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

Attached files

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8-K - FORM 8-K - CNA FINANCIAL CORP	q420118k.htm
EX-99.1 - EX 99.1 - CNA FINANCIAL CORP	q4exhibit991.htm

CNA Financial Corporation

Supplemental Financial Information

December 31, 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

December 31, 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
Investments - European Exposure - Fair Value by Country of Risk	9
Investments - European Exposure - Credit Rating by Country of Risk	10
Property & Casualty Results of Operations (Three Months Ended)	11
Life & Group Non-Core and Corporate & Other Non-Core Segments Results of Operations (Three Months Ended)	12
Property & Casualty Results of Operations (Twelve Months Ended)	13
Life & Group Non-Core and Corporate & Other Non-Core Segments Results of Operations (Twelve Months Ended)	14
Components of Pretax Net Investment Income	15
Statutory Data - Preliminary	16
Property & Casualty Operations Loss & LAE Ratio Analysis	17
Net Carried Life & Group Non-Core Policyholder Reserves	18

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 J to the Condensed Consolidated Financial Statements within the September 30, 2011 Form 10-Q for further discussion of this measure.

•

In evaluating the results of CNA Specialty and CNA Commercial, management utilizes the combined ratio, the loss ratio, the expense ratio and the dividend ratio. These ratios are calculated using financial results prepared in accordance with accounting principles generally accepted in the United States of America. The loss ratio is the percentage of net incurred claim and claim adjustment expenses to net earned premiums. The expense ratio is the percentage of insurance underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums. The dividend ratio is the ratio of policyholders' dividends incurred to net earned premiums. The combined ratio is the sum of the loss, expense and dividend ratios. The statutory expense ratio reported on page 16 is the percentage of acquisition and underwriting expenses to net written premiums in accordance with statutory accounting practices.

•

Limited partnerships are a relatively small portion of CNA's overall investment portfolio. The majority of our limited partnership investments employ hedge fund strategies that generate returns through investing in securities that are marketable while engaging in various management techniques primarily in public fixed income and equity markets. While the Company generally does not invest in highly leveraged partnerships, there are risks which may result in losses due to short-selling, derivatives or other speculative investment practices. The use of leverage increases volatility generated by the underlying investment strategies.


•	Certain immaterial differences are due to rounding.


•	N/M = Not Meaningful


•	FY = Full Year

Agreement to Cede Asbestos and Environmental Pollution (A&EP) Liabilities to National Indemnity Company (NICO)

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

CNA FINANCIAL CORPORATION

Financial Supplement

Statements of Operations



PERIODS ENDED DECEMBER 31	Three Months						Fav / (Unfav)			Twelve Months						Fav / (Unfav)
(In millions)	2011			2010			% Change			2011			2010			% Change
STATEMENTS OF OPERATIONS
Revenues:
Net earned premiums	$	1,661		$	1,647		1		%	$	6,603		$	6,515		1		%
Net investment income	523			624			(16	)		2,054			2,316			(11	)
Net realized investment gains (losses), net of participating policyholders' interests:
Other-than-temporary impairment (OTTI) losses	(39		)	(65		)	40			(175		)	(254		)	31
Portion of OTTI recognized in Other comprehensive income (loss)	3			(6		)	150			(41		)	22			N/M
Net OTTI losses recognized in earnings	(36		)	(71		)	49			(216		)	(232		)	7
Other net realized investment gains (losses)	31			32			(3	)		212			318			(33	)
Net realized investment gains (losses), net of participating policyholders' interests	(5		)	(39		)	87			(4		)	86			(105	)
Other revenues	80			66			21			294			292			1
Total revenues	2,259			2,298			(2	)		8,947			9,209			(3	)
Claims, Benefits and Expenses:
Insurance claims and policyholders' benefits	1,358			1,186			(15	)		5,489			4,985			(10	)
Amortization of deferred acquisition costs	359			349			(3	)		1,410			1,387			(2	)
Other operating expenses	260			243			(7	)		996			1,568			36
Interest	43			44			2			175			157			(11	)
Total claims, benefits and expenses	2,020			1,822			(11	)		8,070			8,097			—
Income (loss) from continuing operations before income tax	239			476			(50	)		877			1,112			(21	)
Income tax (expense) benefit	(48		)	(150		)	68			(246		)	(333		)	26
Income (loss) from continuing operations, net of tax	191			326			(41	)		631			779			(19	)
Income (loss) from discontinued operations, net of tax	—			—			N/M			(1		)	(21		)	95
Net income (loss)	191			326			(41	)		630			758			(17	)
Net (income) loss attributable to noncontrolling interests	(1		)	(24		)	96			(16		)	(68		)	76
Net income (loss) attributable to CNA	$	190		$	302		(37	)	%	$	614		$	690		(11	)	%

CNA FINANCIAL CORPORATION

Financial Supplement

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



PERIODS ENDED DECEMBER 31	Three Months								Twelve Months
(In millions, except per share data)	2011				2010				2011				2010
COMPONENTS OF INCOME (LOSS) ATTRIBUTABLE TO CNA COMMON STOCKHOLDERS
Net operating income (loss) from continuing operations attributable to CNA before LPT	$	191			$	326			$	614			$	1,004
Net loss related to LPT	—				—				—				(344		)
Net operating income (loss) from continuing operations attributable to CNA	191				326				614				660
Less: 2008 Senior Preferred dividend	—				(8		)		—				(76		)
Net operating income (loss) from continuing operations attributable to CNA common stockholders	191				318				614				584
Net realized investment gains (losses) attributable to CNA common stockholders	(1		)		(24		)		1				51
Income (loss) from continuing operations attributable to CNA common stockholders	190				294				615				635
Income (loss) from discontinued operations attributable to CNA common stockholders	—				—				(1		)		(21		)
Income (loss) attributable to CNA common stockholders	$	190			$	294			$	614			$	614

BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE
Net operating income (loss) from continuing operations attributable to CNA before LPT	$	0.71			$	1.21			$	2.28			$	3.73
Net loss related to LPT	—				—				—				(1.28		)
Net operating income (loss) from continuing operations attributable to CNA	0.71				1.21				2.28				2.45
Less: 2008 Senior Preferred dividend	—				(0.03		)		—				(0.28		)
Net operating income (loss) from continuing operations attributable to CNA common stockholders	0.71				1.18				2.28				2.17
Net realized investment gains (losses) attributable to CNA common stockholders	(0.01		)		(0.09		)		—				0.19
Income (loss) from continuing operations attributable to CNA common stockholders	0.70				1.09				2.28				2.36
Income (loss) from discontinued operations attributable to CNA common stockholders	—				—				—				(0.08		)
Basic and diluted earnings (loss) per share attributable to CNA common stockholders	$	0.70			$	1.09			$	2.28			$	2.28

WEIGHTED AVERAGE OUTSTANDING COMMON STOCK AND COMMON STOCK EQUIVALENTS
Basic	269.3				269.2				269.3				269.1
Diluted	269.6				269.6				269.6				269.5

RETURN ON EQUITY
Net income (loss) attributable to CNA ⁽¹⁾	6.5			%	10.5			%	5.5			%	6.4			%
Net operating income (loss) from continuing operations attributable to CNA ⁽²⁾	7.0				12.2				5.7				6.1

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

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

CNA FINANCIAL CORPORATION

Financial Supplement

Selected Balance Sheets Data and Statements of Cash Flows Data



DECEMBER 31
(In millions, except share data)	2011		2010
Total assets	$	55,179	$	55,331
Insurance reserves	37,554		37,590
Debt	2,608		2,651
Total liabilities	43,622		43,807
Accumulated other comprehensive income (loss)	470		326
Noncontrolling interests	—		570
Total CNA stockholders' equity	11,557		10,954

Book value per common share	$	42.92	$	40.70
Book value per common share excluding AOCI	$	41.17	$	39.49

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



THREE MONTHS ENDED DECEMBER 31 (In millions)	2011			2010
Net cash flows provided (used) by operating activities	$	889		$	584
Net cash flows provided (used) by investing activities	(843		)	(93		)
Net cash flows provided (used) by financing activities	(56		)	(497		)
Net cash flows provided (used) by operating, investing and financing activities	$	(10	)	$	(6	)



TWELVE MONTHS ENDED DECEMBER 31 (In millions)	2011			2010
Net cash flows provided (used) by operating activities ⁽¹⁾	$	1,702		$	(89	)
Net cash flows provided (used) by investing activities	(1,060		)	767
Net cash flows provided (used) by financing activities	(644		)	(742		)
Net cash flows provided (used) by operating, investing and financing activities	$	(2	)	$	(64	)

(1) Operating cash flows for the twelve months ended December 31, 2010 include $(1.9) billion related to the initial net cash settlement with NICO for the Loss Portfolio Transfer, as further discussed on page i.

CNA FINANCIAL CORPORATION

Financial Supplement

Claim & Claim Adjustment Expense Reserve Rollforward



THREE MONTHS ENDED DECEMBER 31, 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	$	7,000		$	12,116		$	19,116		$	2,748		$	3,167		$	25,031
Ceded	851			1,723			2,574			571			2,546			5,691
Net	6,149			10,393			16,542			2,177			621			19,340

Reduction of net reserves due to sale of subsidiary	—			(277		)	(277		)	—			—			(277		)
Net incurred claim & claim adjustment expenses	323			498			821			142			(3		)	960
Net claim & claim adjustment expense payments	(450		)	(228		)	(678		)	(135		)	(28		)	(841		)
Foreign currency translation adjustment and other	1			4			5			95			1			101

Claim & claim adjustment expense reserves, end of period
Net	6,023			10,390			16,413			2,279			591			19,283
Ceded	817			1,119			1,936			546			2,538			5,020
Gross	$	6,840		$	11,509		$	18,349		$	2,825		$	3,129		$	24,303



TWELVE MONTHS ENDED DECEMBER 31, 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

Reduction of net reserves due to sale of subsidiary	—			(277		)	(277		)	—			—			(277		)
Net incurred claim & claim adjustment expenses	1,656			2,320			3,976			621			13			4,610
Net claim & claim adjustment expense payments	(1,539		)	(2,285		)	(3,824		)	(534		)	(144		)	(4,502		)
Foreign currency translation adjustment and other	(12		)	(9		)	(21		)	95			4			78

Claim & claim adjustment expense reserves, end of period
Net	6,023			10,390			16,413			2,279			591			19,283
Ceded	817			1,119			1,936			546			2,538			5,020
Gross	$	6,840		$	11,509		$	18,349		$	2,825		$	3,129		$	24,303

