8-K

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) May 2, 2006

CNA FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

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

CNA Center, Chicago, Illinois	60685
(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):

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

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

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

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

Page 1 of 3

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On May 2, 2006, the Registrant issued a press release and posted a financial supplement providing information on its results of operations for the first quarter 2006. 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 are 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

(c) Exhibits:

Exhibit No.	Description
99.1	CNA Financial Corporation press release, issued May 2, 2006, providing information on the first quarter 2006 results of operations.
99.2	CNA Financial Corporation financial supplement, posted May 2, 2006, providing supplemental financial information for the first quarter 2006.

Page 2 of 3

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)

/s/ D. Craig Mense

(Signature)

By: D. Craig Mense

Its: Executive Vice President and

Chief Financial Officer

Dated: May 2, 2006 

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT:
MEDIA:	ANALYSTS:
Katrina W. Parker, 312/822-5167	Cathleen R. Marine, 312/822-4159
Charles M. Boesel, 312/822-2592	David C. Adams, 312/822-2183
	John J. Hanrahan, 312/822-6586

CNA FINANCIAL ANNOUNCES
1st QUARTER 2006 RESULTS

CHICAGO, May 2, 2006 -— CNA Financial Corporation (NYSE: CNA) today announced first quarter of 2006 results, which included the following items:

• Net income for the first quarter of 2006 of $229 million as compared with $185 million for the same period in 2005.

• Net operating income from continuing operations for the first quarter of 2006 of $234 million as compared with $192 million for the same period in 2005.

• Property & Casualty Operations combined ratio of 96.9%.

• Catastrophe losses of $8 million after-tax related to first quarter tornadoes.

	Results for the Three Months
	Ended March 31
($ millions)	2006			2005
				(Restated)
Net operating income (a)	$	234		$	192
Net realized investment gains (losses)		1			(14	)
Net income from continuing operations		235			178
Net (loss) income from discontinued operations		(6	)		7
Net income	$	229		$	185

(a) 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 2005 Form 10-K for further discussion of this measure.

Page 1 of 7

Per Share Results Available to Common Stockholders
	Results for the Three Months
	Ended March 31
	2006			2005
				(Restated)
Net income from continuing operations (a)	$	0.84		$	0.63
Net (loss) income from discontinued operations		(0.02	)		0.03
Net income	$	0.82		$	0.66

(a) The three months ended March 31, 2006 and 2005 per share results available to common stockholders from continuing operations are reduced by $19 million and $17 million, or $0.07 per share and $0.07 per share, of undeclared but accumulated preferred stock dividends.

Net operating income from continuing operations for the three months ended March 31, 2006 increased $42 million as compared with the same period in 2005. This increase was primarily driven by increased net investment income and lower expenses, as well as a decrease in unfavorable net prior year development. These favorable items were partially offset by the impact of modestly higher current accident year loss ratios and increased catastrophe losses. Catastrophe losses of $8 million after-tax in the first quarter of 2006 related primarily to tornadoes, as compared to $1 million of catastrophes after-tax in the same period of 2005. The Property & Casualty Operations produced a combined ratio of 96.9% and 99.0% in the first quarter of 2006 and 2005, respectively.

“We are pleased to have delivered a strong first quarter, financially and operationally,” said Stephen W. Lilienthal, Chairman and Chief Executive Officer of CNA Financial Corporation. “Along with a 24% improvement in net income, our core Property & Casualty Operations’ combined ratio improved 2.1 points. We continued our focus on disciplined pricing, retention of quality renewals, targeted new business growth and control of our expenses. In addition, investment income was a major contributor to our first quarter results.”

Net income for the three months ended March 31, 2006 increased $44 million as compared with the same period in 2005. This increase was due to the favorable items mentioned above, as well as increased realized investment results, partially offset by unfavorable results from discontinued operations.

Net realized investment results improved $15 million for the three months ended March 31, 2006 as compared with the same period in 2005. First quarter of 2005 net realized investment losses included an other-than-temporary impairment loss of $9 million related to loans under a credit facility to a national contractor.

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Segment Results for the Three Months Ended March 31, 2006
	Standard		Specialty		Total P&C		Life & Group			Corporate & Other
($ millions)	Lines		Lines		Ops.		Non-Core			Non-Core			Total
Net operating income (loss)	$	133	$	114	$	247	$	(3	)	$	(10	)	$	234
Net realized investment gains (losses)		9		2		11		(7	)		(3	)		1
Net income (loss) from continuing operations	$	142	$	116	$	258	$	(10	)	$	(13	)	$	235

Segment Results for the Three Months Ended March 31, 2005
	Standard			Specialty		Total P&C			Life & Group			Corporate & Other
($ millions)	Lines			Lines		Ops.			Non-Core			Non-Core			Total
Net operating income	$	101		$	79	$	180		$	1		$	11		$	192
Net realized investment (losses) gains		(8	)		3		(5	)		(3	)		(6	)		(14	)
Net income (loss) from continuing operations	$	93		$	82	$	175		$	(2	)	$	5		$	178

