What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-01 compared with 2022-05-02 · 290 added, 130 removed, 295 unchanged (59% of the section changed)

14 unchanged sentences

and the Corporate segment.

The Corporate segment is primarily comprised of Loews Corporation, excluding its operating subsidiaries, the consolidated operations of Altium Packaging LLC (“Altium Packaging”) for the three months ended March 31, 2021 and the equity method of accounting for Altium Packaging for the three months ended March 31, 2022.

For information regarding the deconsolidation of Altium Packaging, s ee Note 2 of th e Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021.

Unless the context otherwise requires, the term “Company” as used herein means Loews Corporation including its consolidated subsidiaries, the terms “Parent Company,” “we,” “our,” “us” or like terms as used herein mean Loews Corporation excluding its subsidiaries, the term “Net income (loss) attributable to Loews Corporation” as used herein means Net income (loss) attributable to Loews Corporation shareholders and the term “subsidiaries” means Loews Corporation’s consolidated subsidiaries.

The Corporate segment is primarily comprised of Loews Corporation, excluding its operating subsidiaries, the consolidated operations of Altium Packaging LLC (“Altium Packaging”) through March 31, 2021 and the equity method of accounting for Altium Packaging subsequent to its deconsolidation on April 1, 2021.

For information regarding the deconsolidation of Altium Packaging s ee Note 2 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 .

Unless the context otherwise requires, the term “Company” means Loews Corporation including its consolidated subsidiaries, the terms “Parent Company,” “we,” “our,” “us” or like terms mean Loews Corporation excluding its subsidiaries, the term “Net income (loss) attributable to Loews Corporation” means Net income (loss) attributable to Loews Corporation shareholders and the term “subsidiaries” means Loews Corporation’s consolidated subsidiaries.

We rely upon our invested cash balances and distributions from our subsidiaries to generate the funds necessary to meet our obligations and to declare and pay any dividends to our shareholders.

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Claims of creditors of our subsidiaries will generally have priority as to the assets of such subsidiaries over our claims and those of our creditors and shareholders.

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RESULTS OF OPERATIONS

Consolidated Financial Results

The following table summarizes net income (loss) attributable to Loews Corporation by segment and net income (loss) per share attributable to Loews Corporation for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31

The following table summarizes net income (loss) attributable to Loews Corporation by segment and net income (loss) per share attributable to Loews Corporation for the three and six months ended June 30, 2022 and 2021:

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022

(In millions, except per share data)

6 unchanged sentences

Diluted net income per share $ 0.73 $ 2.86 $ 2.09 $ 3.82

Net income attributable to Loews Corporation for the three months ended March 31, 2022 was $338 million, or $1.36 per share, compared to net income attributable to Loews Corporation of $261 million, or $0.97 per share in the comparable 2021 period.

Net income attributable to Loews Corporation increased for the three months ended March 31, 2022 compared to the comparable prior year period as CNA, Boardwalk Pipelines, and Loews Hotels & Co all generated strong operating results.

CNA experienced higher property & casualty non-catastrophe underwriting results and lower catastrophe losses, offset by lower net investment income and investment losses compared to investment gains in the comparable prior year period.

Loews Hotels & Co’s results improved significantly as the company continues its recovery from reduced travel during the COVID-19 pandemic, and Boardwalk Pipelines’ earnings increased due to higher revenues from growth projects recently placed into service.

The parent company generated lower net investment income than in the comparable prior year period.

Net income attributable to Loews Corporation for the three months ended June 30, 2022 was $180 million, or $0.73 per share, compared to $754 million, or $2.86 per share in the comparable 2021 period.

Net income attributable to Loews Corporation for the six months ended June 30, 2022 was $518 million, or $2.09 per share, compared to $1.0 billion, or $3.82 per share in the comparable 2021 period.

The Corporate segment includes a gain of $438 million (after tax) related to the sale of 47% of Altium Packaging and its deconsolidation in the second quarter of 2021.

Excluding this significant transaction, the decrease in net income attributable to Loews Corporation for the three months ended June 30, 2022 as compared to the comparable prior year period, was primarily driven by lower net investment income from limited partnership and common stock investments and net investment losses recognized in the second quarter of 2022 compared to net investment gains in the comparable prior year period.

This decline was partially offset by higher property & casualty underwriting income and higher net investment income from fixed income securities at CNA and significantly improved results at Loews Hotels & Co .

The drivers of the decrease in net income for the six months ended June 30, 2022 as compared to the comparable 2021 period are consistent with the three-month discussion above.

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CNA Financial

The following table summarizes the results of operations for CNA for the three months ended March 31, 2022 and 2021 as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

The following table summarizes the results of operations for CNA for the three and six months ended June 30, 2022 and 2021 as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

For further discussion of Net investment income and Investment gains (losses), see the Investments section of this MD&A.

Three Months Ended March 31

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022

(In millions)

16 unchanged sentences

Net income attributable to Loews Corporation $ 183 $ 330 $ 464 $ 609

Net income attributable to Loews Corporation increased $2 million for the three months ended March 31, 2022 as compared with the comparable 2021 period.

Net income increased due to lower catastrophe losses and improved non-catastrophe underwriting results for the three months ended March 31, 2022 as compared with the comparable 2021 period.

Catastrophe losses were $19 million ($13 million after tax and noncontrolling interests) for the three months ended March 31, 2022 as compared with $125 million ($88 million after tax and noncontrolling interests) in the comparable 2021 period.

Catastrophe losses for the three months ended March 31, 2022 were primarily related to severe weather related events.

Catastrophe losses for the three months ended March 31, 2021 were primarily driven by Winter Storms Uri and Viola.

These increases to net income were offset by lower net investment income and investment losses for the three months ended March 31, 2022 as compared with investment gains in the comparable 2021 period.

Lower net investment income was driven by lower limited partnership and common stock returns and investment losses were driven by the unfavorable change in the fair value of non-redeemable preferred stock and lower investment gains on disposals of fixed maturity securities.

Three Months Ended June 30, 2022 Compared to the Comparable 2021 Period

Net income attributable to Loews Corporation decreased $147 million for the three months ended June 30, 2022 as compared with the comparable 2021 period primarily due to lower net investment income and investment losses for the three months ended June 30, 2022 as compared with investment gains in the comparable 2021 period.

Lower net investment income was from limited partnerships and common stock and lower investment results were driven by the unfavorable change in fair value of non-redeemable preferred stock.

These decreases to net income were partially offset by improved underwriting results and higher net investment income from fixed income securities for the three months ended June 30, 2022 as compared with the comparable 2021 period.

Catastrophe losses were $37 million ($26 million after tax and noncontrolling interests) for the three months ended June 30, 2022 as compared with $54 million ($38 million after tax and noncontrolling interests) in the comparable 2021 period and were primarily related to severe weather related events.

Six Months Ended June 30, 2022 Compared to the Comparable 2021 Period

Net income attributable to Loews Corporation decreased $145 million for the six months ended June 30, 2022 as compared with the comparable 2021 period primarily due to lower net investment income and investment losses for the six months ended June 30, 2022 as compared with investment gains in the comparable 2021 period.

