14 unchanged sentences
and the Corporate segment.
−Removed: 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.
−Removed: 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 .
−Removed: 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.
+Added: The Corporate segment is primarily comprised of Loews Corporation, excluding its operating subsidiaries, and the equity method of accounting for Altium Packaging LLC (“Altium Packaging”).
+Added: Unless the context otherwise requires, as used herein, 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.
4 unchanged sentences
Consolidated Financial Results
−Removed: 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 nine months ended September 30, 2022 and 2021:
−Removed: Three Months Ended Nine Months Ended
−Removed: September 30, September 30,
−Removed: 2022 2021 2022
+Added: 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, 2023 and 2022:
+Added: Three Months Ended March 31 2023 2022
(In millions, except per share data)
−Removed: CNA Financial $ 115 $ 229 $ 579 $ 838
+Added: CNA Financial (a) $ 268 $ 265
Boardwalk Pipelines 86 91
1 unchanged sentence
Corporate (3) (49)
−Removed: Net income attributable to Loews Corporation $ 130 $ 220 $ 648 $ 1,235
−Removed: Basic net income per share $ 0.54 $ 0.86 $ 2.65 $ 4.71
−Removed: Diluted net income per share $ 0.54 $ 0.85 $ 2.64 $ 4.70
−Removed: Net income attributable to Loews Corporation for the three months ended September 30, 2022 was $130 million, or $0.54 per share, compared to $220 million, or $0.85 per share in the comparable 2021 period.
−Removed: Net income attributable to Loews Corporation for the nine months ended September 30, 2022 was $648 million, or $2.64 per share, compared to $1.2 billion, or $4.70 per share in the comparable 2021 period.
−Removed: Net income attributable to Loews Corporation in the third quarter of 2022 as compared to the comparable 2021 period included higher underwriting income and increased net investment income from fixed income securities at CNA and improved results at Loews Hotels & Co offset by losses from limited partnership and common stock investments and net investment losses from sales of fixed income securities at CNA.
−Removed: The Corporate segment included a gain of $438 million (after tax) related to the sale of 47% of Altium Packaging and its deconsolidation in the nine months ended September 30, 2021.
−Removed: Excluding this significant transaction, the drivers of the decrease in net income attributable to Loews Corporation for the nine months ended September 30, 2022 as compared to the comparable 2021 period are consistent with the three-month discussion above.
+Added: Net income attributable to Loews Corporation (a) $ 375 $ 322
+Added: Basic net income per share (a) $ 1.61 $ 1.30
+Added: Diluted net income per share (a) $ 1.61 $ 1.29
+Added: (a) As of January 1, 2023, Accounting Standards Update (“ASU”) 2018-12, “ Financial Services – Insurance (Topic 944):
+Added: Targeted Improvements to the Accounting for Long-Duration Contracts,” (“ASU 2018-12”) was adopted using the modified retrospective method applied as of the transition date of January 1, 2021.
+Added: Prior period amounts presented in the financial statements have been adjusted to reflect application of the new guidance.
+Added: For additional information see Notes 1 and 5 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.
+Added: Net income attributable to Loews Corporation in the first quarter of 2023 as compared to the comparable 2022 period included higher net investment income and improved non-catastrophe current accident year underwriting results at CNA, higher net investment income at the Parent Company, and improved results at Loews Hotels & Co partially offset by higher catastrophe losses, unfavorable net prior year loss reserve development, and higher investment losses at CNA, and lower net income from Boardwalk Pipelines, as higher revenues were offset by the increase in maintenance costs.
CNA Financial
−Removed: The following table summarizes the results of operations for CNA for the three and nine months ended September 30, 2022 and 2021 as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.
+Added: The following table summarizes the results of operations for CNA for the three months ended March 31, 2023 and 2022 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.
−Removed: Three Months Ended Nine Months Ended
−Removed: September 30, September 30,
−Removed: 2022 2021 2022
+Added: Three Months Ended March 31 2023 2022 (a)
(In millions)
1 unchanged sentence
Net investment income 525 448
−Removed: Investment gains (losses) (96) 22 (166) 117
+Added: Investment losses (35) (11)
Non-insurance warranty revenue 407 382
12 unchanged sentences
Net income attributable to Loews Corporation $ 268 $ 265
−Removed: Three Months Ended September 30, 2022 Compared to the Comparable 2021 Period
−Removed: Net income attributable to Loews Corporation decreased $114 million for the three months ended September 30, 2022 as compared with the comparable 2021 period primarily due to lower net investment income and investment losses for the three months ended September 30, 2022 as compared with investment gains in the comparable 2021 period.
−Removed: Lower net investment income was driven by unfavorable limited partnership and common stock results and lower investment results were driven by net losses on fixed maturity securities.
−Removed: 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 September 30, 2022 as compared with the comparable 2021 period.
−Removed: Catastrophe losses were $114 million ($80 million after tax and noncontrolling interests) for the three months ended September 30, 2022 as compared with $178 million ($125 million after tax and noncontrolling interests) in the comparable 2021 period.
−Removed: Catastrophe losses for the three months ended September 30, 2022 were driven by severe weather related events, including $87 million for Hurricane Ian.
−Removed: Catastrophe losses for the three months ended September 30, 2021 included $114 million for Hurricane Ida.
−Removed: Nine Months Ended September 30, 2022 Compared to the Comparable 2021 Period
−Removed: Net income attributable to Loews Corporation decreased $259 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period primarily due to lower net investment income and investment losses for the nine months ended September 30, 2022 as compared with investment gains in the comparable 2021 period.
−Removed: Lower net investment income was driven by unfavorable limited partnership and common stock results and lower investment results were driven by the unfavorable change in fair value of non-redeemable preferred stock and net losses on fixed maturity securities.
−Removed: These decreases to net income were partially offset by improved underwriting results and higher net investment income from fixed income securities for the nine months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: Catastrophe losses were $171 million ($121 million after tax and noncontrolling interests) for the nine months ended September 30, 2022 as compared with $357 million ($251 million after tax and noncontrolling interests) in the comparable 2021 period.
−Removed: Catastrophe losses for the nine months ended September 30, 2022 were driven by severe weather related events, including $87 million for Hurricane Ian.
−Removed: Catastrophe losses for the nine months ended September 30, 2021 were driven by severe weather related events, primarily Hurricane Ida and Winter Storms Uri and Viola.
+Added: (a) As of January 1, 2023, ASU 2018-12 was adopted using the modified retrospective method applied as of the transition date of January 1, 2021.
+Added: Prior period amounts presented in the financial statements have been adjusted to reflect application of the new guidance.
+Added: For additional information see Notes 1 and 5 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.
+Added: Net income attributable to Loews Corporation increased $3 million for the three months ended March 31, 2023 as compared with the comparable 2022 period primarily due to higher net investment income from fixed income securities and limited partnership and common stock returns and improved non-catastrophe current accident year underwriting results.
+Added: These increases to net income were offset by higher catastrophe losses, unfavorable net prior year loss reserve development and higher investment losses on fixed maturity securities for the three months ended March 31, 2023 as compared with the comparable 2022 period.
+Added: Catastrophe losses were $52 million ($37 million after tax and noncontrolling interests) for the three months ended March 31, 2023 as compared with $19 million ($13 million after tax and noncontrolling interests) in the comparable 2022 period.
+Added: Results for the three months ended March 31, 2023 were impacted by unfavorable net pension costs related to CNA’s legacy United States of America (“U.S.”) pension plan, primarily due to higher interest cost on projected benefit obligations as a result of an increase in discount rates year over year, as well as a lower expected return on plan assets as a result of a lower plan asset base given actual asset returns in 2022.
+Added: A portion of this additional cost has resulted in an unfavorable impact on the expense ratio for the three months ended March 31, 2023.
CNA’s Property & Casualty and Other Insurance Operations
4 unchanged sentences
In assessing its insurance operations, CNA utilizes the core income (loss) financial measure.
−Removed: Core income (loss) is calculated by excluding from net income (loss), investment gains or losses and any cumulative effects of changes in accounting guidance.
+Added: Core income (loss) is calculated by excluding investment gains or losses from net income (loss).
In addition, core income (loss) excludes the effects of noncontrolling interests.
1 unchanged sentence
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.
−Removed: Please see the non-GAAP reconciliation of core income (loss) to net income (loss) that follows in this MD&A.
+Added: Please see the non-GAAP reconciliation of net income (loss) to core income (loss) that follows in this MD&A.
Property & Casualty Operations
−Removed: In evaluating the results of Property & Casualty Operations, CNA utilizes the loss ratio, the loss ratio excluding catastrophes and development, the expense ratio, the dividend ratio, the combined ratio and the combined ratio excluding catastrophes and development.
+Added: In evaluating the results of Property & Casualty Operations, CNA utilizes the loss ratio, the underlying loss ratio, the expense ratio, the dividend ratio, the combined ratio and the underlying combined ratio.
These ratios are calculated using GAAP financial results.
The loss ratio is the percentage of net incurred claim and claim adjustment expenses to net earned premiums.
−Removed: The loss ratio excluding catastrophes and development excludes catastrophes losses and changes in estimates of claim and claim adjustment expense reserves, net of reinsurance, for prior years from the loss ratio.
+Added: The underlying loss ratio excludes the impact of catastrophe losses and development-related items from the loss ratio.
+Added: Development-related items represent net prior year loss reserve and premium development, and includes the effects of interest accretion and change in allowance for uncollectible reinsurance and deductible amounts.
