EXHIBIT 99.1
[CNA LOGO]
FOR IMMEDIATE RELEASE
- --------------------------------------------------------------------------------
CONTACT:
MEDIA: ANALYSTS:
Charles M. Boesel, 312/822-2592 Dawn M. Jaffray, 312/822-7757
Katrina W. Parker, 312/822-5167
CNA FINANCIAL ANNOUNCES
2ND QUARTER 2003 RESULTS
CHICAGO, AUGUST 7, 2003 --- CNA Financial Corporation (NYSE: CNA) today reported
net income for the second quarter of 2003 of $70 million, or $0.25 per share, as
compared with net income of $31 million, or $0.14 per share, for the same period
in 2002. Net income for the six months ended June 30, 2003 was $153 million, or
$0.55 per share, compared with net income of $51 million, or $0.23 per share,
for the same period in 2002.
Results for the second quarter of 2003 included $308 million after-tax of
unfavorable net prior year development in the property and casualty operations,
of which approximately 80% relates to accident year 2000 and prior. The
significant unfavorable net prior year premium and loss development was recorded
primarily for workers compensation, directors and officers coverages, and a
recent adverse arbitration decision involving a single large property and
business interruption loss that occurred in 1995. The results also included
increases in the bad debt reserves for reinsurance and insurance receivables,
catastrophe losses for the Texas tornados and Midwest rain storms and decreased
net investment income. These adverse items were more than offset by increased
net realized investment results and strong current accident year results.
The current accident year continued to improve within the primary property and
casualty businesses as evidenced by strong rate increases of 19% during the
quarter and solid production of new business. Gross written premiums increased
19% in the second quarter of 2003 compared with the same period in 2002.
The Company has launched a $200 million expense reduction initiative. The
primary components of the initiative are a reduction of the current workforce by
approximately five percent, lower commissions and other acquisition costs,
principally related to workers compensation, and reduced spending in other
areas. Strategies to realize such savings are expected to be implemented over
the next year.
Realized investment results, net of participating policyholders and minority
interests, increased $354 million after-tax in the second quarter of 2003 as
compared with the same period in 2002. This increase was due primarily to
increased gains on sales of fixed maturity securities and a decrease in
investment related impairment charges in the second quarter of 2003. After-tax
investment related impairment losses were $20 million for the second quarter of
2003 as compared with $190 million for the same period in 2002.
Page 1 of 10
"While disappointed with prior year development recorded in the second quarter,
we continue to focus on our strategic underwriting efforts to obtain profitable
growth," said Stephen W. Lilienthal, Chairman and Chief Executive Officer of the
CNA insurance companies. "Our underwriting discipline over the past few years is
evidenced by the continued improvement in the current gross accident year
results.
"Gross accident year loss ratios for Property and Casualty Operations have
improved by roughly 7 points compared to 2002. Gross written premiums are up 7%
over the first six months of 2002. Underwriting discipline remains strong, rates
continue to be robust and our $200 million expense reduction and streamlining
will position us for strong results going forward."
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME
- ----------------------------------------------------------------------------------------------------------------------------------
RESULTS FOR THE THREE MONTHS ENDED RESULTS FOR THE SIX MONTHS ENDED
JUNE 30 JUNE 30
- ----------------------------------------------------------------------------------------------------------------------------------
($ MILLIONS) 2003 2002 (c) 2003 2002 (c)
- ----------------------------------------------------------------------------------------------------------------------------------
(LOSS) INCOME BEFORE NET REALIZED INVESTMENT
GAINS (LOSSES) $(179) $ 136 $ (47) $ 246
NET REALIZED INVESTMENT GAINS (LOSSES) 249 (105) 200 (103)
-------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS 70 31 153 143
LOSS FROM DISCONTINUED OPERATIONS (a) - - - (35)
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE (b) - - - (57)
==================================================================================================================================
NET INCOME $ 70 $ 31 $ 153 $ 51
==================================================================================================================================
(a) During the first quarter of 2002, CNA Vida, a Chilean-based life insurance
company, was sold and reported as discontinued operations in accordance
with SFAS 144, Accounting for the Impairment or Disposal of Long-Lived
Assets.
