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CNA Financial spiked its second quarter results today with an announcement that it plans to shave five percent of its staff over the next year. While not everyone drinking the CNA Kool-Aid is doomed, it is estimated that 700 out of 14,000 positions nationwide will be eliminated.

The staff reduction is part of CNA’s overall effort to reduce its expenses by $200 million.

Despite a second quarter $308 million charge to beef up its reserves, CNA managed to double its earning from the same period last year and cushion the charge with $70 million.

The reserve increase was necessitated because of unfavorable results related to accident year 2000 and earlier. The company attributes the majority of the loss development to workers’ compensation and directors and officers claims.

“While disappointed with prior year development recorded in the second quarter, we continue to focus on our strategic underwriting efforts to obtain profitable growth,” said Stephen W. Lilienthal, Chairman and Chief Executive Officer of the CNA insurance companies.

He concluded that, “Underwriting discipline remains strong, rates continue to be robust and our $200 million expense reduction and streamlining will position us for strong results going forward.”