* CNA expects net proceeds of about $615 mln from sale
* To book a charge of $220 mln in first quarter
* Posts fourth-quarter profit vs loss year earlier
* Loews' quarterly loss widens due to impairment charges
By Avik Das
Feb 10 CNA Financial Corp said it would
sell its life and group insurance business to focus on property
and casualty insurance, on the same day that parent Loews Corp
reported a bigger quarterly loss due to impairment
CNA's shares rose as much as 7.5 percent on the New York
Stock Exchange, after the company also posted a quarterly profit
compared with a loss a year earlier.
CNA said it was selling the business, Continental Assurance
Co, to a subsidiary of Wilton Re Holdings Ltd for about $615
million, and was expecting to book a charge of about $220
million in the first quarter.
"The life business returns have been pretty uneven and I
would say relatively low," CNA Chief Financial Officer Craig
Mense said on a conference call.
CNA joins Hartford Financial Services Group and
Allstate Corp in shedding life insurance assets as the
companies struggle to make a profit on these products due to low
"(Property and casualty) companies want to go back to their
core insurance underwriting and let someone who is really good
at life insurance to focus on it," Macquarie analyst Amit Kumar
The sale will reduce CNA's non-core life and group gross
GAAP insurance reserves by $3.4 billion, or 25 percent, and
dispose of most of CNA's payout annuity business.
CNA said it expected the transaction to close in the second
quarter of 2014.
CHARGES HIT LOEWS PROFIT
Loews' net loss widened to $198 million, or 51 cents per
share, in the fourth quarter ended Dec. 31 from $32 million, or
8 cents per share, a year earlier.
The company said it took goodwill impairment charges of $398
million in the quarter, primarily related to low market prices
for natural gas and natural gas liquids in its HighMount
Exploration & Production LLC unit.
Loews, owned by the billionaire Tisch family, also booked a
charge of $111 million, related to CNA's transfer of its
asbestos and pollution liabilities to Berkshire Hathaway Inc's
National Indemnity Co unit.
Loews' revenue rose 5 percent to $3.89 billion in the
Excluding charges, the company had an income of $356 million
for the quarter, mainly due to higher earnings at CNA and
increased investment income.
CNA posted a profit for the fourth quarter compared with a
loss a year earlier, helped by an improvement in its
underwriting results and lower disaster-related claims.
Boardwalk Pipeline Partners LP, Loews' third biggest
revenue generator, reported a 78 percent drop in profit and cut
its dividend to boost cash flow.
Loews also controls Diamond Offshore Drilling, which
reported a better-than-expected quarterly profit last week as
the rates it earned for its ultra-deepwater rigs shot up.
Loews' shares were down about 4 percent to $43.19 on the New
York Stock Exchange, while Boardwalk's stock plunged 39 percent