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

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8-K - FORM 8-K - CNA FINANCIAL CORP	a8-k.htm
EX-99.1 - EX-99.1 - CNA FINANCIAL CORP	q1exhibit991.htm

CNA Financial Corporation

Supplemental Financial Information

March 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

March 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
Investments by Segment Aggregation	5
Asset-Backed Exposure	6
Property & Casualty Results of Operations (Three Months Ended)	10
Life & Group Non-Core and Corporate & Other Non-Core Segments Results of Operations (Three Months Ended)	11
Components of Pretax Net Investment Income	12
Statutory Data - Preliminary	13
Property & Casualty Operations Loss & LAE Ratio Analysis	14

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 13 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 MARCH 31	Three months						Fav / (Unfav)
(In millions)	2011			2010			% Change
STATEMENTS OF OPERATIONS
Revenues:
Net earned premiums	$	1,615		$	1,615		—		%
Net investment income	620			590			5
Net realized investment gains (losses), net of participating policyholders' interests:
Other-than-temporary impairment (OTTI) losses	(20		)	(90		)	78
Portion of OTTI recognized in Other comprehensive income (loss)	(21		)	30			(170	)
Net OTTI losses recognized in earnings	(41		)	(60		)	32
Other net realized investment gains (losses)	54			94			(43	)
Net realized investment gains (losses), net of participating policyholders' interests	13			34			(62	)
Other revenues	67			76			(12	)
Total revenues	2,315			2,315			—
Claims, Benefits and Expenses:
Insurance claims and policyholders' benefits	1,364			1,308			(4	)
Amortization of deferred acquisition costs	345			342			(1	)
Other operating expenses	225			272			17
Interest	46			36			(28	)
Total claims, benefits and expenses	1,980			1,958			(1	)
Income (loss) from continuing operations before income tax	335			357			(6	)
Income tax (expense) benefit	(102		)	(102		)	—
Income (loss) from continuing operations, net of tax	233			255			(9	)
Income (loss) from discontinued operations, net of tax	(1		)	—			N/M
Net income (loss)	232			255			(9	)
Net (income) loss attributable to noncontrolling interests	(9		)	(10		)	10
Net income (loss) attributable to CNA	$	223		$	245		(9	)	%

CNA FINANCIAL CORPORATION

Financial Supplement

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



PERIODS ENDED MARCH 31	Three Months
(In millions, except per share data)	2011				2010
COMPONENTS OF INCOME (LOSS) ATTRIBUTABLE TO CNA COMMON STOCKHOLDERS
Net operating income (loss) from continuing operations attributable to CNA	$	216			$	223
Less: 2008 Senior Preferred dividend	—				(25		)
Net operating income (loss) from continuing operations attributable to CNA common stockholders	216				198
Net realized investment gains (losses) attributable to CNA common stockholders	8				22
Income (loss) from continuing operations attributable to CNA common stockholders	224				220
Income (loss) from discontinued operations attributable to CNA common stockholders	(1		)		—
Income (loss) attributable to CNA common stockholders	$	223			$	220

BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE
Net operating income (loss) from continuing operations attributable to CNA	$	0.80			$	0.83
Less: 2008 Senior Preferred dividend	—				(0.09		)
Net operating income (loss) from continuing operations attributable to CNA common stockholders	0.80				0.74
Net realized investment gains (losses) attributable to CNA common stockholders	0.03				0.08
Income (loss) from continuing operations attributable to CNA common stockholders	0.83				0.82
Income (loss) from discontinued operations attributable to CNA common stockholders	—				—
Basic and diluted earnings (loss) per share attributable to CNA common stockholders	$	0.83			$	0.82

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

RETURN ON EQUITY
Net income (loss) attributable to CNA ⁽¹⁾	8.0			%	9.0			%
Net operating income (loss) from continuing operations attributable to CNA ⁽²⁾	8.1				8.0

