Responding to news that Loews Corp., the parent company of commercial insurer CNA Financial Corp., will pour up to $1.25 billion into CNA to boost its surplus, rating agencies A.M. Best Co. and Moody’s said CNA’s ratings remain unchanged.
A.M. Best has affirmed CNA’s property & casualty “A” rating with a stable rating outlook. A.M. Best said that all financial strength ratings, issuer credit ratings and debt ratings of CNA Financial Corp. and its insurance subsidiaries are unchanged. These ratings “reflect the financial flexibility derived through historical explicit support provided by Loews,” according to A.M. Best.
Moody’s Investors Service has also affirmed the P&C rating of “A3” with a stable rating outlook.
CNA Financial Corp. said it plans to use the majority of the proceeds from the Loews offering to issue a $1.0 billion surplus note to its lead property/casualty insurance subsidiary, Continental Casualty Co. to strengthen statutory surplus. This surplus declined notably after the significant investment losses reported through third quarter 2008.
CEO Stephen Lillienthal, who will be stepping down six months earlier than planned at year’s end, sought to reassure agents and brokers that the company can handle their business despite the financial turmoil.
“Overall, in this complex, challenging time, I would like to assure you that with respect to our capital base, our ongoing business and our leadership talent, we continue to take the steps that make CNA a stable, competitive and financially-strong market for your business,” Lillienthal wrote.
CNA is not alone among insurers looking to raise cash recently. MetLife and Hartford Financial Services Group also announced plans to sell stock to raise cash this month.
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