What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-07-31 compared with 2023-05-01 · 346 added, 99 removed, 799 unchanged (36% of the section changed)

2 unchanged sentences

CONSOLIDATED CONDENSED BALANCE SHEETS

March 31, December 31,

June 30, December 31,

(Dollar amounts in millions, except per share data)

45 unchanged sentences

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

Three Months Ended March 31 2023 2022

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(In millions, except per share data)

1 unchanged sentence

Net investment income 592 366 1,161 798

Investment losses ( 35 ) ( 11 )

Investment gains (losses) 14 ( 59 ) ( 21 ) ( 70 )

Non-insurance warranty revenue 407 392 814 774

1 unchanged sentence

Total 3,934 3,388 7,717 6,790

Insurance claims and policyholders’ benefits (re-measurement gain of $ 1 and $ 5 )

Insurance claims and policyholders’ benefits

(re-measurement gain (loss) of $( 33 ), $ 1 , $( 34 ),

1,779 1,601 3,432 3,079

Amortization of deferred acquisition costs 403 374 782 718

9 unchanged sentences

Net income attributable to Loews Corporation $ 360 $ 167 $ 735 $ 489

Basic net income per share $ 1.61 $ 1.30

Diluted net income per share $ 1.61 $ 1.29

Basic and diluted net income per share $ 1.58 $ 0.68 $ 3.19 $ 1.98

Weighted average shares outstanding:

5 unchanged sentences

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended March 31 2023 2022

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(In millions)

5 unchanged sentences

Impact of changes in discount rates used to measure long-duration contract liabilities 256 1,507 ( 140 ) 3,142

Unrealized gains (losses) on cash flow hedges ( 2 ) 18

Unrealized gains on cash flow hedges 8 6 6 24

Pension and postretirement benefits 6 5 15 12

11 unchanged sentences

(In millions)

Balance, April 1, 2022, as reported

$ 17,695 $ 2 $ 2,859 $ 15,097 $ ( 1,251 ) $ ( 132 ) $ 1,120

Cumulative effect adjustments from changes in

accounting standards (Note 1) ( 1,119 ) ( 38 ) ( 965 ) ( 116 )

Balance, April 1, 2022, as adjusted

16,576 2 2,859 15,059 ( 2,216 ) ( 132 ) 1,004

Net income 187 167 20

Other comprehensive loss ( 778 ) ( 699 ) ( 79 )

Dividends paid ($ 0.0625 per share)

( 26 ) ( 15 ) ( 11 )

Purchases of Loews Corporation treasury stock ( 255 ) ( 255 )

Stock-based compensation 12 11 1

Other ( 2 ) ( 1 ) ( 1 ) 2 1 ( 3 )

Balance, June 30, 2022

$ 15,714 $ 2 $ 2,869 $ 15,210 $ ( 2,913 ) $ ( 386 ) $ 932

Balance, April 1, 2023

$ 15,314 $ 2 $ 2,716 $ 15,293 $ ( 3,062 ) $ ( 498 ) $ 863

Net income 388 360 28

Other comprehensive loss ( 109 ) ( 98 ) ( 11 )

Dividends paid ($ 0.0625 per share)

( 25 ) ( 14 ) ( 11 )

Purchase of subsidiary stock from noncontrolling interests ( 2 ) ( 2 )

Purchases of Loews Corporation treasury stock ( 107 ) ( 107 )

Stock-based compensation 9 9

Other 2 3 ( 2 ) 1

Balance, June 30, 2023

$ 15,470 $ 2 $ 2,728 $ 15,637 $ ( 3,160 ) $ ( 604 ) $ 867

See accompanying Notes to Consolidated Condensed Financial Statements.

Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF EQUITY

Loews Corporation Shareholders

Total Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Common Stock

Held in Treasury Noncontrolling Interests

(In millions)

Balance, January 1, 2022, as reported

12 unchanged sentences

Other ( 3 ) ( 1 ) ( 2 ) 1 1 ( 2 )

Balance, March 31, 2022

Balance, June 30, 2022

$ 15,714 $ 2 $ 2,869 $ 15,210 $ ( 2,913 ) $ ( 386 ) $ 932

13 unchanged sentences

Other ( 5 ) ( 3 ) 1 ( 3 )

Balance, March 31, 2023

Balance, June 30, 2023

$ 15,470 $ 2 $ 2,728 $ 15,637 $ ( 3,160 ) $ ( 604 ) $ 867

2 unchanged sentences

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

Three Months Ended March 31

Six Months Ended June 30

(In millions)

44 unchanged sentences

Unless the context otherwise requires, as used herein, the term “Company” means Loews Corporation including its consolidated subsidiaries, the term “Parent Company” means 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.

In the opinion of management, the accompanying unaudited Consolidated Condensed Financial Statements reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the Company’s financial position as of March 31, 2023 and December 31, 2022 and results of operations, comprehensive income (loss), changes in shareholders’ equity and cash flows for the three months ended March 31, 2023 and 2022, in each case in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Net income for the first quarter of each of the years is not necessarily indicative of net income for that entire year.

