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

CNA Financial Corporation

Supplemental Financial Information

March 31, 2009

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 (CNAF)
Table of Contents
March 31, 2009

	Page
Definitions and Presentation		i
Statements of Operations		1
Components of Income (Loss) Attributable to CNAF Common Stockholders, Per Share Data and Return on Equity		2
Selected Balance Sheets Data and Statements of Cash Flows Data		3
Claim & Claim Adjustment Expense Reserve Rollforward		4
Investments by Segment Aggregation		5
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
Components of Pretax Net Investment Income		12
Statutory Data — Preliminary		13
Property & Casualty Operations Loss and LAE Ratio Analysis		14

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 N of the Consolidated Financial Statements within the 2008 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 our limited partnership investments employ strategies that generate returns through investing in securities that are 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 /
PERIOD ENDED MARCH 31	Three Months						(Unfav)
(In millions)	2009			2008			% Change
STATEMENTS OF OPERATIONS
Revenues:
Net earned premiums	$	1,672		$	1,813			(8	)%
Net investment income		420			434			(3	)
Realized investment losses, net of participating policyholders’ interests		(532	)		(51	)		N/M
Other revenues		78			86			(9	)
Total revenues		1,638			2,282			(28	)
Claims, benefits and expenses:
Insurance claims and policyholders’ benefits		1,342			1,389			3
Amortization of deferred acquisition costs		349			368			5
Other operating expenses		251			227			(11	)
Interest		31			34			9
Total claims, benefits and expenses		1,973			2,018			2
Income (loss) from continuing operations before income tax		(335	)		264			N/M
Income tax (expense) benefit		150			(64	)		N/M
Income (loss) from continuing operations		(185	)		200			(193	)
Income (loss) from discontinued operations, net of income tax (expense) benefit of $0 and $0		—			(1	)		N/M
Net income (loss)		(185	)		199			(193	)
Net income attributable to noncontrolling interests		(10	)		(12	)		17
Net income (loss) attributable to CNAF	$	(195	)	$	187			N/M

1

CNA FINANCIAL CORPORATION
Financial Supplement
Components of Income (Loss) Attributable to CNAF Common Stockholders, Per Share Data and Return on Equity

PERIOD ENDED MARCH 31	Three Months
(In millions, except per share data)	2009			2008
COMPONENTS OF INCOME (LOSS) ATTRIBUTABLE TO CNAF COMMON STOCKHOLDERS
Net operating income from continuing operations attributable to CNAF	$	149		$	221
Less: 2008 Senior Preferred dividend		(31	)		—
Net operating income from continuing operations attributable to CNAF common stockholders		118			221
Net realized investment losses attributable to CNAF common stockholders		(344	)		(33	)
Income (loss) from continuing operations attributable to CNAF common stockholders		(226	)		188
Income (loss) from discontinued operations attributable to CNAF common stockholders		—			(1	)
Income (loss) attributable to CNAF common stockholders	$	(226	)	$	187
BASIC AND DILUTED EARNINGS PER COMMON SHARE
Net operating income from continuing operations attributable to CNAF	$	0.56		$	0.82
Less: 2008 Senior Preferred dividend		(0.12	)		—
Net operating income from continuing operations attributable to CNAF common stockholders		0.44			0.82
Net realized investment losses attributable to CNAF common stockholders		(1.28	)		(0.12	)
Income (loss) from continuing operations attributable to CNAF common stockholders		(0.84	)		0.70
Income (loss) from discontinued operations attributable to CNAF common stockholders		—			(0.01	)
Basic and diluted earnings (loss) per share attributable to CNAF common stockholders	$	(0.84	)	$	0.69
WEIGHTED AVERAGE OUTSTANDING COMMON STOCK AND COMMON STOCK EQUIVALENTS
Basic		269.0			270.7
Diluted		269.0			270.8
RETURN ON EQUITY
Net income (loss) attributable to CNAF (1)		(11.2	)%		7.7	%
Net operating income from continuing operations attributable to CNAF (2)		5.6			8.8