CNA FINANCIAL CORPORATION
Financial Supplement
Investment Summary - Consolidated



	December 31, 2011					September 30, 2011						December 31, 2010
(In millions)	Carrying Value		Net Unrealized Gains (Losses)			Carrying Value			Net Unrealized Gains (Losses)			Carrying Value			Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	20,884	$	1,792		$	20,908		$	1,758		$	21,031		$	1,533
States, municipalities and political subdivisions:
Tax-exempt	5,731		277			5,479			206			4,282			(218		)
Taxable	4,051		487			4,058			497			3,607			(50		)
Total states, municipalities and political subdivisions	9,782		764			9,537			703			7,889			(268		)
Asset-backed:⁽¹⁾⁽²⁾
Agency RMBS	4,185		130			4,154			172			3,836			38
Prime RMBS	718		(89		)	775			(80		)	1,139			(128		)
Sub-prime RMBS	330		(34		)	368			(39		)	483			(44		)
Alt-A RMBS	542		(18		)	553			(15		)	632			(30		)
Total RMBS	5,775		(11		)	5,850			38			6,090			(164		)
Agency CMBS	82		3			36			3			30			—
Other CMBS	1,272		(14		)	1,213			(9		)	963			(1		)
Total CMBS	1,354		(11		)	1,249			(6		)	993			(1		)
Other ABS	955		9			1,036			1			763			10
Total asset-backed	8,084		(13		)	8,135			33			7,846			(155		)
U.S. Treasury and obligations of government-sponsored enterprises	493		14			237			16			137			15
Foreign government	636		28			582			25			620			18
Redeemable preferred stock	58		7			57			8			54			7
Total fixed maturity securities	39,937		2,592			39,456			2,543			37,577			1,150
Equities	304		16			327			11			440			18
Limited partnership investments	2,245		—			2,371			—			2,309			—
Other invested assets	12		—			17			—			27			1
Mortgage loans	234		—			204			—			87			—
Short term investments	1,641		—			1,730			(2		)	2,215			2
Total investments	$	44,373	$	2,608		$	44,105		$	2,552		$	42,655		$	1,171

Net receivable/(payable)	$	45	$	—		$	(134	)	$	—		$	(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



	December 31, 2011					September 30, 2011						December 31, 2010
(In millions)	Carrying Value		Net Unrealized Gains (Losses)			Carrying Value			Net Unrealized Gains (Losses)			Carrying Value			Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	13,190	$	620		$	13,241		$	615		$	13,541		$	715
States, municipalities and political subdivisions:
Tax-exempt	2,204		116			2,344			93			2,116			10
Taxable	2,445		236			2,568			263			2,438			(42		)
Total states, municipalities and political subdivisions	4,649		352			4,912			356			4,554			(32		)
Asset-backed:
Agency RMBS	3,981		122			3,952			159			3,680			30
Prime RMBS	635		(78		)	684			(71		)	1,012			(109		)
Sub-prime RMBS	316		(32		)	353			(38		)	461			(45		)
Alt-A RMBS	483		(15		)	491			(14		)	563			(29		)
Total RMBS	5,415		(3		)	5,480			36			5,716			(153		)
Agency CMBS	82		3			36			3			30			—
Other CMBS	1,087		(21		)	1,034			(14		)	803			(2		)
Total CMBS	1,169		(18		)	1,070			(11		)	833			(2		)
Other ABS	913		6			991			(3		)	712			5
Total asset-backed	7,497		(15		)	7,541			22			7,261			(150		)
U.S. Treasury and obligations of government-sponsored enterprises	469		5			213			7			94			6
Foreign government	631		27			577			24			614			18
Redeemable preferred stock	7		1			5			1			5			3
Total fixed maturity securities	26,443		990			26,489			1,025			26,069			560
Equities	105		18			132			17			182			25
Limited partnership investments	2,245		—			2,370			—			2,307			—
Other invested assets	12		—			17			—			27			1
Mortgage loans	214		—			184			—			67			—
Short term investments	1,509		—			1,613			(2		)	2,131			2
Total investments	$	30,528	$	1,008		$	30,805		$	1,040		$	30,783		$	588

Net receivable/(payable)	$	50	$	—		$	(137	)	$	—		$	(197	)	$	—

CNA FINANCIAL CORPORATION

Financial Supplement

Investment Summary - Life & Group Non-Core



	December 31, 2011						September 30, 2011					December 31, 2010
(In millions)	Carrying Value			Net Unrealized Gains (Losses)			Carrying Value		Net Unrealized Gains (Losses)			Carrying Value			Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	7,694		$	1,172		$	7,667	$	1,143		$	7,490		$	818
States, municipalities and political subdivisions:
Tax-exempt	3,527			161			3,135		113			2,166			(228		)
Taxable	1,606			251			1,490		234			1,169			(8		)
Total states, municipalities and political subdivisions	5,133			412			4,625		347			3,335			(236		)
Asset-backed:
Agency RMBS	204			8			202		13			156			8
Prime RMBS	83			(11		)	91		(9		)	127			(19		)
Sub-prime RMBS	14			(2		)	15		(1		)	22			1
Alt-A RMBS	59			(3		)	62		(1		)	69			(1		)
Total RMBS	360			(8		)	370		2			374			(11		)
Agency CMBS	—			—			—		—			—			—
Other CMBS	185			7			179		5			160			1
Total CMBS	185			7			179		5			160			1
Other ABS	42			3			45		4			51			5
Total asset-backed	587			2			594		11			585			(5		)
U.S. Treasury and obligations of government-sponsored enterprises	24			9			24		9			43			9
Foreign government	5			1			5		1			6			—
Redeemable preferred stock	51			6			52		7			49			4
Total fixed maturity securities	13,494			1,602			12,967		1,518			11,508			590
Equities	199			(2		)	195		(6		)	258			(7		)
Limited partnership investments	—			—			1		—			2			—
Other invested assets	—			—			—		—			—			—
Mortgage loans	20			—			20		—			20			—
Short term investments	132			—			117		—			84			—
Total investments	$	13,845		$	1,600		$	13,300	$	1,512		$	11,872		$	583

