Now I will turn the call over to CNA's Chairman and CEO, Tom Motamed.Thomas F. Motamed Thank you, Nancy. Good morning, everyone, and thank you for joining us. Before Craig provides you with details of our operating and financial performance, I would like to share with you some of the reasons I am so optimistic about many of the initiatives we have underway in CNA. Everyone knows the third quarter was yet another quarter of significant natural catastrophe losses for the industry. Despite that fact, CNA delivered a combined ratio of 99.1%, which included only 3.1 points of catastrophes. Catastrophes are part of the business, and we continue to believe we are effective in managing these exposures. The operational strategies and people we put in place a few years ago are beginning to pay off. We are delighted that our net premiums -- net written premiums grew 8% in the quarter, 10% in Commercial and 6% in Specialty. Exposure growth for the quarter was positive for both Commercial and Specialty. We are seeing additional audit premiums in Commercial as opposed to return premiums a year ago. Rates were slightly positive in Specialty for the second quarter in a row and Commercial rates continue their climb from the fourth consecutive quarter. In addition to rate actions, we continue to shed lower quality risk to improve our underwriting margins. Favorable prior year development lowered our third quarter combined ratio by 5 points. Our track record of favorable development now extends over 19 consecutive quarters. Excluding the impacts of favorable reserve development in catastrophe losses, our combined ratio improved to 101% in this year's third quarter from 103.7% in last year's comparable period. This margin improvement was driven by the continued improvement in our net accident year noncat loss ratio in commercial lines, down fully 3 points from a year ago to 69.8%. The ratio for the first 9 months of 2011 was 70.1%, 2 points below full year 2010.
With that, I will now turn it over to Craig. Craig?D. Craig Mense Thanks, Tom. Good morning, everyone. In the third quarter, CNA's net operating income was $91 million and operating return on equity of 3.4%. Operating income available to common shareholders was $0.34 per common share. All the year-over-year comparisons are favorable, given that last year's results included the impact of the asbestos and environmental pollution Loss Portfolio Transfer with National Indemnity Company. The quarter's -- this quarter's earnings were significantly influenced by our limited partnership investment results and, to a lesser extent, catastrophe losses. There's one other small item I would also like to bring to your attention related to our agreement to sell our 50% ownership share in First Insurance Company of Hawaii. Because of the timing of the transaction, which affects the tax treatment applied to those undistributed earnings, we increased income tax expense by $22 million, which reduced third quarter operating EPS by $0.08 per common share. On anticipated closing in the fourth quarter, we would expect to record a modest realized capital gain. The quarter's results do reflect our continued progress towards our longer-term goals of improved margins, scale, earnings consistency and financial stability. Third quarter net income was $75 million and included after-tax realized capital losses of $16 million. The realized capital losses included impairment losses of $50 million after-tax and were driven by intents to sell decisions, which are part of our ongoing portfolio management. Read the rest of this transcript for free on seekingalpha.com