Lower net investment income was from limited partnerships and common stock and lower investment results were driven by the unfavorable change in fair value of non-redeemable preferred stock.

These decreases to net income were partially offset by improved underwriting results and higher net investment income from fixed income securities for the six months ended June 30, 2022

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as compared with the comparable 2021 period.

Catastrophe losses were $57 million ($40 million after tax and noncontrolling interests) for the six months ended June 30, 2022 as compared with $179 million ($126 million after tax and noncontrolling interests) in the comparable 2021 period and were primarily related to severe weather related events.

CNA’s Property & Casualty and Other Insurance Operations

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We believe the presentation of CNA as one reportable segment is appropriate in accordance with applicable accounting standards on segment reporting.

However, for purposes of this discussion and analysis of the results of operations, we provide greater detail with respect to CNA’s Property & Casualty Operations and Other Insurance

Operations to enhance the reader’s understanding and to provide further transparency into key drivers of CNA’s financial results.

However, for purposes of this discussion and analysis of the results of operations, we provide greater detail with respect to CNA’s Property & Casualty Operations and Other Insurance Operations to enhance the reader’s understanding and to provide further transparency into key drivers of CNA’s financial results.

In assessing its insurance operations, CNA utilizes the core income (loss) financial measure.

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The calculation of core income (loss) excludes investment gains or losses because investment gains or losses are generally driven by economic factors that are not necessarily reflective of CNA’s primary insurance operations.

Core income (loss) is deemed to be a non-GAAP financial measure and management believes this measure is useful for investors to evaluate its insurance operations.

Core income (loss) is deemed to be a non-GAAP financial measure and management believes some investors may find this measure useful to evaluate CNA’s insurance operations.

Please see the non-GAAP reconciliation of core income (loss) to net income (loss) that follows in this MD&A.

13 unchanged sentences

Exposure represents the measure of risk used in the pricing of the insurance product.

Retention represents the percentage of premium dollars renewed in comparison to the expiring premium dollars from policies available to renew.

Retention represents the percentage of premium dollars renewed, excluding rate and exposure changes, in comparison to the expiring premium dollars from policies available to renew.

Renewal premium change, rate and retention presented for the prior period are updated to reflect subsequent activity on policies written in the period.

1 unchanged sentence

Gross written premiums, excluding third-party captives, excludes business which is ceded to third-party captives, including business related to large warranty programs.

The following tables summarize the results of CNA’s Property & Casualty Operations for the three months e nded March 31, 2022 and 2021.

Three Months Ended March 31, 2022 Specialty

Table of c o ntents

The following tables summarize the results of CNA’s Property & Casualty Operations for the three and six months e nded June 30, 2022 and 2021.

Three Months Ended June 30, 2022 Specialty

International

19 unchanged sentences

New business $ 132 $ 280 $ 88 $ 500

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Gross written premiums $ 1,903 $ 1,161 $ 339 $ 3,403

17 unchanged sentences

New business $ 121 $ 201 $ 71 $ 393

Gross written premiums, excluding third-party captives, for Specialty increased $69 million for the three months ended March 31, 2022 as compared with the comparable 2021 period driven by higher new business and rate.

Net written premiums for Specialty increased $29 million for the three months ended March 31, 2022 as compared with the comparable 2021 period.

The increase in net earned premiums for the three months ended March 31, 2022 was consistent with the trend in net written premiums for Specialty.

Gross written premiums for Commercial increased $95 million for the three months ended March 31, 2022 as compared with the comparable 2021 period driven by rate and retention.

Net written premiums for Commercial increased $41 million for the three months ended March 31, 2022 as compared with the comparable 2021 period.

The increase in net earned premiums for the three months ended March 31, 2022 was consistent with the trend in net written premiums for Commercial.

Gross written premiums for International increased $20 million for the three months ended March 31, 2022 as compared with the comparable 2021 period.

Excluding the effect of foreign currency exchange rates, gross written premiums increased $30 million driven by rate.

Net written premiums for International increased $16 million for the three months ended March 31, 2022 as compared with the comparable 2021 period.

Excluding the effect of foreign currency exchange rates, net written premiums increased $26 million for the three months ended March 31, 2022 as compared with the comparable 2021 period.

The increase in net earned premiums for the three months ended March 31, 2022 was consistent with the trend in net written premiums for International.

Core income increased $58 million for the three months ended March 31, 2022 as compared with the comparable 2021 period due to lower catastrophe losses and improved non-catastrophe current accident year underwriting results, partially offset by lower net investment income driven by limited partnership and common stock returns.

Total catastrophe losses were $19 million for the three months ended March 31, 2022 as compared with $125 million for the comparable 2021 period.

For the three months ended March 31, 2022 and 2021, Specialty had no catastrophe losses and $5 million of catastrophe losses, Commercial had catastrophe losses of $16 million and $115 million and International had catastrophe losses of $3 million and $5 million.

Favorable net prior year loss reserve development of $12 million and $15 million was recorded for the three months ended March 31, 2022 and 2021.

For the three months ended March 31, 2022 and 2021, Specialty recorded favorable net prior year loss reserve development of $10 million and $15 million.

For the three months ended March 31, 2022, Commercial recorded favorable net prior year loss reserve development of $2 million as compared with no net prior year loss reserve development in the comparable 2021 period.

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Six Months Ended June 30, 2022 Specialty

International

(In millions, except %)

Gross written premiums $ 3,750 $ 2,637 $ 745 $ 7,132

Gross written premiums excluding third-party captives 1,858 2,527 745 5,130

Net written premiums 1,603 2,135 581 4,319

Net earned premiums 1,566 1,878 533 3,977

Net investment income 203 231 28 462

Core income 324 270 44 638

Other performance metrics:

Loss ratio excluding catastrophes and development 58.7 % 61.5 % 58.6 % 60.0 %

Effect of catastrophe impacts 0.1 2.4 2.0 1.4

Effect of development-related items (1.3) (0.9) (1.0) (1.0)

Loss ratio 57.5 % 63.0 % 59.6 % 60.4 %

Expense ratio 30.7 30.3 32.4 30.7

Dividend ratio 0.2 0.5 0.3

Combined ratio 88.4 % 93.8 % 92.0 % 91.4 %

Combined ratio excluding catastrophes and development 89.6 % 92.3 % 91.0 % 91.0 %

Rate 8 % 5 % 8 % 6 %

Renewal premium change 9 8 10 9

Retention 85 86 79 84

New business $ 277 $ 508 $ 166 $ 951

Six Months Ended June 30, 2021

Gross written premiums $ 3,697 $ 2,274 $ 682 $ 6,653

Gross written premiums excluding third-party captives 1,713 2,171 682 4,566

Net written premiums 1,528 1,791 527 3,846

Net earned premiums 1,497 1,736 518 3,751

Net investment income 251 322 28 601

Core income 358 206 50 614

Other performance metrics:

Loss ratio excluding catastrophes and development 59.2 % 60.4 % 59.3 % 59.8 %

Effect of catastrophe impacts 0.3 9.6 1.4 4.7

Effect of development-related items (1.6) 0.7 (0.2) (0.3)

Loss ratio 57.9 % 70.7 % 60.5 % 64.2 %

Expense ratio 30.2 31.8 33.9 31.5

Dividend ratio 0.2 0.6 0.3

Combined ratio 88.3 % 103.1 % 94.4 % 96.0 %

Combined ratio excluding catastrophes and development 89.6 % 92.8 % 93.2 % 91.6 %

Rate 11 % 9 % 14 % 10 %

Renewal premium change 12 11 13 11

Retention 86 81 76 82

New business $ 224 $ 412 $ 150 $ 786

Table of c o ntents

Three Months Ended June 30, 2022 Compared to the Comparable 2021 Period

Gross written premiums, excluding third-party captives, for Specialty increased $76 million for the three months ended June 30, 2022 as compared with the comparable 2021 period driven by rate and higher new business.