Property & Casualty Operations Gross Written Premiums
	Three months ended March 31
($ millions)	2006		2005
Standard Lines	$	1,561	$	1,516
Specialty Lines		825		769
Total P&C Operations	$	2,386	$	2,285

Property & Casualty Operations Net Written Premiums
	Three months ended March 31
($ millions)	2006		2005
Standard Lines	$	1,110	$	1,171
Specialty Lines		648		594
Total P&C Operations	$	1,758	$	1,765

Property & Casualty Calendar Year Loss Ratios
	Three months ended March 31
	2006			2005
Standard Lines		71.8	%		71.0	%
Specialty Lines		59.3	%		62.3	%
Total P&C Operations		67.2	%		68.1	%
Total P&C Companies (a)		75.2	%		74.6	%

(a) P&C Companies includes Standard Lines, Specialty Lines and P&C business written in Life and Group Non-Core and Corporate and Other Non-Core, including CNA Re and asbestos, environmental pollution and mass tort exposures.

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Property & Casualty Calendar Year Combined Ratios
	Three months ended March 31
	2006			2005
Standard Lines		103.4	%		103.7	%
Specialty Lines		85.6	%		89.4	%
Total P&C Operations		96.9	%		99.0	%
Total P&C Companies (a)		106.3	%		106.4	%

(a) P&C Companies includes Standard Lines, Specialty Lines and P&C business written in Life and Group Non-Core and Corporate and Other Non-Core, including CNA Re and asbestos, environmental pollution and mass tort exposures.

Property & Casualty Gross Accident Year Loss Ratios
	Accident year 2006			Accident year 2005			Accident year 2005
	evaluated at			evaluated at			evaluated at
	March 31, 2006			December 31, 2005			March 31, 2006
Standard Lines		65.8	%		76.4	%		75.8	%
Specialty Lines		60.0	%		63.7	%		62.8	%
Total P&C Operations		63.8	%		72.2	%		71.5	%

Property & Casualty Net Accident Year Loss Ratios
	Accident year 2006			Accident year 2005			Accident year 2005
	evaluated at			evaluated at			evaluated at
	March 31, 2006			December 31, 2005			March 31, 2006 (a)
Standard Lines		68.2	%		76.3	%		75.8	%
Specialty Lines		59.2	%		63.4	%		62.5	%
Total P&C Operations		64.8	%		71.6	%		70.9	%

(a) The 2005 net accident year loss ratio evaluated at March 31, 2006 includes 11 points, 1 point, and 7 points related to catastrophe losses for Standard Lines, Specialty Lines, and P&C Operations.

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Business Operating Highlights

Standard Lines includes standard property and casualty coverages sold to small and middle market commercial businesses primarily through an independent agency distribution system. This business also includes excess and surplus lines, as well as insurance and risk management products sold to large corporations.

• Net written premiums decreased $61 million for the first quarter of 2006 as compared with the same period in 2005. Standard Lines retention improved 9 points to 81% while rates, on average, decreased 1% during the first quarter of 2006.

• Net operating income increased $32 million for the first quarter of 2006 as compared with the same period in 2005. This increase was primarily driven by an increase in net investment income and a decrease in unfavorable net prior year development. These favorable items were partially offset by decreased current accident year results and increased catastrophe losses.

• Net income for the first quarter of 2006 increased $49 million as compared with the same period in 2005. This improvement was attributable to increased net operating income and increased net realized investment gains.

Specialty Lines provides a broad array of professional, financial and specialty property and casualty products and services.

• Net written premiums increased $54 million for the first quarter of 2006 as compared with the same period in 2005. Specialty Lines retention remained flat at 87% while rates, on average, increased 1% during the first quarter of 2006.

• Net income increased $34 million and net operating income increased $35 million for the first quarter of 2006 as compared with the same period in 2005. This increase was primarily driven by an absence of unfavorable net prior year development in 2006 and increased net investment income.

Life and Group Non-Core primarily includes the results of the life and group lines of business that have either been sold or placed in run-off.

• Net earned premiums decreased $3 million to $163 million for the first quarter of 2006 as compared with the same period in 2005. Net earned premiums relate primarily to the group and individual long term care businesses.

• Net results for the first quarter of 2006 decreased $8 million as compared with the same period in 2005. The decrease in net results is primarily due to a decline in results for life settlement contracts, an increase in net realized investment losses and the absence of income related to agreements with the buyers of sold businesses. These unfavorable items were partially offset by results in the pension deposit business.

Page 5 of 7

Corporate and Other Non-Core contains certain corporate expenses such as interest on corporate debt, and losses and expenses related to the centralized adjusting and settlement of asbestos, environmental pollution and mass tort claims (APMT). In addition, this segment includes the results of certain property and casualty insurance run-off operations, including CNA Re.

• Net results for the first quarter of 2006 decreased $18 million as compared with the same period in 2005. The decrease in results was primarily due to increased indirect expenses, the discontinuation of royalty income related to a sold business, a loss related to a commutation and an increase in current accident year losses related to mass torts. These items were partially offset by a decrease in unfavorable net prior year development, decreased interest costs on corporate debt and increased net investment income.