In the opinion of management, the accompanying unaudited Consolidated Condensed Financial Statements reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the Company’s financial position as of June 30, 2023 and December 31, 2022 and results of operations, comprehensive income (loss) and changes in shareholders’ equity for the three and six months ended June 30, 2023 and 2022 and cash flows for the six months ended June 30, 2023 and 2022, in each case in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Net income for the interim periods is not necessarily indicative of net income for the entire year.

These Consolidated Condensed Financial Statements should be read in conjunction with the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

2 unchanged sentences

Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

For the three months ended March 31, 2023 and 2022 there were no shares attributable to employee stock-based compensation awards excluded from the diluted weighted average shares outstanding amounts because the effect would have been antidilutive.

For the three and six months ended June 30, 2023 and 2022 there were no shares attributable to employee stock-based compensation awards excluded from the diluted weighted average shares outstanding amounts because the effect would have been antidilutive.

Accounting changes – In August of 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-12, “Financial Services – Insurance (Topic 944):

2 unchanged sentences

The LFPB must also be updated for actual experience at least annually.

The LFPB is reflected as Future policy benefits on the Consolidated Condensed Balance Sheets.

The LFPB is reflected as Insurance reserves:

Future policy benefits on the Consolidated Condensed Balance Sheets.

The discount rate assumption used to measure the LFPB must be updated quarterly using an upper-medium grade (low credit risk) fixed-income instrument yield, commonly interpreted as a single-A rate.

50 unchanged sentences

The effects of adoption of ASU 2018-12 on the Consolidated Condensed Statement of Operations were as follows:

Three Months Ended March 31, 2022 As Reported Effect of Adoption As Adjusted

Three Months Ended June 30, 2022 As Reported Effect of Adoption As Adjusted

(In millions)

8 unchanged sentences

(a) The effect of adopting ASU 2018-12 on Insurance claims and policyholders’ benefits is inclusive of the re-measurement gain of $ 1 million, which is presented parenthetically on the Consolidated Condensed Statement of Operations.

Six Months Ended June 30, 2022 As Reported Effect of Adoption As Adjusted

(In millions)

Insurance claims and policyholders’ benefits (a) $ 3,038 $ 41 $ 3,079

Income before income tax 715 ( 41 ) 674

Income tax expense ( 143 ) 8 ( 135 )

Net income 572 ( 33 ) 539

Amounts attributable to noncontrolling interests ( 54 ) 4 ( 50 )

Net income attributable to Loews Corporation 518 ( 29 ) 489

Basic net income per share 2.10 ( 0.12 ) 1.98

Diluted net income per share 2.09 ( 0.11 ) 1.98

(a) The effect of adopting ASU 2018-12 on Insurance claims and policyholders’ benefits is inclusive of the re-measurement gain of $ 6 million, which is presented parenthetically on the Consolidated Condensed Statement of Operations.

The effects of adoption of ASU 2018-12 on the Consolidated Condensed Balance Sheet were as follows:

13 unchanged sentences

The effects of adoption of ASU 2018-12 on the Consolidated Condensed Statement of Comprehensive Income (Loss) were as follows:

Three Months Ended March 31, 2022 As Reported Effect of Adoption As Adjusted

Three Months Ended June 30, 2022 As Reported Effect of Adoption As Adjusted

(In millions)

7 unchanged sentences

Total comprehensive (loss) attributable to Loews Corporation ( 1,079 ) 547 ( 532 )

Six Months Ended June 30, 2022 As Reported Effect of Adoption As Adjusted

(In millions)

Net unrealized losses on other investments $ ( 2,957 ) $ ( 1,912 ) $ ( 4,869 )

Total unrealized losses on investments ( 2,963 ) ( 1,912 ) ( 4,875 )

Impact of changes in discount rates used to measure long-duration

contract liabilities 3,142 3,142

Other comprehensive (loss) ( 3,010 ) 1,230 ( 1,780 )

Comprehensive (loss) ( 2,438 ) 1,197 ( 1,241 )

Amounts attributable to noncontrolling interests 260 ( 124 ) 136

Total comprehensive (loss) attributable to Loews Corporation ( 2,178 ) 1,073 ( 1,105 )

The effects of adoption of ASU 2018-12 on the Consolidated Condensed Statements of Cash Flows were as follows:

Three Months Ended March 31, 2022 As Reported Effect of Adoption As Adjusted

Six Months Ended June 30, 2022 As Reported Effect of Adoption As Adjusted

(In millions)

4 unchanged sentences

The effects of adoption of ASU 2018-12 on segment results of operations of CNA were as follows:

Three Months Ended March 31, 2022 As Reported Effect of Adoption As Adjusted

Three Months Ended June 30, 2022 As Reported Effect of Adoption As Adjusted

(In millions)

6 unchanged sentences

Six Months Ended June 30, 2022 As Reported Effect of Adoption As Adjusted

(In millions)

Insurance claims and policyholders’ benefits (a) $ 3,038 $ 41 $ 3,079

Income before income tax 623 ( 41 ) 582

Income tax expense ( 105 ) 8 ( 97 )

Net income 518 ( 33 ) 485

Amounts attributable to noncontrolling interests ( 54 ) 4 ( 50 )

Net income attributable to Loews Corporation 464 ( 29 ) 435

During the second quarter of 2023, Loews Hotels & Co paid $ 46 million to acquire an additional equity interest in a previously unconsolidated joint venture property.

