The ratings acknowledge the historical financial support provided by CNA’s ultimate parent, Loews Corporation (Loews). In 2008, Loews purchased $1.25 billion of senior perpetual preferred stock issued by CNAF. The majority of proceeds from this offering, $1.0 billion, were down-streamed to CNA’s lead property/casualty insurer, Continental Casualty Company (CCC), via a surplus note. Also in 2008, CNAF contributed an additional $500 million to CNA largely to offset significant investment losses during that year. Since 2008, CNAF’s dramatically improved financial position has enabled it to redeem all of the $1.25 billion preferred stock issued to Loews by year-end 2010 and enabled CNA to pay off the $1.0 billion surplus note issuance to CNAF by June 2012.CNAF’s financial leverage decreased as of September 2012, with CNAF’s adjusted debt to-total-tangible capital measuring 18.6%, compared with 19.4% at year-end 2011, based on A.M. Best’s current methodology for calculating financial leverage that excludes accumulated other comprehensive income, which was primarily driven by an increase in stockholder equity.
A.M. Best Affirms Ratings Of CNA Financial Corporation And Its Subsidiaries
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