(1)	Annualized net income (loss) attributable to CNAF divided by the average CNAF 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.
(2)	Annualized net operating income from continuing operations attributable to CNAF divided by the average CNAF 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)	March 31, 2009			December 31, 2008
Total assets	$	51,777		$	51,688
Insurance reserves		38,591			38,771
Debt		2,058			2,058
Total liabilities		44,288			44,391
Preferred stock		1,250			1,250
Accumulated other comprehensive loss		(3,536	)		(3,924	)
Noncontrolling interests		437			420
Total CNAF stockholders’ equity		7,052			6,877
Book value per common share	$	21.57		$	20.92
Book value per common share excluding AOCI	$	34.71		$	35.50
Outstanding shares of common stock (in millions of shares)		269.0			269.0

THREE MONTHS ENDED
MARCH 31
(In millions)	2009			2008
Net cash flows provided by operating activities (1)	$	187		$	303
Net cash flows provided (used) by investing activities		(150	)		11
Net cash flows used by financing activities		(26	)		(273	)
Net cash flows from operating, investing and financing activities	$	11		$	41

(1) Operating cash flows for the three months ended March 31, 2009 and 2008 include $(9) million and $4 million related to discontinued operations.

3

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

THREE MONTHS ENDED MARCH 31, 2009
										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		$	8,282		$	20,330		$	2,862		$	4,401		$	27,593
Ceded		2,178			1,439			3,617			957			1,714			6,288
Net		9,870			6,843			16,713			1,905			2,687			21,305
Net incurred claim & claim adjustment expenses		510			499			1,009			134			22			1,165
Net claim & claim adjustment expense payments		(609	)		(429	)		(1,038	)		(123	)		(133	)		(1,294	)
Foreign currency translation adjustment		—			(43	)		(43	)		—			(1	)		(44	)
Claim & claim adjustment expense reserves, end of period
Net		9,771			6,870			16,641			1,916			2,575			21,132
Ceded		2,122			1,420			3,542			941			1,628			6,111
Gross	$	11,893		$	8,290		$	20,183		$	2,857		$	4,203		$	27,243

4

CNA FINANCIAL CORPORATION
Financial Supplement
Investments by Segment Aggregation

	March 31, 2009					December 31, 2008
(In millions)	Book Value			Fair Value		Book Value		Fair Value
Property & Casualty and Corporate & Other Non-Core:
Fixed maturities — taxable	$	17,112		$	14,341	$	18,987	$	15,880
Fixed maturities — tax exempt		6,841			6,407		6,341		5,638
Equities		378			462		466		515
Short-term investments		4,471			4,471		3,070		3,078
Limited partnership investments		1,655			1,655		1,667		1,667
Other		3			11		3		27
Total investments	$	30,460		$	27,347	$	30,534	$	26,805
Net receivable/(payable)	$	96				$	311
Securities lending collateral		(41	)				—
Life & Group Non-Core:
Fixed maturities — taxable	$	6,809		$	5,649	$	6,611	$	5,592
Fixed maturities — tax exempt		2,427			2,064		2,216		1,777
Equities		405			264		550		356
Short-term investments		112			112		457		456
Limited partnership investments		12			12		16		16
Other		1			—		1		1
Total investments	$	9,766		$	8,101	$	9,851	$	8,198
Net receivable/(payable)	$	(9	)			$	79
Securities lending collateral		—					—
Total investments	$	40,226		$	35,448	$	40,385	$	35,003
Total net receivable/(payable)	$	87				$	390
Total securities lending collateral		(41	)				—

The information above related to net receivable/(payable) and securities lending collateral is provided to facilitate an analysis of significant changes in book value.

