Business Segments

6 Months Ended

Jun. 30, 2011

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Business Segments

The Company's core property and casualty commercial insurance operations are reported in two business segments: CNA Specialty and CNA Commercial. The Company's non-core operations are managed in two segments: Life & Group Non-Core and Corporate & Other Non-Core.

The accounting policies of the segments are the same as those described in Note A of the Consolidated Financial Statements within CNAF's Annual Report on Form 10-K for the year ended December 31, 2010. The Company manages most of its assets on a legal entity basis, while segment operations are conducted across legal entities. As such, only insurance and reinsurance receivables, insurance reserves and deferred acquisition costs are readily identifiable by individual segment. Distinct investment portfolios are not maintained for each segment; accordingly, allocation of assets to each segment is not performed. Therefore, net investment income and realized investment gains or losses are allocated primarily based on each segment's net carried insurance reserves, as adjusted. All significant intrasegment income and expense has been eliminated. Income taxes have been allocated on the basis of the taxable income of the segments.

In the following tables, certain financial measures are presented to provide information used by management to monitor the Company's operating performance. Management utilizes these financial measures to monitor the Company's insurance operations and investment portfolio. Net operating income, which is derived from certain income statement amounts, is used by management to monitor performance of the Company's insurance operations. The Company's investment portfolio is monitored by management through analysis of various factors including unrealized gains and losses on securities, portfolio duration and exposure to interest rate, market and credit risk. Based on such analyses, the Company may recognize an OTTI loss on an investment security in accordance with its policy, or sell a security, which may produce realized gains and losses.

Net operating income (loss) is calculated by excluding from net income (loss) attributable to CNA the after-tax effects of 1) net realized investment gains or losses, 2) income or loss from discontinued operations and 3) any cumulative effects of changes in accounting guidance. The calculation of net operating income excludes net realized investment gains or losses because net realized investment gains or losses are largely discretionary, except for losses related to OTTI, and are generally driven by economic factors that are not necessarily consistent with key drivers of underwriting performance, and are therefore not considered an indication of trends in insurance operations.

The significant components of the Company's continuing operations and selected balance sheet items are presented in the following tables.

Three months ended
June 30, 2011	CNA Specialty			CNA Commercial			Life & Group Non-Core			Corporate & Other Non-Core
(In millions)													Eliminations		Total
Operating revenues
Net earned premiums	$	688		$	768		$	141		$	(2	)	$	—	$	1,595
Net investment income	126			193			189			9			—		517
Other revenues	54			12			2			3			—		71
Total operating revenues	868			973			332			10			—		2,183
Claims, Benefits and Expenses
Net incurred claims and benefits	418			621			330			(6		)	—		1,363
Policyholders’ dividends	—			2			2			—			—		4
Amortization of deferred acquisition costs	164			180			6			—			—		350
Other insurance related expenses	52			102			34			2			—		190
Other expenses	52			11			6			43			—		112
Total claims, benefits and expenses	686			916			378			39			—		2,019
Operating income (loss) from continuing operations before income tax	182			57			(46		)	(29		)	—		164
Income tax (expense) benefit on operating income (loss)	(64		)	(16		)	27			11			—		(42		)
Net operating (income) loss, after-tax, attributable to noncontrolling interests	(4		)	(2		)	—			—			—		(6		)
Net operating income (loss) from continuing operations attributable to CNA	114			39			(19		)	(18		)	—		116
Net realized investment gains (losses), net of participating policyholders’ interests	7			11			1			(4		)	—		15
Income tax (expense) benefit on net realized investment gains (losses)	(2		)	(3		)	—			—			—		(5		)
Net realized investment (gains) losses, after-tax, attributable to noncontrolling interests	—			—			—			—			—		—
Net realized investment gains (losses) attributable to CNA	5			8			1			(4		)	—		10
Net income (loss) from continuing operations attributable to CNA	$	119		$	47		$	(18	)	$	(22	)	$	—	$	126

