EX-99.2 3 q3exhibit992.htm EX 99.2 Q3 Exhibit 99.2





CNA Financial Corporation

Supplemental Financial Information

September 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
September 30, 2011

 
Page



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 16 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 hedge fund 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. While the Company generally does not invest in highly leveraged partnerships, there are risks which may result in losses due to 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


Agreement to Cede Asbestos and Environmental Pollution (A&EP) Liabilities to National Indemnity Company (NICO)
On August 31, 2010, the Company completed a transaction with National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway Inc., under which substantially all of the Company's legacy A&EP liabilities were ceded to NICO (Loss Portfolio Transfer or LPT). The Company recognized an after-tax net loss of $365 million in the third quarter of 2010, of which $344 million related to the Company's continuing operations and $21 million related to the Company's discontinued operations.

i



CNA FINANCIAL CORPORATION
Financial Supplement
Statements of Operations
PERIODS ENDED SEPTEMBER 30
Three Months
 
Fav / (Unfav)
 
 
Nine Months
 
Fav / (Unfav)
 
(In millions)
2011
 
2010
 
% Change
 
 
2011
 
2010
 
% Change
 
STATEMENTS OF OPERATIONS
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earned premiums
$
1,732

 
$
1,645

 
5

%
 
$
4,942

 
$
4,868

 
2

%
Net investment income
394

 
581

 
(32
)
 
 
1,531

 
1,692

 
(10
)
 
Net realized investment gains (losses), net of participating policyholders' interests:
 
 
 
 
 
 
 
 
 
 
 
 
 
Other-than-temporary impairment (OTTI) losses
(75
)
 
(41
)
 
(83
)
 
 
(136
)
 
(189
)
 
28

 
Portion of OTTI recognized in Other comprehensive income (loss)
(2
)
 
(3
)
 
33

 
 
(44
)
 
28

 
N/M

 
Net OTTI losses recognized in earnings
(77
)
 
(44
)
 
(75
)
 
 
(180
)
 
(161
)
 
(12
)
 
Other net realized investment gains (losses)
50

 
106

 
(53
)
 
 
181

 
286

 
(37
)
 
Net realized investment gains (losses), net of participating policyholders' interests
(27
)
 
62

 
(144
)
 
 
1

 
125

 
(99
)
 
Other revenues
76

 
75

 
1

 
 
214

 
226

 
(5
)
 
Total revenues
2,175

 
2,363

 
(8
)
 
 
6,688

 
6,911

 
(3
)
 
Claims, Benefits and Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance claims and policyholders' benefits
1,400

 
1,344

 
(4
)
 
 
4,131

 
3,799

 
(9
)
 
Amortization of deferred acquisition costs
356

 
351

 
(1
)
 
 
1,051

 
1,038

 
(1
)
 
Other operating expenses
252

 
795

 
68

 
 
736

 
1,325

 
44

 
Interest
43

 
40

 
(8
)
 
 
132

 
113

 
(17
)
 
Total claims, benefits and expenses
2,051

 
2,530

 
19

 
 
6,050

 
6,275

 
4

 
Income (loss) from continuing operations before income tax
124

 
(167
)
 
174

 
 
638

 
636

 
—

 
Income tax (expense) benefit
(49
)
 
64

 
(177
)
 
 
(198
)
 
(183
)
 
(8
)
 
Income (loss) from continuing operations, net of tax
75

 
(103
)
 
173

 
 
440

 
453

 
(3
)
 
Income (loss) from discontinued operations, net of tax
—

 
(22
)
 
N/M

 
 
(1
)
 
(21
)
 
95

 
Net income (loss)
75

 
(125
)
 
160

 
 
439

 
432

 
2

 
Net (income) loss attributable to noncontrolling interests
—

 
(15
)
 
N/M

 
 
(15
)
 
(44
)
 
66

 
Net income (loss) attributable to CNA
$
75

 
$
(140
)
 
154

%
 
$
424

 
$
388

 
9

%

1


CNA FINANCIAL CORPORATION
Financial Supplement
Components of Income (Loss) Attributable to CNA Common Stockholders, Per Share Data and Return on Equity
PERIODS ENDED SEPTEMBER 30
Three Months
 
 
Nine 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 before LPT
$
91

 
$
186

 
 
$
423

 
$
678

 
Net loss related to LPT
—

 
(344
)
 
 
—

 
(344
)
 
Net operating income (loss) from continuing operations attributable to CNA
91

 
(158
)
 
 
423

 
334

 
Less: 2008 Senior Preferred dividend
—

 
(18
)
 
 
—

 
(68
)
 
Net operating income (loss) from continuing operations attributable to CNA common stockholders
91

 
(176
)
 
 
423

 
266

 
Net realized investment gains (losses) attributable to CNA common stockholders
(16
)
 
40

 
 
2

 
75

 
Income (loss) from continuing operations attributable to CNA common stockholders
75

 
(136
)
 
 
425

 
341

 
Income (loss) from discontinued operations attributable to CNA common stockholders
—

 
(22
)
 
 
(1
)
 
(21
)
 
Income (loss) attributable to CNA common stockholders
$
75

 
$
(158
)
 
 
$
424

 
$
320

 
 
 
 
 
 
 
 
 
 
 
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE
 
 
 
 
 
 
 
 
 
Net operating income (loss) from continuing operations attributable to CNA before LPT
$
0.34

 
$
0.69

 
 
$
1.57

 
$
2.52

 
Net loss related to LPT
—

 
(1.28
)
 
 
—

 
(1.28
)
 
Net operating income (loss) from continuing operations attributable to CNA
0.34

 
(0.59
)
 
 
1.57

 
1.24

 
Less: 2008 Senior Preferred dividend
—

 
(0.07
)
 
 
—

 
(0.25
)
 
Net operating income (loss) from continuing operations attributable to CNA common stockholders
0.34

 
(0.66
)
 
 
1.57

 
0.99

 
Net realized investment gains (losses) attributable to CNA common stockholders
(0.06
)
 
0.15

 
 
0.01

 
0.28

 
Income (loss) from continuing operations attributable to CNA common stockholders
0.28

 
(0.51
)
 
 
1.58

 
1.27

 
Income (loss) from discontinued operations attributable to CNA common stockholders
—

 
(0.08
)
 
 
—

 
(0.08
)
 
Basic and diluted earnings (loss) per share attributable to CNA common stockholders
$
0.28

 
$
(0.59
)
 
 
$
1.58

 
$
1.19

 
 
 
 
 
 
 
 
 
 
 
WEIGHTED AVERAGE OUTSTANDING COMMON STOCK AND COMMON STOCK EQUIVALENTS
 
 
 
 
 
 
 
 
 
Basic
269.3

 
269.2

 
 
269.3

 
269.1

 
Diluted
269.6

 
269.2

 
 
269.6

 
269.4

 
 
 
 
 
 
 
 
 
 
 
RETURN ON EQUITY
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to CNA (1)
2.6

%
(4.7
)
%
 
5.0

%
4.6

%
Net operating income (loss) from continuing operations attributable to CNA (2)
3.4

 
(5.7
)
 
 
5.2

 
4.1

 
(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.

