Hi, I've been lurking here for almost a year now. So, I figure this may be a good time for me to come out of my hiding place.
Mike, I have a few questions about the valuation of Loews. First, is WEB really going to consider purchasing CNA? While most (or maybe even all) of WEB's insurance subsidiaries make an underwriting profit, the combined ratio of CNA for the last three years have been over 100 (with 1998 being 114+). WEB likes to buy companies that have excellent management in place. So, I guess I'm questioning the competency of the management. In addition, WEB is really big in reinsurance and auto insurance. Although CNA does have a reinsurance division, it also has other lines (such as life) that WEB has not previously entered. Lastly, CNA makes up about 80% of LTR's revenue. If the rumor does come into fruition, LTR is going to be left with the tobacco division generating about 75% of LTR's revenue (it's currently at 15%). Given the uncertainties surrounding the tobacco industry at this time, isn't Wall Street going to give an even lower valuation on Loews?
Thanks in advance! I've always everyone's posts here (especially yours and JJC's). This thread definitely counts as one of the best threads on SI. |
