What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-07-31 compared with 2023-05-01 · 289 added, 176 removed, 401 unchanged (54% of the section changed)

22 unchanged sentences

Consolidated Financial Results

The following table summarizes net income (loss) attributable to Loews Corporation by segment and net income (loss) per share attributable to Loews Corporation for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31 2023 2022

The following table summarizes net income (loss) attributable to Loews Corporation by segment and the basic and diluted net income per share attributable to Loews Corporation for the three and six months ended June 30, 2023 and 2022:

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(In millions, except per share data)

3 unchanged sentences

Corporate (26) (86) (29) (135)

Net income attributable to Loews Corporation (a) $ 375 $ 322

Basic net income per share (a) $ 1.61 $ 1.30

Diluted net income per share (a) $ 1.61 $ 1.29

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

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

(a) As of January 1, 2023, Accounting Standards Update (“ASU”) 2018-12, “ Financial Services – Insurance (Topic 944):

2 unchanged sentences

For additional information see Notes 1 and 6 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

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.

Net income attributable to Loews Corporation for the three months ended June 30, 2023 was $360 million, or $1.58 per share, compared to $167 million, or $0.68 per share in the comparable 2022 period.

Net income attributable to Loews Corporation for the six months ended June 30, 2023 was $735 million, or $3.19 per share, compared to $489 million, or $1.98 per share in the comparable 2022 period.

The increase in net income attributable to Loews Corporation in the second quarter of 2023 as compared to the comparable 2022 period was driven by higher income from consolidated subsidiaries and higher net investment income at the Parent Company.

CNA’s results improved due to higher net investment income and improved underlying underwriting income, partially offset by higher catastrophe losses and lower favorable property & casualty net prior year loss reserve development.

Boardwalk Pipelines produced higher revenues, partially offset by an increase in maintenance costs.

Loews Hotels & Co results include a gain related to the acquisition of an additional equity interest and consolidation of a previously unconsolidated joint venture property.

The drivers of the increase in net income for the six months ended June 30, 2023 as compared to the comparable 2022 period are consistent with the three-month discussion above.

CNA Financial

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.

The following table summarizes the results of operations for CNA for the three and six months ended June 30, 2023 and 2022 as presented in Note 13 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

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

Three Months Ended March 31 2023 2022 (a)

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 (a) 2023 2022 (a)

(In millions)

19 unchanged sentences

For additional information see Notes 1 and 6 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

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.

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.

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.

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.

A portion of this additional cost has resulted in an unfavorable impact on the expense ratio for the three months ended March 31, 2023.

Three Months Ended June 30, 2023 Compared to the Comparable 2022 Period

Net income attributable to Loews Corporation increased $85 million for the three months ended June 30, 2023 as compared with the comparable 2022 period primarily due to higher net investment income from limited partnership and common stock returns and fixed income securities, lower investment losses driven by the favorable relative change in fair value of non-redeemable preferred stock, improved underlying underwriting income and lower unfavorable net prior year loss reserve development.

These increases to net income were offset by higher catastrophe losses for the three months ended June 30, 2023 as compared with the comparable 2022 period.

Catastrophe losses were $68 million ($48 million after tax and noncontrolling interests) for the three months ended June 30, 2023 as compared with $37 million ($26 million after tax and noncontrolling interests) in the comparable 2022 period.

Six Months Ended June 30, 2023 Compared to the Comparable 2022 Period

Net income attributable to Loews Corporation increased $88 million for the six months ended June 30, 2023 as compared with the comparable 2022 period primarily due to higher net investment income from limited partnership and common

stock returns and fixed income securities and improved underlying underwriting income.

These increases to net income were partially offset by higher catastrophe losses and increased unfavorable net prior year loss reserve development for the six months ended June 30, 2023 as compared with the comparable 2022 period.

Catastrophe losses were $120 million ($85 million after tax and noncontrolling interests) for the six months ended June 30, 2023 as compared with $57 million ($40 million after tax and noncontrolling interests) in the comparable 2022 period.

Results for the three and six months ended June 30, 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.

A portion of this additional cost has resulted in an unfavorable impact on the expense ratio for the three and six months ended June 30, 2023.

CNA’s Property & Casualty and Other Insurance Operations

30 unchanged sentences

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.

The following tables summarize the results of CNA’s Property & Casualty Operations for the three months e nded March 31, 2023 and 2022.

Three Months Ended March 31, 2023 Specialty

Underlying underwriting gain (loss) represents underwriting results excluding catastrophe losses and development-related items.

The following tables summarize the results of CNA’s Property & Casualty Operations for the three and six months e nded June 30, 2023 and 2022.

Three Months Ended June 30, 2023 Specialty

International

20 unchanged sentences

New business $ 120 $ 343 $ 92 $ 555

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Gross written premiums $ 1,904 $ 1,429 $ 382 $ 3,715

18 unchanged sentences

New business $ 132 $ 280 $ 88 $ 500

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.

Net written premiums for Specialty increased $17 million for the three months ended March 31, 2023 as compared with the comparable 2022 period.

