In addition to the $1.7 billion charge, CNA recorded a $0.4 billion after-tax charge related to premium accruals, and several other charges for restructuring, asset write-offs, and an estimated realized loss related to the disposition of certain subsidiary operations.

Adjusting second-quarter 2001 results to remove those items and provide what Chairman and Chief Executive Officer Bernard Hengesbaugh described as a "more meaningful" comparison with the most recent second quarter during a conference call this morning, operating earnings for second-quarter 2001 were $46 million.

On that basis, operating earnings improved by $94 million, he said, noting that all three of CNA's operating units?property-casualty, reinsurance, and life?reported growth and operating profits.

Net income, however, which includes the impact of realized investment losses, was only $35 million, or 16 cents per share. By comparison, last year's second-quarter net income figure, adjusted to exclude the unusual reserve and other charges, was $361 million, or 1.97 per share.

This year's net income figure was impacted by a $190 million after-tax hit related to impairment write-downs on CNA's bond investments in WorldCom and other telecommunications companies.

"We're done with the rebuild," said Stephen Lilienthal, president of CNA's property-casualty operations, during his presentation on this morning's call, suggesting that restructuring charges and reunderwriting would not impact results going forward.

Mr. Lilienthal, who was recently named to ascend to Mr. Hengesbaugh's position as CEO on Aug. 26, went on to say that CNA is now looking to expand its overall insurance writings.

But while the executives reiterated those sentiments with similar remarks throughout the conference call, they still had to devote a substantial amount of time discussing "adjusted" results, not all of which were necessitated by the enormity of last year's charges.

For example, CFO Robert Deutsch noted that a combined ratio improvement of 3 points?to 107 for primary p-c operations in second-quarter 2002, compared to 110.3 for second-quarter 2001 without the reserve charges?appeared small when viewed in relation to rate increases averaging 27 percent.

He suggested that the fact that results in 2001 were improved by finite reinsurance covers, and that results in 2002 were impacted by costs of traditional reinsurance, obscured a more substantial underlying improvement. This coaxed analysts to focus of gross (before reinsurance) accident year loss ratios for the two periods instead.

On that basis, he noted that the gross accident year loss ratio had improved 10.5 points.

Mr. Lilienthal also pointed out that net written premium growth for primary or p-c operations was only 6 percent in the quarter, while premiums grew 13 percent through the first half.

He explained that continued reunderwriting restrained growth in the quarter, highlighting a large amount of business related to professional employer organizations, some programs, and some "balancing" of workers' compensation writings among the underwriting actions.

In spite of adverse loss development of $44 million in the quarter, executives said they were comfortable with overall reserve position.

When questioned specifically about workers' compensation reserves, however, Mr. Lilienthal said, "It's an area I look at with a lot of cynicism and a lot of worry." He noted that the company reviews workers' comp on a regular basis.

He also said that the 1999 and 2000 years are of particular concern for workers' comp for the industry, not just CNA, and that his concerns related to the volatility of the line as well as the size of the company's workers' comp portfolio.

Mr. Hengesbaugh summarized the company's overall position today, saying, "We believe that our restructuring efforts?all those unusual things are really behind us. [But] we are subject to all the aberrations that occur in this business," reiterating remarks made by Mr. Deutsch that industry events and court decisions can impact any p-c insurer.