414				519				(20	)
Net realized investment gains (losses), net of participating policyholders' interests	15				45				(67	)		28				9				N/M			43				54				(20	)
Income tax (expense) benefit on net realized investment gains (losses)	(5		)		(15		)		67			(9		)		(9		)		—			(14		)		(24		)		42
Net realized investment (gains) losses, after-tax, attributable to noncontrolling interests	—				—				N/M			(1		)		—				N/M			(1		)		—				N/M
Net realized investment gains (losses) attributable to CNA	10				30				(67	)		18				—				N/M			28				30				(7	)
Net income (loss) from continuing operations attributable to CNA	$	254			$	326			(22	)	%	$	188			$	223			(16	)	%	$	442			$	549			(19	)	%

FINANCIAL RATIOS
Loss & LAE	62.5			%	54.8			%				77.9			%	67.6			%				70.8			%	61.8			%
Acquisition expense	19.6				19.3							16.9				18.0							18.2				18.6
Underwriting expense	11.4				11.3							17.7				18.1							14.7				15.0
Expense	31.0				30.6							34.6				36.1							32.9				33.6
Dividend	—				0.3							0.1				0.4							0.1				0.4
Combined ratio	93.5			%	85.7			%				112.6			%	104.1			%				103.8			%	95.8			%

RATIO IMPACTS
Impact of catastrophes
Pretax net accident year catastrophe losses incurred	$	6			$	5						$	149			$	83						$	155			$	88
Impact on loss & LAE ratio	0.5			%	0.4			%				9.5			%	5.2			%				5.3			%	3.0			%

Impact of development & other
Pretax net development: (favorable) / unfavorable
Prior year loss & ALAE reserve development	$	(67	)		$	(150	)					$	(57	)		$	(203	)					$	(124	)		$	(353	)
Prior year premium development	(8		)		(3		)					32				56							24				53
Other ⁽¹⁾	—				—							7				5							7				5
Total development & other	$	(75	)		$	(153	)					$	(18	)		$	(142	)					$	(93	)		$	(295	)
Impact of development & other on loss & LAE ratio	(5.4		)	%	(11.5		)	%				(1.6		)	%	(9.6		)	%				(3.4		)	%	(10.6		)	%

(1) Other includes the impacts of interest accretion and change in allowance for uncollectible reinsurance and deductible amounts.



CNA FINANCIAL CORPORATION Financial Supplement Life & Group Non-Core and Corporate & Other Non-Core Segments Results of Operations



	P&C Operations						Life & Group Non-Core									Corporate & Other Non-Core									Total Operations
SIX MONTHS ENDED JUNE 30 (In millions)	2011			2010			2011			2010			Fav / (Unfav) % Change			2011			2010			Fav / (Unfav) % Change			2011			2010			Fav / (Unfav) % Change
Operating revenue:
Net earned premiums	$	2,927		$	2,932		$	285		$	291		(2	)	%	$	(2	)	$	—		N/M		%	$	3,210		$	3,223		—		%
Net investment income	740			677			377			349			8			20			85			(76	)		1,137			1,111			2
Other revenues	134			139			—			6			N/M			4			6			(33	)		138			151			(9	)
Total operating revenues	3,801			3,748			662			646			2			22			91			(76	)		4,485			4,485			—
Claims, Benefits and Expenses:
Net incurred claims and benefits	2,072			1,812			653			595			(10	)		1			36			97			2,726			2,443			(12	)
Policyholders' dividends	2			11			3			1			N/M			—			—			N/M			5			12			58
Amortization of deferred acquisition costs	683			678			12			9			(33	)		—			—			N/M			695			687			(1	)
Other insurance related expenses	281			308			72			96			25			2			(1		)	N/M			355			403			12
Other expenses	119			122			12			6			(100	)		87			72			(21	)		218			200			(9	)
Total claims, benefits and expenses	3,157			2,931			752			707			(6	)		90			107			16			3,999			3,745			(7	)
Operating income (loss) from continuing operations before income tax	644			817			(90		)	(61		)	(48	)		(68		)	(16		)	N/M			486			740			(34	)
Income tax (expense) benefit on operating income (loss)	(216		)	(269		)	53			44			20			23			6			N/M			(140		)	(219		)	36
Net operating (income) loss, after-tax, attributable to noncontrolling interests	(14		)	(29		)	—			—			N/M			—			—			N/M			(14		)	(29		)	52
Net operating income (loss) from continuing operations attributable to CNA	414			519			(37		)	(17		)	(118	)		(45		)	(10		)	N/M			332			492			(33	)
Net realized investment gains (losses), net of participating policyholders' interests	43			54			(3		)	(5		)	40			(12		)	14			(186	)		28			63			(56	)
Income tax (expense) benefit on net realized investment gains (losses)	(14		)	(24		)	1			—			N/M			4			(4		)	N/M			(9		)	(28		)	68
Net realized investment (gains) losses, after-tax, attributable to noncontrolling interests	(1		)	—			—			—			N/M			—			—			N/M			(1		)	—			N/M
Net realized investment gains (losses) attributable to CNA	28			30			(2		)	(5		)	60			(8		)	10			(180	)		18			35			(49	)
Net income (loss) from continuing operations attributable to CNA	$	442		$	549		$	(39	)	$	(22	)	(77	)	%	$	(53	)	$	—		N/M		%	$	350		$	527		(34	)	%