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.

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.

Net written premiums for Commercial increased $187 million for the three months ended March 31, 2023 as compared with the comparable 2022 period.

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.

Gross written premiums for International increased $35 million for the three months ended March 31, 2023 as compared with the comparable 2022 period.

Excluding the effect of foreign currency exchange rates, gross written premiums increased $55 million driven by retention and higher new business.

Net written premiums for International increased $20 million for the three months ended March 31, 2023 as compared with the comparable 2022 period.

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.

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.

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.

Total catastrophe losses were $52 million for the three months ended March 31, 2023 as compared with $19 million for the comparable 2022 period.

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.

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.

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.

Six Months Ended June 30, 2023 Specialty

International

(In millions, except %)

Gross written premiums $ 3,549 $ 3,161 $ 819 $ 7,529

Gross written premiums excluding third-party captives 1,847 3,044 819 5,710

Net written premiums 1,613 2,517 630 4,760

Net earned premiums 1,609 2,166 592 4,367

Underwriting gain 154 83 31 268

Net investment income 271 314 48 633

Core income 348 310 62 720

Other performance metrics:

Loss ratio excluding catastrophes and development 58.5 % 61.5 % 57.7 % 59.9 %

Effect of catastrophe impacts 4.7 2.9 2.7

Effect of development-related items (0.2) (0.3) 2.5 0.2

Loss ratio 58.3 % 65.9 % 63.1 % 62.8 %

Expense ratio 31.9 29.8 31.5 30.8

Dividend ratio 0.2 0.5 0.3

Combined ratio 90.4 % 96.2 % 94.6 % 93.9 %

Combined ratio excluding catastrophes and development 90.6 % 91.8 % 89.2 % 91.0 %

Rate 8 % 4 % 5 %

Renewal premium change 2 % 10 7 7

Retention 89 85 83 86

New business $ 228 $ 653 $ 177 $ 1,058

Six Months Ended June 30, 2022

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

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

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

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

Underwriting gain 181 117 43 341

Net investment income 203 231 28 462

Core income 324 270 44 638

Other performance metrics:

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

Effect of catastrophe impacts 0.1 2.4 2.0 1.4

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

Loss ratio 57.5 % 63.0 % 59.6 % 60.4 %

Expense ratio 30.7 30.3 32.4 30.7

Dividend ratio 0.2 0.5 0.3

Combined ratio 88.4 % 93.8 % 92.0 % 91.4 %

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

Rate 8 % 5 % 8 % 6 %

Renewal premium change 9 8 10 9

Retention 85 86 79 84

New business $ 277 $ 508 $ 166 $ 951

Three Months Ended June 30, 2023 Compared to the Comparable 2022 Period

Gross written premiums, excluding third-party captives, for Specialty decreased $12 million for the three months ended June 30, 2023 as compared with the comparable 2022 period driven by lower new business and rate.

Net written premiums for Specialty decreased $7 million for the three months ended June 30, 2023 as compared with the comparable 2022 period.

The increase in net earned premiums for the three months ended June 30, 2023 was consistent with the trend in net written premiums in recent quarters for Specialty.

Gross written premiums for Commercial increased $290 million for the three months ended June 30, 2023 as compared with the comparable 2022 period driven by favorable renewal premium change and higher new business.

Net written premiums for Commercial increased $195 million for the three months ended June 30, 2023 as compared with the comparable 2022 period.

The increase in net earned premiums for the three months ended June 30, 2023 was consistent with the trend in net written premiums for Commercial.

Gross written premiums for International increased $39 million, or $44 million excluding the effect of foreign currency exchange rates, for the three months ended June 30, 2023 as compared with the comparable 2022 period driven by favorable renewal premium change.

Net written premiums for International increased $29 million, or $31 million excluding the effect of foreign currency exchange rates, for the three months ended June 30, 2023 as compared with the comparable 2022 period.

The increase in n et earned premiums for the three months ended June 30, 2023 was consistent with the trend in net written premiums for International.

Core income for Property & Casualty Operations increased $57 million for the three months ended June 30, 2023 as compared with the comparable 2022 period primarily due to higher net investment income and improved underlying underwriting results, partially offset by higher catastrophe losses and lower favorable net prior year loss reserve development.

Total catastrophe losses for Property & Casualty Operations were $68 million for the three months ended June 30, 2023 as compared with $37 million for the comparable 2022 period.

For the three months ended June 30, 2023 and 2022, Specialty had no catastrophe losses and catastrophe losses of $1 million, Commercial had catastrophe losses of $59 million and $29 million and International had catastrophe losses of $9 million and $7 million.

Favorable net prior year loss reserve development for Property & Casualty Operations of $17 million and $37 million was recorded for the three months ended June 30, 2023 and 2022.

For the three months ended June 30, 2023 and 2022, Specialty recorded favorable net prior year loss reserve development of $4 million and $10 million, Commercial recorded favorable net prior year loss reserve development of $13 million and $22 million and International recorded no net prior year loss reserve development and favorable net prior year loss reserve development of $5 million.