Net written premiums for Specialty increased $46 million for the three months ended June 30, 2022 as compared with the comparable 2021 period.

The increase in net earned premiums for the three months ended June 30, 2022 was consistent with the trend in net written premiums for Specialty.

Gross written premiums for Commercial increased $268 million for the three months ended June 30, 2022 as compared with the comparable 2021 period driven by higher new business and retention.

Net written premiums for Commercial increased $303 million for the three months ended June 30, 2022 as compared with the comparable 2021 period.

The prior period included a one-time written premium catch-up resulting from the addition of a quota share treaty to CNA’s property reinsurance program.

Excluding the impact of the written premium catch-up in the prior period, net written premiums increased $191 million for the three months ended June 30, 2022 as compared with the comparable 2021 period.

Prior period written premiums were also unfavorably impacted by the March 2021 cybersecurity attack.

The increase in net earned premiums for the three months ended June 30, 2022 was consistent with the trend in net written premiums for Commercial.

Gross written premiums for International increased $43 million for the three months ended June 30, 2022 as compared with the comparable 2021 period.

Excluding the effect of foreign currency exchange rates, gross written premiums increased $59 million driven by retention and rate.

Net written premiums for International increased $38 million for the three months ended June 30, 2022 as compared with the comparable 2021 period.

Excluding the effect of foreign currency exchange rates, net written premiums increased $52 million for the three months ended June 30, 2022 as compared with the comparable 2021 period.

The increase in net earned premiums for the three months ended June 30, 2022 was consistent with the trend in net written premiums for International.

Core income for Property & Casualty Operations decreased $34 million for the three months ended June 30, 2022 as compared with the comparable 2021 period primarily due to lower net investment income driven by limited partnership and common stock results, partially offset by improved underwriting results.

Total catastrophe losses were $37 million for the three months ended June 30, 2022 as compared with $54 million for the comparable 2021 period.

For the three months ended June 30, 2022 and 2021, Specialty had $1 million of catastrophe losses, Commercial had catastrophe losses of $29 million and $51 million and International had catastrophe losses of $7 million and $2 million.

Favorable net prior year loss reserve development of $37 million and $11 million was recorded for the three months ended June 30, 2022 and 2021.

For the three months ended June 30, 2022 and 2021, Specialty recorded favorable net prior year loss reserve development of $10 million in each period, Commercial recorded favorable net prior year loss reserve development of $22 million and no net prior year loss reserve development and International recorded favorable net prior year loss reserve development of $5 million and $1 million.

Further information on net prior year loss reserve development is included in Note 4 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

Specialty’s combined ratio improved 0.1 point for the three months ended March 31, 2022 as compared with the comparable 2021 period due to a 0.4 point improvement in the loss ratio largely offset by a 0.3 point increase in the expense ratio.

The improvement in the loss ratio was primarily driven by improved current accident year underwriting results partially offset by lower favorable net prior year loss reserve development.

There were no catastrophe losses for the three months ended March 31, 2022, as compared with catastrophe losses comprising 0.7 points of the loss ratio in the comparable 2021 period.

Specialty’s combined ratio increased 0.2 points for the three months ended June 30, 2022 as compared with the comparable 2021 period due to a 0.4 point increase in the expense ratio partially offset by a 0.2 point improvement in the loss ratio.

The increase in the expense ratio was driven by higher underwriting expenses partially offset by lower acquisition costs.

The improvement in the loss ratio was primarily driven by improved non-catastrophe current accident year underwriting results.

Commercial’s combined ratio improved 6.4 points for the three months ended June 30, 2022 as compared with the comparable 2021 period primarily due to a 4.0 point improvement in the loss ratio and a 2.3 point improvement in the expense ratio.

The improvement in the loss ratio was driven by lower catastrophe losses which were 3.0 points of the loss ratio for the three months ended June 30, 2022, as compared with 5.8 points of the loss ratio in the comparable 2021 period and favorable net prior year loss reserve development.

The combined ratio excluding catastrophes and development improved 1.0 point for the three months ended June 30, 2022 as compared with the comparable 2021 period.

The improvement in the expense ratio of 2.3 points was driven by lower acquisition costs and higher net earned premium partially offset by an increase in underwriting expenses.

The loss ratio excluding catastrophes and development increased 1.4 points primarily driven by a shift in mix of business associated with the property quota share treaty purchased during June of 2021.

Property coverages, which have a lower underlying loss ratio than most other commercial coverages, now represent a smaller proportion of net earned premiums.

Table of c o ntents

International’s combined ratio improved 1.4 points for the three months ended June 30, 2022 as compared with the comparable 2021 period due to a 1.4 point improvement in the expense ratio driven by lower acquisition costs.

The loss ratio for the three months ended June 30, 2022 was consistent with the comparable 2021 period as favorable net prior year loss reserve development and improved non-catastrophe current accident year underwriting results were offset by higher catastrophe losses.

Catastrophe losses were 2.8 points of the loss ratio for the three months ended June 30, 2022, as compared with 0.8 points of the loss ratio in the comparable 2021 period.

Six Months Ended June 30, 2022 Compared to the Comparable 2021 Period

Gross written premiums, excluding third-party captives, for Specialty increased $145 million for the six months ended June 30, 2022 as compared with the comparable 2021 period driven by rate and higher new business.

Net written premiums for Specialty increased $75 million for the six months ended June 30, 2022 as compared with the comparable 2021 period.

The increase in net earned premiums for the six months ended June 30, 2022 was consistent with the trend in net written premiums for Specialty.

Gross written premiums for Commercial increased $363 million for the six months ended June 30, 2022 as compared with the comparable 2021 period driven by higher new business and retention.

Net written premiums for Commercial increased $344 million for the six months ended June 30, 2022 as compared with the comparable 2021 period.

The prior period included a one-time written premium catch-up resulting from the addition of a quota share treaty to CNA’s property reinsurance program.

Excluding the impact of the prior period written premium catch-up, net written premiums increased $232 million for the six months ended June 30, 2022 as compared with the comparable 2021 period.

The increase in net earned premiums for the six months ended June 30, 2022 was consistent with the trend in net written premiums for Commercial.

