CNA Financial Corporation
Supplemental Financial Information
September 30, 2012
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
September 30, 2012
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, CNA Commercial, and Hardy. |
| |
| • | 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 N to the Consolidated Financial Statements within the 2011 Form 10-K for further discussion of this measure. |
| |
| • | In evaluating the results of CNA Specialty, CNA Commercial, and Hardy, 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. |
| |
| • | 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 in the underlying investment strategies also increases volatility. |
| |
| • | Certain immaterial differences are due to rounding. |
Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts
The Company has adjusted its previously reported financial information to reflect a retrospective change in accounting guidance for deferred acquisition costs. Financial information included herein gives effect to this adjustment. Total CNA stockholders' equity at December 31, 2011 was reduced by $69 million and Book value per common share decreased $0.26. For the three and nine months ended September 30, 2011, the impacts of adopting the new accounting standard were no impact and a $0.02 decrease in earnings per share. There was a 0.1% decrease in Net income (loss) attributable to CNA return on equity for the nine months ended September 30, 2011.
Acquisition of Hardy Underwriting Bermuda Limited (Hardy)
On July 2, 2012, the Company completed the previously announced acquisition of all outstanding shares of Hardy Underwriting Bermuda Limited and its subsidiaries (Hardy), a specialized Lloyd's of London (Lloyd's) underwriter. Through Lloyd's Syndicate 382, Hardy underwrites primarily short-tail exposures in marine and aviation, non-marine property, specialty lines and property treaty reinsurance. The acquisition of Hardy aligns with the Company's specialized underwriting focus and will be a key platform for expanding the Company's global business through the Lloyd's marketplace. The results of Hardy for the period from July 2, 2012 to September 30, 2012 are included in the results of our core property and casualty insurance operations as a separate segment.
CNA FINANCIAL CORPORATION
Financial Supplement
Statements of Operations
|
| | | | | | | | | | | | | | | | | | | | | | | |
| PERIODS ENDED SEPTEMBER 30 | Three Months | | Fav / (Unfav) | | | Nine Months | | Fav / (Unfav) | |
| (In millions) | 2012 | | 2011 | | % Change | | | 2012 | | 2011 | | % Change | |
| STATEMENTS OF OPERATIONS | | | | | | | | | | | | | |
| Revenues: | | | | | | | | | | | | | |
| Net earned premiums | $ | 1,781 |
| | $ | 1,732 |
| | 3 |
| % | | $ | 5,098 |
| | $ | 4,942 |
| | 3 |
| % |
| Net investment income | 601 |
| | 394 |
| | 53 |
| | | 1,719 |
| | 1,531 |
| | 12 |
| |
| Net realized investment gains (losses), net of participating policyholders' interests: | | | | | | | | | | | | | |
| Other-than-temporary impairment (OTTI) losses | (62 | ) | | (75 | ) | | 17 |
| | | (89 | ) | | (136 | ) | | 35 |
| |
| Portion of OTTI recognized in Other comprehensive income (loss) | (2 | ) | | (2 | ) | | — |
| | | (25 | ) | | (44 | ) | | 43 |
| |
| Net OTTI losses recognized in earnings | (64 | ) | | (77 | ) | | 17 |
| | | (114 | ) | | (180 | ) | | 37 |
| |
| Other net realized investment gains (losses) | 72 |
| | 50 |
| | 44 |
| | | 180 |
| | 181 |
| | (1 | ) | |
| Net realized investment gains (losses), net of participating policyholders' interests | 8 |
| | (27 | ) | | 130 |
| | | 66 |
| | 1 |
| | N/M |
| |
| Other revenues | 76 |
| | 76 |
| | — |
| | | 230 |
| | 214 |
| | 7 |
| |
| Total revenues | 2,466 |
| | 2,175 |
| | 13 |
| | | 7,113 |
| | 6,688 |
| | 6 |
| |
| Claims, Benefits and Expenses: | | | | | | | | | | | | | |
| Insurance claims and policyholders' benefits | 1,435 |
| | 1,400 |
| | (3 | ) | | | 4,164 |
| | 4,131 |
| | (1 | ) | |
| Amortization of deferred acquisition costs | 333 |
| | 297 |
| | (12 | ) | | | 937 |
| | 880 |
| | (6 | ) | |
| Other operating expenses | 341 |
| | 311 |
| | (10 | ) | | | 976 |
| | 914 |
| | (7 | ) | |
| Interest | 43 |
| | 43 |
| | — |
| | | 128 |
| | 132 |
| | 3 |
| |
| Total claims, benefits and expenses | 2,152 |
| | 2,051 |
| | (5 | ) | | | 6,205 |
| | 6,057 |
| | (2 | ) | |
| Income (loss) from continuing operations before income tax | 314 |
| | 124 |
| | 153 |
| | | 908 |
| | 631 |
| | 44 |
| |
| Income tax (expense) benefit | (93 | ) | | (48 | ) | | (94 | ) | | | (271 | ) | | (196 | ) | | (38 | ) | |
| Income (loss) from continuing operations, net of tax | 221 |
| | 76 |
| | 191 |
| | | 637 |
| | 435 |
| | 46 |
| |
| Income (loss) from discontinued operations, net of tax | — |
| | — |
| | N/M |
| | | — |
| | (1 | ) | | N/M |
| |
| Net income (loss) | 221 |
| | 76 |
| | 191 |
| | | 637 |
| | 434 |
| | 47 |
| |
| Net (income) loss attributable to noncontrolling interests | — |
| | (1 | ) | | N/M |
| | | — |
| | (15 | ) | | N/M |
| |
| Net income (loss) attributable to CNA | $ | 221 |
| | $ | 75 |
| | 195 |
| % | | $ | 637 |
| | $ | 419 |
| | 52 |
| % |
CNA FINANCIAL CORPORATION
Financial Supplement
Components of Income (Loss) Attributable to CNA Common Stockholders, Per Share Data and Return on Equity
|
| | | | | | | | | | | | | | | | | |
| PERIODS ENDED SEPTEMBER 30 | Three Months | | | Nine Months | |
| (In millions, except per share data) | 2012 | | 2011 | | | 2012 | | 2011 | |
| COMPONENTS OF INCOME (LOSS) ATTRIBUTABLE TO CNA COMMON STOCKHOLDERS | | | | | | | | | |
| Net operating income (loss) from continuing operations attributable to CNA common stockholders | $ | 216 |
| | $ | 91 |
| | | $ | 594 |
| | $ | 418 |
| |
| Net realized investment gains (losses) attributable to CNA common stockholders | 5 |
| | (16 | ) | | | 43 |
| | 2 |
| |
| Income (loss) from continuing operations attributable to CNA common stockholders | 221 |
| | 75 |
| | | 637 |
| | 420 |
| |
| Income (loss) from discontinued operations attributable to CNA common stockholders | — |
| | — |
| | | — |
| | (1 | ) | |
| Income (loss) attributable to CNA common stockholders | $ | 221 |
| | $ | 75 |
| | | $ | 637 |
| | $ | 419 |
| |
| | | | | | | | | | |
| DILUTED EARNINGS (LOSS) PER COMMON SHARE | | | | | | | | | |
| Net operating income (loss) from continuing operations attributable to CNA common stockholders | $ | 0.80 |
| | $ | 0.34 |
| | | $ | 2.20 |
| | $ | 1.55 |
| |
| Net realized investment gains (losses) attributable to CNA common stockholders | 0.02 |