5

CNA FINANCIAL CORPORATION
Financial Supplement
Mortgage and Asset-Backed Holdings
As of March 31, 2009
(In millions)

Invested Assets Fair Value By Segment

	P&C and
	Corporate & Other				Life & Group
	Non-Core		%		Non-Core		%		Total		%
MBS/CMO/ABS/CDO	$	6,699		18.9	$	588		1.7	$	7,287		20.6
Other taxable fixed maturities		7,642		21.5		5,061		14.3		12,703		35.8
Tax exempt fixed maturities		6,407		18.1		2,064		5.8		8,471		23.9
All other		6,599		18.6		388		1.1		6,987		19.7
Total investments	$	27,347		77.1	$	8,101		22.9	$	35,448		100.0

Invested Assets Amortized Cost By Segment

	P&C and
	Corporate & Other				Life & Group
	Non-Core		%		Non-Core		%		Total		%
MBS/CMO/ABS/CDO	$	8,298		20.6	$	815		2.0	$	9,113		22.6
Other taxable fixed maturities		8,814		21.9		5,994		14.9		14,808		36.8
Tax exempt fixed maturities		6,841		17.0		2,427		6.1		9,268		23.1
All other		6,507		16.2		530		1.3		7,037		17.5
Total investments	$	30,460		75.7	$	9,766		24.3	$	40,226		100.0

MBS/CMO/ABS/CDO Fair Value Distribution

																					% of Total
	MBS		%		CMO		%		ABS		%		CDO		%		Total		%		Investments
U.S. Government Agencies	$	502		6.9	$	1,190		16.3	$	—		—	$	—		—	$	1,692		23.2		4.8
AAA		—		—		2,764		37.9		1,421		19.5		—		—		4,185		57.4		11.8
AA		—		—		192		2.6		169		2.3		8		0.1		369		5.0		1.0
A		—		—		107		1.5		78		1.1		14		0.2		199		2.8		0.6
BBB		—		—		114		1.6		200		2.7		1		—		315		4.3		0.9
<BBB & Equity Tranches		—		—		455		6.2		68		1.0		4		0.1		527		7.3		1.5
Total MBS/CMO/ABS/CDO	$	502		6.9	$	4,822		66.1	$	1,936		26.6	$	27		0.4	$	7,287		100.0		20.6
Sub-prime (Included Above)	$	—			$	—			$	922			$	1			$	923		12.7		2.6
Alt-A (Included Above)	$	—			$	854			$	—			$	2			$	856		11.7		2.4

MBS/CMO/ABS/CDO Amortized Cost Distribution

																					% of Total
	MBS		%		CMO		%		ABS		%		CDO		%		Total		%		Investments
U.S. Government Agencies	$	492		5.4	$	1,184		13.0	$	—		—	$	—		—	$	1,676		18.4		4.2
AAA		—		—		3,382		37.1		1,794		19.7		—		—		5,176		56.8		12.9
AA		—		—		273		3.0		354		3.9		32		0.4		659		7.3		1.6
A		—		—		160		1.7		210		2.3		77		0.8		447		4.8		1.1
BBB		—		—		163		1.8		239		2.6		7		0.1		409		4.5		1.0
<BBB & Equity Tranches		—		—		610		6.7		96		1.1		40		0.4		746		8.2		1.8
Total MBS/CMO/ABS/CDO	$	492		5.4	$	5,772		63.3	$	2,693		29.6	$	156		1.7	$	9,113		100.0		22.6
Sub-prime (Included Above)	$	—			$	—			$	1,313			$	1			$	1,314		14.4		3.3
Alt-A (Included Above)	$	—			$	1,101			$	—			$	6			$	1,107		12.1		2.8

(1)	The exposure to sub-prime residential mortgage (sub-prime) collateral and Alternative A residential mortgages that have lower than normal standards of loan documentation (Alt-A) collateral is measured by the original deal structure.
(2)	In addition to sub-prime exposure in fixed maturity securities, there is exposure of approximately $30 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 March 31, 2009
(In millions)

Sub-Prime Fair Value Quality Distribution by Vintage Year

																	<BBB &
																	Equity
	AAA		%		AA		%		A		%		BBB		%		Tranches		%		Total		%
2007	$	113		12.2	$	—		—	$	—		—	$	—		—	$	3		0.3	$	116		12.5
2006		412		44.7		57		6.2		—		—		61		6.6		40		4.3		570		61.8
2005		87		9.4		38		4.1		1		0.1		3		0.3		2		0.2		131		14.1
2004		10		1.1		15		1.6		23		2.5		2		0.3		4		0.5		54		6.0
2003 & prior		5		0.5		15		1.6		17		1.9		3		0.3		12		1.3		52		5.6
Total sub-prime	$	627		67.9	$	125		13.5	$	41		4.5	$	69		7.5	$	61		6.6	$	923		100.0