The acquisition resulted in Loews Hotels & Co consolidating the joint venture property and recording a gain of $ 46 million ($ 36 million after tax) .

Upon acquisition, $ 232 million in assets and $ 120 million in liabilities, including mezzanine equity representing the remaining noncontrolling owner’s interest, were consolidated at fair value .

Net investment income is as follows:

Three Months Ended March 31 2023 2022

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(In millions)

4 unchanged sentences

Income (loss) from trading portfolio (a) 14 ( 62 ) 59 ( 77 )

Other 29 13 49 28

Total investment income 615 388 1,205 839

1 unchanged sentence

Net investment income $ 592 $ 366 $ 1,161 $ 798

(a) Net investment income (loss) recognized due to the change in fair value of equity and trading portfolio securities held as of March 31, 2023 and 2022

(a) Net investment income (loss) recognized due to the change in fair value of equity and trading portfolio securities held as of June 30, 2023 and 2022

$ 15 $ ( 95 ) $ 20 $ ( 120 )

Investment gains (losses) are as follows:

Three Months Ended March 31 2023 2022

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(In millions)

6 unchanged sentences

Short term investments and other ( 8 ) 1 ( 7 ) 1

Investment losses $ ( 35 ) $ ( 11 )

(a) Investment losses recognized due to the change in fair value of non-redeemable preferred stock included within equity securities held as of March 31, 2023 and 2022

Gain on acquisition of a joint venture (see Note 2) 46 46

Investment gains (losses) $ 14 $ ( 59 ) $ ( 21 ) $ ( 70 )

(a) Investment gains (losses) recognized due to the change in fair value of non-redeemable preferred stock included within equity securities held as of June 30, 2023 and 2022

$ 3 $ ( 70 ) $ — $ ( 108 )

1 unchanged sentence

The table includes losses (gains) on securities with an intention to sell and changes in the allowance for credit losses on securities since acquisition date:

Three Months Ended March 31 2023 2022

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(In millions)

3 unchanged sentences

Impairment losses recognized in earnings $ 17 $ 20 $ 25 $ 30

T here were no losses recognized on mortgage loans during the three months ended March 31, 2023 and 2022.

T here were $ 6 million of losses recognized on mortgage loans during the three and six months ended June 30, 2023 due to changes in expected credit losses.

There were no losses recognized on mortgage loans during the three and six months ended June 30, 2022.

The following tables present a summary of fixed maturity securities:

March 31, 2023 Cost or Amortized Cost Gross Unrealized

June 30, 2023 Cost or Amortized Cost Gross Unrealized

Gains Gross Unrealized

37 unchanged sentences

Less than 12 Months 12 Months or Longer Total

March 31, 2023 Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses

June 30, 2023 Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses

(In millions)

27 unchanged sentences

The following table presents the estimated fair value and gross unrealized losses of available-for-sale fixed maturity securities in a gross unrealized loss position for which an allowance for credit loss has not been recorded, by ratings distribution.

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses

7 unchanged sentences

Total $ 29,612 $ 3,786 $ 29,511 $ 4,056

Based on current facts and circumstances, the unrealized losses presented in the March 31, 2023 securities in the gross unrealized loss position table above are not believed to be indicative of the ultimate collectibility of the current amortized cost of the securities, but rather are primarily attributable to changes in risk-free interest rates and a general market widening of credit spreads.

Based on current facts and circumstances, the unrealized losses presented in the June 30, 2023 securities in the gross unrealized loss position table above are not believed to be indicative of the ultimate collectibility of the current amortized cost of the securities, but rather are primarily attributable to changes in risk-free interest rates and a general market widening of credit spreads.

In reaching this determination, the continued volatility in risk-free rates and credit spreads, as well as the fact that the unrealized losses are concentrated in investment grade issuers, were considered.

Additionally, there is no current intent to sell securities with unrealized losses, nor is it more likely than not that sale will be required prior to recovery of amortized cost;

accordingly, it was determined that there are no additional impairment losses to be recorded at March 31, 2023.

accordingly, it was determined that there are no additional impairment losses to be recorded as of June 30, 2023.

The following tables present the activity related to the allowance on available-for-sale securities with credit impairments and purchased credit-deteriorated (“PCD”) assets.

Accrued interest receivables on available-for-sale fixed maturity securities totaled $ 407 million, $ 394 million and $ 389 million as of March 31, 2023, December 31, 2022 and March 31, 2022 and are excluded from the estimate of expected credit losses and the amortized cost basis in the tables within this Note.

Three months ended March 31, 2023 Corporate and Other Bonds Asset-backed Total

Accrued interest receivables on available-for-sale fixed maturity securities totaled $ 413 million, $ 394 million and $ 374 million as of June 30, 2023, December 31, 2022 and June 30, 2022 and are excluded from the estimate of expected credit losses and the amortized cost basis in the tables within this Note.