| | (0.06 | ) | | | 0.16 |
| | 0.01 |
| |
| Income (loss) from continuing operations attributable to CNA common stockholders | 0.82 |
| | 0.28 |
| | | 2.36 |
| | 1.56 |
| |
| Income (loss) from discontinued operations attributable to CNA common stockholders | — |
| | — |
| | | — |
| | — |
| |
| Diluted earnings (loss) per share attributable to CNA common stockholders | $ | 0.82 |
| | $ | 0.28 |
| | | $ | 2.36 |
| | $ | 1.56 |
| |
| | | | | | | | | | |
| WEIGHTED AVERAGE OUTSTANDING COMMON STOCK AND COMMON STOCK EQUIVALENTS | | | | | | | | | |
| Basic | 269.4 |
| | 269.3 |
| | | 269.4 |
| | 269.3 |
| |
| Diluted | 269.8 |
| | 269.6 |
| | | 269.8 |
| | 269.6 |
| |
| | | | | | | | | | |
| RETURN ON EQUITY | | | | | | | | | |
Net income (loss) attributable to CNA (1) | 7.1 |
| % | 2.6 |
| % | | 7.0 |
| % | 4.9 |
| % |
Net operating income (loss) from continuing operations attributable to CNA (2) | 7.5 |
| | 3.4 |
| | | 7.0 |
| | 5.2 |
| |
(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 per share data) | September 30, 2012 | | December 31, 2011 |
| Total assets | $ | 58,612 |
| | $ | 55,110 |
|
| Insurance reserves | 39,151 |
| | 37,554 |
|
| Debt | 2,570 |
| | 2,608 |
|
| Total liabilities | 45,952 |
| | 43,622 |
|
| Accumulated other comprehensive income (loss) | 1,130 |
| | 480 |
|
| Total CNA stockholders' equity | 12,660 |
| | 11,488 |
|
| | | | |
| Book value per common share | $ | 46.99 |
| | $ | 42.66 |
|
| Book value per common share excluding AOCI | $ | 42.80 |
| | $ | 40.88 |
|
| | | | |
| Outstanding shares of common stock (in millions of shares) | 269.4 |
| | 269.3 |
|
|
| | | | | | | |
THREE MONTHS ENDED SEPTEMBER 30 (In millions) | 2012 | | 2011 |
| Net cash flows provided (used) by operating activities | $ | 375 |
| | $ | 401 |
|
| Net cash flows provided (used) by investing activities | (237 | ) | | (314 | ) |
| Net cash flows provided (used) by financing activities | (112 | ) | | (84 | ) |
| Net cash flows provided (used) by operating, investing and financing activities | $ | 26 |
| | $ | 3 |
|
|
| | | | | | | |
NINE MONTHS ENDED SEPTEMBER 30 (In millions) | 2012 | | 2011 |
| Net cash flows provided (used) by operating activities | $ | 993 |
| | $ | 813 |
|
| Net cash flows provided (used) by investing activities | (747 | ) | | (217 | ) |
| Net cash flows provided (used) by financing activities | (195 | ) | | (588 | ) |
| Net cash flows provided (used) by operating, investing and financing activities | $ | 51 |
| | $ | 8 |
|
CNA FINANCIAL CORPORATION
Financial Supplement
Claim & Claim Adjustment Expense Reserve Rollforward |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
THREE MONTHS ENDED SEPTEMBER 30, 2012 (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 | $ | 6,925 |
| | $ | 11,316 |
| | $ | — |
| | $ | 18,241 |
| | $ | 2,901 |
| | $ | 2,865 |
| | $ | 24,007 |
|
| Ceded | 819 |
| | 1,103 |
| | — |
| | 1,922 |
| | 512 |
| | 2,315 |
| | 4,749 |
|
| Net | 6,106 |
| | 10,213 |
| | — |
| | 16,319 |
| | 2,389 |
| | 550 |
| | 19,258 |
|
| | | | | | | | | | | | | | |
| Increase in net reserves due to acquisition of Hardy | — |
| | — |
| | 291 |
| | 291 |
| | — |
| | — |
| | 291 |
|
| Net incurred claim & claim adjustment expenses | 460 |
| | 594 |
| | 21 |
| | 1,075 |
| | 186 |
| | 7 |
| | 1,268 |
|
| Net claim & claim adjustment expense payments | (458 | ) | | (679 | ) | | (53 | ) | | (1,190 | ) | | (145 | ) | | (17 | ) | | (1,352 | ) |
| Foreign currency translation adjustment and other | 14 |
| | 12 |
| | 6 |
| | 32 |
| | 33 |
| | 1 |
| | 66 |
|
| | | | | | | | | | | | | | |
| Claim & claim adjustment expense reserves, end of period | | | | | | | | | | | | | |
| Net | 6,122 |
| | 10,140 |
| | 265 |
| | 16,527 |
| | 2,463 |
| | 541 |
| | 19,531 |
|
| Ceded | 731 |
| | 1,086 |
| | 201 |
| | 2,018 |
| | 493 |
| | 2,289 |
| | 4,800 |
|
| Gross | $ | 6,853 |
| | $ | 11,226 |
| | $ | 466 |
| | $ | 18,545 |
| | $ | 2,956 |
| | $ | 2,830 |
| | $ | 24,331 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
NINE MONTHS ENDED SEPTEMBER 30, 2012 (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 | $ | 6,840 |
| | $ | 11,509 |
| | $ | — |
| | $ | 18,349 |
| | $ | 2,825 |
| | $ | 3,129 |
| | $ | 24,303 |
|
| Ceded | 817 |
| | 1,119 |
| | — |
| | 1,936 |
| | 546 |
| | 2,538 |
| | 5,020 |
|
| Net | 6,023 |
| | 10,390 |
| | — |
| | 16,413 |
| | 2,279 |
| | 591 |
| | 19,283 |
|
| | | | | | | | | | | | | | |
| Increase in net reserves due to acquisition of Hardy | — |
| | — |
| | 291 |
| | 291 |
| | — |
| | — |
| | 291 |
|
| Net incurred claim & claim adjustment expenses | 1,376 |
| | 1,753 |
| | 21 |
| | 3,150 |
| | 536 |
| | 14 |
| | 3,700 |
|
| Net claim & claim adjustment expense payments | (1,289 | ) | | (2,016 | ) | | (53 | ) | | (3,358 | ) | | (413 | ) | | (63 | ) | | (3,834 | ) |
| Foreign currency translation adjustment and other | 12 |
| | 13 |
| | 6 |
| | 31 |
| | 61 |
| | (1 | ) | | 91 |
|
| | | | | | | | | | | | | | |
| Claim & claim adjustment expense reserves, end of period | | | | | | | | | | | | | |
| Net | 6,122 |
| | 10,140 |
| | 265 |
| | 16,527 |
| | 2,463 |
| | 541 |
| | 19,531 |
|
| Ceded | 731 |
| | 1,086 |
| | 201 |
| | 2,018 |
| | 493 |
| | 2,289 |
| | 4,800 |
|
| Gross | $ | 6,853 |
| | $ | 11,226 |
| | $ | 466 |
| | $ | 18,545 |
| | $ | 2,956 |
| | $ | 2,830 |
| | $ | 24,331 |
|
CNA FINANCIAL CORPORATION
Financial Supplement
Investment Summary - Consolidated
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2012 | | June 30, 2012 | | December 31, 2011 |
| (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 | $ | 21,828 |
| | $ | 2,602 |
| | $ | 21,492 |
| | $ | 2,130 |
| | $ | 20,884 |
| | $ | 1,792 |
|
| States, municipalities and political subdivisions: | | | | | | | | | | | |
| Tax-exempt | 6,612 |
| | 706 |
| | 6,300 |
| | 524 |
| | 5,731 |
| | 277 |
|
| Taxable | 4,200 |
| | 691 |
| | 4,116 |
| | 635 |
| | 4,051 |
| | 487 |
|
| Total states, municipalities and political subdivisions | 10,812 |
| | 1,397 |
| | 10,416 |
| | 1,159 |
| | 9,782 |
| | 764 |
|
| Asset-backed: | | | | | | | | | | | |
| RMBS | 6,090 |
| | 183 |
| | 5,891 |
| | 74 |
| | 5,775 |
| | (11 | ) |
| CMBS | 1,688 |
| | 106 |
| | 1,569 |
| | 55 |
| | 1,354 |
| | (11 | ) |
| Other ABS | 966 |
| | 22 |
| | 1,065 |
| | 19 |
| | 955 |
| | 9 |
|
| Total asset-backed | 8,744 |
| | 311 |
| | 8,525 |
| | 148 |
| | 8,084 |
| | (13 | ) |
| U.S. Treasury and obligations of government-sponsored enterprises | 192 |
| | 10 |
| | 184 |
| | 12 |
| | 493 |
| | 14 |
|
| Foreign government | 614 |
| | 26 |
| | 639 |
| | 23 |
