Exhibit 99.1
CNA
FOR IMMEDIATE RELEASE
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CONTACT:
MEDIA: ANALYSTS:
Charles M. Boesel, 312/822-2592 Dawn M. Jaffray, 312/822-7757
Katrina W. Parker, 312/822-5167
CNA FINANCIAL ANNOUNCES AGREEMENT
TO SELL GROUP BENEFITS BUSINESS
CHICAGO, December 1, 2003 --- CNA Financial Corporation (NYSE: CNA) today
announced that it has entered into a binding agreement to sell its Group
Benefits business to Hartford Financial Services Group, Inc. (NYSE: HIG) for
approximately $500 million. The business sold includes group life and
accident, short and long term disability and certain other products. CNA's
group long term care business is excluded from the sale. The transaction is
expected to be completed on or before December 31, 2003, subject to certain
customary closing conditions and regulatory approvals. Upon completion of the
sale, it is anticipated that approximately 1,200 employees will transfer to
The Hartford.
"The sale of Group Benefits enables us to sharpen our operational focus and
move forward on our recently announced capital plan," stated Stephen W.
Lilienthal, Chairman and Chief Executive Officer of the CNA insurance
companies. "We are pleased to have found a buyer with such a strong position
in the employee benefits business."
The purchase price is subject to certain adjustments including changes in the
level of statutory surplus through the closing date. The sale is expected to
provide additional capital to CNA's principal insurance subsidiary,
Continental Casualty Company (CCC), as contemplated in CNA's recently
announced capital plan. CNA expects to recognize an after-tax GAAP loss of
approximately $200 million on the sale in the fourth quarter of 2003; however,
this amount will fluctuate for changes in the market value of the investment
assets supporting this business. CNA expects to recognize an after-tax
statutory gain on the sale in excess of $100 million.
About CNA
CNA is the country's fourth largest commercial insurance writer and the 11th
largest property and casualty company. CNA's insurance products include
standard commercial lines, specialty lines, surety, marine and other property
and casualty coverages; life and accident insurance; and pension products. CNA
services include risk management, information services, underwriting, risk
control and claims administration. For more information, please visit CNA at
www.cna.com. CNA is a registered service mark, trade name and domain name of
CNA Financial Corporation.
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About The Hartford
The Hartford Financial Services Group, Inc. is one of the nation's largest
investment and insurance companies, with 2002 revenues of $16.4 billion. The
company is a leading provider of investment products, life insurance and group
benefits; automobile and homeowners products; and business property and
casualty insurance.
FORWARD-LOOKING STATEMENT
The statements contained in this press release, which are not historical
facts, are forward-looking statements. When included in this press release,
the words "believes," "expects," "intends," "anticipates," "estimates," and
analogous expressions are intended to identify forward-looking statements.
Forward-looking statements include expected developments in the insurance
business of CNA (the "Company"), including losses for asbestos, environmental
pollution and mass tort claims; the Company's expectations concerning its
revenues, earnings, expenses and investment activities; expected cost savings
and other results from the Company's expense reduction and restructuring
activities; and the Company's proposed actions in response to trends in its
business.
Such statements, and the financial condition and results of operations of the
Company and the price of the Company's common stock, are subject to a variety
of inherent risks and uncertainties. These risks and uncertainties could cause
actual results to differ materially from those projected. Such risks and
uncertainties include, among others: general economic and business conditions,
including inflationary pressures on medical care costs, construction costs and
other economic sectors that increase the severity of claims; changes in
financial markets such as fluctuations in interest rates, long-term periods of
low interest rates, credit conditions and currency, commodity and stock
prices; the effects of corporate bankruptcies, such as Enron and WorldCom, on
surety bond claims, as well as on capital markets and on the markets for
directors & officers and errors & omissions coverages; changes in foreign or
domestic political, social and economic conditions; regulatory initiatives and
compliance with governmental regulations; judicial decisions and rulings,
including interpretation of policy provisions, decisions regarding coverage
and theories of liability, trends in litigation and the outcome of any
litigation involving the Company; changes in tax laws and regulations;
regulatory limitations and restrictions upon the Company and its insurance
subsidiaries; the impact of competitive products, policies and pricing and the
competitive environment in which the Company operates, including changes in
the Company's books of business; product and policy availability and demand
and market responses, including the level of ability to obtain rate increases
and decline or non-renew underpriced accounts, to achieve premium targets and
profitability and to realize growth and retention estimates; development of
claims and the impact on loss reserves, including changes in claim settlement
practices; the effectiveness of current initiatives by claims management to
reduce loss and expense ratio through more efficacious claims handling
techniques; the performance of reinsurance companies under reinsurance
contracts with the Company; results of financing efforts, including the
availability of bank credit facilities; changes in the Company's composition
of operating segments; weather and other natural physical events, including
the severity and frequency of storms, hail, snowfall and other winter
conditions, as well as of natural disasters such as hurricanes and
earthquakes; man-made disasters, including the possible occurrence of
terrorist attacks and the effect of the absence of applicable terrorism
legislation on coverages; the occurrence of epidemics; exposure to liabilities
due to claims made by insureds and others relating to asbestos remediation and
health-based asbestos impairments, and exposure to liabilities for
environmental pollution and other mass tort claims; whether a national
privately financed trust to replace litigation of asbestos claims with
payments to claimants from the trust will be established or approved through
federal legislation, or, if established and approved, whether it will contain
funding requirements in excess of the Company's established loss reserves or
carried loss reserves; the sufficiency of the Company's loss reserves and the
possibility of future increases in reserves; the level of success in
integrating acquired businesses and operations, and in consolidating existing
ones; the possibility of changes in the Company's ratings by ratings agencies,
including the inability to access certain markets or distribution channels and
the required collateralization of future payment obligations as a result of
such changes, and changes in rating agency policies and practices; the actual
closing of contemplated transactions and agreements; and various other matters
and risks (many of which are beyond the Company's control) detailed in the
Company's Securities and Exchange Commission filings.
These forward-looking statements speak only as of the date of this press
release. The Company expressly disclaims any obligation or undertaking to
release any updates or revisions to any forward-looking statement contained in
this press release to reflect any change in the Company's expectations with
regard thereto or any change in events, conditions or circumstances on which
any statement is based.
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