Net Investment Income

Pretax net investment income for the first quarter of 2006 increased $164 million over the same period of 2005. This was due to improved results across fixed maturity securities and short-term investments, which reflects improved period over period yields. Also affecting results are increases in investment income from the trading portfolio and reduced interest expense on funds withheld and other deposits, reflecting commutations of significant reinsurance contracts in 2005. The increase in trading portfolio income of $72 million was largely offset by a corresponding increase in the policyholders’ funds reserves supported by the trading portfolio.

About the Company

CNA is the country’s seventh largest commercial insurance writer and the 14^th largest property and casualty company. CNA’s insurance products include standard commercial lines, specialty lines, surety, marine and other property and casualty coverages. CNA’s services include risk management, information services, underwriting, risk control and claims administration. For more information, please visit CNA at www.cna.com. CNA is a registered service mark, trade name and domain name of CNA Financial Corporation.

Page 6 of 7

Conference Call and Webcast Information:

A conference call for investors and the professional investment community will be held from 10:00 a.m. to 11:00 a.m. ET today. On the conference call will be Stephen W. Lilienthal, Chairman and Chief Executive Officer of CNA Financial Corporation, and other members of senior management. Participants can access the call by dialing (877) 502-9274 or for international callers (913) 981-5584. The call will also be broadcast live on the internet at http://investor.cna.com or you may go to the investor relations pages of the CNA Website (www.cna.com) for further details.

The call is available to the media, but questions will be restricted to investors and the professional investment community. A taped replay of the call will be available on CNA’s website through May 9, 2006. The replay can also be accessed by dialing (888) 203-1112 or for international callers (719) 457-0820 and using passcode 5504613. Financial supplement information related to the first quarter results is available on the investor relations pages of the CNA Website or by contacting David C. Adams at (312) 822-2183.

FORWARD-LOOKING STATEMENT

This press release includes statements which relate to anticipated future events (forward-looking statements) rather than actual present conditions or historical events. You can identify forward-looking statements because generally they 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 please refer to CNA’s filings 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. 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.

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

This press release may also contain financial measures that are not in accordance with GAAP. For reconciliations of non-GAAP measures to the most comparable GAAP measures, refer to this press release and the financial supplement posted on the Company’s website.

# # #

Page 7 of 7

EX-99.2

EXHIBIT 99.2

CNA Financial Corporation

Supplemental Financial Information

March 31, 2006

CNA Financial Corporation
Table of Contents
March 31, 2006

	Page
Supplemental Financial Information	i-ii
Statements of Operations		1
Components of Net Income and Per Share Data		2
Selected Balance Sheets Data and Statements of Cash Flows Data		3
Claim & Claim Adjustment Expense Reserve Data		4
Claim & Claim Adjustment Expense Reserve Rollforward		5
Investments by Segment Aggregation		6
Property & Casualty Results of Operations		7
Life & Group Non-Core and Corporate & Other Non-Core Segments Results of Operations		8
Property & Casualty Operations and Corporate & Other Non-Core Segment — Catastrophe Losses		9
Analysis of Pretax Net Investment Income		10
Statutory Data — Preliminary		11
Property & Casualty Operations Loss and LAE Ratio Analysis		12
Asbestos Summary by Policyholder Category		13

CNA Financial Corporation

Supplemental Financial Information

DEFINITIONS AND PRESENTATION

• P&C Operations includes Standard Lines and Specialty Lines.

• Life & Group Non-Core segment primarily includes the results of the life and group lines of business that have been sold or placed in run-off.

• Corporate & Other Non-Core segment includes the results of certain property and casualty lines of business placed in run-off, including CNA Re. This segment also includes the results related to the centralized adjusting and settlement of asbestos, environmental pollution and mass tort (APMT) claims and interest expense on corporate debt.

• Property and Casualty Companies includes Standard Lines, Specialty Lines and P&C business written in the Life & Group Non-Core and Corporate & Other Non-Core segments.

• 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 2005 Form 10-K for further discussion of this measure.

• In evaluating the results of the Standard Lines and Specialty Lines, 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 (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 underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums. The dividend ratio is the ratio of dividends incurred to net earned premiums. The combined ratio is the sum of the loss, expense and dividend ratios.

• Limited partnerships (LPs) are a relatively small portion of CNA’s overall investment portfolio. The majority of the LPs invest in a substantial number of securities that are readily marketable. CNA is primarily a passive investor in such partnerships and does not have influence over the partnerships’ management, who are committed to operate them according to established guidelines and strategies. These strategies may include the use of leverage and hedging techniques that potentially introduce more volatility and risk to the partnerships.

• All amounts are in millions, except for per share and ratio information.

