PRESS RELEASE
CNA
CNA Plaza Chicago, IL 60685 Media:
Charles Boesel
312-822-2592
Analysts:
Donald P. Lofe, Jr.
312-822-3993
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NEWS
For Immediate Release:
October 6, 2000
CNA ANNOUNCES SALE OF LIFE REINSURANCE BUSINESS Munich American Reassurance
Company (MARC) boosts American presence with purchase as CNA continues to target
its strategy on the business-to-business insurance market
CHICAGO - CNA Financial Corporation (NYSE: CNA), the nation's second largest
commercial insurer,the parent company of Valley Forge Life Insurance Company,
today announced the sale of its life reinsurance business to MARC, the U.S. life
subsidiary of Munich Re, a world leader in the reinsurance business. CNA's life
reinsurance business (CNA LIFE RE) reinsures individual life and health products
sold by other life insurance companies. A portion of the life reinsurance
business is conducted through Valley Forge Life Insurance as part of a
Reinsurance Pooling Agreement.
"CNA has been a strong presence in the U.S. life reinsurance marketplace," noted
Jeff Katz, who currently heads CNA LIFE RE. "We are noted for our facultative
underwriting services, and our creation of the AgoraRe.com web-site to
facilitate information exchange between ceding companies and reinsurers. CNA
LIFE RE's talented employees have a great deal to offer MARC, and we look
forward to joining an organization that is committed to being a leader in
reinsurance worldwide."
"We view the acquisition of CNA LIFE RE as an excellent strategic fit with our
current U.S. life operations, and in keeping with our desire to be one of the
leaders in this market," stated David Holland, President and Chief Executive
Officer of MARC. "We are pleased that Jeff Katz will continue to lead his team
as a part of the MARC family, and we are impressed with their innovative
thinking which, for example, led to the successful development of AgoraRe.com."
Based in Atlanta, Georgia, MARC has been a strong competitor in the life
reinsurance industry; its purchase of CNA LIFE RE will not only strengthen its
position in the marketplace but will also strengthen its ability to provide high
quality services to an ever-increasing list of customers. Jeff Katz will join
the executive management of MARC and lead the new life reinsurance office
located in Chicago.
Under the terms of the agreement, MARC will acquire the CNA LIFE RE business via
an indemnity reinsurance agreement. The transaction is expected to close by the
end of the year or early 2001.
"This is a winning business combination for both CNA and MARC," stated CNA
Insurance Chairman and Chief Executive Officer Bernard L. Hengesbaugh. "MARC
will increase its market share and value for its customers by acquiring a
talented staff of professionals who are dedicated experts in this field. In
addition, this transaction brings CNA one step closer to narrowing its focus on
our core business-to-business insurance services."
Donaldson, Lufkin & Jenrette Securities Corporation advised CNA Financial
Corporation in connection with the sale.
CNA is a leading insurance organization serving individuals and businesses with
a broad range of insurance products and insurance-related services. Since 1897,
CNA has built on a foundation of financial strength, stability and commitment to
customers and business partners. Visit CNA at www.cna.com. CNA is a registered
service mark, trade name, and domain name of CNA Financial Corporation.
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
"believe," "expects," "intends," "anticipates," "estimates," and analogous
expressions are intended to identify forward-looking statements. Such statements
inherently are subject to a variety of risks and uncertainties that could cause
actual results to differ materially from those projected. Such risks and
uncertainties include, among others, the impact of competitive products,
policies and pricing; product and policy demand and market responses;
development of claims and the effect on loss reserves; the performance of
reinsurance companies under reinsurance contracts with CNA Financial Corporation
and its subsidiaries (the Company); general economic and business conditions;
changes in financial markets (interest rate, credit, currency, commodities and
stocks); changes in foreign, political, social and economic conditions;
regulatory initiatives and compliance with governmental regulations; judicial
decisions and rulings; changes in rating agency policies and practices; the
results of financing efforts; changes in the Company's composition of operating
segments; 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 publicly
any updates or revisions to any forward-looking statement contained herein 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.