Sub-Prime Book Value Quality Distribution by Vintage Year

																	<BBB &
																	Equity
	AAA		%		AA		%		A		%		BBB		%		Tranches		%		Total		%
2007	$	139		10.6	$	—		—	$	—		—	$	—		—	$	4		0.3	$	143		10.9
2006		536		40.8		114		8.7		—		—		76		5.8		52		3.9		778		59.2
2005		108		8.2		65		4.9		1		0.1		3		0.2		2		0.2		179		13.6
2004		13		1.0		22		1.7		78		5.9		3		0.2		9		0.7		125		9.5
2003 & prior		7		0.5		26		2.0		35		2.7		4		0.3		17		1.3		89		6.8
Total sub-prime	$	803		61.1	$	227		17.3	$	114		8.7	$	86		6.5	$	84		6.4	$	1,314		100.0

Alt-A Fair Value Quality Distribution by Vintage Year

																	<BBB &
																	Equity
	AAA		%		AA		%		A		%		BBB		%		Tranches		%		Total		%
2007	$	12		1.4	$	25		2.9	$	—		—	$	32		3.7	$	85		9.9	$	154		17.9
2006		14		1.6		10		1.2		—		—		—		—		75		8.8		99		11.6
2005		64		7.5		19		2.2		—		—		—		—		18		2.1		101		11.8
2004		354		41.4		27		3.2		—		—		—		—		—		—		381		44.6
2003 & prior		121		14.1		—		—		—		—		—		—		—		—		121		14.1
Total Alt-A	$	565		66.0	$	81		9.5	$	—		—	$	32		3.7	$	178		20.8	$	856		100.0

Alt-A Book Value Quality Distribution by Vintage Year

																	<BBB &
																	Equity
	AAA		%		AA		%		A		%		BBB		%		Tranches		%		Total		%
2007	$	16		1.5	$	30		2.7	$	—		—	$	32		2.9	$	96		8.7	$	174		15.8
2006		18		1.6		17		1.5		—		—		—		—		100		9.0		135		12.1
2005		111		10.0		32		2.9		—		—		—		—		22		2.0		165		14.9
2004		463		41.8		32		2.9		—		—		—		—		—		—		495		44.7
2003 & prior		138		12.5		—		—		—		—		—		—		—		—		138		12.5
Total Alt-A	$	746		67.4	$	111		10.0	$	—		—	$	32		2.9	$	218		19.7	$	1,107		100.0

7

CNA FINANCIAL CORPORATION
Financial Supplement
Mortgage and Asset-Backed Holdings
As of March 31, 2009
(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	$	21	$	21	$	370	$	362	$	59	$	58	$	52	$	51	$	502	$	492
AAA		—		—		—		—		—		—		—		—		—		—
AA		—		—		—		—		—		—		—		—		—		—
A		—		—		—		—		—		—		—		—		—		—
BBB		—		—		—		—		—		—		—		—		—		—
<BBB & Equity Tranches		—		—		—		—		—		—		—		—		—		—
Total MBS	$	21	$	21	$	370	$	362	$	59	$	58	$	52	$	51	$	502	$	492
Included in Total MBS:
Sub-prime	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Alt A		—		—		—		—		—		—		—		—		—		—
Prime		21		21		370		362		59		58		52		51		502		492
Total MBS	$	21	$	21	$	370	$	362	$	59	$	58	$	52	$	51	$	502	$	492