Net receivable/(payable)	$	(5	)	$	—		$	3	$	—		$	(25	)	$	—

CNA FINANCIAL CORPORATION
Financial Supplement
Investments - Fixed Maturity Securities by Credit Rating
December 31, 2011



	U.S. Government, Government agencies and Government-sponsored enterprises					AAA						AA						A						BBB						Non-investment grade						Total
(In millions)	Fair Value			Net Unrealized Gains (Losses)		Fair Value			Net Unrealized Gains (Losses)			Fair Value			Net Unrealized Gains (Losses)			Fair Value			Net Unrealized Gains (Losses)			Fair Value			Net Unrealized Gains (Losses)			Fair Value			Net Unrealized Gains (Losses)			Fair Value			Net Unrealized Gains (Losses)
Corporate and other bonds	$	—		$	—	$	300		$	14		$	1,301		$	97		$	6,941		$	693		$	10,217		$	899		$	2,125		$	89		$	20,884		$	1,792
States, municipalities and political subdivisions:
Tax-exempt	—			—		1,026			63			3,443			181			1,114			37			138			(3		)	10			(1		)	5,731			277
Taxable	—			—		625			61			2,630			321			796			105			—			—			—			—			4,051			487
Total states, municipalities and political subdivisions	—			—		1,651			124			6,073			502			1,910			142			138			(3		)	10			(1		)	9,782			764
Asset-backed:
Agency RMBS	4,185			130		—			—			—			—			—			—			—			—			—			—			4,185			130
Prime RMBS	—			—		15			(1		)	65			(4		)	27			—			94			(12		)	517			(72		)	718			(89		)
Sub-prime RMBS	—			—		55			(4		)	91			(9		)	44			—			28			(4		)	112			(17		)	330			(34		)
Alt-A RMBS	—			—		143			(1		)	14			—			142			(1		)	71			(1		)	172			(15		)	542			(18		)
Total RMBS	4,185			130		213			(6		)	170			(13		)	213			(1		)	193			(17		)	801			(104		)	5,775			(11		)
Agency CMBS	82			3		—			—			—			—			—			—			—			—			—			—			82			3
Other CMBS	—			—		346			12			262			(1		)	286			6			159			(6		)	219			(25		)	1,272			(14		)
Total CMBS	82			3		346			12			262			(1		)	286			6			159			(6		)	219			(25		)	1,354			(11		)
Other ABS	—			—		515			12			251			—			160			(3		)	27			—			2			—			955			9
Total asset-backed	4,267			133		1,074			18			683			(14		)	659			2			379			(23		)	1,022			(129		)	8,084			(13		)
U.S. Treasury and obligations of government-sponsored enterprises	493			14		—			—			—			—			—			—			—			—			—			—			493			14
Foreign government	—			—		396			16			132			7			108			5			—			—			—			—			636			28
Redeemable preferred stock	—			—		—			—			—			—			—			—			56			7			2			—			58			7
Total fixed maturity securities	$	4,760		$	147	$	3,421		$	172		$	8,189		$	592		$	9,618		$	842		$	10,790		$	880		$	3,159		$	(41	)	$	39,937		$	2,592

Percentage of total fixed maturity securities	11.9		%			8.6		%				20.5		%				24.1		%				27.0		%				7.9		%				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

Investments - European Exposure

Fair Value by Country of Risk*

December 31, 2011



	Corporate				Sovereign		Total
(In millions)	Financial Sector		Other Sectors
European exposure:
United Kingdom	$	651	$	625	$	102	$	1,378
France	206		187		31		424
Germany	109		270		—		379
Netherlands	190		151		15		356
Spain	49		147		1		197
Belgium	5		176		—		181
Sweden	138		32		—		170
Italy	12		120		11		143
Switzerland	74		37		2		113
Luxembourg	—		77		—		77
Greece	—		43		—		43
Norway	—		37		3		40
Russian Federation	—		33		—		33
Finland	—		24		5		29
Austria	4		4		7		15
Ireland	4		5		—		9
Czech Republic	—		4		—		4
Total fair value	$	1,442	$	1,972	$	177	$	3,591
Total amortized cost	$	1,474	$	1,790	$	174	$	3,438

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

CNA FINANCIAL CORPORATION

Financial Supplement

Investments - European Exposure

Credit Rating by Country of Risk*

December 31, 2011



(In millions)	AAA		AA		A		BBB		Non-investment grade		Total
United Kingdom	$	134	$	77	$	749	$	388	$	30	$	1,378
France	78		53		125		142		26		424
Germany	80		3		121		170		5		379
Netherlands	50		55		127		79		45		356
Spain	—		12		71		107		7		197
Belgium	—		—		84		97		—		181
Sweden	—		95		46		29		—		170
Italy	6		2		69		63		3		143
Switzerland	2		30		52		22		7		113
Luxembourg	—		—		4		63		10		77
Greece	—		—		43		—		—		43
Norway	3		2		—		29		6		40
Russian Federation	—		—		—		28		5		33
Finland	5		—		—		24		—		29
Austria	11		—		4		—		—		15
Ireland	—		—		—		9		—		9
Czech Republic	—		—		4		—		—		4
Total fair value	$	369	$	329	$	1,499	$	1,250	$	144	$	3,591
Total amortized cost	$	363	$	303	$	1,448	$	1,184	$	140	$	3,438

