CNA FINANCIAL CORP - FORM 8-K - EX-99.2 - EX 99.2

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8-K - 8-K - CNA FINANCIAL CORP	a2011q28k.htm
EX-99.1 - EX 99.1 - CNA FINANCIAL CORP	q2exhibit991.htm

CNA Financial Corporation

Supplemental Financial Information

June 30, 2011

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

CNA Financial Corporation

Table of Contents

June 30, 2011



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

CNA Financial Corporation

Definitions and Presentation


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


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


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


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


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

•

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

•

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


•	Certain immaterial differences are due to rounding.


•	N/M = Not Meaningful


•	FY = Full Year

CNA FINANCIAL CORPORATION

Financial Supplement

Statements of Operations



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

CNA FINANCIAL CORPORATION

Financial Supplement

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



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

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

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

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

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

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

CNA FINANCIAL CORPORATION

Financial Supplement

Selected Balance Sheets Data and Statements of Cash Flows Data



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

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

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



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



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

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

CNA FINANCIAL CORPORATION

Financial Supplement

Claim & Claim Adjustment Expense Reserve Rollforward



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

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

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



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

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

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



CNA FINANCIAL CORPORATION Financial Supplement Investment Summary - Consolidated



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

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

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

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

RMBS - Residential mortgage-backed securities

CMBS - Commercial mortgage-backed securities

Other ABS - Other asset-backed securities

CNA FINANCIAL CORPORATION

Financial Supplement

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



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

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

CNA FINANCIAL CORPORATION

Financial Supplement

Investment Summary - Life & Group Non-Core



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

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



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



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

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

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



CNA FINANCIAL CORPORATION Financial Supplement Property & Casualty Results of Operations



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

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

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

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

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



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



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



CNA FINANCIAL CORPORATION Financial Supplement Property & Casualty Results of Operations



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

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

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

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

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



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



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



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



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


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


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


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


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


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



CNA FINANCIAL CORPORATION Financial Supplement Statutory Data - Preliminary



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

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

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



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

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

CNA FINANCIAL CORPORATION

Financial Supplement

Property & Casualty Operations Loss & LAE Ratio Analysis



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



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



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

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

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