Three months ended June 30, 2023 Corporate and Other Bonds

Asset-backed Total

(In millions)

Allowance for credit losses:

Balance as of April 1, 2023

Additions to the allowance for credit losses:

Securities for which credit losses were not previously recorded 1 7 8

Available-for-sale securities accounted for as PCD assets 11 11

Additional increases to the allowance for credit losses

on securities that had an allowance recorded in a previous period

Total allowance for credit losses $ 13 $ 9 $ 22

Three months ended June 30, 2022 Corporate and Other Bonds Asset-backed Total

(In millions)

Allowance for credit losses:

Balance as of April 1, 2022

$ 12 $ 5 $ 17

Additions to the allowance for credit losses:

Available-for-sale securities accounted for as PCD assets 3 3

Reductions to the allowance for credit losses:

Write-offs charged against the allowance 12 12

Additional decreases to the allowance for credit losses

on securities that had an allowance recorded in a previous period

Total allowance for credit losses $ — $ 5 $ 5

Six months ended June 30, 2023

Allowance for credit losses:

Balance as of January 1, 2023

Additions to the allowance for credit losses:

Securities for which credit losses were not previously recorded 1 7 8

Available-for-sale securities accounted for as PCD assets 20 20

2 unchanged sentences

Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis 3 3

Additional increases or (decreases) to the allowance for credit

Additional increases to the allowance for credit

losses on securities that had an allowance recorded in a previous period

Total allowance for credit losses $ 13 $ 9 $ 22

Three months ended March 31, 2022 Corporate and Other Bonds Asset-backed Total

(In millions)

Six months ended June 30, 2022

Allowance for credit losses:

1 unchanged sentence

$ 11 $ 7 $ 18

Additions to the allowance for credit losses:

Available-for-sale securities accounted for as PCD assets 3 3

Reductions to the allowance for credit losses:

Write-offs charged against the allowance 12 12

Additional increases or (decreases) to the allowance for credit losses

4 unchanged sentences

The following table presents available-for-sale fixed maturity securities by contractual maturity.

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Cost or Amortized Cost Estimated Fair

12 unchanged sentences

Mortgage Loans Amortized Cost Basis by Origination Year (a)

As of March 31, 2023

As of June 30, 2023

(In millions)

13 unchanged sentences

A summary of the aggregate contractual or notional amounts and gross estimated fair values related to derivative financial instruments follows.

The contractual or notional amounts for derivatives are used to calculate the exchange of contractual payments under related agreements and may not be representative of the potential for gain or loss on these instruments.

Gross estimated fair values of derivative positions are currently presented in Equity securities, Receivables and Payable to brokers on the Consolidated Condensed Balance Sheets.

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Contractual/Notional Amount Estimated Fair Value Contractual/Notional Amount Estimated Fair Value

12 unchanged sentences

These investments are recorded once funded, and the related commitments may include future capital calls from various third-party limited partnerships, signed and accepted mortgage loan applications and obligations related to private placement securities.

As of March 31, 2023, commitments to purchase or fund were approximately $ 1.7 billion and to sell were approximately $ 125 million under the terms of these investments.

As of June 30, 2023, commitments to purchase or fund were approximately $ 1.5 billion and to sell were approximately $ 60 million under the terms of these investments.

Assets and liabilities measured at fair value on a recurring basis are summarized in the following tables.

Corporate bonds and other includes obligations of the United States of America (“U.S.”) Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock.

March 31, 2023 Level 1

June 30, 2023 Level 1

Level 3 Total

23 unchanged sentences

Payable to brokers ( 82 ) ( 82 )

The following tables present reconciliations for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2023 and 2022:

Net Realized Investment Gains (Losses) and Net Change in Unrealized Investment Gains (Losses) Unrealized Gains (Losses) Recognized in Net Income (Loss) on Level 3 Assets and Liabilities Held at March 31

Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at March 31

Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30

2023 Balance, April 1 Included in Net Income

Included in OCI Purchases Sales

Transfers into

Level 3 Transfers out of Level 3

Balance, June 30

(In millions)

Fixed maturity securities:

Corporate bonds and other $ 912 $ ( 15 ) $ 68 $ ( 5 ) $ 11 $ 971 $ ( 15 )

States, municipalities and political

subdivisions 44 ( 1 ) 43 ( 1 )

Asset-backed 859 $ 4 ( 7 ) 87 ( 17 ) $ ( 43 ) 883 ( 7 )

Fixed maturities available-for-sale $ 1,815 $ 4 $ ( 23 ) $ 155 $ — $ ( 22 ) $ 11 $ ( 43 ) $ 1,897 $ — $ ( 23 )

Equity securities $ 29 $ ( 1 ) $ ( 2 ) $ 26 $ ( 1 )

Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30

2022 Balance, April 1 Included in Net Income Included in OCI Purchases Sales Settlements Transfers into

Level 3 Transfers out of Level 3 Balance, June 30

(In millions)

Fixed maturity securities:

Corporate bonds and other $ 915 $ ( 1 ) $ ( 82 ) $ 51 $ ( 37 ) $ 846 $ ( 81 )

States, municipalities and political

subdivisions 51 ( 5 ) 46 ( 5 )

Asset-backed 604 8 ( 52 ) 92 $ ( 2 ) ( 23 ) $ 14 641 ( 52 )

