LOEWS CORP 10-Q

Item 1. Financial Statements. Loews Corporation and Subsidiaries CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) June 30, December 31, 2024 2023 (Dollar amounts in millions, except per share data) Assets: Investments: Fixed maturities, amortized cost of $ 43,469 and $ 42,615 , less allowance for credit loss of $ 17 and $ 16 $ 40,879 $ 40,626 Equity securities, cost of $ 1,076 and $ 1,015 1,117 1,050 Limited partnership investments 2,367 2,174 Other invested assets, primarily mortgage loans, less allowance for credit loss of $ 35 and $ 35 1,067 1,123 Short-term investments 4,916 4,396 Total investments 50,346 49,369 Cash 470 399 Receivables 10,280 9,660 Property, plant and equipment 10,710 10,718 Goodwill 347 347 Deferred non-insurance warranty acquisition expenses 3,598 3,661 Deferred acquisition costs of insurance subsidiaries 948 896 Other assets 4,358 4,147 Total assets $ 81,057 $ 79,197 Liabilities and Equity: Insurance reserves: Claim and claim adjustment expense $ 23,974 $ 23,304 Future policy benefits 13,211 13,959 Unearned premiums 7,409 6,933 Total insurance reserves 44,594 44,196 Payable to brokers 130 79 Short-term debt 1,013 1,084 Long-term debt 8,558 7,919 Deferred income taxes 502 398 Deferred non-insurance warranty revenue 4,623 4,694 Other liabilities 4,436 4,302 Total liabilities 63,856 62,672 Commitments and contingent liabilities Preferred stock, $ 0.10 par value: Authorized – 100,000,000 shares Common stock, $ 0.01 par value: Authorized – 1,800,000,000 shares Issued – 222,456,544 and 222,268,150 shares 2 2 Additional paid-in capital 2,556 2,589 Retained earnings 16,415 15,617 Accumulated other comprehensive loss ( 2,383 ) ( 2,497 ) 16,590 15,711 Less treasury stock, at cost ( 2,749,732 and 100,000 shares) ( 206 ) ( 7 ) Total shareholders’ equity 16,384 15,704 Noncontrolling interests 817 821 Total equity 17,201 16,525 Total liabilities and equity $ 81,057 $ 79,197 See accompanying Notes to Consolidated Condensed Financial Statements. 3 Table of contents Loews Corporation and Subsidiaries CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions, except per share data) Revenues: Insurance premiums $ 2,498 $ 2,347 $ 4,939 $ 4,595 Net investment income 639 592 1,308 1,161 Investment gains (losses) ( 10 ) 14 ( 32 ) ( 21 ) Non-insurance warranty revenue 404 407 811 814 Operating revenues and other 736 574 1,472 1,168 Total 4,267 3,934 8,498 7,717 Expenses: Insurance claims and policyholders’ benefits (re-measurement gain (loss) of $( 25 ), $( 33 ), $( 40 ) and $( 34 )) 1,882 1,779 3,689 3,432 Amortization of deferred acquisition costs 435 403 879 782 Non-insurance warranty expense 388 384 782 768 Operating expenses and other 968 808 1,848 1,589 Equity method income ( 27 ) ( 39 ) ( 53 ) ( 67 ) Interest 114 91 217 186 Total 3,760 3,426 7,362 6,690 Income before income tax 507 508 1,136 1,027 Income tax expense ( 112 ) ( 120 ) ( 256 ) ( 235 ) Net income 395 388 880 792 Amounts attributable to noncontrolling interests ( 26 ) ( 28 ) ( 54 ) ( 57 ) Net income attributable to Loews Corporation $ 369 $ 360 $ 826 $ 735 Basic and diluted net income per share $ 1.67 $ 1.58 $ 3.72 $ 3.19 Weighted average shares outstanding: Shares of common stock 221.35 227.69 221.91 230.48 Dilutive potential shares of common stock 0.25 0.28 0.27 0.30 Total weighted average shares outstanding assuming dilution 221.60 227.97 222.18 230.78 See accompanying Notes to Consolidated Condensed Financial Statements. 4 Table of contents Loews Corporation and Subsidiaries CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Net income $ 395 $ 388 $ 880 $ 792 Other comprehensive income (loss), after tax Changes in: Net unrealized gains (losses) on investments with an allowance for credit losses ( 1 ) 2 ( 9 ) Net unrealized gains (losses) on other investments ( 244 ) ( 413 ) ( 461 ) 257 Total unrealized gains (losses) on investments ( 244 ) ( 414 ) ( 459 ) 248 Impact of changes in discount rates used to measure long-duration contract liabilities 273 256 614 ( 140 ) Unrealized gains (losses) on cash flow hedges ( 1 ) 8 1 6 Pension and postretirement benefits 6 6 12 15 Foreign currency translation ( 10 ) 35 ( 43 ) 51 Other comprehensive income (loss) 24 ( 109 ) 125 180 Comprehensive income 419 279 1,005 972 Amounts attributable to noncontrolling interests ( 29 ) ( 17 ) ( 65 ) ( 77 ) Total comprehensive income attributable to Loews Corporation $ 390 $ 262 $ 940 $ 895 See accompanying Notes to Consolidated Condensed Financial Statements. 5 Table of contents Loews Corporation and Subsidiaries CONSOLIDATED CONDENSED STATEMENTS OF EQUITY (Unaudited) 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, 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 Balance, April 1, 2024 $ 16,998 $ 2 $ 2,547 $ 16,060 $ ( 2,401 ) $ ( 24 ) $ 814 Net income 395 369 26 Other comprehensive income 24 21 3 Dividends paid ($ 0.0625 per share) ( 23 ) ( 14 ) ( 9 ) Purchase of subsidiary stock from noncontrolling interests ( 20 ) ( 20 ) Purchases of Loews Corporation treasury stock ( 182 ) ( 182 ) Stock-based compensation 11 11 Other ( 2 ) ( 2 ) ( 3 ) 3 Balance, June 30, 2024 $ 17,201 $ 2 $ 2,556 $ 16,415 $ ( 2,383 ) $ ( 206 ) $ 817 See accompanying Notes to Consolidated Condensed Financial Statements. 6 Table of contents Loews Corporation and Subsidiaries CONSOLIDATED CONDENSED STATEMENTS OF EQUITY (Unaudited) 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, 2023, as reported $ 15,478 $ 2 $ 2,748 $ 15,144 $ ( 3,284 ) $ ( 12 ) $ 880 Cumulative effect adjustments from changes in accounting standards ( 277 ) ( 213 ) ( 36 ) ( 28 ) Balance, January 1, 2023, as adjusted 15,201 2 2,748 14,931 ( 3,320 ) ( 12 ) 852 Net income 792 735 57 Other comprehensive income 180 160 20 Dividends paid ($ 0.125 per share) ( 84 ) ( 29 ) ( 55 ) Purchase of subsidiary stock from noncontrolling interests ( 26 ) ( 26 ) Purchases of Loews Corporation treasury stock ( 593 ) ( 593 ) Stock-based compensation 5 ( 17 ) 22 Other ( 5 ) ( 3 ) 1 ( 3 ) Balance, June 30, 2023 $ 15,470 $ 2 $ 2,728 $ 15,637 $ ( 3,160 ) $ ( 604 ) $ 867 Balance, January 1, 2024 $ 16,525 $ 2 $ 2,589 $ 15,617 $ ( 2,497 ) $ ( 7 ) $ 821 Net income 880 826 54 Other comprehensive income 125 114 11 Dividends paid ($ 0.125 per share) ( 93 ) ( 28 ) ( 65 ) Purchase of subsidiary stock from noncontrolling interests ( 20 ) ( 20 ) Purchases of Loews Corporation treasury stock ( 199 ) ( 199 ) Stock-based compensation ( 3 ) ( 22 ) 19 Other ( 14 ) ( 11 ) ( 3 ) Balance, June 30, 2024 $ 17,201 $ 2 $ 2,556 $ 16,415 $ ( 2,383 ) $ ( 206 ) $ 817 See accompanying Notes to Consolidated Condensed Financial Statements. 