CNA Completes $66.3 Million Sale of Argentine Subsidiary

CNA Financial Corp. said it has completed the $66.3 million sale of its Argentine workers' compensation subsidiary, CNA Aseguradora de Riesgos del Trabajo, to QBE the Americas, an Australia-based insurer and reinsurer.

The sale price of $66.3 million is about two times generally accepted accounting principles book value and regulatory surplus, but will result in "a modest realized loss" under U.S. GAAP because of historical unrealized currency translation losses, the company said in a statement.

This sale is consistent with CNA's strategies, which focus on profitable growth in U.S., Canadian and European markets, Tom Motamed, chairman and chief executive officer of CNA, said in a statement.

CNA (NYSE: CNA) has reduced its exposure to large workers' compensation risks and has generally increased its focus on small to middle market business, according to BestLink, which provides online access to A.M. Best's Global Insurance & Banking Database. In addition, CNA expects to open several new U.S. branches over the next year, adding resources and increasing authority at the point of sale, BestLink said. In Europe, CNA sees the opportunity to strengthen positions in financial lines, cargo, and property/casualty, while pursuing specialized risks in emerging areas such as health care, technology, and renewable energy. CNA also intends to approach the Canadian market much like the U.S. operations, according to BestLink.

In November, QBE Insurance Group Ltd. said it targeted a 24% growth in gross premium income in 2010 for its Australian operation, supported by enhanced distribution through acquisitions and other initiatives (BestWire, Nov. 6, 2009).

CNA Insurance Cos. has a current Best's Financial Strength Rating of A (Excellent). QBE Insurance Corp. has a current Best's Financial Strength Rating of A (Excellent).

Shares of CNA were trading the morning of June 7 at $25.01, down 0.20% from the previous close.

(By Caroline Saucer, editor, BestWeek: [email protected])