Three months ended
June 30, 2010	CNA Specialty			CNA Commercial			Life & Group Non-Core			Corporate & Other Non-Core
(In millions)													Eliminations			Total
Operating revenues
Net earned premiums	$	665		$	797		$	146		$	1		$	(1	)	$	1,608
Net investment income	125			184			174			38			—			521
Other revenues	53			16			2			4			—			75
Total operating revenues	843			997			322			43			(1		)	2,204
Claims, Benefits and Expenses
Net incurred claims and benefits	320			486			314			17			—			1,137
Policyholders’ dividends	3			6			1			—			—			10
Amortization of deferred acquisition costs	154			186			5			—			—			345
Other insurance related expenses	47			107			45			(1		)	(1		)	197
Other expenses	50			11			—			37			—			98
Total claims, benefits and expenses	574			796			365			53			(1		)	1,787
Operating income (loss) from continuing operations before income tax	269			201			(43		)	(10		)	—			417
Income tax (expense) benefit on operating income (loss)	(90		)	(68		)	25			4			—			(129		)
Net operating (income) loss, after-tax, attributable to noncontrolling interests	(11		)	(8		)	—			—			—			(19		)
Net operating income (loss) from continuing operations attributable to CNA	168			125			(18		)	(6		)	—			269
Net realized investment gains (losses), net of participating policyholders’ interests	32			(12		)	(1		)	10			—			29
Income tax (expense) benefit on net realized investment gains (losses)	(11		)	(2		)	—			(3		)	—			(16		)
Net realized investment (gains) losses, after-tax, attributable to noncontrolling interests	—			—			—			—			—			—
Net realized investment gains (losses) attributable to CNA	21			(14		)	(1		)	7			—			13
Net income (loss) from continuing operations attributable to CNA	$	189		$	111		$	(19	)	$	1		$	—		$	282

Six months ended
June 30, 2011	CNA Specialty			CNA Commercial			Life & Group Non-Core			Corporate & Other Non-Core
(In millions)													Eliminations			Total
Operating revenues
Net earned premiums	$	1,357		$	1,570		$	285		$	(1	)	$	(1	)	$	3,210
Net investment income	286			454			377			20			—			1,137
Other revenues	108			26			—			4			—			138
Total operating revenues	1,751			2,050			662			23			(1		)	4,485
Claims, Benefits and Expenses
Net incurred claims and benefits	848			1,224			653			1			—			2,726
Policyholders’ dividends	—			2			3			—			—			5
Amortization of deferred acquisition costs	325			358			12			—			—			695
Other insurance related expenses	96			185			72			3			(1		)	355
Other expenses	92			27			12			87			—			218
Total claims, benefits and expenses	1,361			1,796			752			91			(1		)	3,999
Operating income (loss) from continuing operations before income tax	390			254			(90		)	(68		)	—			486
Income tax (expense) benefit on operating income (loss)	(134		)	(82		)	53			23			—			(140		)
Net operating (income) loss, after-tax, attributable to noncontrolling interests	(12		)	(2		)	—			—			—			(14		)
Net operating income (loss) from continuing operations attributable to CNA	244			170			(37		)	(45		)	—			332
Net realized investment gains (losses), net of participating policyholders’ interests	15			28			(3		)	(12		)	—			28
Income tax (expense) benefit on net realized investment gains (losses)	(5		)	(9		)	1			4			—			(9		)
Net realized investment (gains) losses, after-tax, attributable to noncontrolling interests	—			(1		)	—			—			—			(1		)
Net realized investment gains (losses) attributable to CNA	10			18			(2		)	(8		)	—			18
Net income (loss) from continuing operations attributable to CNA	$	254		$	188		$	(39	)	$	(53	)	$	—		$	350