The expense ratio is the percentage of insurance underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums.
1 unchanged sentence
The combined ratio is the sum of the loss, expense and dividend ratios.
−Removed: The combined ratio excluding catastrophes and development is the sum of the loss ratio excluding catastrophes and development, the expense ratio and the dividend ratio.
+Added: The underlying combined ratio is the sum of the underlying loss ratio, the expense ratio and the dividend ratio.
In addition, renewal premium change, rate, retention and new business are also utilized in evaluating operating trends.
3 unchanged sentences
Exposure represents the measure of risk used in the pricing of the insurance product.
+Added: The change in exposure represents the change in premium dollars on policies that renew as a result of the change in risk of the policy.
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.
−Removed: Renewal premium change, rate and retention presented for the prior period are updated to reflect subsequent activity on policies written in the period.
New business represents premiums from policies written with new customers and additional policies written with existing customers.
Gross written premiums, excluding third-party captives, excludes business which is ceded to third-party captives, including business related to large warranty programs.
−Removed: The following tables summarize the results of CNA’s Property & Casualty Operations for the three and nine months e nded September 30, 2022 and 2021.
−Removed: Three Months Ended September 30, 2022 Specialty
−Removed: International
−Removed: (In millions, except %)
−Removed: Gross written premiums $ 1,890 $ 1,187 $ 288 $ 3,365
−Removed: Gross written premiums excluding third-party captives 958 1,184 288 2,430
−Removed: Net written premiums 840 962 258 2,060
−Removed: Net earned premiums 810 1,023 270 2,103
−Removed: Net investment income 102 112 16 230
−Removed: Core income 161 80 19 260
−Removed: Other performance metrics:
−Removed: Loss ratio excluding catastrophes and development 58.4 % 61.5 % 58.6 % 59.9 %
−Removed: Effect of catastrophe impacts 0.2 10.0 4.1 5.5
−Removed: Effect of development-related items (1.9) (0.8)
−Removed: Loss ratio 56.7 % 71.5 % 62.7 % 64.6 %
−Removed: Expense ratio 31.7 29.9 31.7 30.8
−Removed: Dividend ratio 0.3 0.5 0.4
−Removed: Combined ratio 88.7 % 101.9 % 94.4 % 95.8 %
−Removed: Combined ratio excluding catastrophes and development 90.4 % 91.9 % 90.3 % 91.1 %
−Removed: Rate 5 % 4 % 6 % 5 %
−Removed: Renewal premium change 6 8 12 8
−Removed: Retention 87 84 82 85
−Removed: New business $ 130 $ 246 $ 79 $ 455
−Removed: Three Months Ended September 30, 2021
−Removed: Gross written premiums $ 1,953 $ 1,010 $ 276 $ 3,239
−Removed: Gross written premiums excluding third-party captives 943 1,005 276 2,224
−Removed: Net written premiums 822 831 256 1,909
−Removed: Net earned premiums 773 893 271 1,937
−Removed: Net investment income 116 141 14 271
−Removed: Core income 173 27 17 217
−Removed: Other performance metrics:
−Removed: Loss ratio excluding catastrophes and development 59.1 % 61.5 % 58.9 % 60.2 %
−Removed: Effect of catastrophe impacts 0.4 18.6 3.4 9.2
−Removed: Effect of development-related items (1.8) 0.5 1.1 (0.3)
−Removed: Loss ratio 57.7 % 80.6 % 63.4 % 69.1 %
−Removed: Expense ratio 30.6 30.4 32.1 30.7
−Removed: Dividend ratio (0.1) 0.6 0.2
−Removed: Combined ratio 88.2 % 111.6 % 95.5 % 100.0 %
−Removed: Combined ratio excluding catastrophes and development 89.6 % 92.5 % 91.0 % 91.1 %
−Removed: Rate 10 % 6 % 13 % 8 %
−Removed: Renewal premium change 11 9 13 10
−Removed: Retention 80 83 79 81
−Removed: New business $ 147 $ 204 $ 54 $ 405
−Removed: Nine Months Ended September 30, 2022 Specialty
+Added: CNA uses underwriting gain (loss), calculated using GAAP financial results, to monitor insurance operations.
+Added: Underwriting gain (loss) is pretax and is calculated as net earned premiums less total insurance expenses, which includes insurance claims and policyholders’ benefits, amortization of deferred acquisition costs and other insurance related expenses.
+Added: The following tables summarize the results of CNA’s Property & Casualty Operations for the three months e nded March 31, 2023 and 2022.
+Added: Three Months Ended March 31, 2023 Specialty
International
4 unchanged sentences
Net earned premiums 797 1,046 290 2,133
+Added: Underwriting gain 80 41 9 130
Net investment income 129 149 23 301
13 unchanged sentences
New business $ 108 $ 310 $ 85 $ 503
−Removed: Nine Months Ended September 30, 2021
+Added: Three Months Ended March 31, 2022
Gross written premiums $ 1,846 $ 1,208 $ 363 $ 3,417
2 unchanged sentences
Net earned premiums 772 904 264 1,940
+Added: Underwriting gain 88 48 20 156
Net investment income 103 118 14 235
13 unchanged sentences
New business $ 145 $ 228 $ 78 $ 451
−Removed: Three Months Ended September 30, 2022 Compared to the Comparable 2021 Period
−Removed: Gross written premiums, excluding third-party captives, for Specialty increased $15 million for the three months ended September 30, 2022 as compared with the comparable 2021 period driven by retention and rate.
−Removed: Net written premiums for Specialty increased $18 million for the three months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: The increase in net earned premiums for the three months ended September 30, 2022 was consistent with the trend in net written premiums for Specialty.
−Removed: Gross written premiums for Commercial increased $177 million for the three months ended September 30, 2022 as compared with the comparable 2021 period driven by higher new business and rate.
−Removed: Net written premiums for Commercial increased $131 million for the three months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: The increase in net earned premiums for the three months ended September 30, 2022 was consistent with the trend in net written premiums for Commercial.
−Removed: Gross written premiums for International increased $12 million for the three months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: Excluding the effect of foreign currency exchange rates, gross written premiums increased $31 million driven by higher new business and rate.
−Removed: Net written premiums for International increased $2 million for the three months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: Excluding the effect of foreign currency exchange rates, net written premiums increased $19 million for the three months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: Net earned premiums for the three months ended September 30, 2022 were consistent with the comparable 2021 period for International.
−Removed: Core income for Property & Casualty Operations increased $43 million for the three months ended September 30, 2022 as compared with the comparable 2021 period primarily due to improved underwriting results and higher net investment income from fixed income securities partially offset by lower net investment income from limited partnerships and common stock results.
−Removed: Total catastrophe losses were $114 million for the three months ended September 30, 2022 as compared with $178 million for the comparable 2021 period.
−Removed: For the three months ended September 30, 2022 and 2021, Specialty had catastrophe losses of $1 million and $3 million, Commercial had catastrophe losses of $103 million and $166 million and International had catastrophe losses of $10 million and $9 million.
−Removed: Favorable net prior year loss reserve development of $17 million and $10 million was recorded for the three months ended September 30, 2022 and 2021.
−Removed: For the three months ended September 30, 2022 and 2021, Specialty recorded favorable net prior year loss reserve development of $15 million in each period, Commercial recorded favorable net prior year loss reserve development of $2 million and unfavorable net prior year loss reserve development of $2 million and International recorded no net prior year loss reserve development and unfavorable net prior year loss reserve development of $3 million.
−Removed: 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.
−Removed: Specialty’s combined ratio increased 0.5 points for the three months ended September 30, 2022 as compared with the comparable 2021 period primarily due to a 1.1 point increase in the expense ratio largely offset by a 1.0 point improvement in the loss ratio.
−Removed: The increase in the expense ratio was largely due to higher underwriting expenses driven by investments in technology and talent.
−Removed: The improvement in the loss ratio was primarily driven by improved current accident year underwriting results.
−Removed: Commercial’s combined ratio improved 9.7 points for the three months ended September 30, 2022 as compared with the comparable 2021 period primarily due to a 9.1 point improvement in the loss ratio and a 0.5 point improvement in the expense ratio.
−Removed: The improvement in the loss ratio was primarily driven by lower catastrophe losses which were 10.0 points of the loss ratio for the three months ended September 30, 2022, as compared with 18.6 points of the loss ratio in the comparable 2021 period.
−Removed: The improvement in the expense ratio of 0.5 points was driven by higher net earned premiums and lower acquisition costs partially offset by an increase in underwriting expenses.
−Removed: International’s combined ratio improved 1.1 points for the three months ended September 30, 2022 as compared with the comparable 2021 period due to a 0.7 point improvement in the loss ratio and a 0.4 point improvement in the expense ratio.
−Removed: The improvement in the loss ratio was primarily due to improved non-catastrophe underwriting results.
−Removed: Catastrophe losses were 4.1 points of the loss ratio for the three months ended September 30, 2022, as compared with 3.4 points of the loss ratio in the comparable 2021 period.
−Removed: The improvement in the expense ratio of 0.4 points was primarily driven by lower acquisition costs partially offset by an increase in underwriting expenses.
−Removed: Nine Months Ended September 30, 2022 Compared to the Comparable 2021 Period
−Removed: Gross written premiums, excluding third-party captives, for Specialty increased $160 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period driven by retention and higher new business.
−Removed: Net written premiums for Specialty increased $93 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: The increase in net earned premiums for the nine months ended September 30, 2022 was consistent with the trend in net written premiums for Specialty.
