CNA Financial (CNA) 8-K Results of Operations and Financial Condition

Exhibit 99.2

CNA Financial Corporation

Supplemental Financial Information

December 31, 2008

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

CNA Financial Corporation
Table of Contents
December 31, 2008

	Page
Definitions and Presentation		i
Statements of Operations		1
Components of Net Income, Per Share Data and Return on Equity		2
Selected Balance Sheets Data and Statements of Cash Flows Data		3
Claim & Claim Adjustment Expense Reserve Rollforward		4
Investments by Segment Aggregation		5
Mortgage and Asset-Backed Holdings		6-9
Property & Casualty Results of Operations (Three Months Ended)		10
Life & Group Non-Core and Corporate & Other Non-Core Segments Results of Operations (Three Months Ended)		11
Property & Casualty Results of Operations (Twelve Months Ended)		12
Life & Group Non-Core and Corporate & Other Non-Core Segments Results of Operations (Twelve Months Ended)		13
Components of Pretax Net Investment Income		14
Statutory Data — Preliminary		15
Property & Casualty Operations Loss and LAE Ratio Analysis		16

CNA Financial Corporation

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 are in run-off.

• Corporate & Other Non-Coresegment primarily includes certain corporate expenses including interest on corporate debt and the results of certain property and casualty business primarily in run-off, including CNA Re. This segment also includes the results related to the centralized adjusting and settlement of asbestos and environmental pollution claims (A&E).

• 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 M of the Condensed Consolidated Financial Statements within the September 30, 2008 Form 10-Q 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 our limited partnership investments employ strategies that generate returns through investing in a substantial number of securities that are readily marketable while engaging in various risk management techniques primarily in fixed and public equity markets. Some of these limited partnership investment strategies may include low levels of leverage and hedging that potentially introduce more volatility and risk to the partnership returns.

• Certain immaterial differences are due to rounding.

• N/M = Not Meaningful

i

CNA FINANCIAL CORPORATION
Financial Supplement
Statements of Operations

							Fav /									Fav /
PERIOD ENDED DECEMBER 31	Three Months						(Unfav)			Twelve Months						(Unfav)
(In millions)	2008			2007			% Change			2008			2007			% Change
STATEMENTS OF OPERATIONS
Revenues:
Net earned premiums	$	1,765		$	1,867			(5	)%	$	7,151		$	7,484			(4	)%
Net investment income		170			574			(70	)		1,619			2,433			(33	)
Realized investment losses, net of participating policyholders’ and minority interests		(484	)		(94	)		N/M			(1,297	)		(311	)		N/M
Other revenues		86			68			26			326			279			17
Total revenues		1,537			2,415			(36	)		7,799			9,885			(21	)
Claims, benefits and expenses:
Insurance claims and policyholders’ benefits		1,343			1,513			11			5,723			6,009			5
Amortization of deferred acquisition costs		384			383			—			1,467			1,520			3
Other operating expenses		313			272			(15	)		1,037			994			(4	)
Interest		34			36			6			134			140			4
Total claims, benefits and expenses		2,074			2,204			6			8,361			8,663			3
Income (loss) before income tax and minority interest		(537	)		211			N/M			(562	)		1,222			(146	)
Income tax (expense) benefit		219			(38	)		N/M			311			(317	)		198
Minority interest		(17	)		(11	)		(55	)		(57	)		(48	)		(19	)
Income (loss) from continuing operations		(335	)		162			N/M			(308	)		857			(136	)
Income (loss) from discontinued operations, net of tax		(1	)		2			(150	)		9			(6	)		N/M
Net income (loss)	$	(336	)	$	164			N/M	%	$	(299	)	$	851			(135	)%

1

CNA FINANCIAL CORPORATION
Financial Supplement
Components of Net Income, Per Share Data and Return on Equity

							Fav /									Fav /
PERIOD ENDED DECEMBER 31	Three Months						(Unfav)			Twelve Months						(Unfav)
(In millions, except per share data)	2008			2007			% Change			2008			2007			% Change
COMPONENTS OF NET INCOME
Net operating income (loss)	$	(21	)	$	223			(109)	%	$	533		$	1,060			(50	)%
Net realized investment losses, net of participating policyholders’ and minority interests		(314	)		(61	)		N/M			(841	)		(203	)		N/M
Income (loss) from continuing operations		(335	)		162			N/M			(308	)		857			(136	)
Income (loss) from discontinued operations, net of tax		(1	)		2			(150	)		9			(6	)		N/M
Net income (loss)	$	(336	)	$	164			N/M	%	$	(299	)	$	851			(135	)%
BASIC AND DILUTED EARNINGS PER COMMON SHARE
Net operating income (loss)	$	(0.15	)	$	0.82			(118)	%	$	1.91		$	3.90			(51	)%
Net realized investment losses, net of participating policyholders’ and minority interests		(1.16	)		(0.23	)		N/M			(3.12	)		(0.75	)		N/M
Income (loss) from continuing operations		(1.31	)		0.59			N/M			(1.21	)		3.15			(138	)
Income (loss) from discontinued operations, net of tax		—			0.01			N/M			0.03			(0.02	)		N/M
Basic and diluted earnings (loss) per share available to common stockholders (1)	$	(1.31	)	$	0.60			N/M	%	$	(1.18	)	$	3.13			(138	)%
WEIGHTED AVERAGE OUTSTANDING COMMON STOCK AND COMMON STOCK EQUIVALENTS
Basic		269.0			271.6						269.4			271.5
Diluted		269.0			271.8						269.4			271.8
RETURN ON EQUITY
Net income (loss) (2)		(18.4)	%		6.5	%					(3.5	)%		8.5	%
Net operating income (loss) (3)		(0.8	)		9.0						5.1			11.0

(1)	The three and twelve months ended December 31, 2008 per share results available to common stockholders are reduced by $19 million, or $0.07 per share, of preferred stock dividends.
(2)	Annualized net income (loss) 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.

