Q2 2013 8K

0000021175-13-000027.txt : 20130729 0000021175-13-000027.hdr.sgml : 20130729 20130729110728 ACCESSION NUMBER: 0000021175-13-000027 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20130729 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20130729 DATE AS OF CHANGE: 20130729 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: 13991449 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 q2138k.htm FORM 8-K Q2 2013 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) July 29, 2013

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 July 29, 2013, 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 2013. 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: July 29, 2013	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 July 29, 2013 providing information on the second quarter 2013 results of operations.

99.2		CNA Financial Corporation financial supplement, posted on its website July 29, 2013, providing supplemental financial information on the second quarter 2013.

EX-99.1 2 q213exhibit991.htm EX-99.1 Q2-13 Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT:



MEDIA:		ANALYSTS:
Jennifer Martinez, 312/822-5167		James Anderson, 312/822-7757
Sarah Pang, 312/822-6394		Derek Smith, 312/822-6612
		David Adams, 312/822-2183

CNA FINANCIAL ANNOUNCES SECOND QUARTER 2013 RESULTS:


•	NET OPERATING INCOME OF $204 MILLION


•	P&C NET WRITTEN PREMIUM GROWTH OF 7%


•	BOOK VALUE PER SHARE EX AOCI OF $43.81, AN INCREASE OF 3% FOR THE YEAR


•	OPERATING ROE OF 6.9%


•	QUARTERLY DIVIDEND OF $0.20 PER SHARE

CHICAGO, July 29, 2013 --- CNA Financial Corporation (NYSE: CNA) today announced second quarter 2013 results, which included net operating income of $204 million, or $0.75 per share, and net income of $194 million, or $0.72 per share. Property & Casualty Operations' combined ratio for the second quarter was 101.5%.

CNA Financial also declared a quarterly dividend of $0.20 per share, payable August 28, 2013 to stockholders of record on August 12, 2013.



	Results for the Three Months Ended June 30 (a)				Results for the Six Months Ended June 30 (a)
($ millions, except per share data)	2013		2012		2013				2012
Net operating income	$	204	$	152	$	435			$	378
Net income	194		166		444				416

Net operating income per diluted share	0.75		0.56		1.61				1.40
Net income per diluted share	0.72		0.62		1.64				1.54


	June 30, 2013		December 31, 2012		Change
	June 30, 2013		December 31, 2012		Change
Book value per share	$	44.29	$	45.71	(3		)	%
Book value per share excluding AOCI	43.81		42.62		3			%


(a)	Management utilizes the net operating income financial measure to monitor the Company's operations. Please refer to Note O in the Consolidated Financial Statements within CNA's Annual Report on Form 10-K for the year ended December 31, 2012 for further discussion of this measure.

Property & Casualty Operations' net operating income was $258 million for the second quarter of 2013 as compared with $163 million in the prior year quarter. This increase was primarily due to higher net investment income, improved current accident year underwriting results and a settlement benefit of $30 million after-tax related to workers' compensation residual market litigation. These favorable items were partially offset by lower favorable net prior year development, including unfavorable development of $23 million after-tax recorded in response to New York workers' compensation legislation. Net written premiums grew 7% year over year, driven by the acquisition of Hardy and increased rates across both CNA Specialty and CNA Commercial.

Net operating results for our non-core segments decreased $43 million as compared with the prior year quarter. The Life & Group Non-Core segment was adversely affected by unfavorable morbidity in our long term care business, driven by an increase in claim volume.

Pretax net investment income increased to $578 million for the second quarter of 2013 as compared with $470 million in the prior year quarter. The increase was primarily driven by limited partnership investment results. Fixed maturity securities income decreased due to the effect of investing at lower interest rates, partially offset by a higher invested asset base.

Net realized investment losses were $10 million for the second quarter of 2013 as compared with net realized investment gains of $14 million for the prior year quarter, driven by lower realized investment gains on sales of securities, partially offset by lower other-than-temporary impairment losses recognized in earnings.

Property & Casualty Operations

“We are pleased to see the impact of our efforts clearly reflected in this quarter's results. Our second quarter and year-to-date P&C accident year loss ratios ex cats and development improved 2.9 and 2.4 points respectively over prior periods. In addition, rate continues to be strong and we are delivering top line growth,” said Thomas F. Motamed, Chairman and Chief Executive Officer of CNA Financial Corporation.

“We are also pleased that Standard & Poor's recently announced that it had upgraded CNA's financial strength ratings to A with a stable outlook. This improves our competitive position and validates the work we have done to enhance our financial strength. We are encouraged by our progress yet realize that we have more work to do to improve CNA's earnings power.”



	Results for the Three Months Ended June 30								Results for the Six Months Ended June 30
($ millions)	2013				2012				2013				2012
Net written premiums	$	1,720			$	1,607			$	3,496			$	3,215
NWP growth (% year over year)	7			%	3			%	9			%	3			%
Net operating income	$	258			$	163			$	515			$	434

Loss ratio	68.4			%	67.9			%	67.9			%	68.2			%
Effect of catastrophe impacts	(3.9		)		(4.4		)		(3.2		)		(3.2		)
Effect of development-related items	—				3.9				1.0				3.1
Loss ratio excluding catastrophes and development	64.5			%	67.4			%	65.7			%	68.1			%

Combined ratio	101.5			%	101.7			%	101.5			%	101.8			%
Combined ratio excluding catastrophes and development	97.6			%	101.2			%	99.3			%	101.7			%

Business Operating Highlights

CNA Specialty



	Results for the Three Months Ended June 30								Results for the Six Months Ended June 30
($ millions)	2013				2012				2013				2012
Net written premiums	$	756			$	718			$	1,559			$	1,483
NWP growth (% year over year)	5			%	5			%	5			%	4			%
Net operating income	$	148			$	106			$	288			$	238

Loss ratio	60.6			%	62.2			%	62.4			%	64.2			%
Effect of catastrophe impacts	(0.7		)		(0.4		)		(0.5		)		(0.3		)
Effect of development-related items	5.9				5.3				4.5				3.6
Loss ratio excluding catastrophes and development	65.8			%	67.1			%	66.4			%	67.5			%

Combined ratio	90.4			%	94.4			%	92.7			%	95.8			%
Combined ratio excluding catastrophes and development	95.6			%	99.3			%	96.7			%	99.1			%


•	Net written premiums increased $38 million for the second quarter of 2013 as compared with the prior year quarter. This increase was primarily driven by increased rate. Average rate increased 7% for the second quarter of 2013 as compared with an increase of 5% for the prior year quarter for the policies that renewed in each period. Retention of 84% and 86% was achieved in each period.


•	Net operating income increased $42 million for the second quarter of 2013 as compared with the prior year quarter. This increase was primarily due to higher net investment income and improved underwriting results.