−Removed: Gross written premiums for Commercial increased $540 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period driven by higher new business and retention.
−Removed: Net written premiums for Commercial increased $475 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: 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.
−Removed: Excluding the impact of the prior period written premium catch-up, net written premiums increased $363 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: The increase in net earned premiums for the nine months ended September 30, 2022 was consistent with the trend in net written premiums for Commercial.
−Removed: Gross written premiums for International increased $75 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: Excluding the effect of foreign currency exchange rates, gross written premiums increased $121 million driven by higher new business and retention.
−Removed: Net written premiums for International increased $56 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: Excluding the effect of foreign currency exchange rates, net written premiums increased $97 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: The increase in net earned premiums for the nine months ended September 30, 2022 was consistent with the trend in net written premiums for International.
−Removed: Core income for Property & Casualty Operations increased $67 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period primarily due to improved underwriting results and higher net investment income from fixed income securities partially offset by lower net investment income from limited partnership and common stock results.
−Removed: Total catastrophe losses were $171 million for the nine months ended September 30, 2022 as compared with $357 million for the comparable 2021 period.
−Removed: For the nine months ended September 30, 2022 and 2021, Specialty had catastrophe losses of $2 million and $9 million, Commercial had catastrophe losses of $148 million and $332 million and International had catastrophe losses of $21 million and $16 million.
−Removed: Favorable net prior year loss reserve development of $66 million and $36 million was recorded for the nine months ended September 30, 2022 and 2021.
−Removed: For the nine months ended September 30, 2022 and 2021, Specialty recorded favorable net prior year loss reserve development of $35 million and $40 million, Commercial recorded favorable net prior year loss reserve development of $26 million and unfavorable net prior year loss reserve development of $2 million and International recorded favorable net prior year loss reserve development of $5 million and unfavorable net prior year loss reserve development of $2 million.
+Added: Gross written premiums, excluding third-party captives, for Specialty for the three months ended March 31, 2023 were largely consistent with the comparable 2022 period.
+Added: Net written premiums for Specialty increased $17 million for the three months ended March 31, 2023 as compared with the comparable 2022 period.
+Added: The increase in net earned premiums for the three months ended March 31, 2023 was consistent with the trend in net written premiums for Specialty.
+Added: Gross written premiums for Commercial increased $234 million for the three months ended March 31, 2023 as compared with the comparable 2022 period driven by higher new business and rate.
+Added: Net written premiums for Commercial increased $187 million for the three months ended March 31, 2023 as compared with the comparable 2022 period.
+Added: The increase in net earned premiums for the three months ended March 31, 2023 was consistent with the trend in net written premiums for Commercial.
+Added: Gross written premiums for International increased $35 million for the three months ended March 31, 2023 as compared with the comparable 2022 period.
+Added: Excluding the effect of foreign currency exchange rates, gross written premiums increased $55 million driven by retention and higher new business.
+Added: Net written premiums for International increased $20 million for the three months ended March 31, 2023 as compared with the comparable 2022 period.
+Added: Excluding the effect of foreign currency exchange rates, net written premiums increased $35 million for the three months ended March 31, 2023 as compared with the comparable 2022 period.
+Added: The increase in n et earned premiums for the three months ended March 31, 2023 was consistent with the trend in net written premiums for International.
+Added: Core income for Property & Casualty Operations increased $25 million for the three months ended March 31, 2023 as compared with the comparable 2022 period primarily due to higher net investment income and improved non-catastrophe current accident year underwriting results, partially offset by higher catastrophe losses and unfavorable net prior year loss reserve development.
+Added: Total catastrophe losses were $52 million for the three months ended March 31, 2023 as compared with $19 million for the comparable 2022 period.
+Added: For the three months ended March 31, 2023 and 2022, Specialty had no catastrophe losses, Commercial had catastrophe losses of $44 million and $16 million and International had catastrophe losses of $8 million and $3 million.
+Added: Unfavorable net prior year loss reserve development of $13 million was recorded for the three months ended March 31, 2023 as compared with favorable net prior year loss reserve development of $12 million recorded for the three months ended March 31, 2022.
+Added: For the three months ended March 31, 2023 and 2022, Specialty recorded no net prior year loss reserve development and favorable net prior year loss reserve development of $10 million, Commercial recorded favorable net prior year loss reserve development of $2 million in each period and International recorded unfavorable net prior year loss reserve development of $15 million and no net prior year loss reserve development.
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.
−Removed: Specialty’s combined ratio increased 0.2 points for the nine months ended September 30, 2022 as compared with the comparable 2021 period primarily due to a 0.6 point increase in the expense ratio largely offset by a 0.5 point improvement in the loss ratio.
−Removed: The increase in the expense ratio was largely due to higher underwriting expenses driven by investments in technology and talent.
−Removed: The improvement in the loss ratio was primarily driven by improved current accident year underwriting results.
−Removed: Catastrophe losses were 0.1 point of the loss ratio for the nine months ended September 30, 2022, as compared with 0.4 points of the loss ratio in the comparable 2021 period.
−Removed: Commercial’s combined ratio improved 9.4 points for the nine months ended September 30, 2022 as compared with the comparable 2021 period primarily due to an 8.0 point improvement in the loss ratio and a 1.3 point improvement in the expense ratio.
−Removed: The improvement in the loss ratio was driven by lower catastrophe losses which were 5.0 points of the loss ratio for the nine months ended September 30, 2022, as compared with 12.6 points of the loss ratio in the comparable 2021 period, and favorable net prior year loss reserve development.
−Removed: The combined ratio excluding catastrophes and development improved 0.7 points for the nine months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: The improvement in the expense ratio of 1.3 points was driven by higher net earned premiums and lower acquisition costs partially offset by an increase in underwriting expenses.
−Removed: The loss ratio excluding catastrophes and development increased 0.7 points primarily driven by a shift in mix of business associated with the property quota share treaty purchased during June of 2021.
−Removed: Property coverages, which have a lower underlying loss ratio than most other commercial coverages, now represent a smaller proportion of net earned premiums.
−Removed: International’s combined ratio improved 2.0 points for the nine months ended September 30, 2022 as compared with the comparable 2021 period due to a 1.2 point improvement in the expense ratio and a 0.8 point improvement in the loss ratio.
−Removed: The improvement in the expense ratio was primarily driven by lower acquisition costs.
−Removed: The improvement in the loss ratio was driven by improved non-catastrophe underwriting results, partially offset by higher net catastrophe losses.
−Removed: Catastrophe losses were 2.7 points of the loss ratio for the nine months ended September 30, 2022, as compared with 2.0 points of the loss ratio in the comparable 2021 period.
+Added: Specialty’s combined ratio increased 1.3 points for the three months ended March 31, 2023 as compared with the comparable 2022 period due to a 0.8 point increase in the loss ratio and a 0.5 point increase in the expense ratio.
+Added: The increase in the loss ratio was primarily driven by no net prior year loss reserve development recorded for the three months ended March 31, 2023 as compared with $10 million of favorable net prior year loss reserve development recorded for the three months ended March 31, 2022, partially offset by improved current accident year underwriting results.
+Added: The increase in the expense ratio was primarily driven by employee related costs.
+Added: Commercial’s combined ratio increased 1.5 points for the three months ended March 31, 2023 as compared with the comparable 2022 period due to a 2.4 point increase in the loss ratio, partially offset by a 0.9 point improvement in the expense ratio.
+Added: The increase in the loss ratio was driven by higher catastrophe losses, which were 4.2 points of the loss ratio for the three months ended March 31, 2023, as compared with 1.8 points of the loss ratio in the comparable 2022 period.
+Added: The improvement in the expense ratio was driven by higher net earned premiums, partially offset by employee related costs.
+Added: International’s combined ratio increased 4.8 points for the three months ended March 31, 2023 as compared with the comparable 2022 period due to a 5.6 point increase in the loss ratio, partially offset by a 0.8 point improvement in the expense ratio.
+Added: The increase in the loss ratio was largely driven by unfavorable net prior period loss reserve development.
+Added: Catastrophe losses were 2.8 points of the loss ratio for the three months ended March 31, 2023, as compared with 1.2 points of the loss ratio in the comparable 2022 period.
+Added: The improvement in the expense ratio was largely driven by higher net earned premiums.
Other Insurance Operations
−Removed: The following table summarizes the results of CNA’s Other Insurance Operations for the three and nine months ended September 30, 2022 and 2021.
−Removed: Three Months Ended Nine Months Ended
−Removed: September 30, September 30,
−Removed: 2022 2021 2022
+Added: The following table summarizes the results of CNA’s Other Insurance Operations for the three months ended March 31, 2023 and 2022.
+Added: Three Months Ended March 31 2023 2022
(In millions)
1 unchanged sentence
Net investment income 224 213
−Removed: Core income (loss) (47) 20 (124) 10
−Removed: Three Months Ended September 30, 2022 Compared to the Comparable 2021 Period
−Removed: Core results for Other Insurance Operations decreased $67 million for the three months ended September 30, 2022 as compared with the comparable 2021 period primarily due to a $54 million pretax decline in net investment income from limited partnerships.
−Removed: Results for the three months ended September 30, 2022 and 2021 included no unlocking event for future policy benefit reserves as a result of the gross premium valuation (“GPV”).
−Removed: Core loss for the three months ended September 30, 2022 included a $25 million pretax favorable impact from the reduction in long term care claim reserves resulting from the annual claim reserve review in the third quarter of 2022.
