DOW JONES NEWSWIRES
Loews Corp. (L) and its CNA Financial Corp. (CNA) insurance unit swung to the black in third quarter because of significantly lower investment losses and improved investment income, as both companies handily beat analysts' expectations.
Investment losses at CNA have hurt results, as they have at many insurers, but the stock market has surged in recent months. And earlier this year, CNA said it would expand to new sectors for a bigger geographic footprint. Loews holds a 90% stake in CNA, its largest holding, and the insurer usually accounts for about half its revenue.
Loews, a conglomerate led by New York's Tisch family, posted a profit of $468 million, or $1.08 a share, compared with a year-earlier loss of $137 million, or 31 cents per share. Analysts polled by Thomson Reuters expected earnings of 89 cents.
Revenue increased 26% to $3.74 billion.
CNA posted a profit of $263 million, or 86 cents a share, compared with a year-earlier loss of $331 million, or $1.23 per share. Operating income, which excludes investment gains and losses, was $1.23 from 31 cents. Analysts expected 92 cents.
Beyond investment losses, the previously year also included $168 million in catastrophe losses, primarily from hurricanes, versus just $15 million in the most recent period.
In the property-and-casualty segment, net written premiums fell 7.6% to $1.48 billion. The percentage of premiums paid in claims rose to 99.5% from 91.3% including impacts related to catastrophes; excluding those, the percentage fell to 101% from 107%.
Loews is also majority owner of Diamond Offshore Drilling Inc. (DO), which last month posted a bigger-than-expected earnings jump due to lower drilling expenses.
In September, a subsidiary of Willis Group Holdings Ltd. (WSH) agreed to pay CNA $130 million to settle a dispute over the placement of personal accident reinsurance, with the installments set to be complete by late December.
Loews and CNA shares closed at $33.10 and $21.77 Friday and weren't active premarket. Both stocks risen in value this year, with Loews up 17% and CNA up one-third.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com