Slight Losses for Financial Stocks; CNA Financial Sells Life, Group Insurance Unit for $615 Mln

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Financial stocks were narrowly lower, with the NYSE Financial Sector Index sinking about 0.3%, and the S&P Financial 100 Index falling almost 0.2%.

In company news, CNA Financial Corp ( CNA ) was higher Monday after the insurance carrier said it sold its life and group insurance business to a subsidiary of Wilton Re Holdings Ltd. for around $615 million in net proceeds.

CNA said it expected to receive a portion of the proceeds in the form of a dividend from its former Continental Assurance Co. immediately prior to closing. It anticipates net proceeds are around $18 million more than Continental's statutory capital and surplus at the end of the year, and it expects to record an after-tax, GAAP charge of $220 million in Q1.

Wilton Re, a privately held reinsurance firm based in Bermuda and backed by Stone Point Capital LLC, also will assume liabilities tied to structured-settlement annuities CNA backed through Continental. The deal is expected to close by the end of June.

Also Monday, CNA reported Q4 net income of $221 million, or $0.82 per share, reversing a $0.03 per share loss during the year-ago quarter but trailing the $0.88 per share gain analysts polled by Capital IQ were expecting. Total gross written premiums from property and casualty operations rose 6.2% year over year to $2.3 billion, topping expectations for around $2.06 billion in premiums during the quarter.

CNA also declared a special dividend of $1.00 per share along with a 25% increase in its quarterly dividend over the prior quarter to $0.25 per share. Both payments are due out on March 12 to shareholders of record on Feb. 24.

Shares were up 7.4% at $42.62 apiece, earlier climbing to within 20 cents of its 52-week high of $42.93 a share.

In other sector news,

(-) TOFC, (-0.2%) Shareholders Friday vote for proposed merger with Old National Bancorp ( ONB ). The $108 mln transaction still requires regulatory approvals before an expected Q1 close. ONB shares were off 0.8% in recent trade.

(-) NATL, (-0.7%) Agrees to issue a recommendation - including filing a Form 14D-9 with the Securities and Exchange Commission - to shareholders by Feb. 19 on the $28-a-share tender offer by American Financial Group's ( AFG ) Great American Insurance Co. AFG shares were down about 0.5%.



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This article appears in: Investing , Commodities

Referenced Stocks: CNA , ONB , AFG

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