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

CNA FINANCIAL CORPORATION

Financial Supplement

Property & Casualty Results of Operations



	CNA Specialty											CNA Commercial											P&C Operations
THREE MONTHS ENDED DECEMBER 31 (In millions)	2011				2010				Fav / (Unfav) % Change			2011				2010				Fav / (Unfav) % Change			2011				2010				Fav / (Unfav) % Change
Gross written premiums	$	1,126			$	1,054			7		%	$	859			$	839			2		%	$	1,985			$	1,893			5		%
Net written premiums	700				682				3			806				778				4			1,506				1,460				3
Operating revenues:
Net earned premiums	698				681				2			822				824				—			1,520				1,505				1
Net investment income	129				171				(25	)		194				252				(23	)		323				423				(24	)
Other revenues	57				54				6			14				12				17			71				66				8
Total operating revenues	884				906				(2	)		1,030				1,088				(5	)		1,914				1,994				(4	)
Claims, Benefits and Expenses:
Net incurred claims and benefits	324				332				2			489				507				4			813				839				3
Policyholders' dividends	1				6				83			3				3				—			4				9				56
Amortization of deferred acquisition costs	168				160				(5	)		186				184				(1	)		354				344				(3	)
Other insurance related expenses	50				47				(6	)		104				106				2			154				153				(1	)
Other expenses	51				49				(4	)		16				13				(23	)		67				62				(8	)
Total claims, benefits and expenses	594				594				—			798				813				2			1,392				1,407				1
Operating income (loss) from continuing operations before income tax	290				312				(7	)		232				275				(16	)		522				587				(11	)
Income tax (expense) benefit on operating income (loss)	(99		)		(105		)		6			(78		)		(95		)		18			(177		)		(200		)		12
Net operating (income) loss, after-tax, attributable to noncontrolling interests	—				(22		)		N/M			(1		)		(2		)		50			(1		)		(24		)		96
Net operating income (loss) from continuing operations attributable to CNA	191				185				3			153				178				(14	)		344				363				(5	)
Net realized investment gains (losses), net of participating policyholders' interests	(12		)		(30		)		60			1				(45		)		102			(11		)		(75		)		85
Income tax (expense) benefit on net realized investment gains (losses)	4				11				(64	)		2				16				(88	)		6				27				(78	)
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	(8		)		(19		)		58			3				(29		)		110			(5		)		(48		)		90
Net income (loss) from continuing operations attributable to CNA	$	183			$	166			10		%	$	156			$	149			5		%	$	339			$	315			8		%

FINANCIAL RATIOS
Loss & LAE	46.3			%	48.8			%				59.6			%	61.8			%				53.5			%	55.9			%
Acquisition expense	19.7				18.6							18.0				17.1							18.8				17.8
Underwriting expense	11.7				11.9							17.2				18.1							14.6				15.3
Expense	31.4				30.5							35.2				35.2							33.4				33.1
Dividend	0.1				0.9							0.4				0.4							0.3				0.6
Combined ratio	77.8			%	80.2			%				95.2			%	97.4			%				87.2			%	89.6			%

RATIO IMPACTS
Impact of catastrophes
Pretax net accident year catastrophe losses incurred	$	4			$	2						$	13			$	19						$	17			$	21
Impact on loss & LAE ratio	0.6			%	0.3			%				1.6			%	2.3			%				1.1			%	1.4			%

Impact of development & other
Pretax net prior year development: (favorable) / unfavorable
Prior year loss & ALAE reserve development	$	(145	)		$	(126	)					$	(105	)		$	(75	)					$	(250	)		$	(201	)
Prior year premium development	6				2							—				(6		)					6				(4		)
Other ⁽¹⁾	—				(2		)					—				(15		)					—				(17		)
Total development & other	$	(139	)		$	(126	)					$	(105	)		$	(96	)					$	(244	)		$	(222	)
Impact of development & other on loss & LAE ratio	(20.1		)	%	(18.6		)	%				(12.8		)	%	(11.3		)	%				(16.1		)	%	(14.6		)	%