Gross written premiums for International increased $63 million for the six months ended June 30, 2022 as compared with the comparable 2021 period.

Excluding the effect of foreign currency exchange rates, gross written premiums increased $90 million driven by retention and rate.

Net written premiums for International increased $54 million for the six months ended June 30, 2022 as compared with the comparable 2021 period.

Excluding the effect of foreign currency exchange rates, net written premiums increased $78 million for the six months ended June 30, 2022 as compared with the comparable 2021 period.

The increase in net earned premiums for the six months ended June 30, 2022 was consistent with the trend in net written premiums for International.

Core income for Property & Casualty Operations increased $24 million for the six months ended June 30, 2022 as compared with the comparable 2021 period primarily due to improved underwriting results largely offset by lower net investment income driven by limited partnership and common stock results.

Total catastrophe losses were $57 million for the six months ended June 30, 2022 as compared with $179 million for the comparable 2021 period.

For the six months ended June 30, 2022 and 2021, Specialty had catastrophe losses of $1 million and $6 million, Commercial had catastrophe losses of $45 million and $166 million and International had catastrophe losses of $11 million and $7 million.

Favorable net prior year loss reserve development of $49 million and $26 million was recorded for the six months ended June 30, 2022 and 2021.

For the six months ended June 30, 2022 and 2021, Specialty recorded favorable net prior year loss reserve development of $20 million and $25 million, Commercial recorded favorable net prior year loss reserve development of $24 million and no net prior year loss reserve development and International recorded favorable net prior year loss reserve development of $5 million and $1 million.

Further information on net prior year loss reserve development is included in Note 4 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

Specialty’s combined ratio increased 0.1 point for the six months ended June 30, 2022 as compared with the comparable 2021 period due to a 0.5 point increase in the expense ratio largely offset by a 0.4 point improvement in the loss ratio.

The increase in the expense ratio was driven by higher underwriting expenses partially offset by higher net earned premiums.

Commercial’s combined ratio improved 12.2 points for the three months ended March 31, 2022 as compared with the comparable 2021 period primarily due to a 11.4 point improvement in the loss ratio and a 0.7 point improvement in the expense ratio.

The improvement in the loss ratio was primarily due to lower catastrophe losses which were 1.8 points of the loss ratio for the three months ended March 31, 2022, as compared with 13.4 points of the loss ratio in the comparable 2021 period.

The combined ratio excluding catastrophes and development improved 0.1 point for the three months ended March 31, 2022 as compared with the comparable 2021 period.

The improvement in the expense ratio of 0.7 points was driven by higher net earned premiums and lower acquisition costs partially offset by an increase in underwriting expenses.

The loss ratio excluding catastrophes and development increased 0.7 points due to a shift in mix of business associated with the property quota share treaty purchased during the second quarter of 2021.

CNA’s property coverages, which have a lower underlying loss ratio than most other commercial coverages, now represent a smaller proportion of net earned premiums.

On a mix adjusted basis, there was no change in the underlying loss ratio.

International’s combined ratio improved 3.5 points for the three months ended March 31, 2022 as compared with the comparable 2021 period due to a 1.8 point improvement in the expense ratio and a 1.7 point improvement in the loss ratio.

The improvement in the expense ratio was driven by lower acquisition costs and higher net earned premiums.

The improvement in the loss ratio was driven by improved current accident year underwriting results.

Catastrophe losses were

1.2 points of the loss ratio for the three months ended March 31, 2022, as compared with 2.0 points of the loss ratio in the comparable 2021 period.

The improvement in the loss ratio was primarily driven by improved current accident year underwriting results.

Catastrophe losses were 0.1 point of the loss ratio for the six months ended June 30, 2022, as compared with 0.3 points of the loss ratio in the comparable 2021 period.

Commercial’s combined ratio improved 9.3 points for the six months ended June 30, 2022 as compared with the comparable 2021 period primarily due to a 7.7 point improvement in the loss ratio and a 1.5 point improvement in the expense ratio.

The improvement in the loss ratio was driven by lower catastrophe losses which were 2.4 points of the loss ratio for the six months ended June 30, 2022, as compared with 9.6 points of the loss ratio in the comparable 2021 period, and favorable net prior year loss reserve development.

The combined ratio excluding catastrophes and development improved 0.5 points for the six months ended June 30, 2022 as compared with the comparable 2021 period.

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improvement in the expense ratio was driven by lower acquisition costs and higher net earned premiums partially offset by an increase in underwriting expenses.

The loss ratio excluding catastrophes and development increased 1.1 points primarily driven by a shift in mix of business associated with the property quota share treaty purchased during June of 2021.

Property coverages, which have a lower underlying loss ratio than most other commercial coverages, now represent a smaller proportion of net earned premiums.

International’s combined ratio improved 2.4 points for the six months ended June 30, 2022 as compared with the comparable 2021 period due to a 1.5 point improvement in the expense ratio and a 0.9 point improvement in the loss ratio.

The improvement in the expense ratio was driven by lower acquisition costs.

The improvement in the loss ratio was driven by favorable net prior year loss reserve development and improved non-catastrophe current accident year underwriting results, partially offset by higher net catastrophe losses.

Catastrophe losses were 2.0 points of the loss ratio for the six months ended June 30, 2022, as compared with 1.4 points of the loss ratio in the comparable 2021 period.

Other Insurance Operations

The following table summarizes the results of CNA’s Other Insurance Operations for the three months ended March 31, 2022 and 2021.

Three Months Ended March 31

The following table summarizes the results of CNA’s Other Insurance Operations for the three and six months ended June 30, 2022 and 2021.

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022

(In millions)

1 unchanged sentence

Net investment income 205 269 418 494

Core income (loss) (5) —

Core results decreased $5 million for the three months ended March 31, 2022 as compared with the comparable 2021 period primarily due to lower net investment income and higher expenses, partially offset by the recognition of a $12 million loss resulting from the legacy excess workers’ compensation loss portfolio transfer (“EWC LPT”) in the three months ended March 31, 2021.

For further information on the EWC LPT see Note 8 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021.

Core loss (72) (10) (77) (10)

Three Months Ended June 30, 2022 Compared to the Comparable 2021 Period

Core results for Other Insurance Operations decreased $62 million for the three months ended June 30, 2022 as compared with the comparable 2021 period primarily due to lower net investment income and a $51 million charge for the three months ended June 30, 2022 related to unfavorable net prior year loss reserve development largely associated with legacy mass tort abuse claims as compared with a $32 million charge in the comparable 2021 period.

Net prior year loss reserve development is further discussed in Note 4 of the Notes to Consolidated Condensed Financial Statements included under Item 1.

Six Months Ended June 30, 2022 Compared to the Comparable 2021 Period

Core results for Other Insurance Operations decreased $67 million for the six months ended June 30, 2022 as compared with the comparable 2021 period primarily due to lower net investment income and higher net prior year loss reserve development associated with legacy mass tort abuse claims.

These results were partially offset by the prior period recognition of a $12 million loss resulting from the legacy excess workers’ compensation loss portfolio transfer (“EWC LPT”).

