Item 1. Financial Statements
Item 1. Financial Statements.
Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
June 30,
2021
December 31,
2020
(Dollar amounts in millions, except per share data)
Assets:
Investments:
Fixed maturities, amortized cost of $ 39,826 and $ 38,963 , less allowance for credit loss of $ 45 and $ 40
$
44,910
$
44,646
Equity securities, cost of $ 1,496 and $ 1,456
1,663
1,561
Limited partnership investments
1,898
1,798
Other invested assets, primarily mortgage loans, less allowance for credit loss of $ 26 and $ 26
1,101
1,165
Short term investments
4,802
4,674
Total investments
54,374
53,844
Cash
578
478
Receivables
9,162
7,833
Property, plant and equipment
9,847
10,451
Goodwill
350
785
Deferred non-insurance warranty acquisition expenses
3,305
3,068
Deferred acquisition costs of insurance subsidiaries
721
708
Other assets
3,271
3,069
Total assets
$
81,608
$
80,236
Liabilities and Equity:
Insurance reserves:
Claim and claim adjustment expense
$
23,480
$
22,706
Future policy benefits
13,285
13,318
Unearned premiums
5,592
5,119
Total insurance reserves
42,357
41,143
Payable to brokers
654
92
Short term debt
122
37
Long term debt
8,988
10,072
Deferred income taxes
1,083
1,065
Deferred non-insurance warranty revenue
4,309
4,023
Other liabilities
4,697
4,623
Total liabilities
62,210
61,055
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 – 269,514,991 and 269,360,973 shares
3
3
Additional paid-in capital
3,121
3,133
Retained earnings
15,132
14,150
Accumulated other comprehensive income
327
581
18,583
17,867
Less treasury stock, at cost ( 9,652,672 and 150,000 shares)
( 500
)
( 7
)
Total shareholders’ equity
18,083
17,860
Noncontrolling interests
1,315
1,321
Total equity
19,398
19,181
Total liabilities and equity
$
81,608
$
80,236
See accompanying Notes to Consolidated Condensed Financial Statements.
3
Index
Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2021
2020
2021
2020
(In millions, except per share data)
Revenues:
Insurance premiums
$
2,035
$
1,850
$
3,997
$
3,719
Net investment income
616
644
1,166
807
Investment gains (losses) (Note 2)
578
( 1,142
)
635
( 1,358
)
Non-insurance warranty revenue
359
308
697
609
Operating revenues and other
415
650
1,130
1,632
Total
4,003
2,310
7,625
5,409
Expenses:
Insurance claims and policyholders’ benefits
1,546
1,642
3,052
3,067
Amortization of deferred acquisition costs
357
342
716
686
Non-insurance warranty expense
332
285
643
566
Operating expenses and other
656
992
1,570
3,018
Interest
100
123
225
267
Total
2,991
3,384
6,206
7,604
Income (loss) before income tax
1,012
( 1,074
)
1,419
( 2,195
)
Income tax (expense) benefit
( 219
)
228
( 333
)
305
Net income (loss)
793
( 846
)
1,086
( 1,890
)
Amounts attributable to noncontrolling interests
( 39
)
11
( 71
)
423
Net income (loss) attributable to Loews Corporation
$
754
$
( 835
)
$
1,015
$
( 1,467
)
Basic net income (loss) per share
$
2.87
$
( 2.96
)
$
3.83
$
( 5.16
)
Diluted net income (loss) per share
$
2.86
$
( 2.96
)
$
3.82
$
( 5.16
)
Weighted average shares outstanding:
Shares of common stock
262.76
281.48
265.06
284.26
Dilutive potential shares of common stock
0.58
0.49
Total weighted average shares outstanding assuming dilution
263.34
281.48
265.55
284.26
See accompanying Notes to Consolidated Condensed Financial Statements.
4
Index
Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2021
2020
2021
2020
(In millions)
Net income (loss)
$
793
$
( 846
)
$
1,086
$
( 1,890
)
Other comprehensive income (loss), after tax
Changes in:
Net unrealized gains (losses) on investments with an allowance for credit losses
2
( 9
)
Net unrealized gains (losses) on other investments
300
1,191
( 327
)
147
Total unrealized gains (losses) on investments
300
1,193
( 327
)
138
Unrealized gains (losses) on cash flow hedges
8
12
( 19
)
Pension and postretirement benefits
7
6
16
20
Foreign currency translation
11
29
14
( 55
)
Other comprehensive income (loss)
326
1,228
( 285
)
84
Comprehensive income (loss)
1,119
382
801
( 1,806
)
Amounts attributable to noncontrolling interests
( 72
)
( 119
)
( 40
)
412
Total comprehensive income (loss) attributable to Loews Corporation
$
1,047
$
263
$
761
$
( 1,394
)
See accompanying Notes to Consolidated Condensed Financial Statements.
