CNA Financial Corp. today announced that it has entered into a definitive agreement to sell its individual life insurance business to Swiss Re Life & Health America Inc. (Swiss Re) for approximately $690 million. The business sold includes term, universal and permanent life insurance policies and individual annuity products. CNA's individual long term care and structured settlement businesses are excluded from the sale. Additionally, the
"The sale of CNA's life operations allows us to focus on our core property and casualty businesses," stated Stephen W. Lilienthal, Chairman and Chief Executive Officer of the CNA insurance companies. "In addition, this transaction demonstrates our commitment and ability to deliver on our previously announced capital plan."
The purchase price is subject to certain adjustments including changes in the level of statutory surplus through the closing date. The sale is expected to provide additional capital in excess of $400 million to CNA's principal insurance subsidiary, Continental Casualty Company (CCC), as contemplated in CNA's recently announced capital plan. CNA expects to recognize an after-tax GAAP loss of approximately $300 million on the sale in the first quarter of 2004; however, this amount will fluctuate for changes in the market value of the investments supporting this business.
As part of CNA's focus on core property and casualty businesses, CNA has also announced the decision to cease new sales in its structured settlement and institutional markets businesses. CNA will continue to service its existing customer commitments and will manage these businesses as a run-off operation. CCC will provide credit enhancement to Continental Assurance Company (CAC) for certain of CAC's investment and specialty medical products.
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