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CNA won't do deal just to be bigger, CEO says

Written by Jasir Jawaid

CNA Financial Corp. will only make an acquisition if a deal makes sense both strategically and financially and will not do one to simply become bigger, Chairman and CEO Thomas Motamed said on an Aug. 3 earnings call.

The executive said there is "a lot of action" in the space but much of the chatter in recent weeks revolves around scale and the ability to compete for different-sized companies. Getting bigger purely for the sake of size "doesn't mean you're going to be better," Motamed said during the call's question-and-answer session.

His comments echoed those recently made by Lincoln National Corp. and Everest Re Group Ltd.

Motamed touted CNA's "very strong" specialty business, an improving commercial business and an international business that is building momentum as three pillars that are getting stronger each quarter. He said the company has come a long way since he took the helm at a time when underwriting margins were "unacceptable" in the commercial segment. The company worked "very hard" to improve the underlying accident year loss ratios, which required a shift in strategy on many fronts.

"We are not going to just do a transaction and screw up everything we've worked on," he said.

The company also on the call announced that it will now conduct a review of claim reserves and active life reserves simultaneously in 2015.

This article was published by S&P Global Market Intelligence on the S&P Capital IQ Pro platform.


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