UPDATE 3-Loews to inject $1.25 bln into CNA after losses

* CNA results miss forecasts, receives help from Loews

* Loews to inject up to $1 billion into Boardwalk unit

* Shares of CNA, Loews tumble (Adds Loews CEO comments, details)

By Jonathan Stempel

NEW YORK, Oct 27 (Reuters) - Loews Corp (L.N), a conglomerate run by the billionaire Tisch family, will inject $1.25 billion into its CNA Financial Corp (CNA.N) commercial insurance unit after soured investments and hurricane claims led to third-quarter losses at both companies.

CNA suspended its common stock dividend in exchange for the injection, after losing $331 million, or $1.23 per share, in the third quarter.

Loews, based in New York, lost $137 million, or 31 cents per share, in the period. The company owns 90 percent of Chicago-based CNA, which typically accounts for more than half of Loews' revenue.

"Our third-quarter results no doubt disappoint all of us," Loews Chief Executive James Tisch said on a conference call. He nevertheless said "Loews is in a strong position to withstand these dysfunctional markets" and plans "to be 100 percent sure CNA has all the capital it needs."

Shares of both companies tumbled, with Loews falling as much as 14.6 percent and CNA as much as 23.6 percent.

CNA will sell preferred stock to Loews that carries an initial 10 percent dividend for five years. The seventh-largest U.S. commercial insurer will use $1 billion of proceeds to bolster its main insurance unit, Continental Casualty Co.

"It is bad for CNA investors because it dilutes existing shareholders," said Drew Woodbury, an analyst at Morningstar Inc. "It is bad for Loews investors in that it signifies that CNA, traditionally Loews' largest source of revenue, continues to perform poorly." He also said it will leave Loews with less cash to make acquisitions.

CNA operating profit excluding investments fell 61 percent to $83 million, or 31 cents per share. On that basis, analysts expected 69 cents per share, according to Reuters Estimates.

Results were hurt by falling prices on insurance policies and the worst U.S. hurricane season since 2005, including storms Gustav and Ike. Other insurers face similar pressures.

CNA also suffered $423 million of investment losses, including on securities issued by mortgage financiers Fannie Mae (FNM.N) and Freddie Mac (FRE.N), the insurer American International Group Inc (AIG.N), the failed thrift Washington Mutual Inc (WAMUQ.PK), and Icelandic banks.

CNA's third-quarter net loss compared with a year-earlier profit of $174 million, or 64 cents per share. Loews' net loss compared with a year-earlier profit of $555 million, or 77 cents per share.

LOEWS TO INJECT MONEY INTO BOARDWALK