2


CNA FINANCIAL CORPORATION
Financial Supplement
Selected Balance Sheets Data and Statements of Cash Flows Data
(In millions, except share data)
September 30, 2011
 
December 31, 2010
Total assets
$
55,844

 
$
55,331

Insurance reserves
37,851

 
37,590

Debt
2,638

 
2,651

Total liabilities
43,888

 
43,807

Accumulated other comprehensive income (loss)
886

 
326

Noncontrolling interests
148

 
570

Total CNA stockholders' equity
11,808

 
10,954

 
 
 
 
Book value per common share
$
43.85

 
$
40.70

Book value per common share excluding AOCI
$
40.56

 
$
39.49

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

 
269.1

THREE MONTHS ENDED SEPTEMBER 30
(In millions)
2011
 
2010
Net cash flows provided (used) by operating activities (1)
$
401

 
$
(1,254
)
Net cash flows provided (used) by investing activities
(314
)
 
1,383

Net cash flows provided (used) by financing activities
(84
)
 
(121
)
Net cash flows provided (used) by operating, investing and financing activities
$
3

 
$
8

NINE MONTHS ENDED SEPTEMBER 30
(In millions)
2011
 
2010
Net cash flows provided (used) by operating activities (1)
$
813

 
$
(673
)
Net cash flows provided (used) by investing activities
(217
)
 
860

Net cash flows provided (used) by financing activities
(588
)
 
(245
)
Net cash flows provided (used) by operating, investing and financing activities
$
8

 
$
(58
)
(1) Operating cash flows for the three and nine months ended September 30, 2010 include $(1.9) billion related to the initial net cash settlement with NICO for the Loss Portfolio Transfer, as further discussed on page i.

3


CNA FINANCIAL CORPORATION
Financial Supplement
Claim & Claim Adjustment Expense Reserve Rollforward
THREE MONTHS ENDED SEPTEMBER 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
$
6,953

 
$
12,282

 
$
19,235

 
$
2,734

 
$
3,227

 
$
25,196

Ceded
902

 
1,786

 
2,688

 
577

 
2,554

 
5,819

Net
6,051

 
10,496

 
16,547

 
2,157

 
673

 
19,377

 
 
 
 
 
 
 
 
 
 
 
 
Net incurred claim & claim adjustment expenses
485

 
594

 
1,079

 
151

 
15

 
1,245

Net claim & claim adjustment expense payments
(351
)
 
(663
)
 
(1,014
)
 
(131
)
 
(70
)
 
(1,215
)
Foreign currency translation adjustment and other
(36
)
 
(34
)
 
(70
)
 
—

 
3

 
(67
)
 
 
 
 
 
 
 
 
 
 
 
 
Claim & claim adjustment expense reserves, end of period
 
 
 
 
 
 
 
 
 
 
 
Net
6,149

 
10,393

 
16,542

 
2,177

 
621

 
19,340

Ceded
851

 
1,723

 
2,574

 
571

 
2,546

 
5,691

Gross
$
7,000

 
$
12,116

 
$
19,116

 
$
2,748

 
$
3,167

 
$
25,031

NINE MONTHS ENDED SEPTEMBER 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
1,333

 
1,822

 
3,155

 
479

 
16

 
3,650

Net claim & claim adjustment expense payments
(1,089
)
 
(2,057
)
 
(3,146
)
 
(399
)
 
(116
)
 
(3,661
)
Foreign currency translation adjustment and other
(13
)
 
(13
)
 
(26
)
 
—

 
3

 
(23
)
 
 
 
 
 
 
 
 
 
 
 
 
Claim & claim adjustment expense reserves, end of period
 
 
 
 
 
 
 
 
 
 
 
Net
6,149

 
10,393

 
16,542

 
2,177

 
621

 
19,340

Ceded
851

 
1,723

 
2,574

 
571

 
2,546

 
5,691

Gross
$
7,000

 
$
12,116

 
$
19,116

 
$
2,748

 
$
3,167

 
$
25,031


4


CNA FINANCIAL CORPORATION
Financial Supplement
Investment Summary - Consolidated
 
 
September 30, 2011
 
June 30, 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
$
20,908

 
$
1,758

 
$
20,879

 
$
1,666

 
$
21,031

 
$
1,533

States, municipalities and political subdivisions:
 
 
 
 
 
 
 
 
 
 
 
Tax-exempt
5,479

 
206

 
4,855

 
(53
)
 
4,282

 
(218
)
Taxable
4,058

 
497

 
3,862

 
142

 
3,607

 
(50
)
Total states, municipalities and political subdivisions
9,537

 
703

 
8,717

 
89

 
7,889

 
(268
)
Asset-backed: (1)(2)
 
 
 
 
 
 
 
 
 
 
 
Agency RMBS
4,154

 
172

 
4,187

 
64

 
3,836

 
38

Prime RMBS
775

 
(80
)
 
867

 
(79
)
 
1,139

 
(128
)
Sub-prime RMBS
368

 
(39
)
 
383

 
(27
)
 
483

 
(44
)
Alt-A RMBS
553

 
(15
)
 
576

 
(21
)
 
632

 
(30
)
Total RMBS
5,850

 
38

 
6,013

 
(63
)
 
6,090

 
(164
)
Agency CMBS
36

 
3

 
30

 
1

 
30

 
—

Other CMBS
1,213

 
(9
)
 
1,007

 
25

 
963

 
(1
)
Total CMBS
1,249

 
(6
)
 
1,037

 
26

 
993

 
(1
)
Other ABS
1,036

 
1

 
933

 
8

 
763

 
10

Total asset-backed
8,135

 
33

 
7,983

 
(29
)
 
7,846

 
(155
)
U.S. Treasury and obligations of government-sponsored enterprises
237

 
16

 
244

 
13

 
137

 
15

Foreign government
582

 
25

 
677

 
18

 
620

 
18

Redeemable preferred stock
57

 
8

 
54

 
6

 
54

 
7

Total fixed maturity securities
39,456

 
2,543

 
38,554

 
1,763

 
37,577

 
1,150

Equities
327

 
11

 
346

 
26

 
440

 
18

Limited partnership investments
2,371

 
—

 
2,554

 
—

 
2,309

 
—

Other invested assets
17

 
—

 
16

 
—

 
27

 
1

Mortgage loans
204

 
—

 
198

 
—

 
87

 
—

Short term investments
1,730

 
(2
)
 
1,709

 
—

 
2,215

 
2

Total investments
$
44,105

 
$
2,552

 
$
43,377

 
$
1,789

 
$
42,655

 
$
1,171

 
 
 
 
 
 
 
 
 
 
 
 
Net receivable/(payable)
$
(134
)
 
$
—

 
$
(177
)
 