Further information on net prior year loss reserve development is included in Note 5 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

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.

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.

The increase in the expense ratio was primarily driven by employee related costs.

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.

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.

The improvement in the expense ratio was driven by higher net earned premiums, partially offset by employee related costs.

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.

The increase in the loss ratio was largely driven by unfavorable net prior period loss reserve development.

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.

The improvement in the expense ratio was largely driven by higher net earned premiums.

Specialty’s combined ratio increased 2.8 points for the three months ended June 30, 2023 as compared with the comparable 2022 period due to a 2.0 point increase in the expense ratio and a 0.8 point increase in the loss ratio.

The increase in the expense ratio was primarily driven by higher employee related and acquisition costs.

The increase in the loss ratio was primarily driven by lower favorable net prior year loss reserve development.

Commercial’s combined ratio increased 3.1 points for the three months ended June 30, 2023 as compared with the comparable 2022 period due to a 3.5 point increase in the loss ratio, partially offset by a 0.4 point improvement in the expense ratio.

The increase in the loss ratio was driven by higher catastrophe losses, which were 5.2 points of the loss ratio for the three months ended June 30, 2023, as compared with 3.0 points of the loss ratio in the comparable 2022 period, and lower favorable net prior year loss reserve development.

The improvement in the expense ratio was driven by higher net earned premiums, partially offset by higher employee related costs.

International’s combined ratio increased 0.6 points for the three months ended June 30, 2023 as compared with the comparable 2022 period due to a 1.5 point increase in the loss ratio, partially offset by a 0.9 point improvement in the expense ratio.

The increase in the loss ratio was driven by no net prior period loss reserve development recorded for the three months ended June 30, 2023 as compared with $5 million of favorable net prior year loss reserve in the comparable 2022 period.

Catastrophe losses were 3.1 points of the loss ratio for the three months ended June 30, 2023, as compared with 2.8 points of the loss ratio in the comparable 2022 period.

The improvement in the expense ratio was primarily driven by higher net earned premiums and lower acquisition costs partially offset by higher employee related costs.

Six Months Ended June 30, 2023 Compared to the Comparable 2022 Period

Gross written premiums, excluding third-party captives, for Specialty decreased $11 million for the six months ended June 30, 2023 as compared with the comparable 2022 period driven by lower new business and rate.

Net written premiums for Specialty increased $10 million for the six months ended June 30, 2023 as compared with the comparable 2022 period.

The increase in net earned premiums for the six months ended June 30, 2023 was consistent with the trend in net written premiums for Specialty.

Gross written premiums for Commercial increased $524 million for the six months ended June 30, 2023 as compared with the comparable 2022 period driven by favorable renewal premium change and higher new business.

Net written premiums for Commercial increased $382 million for the six months ended June 30, 2023 as compared with the comparable 2022 period.

The increase in net earned premiums for the six months ended June 30, 2023 was consistent with the trend in net written premiums for Commercial.

Gross written premiums for International increased $74 million for the six months ended June 30, 2023 as compared with the comparable 2022 period.

Excluding the effect of foreign currency exchange rates, gross written premiums increased $99 million driven by favorable renewal premium change.

Net written premiums for International increased $49 million for the six months ended June 30, 2023 as compared with the comparable 2022 period.

Excluding the effect of foreign currency exchange rates, net written premiums increased $66 million for the six months ended June 30, 2023 as compared with the comparable 2022 period.

The increase in n et earned premiums for the six months ended June 30, 2023 was consistent with the trend in net written premiums for International.

Core income for Property & Casualty Operations increased $82 million for the six months ended June 30, 2023 as compared with the comparable 2022 period primarily due to higher net investment income and improved underlying underwriting results, partially offset by higher catastrophe losses and lower favorable net prior year loss reserve development.

Total catastrophe losses for Property & Casualty Operations were $120 million for the six months ended June 30, 2023 as compared with $57 million for the comparable 2022 period.

For the six months ended June 30, 2023 and 2022, Specialty had no catastrophe losses and catastrophe losses of $1 million, Commercial had catastrophe losses of $103 million and $45 million and International had catastrophe losses of $17 million and $11 million.

Favorable net prior year loss reserve development for Property & Casualty Operations of $4 million and $49 million was recorded for the six months ended June 30, 2023 and 2022.

For the six months ended June 30, 2023 and 2022, Specialty recorded favorable net prior year loss reserve development of $4 million and $20 million, Commercial recorded favorable net prior year loss reserve development of $15 million and $24 million and International recorded unfavorable net prior year loss reserve development of $15 million and favorable net prior year loss reserve development of $5 million.

Further information on net prior year loss reserve development is included in Note 5 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

Specialty’s combined ratio increased 2.0 points for the six months ended June 30, 2023 as compared with the comparable 2022 period due to a 1.2 point increase in the expense ratio and a 0.8 point increase in the loss ratio.

The increase in the expense ratio was primarily driven by higher employee related costs.

The increase in the loss ratio was primarily driven by lower favorable net prior year loss reserve development.