(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)	March 31, 2011		December 31, 2010
Total assets	$	55,543	$	55,331
Insurance reserves	37,680		37,590
Debt	2,647		2,651
Total liabilities	43,721		43,807
Accumulated other comprehensive income (loss)	415		326
Noncontrolling interests	580		570
Total CNA stockholders' equity	11,242		10,954

Book value per common share	$	41.75	$	40.70
Book value per common share excluding AOCI	$	40.20	$	39.49

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



THREE MONTHS ENDED MARCH 31 (In millions)	2011			2010
Net cash flows provided (used) by operating activities ⁽¹⁾	$	112		$	364
Net cash flows provided (used) by investing activities	(74		)	(369		)
Net cash flows provided (used) by financing activities	(36		)	(38		)
Net cash flows provided (used) by operating, investing and financing activities	$	2		$	(43	)

(1) Operating cash flows for the three months ended March 31, 2011 and 2010 include $(2) million and $(5) million related to discontinued operations.

CNA FINANCIAL CORPORATION

Financial Supplement

Claim & Claim Adjustment Expense Reserve Rollforward



THREE MONTHS ENDED MARCH 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

Net incurred claim & claim adjustment expenses	430			606			1,036			169			7			1,212
Net claim & claim adjustment expense payments	(369		)	(693		)	(1,062		)	(143		)	(25		)	(1,230		)
Foreign currency translation adjustment and other	17			14			31			—			1			32

Claim & claim adjustment expense reserves, end of period
Net	5,996			10,568			16,564			2,123			701			19,388
Ceded	892			1,815			2,707			634			2,623			5,964
Gross	$	6,888		$	12,383		$	19,271		$	2,757		$	3,324		$	25,352

CNA FINANCIAL CORPORATION

Financial Supplement

Investments by Segment Aggregation



	March 31, 2011					December 31, 2010
(In millions)	Book Value			Carrying Value		Book Value			Carrying Value
Property & Casualty and Corporate & Other Non-Core:
Fixed maturities, excluding states, municipalities and political subdivisions	$	21,203		$	21,836	$	20,962		$	21,559
States, municipalities and political subdivisions:
Tax-exempt	2,187			2,199		2,106			2,116
Taxable	2,531			2,520		2,484			2,442
Equities	113			138		157			182
Short term investments	1,570			1,573		2,129			2,131
Limited partnership investments	2,459			2,459		2,307			2,307
Mortgage loans & other	113			113		93			94
Total investments	$	30,176		$	30,838	$	30,238		$	30,831

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

Life & Group Non-Core:
Fixed maturities, excluding states, municipalities and political subdivisions	$	7,205		$	8,040	$	7,308		$	8,129
States, municipalities and political subdivisions:
Tax-exempt	2,626			2,386		2,394			2,166
Taxable	1,208			1,223		1,173			1,165
Equities	217			218		265			258
Short term investments	104			104		84			84
Limited partnership investments	1			1		2			2
Mortgage loans & other	20			20		20			20
Total investments	$	11,381		$	11,992	$	11,246		$	11,824

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

Total investments	$	41,557		$	42,830	$	41,484		$	42,655

Total net receivable/(payable)	$	(32	)			$	(222	)



CNA FINANCIAL CORPORATION Financial Supplement Asset-Backed Exposure As of March 31, 2011 (In millions)



Invested Assets Fair Value By Segment
	P&C and Corporate & Other Non-Core		%	Life & Group Non-Core		%	Total		%
RMBS	$	5,712	18.5	$	363	3.0	$	6,075	14.2
CMBS	940		3.0	170		1.4	1,110		2.6
Other ABS	847		2.8	49		0.4	896		2.1
Total asset-backed exposure	7,499		24.3	582		4.8	8,081		18.9
Other fixed maturities	19,056		61.8	11,067		92.3	30,123		70.3
All other invested assets	4,283		13.9	343		2.9	4,626		10.8
Total investments	$	30,838	100.0	$	11,992	100.0	$	42,830	100.0