• Certain immaterial differences are due to rounding.

i

CNA Financial Corporation

Supplemental Financial Information

Restatement for Discontinued Operations

The Company has restated its Consolidated Statement of Operations for the three months ended March 31, 2005. A review of discontinued operations completed in February 2006 identified an overstatement of the net assets of these discontinued operations and errors in accounting for the periodic results of these operations. The Company did not have an effectively designed control process in place to ensure adequate oversight, analysis, reconciliation, documentation and periodic evaluation of the results and balances that comprise the net assets of businesses reported as discontinued operations. There was also a lack of understanding of subsidiary ledger detail which contributed to the Company’s failure to eliminate intercompany activity within discontinued operations and between continuing and discontinued operations. As a result, the balances related to discontinued operations were incorrectly established in the Company’s current general ledger system in 1997 in connection with a general ledger conversion, creating an overstatement of the reported net assets of discontinued operations. In addition, the Company’s evaluation of the periodic results of discontinued operations was ineffective. The correction of the elimination issue noted above caused the historical results of discontinued operations to change, requiring current evaluation of the revised periodic results for reporting purposes. Further, in light of the impact of the elimination corrections, the Company reviewed its historical process to evaluate the results of discontinued operations and determined that process did not address recorded loss reserves at all consolidating levels for discontinued operations. Therefore, the Company determined that it was appropriate to recognize the impact of the revised historical periodic income or loss of discontinued operations.

Restatement for Condensed Consolidated Statement of Cash Flows

The Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2005 has been restated to reflect the following:

• Net purchases and sales of trading securities and changes in the net receivable/payable from unsettled investment purchases and sales related to trading securities, previously classified within investing activities, have been reclassified to cash flows from operating activities.

• Cash flows from equity method investees were reclassified to distinguish between return on investments, which are reflected within operating cash flows, and return of investments, which are reflected within investing cash flows. Previously, all amounts were reflected within investing cash flows.

• Deposits and withdrawals related to investment contract products issued by the Company have been reflected within financing cash flows. Previously, amounts related to certain investment contracts were reflected within operating cash flows.

• The impact of cumulative translation adjustment, previously reflected within investing activities, is now classified within operating activities.

The restatements related to cash flows had no impact on the total change in cash from continuing operations within the Condensed Consolidated Statement of Cash Flows.

Additionally, the Company has revised its Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2005 to separately disclose the operating, investing and financing portions of the cash flows attributable to discontinued operations, as well as to include the cash balance related to discontinued operations in the Condensed Consolidated Statement of Cash Flows.

ii

CNA FINANCIAL CORPORATION
Financial Supplement
Statements of Operations

PERIOD ENDED MARCH 31	Three Months
							Fav /
							(Unfav)
(In millions)	2006			2005			% Change
STATEMENTS OF OPERATIONS
Revenues:
Net earned premiums	$	1,869		$	1,899			(2	)%
Net investment income		570			406			40
Realized investment gains (losses), net of participating policyholders’ and minority interests		9			(19	)		147
Other revenues		53			78			(32	)
Total revenues		2,501			2,364			6
Claims, benefits and expenses:
Insurance claims and policyholders’ benefits		1,492			1,434			(4	)
Amortization of deferred acquisition costs		370			378			2
Other operating expenses		257			274			6
Interest		30			37			19
Total claims, benefits and expenses		2,149			2,123			(1	)
Income before income tax and minority interest		352			241			46
Income tax expense		(108	)		(56	)		(93	)
Minority interest		(9	)		(7	)		(29	)
Income from continuing operations		235			178			32
Income (loss) from discontinued operations, net of tax		(6	)		7			(186	)
Net income	$	229		$	185			24	%

1

CNA FINANCIAL CORPORATION
Financial Supplement
Components of Net Income and Per Share Data

PERIOD ENDED MARCH 31	Three Months
							Fav /
							(Unfav)
(In millions, except per share data)	2006			2005			% Change
COMPONENTS OF NET INCOME
Net operating income	$	234		$	192			22	%
Net realized investment gains (losses), net of participating policyholders’ and minority interests		1			(14	)		107
Income from continuing operations		235			178			32
Income (loss) from discontinued operations, net of tax		(6	)		7			(186	)
Net income	$	229		$	185			24	%
BASIC AND DILUTED EARNINGS PER SHARE
Income from continuing operations	$	0.84		$	0.63			33
Income (loss) from discontinued operations		(0.02	)		0.03			(167	)
Basic and diluted earnings per share available to common stockholders (1)	$	0.82		$	0.66			24	%
Weighted average outstanding common stock and common stock equivalents		256.0			256.0

(1) The three months ended March 31, 2006 and 2005 per share results available to common stockholders are reduced by $19 million and $17 million, or $0.07 per share and $0.07 per share, of undeclared but accumulated preferred stock dividends.