5
Index
Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF EQUITY
(Unaudited)
Loews Corporation Shareholders
Accumulated
Common
Additional
Other
Stock
Common
Paid-in
Retained
Comprehensive
Held in
Noncontrolling
Total
Stock
Capital
Earnings
Income (Loss)
Treasury
Interests
(In millions)
Balance, April 1, 2020
$
19,178
$
3
$
3,347
$
15,167
$
( 1,093
)
$
( 458
)
$
2,212
Net loss
( 846
)
( 835
)
( 11
)
Other comprehensive income
1,228
1,098
130
Dividends paid ($ 0.0625 per share)
( 27
)
( 18
)
( 9
)
Deconsolidation of Diamond Offshore
( 1,087
)
( 1,087
)
Purchases of Loews Corporation treasury stock
( 33
)
( 33
)
Purchases of subsidiary stock from noncontrolling interests
( 19
)
5
( 24
)
Stock-based compensation
13
13
Other
6
6
2
( 2
)
Balance, June 30, 2020
$
18,413
$
3
$
3,371
$
14,316
$
5
$
( 491
)
$
1,209
Balance, April 1, 2021
$
18,537
$
3
$
3,119
$
14,394
$
34
$
( 280
)
$
1,267
Net income
793
754
39
Other comprehensive income
326
293
33
Dividends paid ($ 0.0625 per share)
( 27
)
( 16
)
( 11
)
Purchases of Loews Corporation treasury stock
( 219
)
( 219
)
Purchases of subsidiary stock from noncontrolling interests
( 15
)
( 15
)
Stock-based compensation
3
2
1
Other
-
( 1
)
1
Balance, June 30, 2021
$
19,398
$
3
$
3,121
$
15,132
$
327
$
( 500
)
$
1,315
See accompanying Notes to Consolidated Condensed Financial Statements.
6
Index
Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF EQUITY
(Unaudited)
Loews Corporation Shareholders
Accumulated
Common
Additional
Other
Stock
Common
Paid-in
Retained
Comprehensive
Held in
Noncontrolling
Total
Stock
Capital
Earnings
Income (Loss)
Treasury
Interests
(In millions)
Balance, January 1, 2020, as reported
$
21,930
$
3
$
3,374
$
15,823
$
( 68
)
$
( 13
)
$
2,811
Cumulative effect adjustment from change in accounting standards
( 5
)
( 5
)
Balance, January 1, 2020, as adjusted
21,925
3
3,374
15,818
( 68
)
( 13
)
2,811
Net loss
( 1,890
)
( 1,467
)
( 423
)
Other comprehensive income
84
73
11
Dividends paid ($ 0.125 per share)
( 114
)
( 36
)
( 78
)
Deconsolidation of Diamond Offshore
( 1,087
)
( 1,087
)
Purchases of Loews Corporation treasury stock
( 478
)
( 478
)
Purchases of subsidiary stock from noncontrolling interests
( 37
)
5
( 42
)
Stock-based compensation
9
( 9
)
18
Other
1
1
1
( 1
)
Balance, June 30, 2020
$
18,413
$
3
$
3,371
$
14,316
$
5
$
( 491
)
$
1,209
Balance, January 1, 2021
$
19,181
$
3
$
3,133
$
14,150
$
581
$
( 7
)
$
1,321
Net income
1,086
1,015
71
Other comprehensive loss
( 285
)
( 254
)
( 31
)
Dividends paid ($ 0.125 per share)
( 76
)
( 33
)
( 43
)
Purchases of Loews Corporation treasury stock
( 493
)
( 493
)
Purchases of subsidiary stock from noncontrolling interests
( 18
)
( 18
)
Stock-based compensation
7
( 9
)
16
Other
( 4
)
( 3
)
( 1
)
Balance, June 30, 2021
$
19,398
$
3
$
3,121
$
15,132
$
327
$
( 500
)
$
1,315
See accompanying Notes to Consolidated Condensed Financial Statements.