2

CNA FINANCIAL CORPORATION
Financial Supplement
Selected Balance Sheets Data and Statements of Cash Flows Data

(In millions, except per share data)	December 31, 2008			December 31, 2007
Total assets	$	51,688		$	56,759
Insurance reserves		38,771			40,222
Debt		2,058			2,157
Total liabilities		44,391			46,224
Minority interest		420			385
Preferred stock		1,250			—
Accumulated other comprehensive income (loss)		(3,924	)		103
Total stockholders’ equity		6,877			10,150
Book value per common share	$	20.92		$	37.36
Book value per common share excluding AOCI	$	35.50		$	36.98
Outstanding shares of common stock (in millions of shares)		269.0			271.7

THREE MONTHS ENDED
DECEMBER 31

(In millions)	2008			2007
Net cash flows provided by operating activities (1)	$	297		$	526
Net cash flows used by investing activities		(1,400	)		(415	)
Net cash flows provided (used) by financing activities		1,080			(102	)
Net cash flows from operating, investing and financing activities	$	(23	)	$	9

TWELVE MONTHS ENDED
DECEMBER 31

(In millions)	2008			2007
Net cash flows provided by operating activities (1)	$	1,558		$	1,239
Net cash flows used by investing activities		(1,908	)		(1,082	)
Net cash flows provided (used) by financing activities		347			(185	)
Net cash flows from operating, investing and financing activities	$	(3	)	$	(28	)

(1) Operating cash flows for the three and twelve months ended December 31, 2008 include $(1) million and $(8) million related to discontinued operations. Operating cash flows for the three and twelve months ended December 31, 2007 include $3 million and $(13) million related to discontinued operations.

3

CNA FINANCIAL CORPORATION
Financial Supplement
Claim & Claim Adjustment Expense Reserve Rollforward

THREE MONTHS ENDED DECEMBER 31, 2008
										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	$	12,157		$	8,364		$	20,521		$	2,930		$	4,572		$	28,023
Ceded		2,180			1,479			3,659			1,016			1,793			6,468
Net		9,977			6,885			16,862			1,914			2,779			21,555
Net incurred claim & claim adjustment expenses		540			518			1,058			139			117			1,314
Net claim & claim adjustment expense payments		(646	)		(450	)		(1,096	)		(148	)		(202	)		(1,446	)
Foreign currency translation adjustment		(1	)		(110	)		(111	)		—			(7	)		(118	)
Claim & claim adjustment expense reserves, end of period
Net		9,870			6,843			16,713			1,905			2,687			21,305
Ceded		2,178			1,439			3,617			957			1,714			6,288
Gross	$	12,048		$	8,282		$	20,330		$	2,862		$	4,401		$	27,593

TWELVE MONTHS ENDED DECEMBER 31, 2008
										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	$	12,048		$	8,403		$	20,451		$	3,027		$	5,110		$	28,588
Ceded		2,128			1,786			3,914			1,147			1,995			7,056
Net		9,920			6,617			16,537			1,880			3,115			21,532
Net incurred claim & claim adjustment expenses		2,417			2,164			4,581			519			211			5,311
Net claim & claim adjustment expense payments		(2,466	)		(1,763	)		(4,229	)		(495	)		(628	)		(5,352	)
Foreign currency translation adjustment		(1	)		(175	)		(176	)		1			(11	)		(186	)
Claim & claim adjustment expense reserves, end of period
Net		9,870			6,843			16,713			1,905			2,687			21,305
Ceded		2,178			1,439			3,617			957			1,714			6,288
Gross	$	12,048		$	8,282		$	20,330		$	2,862		$	4,401		$	27,593

4

CNA FINANCIAL CORPORATION
Financial Supplement
Investments by Segment Aggregation

	December 31, 2008				September 30, 2008					December 31, 2007
(In millions)	Book Value		Fair Value		Book Value			Fair Value		Book Value			Fair Value
Property & Casualty and Corporate & Other Non-Core:
Fixed maturities — taxable	$	18,987	$	15,880	$	17,877		$	16,081	$	19,351		$	18,951
Fixed maturities — tax exempt		6,341		5,638		5,772			5,310		5,815			5,810
Equities		466		515		549			584		254			459
Short-term investments		3,070		3,078		4,558			4,563		4,385			4,387
Limited partnership investments		1,667		1,667		1,965			1,965		1,877			1,877
Other		3		27		5			62		8			71
Total investments	$	30,534	$	26,805	$	30,726		$	28,565	$	31,690		$	31,555
Net receivable/(payable)	$	311			$	47				$	(265	)
Securities lending collateral		—				—					(53	)
Life & Group Non-Core:
Fixed maturities — taxable	$	6,611	$	5,592	$	6,761		$	6,129	$	7,422		$	7,631
Fixed maturities — tax exempt		2,216		1,777		2,009			1,656		1,800			1,865
Equities		550		356		560			377		112			109
Short-term investments		457		456		186			186		290			290
Limited partnership investments		16		16		145			145		337			337
Other		1		1		—			1		2			2
Total investments	$	9,851	$	8,198	$	9,661		$	8,494	$	9,963		$	10,234
Net receivable/(payable)	$	79			$	(23	)			$	1
Securities lending collateral		—				—					—
Total investments	$	40,385	$	35,003	$	40,387		$	37,059	$	41,653		$	41,789
Total net receivable/(payable)	$	390			$	24				$	(264	)
Total securities lending collateral		—				—					(53	)

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 $0 million, $24 million, and $53 million as of December 31, 2008, September 30, 2008, and December 31, 2007 where the net receivable/(payable) balance does not relate to change in book value.