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	$	235	$	228	$	362	$	350	$	—	$	—	$	593	$	606	$	1,190	$	1,184
AAA		233		281		1,753		2,108		417		613		361		380		2,764		3,382
AA		—		—		146		204		46		69		—		—		192		273
A		—		—		39		49		44		80		24		31		107		160
BBB		5		8		56		61		53		94		—		—		114		163
<BBB & Equity Tranches		27		27		200		235		191		286		37		62		455		610
Total CMO	$	500	$	544	$	2,556	$	3,007	$	751	$	1,142	$	1,015	$	1,079	$	4,822	$	5,772
Included in Total CMO:
Sub-prime	$	—	$	—	$	—	$	—	$	—		—	$	—	$	—	$	—	$	—
Alt A		51		53		657		846		146		202		—		—		854		1,101
Prime		449		491		1,899		2,161		605		940		1,015		1,079		3,968		4,671
Total CMO	$	500	$	544	$	2,556	$	3,007	$	751	$	1,142	$	1,015	$	1,079	$	4,822	$	5,772

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 March 31, 2009
(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	$	514	$	682	$	455	$	595	$	40	$	41	$	173	$	208	$	110	$	148	$	129	$	120	$	1,421	$	1,794
AA		44		126		49		80		—		—		75		147		—		—		1		1		169		354
A		37		95		28		97		—		1		12		16		—		—		1		1		78		210
BBB		7		28		13		24		124		125		56		62		—		—		—		—		200		239
<BBB & Equity Tranches		7		12		16		24		—		—		45		60		—		—		—		—		68		96
Total ABS	$	609	$	943	$	561	$	820	$	164	$	167	$	361	$	493	$	110	$	148	$	131	$	122	$	1,936	$	2,693
Included in Total ABS:
Sub-prime	$	—	$	—	$	561	$	820	$	—	$	—	$	361	$	493	$	—	$	—	$	—	$	—	$	922	$	1,313
Alt A		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Prime & Non-Residential Mortgages		609		943		—		—		164		167		—		—		110		148		131		122		1,014		1,380
Total ABS	$	609	$	943	$	561	$	820	$	164	$	167	$	361	$	493	$	110	$	148	$	131	$	122	$	1,936	$	2,693

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	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
AA		4		22		—		—		4		10		—		—		8		32
A		11		57		—		—		3		20		—		—		14		77
BBB		1		7		—		—		—		—		—		—		1		7
<BBB & Equity Tranches		2		33		2		7		—		—		—		—		4		40
Total CDO	$	18	$	119	$	2	$	7	$	7	$	30	$	—	$	—	$	27	$	156
Included in Total CDO:
Sub-prime	$	—	$	—	$	—	$	—	$	1	$	1	$	—	$	—	$	1	$	1
Alt A		—		—		2		6		—		—		—		—		2		6
Prime & Non-Residential Mortgages		18		119		—		1		6		29		—		—		24		149
Total CDO	$	18	$	119	$	2	$	7	$	7	$	30	$	—	$	—	$	27	$	156

