Exhibit 99.2
CNA Financial Corporation
Supplemental Financial Information
March 31, 2007
Supplemental Financial Information
March 31, 2007
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.
Table of Contents
CNA Financial Corporation
Table of Contents
March 31, 2007
Table of Contents
March 31, 2007
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Table of Contents
CNA Financial Corporation
Supplemental Financial Information
DEFINITIONS AND PRESENTATION
| • | P&C Operationsincludes Standard Lines and Specialty Lines. | |
| • | Life & Group Non-Coresegment primarily includes the results of the life and group lines of business that have been placed in run-off. | |
| • | Corporate & Other Non-Coresegment includes the results of certain property and casualty lines of business placed in run-off, including CNA Re. This segment also includes the results related to the centralized adjusting and settlement of asbestos, environmental pollution and mass tort (APMT) claims and interest expense on corporate debt. | |
| • | Property and Casualty Companiesincludes Standard Lines, Specialty Lines and P&C business written in the Life & Group Non-Core and Corporate & Other Non-Core segments. | |
| • | Management utilizes the net operating income financial measure to monitor the Company’s operations. Please refer to Note N of the Consolidated Financial Statements within the 2006 Form 10-K for further discussion of this measure. | |
| • | In evaluating the results of Standard Lines and Specialty Lines, 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 (GAAP). 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. | |
| • | Limited partnerships (LPs) are a relatively small portion of CNA’s overall investment portfolio. The majority of the LPs invest in a substantial number of securities that are readily marketable. CNA is primarily a passive investor in such partnerships and does not have influence over the partnerships’ management, who are committed to operate them according to established guidelines and strategies. These strategies may include the use of leverage and hedging techniques that potentially introduce more volatility and risk to the partnerships. | |
| • | Certain immaterial differences are due to rounding. | |
| • | N/M = Not Meaningful |
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Table of Contents
CNA FINANCIAL CORPORATION
Financial Supplement
Statements of Operations
| PERIOD ENDED MARCH 31 | Three Months | |||||||||||
| Fav / | ||||||||||||
| (Unfav) | ||||||||||||
| (In millions) | 2007 | 2006 | % Change | |||||||||
STATEMENTS OF OPERATIONS | ||||||||||||
| Revenues: | ||||||||||||
| Net earned premiums | $ | 1,863 | $ | 1,869 | — | % | ||||||
| Net investment income | 608 | 570 | 7 | |||||||||
| Realized investment gains (losses), net of participating policyholders’ and minority interests | (21 | ) | 9 | N/M | ||||||||
| Other revenues | 67 | 53 | 26 | |||||||||
| Total revenues | 2,517 | 2,501 | 1 | |||||||||
| Claims, benefits and expenses: | ||||||||||||
| Insurance claims and policyholders’ benefits | 1,448 | 1,492 | 3 | |||||||||
| Amortization of deferred acquisition costs | 381 | 370 | (3 | ) | ||||||||
| Other operating expenses | 218 | 257 | 15 | |||||||||
| Interest | 34 | 30 | (13 | ) | ||||||||
| Total claims, benefits and expenses | 2,081 | 2,149 | 3 | |||||||||
| Income before income tax and minority interest | 436 | 352 | 24 | |||||||||
| Income tax expense | (132 | ) | (108 | ) | (22 | ) | ||||||
| Minority interest | (10 | ) | (9 | ) | (11 | ) | ||||||
| Income from continuing operations | 294 | 235 | 25 | |||||||||
| Income (loss) from discontinued operations, net of tax | 2 | (6 | ) | 133 | ||||||||