Commercial’s combined ratio increased 2.4 points for the six months ended June 30, 2023 as compared with the comparable 2022 period due to a 2.9 point increase in the loss ratio, partially offset by a 0.5 point improvement in the expense ratio.

The increase in the loss ratio was driven by higher catastrophe losses, which were 4.7 points of the loss ratio for the six months ended June 30, 2023, as compared with 2.4 points of the loss ratio in the comparable 2022 period, and lower favorable net prior year loss reserve development.

The improvement in the expense ratio was driven by higher net earned premiums, partially offset by higher employee related costs.

International’s combined ratio increased 2.6 points for the six months ended June 30, 2023 as compared with the comparable 2022 period due to a 3.5 point increase in the loss ratio, partially offset by a 0.9 point improvement in the expense ratio.

The increase in the loss ratio was driven by unfavorable net prior period loss reserve development and higher catastrophe losses.

Catastrophe losses were 2.9 points of the loss ratio for the six months ended June 30, 2023, as compared with 2.0 points of the loss ratio in the comparable 2022 period.

The improvement in the expense ratio was driven by higher net earned premiums.

Other Insurance Operations

The following table summarizes the results of CNA’s Other Insurance Operations for the three months ended March 31, 2023 and 2022.

Three Months Ended March 31 2023 2022

The following table summarizes the results of CNA’s Other Insurance Operations for the three and six months ended June 30, 2023 and 2022.

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(In millions)

2 unchanged sentences

Core loss (a)

(66) (87) (87) (110)

(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.

Prior period amounts presented in the financial statements have been adjusted to reflect application of the new guidance.

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.

Core loss for Other Insurance Operations for the three and six months ended June 30, 2022 was adjusted by $(15) million and $(33) million as a result of adopting the standard.

For additional information see Notes 1 and 6 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

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.

Three Months Ended June 30, 2023 Compared to the Comparable 2022 Period

Core results for Other Insurance Operations improved $21 million for the three months ended June 30, 2023 as compared with the comparable 2022 period primarily driven by lower net prior year loss reserve development and higher net investment income, partially offset by long term care policy buyouts.

Policy buyouts generally result in an unfavorable impact on core loss, as the cash payments are linked to higher statutory reserve levels.

Core loss for the three months ended June 30, 2023 includes a $28 million charge related to unfavorable net prior year loss reserve development largely associated with legacy mass tort claims as compared with a $51 million charge related to unfavorable net prior year loss reserve development for the comparable 2022 period.

Further information on net prior year loss reserve development is included in Note 5 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

Six Months Ended June 30, 2023 Compared to the Comparable 2022 Period

Core results for Other Insurance Operations improved $23 million for the six months ended June 30, 2023 as compared with the comparable 2022 period primarily driven by lower net prior year loss reserve development associated with legacy mass tort claims and higher net investment income, partially offset by long term care policy buyouts.

Excluding the impacts of long term care policy buyouts, underwriting results are generally in line with expectations.

CNA expects to continue offering policy buyouts for the remainder of 2023 and into future years.

Further information on net prior year loss reserve development is included in Note 5 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

Non-GAAP Reconciliation of Net Income Attributable to Loews Corporation to Core Income

The following table reconciles net income attributable to Loews Corporation to core income for t he three months ended March 31, 2023 and 2022:

Three Months Ended March 31 2023 2022

The following table reconciles net income attributable to Loews Corporation to core income for t he three and six months ended June 30, 2023 and 2022:

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(In millions)

1 unchanged sentence

Investment losses 25 40 53 43

Consolidating adjustments including noncontrolling interests (a) 29 30

Consolidating adjustments including

noncontrolling interests (a)

Total core income $ 308 $ 230 $ 633 $ 528

5 unchanged sentences

Prior period amounts presented in the financial statements have been adjusted to reflect application of the new guidance.

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.

Core loss for Other Insurance Operations for the three and six months ended June 30, 2022 was adjusted by $(15) million and $(33) million as a result of adopting the standard.

For additional information see Notes 1 and 6 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

2 unchanged sentences

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

For further information on Boardwalk Pipelines’ revenue recognition policies see Note 1 of the

Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022.

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, 2022.

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.

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.

The following table summarizes the results of operations for Boardwalk Pipelines for the three and six months ended June 30, 2023 and 2022, as presented in Note 13 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

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.

Three Months Ended March 31 2023 2022

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(In millions)

Operating revenues and other $ 361 $ 325 $ 756 $ 706

Interest income 4 6

Total 365 325 762 706

8 unchanged sentences

EBITDA $ 213 $ 193 $ 467 $ 452

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.

Total revenues increased $16 million for the three months ended March 31, 2023 as compared with the comparable 2022 period.

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.

Operating costs and expenses increased $18 million for the three months ended March 31, 2023 as compared with the comparable 2022 period.

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.

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.

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.

Three Months Ended June 30, 2023 Compared to the Comparable 2022 Period

Net income attributable to Loews Corporation and EBITDA increased $18 million and $20 million for the three months ended June 30, 2023 as compared with the comparable 2022 period.