CNA FINANCIAL CORPORATION Financial Supplement Components of Pretax Net Investment Income (In millions)



	CNA Specialty
	1Q10		2Q10			3Q10		4Q10			2010			1Q11		2Q11		YTD 2011
Income (loss) from limited partnerships	$	23	$	(1	)	$	23	$	41		$	86		$	38	$	4	$	42
Income (loss) from trading portfolio	1		1			1		2			5			1		1		2
Other investment income	123		125			124		128			500			121		121		242
Net investment income	$	147	$	125		$	148	$	171		$	591		$	160	$	126	$	286


	CNA Commercial
	1Q10		2Q10			3Q10		4Q10			2010			1Q11		2Q11		YTD 2011
Income (loss) from limited partnerships	$	40	$	(2	)	$	38	$	68		$	144		$	73	$	6	$	79
Income (loss) from trading portfolio	2		1			2		2			7			2		2		4
Other investment income	179		185			176		182			722			186		185		371
Net investment income	$	221	$	184		$	216	$	252		$	873		$	261	$	193	$	454


	P&C Operations
	1Q10		2Q10			3Q10		4Q10			2010			1Q11		2Q11		YTD 2011
Income (loss) from limited partnerships	$	63	$	(3	)	$	61	$	109		$	230		$	111	$	10	$	121
Income (loss) from trading portfolio	3		2			3		4			12			3		3		6
Other investment income	302		310			300		310			1,222			307		306		613
Net investment income	$	368	$	309		$	364	$	423		$	1,464		$	421	$	319	$	740


	Life & Group Non-Core
	1Q10		2Q10			3Q10		4Q10			2010			1Q11		2Q11		YTD 2011
Income (loss) from limited partnerships	$	—	$	(3	)	$	1	$	—		$	(2	)	$	—	$	—	$	—
Income (loss) from trading portfolio	—		—			—		—			—			—		—		—
Other investment income	175		177			181		184			717			188		189		377
Net investment income	$	175	$	174		$	182	$	184		$	715		$	188	$	189	$	377


	Corporate & Other Non-Core
	1Q10		2Q10			3Q10		4Q10			2010			1Q11		2Q11		YTD 2011
Income (loss) from limited partnerships	$	9	$	2		$	6	$	4		$	21		$	3	$	1	$	4
Income (loss) from trading portfolio	1		—			1		(1		)	1			—		—		—
Other investment income	37		36			28		14			115			8		8		16
Net investment income	$	47	$	38		$	35	$	17		$	137		$	11	$	9	$	20


	Total Operations
	1Q10		2Q10			3Q10		4Q10			2010			1Q11		2Q11		YTD 2011
Income (loss) from limited partnerships	$	72	$	(4	)	$	68	$	113		$	249		$	114	$	11	$	125
Income (loss) from trading portfolio	4		2			4		3			13			3		3		6
Other investment income	514		523			509		508			2,054			503		503		1,006
Net investment income	$	590	$	521		$	581	$	624		$	2,316		$	620	$	517	$	1,137