5

CNA FINANCIAL CORPORATION
Financial Supplement
Mortgage and Asset-Backed Holdings
As of December 31, 2008
(In millions)

Invested Assets Fair Value By Segment

	P&C and
	Corporate & Other				Life & Group
	Non-Core		%		Non-Core		%		Total		%
MBS/CMO/ABS/CDO	$	7,072		20.2	$	692		2.0	$	7,764		22.2
Other taxable fixed maturities		8,808		25.2		4,900		14.0		13,708		39.2
Tax exempt fixed maturities		5,638		16.1		1,777		5.0		7,415		21.1
All other		5,287		15.1		829		2.4		6,116		17.5
Total investments	$	26,805		76.6	$	8,198		23.4	$	35,003		100.0

Invested Assets Amortized Cost By Segment

	P&C and
	Corporate & Other				Life & Group
	Non-Core		%		Non-Core		%		Total		%
MBS/CMO/ABS/CDO	$	8,774		21.7	$	896		2.2	$	9,670		23.9
Other taxable fixed maturities		10,213		25.3		5,715		14.2		15,928		39.5
Tax exempt fixed maturities		6,341		15.7		2,216		5.5		8,557		21.2
All other		5,206		12.9		1,024		2.5		6,230		15.4
					��
Total investments	$	30,534		75.6	$	9,851		24.4	$	40,385		100.0

MBS/CMO/ABS/CDO Fair Value Distribution

																					% of Total
	MBS		%		CMO		%		ABS		%		CDO		%		Total		%		Investments
U.S. Government Agencies	$	408		5.3	$	1,273		16.4	$	—		—	$	—		—	$	1,681		21.7		4.8
AAA		—		—		3,249		41.9		1,672		21.5		3		0.1		4,924		63.5		14.1
AA		—		—		187		2.4		190		2.5		6		0.1		383		5.0		1.1
A		—		—		80		1.0		96		1.2		28		0.3		204		2.5		0.6
BBB		—		—		92		1.2		230		3.0		2		—		324		4.2		0.9
<BBB & Equity Tranches		—		—		213		2.7		27		0.3		8		0.1		248		3.1		0.7
Total MBS/CMO/ABS/CDO	$	408		5.3	$	5,094		65.6	$	2,215		28.5	$	47		0.6	$	7,764		100.0		22.2
Sub-prime (Included Above)	$	—			$	—			$	1,163			$	1			$	1,164		15.0		3.3
Alt-A (Included Above)	$	—			$	898			$	—			$	3			$	901		11.6		2.6

MBS/CMO/ABS/CDO Amortized Cost Distribution

																					% of Total
	MBS		%		CMO		%		ABS		%		CDO		%		Total		%		Investments
U.S. Government Agencies	$	405		4.2	$	1,285		13.3	$	—		—	$	—		—	$	1,690		17.5		4.2
AAA		—		—		4,143		42.8		2,008		20.8		10		0.1		6,161		63.7		15.2
AA		—		—		102		1.1		361		3.7		23		0.2		486		5.0		1.2
A		—		—		245		2.5		209		2.2		143		1.5		597		6.2		1.5
BBB		—		—		123		1.3		257		2.7		9		0.1		389		4.1		1.0
<BBB & Equity Tranches		—		—		283		2.9		52		0.5		12		0.1		347		3.5		0.8
Total MBS/CMO/ABS/CDO	$	405		4.2	$	6,181		63.9	$	2,887		29.9	$	197		2.0	$	9,670		100.0		23.9
Sub-prime (Included Above)	$	—			$	—			$	1,477			$	31			$	1,508		15.6		3.7
Alt-A (Included Above)	$	—			$	1,229			$	—			$	8			$	1,237		12.8		3.1

(1) In addition to sub-prime exposure in fixed maturity securities, there is exposure of approximately $36 million through limited partnerships and sold credit default swaps which provide the buyer protection against declines in sub-prime indices.

MBS — Mortgage-backed securities

CMO — Collateralized mortgage obligations

ABS — Asset-backed securities

CDO — Collateralized debt obligations

6

CNA FINANCIAL CORPORATION
Financial Supplement
Mortgage and Asset-Backed Holdings
As of December 31, 2008
(In millions)

Sub-Prime Fair Value Quality Distribution by Vintage Year

																	<BBB &
																	Equity
	AAA		%		AA		%		A		%		BBB		%		Tranches		%		Total		%
2007	$	138		11.9	$	—		—	$	—		—	$	—		—	$	2		0.2	$	140		12.1
2006		605		52.0		68		5.8		2		0.2		56		4.8		6		0.5		737		63.3
2005		114		9.8		41		3.5		1		0.1		4		0.3		2		0.2		162		13.9
2004		11		0.9		16		1.4		30		2.6		2		0.2		5		0.4		64		5.5
2003 & prior		7		0.6		16		1.4		21		1.8		4		0.3		13		1.1		61		5.2
Total sub-prime	$	875		75.2	$	141		12.1	$	54		4.7	$	66		5.6	$	28		2.4	$	1,164		100.0

Sub-Prime Book Value Quality Distribution by Vintage Year

																	<BBB &
																	Equity
	AAA		%		AA		%		A		%		BBB		%		Tranches		%		Total		%
2007	$	149		9.9	$	—		—	$	—		—	$	—		—	$	2		0.1	$	151		10.0
2006		690		45.8		114		7.6		3		0.2		62		4.1		18		1.2		887		58.9
2005		128		8.5		75		5.0		32		2.1		4		0.3		2		0.1		241		16.0
2004		14		0.9		23		1.5		83		5.5		3		0.2		10		0.7		133		8.8
2003 & prior		8		0.5		28		1.8		35		2.3		7		0.5		18		1.2		96		6.3
Total sub-prime	$	989		65.6	$	240		15.9	$	153		10.1	$	76		5.1	$	50		3.3	$	1,508		100.0

Alt-A Fair Value Quality Distribution by Vintage Year

																	<BBB &
																	Equity
	AAA		%		AA		%		A		%		BBB		%		Tranches		%		Total		%
2007	$	76		8.4	$	31		3.5	$	18		2.0	$	33		3.7	$	8		0.9	$	166		18.5
2006		84		9.3		7		0.8		1		0.1		—		—		20		2.2		112		12.4
2005		115		12.8		4		0.4		—		—		—		—		1		0.1		120		13.3
2004		390		43.3		1		0.1		—		—		—		—		—		—		391		43.4
2003 & prior		112		12.4		—		—		—		—		—		—		—		—		112		12.4
Total Alt-A	$	777		86.2	$	43		4.8	$	19		2.1	$	33		3.7	$	29		3.2	$	901		100.0

Alt-A Book Value Quality Distribution by Vintage Year

																	<BBB &
																	Equity
	AAA		%		AA		%		A		%		BBB		%		Tranches		%		Total		%
2007	$	138		11.2	$	31		2.5	$	24		1.9	$	41		3.3	$	12		1.0	$	246		19.9
2006		114		9.2		16		1.3		1		0.1		1		0.1		29		2.3		161		13.0
2005		166		13.4		8		0.6		—		—		—		—		1		0.1		175		14.1
2004		511		41.3		1		0.1		—		—		—		—		—		—		512		41.4
2003 & prior		143		11.6		—		—		—		—		—		—		—		—		143		11.6
Total Alt-A	$	1,072		86.7	$	56		4.5	$	25		2.0	$	42		3.4	$	42		3.4	$	1,237		100.0