$
—

 
$
(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

5


CNA FINANCIAL CORPORATION
Financial Supplement
Investment Summary - Property & Casualty and Corporate & Other Non-Core
 
September 30, 2011
 
June 30, 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
$
13,241

 
$
615

 
$
13,421

 
$
769

 
$
13,541

 
$
715

States, municipalities and political subdivisions:
 
 
 
 
 
 
 
 
 
 
 
Tax-exempt
2,344

 
93

 
2,118

 
45

 
2,116

 
10

Taxable
2,568

 
263

 
2,550

 
72

 
2,438

 
(42
)
Total states, municipalities and political subdivisions
4,912

 
356

 
4,668

 
117

 
4,554

 
(32
)
Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
Agency RMBS
3,952

 
159

 
3,996

 
58

 
3,680

 
30

Prime RMBS
684

 
(71
)
 
770

 
(70
)
 
1,012

 
(109
)
Sub-prime RMBS
353

 
(38
)
 
365

 
(27
)
 
461

 
(45
)
Alt-A RMBS
491

 
(14
)
 
513

 
(18
)
 
563

 
(29
)
Total RMBS
5,480

 
36

 
5,644

 
(57
)
 
5,716

 
(153
)
Agency CMBS
36

 
3

 
30

 
1

 
30

 
—

Other CMBS
1,034

 
(14
)
 
829

 
21

 
803

 
(2
)
Total CMBS
1,070

 
(11
)
 
859

 
22

 
833

 
(2
)
Other ABS
991

 
(3
)
 
886

 
4

 
712

 
5

Total asset-backed
7,541

 
22

 
7,389

 
(31
)
 
7,261

 
(150
)
U.S. Treasury and obligations of government-sponsored enterprises
213

 
7

 
200

 
4

 
94

 
6

Foreign government
577

 
24

 
670

 
17

 
614

 
18

Redeemable preferred stock
5

 
1

 
3

 
—

 
5

 
3

Total fixed maturity securities
26,489

 
1,025

 
26,351

 
876

 
26,069

 
560

Equities
132

 
17

 
145

 
26

 
182

 
25

Limited partnership investments
2,370

 
—

 
2,553

 
—

 
2,307

 
—

Other invested assets
17

 
—

 
16

 
—

 
27

 
1

Mortgage loans
184

 
—

 
178

 
—

 
67

 
—

Short term investments
1,613

 
(2
)
 
1,589

 
—

 
2,131

 
2

Total investments
$
30,805

 
$
1,040

 
$
30,832

 
$
902

 
$
30,783

 
$
588

 
 
 
 
 
 
 
 
 
 
 
 
Net receivable/(payable)
$
(137
)
 
$
—

 
$
(163
)
 
$
—

 
$
(197
)
 
$
—



6


CNA FINANCIAL CORPORATION
Financial Supplement
Investment Summary - Life & Group Non-Core
 
September 30, 2011
 
June 30, 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
$
7,667

 
$
1,143

 
$
7,458

 
$
897

 
$
7,490

 
$
818

States, municipalities and political subdivisions:
 
 
 
 
 
 
 
 
 
 
 
Tax-exempt
3,135

 
113

 
2,737

 
(98
)
 
2,166

 
(228
)
Taxable
1,490

 
234

 
1,312

 
70

 
1,169

 
(8
)
Total states, municipalities and political subdivisions
4,625

 
347

 
4,049

 
(28
)
 
3,335

 
(236
)
Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
Agency RMBS
202

 
13

 
191

 
6

 
156

 
8

Prime RMBS
91

 
(9
)
 
97

 
(9
)
 
127

 
(19
)
Sub-prime RMBS
15

 
(1
)
 
18

 
—

 
22

 
1

Alt-A RMBS
62

 
(1
)
 
63

 
(3
)
 
69

 
(1
)
Total RMBS
370

 
2

 
369

 
(6
)
 
374

 
(11
)
Agency CMBS
—

 
—

 
—

 
—

 
—

 
—

Other CMBS
179

 
5

 
178

 
4

 
160

 
1

Total CMBS
179

 
5

 
178

 
4

 
160

 
1

Other ABS
45

 
4

 
47

 
4

 
51

 
5

Total asset-backed
594

 
11

 
594

 
2

 
585

 
(5
)
U.S. Treasury and obligations of government-sponsored enterprises
24

 
9

 
44

 
9

 
43

 
9

Foreign government
5

 
1

 
7

 
1

 
6

 
—

Redeemable preferred stock
52

 
7

 
51

 
6

 
49

 
4

Total fixed maturity securities
12,967

 
1,518

 
12,203

 
887

 
11,508

 
590

Equities
195

 
(6
)
 
201

 
—

 
258

 
(7
)
Limited partnership investments
1

 
—

 
1

 
—

 
2

 
—

Other invested assets
—

 
—

 
—

 
—

 
—

 
—

Mortgage loans
20

 
—

 
20

 
—

 
20

 
—

Short term investments
117

 
—

 
120

 
—

 
84

 
—

Total investments
$
13,300

 
$
1,512

 
$
12,545

 
$
887

 
$
11,872

 
$
583

 
 
 
 
 
 
 
 
 
 
 
 
Net receivable/(payable)
$
3

 
$
—

 
$
(14
)
 
$
—

 
$
(25
)
 
$
—



7


CNA FINANCIAL CORPORATION
Financial Supplement
Investments - Fixed Maturity Securities by Credit Rating
As of September 30, 2011
 
 
U.S. Government, Government agencies and Government-sponsored enterprises
 
AAA
 
AA
 
A
 
BBB
 
Non-investment grade
 
 Total
(In millions)
Fair Value
 
Net Unrealized Gains (Losses)
 
Fair Value
 
Net Unrealized Gains (Losses)
 
Fair Value
 
Net Unrealized Gains (Losses)
 
Fair Value
 
Net Unrealized Gains (Losses)
 
Fair Value
 
Net Unrealized Gains (Losses)
 
Fair Value
 
Net Unrealized Gains (Losses)
 
Fair Value
 
Net Unrealized Gains (Losses)
Corporate and other bonds
$
—

 
$
—

 
$
343

 
$
18

 
$
1,640

 
$
110

 
$
6,898

 
$
679

 
$
9,744

 
$
912

 
$
2,283

 
$
39

 
$
20,908

 
$
1,758

States, municipalities and political subdivisions:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax-exempt
—

 
—

 
1,026

 
59

 
3,345

 
145

 
999

 
6

 
94

 
(3
)
 
15

 
(1
)
 
5,479

 
206

Taxable
—

 
—

 
625

 
61

 
2,723

 
329

 
710

 
107

 
—

 
—

 
—

 
—

 
4,058

 
497

Total states, municipalities and political subdivisions
—

 
—

 
1,651

 
120

 
6,068

 
474

 
1,709

 
113

 
94

 
(3
)
 
15

 
(1
)
 