Sub-prime (included in RMBS above)	$	412	1.3	$	23	0.2	$	435	1.0
Alt-A (included in RMBS above)	$	562	1.8	$	65	0.5	$	627	1.5



Invested Assets Amortized Cost By Segment
	P&C and Corporate & Other Non-Core		%	Life & Group Non-Core		%	Total		%
RMBS	$	5,824	19.3	$	369	3.3	$	6,193	14.9
CMBS	917		3.0	161		1.4	1,078		2.6
Other ABS	841		2.8	45		0.4	886		2.1
Total asset-backed exposure	7,582		25.1	575		5.1	8,157		19.6
Other fixed maturities	18,339		60.8	10,464		91.9	28,803		69.3
All other invested assets	4,255		14.1	342		3.0	4,597		11.1
Total investments	$	30,176	100.0	$	11,381	100.0	$	41,557	100.0

Sub-prime (included in RMBS above)	$	435	1.4	$	20	0.2	$	455	1.1
Alt-A (included in RMBS above)	$	580	1.9	$	69	0.6	$	649	1.6



RMBS/CMBS/Other ABS Distribution
	RMBS				CMBS				Other ABS				Total				% of Asset-Backed Exposure		% of Total Investments
	Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value	Amortized Cost	Fair Value	Amortized Cost
U.S. Government Agencies	$	3,521	$	3,507	$	45	$	45	$	—	$	—	$	3,566	$	3,552	44.1	43.6	8.3	8.4
AAA	1,195		1,231		228		223		659		652		2,082		2,106		25.7	25.8	4.9	5.1
AA	156		176		260		266		130		129		546		571		6.8	7.0	1.3	1.4
A	152		154		250		240		64		63		466		457		5.8	5.6	1.1	1.1
BBB	198		223		145		142		35		35		378		400		4.7	4.9	0.9	1.0
<BBB & Equity Tranches	853		902		182		162		8		7		1,043		1,071		12.9	13.1	2.4	2.6
Total RMBS/CMBS/other ABS	$	6,075	$	6,193	$	1,110	$	1,078	$	896	$	886	$	8,081	$	8,157	100.0	100.0	18.9	19.6

(1) 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.

(2) 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 Service, 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.

RMBS - Residential mortgage-backed securities

CMBS - Commercial mortgage-backed securities

Other ABS - Other asset-backed securities



CNA FINANCIAL CORPORATION Financial Supplement Asset-Backed Exposure As of March 31, 2011 (In millions)



RMBS Sub-Prime Fair Value Quality Distribution by Vintage Year
	AAA		%	AA		%	A		%	BBB		%	<BBB & Equity Tranches		%	Total		%
2009	$	11	8.0	$	—	—	$	1	3.3	$	—	—	$	—	—	$	12	2.7
2008	—		—	—		—	2		6.7	—		—	—		—	2		0.5
2007	6		4.4	25		19.9	3		10.0	7		17.9	10		9.7	51		11.7
2006	75		54.8	42		33.3	9		30.0	31		79.5	47		45.7	204		46.9
2005	37		27.0	35		27.8	1		3.3	—		—	3		2.9	76		17.5
2004	4		2.9	15		11.9	—		—	1		2.6	23		22.3	43		9.9
2003 & prior	4		2.9	9		7.1	14		46.7	—		—	20		19.4	47		10.8
Total sub-prime	$	137	100.0	$	126	100.0	$	30	100.0	$	39	100.0	$	103	100.0	$	435	100.0