| Net income | $ | 296 | $ | 229 | 29 | % | ||||||
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Table of Contents
CNA FINANCIAL CORPORATION
Financial Supplement
Financial Supplement
Components of Net Income, Per Share Data and Return on Equity
| PERIOD ENDED MARCH 31 | Three Months | |||||||||||
| Fav / | ||||||||||||
| (Unfav) | ||||||||||||
| (In millions, except per share data) | 2007 | 2006 | % Change | |||||||||
COMPONENTS OF NET INCOME | ||||||||||||
| Net operating income | $ | 307 | $ | 234 | 31 | % | ||||||
| Net realized investment gains (losses), net of participating policyholders’ and minority interests | (13 | ) | 1 | N/M | ||||||||
| Income from continuing operations | 294 | 235 | 25 | |||||||||
| Income (loss) from discontinued operations, net of tax | 2 | (6 | ) | 133 | ||||||||
| Net income | $ | 296 | $ | 229 | 29 | % | ||||||
BASIC AND DILUTED EARNINGS PER SHARE | ||||||||||||
| Income from continuing operations | $ | 1.08 | $ | 0.84 | 29 | % | ||||||
| Income (loss) from discontinued operations, net of tax | 0.01 | (0.02 | ) | 150 | ||||||||
| Basic earnings per share available to common stockholders (1) | $ | 1.09 | $ | 0.82 | 33 | % | ||||||
WEIGHTED AVERAGE OUTSTANDING COMMON STOCK AND COMMON STOCK EQUIVALENTS | ||||||||||||
| Basic | 271.3 | 256.0 | ||||||||||
| Diluted | 271.6 | 256.0 | ||||||||||
RETURN ON EQUITY | ||||||||||||
| Net income (2) | 11.9 | % | 10.2 | % | ||||||||
| Net operating income (3) | 13.1 | 10.8 | ||||||||||
| (1) | The three months ended March 31, 2006 per share results available to common stockholders are reduced by $19 million, or $0.07 per share, of undeclared but accumulated preferred stock dividends. The undeclared but accumulated preferred stock dividends relate to the Company’s Series H Cumulative Preferred Stock which was repurchased from Loews on August 8, 2006. | |
| (2) | Annualized net income divided by the average stockholders’ equity including accumulated other comprehensive income (AOCI) for the period. Average equity including AOCI is calculated using a simple average of the beginning and ending balances for the period. | |
| (3) | Annualized net operating income 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. |
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Table of Contents
CNA FINANCIAL CORPORATION
Financial Supplement
Financial Supplement
Selected Balance Sheets Data and Statements of Cash Flows Data
| (In millions, except per share data) | March 31, 2007 | December 31, 2006 | ||||||||
| Total assets | $ | 61,605 | $ | 60,283 | ||||||
| Insurance reserves | 41,067 | 41,080 | ||||||||
| Debt | 2,156 | 2,156 | ||||||||
| Total liabilities | 51,119 | 50,180 | ||||||||
| Minority interest | 347 | 335 | ||||||||
| Accumulated other comprehensive income | 563 | 549 | ||||||||
| Total stockholders’ equity | 10,139 | 9,768 | ||||||||
| Book value per common share | $ | 37.34 | $ | 36.03 | ||||||
| Book value per common share excluding AOCI | $ | 35.26 | $ | 34.00 | ||||||
| Outstanding shares of common stock (in millions of shares) | 271.5 | 271.1 | ||||||||
| THREE MONTHS ENDED | ||||||||
| MARCH 31 | ||||||||
| (In millions) | 2007 | 2006 | ||||||
| Net cash flows provided by operating activities (1) | $ | 217 | $ | 626 | ||||
| Net cash flows used by investing activities | (201 | ) | (307 | ) | ||||
| Net cash flows used by financing activities | (26 | ) | (343 | ) | ||||
| Net cash flows | $ | (10 | ) | $ | (24 | ) | ||
| (1) | Operating cash flows for the three months ended March 31, 2007 and 2006 include $(18) million and $(5) million related to discontinued operations. |
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Table of Contents