7
Index
Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30
2021
2020
(In millions)
Operating Activities:
Net income (loss)
$
1,086
$
( 1,890
)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities, net
( 187
)
2,430
Changes in operating assets and liabilities, net:
Receivables
( 1,087
)
( 574
)
Deferred acquisition costs
( 12
)
( 41
)
Insurance reserves
1,373
1,181
Other assets
( 720
)
( 280
)
Other liabilities
598
( 46
)
Trading securities
( 508
)
( 340
)
Net cash flow provided by operating activities
543
440
Investing Activities:
Purchases of fixed maturities
( 4,615
)
( 5,356
)
Proceeds from sales of fixed maturities
1,846
3,773
Proceeds from maturities of fixed maturities
2,104
1,622
Purchases of equity securities
( 181
)
( 312
)
Proceeds from sales of equity securities
193
230
Purchases of limited partnership investments
( 169
)
( 90
)
Proceeds from sales of limited partnership investments
185
259
Purchases of property, plant and equipment
( 183
)
( 440
)
Dispositions
52
11
Sale of interest in Altium Packaging
417
Deconsolidation of Diamond Offshore
( 483
)
Change in short term investments
405
526
Other, net
39
( 65
)
Net cash flow provided (used) by investing activities
93
( 325
)
Financing Activities:
Dividends paid
( 33
)
( 36
)
Dividends paid to noncontrolling interests
( 43
)
( 78
)
Purchases of Loews Corporation treasury stock
( 484
)
( 491
)
Purchases of subsidiary stock from noncontrolling interests
( 18
)
( 37
)
Principal payments on debt
( 1,146
)
( 465
)
Issuance of debt
1,199
1,342
Other, net
( 12
)
( 13
)
Net cash flow (used) provided by financing activities
( 537
)
222
Effect of foreign exchange rate on cash
1
( 5
)
Net change in cash
100
332
Cash, beginning of period
478
336
Cash, end of period
$
578
$
668
See accompanying Notes to Consolidated Condensed Financial Statements.
8
Index
Loews Corporation and Subsidiaries
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
Loews Corporation is a holding company. Its consolidated subsidiaries are engaged in the following lines of business: commercial property and casualty insurance (CNA Financial Corporation (“CNA”), an 89.6 % owned subsidiary); transportation and storage of natural gas and natural gas liquids (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, the term “Company” as used herein means Loews Corporation including its consolidated subsidiaries, the term “Net income (loss) attributable to Loews Corporation” as used herein means Net income (loss) attributable to Loews Corporation shareholders and the term “subsidiaries” means Loews Corporation’s consolidated subsidiaries.
On April 1, 2021, Loews Corporation sold 47 % of its interest in Altium Packaging, previously a 99 % owned subsidiary. See Note 2 for further discussion.
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, 2021 and December 31, 2020, results of operations, comprehensive income (loss) and changes in shareholders’ equity for the three and six months ended June 30, 2021 and 2020 and cash flows for the six months ended June 30, 2021 and 2020. Net income (loss) for the second quarter and first half of each of the years is not necessarily indicative of net income (loss) for that 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, 2020.
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, 2021 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 ASUs – In August of 2018 , the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-12 , “Financial Services – Insurance (Topic 944 ) : Targeted Improvements to the Accounting for Long-Duration Contracts.” The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts. The guidance requires entities to update annually cash flow assumptions, including morbidity and persistency, and update quarterly discount rate assumptions using an upper-medium grade fixed-income instrument yield. The effect of changes in cash flow assumptions will be recorded in Net income and the effect of changes in discount rate assumptions will be recorded in Other comprehensive income (“OCI”). This guidance is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. The guidance may be applied using either a modified retrospective transition method or a full retrospective transition method. The guidance requires restatement of prior periods presented. The Company plans to adopt on the effective date, using the modified retrospective transition method and is currently evaluating the effect the updated guidance will have on its consolidated financial statements, including the increased disclosure requirements. The annual updating of cash flow assumptions is expected to increase income statement volatility. While the requirements of the new guidance represent a material change from existing accounting guidance, the underlying economics of the business and related cash flows will be unchanged.
2. Significant Transactions
Altium Packaging
On April 1, 2021, Loews Corporation sold 47 % of its interest in Altium Packaging to GIC, Singapore’s sovereign wealth fund for $ 420 million in cash consideration. Loews Corporation will share certain participating rights with GIC related to capital allocation and other decisions by Altium Packaging. Therefore, in accordance with Accounting Standards Codification (“ASC”) 810, “Consolidation,” Altium Packaging was deconsolidated from Loews Corporation’s consolidated financial statements effective as of April 1, 2021. Effective April 1, 2021, Loews Corporation’s investment in Altium Packaging is accounted for under the equity method of accounting, with the investment reported in Other assets on the Consolidated Condensed Balance Sheets and equity income (loss) reported in Operating expenses and other on the Consolidated Condensed Statements of Operations.
