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

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8-K - FORM 8-K - CNA FINANCIAL CORP	q2138k.htm
EX-99.1 - EX-99.1 - CNA FINANCIAL CORP	q213exhibit991.htm

CNA Financial Corporation

Supplemental Financial Information

June 30, 2013

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

CNA Financial Corporation

Table of Contents

June 30, 2013



	Page
Definitions and Presentation	i
Statements of Operations	1
Components of Income (Loss), Per Share Data and Return on Equity	2
Selected Balance Sheets Data and Statements of Cash Flows Data	3
Claim & Claim Adjustment Expense Reserve Rollforward	4
Investment Summary - Consolidated	5
Investment Summary - Property & Casualty and Corporate & Other Non-Core	6
Investment Summary - Life & Group Non-Core	7
Investments - Fixed Maturity Securities by Credit Rating	8
Consolidated - Results of Operations	9
Property & Casualty - Results of Operations	10
CNA Specialty - Results of Operations	11
CNA Commercial - Results of Operations	12
Hardy - Results of Operations	13
Life & Group Non-Core - Results of Operations	14
Corporate & Other Non-Core - Results of Operations	15
Components of Pretax Net Investment Income	16
Statutory Data - Preliminary	17
Property & Casualty Operations Loss & LAE Ratio Analysis	18
Net Carried Life & Group Non-Core Policyholder Reserves	19

CNA Financial Corporation

Definitions and Presentation


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


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


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


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


•	Management utilizes the net operating income financial measure to monitor the Company’s operations. Please refer to Note O to the Consolidated Financial Statements within the 2012 Form 10-K for further discussion of this measure.

•

In the evaluation of the results of CNA Specialty, CNA Commercial and Hardy, management utilizes the loss ratio, the expense ratio, the dividend ratio and the combined ratio. These ratios are calculated using financial results prepared in accordance with accounting principles generally accepted in the United States of America. The loss ratio is the percentage of net incurred claim and claim adjustment expenses to net earned premiums. The expense ratio is the percentage of insurance underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums. The dividend ratio is the ratio of policyholders' dividends incurred to net earned premiums. The combined ratio is the sum of the loss, expense and dividend ratios. The statutory expense ratio reported on page 17 is the percentage of acquisition and underwriting expenses to net written premiums in accordance with statutory accounting practices.

•

The majority of our limited partnership investments employ hedge fund strategies that generate returns primarily through investing in the fixed income and equity markets. While the Company generally does not invest in highly leveraged partnerships, there are risks which may result in losses due to short-selling, derivatives or other speculative investment practices. The use of leverage increases volatility generated by the underlying investment strategies.


•	Certain immaterial differences are due to rounding.


•	N/M = Not Meaningful


•	FY = Full Year

CNA FINANCIAL CORPORATION

Financial Supplement

Statements of Operations



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

CNA FINANCIAL CORPORATION

Financial Supplement

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



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

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

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

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

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

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

CNA FINANCIAL CORPORATION

Financial Supplement

Selected Balance Sheets Data and Statements of Cash Flows Data



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

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

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



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



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

CNA FINANCIAL CORPORATION

Financial Supplement

Claim & Claim Adjustment Expense Reserve Rollforward



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

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

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



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

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

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

CNA FINANCIAL CORPORATION
Financial Supplement
Investment Summary - Consolidated



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

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

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

RMBS - Residential mortgage-backed securities

CMBS - Commercial mortgage-backed securities

Other ABS - Other asset-backed securities

CNA FINANCIAL CORPORATION

Financial Supplement

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



	June 30, 2013					March 31, 2013				December 31, 2012
(In millions)	Carrying Value			Net Unrealized Gains (Losses)		Carrying Value		Net Unrealized Gains (Losses)		Carrying Value			Net Unrealized Gains (Losses)
Fixed maturity securities:
Corporate and other bonds	$	14,025		$	583	$	14,108	$	965	$	13,959		$	977
States, municipalities and political subdivisions:
Tax-exempt	2,355			55		2,208		129		2,117			143
Taxable	2,038			189		2,242		327		2,233			316
Total states, municipalities and political subdivisions	4,393			244		4,450		456		4,350			459
Asset-backed:
RMBS	4,754			51		5,294		142		5,515			155
CMBS	1,737			50		1,710		107		1,572			105
Other ABS	836			14		858		21		915			21
Total asset-backed	7,327			115		7,862		270		8,002			281
U.S. Treasury and obligations of government-sponsored enterprises	153			2		158		2		159			2
Foreign government	539			15		547		23		608			23
Redeemable preferred stock	34			—		35		—		35			1
Total fixed maturity securities	26,471			959		27,160		1,716		27,113			1,743
Equities	73			11		78		19		90			17
Limited partnership investments	2,665			—		2,564		—		2,462			—
Other invested assets	36			—		49		—		59			—
Mortgage loans	418			—		405		—		382			—
Short term investments	1,430			—		1,445		1		1,762			(1		)
Total investments	$	31,093		$	970	$	31,701	$	1,736	$	31,868		$	1,759

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

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

CNA FINANCIAL CORPORATION

Financial Supplement

Investment Summary - Life & Group Non-Core



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

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

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

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

June 30, 2013



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

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

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

CNA FINANCIAL CORPORATION

Financial Supplement

Consolidated - Results of Operations



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

CNA FINANCIAL CORPORATION

Financial Supplement

Property & Casualty - Results of Operations



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

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

CNA FINANCIAL CORPORATION

Financial Supplement

CNA Specialty - Results of Operations



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

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

CNA FINANCIAL CORPORATION

Financial Supplement

CNA Commercial - Results of Operations



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

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

CNA FINANCIAL CORPORATION

Financial Supplement

Hardy - Results of Operations



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

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

CNA FINANCIAL CORPORATION

Financial Supplement

Life & Group Non-Core - Results of Operations



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

CNA FINANCIAL CORPORATION

Financial Supplement

Corporate & Other Non-Core - Results of Operations



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

CNA FINANCIAL CORPORATION

Financial Supplement

Components of Pretax Net Investment Income



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



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



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

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

CNA FINANCIAL CORPORATION

Financial Supplement

Statutory Data - Preliminary



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

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

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



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

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

CNA FINANCIAL CORPORATION

Financial Supplement

Property & Casualty Operations Loss & LAE Ratio Analysis



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



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



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



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

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

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

CNA FINANCIAL CORPORATION

Financial Supplement

Net Carried Life & Group Non-Core Policyholder Reserves



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

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



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

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

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