Fixed maturities available-for-sale $ 1,570 $ 7 $ ( 139 ) $ 143 $ ( 2 ) $ ( 60 ) $ 14 $ — $ 1,533 $ — $ ( 138 )

Equity securities $ 44 $ ( 3 ) $ ( 3 ) $ 9 $ 47 $ ( 3 )

Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30

2023 Balance, January 1 Included in Net Income

2 unchanged sentences

Level 3 Transfers out of Level 3

Balance, March 31

Balance, June 30

(In millions)

5 unchanged sentences

Fixed maturities available-for-sale $ 1,641 $ 9 $ 9 $ 291 $ — $ ( 34 ) $ 34 $ ( 53 ) $ 1,897 $ — $ 8

Fixed maturities trading — —

Total fixed maturities $ 1,641 $ 5 $ 32 $ 136 $ — $ ( 12 ) $ 23 $ ( 10 ) $ 1,815 $ — $ 32

Equity securities $ 35 $ ( 7 ) $ ( 2 ) $ 26 $ ( 7 )

Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at March 31

Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30

2022 Balance, January 1 Included in Net Income Included in OCI Purchases Sales Settlements Transfers into

Level 3 Transfers out of Level 3 Balance, March 31

Level 3 Transfers out of Level 3 Balance, June 30

(In millions)

5 unchanged sentences

Fixed maturities available-for-sale $ 1,549 $ 9 $ ( 247 ) $ 350 $ ( 7 ) $ ( 99 ) $ 29 $ ( 51 ) $ 1,533 $ — $ ( 246 )

Fixed maturities trading — —

Total fixed maturities $ 1,549 $ 2 $ ( 108 ) $ 207 $ ( 5 ) $ ( 39 ) $ 15 $ ( 51 ) $ 1,570 $ — $ ( 108 )

Equity securities $ 29 $ 12 $ ( 3 ) $ 9 $ 47 $ ( 1 )

12 unchanged sentences

The weighted average rate is calculated based on fair value.

March 31, 2023 Estimated

June 30, 2023 Estimated

Fair Value Valuation Techniques Unobservable Inputs Range (Weighted Average)

9 unchanged sentences

Carrying Amount Estimated Fair Value

March 31, 2023 Level 1 Level 2 Level 3 Total

June 30, 2023 Level 1 Level 2 Level 3 Total

(In millions)

21 unchanged sentences

Catastrophes are an inherent risk of the property and casualty insurance business and have contributed to material period-to-period fluctuations in the Company’s results of operations and/or equity.

The Company reported catastrophe losses, net of reinsurance, of $ 52 million and $ 19 million for the three months ended March 31, 2023 and 2022 primarily related to severe weather related events.

The Company reported catastrophe losses, net of reinsurance, of $ 68 million and $ 37 million for the three months ended June 30, 2023 and 2022 and $ 120 million and $ 57 million for the six months ended June 30, 2023 and 2022 primarily due to severe weather related events.

Liability for Unpaid Claim and Claim Adjustment Expenses

The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves.

Three Months Ended March 31

Six Months Ended June 30

2023 2022 (a)

23 unchanged sentences

These changes can be favorable or unfavorable.

For commercial property and casualty operations (“Property & Casualty Operations”) unfavorable net prior year development of $ 13 million was recorded for the three months ended March 31, 2023 and favorable net prior year development of $ 12 million was recorded for the three months ended March 31, 2022.

The following table presents details of the net prior year loss reserve development in Property & Casualty Operations:

Three Months Ended March 31

Favorable net prior year loss reserve development of $ 17 million and $ 37 million was recorded for CNA’s commercial property and casualty operations (“Property & Casualty Operations”) for the three months ended June 30, 2023 and 2022 and favorable net prior year loss reserve development of $ 4 million and $ 49 million was recorded for the six months ended June 30, 2023 and 2022.

Unfavorable net prior year loss reserve development of $ 35 million and $ 64 million was recorded for CNA’s operations outside of Property & Casualty Operations (“Other Insurance Operations”) for the three and six months ended June 30, 2023 and 2022.

The following table and discussion present details of the net prior year loss reserve development in Property & Casualty Operations and Other Insurance Operations:

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(In millions)

Medical professional liability $ 1 $ 9 $ 9

Other professional liability and management liability $ ( 1 ) 13 ( 1 ) 13

Surety ( 7 ) ( 19 ) ( 7 ) ( 28 )

Commercial auto 11 21 11 21

General liability 70 41 70 41

Workers’ compensation ( 96 ) ( 82 ) ( 98 ) ( 84 )

Property and other 6 ( 12 ) 12 ( 21 )

Other insurance operations 35 64 35 64

Total pretax (favorable) unfavorable development $ 18 $ 27 $ 31 $ 15

Three and Six Months

Unfavorable development in general liability was due to higher than expected claim severity in CNA’s construction and middle market businesses across multiple accident years.

Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in multiple accident years.

Following the second quarter annual review of legacy mass tort exposures, unfavorable development in other insurance operations was primarily driven by higher than expected frequency and severity in abuse claims in older accident years.

Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in recent accident years.