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
MARCH 31							Fav / (Unfav)									Fav / (Unfav)									Fav / (Unfav)
(In millions)	2009			2008			% Change			2009			2008			% Change			2009			2008			% Change
Gross written premiums	$	829		$	832			(0	)%	$	1,276		$	1,293			(1	)%	$	2,105		$	2,125			(1	)%
Net written premiums		763			771			(1	)		829			848			(2	)		1,592			1,619			(2	)
Net earned premiums		710			783			(9	)		812			873			(7	)		1,522			1,656			(8	)
Net investment income		120			164			(27	)		108			132			(18	)		228			296			(23	)
Other revenues		13			14			(7	)		57			53			8			70			67			4
Total operating revenues		843			961			(12	)		977			1,058			(8	)		1,820			2,019			(10	)
Claims, benefits and expenses:
Net incurred claims and benefits		510			577			12			499			566			12			1,009			1,143			12
Policyholders’ dividends		3			4			25			3			7			57			6			11			45
Amortization of deferred acquisition costs		166			179			7			177			184			4			343			363			6
Other insurance related expenses		76			58			(31	)		59			50			(18	)		135			108			(25	)
Other expenses		9			12			25			56			51			(10	)		65			63			(3	)
Total claims, benefits and expenses		764			830			8			794			858			7			1,558			1,688			8
Operating income from continuing operations before income tax		79			131			(40	)		183			200			(9	)		262			331			(21	)
Income tax expense on operating income		(18	)		(36	)		50			(53	)		(64	)		17			(71	)		(100	)		29
Net operating income attributable to noncontrolling interests		—			—			N/M			(11	)		(12	)		8			(11	)		(12	)		8
Net operating income from continuing operations attributable to CNAF		61			95			(36	)		119			124			(4	)		180			219			(18	)
Realized investment losses, net of participating policyholders’ interests		(179	)		(16	)		N/M			(116	)		(9	)		N/M			(295	)		(25	)		N/M
Income tax benefit on realized investment losses		62			5			N/M			41			4			N/M			103			9			N/M
Realized investment losses, after-tax, attributable to noncontrolling interests		—			—			N/M			1			—			N/M			1			—			N/M
Net realized investment losses attributable to CNAF		(117	)		(11	)		N/M			(74	)		(5	)		N/M			(191	)		(16	)		N/M
Net income (loss) from continuing operations attributable to CNAF	$	(56	)	$	84			(167	)%	$	45		$	119			(62	)%	$	(11	)	$	203			(105	)%
FINANCIAL RATIOS
Loss & LAE		71.8	%		73.7	%					61.4	%		64.8	%					66.3	%		69.0	%
Acquisition expense		17.0			16.9						18.0			17.0						17.6			16.9
Underwriting expense		17.0			13.3						11.2			9.8						13.9			11.5
Expense		34.0			30.2						29.2			26.8						31.5			28.4
Dividend		0.5			0.5						0.4			0.8						0.4			0.7
Combined ratio		106.3	%		104.4	%					91.0	%		92.4	%					98.2	%		98.1	%
RATIO IMPACTS
Impact of catastrophes
Pretax net accident year catastrophe losses incurred	$	12		$	53					$	1		$	—					$	13		$	53
Impact on loss & LAE ratio		1.7	%		6.8	%					0.1	%		—	%					0.9	%		3.2	%
Impact of development & other
Pretax net development: (favorable) / unfavorable
Prior year loss & ALAE reserve development (1)	$	(30	)	$	(35	)				$	(41	)	$	17					$	(71	)	$	(18	)
Prior year premium development		17			9						(2	)		(19	)					15			(10	)
Other (2)		5			7						(1	)		(5	)					4			2
Total development & other	$	(8	)	$	(19	)				$	(44	)	$	(7	)				$	(52	)	$	(26	)
Impact of development & other on loss & LAE ratio		(1.7	)%		(2.6	)%					(5.4	)%		—	%					(3.7	)%		(1.3	)%

(1)	In 2009, Standard Lines includes $31 million and Specialty Lines includes $7 million of favorable loss and LAE reserve development related to catastrophes in accident years 2005 and 2008.
(2)	Other includes the impacts of change in allowance for uncollectible reinsurance and interest accretion.

