CNA to Get Capital Infusion from Loews; CNA CEO to Resign at Year-End
Loews Corp., the holding company run by New York's Tisch family, will inject $1.25 billion into CNA Financial Corp. after the insurance unit posted a third-quarter loss on investment declines and hurricane claims. Loews fell 9 percent in New York trading and CNA dropped 12 percent.
Loews posted a net loss of $137 million, or 31 cents a share, compared with profit of $555.7 million, or 77 cents, in the same period a year earlier, the New York-based holding company said in a statement today.
Loews owns 90 percent of CNA and 50 percent of Diamond Offshore Drilling Inc., the world's second-largest deepwater oil driller. CNA suspended its dividend for common shares today after a loss of $331 million in the period ended Sept. 30. The new preferred shares sold to Loews will pay a 10 percent dividend for the first five years.
"By taking this proactive step, we further augment our solid capital base,'' said CNA Chief Executive Officer Stephen Lilienthal in a separate statement. "I remain very positive about the underlying performance of our core property/ casualty operations, as measured by a 91.3 percent combined ratio before catastrophes. We continue to focus on the fundamentals of disciplined underwriting, portfolio optimization and expense management."
Published on October 27, 2008
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