7 Table of contents Loews Corporation and Subsidiaries CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30 2024 2023 (In millions) Operating Activities: Net income $ 880 $ 792 Adjustments to reconcile net income to net cash provided by operating activities, net 250 300 Changes in operating assets and liabilities, net: Receivables ( 599 ) ( 456 ) Deferred acquisition costs ( 55 ) ( 74 ) Insurance reserves 1,255 1,165 Other assets ( 172 ) ( 173 ) Other liabilities 83 ( 139 ) Trading securities ( 492 ) 738 Net cash flow provided by operating activities 1,150 2,153 Investing Activities: Purchases of fixed maturities ( 3,338 ) ( 3,506 ) Proceeds from sales of fixed maturities 1,611 2,285 Proceeds from maturities of fixed maturities 1,109 613 Purchases of equity securities ( 246 ) ( 126 ) Proceeds from sales of equity securities 288 121 Purchases of limited partnership investments ( 140 ) ( 245 ) Proceeds from sales of limited partnership investments 30 132 Purchases of property, plant and equipment ( 318 ) ( 299 ) Dispositions 23 Change in short-term investments ( 338 ) ( 322 ) Other, net 43 ( 120 ) Net cash flow used by investing activities ( 1,276 ) ( 1,467 ) Financing Activities: Dividends paid ( 28 ) ( 29 ) Dividends paid to noncontrolling interests ( 65 ) ( 55 ) Purchases of Loews Corporation treasury stock ( 203 ) ( 593 ) Purchases of subsidiary stock from noncontrolling interests ( 20 ) ( 26 ) Principal payments on debt ( 762 ) ( 502 ) Issuance of debt 1,323 463 Other, net ( 45 ) ( 17 ) Net cash flow provided by (used by) financing activities 200 ( 759 ) Effect of foreign exchange rate on cash ( 3 ) 4 Net change in cash 71 ( 69 ) Cash, beginning of period 399 532 Cash, end of period $ 470 $ 463 See accompanying Notes to Consolidated Condensed Financial Statements. 8 Table of contents Loews Corporation and Subsidiaries NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation Loews Corporation is a holding company. Its consolidated operating subsidiaries are engaged in the following lines of business: commercial property and casualty insurance (CNA Financial Corporation (“CNA”), an approximately 92 % owned subsidiary); transportation and storage of natural gas and natural gas liquids and other hydrocarbons (Boardwalk Pipeline Partners, LP (“Boardwalk Pipelines”), a wholly owned subsidiary) and the operation of a chain of hotels (Loews Hotels Holding Corporation (“Loews Hotels & Co”), a wholly owned subsidiary). 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 June 30, 2024 and December 31, 2023, results of operations, comprehensive income (loss) and changes in shareholders’ equity for the three and six months ended June 30, 2024 and 2023 and cash flows for the six months ended June 30, 2024 and 2023, in each case in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Results for the interim periods are not necessarily indicative of results 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, 2023. The Company presents basic and diluted net income (loss) per share on the Consolidated Condensed Statements of Operations. Basic net income (loss) per share excludes dilution and is computed by dividing net income (loss) attributable to common stock by the weighted average number of common shares outstanding for the period. 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 and six months ended June 30, 2024 and 2023 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. Recently issued Accounting Standards Updates (“ASUs”) - In November of 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The updated accounting guidance requires enhanced reportable segment disclosures, primarily related to significant segment expenses which are regularly provided to the chief operating decision maker (“CODM”). The guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Retrospective application is required and early adoption is permitted. The Company is currently evaluating the effect the updated guidance will have on its financial statement disclosures and expects to disclose additional quantitative and qualitative information related to segment expenses regularly provided to the CODM that are included in the segment measures of profit or loss. In December of 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The updated accounting guidance requires expanded income tax disclosures, including the disaggregation of existing disclosures related to the effective tax rate reconciliation and income taxes paid. The guidance is effective for fiscal years beginning after December 15, 2024. Prospective application is required, with retrospective application permitted. The Company is currently evaluating the effect the updated guidance will have on its financial statement disclosures. 9 Table of contents 2. Investments Net investment income is as follows: Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Fixed maturity securities $ 511 $ 482 $ 1,013 $ 952 Limited partnership investments 74 55 128 82 Short-term investments 20 14 49 30 Equity securities (a) 13 21 35 33 Income from trading portfolio (a) 11 14 69 59 Other 34 29 62 49 Total investment income 663 615 1,356 1,205 Investment expenses ( 24 ) ( 23 ) ( 48 ) ( 44 ) Net investment income $ 639 $ 592 $ 1,308 $ 1,161 (a) Net investment income (loss) recognized due to the change in fair value of equity and trading portfolio securities held as of June 30, 2024 and 2023 $ ( 21 ) $ 15 $ 19 $ 20 Investment gains (losses) are as follows: Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Fixed maturity securities: Gross gains $ 13 $ 8 $ 27 $ 43 Gross losses ( 25 ) ( 35 ) ( 71 ) ( 92 ) Investment losses on fixed maturity securities ( 12 ) ( 27 ) ( 44 ) ( 49 ) Equity securities (a) 1 3 12 ( 11 ) Short-term investments and other 1 ( 8 ) ( 7 ) Gain on acquisition of a joint venture 46 46 Investment gains (losses) $ ( 10 ) $ 14 $ ( 32 ) $ ( 21 ) (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, 2024 and 2023 $ 1 $ 3 $ 12 $ — The available-for-sale impairment losses (gains) recognized in earnings by asset type are presented in the following table. 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: 10 Table of contents Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 6 $ 9 $ 15 $ 17 Asset-backed 8 5 8 Impairment losses recognized in earnings $ 6 $ 17 $ 20 $ 25 T here were no losses recognized on mortgage loans during the three and six months ended June 30, 2024. There were $ 6 million of losses recognized on mortgage loans during the three and six months ended June 30, 2023. 11 Table of contents The following tables present a summary of fixed maturity securities: June 30, 2024 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Estimated Fair Value (In millions) Fixed maturity securities: Corporate and other bonds $ 25,463 $ 401 $ 1,496 $ 24,368 States, municipalities and political subdivisions 7,560 269 800 7,029 Asset-backed: Residential mortgage-backed 3,602 8 495 3,115 Commercial mortgage-backed 1,798 7 186 $ 8 1,611 Other asset-backed 3,631 17 260 9 3,379 Total asset-backed 9,031 32 941 17 8,105 U.S. Treasury and obligations of government sponsored enterprises 193 1 3 191 Foreign government 742 2 38 706 Fixed maturities available-for-sale $ 42,989 $ 705 $ 3,278 $ 17 $ 40,399 Fixed maturities trading 480 480 Total fixed maturity securities $ 43,469 $ 705 $ 3,278 $ 17 $ 40,879 December 31, 2023 Fixed maturity securities: Corporate and other bonds $ 25,020 $ 597 $ 1,345 $ 4 $ 24,268 States, municipalities and political subdivisions 7,713 382 703 7,392 Asset-backed: Residential mortgage-backed 3,411 16 425 3,002 Commercial mortgage-backed 1,862 7 230 8 1,631 Other asset-backed 3,515 13 256 4 3,268 Total asset-backed 8,788 36 911 12 7,901 U.S. Treasury and obligations of government sponsored enterprises 152 1 2 151 Foreign government 741 6 34 713 Fixed maturities available-for-sale $ 42,414 $ 1,022 $ 2,995 $ 16 $ 40,425 Fixed maturities trading 201 201 Total fixed maturity securities $ 42,615 $ 1,022 $ 2,995 $ 16 $ 40,626 12 Table of contents The available-for-sale fixed maturity securities in a gross unrealized loss position for which an allowance for credit losses has