| | 636 |
| | 28 |
|
| Redeemable preferred stock | 115 |
| | 14 |
| | 111 |
| | 10 |
| | 58 |
| | 7 |
|
| Total fixed maturity securities | 42,305 |
| | 4,360 |
| | 41,367 |
| | 3,482 |
| | 39,937 |
| | 2,592 |
|
| Equities | 260 |
| | 32 |
| | 290 |
| | 38 |
| | 304 |
| | 16 |
|
| Limited partnership investments | 2,370 |
| | — |
| | 2,242 |
| | — |
| | 2,245 |
| | — |
|
| Other invested assets | 11 |
| | — |
| | 11 |
| | — |
| | 12 |
| | — |
|
| Mortgage loans | 358 |
| | — |
| | 339 |
| | — |
| | 234 |
| | — |
|
| Short term investments | 2,484 |
| | 1 |
| | 1,752 |
| | — |
| | 1,641 |
| | — |
|
| Total investments | $ | 47,788 |
| | $ | 4,393 |
| | $ | 46,001 |
| | $ | 3,520 |
| | $ | 44,373 |
| | $ | 2,608 |
|
| | | | | | | | | | | | |
| Net receivable/(payable) | $ | (467 | ) | | $ | — |
| | $ | (72 | ) | | $ | — |
| | $ | 45 |
| | $ | — |
|
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
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2012 | | June 30, 2012 | | December 31, 2011 |
| (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 | $ | 13,721 |
| | $ | 972 |
| | $ | 13,544 |
| | $ | 803 |
| | $ | 13,190 |
| | $ | 620 |
|
| States, municipalities and political subdivisions: | | | | | | | | | | | |
| Tax-exempt | 2,271 |
| | 163 |
| | 2,204 |
| | 142 |
| | 2,204 |
| | 116 |
|
| Taxable | 2,306 |
| | 326 |
| | 2,444 |
| | 323 |
| | 2,445 |
| | 236 |
|
| Total states, municipalities and political subdivisions | 4,577 |
| | 489 |
| | 4,648 |
| | 465 |
| | 4,649 |
| | 352 |
|
| Asset-backed: | | | | | | | | | | | |
| RMBS | 5,684 |
| | 164 |
| | 5,507 |
| | 71 |
| | 5,415 |
| | (3 | ) |
| CMBS | 1,467 |
| | 86 |
| | 1,372 |
| | 43 |
| | 1,169 |
| | (18 | ) |
| Other ABS | 936 |
| | 20 |
| | 1,023 |
| | 16 |
| | 913 |
| | 6 |
|
| Total asset-backed | 8,087 |
| | 270 |
| | 7,902 |
| | 130 |
| | 7,497 |
| | (15 | ) |
| U.S. Treasury and obligations of government-sponsored enterprises | 168 |
| | 1 |
| | 160 |
| | 4 |
| | 469 |
| | 5 |
|
| Foreign government | 609 |
| | 25 |
| | 633 |
| | 21 |
| | 631 |
| | 27 |
|
| Redeemable preferred stock | 36 |
| | 1 |
| | 36 |
| | 1 |
| | 7 |
| | 1 |
|
| Total fixed maturity securities | 27,198 |
| | 1,758 |
| | 26,923 |
| | 1,424 |
| | 26,443 |
| | 990 |
|
| Equities | 101 |
| | 27 |
| | 132 |
| | 34 |
| | 105 |
| | 18 |
|
| Limited partnership investments | 2,370 |
| | — |
| | 2,242 |
| | — |
| | 2,245 |
| | — |
|
| Other invested assets | 11 |
| | — |
| | 11 |
| | — |
| | 12 |
| | — |
|
| Mortgage loans | 338 |
| | — |
| | 319 |
| | — |
| | 214 |
| | — |
|
| Short term investments | 2,298 |
| | 1 |
| | 1,640 |
| | — |
| | 1,509 |
| | — |
|
| Total investments | $ | 32,316 |
| | $ | 1,786 |
| | $ | 31,267 |
| | $ | 1,458 |
| | $ | 30,528 |
| | $ | 1,008 |
|
| | | | | | | | | | | | |
| Net receivable/(payable) | $ | (435 | ) | | $ | — |
| | $ | (62 | ) | | $ | — |
| | $ | 50 |
| | $ | — |
|
CNA FINANCIAL CORPORATION
Financial Supplement
Investment Summary - Life & Group Non-Core
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2012 | | June 30, 2012 | | December 31, 2011 |
| (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 | $ | 8,107 |
| | $ | 1,630 |
| | $ | 7,948 |
| | $ | 1,327 |
| | $ | 7,694 |
| | $ | 1,172 |
|
| States, municipalities and political subdivisions: | | | | | | | | | | | |
| Tax-exempt | 4,341 |
| | 543 |
| | 4,096 |
| | 382 |
| | 3,527 |
| | 161 |
|
| Taxable | 1,894 |
| | 365 |
| | 1,672 |
| | 312 |
| | 1,606 |
| | 251 |
|
| Total states, municipalities and political subdivisions | 6,235 |
| | 908 |
| | 5,768 |
| | 694 |
| | 5,133 |
| | 412 |
|
| Asset-backed: | | | | | | | | | | | |
| RMBS | 406 |
| | 19 |
| | 384 |
| | 3 |
| | 360 |
| | (8 | ) |
| CMBS | 221 |
| | 20 |
| | 197 |
| | 12 |
| | 185 |
| | 7 |
|
| Other ABS | 30 |
| | 2 |
| | 42 |
| | 3 |
| | 42 |
| | 3 |
|
| Total asset-backed | 657 |
| | 41 |
| | 623 |
| | 18 |
| | 587 |
| | 2 |
|
| U.S. Treasury and obligations of government-sponsored enterprises | 24 |
| | 9 |
| | 24 |
| | 8 |
| | 24 |
| | 9 |
|
| Foreign government | 5 |
| | 1 |
| | 6 |
| | 2 |
| | 5 |
| | 1 |
|
| Redeemable preferred stock | 79 |
| | 13 |
| | 75 |
| | 9 |
| | 51 |
| | 6 |
|
| Total fixed maturity securities | 15,107 |
| | 2,602 |
| | 14,444 |
| | 2,058 |
| | 13,494 |
| | 1,602 |
|
| Equities | 159 |
| | 5 |
| | 158 |
| | 4 |
| | 199 |
| | (2 | ) |
| Limited partnership investments | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Other invested assets | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Mortgage loans | 20 |
| | — |
| | 20 |
| | — |
| | 20 |
| | — |
|
| Short term investments | 186 |
| | — |
| | 112 |
| | — |
| | 132 |
| | — |
|
| Total investments | $ | 15,472 |
| | $ | 2,607 |
| | $ | 14,734 |
| | $ | 2,062 |
| | $ | 13,845 |
| | $ | 1,600 |
|
| | | | | | | | | | | | |
| Net receivable/(payable) | $ | (32 | ) | | $ | — |
| | $ | (10 | ) | | $ | — |
| | $ | (5 | ) | | $ | — |
|
CNA FINANCIAL CORPORATION
Financial Supplement
Investments - Fixed Maturity Securities by Credit Rating
September 30, 2012
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 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 | $ | — |
| | $ | — |
| | $ | 319 |
| | $ | 19 |
| | $ | 1,358 |
| | $ | 126 |
| | $ | 7,159 |
| | $ | 994 |
| | $ | 10,968 |
| | $ | 1,317 |
| | $ | 2,024 |
| | $ | 146 |
| | $ | 21,828 |
| | $ | 2,602 |
|
| States, municipalities and political subdivisions: | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Tax-exempt | — |
| | — |
| | 1,038 |
| | 117 |
| | 3,995 |
| | 439 |
| | 1,371 |
| | 134 |
| | 203 |
| | 16 |
| | 5 |
| | — |
| | 6,612 |
| | 706 |
|
| Taxable | — |
| | — |
| | 602 |
| | 91 |
| | 2,767 |
| | 453 |
| | 779 |
| | 145 |
| | 52 |
| | 2 |
| | — |
| | — |
| | 4,200 |
| | 691 |
|
| Total states, municipalities and political subdivisions | — |
| | — |
| | 1,640 |
| | 208 |
| | 6,762 |
| | 892 |
| | 2,150 |
| | 279 |
| | 255 |
| | 18 |
| | 5 |
| | — |
| | 10,812 |
| | 1,397 |
|
| Asset-backed: | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| RMBS | 4,461 |
| | 173 |
| | 249 |
| | 2 |
| | 158 |
| | (3 | ) | | 193 |
| | 1 |
| | 187 |
| | (11 | ) | | 842 |
| | 21 |
| | 6,090 |
| | 183 |
|
| CMBS | 90 |
| | 6 |
| | 426 |
| | 30 |
| | 209 |
| | 19 |
| | 456 |
| | 27 |
| | 260 |
| | 15 |
| | 247 |
| | 9 |
| | 1,688 |
| | 106 |
|
| Other ABS | — |
| | — |
| | 406 |
| | 12 |
| | 347 |
| | 5 |
| | 197 |
| | 5 |
| | 16 |
| | — |
| | — |
| | — |
| | 966 |
| | 22 |
|
| Total asset-backed | 4,551 |
| | 179 |
| | 1,081 |
| | 44 |
| | 714 |
| | 21 |
| | 846 |
| | 33 |