RMBS Sub-Prime Amortized Cost Quality Distribution by Vintage Year
	AAA		%	AA		%	A		%	BBB		%	<BBB & Equity Tranches		%	Total		%
2009	$	11	7.9	$	—	—	$	1	3.2	$	—	—	$	—	—	$	12	2.7
2008	—		—	—		—	1		3.2	—		—	—		—	1		0.2
2007	6		4.3	25		17.5	4		12.9	7		17.9	11		10.7	53		11.6
2006	76		54.7	49		34.3	9		29.1	31		79.5	51		49.5	216		47.5
2005	38		27.3	45		31.4	1		3.2	—		—	3		2.9	87		19.1
2004	4		2.9	15		10.5	—		—	1		2.6	20		19.4	40		8.8
2003 & prior	4		2.9	9		6.3	15		48.4	—		—	18		17.5	46		10.1
Total sub-prime	$	139	100.0	$	143	100.0	$	31	100.0	$	39	100.0	$	103	100.0	$	455	100.0



RMBS Alt-A Fair Value Quality Distribution by Vintage Year
	AAA		%	AA		%	A		%	BBB		%	<BBB & Equity Tranches		%	Total		%
2009	$	—	—	$	—	—	$	—	—	$	—	—	$	—	—	$	—	—
2008	—		—	—		—	—		—	—		—	—		—	—		—
2007	8		2.3	—		—	2		3.5	—		—	36		34.6	46		7.3
2006	—		—	2		9.6	18		31.5	8		8.3	39		37.5	67		10.7
2005	24		6.9	7		33.3	11		19.3	53		55.2	3		2.9	98		15.6
2004	268		76.8	—		—	25		43.9	35		36.5	26		25.0	354		56.5
2003 & prior	49		14.0	12		57.1	1		1.8	—		—	—		—	62		9.9
Total Alt-A	$	349	100.0	$	21	100.0	$	57	100.0	$	96	100.0	$	104	100.0	$	627	100.0



RMBS Alt-A Amortized Cost Quality Distribution by Vintage Year
	AAA		%	AA		%	A		%	BBB		%	<BBB & Equity Tranches		%	Total		%
2009	$	—	—	$	—	—	$	—	—	$	—	—	$	—	—	$	—	—
2008	—		—	—		—	—		—	—		—	—		—	—		—
2007	8		2.3	—		—	2		3.5	—		—	39		35.5	49		7.6
2006	1		0.3	1		4.4	18		31.6	7		6.9	42		38.2	69		10.6
2005	24		6.7	9		39.1	10		17.5	58		56.8	3		2.7	104		16.0
2004	275		77.0	—		—	26		45.6	37		36.3	26		23.6	364		56.1
2003 & prior	49		13.7	13		56.5	1		1.8	—		—	—		—	63		9.7
Total Alt-A	$	357	100.0	$	23	100.0	$	57	100.0	$	102	100.0	$	110	100.0	$	649	100.0



CNA FINANCIAL CORPORATION Financial Supplement Asset-Backed Exposure As of March 31, 2011 (In millions)



RMBS Distribution By Collateral Type & Quality
	Fixed Coupon - 30 Year				Fixed Coupon -15/20 Year				ARM				Home Equity				Other				Total
	Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost
U.S. Government Agencies	$	3,044	$	3,027	$	471	$	474	$	5	$	5	$	—	$	—	$	1	$	1	$	3,521	$	3,507
AAA	551		565		136		143		51		53		12		12		445		458		1,195		1,231
AA	45		53		—		—		49		50		59		71		3		2		156		176
A	110		112		13		13		26		26		1		1		2		2		152		154
BBB	152		177		4		4		31		31		11		11		—		—		198		223
<BBB & Equity Tranches	437		444		—		—		373		414		25		26		18		18		853		902
Total RMBS	$	4,339	$	4,378	$	624	$	634	$	535	$	579	$	108	$	121	$	469	$	481	$	6,075	$	6,193

Included in Total RMBS:
MBS Pass-Through	$	1,422	$	1,443	$	201	$	205	$	5	$	5	$	—	$	—	$	6	$	4	$	1,634	$	1,657
Structured	2,917		2,935		423		429		530		574		108		121		463		477		4,441		4,536
Total RMBS	$	4,339	$	4,378	$	624	$	634	$	535	$	579	$	108	$	121	$	469	$	481	$	6,075	$	6,193