Total revenues increased $40 million for the three months ended June 30, 2023 as compared with the comparable 2022 period, due to higher operating revenues.

Including fuel and transportation expenses, operating revenues increased $39 million, primarily driven by an increase in transportation revenues of $27 million due to re-contracting at higher rates, higher utilization-based revenues and recently completed growth projects as well as a $10 million increase in storage and parking and lending revenues due to favorable market conditions.

Operating costs and expenses increased $16 million for the three months ended June 30, 2023 as compared with the comparable 2022 period.

Excluding expenses offset with operating revenues, operating costs and expenses increased $19 million, primarily due to increased costs from maintenance projects associated with the requirements of the Mega Rule and higher employee-related and outside services costs.

Depreciation and amortization expenses increased $3 million for the three months ended June 30, 2023 as compared with the comparable 2022 period due to a change in the estimated life of certain assets.

Interest expenses decreased $3 million for the three months ended June 30, 2023 as compared with the comparable 2022 period, primarily due to lower average outstanding long-term debt.

Six Months Ended June 30, 2023 Compared to the Comparable 2022 Period

Net income attributable to Loews Corporation and EBITDA increased $13 million and $15 million for the six months ended June 30, 2023 as compared with the comparable 2022 period.

Total revenues increased $56 million for the six months ended June 30, 2023 as compared with the comparable 2022 period.

This increase was primarily due to operating revenues, which increased $50 million, primarily driven by an increase in transportation revenues of $47 million due to re-contracting at higher rates and recently completed growth projects, as well as a $13 million increase in storage and parking and lending revenues due to favorable market conditions, partially offset by lower product sales of $8 million.

In addition, interest income increased $6 million for the six months ended June 30, 2023 as compared with the comparable 2022 period.

Operating costs and expenses increased $35 million for the six months ended June 30, 2023 as compared with the comparable 2022 period, primarily due to higher costs from increased maintenance projects associated with the requirements of the Mega Rule and higher employee-related, materials and supplies and outside services costs.

Depreciation and amortization expenses increased $9 million for the six months ended June 30, 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.

Interest expenses decreased $6 million for the six months ended June 30, 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

The following table reconciles net income attributable to Loews Corporation to EBITDA for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31 2023 2022

The following table reconciles net income attributable to Loews Corporation to EBITDA for the three and six months ended June 30, 2023 and 2022:

Three Months Ended

Six Months Ended

2023 2022 2023 2022

(In millions)

Net income attributable to Loews Corporation

$ 57 $ 39 $ 143 $ 130

Income tax expense

Depreciation and amortization

102 99 203 194

$ 213 $ 193 $ 467 $ 452

Loews Hotels & Co

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.

Three Months Ended March 31 2023 2022

The following table summarizes the results of operations for Loews Hotels & Co for the three and six months ended June 30, 2023 and 2022, as presented in Note 13 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(In millions)

Operating revenue $ 182 $ 168 $ 337 $ 291

Gain on acquisition of a joint venture 46 46

Revenues related to reimbursable expenses 26 32 63 61

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Operating 142 123 272 231

Asset impairments 9 14 9 14

Reimbursable expenses 26 32 63 61

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Equity income from joint ventures (41) (53) (72) (79)

Interest 4 6 8

Total 153 136 311 266

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Net income attributable to Loews Corporation $ 74 $ 44 $ 98 $ 59

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.

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.

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.

Occupancy levels in the first quarter of 2022 were negatively impacted by COVID variants.

Operating expenses have likewise increased to support the higher demand levels.

Equity income from joint ventures improved $5 million for the three months ended March 31, 2023 as compared with the comparable 2022 period.

The increase was driven by stronger occupancy levels and higher average daily room rates at

many joint venture hotels, particularly at the Universal Orlando Resort, during the first quarter of 2023 as compared with the comparable 2022 period.

Occupancy levels in the first quarter of 2022 were negatively impacted by COVID variants.

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.

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.

Net income attributable to Loews Corporation increased by $30 million and $39 million for the three and six months ended June 30, 2023 as compared with the comparable 2022 periods primarily due to the reasons discussed below.

Operating revenues improved by $14 million and $46 million and operating expenses increased by $19 million and $41 million for the three and six months ended June 30, 2023 as compared with the comparable 2022 periods.

The increase in operating revenues was driven by slightly higher occupancy levels at many owned hotels in 2023 as compared with the comparable 2022 periods along with consolidating the results of a property in the three months ended June 30, 2023 that was previously accounted for under the equity method.

Occupancy levels in the first quarter of 2022 were negatively impacted by COVID variants and experienced improvement in the first quarter of 2023.

The increase in operating expenses was largely due to increased staffing costs.

During the second quarter of 2023, Loews Hotels & Co recorded a gain of $46 million ($36 million after tax) related to the acquisition of an additional equity interest and consolidation of a previously unconsolidated joint venture property .

Equity income from joint ventures decreased $12 million and $7 million for the three and six months ended June 30, 2023 as compared with the comparable 2022 periods.