Net prior year loss reserve development is further discussed in Note 4 of the Notes to Consolidated Condensed Financial Statements included under Item 1.

Table of c o ntents

Non-GAAP Reconciliation of Core Income to Net Income

The following table reconciles core income to net income attributable to Loews Corporation for t he three months ended March 31, 2022 and 2021:

Three Months Ended March 31

The following table reconciles core income to net income attributable to Loews Corporation for t he three and six months ended June 30, 2022 and 2021:

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022

(In millions)

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Boardwalk Pipelines

A significant portion of Boardwalk Pipelines’ revenues are fee-based, being derived from capacity reservation charges under firm agreements with customers, which do not vary significantly period to period, but are impacted by longer term trends in its business such as lower pricing on contract renewals and other factors.

A significant portion of Boardwalk Pipelines’ revenues is fee-based, being derived from capacity reservation charges under firm agreements with customers, which do not vary significantly period to period, but are impacted by longer term trends in its business such as changes in pricing on contract renewals and other factors.

Boardwalk Pipelines’ operating costs and expenses do not vary significantly based upon the amount of products transported, with the exception of costs recorded in fuel and transportation expense, which are netted with fuel retained on our Consolidated Condensed Statements of Operations.

For further information on Boardwalk Pipelines’ revenue recognition policies see Note 1 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021.

The following table summarizes the results of operations for Boardwalk Pipelines for the three months ended March 31, 2022 and 2021 as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report:

Three Months Ended March 31

The following table summarizes the results of operations for Boardwalk Pipelines for the three and six months ended June 30, 2022 and 2021, as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

Boardwalk Pipelines also utilizes earnings before interest, income tax expense, depreciation and amortization (“EBITDA”), a non-GAAP measure, as a financial measure to assess its operating and financial performance and return on invested capital.

Management believes some investors may find this measure useful in evaluating Boardwalk Pipelines’ performance.

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Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022

(In millions)

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Operating and other:

Operating costs and expenses 132 116 254 241

Depreciation and amortization 99 93 194 185

Interest 42 40 84 81

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Net income attributable to Loews Corporation $ 39 $ 47 $ 130 $ 132

Total revenues increased $9 million for the three months ended March 31, 2022 as compared with the comparable 2021 period.

Including the items in fuel and transportation expense, operating revenues increased $13 million, primarily driven by an increase in natural gas transportation revenues from recently completed growth projects.

Operating expenses were flat for the three months ended March 31, 2022 as compared with the comparable 2021 period.

Excluding items offset with operating revenues, operating expenses increased $4 million, primarily due to higher employee-related costs and an increased asset base from recently completed growth projects.

EBITDA $ 193 $ 196 $ 452 $ 443

Three Months Ended June 30, 2022 Compared to the Comparable 2021 Period

Net income attributable to Loews Corporation decreased $8 million for the three months ended June 30, 2022 as compared with the comparable 2021 period.

EBITDA decreased $3 million for the three months ended June 30, 2022 as compared with the comparable 2021 period.

Total revenues increased $13 million for the three months ended June 30, 2022 as compared with the comparable 2021 period.

Including the items in fuel and transportation expense, operating revenues increased $9 million, primarily driven by an increase in storage and parking and lending revenues of $5 million due to favorable market conditions and an increase in transportation revenues of $4 million due to recently completed growth projects.

Operating costs and expenses increased $16 million for the three months ended June 30, 2022 as compared with the comparable 2021 period.

Excluding items offset with operating revenues, operating costs and expenses increased $12 million, primarily due to increased costs from maintenance projects associated with the requirements of the Pipeline and Hazardous Materials Safety Administration Mega Rule (“PHMSA Mega Rule”).

Depreciation and amortization expenses increased $6 million for the three months ended June 30, 2022 as compared with the comparable 2021 period due to an increased asset base from recently completed growth projects and a change in the estimated life of certain assets.

Interest expenses increased $2 million for the three months ended June 30, 2022 as compared with the comparable 2021 period, primarily due to higher average outstanding long-term debt.

Six Months Ended June 30, 2022 Compared to the Comparable 2021 Period

Net income attributable to Loews Corporation decreased $2 million for the six months ended June 30, 2022 as compared with the comparable 2021 period.

EBITDA increased $9 million for the six months ended June 30, 2022 as compared with the comparable 2021 period.

Total revenues increased $22 million for the six months ended June 30, 2022 as compared with the comparable 2021 period, primarily driven by an increase in transportation revenues of $16 million due to recently completed growth projects and an increase in storage and parking and lending revenues of $6 million due to favorable market conditions.

Operating costs and expenses increased $13 million for the six months ended June 30, 2022 as compared with the comparable 2021 period primarily due to increased costs from maintenance projects associated with the requirements of the PHMSA Mega Rule.

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Depreciation and amortization expenses increased $9 million for the six months ended June 30, 2022 as compared with the comparable 2021 period due to an increased asset base from recently completed growth projects and a change in the estimated life of certain assets.

Interest expense increased $3 million for the six months ended June 30, 2022 as compared with the comparable 2021 period primarily due to higher average outstanding long-term debt.

Non-GAAP Reconciliation of Net Income attributable to Loews Corporation to EBITDA

The following table for Boardwalk Pipelines presents a reconciliation of net income attributable to Loews Corporation to EBITDA for the three and six months ended June 30, 2022 and 2021:

Three Months Ended

Six Months Ended

(In millions)

Net income attributable to Loews Corporation

$ 39 $ 47 $ 130 $ 132

Income tax expense

Depreciation and amortization

99 93 194 185

$ 193 $ 196 $ 452 $ 443

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Loews Hotels & Co

The following table summarizes the results of operations for Loews Hotels & Co for the three months ended March 31, 2022 and 2021 as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report:

Three Months Ended March 31

The following table summarizes the results of operations for Loews Hotels & Co for the three and six months ended June 30, 2022 and 2021, as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022

(In millions)

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Revenues related to reimbursable expenses 32 22 61 40

Total 200 98 352 155

Operating and other:

Operating 123 80 231 138

Asset impairment 14 14

Reimbursable expenses 32 22 61 40

Depreciation 15 16

Depreciation and amortization expense 16 16 31 32

Equity (income) loss from joint ventures (53) (3) (79) 9

Interest 4 9 8 17

Total 136 124 266 236

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Net income (loss) attributable to Loews Corporation $ 44 $ (21) $ 59 $ (64)

Loews Hotels & Co’s results have significantly improved for the three months ended March 31, 2022 as compared with the comparable 2021 period as overall travel demand and resulting business levels were considerably higher in 2022.

Net income (loss) attributable to Loews Corporation improved by $65 million and $123 million for the three and six months ended June 30, 2022 as compared to the comparable prior year periods.

Loews Hotels & Co’s results significantly improved for the three and six months ended June 30, 2022 as compared with the comparable 2021 periods as overall travel demand and resulting business levels were considerably higher in 2022.

Travel, particularly to resort destinations, has significantly rebounded from the impacts of the COVID-19 pandemic causing overall occupancy rates to improve.