not been recorded are as follows: Less than 12 Months 12 Months or Longer Total June 30, 2024 Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses (In millions) Fixed maturity securities: Corporate and other bonds $ 3,388 $ 84 $ 13,395 $ 1,412 $ 16,783 $ 1,496 States, municipalities and political subdivisions 899 23 3,257 777 4,156 800 Asset-backed: Residential mortgage-backed 556 9 2,227 486 2,783 495 Commercial mortgage-backed 170 1 1,153 185 1,323 186 Other asset-backed 372 9 1,904 251 2,276 260 Total asset-backed 1,098 19 5,284 922 6,382 941 U.S. Treasury and obligations of government-sponsored enterprises 117 1 51 2 168 3 Foreign government 160 3 442 35 602 38 Total fixed maturity securities $ 5,662 $ 130 $ 22,429 $ 3,148 $ 28,091 $ 3,278 December 31, 2023 Fixed maturity securities: Corporate and other bonds $ 1,943 $ 37 $ 13,406 $ 1,308 $ 15,349 $ 1,345 States, municipalities and political subdivisions 598 18 3,104 685 3,702 703 Asset-backed: Residential mortgage-backed 233 4 2,212 421 2,445 425 Commercial mortgage-backed 200 5 1,184 225 1,384 230 Other asset-backed 392 8 1,869 248 2,261 256 Total asset-backed 825 17 5,265 894 6,090 911 U.S. Treasury and obligations of government-sponsored enterprises 65 1 23 1 88 2 Foreign government 52 1 450 33 502 34 Total fixed maturity securities $ 3,483 $ 74 $ 22,248 $ 2,921 $ 25,731 $ 2,995 13 Table of contents 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. June 30, 2024 December 31, 2023 Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses (In millions) U.S. Government, Government agencies and Government-sponsored enterprises $ 2,599 $ 378 $ 2,273 $ 309 AAA 1,841 288 1,524 261 AA 4,371 730 3,817 658 A 6,587 629 5,652 517 BBB 11,813 1,119 11,523 1,095 Non-investment grade 880 134 942 155 Total $ 28,091 $ 3,278 $ 25,731 $ 2,995 Based on current facts and circumstances, the unrealized losses presented in the June 30, 2024 securities in the gross unrealized loss position table above are not indicative of the ultimate collectability of the current amortized cost of the securities, but rather are primarily attributable to changes in risk-free interest rates. In reaching this determination, the 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 as of June 30, 2024. 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 receivable on available-for-sale fixed maturity securities totaled $ 444 million, $ 435 million and $ 413 million as of June 30, 2024, December 31, 2023 and June 30, 2023 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, 2024 Corporate and Other Bonds Asset-backed Total (In millions) Allowance for credit losses: Balance as of April 1, 2024 $ 3 $ 17 $ 20 Reductions to the allowance for credit losses: Securities sold during the period (realized) 3 1 4 Additional increases to the allowance for credit losses on securities that had an allowance recorded in a previous period 1 1 Total allowance for credit losses $ — $ 17 $ 17 14 Table of contents 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 $ 1 $ 1 $ 2 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 1 1 Total allowance for credit losses $ 13 $ 9 $ 22 Six months ended June 30, 2024 Corporate and Other Bonds Asset-backed Total (In millions) Allowance for credit losses: Balance as of January 1, 2024 $ 4 $ 12 $ 16 Reductions to the allowance for credit losses: Securities sold during the period (realized) 3 1 4 Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis 1 1 Additional increases to the allowance for credit losses on securities that had an allowance recorded in a previous period 6 6 Total allowance for credit losses $ — $ 17 $ 17 Six months ended June 30, 2023 Corporate and Other Bonds Asset-backed Total (In millions) Allowance for credit losses: Balance as of January 1, 2023 $ — $ 1 $ 1 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 Reductions to the allowance for credit losses: Securities sold during the period (realized) 6 6 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 to the allowance for credit losses on securities that had an allowance recorded in a previous period 1 1 2 Total allowance for credit losses $ 13 $ 9 $ 22 15 Table of contents Contractual Maturity The following table presents available-for-sale fixed maturity securities by contractual maturity. June 30, 2024 December 31, 2023 Cost or Amortized Cost Estimated Fair Value Cost or Amortized Cost Estimated Fair Value (In millions) Due in one year or less $ 1,528 $ 1,493 $ 1,121 $ 1,091 Due after one year through five years 11,521 11,129 11,563 11,180 Due after five years through ten years 13,115 12,225 13,359 12,573 Due after ten years 16,825 15,552 16,371 15,581 Total $ 42,989 $ 40,399 $ 42,414 $ 40,425 Actual maturities may differ from contractual maturities because certain securities may be called or prepaid. Securities not due at a single date are allocated based on weighted average life. Mortgage Loans The following table presents the amortized cost basis of mortgage loans for each credit quality indicator by year of origination. The primary credit quality indicators utilized are debt service coverage ratios (“DSCR”) and loan-to-value (“LTV”) ratios. Mortgage Loans Amortized Cost Basis by Origination Year (a) As of June 30, 2024 2024 2023 2022 2021 2020 Prior Total (In millions) DSCR ≥1.6x LTV less than 55% $ 33 $ 10 $ 2 $ 96 $ 241 $ 382 LTV 55% to 65% 5 5 LTV greater than 65% 30 12 42 DSCR 1.2x - 1.6x LTV less than 55% 28 5 13 63 109 LTV 55% to 65% $ 12 21 36 36 4 31 140 LTV greater than 65% 12 64 21 97 DSCR ≤1.2x LTV less than 55% — LTV 55% to 65% 32 75 42 149 LTV greater than 65% 28 21 48 97 Total $ 12 $ 126 $ 248 $ 76 $ 134 $ 425 $ 1,021 (a) The values in the table above reflect DSCR on a standardized amortization period and LTV ratios based on the most recent appraised values trended forward using changes in a commercial real estate price index. Derivative Financial Instruments 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 16 Table of contents 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. June 30, 2024 December 31, 2023 Contractual/Notional Amount Estimated Fair Value Contractual/Notional Amount Estimated Fair Value Asset (Liability) Asset (Liability) (In millions) Without hedge designation: Equity markets: Options – purchased $ 288 $ 2 $ 202 $ 1 Futures – short 133 1 116 Warrants 76 1 84 3 Interest rate swaps 300 10 300 13 Currency forwards 13 $ ( 1 ) Investment Commitments As part of the overall investment strategy, investments are made in various assets which require future purchase, sale or funding commitments. 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 June 30, 2024, commitments to purchase or fund were approximately $ 1.8 billion and to sell were approximately $ 145 million under the terms of these investments. 