Occupancy levels at joint venture properties decreased slightly in the second quarter of 2023 compared to the comparable prior year period while average daily rates increased nominally.

In addition, occupancy levels in the first quarter of 2022 were negatively impacted by COVID variants and experienced improvement in the first quarter of 2023.

Expenses at joint venture properties have increased in 2023 compared to 2022, largely due to increased staffing costs and higher interest costs.

The three and six months ended June 30, 2023 and 2022 include impairment charges of $9 million and $14 million to reduce the carrying value of assets to their estimated fair value.

Interest expense decreased $4 million and $2 million for the three and six months ended June 30, 2023 as compared with the comparable 2022 periods due primarily to the increase in capitalized interest on projects under development and the favorable impact of interest rate caps.

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

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Corporate also includes the equity method of accounting for Altium Packaging.

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:

Three Months Ended March 31 2023 2022

The following table summarizes the results of operations for Corporate for the three and six months ended June 30, 2023 and 2022 as presented in Note 13 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report:

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(In millions)

Net investment income (loss) $ 11 $ (65) $ 53 $ (81)

Operating revenues and other 2 2

Total 11 (63) 53 (79)

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Interest 21 22 43 44

Total 41 45 85 89

Loss before income tax (30) (108) (32) (168)

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Net loss attributable to Loews Corporation $ (26) $ (86) $ (29) $ (135)

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.

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.

Net investment income for the Parent Company was $11 million and $53 million for the three and six months ended June 30, 2023 as compared with net investment losses of $65 million and $81 million in the comparable 2022 periods, primarily due to improved results from short term investments and the favorable change in the fair value of equity based investments in the trading portfolio.

The Company expects to record approximately $50 million in Operating and other expenses in the second half of 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

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.

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.

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 .

Parent Company cash and investments, net of receivables and payables, totaled $2.5 billion at June 30, 2023 as compared to $3.2 billion at December 31, 2022.

During the six months ended June 30, 2023 , we received $498 million in cash dividends from CNA, including a special cash dividend of $293 million.

Cash outflows during the six months ended June 30, 2023 included the payment of $593 million to fund treasury stock purchases, $500 million to retire at maturity the outstanding aggregate principal amount of our 2.6% senior notes, $29 million of cash dividends to our shareholders, $3 million to purchase common shares of CNA and an equity contribution of $30 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.

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

We also have an effective shelf registration statement on file with the Securities and Exchange Commission (“SEC”) under which we may publicly issue an unspecified amount of our debt, equity or hybrid securities from time to time.

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

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

During the three months ended March 31, 2023 ,

we purchased 8.2 million shares of Loews Corporation common stock.

As of April 28, 2023, there were 227,898,186 shares of Loews Corporation common stock outstanding.

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.

During the six months ended June 30, 2023 , we

purchased 10.0 million shares of Loews Corporation common stock and 0.1 million shares of CNA’s common stock.

As of July 28, 2023, there were 225,508,650 shares of Loews Corporation common stock outstanding.

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

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

CNA’s cash provided by operating activities was $436 million for the three months ended March 31, 2023 and $645 million for the comparable 2022 period.

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.

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.

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 cash provided by operating activities was $937 million for the six months ended June 30, 2023 and $1.3 billion for the comparable 2022 period.

The decrease in cash provided by operating activities was driven by higher net claim payments, which includes long term care policy buyouts, and lower distributions from limited partnerships, partially offset by an increase in premiums collected.

CNA paid cash dividends of $2.04 per share on its common stock, including a special cash dividend of $1.20 per share, during the six months ended June 30, 2023.

On July 28, 2023, CNA’s Board of Directors declared a quarterly cash dividend of $0.42 per share payable August 31, 2023 to shareholders of record on August 14, 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.

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

As of March 31, 2023, CCC was in a positive earned surplus position.

CCC paid dividends of $475 million and $535 million during the three months ended March 31, 2023 and 2022.

As of June 30, 2023, CCC was in a positive earned surplus position.

CCC paid dividends of $660 million and $690 million during the six months ended June 30, 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.

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.

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

Boardwalk Pipelines’ cash provided by operating activities increased $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.

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.

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.

Boardwalk Pipelines’ cash provided by operating activities increased $31 million for the six months ended June 30, 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.

For the six months ended June 30, 2023 and 2022, Boardwalk Pipelines’ capital expenditures were $151 million and $122 million, consisting of growth capital expenditures of $95 million and $76 million and maintenance capital expenditures of $56 million and $39 million.

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

Boardwalk Pipelines anticipates that its existing capital resources, including its cash on hand, revolving credit facility and cash flows from operating activities, will be adequate to fund its operations and capital expenditures for 2023.

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.

As of March 31, 2023, Boardwalk Pipelines had available the entire $1.0 billion of borrowing capacity under its revolving credit facility.

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.

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.

As of June 30, 2023, Boardwalk Pipelines had available the entire $1.0 billion of borrowing capacity under its revolving credit facility.

In June of 2023, Boardwalk Pipelines’ amended its revolving credit facility to extend the maturity date by one year to May 26, 2028.