CNA FINANCIAL CORPORATION Financial Supplement Statutory Data - Preliminary



PERIODS ENDED JUNE 30	Three Months											Six Months
Income Statements	(Preliminary) 2011								Fav / (Unfav) % Change			(Preliminary) 2011								Fav / (Unfav) % Change
(In millions)	(Preliminary) 2011				2010				Fav / (Unfav) % Change			(Preliminary) 2011				2010				Fav / (Unfav) % Change
Combined Continental Casualty Companies
Gross written premiums	$	1,958			$	1,901			3		%	$	3,910			$	3,763			4		%
Net written premiums	1,483				1,412				5			2,993				2,814				6

Net earned premiums	1,246				1,239				1			2,492				2,456				1
Claim and claim adjustment expenses	1,104				895				(23	)		2,213				1,956				(13	)
Acquisition expenses	256				226				(13	)		512				465				(10	)
Underwriting expenses	197				199				1			391				412				5
Policyholders' dividends	2				3				(33	)		5				6				(17	)
Underwriting income (loss)	(313		)		(84		)		N/M			(629		)		(383		)		(64	)
Net investment income	465				414				12			890				827				8
Other income (loss)	9				3				N/M			31				13				138
Income tax (expense) benefit	(16		)		(91		)		82			(25		)		(108		)		77
Net realized gains (losses)	37				93				(60	)		64				103				(38	)
Net income (loss)	$	182			$	335			(46	)	%	$	331			$	452			(27	)	%

Financial Ratios
Loss and LAE	88.5			%	72.2			%				88.8			%	79.6			%
Acquisition expense	17.3				16.0							17.1				16.5
Underwriting expense	13.3				14.1							13.1				14.8
Expense	30.6				30.1							30.2				31.3
Dividend	0.2				0.3							0.2				0.2
Combined ratio	119.3			%	102.6			%				119.2			%	111.1			%



SUPPLEMENTAL STATUTORY DATA	(Preliminary) June 30, 2011
(In millions)	(Preliminary) June 30, 2011		December 31, 2010
Combined Continental Casualty Companies
Statutory surplus (1)	$	10,056	$	9,821
Life Company
Statutory surplus	$	519	$	498

(1) Represents the combined statutory surplus of Continental Casualty Company and its subsidiaries, including the Life Company, as determined in accordance with statutory accounting practices.

CNA FINANCIAL CORPORATION

Financial Supplement

Property & Casualty Operations Loss & LAE Ratio Analysis



	CNA Specialty
	2011 YTD Evaluated at 6/30/11			2010 FY Evaluated at 12/31/10			2010 FY Evaluated at 6/30/11
Gross Accident Year	63.5		%	62.6		%	62.4	%
Impact of Reinsurance	4.4			4.3			4.3
Net Accident Year	67.9			66.9			66.7	%
Impact of Development and Other ⁽¹⁾	(5.4	)		(12.9	)
Net Calendar Year	62.5		%	54.0		%



	CNA Commercial
	2011 YTD Evaluated at 6/30/11			2010 FY Evaluated at 12/31/10			2010 FY Evaluated at 6/30/11
Gross Accident Year	75.6		%	71.7		%	71.9	%
Impact of Reinsurance	3.9			3.8			3.6
Net Accident Year	79.5			75.5			75.5	%
Impact of Development and Other⁽¹⁾	(1.6	)		(8.7	)
Net Calendar Year	77.9		%	66.8		%



	P&C Operations
	2011 YTD Evaluated at 6/30/11			2010 FY Evaluated at 12/31/10			2010 FY Evaluated at 6/30/11
Gross Accident Year	68.9		%	66.8		%	66.8	%
Impact of Reinsurance	5.3			4.8			4.8
Net Accident Year	74.2			71.6			71.6	%
Impact of Development and Other ⁽¹⁾	(3.4	)		(10.6	)
Net Calendar Year	70.8		%	61.0		%

(1) Other includes the impacts of interest accretion and change in allowance for uncollectible reinsurance and deductible amounts.

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