17 Table of contents 3. Fair Value 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. June 30, 2024 Level 1 Level 2 Level 3 Total (In millions) Fixed maturity securities: Corporate bonds and other $ 194 $ 23,942 $ 1,129 $ 25,265 States, municipalities and political subdivisions 6,986 43 7,029 Asset-backed 7,218 887 8,105 Fixed maturities available-for-sale 194 38,146 2,059 40,399 Fixed maturities trading 476 4 480 Total fixed maturities $ 670 $ 38,150 $ 2,059 $ 40,879 Equity securities $ 661 $ 442 $ 14 $ 1,117 Short-term and other 4,723 25 4,748 Receivables 10 10 Payable to brokers ( 57 ) ( 57 ) December 31, 2023 Fixed maturity securities: Corporate bonds and other $ 161 $ 23,926 $ 1,045 $ 25,132 States, municipalities and political subdivisions 7,348 44 7,392 Asset-backed 7,000 901 7,901 Fixed maturities available-for-sale 161 38,274 1,990 40,425 Fixed maturities trading 201 201 Total fixed maturities $ 362 $ 38,274 $ 1,990 $ 40,626 Equity securities $ 586 $ 440 $ 24 $ 1,050 Short-term and other 4,215 32 4,247 Receivables 13 13 Payable to brokers ( 62 ) ( 62 ) 18 Table of contents 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 and six months ended June 30, 2024 and 2023: 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 June 30 Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30 2024 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 $ 1,082 $ ( 8 ) $ 72 $ ( 17 ) $ 1,129 $ ( 8 ) States, municipalities and political subdivisions 43 43 Asset-backed 871 $ 2 ( 11 ) 55 $ ( 5 ) ( 25 ) 887 ( 11 ) Fixed maturities available-for-sale $ 1,996 $ 2 $ ( 19 ) $ 127 $ ( 5 ) $ ( 42 ) $ — $ — $ 2,059 $ — $ ( 19 ) Equity securities $ 11 $ 3 $ 14 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 June 30 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 Settlements 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 ) 19 Table of contents 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 June 30 Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30 2024 Balance, January 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 $ 1,045 $ ( 20 ) $ 146 $ ( 53 ) $ 11 $ 1,129 $ ( 22 ) States, municipalities and political subdivisions 44 ( 1 ) 43 ( 1 ) Asset-backed 901 $ 4 ( 16 ) 73 $ ( 14 ) ( 42 ) $ ( 19 ) 887 ( 16 ) Fixed maturities available-for-sale $ 1,990 $ 4 $ ( 37 ) $ 219 $ ( 14 ) $ ( 95 ) $ 11 $ ( 19 ) $ 2,059 $ — $ ( 39 ) Equity securities $ 24 $ 6 $ 3 $ ( 19 ) $ 14 $ 2 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 June 30 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 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 $ 810 $ 9 $ 149 $ ( 8 ) $ 11 $ 971 $ 9 States, municipalities and political subdivisions 43 43 Asset-backed 788 $ 9 142 ( 26 ) 23 $ ( 53 ) 883 ( 1 ) Fixed maturities available-for-sale $ 1,641 $ 9 $ 9 $ 291 $ — $ ( 34 ) $ 34 $ ( 53 ) $ 1,897 $ — $ 8 Equity securities $ 35 $ ( 7 ) $ ( 2 ) $ 26 $ ( 7 ) 20 Table of contents Net investment gains and losses are reported in Net income as follows: Major Category of Assets and Liabilities Consolidated Condensed Statements of Operations Line Items Fixed maturity securities available-for-sale Investment gains (losses) Fixed maturity securities trading Net investment income Equity securities Investment gains (losses) and Net investment income Other invested assets Investment gains (losses) and Net investment income Derivative financial instruments held in a trading portfolio Net investment income Derivative financial instruments, other Investment gains (losses) and Operating revenues and other 21 Table of contents Significant Unobservable Inputs The following tables present quantitative information about the significant unobservable inputs utilized in the fair value measurement of Level 3 assets. Valuations for assets and liabilities not presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of unobservable inputs from these broker quotes is neither provided nor reasonably available. The weighted average rate is calculated based on fair value. June 30, 2024 Estimated Fair Value Valuation Techniques Unobservable Inputs Range (Weighted Average) (In millions) Fixed maturity securities $ 1,571 Discounted cash flow Credit spread 1 % — 6 % ( 2 %) December 31, 2023 Fixed maturity securities $ 1,495 Discounted cash flow Credit spread 1 % — 7 % ( 2 %) For fixed maturity securities, an increase to the credit spread assumptions would result in a lower fair value measurement. Financial Assets and Liabilities Not Measured at Fair Value The carrying amount, estimated fair value and the level of the fair value hierarchy of the financial assets and liabilities which are not measured at fair value on the Consolidated Condensed Balance Sheets are presented in the following tables. The carrying amounts and estimated fair values of short-term debt and long-term debt exclude finance lease obligations. The carrying amounts reported on the Consolidated Condensed Balance Sheets for cash and short-term investments not carried at fair value and certain other assets and liabilities approximate fair value due to the short-term nature of these items. Carrying Amount Estimated Fair Value June 30, 2024 Level 1 Level 2 Level 3 Total (In millions) Assets: Other invested assets, primarily mortgage loans $ 986 $ 944 $ 944 Liabilities: Short-term debt 1,013 $ 598 404 1,002 Long-term debt 8,555 7,611 566 8,177 December 31, 2023 Assets: Other invested assets, primarily mortgage loans $ 1,035 $ 997 $ 997 Liabilities: Short-term debt 1,083 $ 546 520 1,066 Long-term debt 7,915 7,255 385 7,640 22 Table of contents 4. Claim and Claim Adjustment Expense Reserves Claim and claim adjustment expense reserves represent the estimated amounts necessary to resolve all outstanding claims, including incurred but not reported (“IBNR”) claims as of the reporting date. Reserve projections are based primarily on detailed analysis of the facts in each case, experience with similar cases and various historical development patterns. Consideration is given to historical patterns such as claim reserving trends and settlement practices, loss payments, pending levels of unpaid claims and product mix, economic, medical and social inflation, and public attitudes. All of these factors can affect the estimation of claim and claim adjustment expense reserves. Establishing claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves for catastrophic events that have occurred, is an estimation process. Many factors can ultimately affect the final settlement of a claim and, therefore, the necessary reserve. Changes in the law, results of litigation, medical costs, the cost of repair materials and labor rates can affect ultimate claim costs. In addition, time can be a critical part of reserving determinations since the longer the span between the incidence of a loss and the payment or settlement of the claim, the more variable the ultimate settlement amount can be. Accordingly, short-tail claims, such as property damage claims, tend to be more reasonably estimable than long-tail claims, such as workers’ compensation, general liability and professional liability claims. Claim and claim adjustment expense reserves are also maintained for structured settlement obligations. In developing the claim and claim adjustment expense reserve estimates for structured settlement obligations, actuaries review mortality experience on an annual basis. Adjustments to prior year reserve estimates, if necessary, are reflected in the results of operations in the period that the need for such adjustments is determined. There can be no assurance that the ultimate cost for insurance losses will not exceed current estimates. 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. Catastrophe losses, net of reinsurance, of $ 82 million and $ 68 million for the three months ended June 30, 2024 and 2023 and $ 170 million and $ 120 million for the six months ended June 30, 2024 and 2023 were recorded primarily related to severe weather related events. 