A.M. Best Co. has revised the outlook on CNA Insurance Companies to negative from stable after the company posted a 2008 fourth-quarter net loss of $336 million.
The Oldwick, N.J., rating agency said last week that CNA's results "were strained by significant investment losses, both realized and unrealized, as well as declining net investment income due to losses from limited partnership investments."
Chicago-based insurer CNA reported fourth-quarter net realized investment losses of $314 million.
"Given the magnitude of investment losses already reported, continued turmoil in capital markets and CNA's sizable investment in mortgage and asset-backed securities, uncertainties exist regarding the potential for continued investment losses and the further strain that may place on risk-adjusted capitalization," A.M. Best said.
A.M. Best affirmed CNA's financial strength rating of "A" and its issuer credit ratings of "a." The ratings, A.M. Best noted, reflect CNA's adequate risk-adjusted capitalization, continued solid underwriting fundamentals, adequate liquidity and good business position as a top writer within the commercial lines segment of the U.S. property/casualty industry.
Last week, Moody's Investors Service 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.
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