Unfavorable development in commercial auto was due to higher than expected claim severity in CNA’s construction business in multiple accident years.

Unfavorable development in general liability was due to higher than expected claim severity in CNA’s construction, middle market and small businesses across multiple accident years.

Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in multiple accident years.

Unfavorable development in other insurance operations was largely associated with legacy mass tort abuse claims, including the Diocese of Rochester proposed settlement.

Asbestos & Environmental Pollution (“A&EP”) Reserves

1 unchanged sentence

At the effective date of the transaction, approximately $ 1.6 billion of net A&EP claim and allocated claim adjustment expense reserves were ceded to NICO under a retroactive reinsurance agreement with an aggregate limit of $ 4.0 billion.

The $ 1.6 billion of claim and allocated claim adjustment expense reserves ceded to NICO was net of $ 1.2 billion of ceded claim and allocated claim adjustment expense reserves under existing third party reinsurance contracts.

The $ 1.6 billion of claim and allocated claim adjustment expense reserves ceded to NICO was net of $ 1.2 billion of ceded claim and allocated claim

adjustment expense reserves under existing third party reinsurance contracts.

The NICO LPT aggregate reinsurance limit also covers credit risk on the existing third party reinsurance related to these liabilities.

6 unchanged sentences

The effect of the deferred retroactive reinsurance benefit is recorded in Insurance claims and policyholders’ benefits on the Consolidated Condensed Statements of Operations.

The impact of the LPT on the Consolidated Condensed Statements of Operations was the recognition of a retroactive reinsurance benefit of $ 8 million and $ 12 million for the three months ended March 31, 2023 and 2022 .

As of March 31, 2023 and December 31, 2022, the cumulative amounts ceded under the LPT were $ 3.5 billion.

The unrecognized deferred retroactive reinsurance benefit was $ 417 million and $ 425 million as of March 31, 2023 and December 31, 2022 and is included within Other liabilities on the Consolidated Condensed Balance Sheets.

The impact of the LPT on the Consolidated Condensed Statements of Operations was the recognition of a retroactive reinsurance benefit of $ 15 million and $ 11 million for the three months ended June 30, 2023 and 2022 and $ 23 million for each of the six months ended June 30, 2023 and 2022 .

As of June 30, 2023 and December 31, 2022, the cumulative amounts ceded under the LPT were $ 3.5 billion.

The unrecognized deferred retroactive reinsurance benefit was $ 402 million and $ 425 million as of June 30, 2023 and December 31, 2022 and is included within Other liabilities on the Consolidated Condensed Balance Sheets.

NICO established a collateral trust account as security for its obligations under the LPT.

The fair value of the collateral trust account was $ 2.5 billion as of March 31, 2023.

The fair value of the collateral trust account was $ 2.4 billion as of June 30, 2023.

In addition, Berkshire Hathaway Inc.

54 unchanged sentences

Effect of changes in discount rate 78 246

Balance, March 31 $ 3,965 $ 4,303

Balance, June 30

$ 3,790 $ 3,944

Present value of future benefits & expenses

9 unchanged sentences

Effect of changes in discount rate 307 1,329

Balance, March 31 $ 17,941 $ 20,305

Balance, June 30

$ 17,456 $ 18,101

Net LFPB $ 13,666 $ 14,157

(a) As of March 31, 2023 and 2022, the re-measurement gain of $ 1 million and $ 5 million presented parenthetically on the Consolidated Condensed Statement of Operations is comprised of the effect of changes in cash flow assumptions and the effect of actual variances from expected experience.

Earned premiums associated with the long term care business were $ 115 million and $ 120 million for the three months ended March 31, 2023 and 2022.

(a) As of June 30, 2023 and 2022 , the re-measurement gain (loss) of $( 34 ) million and $ 6 million presented parenthetically on the Consolidated Condensed Statement of Operations is comprised of the effect of changes in cash flow assumptions and the effect of actual variances from expected experience.

The following table presents earned premiums and interest expense associated with the long term care business recognized on the Condensed Consolidated Statement of Operations.

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(In millions)

Earned premiums $ 113 $ 118 $ 228 $ 238

Interest expense 189 189 379 377

The following table presents undiscounted expected future benefit and expense payments and undiscounted expected future gross premiums.

Three Months Ended March 31

(In millions)

1 unchanged sentence

Expected future gross premiums 5,536 5,848

Discounted expected future gross premiums at the upper-medium grade fixed income instrument yield discount rate were $ 4.0 billion and $ 4.6 billion as of March 31, 2023 and 2022.

The weighted average effective duration of the LFPB calculated using the original locked in discount rate was 12 years as of March 31, 2023 and 2022.

Discounted expected future gross premiums at the upper-medium grade fixed income instrument yield discount rate were $ 3.9 billion and $ 4.2 billion as of June 30, 2023 and 2022.

The weighted average effective duration of the LFPB calculated using the original locked in discount rate was 12 years as of June 30, 2023 and 2022.

The weighted average interest rates in the table below are calculated based on the rate used to discount all future cash flows.

March 31, December 31,

June 30, December 31,

2023 2022 2022

1 unchanged sentence

Upper-medium grade fixed income instrument discount rate 5.10 4.64 5.23

For the three months ended March 31, 2023, immediate charges to net income resulting from adverse development that caused NPR to exceed 100% were $ 13 million.

There were no such charges for the three months ended March 31, 2022.

The portion of losses recognized in a prior period due to NPR exceeding 100% which, due to favorable development, was reversed through net income for the three months ended March 31, 2023 and 2022 was $ 11 million and $ 1 million.

For the three and six months ended June 30, 2023, immediate charges to net income resulting from adverse development that caused the NPR to exceed 100% were $ 29 million and $ 42 million.

For the three and six months ended June 30, 2022, immediate charges to net income resulting from adverse development that caused the NPR to exceed 100% were less than $ 1 million.

For the three and six months ended June 30, 2023, the portion of losses recognized in a prior period due to NPR exceeding 100% which, due to favorable development, was reversed through net income were less than $ 1 million and $ 11 million.

For the six months ended June 30, 2022, the portion of losses recognized in a prior period due to NPR exceeding 100% which, due to favorable development, was reversed through net income was $ 1 million.

There were no such reversals for the three months ended June 30, 2022.

Shareholders’ Equity

Accumulated other comprehensive income (loss)

The tables below present the changes in AOCI by component for the three months ended March 31, 2022 and 2023 :

Net Unrealized Gains (Losses) on Investments with an Allowance for Credit Losses Net Unrealized Gains (Losses) on Other Investments Unrealized Gains (Losses) on Cash Flow Hedges Pension and Postretirement Benefits Cumulative

The tables below present the changes in AOCI by component for the three and six months ended June 30, 2022 and 2023 :

Net Unrealized Gains (Losses) on Investments with an Allowance for Credit Losses Net Unrealized Gains (Losses) on Other Investments Cumulative

rates used to

contracts Foreign Currency Translation Total Accumulated Other Comprehensive Income (Loss)

contracts Unrealized Gains (Losses) on Cash Flow Hedges Pension and Postretirement Benefits Foreign Currency Translation Total Accumulated Other Comprehensive Income (Loss)

(In millions)

Balance, April 1, 2022, as reported

$ ( 6 ) $ ( 513 ) $ — $ 12 $ ( 630 ) $ ( 114 ) $ ( 1,251 )

Cumulative effect adjustments from changes in accounting standards (Note 1), after tax of $ 0 , $ 270 , $( 497 ), $ 0 , $ 0 and $ 0

1,154 ( 2,119 ) ( 965 )

Balance, April 1, 2022, as adjusted

( 6 ) 641 ( 2,119 ) 12 ( 630 ) ( 114 ) ( 2,216 )

Other comprehensive income (loss) before reclassifications, after tax of $( 1 ), $ 593 , $( 400 ), $ 5 , $ 2 , and $ 0

( 1 ) ( 2,240 ) 1,507 6 ( 2 ) ( 68 ) ( 798 )

Reclassification of (gains) losses from accumulated other comprehensive income, after tax of $ 1 , $( 3 ), $ 0 , $ 2 , $( 1 ) and $ 0

( 1 ) 14 7 20

Other comprehensive income (loss) ( 2 ) ( 2,226 ) 1,507 6 5 ( 68 ) ( 778 )

Amounts attributable to noncontrolling interests 1 229 ( 156 ) 7 81

Balance, June 30, 2022

$ ( 7 ) $ ( 1,356 ) $ ( 768 ) $ 18 $ ( 625 ) $ ( 175 ) $ ( 2,913 )

Balance, April 1, 2023

$ ( 14 ) $ ( 1,867 ) $ ( 393 ) $ 12 $ ( 614 ) $ ( 186 ) $ ( 3,062 )

Other comprehensive income (loss) before reclassifications, after tax of $ 2 , $ 116 , $( 68 ), $ 0 , $ 0 and $ 0

( 8 ) ( 427 ) 256 8 35 ( 136 )

Reclassification of (gains) losses from accumulated other comprehensive loss, after tax of $( 2 ), $( 4 ), $ 0 , $ 0 , $( 2 ) and $ 0

Other comprehensive income (loss) ( 1 ) ( 413 ) 256 8 6 35 ( 109 )

Amounts attributable to noncontrolling interests ( 1 ) 42 ( 26 ) ( 1 ) ( 3 ) 11

Balance, June 30, 2023

$ ( 16 ) $ ( 2,238 ) $ ( 163 ) $ 20 $ ( 609 ) $ ( 154 ) $ ( 3,160 )

Net Unrealized Gains (Losses) on Investments with an Allowance for Credit Losses Net Unrealized Gains (Losses) on Other Investments Cumulative

rates used to

contracts Unrealized Gains (Losses) on Cash Flow Hedges Pension and Postretirement Benefits Foreign Currency Translation Total Accumulated Other Comprehensive Income (Loss)

(In millions)

Balance, January 1, 2022, as reported

6 unchanged sentences

( 5 ) ( 4,884 ) 3,142 21 ( 83 ) ( 1,809 )

Reclassification of losses from accumulated other comprehensive loss, after tax of $ 0 , $( 1 ), $( 1 ), $( 2 ), $ 0 and $ 0