9
Index
The transaction resulted in a gain of $ 555 million ($ 438 million after tax) for the three and six months ended June 30, 2021, which is recorded in Investment gains (losses) on the Consolidated Condensed Statement of Operations. Loews Corporation’s retained investment in Altium Packaging was recorded at an estimated fair value of $ 473 million. The difference between the fair value of Loews Corporation’s investment in Altium Packaging and Loews Corporation’s 53 % share of the carrying value of Altium Packaging’s net assets was attributed to definite lived intangible assets and goodwill. The amortization of the amounts attributed to definite lived intangible assets will be recognized as a component of equity income (loss) reported in Operating expenses and other on the Consolidated Condensed Statements of Operations. The assets and liabilities deconsolidated from the Consolidated Condensed Balance Sheets were property, plant and equipment of $ 490 million, goodwill of $ 436 million, intangible assets of $ 488 million, other assets of approximately $ 370 million, long term debt of $ 1.1 billion and other liabilities of approximately $ 380 million.
Diamond Offshore
As a result of the April 26, 2020 (“the Filing Date”) bankruptcy filing of Diamond Offshore Drilling, Inc. (“Diamond Offshore”) and certain of its subsidiaries and applicable accounting principles generally accepted in the United States of America (“GAAP”), Diamond Offshore was deconsolidated from Loews Corporation’s consolidated financial statements in the second quarter of 2020. Through the Filing Date, Diamond Offshore’s results were included in Loews Corporation’s consolidated financial statements and Loews Corporation recognized in its earnings its proportionate share of Diamond Offshore’s losses through such date. The deconsolidation resulted in the recognition of a loss of $ 1.2 billion ($ 957 million after tax) during the three and six months ended June 30, 2020, which is reported within Investment gains (losses) on the Consolidated Condensed Statements of Operations. During the first quarter of 2020, Diamond Offshore recorded an aggregate asset impairment charge of $ 774 million ($ 408 million after tax and noncontrolling interests), which is reported within Operating expenses and other on the Consolidated Condensed Statements of Operations. For additional information regarding the deconsolidation of Diamond Offshore and the Diamond Offshore asset impairments, see Notes 2 and 6 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
3. Investments
Net investment income is as follows:
Three Months Ended
June 30,
Six Months Ended
June 30 ,
2021
2020
2021
2020
(In millions)
Fixed maturity securities
$
425
$
430
$
853
$
868
Limited partnership investments
149
57
196
( 45
)
Short term investments
2
9
Equity securities
20
50
49
6
Income (loss) from trading portfolio (a)
26
107
76
( 22
)
Other
14
16
30
30
Total investment income
634
662
1,204
846
Investment expenses
( 18
)
( 18
)
( 38
)
( 39
)
Net investment income
$
616
$
644
$
1,166
$
807
(a)
Net unrealized gains (losses) related to changes in fair value on securities still held were $ 28 and $ 80 for the three months ended June 30, 2021 and 2020 and $ 58 and $ 7 for the six months ended June 30, 2 021 and 2020 .
10
Index
Investment gains (losses) are as follows:
Three Months Ended
June 30,
Six Months Ended
June 30 ,
2021
2020
2021
2020
(In millions)
Fixed maturity securities
$
31
$
17
$
69
$
( 58
)
Equity securities
17
63
19
( 70
)
Derivative instruments
( 12
)
( 10
)
5
( 5
)
Short term investments and other
2
( 1
)
2
( 14
)
Sale of 47 % interest in Altium Packaging (see Note 2)
555
555
Deconsolidation of Diamond Offshore
( 15
)
( 1,211
)
( 15
)
( 1,211
)
Investment gains (losses) (a)
$
578
$
( 1,142
)
$
635
$
( 1,358
)
(a)
Gross investment gains on available-for-sale securities were $ 51 and $ 102 for the three months ended June 30, 2021 and 2020 and $ 109 and $ 131 for the six months ended June 30, 2021 and 2020 . Gross investment losses on available-for-sale securities were $ 20 and $ 85 for the three months ended June 30, 2021 and 2020 and $ 40 and $ 189 for the six months ended June 30, 2021 and 2020. During the three and six months ended June 30, 2021, $ 15 of investment gains were recognized due to the change in fair value of non-redeemable preferred stock still held as of June 30, 2021. During the three and six months ended June 30, 2020, $ 63 of investment gains and $ 70 of investment losses were recognized due to the change in fair value of non-redeemable preferred stock still held as of June 30, 2020 .
