Business Segments

3 Months Ended

Mar. 31, 2012

Segment Reporting [Abstract]

Business Segments

Note J. Business Segments

The Company's core property and casualty commercial insurance operations are reported in two business segments: CNA Specialty and CNA Commercial. The Company's non-core operations are managed in two segments: Life & Group Non-Core and Corporate & Other Non-Core.

The accounting policies of the segments are the same as those described in Note A of the Consolidated Financial Statements within CNAF's Annual Report on Form 10-K for the year ended December 31, 2011, other than the accounting for deferred acquisition costs, as further discussed in Note A herein. The Company manages most of its assets on a legal entity basis, while segment operations are conducted across legal entities. As such, only insurance and reinsurance receivables, insurance reserves and deferred acquisition costs are readily identifiable by individual segment. Distinct investment portfolios are not maintained for each individual segment; accordingly, allocation of assets to each segment is not performed. Therefore, net investment income and realized investment gains or losses are allocated primarily based on each segment's net carried insurance reserves, as adjusted. All significant intersegment income and expense has been eliminated. Income taxes have been allocated on the basis of the taxable income of the segments.

In the following tables, certain financial measures are presented to provide information used by management to monitor the Company's operating performance. Management utilizes these financial measures to monitor the Company's insurance operations and investment portfolio. Net operating income, which is derived from certain income statement amounts, is used by management to monitor performance of the Company's insurance operations. The Company's investment portfolio is monitored by management through analysis of various factors including unrealized gains and losses on securities, portfolio duration and exposure to market and credit risk. Based on such analyses, the Company may recognize an OTTI loss on an investment security in accordance with its policy, or sell a security, which may produce realized gains and losses.

Net operating income (loss) is calculated by excluding from net income (loss) attributable to CNA the after-tax effects of 1) net realized investment gains or losses, 2) income or loss from discontinued operations and 3) any cumulative effects of changes in accounting guidance. The calculation of net operating income excludes net realized investment gains or losses because net realized investment gains or losses are largely discretionary, except for some losses related to OTTI, and are generally driven by economic factors that are not necessarily consistent with key drivers of underwriting performance, and are therefore not considered an indication of trends in insurance operations.

The significant components of the Company's continuing operations and selected balance sheet items are presented in the following tables.

Three months ended
March 31, 2012	CNA Specialty			CNA Commercial			Life & Group Non-Core			Corporate & Other Non-Core
(In millions)													Eliminations		Total
Operating revenues
Net earned premiums	$	706		$	803		$	141		$	(1	)	$	—	$	1,649
Net investment income	175			265			198			10			—		648
Other revenues	56			9			(2		)	5			—		68
Total operating revenues	937			1,077			337			14			—		2,365
Claims, Benefits and Expenses
Net incurred claims and benefits	468			567			336			7			—		1,378
Policyholders’ dividends	(2		)	3			2			—			—		3
Amortization of deferred acquisition costs	148			139			8			—			—		295
Other insurance related expenses	72			144			35			(1		)	—		250
Other expenses	50			7			6			48			—		111
Total claims, benefits and expenses	736			860			387			54			—		2,037
Operating income (loss) from continuing operations before income tax	201			217			(50		)	(40		)	—		328
Income tax (expense) benefit on operating income (loss)	(69		)	(78		)	31			14			—		(102		)
Net operating income (loss) from continuing operations attributable to CNA	132			139			(19		)	(26		)	—		226
Net realized investment gains (losses), net of participating policyholders’ interests	8			11			13			4			—		36
Income tax (expense) benefit on net realized investment gains (losses)	(2		)	(4		)	(5		)	(1		)	—		(12		)
Net realized investment gains (losses) attributable to CNA	6			7			8			3			—		24
Net income (loss) from continuing operations attributable to CNA	$	138		$	146		$	(11	)	$	(23	)	$	—	$	250