Included in Total RMBS:
Sub-prime	$	227	$	234	$	—	$	—	$	84	$	84	$	108	$	121	$	16	$	16	$	435	$	455
Alt-A	555		572		12		13		56		60		—		—		4		4		627		649
Prime	3,557		3,572		612		621		395		435		—		—		449		461		5,013		5,089
Total RMBS	$	4,339	$	4,378	$	624	$	634	$	535	$	579	$	108	$	121	$	469	$	481	$	6,075	$	6,193



CMBS Distribution By Deal Coupon Type & Quality
	Fixed Rate				Adjustable/Floating Rate				Total
	Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost
U.S. Government Agencies	$	—	$	—	$	45	$	45	$	45	$	45
AAA	157		154		71		69		228		223
AA	53		52		207		214		260		266
A	78		78		172		162		250		240
BBB	34		33		111		109		145		142
<BBB & Equity Tranches	84		95		98		67		182		162
Total CMBS	$	406	$	412	$	704	$	666	$	1,110	$	1,078

Included in Total CMBS:
MBS Pass-Through	$	—	$	—	$	—	$	—	$	—	$	—
Structured	406		412		704		666		1,110		1,078
Total CMBS	$	406	$	412	$	704	$	666	$	1,110	$	1,078

ARM - Adjustable rate mortgages

MBS - Mortgage-backed securities

CNA FINANCIAL CORPORATION

Financial Supplement

Asset-Backed Exposure

As of March 31, 2011

(In millions)



Other ABS Distribution By Collateral Type & Quality
	Auto Loans				Student Loans				Other				Total
	Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost
AAA	$	331	$	324	$	60	$	67	$	268	$	261	$	659	$	652
AA	39		39		—		—		91		90		130		129
A	31		31		—		—		33		32		64		63
BBB	31		31		—		—		4		4		35		35
<BBB & Equity Tranches	—		—		—		—		8		7		8		7
Total other ABS	$	432	$	425	$	60	$	67	$	404	$	394	$	896	$	886

Included in Total other ABS:
Pass-Through	$	18	$	18	$	—	$	—	$	—	$	—	$	18	$	18
Structured	414		407		60		67		404		394		878		868
Total other ABS	$	432	$	425	$	60	$	67	$	404	$	394	$	896	$	886



CNA FINANCIAL CORPORATION Financial Supplement Property & Casualty Results of Operations



	CNA Specialty											CNA Commercial											P&C Operations
THREE MONTHS ENDED MARCH 31 (In millions)	2011				2010				Fav / (Unfav) % Change			2011				2010				Fav / (Unfav) % Change			2011				2010				Fav / (Unfav) % Change
Gross written premiums	$	1,130			$	1,050			8		%	$	893			$	912			(2	)	%	$	2,023			$	1,962			3		%
Net written premiums	739				656				13			828				829				—			1,567				1,485				6
Operating revenues:
Net earned premiums	669				654				2			802				816				(2	)		1,471				1,470				—
Net investment income	160				147				9			261				221				18			421				368				14
Other revenues	54				52				4			14				18				(22	)		68				70				(3	)
Total operating revenues	883				853				4			1,077				1,055				2			1,960				1,908				3
Claims, Benefits and Expenses:
Net incurred claims and benefits	430				402				(7	)		603				604				—			1,033				1,006				(3	)
Policyholders' dividends	—				1				N/M			—				1				N/M			—				2				N/M
Amortization of deferred acquisition costs	161				155				(4	)		178				183				3			339				338				—
Other insurance related expenses	44				47				6			83				107				22			127				154				18
Other expenses	40				44				9			16				17				6			56				61				8
Total claims, benefits and expenses	675				649				(4	)		880				912				4			1,555				1,561				—
Operating income (loss) from continuing operations before income tax	208				204				2			197				143				38			405				347				17
Income tax (expense) benefit on operating income (loss)	(70		)		(68		)		(3	)		(66		)		(43		)		(53	)		(136		)		(111		)		(23	)
Net operating (income) loss, after-tax, attributable to noncontrolling interests	(8		)		(8		)		—			—				(2		)		N/M			(8		)		(10		)		20
Net operating income (loss) from continuing operations attributable to CNA	130				128				2			131				98				34			261				226				15
Net realized investment gains (losses), net of participating policyholders' interests	8				13				(38	)		17				21				(19	)		25				34				(26	)
Income tax (expense) benefit on net realized investment gains (losses)	(3		)		(4		)		25			(6		)		(7		)		14			(9		)		(11		)		18
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	5				9				(44	)		10				14				(29	)		15				23				(35	)
Net income (loss) from continuing operations attributable to CNA	$	135			$	137			(1	)	%	$	141			$	112			26		%	$	276			$	249			11		%

