Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

CNA Will Manage Capital ‘Very Conservatively,’ Loews CEO Says

Aug. 26 (Bloomberg) -- CNA Financial Corp., the insurer that hasn’t paid a common stock dividend since 2008, must manage capital carefully so it can expand when markets improve, said the chief executive officer of the company’s parent, Loews Corp.

“CNA will manage itself very conservatively,” Loews CEO Jim Tisch said yesterday in an interview at Bloomberg headquarters in New York. “CNA will want to be in a position when the markets improve that it can service its clients and actually grow its business.”

CNA, which has reported five straight quarterly profits, is prohibited from reviving the dividend until it repays $500 million owed to Loews on a $1.25 billion preferred-stock issuance completed during the financial crisis. Chicago-based CNA is paying a 10 percent annual coupon on the investment and needs Loews’s consent to redeem the preferred shares. Tisch declined to give a timeframe.

“Hopefully in the not-too-distant future it will be able to repay the other $500 million,” Tisch said. “Once it’s done then it’s free to pay dividends. That’s the way it could return capital to shareholders.”

CNA, 90 percent-owned by Loews, went to its parent for capital amid investment declines and three quarterly losses at the end of 2008 and beginning of last year. The insurer reduced the amount it owed to Loews from $1 billion this month after completing a $500 million sale of notes.

To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net;

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.