For further information, see Note 8 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

As of June 30, 2023, Loews Hotels & Co, through its subsidiaries, had $164 million in mortgage loans that mature within twelve months.

Each loan has an extension option which Loews Hotels & Co currently plans to exercise before maturity.

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.

Through the date of this Report, all Loews Hotels & Co’s subsidiaries are in compliance with their debt covenants.

Through April 28, 2023, Loews Hotels & Co received a capital contribution of $30 million from Loews Corporation to fund development projects during 2023.

Through July 28, 2023 , Loews Hotels & Co received capital contributions 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.

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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.

If such movements do not occur as anticipated, significant losses may occur.

Monitoring procedures include senior management review of daily reports of existing positions and valuation fluctuations to seek to ensure that open positions are consistent with the portfolio strategy.

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

Three Months Ended March 31 2023 2022

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(In millions)

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Limited partnership and common stock return 3.1 % (0.7) % 4.5 % (0.3) %

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.

CNA’s net investment income increased $143 million and $220 million for the three and six months ended June 30, 2023 as compared with the comparable 2022 periods, driven by higher limited partnership and common stock returns and higher income from fixed income securities and other.

Investment Gains (Losses)

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

Three Months Ended March 31 2023 2022

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(In millions)

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Investment losses attributable to Loews Corporation $ (23) $ (36) $ (48) $ (39)

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.

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.

CNA’s pretax investment results improved $27 million and $3 million for the three and six months ended June 30, 2023 as compared with the comparable 2022 periods, driven by the favorable relative change in fair value of non-redeemable preferred stock in the three and six months ended June 30, 2023 as compared to the comparable 2022 periods, partially offset by higher net losses on disposals of fixed maturity securities.

The three and six months ended June 30, 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 3 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

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

March 31, 2023

June 30, 2023

December 31, 2022

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Total $ 38,728 $ (3,088) $ 37,627 $ (3,404)

As of March 31, 2023 and December 31, 2022, 1% of CNA’s fixed maturity portfolio was rated internally.

AAA rated securities included $0.3 billion of pre-funded municipal bonds as of March 31, 2023 and December 31, 2022.

As of June 30, 2023 and December 31, 2022, 1% of CNA’s fixed maturity portfolio was rated internally.

AAA rated securities included $0.3 billion of pre-funded municipal bonds as of June 30, 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:

March 31, 2023

June 30, 2023

Estimated Fair Value

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

March 31, 2023

June 30, 2023

Estimated Fair Value

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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:

March 31, 2023

June 30, 2023

Estimated Fair Value

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Total commercial mortgage-backed $ 1,583 $ (253)

March 31, 2023

June 30, 2023

Estimated Fair Value

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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:

March 31, 2023

June 30, 2023

Estimated Fair Value

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(a) Other includes a diversified mix of property type strategies including self-storage, healthcare and apartments.

March 31, 2023

June 30, 2023

Estimated Fair Value

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AA $ 11 $ (1)

BBB 936 (106)

Non-investment grade 16 (2)

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This assessment utilizes historical credit loss experience adjusted to reflect current conditions and reasonable and supportable forecasts.

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.

As of June 30, 2023 the allowance for expected credit losses on CNA’s mortgage portfolio was $30 million, or 2.9% of its amortized cost basis.

The following table presents the amortized cost basis of mortgage loans by property type:

March 31, 2023

June 30, 2023

Amortized Cost Percentage of Total

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Total mortgage loans 1,039 100 %

Allowance for expected credit losses (30)

Total mortgage loans - net of allowance $ 1,009

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.

As of March 31, 2023, these holdings had an estimated fair value of $484 million and net unrealized losses of $82 million.

As of June 30, 2023 , these holdings had an estimated fair value of $474 million and net unrealized losses of $92 million.

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.

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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.

minimize interest rate risk and maintain a level of income sufficient to support the underlying insurance liabilities.

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.

For portfolios where future liability cash flows are determinable and typically long term in nature, CNA segregates investments for asset/liability management purposes.

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

March 31, 2023

June 30, 2023

December 31, 2022

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A summary of these risks and specific analysis on changes is included in the Quantitative and Qualitative Disclosures about Market Risk included under Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2022.

CATASTROPHES AND RELATED REINSURANCE

Various events can cause catastrophe losses.

These events can be natural or man-made, including hurricanes, tornadoes, windstorms, earthquakes, hail, severe winter weather, fires, floods, riots, strikes, civil unrest, cyber attacks, pandemics and acts of terrorism that produce unusually large aggregate losses.

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

CNA uses various analyses and methods, including using one of the industry standard natural catastrophe models to estimate hurricane and earthquake losses at various return periods, to inform underwriting and reinsurance decisions designed to manage its exposure to catastrophic events.

CNA generally seeks to manage its exposure through the purchase of catastrophe reinsurance and utilizes various reinsurance

programs to mitigate catastrophe losses including excess-of-loss occurrence and aggregate treaties covering property and workers’ compensation, a property quota share treaty and the Terrorism Risk Insurance Program Reauthorization Act of 2019 (“TRIPRA”), as well as individual risk agreements that reinsure from losses from specific classes or lines of business.