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
MARCH 31													Fav / (Unfav)									Fav / (Unfav)									Fav / (Unfav)
(In millions)	2009			2008			2009			2008			% Change			2009			2008			% Change			2009			2008			% Change
Net earned premiums	$	1,522		$	1,656		$	150		$	157			(4	)%	$	—		$	—			N/M	%	$	1,672		$	1,813			(8	)%
Net investment income		228			296			159			84			89			33			54			(39	)		420			434			(3	)
Other revenues		70			67			6			13			(54	)		2			6			(67	)		78			86			(9	)
Total operating revenues		1,820			2,019			315			254			24			35			60			(42	)		2,170			2,333			(7	)
Claims, benefits and expenses:
Net incurred claims and benefits		1,009			1,143			305			212			(44	)		21			21			0			1,335			1,376			3
Policyholders’ dividends		6			11			1			2			50			—			—			N/M			7			13			46
Amortization of deferred acquisition costs		343			363			6			4			(50	)		—			1			N/M			349			368			5
Other insurance related expenses		135			108			46			50			8			—			3			N/M			181			161			(12	)
Other expenses		65			63			6			5			(20	)		30			32			6			101			100			(1	)
Total claims, benefits and expenses		1,558			1,688			364			273			(33	)		51			57			11			1,973			2,018			2
Operating income (loss) from continuing operations before income tax		262			331			(49	)		(19	)		(158	)		(16	)		3			N/M			197			315			(37	)
Income tax (expense) benefit on operating income (loss)		(71	)		(100	)		27			16			69			7			2			N/M			(37	)		(82	)		55
Net operating income attributable to noncontrolling interests		(11	)		(12	)		—			—			N/M			—			—			N/M			(11	)		(12	)		8
Net operating income (loss) from continuing operations attributable to CNAF		180			219			(22	)		(3	)		N/M			(9	)		5			N/M			149			221			(33	)
Realized investment losses, net of participating policyholders’ interests		(295	)		(25	)		(190	)		(17	)		N/M			(47	)		(9	)		N/M			(532	)		(51	)		N/M
Income tax benefit on realized investment losses		103			9			66			6			N/M			18			3			N/M			187			18			N/M
Realized investment losses, after-tax, attributable to noncontrolling interests		1			—			—			—			N/M			—			—			N/M			1			—			N/M
Net realized investment losses attributable to CNAF		(191	)		(16	)		(124	)		(11	)		N/M			(29	)		(6	)		N/M			(344	)		(33	)		N/M
Net income (loss) from continuing operations attributable to CNAF	$	(11	)	$	203		$	(146	)	$	(14	)		N/M	%	$	(38	)	$	(1	)		N/M	%	$	(195	)	$	188			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	2009			2008			2009			2008			% Change			2009			2008			% Change			2009			2008			% Change
Gross written premiums	$	2,105		$	2,125		$	156		$	163			(4	)%	$	—		$	(1	)		N/M	%	$	2,261		$	2,287			(1)	%
Net written premiums		1,592			1,619			157			162			(3	)		(2	)		(3	)		33			1,747			1,778			(2	)
Net earned premiums		1,522			1,656			150			156			(4	)		—			—			N/M			1,672			1,812			(8	)
FINANCIAL RATIOS
Loss & LAE		66.3	%		69.0	%		N/M	%		N/M	%					N/M	%		N/M	%					77.1	%		77.8	%
Acquisition expense		17.6			16.9			N/M			N/M						N/M			N/M						17.1			16.6
Underwriting expense		13.9			11.5			N/M			N/M						N/M			N/M						14.5			12.5
Expense		31.5			28.4			N/M			N/M						N/M			N/M						31.6			29.1
Dividend		0.4			0.7			N/M			N/M						N/M			N/M						0.4			0.6
Combined ratio		98.2	%		98.1	%		N/M	%		N/M	%					N/M	%		N/M	%					109.1	%		107.5	%

11

CNA FINANCIAL CORPORATION
Financial Supplement
Components of Pretax Net Investment Income

	Standard Lines
(In millions)	1Q08			2Q08		3Q08			4Q08			2008			1Q09
Income (loss) from limited partnerships	$	(23	)	$	22	$	(39	)	$	(159	)	$	(199	)	$	(36	)
Income (loss) from trading securities		(1	)		1		(1	)		(1	)		(2	)		—
Other investment income		188			176		176			167			707			156
Net investment income	$	164		$	199	$	136		$	7		$	506		$	120

	Specialty Lines
	1Q08			2Q08		3Q08			4Q08			2008			1Q09
Income (loss) from limited partnerships	$	(13	)	$	13	$	(24	)	$	(97	)	$	(121	)	$	(22	)
Loss from trading securities		—			—		—			(1	)		(1	)		—
Other investment income		145			142		145			141			573			130
Net investment income	$	132		$	155	$	121		$	43		$	451		$	108

	P&C Operations
	1Q08			2Q08		3Q08			4Q08			2008			1Q09
Income (loss) from limited partnerships	$	(36	)	$	35	$	(63	)	$	(256	)	$	(320	)		$	(58	)
Income (loss) from trading securities		(1	)		1		(1	)		(2	)		(3	)			—
Other investment income		333			318		321			308			1,280				286
Net investment income	$	296		$	354	$	257		$	50		$	957			$	228

	Life & Group Non-Core
	1Q08			2Q08			3Q08			4Q08			2008			1Q09
Income (loss) from limited partnerships	$	4		$	5		$	(2	)	$	(12	)	$	(5	)	$	(2	)
Loss from trading securities		(76	)		(5	)		(22	)		(43	)		(146	)		—
Other investment income		156			157			159			163			635			161
Net investment income	$	84		$	157		$	135		$	108		$	484		$	159

