NEW YORK (Bloomberg) — Loews Corp., the holding company run by New York's Tisch family, will inject $1.25 billion into CNA Financial Corp. after the insurance unit posted a third-quarter loss on investment declines and hurricane claims. Loews fell 12 percent in New York trading and CNA dropped 15 percent.

Loews posted a net loss of $137 million, or 31 cents a share, compared with profit of $555.7 million, or 77 cents, in the same period a year earlier, the New York-based holding company said in a statement yesterday.

Loews owns 90 percent of CNA and 50 percent of Diamond Offshore Drilling Inc., the world's second-largest deepwater oil driller. CNA suspended its dividend for common shares today after a loss of $331 million in the period ended September 30. The new preferred shares sold to Loews will pay a 10 percent dividend for the first five years.

"Economic conditions remain stagnant, the global financial markets experienced the most severe pressure in memory, if not in history, and the insurance marketplace remained competitive, further aggravated by significant catastrophe activity," CNA chief executive officer Stephen Lilienthal said in a conference call yesterday.

CNA, which typically supplies the majority of Loews's revenue, suffered from the worst US hurricane season since 2005 and declines of holdings in financial firms including mortgage lenders Fannie Mae and Freddie Mac. Fannie and Freddie made up almost half the insurer's $423 million in investment losses, which also included $63 million tied to Icelandic banks.

The losses contributed to a 17 percent decline in book value, a measure of assets minus liabilities, to $28.75 in the three months ended September 30.

CNA has reported seven straight quarters of investment losses, totaling more than $700 million. The biggest insurers in the US and Bermuda have reported more than $93 billion in writedowns and unrealized losses tied to the US mortgage market since the beginning of last year.

CNA joins insurers MetLife Inc. and Hartford Financial Services Group Inc. in selling shares to shore up capital amid declines in the value of holdings.