•	The combined ratio improved 4.0 points for the second quarter of 2013 as compared with the prior year quarter. The loss ratio improved 1.6 points, due primarily to an improved current accident year loss ratio. The expense ratio improved 2.4 points, primarily due to the impact of lower expenses and a higher net earned premium base.

CNA Commercial



	Results for the Three Months Ended June 30								Results for the Six Months Ended June 30
($ millions)	2013				2012				2013				2012
Net written premiums	$	826			$	889			$	1,744			$	1,732
NWP growth (% year over year)	(7		)	%	1			%	1			%	1			%
Net operating income	$	112			$	57			$	237			$	196

Loss ratio	76.5			%	72.9			%	74.1			%	71.8			%
Effect of catastrophe impacts	(7.1		)		(8.0		)		(5.8		)		(5.6		)
Effect of development-related items	(3.4		)		2.8				(1.0		)		2.6
Loss ratio excluding catastrophes and development	66.0			%	67.7			%	67.3			%	68.8			%

Combined ratio	111.7			%	108.1			%	109.3			%	107.2			%
Combined ratio excluding catastrophes and development	101.2			%	102.9			%	102.5			%	104.2			%

•

Net written premiums decreased $63 million for the second quarter of 2013 as compared with the prior year quarter. This decrease was primarily driven by underwriting actions taken in certain business classes, including a transfer of $44 million of in-force business. These underwriting actions were partially offset by continued strong rate increases. Average rate increased 9% for the second quarter of 2013, as compared with an increase of 7% for the prior year quarter for the policies that renewed in each period. Retention of 75% and 77% was achieved in each period.

•

Net operating income increased $55 million for the second quarter of 2013 as compared with the prior year quarter. This increase was primarily due to higher net investment income, the settlement benefit of $30 million and improved current accident year underwriting results. These favorable items were partially offset by unfavorable net prior year development in 2013, which includes $23 million after-tax recorded for workers' compensation in response to legislation related to the New York Fund for Reopened Cases. The legal settlement benefit is reflected within Other revenues and is not included in the combined ratio.


•	The combined ratio increased 3.6 points for the second quarter of 2013 as compared with the prior year quarter. The loss ratio increased 3.6 points, primarily due to unfavorable net prior year development, including a 4.2 point impact related to the workers' compensation legislation discussed above, partially offset by an improved current accident year loss ratio.

Hardy



	Results for the Three Months Ended June 30				Results for the Six Months Ended June 30
($ millions)	2013				2013
Net written premiums	$	138			$	193
Net operating loss	(2		)		(10		)

Loss ratio	53.9			%	51.5			%
Effect of catastrophe impacts	—				—
Effect of development-related items	(17.4		)		(10.0		)
Loss ratio excluding catastrophes and development	36.5			%	41.5			%

Combined ratio	98.4			%	101.6			%
Combined ratio excluding catastrophes and development	81.0			%	91.6			%


•	Hardy, a specialized Lloyd's of London underwriter, was acquired on July 2, 2012.


•	Net written premiums were $138 million for the second quarter of 2013. Average rate decreased 1% for the second quarter of 2013 for the policies that renewed in the period. Retention of 64% was achieved in the period.


•	Results for the second quarter of 2013 included pretax unfavorable net prior year development of $14 million primarily related to 2011 catastrophe events, including the Thailand floods and the New Zealand Lyttelton earthquake. The net prior year development included $2 million of unfavorable premium development.


•	The combined ratio excluding catastrophes and prior year development was 81.0% for the second quarter of 2013. The loss ratio was adversely affected by unfavorable development, as discussed above.

Life & Group Non-Core



	Results for the Three Months Ended June 30					Results for the Six Months Ended June 30
($ millions)	2013			2012		2013			2012
Operating revenues	$	346		$	356	$	695		$	693
Total claims, benefits and expenses	424			373		796			760
Net operating income (loss)	(36		)	3		(36		)	(16		)


•	Net operating results decreased $39 million for the second quarter of 2013 as compared with the prior year quarter. This decrease was primarily due to unfavorable morbidity in our long term care business, driven by an increase in claim volume, and a gain on a life settlement contract in 2012.

Corporate & Other Non-Core



	Results for the Three Months Ended June 30						Results for the Six Months Ended June 30
($ millions)	2013			2012			2013			2012
Operating revenues	$	9		$	9		$	19		$	23
Total claims, benefits and expenses	36			27			85			81
Net operating loss	(18		)	(14		)	(44		)	(40		)

•

Net operating loss increased $4 million for the second quarter of 2013 as compared with the prior year quarter. Both periods benefited from releases of previously established allowances for uncollectible amounts arising from changes in estimates. For the second quarter of 2013, results were positively affected by $6 million related to the release of an allowance established for officer notes receivable. For the second quarter of 2012, results were positively affected by $13 million related to the release of an allowance established for uncollectible reinsurance receivables. Both periods also benefited from a modest amount of favorable reserve development.

Net Operating Income (Loss)

	Results for the Three Months Ended June 30						Results for the Six Months Ended June 30
($ millions)	2013			2012			2013			2012
CNA Specialty	$	148		$	106		$	288		$	238
CNA Commercial	112			57			237			196
Hardy	(2		)				(10		)
Total P&C Operations	258			163			515			434
Life & Group Non-Core	(36		)	3			(36		)	(16		)
Corporate & Other Non-Core	(18		)	(14		)	(44		)	(40		)
Total	$	204		$	152		$	435		$	378

Net Income (Loss)

	Results for the Three Months Ended June 30						Results for the Six Months Ended June 30
($ millions)	2013			2012			2013			2012
CNA Specialty	$	144		$	112		$	286		$	250
CNA Commercial	104			65			232			211
Hardy	(2		)				(9		)
Total P&C Operations	246			177			509			461
Life & Group Non-Core	(36		)	6			(27		)	(5		)
Corporate & Other Non-Core	(16		)	(17		)	(38		)	(40		)
Total	$	194		$	166		$	444		$	416

Property & Casualty Operations Gross Written Premiums

	Results for the Three Months Ended June 30				Results for the Six Months Ended June 30
($ millions)	2013		2012		2013		2012
CNA Specialty	$	1,295	$	1,186	$	2,612	$	2,459
CNA Commercial	950		964		1,910		1,851
Hardy	147				254
Total P&C Operations	$	2,392	$	2,150	$	4,776	$	4,310

Property & Casualty Operations Net Written Premiums

	Results for the Three Months Ended June 30				Results for the Six Months Ended June 30
($ millions)	2013		2012		2013		2012
CNA Specialty	$	756	$	718	$	1,559	$	1,483
CNA Commercial	826		889		1,744		1,732
Hardy	138				193
Total P&C Operations	$	1,720	$	1,607	$	3,496	$	3,215

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 service mark registered by CNA Financial Corporation with the United States Patent and Trademark Office. Certain CNA Financial Corporation subsidiaries use the “CNA” service mark in connection with insurance underwriting and claims activities.