9,537

 
703

Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency RMBS
4,154

 
172

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
4,154

 
172

Prime RMBS
—

 
—

 
70

 
(1
)
 
53

 
(4
)
 
17

 
—

 
74

 
(13
)
 
561

 
(62
)
 
775

 
(80
)
Sub-prime RMBS
—

 
—

 
96

 
(8
)
 
100

 
(14
)
 
16

 
—

 
27

 
(7
)
 
129

 
(10
)
 
368

 
(39
)
Alt-A RMBS
—

 
—

 
300

 
(4
)
 
11

 
—

 
53

 
—

 
26

 
(1
)
 
163

 
(10
)
 
553

 
(15
)
Total RMBS
4,154

 
172

 
466

 
(13
)
 
164

 
(18
)
 
86

 
—

 
127

 
(21
)
 
853

 
(82
)
 
5,850

 
38

Agency CMBS
36

 
3

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
36

 
3

Other CMBS
—

 
—

 
345

 
6

 
237

 
(3
)
 
265

 
4

 
161

 
(16
)
 
205

 
—

 
1,213

 
(9
)
Total CMBS
36

 
3

 
345

 
6

 
237

 
(3
)
 
265

 
4

 
161

 
(16
)
 
205

 
—

 
1,249

 
(6
)
Other ABS
—

 
—

 
620

 
2

 
260

 
1

 
124

 
(2
)
 
30

 
—

 
2

 
—

 
1,036

 
1

Total asset-backed
4,190

 
175

 
1,431

 
(5
)
 
661

 
(20
)
 
475

 
2

 
318

 
(37
)
 
1,060

 
(82
)
 
8,135

 
33

U.S. Treasury and obligations of government-sponsored enterprises
237

 
16

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
237

 
16

Foreign government
—

 
—

 
370

 
15

 
132

 
6

 
80

 
4

 
—

 
—

 
—

 
—

 
582

 
25

Redeemable preferred stock
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
57

 
8

 
—

 
—

 
57

 
8

Total fixed maturity securities
$
4,427

 
$
191

 
$
3,795

 
$
148

 
$
8,501

 
$
570

 
$
9,162

 
$
798

 
$
10,213

 
$
880

 
$
3,358

 
$
(44
)
 
$
39,456

 
$
2,543

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of total fixed maturity securities
11.2
%
 
 
 
9.6
%
 
 
 
21.6
%
 
 
 
23.2
%
 
 
 
25.9
%
 
 
 
8.5
%
 
 
 
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.

8


CNA FINANCIAL CORPORATION
Financial Supplement
Investments - European Exposure
Fair Value by Country of Risk*
As of September 30, 2011
 
 
Corporate
 
Sovereign
 
Total
(In millions)
 
Financial Sector
 
Other Sectors
 
 
 
 
European exposure:
 
 
 
 
 
 
 
 
United Kingdom
 
$
669

 
$
607

 
$
103

 
$
1,379

France
 
231

 
188

 
32

 
451

Germany
 
93

 
269

 
—

 
362

Netherlands
 
198

 
141

 
16

 
355

Spain
 
34

 
149

 
1

 
184

Belgium
 
5

 
177

 
—

 
182

Italy
 
13

 
152

 
11

 
176

Sweden
 
139

 
31

 
—

 
170

Switzerland
 
99

 
52

 
2

 
153

Luxembourg
 
—

 
102

 
—

 
102

Greece
 
—

 
54

 
—

 
54

Norway
 
—

 
37

 
3

 
40

Russian Federation
 
—

 
32

 
—

 
32

Finland
 
—

 
24

 
5

 
29

Austria
 
4

 
—

 
12

 
16

Ireland
 
4

 
10

 
—

 
14

Czech Republic
 
—

 
12

 
—

 
12

Portugal
 
—

 
11

 
—

 
11

Total fair value
 
$
1,489

 
$
2,048

 
$
185

 
$
3,722

Total amortized cost
 
$
1,502

 
$
1,858

 
$
181

 
$
3,541

* Country of risk is derived from the issuing entity's management location, country of primary listing, revenue and reporting currency.

9


CNA FINANCIAL CORPORATION
Financial Supplement
Investments - European Exposure
Credit Rating by Country of Risk*
As of September 30, 2011
(In millions)
 
AAA
 
AA
 
A
 
BBB
 
Non-investment grade
 
 Total
United Kingdom
 
$
137

 
$
185

 
$
718

 
$
302

 
$
37

 
$
1,379

France
 
79

 
90

 
130

 
107

 
45

 
451

Germany
 
62

 
3

 
121

 
171

 
5

 
362

Netherlands
 
97

 
14

 
162

 
48

 
34

 
355

Spain
 
—

 
23

 
61

 
93

 
7

 
184

Belgium
 
—

 
—

 
84

 
98

 
—

 
182

Italy
 
8

 
12

 
64

 
89

 
3

 
176

Sweden
 
—

 
96

 
46

 
28

 
—

 
170

Switzerland
 
2

 
44

 
100

 
—

 
7

 
153

Luxembourg
 
—

 
—

 
—

 
88

 
14

 
102

Greece
 
—

 
—

 
54

 
—

 
—

 
54

Norway
 
3

 
2

 
—

 
29

 
6

 
40

Russian Federation
 
—

 
—

 
—

 
27

 
5

 
32

Finland
 
5

 
—

 
—

 
24

 
—

 
29

Austria
 
12

 
—

 
4

 
—

 
—

 
16

Ireland
 
—

 
—

 
—

 
9

 
5

 
14

Czech Republic
 
—

 
—

 
4

 
—

 
8

 
12

Portugal
 
—

 
—

 
—

 
11

 
—

 
11

Total fair value
 
$
405

 
$
469

 
$
1,548

 
$
1,124

 
$
176

 
$
3,722

Total amortized cost
 
$
395

 
$
442

 
$
1,493

 
$
1,034

 
$
177

 
$
3,541

* Country of risk is derived from the issuing entity's management location, country of primary listing, revenue and reporting currency.