2

CNA FINANCIAL CORPORATION
Financial Supplement
Selected Balance Sheets Data and Statements of Cash Flows Data

(In millions, except per share data)	March 31, 2006		December 31, 2005
Total assets	$	59,675	$	58,786
Insurance reserves		41,912		42,436
Debt		1,690		1,690
Total liabilities		50,437		49,545
Minority interest		298		291
Accumulated other comprehensive income		120		359
Total stockholders’ equity		8,940		8,950
Book value per common share (1)	$	31.15	$	31.26
Book value per common share excluding unrealized gain or loss on fixed maturity securities (1)	$	30.59	$	29.69
Outstanding shares of common stock (in millions of shares)		256.0		256.0

THREE MONTHS ENDED
MARCH 31
(In millions)	2006			2005
Net cash flows provided by operating activities (2)	$	626		$	159
Net cash flows used by investing activities		(307	)		(110	)
Net cash flows used by financing activities		(343	)		(56	)
Net cash flows	$	(24	)	$	(7	)

(1)	Book value per common share as of March 31, 2006 and December 31, 2005 excludes $750 million of preferred stock (Series H) and $216 million and $197 million of undeclared but accumulated dividends.
(2)	Operating cash flows for the three months ended March 31, 2006 and 2005 include $(5) million and $(11) million related to discontinued operations.

3

CNA FINANCIAL CORPORATION
Financial Supplement
Claim & Claim Adjustment Expense Reserve Data

CLAIM & CLAIM ADJUSTMENT EXPENSE RESERVES
(In millions)	Standard Lines		Specialty Lines		P&C Operations
As of March 31, 2006
Gross	$	14,905	$	5,316	$	20,221
Ceded		3,770		1,435		5,205
Net	$	11,135	$	3,881	$	15,016
As of December 31, 2005
Gross	$	15,084	$	5,205	$	20,289
Ceded		3,838		1,411		5,249
Net	$	11,246	$	3,794	$	15,040

CLAIM & CLAIM ADJUSTMENT EXPENSE RESERVES	Life & Group		Corporate &
(In millions)	Non-Core		Other Non-Core		Total Operations
As of March 31, 2006
Gross	$	3,231	$	7,089	$	30,541
Ceded		1,385		3,762		10,352
Net	$	1,846	$	3,327	$	20,189
As of December 31, 2005
Gross	$	3,277	$	7,372	$	30,938
Ceded		1,440		3,916		10,605
Net	$	1,837	$	3,456	$	20,333

4

CNA FINANCIAL CORPORATION
Financial Supplement
Claim & Claim Adjustment Expense Reserve Rollforward

PERIOD ENDED MARCH 31, 2006	Three Months
(In millions)	Ended
Claim & claim adjustment expense reserves, beginning of period
Gross	$	30,938
Ceded		10,605
Net		20,333
Net incurred claim & claim adjustment expenses		1,289
Net claim & claim adjustment expense payments		(1,433	)
Claim & claim adjustment expense reserves, end of period
Net		20,189
Ceded		10,352
Gross	$	30,541

5

CNA FINANCIAL CORPORATION
Financial Supplement
Investments by Segment Aggregation

	March 31, 2006					December 31, 2005
(In millions)	Book Value			Fair Value		Book Value			Fair Value
Property & Casualty and Corporate & Other Non-Core:
Fixed maturities — taxable	$	18,185		$	18,031	$	16,988		$	16,972
Fixed maturities — tax exempt		3,444			3,435		7,579			7,631
Equities		221			391		221			374
Short-term investments		7,853			7,851		3,715			3,714
Limited partnership investments		1,383			1,383		1,223			1,223
Other (e.g., Real Estate)		38			36		34			32
Total investments	$	31,124		$	31,127	$	29,760		$	29,946
Net receivable/(payable)	$	154				$	266
Securities lending collateral		(1,751	)				(742	)
Life & Group Non-Core:
Fixed maturities — taxable	$	6,630		$	6,917	$	6,574		$	7,053
Fixed maturities — tax exempt		1,492			1,588		1,475			1,578
Equities		316			329		290			307
Short-term investments		426			426		523			524
Limited partnership investments		270			270		286			286
Other (e.g., Mortgage & Policy Loans)		1			1		1			1
Total investments	$	9,135		$	9,531	$	9,149		$	9,749
Net receivable/(payable)	$	(68	)			$	84
Securities lending collateral		(38	)				(25	)
Total investments	$	40,259		$	40,658	$	38,909		$	39,695
Total net receivable/(payable)	$	86				$	350
Total securities lending collateral		(1,789	)				(767	)

The information above related to net receivable/(payable) and securities lending collateral is provided to facilitate an analysis of significant changes in book value. When compared to the net receivable/(payable) per the Consolidated Balance Sheets, the amounts above exclude $107 million and $86 million as of March 31, 2006 and December 31, 2005 where the net receivable/(payable) balance does not relate to the change in book value.

6

CNA FINANCIAL CORPORATION
Financial Supplement
Property & Casualty Results of Operations

THREE MONTHS ENDED	Standard Lines									Specialty Lines									P&C Operations
MARCH 31							Fav / (Unfav)									Fav / (Unfav)									Fav / (Unfav)
(In millions)	2006			2005			% Change			2006			2005			% Change			2006			2005			% Change
Gross written premiums	$	1,561		$	1,516			3	%	$	825		$	769			7	%	$	2,386		$	2,285			4	%
Net written premiums		1,110			1,171			(5	)		648			594			9			1,758			1,765			—
Net earned premiums		1,086			1,169			(7	)		628			573			10			1,714			1,742			(2	)
Net investment income		228			183			25			87			56			55			315			239			32
Other revenues		20			21			(5	)		33			31			6			53			52			2
Total operating revenues		1,334			1,373			(3	)		748			660			13			2,082			2,033			2
Claims, benefits and expenses:
Net incurred claims and benefits		780			830			6			372			357			(4	)		1,152			1,187			3
Policyholders’ dividends		4			4			—			1			1			—			5			5			—
Amortization of deferred acquisition costs		238			239			—			127			130			2			365			369			1
Other insurance related expenses		101			139			27			37			24			(54	)		138			163			15
Other expenses		19			26			27			32			28			(14	)		51			54			6
Total claims, benefits and expenses		1,142			1,238			8			569			540			(5	)		1,711			1,778			4
Operating income before income tax and minority interest		192			135			42			179			120			49			371			255			45
Income tax expense on operating income		(56	)		(32	)		(75	)		(59	)		(36	)		(64	)		(115	)		(68	)		(69	)
Minority interest		(3	)		(2	)		(50	)		(6	)		(5	)		(20	)		(9	)		(7	)		(29	)
Net operating income from continuing operations		133			101			32			114			79			44			247			180			37
Realized investment gains (losses), net of participating policyholders’ and minority interests		13			(5	)		N/M			3			1			200			16			(4	)		N/M
Income tax (expense) benefit on realized investment gains (losses)		(4	)		(3	)		(33	)		(1	)		2			(150	)		(5	)		(1	)		N/M
Net income from continuing operations	$	142		$	93			53	%	$	116		$	82			41	%	$	258		$	175			47	%
Financial Ratios
Loss & LAE		71.8	%		71.0	%					59.3	%		62.3	%					67.2	%		68.1	%
Acquisition expense		18.5			21.0						17.9			20.1						18.3			20.7
Underwriting expense		12.7			11.4						8.2			6.8						11.1			9.9
Dividends		0.4			0.3						0.2			0.2						0.3			0.3
Expense ratio, including dividends		31.6			32.7						26.3			27.1						29.7			30.9
Combined ratio		103.4	%		103.7	%					85.6	%		89.4	%					96.9	%		99.0	%

N/M = Not Meaningful

7

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

THREE MONTHS ENDED							Life & Group Non-Core									Corporate & Other Non-Core									Total Operations
MARCH 31	P&C Operations												Fav / (Unfav)									Fav / (Unfav)									Fav / (Unfav)
(In millions)	2006			2005			2006			2005			% Change			2006			2005			% Change			2006			2005			% Change
Net earned premiums	$	1,714		$	1,742		$	163		$	166			(2	)%	$	(8	)	$	(9	)		11	%	$	1,869		$	1,899			(2	)%
Net investment income		315			239			187			106			76			68			61			11			570			406			40
Other revenues		53			52			12			33			(64	)		(12	)		(7	)		(71	)		53			78			(32	)
Total operating revenues		2,082			2,033			362			305			19			48			45			7			2,492			2,383			5
Claims, benefits and expenses:
Net incurred claims and benefits		1,152			1,187			306			234			(31	)		29			8			N/M			1,487			1,429			(4	)
Policyholders’ dividends		5			5			—			—			N/M			—			—			N/M			5			5			—
Amortization of deferred acquisition costs		365			369			4			7			43			1			2			50			370			378			2
Other insurance related expenses		138			163			53			54			2			15			9			(67	)		206			226			9
Other expenses		51			54			13			14			7			17			17			—			81			85			5
Total claims, benefits and expenses		1,711			1,778			376			309			(22	)		62			36			(72	)		2,149			2,123			(1	)
Operating income (loss) before income tax and minority interest		371			255			(14	)		(4	)		N/M			(14	)		9			N/M			343			260			32
Income tax (expense) benefit on operating income (loss)		(115	)		(68	)		11			5			120			4			2			100			(100	)		(61	)		(64	)
Minority interest		(9	)		(7	)		—			—			N/M			—			—			N/M			(9	)		(7	)		(29	)
Net operating income (loss) from continuing operations		247			180			(3	)		1			N/M			(10	)		11			(191	)		234			192			22
Realized investment gains (losses), net of participating policyholders’ and minority interests		16			(4	)		(12	)		(5	)		(140	)		5			(10	)		150			9			(19	)		147
Income tax (expense) benefit on realized investment gains (losses)		(5	)		(1	)		5			2			150			(8	)		4			N/M			(8	)		5			N/M
Net income (loss) from continuing operations	$	258		$	175		$	(10	)	$	(2	)		N/M	%	$	(13	)	$	5			N/M	%	$	235			178			32	%
Other Financial Data							Life & Group Non-Core									Corporate & Other Non-Core									Total Operations
Property & Casualty Company Information	P&C Operations												Fav / (Unfav)									Fav / (Unfav)									Fav / (Unfav)
	2006			2005			2006			2005			% Change			2006			2005			% Change			2006			2005			% Change
Gross written premiums	$	2,386		$	2,285		$	194		$	278			(30	)%	$	(1	)	$	252			(100	)%	$	2,579		$	2,815			(8	)%
Net written premiums		1,758			1,765			165			172			(4	)		(10	)		(20	)		50			1,913			1,917			—
Net earned premiums		1,714			1,742			160			161			(1	)		(8	)		(8	)		—			1,866			1,895			(2	)
Financial Ratios
Loss & LAE		67.2	%		68.1	%		N/M	%		N/M	%					N/M	%		N/M	%					75.2	%		74.6	%
Acquisition expense		18.3			20.7			N/M			N/M						N/M			N/M						18.4			20.5
Underwriting expense		11.1			9.9			N/M			N/M						N/M			N/M						12.4			11.0
Dividends		0.3			0.3			N/M			N/M						N/M			N/M						0.3			0.3
Expense ratio, including dividends		29.7			30.9			N/M			N/M						N/M			N/M						31.1			31.8
Combined ratio		96.9	%		99.0	%		N/M	%		N/M	%					N/M	%		N/M	%					106.3	%		106.4	%