June 30, 2011
(In millions)
Reinsurance receivables	$	916	$	1,890	$	1,423	$	2,698	$	—		$	6,927
Insurance receivables	$	631	$	1,197	$	8	$	4	$	—		$	1,840
Deferred acquisition costs	$	345	$	338	$	423	$	—	$	—		$	1,106
Insurance reserves
Claim and claim adjustment expenses	$	6,953	$	12,282	$	2,734	$	3,227	$	—		$	25,196
Unearned premiums	1,635		1,632		143		—		(1		)	3,409
Future policy benefits	—		—		9,021		—		—			9,021
Policyholders’ funds	14		10		142		—		—			166

Six months ended
June 30, 2010	CNA Specialty			CNA Commercial			Life & Group Non-Core			Corporate & Other Non-Core
(In millions)													Eliminations			Total
Operating revenues
Net earned premiums	$	1,319		$	1,613		$	291		$	2		$	(2	)	$	3,223
Net investment income	272			405			349			85			—			1,111
Other revenues	105			34			6			6			—			151
Total operating revenues	1,696			2,052			646			93			(2		)	4,485
Claims, Benefits and Expenses
Net incurred claims and benefits	722			1,090			595			36			—			2,443
Policyholders’ dividends	4			7			1			—			—			12
Amortization of deferred acquisition costs	309			369			9			—			—			687
Other insurance related expenses	94			214			96			1			(2		)	403
Other expenses	94			28			6			72			—			200
Total claims, benefits and expenses	1,223			1,708			707			109			(2		)	3,745
Operating income (loss) from continuing operations before income tax	473			344			(61		)	(16		)	—			740
Income tax (expense) benefit on operating income (loss)	(158		)	(111		)	44			6			—			(219		)
Net operating (income) loss, after-tax, attributable to noncontrolling interests	(19		)	(10		)	—			—			—			(29		)
Net operating income (loss) from continuing operations attributable to CNA	296			223			(17		)	(10		)	—			492
Net realized investment gains (losses), net of participating policyholders’ interests	45			9			(5		)	14			—			63
Income tax (expense) benefit on net realized investment gains (losses)	(15		)	(9		)	—			(4		)	—			(28		)
Net realized investment (gains) losses, after-tax, attributable to noncontrolling interests	—			—			—			—			—			—
Net realized investment gains (losses) attributable to CNA	30			—			(5		)	10			—			35
Net income (loss) from continuing operations attributable to CNA	$	326		$	223		$	(22	)	$	—		$	—		$	527

December 31, 2010
(In millions)
Reinsurance receivables	$	906	$	1,973	$	1,502	$	2,823	$	—	$	7,204
Insurance receivables	$	654	$	1,050	$	9	$	4	$	—	$	1,717
Deferred acquisition costs	$	330	$	315	$	434	$	—	$	—	$	1,079
Insurance reserves
Claim and claim adjustment expenses	$	6,793	$	12,522	$	2,739	$	3,442	$	—	$	25,496
Unearned premiums	1,543		1,526		132		2		—		3,203
Future policy benefits	—		—		8,718		—		—		8,718
Policyholders’ funds	16		13		144		—		—		173

The following table provides revenue by line of business for each reportable segment. Revenues are comprised of operating revenues and net realized investment gains and losses, net of participating policyholders’ interests.

Revenues by Line of Business

Periods ended June 30	Three Months					Six Months
(In millions)	2011		2010			2011			2010
CNA Specialty
International	$	54	$	48		$	105		$	99
Professional & Management Liability	626		634			1,286			1,265
Surety	119		119			230			233
Warranty & Alternative Risks	76		74			145			144
CNA Specialty revenues	875		875			1,766			1,741
CNA Commercial
CNA Select Risk	67		62			138			126
Commercial Insurance	641		694			1,393			1,410
International	130		89			257			244
Small Business	146		140			290			281
CNA Commercial revenues	984		985			2,078			2,061
Life & Group Non-Core
Health	274		266			544			520
Life & Annuity	59		52			115			116
Other	—		3			—			5
Life & Group Non-Core revenues	333		321			659			641
Corporate & Other Non-Core revenues	6		53			11			107
Eliminations	—		(1		)	(1		)	(2		)
Total revenues	$	2,198	$	2,233		$	4,513		$	4,548