(b) Represents the effect of the adoption of SFAS 142, which was a change in
accounting for goodwill and indefinite-lived intangible assets in 2002.
(c) The three and six months ended June 30, 2002 results have been restated to
reflect an adjustment to the Company's historical accounting for CNA's life
settlement contracts and the related revenue recognition. Refer to CNA's
2002 Form 10-K for further information related to this restatement.
Page 2 of 10
===============================================================================================================================
PER SHARE RESULTS AVAILABLE TO COMMON STOCKHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
RESULTS FOR THE THREE MONTHS ENDED RESULTS FOR THE SIX MONTHS ENDED
JUNE 30 JUNE 30
- -------------------------------------------------------------------------------------------------------------------------------
2003 2002 (d) 2003 2002 (d)
----------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS (a) $ 0.25 $ 0.14 $ 0.55 $ 0.65
LOSS FROM DISCONTINUED OPERATIONS (b) - - - (0.16)
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE (c) - - - (0.26)
================================================================================================================================
NET INCOME $ 0.25 $ 0.14 $ 0.55 $ 0.23
================================================================================================================================
(a) The three and six months ended June 30, 2003 per share results
available to common stockholders are reduced by $15 million and $30
million, or $0.07 per share and $0.13 per share, of accumulated but
undeclared preferred stock dividends.
(b) During the first quarter of 2002, CNA Vida, a Chilean-based life
insurance company, was sold and reported as discontinued operations in
accordance with SFAS 144, Accounting for the Impairment or Disposal of
Long-Lived Assets.
(c) Represents the effect of the adoption of SFAS 142, which was a change
in accounting for goodwill and indefinite-lived intangible assets in
2002.
(d) The three and six months ended June 30, 2002 results have been
restated to reflect an adjustment to the Company's historical
accounting for CNA's life settlement contracts and the related revenue
recognition. Refer to CNA's 2002 Form 10-K for further information
related to this restatement.
==================================================================================================================================
SEGMENT RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2003
- ----------------------------------------------------------------------------------------------------------------------------------
STANDARD SPECIALTY P&C CNA P&C GROUP LIFE CORPORATE
($ MILLIONS) LINES LINES OPS. RE SEGMENTS OPS. OPS. & OTHER TOTAL
- ----------------------------------------------------------------------------------------------------------------------------------
(LOSS) INCOME BEFORE NET
REALIZED INVESTMENT GAINS $(144) $ (58) $(202) $ 13 $(189) $ 26 $ 17 $ (33) $(179)
NET REALIZED INVESTMENT
GAINS 110 55 165 22 187 13 18 31 249
==================================================================================================================================
NET (LOSS) INCOME $ (34) $ (3) $ (37) $ 35 $ (2) $ 39 $ 35 $ (2) $ 70
==================================================================================================================================
==================================================================================================================================
SEGMENT RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2002
- ----------------------------------------------------------------------------------------------------------------------------------
STANDARD SPECIALTY P&C CNA P&C GROUP LIFE CORPORATE
($ MILLIONS) LINES LINES OPS. RE SEGMENTS OPS. OPS. (c) & OTHER TOTAL
- ----------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE NET
REALIZED INVESTMENT GAINS
(LOSSES) $ 40 $ 40 $ 80 $ 24 $ 104 $ 25 $ 27 $ (20) $ 136
NET REALIZED INVESTMENT LOSSES (21) (17) (38) (4) (42) (18) (35) (10) (105)
==================================================================================================================================
NET INCOME (LOSS) $ 19 $ 23 $ 42 $ 20 $ 62 $ 7 $ (8) $ (30) $ 31
==================================================================================================================================
Page 3 of 10
==================================================================================================================================
SEGMENT RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2003
- ----------------------------------------------------------------------------------------------------------------------------------
STANDARD SPECIALTY P&C CNA P&C GROUP LIFE CORPORATE
($ MILLIONS) LINES LINES OPS. RE SEGMENTS OPS. OPS. & OTHER TOTAL
- ----------------------------------------------------------------------------------------------------------------------------------
(LOSS) INCOME BEFORE NET
REALIZED INVESTMENT GAINS
(LOSSES) $(109) $ (12) $(121) $ 38 $ (83) $ 45 $ 27 $ (36) $ (47)
NET REALIZED INVESTMENT GAINS
(LOSSES) 118 44 162 31 193 (21) (15) 43 200
