Fitch Assigns Rating to Subsidiaries of CNA

March 27, 2002

Fitch Ratings has assigned new ratings to various entities of CNA Financial Corporation (CNA), including a ‘A’ insurer financial strength ratings for members of The Continental Insurance Company Pool (CIC) and a ‘BBB’ senior debt rating for The Continental Corporation (Continental).

Fitch believes CIC is a core operation for CNA. The rating rationale includes comparable capitalization, aligned strategic focus, common management and similar liability profiles. The 2001 reserve strengthening included a material addition to CIC’s reserves, indicating management is intent on maintaining the operation’s long-term financial strength. Therefore, the ‘A’ insurer financial strength rating for CIC is the same as the ‘A’ insurer financial strength rating for the corporation’s larger domestic property/casualty operation, the Continental Casualty Company Pool (CCC).

Given that Continental’s fixed income obligations are supported by the financial performance at CIC, and that those obligations are small relative to CNA’s overall financial leverage, the senior debt rating at Continental was also placed at the same level as the senior debt at CNA. As such, the ‘BBB’ senior debt rating for Continental aligns with the ‘BBB’ senior debt rating for CNA.

In February 2002, Fitch removed CNA’s senior debt rating and CCC’s insurer financial strength ratings from Rating Watch Negative where they were placed in Sept. 2001 following the events of 9/11. This reflected Fitch’s opinion that CNA’s losses from the 9/11 event will not materially increase from the company’s current public disclosure. Factors supporting this decision include detailed conversations with management, a reasonable amount of time has passed with current claims trends continuing to support loss estimates, CNA’s ground-up analysis and modest net exposure relative to the company’s capital base.

Fitch’s main focus for evaluating CNA’s ratings during 2002 will be studying improvements in operating performance.

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