However, occupancy rates have not reached pre-pandemic levels at some hotels owned and/or operated by Loews Hotels & Co, notably those located in city centers.

Operating revenues improved by $84 million and operating expenses increased by $50 million for the three months ended March 31, 2022 as compared with the comparable 2021 period.

Operating revenues improved by $92 million and $176 million and operating expenses increased by $43 million and $93 million for the three and six months ended June 30, 2022 as compared with the comparable 2021 periods.

The increase in operating revenues was driven by stronger occupancy levels and higher average daily rates at many hotels in 2022 as compared to 2021.

Operating expenses have likewise increased to support the higher demand levels and resumption of additional pre-pandemic services.

As additional hotels continue to achieve greater occupancy levels, operating expenses may continue to increase.

Equity (income) loss from joint ventures improved $38 million for the three months ended March 31, 2022 as compared with the comparable 2021 period.

This improvement was the result of having all 9,000 rooms available at the Universal Orlando Resort along with greater occupancy levels and higher average daily rates, particularly at the Universal Orlando Resort.

Interest expense for the three months ended March 31, 2022 decreased $4 million as compared with the comparable 2021 period due primarily to the increase in fair value of an interest rate cap that was executed in the first quarter of 2022, capitalized interest on a project under development, and lower average debt balances.

Equity (income) loss from joint ventures improved $50 million and $88 million for the three and six months ended June 30, 2022 as compared with the comparable 2021 periods.

This improvement was the result of having all 9,000 rooms available at the Universal Orlando Resort in the first half of 2022 along with greater occupancy levels and higher average daily rates, particularly at the Universal Orlando Resort.

During the second quarter of 2022, Loews Hotels & Co recorded an impairment charge of $14 million to reduce the carrying value of an asset to its estimated fair value.

Interest expense decreased $5 million and $9 million for the three and six months ended June 30, 2022 as compared with the comparable 2021 periods due primarily to the increase in fair value of an interest rate cap that was executed in the first quarter of 2022, higher capitalized interest on a project under development, and lower average debt balances.

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Corporate operations consist primarily of investment income, interest expense and administrative costs at the Parent Company.

Investment income includes earnings on cash and short term investments held at the Parent Company to meet current and future liquidity needs, as well as results of the trading portfolio held at the Parent Company.

Corporate also includes Altium Packaging recorded under the equity method of accounting for the three months ended March 31, 2022 and includes the consolidated operating results of Altium Packaging for the three months ended March 31, 2021 .

The following table summarizes the results of operations for Corporate for the three months ended March 31, 2022 and 2021 as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report:

Three Months Ended March 31

Corporate also includes the consolidated operations of Altium Packaging through March 31, 2021 and the equity method of accounting for Altium Packaging subsequent to its deconsolidation on April 1, 2021.

The following table summarizes the results of operations for Corporate for the three and six months ended June 30, 2022 and 2021 as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report:

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022

(In millions)

Net investment income (loss) $ (65) $ 24 $ (81) $ 70

Investment gains 540 540

Operating revenues and other 2 2 281

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Interest 22 22 44 70

Loss before income tax (60) (29)

Total 45 52 89 408

Income (loss) before income tax (108) 512 (168) 483

Income tax (expense) benefit 22 (114) 33 (145)

Net loss attributable to Loews Corporation $ (49) $ (60)

Net investment loss for the Parent Company was $16 million for the three months ended March 31, 2022 as compared with income of $46 million for the comparable 2021 period, primarily due to a decline in the fair value of equity based investments.

Operating revenues and other for the three months ended March 31, 2021 include $280 million of consolidated operating revenues for Altium Packaging .

Operating and other expenses decreased for the three months ended March 31, 2022 as compared with the comparable 2021 period, primarily due to $279 million of consolidated operating expenses for Altium Packaging during the three months ended March 31, 2021 as compared with the equity method of accounting for Altium Packaging during the three months ended March 31, 2022.

Operating and other expenses also include lower legal and other corporate overhead expenses at the Parent Company for the three months ended March 31, 2022 as compared with the comparable 2021 period.

Interest expenses decreased $26 million for the three months ended March 31, 2022 as compared with the comparable 2021 period, primarily due to $26 million of consolidated interest expenses for Altium Packaging for the three months ended March 31, 2021, which included a charge of approximately $14 million to write off debt issuance costs for the early retirement of debt.

Income tax expense for the three months ended March 31, 2021 included the recognition of a $35 million deferred tax liability resulting from the asset held for sale designation of Altium Packaging.

Net income (loss) attributable to Loews Corporation $ (86) $ 398 $ (135) $ 338

Net investment losses for the Parent Company were $65 million and $81 million for the three and six months ended June 30, 2022 as compared with income of $24 million and $70 million for the comparable 2021 periods, primarily due to the decline in fair value of equity based investments.

Investment gains of $540 million for the three and six months ended June 30, 2021 were primarily due to a gain of $555 million ($438 million after tax) on the sale of 47% of Altium Packaging and deconsolidation on April 1, 2021.

Operating revenues and other for the six months ended June 30, 2021 include $280 million of consolidated operating revenues for Altium Packaging through March 31, 2021.

Operating and other expenses decreased $7 million for the three months ended June 30, 2022 as compared with the comparable 2021 period, primarily due to lower corporate overhead expenses at the Parent Company.

Operating and other expenses decreased $293 million for the six months ended June 30, 2022 as compared with the comparable 2021 period, primarily due to $279 million of operating expenses for Altium Packaging through March 31, 2021 prior to its deconsolidation and use of the equity method for Altium Packaging since its deconsolidation.

In addition, there were lower corporate overhead and legal expenses at the Parent Company for the six months ended June 30, 2022 as compared with the comparable 2021 period .

Interest expenses decreased $26 million for the six months ended June 30, 2022 as compared with the comparable 2021 period due to consolidated interest expenses for Altium Packaging through March 31, 2021, which included a charge of approximately $14 million to write off debt issuance costs for the early retirement of debt.

Income tax expense of $114 million and $145 million for the three and six months ended June 30, 2021 includes the recognition of $117 million of taxes on the investment gain related to the sale of 47% of Altium Packaging.

The income tax

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expense for the six months ended June 30, 2021 also included the recognition of a $40 million deferred tax liability related to the sale of Altium Packaging.

LIQUIDITY AND CAPITAL RESOURCES

Parent Company

Parent Company cash and investments, net of receivables and payables, totaled $3.8 billion at March 31, 2022 as compared to $3.4 billion at December 31, 2021.

During the three months ended March 31, 2022 , we received $584 million in cash dividends from CNA, including a special cash dividend of $486 million.

Cash outflows during the three months ended March 31, 2022 included the payment of $132 million to fund treasury stock purchases and $15 million of cash dividends to our shareholders.

Parent Company cash and investments, net of receivables and payables, totaled $3.5 billion at June 30, 2022 as compared to $3.4 billion at December 31, 2021.

During the six months ended June 30, 2022 , we received $681 million in cash dividends from CNA, including a special cash dividend of $486 million.