10
CNA FINANCIAL CORPORATION
Financial Supplement
Property & Casualty Results of Operations
 
CNA Specialty
 
CNA Commercial
 
P&C Operations
THREE MONTHS ENDED SEPTEMBER 30
(In millions)
2011
 
2010
 
Fav / (Unfav)
% Change
 
 
2011
 
2010
 
Fav / (Unfav)
% Change
 
 
2011
 
2010
 
Fav / (Unfav)
% Change
 
Gross written premiums
$
1,139

 
$
1,087

 
5

%
 
$
882

 
$
825

 
7

%
 
$
2,021

 
$
1,912

 
6

%
Net written premiums
750

 
706

 
6

 
 
836

 
763

 
10

 
 
1,586

 
1,469

 
8

 
Operating revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earned premiums
741

 
679

 
9

 
 
848

 
819

 
4

 
 
1,589

 
1,498

 
6

 
Net investment income
85

 
148

 
(43
)
 
 
115

 
216

 
(47
)
 
 
200

 
364

 
(45
)
 
Other revenues
56

 
57

 
(2
)
 
 
14

 
15

 
(7
)
 
 
70

 
72

 
(3
)
 
Total operating revenues
882

 
884

 
—

 
 
977

 
1,050

 
(7
)
 
 
1,859

 
1,934

 
(4
)
 
Claims, Benefits and Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net incurred claims and benefits
485

 
393

 
(23
)
 
 
583

 
578

 
(1
)
 
 
1,068

 
971

 
(10
)
 
Policyholders' dividends
(4
)
 
2

 
N/M

 
 
3

 
4

 
25

 
 
(1
)
 
6

 
117

 
Amortization of deferred acquisition costs
170

 
162

 
(5
)
 
 
181

 
183

 
1

 
 
351

 
345

 
(2
)
 
Other insurance related expenses
51

 
45

 
(13
)
 
 
106

 
104

 
(2
)
 
 
157

 
149

 
(5
)
 
Other expenses
48

 
47

 
(2
)
 
 
10

 
14

 
29

 
 
58

 
61

 
5

 
Total claims, benefits and expenses
750

 
649

 
(16
)
 
 
883

 
883

 
—

 
 
1,633

 
1,532

 
(7
)
 
Operating income (loss) from continuing operations before income tax
132

 
235

 
(44
)
 
 
94

 
167

 
(44
)
 
 
226

 
402

 
(44
)
 
Income tax (expense) benefit on operating income (loss)
(48
)
 
(80
)
 
40

 
 
(47
)
 
(54
)
 
13

 
 
(95
)
 
(134
)
 
29

 
Net operating (income) loss, after-tax, attributable to noncontrolling interests
—

 
(11
)
 
N/M

 
 
(1
)
 
(5
)
 
80

 
 
(1
)
 
(16
)
 
94

 
Net operating income (loss) from continuing operations attributable to CNA
84

 
144

 
(42
)
 
 
46

 
108

 
(57
)
 
 
130

 
252

 
(48
)
 
Net realized investment gains (losses), net of participating policyholders' interests
(8
)
 
15

 
(153
)
 
 
(15
)
 
21

 
(171
)
 
 
(23
)
 
36

 
(164
)
 
Income tax (expense) benefit on net realized investment gains (losses)
3

 
(6
)
 
150

 
 
5

 
(8
)
 
163

 
 
8

 
(14
)
 
157

 
Net realized investment (gains) losses, after-tax, attributable to noncontrolling interests
—

 
—

 
N/M

 
 
1

 
1

 
—

 
 
1

 
1

 
—

 
Net realized investment gains (losses) attributable to CNA
(5
)
 
9

 
(156
)
 
 
(9
)
 
14

 
(164
)
 
 
(14
)
 
23

 
(161
)
 
Net income (loss) from continuing operations attributable to CNA
$
79

 
$
153

 
(48
)
%
 
$
37

 
$
122

 
(70
)
%
 
$
116

 
$
275

 
(58
)
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss & LAE
65.5

%
57.8

%
 
 
 
68.7

%
70.3

%
 
 
 
67.2

%
64.7

%
 
 
Acquisition expense
19.6

 
19.7

 
 
 
 
17.7

 
18.2

 
 
 
 
18.6

 
18.9

 
 
 
Underwriting expense
10.2

 
10.7

 
 
 
 
16.2

 
16.9

 
 
 
 
13.3

 
14.1

 
 
 
Expense
29.8

 
30.4

 
 
 
 
33.9

 
35.1

 
 
 
 
31.9

 
33.0

 
 
 
Dividend
(0.6
)
 
0.3

 
 
 
 
0.4

 
0.4

 
 
 
 
—

 
0.3

 
 
 
Combined ratio
94.7

%
88.5

%
 
 
 
103.0

%
105.8

%
 
 
 
99.1

%
98.0

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RATIO IMPACTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impact of catastrophes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pretax net accident year catastrophe losses incurred
$
4

 
$
1

 
 
 
 
$
46

 
$
11

 
 
 
 
$
50

 
$
12

 
 
 
Impact on loss & LAE ratio
0.5

%
0.1

%
 
 
 
5.5

%
1.4

%
 
 
 
3.1

%
0.8

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impact of development & other
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pretax net development: (favorable) / unfavorable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prior year loss & ALAE reserve development
$
(5
)
 
$
(65
)
 
 
 
 
$
(42
)
 
$
(26
)
 
 
 
 
$
(47
)
 
$
(91
)
 
 
 
Prior year premium development
(26
)
 
(2
)
 
 
 
 
(11
)
 
(2
)
 
 
 
 
(37
)
 
(4
)
 
 
 
Other (1)
—

 
—

 
 
 
 
(6
)
 
(4
)
 
 
 
 
(6
)
 
(4
)
 
 
 
Total development & other
$
(31
)
 
$
(67
)
 
 
 
 
$
(59
)
 
$
(32
)
 
 
 
 
$
(90
)
 
$
(99
)
 
 
 
Impact of development & other on loss & LAE ratio
(3.1
)
%
(9.8
)
%
 
 
 
(6.6
)
%
(3.9
)
%
 
 
 
(5.0
)
%
(6.5
)
%
 
 
(1) Other includes the impacts of interest accretion and change in allowance for uncollectible reinsurance and deductible amounts.

11
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 SEPTEMBER 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
$
1,589

 
$
1,498

 
 
$
142

 
$
145

 
(2
)
%
 
$
1

 
$
2

 
(50
)
%
 
$
1,732

 
$
1,645

 
5

%
Net investment income
200

 
364

 
 
190

 
182

 
4

 
 
4

 
35

 
(89
)
 
 
394

 
581

 
(32
)
 
Other revenues
70

 
72

 
 
6

 
4

 
50

 
 
—

 
(1
)
 
N/M

 
 
76

 
75

 
1

 
Total operating revenues
1,859

 
1,934

 
 
338

 
331

 
2

 
 
5

 
36

 
(86
)
 
 
2,202

 
2,301

 
(4
)
 
Claims, Benefits and Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net incurred claims and benefits
1,068

 
971

 
 
332

 
354

 
6

 
 
(1
)
 
12

 
108

 
 
1,399

 
1,337

 
(5
)
 
Policyholders' dividends
(1
)
 
6

 
 
2

 
1

 
(100
)
 
 
—

 
—

 
N/M

 
 
1

 
7

 
86

 
Amortization of deferred acquisition costs
351

 
345

 
 
5

 
6

 
17

 
 
—

 
—

 
N/M

 
 
356

 
351

 
(1
)
 
Other insurance related expenses
157

 
149

 
 
36

 
41

 
12

 
 
—

 
8

 
N/M

 
 
193

 
198

 
3

 
Other expenses
58

 
61

 
 
2

 
7

 
71

 
 
42

 
569

 
93

 
 
102

 
637

 
84

 
Total claims, benefits and expenses
1,633

 
1,532

 
 
377

 
409

 
8

 
 
41

 
589

 
93

 
 
2,051

 
2,530

 
19

 
Operating income (loss) from continuing operations before income tax
226

 
402

 
 
(39
)
 
(78
)
 
50

 
 
(36
)
 
(553
)
 
93

 
 
151

 
(229
)
 
166

 
Income tax (expense) benefit on operating income (loss)
(95
)
 
(134
)
 
 
25

 
23

 
9

 
 
11

 
198

 
(94
)
 
 
(59
)
 
87

 
(168
)
 
Net operating (income) loss, after-tax, attributable to noncontrolling interests
(1
)
 
(16
)
 
 
—

 
—

 
N/M

 
 
—

 
—

 
N/M

 
 
(1
)
 
(16
)
 
94

 
Net operating income (loss) from continuing operations attributable to CNA
130

 
252

 
 
(14
)
 
(55
)
 
75

 
 
(25
)
 
(355
)
 
93

 
 
91

 
(158
)
 
158

 
Net realized investment gains (losses), net of participating policyholders' interests
(23
)
 
36

 
 
(4
)
 
20

 
(120
)
 
 
—

 
6

 
N/M

 
 
(27
)
 
62

 
(144
)
 
Income tax (expense) benefit on net realized investment gains (losses)
8

 
(14
)
 
 
1

 
(7
)
 
114

 
 
1

 
(2
)
 
150

 
 
10

 
(23
)
 
143

 
Net realized investment (gains) losses, after-tax, attributable to noncontrolling interests
1

 
1

 
 
—

 
—

 
N/M

 
 
—

 
—

 
N/M

 
 
1

 
1

 
—

 
Net realized investment gains (losses) attributable to CNA
(14
)
 
23

 
 
(3
)
 
13

 
(123
)
 
 
1

 
4

 
(75
)
 
 
(16
)
 
40

 
(140
)
 
Net income (loss) from continuing operations attributable to CNA
$
116

 
$
275

 
 
$
(17
)
 
$
(42
)
 
60

%
 
$
(24
)
 
$
(351
)
 
93

%
 
$
75

 
$
(118
)
 
164

%


12
CNA FINANCIAL CORPORATION
Financial Supplement
Property & Casualty Results of Operations
 
CNA Specialty
 
CNA Commercial
 
P&C Operations
NINE MONTHS ENDED SEPTEMBER 30
(In millions)
2011
 
2010
 
Fav / (Unfav)
% Change
 
 
2011
 
2010
 
Fav / (Unfav)
% Change
 
 
2011
 
2010
 
Fav / (Unfav)
% Change
 
Gross written premiums
$
3,348

 
$
3,180

 
5

%
 
$
2,740

 
$
2,673

 
3

%
 
$
6,088

 
$
5,853

 
4

%
Net written premiums
2,172

 
2,009

 
8

 
 
2,544

 
2,430

 
5

 
 
4,716

 
4,439

 
6

 
Operating revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earned premiums
2,098

 
1,998

 
5

 
 
2,418

 
2,432

 
(1
)
 
 
4,516

 
4,430

 
2

 
Net investment income
371

 
420

 
(12
)
 
 
569

 
621

 
(8
)
 
 
940

 
1,041

 
(10
)
 
Other revenues
164

 
162

 
1

 
 
40

 
49

 
(18
)
 
 
204

 
211

 
(3
)
 
Total operating revenues
2,633

 
2,580

 
2

 
 
3,027

 
3,102

 
(2
)
 
 
5,660

 
5,682

 
—

 
Claims, Benefits and Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net incurred claims and benefits
1,333

 
1,115

 
(20
)
 
 
1,807

 
1,668

 
(8
)
 
 
3,140

 
2,783

 
(13
)
 
Policyholders' dividends
(4
)
 
6

 
167

 
 
5

 
11

 
55

 
 
1

 
17

 
94

 
Amortization of deferred acquisition costs
495

 
471

 
(5
)
 
 
539

 
552

 
2

 
 
1,034

 
1,023

 
(1
)
 
Other insurance related expenses
147

 
139

 
(6
)
 
 
291

 
318

 
8

 
 
438

 
457

 
4

 
Other expenses
140

 
141

 
1

 
 
37

 
42

 
12

 
 
177

 
183

 
3

 
Total claims, benefits and expenses
2,111

 
1,872

 
(13
)
 
 
2,679

 
2,591

 
(3
)
 
 
4,790

 
4,463

 
(7
)
 
Operating income (loss) from continuing operations before income tax
522

 
708

 
(26
)
 
 
348

 
511

 
(32
)
 
 
870

 
1,219

 
(29
)
 
Income tax (expense) benefit on operating income (loss)
(182
)
 
(238
)
 
24

 
 
(129
)
 
(165
)
 
22

 
 
(311
)
 
(403
)
 
23

 
Net operating (income) loss, after-tax, attributable to noncontrolling interests
(12
)
 
(30
)
 
60

 
 
(3
)
 
(15
)
 
80

 
 
(15
)
 
(45
)
 
67

 
Net operating income (loss) from continuing operations attributable to CNA
328

 
440

 
(25
)
 
 
216

 
331

 
(35
)
 
 
544

 
771

 
(29
)
 
Net realized investment gains (losses), net of participating policyholders' interests
7

 
60

 
(88
)
 
 
13

 
30

 
(57
)
 
 
20

 
90

 
(78
)
 
Income tax (expense) benefit on net realized investment gains (losses)
(2
)
 
(21
)
 
90

 
 
(4
)
 
(17
)
 
76

 
 
(6
)
 
(38
)
 
84

 
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
5

 
39

 
(87
)
 
 
9

 
14

 
(36
)
 
 
14

 
53

 
(74
)
 
Net income (loss) from continuing operations attributable to CNA
$
333

 
$
479

 
(30
)
%
 
$
225

 
$
345

 
(35
)
%
 
$
558

 
$
824

 
(32
)
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss & LAE
63.6

%
55.8

%
 
 
 
74.7

%
68.5

%
 
 
 
69.5

%
62.8

%
 
 
Acquisition expense
19.6

 
19.4

 
 
 
 
17.2

 
18.0

 
 
 
 
18.3

 
18.7

 
 
 
Underwriting expense
10.9

 
11.1

 
 
 
 
17.2

 
17.8

 
 
 
 
14.3

 
14.7

 
 
 
Expense
30.5

 
30.5

 
 
 
 
34.4

 
35.8

 
 
 
 
32.6

 
33.4

 
 
 
Dividend
(0.2
)
 
0.3

 
 
 
 
0.2

 
0.4

 
 
 
 
—

 
0.4

 
 
 
Combined ratio
93.9

%
86.6

%
 
 
 
109.3

%
104.7

%
 
 
 
102.1

%
96.6

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RATIO IMPACTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impact of catastrophes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pretax net accident year catastrophe losses incurred
$
10

 
$
6

 
 