| | 463 |
| | 4 |
| | 1,089 |
| | 30 |
| | 8,744 |
| | 311 |
|
| U.S. Treasury and obligations of government-sponsored enterprises | 192 |
| | 10 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 192 |
| | 10 |
|
| Foreign government | — |
| | — |
| | 322 |
| | 14 |
| | 182 |
| | 8 |
| | 103 |
| | 4 |
| | 7 |
| | �� |
| | — |
| | — |
| | 614 |
| | 26 |
|
| Redeemable preferred stock | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 95 |
| | 13 |
| | 20 |
| | 1 |
| | 115 |
| | 14 |
|
| Total fixed maturity securities | $ | 4,743 |
| | $ | 189 |
| | $ | 3,362 |
| | $ | 285 |
| | $ | 9,016 |
| | $ | 1,047 |
| | $ | 10,258 |
| | $ | 1,310 |
| | $ | 11,788 |
| | $ | 1,352 |
| | $ | 3,138 |
| | $ | 177 |
| | $ | 42,305 |
| | $ | 4,360 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Percentage of total fixed maturity securities | 11 | % | | | | 8 | % | | | | 21 | % | | | | 24 | % | | | | 28 | % | | | | 8 | % | | | | 100 | % | | |
(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*
September 30, 2012
|
| | | | | | | | | | | | | | | | |
| | | Corporate | | Sovereign | | Total |
| (In millions) | | Financial Sector | | Other Sectors | | | | |
| European exposure: | | | | | | | | |
| United Kingdom | | $ | 747 |
| | $ | 847 |
| | $ | 84 |
| | $ | 1,678 |
|
| France | | 216 |
| | 279 |
| | 26 |
| | 521 |
|
| Netherlands | | 300 |
| | 158 |
| | 18 |
| | 476 |
|
| Germany | | 123 |
| | 255 |
| | 5 |
| | 383 |
|
| Sweden | | 157 |
| | 36 |
| | — |
| | 193 |
|
| Belgium | | 6 |
| | 170 |
| | 4 |
| | 180 |
|
| Italy | | 13 |
| | 124 |
| | 6 |
| | 143 |
|
| Spain | | 31 |
| | 100 |
| | 1 |
| | 132 |
|
| Switzerland | | 82 |
| | 44 |
| | 1 |
| | 127 |
|
| Luxembourg | | — |
| | 58 |
| | — |
| | 58 |
|
| Norway | | 2 |
| | 36 |
| | 6 |
| | 44 |
|
| Russian Federation | | — |
| | 37 |
| | — |
| | 37 |
|
| Greece | | — |
| | 21 |
| | — |
| | 21 |
|
| Finland | | — |
| | 10 |
| | 7 |
| | 17 |
|
| Ireland | | 5 |
| | 10 |
| | — |
| | 15 |
|
| Austria | | 1 |
| | 4 |
| | — |
| | 5 |
|
| Poland | | — |
| | — |
| | 5 |
| | 5 |
|
| Czech Republic | | — |
| | 4 |
| | — |
| | 4 |
|
| Total fair value | | $ | 1,683 |
| | $ | 2,193 |
| | $ | 163 |
| | $ | 4,039 |
|
| Total amortized cost | | $ | 1,598 |
| | $ | 1,941 |
| | $ | 159 |
| | $ | 3,698 |
|
* 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*
September 30, 2012
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | | AAA | | AA | | A | | BBB | | Non-investment grade | | Total |
| European exposure: | | | | | | | | | | | | |
| United Kingdom | | $ | 172 |
| | $ | 60 |
| | $ | 857 |
| | $ | 533 |
| | $ | 56 |
| | $ | 1,678 |
|
| France | | 48 |
| | 39 |
| | 188 |
| | 230 |
| | 16 |
| | 521 |
|
| Netherlands | | 73 |
| | 91 |
| | 166 |
| | 100 |
| | 46 |
| | 476 |
|
| Germany | | 93 |
| | 11 |
| | 198 |
| | 65 |
| | 16 |
| | 383 |
|
| Sweden | | — |
| | 114 |
| | 46 |
| | 33 |
| | — |
| | 193 |
|
| Belgium | | — |
| | 4 |
| | 93 |
| | 83 |
| | — |
| | 180 |
|
| Italy | | — |
| | — |
| | 8 |
| | 130 |
| | 5 |
| | 143 |
|
| Spain | | — |
| | — |
| | — |
| | 109 |
| | 23 |
| | 132 |
|
| Switzerland | | 1 |
| | 37 |
| | 57 |
| | 25 |
| | 7 |
| | 127 |
|
| Luxembourg | | — |
| | — |
| | 4 |
| | — |
| | 54 |
| | 58 |
|
| Norway | | 8 |
| | 2 |
| | — |
| | 29 |
| | 5 |
| | 44 |
|
| Russian Federation | | — |
| | — |
| | — |
| | 30 |
| | 7 |
| | 37 |
|
| Greece | | ��� |
| | — |
| | — |
| | 21 |
| | — |
| | 21 |
|
| Finland | | 7 |
| | — |
| | — |
| | — |
| | 10 |
| | 17 |
|
| Ireland | | — |
| | — |
| | — |
| | 10 |
| | 5 |
| | 15 |
|
| Austria | | — |
| | 5 |
| | — |
| | — |
| | — |
| | 5 |
|
| Poland | | — |
| | — |
| | 5 |
| | — |
| | — |
| | 5 |
|
| Czech Republic | | — |
| | — |
| | 4 |
| | — |
| | — |
| | 4 |
|
| Total fair value | | $ | 402 |
| | $ | 363 |
| | $ | 1,626 |
| | $ | 1,398 |
| | $ | 250 |
| | $ | 4,039 |
|
| Total amortized cost | | $ | 391 |
| | $ | 335 |
| | $ | 1,446 |
| | $ | 1,288 |
| | $ | 238 |
| | $ | 3,698 |
|
* 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 | | Hardy | | | P&C Operations |
THREE MONTHS ENDED SEPTEMBER 30 (In millions) | 2012 | | 2011 | | Fav / (Unfav) % Change | | | 2012 | | 2011 | | Fav / (Unfav) % Change | | | 2012 | | | 2012 | | 2011 | | Fav / (Unfav) % Change | |
| Gross written premiums | $ | 1,211 |
| | $ | 1,139 |
| | 6 |
| % | | $ | 864 |
| | $ | 882 |
| | (2 | ) | % | | $ | 87 |
| | | $ | 2,162 |
| | $ | 2,021 |
| | 7 |
| % |
Net written premiums (1) | 723 |
| | 750 |
| | (4 | ) | | | 811 |
| | 836 |
| | (3 | ) | | | 56 |
| | | 1,590 |
| | 1,586 |
| | — |
| |
| Operating revenues: | | | | | | | | | | | | | | | | | | | | | | | |
| Net earned premiums | 738 |
| | 741 |
| | — |
| | | 840 |
| | 848 |
| | (1 | ) | | | 64 |
| | | 1,642 |
| | 1,589 |
| | 3 |
| |
| Net investment income | 159 |
| | 85 |
| | 87 |
| | | 230 |
| | 115 |
| | 100 |
| | | 2 |
| | | 391 |
| | 200 |
| | 96 |
| |
| Other revenues | 58 |
| | 56 |
| | 4 |
| | | 11 |
| | 14 |
| | (21 | ) | | | — |
| | | 69 |
| | 70 |
| | (1 | ) | |
| Total operating revenues | 955 |
| | 882 |
| | 8 |
| | | 1,081 |
| | 977 |
| | 11 |
| | | 66 |
| | | 2,102 |
| | 1,859 |
| | 13 |
| |
| Claims, Benefits and Expenses: | | | | | | | | | | | | | | | | | | | | | | | |
| Net incurred claims and benefits | 460 |
| | 485 |
| | 5 |
| | | 591 |
| | 583 |
| | (1 | ) | | | 21 |
| | | 1,072 |
| | 1,068 |
| | — |
| |
| Policyholders' dividends | 1 |
| | (4 | ) | | (125 | ) | | | 3 |
| | 3 |
| | — |
| | | — |
| | | 4 |
| | (1 | ) | | N/M |
| |
| Amortization of deferred acquisition costs | 156 |
| | 147 |
| | (6 | ) | | | 151 |
| | 145 |
| | (4 | ) | | | 20 |
| | | 327 |
| | 292 |
| | (12 | ) | |
| Other insurance related expenses | 73 |
| | 75 |
| | 3 |
| | | 146 |
| | 141 |
| | (4 | ) | | | 13 |
| | | 232 |
| | 216 |
| | (7 | ) | |
| Other expenses | 53 |
| | 48 |
| | (10 | ) | | | 7 |
| | 10 |
| | 30 |
| | | 7 |
| | | 67 |
| | 58 |
| | (16 | ) | |
| Total claims, benefits and expenses | 743 |
| | 751 |
| | 1 |
| | | 898 |
| | 882 |
| | (2 | ) | | | 61 |
| | | 1,702 |
| | 1,633 |
| | (4 | ) | |
| Operating income (loss) from continuing operations before income tax | 212 |
| | 131 |
| | 62 |
| | | 183 |
| | 95 |
| | 93 |
| | | 5 |
| | | 400 |
| | 226 |
| | 77 |
| |
| Income tax (expense) benefit on operating income (loss) | (76 | ) | | (48 | ) | | (58 | ) | | | (58 | ) | | (46 | ) | | (26 | ) | | | (2 | ) | | | (136 | ) | | (94 | ) | | (45 | ) | |
| Net operating (income) loss, after-tax, attributable to noncontrolling interests | — |
| | — |
| | N/M |
| | | — |
| | (2 | ) | | N/M |
| | | — |