==================================================================================================================================
NET INCOME (LOSS) $ 9 $ 32 $ 41 $ 69 $ 110 $ 24 $ 12 $ 7 $ 153
==================================================================================================================================
==================================================================================================================================
SEGMENT RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2002
- ----------------------------------------------------------------------------------------------------------------------------------
STANDARD SPECIALTY P&C CNA P&C GROUP LIFE CORPORATE
($ MILLIONS) LINES LINES OPS. RE SEGMENTS OPS. OPS. (c) & OTHER TOTAL
- ----------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE NET
REALIZED INVESTMENT GAINS
(LOSSES) $ 50 $ 74 $ 124 $ 64 $ 188 $ 43 $ 58 $ (43) $ 246
NET REALIZED INVESTMENT GAINS
(LOSSES) (16) (21) (37) 4 (33) (12) (27) (31) (103)
-------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS 34 53 87 68 155 31 31 (74) 143
LOSS FROM DISCONTINUED
OPERATIONS (a) - - - - - - (35) - (35)
CUMULATIVE EFFECT OF A
CHANGE IN ACCOUNTING
PRINCIPLE (b) - (48) (48) - (48) - (8) (1) (57)
==================================================================================================================================
NET INCOME (LOSS) $ 34 $ 5 $ 39 $ 68 $ 107 $ 31 $ (12) $ (75) $ 51
==================================================================================================================================
(a) During the first quarter of 2002, CNA Vida, a Chilean-based life
insurance company, was sold and reported as discontinued operations in
accordance with SFAS 144, Accounting for the Impairment or Disposal of
Long-Lived Assets.
(b) Represents the effect of the adoption of SFAS 142, which was a change
in accounting for goodwill and indefinite-lived intangible assets in
2002.
(c) The three and six months ended June 30, 2002 results have been
restated to reflect an adjustment to the Company's historical
accounting for CNA's life settlement contracts and the related revenue
recognition. Refer to CNA's 2002 Form 10-K for further information
related to this restatement.
==================================================================================================================================
PROPERTY & CASUALTY SEGMENTS GROSS WRITTEN PREMIUMS
- ----------------------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
- ----------------------------------------------------------------------------------------------------------------------------------
($ MILLIONS) 2003 2002 2003 2002
- ----------------------------------------------------------------------------------------------------------------------------------
STANDARD LINES $ 1,422 $ 1,194 $ 2,859 $ 2,804
SPECIALTY LINES 863 729 1,843 1,595
----------------------------------------------------------------------------------
TOTAL P&C OPERATIONS 2,285 1,923 4,702 4,399
CNA RE 148 171 378 399
==================================================================================================================================
TOTAL P&C SEGMENTS $ 2,433 $ 2,094 $ 5,080 $ 4,798
==================================================================================================================================
Page 4 of 10
- ----------------------------------------------------------------------------------------
PROPERTY & CASUALTY SEGMENTS NET WRITTEN PREMIUMS
- ----------------------------------------------------------------------------------------
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
- ----------------------------------------------------------------------------------------
($ MILLIONS) 2003 2002 2003 2002
- ----------------------------------------------------------------------------------------
STANDARD LINES $ 890 $ 1,056 $ 1,994 $ 2,139
SPECIALTY LINES 681 572 1,345 1,112
-----------------------------------------------------------
TOTAL P&C OPERATIONS 1,571 1,628 3,339 3,251
CNA RE 123 160 328 327
========================================================================================
TOTAL P&C SEGMENTS $ 1,694 $ 1,788 $ 3,667 $ 3,578
========================================================================================
- ----------------------------------------------------------------------------------------
GROUP AND LIFE OPERATIONS NET EARNED PREMIUMS
- ----------------------------------------------------------------------------------------
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
- ----------------------------------------------------------------------------------------
($ MILLIONS) 2003 2002 2003 2002
- ----------------------------------------------------------------------------------------
GROUP OPERATIONS (a) $ 329 $ 820 $ 644 $ 1,725
LIFE OPERATIONS 263 234 519 474
========================================================================================
(a) For the three and six months ended June 30, 2002, net earned premiums
include $535 million and $1,151 million of net earned premiums related
to the National Postal Mail Handlers Union (Mail Handlers Plan)
contract which was transferred on July 1, 2002.
- ----------------------------------------------------------------------------------------
PROPERTY & CASUALTY CALENDAR YEAR LOSS RATIOS
- ----------------------------------------------------------------------------------------
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
- ----------------------------------------------------------------------------------------
2003 2002 2003 2002
- ----------------------------------------------------------------------------------------
STANDARD LINES 93.9% 78.1% 82.8% 77.6%
SPECIALTY LINES 92.7 70.3 81.4 70.8
TOTAL P&C OPERATIONS 93.4 75.5 82.3 75.3
CNA RE 71.4 81.6 67.4 63.6
TOTAL P&C SEGMENTS 91.6 76.0 81.0 74.3
========================================================================================
TOTAL P&C COMPANIES 95.1% 81.5% 84.5% 79.9%
========================================================================================
- ----------------------------------------------------------------------------------------
PROPERTY & CASUALTY CALENDAR YEAR COMBINED RATIOS
- ----------------------------------------------------------------------------------------
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
- ----------------------------------------------------------------------------------------
2003 2002 2003 2002
- ----------------------------------------------------------------------------------------
STANDARD LINES 139.6% 109.3% 121.8% 110.0%
SPECIALTY LINES 124.4 102.8 113.0 103.3
TOTAL P&C OPERATIONS 132.8 107.1 118.2 107.7
CNA RE 103.8 108.9 97.9 96.7
TOTAL P&C SEGMENTS 130.4 107.2 116.5 106.8
========================================================================================
TOTAL P&C COMPANIES 135.2% 108.4% 120.3% 107.9%
========================================================================================
Page 5 of 10
- ----------------------------------------------------------------------------------------------------
PROPERTY & CASUALTY GROSS ACCIDENT YEAR LOSS RATIOS
- ----------------------------------------------------------------------------------------------------
ACCIDENT YEAR 2003 ACCIDENT YEAR 2002 ACCIDENT YEAR 2002
EVALUATED AT JUNE 30, EVALUATED AT DECEMBER 31, EVALUATED AT JUNE 30,
2003 2002 2003
- ----------------------------------------------------------------------------------------------------
STANDARD LINES 64.2% 74.6% 71.5%
SPECIALTY LINES 64.9 68.1 69.4
TOTAL P&C OPERATIONS 64.5 72.1 70.8
CNA RE 59.9 64.2 63.2
====================================================================================================
TOTAL P&C SEGMENTS 64.2% 71.5% 70.2%
====================================================================================================
- ----------------------------------------------------------------------------------------------------
PROPERTY & CASUALTY NET ACCIDENT YEAR LOSS RATIOS
- ----------------------------------------------------------------------------------------------------
ACCIDENT YEAR 2003 ACCIDENT YEAR 2002 ACCIDENT YEAR 2002
EVALUATED AT JUNE 30, EVALUATED AT DECEMBER 31, EVALUATED AT JUNE 30,
2003 2002 2003
- ----------------------------------------------------------------------------------------------------
STANDARD LINES 68.2% 75.3% 74.5%
SPECIALTY LINES 66.3 71.7 72.5
TOTAL P&C OPERATIONS 67.5 74.1 73.8
CNA RE 63.5 69.3 69.0
====================================================================================================
TOTAL P&C SEGMENTS 67.2% 73.6% 73.4%
====================================================================================================
BUSINESS OPERATING HIGHLIGHTS
STANDARD LINES includes standard property and casualty coverages sold to
small and middle market commercial businesses primarily through an
independent agency distribution system, and excess and surplus lines, as
well as insurance and risk management products sold to large corporations.
o Net written premiums decreased $166 million for the second quarter of
2003 as compared with the same period in 2002, due primarily to
additional ceded premiums of approximately $200 million for the
corporate aggregate and other reinsurance treaties, partially offset
by strong rate increases.
o Standard Lines achieved average rate increases during the second
quarter of 2003 of 17%.
o Results for the second quarter of 2003 included $185 million after-tax
of unfavorable net prior year premium and loss development,
principally recorded for workers compensation, increased catastrophe
losses, decreased net investment income and an increase in the bad
debt reserve for insurance receivables. These items were partially
offset by improvements in the current net accident year loss ratio.
Page 6 of 10
SPECIALTY LINES provides a broad array of professional, financial and specialty
property and casualty products and services in the U.S. and abroad.
o Net written premiums increased $109 million for the second quarter of 2003
as compared with the same period in 2002, primarily in the professional
liability lines.
o Specialty Lines achieved average rate increases during the second quarter
of 2003 of 24%, primarily across most professional liability lines of
business.
o Results for the second quarter of 2003 included $123 million after-tax of
unfavorable net prior year reserve development recorded for the previously
disclosed adverse arbitration decision involving a single large property
and business interruption loss, directors and officers coverages and the
commutation of certain CNA Health Pro reinsurance treaties. This
unfavorable development was partially offset by continued improvement in
the current net accident year loss ratio.
CNA RE operates globally as a reinsurer in the broker market for treaty products
and in the direct market for facultative products.
o Net written premiums decreased $37 million for the second quarter of 2003
for CNA Re as compared with the same period in 2002, due primarily to
additional ceded premiums related to the corporate aggregate reinsurance
treaties and reduced level of premiums from prior underwriting years.
o CNA Re achieved average rate increases during the second quarter of 2003 of
approximately 7%.
o Results for the second quarter of 2003 included $8 million after-tax of
unfavorable net prior year reserve development, principally for directors
and officers coverages; increased catastrophe losses and decreased net
investment income. These items were partially offset by an improvement in
the current net accident year loss ratio.
GROUP OPERATIONS provides a broad array of group life and group health insurance
and investment products and services to employers, affinity groups and other
entities that purchase insurance as a group.
o Net earned premiums decreased $491 million for the second quarter of 2003
as compared with the same period in 2002, due principally to the transfer
of the Mail Handlers Plan, partially offset by premium growth in the
disability, life and long term care products within Group Benefits due to
increased new sales and rate increases.
o Group Operations achieved average rate increases during the second quarter
of 2003 of approximately 7%.
o Results for the second quarter of 2003 included the positive impact of
premium growth within Group Benefits and the absence of unfavorable
operating results from variable annuity products, which were sold in 2002.
These items were partially offset by the absence of favorable operating
results for the Mail Handlers Plan.
Page 7 of 10
LIFE OPERATIONS provides financial protection to individuals through a full
product line of term life insurance, universal life insurance, individual long
term care insurance, annuities and other products. Life Operations has several
distribution relationships and partnerships including managing general agencies,
other independent agencies working with CNA life sales offices, a network of
brokers and dealers, and other independent insurance consultants.
o Net earned premiums increased $29 million for the second quarter of 2003 as
compared with the same period in 2002, due primarily to higher sales of
structured settlement annuities and growth in individual long term care and
life insurance products. Based on the Company's decision to significantly
reduce new sales, a lower rate of premium growth is expected in its
individual long term care product for the remainder of 2003.
o Results for the second quarter of 2003 included unfavorable individual long
term care morbidity, severance costs and decreased net investment income as
compared with the same period in 2002. These items were partially offset by
improved results related to life settlement contracts.
CORPORATE AND OTHER segment contains certain corporate expenses such as interest
on corporate debt and losses and expenses related to the centralized adjusting
and settlement of asbestos, environmental pollution and mass tort claims (APMT).
In addition, this segment includes the results of certain run-off insurance and
non-insurance operations.
o Results for the second quarter of 2003 included an increase in the bad debt
reserve for reinsurance receivables related to deterioration in the
financial strength ratings of several reinsurers, partially offset by
decreased eBusiness expenses. Beginning in 2003, expenses related to
eBusiness were included within property and casualty operations.
NET INVESTMENT INCOME
Pretax net investment income decreased $75 million to $427 million for the
second quarter of 2003 as compared with the same period in 2002. The change was
primarily due to lower investment yields on fixed maturity securities and
increased interest costs on funds withheld and other deposits related to certain
reinsurance contracts. The interest costs on these reinsurance contracts
increased due to additional cessions to the corporate aggregate reinsurance
treaties as a result of the unfavorable net prior year reserve development
recorded in the second quarter of 2003. These declines were partially offset by
improved limited partnership investment results.
