CNA Financial Corp. has decided to hang on to its life insurance operations, after shopping them around for several months but finding the offers wanting.

"We decided that it was not in the interest of our shareholders to sell these businesses for less than they were worth," said Donald P. Lofe Jr., group vice president of corporate finance for the Chicago company. The operations sell through agents, brokers, financial planners, and banks.

In March the insurance company had decided to sell its individual life, long-term care, retirement services, viaticle settlement, and life reinsurance business to further focus on its commercial insurance operations. Viaticle settlements are arrangements that allow people with life-threatening illnesses to sell their insurance policies for cash.

Last week the company said it would keep its life, long-term care, and retirement services units but continues to look for buyers for the viaticle settlements and life insurance operations.

"Those businesses are relevant to individuals," Mr. Lofe said. "Our core strategy is selling insurance products to commercial clients."

However, after seeking potential buyers for several months, "we felt that the offers that were presented were not appropriate," he said. The company intends to operate the life businesses on a stand-alone basis.

CNA reported its second quarter results Monday, posting net operating income, which excludes investment gains, of $88 million, up from $45 million a year earlier.

Second-quarter 1999 net operating income included $13 million in after tax restructuring charges. The life operations represent $46 million of that, up from $31 million in the second quarter last year. In addition, the life operations posted premiums of $226 million, up from $214 million.

The company said sales volume declined in the life operations because of a reduction in retirement products sold to institutions. However, net income increased for the business because of favorable mortality experience in universal life and term insurance - that is, fewer policyholders died than expected - as well as favorable investment earnings.

CNA's attempts to sell its life insurance business is part of a continuing strategy to get out of personal lines insurance and concentrate on coverage sold to businesses. In October the company closed the sale of its personal lines property-casualty business to Allstate Corp. of Northbrook, Ill. The deal garnered CNA $140 million and an interest in the organization through a $75 million, 10-year equity-linked note and ongoing royalty fees.

"The company is clearly focusing on the commercial end of the business, rather than selling insurance to individuals," said Jay Cohen, an analyst with Merrill Lynch & Co. CNA's removal of that business from the market "appears to reflect their unwilling to make strategic changes at what they deem to be uneconomic prices," he said.

"I wouldn't rule out a future attempt to divest that business," he said, predicting that in five or 10 years CNA would no longer be selling life insurance.

The company's second-quarter results indicated improvements over recent quarters, Mr. Cohen said. But some of that improvement is due to better pricing in the commercial lines property-casualty insurance market, he said, after years of price decreases.

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