−Removed: The favorable impact was driven by a $107 million release of all remaining incurred but not reported (“IBNR”) reserves established during 2020 and 2021 in response to the COVID-19 pandemic partially offset by an $82 million unfavorable impact from higher claim severity, including utilization and cost of care inflation, than anticipated in the reserve estimates.
−Removed: The annual structured settlement claim reserve review resulted in a $5 million pretax favorable impact from the reduction in reserves due to discount rate assumption changes.
−Removed: Core income for the three months ended September 30, 2021 included a $40 million pretax favorable impact from the reduction in long term care claim reserves resulting from the annual claim reserve reviews in the third quarter of 2021.
−Removed: Nine Months Ended September 30, 2022 Compared to the Comparable 2021 Period
−Removed: Core results for Other Insurance Operations decreased $134 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period, the drivers of which were generally consistent with the three month discussion above.
−Removed: In addition, core results for the nine months ended September 30, 2022 included higher net prior year loss reserve development associated with legacy mass tort abuse claims and an increase in expenses as a result of continued investments in technology infrastructure and security as compared with the comparable 2021 period.
−Removed: 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”).
−Removed: Net prior year loss reserve development is further discussed in Note 4 of the Notes to Consolidated Condensed Financial Statements included under Item 1.
−Removed: Life & Group Policyholder Reserves
−Removed: Annually, in the third quarter, CNA assesses the adequacy of its long term care future policy benefit reserves by performing a GPV to determine if there is a premium deficiency.
−Removed: See the Insurance Reserves section of our MD&A included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021 for further information on the reserving process.
−Removed: The September 30, 2022 GPV indicated that the recorded reserves included a margin of approximately $125 million.
−Removed: A summary of the changes in the estimated reserve margin is presented in the table below:
−Removed: (In millions)
−Removed: Long term care active life reserve - change in estimated reserve margin
−Removed: September 30, 2021 estimated margin $ 72
−Removed: Changes in underlying economic assumptions (a)
−Removed: Changes in underlying morbidity assumptions (30)
−Removed: Changes in underlying persistency assumptions 40
−Removed: Changes in underlying premium rate action assumptions 190
−Removed: Changes in underlying expense and other assumptions (17)
−Removed: September 30, 2022 Estimated Margin $ 125
−Removed: (a) Economic assumptions include the impact of interest rates and cost of care inflation.
−Removed: The increase in the margin in 2022 was primarily driven by changes in discount rate assumptions due to higher near term expected reinvestment rates and higher than previously estimated rate increases on active rate increase programs.
−Removed: These favorable drivers were partially offset by changes in cost of care inflation assumptions.
−Removed: CNA has determined that additional future policy benefit reserves for profits followed by losses are not currently required based on the most recent projection.
−Removed: The table below summarizes the estimated pretax impact on CNA’s results of operations from various hypothetical revisions to its future policy benefit reserve assumptions.
−Removed: The annual GPV process involves updating all assumptions to management’s then current best estimate, and historically all significant assumptions have been revised each year.
−Removed: In the table below, CNA has assumed that revisions to such assumptions would occur in each policy type, age and duration within each policy group.
−Removed: The impact of each sensitivity is discrete and does not reflect the impact one factor may have on another or the mitigating impact from CNA’s actions, which may include additional future premium rate increases.
−Removed: Although such hypothetical revisions are not currently required or anticipated, CNA believes they could occur based on past variances in experience and its expectations of the ranges of future experience that could reasonably occur.
−Removed: Any required increase in the recorded reserves resulting from a hypothetical revision in the table below would first reduce the margin in the carried reserves before it would affect results from operations.
−Removed: Any actual adjustment would be dependent on the specific policies affected and, therefore, may differ from the estimates summarized below.
−Removed: The estimated impacts to results of operations in the table below are after consideration of the existing margin.
−Removed: September 30, 2022
−Removed: Estimated Reduction to Pretax Income
−Removed: (In millions)
−Removed: Hypothetical revisions
−Removed: 2.5% increase in morbidity $ 200
−Removed: 5% increase in morbidity 500
−Removed: 5% decrease in active life mortality and lapse $ 100
−Removed: 10% decrease in active life mortality and lapse 300
−Removed: Discount rates:
−Removed: 25 basis point decline in new money interest rates $ —
−Removed: 50 basis point decline in new money interest rates 100
−Removed: (a) Represents a sensitivity in future paid claims.
−Removed: Non-GAAP Reconciliation of Core Income to Net Income
−Removed: The following table reconciles core income to net income attributable to Loews Corporation for t he three and nine months ended September 30, 2022 and 2021:
−Removed: Three Months Ended Nine Months Ended
−Removed: September 30, September 30,
−Removed: 2022 2021 2022
+Added: Core loss (a)
+Added: (a) As of January 1, 2023, ASU 2018-12 was adopted using the modified retrospective method applied as of the transition date of January 1, 2021.
+Added: Prior period amounts presented in the financial statements have been adjusted to reflect application of the new guidance.
+Added: Core loss for Other Insurance Operations for the three months ended March 31, 2022 was adjusted by $(18) million as a result of adopting the standard.
+Added: For additional information see Notes 1 and 5 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.
+Added: Core results for Other Insurance Operations improved $2 million for the three months ended March 31, 2023 as compared with the comparable 2022 period driven by higher net investment income, partially offset by long term care policy buyouts.
+Added: Non-GAAP Reconciliation of Net Income Attributable to Loews Corporation to Core Income
+Added: The following table reconciles net income attributable to Loews Corporation to core income for t he three months ended March 31, 2023 and 2022:
+Added: Three Months Ended March 31 2023 2022
(In millions)
+Added: Net income attributable to Loews Corporation (a) $ 268 $ 265
+Added: Investment losses 28 3
+Added: Consolidating adjustments including noncontrolling interests (a) 29 30
+Added: Total core income $ 325 $ 298
Core income (loss):
Property & Casualty Operations $ 346 $ 321
−Removed: Other Insurance Operations (47) 20 (124) 10
+Added: Other Insurance Operations (a) (21) (23)
Total core income $ 325 $ 298
−Removed: Investment gains (losses) (84) 18 (127) 94
−Removed: Consolidating adjustments including noncontrolling interests (14) (26) (68) (97)
−Removed: Net income attributable to Loews Corporation $ 115 $ 229 $ 579 $ 838
+Added: (a) As of January 1, 2023, ASU 2018-12 was adopted using the modified retrospective method applied as of the transition date of January 1, 2021.
+Added: Prior period amounts presented in the financial statements have been adjusted to reflect application of the new guidance.
+Added: Core loss for Other Insurance Operations for the three months ended March 31, 2022 was adjusted by $(18) million as a result of adopting the standard.
+Added: For additional information see Notes 1 and 5 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.
Boardwalk Pipelines
1 unchanged sentence
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.
−Removed: 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.
−Removed: Boardwalk Pipelines’ operations and maintenance expenses are impacted by its compliance with the requirements of, among other regulations, the Pipeline and Hazardous Materials Safety Administration Mega Rule (“Mega Rule”), as further discussed in Results of Operations of our MD&A included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021.
−Removed: The following table summarizes the results of operations for Boardwalk Pipelines for the three and nine months ended September 30, 2022 and 2021, as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.
−Removed: 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.
+Added: For further information on Boardwalk Pipelines’ revenue recognition policies see Note 1 of the
+Added: Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022.
+Added: Boardwalk Pipelines’ operations and maintenance expenses are impacted by its compliance with the requirements of, among other regulations, the Pipeline and Hazardous Materials Safety Administration Mega Rule (“Mega Rule”) and Boardwalk Pipelines’ efforts to monitor, control and reduce emissions, as further discussed in Results of Operations of our MD&A included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.
+Added: The following table summarizes the results of operations for Boardwalk Pipelines for the three months ended March 31, 2023 and 2022, as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.
+Added: Boardwalk Pipelines also utilizes a non-GAAP measure, earnings before interest, income tax expense, depreciation and amortization (“EBITDA”) 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.
−Removed: Three Months Ended Nine Months Ended
−Removed: September 30, September 30,
−Removed: 2022 2021 2022
+Added: Three Months Ended March 31 2023 2022
(In millions)
10 unchanged sentences
EBITDA $ 256 $ 258
−Removed: Three Months Ended September 30, 2022 Compared to the Comparable 2021 Period
−Removed: Net income attributable to Loews Corporation decreased $4 million for the three months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: EBITDA increased $8 million for the three months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: T he decrease in net income as compared with the increase in EBITDA is primarily due to the increase in depreciation and amortization expense and interest expense as discussed below.
−Removed: Total revenues increased $32 million for the three months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: Including the items in fuel and transportation expense, operating revenues increased $28 million, primarily driven by an increase in transportation revenues of $25 million due to recently completed growth projects, higher utilization-based revenues and re-contracting at higher rates.
−Removed: In addition, storage and parking and lending revenues increased $5 million due to favorable market conditions.
−Removed: Operating costs and expenses increased $24 million for the three months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: Excluding items offset with operating revenues, operating costs and expenses increased $20 million, primarily due to increased costs from maintenance projects associated with compliance with the requirements of the Mega Rule and asset impairment charges resulting from an increase in the estimate of existing asset retirement obligations related to retired assets.
−Removed: Depreciation and amortization expenses increased $11 million for the three months ended September 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.