Page 8 of 10
THIRD QUARTER RESERVE REVIEWS
Adverse trends in both APMT and non-APMT property and casualty segments continue
to impact the property and casualty insurance industry. The Company reviews its
property and casualty claim and claim adjustment expense reserves (reserves) on
a regular basis, and as part of these reviews, has noted an increase in reported
construction defect claims. The Company expects to complete a comprehensive
reserve review of construction defect exposures in the third quarter. In
addition, other volatile exposures will also be reviewed on a comprehensive
basis in the third quarter.
While the Company continues to monitor and evaluate its APMT exposures on a
regular basis, the completion of a comprehensive ground up analysis of its APMT
exposures, previously scheduled for the second quarter, will be completed in the
third quarter of 2003. Significant resources were dedicated to the proposed
national asbestos reform legislation and to support the regulatory reviews
described below. As such, the Company plans to complete its more formal and
comprehensive analysis in the third quarter of 2003.
In addition, in connection with routine state regulatory exams of Continental
Casualty Company (CCC) and Continental Insurance Company (CIC), an independent
actuarial firm is in the process of reviewing the Company's reserves as of
December 31, 2001. The Company intends to have the independent actuarial firm
update its review to include an assessment of its December 31, 2002 reserves
using more recent data. These independent reviews are expected to be completed
by December 31, 2003. The Company will consider the results of these independent
actuarial reviews in the reserving process.
While management believes that the Company's reserves as of June 30, 2003 are
appropriate based on information known at this time, the Company, as a result of
the third quarter reviews by the Company and the independent actuarial firm and
other factors deemed relevant by the Company, may in the future determine that
its recorded reserves are not sufficient and may increase its reserves by
amounts that may be material, which could adversely affect the Company's
business, insurer financial strength and debt ratings and equity. Adjustments to
prior year reserve estimates, if necessary, are reflected in the results of
operations in the period that the need for such adjustments is determined.
ABOUT THE COMPANY
CNA is the country's fourth largest commercial insurance writer, the 11th
largest property and casualty company and the 51st largest life insurance
organization. CNA's insurance products include standard commercial lines,
specialty lines, surety, reinsurance, marine and other property and casualty
coverages; life and accident insurance; group long term care, disability and
life insurance; and pension products. CNA services include risk management,
information services, underwriting, risk control and claims administration. For
more information, please visit CNA at www.cna.com. CNA is a registered service
mark, trade name and domain name of CNA Financial Corporation.
Page 9 of 10
CONFERENCE CALL AND WEBCAST INFORMATION:
A CONFERENCE CALL FOR INVESTORS AND THE PROFESSIONAL INVESTMENT COMMUNITY WILL
BE HELD FROM 8:00 A.M. TO 9:00 A.M. ET TODAY. ON THE CONFERENCE CALL WILL BE
STEPHEN W. LILIENTHAL, CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF THE CNA INSURANCE
COMPANIES, AND OTHER MEMBERS OF SENIOR MANAGEMENT. PARTICIPANTS CAN ACCESS THE
CALL BY DIALING 800-289-0730 OR FOR INTERNATIONAL CALLERS 913-981-5509. THE CALL
WILL ALSO BE BROADCAST LIVE ON THE INTERNET AT HTTP://INVESTORS.CNA.COM OR YOU
MAY GO TO THE INVESTOR RELATIONS PAGES OF THE CNA WEBSITE (WWW.CNA.COM) FOR
FURTHER DETAILS.
THE CALL IS AVAILABLE TO THE MEDIA, BUT QUESTIONS WILL BE RESTRICTED TO
INVESTORS AND THE PROFESSIONAL INVESTMENT COMMUNITY. A TAPED REPLAY OF THE CALL
WILL BE AVAILABLE UNTIL AUGUST 14, 2003 BY DIALING 888-203-1112 AND USING
PASSCODE 160543 OR FOR INTERNATIONAL CALLERS 719-457-0820 AND USING PASSCODE
160543. IT WILL ALSO BE ARCHIVED LATER IN THE DAY FOR REPLAY ON OUR WEBSITE.
FINANCIAL SUPPLEMENT INFORMATION RELATED TO THE SECOND QUARTER RESULTS IS
AVAILABLE ON THE INVESTOR RELATIONS PAGES OF THE CNA WEBSITE OR BY CONTACTING
DAWN JAFFRAY AT 312-822-7757.