| | | — |
| | (2 | ) | | N/M |
| |
| Net operating income (loss) from continuing operations attributable to CNA | 136 |
| | 83 |
| | 64 |
| | | 125 |
| | 47 |
| | 166 |
| | | 3 |
| | | 264 |
| | 130 |
| | 103 |
| |
| Net realized investment gains (losses), net of participating policyholders' interests | 2 |
| | (8 | ) | | 125 |
| | | 10 |
| | (15 | ) | | 167 |
| | | (1 | ) | | | 11 |
| | (23 | ) | | 148 |
| |
| Income tax (expense) benefit on net realized investment gains (losses) | (2 | ) | | 3 |
| | (167 | ) | | | (3 | ) | | 5 |
| | (160 | ) | | | — |
| | | (5 | ) | | 8 |
| | (163 | ) | |
| 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 | ) | | N/M |
| | | 7 |
| | (9 | ) | | 178 |
| | | (1 | ) | | | 6 |
| | (14 | ) | | 143 |
| |
| Net income (loss) from continuing operations attributable to CNA | $ | 136 |
| | $ | 78 |
| | 74 |
| % | | $ | 132 |
| | $ | 38 |
| | N/M |
| % | | $ | 2 |
| | | $ | 270 |
| | $ | 116 |
| | 133 |
| % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| FINANCIAL RATIOS | | | | | | | | | | | | | | | | | | | | | | | |
| Loss & LAE | 62.5 |
| % | 65.5 |
| % | | | | 70.5 |
| % | 68.7 |
| % | | | | 33.3 |
| % | | 65.4 |
| % | 67.2 |
| % | | |
| Acquisition expense | 20.1 |
| | 19.6 |
| | | | | 18.2 |
| | 17.6 |
| | | | | 32.3 |
| | | 19.6 |
| | 18.6 |
| | | |
| Underwriting expense | 10.9 |
| | 10.2 |
| | | | | 17.0 |
| | 16.2 |
| | | | | 20.2 |
| | | 14.5 |
| | 13.3 |
| | | |
| Expense | 31.0 |
| | 29.8 |
| | | | | 35.2 |
| | 33.8 |
| | | | | 52.5 |
| | | 34.1 |
| | 31.9 |
| | | |
| Dividend | 0.2 |
| | (0.6 | ) | | | | | 0.3 |
| | 0.4 |
| | | | | — |
| | | 0.2 |
| | — |
| | | |
| Combined ratio | 93.7 |
| % | 94.7 |
| % | | | | 106.0 |
| % | 102.9 |
| % | | | | 85.8 |
| % | | 99.7 |
| % | 99.1 |
| % | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| RATIO IMPACTS | | | | | | | | | | | | | | | | | | | | | | | |
| Impact of catastrophes | | | | | | | | | | | | | | | | | | | | | | | |
| Pretax net accident year catastrophe losses incurred | $ | 3 |
| | $ | 4 |
| | | | | $ | 24 |
| | $ | 46 |
| | | | | $ | — |
| | | $ | 27 |
| | $ | 50 |
| | | |
| Impact on loss & LAE ratio | 0.5 |
| % | 0.5 |
| % | | | | 2.8 |
| % | 5.5 |
| % | | | | — |
| % | | 1.6 |
| % | 3.1 |
| % | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Impact of development & other | | | | | | | | | | | | | | | | | | | | | | | |
| Pretax net prior year development: (favorable) / unfavorable | | | | | | | | | | | | | | | | | | | | | | | |
| Prior year loss & ALAE reserve development | $ | (39 | ) | | $ | (5 | ) | | | | | $ | 2 |
| | $ | (42 | ) | | | | | $ | (6 | ) | | | $ | (43 | ) | | $ | (47 | ) | | | |
| Prior year premium development | (1 | ) | | (26 | ) | | | | | (5 | ) | | (11 | ) | | | | | — |
| | | (6 | ) | | (37 | ) | | | |
Other (2) | — |
| | — |
| | | | | 4 |
| | (6 | ) | | | | | — |
| | | 4 |
| | (6 | ) | | | |
| Total development & other | $ | (40 | ) | | $ | (31 | ) | | | | | $ | 1 |
| | $ | (59 | ) | | | | | $ | (6 | ) | | | $ | (45 | ) | | $ | (90 | ) | | | |
| Impact of development & other on loss & LAE ratio | (5.4 | ) | % | (3.1 | ) | % | | | | 0.3 |
| % | (6.6 | ) | % | | | | (8.9 | ) | % | | (2.6 | ) | % | (5.0 | ) | % | | |
(1) Excluding the impact of First Insurance Company of Hawaii (FICOH), net written premiums for CNA Commercial and P&C Operations increased 2% and 3%. The Company sold its 50% ownership interest in FICOH in the fourth quarter of 2011.
(2) 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 SEPTEMBER 30 (In millions) | 2012 | | 2011 | | | 2012 | | 2011 | | Fav / (Unfav) % Change | | | 2012 | | 2011 | | Fav / (Unfav) % Change | | | 2012 | | 2011 | | Fav / (Unfav) % Change | |
| Operating revenue: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net earned premiums | $ | 1,642 |
| | $ | 1,589 |
| | | $ | 141 |
| | $ | 142 |
| | (1 | ) | % | | $ | (2 | ) | | $ | 1 |
| | N/M |
| % | | $ | 1,781 |
| | $ | 1,732 |
| | 3 |
| % |
| Net investment income | 391 |
| | 200 |
| | | 201 |
| | 190 |
| | 6 |
| | | 9 |
| | 4 |
| | 125 |
| | | 601 |
| | 394 |
| | 53 |
| |
| Other revenues | 69 |
| | 70 |
| | | 1 |
| | 6 |
| | (83 | ) | | | 6 |
| | — |
| | N/M |
| | | 76 |
| | 76 |
| | — |
| |
| Total operating revenues | 2,102 |
| | 1,859 |
| | | 343 |
| | 338 |
| | 1 |
| | | 13 |
| | 5 |
| | 160 |
| | | 2,458 |
| | 2,202 |
| | 12 |
| |
| Claims, Benefits and Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net incurred claims and benefits | 1,072 |
| | 1,068 |
| | | 350 |
| | 332 |
| | (5 | ) | | | 8 |
| | (1 | ) | | N/M |
| | | 1,430 |
| | 1,399 |
| | (2 | ) | |
| Policyholders' dividends | 4 |
| | (1 | ) | | | 1 |
| | 2 |
| | 50 |
| | | — |
| | — |
| | N/M |
| | | 5 |
| | 1 |
| | N/M |
| |
| Amortization of deferred acquisition costs | 327 |
| | 292 |
| | | 6 |
| | 5 |
| | (20 | ) | | | — |
| | — |
| | N/M |
| | | 333 |
| | 297 |
| | (12 | ) | |
| Other insurance related expenses | 232 |
| | 216 |
| | | 35 |
| | 36 |
| | 3 |
| | | 1 |
| | — |
| | N/M |
| | | 268 |
| | 252 |
| | (6 | ) | |
| Other expenses | 67 |
| | 58 |
| | | 8 |
| | 2 |
| | N/M |
| | | 41 |
| | 42 |
| | 2 |
| | | 116 |
| | 102 |
| | (14 | ) | |
| Total claims, benefits and expenses | 1,702 |
| | 1,633 |
| | | 400 |
| | 377 |
| | (6 | ) | | | 50 |
| | 41 |
| | (22 | ) | | | 2,152 |
| | 2,051 |
| | (5 | ) | |
| Operating income (loss) from continuing operations before income tax | 400 |
| | 226 |
| | | (57 | ) | | (39 | ) | | (46 | ) | | | (37 | ) | | (36 | ) | | (3 | ) | | | 306 |
| | 151 |
| | 103 |
| |
| Income tax (expense) benefit on operating income (loss) | (136 | ) | | (94 | ) | | | 35 |
| | 25 |
| | 40 |
| | | 11 |
| | 11 |
| | — |
| | | (90 | ) | | (58 | ) | | (55 | ) | |
| Net operating (income) loss, after-tax, attributable to noncontrolling interests | — |
| | (2 | ) | | | — |
| | — |
| | N/M |
| | | — |
| | — |
| | N/M |
| | | — |
| | (2 | ) | | N/M |
| |
| Net operating income (loss) from continuing operations attributable to CNA | 264 |
| | 130 |
| | | (22 | ) | | (14 | ) | | (57 | ) | | | (26 | ) | | (25 | ) | | (4 | ) | | | 216 |
| | 91 |
| | 137 |
| |
| Net realized investment gains (losses), net of participating policyholders' interests | 11 |
| | (23 | ) | | | (3 | ) | | (4 | ) | | 25 |
| | | — |
| | — |
| | N/M |
| | | 8 |
| | (27 | ) | | 130 |
| |
| Income tax (expense) benefit on net realized investment gains (losses) | (5 | ) | | 8 |
| | | 1 |
| | 1 |
| | — |
| | | 1 |
| | 1 |
| | — |
| | | (3 | ) | | 10 |
| | (130 | ) | |
| 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 | 6 |