23 Table of contents Liability for Unpaid Claim and Claim Adjustment Expenses The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves. Six Months Ended June 30 2024 2023 (In millions) Reserves, beginning of year: Gross $ 23,304 $ 22,120 Ceded 5,141 5,191 Net reserves, beginning of year 18,163 16,929 Net incurred claim and claim adjustment expenses: Provision for insured events of current year 3,039 2,746 Increase (decrease) in provision for insured events of prior years 19 37 Amortization of discount 20 22 Total net incurred (a) 3,078 2,805 Net payments attributable to: Current year events ( 308 ) ( 287 ) Prior year events ( 2,259 ) ( 2,014 ) Total net payments ( 2,567 ) ( 2,301 ) Foreign currency translation adjustment and other ( 58 ) 57 Net reserves, end of period 18,616 17,490 Ceded reserves, end of period 5,358 5,312 Gross reserves, end of period $ 23,974 $ 22,802 (a) Total net incurred does not agree to Insurance claims and policyholders’ benefits as reflected on the Consolidated Condensed Statements of Operations due to amounts related to retroactive reinsurance deferred gain accounting, uncollectible reinsurance, benefit expenses related to future policy benefits and policyholders’ dividends, which are not reflected in the table above. Net Prior Year Development Changes in estimates of claim and claim adjustment expense reserves, net of reinsurance, for prior years are defined as net prior year loss reserve development. These changes can be favorable or unfavorable. Favorable net prior year loss reserve development of $ 12 million and $ 17 million for the three months ended June 30, 2024 and 2023 and $ 19 million and $ 4 million for the six months ended June 30, 2024 and 2023 was recorded for CNA’s commercial property and casualty operations (“Property & Casualty Operations”). Unfavorable net prior year loss reserve development of $ 35 million was recorded for CNA’s operations outside of Property & Casualty Operations (“Other Insurance Operations”) for the three and six months ended June 30, 2024 and 2023. 24 Table of contents 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, 2024 2023 2024 2023 (In millions) Medical professional liability $ ( 2 ) $ ( 2 ) $ 9 Other professional liability and management liability 17 $ ( 1 ) 17 ( 1 ) Surety ( 8 ) ( 7 ) ( 26 ) ( 7 ) Warranty 13 ( 9 ) Commercial auto 21 11 21 11 General liability 19 70 19 70 Workers’ compensation ( 47 ) ( 96 ) ( 49 ) ( 98 ) Other property and casualty operations ( 12 ) 6 ( 12 ) 21 Other insurance operations 35 35 35 35 Total pretax (favorable) unfavorable development $ 23 $ 18 $ 16 $ 31 Three Months 2024 Unfavorable development in other professional liability and management liability was primarily due to higher than expected claim severity and frequency in CNA’s professional errors and omissions (“E&O”) and cyber businesses. Unfavorable development in commercial auto was due to higher than expected claim severity in recent accident years. Unfavorable development in general liability was due to higher than expected claim severity in multiple accident years going back to 2014 and prior. Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in multiple accident years. Favorable development in other property and casualty operations was primarily due to favorable loss emergence in casualty coverages associated with healthcare products. Unfavorable development in other insurance operations was largely associated with legacy mass tort abuse claims. 2023 Unfavorable development in commercial auto was due to higher than expected claim severity in CNA’s construction business in a recent accident year. 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. Unfavorable development in other insurance operations was largely associated with legacy mass tort abuse claims. 25 Table of contents Six Months 2024 Unfavorable development in other professional liability and management liability was primarily due to higher than expected claim severity and frequency in CNA’s professional E&O and cyber businesses. Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in multiple accident years. Unfavorable development in warranty was primarily due to higher than expected frequency and severity in a recent accident year. Unfavorable development in commercial auto was due to higher than expected claim severity in recent accident years. Unfavorable development in general liability was due to higher than expected claim severity in multiple accident years going back to 2014 and prior. Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in multiple accident years. Favorable development in other property and casualty operations was primarily due to favorable loss emergence in casualty coverages associated with healthcare products. Unfavorable development in other insurance operations was largely associated with legacy mass tort abuse claims. 2023 Unfavorable development in commercial auto was due to higher than expected claim severity in CNA’s construction business in a recent accident year. 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. Unfavorable development in other property and casualty operations was due to higher than expected large loss emergence in CNA’s professional liability business in accident year 2017. Unfavorable development in other insurance operations was largely associated with legacy mass tort abuse claims. Asbestos & Environmental Pollution (“A&EP”) Reserves In 2010, Continental Casualty Company (“CCC”) together with several insurance subsidiaries completed a transaction with National Indemnity Company (“NICO”), a subsidiary of Berkshire Hathaway Inc., under which substantially all of their legacy A&EP liabilities were ceded to NICO through a loss portfolio transfer (“LPT”). 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 NICO LPT aggregate reinsurance limit also covers credit risk on the existing third party reinsurance related to these liabilities. NICO was paid a reinsurance premium of $ 2.0 billion and billed third party reinsurance receivables related to A&EP claims with a net book value of $ 215 million were transferred to NICO, resulting in total consideration of $ 2.2 billion. In years subsequent to the effective date of the LPT, adverse prior year development on A&EP reserves was recognized resulting in additional amounts ceded under the LPT. As a result, the cumulative amounts ceded under the LPT have exceeded the $ 2.2 billion consideration paid, resulting in the NICO LPT moving into a gain position, requiring retroactive reinsurance accounting. Under retroactive reinsurance accounting, this gain is deferred and only recognized in earnings in proportion to actual paid recoveries under the LPT. Over the life of the contract, there is no economic impact as long as any additional losses incurred are within the limit of the LPT. In a period in which a change in the estimate of A&EP reserves is 26 Table of contents recognized that increases or decreases the amounts ceded under the LPT, the proportion of actual paid recoveries to total ceded losses is affected and the change in the deferred gain is recognized in earnings as if the revised estimate of ceded losses was available at the effective date of the LPT. The effect of the deferred retroactive reinsurance benefit is recorded in Insurance claims and policyholders’ benefits in 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 $ 13 million