(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
THREE MONTHS ENDED DECEMBER 31 (In millions)	2011			2010			2011			2010			Fav / (Unfav) % Change			2011			2010			Fav / (Unfav) % Change			2011			2010			Fav / (Unfav) % Change
Operating revenue:
Net earned premiums	$	1,520		$	1,505		$	142		$	146		(3	)	%	$	(1	)	$	(4	)	75		%	$	1,661		$	1,647		1		%
Net investment income	323			423			192			184			4			8			17			(53	)		523			624			(16	)
Other revenues	71			66			7			(3		)	N/M			2			3			(33	)		80			66			21
Total operating revenues	1,914			1,994			341			327			4			9			16			(44	)		2,264			2,337			(3	)
Claims, Benefits and Expenses:
Net incurred claims and benefits	813			839			541			326			(66	)		(3		)	10			130			1,351			1,175			(15	)
Policyholders' dividends	4			9			3			2			(50	)		—			—			N/M			7			11			36
Amortization of deferred acquisition costs	354			344			5			5			—			—			—			N/M			359			349			(3	)
Other insurance related expenses	154			153			35			43			19			1			—			N/M			190			196			3
Other expenses	67			62			5			(11		)	(145	)		41			40			(3	)		113			91			(24	)
Total claims, benefits and expenses	1,392			1,407			589			365			(61	)		39			50			22			2,020			1,822			(11	)
Operating income (loss) from continuing operations before income tax	522			587			(248		)	(38		)	N/M			(30		)	(34		)	12			244			515			(53	)
Income tax (expense) benefit on operating income (loss)	(177		)	(200		)	91			23			N/M			34			12			183			(52		)	(165		)	68
Net operating (income) loss, after-tax, attributable to noncontrolling interests	(1		)	(24		)	—			—			N/M			—			—			N/M			(1		)	(24		)	96
Net operating income (loss) from continuing operations attributable to CNA	344			363			(157		)	(15		)	N/M			4			(22		)	118			191			326			(41	)
Net realized investment gains (losses), net of participating policyholders' interests	(11		)	(75		)	—			38			N/M			6			(2		)	N/M			(5		)	(39		)	87
Income tax (expense) benefit on net realized investment gains (losses)	6			27			—			(13		)	N/M			(2		)	1			N/M			4			15			(73	)
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		)	(48		)	—			25			N/M			4			(1		)	N/M			(1		)	(24		)	96
Net income (loss) from continuing operations attributable to CNA	$	339		$	315		$	(157	)	$	10		N/M		%	$	8		$	(23	)	135		%	$	190		$	302		(37	)	%

CNA FINANCIAL CORPORATION

Financial Supplement

Property & Casualty Results of Operations



	CNA Specialty											CNA Commercial											P&C Operations
TWELVE MONTHS ENDED DECEMBER 31 (In millions)	2011				2010				Fav / (Unfav) % Change			2011				2010				Fav / (Unfav) % Change			2011				2010				Fav / (Unfav) % Change
Gross written premiums	$	4,474			$	4,234			6		%	$	3,599			$	3,512			2		%	$	8,073			$	7,746			4		%
Net written premiums	2,872				2,691				7			3,350				3,208				4			6,222				5,899				5
Operating revenues:
Net earned premiums	2,796				2,679				4			3,240				3,256				—			6,036				5,935				2
Net investment income	500				591				(15	)		763				873				(13	)		1,263				1,464				(14	)
Other revenues	221				216				2			54				61				(11	)		275				277				(1	)
Total operating revenues	3,517				3,486				1			4,057				4,190				(3	)		7,574				7,676				(1	)
Claims, Benefits and Expenses:
Net incurred claims and benefits	1,657				1,447				(15	)		2,296				2,175				(6	)		3,953				3,622				(9	)
Policyholders' dividends	(3		)		12				125			8				14				43			5				26				81
Amortization of deferred acquisition costs	663				631				(5	)		725				736				1			1,388				1,367				(2	)
Other insurance related expenses	197				186				(6	)		395				424				7			592				610				3
Other expenses	191				190				(1	)		53				55				4			244				245				—
Total claims, benefits and expenses	2,705				2,466				(10	)		3,477				3,404				(2	)		6,182				5,870				(5	)
Operating income (loss) from continuing operations before income tax	812				1,020				(20	)		580				786				(26	)		1,392				1,806				(23	)
Income tax (expense) benefit on operating income (loss)	(281		)		(343		)		18			(207		)		(260		)		20			(488		)		(603		)		19
Net operating (income) loss, after-tax, attributable to noncontrolling interests	(12		)		(52		)		77			(4		)		(17		)		76			(16		)		(69		)		77
Net operating income (loss) from continuing operations attributable to CNA	519				625				(17	)		369				509				(28	)		888				1,134				(22	)
Net realized investment gains (losses), net of participating policyholders' interests	(5		)		30				(117	)		14				(15		)		193			9				15				(40	)
Income tax (expense) benefit on net realized investment gains (losses)	2				(10		)		120			(2		)		(1		)		(100	)		—				(11		)		N/M
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	(3		)		20				(115	)		12				(15		)		180			9				5				80
Net income (loss) from continuing operations attributable to CNA	$	516			$	645			(20	)	%	$	381			$	494			(23	)	%	$	897			$	1,139			(21	)	%

FINANCIAL RATIOS
Loss & LAE	59.3			%	54.0			%				70.9			%	66.8			%				65.5			%	61.0			%
Acquisition expense	19.6				19.2							17.4				17.8							18.4				18.4
Underwriting expense	11.1				11.3							17.1				17.9							14.4				15.0
Expense	30.7				30.5							34.5				35.7							32.8				33.4
Dividend	(0.1		)		0.5							0.3				0.4							0.1				0.4
Combined ratio	89.9			%	85.0			%				105.7			%	102.9			%				98.4			%	94.8			%

RATIO IMPACTS
Impact of catastrophes
Pretax net accident year catastrophe losses incurred	$	14			$	8						$	208			$	113						$	222			$	121
Impact on loss & LAE ratio	0.5			%	0.3			%				6.4			%	3.5			%				3.7			%	2.0			%