−Removed: Interest expenses increased $2 million for the three months ended September 30, 2022 as compared with the comparable 2021 period, primarily due to higher average outstanding long-term debt.
−Removed: Nine Months Ended September 30, 2022 Compared to the Comparable 2021 Period
−Removed: Net income attributable to Loews Corporation decreased $6 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: EBITDA increased $17 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: The decrease in net income as compared with the increase in EBITDA is primarily due to the increase in depreciation and amortization expense and interest expense as discussed below.
−Removed: Total revenues increased $54 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: Including the items in fuel and transportation expense, operating revenues increased $50 million, primarily driven by an increase in transportation revenues of $41 million due to recently completed growth projects, re-contracting at higher rates and higher utilization-based revenues.
−Removed: In addition, storage and parking and lending revenues increased $11 million due to favorable market conditions.
−Removed: Operating costs and expenses increased $37 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period.
−Removed: Excluding items offset with operating revenues, operating costs and expenses increased $33 million, primarily due to increased costs from maintenance projects associated with compliance with the requirements of the Mega Rule and asset impairment charges resulting from an increase in the estimate of existing asset retirement obligations related to retired assets.
−Removed: Depreciation and amortization expenses increased $20 million for the nine months ended September 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.
−Removed: Interest expense increased $5 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period primarily due to higher average outstanding long-term debt.
+Added: Net income attributable to Loews Corporation and EBITDA decreased $5 million and $2 million for the three months ended March 31, 2023 as compared with the comparable 2022 period primarily due to the reasons discussed below.
+Added: Total revenues increased $16 million for the three months ended March 31, 2023 as compared with the comparable 2022 period.
+Added: Including fuel and transportation expense, operating revenues increased $13 million, primarily driven by an increase in transportation revenues of $20 million due to re-contracting at higher rates and recently completed growth projects, as well as a $3 million increase in storage and parking and lending revenues due to favorable market conditions, partially offset by product sales that occurred in 2022.
+Added: Operating costs and expenses increased $18 million for the three months ended March 31, 2023 as compared with the comparable 2022 period.
+Added: Excluding expenses offset with operating revenues, operating costs and expenses increased $15 million, primarily due to increased costs of $10 million from increased maintenance projects associated with the requirements of the Mega Rule and higher employee-related, materials and supplies and outside services costs.
+Added: Depreciation and amortization expenses increased $7 million for the three months ended March 31, 2023 as compared with the comparable 2022 period due to an increased asset base from recently completed growth projects and a change in the estimated life of certain assets.
+Added: Interest expenses decreased $3 million for the three months ended March 31, 2023 as compared with the comparable 2022 period, primarily due to lower average outstanding long-term debt.
Non-GAAP Reconciliation of Net Income Attributable to Loews Corporation to EBITDA
−Removed: The following table for Boardwalk Pipelines presents a reconciliation of net income attributable to Loews Corporation to EBITDA for the three and nine months ended September 30, 2022 and 2021:
−Removed: Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
+Added: The following table reconciles net income attributable to Loews Corporation to EBITDA for the three months ended March 31, 2023 and 2022:
+Added: Three Months Ended March 31 2023 2022
(In millions)
Net income attributable to Loews Corporation
−Removed: $ 34 $ 38 $ 164 $ 170
Income tax expense
Depreciation and amortization
−Removed: 103 92 297 277
−Removed: 42 40 126 121
−Removed: $ 192 $ 184 $ 644 $ 627
Loews Hotels & Co
−Removed: The following table summarizes the results of operations for Loews Hotels & Co for the three and nine months ended September 30, 2022 and 2021, as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.
−Removed: Three Months Ended Nine Months Ended
−Removed: September 30, September 30,
−Removed: 2022 2021 2022
+Added: The following table summarizes the results of operations for Loews Hotels & Co for the three months ended March 31, 2023 and 2022, as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.
+Added: Three Months Ended March 31 2023 2022
(In millions)
4 unchanged sentences
Operating 130 108
−Removed: Asset impairment 8 22
Reimbursable expenses 37 29
1 unchanged sentence
Equity income from joint ventures (31) (26)
−Removed: Interest (1) 8 7 25
Total 158 130
−Removed: Income (loss) before income tax 34 17 120 (64)
−Removed: Income tax (expense) benefit (9) (4) (36) 13
−Removed: Net income (loss) attributable to Loews Corporation $ 25 $ 13 $ 84 $ (51)
−Removed: Net income (loss) attributable to Loews Corporation improved by $12 million and $135 million for the three and nine months ended September 30, 2022 as compared to the comparable prior year periods.
−Removed: Loews Hotels & Co’s results significantly improved for the three and nine months ended September 30, 2022 as compared with the comparable 2021 periods as overall travel demand and resulting business levels were considerably higher in 2022.
−Removed: Travel has significantly rebounded from the impacts of the COVID-19 pandemic, causing overall occupancy rates to improve.
−Removed: Operating revenues improved by $42 million and $218 million and operating expenses increased by $35 million and $128 million for the three and nine months ended September 30, 2022 as compared with the comparable 2021 periods.
−Removed: 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.
−Removed: Operating expenses have likewise increased to support the higher demand levels and resumption of additional pre-pandemic services.
−Removed: Equity income from joint ventures improved $10 million and $98 million for the three and nine months ended September 30, 2022 as compared with the comparable 2021 periods.
−Removed: The increase in equity income from joint ventures was driven by stronger occupancy levels and higher average daily rates at many joint venture hotels, particularly at the Universal Orlando Resort, during 2022 as compared to 2021.
−Removed: Operating expenses have likewise increased to support the higher demand levels and resumption of additional pre-pandemic services at those joint venture hotels.
−Removed: Additionally, improvement in the 2022 nine months period also resulted from having all 9,000 rooms available at the Universal Orlando Resort for the entire 2022 period whereas certain properties were not available for periods of 2021.
−Removed: The three and nine months ended September 30, 2022 include impairment charges of $8 million and $22 million to reduce the carrying value of an asset to its estimated fair value.
−Removed: Interest expense decreased $9 million and $18 million for the three and nine months ended September 30, 2022 as compared with the comparable 2021 periods due primarily to the increase in fair value of an interest rate cap of $7 million and $11 million that was executed in the first quarter of 2022, higher capitalized interest on a project under development, and lower average debt balances.
+Added: Income before income tax 34 22
+Added: Income tax expense (10) (7)
+Added: Net income attributable to Loews Corporation $ 24 $ 15
+Added: Net income attributable to Loews Corporation increased by $9 million for the three months ended March 31, 2023 as compared with the comparable 2022 period primarily due to the reasons discussed below.
+Added: Operating revenues improved by $32 million and operating expenses increased by $22 million for the three months ended March 31, 2023 as compared with the comparable 2022 period.
+Added: The increase in operating revenues was driven by stronger occupancy levels and higher average daily rates at many hotels in 2023 as compared with the comparable 2022 period.
+Added: Occupancy levels in the first quarter of 2022 were negatively impacted by COVID variants.
+Added: Operating expenses have likewise increased to support the higher demand levels.
+Added: Equity income from joint ventures improved $5 million for the three months ended March 31, 2023 as compared with the comparable 2022 period.
+Added: The increase was driven by stronger occupancy levels and higher average daily room rates at
+Added: many joint venture hotels, particularly at the Universal Orlando Resort, during the first quarter of 2023 as compared with the comparable 2022 period.
+Added: Occupancy levels in the first quarter of 2022 were negatively impacted by COVID variants.
+Added: This was offset by both operating expenses that have likewise increased, largely due to higher staffing levels to support the higher demand levels, and higher interest costs from joint ventures.
+Added: Interest expense increased $2 million for the three months ended March 31, 2023 as compared with the comparable 2022 period due primarily to the decrease in fair value of interest rate caps.
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.
−Removed: 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.
−Removed: The following table summarizes the results of operations for Corporate for the three and nine months ended September 30, 2022 and 2021 as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report:
−Removed: Three Months Ended Nine Months Ended
−Removed: September 30, September 30,
−Removed: 2022 2021 2022
+Added: Corporate also includes the equity method of accounting for Altium Packaging.
+Added: The following table summarizes the results of operations for Corporate for the three months ended March 31, 2023 and 2022 as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report:
+Added: Three Months Ended March 31 2023 2022
(In millions)
Net investment income (loss) $ 42 $ (16)
−Removed: Investment gains 540
−Removed: Operating revenues and other 4 1 6 282
Total 42 (16)
Operating and other 19 21
+Added: Equity method loss 3 1
Interest 22 22
−Removed: Total 40 50 129 458
−Removed: Income (loss) before income tax (55) (79) (223) 404
+Added: Loss before income tax (2) (60)
Income tax (expense) benefit (1) 11
−Removed: Net income (loss) attributable to Loews Corporation $ (44) $ (60) $ (179) $ 278
−Removed: Net investment loss for the Parent Company decreased $11 million for the three months ended September 30, 2022 as compared with the comparable 2021 period primarily due to improved results from short term investments in the Parent Company trading portfolio.
−Removed: Net investment loss was $100 million for the nine months ended September 30, 2022 as compared with net investment income of $40 million in the comparable 2021 period primarily due to the decline in fair value of equity based investments.
−Removed: Investment gains of $540 million for the nine months ended September 30, 2021 were primarily due to a gain of $555 million ($438 million after tax) on the sale of 47% of Altium Packaging and its deconsolidation on April 1, 2021.
−Removed: Operating revenues and other for the nine months ended September 30, 2021 include $280 million of consolidated operating revenues for Altium Packaging through March 31, 2021.