CNA FINANCIAL CORPORATION
Financial Supplement
Financial Supplement
Claim & Claim Adjustment Expense Reserve Rollforward
| PERIOD ENDED MARCH 31, 2007 | ||||||||||||||||||||||||
| Life & Group | Corporate & | |||||||||||||||||||||||
| (In millions) | Standard Lines | Specialty Lines | P&C Operations | Non-Core | Other Non-Core | Total Operations | ||||||||||||||||||
| Claim & claim adjustment expense reserves, beginning of period | ||||||||||||||||||||||||
| Gross | $ | 14,934 | $ | 5,529 | $ | 20,463 | $ | 3,134 | $ | 6,039 | $ | 29,636 | ||||||||||||
| Ceded | 3,068 | 1,258 | 4,326 | 1,278 | 2,587 | 8,191 | ||||||||||||||||||
| Net | 11,866 | 4,271 | 16,137 | 1,856 | 3,452 | 21,445 | ||||||||||||||||||
| Net incurred claim & claim adjustment expenses | 738 | 398 | 1,136 | 102 | 33 | 1,271 | ||||||||||||||||||
| Net claim & claim adjustment expense payments | (763 | ) | (283 | ) | (1,046 | ) | (113 | ) | (152 | ) | (1,311 | ) | ||||||||||||
| Claim & claim adjustment expense reserves, end of period | ||||||||||||||||||||||||
| Net | 11,841 | 4,386 | 16,227 | 1,845 | 3,333 | 21,405 | ||||||||||||||||||
| Ceded | 3,095 | 1,328 | 4,423 | 1,240 | 2,442 | 8,105 | ||||||||||||||||||
| Gross | $ | 14,936 | $ | 5,714 | $ | 20,650 | $ | 3,085 | $ | 5,775 | $ | 29,510 | ||||||||||||
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Table of Contents
CNA FINANCIAL CORPORATION
Financial Supplement
Financial Supplement
Investments by Segment Aggregation
| March 31, 2007 | December 31, 2006 | ||||||||||||||||
| (In millions) | Book Value | Fair Value | Book Value | Fair Value | |||||||||||||
Property & Casualty and Corporate & Other Non-Core: | |||||||||||||||||
| Fixed maturities — taxable | $ | 21,356 | $ | 21,410 | $ | 23,238 | $ | 23,254 | |||||||||
| Fixed maturities — tax exempt | 3,809 | 3,846 | 3,307 | 3,351 | |||||||||||||
| Equities | 239 | 484 | 236 | 475 | |||||||||||||
| Short-term investments | 7,553 | 7,554 | 5,329 | 5,330 | |||||||||||||
| Limited partnership investments | 1,685 | 1,685 | 1,605 | 1,605 | |||||||||||||
| Other | 20 | 24 | 26 | 26 | |||||||||||||
Total investments | $ | 34,662 | $ | 35,003 | $ | 33,741 | $ | 34,041 | |||||||||
| Net receivable/(payable) | $ | (788 | ) | $ | (6 | ) | |||||||||||
| Securities lending collateral | (2,914 | ) | (2,851 | ) | |||||||||||||
Life & Group Non-Core: | |||||||||||||||||
| Fixed maturities — taxable | $ | 7,178 | $ | 7,644 | $ | 6,981 | $ | 7,451 | |||||||||
| Fixed maturities — tax exempt | 1,642 | 1,819 | 1,609 | 1,795 | |||||||||||||
| Equities | 178 | 189 | 172 | 182 | |||||||||||||
| Short-term investments | 292 | 292 | 380 | 380 | |||||||||||||
| Limited partnership investments | 255 | 255 | 247 | 247 | |||||||||||||
| Other | 1 | 1 | — | — | |||||||||||||
Total investments | $ | 9,546 | $ | 10,200 | $ | 9,389 | $ | 10,055 | |||||||||
| Net receivable/(payable) | $ | (20 | ) | $ | (2 | ) | |||||||||||
| Securities lending collateral | — | — | |||||||||||||||
Total investments | $ | 44,208 | $ | 45,203 | $ | 43,130 | $ | 44,096 | |||||||||
| Total net receivable/(payable) | $ | (808 | ) | $ | (8 | ) | |||||||||||
| Total securities lending collateral | (2,914 | ) | (2,851 | ) | |||||||||||||
The information above related to net receivable/(payable) and securities lending collateral is provided to facilitate an analysis of significant changes in book value. When compared to the net receivable/(payable) per the Consolidated Balance Sheets, the amounts above exclude $88 million and $90 million as of March 31, 2007 and December 31, 2006 where the net receivable/(payable) balance does not relate to the change in book value.