Impact of development & other
Pretax net prior year development: (favorable) / unfavorable
Prior year loss & ALAE reserve development	$	(217	)		$	(341	)					$	(204	)		$	(304	)					$	(421	)		$	(645	)
Prior year premium development	(28		)		(3		)					21				48							(7		)		45
Other ⁽¹⁾	—				(2		)					1				(14		)					1				(16		)
Total development & other	$	(245	)		$	(346	)					$	(182	)		$	(270	)					$	(427	)		$	(616	)
Impact of development & other on loss & LAE ratio	(8.4		)	%	(12.9		)	%				(5.7		)	%	(8.7		)	%				(7.0		)	%	(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
TWELVE MONTHS ENDED DECEMBER 31 (In millions)	2011			2010			2011			2010			Fav / (Unfav) % Change			2011			2010			Fav / (Unfav) % Change			2011			2010			Fav / (Unfav) % Change
Operating revenue:
Net earned premiums	$	6,036		$	5,935		$	569		$	582		(2	)	%	$	(2	)	$	(2	)	—		%	$	6,603		$	6,515		1		%
Net investment income	1,263			1,464			759			715			6			32			137			(77	)		2,054			2,316			(11	)
Other revenues	275			277			13			7			86			6			8			(25	)		294			292			1
Total operating revenues	7,574			7,676			1,341			1,304			3			36			143			(75	)		8,951			9,123			(2	)
Claims, Benefits and Expenses:
Net incurred claims and benefits	3,953			3,622			1,526			1,275			(20	)		(3		)	58			105			5,476			4,955			(11	)
Policyholders' dividends	5			26			8			4			(100	)		—			—			N/M			13			30			57
Amortization of deferred acquisition costs	1,388			1,367			22			20			(10	)		—			—			N/M			1,410			1,387			(2	)
Other insurance related expenses	592			610			143			180			21			3			7			57			738			797			7
Other expenses	244			245			19			2			N/M			170			681			75			433			928			53
Total claims, benefits and expenses	6,182			5,870			1,718			1,481			(16	)		170			746			77			8,070			8,097			—
Operating income (loss) from continuing operations before income tax	1,392			1,806			(377		)	(177		)	(113	)		(134		)	(603		)	78			881			1,026			(14	)
Income tax (expense) benefit on operating income (loss)	(488		)	(603		)	169			90			88			68			216			(69	)		(251		)	(297		)	15
Net operating (income) loss, after-tax, attributable to noncontrolling interests	(16		)	(69		)	—			—			N/M			—			—			N/M			(16		)	(69		)	77
Net operating income (loss) from continuing operations attributable to CNA	888			1,134			(208		)	(87		)	(139	)		(66		)	(387		)	83			614			660			(7	)
Net realized investment gains (losses), net of participating policyholders' interests	9			15			(7		)	53			(113	)		(6		)	18			(133	)		(4		)	86			(105	)
Income tax (expense) benefit on net realized investment gains (losses)	—			(11		)	2			(20		)	110			3			(5		)	160			5			(36		)	114
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	9			5			(5		)	33			(115	)		(3		)	13			(123	)		1			51			(98	)
Net income (loss) from continuing operations attributable to CNA	$	897		$	1,139		$	(213	)	$	(54	)	N/M		%	$	(69	)	$	(374	)	82		%	$	615		$	711		(14	)	%

CNA FINANCIAL CORPORATION

Financial Supplement

Components of Pretax Net Investment Income

(In millions)



	CNA Specialty
	1Q10		2Q10			3Q10		4Q10			2010			1Q11		2Q11		3Q11			4Q11		YTD 2011
Income (loss) from limited partnerships	$	23	$	(1	)	$	23	$	41		$	86		$	38	$	4	$	(32	)	$	5	$	15
Income (loss) from trading portfolio	1		1			1		2			5			1		1		—			1		3
Other investment income	123		125			124		128			500			121		121		117			123		482
Net investment income	$	147	$	125		$	148	$	171		$	591		$	160	$	126	$	85		$	129	$	500


	CNA Commercial
	1Q10		2Q10			3Q10		4Q10			2010			1Q11		2Q11		3Q11			4Q11		YTD 2011
Income (loss) from limited partnerships	$	40	$	(2	)	$	38	$	68		$	144		$	73	$	6	$	(59	)	$	11	$	31
Income (loss) from trading portfolio	2		1			2		2			7			2		2		(1		)	2		5
Other investment income	179		185			176		182			722			186		185		175			181		727
Net investment income	$	221	$	184		$	216	$	252		$	873		$	261	$	193	$	115		$	194	$	763


	P&C Operations
	1Q10		2Q10			3Q10		4Q10			2010			1Q11		2Q11		3Q11			4Q11		YTD 2011
Income (loss) from limited partnerships	$	63	$	(3	)	$	61	$	109		$	230		$	111	$	10	$	(91	)	$	16	$	46
Income (loss) from trading portfolio	3		2			3		4			12			3		3		(1		)	3		8
Other investment income	302		310			300		310			1,222			307		306		292			304		1,209
Net investment income	$	368	$	309		$	364	$	423		$	1,464		$	421	$	319	$	200		$	323	$	1,263


	Life & Group Non-Core
	1Q10		2Q10			3Q10		4Q10			2010			1Q11		2Q11		3Q11			4Q11		YTD 2011
Income (loss) from limited partnerships	$	—	$	(3	)	$	1	$	—		$	(2	)	$	—	$	—	$	—		$	—	$	—
Income (loss) from trading portfolio	—		—			—		—			—			—		—		—			—		—
Other investment income	175		177			181		184			717			188		189		190			192		759
Net investment income	$	175	$	174		$	182	$	184		$	715		$	188	$	189	$	190		$	192	$	759