−Removed: Operating and other expenses decreased $10 million for the three months ended September 30, 2022 as compared with the comparable 2021 period, primarily due to lower corporate expenses at the Parent Company.
−Removed: Operating and other expenses decreased $303 million for the nine months ended September 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.
−Removed: In addition, there were lower corporate expenses at the Parent Company for the nine months ended September 30, 2022 as compared with the comparable 2021 period .
−Removed: Interest expenses decreased $26 million for the nine months ended September 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.
−Removed: Income tax expense of $126 million for the nine months ended September 30, 2021 includes the recognition of $117 million of taxes on the investment gain and the recognition of a $40 million deferred tax liability, both of which are related to the sale of 47% of Altium Packaging.
+Added: Net loss attributable to Loews Corporation $ (3) $ (49)
+Added: Net investment income for the Parent Company was $42 million for the three months ended March 31, 2023 as compared with net investment loss of $16 million in the comparable 2022 period primarily due to improved results from short term investments and the increase in fair value of equity based investments in the trading portfolio.
+Added: The Company expects to record approximately $50 million in Operating and other expenses in 2023 to recognize unrealized losses which are included in AOCI due to the planned termination of a non-contributory defined benefit plan.
LIQUIDITY AND CAPITAL RESOURCES
Parent Company
−Removed: Parent Company cash and investments, net of receivables and payables, totaled $3.2 billion at September 30, 2022 as compared to $3.4 billion at December 31, 2021.
−Removed: During the nine months ended September 30, 2022 , we received $778 million in cash dividends from CNA, including a special cash dividend of $486 million.
−Removed: Cash outflows during the nine months ended September 30, 2022 included the payment of $611 million to fund treasury stock purchases, $46 million of cash dividends to our shareholders, $26 million to purchase common shares of CNA and equity contributions of $33 million to Loews Hotels & Co and $79 million to Altium Packaging.
+Added: Parent Company cash and investments, net of receivables and payables, totaled $3.1 billion at March 31, 2023 as compared to $3.2 billion at December 31, 2022.
+Added: During the three months ended March 31, 2023 , we received $395 million in cash dividends from CNA, including a special cash dividend of $293 million.
+Added: Cash outflows during the three months ended March 31, 2023 included the payment of $462 million to fund treasury stock purchases, $14 million of cash dividends to our shareholders and an equity contribution of $5 million 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.
1 unchanged sentence
We are not responsible for the liabilities and obligations of our subsidiaries and there are no Parent Company guarantees.
−Removed: 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.
−Removed: During the nine months ended September 30, 2022 , we purchased 10.5 million shares of Loews Corporation common stock and 0.7 million shares of CNA’s common stock.
−Removed: As of October 28, 2022, we had purchased an additional 0.7 million shares of Loews Corporation common stock in 2022 at an additional aggregate cost of $38 million.
−Removed: As of October 28, 2022, there were 237,427,052 shares of Loews Corporation common stock outstanding.
+Added: Depending on market and other conditions, we may purchase shares of our and our subsidiaries outstanding common stock in the open market, in privately negotiated transactions or otherwise.
+Added: During the three months ended March 31, 2023 ,
+Added: we purchased 8.2 million shares of Loews Corporation common stock.
+Added: As of April 28, 2023, there were 227,898,186 shares of Loews Corporation common stock outstanding.
+Added: In May of 2023, we plan to retire at maturity with available cash the $500 million outstanding aggregate principal amount of our 2.6% senior notes.
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.
−Removed: CNA’s cash provided by operating activities was $2.0 billion for the nine months ended September 30, 2022 and $1.4 billion for the comparable 2021 period.
−Removed: The increase in cash provided by operating activities was driven by the prior year payment of the EWC LPT premium.
−Removed: CNA paid cash dividends of $3.20 per share on its common stock, including a special cash dividend of $2.00 per share, during the nine months ended September 30, 2022.
−Removed: On October 28, 2022, CNA’s Board of Directors declared a quarterly cash dividend of $0.40 per share payable December 1, 2022 to shareholders of record on November 15, 2022 .
+Added: CNA’s cash provided by operating activities was $436 million for the three months ended March 31, 2023 and $645 million for the comparable 2022 period.
+Added: The decrease in cash provided by operating activities was driven by higher net claim payments, including long term care policy buyouts, and lower distributions from limited partnerships, partially offset by an increase in premiums collected.
+Added: CNA paid cash dividends of $1.62 per share on its common stock, including a special cash dividend of $1.20 per share, during the three months ended March 31, 2023.
+Added: On April 28, 2023, CNA’s Board of Directors declared a quarterly cash dividend of $0.42 per share payable June 1, 2023 to shareholders of record on May 15, 2023 .
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.
3 unchanged sentences
Additionally, ordinary dividends may only be paid from earned surplus, which is calculated by removing unrealized gains from unassigned surplus.
−Removed: As of September 30, 2022, CCC was in a positive earned surplus position.
−Removed: CCC paid dividends of $845 million and $600 million during the nine months ended September 30, 2022 and 2021.
+Added: As of March 31, 2023, CCC was in a positive earned surplus position.
+Added: CCC paid dividends of $475 million and $535 million during the three months ended March 31, 2023 and 2022.
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 an unspecified amount of debt, equity or hybrid securities from time to time.
−Removed: Boardwalk Pipelines’ cash provided by operating activities increased $55 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period, primarily due to the timing of gas transportation receivables and the impacts of higher natural gas prices on fuel tracker activities.
−Removed: For the nine months ended September 30, 2022 and 2021, Boardwalk Pipelines’ capital expenditures were $208 million and $239 million, consisting of growth capital expenditures of $122 million and $130 million and maintenance capital expenditures of $79 million and $89 million.
−Removed: During the nine months ended September 30, 2022, Boardwalk Pipelines also spent $7 million on natural gas to be used in its integrated natural gas pipeline system.
−Removed: During the nine months ended September 30, 2021, Boardwalk Pipelines acquired certain natural gas pipeline assets for approximately $20 million.
−Removed: 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 (“2023 Notes”).
−Removed: Boardwalk Pipelines also has an effective shelf registration statement on file with the SEC under which it may publicly issue $1.0 billion of debt securities, warrants or rights from time to time.
−Removed: In February of 2022, Boardwalk Pipelines completed a public offering of $500 million aggregate principal amount of its 3.6% senior notes due September 1, 2032, which utilized $500 million of capacity under its shelf registration statement.
−Removed: 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.
−Removed: In September of 2022, Boardwalk Pipelines notified the holders of the 2023 Notes that it intends to retire the 2023 Notes on November 1, 2022, at a redemption price of 100% of the principal amount plus any unpaid and accrued interest.
−Removed: Boardwalk Pipelines will fund the retirement of the 2023 Notes from available cash.
−Removed: 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”).
−Removed: As of September 30, 2022, Boardwalk Pipelines had no outstanding borrowings and all of the $1.0 billion available borrowing capacity under its revolving credit facility.
−Removed: As of September 30, 2022, Loews Hotels & Co has a $13 million loan that matures within twelve months, which it currently intends to pay off in the fourth quarter of 2022.
−Removed: Loews Hotels & Co, through its subsidiaries, has loans maturing beyond twelve months which it will work to refinance prior to maturity.
−Removed: Extending any indebtedness, including loans of unconsolidated joint venture partnerships, may require Loews Hotels & Co to make principal pay downs, establish restricted cash reserves or provide guaranties of the subsidiary’s debt.
−Removed: Through the date of this Report, none of Loews Hotels & Co’s subsidiaries are in default on any of their loans.
−Removed: In October of 2022, Loews Hotels & Co contributed $34 million as an initial investment in two joint venture development projects expected to open in 2025.
−Removed: These projects are currently estimated to require an aggregate investment of approximately $200 million in capital contributions from Loews Hotels & Co.
−Removed: Based on the timing of capital calls relative to the seasonality of Loews Hotels & Co’s business, capital contributions from Loews Corporation to Loews Hotels & Co may be required.
−Removed: Through October 28, 2022, Loews Hotels & Co received capital contributions of $33 million from Loews Corporation to fund development projects during 2022.
−Removed: In August of 2022, we made a cash contribution of $79 million to our equity method investee, Altium Packaging.
−Removed: These funds and a pro rata contribution from our joint venture partner were used by Altium Packaging for acquisitions which expand its offerings and increase its bottle manufacturing capabilities throughout key industries and geographies.
+Added: Boardwalk Pipelines’ cash provided by operating activities increased $5 million for the three months ended March 31, 2023 as compared with the comparable 2022 period, primarily due to changes in net income adjusted for depreciation and amortization and other non-cash operating activities and the impacts of lower natural gas prices on Boardwalk Pipelines’ imbalance activities.
+Added: For the three months ended March 31, 2023 and 2022, Boardwalk Pipelines’ capital expenditures were $86 million and $60 million, consisting of growth capital expenditures of $59 million and $35 million and maintenance capital expenditures of $27 million and $18 million.
+Added: During the three months ended March 31, 2022, Boardwalk Pipelines also spent $7 million on natural gas to be used in its integrated natural gas pipeline system in the 2022 period.
+Added: 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 2023.
+Added: Boardwalk Pipelines also has an effective shelf registration statement on file with the SEC under which it has $500 million of remaining capacity available to publicly issue debt securities, warrants or rights.
+Added: As of March 31, 2023, Boardwalk Pipelines had available the entire $1.0 billion of borrowing capacity under its revolving credit facility.