CNA conducts an ongoing review of its risk and catastrophe reinsurance coverages and from time to time makes changes as it deems appropriate.

In the second quarter of 2023, CNA renewed its excess-of-loss property catastrophe reinsurance as described below.

Group North American Property Treaty

CNA purchased corporate catastrophe excess-of-loss treaty reinsurance covering its U.S.

states and territories and Canadian property exposures underwritten in its North American and European companies.

Exposures underwritten through Hardy are excluded and covered under a separate treaty.

The treaty has a term of June 1, 2023 to June 1, 2024 and provides coverage for the accumulation of covered losses from catastrophe occurrences above CNA’s per occurrence retention of $235 million up to $1.1 billion for all losses other than earthquakes.

Earthquakes are covered up to $1.2 billion.

Losses stemming from terrorism events are covered unless they are due to a nuclear, biological or chemical attack.

All layers of the treaty provide for one full reinstatement.

Group Workers’ Compensation Treaty

CNA also purchased corporate Workers’ Compensation catastrophe excess-of-loss treaty reinsurance for the period January 1, 2023 to January 1, 2024 providing $275 million of coverage for the accumulation of covered losses related to natural catastrophes above CNA’s per occurrence retention of $25 million.

The treaty also provides $600 million of coverage for the accumulation of covered losses related to terrorism events above CNA’s per occurrence retention of $25 million.

Of this $600 million in Terrorism coverage, $200 million is provided for nuclear, biological, chemical and radiation events.

One full reinstatement is available for the first $275 million above the retention, regardless of the covered peril.

CRITICAL ACCOUNTING ESTIMATES

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In addition, regulatory approval may not be received for the level of premium rate increases requested.

These changes to reserves could materially adversely impact our results of operations, financial condition and equity.

Changes to reserves could materially adversely impact our results of operations, financial condition and equity.

ACCOUNTING STANDARDS UPDATE

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For the Company, this includes CNA’s long term care business in Other Insurance Operations.

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.

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.

All prior periods to be presented in the 2023 financial statements have been adjusted to reflect the application of the new guidance.

The following table presents the effect of adoption of ASU 2018-12 on selected 2022 and 2021 financial data.

Q1 Q2 Q3 Q4 Full Year Full Year

(In millions, except per share data)

Components of Income (Loss)

Net income (loss) attributable to

Loews Corporation

As reported $ 338 $ 180 $ 130 $ 364 $ 1,012 $ 1,578

Effect of adoption (16) (13) (152) (9) (190) (16)

As adjusted $ 322 $ 167 $ (22) $ 355 $ 822 $ 1,562

Other comprehensive income (loss)

As reported $ (1,605) $ (1,405) $ (1,425) $ 577 $ (3,858) $ (445)

Effect of adoption 603 627 586 (177) 1,639 660

As adjusted $ (1,002) $ (778) $ (839) $ 400 $ (2,219) $ 215

Diluted Net Income (Loss) Per Share

Net income (loss) attributable to

Loews Corporation

As reported $ 1.36 $ 0.73 $ 0.54 $ 1.53 $ 4.16 $ 6.07

Effect of adoption (0.07) (0.05) (0.63) (0.04) (0.78) (0.07)

As adjusted $ 1.29 $ 0.68 $ (0.09) $ 1.49 $ 3.38 $ 6.00

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.

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.

Prior period amounts in the financial statements have been adjusted to reflect application of ASU 2018-12.

Net income 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.

Under legacy accounting guidance, the third quarter 2022 gross premium valuation assessment indicated a pretax margin of $125 million and no unlocking event occurred.

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.

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.

The following table presents the effect of adoption of ASU 2018-12 on selected 2022 and 2021 balance sheet data.

December 31, 2022 December 31, 2021

(In millions)

As reported $ 75,494 $ 81,626

Effect of adoption 73

As adjusted $ 75,567 $ 81,626

Insurance reserves:

Claim and claim adjustment expenses

As reported $ 25,099 $ 24,174

Effect of adoption (2,979) (2,905)

As adjusted $ 22,120 $ 21,269

Future policy benefits

As reported $ 10,151 $ 13,236

Effect of adoption 3,329 5,062

As adjusted $ 13,480 $ 18,298

Total liabilities

As reported $ 60,016 $ 62,451

Effect of adoption 350 1,704

As adjusted $ 60,366 $ 64,155

Accumulated other comprehensive income (loss)

As reported $ (3,284) $ 186

Effect of adoption (36) (1,506)

As adjusted $ (3,320) $ (1,320)

As reported $ 15,478 $ 19,175

Effect of adoption (277) (1,704)

As adjusted $ 15,201 $ 17,471

Under the new guidance 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.

Excluding the third quarter of 2022, net income attributable to Loews Corporation did not change materially from what was reported prior to adoption of ASU 2018-12.

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.

FORWARD-LOOKING STATEMENTS

8 unchanged sentences

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What changed 10-Q

Item 2. Management’s Discussion and Analysis