CNA Hires DLJ to Sell Life Insurance Units

CNA Financial Corp., an insurer controlled by billionaire investor Laurence Tisch and his family, said it hired Donaldson, Lufkin & Jenrette to sell its life insurance units. A sale could raise more than $2.5 billion. The life insurance business would be the latest to be sold by Chicago-based CNA, which has been paring back its smaller operations to concentrate on insuring companies against property and other losses. It’s keeping its health insurance operations, a spokesman said. CNA, the No. 2 U.S. insurer of companies, last year sold its auto and home insurance units to Allstate Corp. for $1.2 billion. By exiting markets it doesn’t dominate, the company is hoping to stave off threats from larger competitors that can take advantage of lower costs to sell insurance more cheaply. The life insurance units had 1999 earnings of $160 million and a book value (assets minus liabilities) of about $2.5 billion. Bernard Hengesbaugh, chairman and chief executive of CNA Insurance, said that, “in general terms,” the units could be worth the 1.1 to 1.6 times book value that similar operations have commanded in recent years. That would value the life insurance business at between $2.75 billion and $4 billion. CNA shares closed off 38 cents at $24.75 on the New York Stock Exchange.