The following tables present the activity related to the allowance on available-for-sale securities with credit impairments and purchased credit-deteriorated (“PCD”) assets. Accrued interest receivables on available-for-sale fixed maturity securities totaled $ 374 million, $ 371 million and $ 373 million as of June 30, 2021, December 31, 2020 and June 30, 2020 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, 2021
Corporate and
Other Bonds
Asset-
backed
Total
(In millions)
Allowance for credit losses:
Balance as of April 1, 2021
$
27
$
16
$
43
Additions to the allowance for credit losses:
Securities for which credit losses were not previously recorded
Available-for-sale securities accounted for as PCD assets
4
4
Reductions to the allowance for credit losses:
Securities sold during the period (realized)
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period
( 3
)
1
( 2
)
Total allowance for credit losses
$
24
$
21
$
45
Three months ended June 30, 2020
Allowance for credit losses:
Balance as of April 1, 2020
$
49
$
-
$
49
Additions to the allowance for credit losses:
Securities for which credit losses were not previously recorded
10
12
22
Available-for-sale securities accounted for as PCD assets
1
1
Reductions to the allowance for credit losses:
Securities sold during the period (realized)
1
1
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period
( 20
)
( 20
)
Total allowance for credit losses
$
39
$
12
$
51
11
Index
Six months ended June 30, 2021
Corporate and
Other Bonds
Asset-
backed
Total
(In millions)
Allowance for credit losses:
Balance as of January 1, 2021
$
23
$
17
$
40
Additions to the allowance for credit losses:
Securities for which credit losses were not previously recorded
14
14
Available-for-sale securities accounted for as PCD assets
2
4
6
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
Additional increases or (decrease) to the allowance for credit losses on securities that had an allowance recorded in a previous period
( 9
)
( 9
)
Total allowance for credit losses
$
24
$
21
$
45
Six months ended June 30, 2020
Allowance for credit losses:
Balance as of January 1, 2020
$
-
$
-
$
-
Additions to the allowance for credit losses:
Impact of adopting ASC 326
6
6
Securities for which credit losses were not previously recorded
58
12
70
Available-for-sale securities accounted for as PCD assets
2
2
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
1
1
Additional increases or (decrease) to the allowance for credit losses on securities that had an allowance recorded in a previous period
( 20
)
( 20
)
Total allowance for credit losses
$
39
$
12
$
51
The components of available-for-sale impairment losses recognized in earnings by asset type are presented in the following table. The table includes losses on securities with an intention to sell and changes in the allowance for credit losses on securities since acquisition date:
Three Months Ended
June 30,
Six Months Ended
June 30,
2021
2020
2021
2020
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds
$
( 2
)
$
( 1
)
$
5
$
90
Asset-backed
1
12
13
Impairment losses (gains) recognized in earnings
$
( 1
)
$
11
$
5
$
103
There were $ 13 million of losses on mortgage loans recognized during the six months ended June 30, 2020 due to changes in expected credit losses. There were no losses recognized on mortgage loans during the three and six months ended June 30, 2021 or during the three months ended June 30, 2020.
12
Index
The amortized cost and fair values of fixed maturity securities are as follows:
June 30 , 2021
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
$
21,291
$
3,153
$
35
$
24
$
24,385
States, municipalities and political subdivisions
10,125
1,743
2
11,866
Asset-backed:
Residential mortgage-backed
3,337
99
10
3,426
Commercial mortgage-backed
2,068
98
14
17
2,135
Other asset-backed
2,338
84
3
4
2,415
Total asset-backed
7,743
281
27
21
7,976
U.S. Treasury and obligations of government-sponsored enterprises
142
5
137
Foreign government
515
22
1
536
Fixed maturities available-for-sale
39,816
5,199
70
45
44,900
Fixed maturities trading
10
10
Total fixed maturity securities
$
39,826
$
5,199
$
70
$
45
$
44,910
December 31 , 2020
Fixed maturity securities:
Corporate and other bonds
$
20,792
$
3,578
$
22
$
23
$
24,325
States, municipalities and political subdivisions
9,729
1,863
11,592
Asset-backed:
Residential mortgage-backed
3,442
146
1
3,587
Commercial mortgage-backed
1,933
93
42
17
1,967
Other asset-backed
2,179
81
9
2,251
Total asset-backed
7,554
320
52
17
7,805
U.S. Treasury and obligations of government-sponsored enterprises
339
2
3
338
Foreign government
512
32
544
Fixed maturities available-for-sale
38,926
5,795
77
40
44,604
Fixed maturities trading
37
5
42
Total fixed maturity securities
$
38,963
$
5,800
$
77
$
40
$
44,646
The net unrealized gains on available-for-sale investments included in the tables above are recorded as a component of Accumulated other comprehensive income (loss) (“AOCI”). When presented in AOCI, these amounts are net of tax and noncontrolling interests and any required Shadow Adjustments. To the extent that unrealized gains on fixed income securities supporting long term care products and structured settlements not funded by annuities would result in a premium deficiency if those gains were realized, a related increase in Insurance reserves is recorded, net of tax and noncontrolling interests, as a reduction of net unrealized gains through Other comprehensive income (loss) (“Shadow Adjustments”). As of June 30, 2021 and December 31, 2020, the net unrealized gains on investments included in AOCI were correspondingly reduced by Shadow Adjustments of $ 2.4 billion and $ 2.5 billion (after tax and noncontrolling interests).
