"This will be our third consecutive quarter where we had nothing major to announce," he said, attributed the good result to fundamentals built up in recent quarters. This was a "quiet solid quarter," he said.

Following that 2003 boost of $308 million for prior- year loss development in workers' compensation, directors and officers coverage, and an adverse arbitration decision on a business interruption claim, the Chicago-based insurer's third-quarter was even worse last year. In third-quarter 2003, CNA reported a $1.76 billion net loss triggered by a $1.5 billion charge to beef up reserves for asbestos and other claims.

During last year's second quarter, CNA said it was launching a cost-saving initiative to slice some $200 million in expenses--downsizing its work force by some five percent and lowering commissions on workers' comp policies. And today, Mr. Lilienthal reported that while that initiative is virtually done, more expense initiatives are in the works.

CNA is now going forward with additional initiatives to take out in excess of another $100 million this year and in 2005, Mr. Lilienthal said.

While he did not provide details of these initiatives, he said, "the actions to support this are in place as we speak." He added that further analysis is underway to remove additional costs "through process improvement, consolidation and organizational streamlining."

Mr. Lilienthal reported that in spite of expense initiatives, CNA's expense ratio remains heavier than he would like it to be. But "our decision to let it [the expense ratio] run a bit heavy to invest in underwriting and claims initiatives, we think is well grounded," he said.

"We feel that the trade of approximately two points of expense, combined with other rate and other underwriting to reduce our loss ratio 18 points was a very good strategy."

CNA's loss ratio for the quarter was 68.6, and the combined ratio (which adds on the expense ratio) was 96.8.

Turning to overall market conditions, the CEO said, "The tide is in fact going out. Rates are slowly and persistently dropping. Terms and conditions are easing," he said. He reported that large property, large casualty, and large directors and officers lines continue to loosen more than other lines.

"There are players that are writing construction without residential exclusions. There are markets paying excess commissions on workers' compensation. And in the excess and surplus area, we are seeing risks moving into standard market that should have stayed in E&S market," he said.

CNA also reported that its gross written premiums for the quarter decreased 3.6 percent to $2.18 billion, with standard lines gross premiums falling 8.7 percent to $1.5 billion.

Jim Lewis, president of p-c operations, attributed the premium declines to "intentional underwriting actions."

"Our priority isn't growth. It's building a diversified portfolio in profitable classes of business," Mr. Lewis said, going on to explain how intentional actions lowered retention levels. "This is not the time to load up on new business--and we're not," he added.

"We continue to shift our portfolio away from workers' compensation," he reported, highlighting high-hazard workers' comp classes like construction as those which CNA underwriters have a reduced appetite for in 2004.

CNA has also exited some unprofitable programs in the excess and surplus lines segment, moved out of some habitational construction business, and business with silica-related risks, he said.

Going into some detail on the workers' comp area, Mr. Lewis said that between 2002 and 2003, CNA reduced its workers' comp exposures roughly 32 percent, while premiums remained flat as a result of rate hikes. Working to improve the hazard mix of its workers' comp business, he said that CNA reduced the proportion of the workers' compensation book in construction classes to 20 percent in 2003 from 30 percent in 2000.