CNA Financial Corporation reported a fourth quarter 2001 net loss of $22 million compared with net income of $193 million for the same quarter in 2000. Total net loss for the year ended Dec. 31, 2001 was $1.6 billion compared with net income of $1.2 billion for the year ended Dec. 31, 2000. Total net operating loss, which excludes net realized investment gains, for the fourth quarter 2001 was $290 million compared with net operating income of $114 million in the fourth quarter 2000. Total net operating loss for the year ended Dec. 31, 2001 was $2.4 billion compared with net operating income of $544 million for the year ended Dec. 31, 2000.
According to chairman and CEO Bernard Hengesbaugh, 2001 was a year when the company stepped up to a series of tough issues. Hengesbaugh said now it’s time for the company to deliver, noting it is well positioned to make that happen.
As previously disclosed on Jan. 25, 2002, the fourth quarter 2001 net loss included $125 million after-tax restructuring and other related charges; $52 million after-tax Enron related losses, net of anticipated reinsurance recoveries; and $69 million after-tax reserve strengthening, primarily for the current accident year, in CNA’s London-based commercial and marine operations.
Fourth quarter 2001 net operating loss included a $160 million after-tax charge to strengthen prior underwriting year loss reserves of its London-based reinsurance operation, CNA Reinsurance Company Limited (CNA Re U.K.). Net realized investment gains for the fourth quarter 2001 included a $160 million after-tax adjustment to reduce the $285 million after-tax estimated impairment loss related to the anticipated sale of CNA Re U.K., which was recorded in the second quarter of 2001. The fourth quarter 2001 adjustment was based on a revaluation of the estimated impairment loss and is reflected as an after-tax realized gain. There was no net effect on equity or net income from these two items.
Included in the net operating loss for the year ended Dec. 31, 2001 was a $2.1 billion after-tax charge related to a change in estimate of prior year loss reserves and the related premium accruals recorded in the second quarter 2001; $304 million after-tax losses from the Sept. World Trade Center attack and related events recorded in the third quarter; and the previously discussed restructuring and other related charges, Enron related losses, and reserve strengthening recorded in the fourth quarter.
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