CNA Financial Corporation announced a 2008 fourth-quarter net loss of $336 million, or $1.31 per share, and a full-year net loss of $299 million, or $1.18 per share.

The Chicago-based insurer attributed the results mostly to investment losses stemming from continuing turmoil in the financial markets.

In reaction, Moody's Investors Service affirmed CNA ratings, but revised its outlook for CNA Financial Corp.'s senior debt and insurance financial strength ratings to negative from stable due to "issues stemming from continued investment losses."

In 2007, CNA reported fourth-quarter net income of $164 million, or 60 cents per share available to common stockholders, and full-year net income of $851 million, or $3.13 per share.

CNA reported 2008 fourth-quarter net realized investment losses of $314 million, compared to a 2007 fourth-quarter net loss of $61 million. For the year, CNA said net realized investment losses totaled $841 million for 2008 versus a net loss of $203 million for 2007.

For its total property-casualty operations, CNA reported a 2008 fourth-quarter net loss from continuing operations of $115 million, versus 2007 fourth-quarter net income from continuing operations of $236 million.

Without the $238 million in investment losses for p-c operations, p-c operations saw 2008 fourth-quarter net operating income of $123 million.

In all of 2008, CNA reported $201 million in net income from continuing operations for its p-c operations, compared to $1.1 billion in 2007.

Minus $502 million in investment losses, p-c net operating income was $703 million in 2008.

The combined ratio for p-c operations was 89.1 for the 2008 fourth quarter, compared to 98 in the 2007 fourth quarter. For all of 2008, CNA reported a combined ratio of 98, compared to 94.8 in 2007.

Thomas F. Motamed, chairman and chief executive officer of CNA, said, "While our core business is strong, our fourth-quarter and full-year results reflect the impact of the severe and prolonged turmoil in the financial markets on our investment income and realized investment results."

Moody's, in the same announcement downgrading the company from stable, affirmed CNA Financial's "Baa3" senior debt rating and the "A3" insurance financial strength ratings on Continental Casualty Company and members of its property-casualty insurance intercompany pool.

Moody's senior credit officer Alan Murray said, "Although CNA's investment portfolio includes a well-diversified mix of municipal, corporate, structured and alternative instruments, we believe that further losses of meaningful amount are likely to continue in 2009. However, the ultimate economic loss potential in these positions is likely to be significantly less than current market values suggest."

In affirming the ratings, Moody's cited CNA's leadership position in many major commercial and specialty property-casualty insurance lines in the U.S., its adequate capitalization, a generally improved profitability and operational leverage profile in recent years, and the historically supportive parentage of Loews.

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CNA Posts 4Q Loss; Moody's Revises Outlook

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