Conference Call and Webcast/Presentation 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) 427-9376, or for international callers, (719) 457-2645. 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. A presentation will be posted and available on the CNA website and will provide additional insight into the results.

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 5, 2013 by dialing (888) 203-1112, or for international callers, (719) 457-0820. The replay passcode is 9095270. 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.

Definition of Reported Segments

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

CNA Commercial works with an independent agency distribution system and 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.

Hardy, a specialized Lloyd's of London underwriter, was acquired on July 2, 2012. Through Lloyd's Syndicate 382, Hardy underwrites primarily short-tail exposures in marine and aviation, non-marine property, specialty lines and property treaty reinsurance.

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.

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.

Financial Measures

In the evaluation of the results of CNA Specialty, CNA Commercial and Hardy, management utilizes the loss ratio, the expense ratio, the dividend ratio and the combined ratio. These ratios are calculated using financial results prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). 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 q213exhibit992.htm EX-99.2 Q2-13 Exhibit 99.2

CNA Financial Corporation

Supplemental Financial Information

June 30, 2013

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.

CNA Financial Corporation

Table of Contents

June 30, 2013



	Page
Definitions and Presentation	i
Statements of Operations	1
Components of Income (Loss), 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
Consolidated - Results of Operations	9
Property & Casualty - Results of Operations	10
CNA Specialty - Results of Operations	11
CNA Commercial - Results of Operations	12
Hardy - Results of Operations	13
Life & Group Non-Core - Results of Operations	14
Corporate & Other Non-Core - Results of Operations	15
Components of Pretax Net Investment Income	16
Statutory Data - Preliminary	17
Property & Casualty Operations Loss & LAE Ratio Analysis	18
Net Carried Life & Group Non-Core Policyholder Reserves	19

CNA Financial Corporation

Definitions and Presentation


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


•	P&C Operations includes CNA Specialty, CNA Commercial and Hardy. Hardy was acquired on July 2, 2012.


•	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. 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 O to the Consolidated Financial Statements within the 2012 Form 10-K for further discussion of this measure.

•

In the evaluation of the results of CNA Specialty, CNA Commercial and Hardy, management utilizes the loss ratio, the expense ratio, the dividend ratio and the combined 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 17 is the percentage of acquisition and underwriting expenses to net written premiums in accordance with statutory accounting practices.

•

The majority of our limited partnership investments employ hedge fund strategies that generate returns primarily through investing in the 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

CNA FINANCIAL CORPORATION

Financial Supplement

Statements of Operations



PERIODS ENDED JUNE 30	Three Months						Fav / (Unfav)			Six Months						Fav / (Unfav)
(In millions)	2013			2012			% Change			2013			2012			% Change
STATEMENTS OF OPERATIONS
Revenues:
Net earned premiums	$	1,800		$	1,668		8		%	$	3,564		$	3,317		7		%
Net investment income	578			470			23			1,211			1,118			8
Net realized investment gains (losses):
Other-than-temporary impairment (OTTI) losses	(16		)	(12		)	(33	)		(34		)	(27		)	(26	)
Portion of OTTI recognized in Other comprehensive income (loss)	—			(11		)	N/M			—			(23		)	N/M
Net OTTI losses recognized in earnings	(16		)	(23		)	30			(34		)	(50		)	32
Other net realized investment gains (losses)	2			45			(96	)		48			108			(56	)
Net realized investment gains (losses)	(14		)	22			(164	)		14			58			(76	)
Other revenues	129			86			50			207			154			34
Total revenues	2,493			2,246			11			4,996			4,647			8
Claims, Benefits and Expenses:
Insurance claims and policyholders' benefits	1,521			1,348			(13	)		2,950			2,729			(8	)
Amortization of deferred acquisition costs	335			309			(8	)		663			604			(10	)
Other operating expenses	320			316			(1	)		661			635			(4	)
Interest	41			43			5			83			85			2
Total claims, benefits and expenses	2,217			2,016			(10	)		4,357			4,053			(8	)
Income (loss) before income tax	276			230			20			639			594			8
Income tax (expense) benefit	(82		)	(64		)	(28	)		(195		)	(178		)	(10	)
Net income (loss)	$	194		$	166		17		%	$	444		$	416		7		%

CNA FINANCIAL CORPORATION

Financial Supplement

Components of Income (Loss), Per Share Data and Return on Equity



PERIODS ENDED JUNE 30	Three Months							Six Months
(In millions, except per share data)	2013				2012			2013			2012
COMPONENTS OF INCOME (LOSS)
Net operating income (loss)	$	204			$	152		$	435		$	378
Net realized investment gains (losses)	(10		)		14			9			38
Income (loss)	$	194			$	166		$	444		$	416

DILUTED EARNINGS (LOSS) PER COMMON SHARE
Net operating income (loss)	$	0.75			$	0.56		$	1.61		$	1.40
Net realized investment gains (losses)	(0.03		)		0.06			0.03			0.14
Diluted earnings (loss) per share	$	0.72			$	0.62		$	1.64		$	1.54

WEIGHTED AVERAGE OUTSTANDING COMMON STOCK AND COMMON STOCK EQUIVALENTS
Basic	269.7				269.4			269.6			269.4
Diluted	270.1				269.8			270.0			269.7

RETURN ON EQUITY
Net income (loss) ⁽¹⁾	6.4			%	5.5		%	7.3		%	7.0		%
Net operating income (loss) ⁽²⁾	6.9				5.4			7.5			6.8

(1) Annualized net income (loss) divided by the average 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) divided by the average 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 per share data)	June 30, 2013		December 31, 2012
Total assets	$	57,567	$	58,522
Insurance reserves	39,128		40,005
Debt	2,571		2,570
Total liabilities	45,623		46,208
Accumulated other comprehensive income (loss)	126		831
Total stockholders' equity	11,944		12,314

Book value per common share	$	44.29	$	45.71
Book value per common share excluding AOCI	$	43.81	$	42.62

Outstanding shares of common stock (in millions of shares)	269.7		269.4



THREE MONTHS ENDED JUNE 30 (In millions)	2013			2012
Net cash flows provided (used) by operating activities	$	378		$	306
Net cash flows provided (used) by investing activities	(310		)	(223		)
Net cash flows provided (used) by financing activities	(71		)	(41		)
Net cash flows provided (used) by operating, investing and financing activities	$	(3	)	$	42



SIX MONTHS ENDED JUNE 30 (In millions)	2013			2012
Net cash flows provided (used) by operating activities	$	569		$	618
Net cash flows provided (used) by investing activities	(471		)	(510		)
Net cash flows provided (used) by financing activities	(127		)	(83		)
Net cash flows provided (used) by operating, investing and financing activities	$	(29	)	$	25