13
Index
The available-for-sale 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 , 2021
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
$
1,190
$
33
$
61
$
2
$
1,251
$
35
States, municipalities and political subdivisions
128
2
128
2
Asset-backed:
Residential mortgage-backed
932
10
10
942
10
Commercial mortgage-backed
153
2
206
12
359
14
Other asset-backed
255
2
74
1
329
3
Total asset-backed
1,340
14
290
13
1,630
27
U.S. Treasury and obligations of government-sponsored enterprises
80
5
80
5
Foreign government
48
1
48
1
Total fixed maturity securities
$
2,786
$
55
$
351
$
15
$
3,137
$
70
December 31 , 2020
Fixed maturity securities:
Corporate and other bonds
$
609
$
21
$
12
$
1
$
621
$
22
States, municipalities and political subdivisions
33
33
Asset-backed:
Residential mortgage-backed
71
1
11
82
1
Commercial mortgage-backed
533
40
28
2
561
42
Other asset-backed
344
9
13
357
9
Total asset-backed
948
50
52
2
1,000
52
U.S. Treasury and obligations of government-sponsored enterprises
63
3
63
3
Foreign government
13
13
Total fixed maturity securities
$
1,666
$
74
$
64
$
3
$
1,730
$
77
Based on current facts and circumstances, the Company believes the unrealized losses presented in the June 30, 2021 securities in a gross unrealized loss position table above are not indicative of the ultimate collectability of the current amortized cost of the securities, but rather are attributable to changes in interest rates, credit spreads and other factors. There is no current intent to sell securities with unrealized losses, nor is it more likely than not that sale will be required prior to recovery of amortized cost; accordingly, it was determined that there are no additional impairment losses to be recorded at June 30, 2021.
Contractual Maturity
The following table presents available-for-sale fixed maturity securities by contractual maturity.
June 30, 2021
December 31, 2020
Cost or
Amortized
Cost
Estimated
Fair
Value
Cost or
Amortized
Cost
Estimated
Fair
Value
(In millions)
Due in one year or less
$
1,685
$
1,702
$
1,456
$
1,458
Due after one year through five years
10,723
11,479
12,304
13,098
Due after five years through ten years
13,775
15,012
12,319
13,878
Due after ten years
13,633
16,707
12,847
16,170
Total
$
39,816
$
44,900
$
38,926
$
44,604
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.
14
Index
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 , 2021
2021
2020
2019
2018
2017
Prior
Total
(In millions)
DSCR ≥1.6x
LTV less than 55%
$
89
$
33
$
50
$
113
$
183
$
468
LTV 55% to 65%
19
9
4
32
LTV greater than 65%
$
5
6
24
35
DSCR 1.2x - 1.6x
LTV less than 55%
16
5
71
92
LTV 55% to 65%
10
38
39
42
27
156
LTV greater than 65%
34
44
8
12
98
DSCR ≤1.2x
LTV less than 55%
50
8
10
68
LTV 55% to 65%
47
47
LTV greater than 65%
29
7
36
Total
$
15
$
161
$
283
$
92
$
170
$
311
$
1,032
(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 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, 2021
December 31, 2020
Contractual/
Notional
Estimated Fair Value
Contractual/
Notional
Estimated Fair Value
Amount
Asset
(Liability)
Amount
Asset
(Liability)
(In millions)
With hedge designation:
Interest rate swaps
$
675
$
( 26 )
Without hedge designation:
Equity markets:
Options – purchased
$
6
135
$
3
Interest rate swaps
100
$
( 2 )
100
( 3 )
Embedded derivative on funds withheld liability
274
( 13 )
190
( 19 )
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, 2021, commitments to purchase or fund were approximately $ 1.3 billion and to sell were approximately $ 95 million under the terms of these investments.