7

CNA FINANCIAL CORPORATION
Financial Supplement
Mortgage and Asset-Backed Holdings
As of December 31, 2008
(In millions)

MBS Distribution By Collateral Type & Quality

	15 Year				30 Year				ARM				Other				Total
	Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized
	Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost
U.S. Government Agencies	$	22	$	22	$	271	$	269	$	61	$	61	$	54	$	53	$	408	$	405
AAA		—		—		—		—		—		—		—		—		—		—
AA		—		—		—		—		—		—		—		—		—		—
A		—		—		—		—		—		—		—		—		—		—
BBB		—		—		—		—		—		—		—		—		—		—
<BBB & Equity Tranches		—		—		—		—		—		—		—		—		—		—
Total MBS	$	22	$	22	$	271	$	269	$	61	$	61	$	54	$	53	$	408	$	405
Included in Total MBS:
Sub-prime	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Alt A		—		—		—		—		—		—		—		—		—		—
Prime		22		22		271		269		61		61		54		53		408		405
Total MBS	$	22	$	22	$	271	$	269	$	61	$	61	$	54	$	53	$	408	$	405

CMO Distribution By Collateral Type & Quality

	15 Year				30 Year				ARM				Other				Total
	Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized
	Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost
U.S. Government Agencies	$	243	$	241	$	446	$	439	$	—	$	—	$	584	$	605	$	1,273	$	1,285
AAA		275		332		1,906		2,387		667		994		401		430		3,249		4,143
AA		—		—		166		47		21		55		—		—		187		102
A		—		—		38		221		42		24		—		—		80		245
BBB		5		8		68		84		19		31		—		—		92		123
<BBB & Equity Tranches		—		—		146		207		67		76		—		—		213		283
Total CMO	$	523	$	581	$	2,770	$	3,385	$	816	$	1,180	$	985	$	1,035	$	5,094	$	6,181
Included in Total CMO:
Sub-prime	$	—	$	—	$	—	$	—	$	—		—	$	—	$	—	$	—	$	—
Alt A		54		72		696		947		148		210		—		—		898		1,229
Prime		469		509		2,074		2,438		668		970		985		1,035		4,196		4,952
Total CMO	$	523	$	581	$	2,770	$	3,385	$	816	$	1,180	$	985	$	1,035	$	5,094	$	6,181

ARM — Adjustable rate mortgages

MBS — Mortgage-backed securities

CMO — Collateralized mortgage obligations

8

CNA FINANCIAL CORPORATION
Financial Supplement
Mortgage and Asset-Backed Holdings
As of December 31, 2008
(In millions)

ABS Distribution By Collateral Type & Quality

	CMBS				RMBS				Auto Loans				Home Equity				Student Loans				Other				Total
	Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized
	Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost
AAA	$	530	$	714	$	617	$	699	$	29	$	31	$	258	$	291	$	111	$	148	$	127	$	125	$	1,672	$	2,008
AA		42		112		44		76		5		6		98		165		—		—		1		2		190		361
A		41		87		38		100		1		1		16		21		—		—		—		—		96		209
BBB		12		26		4		7		153		155		61		69		—		—		—		—		230		257
<BBB & Equity Tranches		—		2		16		36		—		—		11		14		—		—		—		—		27		52
Total ABS	$	625	$	941	$	719	$	918	$	188	$	193	$	444	$	560	$	111	$	148	$	128	$	127	$	2,215	$	2,887
Included in Total ABS:
Sub-prime	$	—	$	—	$	719	$	918	$	—	$	—	$	444	$	559	$	—	$	—	$	—	$	—	$	1,163	$	1,477
Alt A		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Prime & Non-Residential Mortgages		625		941		—		—		188		193		—		1		111		148		128		127		1,052		1,410
Total ABS	$	625	$	941	$	719	$	918	$	188	$	193	$	444	$	560	$	111	$	148	$	128	$	127	$	2,215	$	2,887

CDO Distribution By Collateral Type & Quality

	CMBS				RMBS				CDS				Other				Total
	Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized
	Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost
AAA	$	—	$	—	$	—	$	—	$	3	$	10	$	—	$	—	$	3	$	10
AA		6		23		—		—		—		—		—		—		6		23
A		24		91		—		—		4		52		—		—		28		143
BBB		2		9		—		—		—		—		—		—		2		9
<BBB & Equity Tranches		4		4		4		8		—		—		—		—		8		12
Total CDO	$	36	$	127	$	4	$	8	$	7	$	62	$	—	$	—	$	47	$	197
Included in Total CDO:
Sub-prime	$	—	$	—	$	—	$	—	$	1	$	31	$	—	$	—	$	1	$	31
Alt A		—		—		3		8		—		—		—		—		3		8
Prime & Non-Residential Mortgages		36		127		1		—		6		31		—		—		43		158
Total CDO	$	36	$	127	$	4	$	8	$	7	$	62	$	—	$	—	$	47	$	197

ABS — Asset-backed securities

CMBS — Commercial mortgage-backed securities

RMBS — Residential mortgage-backed securities

CDO — Collateralized debt obligations

CDS — Credit default swaps

9

CNA FINANCIAL CORPORATION
Financial Supplement
Property & Casualty Results of Operations