 
 
$
195

 
$
94

 
 
 
 
$
205

 
$
100

 
 
 
Impact on loss & LAE ratio
0.5

%
0.3

%
 
 
 
8.1

%
3.9

%
 
 
 
4.5

%
2.3

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impact of development & other
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pretax net development: (favorable) / unfavorable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prior year loss & ALAE reserve development
$
(72
)
 
$
(215
)
 
 
 
 
$
(99
)
 
$
(229
)
 
 
 
 
$
(171
)
 
$
(444
)
 
 
 
Prior year premium development
(34
)
 
(5
)
 
 
 
 
21

 
54

 
 
 
 
(13
)
 
49

 
 
 
Other (1)
—

 
—

 
 
 
 
1

 
1

 
 
 
 
1

 
1

 
 
 
Total development & other
$
(106
)
 
$
(220
)
 
 
 
 
$
(77
)
 
$
(174
)
 
 
 
 
$
(183
)
 
$
(394
)
 
 
 
Impact of development & other on loss & LAE ratio
(4.5
)
%
(10.9
)
%
 
 
 
(3.4
)
%
(7.7
)
%
 
 
 
(4.0
)
%
(9.2
)
%
 
 
(1) Other includes the impacts of interest accretion and change in allowance for uncollectible reinsurance and deductible amounts.

13
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
 
NINE MONTHS ENDED SEPTEMBER 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
$
4,516

 
$
4,430

 
 
$
427

 
$
436

 
(2
)
%
 
$
(1
)
 
$
2

 
(150
)
%
 
$
4,942

 
$
4,868

 
2

%
Net investment income
940

 
1,041

 
 
567

 
531

 
7

 
 
24

 
120

 
(80
)
 
 
1,531

 
1,692

 
(10
)
 
Other revenues
204

 
211

 
 
6

 
10

 
(40
)
 
 
4

 
5

 
(20
)
 
 
214

 
226

 
(5
)
 
Total operating revenues
5,660

 
5,682

 
 
1,000

 
977

 
2

 
 
27

 
127

 
(79
)
 
 
6,687

 
6,786

 
(1
)
 
Claims, Benefits and Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net incurred claims and benefits
3,140

 
2,783

 
 
985

 
949

 
(4
)
 
 
—

 
48

 
N/M

 
 
4,125

 
3,780

 
(9
)
 
Policyholders' dividends
1

 
17

 
 
5

 
2

 
(150
)
 
 
—

 
—

 
N/M

 
 
6

 
19

 
68

 
Amortization of deferred acquisition costs
1,034

 
1,023

 
 
17

 
15

 
(13
)
 
 
—

 
—

 
N/M

 
 
1,051

 
1,038

 
(1
)
 
Other insurance related expenses
438

 
457

 
 
108

 
137

 
21

 
 
2

 
7

 
71

 
 
548

 
601

 
9

 
Other expenses
177

 
183

 
 
14

 
13

 
(8
)
 
 
129

 
641

 
80

 
 
320

 
837

 
62

 
Total claims, benefits and expenses
4,790

 
4,463

 
 
1,129

 
1,116

 
(1
)
 
 
131

 
696

 
81

 
 
6,050

 
6,275

 
4

 
Operating income (loss) from continuing operations before income tax
870

 
1,219

 
 
(129
)
 
(139
)
 
7

 
 
(104
)
 
(569
)
 
82

 
 
637

 
511

 
25

 
Income tax (expense) benefit on operating income (loss)
(311
)
 
(403
)
 
 
78

 
67

 
16

 
 
34

 
204

 
(83
)
 
 
(199
)
 
(132
)
 
(51
)
 
Net operating (income) loss, after-tax, attributable to noncontrolling interests
(15
)
 
(45
)
 
 
—

 
—

 
N/M

 
 
—

 
—

 
N/M

 
 
(15
)
 
(45
)
 
67

 
Net operating income (loss) from continuing operations attributable to CNA
544

 
771

 
 
(51
)
 
(72
)
 
29

 
 
(70
)
 
(365
)
 
81

 
 
423

 
334

 
27

 
Net realized investment gains (losses), net of participating policyholders' interests
20

 
90

 
 
(7
)
 
15

 
(147
)
 
 
(12
)
 
20

 
(160
)
 
 
1

 
125

 
(99
)
 
Income tax (expense) benefit on net realized investment gains (losses)
(6
)
 
(38
)
 
 
2

 
(7
)
 
129

 
 
5

 
(6
)
 
183

 
 
1

 
(51
)
 
102

 
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
14

 
53

 
 
(5
)
 
8

 
(163
)
 
 
(7
)
 
14

 
(150
)
 
 
2

 
75

 
(97
)
 
Net income (loss) from continuing operations attributable to CNA
$
558

 
$
824

 
 
$
(56
)
 
$
(64
)
 
13

%
 
$
(77
)
 
$
(351
)
 
78

%
 
$
425

 
$
409

 
4

%


14
CNA FINANCIAL CORPORATION
Financial Supplement
Components of Pretax Net Investment Income
(In millions)
 
CNA Specialty
 
1Q10
 
 2Q10
 
 3Q10
 
 4Q10
 
2010
 
 
1Q11
 
2Q11
 
3Q11
 
YTD 2011
Income (loss) from limited partnerships
$
23

 
$
(1
)
 
$
23

 
$
41

 
$
86

 
 
$
38

 
$
4

 
$
(32
)
 
$
10

Income (loss) from trading portfolio
1

 
1

 
1

 
2

 
5

 
 
1

 
1

 
—

 
2

Other investment income
123

 
125

 
124

 
128

 
500

 
 
121

 
121

 
117

 
359

Net investment income
$
147

 
$
125

 
$
148

 
$
171

 
$
591

 
 
$
160

 
$
126

 
$
85

 
$
371

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CNA Commercial
 
 1Q10
 
 2Q10
 
 3Q10
 
 4Q10
 
2010
 
 
1Q11
 
2Q11
 
3Q11
 
YTD 2011
Income (loss) from limited partnerships
$
40

 
$
(2
)
 
$
38

 
$
68

 
$
144

 
 
$
73

 
$
6

 
$
(59
)
 
$
20

Income (loss) from trading portfolio
2

 
1

 
2

 
2

 
7

 
 
2

 
2

 
(1
)
 
3

Other investment income
179

 
185

 
176

 
182

 
722

 
 
186

 
185

 
175

 
546

Net investment income
$
221

 
$
184

 
$
216

 
$
252

 
$
873

 
 
$
261

 
$
193

 
$
115

 
$
569

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
P&C Operations
 
 1Q10
 
 2Q10
 
 3Q10
 
 4Q10
 
2010
 
 
1Q11
 
2Q11
 
3Q11
 
YTD 2011
Income (loss) from limited partnerships
$
63

 
$
(3
)
 
$
61

 
$
109

 
$
230

 
 
$
111

 
$
10

 
$
(91
)
 