FINANCIAL RATIOS
Loss & LAE	64.2			%	61.5			%				75.3			%	74.1			%				70.3			%	68.5			%
Acquisition expense	19.2				19.2							15.6				18.1							17.3				18.6
Underwriting expense	11.4				11.6							17.0				17.5							14.4				14.9
Expense	30.6				30.8							32.6				35.6							31.7				33.5
Dividend	0.1				0.2							(0.2		)		0.1							(0.1		)		0.1
Combined ratio	94.9			%	92.5			%				107.7			%	109.8			%				101.9			%	102.1			%

RATIO IMPACTS
Impact of catastrophes
Pretax net accident year catastrophe losses incurred	$	2			$	2						$	53			$	38						$	55			$	40
Impact on loss & LAE ratio	0.3			%	0.3			%				6.6			%	4.7			%				3.7			%	2.7			%

Impact of development & other
Pretax net development: (favorable) / unfavorable
Prior year loss & ALAE reserve development	$	(15	)		$	(25	)					$	(7	)		$	(28	)					$	(22	)		$	(53	)
Prior year premium development	(7		)		(4		)					(8		)		21							(15		)		17
Other ⁽¹⁾	—				—							3				—							3				—
Total development & other	$	(22	)		$	(29	)					$	(12	)		$	(7	)					$	(34	)		$	(36	)
Impact of development & other on loss & LAE ratio	(3.0		)	%	(4.2		)	%				(1.2		)	%	(1.5		)	%				(2.0		)	%	(2.7		)	%

(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 MARCH 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	$	1,471		$	1,470		$	144		$	145		(1	)	%	$	—		$	—		N/M		%	$	1,615		$	1,615		—		%
Net investment income	421			368			188			175			7			11			47			(77	)		620			590			5
Other revenues	68			70			(2		)	4			(150	)		1			2			(50	)		67			76			(12	)
Total operating revenues	1,960			1,908			330			324			2			12			49			(76	)		2,302			2,281			1
Claims, Benefits and Expenses:
Net incurred claims and benefits	1,033			1,006			323			281			(15	)		7			19			63			1,363			1,306			(4	)
Policyholders' dividends	—			2			1			—			N/M			—			—			—			1			2			50
Amortization of deferred acquisition costs	339			338			6			4			(50	)		—			—			—			345			342			(1	)
Other insurance related expenses	127			154			38			51			25			—			1			N/M			165			206			20
Other expenses	56			61			6			6			—			44			35			(26	)		106			102			(4	)
Total claims, benefits and expenses	1,555			1,561			374			342			(9	)		51			55			7			1,980			1,958			(1	)
Operating income (loss) from continuing operations before income tax	405			347			(44		)	(18		)	(144	)		(39		)	(6		)	N/M			322			323			—
Income tax (expense) benefit on operating income (loss)	(136		)	(111		)	26			19			37			12			2			N/M			(98		)	(90		)	(9	)
Net operating (income) loss, after-tax, attributable to noncontrolling interests	(8		)	(10		)	—			—			—			—			—			—			(8		)	(10		)	20
Net operating income (loss) from continuing operations attributable to CNA	261			226			(18		)	1			N/M			(27		)	(4		)	N/M			216			223			(3	)
Net realized investment gains (losses), net of participating policyholders' interests	25			34			(4		)	(4		)	—			(8		)	4			N/M			13			34			(62	)
Income tax (expense) benefit on net realized investment gains (losses)	(9		)	(11		)	1			—			N/M			4			(1		)	N/M			(4		)	(12		)	67
Net realized investment (gains) losses, after-tax, attributable to noncontrolling interests	(1		)	—			—			—			—			—			—			—			(1		)	—			N/M
Net realized investment gains (losses) attributable to CNA	15			23			(3		)	(4		)	25			(4		)	3			N/M			8			22			(64	)
Net income (loss) from continuing operations attributable to CNA	$	276		$	249		$	(21	)	$	(3	)	N/M		%	$	(31	)	$	(1	)	N/M		%	$	224		$	245		(9	)	%