CNA FINANCIAL CORPORATION

Financial Supplement

Claim & Claim Adjustment Expense Reserve Rollforward



THREE MONTHS ENDED JUNE 30, 2013 (In millions)	CNA Specialty			CNA Commercial			Hardy			P&C Operations			Life & Group Non-Core			Corporate & Other Non-Core			Total Operations
Claim & claim adjustment expense reserves, beginning of period
Gross	$	6,807		$	11,105		$	470		$	18,382		$	3,031		$	3,098		$	24,511
Ceded	654			1,120			212			1,986			487			2,597			5,070
Net	6,153			9,985			258			16,396			2,544			501			19,441

Net incurred claim & claim adjustment expenses	452			643			41			1,136			216			(2		)	1,350
Net claim & claim adjustment expense payments	(409		)	(744		)	(46		)	(1,199		)	(158		)	(13		)	(1,370		)
Foreign currency translation adjustment and other	(5		)	(11		)	(3		)	(19		)	(48		)	1			(66		)

Claim & claim adjustment expense reserves, end of period
Net	6,191			9,873			250			16,314			2,554			487			19,355
Ceded	686			1,100			197			1,983			477			2,524			4,984
Gross	$	6,877		$	10,973		$	447		$	18,297		$	3,031		$	3,011		$	24,339



SIX MONTHS ENDED JUNE 30, 2013 (In millions)	CNA Specialty			CNA Commercial			Hardy			P&C Operations			Life & Group Non-Core			Corporate & Other Non-Core			Total Operations
Claim & claim adjustment expense reserves, beginning of period
Gross	$	6,748		$	11,326		$	521		$	18,595		$	3,006		$	3,162		$	24,763
Ceded	636			1,115			247			1,998			478			2,650			5,126
Net	6,112			10,211			274			16,597			2,528			512			19,637

Net incurred claim & claim adjustment expenses	917			1,244			72			2,233			395			2			2,630
Net claim & claim adjustment expense payments	(814		)	(1,556		)	(84		)	(2,454		)	(318		)	(26		)	(2,798		)
Foreign currency translation adjustment and other	(24		)	(26		)	(12		)	(62		)	(51		)	(1		)	(114		)

Claim & claim adjustment expense reserves, end of period
Net	6,191			9,873			250			16,314			2,554			487			19,355
Ceded	686			1,100			197			1,983			477			2,524			4,984
Gross	$	6,877		$	10,973		$	447		$	18,297		$	3,031		$	3,011		$	24,339

CNA FINANCIAL CORPORATION
Financial Supplement
Investment Summary - Consolidated



	June 30, 2013						March 31, 2013				December 31, 2012
(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	$	21,788		$	1,679		$	22,354	$	2,544	$	22,236		$	2,677
States, municipalities and political subdivisions:
Tax-exempt	6,871			211			6,759		641		6,605			720
Taxable	3,868			430			4,189		708		4,178			691
Total states, municipalities and political subdivisions	10,739			641			10,948		1,349		10,783			1,411
Asset-backed:
RMBS	5,096			65			5,683		165		5,920			175
CMBS	2,009			68			1,990		137		1,822			130
Other ABS	947			14			955		23		952			23
Total asset-backed	8,052			147			8,628		325		8,694			328
U.S. Treasury and obligations of government-sponsored enterprises	176			9			181		11		182			10
Foreign government	544			16			552		24		613			25
Redeemable preferred stock	132			11			136		13		125			12
Total fixed maturity securities	41,431			2,503			42,799		4,266		42,633			4,463
Equities	199			14			201		24		249			21
Limited partnership investments	2,665			—			2,564		—		2,462			—
Other invested assets	36			—			49		—		59			—
Mortgage loans	437			—			425		—		401			—
Short term investments	1,531			(1		)	1,555		1		1,832			(1		)
Total investments	$	46,299		$	2,516		$	47,593	$	4,291	$	47,636		$	4,483

Net receivable/(payable) on investment activity	$	(186	)	$	—		$	20	$	—	$	(22	)	$	—

Effective portfolio duration (in years)	6.7						6.6				6.5
Weighted average rating of fixed maturity securities	A						A				A

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, 2013					March 31, 2013				December 31, 2012
(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	$	14,025		$	583	$	14,108	$	965	$	13,959		$	977
States, municipalities and political subdivisions:
Tax-exempt	2,355			55		2,208		129		2,117			143
Taxable	2,038			189		2,242		327		2,233			316
Total states, municipalities and political subdivisions	4,393			244		4,450		456		4,350			459
Asset-backed:
RMBS	4,754			51		5,294		142		5,515			155
CMBS	1,737			50		1,710		107		1,572			105
Other ABS	836			14		858		21		915			21
Total asset-backed	7,327			115		7,862		270		8,002			281
U.S. Treasury and obligations of government-sponsored enterprises	153			2		158		2		159			2
Foreign government	539			15		547		23		608			23
Redeemable preferred stock	34			—		35		—		35			1
Total fixed maturity securities	26,471			959		27,160		1,716		27,113			1,743
Equities	73			11		78		19		90			17
Limited partnership investments	2,665			—		2,564		—		2,462			—
Other invested assets	36			—		49		—		59			—
Mortgage loans	418			—		405		—		382			—
Short term investments	1,430			—		1,445		1		1,762			(1		)
Total investments	$	31,093		$	970	$	31,701	$	1,736	$	31,868		$	1,759

Net receivable/(payable) on investment activity	$	(111	)	$	—	$	46	$	—	$	(22	)	$	—

Effective portfolio duration (in years)	4.3					4.1				3.9
Weighted average rating of fixed maturity securities	A					A				A

CNA FINANCIAL CORPORATION

Financial Supplement

Investment Summary - Life & Group Non-Core



	June 30, 2013						March 31, 2013					December 31, 2012
(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	$	7,763		$	1,096		$	8,246		$	1,579	$	8,277	$	1,700
States, municipalities and political subdivisions:
Tax-exempt	4,516			156			4,551			512		4,488		577
Taxable	1,830			241			1,947			381		1,945		375
Total states, municipalities and political subdivisions	6,346			397			6,498			893		6,433		952
Asset-backed:
RMBS	342			14			389			23		405		20
CMBS	272			18			280			30		250		25
Other ABS	111			—			97			2		37		2
Total asset-backed	725			32			766			55		692		47
U.S. Treasury and obligations of government-sponsored enterprises	23			7			23			9		23		8
Foreign government	5			1			5			1		5		2
Redeemable preferred stock	98			11			101			13		90		11
Total fixed maturity securities	14,960			1,544			15,639			2,550		15,520		2,720
Equities	126			3			123			5		159		4
Limited partnership investments	—			—			—			—		—		—
Other invested assets	—			—			—			—		—		—
Mortgage loans	19			—			20			—		19		—
Short term investments	101			(1		)	110			—		70		—
Total investments	$	15,206		$	1,546		$	15,892		$	2,555	$	15,768	$	2,724