+Added: As of March 31, 2023, Loews Hotels & Co, through its subsidiaries, has $164 million in variable rate mortgage loans that mature within twelve months, which it currently intends to refinance before maturity.
+Added: Extending any indebtedness, including loans of unconsolidated joint venture partnerships, one of which has $367 million in indebtedness that matures within twelve months of which Loews Hotels & Co has guaranteed up to $46 million, may require Loews Hotels & Co to make principal pay downs, establish restricted cash reserves or provide guaranties of the subsidiary’s debt.
+Added: Through the date of this Report, all Loews Hotels & Co’s subsidiaries are in compliance with their debt covenants.
+Added: Through April 28, 2023, Loews Hotels & Co received a capital contribution of $30 million from Loews Corporation to fund development projects during 2023.
Investment activities of our non-insurance subsidiaries primarily consist of investments in fixed income securities, including short term investments.
−Removed: The Parent Company portfolio also includes equity securities, including short sales and derivative instruments, and investments in limited partnerships.
+Added: The Parent Company portfolio also includes equity securities, including short sales and derivative instruments.
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.
−Removed: 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
−Removed: future movements in the underlying markets.
+Added: 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.
If such movements do not occur as anticipated, then significant losses may occur.
8 unchanged sentences
Fixed income securities, as presented, include both fixed maturity securities and non-redeemable preferred stock.
−Removed: Three Months Ended Nine Months Ended
−Removed: September 30, September 30,
−Removed: 2022 2021 2022
+Added: Three Months Ended March 31 2023 2022
(In millions)
8 unchanged sentences
Limited partnership and common stock return 1.3 % 0.4 %
−Removed: CNA’s net investment income decreased $91 million and $306 million for the three and nine months ended September 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.
+Added: CNA’s net investment income increased $77 million for the three months ended March 31, 2023 as compared with the comparable 2022 period, driven by higher income from fixed income securities and other, and higher limited partnership and common stock returns.
Investment Gains (Losses)
The components of CNA’s investment gains (losses) are presented in the following table:
−Removed: Three Months Ended Nine Months Ended
−Removed: September 30, September 30,
−Removed: 2022 2021 2022
+Added: Three Months Ended March 31 2023 2022
(In millions)
7 unchanged sentences
Derivatives, short term and other 1 29
−Removed: Total investment gains (losses) (96) 22 (166) 117
−Removed: Income tax (expense) benefit 12 (4) 39 (23)
+Added: Total investment losses (35) (11)
+Added: Income tax benefit 7 8
Amounts attributable to noncontrolling interests 3
−Removed: Investment gains (losses) attributable to Loews Corporation $ (76) $ 16 $ (115) $ 84
−Removed: (a) Excludes the loss in the third quarter of 2022 on the assets supporting the funds withheld liability, which is reflected in the Derivatives, short term and other line.
−Removed: CNA’s pretax investment results decreased $118 million for the three months ended September 30, 2022 as compared with the comparable 2021 period, driven by the net losses on fixed maturity securities in the three months ended September 30, 2022 as compared to net gains in the comparable 2021 period.
−Removed: Additionally, Derivatives, short term and other for the three months ended September 30, 2022 includes a $35 million non-economic net loss related to the expected novation of a coinsurance agreement on CNA’s legacy annuity business in its Other Insurance Operations and the associated funds withheld embedded derivative.
−Removed: CNA’s pretax investment results decreased $283 million for the nine months ended September 30, 2022 as compared with the comparable 2021 period, driven by the unfavorable change in fair value of non-redeemable preferred stock and net losses on fixed maturity securities in the nine months ended September 30, 2022 as compared to net gains in the comparable 2021 period.
+Added: Investment losses attributable to Loews Corporation $ (25) $ (3)
+Added: CNA’s pretax investment results decreased $24 million for the three months ended March 31, 2023 as compared with the comparable 2022 period, driven by higher net losses on fixed maturity securities partially offset by the favorable relative change in fair value of non-redeemable preferred stock in the three months ended March 31, 2023 as compared to the comparable 2022 period.
+Added: The three months ended March 31, 2022 also included gains on a funds withheld embedded derivative which related to a coinsurance agreement on CNA’s legacy annuity business that was novated in the fourth quarter of 2022.
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:
−Removed: September 30, 2022
+Added: March 31, 2023
December 31, 2022
11 unchanged sentences
Total $ 39,107 $ (2,551) $ 37,627 $ (3,404)
−Removed: As of September 30, 2022 and December 31, 2021, 1% of CNA’s fixed maturity portfolio was rated internally.
−Removed: AAA rated securities included $0.4 billion and $1.7 billion of pre-refunded municipal bonds as of September 30, 2022 and December 31, 2021.
+Added: As of March 31, 2023 and December 31, 2022, 1% of CNA’s fixed maturity portfolio was rated internally.
+Added: AAA rated securities included $0.3 billion of pre-funded municipal bonds as of March 31, 2023 and December 31, 2022.
The following table presents CNA’s available-for-sale fixed maturity securities in a gross unrealized loss position by ratings distribution:
−Removed: September 30, 2022
+Added: March 31, 2023
Estimated Fair Value
9 unchanged sentences
Securities not due to mature on a single date are allocated based on weighted average life:
−Removed: September 30, 2022
+Added: March 31, 2023
Estimated Fair Value
6 unchanged sentences
Total $ 28,266 $ 3,418
+Added: Commercial Real Estate
+Added: CNA’s investment portfolio has exposure to the commercial real estate sector primarily through its fixed maturity securities and mortgage loan portfolios.
+Added: The performance of these assets is dependent on a number of factors, including the performance of the underlying collateral (which is influenced by cash flows from underlying property leases), changes in the fair value of collateral, refinancing risk, and the creditworthiness of tenants of credit tenant loan properties (where lease payments directly service the loan).
+Added: Within CNA’s fixed maturity securities portfolio, its exposure is primarily through the commercial mortgage-backed securities portfolio and the corporate and other bonds portfolio, which contains obligations of real estate investment trust (“REIT”) issuers.
+Added: Commercial mortgage-backed securities include both single asset, single borrower collateral that is securitized independently and conduit collateral that is securitized in diversified pools.
+Added: The following tables present the estimated fair value and net unrealized gains (losses) of CNA’s commercial mortgage-backed securities by property type and by ratings distribution:
+Added: March 31, 2023
+Added: Estimated Fair Value
+Added: Net Unrealized Gains (Losses)
+Added: (In millions)
+Added: Commercial mortgage-backed:
+Added: Single asset, single borrower:
+Added: Office $ 323 $ (67)
+Added: Retail 304 (40)
+Added: Lodging 201 (22)
+Added: Industrial 84 (7)
+Added: Multifamily 53 (4)
+Added: Total single asset, single borrower 965 (140)
+Added: Conduits (multi property, multi borrower pools) 666 (97)
+Added: Total commercial mortgage-backed $ 1,631 $ (237)
+Added: March 31, 2023
+Added: Estimated Fair Value
+Added: Net Unrealized Gains (Losses)
+Added: (In millions)
+Added: Commercial mortgage backed:
+Added: AAA $ 367 $ (29)
+Added: Non-investment grade 137 (26)
+Added: Total commercial mortgage-backed $ 1,631 $ (237)
+Added: The following tables present the estimated fair value and net unrealized gains (losses) of the REIT issuer exposure within CNA’s corporate and other bonds portfolio by property type and by ratings distribution:
+Added: March 31, 2023
+Added: Estimated Fair Value
+Added: Net Unrealized Gains (Losses)
+Added: (In millions)
+Added: Corporate and other bonds - REITs:
+Added: Retail $ 452 $ (43)
+Added: Office 261 (30)
+Added: Industrial 85 (3)
+Added: Other (a) 418 (34)
+Added: Total corporate and other bonds - REITs $ 1,216 $ (110)
+Added: (a) Other includes a diversified mix of property type strategies including self-storage, healthcare and apartments.
+Added: March 31, 2023
+Added: Estimated Fair Value
+Added: Net Unrealized Gains (Losses)
+Added: (In millions)
+Added: Corporate and other bonds - REITs:
+Added: AA $ 11 $ (1)
+Added: Non-investment grade 18 (2)
+Added: Total corporate and other bonds - REITs $ 1,216 $ (110)
+Added: Mortgage loans are commercial in nature and are carried at unpaid principal balance, net of unamortized fees and an allowance for expected credit losses.
+Added: The allowance for expected credit losses is developed by assessing the credit quality of pools of mortgage loans in good standing using debt service coverage ratios (“DSCR”) and loan-to-value ratios (“LTV”).
+Added: This assessment utilizes historical credit loss experience adjusted to reflect current conditions and reasonable and supportable forecasts.
+Added: As of March 31, 2023 the allowance for expected credit losses on CNA’s mortgage portfolio was $24 million, or 2% of its amortized cost basis.
+Added: The following table presents the amortized cost basis of mortgage loans by property type:
+Added: March 31, 2023
+Added: Amortized Cost Percentage of Total
+Added: (In millions, except %)
+Added: Mortgage loans:
+Added: Retail $ 461 44 %
+Added: Office 263 26
+Added: Industrial 119 12
+Added: Total mortgage loans $ 1,030 100 %
+Added: In addition to the mortgage loan portfolio, CNA invests in securitized credit tenant loans and ground lease financings that are classified as fixed maturity securities, all of which are investment grade quality.