| | (14 | ) | | | (2 | ) | | (3 | ) | | 33 |
| | | 1 |
| | 1 |
| | — |
| | | 5 |
| | (16 | ) | | 131 |
| |
| Net income (loss) from continuing operations attributable to CNA | $ | 270 |
| | $ | 116 |
| | | $ | (24 | ) | | $ | (17 | ) | | (41 | ) | % | | $ | (25 | ) | | $ | (24 | ) | | (4 | ) | % | | $ | 221 |
| | $ | 75 |
| | 195 |
| % |
CNA FINANCIAL CORPORATION
Financial Supplement
Property & Casualty Results of Operations
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | CNA Specialty | | CNA Commercial | | Hardy | | | P&C Operations |
NINE MONTHS ENDED SEPTEMBER 30 (In millions) | 2012 | | 2011 | | Fav / (Unfav) % Change | | | 2012 | | 2011 | | Fav / (Unfav) % Change | | | 2012 | | | 2012 | | 2011 | | Fav / (Unfav) % Change | |
| Gross written premiums | $ | 3,670 |
| | $ | 3,348 |
| | 10 |
| % | | $ | 2,715 |
| | $ | 2,740 |
| | (1 | ) | % | | $ | 87 |
| | | $ | 6,472 |
| | $ | 6,088 |
| | 6 |
| % |
Net written premiums (1) | 2,206 |
| | 2,172 |
| | 2 |
| | | 2,543 |
| | 2,544 |
| | — |
| | | 56 |
| | | 4,805 |
| | 4,716 |
| | 2 |
| |
| Operating revenues: | | | | | | | | | | | | | | | | | | | | | | | |
| Net earned premiums | 2,163 |
| | 2,098 |
| | 3 |
| | | 2,452 |
| | 2,418 |
| | 1 |
| | | 64 |
| | | 4,679 |
| | 4,516 |
| | 4 |
| |
| Net investment income | 446 |
| | 371 |
| | 20 |
| | | 646 |
| | 569 |
| | 14 |
| | | 2 |
| | | 1,094 |
| | 940 |
| | 16 |
| |
| Other revenues | 171 |
| | 164 |
| | 4 |
| | | 31 |
| | 40 |
| | (23 | ) | | | — |
| | | 202 |
| | 204 |
| | (1 | ) | |
| Total operating revenues | 2,780 |
| | 2,633 |
| | 6 |
| | | 3,129 |
| | 3,027 |
| | 3 |
| | | 66 |
| | | 5,975 |
| | 5,660 |
| | 6 |
| |
| Claims, Benefits and Expenses: | | | | | | | | | | | | | | | | | | | | | | | |
| Net incurred claims and benefits | 1,376 |
| | 1,333 |
| | (3 | ) | | | 1,749 |
| | 1,807 |
| | 3 |
| | | 21 |
| | | 3,146 |
| | 3,140 |
| | — |
| |
| Policyholders' dividends | — |
| | (4 | ) | | N/M |
| | | 9 |
| | 5 |
| | (80 | ) | | | — |
| | | 9 |
| | 1 |
| | N/M |
| |
| Amortization of deferred acquisition costs | 458 |
| | 428 |
| | (7 | ) | | | 437 |
| | 435 |
| | — |
| | | 20 |
| | | 915 |
| | 863 |
| | (6 | ) | |
| Other insurance related expenses | 222 |
| | 216 |
| | (3 | ) | | | 425 |
| | 400 |
| | (6 | ) | | | 13 |
| | | 660 |
| | 616 |
| | (7 | ) | |
| Other expenses | 153 |
| | 140 |
| | (9 | ) | | | 24 |
| | 37 |
| | 35 |
| | | 7 |
| | | 184 |
| | 177 |
| | (4 | ) | |
| Total claims, benefits and expenses | 2,209 |
| | 2,113 |
| | (5 | ) | | | 2,644 |
| | 2,684 |
| | 1 |
| | | 61 |
| | | 4,914 |
| | 4,797 |
| | (2 | ) | |
| Operating income (loss) from continuing operations before income tax | 571 |
| | 520 |
| | 10 |
| | | 485 |
| | 343 |
| | 41 |
| | | 5 |
| | | 1,061 |
| | 863 |
| | 23 |
| |
| Income tax (expense) benefit on operating income (loss) | (197 | ) | | (182 | ) | | (8 | ) | | | (164 | ) | | (127 | ) | | (29 | ) | | | (2 | ) | | | (363 | ) | | (309 | ) | | (17 | ) | |
| Net operating (income) loss, after-tax, attributable to noncontrolling interests | — |
| | (12 | ) | | N/M |
| | | — |
| | (3 | ) | | N/M |
| | | — |
| | | — |
| | (15 | ) | | N/M |
| |
| Net operating income (loss) from continuing operations attributable to CNA | 374 |
| | 326 |
| | 15 |
| | | 321 |
| | 213 |
| | 51 |
| | | 3 |
| | | 698 |
| | 539 |
| | 29 |
| |
| Net realized investment gains (losses), net of participating policyholders' interests | 18 |
| | 7 |
| | 157 |
| | | 34 |
| | 13 |
| | 162 |
| | | (1 | ) | | | 51 |
| | 20 |
| | 155 |
| |
| Income tax (expense) benefit on net realized investment gains (losses) | (6 | ) | | (2 | ) | | N/M |
| | | (12 | ) | | (4 | ) | | N/M |
| | | — |
| | | (18 | ) | | (6 | ) | | N/M |
| |
| 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 | 12 |
| | 5 |
| | 140 |
| | | 22 |
| | 9 |
| | 144 |
| | | (1 | ) | | | 33 |
| | 14 |
| | 136 |
| |
| Net income (loss) from continuing operations attributable to CNA | $ | 386 |
| | $ | 331 |
| | 17 |
| % | | $ | 343 |
| | $ | 222 |
| | 55 |
| % | | $ | 2 |
| | | $ | 731 |
| | $ | 553 |
| | 32 |
| % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| FINANCIAL RATIOS | | | | | | | | | | | | | | | | | | | | | | | |
| Loss & LAE | 63.6 |
| % | 63.6 |
| % | | | | 71.3 |
| % | 74.7 |
| % | | | | 33.3 |
| % | | 67.3 |
| % | 69.5 |
| % | | |
| Acquisition expense | 20.0 |
| | 19.7 |
| | | | | 18.0 |
| | 17.4 |
| | | | | 32.3 |
| | | 19.1 |
| | 18.5 |
| | | |
| Underwriting expense | 11.5 |
| | 10.9 |
| | | | | 17.2 |
| | 17.2 |
| | | | | 20.2 |
| | | 14.5 |
| | 14.3 |
| | | |
| Expense | 31.5 |
| | 30.6 |
| | | | | 35.2 |
| | 34.6 |
| | | | | 52.5 |
| | | 33.6 |
| | 32.8 |
| | | |
| Dividend | — |
| | (0.2 | ) | | | | | 0.3 |
| | 0.2 |
| | | | | — |
| | | 0.2 |
| | — |
| | | |
| Combined ratio | 95.1 |
| % | 94.0 |
| % | | | | 106.8 |
| % | 109.5 |
| % | | | | 85.8 |
| % | | 101.1 |
| % | 102.3 |
| % | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| RATIO IMPACTS | | | | | | | | | | | | | | | | | | | | | | | |
| Impact of catastrophes | | | | | | | | | | | | | | | | | | | | | | | |
| Pretax net accident year catastrophe losses incurred | $ | 8 |
| | $ | 10 |
| | | | | $ | 115 |
| | $ | 195 |
| | | | | $ | — |
| | | $ | 123 |
| | $ | 205 |
| | | |
| Impact on loss & LAE ratio | 0.4 |
| % | 0.5 |
| % | | | | 4.7 |
| % | 8.1 |
| % | | | | — |
| % | | 2.6 |
| % | 4.5 |
| % | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Impact of development & other | | | | | | | | | | | | | | | | | | | | | | | |
| Pretax net prior year development: (favorable) / unfavorable | | | | | | | | | | | | | | | | | | | | | | | |
| Prior year loss & ALAE reserve development | $ | (80 | ) | | $ | (72 | ) | | | | | $ | (25 | ) | | $ | (99 | ) | | | | | $ | (6 | ) | | | $ | (111 | ) | | $ | (171 | ) | | | |
| Prior year premium development | (15 | ) | | (34 | ) | | | | | (41 | ) | | 21 |
| | | | | — |
| | | (56 | ) | | (13 | ) | | | |
Other (2) | — |
| | — |
| | | | | 15 |
| | 1 |
| | | | | — |
| | | 15 |
| | 1 |
| | | |
| Total development & other | $ | (95 | ) | | $ | (106 | ) | | | | | $ | (51 | ) | | $ | (77 | ) | | | | | $ | (6 | ) | | | $ | (152 | ) | | $ | (183 | ) | | | |
| Impact of development & other on loss & LAE ratio | (4.2 | ) | % | (4.5 | ) | % | | | | (1.7 | ) | % | (3.4 | ) | % | | | | (8.9 | ) | % | | (2.8 | ) | % | (4.0 | ) | % | | |
(1) Excluding the impact of First Insurance Company of Hawaii (FICOH), net written premiums for CNA Commercial and P&C Operations increased 4%. The Company sold its 50% ownership interest in FICOH in the fourth quarter of 2011.
