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CNA to sell life and group insurance business

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CNA to sell life and group insurance business

(Reuters) — CNA Financial Corp. said it will sell its life and group insurance business on the same day that parent Loews Corp. reported a bigger quarterly loss, hurt by impairment charges.

CNA said it was selling Continental Assurance Co. to a subsidiary of Wilton Re Holdings Ltd. and was expecting to book an after-tax charge of about $220 million in the first quarter of 2014.

CNA said it expected net proceeds of about $615 million from the sale, and that a portion of this would be in the form of a dividend from Continental.

The sale will reduce CNA's noncore life and group gross GAAP insurance reserves by $3.4 billion, or 25%, and dispose of most of CNA's payout annuity business.

CNA said it expected the transaction to close in the second quarter of 2014.

Loews' net loss widened to $198 million, or 51 cents per share, in the fourth quarter ended Dec. 31 from $32 million, or 8 cents per share, a year earlier.

The company said it took goodwill impairment charges of $398 million in the quarter, primarily related to low market prices for natural gas and natural gas liquids in its HighMount Exploration & Production L.L.C. unit.

Loews, owned by the billionaire Tisch family, also booked a charge of $111 million, related to CNA's transfer of its asbestos and pollution liabilities to Berkshire Hathaway Inc.'s National Indemnity Co. unit.

Loews' revenue rose 5% to $3.89 billion in the quarter.

Excluding charges, the company had an income of $356 million for the quarter, mainly due to higher earnings at CNA and increased investment income.

CNA posted a profit for the fourth quarter compared with a loss a year earlier, helped by an improvement in its underwriting results and lower disaster-related claims.

Shares of Loews, which has a market capitalization of about $17 billion, closed at $45.18 on Friday on the New York Stock Exchange.

CNA's shares closed at $39.67 on Friday.