Cash outflows during the six months ended June 30, 2022 included the payment of $380 million to fund treasury stock purchases, $31 million of cash dividends to our shareholders and $33 million of cash contributions to Loews Hotels & Co.

As a holding company we depend on dividends from our subsidiaries and returns on our investment portfolio to fund our obligations.

We also have an effective shelf registration statement on file with the Securities and Exchange Commission (“SEC”) registering the future sale of an unlimited amount of our debt and equity securities from time to time.

We also have an effective shelf registration statement on file with the Securities and Exchange Commission (“SEC”) registering the future sale of an unspecified amount of our debt, equity or hybrid securities from time to time.

We are not responsible for the liabilities and obligations of our subsidiaries and there are no Parent Company guarantees.

Depending on market and other conditions, we may purchase our shares and shares of our subsidiaries outstanding common stock in the open market, in privately negotiated transactions or otherwise.

During the three months ended March 31, 2022 , we purchased 2.1 million shares of Loews Corporation common stock.

As of April 29, 2022, we had purchased an additional 0.3 million shares of Loews Corporation common stock in 2022 at an aggregate cost of $19 million.

As of April 29, 2022, there were 246,108,045 shares of Loews Corporation common stock outstanding.

During the six months ended June 30, 2022 , we purchased 6.3 million shares of Loews Corporation common stock.

As of July 29, 2022, we had purchased an additional 1.3 million shares of Loews Corporation common stock in 2022 at an additional aggregate cost of $75 million.

As of July 29, 2022, there were 240,947,343 shares of Loews Corporation common stock outstanding.

Future uses of our cash may include investing in our subsidiaries, new acquisitions, dividends and/or repurchases of our and our subsidiaries’ outstanding common stock.

The declaration and payment of future dividends to holders of our common stock will be at the discretion of our Board of Directors and will depend on many factors, including our earnings, financial condition and business needs.

CNA’s cash provided by operating activities was $645 million for the three months ended March 31, 2022 and $82 million for the comparable 2021 period.

CNA’s cash provided by operating activities was $1.3 billion for the six months ended June 30, 2022 and $685 million for the comparable 2021 period.

The increase in cash provided by operating activities was driven by the prior year payment of the EWC LPT premium.

CNA paid a cash dividend of $2.40 per share on its common stock, including a special cash dividend of $2.00 per share, during the three months ended March 31, 2022 .

On April 29, 2022, CNA’s Board of Directors declared a quarterly cash dividend of $0.40 per share payable June 2, 2022 to shareholders of record on May 16, 2022 .

CNA paid cash dividends of $2.80 per share on its common stock, including a special cash dividend of $2.00 per share, during the six months ended June 30, 2022.

On July 29, 2022, CNA’s Board of Directors declared a quarterly cash dividend of $0.40 per share payable September 1, 2022 to shareholders of record on August 15, 2022 .

CNA’s declaration and payment of future dividends is at the discretion of its Board of Directors and will depend on many factors, including CNA’s earnings, financial condition, business needs and regulatory constraints.

CNA believes that its present cash flows from operating, investing and financing activities are sufficient to fund its current and expected working capital and debt obligation needs and does not expect this to change in the near term.

Dividends from Continental Casualty Company (“CCC”), a subsidiary of CNA, are subject to the insurance holding company laws of the State of Illinois, the domiciliary state of CCC.

Dividends to CNA from Continental Casualty Company (“CCC”), a subsidiary of CNA, are subject to the insurance holding company laws of the State of Illinois, the domiciliary state of CCC.

Under these laws, ordinary dividends, or dividends that do not require prior approval by the Illinois Department of Insurance (the “Department”), are determined based on the greater of the prior year’s statutory net income or 10% of statutory surplus as of the end of the prior year, as well as the timing and amount of dividends paid in the preceding 12 months.

Additionally, ordinary dividends may only be paid from earned surplus, which is calculated by removing unrealized gains from unassigned surplus.

As of March 31, 2022, CCC was in a positive earned surplus position.

CCC paid dividends of $535 million and $330 million during the three months ended March 31, 2022 and 2021.

As of June 30, 2022, CCC was in a positive earned surplus position.

CCC paid dividends of $690 million and $480 million during the six months ended June 30, 2022 and 2021.

The actual level of dividends paid in any year is determined after an assessment of available dividend capacity, holding company liquidity and cash needs as well as the impact the dividends will have on the statutory surplus of the applicable insurance company.

CNA has an effective shelf registration statement on file with the SEC under which it may publicly issue debt, equity or hybrid securities from time to time.

Boardwalk Pipelines’ cash provided by operating activities increased $13 million for the three months ended March 31, 2022 compared to the comparable 2021 period, primarily due to the change in net income.

For the three months ended March 31, 2022 and 2021, Boardwalk Pipelines’ capital expenditures were $60 million and $53 million, consisting of growth capital expenditures of $35 million and $34 million and maintenance capital expenditures of $18 million and $19 million.

Boardwalk Pipelines also paid $7 million for natural gas to be used in its integrated natural gas pipeline system in the 2022 period.

CNA has an effective shelf registration statement on file with the SEC under which it may publicly issue an unspecified amount of debt, equity or hybrid securities from time to time.

Boardwalk Pipelines’ cash provided by operating activities increased $35 million for the six months ended June 30, 2022 compared to the comparable 2021 period, primarily due to the timing of receivables and prepaids.

For the six months ended June 30, 2022 and 2021, Boardwalk Pipelines’ capital expenditures were $122 million and $138 million, consisting of growth capital expenditures of $76 million and $86 million and maintenance capital

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expenditures of $39 million and $52 million.

During the six months ended June 30, 2022, Boardwalk Pipelines also spent $7 million on natural gas to be used in its integrated natural gas pipeline system.

Boardwalk Pipelines anticipates that its existing capital resources, including its cash on hand, revolving credit facility and cash flows from operating activities, will be adequate to fund its operations and capital expenditures for 2022 and to retire the outstanding $300 million aggregate principal amount of its 3.4% senior notes due in February of 2023.

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Boardwalk Pipelines used the proceeds to retire the outstanding $300 million aggregate principal amount of its 4.0% senior notes due June 2022 in March of 2022, to fund growth capital expenditures and for general corporate purposes.

As of March 31, 2022, Boardwalk Pipelines had no outstanding borrowings and all of the $1.0 billion available borrowing capacity under its revolving credit facility.

During 2022, Loews Hotels & Co anticipates funding its development projects in progress with cash on hand, cash generated from operations, and, if necessary, cash contributions from Loews Corporation.

As of March 31, 2022, Loews Hotels & Co, through its subsidiaries, has loans that mature within twelve months and is actively working with lenders to refinance $93 million in current maturities of long term debt.

In June of 2022, Boardwalk Pipelines’ revolving credit facility was amended to, among other things, extend the maturity date by one year to May 27, 2027, while preserving the two one-year extensions that can be exercised at Boardwalk Pipelines’ election and complete a full transition to interest rates based on the term Secured Overnight Financing Rate (“SOFR”).

As of June 30, 2022, Boardwalk Pipelines had no outstanding borrowings and all of the $1.0 billion available borrowing capacity under its revolving credit facility.