March 31, 2012
(In millions)
Reinsurance receivables	$	863	$	1,159	$	1,359	$	2,608	$	—		$	5,989
Insurance receivables	$	679	$	1,086	$	8	$	4	$	—		$	1,777
Deferred acquisition costs	$	311	$	265	$	—	$	—	$	—		$	576
Insurance reserves
Claim and claim adjustment expenses	$	6,920	$	11,422	$	2,875	$	2,986	$	—		$	24,203
Unearned premiums	1,705		1,529		150		—		(1		)	3,383
Future policy benefits	—		—		9,959		—		—			9,959
Policyholders’ funds	12		13		144		—		—			169

Three months ended
March 31, 2011	CNA Specialty			CNA Commercial			Life & Group Non-Core			Corporate & Other Non-Core						Total
(In millions)													Eliminations
Operating revenues
Net earned premiums	$	669		$	802		$	144		$	1		$	(1	)	$	1,615
Net investment income	160			261			188			11			—			620
Other revenues	54			14			(2		)	1			—			67
Total operating revenues	883			1,077			330			13			(1		)	2,302
Claims, Benefits and Expenses
Net incurred claims and benefits	430			603			323			7			—			1,363
Policyholders’ dividends	—			—			1			—			—			1
Amortization of deferred acquisition costs	143			148			6			—			—			297
Other insurance related expenses	64			115			38			1			(1		)	217
Other expenses	40			16			6			44			—			106
Total claims, benefits and expenses	677			882			374			52			(1		)	1,984
Operating income (loss) from continuing operations before income tax	206			195			(44		)	(39		)	—			318
Income tax (expense) benefit on operating income (loss)	(70		)	(65		)	26			12			—			(97		)
Net operating (income) loss, after-tax, attributable to noncontrolling interests	(8		)	—			—			—			—			(8		)
Net operating income (loss) from continuing operations attributable to CNA	128			130			(18		)	(27		)	—			213
Net realized investment gains (losses), net of participating policyholders’ interests	8			17			(4		)	(8		)	—			13
Income tax (expense) benefit on net realized investment gains (losses)	(3		)	(6		)	1			4			—			(4		)
Net realized investment (gains) losses, after-tax, attributable to noncontrolling interests	—			(1		)	—			—			—			(1		)
Net realized investment gains (losses) attributable to CNA	5			10			(3		)	(4		)	—			8
Net income (loss) from continuing operations attributable to CNA	$	133		$	140		$	(21	)	$	(31	)	$	—		$	221

December 31, 2011
(In millions)
Reinsurance receivables	$	852	$	1,188	$	1,375	$	2,677	$	—	$	6,092
Insurance receivables	$	670	$	1,047	$	8	$	1	$	—	$	1,726
Deferred acquisition costs	$	300	$	252	$	—	$	—	$	—	$	552
Insurance reserves
Claim and claim adjustment expenses	$	6,840	$	11,509	$	2,825	$	3,129	$	—	$	24,303
Unearned premiums	1,629		1,480		141		—		—		3,250
Future policy benefits	—		—		9,810		—		—		9,810
Policyholders’ funds	15		10		166		—		—		191

The following table provides revenue by line of business for each reportable segment. Revenues are comprised of operating revenues and net realized investment gains and losses, net of participating policyholders’ interests.

Revenues by Line of Business

Three months ended March 31
(In millions)	2012			2011
CNA Specialty
International	$	57		$	51
Professional & Management Liability	694			660
Surety	119			111
Warranty & Alternative Risks	75			69
CNA Specialty revenues	945			891
CNA Commercial
CNA Select Risk	73			71
Commercial Insurance	762			752
International	91			127
Small Business	162			144
CNA Commercial revenues	1,088			1,094
Life & Group Non-Core
Health	291			270
Life & Annuity	60			56
Other	(1		)	—
Life & Group Non-Core revenues	350			326
Corporate & Other Non-Core revenues	18			5
Eliminations	—			(1		)
Total revenues	$	2,401		$	2,315