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

By Staff,

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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%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing Commodities
Referenced Stocks: CNA , ONB , AFG

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