THREE MONTHS ENDED	Standard Lines									Specialty Lines									P&C Operations
DECEMBER 31							Fav / (Unfav)									Fav / (Unfav)									Fav / (Unfav)
(In millions)	2008			2007			% Change			2008			2007			% Change			2008			2007			% Change
Gross written premiums	$	764		$	824			(7	)%	$	1,259		$	1,292			(3	)%	$	2,023		$	2,116			(4	)%
Net written premiums		712			743			(4	)		852			887			(4	)		1,564			1,630			(4	)
Net earned premiums		752			833			(10	)		863			884			(2	)		1,615			1,717			(6	)
Net investment income		7			214			(97	)		43			158			(73	)		50			372			(87	)
Other revenues		15			15			—			61			49			24			76			64			19
Total operating revenues		774			1,062			(27	)		967			1,091			(11	)		1,741			2,153			(19	)
Claims, benefits and expenses:
Net incurred claims and benefits		436			594			27			512			557			8			948			1,151			18
Policyholders’ dividends		2			3			33			5			2			(150	)		7			5			(40	)
Amortization of deferred acquisition costs		172			186			8			209			195			(7	)		381			381			—
Other insurance related expenses		74			95			22			31			53			42			105			148			29
Other expenses		22			7			N/M			93			60			(55	)		115			67			(72	)
Total claims, benefits and expenses		706			885			20			850			867			2			1,556			1,752			11
Operating income before income tax and minority interest		68			177			(62	)		117			224			(48	)		185			401			(54	)
Income tax expense on operating income		(13	)		(53	)		75			(32	)		(68	)		53			(45	)		(121	)		63
Minority interest		—			—			N/M			(17	)		(11	)		(55	)		(17	)		(11	)		(55	)
Net operating income from continuing operations		55			124			(56	)		68			145			(53	)		123			269			(54	)
Realized investment losses, net of participating policyholders’ and minority interests		(233	)		(33	)		N/M			(134	)		(19	)		N/M			(367	)		(52	)		N/M
Income tax benefit on realized investment losses		81			12			N/M			48			7			N/M			129			19			N/M
Net income (loss) from continuing operations	$	(97	)	$	103			(194	)%	$	(18	)	$	133			(114	)%	$	(115	)	$	236			(149	)%
FINANCIAL RATIOS
Loss & LAE		57.9	%		71.2	%					59.2	%		63.0	%					58.6	%		67.0	%
Acquisition expense		18.0			20.0						17.8			18.2						17.9			19.1
Underwriting expense		14.6			13.8						10.0			9.8						12.1			11.6
Expense		32.6			33.8						27.8			28.0						30.0			30.7
Dividend		0.4			0.4						0.5			0.1						0.5			0.3
Combined ratio		90.9	%		105.4	%					87.5	%		91.1	%					89.1	%		98.0	%
RATIO IMPACTS
Impact of catastrophes
Pretax net accident year catastrophe losses incurred	$	6		$	21					$	4		$	3					$	10		$	24
Impact on loss & LAE ratio		0.7	%		2.5	%					0.5	%		0.3	%					0.6	%		1.4	%
Impact of development & other
Pretax net development: (favorable) / unfavorable
Prior year loss & ALAE reserve development (1)	$	20		$	(30	)				$	(114	)	$	(21	)				$	(94	)	$	(51	)
Prior year premium development		12			(4	)					—			2						12			(2	)
Other (2)		(97	)		8						(7	)		(3	)					(104	)		5
Total development & other (3)	$	(65	)	$	(26	)				$	(121	)	$	(22	)				$	(186	)	$	(48	)
Impact of development & other on loss & LAE ratio		(9.2	)%		(2.9	)%					(14.0	)%		(2.6	)%					(11.8	)%		(2.7	)%

(1)	In 2008, Standard Lines includes $17 million of favorable loss & LAE reserve development primarily related to the 2005 hurricanes.
(2)	Other includes the impacts of change in allowance for uncollectible reinsurance and interest accretion.
(3)	In 2008, the amount due from policyholders related to losses under deductible policies within Standard Lines was reduced by $90 million for insolvent insureds. The reduction of this amount, which represents unfavorable net prior year reserve development, had no effect on 2008 results of operations as the Company had previously recognized provisions in prior years. These impacts were reported in Insurance claims and policyholders’ benefits in the 2008 Consolidated Statement of Operations.

10

CNA FINANCIAL CORPORATION
Financial Supplement
Life & Group Non-Core and Corporate & Other Non-Core Segments Results of Operations

THREE MONTHS ENDED	P&C Operations						Life & Group Non-Core									Corporate & Other Non-Core									Total Operations
DECEMBER 31													Fav / (Unfav)									Fav / (Unfav)									Fav / (Unfav)
(In millions)	2008			2007			2008			2007			% Change			2008			2007			% Change			2008			2007			% Change
Net earned premiums	$	1,615		$	1,717		$	152		$	149			2	%	$	(2	)	$	1			N/M	%	$	1,765		$	1,867			(5	)%
Net investment income		50			372			108			128			(16	)		12			74			(84	)		170			574			(70	)
Other revenues		76			64			8			2			N/M			2			2			—			86			68			26
Total operating revenues		1,741			2,153			268			279			(4	)		12			77			(84	)		2,021			2,509			(19	)
Claims, benefits and expenses:
Net incurred claims and benefits		948			1,151			282			250			(13	)		105			106			1			1,335			1,507			11
Policyholders’ dividends		7			5			1			1			—			—			—			N/M			8			6			(33	)
Amortization of deferred acquisition costs		381			381			3			2			(50	)		—			—			N/M			384			383			—
Other insurance related expenses		105			148			49			56			13			8			(4	)		N/M			162			200			19
Other expenses		115			67			7			9			22			63			32			(97	)		185			108			(71	)
Total claims, benefits and expenses		1,556			1,752			342			318			(8	)		176			134			(31	)		2,074			2,204			6
Operating income (loss) before income tax and minority interest		185			401			(74	)		(39	)		(90	)		(164	)		(57	)		(188	)		(53	)		305			(117	)
Income tax (expense) benefit on operating income (loss)		(45	)		(121	)		35			22			59			59			28			111			49			(71	)		169
Minority interest		(17	)		(11	)		—			—			N/M			—			—			N/M			(17	)		(11	)		(55	)
Net operating income (loss) from continuing operations		123			269			(39	)		(17	)		(129	)		(105	)		(29	)		N/M			(21	)		223			(109	)
Realized investment losses, net of participating policyholders’ and minority interests		(367	)		(52	)		(42	)		(30	)		(40	)		(75	)		(12	)		N/M			(484	)		(94	)		N/M
Income tax benefit on realized investment losses		129			19			15			11			36			26			3			N/M			170			33			N/M
Net income (loss) from continuing operations	$	(115	)	$	236		$	(66	)	$	(36	)		(83	)%	$	(154	)	$	(38	)		N/M	%	$	(335	)	$	162			N/M	%