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Table of Contents
CNA FINANCIAL CORPORATION
Financial Supplement
Financial Supplement
Property & Casualty Results of Operations
| THREE MONTHS ENDED | Standard Lines | Specialty Lines | P&C Operations | |||||||||||||||||||||||||||||||||||
| MARCH 31 | Fav / (Unfav) | Fav / (Unfav) | Fav / (Unfav) | |||||||||||||||||||||||||||||||||||
| (In millions) | 2007 | 2006 | % Change | 2007 | 2006 | % Change | 2007 | 2006 | % Change | |||||||||||||||||||||||||||||
| Gross written premiums | $ | 1,585 | $ | 1,561 | 2 | % | $ | 775 | $ | 825 | (6 | )% | $ | 2,360 | $ | 2,386 | (1 | )% | ||||||||||||||||||||
| Net written premiums | 1,081 | 1,110 | (3 | ) | 650 | 648 | — | 1,731 | 1,758 | (2 | ) | |||||||||||||||||||||||||||
| Net earned premiums | 1,060 | 1,086 | (2 | ) | 648 | 628 | 3 | 1,708 | 1,714 | — | ||||||||||||||||||||||||||||
| Net investment income | 259 | 228 | 14 | 110 | 87 | 26 | 369 | 315 | 17 | |||||||||||||||||||||||||||||
| Other revenues | 23 | 20 | 15 | 41 | 33 | 24 | 64 | 53 | 21 | |||||||||||||||||||||||||||||
| Total operating revenues | 1,342 | 1,334 | 1 | 799 | 748 | 7 | 2,141 | 2,082 | 3 | |||||||||||||||||||||||||||||
| Claims, benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
| Net incurred claims and benefits | 738 | 780 | 5 | 398 | 372 | (7 | ) | 1,136 | 1,152 | 1 | ||||||||||||||||||||||||||||
| Policyholders’ dividends | 5 | 4 | (25 | ) | 1 | 1 | — | 6 | 5 | (20 | ) | |||||||||||||||||||||||||||
| Amortization of deferred acquisition costs | 242 | 238 | (2 | ) | 134 | 127 | (6 | ) | 376 | 365 | (3 | ) | ||||||||||||||||||||||||||
| Other insurance related expenses | 66 | 101 | 35 | 40 | 37 | (8 | ) | 106 | 138 | 23 | ||||||||||||||||||||||||||||
| Other expenses | 25 | 19 | (32 | ) | 38 | 32 | (19 | ) | 63 | 51 | (24 | ) | ||||||||||||||||||||||||||
| Total claims, benefits and expenses | 1,076 | 1,142 | 6 | 611 | 569 | (7 | ) | 1,687 | 1,711 | 1 | ||||||||||||||||||||||||||||
| Operating income before income tax and minority interest | 266 | 192 | 39 | 188 | 179 | 5 | 454 | 371 | 22 | |||||||||||||||||||||||||||||
| Income tax expense on operating income | (86 | ) | (56 | ) | (54 | ) | (62 | ) | (59 | ) | (5 | ) | (148 | ) | (115 | ) | (29 | ) | ||||||||||||||||||||
| Minority interest | (2 | ) | (3 | ) | 33 | (8 | ) | (6 | ) | (33 | ) | (10 | ) | (9 | ) | (11 | ) | |||||||||||||||||||||
| Net operating income from continuing operations | 178 | 133 | 34 | 118 | 114 | 4 | 296 | 247 | 20 | |||||||||||||||||||||||||||||
| Realized investment gains (losses), net of participating policyholders’ and minority interests | (28 | ) | 13 | N/M | (10 | ) | 3 | N/M | (38 | ) | 16 | N/M | ||||||||||||||||||||||||||
| Income tax (expense) benefit on realized investment gains (losses) | 10 | (4 | ) | N/M | 4 | (1 | ) | N/M | 14 | (5 | ) | N/M | ||||||||||||||||||||||||||
| Net income from continuing operations | $ | 160 | $ | 142 | 13 | % | $ | 112 | $ | 116 | (3 | )% | $ | 272 | $ | 258 | 5 | % | ||||||||||||||||||||
Financial Ratios | ||||||||||||||||||||||||||||||||||||||
| Loss & LAE | 69.6 | % | 71.8 | % | 61.5 | % | 59.3 | % | 66.5 | % | 67.2 | % | ||||||||||||||||||||||||||
| Acquisition expense | 16.1 | 18.5 | 18.4 | 17.9 | 16.9 | 18.3 | ||||||||||||||||||||||||||||||||
| Underwriting expense | 13.0 | 12.7 | 8.4 | 8.2 | 11.4 | 11.1 | ||||||||||||||||||||||||||||||||