	Corporate & Other Non-Core
	1Q10		2Q10			3Q10		4Q10			2010			1Q11		2Q11		3Q11			4Q11		YTD 2011
Income (loss) from limited partnerships	$	9	$	2		$	6	$	4		$	21		$	3	$	1	$	(2	)	$	—	$	2
Income (loss) from trading portfolio	1		—			1		(1		)	1			—		—		—			1		1
Other investment income	37		36			28		14			115			8		8		6			7		29
Net investment income	$	47	$	38		$	35	$	17		$	137		$	11	$	9	$	4		$	8	$	32


	Total Operations
	1Q10		2Q10			3Q10		4Q10			2010			1Q11		2Q11		3Q11			4Q11		YTD 2011
Income (loss) from limited partnerships	$	72	$	(4	)	$	68	$	113		$	249		$	114	$	11	$	(93	)	$	16	$	48
Income (loss) from trading portfolio	4		2			4		3			13			3		3		(1		)	4		9
Other investment income	514		523			509		508			2,054			503		503		488			503		1,997
Net investment income	$	590	$	521		$	581	$	624		$	2,316		$	620	$	517	$	394		$	523	$	2,054

CNA FINANCIAL CORPORATION

Financial Supplement

Statutory Data - Preliminary



PERIODS ENDED DECEMBER 31	Three Months											Twelve 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	$	1,938			$	1,818			7		%	$	7,892			$	7,448			6		%
Net written premiums	1,464				1,382				6			6,072				5,637				8

Net earned premiums	1,316				1,298				1			5,167				5,042				2
Claim and claim adjustment expenses	1,005				1,072				6			4,425				4,123				(7	)
Acquisition expenses	242				237				(2	)		1,030				962				(7	)
Underwriting expenses	218				222				2			810				818				1
Policyholders' dividends	4				5				20			13				14				7
Underwriting income (loss)	(153		)		(238		)		36			(1,111		)		(875		)		(27	)
Net investment income	508				423				20			1,888				1,679				12
Other income (loss)	37				79				(53	)		153				(626		)		124
Income tax (expense) benefit	(58		)		(69		)		16			(94		)		(25		)		N/M
Net realized gains (losses)	111				(5		)		N/M			118				105				12
Net income (loss)	$	445			$	190			134		%	$	954			$	258			N/M		%

Financial Ratios
Loss and LAE	76.4			%	82.6			%				85.6			%	81.8			%
Acquisition expense	16.5				17.2							17.0				17.1
Underwriting expense	14.9				16.0							13.3				14.4
Expense	31.4				33.2							30.3				31.5
Dividend	0.3				0.4							0.3				0.3
Combined ratio	108.1			%	116.2			%				116.2			%	113.6			%



SUPPLEMENTAL STATUTORY DATA	(Preliminary) 2011		2010
DECEMBER 31
(In millions)
Combined Continental Casualty Companies
Statutory surplus ⁽¹⁾	$	9,888	$	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 12/31/11			2010 FY Evaluated at 12/31/10			2010 FY Evaluated at 12/31/11
Gross Accident Year	62.8		%	62.6		%	62.4	%
Impact of Reinsurance	4.9			4.3			4.3
Net Accident Year	67.7			66.9			66.7	%
Impact of Development and Other ⁽¹⁾	(8.4	)		(12.9	)
Net Calendar Year	59.3		%	54.0		%



	CNA Commercial
	2011 YTD Evaluated at 12/31/11			2010 FY Evaluated at 12/31/10			2010 FY Evaluated at 12/31/11
Gross Accident Year	72.9		%	71.7		%	72.6	%
Impact of Reinsurance	3.7			3.8			3.1
Net Accident Year	76.6			75.5			75.7	%
Impact of Development and Other⁽¹⁾	(5.7	)		(8.7	)
Net Calendar Year	70.9		%	66.8		%



	P&C Operations
	2011 YTD Evaluated at 12/31/11			2010 FY Evaluated at 12/31/10			2010 FY Evaluated at 12/31/11
Gross Accident Year	67.3		%	66.8		%	67.1	%
Impact of Reinsurance	5.2			4.8			4.6
Net Accident Year	72.5			71.6			71.7	%
Impact of Development and Other ⁽¹⁾	(7.0	)		(10.6	)
Net Calendar Year	65.5		%	61.0		%

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

CNA FINANCIAL CORPORATION

Financial Supplement

Net Carried Life & Group Non-Core Policyholder Reserves



December 31, 2011
(In millions)	Claim and claim adjustment expenses		Future policy benefits		Policyholders' funds		Separate account business
Long term care	$	1,470	$	6,374	$	—	$	—
Payout annuities	660		1,997		—		—
Institutional markets	1		15		129		417
Other	53		5		—		—
Total	$	2,184	$	8,391	$	129	$	417

The reserve amounts above are net of $1,375 million of ceded reserves and exclude $95 million of claim and claim adjustment expenses and $627 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 (Shadow Adjustments).



December 31, 2010
(In millions)	Claim and claim adjustment expenses		Future policy benefits		Policyholders' funds		Separate account business
Long term care	$	1,286	$	5,829	$	—	$	—
Payout annuities	740		1,812		—		—
Institutional markets	1		15		106		450
Other	70		5		—		—
Total	$	2,097	$	7,661	$	106	$	450

The reserve amounts above are net of $1,502 million of ceded reserves and exclude $235 million of future policy benefits relating to Shadow Adjustments.

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