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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) January 25, 2002
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CNA FINANCIAL CORPORATION
(Exact Name of Registrant as Specified in Charter)
DELAWARE 1-5823 36-6169860
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
CNA PLAZA, CHICAGO, ILLINOIS 60685
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (312) 822-5000
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
Exhibit No. Description
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02.01 On January 25, 2002 CNA Financial Corporation issued
a press release announcing its preliminary 2001
fourth quarter and year end results. A copy of the
press release is attached hereto as Exhibit 02.01 and
is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CNA FINANCIAL CORPORATION
Date: January 25, 2002 By: /s/ Robert V. Deutsch
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Robert V. Deutsch
Executive Vice President and
Chief Financial Officer
[CNA LOGO]
INSURANCE IN TOUCH
WITH BUSINESS
FOR IMMEDIATE RELEASE
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CONTACT:
MEDIA: ANALYSTS:
Charles M. Boesel, 312/822-2592 Robert V. Deutsch, 312/822-4242
Katrina W. Parker, 312/822-5167 Donald P. Lofe, Jr., 312/822-3993
CNA FINANCIAL ANNOUNCES
PRELIMINARY 4TH QUARTER AND YEAR END RESULTS
CHICAGO, ILLINOIS, JANUARY 25, 2002 --- CNA Financial Corporation (NYSE: CNA)
today announced that it expects a 2001 fourth quarter net loss between $20
million and $35 million, compared with net income of $193 million for the same
quarter in 2000. Included in the 2001 fourth quarter net loss are the previously
disclosed restructuring and other related charges of $125 million after-tax and
$52 million after-tax of Enron related losses, net of anticipated reinsurance
recoveries. CNA has also recorded a $69 million after-tax reserve strengthening
charge, primarily for the current accident year, in CNA's London-based primary
commercial and marine operations.
Total net operating loss, which excludes realized investment gains, for the 2001
fourth quarter is expected to be between $288 million and $303 million compared
with net operating income of $114 million in the 2000 fourth quarter. Total net
realized investment gains for the 2001 fourth quarter were $268 million compared
with $79 million for the 2000 fourth quarter.
The 2001 fourth quarter net operating loss includes a $160 million after-tax
charge to strengthen the prior year loss reserves of its London-based
reinsurance operation, CNA Reinsurance Company Limited (CNA Re U.K.). Net
realized investment gains for the 2001 fourth quarter includes a $160 million
after-tax adjustment to reduce the second quarter $285 million after-tax
estimated impairment losses related to the anticipated sale of CNA Re U.K. The
fourth quarter adjustment is based on a revaluation of the estimated impairment
losses and is reflected as an after-tax realized gain. There is no net effect on
equity or net income from these two items.
- more -
Total net loss for the year ended December 31, 2001 is expected to be $1.6
billion compared with net income of $1.2 billion for the year ended December 31,
2000. Total net operating loss, which excludes realized investment gains, for
the year ended December 31, 2001 is expected to be $2.4 billion compared with
net operating income of $544 million for the year ended December 31, 2000.
Included in the December 31, 2001 net operating loss is the $2.1 billion
after-tax charge recorded in the second quarter related to a change in estimate
of prior year loss reserves and premium accruals, $304 million after-tax losses
from the September 11, 2001 World Trade Center attack and related events
recorded in the third quarter, fourth quarter restructuring and other related
charges, Enron related losses, and fourth quarter reserve strengthening
discussed above.
CNA Financial Corporation is scheduled to issue its full quarterly earnings
press release and financial supplement before the opening of the market on
Thursday, February 14, 2002. CNA management will host its quarterly conference
call and webcast at 10:00 E.S.T. on the same day.
CNA is a leading insurance organization offering a broad range of insurance
products and insurance-related services in the property and casualty, life,
group and reinsurance markets. Visit CNA at www.cna.com. CNA is a registered
service mark, trade name and domain name of CNA Financial Corporation.
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 losses in the Company's insurance business,
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 restructuring activities; and expected proceeds and terms of, and
other matters concerning, the Company's anticipated disposition of its
U.K.-based reinsurance business; 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, inherently are subject to a
variety of risks and uncertainties. These risks and uncertainties could cause
actual results to differ materially from those projected. Such risks and
uncertainties include, among others, the impact of competitive products,
policies and pricing and the competitive environment in which the Company
operates; product and policy demand and market responses; development of claims
and the effect on loss reserves; 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 mass
tort claims; the sufficiency of the Company's loss reserves and the possibility
of future increases in reserves; the performance of reinsurance companies under
contracts with the Company; general economic and business conditions; changes in
financial markets (interest rate, credit, currency, commodities and stocks);
changes in foreign, political social and economic conditions; regulatory
limitations and restrictions upon the Company and its insurance subsidiaries;
regulatory initiatives and compliance with governmental regulations; judicial
decisions and rulings; the possibility of downgrades in the Company's ratings by
ratings agencies and changes in rating agency policies and practices; the
results of financing efforts; changes in the Company's composition of operating
segments; 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 publicly any updates or revisions to any forward-looking statement
contained herein 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.
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