N/M = Not Meaningful

8

CNA FINANCIAL CORPORATION
Financial Supplement
Property & Casualty Operations and Corporate & Other Non-Core Segment — Catastrophe Losses

CATASTROPHE LOSSES (PRETAX)							Corporate &
(In millions)	Standard Lines		Specialty Lines		P&C Operations		Other Non-Core		Total
Three months ended March 31, 2006	$	12	$	—	$	12	$	—	$	12
Three months ended March 31, 2005	$	1	$	—	$	1	$	—	$	1

CATASTROPHE LOSSES (AFTER-TAX)							Corporate &
(In millions)	Standard Lines		Specialty Lines		P&C Operations		Other Non-Core		Total
Three months ended March 31, 2006	$	8	$	—	$	8	$	—	$	8
Three months ended March 31, 2005	$	1	$	—	$	1	$	—	$	1

9

CNA FINANCIAL CORPORATION
Financial Supplement
Analysis of Pretax Net Investment Income

(In millions)	Standard Lines
	1Q05			2Q05			3Q05			4Q05			YTD 2005			1Q06
Limited partnership income	$	42		$	22		$	38		$	37		$	139		$	38
Interest on funds withheld and other deposits		(18	)		(34	)		(34	)		(19	)		(105	)		(14	)
Income from trading securities		1			—			1			—			2			—
Other investment income		158			183			181			209			731			204
Net investment income	$	183		$	171		$	186		$	227		$	767		$	228
	Specialty Lines
	1Q05			2Q05			3Q05			4Q05			YTD 2005			1Q06
Limited partnership income	$	13		$	7		$	12		$	13		$	45		$	13
Interest on funds withheld and other deposits		(12	)		(1	)		(2	)		(2	)		(17	)		(2	)
Income from trading securities		—			—			—			—			—			—
Other investment income		55			61			64			73			253			76
Net investment income	$	56		$	67		$	74		$	84		$	281		$	87
	P&C Operations
	1Q05			2Q05			3Q05			4Q05			YTD 2005			1Q06
Limited partnership income	$	55		$	29		$	50		$	50		$	184		$	51
Interest on funds withheld and other deposits		(30	)		(35	)		(36	)		(21	)		(122	)		(16	)
Income from trading securities		1			—			1			—			2			—
Other investment income		213			244			245			282			984			280
Net investment income	$	239		$	238		$	260		$	311		$	1,048		$	315
	Life & Group Non-Core
	1Q05			2Q05			3Q05			4Q05			YTD 2005			1Q06
Limited partnership income	$	9		$	1		$	8		$	4		$	22		$	10
Interest on funds withheld and other deposits		—			—			—			—			—			—
Income from trading securities		(31	)		14			40			22			45			42
Other investment income		128			131			131			136			526			135
Net investment income	$	106		$	146		$	179		$	162		$	593		$	187
	Corporate & Other Non-Core
	1Q05			2Q05			3Q05			4Q05			YTD 2005			1Q06
Limited partnership income	$	15		$	8		$	14		$	11		$	48		$	13
Interest on funds withheld and other deposits		(9	)		(15	)		(14	)		(6	)		(44	)		(9	)
Income from trading securities		—			—			—			—			—			—
Other investment income		55			62			61			69			247			64
Net investment income	$	61		$	55		$	61		$	74		$	251		$	68
	Total Operations
	1Q05			2Q05			3Q05			4Q05			YTD 2005			1Q06
Limited partnership income	$	79		$	38		$	72		$	65		$	254		$	74
Interest on funds withheld and other deposits		(39	)		(50	)		(50	)		(27	)		(166	)		(25	)
Income from trading securities		(30	)		14			41			22			47			42
Other investment income		396			437			437			487			1,757			479
Net investment income	$	406		$	439		$	500		$	547		$	1,892		$	570