| Dividends | 0.4 | 0.4 | 0.2 | 0.2 | 0.3 | 0.3 | ||||||||||||||||||||||||||||||||
| Expense ratio, including dividends | 29.5 | 31.6 | 27.0 | 26.3 | 28.6 | 29.7 | ||||||||||||||||||||||||||||||||
| Combined ratio | 99.1 | % | 103.4 | % | 88.5 | % | 85.6 | % | 95.1 | % | 96.9 | % | ||||||||||||||||||||||||||
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Table of Contents
CNA FINANCIAL CORPORATION
Financial Supplement
Financial Supplement
Life & Group Non-Core and Corporate & Other Non-Core Segments Results of Operations
| THREE MONTHS ENDED | Life & Group Non-Core | Corporate & Other Non-Core | Total Operations | ||||||||||||||||||||||||||||||||||||||||||||
| MARCH 31 | P&C Operations | Fav / (Unfav) | Fav / (Unfav) | Fav / (Unfav) | |||||||||||||||||||||||||||||||||||||||||||
| (In millions) | 2007 | 2006 | 2007 | 2006 | % Change | 2007 | 2006 | % Change | 2007 | 2006 | % Change | ||||||||||||||||||||||||||||||||||||
| Net earned premiums | $ | 1,708 | $ | 1,714 | $ | 156 | $ | 163 | (4 | )% | $ | (1 | ) | $ | (8 | ) | 88 | % | $ | 1,863 | $ | 1,869 | — | % | |||||||||||||||||||||||
| Net investment income | 369 | 315 | 161 | 187 | (14 | ) | 78 | 68 | 15 | 608 | 570 | 7 | |||||||||||||||||||||||||||||||||||
| Other revenues | 64 | 53 | 12 | 12 | — | (9 | ) | (12 | ) | 25 | 67 | 53 | 26 | ||||||||||||||||||||||||||||||||||
| Total operating revenues | 2,141 | 2,082 | 329 | 362 | (9 | ) | 68 | 48 | 42 | 2,538 | 2,492 | 2 | |||||||||||||||||||||||||||||||||||
| Claims, benefits and expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
| Net incurred claims and benefits | 1,136 | 1,152 | 273 | 306 | 11 | 34 | 29 | (17 | ) | 1,443 | 1,487 | 3 | |||||||||||||||||||||||||||||||||||
| Policyholders’ dividends | 6 | 5 | (1 | ) | — | N/M | — | — | N/M | 5 | 5 | — | |||||||||||||||||||||||||||||||||||
| Amortization of deferred acquisition costs | 376 | 365 | 5 | 4 | (25 | ) | — | 1 | N/M | 381 | 370 | (3 | ) | ||||||||||||||||||||||||||||||||||
| Other insurance related expenses | 106 | 138 | 51 | 53 | 4 | 3 | 15 | 80 | 160 | 206 | 22 | ||||||||||||||||||||||||||||||||||||
| Other expenses | 63 | 51 | 9 | 13 | 31 | 20 | 17 | (18 | ) | 92 | 81 | (14 | ) | ||||||||||||||||||||||||||||||||||
| Total claims, benefits and expenses | 1,687 | 1,711 | 337 | 376 | 10 | 57 | 62 | 8 | 2,081 | 2,149 | 3 | ||||||||||||||||||||||||||||||||||||
| Operating income (loss) before income tax and minority interest | 454 | 371 | (8 | ) | (14 | ) | 43 | 11 | (14 | ) | 179 | 457 | 343 | 33 | |||||||||||||||||||||||||||||||||
| Income tax (expense) benefit on operating income (loss) | (148 | ) | (115 | ) | 10 | 11 | (9 | ) | (2 | ) | 4 | (150 | ) | (140 | ) | (100 | ) | (40 | ) | ||||||||||||||||||||||||||||
| Minority interest | (10 | ) | (9 | ) | — | — | N/M | — | — | N/M | (10 | ) | (9 | ) | (11 | ) | |||||||||||||||||||||||||||||||
| Net operating income (loss) from continuing operations | 296 | 247 | 2 | (3 | ) | 167 | 9 | (10 | ) | 190 | 307 | 234 | 31 | ||||||||||||||||||||||||||||||||||
| Realized investment gains (losses), net of participating policyholders’ and minority interests | (38 | ) | 16 | 1 | (12 | ) | 108 | 16 | 5 | N/M | (21 | ) | 9 | N/M | |||||||||||||||||||||||||||||||||
| Income tax (expense) benefit on realized investment gains (losses) | 14 | (5 | ) | — | 5 | N/M | (6 | ) | (8 | ) | 25 | 8 | (8 | ) | 200 | ||||||||||||||||||||||||||||||||