Net receivable/(payable) on investment activity	$	(75	)	$	—		$	(26	)	$	—	$	—	$	—

Effective portfolio duration (in years)	11.2						11.1					11.3
Weighted average rating of fixed maturity securities	A						A					A

CNA FINANCIAL CORPORATION
Financial Supplement
Investments - Fixed Maturity Securities by Credit Rating ⁽¹⁾

June 30, 2013



	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	$	—		$	—	$	307		$	12	$	1,289		$	86		$	7,089		$	734	$	10,846		$	751		$	2,257		$	96		$	21,788		$	1,679
States, municipalities and political subdivisions:
Tax-exempt	—			—		1,071			48		4,070			127			1,665			38		30			(1		)	35			(1		)	6,871			211
Taxable	—			—		545			57		2,568			281			755			92		—			—			—			—			3,868			430
Total states, municipalities and political subdivisions	—			—		1,616			105		6,638			408			2,420			130		30			(1		)	35			(1		)	10,739			641
Asset-backed:
RMBS	3,414			25		120			—		151			(1		)	196			—		135			(6		)	1,080			47			5,096			65
CMBS	80			2		501			15		377			14			394			8		300			14			357			15			2,009			68
Other ABS	—			—		289			7		274			5			325			2		59			—			—			—			947			14
Total asset-backed	3,494			27		910			22		802			18			915			10		494			8			1,437			62			8,052			147
U.S. Treasury and obligations of government-sponsored enterprises	176			9		—			—		—			—			—			—		—			—			—			—			176			9
Foreign government	—			—		215			8		237			5			92			3		—			—			—			—			544			16
Redeemable preferred stock	—			—		—			—		—			—			—			—		90			10			42			1			132			11
Total fixed maturity securities	$	3,670		$	36	$	3,048		$	147	$	8,966		$	517		$	10,516		$	877	$	11,460		$	768		$	3,771		$	158		$	41,431		$	2,503

Percentage of total fixed maturity securities	9		%			7		%			22		%				25		%			28		%				9		%				100		%

(1) The ratings presented are based on a ratings methodology that takes into account ratings from Standard & Poor's and Moody's Investors Services, Inc. in that order of preference. If a security is not rated by these rating agencies, 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

Consolidated - Results of Operations



PERIODS ENDED JUNE 30	Three Months						Fav / (Unfav) % Change			Six Months						Fav / (Unfav) % Change
(In millions)	2013			2012			Fav / (Unfav) % Change			2013			2012			Fav / (Unfav) % Change
Operating revenues:
Net earned premiums	$	1,800		$	1,668		8		%	$	3,564		$	3,317		7		%
Net investment income	578			470			23			1,211			1,118			8
Other revenues	129			86			50			207			154			34
Total operating revenues	2,507			2,224			13			4,982			4,589			9
Claims, Benefits and Expenses:
Net incurred claims and benefits	1,515			1,342			(13	)		2,940			2,720			(8	)
Policyholders' dividends	6			6			—			10			9			(11	)
Amortization of deferred acquisition costs	335			309			(8	)		663			604			(10	)
Other insurance related expenses	253			248			(2	)		515			498			(3	)
Other expenses	108			111			3			229			222			(3	)
Total claims, benefits and expenses	2,217			2,016			(10	)		4,357			4,053			(8	)
Operating income (loss) before income tax	290			208			39			625			536			17
Income tax (expense) benefit on operating income (loss)	(86		)	(56		)	(54	)		(190		)	(158		)	(20	)
Net operating income (loss)	204			152			34			435			378			15
Net realized investment gains (losses), pre-tax	(14		)	22			(164	)		14			58			(76	)
Income tax (expense) benefit on net realized investment gains (losses)	4			(8		)	150			(5		)	(20		)	75
Net realized investment gains (losses)	(10		)	14			(171	)		9			38			(76	)
Net income (loss)	$	194		$	166		17		%	$	444		$	416		7		%

CNA FINANCIAL CORPORATION

Financial Supplement

Property & Casualty - Results of Operations



PERIODS ENDED JUNE 30	Three Months								Fav / (Unfav) % Change			Six Months								Fav / (Unfav) % Change
(In millions)	2013				2012				Fav / (Unfav) % Change			2013				2012				Fav / (Unfav) % Change
Gross written premiums	$	2,392			$	2,150			11		%	$	4,776			$	4,310			11		%
Net written premiums	1,720				1,607				7			3,496				3,215				9
Operating revenues:
Net earned premiums	1,662				1,528				9			3,286				3,037				8
Net investment income	363				263				38			784				703				12
Other revenues	127				68				87			198				133				49
Total operating revenues	2,152				1,859				16			4,268				3,873				10
Claims, Benefits and Expenses:
Net incurred claims and benefits	1,137				1,039				(9	)		2,233				2,074				(8	)
Policyholders' dividends	3				4				25			6				5				(20	)
Amortization of deferred acquisition costs	329				301				(9	)		649				588				(10	)
Other insurance related expenses	220				212				(4	)		450				428				(5	)
Other expenses	68				60				(13	)		138				117				(18	)
Total claims, benefits and expenses	1,757				1,616				(9	)		3,476				3,212				(8	)
Operating income (loss) before income tax	395				243				63			792				661				20
Income tax (expense) benefit on operating income (loss)	(137		)		(80		)		(71	)		(277		)		(227		)		(22	)
Net operating income (loss)	258				163				58			515				434				19
Net realized investment gains (losses), pre-tax	(17		)		21				(181	)		(9		)		40				(123	)
Income tax (expense) benefit on net realized investment gains (losses)	5				(7		)		171			3				(13		)		123
Net realized investment gains (losses)	(12		)		14				(186	)		(6		)		27				(122	)
Net income (loss)	$	246			$	177			39		%	$	509			$	461			10		%
PRODUCTION METRICS
Rate	8			%	6			%				8			%	5			%
Retention	77			%	80			%				79			%	81			%
New Business (Specialty and Commercial only)	$	284			$	306						$	592			$	637
FINANCIAL RATIOS
Loss & LAE	68.4			%	67.9			%				67.9			%	68.2			%
Acquisition expense	19.5				18.9							19.4				18.9
Underwriting expense	13.4				14.6							14.0				14.5
Expense	32.9				33.5							33.4				33.4
Dividend	0.2				0.3							0.2				0.2
Combined ratio	101.5			%	101.7			%				101.5			%	101.8			%
RATIO IMPACTS
Impact of catastrophes
Pretax net accident year catastrophe losses incurred	$	65			$	68						$	104			$	96
Impact on loss & LAE ratio	3.9			%	4.4			%				3.2			%	3.2			%
Impact of development & other
Pretax net prior year development: (favorable) / unfavorable
Prior year loss & ALAE reserve development	$	(2	)		$	(48	)					$	(29	)		$	(68	)
Prior year premium development	(8		)		(24		)					(22		)		(50		)
Other ⁽¹⁾	6				5							12				11
Total development & other	$	(4	)		$	(67	)					$	(39	)		$	(107	)
Impact of development & other on loss & LAE ratio	—			%	(3.9		)	%				(1.0		)	%	(3.1		)	%

