CNA Financial Corp has reached an agreement to divest its life and group insurance business Continental Assurance Company (CAC) to a subsidiary of Wilton Re Holdings, in a $615m transaction.
The divestment of the life and group insurance subsidiary will enable CNA to focus on property and casualty insurance business.
Apart from divesting CAC, certain affiliates of each of CNA and Wilton Re have entered into a 100% reinsurance agreement and related transaction agreements, whereby a Wilton Re subsidiary will reinsure all of the run-off structured settlement annuities reinsured by a Bermuda-based subsidiary of CNA.
Following completion of the transaction, which is expected to conclude during the second quarter of 2014, CNA’s non-core Life & Group gross GAAP insurance reserves will decrease by $3.4bn, or 25%, and dispose of the vast majority of CNA’s payout annuity business.
CNA chairman and CEO Thomas Motamed said, "Over the past several years, we have simplified our operations through targeted dispositions and made strategic investments in higher growth businesses.
"This transaction is another step in the execution of our strategy to create a more focused P&C business capable of delivering consistent performance."
Morgan Stanley & Co has been appointed to serve as the financial advisor and Hogan Lovells US will act as the legal counsel for CNA over this transaction.
CAN offers various types of insurance products such as standard commercial lines, specialty lines, surety, marine and other property and casualty coverages.
Image: CNA headquarter in Chicago. Photo: courtesy of Daniel Schwen.