| Net income (loss) from continuing operations | $ | 272 | $ | 258 | $ | 3 | $ | (10 | ) | 130 | % | $ | 19 | $ | (13 | ) | N/M | % | $ | 294 | $ | 235 | 25 | % | |||||||||||||||||||||||
| Life & Group Non-Core | Corporate & Other Non-Core | Total Operations | |||||||||||||||||||||||||||||||||||||||||||||
| Other Financial Data | P&C Operations | Fav / (Unfav) | Fav / (Unfav) | Fav / (Unfav) | |||||||||||||||||||||||||||||||||||||||||||
| Property & Casualty Company Information | 2007 | 2006 | 2007 | 2006 | % Change | 2007 | 2006 | % Change | 2007 | 2006 | % Change | ||||||||||||||||||||||||||||||||||||
| Gross written premiums | $ | 2,360 | $ | 2,386 | $ | 183 | $ | 194 | (6 | )% | $ | 2 | $ | (1 | ) | N/M | % | $ | 2,545 | $ | 2,579 | (1 | )% | ||||||||||||||||||||||||
| Net written premiums | 1,731 | 1,758 | 162 | 165 | (2 | ) | (2 | ) | (10 | ) | 80 | 1,891 | 1,913 | (1 | ) | ||||||||||||||||||||||||||||||||
| Net earned premiums | 1,708 | 1,714 | 157 | 160 | (2 | ) | (2 | ) | (8 | ) | 75 | 1,863 | 1,866 | — | |||||||||||||||||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||||||||||||||||||||
| Loss & LAE | 66.5 | % | 67.2 | % | N/M | % | N/M | % | N/M | % | N/M | % | 75.3 | % | 75.2 | % | |||||||||||||||||||||||||||||||
| Acquisition expense | 16.9 | 18.3 | N/M | N/M | N/M | N/M | 16.7 | 18.4 | |||||||||||||||||||||||||||||||||||||||
| Underwriting expense | 11.4 | 11.1 | N/M | N/M | N/M | N/M | 12.2 | 12.4 | |||||||||||||||||||||||||||||||||||||||
| Dividends | 0.3 | 0.3 | N/M | N/M | N/M | N/M | 0.3 | 0.3 | |||||||||||||||||||||||||||||||||||||||
| Expense ratio, including dividends | 28.6 | 29.7 | N/M | N/M | N/M | N/M | 29.2 | 31.1 | |||||||||||||||||||||||||||||||||||||||
| Combined ratio | 95.1 | % | 96.9 | % | N/M | % | N/M | % | N/M | % | N/M | % | 104.5 | % | 106.3 | % | |||||||||||||||||||||||||||||||
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Table of Contents
CNA FINANCIAL CORPORATION
Financial Supplement
Financial Supplement
Property & Casualty Operations Net Accident Year Catastrophe Losses
| CATASTROPHE LOSSES (PRETAX) | ||||||||||||||
| (In millions) | Standard Lines | Specialty Lines | P&C Operations | |||||||||||
| Three months ended March 31, 2007 | $ | 30 | $ | 2 | $ | 32 | ||||||||
| Three months ended March 31, 2006 | $ | 12 | $ | — | $ | 12 | ||||||||
| CATASTROPHE LOSSES (AFTER-TAX) | ||||||||||||||
| (In millions) | Standard Lines | Specialty Lines | P&C Operations | |||||||||||
| Three months ended March 31, 2007 | $ | 20 | $ | 1 | $ | 21 | ||||||||
| Three months ended March 31, 2006 | $ | 8 | $ | — | $ | 8 | ||||||||
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Table of Contents
CNA FINANCIAL CORPORATION
Financial Supplement
Financial Supplement
Analysis of Pretax Net Investment Income
| (In millions) | Standard Lines | ||||||||||||||||||||||||
| 1Q06 | 2Q06 | 3Q06 | 4Q06 | 2006 | 1Q07 | ||||||||||||||||||||
| Limited partnership income | $ | 38 | $ | 27 | $ | 23 | $ | 62 | $ | 150 | $ | 25 | |||||||||||||
| Interest on funds withheld and other deposits | (14 | ) | (22 | ) | (8 | ) | (3 | ) | (47 | ) | (2 | ) | |||||||||||||
| Income (loss) from trading securities | — | — | — | — | — | — | |||||||||||||||||||
| Other investment income | 204 | 233 | 224 | 227 | 888 | 236 | |||||||||||||||||||
| Net investment income | $ | 228 | $ | 238 | $ | 239 | $ | 286 | $ | 991 | $ | 259 | |||||||||||||
