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D&P RATES CNA FINANCIAL CORP., CONTINENTAL CASUALTY COMPANY INTERCOMPANY POOL AND CONTINENTAL ASSURANCE COMPANY

 CHICAGO, Sept. 1 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has lowered CNA Financial Corp.'s (CNA) `AA' (Double-A) senior debt rating to `AA-' (Double-A-Minus), and the company's `AA-' (Double-A-Minus) preferred stock rating has been lowered to `A+' (Single-A-Plus). Also, the `AA+' (Double-A-Plus) claims paying ability rating of the Continental Casualty Company Intercompany Pool (CCC) has been lowered to `AA' (Double-A). The `AAA' (Triple-A) claims paying ability rating of CNA's life insurance affiliate, Continental Assurance Company, is reaffirmed.
 This action is based on the continued negative earnings trend within CNA's core property-casualty insurance operation, and the impact of the company's announcement of a preliminary settlement regarding asbestos related claims litigation with Fibreboard Corp. This settlement will result in a $500 million addition to loss reserves during the third quarter and reduce third quarter after-tax earnings by $325 million, or $5.26 per share. Approximately $413 million in outstanding long-term debt is affected by this rating action.
 CNA is one of the largest multi-line insurance holding company's in the United States with $40.4 billion in assets and $5.2 billion in stockholders' equity at June 30, 1993. The company's ratio of debt to total capital was a modest 7.4 percent at June 30, 1993. However, fixed charge coverage was negative in 1992 due to previous charges related to the Fibreboard litigation and large catastrophe losses. Fixed charge coverage, excluding capital gains, is likely to be negative in 1993 due to the recently announced charges and unfavorable underwriting results. Investment income is also decreasing due to the continuing trend of lower interest rates.
 CNA's wholly owned affiliate, CCC, is the company's primary property-casualty insurance operating subsidiary. Operating profitability for CCC has trended unfavorably for the last few years due to continued competitive pricing in the commercial lines underwriting segment. CNA reported a GAAP pre-tax pre-realized gain operating loss of $132 million on premium volume of $4.2 billion for the first six months of 1993 vs. pre-tax pre-realized gain income of $24 million on premium volume of $4.4 billion for the same period in 1992. CNA reported pre-tax realized capital gains of $573 million for the first six months of 1993 compared with $181 million of realized gains for the same period one year earlier.
 -0- 9/1/93
 /CONTACT: James B. Auden, CFA, 312-368-3146, or Timothy A. Bienek, 312-368-3192, both of Duff & Phelps Credit Rating Co./


CO: CNA Financial Corp.; Continental Casualty Company Intercompany
 Pool; Continental Assurance Company ST: IN: FIN SU:


TW -- NY063 -- 8083 09/01/93 15:57 EDT
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Publication:PR Newswire
Date:Sep 1, 1993
Words:422
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