	P&C Operations						Life & Group Non-Core									Corporate & Other Non-Core									Total Operations
Other Financial Data													Fav / (Unfav)									Fav / (Unfav)									Fav / (Unfav)
Property & Casualty Company Information	2008			2007			2008			2007			% Change			2008			2007			% Change			2008			2007			% Change
Gross written premiums	$	2,023		$	2,116		$	145		$	180			(19	)%	$	1		$	1			—	%	$	2,169		$	2,297			(6	)%
Net written premiums		1,564			1,630			146			146			—			(1	)		—			N/M			1,709			1,776			(4	)
Net earned premiums		1,615			1,717			150			148			1			(2	)		1			N/M			1,763			1,866			(6	)
FINANCIAL RATIOS
Loss & LAE		58.6	%		67.0	%		N/M	%		N/M	%					N/M	%		N/M	%					74.0	%		79.8	%
Acquisition expense		17.9			19.1			N/M			N/M						N/M			N/M						17.2			18.2
Underwriting expense		12.1			11.6			N/M			N/M						N/M			N/M						13.6			13.0
Expense		30.0			30.7			N/M			N/M						N/M			N/M						30.8			31.2
Dividend		0.5			0.3			N/M			N/M						N/M			N/M						0.4			0.2
Combined ratio		89.1	%		98.0	%		N/M	%		N/M	%					N/M	%		N/M	%					105.2	%		111.2	%

11

CNA FINANCIAL CORPORATION
Financial Supplement
Property & Casualty Results of Operations

TWELVE MONTHS ENDED	Standard Lines									Specialty Lines									P&C Operations
DECEMBER 31							Fav / (Unfav)									Fav / (Unfav)									Fav / (Unfav)
(In millions)	2008			2007			% Change			2008			2007			% Change			2008			2007			% Change
Gross written premiums	$	3,344		$	3,620			(8	)%	$	5,123		$	5,420			(5	)%	$	8,467		$	9,040			(6	)%
Net written premiums		3,054			3,267			(7	)		3,435			3,506			(2	)		6,489			6,773			(4	)
Net earned premiums		3,065			3,379			(9	)		3,477			3,484			—			6,542			6,863			(5	)
Net investment income		506			878			(42	)		451			621			(27	)		957			1,499			(36	)
Other revenues		57			47			21			227			188			21			284			235			21
Total operating revenues		3,628			4,304			(16	)		4,155			4,293			(3	)		7,783			8,597			(9	)
Claims, benefits and expenses:
Net incurred claims and benefits		2,313			2,279			(1	)		2,153			2,187			2			4,466			4,466			—
Policyholders’ dividends		(1	)		6			117			15			7			(114	)		14			13			(8	)
Amortization of deferred acquisition costs		700			761			8			754			744			(1	)		1,454			1,505			3
Other insurance related expenses		267			338			21			213			187			(14	)		480			525			9
Other expenses		66			43			(53	)		237			185			(28	)		303			228			(33	)
Total claims, benefits and expenses		3,345			3,427			2			3,372			3,310			(2	)		6,717			6,737			—
Operating income before income tax and minority interest		283			877			(68	)		783			983			(20	)		1,066			1,860			(43	)
Income tax expense on operating income		(62	)		(275	)		77			(244	)		(317	)		23			(306	)		(592	)		48
Minority interest		—			—			N/M			(57	)		(47	)		(21	)		(57	)		(47	)		(21	)
Net operating income from continuing operations		221			602			(63	)		482			619			(22	)		703			1,221			(42	)
Realized investment losses, net of participating policyholders’ and minority interests		(487	)		(149	)		N/M			(288	)		(81	)		N/M			(775	)		(230	)		N/M
Income tax benefit on realized investment losses		170			52			N/M			103			28			N/M			273			80			N/M
Net income (loss) from continuing operations	$	(96	)	$	505			(119)	%	$	297		$	566			(48)	%	$	201		$	1,071			(81	)%
FINANCIAL RATIOS
Loss & LAE		75.4	%		67.4	%					61.9	%		62.8	%					68.2	%		65.1	%
Acquisition expense		17.4			18.9						17.7			17.1						17.6			18.0
Underwriting expense		14.2			13.6						10.1			9.6						12.0			11.5
Expense		31.6			32.5						27.8			26.7						29.6			29.5
Dividend		—			0.2						0.4			0.2						0.2			0.2
Combined ratio		107.0	%		100.1	%					90.1	%		89.7	%					98.0	%		94.8	%
RATIO IMPACTS
Impact of catastrophes
Pretax net accident year catastrophe losses incurred	$	340		$	73					$	18		$	5					$	358		$	78
Impact on loss & LAE ratio		11.1	%		2.2	%					0.5	%		0.1	%					5.5	%		1.1	%
Pretax assessments related to catastrophes	$	10		$	—					$	—		$	—					$	10		$	—
Impact on expense ratio		0.3	%		—	%					—	%		—	%					0.2	%		—	%
Impact of development & other
Pretax net development: (favorable) / unfavorable
Prior year loss & ALAE reserve development (1)	$	(34	)	$	(104	)				$	(164	)	$	(25	)				$	(198	)	$	(129	)
Prior year premium development		16			(19	)					(20	)		(11	)					(4	)		(30	)
Other (2)		(75	)		28						(12	)		(3	)					(87	)		25
Total development & other (3)	$	(93	)	$	(95	)				$	(196	)	$	(39	)				$	(289	)	$	(134	)
Impact of development & other on loss & LAE ratio		(3.2	)%		(2.7	)%					(5.4	)%		(1.0	)%					(4.4	)%		(1.8	)%

(1)	In 2008, Standard Lines includes $46 million of favorable loss & LAE reserve development primarily related to the 2005 hurricanes.
(2)	Other includes the impacts of change in allowance for uncollectible reinsurance and interest accretion.
(3)	In 2008, the amount due from policyholders related to losses under deductible policies within Standard Lines was reduced by $90 million for insolvent insureds. The reduction of this amount, which represents unfavorable net prior year reserve development, had no effect on 2008 results of operations as the Company had previously recognized provisions in prior years. These impacts were reported in Insurance claims and policyholders’ benefits in the 2008 Consolidated Statement of Operations.