15
Index
4. Fair Value
Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable:
●
Level 1 – Quoted prices for identical instruments in active markets.
●
Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.
●
Level 3 – Valuations derived from valuation techniques in which one or more significant inputs are not observable.
Prices may fall within Level 1, 2 or 3 depending upon the methodology and inputs used to estimate fair value for each specific security. In general, securities are priced using third party pricing services. Securities not priced by pricing services are submitted to independent brokers for valuation and, if those are not available, internally developed pricing models are used to value assets using a methodology and inputs that market participants presumably would use to value the assets. Prices obtained from third-party pricing services or brokers are not adjusted.
Control procedures are performed over information obtained from pricing services and brokers to ensure prices received represent a reasonable estimate of fair value and to confirm representations regarding whether inputs are observable or unobservable. Procedures may include: (i) the review of pricing service methodologies or broker pricing qualifications, (ii) back-testing, where past fair value estimates are compared to actual transactions executed in the market on similar dates, (iii) exception reporting, where period-over-period changes in price are reviewed and challenged with the pricing service or broker based on exception criteria and (iv) detailed analysis, where an independent analysis of the inputs and assumptions used to price individual securities is performed .
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 U.S. Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock .
June 30 , 2021
Level 1
Level 2
Level 3
Total
(In millions)
Fixed maturity securities:
Corporate bonds and other
$
158
$
24,017
$
883
$
25,058
States, municipalities and political subdivisions
11,809
57
11,866
Asset-backed
7,566
410
7,976
Fixed maturities available-for-sale
158
43,392
1,350
44,900
Fixed maturities trading
10
10
Total fixed maturities
$
158
$
43,402
$
1,350
$
44,910
Equity securities
$
884
$
743
$
36
$
1,663
Short term and other
4,661
37
4,698
Payable to brokers
( 94
)
( 2
)
( 96
)
December 31 , 2020
Fixed maturity securities:
Corporate bonds and other
$
355
$
24,082
$
770
$
25,207
States, municipalities and political subdivisions
11,546
46
11,592
Asset-backed
7,497
308
7,805
Fixed maturities available-for-sale
355
43,125
1,124
44,604
Fixed maturities trading
34
8
42
Total fixed maturities
$
355
$
43,159
$
1,132
$
44,646
Equity securities
$
796
$
722
$
43
$
1,561
Short term and other
4,538
39
4,577
Payable to brokers
( 14
)
( 29
)
( 43
)
16
Index
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, 2021 and 2020 :
Unrealized
Gains
Unrealized
(Losses)
Gains
Recognized in
Net Realized
(Losses)
Other
Investment Gains
Recognized in
Comprehensive
(Losses) and Net Change
Net Income
Income (Loss)
in Unrealized Investment
(Loss) on Level
on Level 3
Gains (Losses)
3 Assets and
Assets and
Included in
Transfers
Transfers
Liabilities
Liabilities
Balance,
Net Income
Included in
into
out of
Balance,
Held at
Held at
2021
April 1
(Loss)
OCI
Purchases
Sales
Settlements
Level 3
Level 3
June 30
June 30
June 30
(In millions)
Fixed maturity securities:
Corporate bonds and other
$
767
$
3
$
16
$
122
$
( 3
)
$
( 22
)
$
883
$
16
States, municipalities and political subdivisions
44
2
12
( 1
)
57
2
Asset-backed
315
1
4
84
( 10
)
$
21
$
( 5
)
410
4
Fixed maturities available-for-sale
1,126
4
22
218
( 3
)
( 33
)
21
( 5
)
1,350
$
-
22
Fixed maturities trading
5
( 3
)
( 2
)
Total fixed maturities
$
1,131
$
1
$
22
$
218
$
( 3
)
$
( 35
)
$
21
$
( 5
)
$
1,350
$
-
$
22
Equity securities
$
45
$
( 15
)
$
10
$
( 4
)
$
36
17
Index
Unrealized
Gains
Unrealized
(Losses)
Gains
Recognized in
Net Realized
(Losses)
Other
Investment Gains
Recognized in
Comprehensive
(Losses) and Net Change
Net Income
Income (Loss)
in Unrealized Investment
(Loss) on Level
on Level 3
Gains (Losses)
3 Assets and