| Specialty Lines | |||||||||||||||||||||||||
| 1Q06 | 2Q06 | 3Q06 | 4Q06 | 2006 | 1Q07 | ||||||||||||||||||||
| Limited partnership income | $ | 13 | $ | 10 | $ | 8 | $ | 24 | $ | 55 | $ | 10 | |||||||||||||
| Interest on funds withheld and other deposits | (2 | ) | (1 | ) | (1 | ) | (1 | ) | (5 | ) | — | ||||||||||||||
| Income (loss) from trading securities | — | — | — | — | — | — | |||||||||||||||||||
| Other investment income | 76 | 90 | 94 | 93 | 353 | 100 | |||||||||||||||||||
| Net investment income | $ | 87 | $ | 99 | $ | 101 | $ | 116 | $ | 403 | $ | 110 | |||||||||||||
| P&C Operations | |||||||||||||||||||||||||
| 1Q06 | 2Q06 | 3Q06 | 4Q06 | 2006 | 1Q07 | ||||||||||||||||||||
| Limited partnership income | $ | 51 | $ | 37 | $ | 31 | $ | 86 | $ | 205 | $ | 35 | |||||||||||||
| Interest on funds withheld and other deposits | (16 | ) | (23 | ) | (9 | ) | (4 | ) | (52 | ) | (2 | ) | |||||||||||||
| Income (loss) from trading securities | — | — | — | — | — | — | |||||||||||||||||||
| Other investment income | 280 | 323 | 318 | 320 | 1,241 | 336 | |||||||||||||||||||
| Net investment income | $ | 315 | $ | 337 | $ | 340 | $ | 402 | $ | 1,394 | $ | 369 | |||||||||||||
| Life & Group Non-Core | |||||||||||||||||||||||||
| 1Q06 | 2Q06 | 3Q06 | 4Q06 | 2006 | 1Q07 | ||||||||||||||||||||
| Limited partnership income | $ | 10 | $ | 8 | $ | 6 | $ | 10 | $ | 34 | $ | 9 | |||||||||||||
| Interest on funds withheld and other deposits | — | — | — | — | — | — | |||||||||||||||||||
| Income (loss) from trading securities | 42 | (9 | ) | 30 | 40 | 103 | 3 | ||||||||||||||||||
| Other investment income | 135 | 139 | 143 | 144 | 561 | 149 | |||||||||||||||||||
| Net investment income | $ | 187 | $ | 138 | $ | 179 | $ | 194 | $ | 698 | $ | 161 | |||||||||||||
| Corporate & Other Non-Core | |||||||||||||||||||||||||
| 1Q06 | 2Q06 | 3Q06 | 4Q06 | 2006 | 1Q07 | ||||||||||||||||||||
| Limited partnership income | $ | 13 | $ | 8 | $ | 9 | $ | 19 | $ | 49 | $ | 8 | |||||||||||||
| Interest on funds withheld and other deposits | (9 | ) | (7 | ) | (1 | ) | 1 | (16 | ) | 1 | |||||||||||||||
| Income (loss) from trading securities | — | — | — | — | — | — | |||||||||||||||||||
| Other investment income | 64 | 76 | 73 | 74 | 287 | 69 | |||||||||||||||||||
| Net investment income | $ | 68 | $ | 77 | $ | 81 | $ | 94 | $ | 320 | $ | 78 | |||||||||||||
| Total Operations | |||||||||||||||||||||||||
| 1Q06 | 2Q06 | 3Q06 | 4Q06 | 2006 | 1Q07 | ||||||||||||||||||||
| Limited partnership income | $ | 74 | $ | 53 | $ | 46 | $ | 115 | $ | 288 | $ | 52 | |||||||||||||
| Interest on funds withheld and other deposits | (25 | ) | (30 | ) | (10 | ) | (3 | ) | (68 | ) | (1 | ) | |||||||||||||
| Income (loss) from trading securities | 42 | (9 | ) | 30 | 40 | 103 | 3 | ||||||||||||||||||
| Other investment income | 479 | 538 | 534 | 538 | 2,089 | 554 | |||||||||||||||||||
| Net investment income | $ | 570 | $ | 552 | $ | 600 | $ | 690 | $ | 2,412 | $ | 608 | |||||||||||||
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Table of Contents
CNA FINANCIAL CORPORATION
Financial Supplement
Financial Supplement
Statutory Data - Preliminary
| PERIOD ENDED MARCH 31 | Three Months | |||||||||||
| Income Statement | (Preliminary) | Fav / (Unfav) | ||||||||||
| (In millions) | 2007 | 2006 | % Change | |||||||||
Property & Casualty Companies | ||||||||||||