12

CNA FINANCIAL CORPORATION
Financial Supplement
Life & Group Non-Core and Corporate & Other Non-Core
Segments Results of Operations

TWELVE MONTHS ENDED	P&C Operations						Life & Group Non-Core									Corporate & Other Non-Core									Total Operations
DECEMBER 31													Fav / (Unfav)									Fav / (Unfav)									Fav / (Unfav)
(In millions)	2008			2007			2008			2007			% Change			2008			2007			% Change			2008			2007			% Change
Net earned premiums	$	6,542		$	6,863		$	612		$	618			(1)	%	$	(3	)	$	3			(200	)%	$	7,151		$	7,484			(4	)%
Net investment income		957			1,499			484			622			(22	)		178			312			(43	)		1,619			2,433			(33	)
Other revenues		284			235			28			36			(22	)		14			8			75			326			279			17
Total operating revenues		7,783			8,597			1,124			1,276			(12	)		189			323			(41	)		9,096			10,196			(11	)
Claims, benefits and expenses:
Net incurred claims and benefits		4,466			4,466			1,104			1,312			16			133			217			39			5,703			5,995			5
Policyholders’ dividends		14			13			6			1			N/M			—			—			N/M			20			14			(43	)
Amortization of deferred acquisition costs		1,454			1,505			13			15			13			—			—			N/M			1,467			1,520			3
Other insurance related expenses		480			525			201			199			(1	)		13			9			(44	)		694			733			5
Other expenses		303			228			24			43			44			150			130			(15	)		477			401			(19	)
Total claims, benefits and expenses		6,717			6,737			1,348			1,570			14			296			356			17			8,361			8,663			3
Operating income (loss) before income tax and minority interest		1,066			1,860			(224	)		(294	)		24			(107	)		(33	)		N/M			735			1,533			(52	)
Income tax (expense) benefit on operating income (loss)		(306	)		(592	)		116			135			(14	)		45			32			41			(145	)		(425	)		66
Minority interest		(57	)		(47	)		—			—			N/M			—			(1	)		N/M			(57	)		(48	)		(19	)
Net operating income (loss) from continuing operations		703			1,221			(108	)		(159	)		32			(62	)		(2	)		N/M			533			1,060			(50	)
Realized investment losses, net of participating policyholders’ and minority interests		(775	)		(230	)		(363	)		(56	)		N/M			(159	)		(25	)		N/M			(1,297	)		(311	)		N/M
Income tax benefit on realized investment losses		273			80			127			20			N/M			56			8			N/M			456			108			N/M
Net income (loss) from continuing operations	$	201		$	1,071		$	(344	)	$	(195	)		(76)	%	$	(165	)	$	(19	)		N/M	%	$	(308	)	$	857			(136)	%
Other Financial Data	P&C Operations						Life & Group Non-Core									Corporate & Other Non-Core									Total Operations
Property & Casualty Company Information													Fav / (Unfav)									Fav / (Unfav)									Fav / (Unfav)
	2008			2007			2008			2007			% Change			2008			2007			% Change			2008			2007			% Change
Gross written premiums	$	8,467		$	9,040		$	620		$	692			(10	)%	$	128		$	7			N/M	%	$	9,215		$	9,739			(5	)%
Net written premiums		6,489			6,773			604			607			—			(3	)		2			N/M			7,090			7,382			(4	)
Net earned premiums		6,542			6,863			610			615			(1	)		(3	)		3			(200	)		7,149			7,481			(4	)
FINANCIAL RATIOS
Loss & LAE		68.2	%		65.1	%		N/M	%		N/M	%					N/M	%		N/M	%					78.7	%		77.7	%
Acquisition expense		17.6			18.0			N/M			N/M						N/M			N/M						17.0			17.5
Underwriting expense		12.0			11.5			N/M			N/M						N/M			N/M						13.1			12.5
Expense		29.6			29.5			N/M			N/M						N/M			N/M						30.1			30.0
Dividend		0.2			0.2			N/M			N/M						N/M			N/M						0.2			0.2
Combined ratio		98.0	%		94.8	%		N/M	%		N/M	%					N/M	%		N/M	%					109.0	%		107.9	%

13

CNA FINANCIAL CORPORATION
Financial Supplement
Components of Pretax Net Investment Income

	Standard Lines
(In millions)	1Q07		2Q07		3Q07		4Q07		2007		1Q08			2Q08		3Q08			4Q08			2008
Income (loss) from limited partnerships	$	23	$	36	$	12	$	21	$	92	$	(23	)	$	22	$	(39	)	$	(159	)		$	(199	)
Income (loss) from trading securities		—		—		—		—		—		(1	)		1		(1	)		(1	)			(2	)
Other investment income		197		199		197		193		786		188			176		176			167				707
Net investment income	$	220	$	235	$	209	$	214	$	878	$	164		$	199	$	136		$	7			$	506

	Specialty Lines
	1Q07		2Q07		3Q07		4Q07		2007		1Q08			2Q08		3Q08			4Q08			2008
Income (loss) from limited partnerships	$	12	$	20	$	7	$	12	$	51	$	(13	)	$	13	$	(24	)	$	(97	)	$	(121	)
Income (loss) from trading securities		—		—		—		—		—		—			—		—			(1	)		(1	)
Other investment income		137		142		145		146		570		145			142		145			141			573
Net investment income	$	149	$	162	$	152	$	158	$	621	$	132		$	155	$	121		$	43		$	451

	P&C Operations
	1Q07		2Q07		3Q07		4Q07		2007			1Q08			2Q08		3Q08			4Q08			2008
Income (loss) from limited partnerships	$	35	$	56	$	19	$	33	$	143		$	(36	)	$	35	$	(63	)	$	(256	)	$	(320	)
Income (loss) from trading securities		—		—		—		—		—	��		(1	)		1		(1	)		(2	)		(3	)
Other investment income		334		341		342		339		1,356			333			318		321			308			1,280
Net investment income	$	369	$	397	$	361	$	372	$	1,499		$	296		$	354	$	257		$	50		$	957