Reclassification of (gains) losses from accumulated other comprehensive loss, after tax of $ 1 , $( 4 ), $ 0 , $ 1 , $( 3 ) and $ 0

( 1 ) 15 3 12 29

Other comprehensive income (loss) ( 6 ) ( 4,869 ) 3,142 24 12 ( 83 ) ( 1,780 )

Amounts attributable to noncontrolling interests 1 504 ( 325 ) ( 1 ) 8 187

Balance, March 31, 2022

Balance, June 30, 2022

$ ( 7 ) $ ( 1,356 ) $ ( 768 ) $ 18 $ ( 625 ) $ ( 175 ) $ ( 2,913 )

10 unchanged sentences

Amounts attributable to noncontrolling interests — ( 26 ) 13 ( 2 ) ( 5 ) ( 20 )

Balance, March 31, 2023

Balance, June 30, 2023

$ ( 16 ) $ ( 2,238 ) $ ( 163 ) $ 20 $ ( 609 ) $ ( 154 ) $ ( 3,160 )

5 unchanged sentences

Treasury Stock

Loews Corporation repurchased 8.2 million and 2.1 million shares of its common stock at aggregate costs of $ 486 million and $ 129 million during the three months ended March 31, 2023 and 2022.

Loews Corporation repurchased 10.0 million and 6.3 million shares of its common stock at aggregate costs of $ 593 million and $ 384 million during the six months ended June 30, 2023 and 2022.

Loews Corporation purchased 0.1 million shares of CNA’s common stock at an aggregate cost of $ 3 million during the six months ended June 30, 2023.

In June of 2023, Boardwalk Pipelines entered into an amendment to its revolving credit agreement, which extended the maturity date of its revolving credit facility from May 27, 2027 to May 26, 2028, while preserving the two one-year extensions that can be exercised at Boardwalk Pipelines’ election.

The available borrowing capacity under the credit agreement will decrease from $ 1 billion to $ 912 million after May 27, 2027.

In May of 2023 , CNA completed a public offering of $ 400 million aggregate principal amount of its 5.5 % senior notes due June 15, 2033.

In May of 2023, Loews Corporation retired at maturity with available cash the outstanding $ 500 million aggregate principal amount of its 2.6 % senior notes.

Revenue from Contracts with Customers

1 unchanged sentence

The following table presents revenues from contracts with customers disaggregated by revenue type along with the reportable segment and a reconciliation to Operating revenues and other as reported in Note 13 :

Three Months Ended March 31 2023 2022

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(In millions)

5 unchanged sentences

Operating revenues and other $ 574 $ 534 $ 1,168 $ 1,074

Receivables from contracts with customers – As of March 31, 2023 and December 31, 2022, receivables from contracts with customers were approximately $ 160 million and $ 168 million and are included within Receivables on the Consolidated Condensed Balance Sheets.

Deferred revenue – As of March 31, 2023 and December 31, 2022, deferred revenue resulting from contracts with customers was approximately $ 4.8 billion and is reported as Deferred non-insurance warranty revenue and within Other liabilities on the Consolidated Condensed Balance Sheets.

Approximately $ 397 million and $ 374 million of revenues recognized during the three months ended March 31, 2023 and 2022 were included in deferred revenue as of December 31, 2022 and 2021.

Performance obligations – As of March 31, 2023, approximately $ 13.5 billion of estimated operating revenues is expected to be recognized in the future related to outstanding performance obligations.

Receivables from contracts with customers – As of June 30, 2023 and December 31, 2022, receivables from contracts with customers were approximately $ 145 million and $ 168 million and are included within Receivables on the Consolidated Condensed Balance Sheets.

Deferred revenue – As of June 30, 2023 and December 31, 2022, deferred revenue resulting from contracts with customers was approximately $ 4.8 billion and is reported as Deferred non-insurance warranty revenue and within Other liabilities on the Consolidated Condensed Balance Sheets.

Approximately $ 660 million and $ 723 million of revenues recognized during the six months ended June 30, 2023 and 2022 were included in deferred revenue as of December 31, 2022 and 2021.

Performance obligations – As of June 30, 2023, approximately $ 13.7 billion of estimated operating revenues is expected to be recognized in the future related to outstanding performance obligations.

The balance relates primarily to revenues for transportation and storage services for natural gas and natural gas liquids and hydrocarbons (“NGLs”) at Boardwalk Pipelines and non-insurance warranty revenue at CNA.

Approximately $ 2.1 billion will be recognized during the remaining nine months of 2023 , $ 2.3 billion in 2024 and the remainder in following years.

Approximately $ 1.6 billion will be recognized during the remaining six months of 2023 , $ 2.4 billion in 2024 and the remainder in following years.

The actual timing of recognition may vary due to factors outside of the Company’s control.

1 unchanged sentence

The Company has several non-contributory defined benefit plans and postretirement benefit plans covering eligible employees and retirees.

The following table presents the components of net periodic (benefit) cost for the defined benefit plans:

The following tables present the components of net periodic (benefit) cost for the defined benefit plans:

Pension Benefits

What changed 10-Q

Item 1. Financial Statements