As of June 30, 2022, Loews Hotels & Co, through its subsidiaries, has loans that mature within twelve months and is actively working with lenders to refinance $13 million in current maturities of long term debt.

Extending these loans, along with certain loans of unconsolidated joint venture partnerships, may require Loews Hotels & Co to make principal pay downs, establish restricted cash reserves or provide guaranties of a subsidiary’s debt.

Through the date of this Report, none of Loews Hotels & Co’s subsidiaries are in default on any of their loans.

Through July 29, 2022, Loews Hotels & Co received capital contributions of $33 million from Loews Corporation to fund development projects.

Investment activities of our non-insurance subsidiaries primarily consist of investments in fixed income securities, including short term investments.

The Parent Company portfolio also includes equity securities, including short sales and derivative instruments, and investments in limited partnerships.

Certain of these types of investments generally have greater volatility, less liquidity and greater risk than fixed income investments and are included within Results of Operations – Corporate.

Certain of these types of Parent Company investments generally have greater volatility, less liquidity and greater risk than fixed income investments and are included within Results of Operations – Corporate.

The Parent Company enters into short sales and invests in certain derivative instruments that are used for asset and liability management activities, income enhancements to its portfolio management strategy and to benefit from anticipated future movements in the underlying markets.

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CNA’s investment portfolio supports its obligation to pay future insurance claims and provides investment returns which are an important part of CNA’s overall profitability.

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Net Investment Income

1 unchanged sentence

Fixed income securities, as presented, include both fixed maturity securities and non-redeemable preferred stock.

Three Months Ended March 31

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022

(In millions)

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Net investment income $ 432 $ 591 $ 880 $ 1,095

Effective income yield for the fixed income securities

portfolio 4.3 % 4.4 %

Effective income yield for the fixed income securities portfolio 4.3 % 4.3 % 4.3 % 4.4 %

Limited partnership and common stock return (0.7)% 8.3 % (0.3)% 12.1 %

CNA’s net investment income decreased $56 million for the three months ended March 31, 2022 as compared with the comparable 2021 period driven by lower limited partnership and common stock returns.

CNA’s net investment income decreased $159 million and $215 million for the three and six months ended June 30, 2022 as compared with the comparable 2021 periods, driven by unfavorable limited partnership and common stock results, partially offset by higher income from fixed income securities.

Investment Gains (Losses)

The components of CNA’s investment gains (losses) are presented in the following table:

Three Months Ended March 31

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022

(In millions)

11 unchanged sentences

Investment gains (losses) attributable to Loews Corporation $ (36) $ 24 $ (39) $ 68

CNA’s investment results decreased $68 million for the three months ended March 31, 2022 as compared with the comparable 2021 period, driven by the unfavorable change in fair value of non-redeemable preferred stock and lower net investment gains on disposals of fixed maturity securities.

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CNA’s investment results decreased $97 million and $165 million for the three and six months ended June 30, 2022 as compared with the comparable 2021 periods, driven by the unfavorable change in fair value of non-redeemable preferred stock.

Further information on CNA’s investment gains and losses is set forth in Note 2 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

1 unchanged sentence

The following table presents the estimated fair value and net unrealized gains (losses) of CNA’s fixed maturity securities by rating distribution:

March 31, 2022

June 30, 2022

December 31, 2021

11 unchanged sentences

Total $ 39,385 $ (1,825) $ 44,380 $ 4,446

As of March 31, 2022 and December 31, 2021, 1% of CNA’s fixed maturity portfolio was rated internally.

AAA rated securities included $1.5 billion and $1.7 billion of pre-refunded municipal bonds as of March 31, 2022 and December 31, 2021.

As of June 30, 2022 and December 31, 2021, 1% of CNA’s fixed maturity portfolio was rated internally.

AAA rated securities included $0.6 billion and $1.7 billion of pre-refunded municipal bonds as of June 30, 2022 and December 31, 2021.

The following table presents CNA’s available-for-sale fixed maturity securities in a gross unrealized loss position by ratings distribution:

March 31, 2022

June 30, 2022

Estimated Fair Value

3 unchanged sentences

Government-sponsored enterprises $ 2,150 $ 223

AAA 1,232 205

BBB 11,806 1,111

1 unchanged sentence

Total $ 26,363 $ 2,842

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The following table presents the maturity profile for these available-for-sale fixed maturity securities.

Securities not due to mature on a single date are allocated based on weighted average life:

March 31, 2022

June 30, 2022

Estimated Fair Value

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Amounts presented are net of payable and receivable amounts for securities purchased and sold, but not yet settled.

March 31, 2022

June 30, 2022

December 31, 2021

5 unchanged sentences

Total $ 41,041 6.8 $ 47,373 6.6

The effective duration of investments supporting Other Insurance Operations liabilities at June 30, 2022 lengthened as compared with December 31, 2021, reflecting strategic repositioning to capitalize on higher rates and reduce reinvestment risk.

CNA’s investment portfolio is periodically analyzed for changes in duration and related price risk.

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A summary of these risks and specific analysis on changes is included in the Quantitative and Qualitative Disclosures about Market Risk included under Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2021.

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CRITICAL ACCOUNTING ESTIMATES

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Such estimates and judgments necessarily involve varying, and possibly significant, degrees of uncertainty.

Accordingly, certain amounts currently recorded in the financial statements will likely be adjusted in the future based on new available information and changes in other facts and circumstances.

Accordingly, certain amounts currently recorded or disclosed in the financial statements will likely be adjusted in the future based on new available information and changes in other facts and circumstances.

See the Critical Accounting Estimates and the Insurance Reserves sections of our MD&A included under Item 7 of our Annual Report on Form 10-K for the year en ded December 31, 2021 for further information.

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The net impact of these changes is expected to be a $2.0 billion - $2.3 billion (after tax and noncontrolling interests) decrease in Accumulated other comprehensive income as of the transition date of January 1, 2021.

To illustrate the sensitivity of this adjustment, had the interest rates in effect as of March 31, 2022 been used in the calculation, the transition impact would have been a $0.9 billion - $1.2 billion (after tax and noncontrolling interests) decrease in Accumulated other comprehensive income.

To illustrate the sensitivity of this adjustment, had the interest rates in effect as of June 30, 2022 been used in the calculation, the transition impact would have been a $0.3 billion - $0.6 billion (after tax and noncontrolling interests) decrease in Accumulated other comprehensive income.

For a discussion of accounting standards updates that have been adopted or will be adopted in the future, please read Note 1 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

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In addition, any statement concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible actions taken by us or our subsidiaries are also forward-looking statements as defined by the Act.

Forward-looking

statements are based on current expectations and projections about future events and are inherently subject to a variety of risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those anticipated or projected.

Forward-looking statements are based on current expectations and projections about future events and are inherently subject to a variety of risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those anticipated or projected.

Developments in any of the risks or uncertainties facing us or our subsidiaries, including those described under Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2021 and in our and our subsidiaries’ other filings with the SEC, could cause our and our subsidiaries’ results to differ materially from results that have been or may be anticipated or projected.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis