CNA Names Mense CFO, Reports Losses

Before coming to CNA, Mr. Mense was president and chief executive officer St. Paul Travelers' Global Run-Off Operations.

Recently, the Chicago-based CNA reported a third quarter net income loss of $28 million, compared to a net income loss of $1.8 billion for the same period last year. The results were on net written premium of $1.66 billion, compared to $1.56 billion in 2003. Combined ratio for the total company stood at 117.5 in the third quarter, compared to 290.7 for the same period last year.

For the nine months of 2003, the company reported net income of $136 million, or 35 cents a share, compared to a net loss of $1.6 billion, or (minus) $7.39 a share.

Net premium written was $5.3 billion, compared to $4.9 billion for the nine months in 2003. Combined ratio for the total company stood at 107.4 for the period, compared to 173.4 in 2003.

The third quarter results were affected by $174 million after-tax charges due to the impact of the four hurricanes that struck Florida this year, the company said.

The company noted that third quarter results for 2003 were impacted by significant charges related to net prior year development and increases in bad debt provisions for insurance and reinsurance receivables.

During an investor's conference call, Steve Lilienthal, chairman and chief executive officer for CNA, said the company's disciplined underwriting in Florida held down losses.

If the same storms had hit in 2002, third quarter net income loss would have stood at $50 million, he said.

Despite the hurricanes, the company's business is steadily improving, said Mr. Lilienthal. Without the catastrophes, combined ratio for the quarter would have stood at 96.1 and 96.4 for the nine months, he added.

In his remarks of Oct. 28, Mr. Lilienthal also took note of the ongoing broker bid-rigging investigation of New York Attorney General Eliot Spitzer and Connecticut's Attorney General Richard Blumenthal, saying the company has received subpoenas from both.

Mr. Lilienthal said that CNA has not engaged in any bid-rigging activities, alleged in Mr. Spitzer's suit against Marsh & McLennan Companies. He noted that the complaint with the lawsuit stated CNA refused to submit to a request from a Marsh executive for a fictitious quote.

He said the company was surprised to learn of the alleged actions by Marsh, including the submission of a fictitious quote on CNA paper without the company's knowledge.

"We were certainly not pleased to learn about this," he said.