and $ 15 million for the three months ended June 30, 2024 and 2023 and $ 25 million and $ 23 million for the six months ended June 30, 2024 and 2023 . As of June 30, 2024 and December 31, 2023, the cumulative amounts ceded under the LPT were $ 3.6 billion. The unrecognized deferred retroactive reinsurance benefit was $ 392 million and $ 417 million as of June 30, 2024 and December 31, 2023 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 $ 2.2 billion as of June 30, 2024. In addition, Berkshire Hathaway Inc. guaranteed the payment obligations of NICO up to the aggregate reinsurance limit as well as certain of NICO’s performance obligations under the trust agreement. NICO is responsible for claims handling and billing and collection from third-party reinsurers related to A&EP claims. Credit Risk for Ceded Reserves The majority of CNA’s outstanding voluntary reinsurance receivables are due from reinsurers with financial strength ratings of A- or higher. Receivables due from reinsurers with lower financial strength ratings are primarily due from captive reinsurers and are backed by collateral arrangements. 5. Future Policy Benefits Reserves Future policy benefits reserves are associated with CNA’s run-off long-term care business, included in Other Insurance Operations, and relate to policyholders that are currently receiving benefits, including claims that have been incurred but are not yet reported, as well as policyholders that are not yet receiving benefits. Future policy benefits reserves are comprised of the liability for future policyholder benefits (“LFPB”) which is reflected as Insurance reserves: Future policy benefits on the Consolidated Condensed Balance Sheet. The determination of Future policy benefits reserves requires management to make estimates and assumptions about expected policyholder experience over the remaining life of the policy. Since policies may be in force for several decades, these assumptions are subject to significant estimation risk. As a result of this variability, CNA’s future policy benefits reserves may be subject to material increases if actual experience develops adversely to its expectations. For further information on the long-term care reserving process see Note 1 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. 27 Table of contents The following table summarizes balances and changes in the LFPB: 2024 2023 (In millions) Present value of future net premiums Balance, January 1 $ 3,710 $ 3,993 Effect of changes in discount rate ( 125 ) ( 74 ) Balance, January 1, at original locked in discount rate 3,585 3,919 Effect of changes in cash flow assumptions (a) Effect of actual variances from expected experience (a) ( 29 ) ( 85 ) Adjusted balance, January 1 3,556 3,834 Interest accrual 92 103 Net premiums: earned during period ( 212 ) ( 225 ) Balance, end of period at original locked in discount rate 3,436 3,712 Effect of changes in discount rate 11 78 Balance, June 30 $ 3,447 $ 3,790 Present value of future benefits & expenses Balance, January 1 $ 17,669 $ 17,472 Effect of changes in discount rate ( 578 ) ( 125 ) Balance, January 1, at original locked in discount rate 17,091 17,347 Effect of changes in cash flow assumptions (a) Effect of actual variances from expected experience (a) 11 ( 51 ) Adjusted balance, January 1 17,102 17,296 Interest accrual 461 482 Benefit & expense payments ( 592 ) ( 629 ) Balance, end of period at original locked in discount rate 16,971 17,149 Effect of changes in discount rate ( 313 ) 307 Balance, June 30 $ 16,658 $ 17,456 Net LFPB, June 30 $ 13,211 $ 13,666 (a) As of June 30, 2024 and 2023 , the re-measurement gain (loss) of $( 40 ) million and $( 34 ) 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. 28 Table of contents 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, 2024 2023 2024 2023 (In millions) Earned premiums $ 109 $ 113 $ 219 $ 228 Interest expense 185 189 369 379 The following table presents undiscounted expected future benefit and expense payments and undiscounted expected future gross premiums. June 30, 2024 2023 (In millions) Expected future benefit and expense payments $ 32,212 $ 33,287 Expected future gross premiums 5,149 5,536 Discounted expected future gross premiums at the upper-medium grade fixed income instrument yield discount rate were $ 3.5 billion and $ 3.9 billion as of June 30, 2024 and 2023. The weighted average effective duration of the LFPB calculated using the original locked in discount rate was 11 years and 12 years as of June 30, 2024 and 2023. The weighted average interest rates in the table below are calculated based on the rate used to discount all future cash flows. June 30, December 31, 2024 2023 2023 Original locked in discount rate 5.21 % 5.25 % 5.22 % Upper-medium grade fixed income instrument discount rate 5.43 5.10 4.94 For the three and six months ended June 30, 2024, immediate charges to net income resulting from adverse development that caused the net premium ratio (“NPR”) to exceed 100% for certain cohorts were $ 24 million and $ 44 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, 2024, the portion of losses recognized in a prior period due to NPR exceeding 100% for certain cohorts which, due to favorable development, was reversed through net income were $ 6 million and $ 8 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 was less than $ 1 million and $ 11 million . 29 Table of contents 6. Shareholders’ Equity Accumulated other comprehensive income (loss) The tables below present the changes in Accumulated other comprehensive income (loss) (“AOCI”) by component for the three and six months ended June 30, 2023 and 2024 : Net Unrealized Gains (Losses) on Investments with an Allowance for Credit Losses Net Unrealized Gains (Losses) on Other Investments Cumulative impact of changes in discount rates used to measure long duration 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, 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 losses from accumulated other comprehensive loss, after tax of $( 2 ), $( 4 ), $ 0 , $ 0 , $( 2 ) and $ 0 7 14 6 27 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 ) Balance, April 1, 2024 $ ( 9 ) $ ( 1,676 ) $ ( 17 ) $ 10 $ ( 530 ) $ ( 179 ) $ ( 2,401 ) Other comprehensive income (loss) before reclassifications, after tax of $ 1 , $ 67 , $( 72 ), $ 1 , $ 0 and $ 0 ( 4 ) ( 250 ) 273 ( 1 ) ( 10 ) 8 Reclassification of losses from accumulated other comprehensive loss, after tax of $( 1 ), $( 1 ), $ 0 , $ 0 , $( 1 ) and $ 0 4 6 6 16 Other comprehensive income (loss) — ( 244 ) 273 ( 1 ) 6 ( 10 ) 24 Amounts attributable to noncontrolling interests 19 ( 22 ) ( 3 ) Other ( 1 ) ( 2 ) 1 ( 1 ) ( 3 ) Balance, June 30, 2024 $ ( 10 ) $ ( 1,903 ) $ 234 $ 10 $ ( 525 ) $ ( 189 ) $ ( 2,383 ) 30 Table of contents Net Unrealized Gains (Losses) on Investments with an Allowance for Credit Losses Net Unrealized Gains (Losses) on Other Investments Cumulative impact of changes in discount rates used to measure long duration 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, 2023, as reported $ ( 7 ) $ ( 2,469 ) $ — $ 14 $ ( 622 ) $ ( 200 ) $ ( 3,284 ) Cumulative effect adjustments from changes in accounting standard s, after tax of $ 0 , $ 0 , $ 11 , $ 0 , $ 0 and $ 0 ( 36 ) ( 36 ) Balance, January 1, 2023, as adjusted ( 7 ) ( 2,469 ) ( 36 ) 14 ( 622 ) ( 200 ) ( 3,320 ) Other comprehensive income (loss) before