Loews Corp.'s (L) second-quarter earnings fell 31% as higher natural catastrophe losses contributed to a 55% drop in its CNA Financial Corp. (CNA) insurance unit's profit.
Insurers have faced a difficult pricing environment due to high competition and customers' reluctance to stomach price increases. Loews, a conglomerate led by New York's Tisch family, owns 90% of CNA Financial, and the insurer typically accounts for nearly two-thirds of its revenue. Last month, CNA Financial expanded its specialty franchise and simplified its operations by acquiring the remaining CNA Surety Corp. stake it didn't already own.
Loews reported a profit of $252 million, or 62 cents a share, down from $366 million, or 87 cents, a year earlier. Revenue rose 1.6% to $3.54 billion.
Revenue from insurance premiums, its largest top-line contributor, slipped 0.8%. Contract drilling revenue grew 7.1% while so-called other revenue rose 1.9%.
Meanwhile, CNA's profit fell to $126 million, or 47 cents a share, from $283 million, or 96 cents, a year earlier. Operating income, which excludes items such as investment results, dropped to 43 cents from $1. Catastrophe losses were $65 million, more than twice the $31 million recorded in 2010.
Analysts polled by Thomson Reuters had most recently forecast earnings of 51 cents.
Loews's other big holdings include Boardwalk Pipeline Partners LP (BWP), which said earlier Monday its second-quarter profit fell 72% on an asset impairment charge, and Diamond Offshore Drilling Inc. (DO), which earlier this month reported second-quarter earnings jumped 19% on stronger revenue.
Loews shares closed Friday at $39.87, while CNA finished at $27.54. Neither was active premarket.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; email@example.com