	Life & Group Non-Core
	1Q07		2Q07		3Q07			4Q07			2007		1Q08			2Q08			3Q08			4Q08			2008
Income (loss) from limited partnerships	$	9	$	3	$	(4	)	$	2		$	10	$	4		$	5		$	(2	)	$	(12	)	$	(5	)
Income (loss) from trading securities		3		40		(2	)		(31	)		10		(76	)		(5	)		(22	)		(43	)		(146	)
Other investment income		149		145		151			157			602		156			157			159			163			635
Net investment income	$	161	$	188	$	145		$	128		$	622	$	84		$	157		$	135		$	108		$	484

	Corporate & Other Non-Core
	1Q07		2Q07		3Q07		4Q07		2007		1Q08			2Q08		3Q08			4Q08			2008
Income (loss) from limited partnerships	$	8	$	12	$	4	$	6	$	30	$	(7	)	$	6	$	(12	)	$	(41	)	$	(54	)
Income (loss) from trading securities		—		—		—		—		—		—			—		—			—			—
Other investment income		70		74		70		68		282		61			59		59			53			232
Net investment income	$	78	$	86	$	74	$	74	$	312	$	54		$	65	$	47		$	12		$	178

	Total Operations
	1Q07		2Q07		3Q07			4Q07			2007		1Q08			2Q08			3Q08			4Q08			2008
Income (loss) from limited partnerships	$	52	$	71	$	19		$	41		$	183	$	(39	)	$	46		$	(77	)	$	(309	)	$	(379	)
Income (loss) from trading securities		3		40		(2	)		(31	)		10		(77	)		(4	)		(23	)		(45	)		(149	)
Other investment income		553		560		563			564			2,240		550			534			539			524			2,147
Net investment income	$	608	$	671	$	580		$	574		$	2,433	$	434		$	576		$	439		$	170		$	1,619

14

CNA FINANCIAL CORPORATION
Financial Supplement
Statutory Data — Preliminary

PERIOD ENDED DECEMBER 31	Three Months									Twelve Months
Income Statement	(Preliminary)						Fav / (Unfav)			(Preliminary)						Fav / (Unfav)
(In millions)	2008			2007			% Change			2008			2007			% Change
Property & Casualty Companies
Gross written premiums	$	1,996		$	2,146			(7	)%	$	8,599		$	9,156			(6	)%
Net written premiums		1,531			1,625			(6	)		6,477			6,805			(5	)
Net earned premiums		1,461			1,556			(6	)		5,896			6,240			(6	)
Claim and claim adjustment expenses		1,226			1,282			(4	)		4,939			4,980			(1	)
Acquisition expenses		260			275			5			1,069			1,150			7
Underwriting expenses		242			217			(12	)		869			893			3
Policyholders’ dividends		4			3			(33	)		15			18			17
Underwriting loss		(271	)		(221	)		(23	)		(996	)		(801	)		(24	)
Net investment income (1)		461			499			(8	)		1,864			2,135			(13	)
Other income (expenses)		83			(14	)		N/M			55			(44	)		N/M
Income tax expense		(22	)		(47	)		53			(55	)		(251	)		78
Net realized losses		(328	)		(212	)		(55	)		(951	)		(464	)		(105	)
Net income (loss)	$	(77	)	$	5			N/M	%	$	(83	)	$	575			(114	)%
Financial Ratios
Loss and LAE		83.9	%		82.4	%					83.8	%		79.8	%
Acquisition expense		17.0			16.9						16.5			16.9
Underwriting expense		15.9			13.3						13.4			13.1
Expense		32.9			30.2						29.9			30.0
Dividend		0.2			0.2						0.3			0.3
Combined ratio		117.0	%		112.8	%					114.0	%		110.1	%
										��

SUPPLEMENTAL STATUTORY DATA	(Preliminary)
(In millions)	December 31, 2008		December 31, 2007
Property & Casualty Companies
Statutory surplus (2)	$	7,955	$	8,511
Life Company
Statutory surplus	$	491	$	471

(1)	The twelve months ended December 31, 2007 include $143 million of declared dividends from Continental Casualty Company’s life subsidiary, Continental Assurance Company.
(2)	Surplus includes the Property & Casualty Companies’ equity ownership of the life insurance subsidiary.

15

CNA FINANCIAL CORPORATION
Financial Supplement
Property & Casualty Operations
Loss and LAE Ratio Analysis

	Standard Lines
	2008 YTD			2007 FY			2007 FY
	Evaluated at			Evaluated at			Evaluated at
	12/31/08			12/31/07			12/31/08
Gross Accident Year		76.4	%		66.6	%		64.3	%
Impact of Reinsurance		2.2			3.5			3.6
Net Accident Year		78.6			70.1			67.9	%
Impact of Development and Other (1) (2)		(3.2	)		(2.7	)
Net Calendar Year		75.4	%		67.4	%

	Specialty Lines
	2008 YTD			2007 FY			2007 FY
	Evaluated at			Evaluated at			Evaluated at
	12/31/08			12/31/07			12/31/08
Gross Accident Year		67.0	%		59.2	%		59.2	%
Impact of Reinsurance		0.3			4.6			5.4
Net Accident Year		67.3			63.8			64.6	%
Impact of Development and Other (1) (2)		(5.4	)		(1.0	)
Net Calendar Year		61.9	%		62.8	%

	P&C Operations
	2008 YTD			2007 FY			2007 FY
	Evaluated at			Evaluated at			Evaluated at
	12/31/08			12/31/07			12/31/08
Gross Accident Year		70.7	%		62.2	%		61.3	%
Impact of Reinsurance		1.9			4.7			4.9
Net Accident Year		72.6			66.9			66.2	%
Impact of Development and Other (1) (2)		(4.4	)		(1.8	)
Net Calendar Year		68.2	%		65.1	%

(1)

Other includes the impacts of change in allowance for uncollectible reinsurance and interest accretion.

(2)

In 2008, the amount due from policyholders related to losses under deductible policies within Standard Lines was reduced by $90 million for insolvent insureds. The reduction of this amount, which represents unfavorable net prior year reserve development, had no effect on 2008 results of operations as the Company had previously recognized provisions in prior years. These impacts were reported in Insurance claims and policyholders’ benefits in the 2008 Consolidated Statement of Operations.

16