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



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


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


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


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


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


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



CNA FINANCIAL CORPORATION Financial Supplement Statutory Data - Preliminary



PERIODS ENDED MARCH 31	Three Months
Income Statement	(Preliminary)								Fav / (Unfav) % Change
(In millions)	2011				2010				Fav / (Unfav) % Change
Combined Continental Casualty Companies
Gross written premiums	$	1,952			$	1,862			5		%
Net written premiums	1,510				1,402				8

Net earned premiums	1,246				1,217				2
Claim and claim adjustment expenses	1,109				1,061				(5	)
Acquisition expenses	256				239				(7	)
Underwriting expenses	194				213				9
Policyholders' dividends	3				3				—
Underwriting income (loss)	(316		)		(299		)		(6	)
Net investment income	425				413				3
Other income (loss)	22				10				120
Income tax (expense) benefit	(9		)		(17		)		47
Net realized gains (losses)	27				10				170
Net income (loss)	$	149			$	117			27		%

Financial Ratios
Loss and LAE	89.0			%	87.2			%
Acquisition expense	16.9				17.1
Underwriting expense	12.9				15.2
Expense	29.8				32.3
Dividend	0.2				0.2
Combined ratio	119.0			%	119.7			%



SUPPLEMENTAL STATUTORY DATA	(Preliminary)
(In millions)	March 31, 2011		December 31, 2010
Combined Continental Casualty Companies
Statutory surplus (1)	$	10,091	$	9,821
Life Company
Statutory surplus	$	509	$	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 3/31/11			2010 FY Evaluated at 12/31/10			2010 FY Evaluated at 3/31/11
Gross Accident Year	63.3		%	62.6		%	62.7	%
Impact of Reinsurance	3.9			4.3			4.2
Net Accident Year	67.2			66.9			66.9	%
Impact of Development and Other ⁽¹⁾	(3.0	)		(12.9	)
Net Calendar Year	64.2		%	54.0		%



	CNA Commercial
	2011 YTD Evaluated at 3/31/11			2010 FY Evaluated at 12/31/10			2010 FY Evaluated at 3/31/11
Gross Accident Year	72.8		%	71.7		%	72.2	%
Impact of Reinsurance	3.7			3.8			3.5
Net Accident Year	76.5			75.5			75.7	%
Impact of Development and Other⁽¹⁾	(1.2	)		(8.7	)
Net Calendar Year	75.3		%	66.8		%



	P&C Operations
	2011 YTD Evaluated at 3/31/11			2010 FY Evaluated at 12/31/10			2010 FY Evaluated at 3/31/11
Gross Accident Year	67.6		%	66.8		%	67.1	%
Impact of Reinsurance	4.7			4.8			4.6
Net Accident Year	72.3			71.6			71.7	%
Impact of Development and Other ⁽¹⁾	(2.0	)		(10.6	)
Net Calendar Year	70.3		%	61.0		%

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

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