Posted on 09 Feb 2009
Chicago-based property and casualty insurer, CNA Financial Corp posted today a net loss of $336 million on investment losses.
“Our fourth quarter and full-year results reflect the impact of the severe and prolonged turmoil in the financial markets on our investment income and realized investment results,” said Thomas Motamed, CNA’s chief executive officer, in a separate statement.
CNA’s investment loss marks the eighth straight quarter in which the insurer wrote down the value of its portfolio, which includes holdings of financial firms and securities tied to the U.S. housing market. The quarterly results are the first announced under Motamed, the former Chubb Corp. executive hired by CNA to replace Stephen Lilienthal.
The insurer said the fourth-quarter investment losses of $314 million were “primarily in the corporate and other taxable bonds and asset-backed bond sectors.”
Unrealized losses on collateralized mortgage obligations and asset-backed securities doubled in three months to $1.76 billion. The declines, which don’t count against earnings, are monitored by investors, ratings firms and regulators who measure financial strength.
New York-based Loews Corp, which owns 90% of the insurer, agreed in October to inject $1.25 billion into CNA by buying preferred shares after the insurer posted a $331 million third-quarter loss. CNA halted its dividend to common shareholders. The insurer typically accounts for more than half Loews’s revenue.