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

CNA FINANCIAL CORPORATION

Financial Supplement

CNA Specialty - Results of Operations



PERIODS ENDED JUNE 30	Three Months								Fav / (Unfav) % Change			Six Months								Fav / (Unfav) % Change
(In millions)	2013				2012				Fav / (Unfav) % Change			2013				2012				Fav / (Unfav) % Change
Gross written premiums	$	1,295			$	1,186			9		%	$	2,612			$	2,459			6		%
Net written premiums	756				718				5			1,559				1,483				5
Operating revenues:
Net earned premiums	746				719				4			1,469				1,425				3
Net investment income	151				112				35			321				287				12
Other revenues	63				57				11			123				113				9
Total operating revenues	960				888				8			1,913				1,825				5
Claims, Benefits and Expenses:
Net incurred claims and benefits	452				448				(1	)		917				916				—
Policyholders' dividends	1				1				—			2				(1		)		N/M
Amortization of deferred acquisition costs	156				154				(1	)		306				302				(1	)
Other insurance related expenses	65				77				16			136				149				9
Other expenses	60				50				(20	)		114				100				(14	)
Total claims, benefits and expenses	734				730				(1	)		1,475				1,466				(1	)
Operating income (loss) before income tax	226				158				43			438				359				22
Income tax (expense) benefit on operating income (loss)	(78		)		(52		)		(50	)		(150		)		(121		)		(24	)
Net operating income (loss)	148				106				40			288				238				21
Net realized investment gains (losses), pre-tax	(6		)		8				(175	)		(3		)		16				(119	)
Income tax (expense) benefit on net realized investment gains (losses)	2				(2		)		N/M			1				(4		)		125
Net realized investment gains (losses)	(4		)		6				(167	)		(2		)		12				(117	)
Net income (loss)	$	144			$	112			29		%	$	286			$	250			14		%
PRODUCTION METRICS
Rate	7			%	5			%				7			%	4			%
Retention	84			%	86			%				85			%	86			%
New Business	$	99			$	99						$	199			$	209
FINANCIAL RATIOS
Loss & LAE	60.6			%	62.2			%				62.4			%	64.2			%
Acquisition expense	19.4				20.4							19.6				20.0
Underwriting expense	10.3				11.7							10.5				11.7
Expense	29.7				32.1							30.1				31.7
Dividend	0.1				0.1							0.2				(0.1		)
Combined ratio	90.4			%	94.4			%				92.7			%	95.8			%
RATIO IMPACTS
Impact of catastrophes
Pretax net accident year catastrophe losses incurred	$	6			$	3						$	7			$	5
Impact on loss & LAE ratio	0.7			%	0.4			%				0.5			%	0.3			%
Impact of development & other
Pretax net prior year development: (favorable) / unfavorable
Prior year loss & ALAE reserve development	$	(41	)		$	(35	)					$	(56	)		$	(41	)
Prior year premium development	(5		)		(5		)					(13		)		(14		)
Other ⁽¹⁾	—				—							—				—
Total development & other	$	(46	)		$	(40	)					$	(69	)		$	(55	)
Impact of development & other on loss & LAE ratio	(5.9		)	%	(5.3		)	%				(4.5		)	%	(3.6		)	%

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

CNA FINANCIAL CORPORATION

Financial Supplement

CNA Commercial - Results of Operations



PERIODS ENDED JUNE 30	Three Months								Fav / (Unfav) % Change			Six Months								Fav / (Unfav) % Change
(In millions)	2013				2012				Fav / (Unfav) % Change			2013				2012				Fav / (Unfav) % Change
Gross written premiums	$	950			$	964			(1	)	%	$	1,910			$	1,851			3		%
Net written premiums	826				889				(7	)		1,744				1,732				1
Operating revenues:
Net earned premiums	840				809				4			1,677				1,612				4
Net investment income	211				151				40			461				416				11
Other revenues	65				11				N/M			75				20				N/M
Total operating revenues	1,116				971				15			2,213				2,048				8
Claims, Benefits and Expenses:
Net incurred claims and benefits	644				591				(9	)		1,244				1,158				(7	)
Policyholders' dividends	2				3				33			4				6				33
Amortization of deferred acquisition costs	153				147				(4	)		302				286				(6	)
Other insurance related expenses	142				135				(5	)		285				279				(2	)
Other expenses	2				10				80			11				17				35
Total claims, benefits and expenses	943				886				(6	)		1,846				1,746				(6	)
Operating income (loss) before income tax	173				85				104			367				302				22
Income tax (expense) benefit on operating income (loss)	(61		)		(28		)		(118	)		(130		)		(106		)		(23	)
Net operating income (loss)	112				57				96			237				196				21
Net realized investment gains (losses), pre-tax	(12		)		13				(192	)		(8		)		24				(133	)
Income tax (expense) benefit on net realized investment gains (losses)	4				(5		)		180			3				(9		)		133
Net realized investment gains (losses)	(8		)		8				N/M			(5		)		15				(133	)
Net income (loss)	$	104			$	65			60		%	$	232			$	211			10		%
PRODUCTION METRICS
Rate	9			%	7			%				9			%	6			%
Retention	75			%	77			%				76			%	77			%
New Business	$	185			$	207						$	393			$	428
FINANCIAL RATIOS
Loss & LAE	76.5			%	72.9			%				74.1			%	71.8			%
Acquisition expense	18.9				17.5							18.6				17.9
Underwriting expense	16.0				17.3							16.4				17.1
Expense	34.9				34.8							35.0				35.0
Dividend	0.3				0.4							0.2				0.4
Combined ratio	111.7			%	108.1			%				109.3			%	107.2			%
RATIO IMPACTS
Impact of catastrophes
Pretax net accident year catastrophe losses incurred	$	59			$	65						$	97			$	91
Impact on loss & LAE ratio	7.1			%	8.0			%				5.8			%	5.6			%
Impact of development & other
Pretax net prior year development: (favorable) / unfavorable
Prior year loss & ALAE reserve development	$	27			$	(13	)					$	16			$	(27	)
Prior year premium development	(5		)		(19		)					(15		)		(36		)
Other ⁽¹⁾	6				5							12				11
Total development & other	$	28			$	(27	)					$	13			$	(52	)
Impact of development & other on loss & LAE ratio	3.4			%	(2.8		)	%				1.0			%	(2.6		)	%