+Added: As of March 31, 2023, these holdings had an estimated fair value of $484 million and net unrealized losses of $82 million.
+Added: CNA owns other fixed maturity securities which have exposure to cell towers, data centers and other collateral types that could be viewed as having real estate characteristics.
+Added: CNA views these securities to have risks more similar to operating enterprises that do not share the same risks as the broader commercial real estate market.
+Added: CNA does not hold any direct investments in commercial real estate.
+Added: Additionally, CNA does not have significant exposure through its limited partnership portfolio to funds whose primary strategy is real estate focused.
A primary objective in the management of CNA’s investment portfolio is to optimize return relative to the corresponding liabilities and respective liquidity needs.
1 unchanged sentence
CNA also continually monitors exposure to issuers of securities held and broader industry sector exposures and may from time to time adjust such exposures based on its views of a specific issuer or industry sector.
−Removed: A further consideration in the management of CNA’s investment portfolio is the characteristics of the corresponding liabilities and the ability to align the duration of the portfolio to those liabilities and to meet future liquidity needs, minimize interest rate risk and maintain a level of income sufficient to support the underlying insurance liabilities.
+Added: A further consideration in the management of CNA’s investment portfolio is the characteristics of the corresponding liabilities and the ability to align the duration of the portfolio to those liabilities and to meet future liquidity needs,
+Added: minimize interest rate risk and maintain a level of income sufficient to support the underlying insurance liabilities.
For portfolios where future liability cash flows are determinable and typically long term in nature, CNA segregates investments for asset/liability management purposes.
2 unchanged sentences
Amounts presented are net of payable and receivable amounts for securities purchased and sold, but not yet settled.
−Removed: September 30, 2022
+Added: March 31, 2023
December 31, 2022
5 unchanged sentences
Total $ 40,749 6.8 $ 39,956 6.6
−Removed: The effective duration of investments supporting Other Insurance Operations liabilities at September 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.
6 unchanged sentences
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.
−Removed: 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.
+Added: See the Critical Accounting Estimates for accounting estimates related to Reinsurance and Insurance Receivables, Valuation of Investments and Impairment of Securities, and the Insurance Reserves sections of our MD&A in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022 for further information.
+Added: The information presented below restates in their entirety, as a result of the adoption of ASU 2018-12 and its impact on long term care reserves, the accounting estimates related to Insurance Reserves and Long Term Care Reserves included in the Critical Accounting Estimates section of our MD&A in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.
+Added: Further information on the long term care reserving process under the new guidance is included in Notes 1 and 5 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.
+Added: Insurance Reserves
+Added: Insurance reserves are established for both short and long-duration insurance contracts.
+Added: Short-duration contracts are primarily related to property and casualty insurance policies where the reserving process is based on actuarial estimates of the amount of loss, including amounts for known and unknown claims.
+Added: Long-duration contracts are primarily related to long term care policies and the reserves are recorded as Future policy benefits reserves as discussed below.
+Added: The reserve for unearned premiums represents the portion of premiums written related to the unexpired terms of coverage.
+Added: The reserving process is discussed in further detail in the Insurance Reserves section of our MD&A in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.
+Added: Long Term Care Reserves
+Added: Future policy benefits reserves for long term care policies are based on certain assumptions, including morbidity, persistency (inclusive of mortality), future premium rate increases and expenses.
+Added: The adequacy of the reserves is contingent upon actual experience and future expectations related to these key assumptions.
+Added: If actual or expected future experience differs from these assumptions, the reserves may not be adequate, requiring an increase to reserves.
+Added: The reserves are
+Added: discounted using upper-medium grade fixed income instrument yields as of each reporting date.
+Added: In addition, regulatory approval may not be received for the level of premium rate increases requested.
+Added: These changes to reserves could materially adversely impact our results of operations, financial condition and equity.
ACCOUNTING STANDARDS UPDATE
−Removed: In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-12, “Financial Services - Insurance (Topic 944):
−Removed: Targeted Improvements to the Accounting for Long-Duration Contracts.” The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts.
−Removed: For the Company, this includes CNA’s long term care and fully-ceded single premium immediate annuity business.
−Removed: The most significant impact will be the effect of updating the discount rate assumption quarterly to reflect an upper-medium grade fixed-income instrument yield, rather than the expected investment portfolio yield.
−Removed: This will be partially offset by the de-recognition of Shadow Adjustments associated with long-duration contracts.
−Removed: The net impact of these changes is expected to be a decrease of approximately $2.1 billion (after tax and noncontrolling interests) in Accumulated other comprehensive income as of the transition date of January 1, 2021.
−Removed: To illustrate the sensitivity of this adjustment, had the interest rates in effect as of September 30, 2022 been used in the calculation, the transition impact to AOCI would have been approximately zero.
−Removed: The requirement to review, and update if there is a change, cash flow assumptions at least annually is expected to change the pattern of earnings being recognized.
−Removed: Under current accounting guidance, the third quarter 2022 gross premium valuation assessment indicated a pretax reserve margin of $125 million, with no unlocking event.
−Removed: However under the new guidance, the effect of changes in cash flow assumptions from the assessment would be recorded in results of operations (except for discount rate changes which would be recorded quarterly through AOCI).
−Removed: 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.
+Added: In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-12.
+Added: The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts.
+Added: For the Company, this includes CNA’s long term care business in Other Insurance Operations.
+Added: For a discussion of accounting standards updates that have been adopted, please read Note 1 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.
+Added: As of January 1, 2023, the Company adopted the new guidance using the modified retrospective method applied as of the transition date of January 1, 2021.
+Added: All prior periods to be presented in the 2023 financial statements have been adjusted to reflect the application of the new guidance.
+Added: The following table presents the effect of adoption of ASU 2018-12 on selected 2022 and 2021 financial data.
+Added: Q1 Q2 Q3 Q4 Full Year Full Year
+Added: (In millions, except per share data)
+Added: Components of Income (Loss)
+Added: Net income (loss) attributable to
+Added: Loews Corporation
+Added: As reported $ 338 $ 180 $ 130 $ 364 $ 1,012 $ 1,578
+Added: Effect of adoption (16) (13) (152) (9) (190) (16)
+Added: As adjusted $ 322 $ 167 $ (22) $ 355 $ 822 $ 1,562
+Added: Other comprehensive income (loss)
+Added: As reported $ (1,605) $ (1,405) $ (1,425) $ 577 $ (3,858) $ (445)
+Added: Effect of adoption 603 627 586 (177) 1,639 660
+Added: As adjusted $ (1,002) $ (778) $ (839) $ 400 $ (2,219) $ 215
+Added: Diluted Net Income (Loss) Per Share
+Added: Net income (loss) attributable to
+Added: Loews Corporation
+Added: As reported $ 1.36 $ 0.73 $ 0.54 $ 1.53 $ 4.16 $ 6.07
+Added: Effect of adoption (0.07) (0.05) (0.63) (0.04) (0.78) (0.07)
+Added: As adjusted $ 1.29 $ 0.68 $ (0.09) $ 1.49 $ 3.38 $ 6.00
+Added: Net income (loss) attributable to Loews Corporation for 2022 decreased from what was previously reported generally driven by the cumulative effect of assumption differences and differences in reserving methodologies between legacy accounting guidance and ASU 2018-12.
+Added: Net income (loss) attributable to Loews Corporation for the third quarter of 2022 decreased $152 million from what was previously reported under legacy accounting guidance, primarily related to CNA’s third quarter 2022 annual review of cash flow reserving assumptions.
+Added: Under legacy accounting guidance, the third quarter 2022 gross premium valuation assessment indicated a pretax margin of $125 million and no unlocking event occurred.
+Added: Under ASU 2018-12 favorable changes to the upper-medium grade fixed income instrument discount rate were recorded through Accumulated other comprehensive income quarterly, while the net unfavorable impact of increased cost of care inflation offset by favorable premium rate action assumptions was recorded in income.
+Added: Other comprehensive loss decreased from what was previously reported driven by increases in the upper-medium grade fixed income instrument yield beginning in 2021 and through 2022, which was used as the discount rate to re-measure the LFPB.
+Added: The following table presents the effect of adoption of ASU 2018-12 on selected 2022 and 2021 balance sheet data.
+Added: December 31, 2022 December 31, 2021
+Added: (In millions)
+Added: As reported $ 75,494 $ 81,626
+Added: Effect of adoption 73
+Added: As adjusted $ 75,567 $ 81,626
+Added: Insurance reserves:
+Added: Claim and claim adjustment expenses
+Added: As reported $ 25,099 $ 24,174
+Added: Effect of adoption (2,979) (2,905)
+Added: As adjusted $ 22,120 $ 21,269
+Added: Future policy benefits
+Added: As reported $ 10,151 $ 13,236
+Added: Effect of adoption 3,329 5,062
+Added: As adjusted $ 13,480 $ 18,298
+Added: Total liabilities
+Added: As reported $ 60,016 $ 62,451
+Added: Effect of adoption 350 1,704
+Added: As adjusted $ 60,366 $ 64,155
+Added: Accumulated other comprehensive income (loss)
+Added: As reported $ (3,284) $ 186
+Added: Effect of adoption (36) (1,506)
+Added: As adjusted $ (3,320) $ (1,320)
+Added: As reported $ 15,478 $ 19,175
+Added: Effect of adoption (277) (1,704)
+Added: As adjusted $ 15,201 $ 17,471
FORWARD-LOOKING STATEMENTS
8 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.