Regarding references to non-GAAP measures, reconciliations with the most comparable GAAP measures have also been provided in our most recent 10-K and 10-Q, as well as the financial supplement. Finally, this call is being recorded and webcast. During the next week, the call may be accessed again on CNA's website.And with that, I'll turn the call over to CNA's Chairman and CEO, Tom Motamed. Thomas Motamed Good morning, everyone, and thank you for joining us today. Let me start by saying we are delighted with the positive premium growth in our Specialty and Commercial businesses. This is the first quarter in which we have had positive growth in both Specialty and Commercial since the fourth quarter of 2006. Submission activity in new business continued to be strong, particularly in those industries where we are concentrating and dedicating our resources. We are also pleased with the improving rate trends across our Property & Casualty business. CNA's financial foundation continues to improve as well. Book value per common share increased 3% since the end of this year's first quarter and 6% since year end 2010. Turning to our financial results, net operating income was $116 million or $0.43 per common share in the second quarter of 2011 as compared to $269 million or $0.91 per common share in the same period last year. The decline was primarily due to lower levels of favorable prior year development, $0.17 per share in this year's second quarter versus $0.64 in last year's second quarter, as well as an increase in catastrophe losses. This losses reduced this year's second quarter earnings by -- earnings per share by $0.24 versus $0.12 last year. Net operating income from Property & Casualty Operations was $153 million in the second quarter of 2011 as compared to $293 million in the second quarter last year. These results included after-tax catastrophe losses of $65 million and $31 million, respectively.
The second quarter net operating loss from our Life & Group and Corporate segments was $37 million in 2011 and $24 million in 2010. Craig will comment on these segments in a moment. The Property & Casualty Operations combined ratio was 105.7% in the second quarter of 2011 as compared to 89.5% in the same period last year. These ratios benefited from favorable development of 4.8 points and 18.4 points, respectively. Second quarter catastrophe losses represented 6.9 points in 2011 and 3.3 points in 2010. While our cat losses were significant considering the severity of the widespread events and their impact in industry loss ratios, we believe our 6.9 points of losses reflect well on our disciplined approach to catastrophe management. Before development and catastrophes, the second quarter 2011 combined ratio improved 1 point to 103.6% from 104.6%. The improvement was primarily driven by the accident year loss ratio before catastrophes. This ratio was 69.4% in the second quarter of 2011 as compared to 70.3% in the second quarter of 2010.The Property & Casualty Operations expense ratio in this year's second quarter was 34.2%, which was inflated by a onetime charge. Our run rate expense ratio is approximately 33.5%, consistent with our full year expense ratio in 2010 at which we've been able to sustain while continuing to make investments to grow our Property & Casualty business. Noncommissioned expenses contributed 15.1 points to the expense ratio in this year's second quarter, a 0.2 point decrease from the prior year period, while commission expenses contributed 19.1 points, an increase of 0.6 point. The Property & Casualty Operations combined ratio was 103.8% for the first 6 months of 2011 as compared to 95.8% in the same period in 2010. These ratios benefited from favorable development or 3.4 points and 10.6 points, respectively. Catastrophe losses in these periods represented 5.3 points in 2011 and 3 points in 2010. Read the rest of this transcript for free on seekingalpha.com