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

CNA FINANCIAL CORPORATION

Financial Supplement

Hardy - Results of Operations



PERIODS ENDED JUNE 30	Three Months				Six Months
(In millions)	2013				2013
Gross written premiums	$	147			$	254
Net written premiums	138				193
Operating revenues:
Net earned premiums	76				140
Net investment income	1				2
Other revenues	(1		)		—
Total operating revenues	76				142
Claims, Benefits and Expenses:
Net incurred claims and benefits	41				72
Policyholders' dividends	—				—
Amortization of deferred acquisition costs	20				41
Other insurance related expenses	13				29
Other expenses	6				13
Total claims, benefits and expenses	80				155
Operating income (loss) before income tax	(4		)		(13		)
Income tax (expense) benefit on operating income (loss)	2				3
Net operating income (loss)	(2		)		(10		)
Net realized investment gains (losses), pre-tax	1				2
Income tax (expense) benefit on net realized investment gains (losses)	(1		)		(1		)
Net realized investment gains (losses)	—				1
Net income (loss)	$	(2	)		$	(9	)
PRODUCTION METRICS
Rate	(1		)	%	—			%
Retention	64			%	67			%
FINANCIAL RATIOS
Loss & LAE	53.9			%	51.5			%
Acquisition expense	26.1				28.2
Underwriting expense	18.4				21.9
Expense	44.5				50.1
Dividend	—				—
Combined ratio	98.4			%	101.6			%
RATIO IMPACTS
Impact of catastrophes
Pretax net accident year catastrophe losses incurred	$	—			$	—
Impact on loss & LAE ratio	—			%	—			%
Impact of development & other
Pretax net prior year development: (favorable) / unfavorable
Prior year loss & ALAE reserve development	$	12			$	11
Prior year premium development	2				6
Other ⁽¹⁾	—				—
Total development & other	$	14			$	17
Impact of development & other on loss & LAE ratio	17.4			%	10.0			%

(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 - Results of Operations



PERIODS ENDED JUNE 30	Three Months						Fav / (Unfav) % Change			Six Months						Fav / (Unfav) % Change
(In millions)	2013			2012			Fav / (Unfav) % Change			2013			2012			Fav / (Unfav) % Change
Operating revenues:
Net earned premiums	$	138		$	139		(1	)	%	$	279		$	280		—		%
Net investment income	207			201			3			411			399			3
Other revenues	1			16			(94	)		5			14			(64	)
Total operating revenues	346			356			(3	)		695			693			—
Claims, Benefits and Expenses:
Net incurred claims and benefits	380			323			(18	)		705			659			(7	)
Policyholders' dividends	3			2			(50	)		4			4			—
Amortization of deferred acquisition costs	6			8			25			14			16			13
Other insurance related expenses	33			36			8			66			71			7
Other expenses	2			4			50			7			10			30
Total claims, benefits and expenses	424			373			(14	)		796			760			(5	)
Operating income (loss) before income tax	(78		)	(17		)	N/M			(101		)	(67		)	(51	)
Income tax (expense) benefit on operating income (loss)	42			20			110			65			51			27
Net operating income (loss)	(36		)	3			N/M			(36		)	(16		)	(125	)
Net realized investment gains (losses), pre-tax	—			4			N/M			14			17			(18	)
Income tax (expense) benefit on net realized investment gains (losses)	—			(1		)	N/M			(5		)	(6		)	17
Net realized investment gains (losses)	—			3			N/M			9			11			(18	)
Net income (loss)	$	(36	)	$	6		N/M		%	$	(27	)	$	(5	)	N/M		%

CNA FINANCIAL CORPORATION

Financial Supplement

Corporate & Other Non-Core - Results of Operations



PERIODS ENDED JUNE 30	Three Months						Fav / (Unfav) % Change			Six Months						Fav / (Unfav) % Change
(In millions)	2013			2012			Fav / (Unfav) % Change			2013			2012			Fav / (Unfav) % Change
Operating revenues:
Net earned premiums	$	—		$	1		N/M		%	$	(1	)	$	—		N/M		%
Net investment income	8			6			33			16			16			—
Other revenues	1			2			(50	)		4			7			(43	)
Total operating revenues	9			9			—			19			23			(17	)
Claims, Benefits and Expenses:
Net incurred claims and benefits	(2		)	(20		)	(90	)		2			(13		)	(115	)
Policyholders' dividends	—			—			N/M			—			—			N/M
Amortization of deferred acquisition costs	—			—			N/M			—			—			N/M
Other insurance related expenses	—			—			N/M			(1		)	(1		)	—
Other expenses	38			47			19			84			95			12
Total claims, benefits and expenses	36			27			(33	)		85			81			(5	)
Operating income (loss) before income tax	(27		)	(18		)	(50	)		(66		)	(58		)	(14	)
Income tax (expense) benefit on operating income (loss)	9			4			125			22			18			22
Net operating income (loss)	(18		)	(14		)	(29	)		(44		)	(40		)	(10	)
Net realized investment gains (losses), pre-tax	3			(3		)	N/M			9			1			N/M
Income tax (expense) benefit on net realized investment gains (losses)	(1		)	—			N/M			(3		)	(1		)	N/M
Net realized investment gains (losses)	2			(3		)	167			6			—			N/M
Net income (loss)	$	(16	)	$	(17	)	6		%	$	(38	)	$	(40	)	5		%

CNA FINANCIAL CORPORATION

Financial Supplement

Components of Pretax Net Investment Income



	Consolidated
PERIODS ENDED JUNE 30	Three Months							Six Months
(In millions)	2013			2012				2013			2012
Fixed maturity securities	$	498		$	505			$	997		$	1,021
Limited partnership investments	79			(35		)		210			95
Other	1			—				4			2
Net investment income	$	578		$	470			$	1,211		$	1,118
Average amortized cost of fixed maturity securities portfolio	$	38,571		$	37,794			$	38,496		$	37,742
Effective income yield for the fixed maturity securities portfolio, pretax ⁽¹⁾	5.2		%	5.3			%	5.2		%	5.4		%
Effective income yield for the fixed maturity securities portfolio, after tax ⁽¹⁾	3.6		%	3.7			%	3.6		%	3.7		%



	Property & Casualty and Corporate and Other Non-Core
PERIODS ENDED JUNE 30	Three Months							Six Months
(In millions)	2013			2012				2013			2012
Fixed maturity securities	$	289		$	303			$	585		$	621
Limited partnership investments	78			(35		)		209			95
Other	4			1				6			3
Net investment income	$	371		$	269			$	800		$	719
Average amortized cost of fixed maturity securities portfolio	$	25,331		$	25,538			$	25,410		$	25,622
Effective income yield for the fixed maturity securities portfolio, pretax ⁽¹⁾	4.6		%	4.8			%	4.6		%	4.9		%
Effective income yield for the fixed maturity securities portfolio, after tax ⁽¹⁾	3.1		%	3.2			%	3.1		%	3.3		%