| Gross written premiums | $ | 2,474 | $ | 2,391 | 3 | % | ||||||
| Net written premiums | 1,729 | 1,762 | (2 | ) | ||||||||
| Net earned premiums | 1,546 | 1,544 | — | |||||||||
| Claim and claim adjustment expenses | 1,198 | 1,204 | — | |||||||||
| Acquisition expenses | 282 | 296 | 5 | |||||||||
| Underwriting expenses | 221 | 227 | 3 | |||||||||
| Policyholders’ dividends | 7 | 4 | (75 | ) | ||||||||
| Underwriting loss | (162 | ) | (187 | ) | 13 | |||||||
| Net investment income | 496 | 428 | 16 | |||||||||
| Other expenses | (5 | ) | (40 | ) | 88 | |||||||
| Income tax expense | (102 | ) | (41 | ) | (149 | ) | ||||||
| Net realized gains (losses) | (16 | ) | 6 | N/M | ||||||||
| Net income | $ | 211 | $ | 166 | 27 | % | ||||||
Financial Ratios | ||||||||||||
| Loss and LAE | 77.4 | % | 78.0 | % | ||||||||
| Acquisition expense | 16.3 | 16.8 | ||||||||||
| Underwriting expense | 12.8 | 12.9 | ||||||||||
| Policyholders’ dividends | 0.5 | 0.2 | ||||||||||
| Expense ratio | 29.6 | 29.9 | ||||||||||
| Combined ratio | 107.0 | % | 107.9 | % | ||||||||
Life Companies | ||||||||||||
| Earned premium | $ | — | $ | 3 | ||||||||
SUPPLEMENTAL STATUTORY DATA
| (Preliminary) | ||||||||
| (In millions) | March 31, 2007 | December 31, 2006 | ||||||
Property & Casualty Companies | ||||||||
| Statutory surplus (1) | $ | 8,235 | $ | 8,137 | ||||
Life Companies | ||||||||
| Statutory surplus | $ | 706 | $ | 687 | ||||
| (1) | Surplus includes the Property & Casualty Companies’ equity ownership of the life insurance subsidiary. |
10
Table of Contents
CNA FINANCIAL CORPORATION
Financial Supplement
Financial Supplement
Property & Casualty Operations
Loss and LAE Ratio Analysis
| Standard Lines | ||||||||||||
| 2007 YTD | 2006 FY | 2006 FY | ||||||||||
| Evaluated at | Evaluated at | Evaluated at | ||||||||||
| 03/31/07 | 12/31/06 | 03/31/07 | ||||||||||
| Gross Accident Year | 63.9 | % | 68.0 | % | 67.6 | % | ||||||
| Impact of Reinsurance | 5.7 | 0.1 | 0.3 | |||||||||
| Net Accident Year | 69.6 | 68.1 | 67.9 | % | ||||||||
| Impact of Significant Commutations | — | 1.1 | ||||||||||
| Impact of Development and Other (1) | — | 0.9 | ||||||||||
| Net Calendar Year | 69.6 | % | 70.1 | % | ||||||||
| Specialty Lines | ||||||||||||
| 2007 YTD | 2006 FY | 2006 FY | ||||||||||
| Evaluated at | Evaluated at | Evaluated at | ||||||||||
| 03/31/07 | 12/31/06 | 03/31/07 | ||||||||||
| Gross Accident Year | 62.9 | % | 60.4 | % | 59.6 | % | ||||||
| Impact of Reinsurance | (1.6 | ) | (0.1 | ) | (0.1 | ) | ||||||
| Net Accident Year | 61.3 | 60.3 | 59.5 | % | ||||||||
| Impact of Significant Commutations | — | — | ||||||||||
| Impact of Development and Other (1) | 0.2 | 0.2 | ||||||||||
| Net Calendar Year | 61.5 | % | 60.5 | % | ||||||||
| P&C Operations | ||||||||||||
| 2007 YTD | 2006 FY | 2006 FY | ||||||||||
| Evaluated at | Evaluated at | Evaluated at | ||||||||||
| 03/31/07 | 12/31/06 | 03/31/07 | ||||||||||
| Gross Accident Year | 63.6 | % | 65.5 | % | 65.0 | % | ||||||
| Impact of Reinsurance | 2.8 | (0.3 | ) | (0.2 | ) | |||||||
| Net Accident Year | 66.4 | 65.2 | 64.8 | % | ||||||||
| Impact of Significant Commutations | — | 0.7 | ||||||||||
| Impact of Development and Other (1) | 0.1 | 0.7 | ||||||||||
| Net Calendar Year | 66.5 | % | 66.6 | % | ||||||||
| (1) | Other includes the impacts of change in allowance for uncollectible reinsurance and interest accretion. |
11