CNA Financial Corp. said it would sell its life and group insurance business, on the same day that parent Loews Corp. reported a bigger quarterly loss, hurt by impairment charges.
CNA said it was selling the business, Continental Assurance Co., to a subsidiary of Wilton Re Holdings Ltd., and was expecting to book an after-tax charge of about $220 million in the first quarter of 2014.
CNA said it expected net proceeds of about $615 million from the sale and a portion of this would be in the form of a dividend from Continental.
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.
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 quarter.
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.
Shares of Loews, which has a market capitalization of about $17 billion, closed at $45.18 on Friday on the New York Stock Exchange.