reclassifications, after tax of $ 4 , $( 60 ), $ 37 , $ 1 , $ 0 and $ 0 ( 16 ) 225 ( 140 ) 6 51 126 Reclassification of losses from accumulated other comprehensive loss, after tax of $( 2 ), $( 8 ), $ 0 , $ 0 , $( 4 ) and $ 0 7 32 15 54 Other comprehensive income (loss) ( 9 ) 257 ( 140 ) 6 15 51 180 Amounts attributable to noncontrolling interests ( 26 ) 13 ( 2 ) ( 5 ) ( 20 ) Balance, June 30, 2023 $ ( 16 ) $ ( 2,238 ) $ ( 163 ) $ 20 $ ( 609 ) $ ( 154 ) $ ( 3,160 ) Balance, January 1, 2024 $ ( 12 ) $ ( 1,483 ) $ ( 329 ) $ 9 $ ( 533 ) $ ( 149 ) $ ( 2,497 ) Other comprehensive income (loss) before reclassifications, after tax of $ 1 , $ 131 , $( 163 ), $ 0 , $ 0 and $ 0 ( 5 ) ( 489 ) 614 1 ( 43 ) 78 Reclassification of losses from accumulated other comprehensive loss, after tax of $( 2 ), $( 7 ), $ 0 , $ 0 , $( 2 ) and $ 0 7 28 12 47 Other comprehensive income (loss) 2 ( 461 ) 614 1 12 ( 43 ) 125 Amounts attributable to noncontrolling interests 38 ( 51 ) ( 1 ) 3 ( 11 ) Other 3 ( 3 ) — Balance, June 30, 2024 $ ( 10 ) $ ( 1,903 ) $ 234 $ 10 $ ( 525 ) $ ( 189 ) $ ( 2,383 ) Amounts reclassified from AOCI shown above are reported in Net income (loss) as follows: Major Category of AOCI Affected Line Item Net unrealized gains (losses) on investments with an allowance for credit losses and Net unrealized gains (losses) on other investments Investment gains (losses) Unrealized gains (losses) on cash flow hedges Operating revenues and other, Interest expense and Operating expenses and other Pension and postretirement benefits Operating expenses and other 31 Table of contents Stock Purchases Loews Corporation repurchased 2.6 million and 10.0 million shares of its common stock at aggregate costs of $ 199 million and $ 593 million during the six months ended June 30, 2024 and 2023. 7. Debt In February of 2024 , CNA completed a public offering of $ 500 million aggregate principal amount of its 5.1 % senior notes due February 15, 2034 and in May of 2024, CNA repaid at maturity the outstanding $ 550 million aggregate principal amount of its 4.0 % senior notes. In February of 2024 , Boardwalk Pipelines completed a public offering of $ 600 million aggregate principal amount of its 5.6 % senior notes due August 1, 2034 . Boardwalk Pipelines intends to use the net proceeds to retire the outstanding $ 600 million aggregate principal amount of its 5.0 % notes due December 2024 . 8. Revenue from Contracts with Customers Disaggregation of revenues – Revenue from contracts with customers, other than insurance premiums, is reported as Non-insurance warranty revenue and within Operating revenues and other on the Consolidated Condensed Statements of Operations. 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 12 : Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Non-insurance warranty – CNA Financial $ 404 $ 407 $ 811 $ 814 Transportation and storage of natural gas and NGLs and ethane supply and transportation services – Boardwalk Pipelines $ 467 $ 350 $ 968 $ 736 Lodging and related services – Loews Hotels & Co 244 202 453 387 Total revenues from contracts with customers 711 552 1,421 1,123 Other revenues 25 22 51 45 Operating revenues and other $ 736 $ 574 $ 1,472 $ 1,168 Receivables from contracts with customers – As of June 30, 2024 and December 31, 2023, receivables from contracts with customers were approximately $ 204 million and $ 228 million and are included within Receivables on the Consolidated Condensed Balance Sheets. Deferred revenue – As of June 30, 2024 and December 31, 2023, deferred revenue resulting from contracts with customers were approximately $ 4.7 billion and $ 4.8 billion and are reported as Deferred non-insurance warranty revenue and within Other liabilities on the Consolidated Condensed Balance Sheets. Approximately $ 786 million and $ 660 million of revenues recognized during the six months ended June 30, 2024 and 2023 were included in deferred revenue as of December 31, 2023 and 2022. Performance obligations – As of June 30, 2024, approximately $ 15.1 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 other hydrocarbons (“NGLs”) and certain ethane supply contracts at Boardwalk Pipelines and non-insurance warranty revenue at CNA. Approximately $ 1.5 billion will be recognized during the remaining six months of 2024 , $ 2.6 billion in 2025 and the remainder in following years. The actual timing of recognition may vary due to factors outside of the Company’s control. 32 Table of contents 9. Benefit Plans The Company has several non-contributory defined benefit plans and postretirement benefit plans covering eligible employees and retirees. The following tables present the components of net periodic (benefit) cost for the defined benefit plans: Pension Benefits Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Service cost $ 1 $ 1 Interest cost $ 25 $ 28 49 56 Expected return on plan assets ( 30 ) ( 32 ) ( 59 ) ( 64 ) Amortization of unrecognized net loss 8 9 15 18 Settlements 1 1 Net periodic cost $ 3 $ 6 $ 6 $ 12 Other Postretirement Benefits Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Interest cost $ 1 $ 1 Expected return on plan assets ( 1 ) ( 1 ) Net periodic benefit $ — $ — $ — $ — 10. Legal Proceedings Boardwalk Pipelines Litigation On May 25, 2018, plaintiffs Tsemach Mishal and Paul Berger (on behalf of themselves and the purported class, “Plaintiffs”) initiated a purported class action in the Court of Chancery of the State of Delaware (the “Trial Court”) against the following defendants: Boardwalk Pipelines, Boardwalk GP, LP (“General Partner”), Boardwalk GP, LLC and Boardwalk Pipelines Holding Corp. (“BPHC”) (together, “Defendants”), regarding the potential exercise by the General Partner of its right to purchase all of the issued and outstanding common units representing limited partnership interests in Boardwalk Pipelines not already owned by the General Partner or its affiliates. On June 25, 2018, Plaintiffs and Defendants entered into a Stipulation and Agreement of Compromise and Settlement, subject to the approval of the Trial Court (the “Proposed Settlement”). Under the terms of the Proposed Settlement, the lawsuit would be dismissed, and related claims against the Defendants would be released by the Plaintiffs, if BPHC, the sole member of the General Partner, elected to cause the General Partner to exercise its right to purchase the issued and outstanding common units of Boardwalk Pipelines pursuant to Boardwalk Pipelines’ Third Amended and Restated Agreement of Limited Partnership, as amended (“Limited Partnership Agreement”), within a period specified by the Proposed Settlement. On June 29, 2018, the General Partner elected to exercise its right to purchase all of the issued and outstanding common units representing limited partnership interests in Boardwalk Pipelines not already owned by the General Partner or its affiliates pursuant to the Limited Partnership Agreement within the period specified by the Proposed Settlement. The transaction was completed on July 18, 2018. 