	Life & Group Non-Core
PERIODS ENDED JUNE 30	Three Months								Six Months
(In millions)	2013				2012				2013				2012
Fixed maturity securities	$	209			$	202			$	412			$	400
Limited partnership investments	1				—				1				—
Other	(3		)		(1		)		(2		)		(1		)
Net investment income	$	207			$	201			$	411			$	399
Average amortized cost of fixed maturity securities portfolio	$	13,240			$	12,256			$	13,086			$	12,120
Effective income yield for the fixed maturity securities portfolio, pretax ⁽¹⁾	6.3			%	6.6			%	6.3			%	6.6			%
Effective income yield for the fixed maturity securities portfolio, after tax ⁽¹⁾	4.5			%	4.7			%	4.5			%	4.7			%

(1) Annualized yields based on the average amortized cost of the fixed maturity securities portfolio.

CNA FINANCIAL CORPORATION

Financial Supplement

Statutory Data - Preliminary



PERIODS ENDED JUNE 30	Three Months											Six Months
Income Statements	(Preliminary) 2013								Fav / (Unfav) % Change			(Preliminary) 2013								Fav / (Unfav) % Change
(In millions)	(Preliminary) 2013				2012				Fav / (Unfav) % Change			(Preliminary) 2013				2012				Fav / (Unfav) % Change
Combined Continental Casualty Companies
Gross written premiums	$	2,196			$	2,111			4		%	$	4,409			$	4,221			4		%
Net written premiums	1,532				1,571				(2	)		3,195				3,134				2

Net earned premiums	1,422				1,371				4			2,789				2,677				4
Claim and claim adjustment expenses	1,272				1,128				(13	)		2,443				2,274				(7	)
Acquisition expenses	265				265				—			555				535				(4	)
Underwriting expenses	207				223				7			417				434				4
Policyholders' dividends	2				3				33			4				3				(33	)
Underwriting income (loss)	(324		)		(248		)		(31	)		(630		)		(569		)		(11	)
Net investment income	463				487				(5	)		895				915				(2	)
Other income (loss)	80				2				N/M			85				8				N/M
Income tax (expense) benefit	(12		)		(34		)		65			(15		)		(48		)		69
Net realized gains (losses)	(49		)		21				N/M			(35		)		52				(167	)
Net income (loss)	$	158			$	228			(31	)	%	$	300			$	358			(16	)	%

Financial Ratios
Loss and LAE	89.5			%	82.3			%				87.6			%	84.9			%
Acquisition expense	17.3				16.9							17.4				17.1
Underwriting expense	13.4				14.2							13.1				13.8
Expense	30.7				31.1							30.5				30.9
Dividend	0.2				0.2							0.1				0.1
Combined ratio	120.4			%	113.6			%				118.2			%	115.9			%



SUPPLEMENTAL STATUTORY DATA	(Preliminary) June 30, 2013		December 31, 2012
(In millions)	(Preliminary) June 30, 2013		December 31, 2012
Combined Continental Casualty Companies
Statutory surplus ⁽¹⁾	$	10,187	$	9,998
Life Company
Statutory surplus	$	582	$	556

(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
	2013 YTD Evaluated at 6/30/13			2012 FY Evaluated at 12/31/12			2012 FY Evaluated at 6/30/13
Gross Accident Year	58.7		%	59.7		%	58.8	%
Impact of Reinsurance	8.2			8.6			9.5
Net Accident Year	66.9			68.3			68.3	%
Impact of Development and Other ⁽¹⁾	(4.5	)		(5.1	)
Net Calendar Year	62.4		%	63.2		%



	CNA Commercial
	2013 YTD Evaluated at 6/30/13		2012 FY Evaluated at 12/31/12			2012 FY Evaluated at 6/30/13
Gross Accident Year	70.6	%	77.6		%	77.7	%
Impact of Reinsurance	2.5		1.9			1.6
Net Accident Year	73.1		79.5			79.3	%
Impact of Development and Other⁽¹⁾	1.0		(1.6	)
Net Calendar Year	74.1	%	77.9		%



	Hardy ⁽²⁾
	2013 YTD Evaluated at 6/30/13		2012 FY Evaluated at 12/31/12			2012 FY Evaluated at 6/30/13
Gross Accident Year	40.7	%	76.6		%	66.3		%
Impact of Reinsurance	0.8		(12.3	)		(2.3	)
Net Accident Year	41.5		64.3			64.0		%
Impact of Development and Other⁽¹⁾	10.0		(4.0	)
Net Calendar Year	51.5	%	60.3		%



	P&C Operations
	2013 YTD Evaluated at 6/30/13			2012 FY Evaluated at 12/31/12			2012 FY Evaluated at 6/30/13
Gross Accident Year	62.5		%	67.4		%	66.7	%
Impact of Reinsurance	6.4			6.7			7.3
Net Accident Year	68.9			74.1			74.0	%
Impact of Development and Other ⁽¹⁾	(1.0	)		(3.3	)
Net Calendar Year	67.9		%	70.8		%

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

(2) Reflects premiums and losses since date of acquisition.

CNA FINANCIAL CORPORATION

Financial Supplement

Net Carried Life & Group Non-Core Policyholder Reserves



June 30, 2013
(In millions)	Claim and claim adjustment expenses		Future policy benefits		Policyholders' funds		Separate account business
Long term care	$	1,773	$	7,123	$	—	$	—
Payout annuities	628		1,997		—		—
Institutional markets	1		12		75		247
Other	42		4		—		—
Total	$	2,444	$	9,136	$	75	$	247

The reserve amounts above are net of $1,257 million of ceded reserves and exclude $110 million of claim and claim adjustment expenses and $906 million of future policy benefits relating to Shadow Adjustments. To the extent that unrealized gains on fixed income securities supporting long term care products and payout annuity contracts would result in a premium deficiency if those gains were realized, a related decrease in Deferred acquisition costs and/or increase in Insurance reserves are recorded, net of tax, as a reduction of net unrealized gains through Other comprehensive income (loss) (Shadow Adjustments).



December 31, 2012
(In millions)	Claim and claim adjustment expenses		Future policy benefits		Policyholders' funds		Separate account business
Long term care	$	1,683	$	6,879	$	—	$	—
Payout annuities	637		2,008		—		—
Institutional markets	1		12		100		312
Other	45		4		—		—
Total	$	2,366	$	8,903	$	100	$	312

The reserve amounts above are net of $1,272 million of ceded reserves and exclude $162 million of claim and claim adjustment expenses and $1,812 million of future policy benefits relating to Shadow Adjustments.

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