CNA Financial Corp. Trims Workforce

December 6, 2001

CNA Financial Corp., hit by insurance claims attributed to the World Trade Center attack, is restructuring, a move that will eliminate 1,850 jobs, or about 10 percent of its employees.

The nation’s second-biggest business insurer said it is restructuring its property-casualty and life insurance operations, discontinuing its variable life and annuity business, consolidating real estate locations and making related job cuts across the country.

The insurance holding company plans to shut down 101 offices in the first half of 2002, leaving it with 68 in 63 cities — the same number of cities it serves now.

About a third of the job cuts will be at its headquarters and elsewhere in the Chicago metropolitan area. The second-largest concentration of job cuts is in Nashville, Tenn., where 165 jobs will be eliminated. It presently employs about 18,350 people.

The announcement comes after a third quarter in which CNA lost $155 million, which it attributed to a $304 million loss for reinsurance and related premiums in connection with the events of Sept. 11.

Asbestos claims have also hit the company as it lost $1.7 billion in the second quarter after absorbing large charges to increase reserves for paying old asbestos and pollution claims.

The Chicago-based company said it will take fourth-quarter charges of $114 million to $124 million as a result of the latest changes.

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