33 Table of contents On September 28, 2018, the Trial Court denied approval of the Proposed Settlement. On February 11, 2019, a substitute verified class action complaint was filed in this proceeding, which among other things, added the Parent Company as a Defendant. The Defendants filed a motion to dismiss, which was heard by the Trial Court in July of 2019. In October of 2019, the Trial Court ruled on the motion and granted a partial dismissal, with certain aspects of the case proceeding to trial. A trial was held the week of February 22, 2021 and post-trial oral arguments were held on July 14, 2021. On November 12, 2021, the Trial Court issued a ruling in the case. The Trial Court held that the General Partner breached the Limited Partnership Agreement and awarded Plaintiffs approximately $ 690 million, plus pre-judgment interest (approximately $ 166 million), post-judgment interest and attorneys’ fees. The Company believed that the Trial Court ruling included factual and legal errors. Therefore, on January 3, 2022, the Defendants appealed the Trial Court’s ruling to the Supreme Court of the State of Delaware (the “Supreme Court”). On January 17, 2022, the Plaintiffs filed a cross-appeal to the Supreme Court contesting the calculation of damages by the Trial Court. Oral arguments were held on September 14, 2022, and on December 19, 2022, the Supreme Court reversed the Trial Court’s ruling and remanded the case to the Trial Court for further proceedings related to claims not decided by the Trial Court’s ruling. Briefing by the parties at the Trial Court on the remanded issues was completed in September 2023. A hearing on the remanded issues was held at the Trial Court in April 2024. Other Litigation The Company is from time to time party to other litigation arising in the ordinary course of business. While it is difficult to predict the outcome or effect of any litigation, management does not believe that the outcome of any pending litigation, including the Boardwalk Pipelines matter described above, will materially affect the Company’s results of operations or equity. 11. Commitments and Contingencies CNA Guarantees CNA has provided guarantees, if the primary obligor fails to perform, to holders of structured settlement annuities issued by a previously owned subsidiary. As of June 30, 2024, the potential amount of future payments CNA could be required to pay under these guarantees was approximately $ 1.4 billion, which will be paid over the lifetime of the annuitants. CNA does not believe any payment is likely under these guarantees, as CNA is the beneficiary of a trust that must be maintained at a level that approximates the discounted reserves for these annuities. 12. Segments Loews Corporation has four reportable segments comprised of three individual consolidated operating subsidiaries, CNA, Boardwalk Pipelines and Loews Hotels & Co; and the Corporate segment. The Corporate segment is primarily comprised of Loews Corporation, excluding its subsidiaries, and the equity method of accounting for Altium Packaging LLC. Each of the operating subsidiaries is headed by a chief executive officer who is responsible for the operation of its business and has the duties and authority commensurate with that position. For additional disclosures regarding the composition of Loews Corporation’s segments, see Note 21 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The following tables present the reportable segments and their contribution to the Consolidated Condensed Statements of Operations. Amounts presented will not necessarily be the same as those in the individual financial statements of the subsidiaries due to adjustments for purchase accounting, income taxes and noncontrolling interests. 34 Table of contents Statements of Operations by segment are presented in the following tables. Three Months Ended June 30, 2024 CNA Financial Boardwalk Pipelines Loews Hotels & Co Corporate Total (In millions) Revenues: Insurance premiums $ 2,498 $ 2,498 Net investment income 618 $ 9 $ 3 $ 9 639 Investment losses ( 10 ) ( 10 ) Non-insurance warranty revenue 404 404 Operating revenues and other 9 479 248 736 Total 3,519 488 251 9 4,267 Expenses: Insurance claims and policyholders’ benefits 1,882 1,882 Amortization of deferred acquisition costs 435 435 Non-insurance warranty expense 388 388 Operating expenses and other 378 347 225 18 968 Equity method (income) loss ( 32 ) 5 ( 27 ) Interest 34 47 14 19 114 Total 3,117 394 207 42 3,760 Income (loss) before income tax 402 94 44 ( 33 ) 507 Income tax (expense) benefit ( 85 ) ( 24 ) ( 9 ) 6 ( 112 ) Net income (loss) 317 70 35 ( 27 ) 395 Amounts attributable to noncontrolling interests ( 26 ) ( 26 ) Net income (loss) attributable to Loews Corporation $ 291 $ 70 $ 35 $ ( 27 ) $ 369 35 Table of contents Three Months Ended June 30, 2023 CNA Financial Boardwalk Pipelines Loews Hotels & Co Corporate Total (In millions) Revenues: Insurance premiums $ 2,347 $ 2,347 Net investment income 575 $ 5 $ 1 $ 11 592 Investment gains (losses) ( 32 ) 46 14 Non-insurance warranty revenue 407 407 Operating revenues and other 7 360 207 574 Total 3,304 365 254 11 3,934 Expenses: Insurance claims and policyholders’ benefits 1,779 1,779 Amortization of deferred acquisition costs 403 403 Non-insurance warranty expense 384 384 Operating expenses and other 346 250 194 18 808 Equity method (income) loss ( 41 ) 2 ( 39 ) Interest 31 39 21 91 Total 2,943 289 153 41 3,426 Income (loss) before income tax 361 76 101 ( 30 ) 508 Income tax (expense) benefit ( 78 ) ( 19 ) ( 27 ) 4 ( 120 ) Net income (loss) 283 57 74 ( 26 ) 388 Amounts attributable to noncontrolling interests ( 28 ) ( 28 ) Net income (loss) attributable to Loews Corporation $ 255 $ 57 $ 74 $ ( 26 ) $ 360 36 Table of contents Six Months Ended June 30, 2024 CNA Financial Boardwalk Pipelines Loews Hotels & Co Corporate Total (In millions) Revenues: Insurance premiums $ 4,939 $ 4,939 Net investment income 1,227 $ 13 $ 5 $ 63 1,308 Investment losses ( 32 ) ( 32 ) Non-insurance warranty revenue 811 811 Operating revenues and other 18 992 462 1,472 Total 6,963 1,005 467 63 8,498 Expenses: Insurance claims and policyholders’ benefits 3,689 3,689 Amortization of deferred acquisition costs 879 879 Non-insurance warranty expense 782 782 Operating expenses and other 715 659 434 40 1,848 Equity method (income) loss ( 59 ) 6 ( 53 ) Interest 69 90 20 38 217 Total 6,134 749 395 84 7,362 Income (loss) before income tax 829 256 72 ( 21 ) 1,136 Income tax (expense) benefit ( 174 ) ( 65 ) ( 21 ) 4 ( 256 ) Net income (loss) 655 191 51 ( 17 ) 880 Amounts attributable to noncontrolling interests ( 54 ) ( 54 ) Net income (loss) attributable to Loews Corporation $ 601 $ 191 $ 51 $ ( 17 ) $ 826 37 Table of contents Six Months Ended June 30, 2023 CNA Financial Boardwalk Pipelines Loews Hotels & Co Corporate Total (In millions) Revenues: Insurance premiums $ 4,595 $ 4,595 Net investment income 1,100 $ 6 $ 2 $ 53 1,161 Investment gains (losses) ( 67 ) 46 ( 21 ) Non-insurance warranty revenue 814 814 Operating revenues and other 14 756 398 1,168 Total 6,456 762 446 53 7,717 Expenses: Insurance claims and policyholders’ benefits 3,432 3,432 Amortization of deferred acquisition costs 782 782 Non-insurance warranty expense 768 768 Operating expenses and other 683 492 377 37 1,589 Equity method (income) loss ( 72 ) 5 ( 67 ) Interest 59 78 6 43 186 Total 5,724 570 311 85 6,690 Income (loss) before income tax 732 192 135 ( 32 ) 1,027 Income tax (expense) benefit ( 152 ) ( 49 ) ( 37 ) 3 ( 235 ) Net income (loss) 580 143 98 ( 29 ) 792 Amounts attributable to noncontrolling interests ( 57 ) ( 57 ) Net income (loss) attributable to Loews Corporation $ 523 $ 143 $ 98 $ ( 29 ) $ 735 38 Table of contents