CNA 1stQ Profit Up 315% From 2002

Chicago-based commercial lines leader CNA Financial Corp. reported first-quarter net income of $83 million, or 30 cents per share, up 315 percent from $20 million, or 9 cents per share, in the first quarter of 2002.

Net operating income from continuing operations was $132 million for the first quarter of 2003 as compared with $110 million in the first quarter of 2002.

The year over year improvement in net operating income was primarily due to an approximate five-point improvement in the current net accident year loss ratio for the primary property and casualty businesses. During the first quarter, the company continued to achieve strong premium rate increases and solid production of new business. These improvements were partially offset by unfavorable prior year net reserve development, principally within standard lines, and decreased operating results for life operations.

Net written premiums increased $21 million for the first quarter of 2003 as compared with the same period in 2002, while standard lines achieved average rate increases during the first quarter of 2003 of 21 percent, primarily in the excess and surplus lines as well as risk management products.

Net operating results improved $25 million for the first quarter of 2003 as compared with the same period in 2002, due primarily to continued improvement in the current net accident year loss ratio and higher net investment income. These improvements were partially offset by unfavorable prior year net reserve development, primarily in excess and surplus lines and risk management products. The 2003 net operating results also include approximately $17 million of pretax eBusiness expenses. The eBusiness expenses were included in the Corporate and Other segment during 2002.

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