(2) 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 | |
NINE MONTHS ENDED SEPTEMBER 30 (In millions) | 2012 | | 2011 | | | 2012 | | 2011 | | Fav / (Unfav) % Change | | | 2012 | | 2011 | | Fav / (Unfav) % Change | | | 2012 | | 2011 | | Fav / (Unfav) % Change | |
| Operating revenue: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net earned premiums | $ | 4,679 |
| | $ | 4,516 |
| | | $ | 421 |
| | $ | 427 |
| | (1 | ) | % | | $ | (2 | ) | | $ | (1 | ) | | (100 | ) | % | | $ | 5,098 |
| | $ | 4,942 |
| | 3 |
| % |
| Net investment income | 1,094 |
| | 940 |
| | | 600 |
| | 567 |
| | 6 |
| | | 25 |
| | 24 |
| | 4 |
| | | 1,719 |
| | 1,531 |
| | 12 |
| |
| Other revenues | 202 |
| | 204 |
| | | 15 |
| | 6 |
| | 150 |
| | | 13 |
| | 4 |
| | N/M |
| | | 230 |
| | 214 |
| | 7 |
| |
| Total operating revenues | 5,975 |
| | 5,660 |
| | | 1,036 |
| | 1,000 |
| | 4 |
| | | 36 |
| | 27 |
| | 33 |
| | | 7,047 |
| | 6,687 |
| | 5 |
| |
| Claims, Benefits and Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net incurred claims and benefits | 3,146 |
| | 3,140 |
| | | 1,009 |
| | 985 |
| | (2 | ) | | | (5 | ) | | — |
| | N/M |
| | | 4,150 |
| | 4,125 |
| | (1 | ) | |
| Policyholders' dividends | 9 |
| | 1 |
| | | 5 |
| | 5 |
| | — |
| | | — |
| | — |
| | N/M |
| | | 14 |
| | 6 |
| | (133 | ) | |
| Amortization of deferred acquisition costs | 915 |
| | 863 |
| | | 22 |
| | 17 |
| | (29 | ) | | | — |
| | — |
| | N/M |
| | | 937 |
| | 880 |
| | (6 | ) | |
| Other insurance related expenses | 660 |
| | 616 |
| | | 106 |
| | 108 |
| | 2 |
| | | — |
| | 2 |
| | N/M |
| | | 766 |
| | 726 |
| | (6 | ) | |
| Other expenses | 184 |
| | 177 |
| | | 18 |
| | 14 |
| | (29 | ) | | | 136 |
| | 129 |
| | (5 | ) | | | 338 |
| | 320 |
| | (6 | ) | |
| Total claims, benefits and expenses | 4,914 |
| | 4,797 |
| | | 1,160 |
| | 1,129 |
| | (3 | ) | | | 131 |
| | 131 |
| | — |
| | | 6,205 |
| | 6,057 |
| | (2 | ) | |
| Operating income (loss) from continuing operations before income tax | 1,061 |
| | 863 |
| | | (124 | ) | | (129 | ) | | 4 |
| | | (95 | ) | | (104 | ) | | 9 |
| | | 842 |
| | 630 |
| | 34 |
| |
| Income tax (expense) benefit on operating income (loss) | (363 | ) | | (309 | ) | | | 86 |
| | 78 |
| | 10 |
| | | 29 |
| | 34 |
| | (15 | ) | | | (248 | ) | | (197 | ) | | (26 | ) | |
| Net operating (income) loss, after-tax, attributable to noncontrolling interests | — |
| | (15 | ) | | | — |
| | — |
| | N/M |
| | | — |
| | — |
| | N/M |
| | | — |
| | (15 | ) | | N/M |
| |
| Net operating income (loss) from continuing operations attributable to CNA | 698 |
| | 539 |
| | | (38 | ) | | (51 | ) | | 25 |
| | | (66 | ) | | (70 | ) | | 6 |
| | | 594 |
| | 418 |
| | 42 |
| |
| Net realized investment gains (losses), net of participating policyholders' interests | 51 |
| | 20 |
| | | 14 |
| | (7 | ) | | N/M |
| | | 1 |
| | (12 | ) | | 108 |
| | | 66 |
| | 1 |
| | N/M |
| |
| Income tax (expense) benefit on net realized investment gains (losses) | (18 | ) | | (6 | ) | | | (5 | ) | | 2 |
| | N/M |
| | | — |
| | 5 |
| | N/M |
| | | (23 | ) | | 1 |
| | N/M |
| |
| 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 | 33 |
| | 14 |
| | | 9 |
| | (5 | ) | | N/M |
| | | 1 |
| | (7 | ) | | 114 |
| | | 43 |
| | 2 |
| | N/M |
| |
| Net income (loss) from continuing operations attributable to CNA | $ | 731 |
| | $ | 553 |
| | | $ | (29 | ) | | $ | (56 | ) | | 48 |
| % | | $ | (65 | ) | | $ | (77 | ) | | 16 |
| % | | $ | 637 |
| | $ | 420 |
| | 52 |
| % |
CNA FINANCIAL CORPORATION
Financial Supplement
Components of Pretax Net Investment Income
(In millions)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | CNA Specialty |
| | 1Q11 | | 2Q11 | | 3Q11 | | 4Q11 | | 1Q12 | | 2Q12 | | 3Q12 |
| Income (loss) from limited partnerships | $ | 38 |
| | $ | 4 |
| | $ | (32 | ) | | $ | 5 |
| | $ | 46 |
| | $ | (13 | ) | | $ | 32 |
|
| Income (loss) from trading portfolio | 1 |
| | 1 |
| | — |
| | 1 |
| | 3 |
| | 2 |
| | 3 |
|
| Other investment income | 121 |
| | 121 |
| | 117 |
| | 123 |
| | 126 |
| | 123 |
| | 124 |
|
| Net investment income | $ | 160 |
| | $ | 126 |
| | $ | 85 |
| | $ | 129 |
| | $ | 175 |
| | $ | 112 |
| | $ | 159 |
|
| | | | | | | | | | | | | | |
| | CNA Commercial |
| | 1Q11 | | 2Q11 | | 3Q11 | | 4Q11 | | 1Q12 | | 2Q12 | | 3Q12 |
| Income (loss) from limited partnerships | $ | 73 |
| | $ | 6 |
| | $ | (59 | ) | | $ | 11 |
| | $ | 81 |
| | $ | (21 | ) | | $ | 55 |
|
| Income (loss) from trading portfolio | 2 |
| | 2 |
| | (1 | ) | | 2 |
| | 4 |
| | 2 |
| | 4 |
|
| Other investment income | 186 |
| | 185 |
| | 175 |
| | 181 |
| | 180 |
| | 170 |
| | 171 |
|
| Net investment income | $ | 261 |
| | $ | 193 |
| | $ | 115 |
| | $ | 194 |
| | $ | 265 |
| | $ | 151 |
| | $ | 230 |
|
| | | | | | | | | | | | | | |
| | Hardy |
| | | | | | | | | | | | | | 3Q12 |
| Income (loss) from limited partnerships | | | | | | | | | | | | | $ | — |
|
| Income (loss) from trading portfolio | | | | | | | | | | | | | — |
|
| Other investment income | | | | | | | | | | | | | 2 |
|
| Net investment income | | |
|
| |
|
| |
|
| |
|
| |
|
| | $ | 2 |
|
| | | | | | | | | | | | | | |
| | P&C Operations |
| | 1Q11 | | 2Q11 | | 3Q11 | | 4Q11 | | 1Q12 | | 2Q12 | | 3Q12 |
| Income (loss) from limited partnerships | $ | 111 |
| | $ | 10 |
| | $ | (91 | ) | | $ | 16 |
| | $ | 127 |
| | $ | (34 | ) | | $ | 87 |
|
| Income (loss) from trading portfolio | 3 |
| | 3 |
| | (1 | ) | | 3 |
| | 7 |
| | 4 |
| | 7 |
|
| Other investment income | 307 |
| | 306 |
| | 292 |
| | 304 |
| | 306 |
| | 293 |
| | 297 |
|
| Net investment income | $ | 421 |
| | $ | 319 |
| | $ | 200 |
| | $ | 323 |
| | $ | 440 |
| | $ | 263 |
| | $ | 391 |
|
| | | | | | | | | | | | | | |
| | Life & Group Non-Core |
| | 1Q11 | | 2Q11 | | 3Q11 | | 4Q11 | | 1Q12 | | 2Q12 | | 3Q12 |
| Income (loss) from limited partnerships | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
|
| Income (loss) from trading portfolio | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Other investment income | 188 |
| | 189 |
| | 190 |
| | 192 |
| | 198 |
| | 201 |
| | 201 |
|
| Net investment income | $ | 188 |
| | $ | 189 |
| | $ | 190 |
| | $ | 192 |
| | $ | 198 |
| | $ | 201 |
| | $ | 201 |
|
| | | | | | | | | | | | | | |
| | Corporate & Other Non-Core |