FORWARD-LOOKING STATEMENT
The statements contained in this press release, which are not historical facts,
are forward-looking statements. When included in this press release, the words
"believes," "expects," "intends," "anticipates," "estimates," and analogous
expressions are intended to identify forward-looking statements. Forward-looking
statements include expected developments in the insurance business of CNA (the
"Company"), including losses for asbestos, environmental pollution and mass tort
claims; the Company's expectations concerning its revenues, earnings, expenses
and investment activities; expected cost savings and other results from the
Company's expense reduction and restructuring activities; and the Company's
proposed actions in response to trends in its business.
Such statements, and the financial condition and results of operations of the
Company and the price of the Company's common stock, are subject to a variety of
inherent risks and uncertainties. These risks and uncertainties could cause
actual results to differ materially from those projected. Such risks and
uncertainties include, among others: general economic and business conditions,
including inflationary pressures on medical care costs, construction costs and
other economic sectors that increase the severity of claims; changes in
financial markets such as fluctuations in interest rates, long-term periods of
low interest rates, credit conditions and currency, commodity and stock prices;
the effects of corporate bankruptcies, such as Enron and WorldCom, on surety
bond claims, as well as on capital markets and on the markets for directors &
officers and errors & omissions coverages; changes in foreign or domestic
political, social and economic conditions; regulatory initiatives and compliance
with governmental regulations; judicial decisions and rulings, including
interpretation of policy provisions, decisions regarding coverage and theories
of liability, trends in litigation and the outcome of any litigation involving
the Company; changes in tax laws and regulations; regulatory limitations and
restrictions upon the Company and its insurance subsidiaries; the impact of
competitive products, policies and pricing and the competitive environment in
which the Company operates, including changes in the Company's books of
business; product and policy availability and demand and market responses,
including the level of ability to obtain rate increases and decline or non-renew
underpriced accounts, to achieve premium targets and profitability and to
realize growth and retention estimates; development of claims and the impact on
loss reserves, including changes in claim settlement practices; the
effectiveness of current initiatives by claims management to reduce loss and
expense ratio through more efficacious claims handling techniques; the
performance of reinsurance companies under reinsurance contracts with the
Company; results of financing efforts, including the availability of bank credit
facilities; changes in the Company's composition of operating segments; weather
and other natural physical events, including the severity and frequency of
storms, hail, snowfall and other winter conditions, as well as of natural
disasters such as hurricanes and earthquakes; man-made disasters, including the
possible occurrence of terrorist attacks and the effect of the absence of
applicable terrorism legislation on coverages; the occurrence of epidemics;
exposure to liabilities due to claims made by insureds and others relating to
asbestos remediation and health-based asbestos impairments, and exposure to
liabilities for environmental pollution and other mass tort claims; whether a
national privately financed trust to replace litigation of asbestos claims with
payments to claimants from the trust will be established or approved through
federal legislation, or, if established and approved, whether it will contain
funding requirements in excess of the Company's established loss reserves or
carried loss reserves; the sufficiency of the Company's loss reserves and the
possibility of future increases in reserves; the level of success in integrating
acquired businesses and operations, and in consolidating existing ones; the
possibility of changes in the Company's ratings by ratings agencies, including
the inability to access certain markets or distribution channels and the
required collateralization of future payment obligations as a result of such
changes, and changes in rating agency policies and practices; the actual closing
of contemplated transactions and agreements; and various other matters and risks
(many of which are beyond the Company's control) detailed in the Company's
Securities and Exchange Commission filings.
These forward-looking statements speak only as of the date of this press
release. The Company expressly disclaims any obligation or undertaking to
release any updates or revisions to any forward-looking statement contained in
this press release to reflect any change in the Company's expectations with
regard thereto or any change in events, conditions or circumstances on which any
statement is based.
# # #
Page 10 of 10