$
30

Income (loss) from trading portfolio
3

 
2

 
3

 
4

 
12

 
 
3

 
3

 
(1
)
 
5

Other investment income
302

 
310

 
300

 
310

 
1,222

 
 
307

 
306

 
292

 
905

Net investment income
$
368

 
$
309

 
$
364

 
$
423

 
$
1,464

 
 
$
421

 
$
319

 
$
200

 
$
940

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Life & Group Non-Core
 
 1Q10
 
 2Q10
 
 3Q10
 
 4Q10
 
2010
 
 
1Q11
 
2Q11
 
3Q11
 
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

 
190

 
567

Net investment income
$
175

 
$
174

 
$
182

 
$
184

 
$
715

 
 
$
188

 
$
189

 
$
190

 
$
567

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate & Other Non-Core
 
 1Q10
 
 2Q10
 
 3Q10
 
 4Q10
 
2010
 
 
1Q11
 
2Q11
 
3Q11
 
YTD 2011
Income (loss) from limited partnerships
$
9

 
$
2

 
$
6

 
$
4

 
$
21

 
 
$
3

 
$
1

 
$
(2
)
 
$
2

Income (loss) from trading portfolio
1

 
—

 
1

 
(1
)
 
1

 
 
—

 
—

 
—

 
—

Other investment income
37

 
36

 
28

 
14

 
115

 
 
8

 
8

 
6

 
22

Net investment income
$
47

 
$
38

 
$
35

 
$
17

 
$
137

 
 
$
11

 
$
9

 
$
4

 
$
24

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Operations
 
 1Q10
 
 2Q10
 
 3Q10
 
 4Q10
 
2010
 
 
1Q11
 
2Q11
 
3Q11
 
YTD 2011
Income (loss) from limited partnerships
$
72

 
$
(4
)
 
$
68

 
$
113

 
$
249

 
 
$
114

 
$
11

 
$
(93
)
 
$
32

Income (loss) from trading portfolio
4

 
2

 
4

 
3

 
13

 
 
3

 
3

 
(1
)
 
5

Other investment income
514

 
523

 
509

 
508

 
2,054

 
 
503

 
503

 
488

 
1,494

Net investment income
$
590

 
$
521

 
$
581

 
$
624

 
$
2,316

 
 
$
620

 
$
517

 
$
394

 
$
1,531


15
CNA FINANCIAL CORPORATION
Financial Supplement
Statutory Data - Preliminary
PERIODS ENDED SEPTEMBER 30
Three Months
 
 
 
 
Nine Months
 
 
 
Income Statements
(Preliminary)
2011
 
 
 
Fav / (Unfav) %
Change
 
 
(Preliminary)
2011
 
 
 
Fav / (Unfav) %
Change
 
(In millions)
 
2010
 
 
 
 
2010
 
 
Combined Continental Casualty Companies
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross written premiums
$
2,044

 
$
1,867

 
9

%
 
$
5,954

 
$
5,630

 
6

%
Net written premiums
1,615

 
1,441

 
12

 
 
4,608

 
4,255

 
8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earned premiums
1,359

 
1,288

 
6

 
 
3,851

 
3,744

 
3

 
Claim and claim adjustment expenses
1,207

 
1,095

 
(10
)
 
 
3,420

 
3,051

 
(12
)
 
Acquisition expenses
276

 
260

 
(6
)
 
 
788

 
725

 
(9
)
 
Underwriting expenses
201

 
184

 
(9
)
 
 
592

 
596

 
1

 
Policyholders' dividends
4

 
3

 
(33
)
 
 
9

 
9

 
—

 
Underwriting income (loss)
(329
)
 
(254
)
 
(30
)
 
 
(958
)
 
(637
)
 
(50
)
 
Net investment income
490

 
429

 
14

 
 
1,380

 
1,256

 
10

 
Other income (loss)
85

 
(718
)
 
112

 
 
116

 
(705
)
 
116

 
Income tax (expense) benefit
(11
)
 
152

 
(107
)
 
 
(36
)
 
44

 
(182
)
 
Net realized gains (losses)
(57
)
 
7

 
N/M

 
 
7

 
110

 
(94
)
 
Net income (loss)
$
178

 
$
(384
)
 
146

%
 
$
509

 
$
68

 
N/M

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss and LAE
88.9

%
85.0

%
 
 
 
88.8

%
81.5

%
 
 
Acquisition expense
17.1

 
18.1

 
 
 
 
17.1

 
17.0

 
 
 
Underwriting expense
12.4

 
12.7

 
 
 
 
12.9

 
14.1

 
 
 
Expense
29.5

 
30.8

 
 
 
 
30.0

 
31.1

 
 
 
Dividend
0.3

 
0.2

 
 
 
 
0.2

 
0.2

 
 
 
Combined ratio
118.7

%
116.0

%
 
 
 
119.0

%
112.8

%
 
 

SUPPLEMENTAL STATUTORY DATA
(Preliminary)
September 30, 2011
 
December 31, 2010
(In millions)
Combined Continental Casualty Companies
 
 
 
Statutory surplus (1)
$
9,776

 
$
9,821

Life Company
 
 
 
Statutory surplus
$
527

 
$
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.

16


CNA FINANCIAL CORPORATION
Financial Supplement
Property & Casualty Operations Loss & LAE Ratio Analysis
 
CNA Specialty
 
2011 YTD Evaluated
at 9/30/11
 
2010 FY Evaluated
at 12/31/10
 
2010 FY Evaluated
at 9/30/11
 
Gross Accident Year
63.3

%
62.6

%
62.4

%
Impact of Reinsurance
4.8

 
4.3

 
4.2

 
Net Accident Year
68.1

 
66.9

 
66.6

%
Impact of Development and Other (1)
(4.5
)
 
(12.9
)
 
 
 
Net Calendar Year
63.6

%
54.0

%
 
 
 
CNA Commercial
 
2011 YTD Evaluated
at 9/30/11
 
2010 FY Evaluated
at 12/31/10
 
2010 FY Evaluated
at 9/30/11
 
Gross Accident Year
74.5

%
71.7

%
71.7

%
Impact of Reinsurance
3.6

 
3.8

 
3.7

 
Net Accident Year
78.1

 
75.5

 
75.4

%
Impact of Development and Other (1)
(3.4
)
 
(8.7
)
 
 
 
Net Calendar Year
74.7

%
66.8

%
 
 
 
P&C Operations
 
2011 YTD Evaluated
at 9/30/11
 
2010 FY Evaluated
at 12/31/10
 
2010 FY Evaluated
at 9/30/11
 
Gross Accident Year
68.3

%
66.8

%
66.7

%
Impact of Reinsurance
5.2

 
4.8

 
4.8

 
Net Accident Year
73.5

 
71.6

 
71.5

%
Impact of Development and Other (1)
(4.0
)
 
(10.6
)
 
 
 
Net Calendar Year
69.5

%
61.0

%
 
 

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

17