	Corporate & Other Non-Core
	1Q08			2Q08		3Q08			4Q08			2008			1Q09
Income (loss) from limited partnerships	$	(7	)	$	6	$	(12	)	$	(41	)	$	(54	)	$	(10	)
Income (loss) from trading securities		—			—		—			—			—			—
Other investment income		61			59		59			53			232			43
Net investment income	$	54		$	65	$	47		$	12		$	178		$	33

	Total Operations
	1Q08			2Q08			3Q08			4Q08			2008			1Q09
Income (loss) from limited partnerships	$	(39	)	$	46		$	(77	)	$	(309	)	$	(379	)	$	(70	)
Loss from trading securities		(77	)		(4	)		(23	)		(45	)		(149	)		—
Other investment income		550			534			539			524			2,147			490
Net investment income	$	434		$	576		$	439		$	170		$	1,619		$	420

12

CNA FINANCIAL CORPORATION
Financial Supplement
Statutory Data – Preliminary

PERIOD ENDED MARCH 31	Three Months
Income Statement	(Preliminary)						Fav / (Unfav)
(In millions)	2009			2008			% Change
Combined Continental Casualty Companies
Gross written premiums	$	2,016		$	2,045			(1)	%
Net written premiums		1,517			1,546			(2	)
Net earned premiums		1,442			1,392			4
Claim and claim adjustment expenses		1,056			1,163			(9	)
Acquisition expenses		244			242			(1	)
Underwriting expenses		211			190			(11	)
Policyholders’ dividends		4			3			(33	)
Underwriting loss		(73	)		(206	)		65
Net investment income		381			478			(20	)
Other income		3			4			(25	)
Income tax expense		(35	)		(55	)		36
Net realized gains (losses)		(532	)		5			N/M
Net income (loss)	$	(256	)	$	226			N/M	%
Financial Ratios
Loss and LAE		73.2	%		83.6	%
Acquisition expense		16.1			15.6
Underwriting expense		13.9			12.2
Expense		30.0			27.8
Dividend		0.3			0.2
Combined ratio		103.5	%		111.6	%

SUPPLEMENTAL STATUTORY DATA
	(Preliminary)
(In millions)	March 31, 2009		December 31, 2008
Combined Continental Casualty Companies
Statutory surplus (1)	$	7,751	$	7,819
Life Company
Statutory surplus	$	483	$	487

(1) Surplus includes the Combined Continental Casualty Companies’ equity ownership of the life insurance subsidiary.

13

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

	Standard Lines
	2009 YTD Evaluated at			2008 FY Evaluated at			2008 FY Evaluated at
	3/31/09			12/31/08			3/31/09
Gross Accident Year		72.7	%		76.4	%		75.4	%
Impact of Reinsurance		0.8			2.2			2.1
Net Accident Year		73.5			78.6			77.5	%
Impact of Development and Other (1)(2)		(1.7	)		(3.2	)
Net Calendar Year		71.8	%		75.4	%

	Specialty Lines
	2009 YTD Evaluated at			2008 FY Evaluated at			2008 FY Evaluated at
	3/31/09			12/31/08			3/31/09
Gross Accident Year		65.6	%		67.0	%		66.9	%
Impact of Reinsurance		1.2			0.3			0.4
Net Accident Year		66.8			67.3			67.3	%
Impact of Development and Other (1)		(5.4	)		(5.4	)
Net Calendar Year		61.4	%		61.9	%

	P&C Operations
	2009 YTD Evaluated at			2008 FY Evaluated at			2008 FY Evaluated at
	3/31/09			12/31/08			3/31/09
Gross Accident Year		68.4	%		70.7	%		70.2	%
Impact of Reinsurance		1.6			1.9			1.9
Net Accident Year		70.0			72.6			72.1	%
Impact of Development and Other (1) (2)		(3.7	)		(4.4	)
Net Calendar Year		66.3	%		68.2	%

(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 is reflected as 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.

14