21175--2/24/2009--CNA_FINANCIAL

related topics

{loss, insurance, financial}

{capital, credit, financial}

{competitive, industry, competition}

{regulation, change, law}

{cost, contract, operation}

{debt, indebtedness, cash}

{personnel, key, retain}

{condition, economic, financial}

{regulation, government, change}

We are unable to predict the impact on us of governmental efforts taken and proposed to be taken in response to the economic and credit crisis. We may continue to incur significant losses from our investments in financial institutions. Rating agencies may downgrade their ratings of us and thereby adversely affect our ability to write insurance at competitive rates or at all. We are subject to extensive federal, state and local governmental regulations that restrict our ability to do business and generate revenues. We are subject to capital adequacy requirements and, if we are unable to maintain or raise sufficient capital to meet these requirements, regulatory agencies may restrict or prohibit us from operating our business. Our insurance subsidiaries, upon whom we depend for dividends in order to fund our working capital needs, are limited by state regulators in their ability to pay dividends. If we determine that loss reserves are insufficient to cover our estimated ultimate unpaid liability for claims, we may need to increase our loss reserves. Loss reserves for asbestos and environmental pollution are especially difficult to estimate and may result in more frequent and larger additions to these reserves. We may suffer losses from non-routine litigation and arbitration matters which may exceed the reserves we have established. Our key assumptions used to determine reserves and deferred acquisition costs for our long term care product offerings could vary significantly from actual experience. We continue to face exposure to losses arising from terrorist acts, despite the passage of the Terrorism Risk Insurance Program Reauthorization Act of 2007. Our premium writings and profitability are affected by the availability and cost of reinsurance. We may not be able to collect amounts owed to us by reinsurers. We face intense competition in our industry and may be adversely affected by the cyclical nature of the property and casualty business. We are dependent on a small number of key executives and other key personnel to operate our business successfully.

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21175--2/24/2009--CNA_FINANCIAL_CORP