10

CNA FINANCIAL CORPORATION
Financial Supplement
Statutory Data — Preliminary

PERIOD ENDED MARCH 31	Three Months
Income Statement	(Preliminary)						Fav / (Unfav)
(In millions)	2006			2005			% Change
Property & Casualty Companies
Gross written premiums	$	2,227		$	2,405			(7	)%
Net written premiums		1,762			1,802			(2	)
Net earned premiums		1,544			1,631			(5	)
Claim and claim adjustment expenses		1,204			1,256			4
Acquisition expenses		296			334			11
Underwriting expenses		227			242			6
Policyholders’ dividends		4			5			20
Underwriting loss		(187	)		(206	)		9
Net investment income (1)		428			837			(49	)
Other revenues (expenses)		(40	)		(36	)		(11	)
Income tax expense		(41	)		(38	)		(8	)
Net realized gains		6			23			(74	)
Net income	$	166		$	580			(71	)%
Financial Ratios
Loss and LAE		78.0	%		77.0	%
Acquisition expense		16.8			18.5
Underwriting expense		12.9			13.5
Policyholders’ dividends		0.2			0.3
Expense ratio		29.9			32.3
Combined ratio		107.9	%		109.3	%
Life Companies
Earned premium	$	3		$	4

SUPPLEMENTAL STATUTORY DATA

	(Preliminary)
(In millions)	March 31, 2006		December 31, 2005
Property & Casualty Companies
Statutory surplus (2)	$	7,193	$	6,940
Life Companies
Statutory surplus	$	640	$	627

(1)	The three months ended March 31, 2005 includes $500 million of dividends from CCC’s life subsidiary, Continental Assurance Company.
(2)	Surplus includes the Property & Casualty Companies’ equity ownership of the life insurance subsidiary.

11

CNA FINANCIAL CORPORATION
Financial Supplement
Property & Casualty Operations
Loss and LAE Ratio Analysis

	Standard Lines
	2006 YTD			2005 FY			2005 FY
	Evaluated at			Evaluated at			Evaluated at
	03/31/06			12/31/05			03/31/06
Gross Accident Year		65.8	%		76.4	%		75.8	%
Impact of Reinsurance		2.4			(0.1	)		—
Net Accident Year (1)		68.2			76.3			75.8	%
Impact of Significant Commutations		—			6.2
Impact of Corporate Covers		—			0.7
Impact of Development & Change in Allowance for Uncollectible Reinsurance		3.6			4.3
Net Calendar Year		71.8	%		87.5	%

	Specialty Lines
	2006 YTD			2005 FY			2005 FY
	Evaluated at			Evaluated at			Evaluated at
	03/31/06			12/31/05			03/31/06
Gross Accident Year		60.0	%		63.7	%		62.8	%
Impact of Reinsurance		(0.8	)		(0.3	)		(0.3	)
Net Accident Year (1)		59.2			63.4			62.5	%
Impact of Significant Commutations		—			0.9
Impact of Corporate Covers		—			(0.3	)
Impact of Development & Change in Allowance for Uncollectible Reinsurance		0.1			1.3
Net Calendar Year		59.3	%		65.3	%

	P&C Operations
	2006 YTD			2005 FY			2005 FY
	Evaluated at			Evaluated at			Evaluated at
	03/31/06			12/31/05			03/31/06
Gross Accident Year		63.8	%		72.2	%		71.5	%
Impact of Reinsurance		1.0			(0.6	)		(0.6	)
Net Accident Year (1)		64.8			71.6			70.9	%
Impact of Significant Commutations		—			4.3
Impact of Corporate Covers		—			0.4
Impact of Development & Change in Allowance for Uncollectible Reinsurance		2.4			3.2
Net Calendar Year		67.2	%		79.5	%

(1) The 2005 net accident year loss ratio evaluated at March 31, 2006 includes 11 points, 1 point, and 7 points related to catastrophe losses for Standard Lines, Specialty Lines, and P&C Operations.

12

CNA FINANCIAL CORPORATION
Financial Supplement
Asbestos Summary by Policyholder Category

			Net Paid		Net Asbestos		Percent of
	Number of		Losses in 2006		Reserves		Asbestos
MARCH 31, 2006	Policyholders		(In millions)		(In millions)		Net Reserves
Policyholders with Settlement Agreements
Structured Settlements		13	$	10	$	158		10	%
Wellington		3		—		15		1
Coverage in Place		36		6		64		4
Fibreboard		1		—		54		4
Total with Settlement Agreements		53		16		291		19
Other Policyholders with Active Accounts
Large Asbestos Accounts		199		23		232		16
Small Asbestos Accounts		1,062		7		127		8
Total Other Policyholders		1,261		30		359		24
Assumed Reinsurance & Pools				1		146		10
Unassigned IBNR (1)						712		47
Total		1,314	$	47	$	1,508		100	%

(1) IBNR includes claims that are incurred but not reported.

13