| | 1Q11 | | 2Q11 | | 3Q11 | | 4Q11 | | 1Q12 | | 2Q12 | | 3Q12 |
| Income (loss) from limited partnerships | $ | 3 |
| | $ | 1 |
| | $ | (2 | ) | | $ | — |
| | $ | 3 |
| | $ | (1 | ) | | $ | 2 |
|
| Income (loss) from trading portfolio | — |
| | — |
| | — |
| | 1 |
| | — |
| | — |
| | — |
|
| Other investment income | 8 |
| | 8 |
| | 6 |
| | 7 |
| | 7 |
| | 7 |
| | 7 |
|
| Net investment income | $ | 11 |
| | $ | 9 |
| | $ | 4 |
| | $ | 8 |
| | $ | 10 |
| | $ | 6 |
| | $ | 9 |
|
| | | | | | | | | | | | | | |
| | Total Operations |
| | 1Q11 | | 2Q11 | | 3Q11 | | 4Q11 | | 1Q12 | | 2Q12 | | 3Q12 |
| Income (loss) from limited partnerships | $ | 114 |
| | $ | 11 |
| | $ | (93 | ) | | $ | 16 |
| | $ | 130 |
| | $ | (35 | ) | | $ | 89 |
|
| Income (loss) from trading portfolio | 3 |
| | 3 |
| | (1 | ) | | 4 |
| | 7 |
| | 4 |
| | 7 |
|
| Other investment income | 503 |
| | 503 |
| | 488 |
| | 503 |
| | 511 |
| | 501 |
| | 505 |
|
| Net investment income | $ | 620 |
| | $ | 517 |
| | $ | 394 |
| | $ | 523 |
| | $ | 648 |
| | $ | 470 |
| | $ | 601 |
|
CNA FINANCIAL CORPORATION
Financial Supplement
Statutory Data - Preliminary
|
| | | | | | | | | | | | | | | | | | | | | | | |
| PERIODS ENDED SEPTEMBER 30 | Three Months | | | | | Nine Months | | | |
| Income Statements | (Preliminary) 2012 | | | | Fav / (Unfav) % Change | | | (Preliminary) 2012 | | | | Fav / (Unfav) % Change | |
| (In millions) | | 2011 | | | | | 2011 | | |
| Combined Continental Casualty Companies | | | | | | | | | | | | | |
| Gross written premiums | $ | 2,048 |
| | $ | 2,044 |
| | — |
| % | | $ | 6,269 |
| | $ | 5,954 |
| | 5 |
| % |
| Net written premiums | 1,514 |
| | 1,615 |
| | (6 | ) | | | 4,648 |
| | 4,608 |
| | 1 |
| |
| | | | | | | | | | | | | | |
| Net earned premiums | 1,394 |
| | 1,359 |
| | 3 |
| | | 4,071 |
| | 3,851 |
| | 6 |
| |
| Claim and claim adjustment expenses | 1,228 |
| | 1,207 |
| | (2 | ) | | | 3,502 |
| | 3,420 |
| | (2 | ) | |
| Acquisition expenses | 275 |
| | 276 |
| | — |
| | | 810 |
| | 788 |
| | (3 | ) | |
| Underwriting expenses | 227 |
| | 201 |
| | (13 | ) | | | 657 |
| | 592 |
| | (11 | ) | |
| Policyholders' dividends | 2 |
| | 4 |
| | 50 |
| | | 5 |
| | 9 |
| | 44 |
| |
| Underwriting income (loss) | (338 | ) | | (329 | ) | | (3 | ) | | | (903 | ) | | (958 | ) | | 6 |
| |
| Net investment income | 436 |
| | 490 |
| | (11 | ) | | | 1,351 |
| | 1,380 |
| | (2 | ) | |
| Other income (loss) | 4 |
| | 85 |
| | (95 | ) | | | 7 |
| | 116 |
| | (94 | ) | |
| Income tax (expense) benefit | 10 |
| | (11 | ) | | 191 |
| | | (38 | ) | | (36 | ) | | (6 | ) | |
| Net realized gains (losses) | (37 | ) | | (57 | ) | | 35 |
| | | 16 |
| | 7 |
| | 129 |
| |
| Net income (loss) | $ | 75 |
| | $ | 178 |
| | (58 | ) | % | | $ | 433 |
| | $ | 509 |
| | (15 | ) | % |
| | | | | | | | | | | | | | |
| Financial Ratios | | | | | | | | | | | | | |
| Loss and LAE | 88.1 |
| % | 88.9 |
| % | | | | 86.0 |
| % | 88.8 |
| % | | |
| Acquisition expense | 18.2 |
| | 17.1 |
| | | | | 17.5 |
| | 17.1 |
| | | |
| Underwriting expense | 14.9 |
| | 12.4 |
| | | | | 14.1 |
| | 12.9 |
| | | |
| Expense | 33.1 |
| | 29.5 |
| | | | | 31.6 |
| | 30.0 |
| | | |
| Dividend | 0.2 |
| | 0.3 |
| | | | | 0.1 |
| | 0.2 |
| | | |
| Combined ratio | 121.4 |
| % | 118.7 |
| % | | | | 117.7 |
| % | 119.0 |
| % | | |
|
| | | | | | | | | | |
| SUPPLEMENTAL STATUTORY DATA | (Preliminary) September 30, 2012 | | December 31, 2011 | | | |
| (In millions) | | | |
| Combined Continental Casualty Companies | | | | | | |
Statutory surplus (1) | $ | 10,110 |
| | $ | 9,888 |
| | | |
| Life Company | | | | | | |
| Statutory surplus | $ | 551 |
| | $ | 519 |
| | | |
(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 |
| | 2012 YTD Evaluated at 9/30/12 | | 2011 FY Evaluated at 12/31/11 | | 2011 FY Evaluated at 9/30/12 | |
| Gross Accident Year | 60.5 |
| % | 62.8 |
| % | 63.1 |
| % |
| Impact of Reinsurance | 7.3 |
| | 4.9 |
| | 5.3 |
| |
| Net Accident Year | 67.8 |
| | 67.7 |
| | 68.4 |
| % |
Impact of Development and Other (1) | (4.2 | ) | | (8.4 | ) | | | |
| Net Calendar Year | 63.6 |
| % | 59.3 |
| % | | |
|
| | | | | | | | | |
| | CNA Commercial |
| | 2012 YTD Evaluated at 9/30/12 | | 2011 FY Evaluated at 12/31/11 | | 2011 FY Evaluated at 9/30/12 | |
| Gross Accident Year | 70.5 |
| % | 72.9 |
| % | 73.6 |
| % |
| Impact of Reinsurance | 2.5 |
| | 3.7 |
| | 3.6 |
| |
| Net Accident Year | 73.0 |
| | 76.6 |
| | 77.2 |
| % |
Impact of Development and Other (1) | (1.7 | ) | | (5.7 | ) | | | |
| Net Calendar Year | 71.3 |
| % | 70.9 |
| % | | |
|
| | | | | | | |
| | Hardy |
| | 2012 YTD Evaluated at 9/30/12 | | | | | |
| Gross Accident Year | 44.7 |
| % | | | | |
| Impact of Reinsurance | (2.5 | ) | | | | | |
| Net Accident Year | 42.2 |
| | | | | |
Impact of Development and Other (1) | (8.9 | ) | | | | | |
| Net Calendar Year | 33.3 |
| % | | | | |
|
| | | | | | | | | |
| | P&C Operations |
| | 2012 YTD Evaluated at 9/30/12 | | 2011 FY Evaluated at 12/31/11 | | 2011 FY Evaluated at 9/30/12 | |
| Gross Accident Year | 64.3 |
| % | 67.3 |
| % | 67.8 |
| % |
| Impact of Reinsurance | 5.8 |
| | 5.2 |
| | 5.4 |
| |
| Net Accident Year | 70.1 |
| | 72.5 |
| | 73.2 |
| % |
Impact of Development and Other (1) | (2.8 | ) | | (7.0 | ) | | | |
| Net Calendar Year | 67.3 |
| % | 65.5 |
| % | | |
(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 |
| | | | | | | | | | | | | | | |
| September 30, 2012 | | | | | | | |
| (In millions) | Claim and claim adjustment expenses | | Future policy benefits | | Policyholders' funds | | Separate account business |
| Long term care | $ | 1,614 |
| | $ | 6,756 |
| | $ | — |
| | $ | — |
|
| Payout annuities | 646 |
| | 1,984 |
| | — |
| | — |
|
| Institutional markets | 1 |
| | 13 |
| | 103 |
| | 345 |
|
| Other | 46 |
| | 4 |
| | — |
| | — |
|
| Total | $ | 2,307 |
| | $ | 8,757 |
| | $ | 103 |
| | $ | 345 |
|
The reserve amounts above are net of $1,296 million of ceded reserves and exclude $156 million of claim and claim adjustment expenses and $1,450 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 is recorded, net of tax, as a reduction of net unrealized gains through Other comprehensive income (Shadow Adjustments).
|
| | | | | | | | | | | | | | | |
| 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.