Assets and
Included in
Transfers
Transfers
Liabilities
Liabilities
Balance,
Net Income
Included in
into
out of
Balance,
Held at
Held at
2020
April 1
(Loss)
OCI
Purchases
Sales
Settlements
Level 3
Level 3
June 30
June 30
June 30
(In millions)
Fixed maturity securities:
Corporate bonds and other
$
496
$
59
$
4
$
( 4
)
$
555
$
58
Asset-backed
197
18
35
$
( 9
)
( 5
)
$
( 14
)
222
18
Fixed maturities available-for-sale
693
$
-
77
39
( 9
)
( 9
)
$
-
( 14
)
777
$
-
76
Fixed maturities trading
3
1
4
1
Total fixed maturities
$
696
$
1
$
77
$
39
$
( 9
)
$
( 9
)
$
-
$
( 14
)
$
781
$
1
$
76
Equity securities
$
16
$
( 4
)
$
15
$
27
$
( 4
)
18
Index
Unrealized
Gains
Unrealized
(Losses)
Gains
Recognized in
Net Realized
(Losses)
Other
Investment Gains
Recognized in
Comprehensive
(Losses) and Net Change
Net Income
Income (Loss)
in Unrealized Investment
(Loss) on Level
on Level 3
Gains (Losses)
3 Assets and
Assets and
Included in
Transfers
Transfers
Liabilities
Liabilities
Balance,
Net Income
Included in
into
out of
Balance,
Held at
Held at
2021
January 1
(Loss)
OCI
Purchases
Sales
Settlements
Level 3
Level 3
June 30
June 30
June 30
(In millions)
Fixed maturity securities:
Corporate bonds and other
$
770
$
( 10
)
$
( 24
)
$
164
$
( 3
)
$
( 24
)
$
10
$
883
$
( 24
)
States, municipalities and political subdivisions
46
12
( 1
)
57
Asset-backed
308
3
( 5
)
114
( 27
)
30
$
( 13
)
410
( 5
)
Fixed maturities available-for-sale
1,124
( 7
)
( 29
)
290
( 3
)
( 52
)
40
( 13
)
1,350
$
-
( 29
)
Fixed maturities trading
8
( 6
)
( 2
)
Total fixed maturities
$
1,132
$
( 13
)
$
( 29
)
$
290
$
( 3
)
$
( 54
)
$
40
$
( 13
)
$
1,350
$
-
$
( 29
)
Equity securities
$
43
$
( 13
)
$
10
$
( 4
)
$
36
$
2
19
Index
Unrealized
Gains
Unrealized
(Losses)
Gains
Recognized in
Net Realized
(Losses)
Other
Investment Gains
Recognized in
Comprehensive
(Losses) and Net Change
Net Income
Income (Loss)
in Unrealized Investment
(Loss) on Level
on Level 3
Gains (Losses)
3 Assets and
Assets and
Included in
Transfers
Transfers
Liabilities
Liabilities
Balance,
Net Income
Included in
into
out of
Balance,
Held at
Held at
2020
January 1
(Loss)
OCI
Purchases
Sales
Settlements
Level 3
Level 3
June 30
June 30
June 30
(In millions)
Fixed maturity securities:
Corporate bonds and other
$
468
$
22
$
71
$
( 6
)
$
555
$
24
Asset-backed
165
10
80
$
( 9
)
( 9
)
$
( 15
)
222
10
Fixed maturities available-for-sale
633
$
-
32
151
( 9
)
( 15
)
$
-
( 15
)
777
$
-
34
Fixed maturities trading
4
4
Total fixed maturities
$
637
$
-
$
32
$
151
$
( 9
)
$
( 15
)
$
-
$
( 15
)
$
781
$
-
$
34
Equity securities
$
19
$
( 7
)
$
15
$
27
$
( 7
)
Net investment gains and losses are reported in Net income (loss) 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
20
Index
Securities may be transferred in or out of levels within the fair value hierarchy based on the availability of observable market information and quoted prices used to determine the fair value of the security. The availability of observable market information and quoted prices varies based on market conditions and trading volume.
Valuation Methodologies and Inputs
The following section describes the valuation methodologies and relevant inputs used to measure different financial instruments at fair value, including an indication of the level in the fair value hierarchy in which the instruments are generally classified.
Fixed Maturity Securities
Level 1 securities include highly liquid government securities and exchange traded bonds valued using quoted market prices. Level 2 securities include most other fixed maturity securities as the significant inputs are observable in the marketplace. All classes of Level 2 fixed maturity securities are valued using a methodology based on information generated by market transactions involving identical or comparable assets, a discounted cash flow methodology or a combination of both when necessary. Common inputs for all classes of fixed maturity securities include prices from recently executed transactions of similar securities, marketplace quotes, benchmark yields, spreads off benchmark yields, interest rates and U.S. Treasury or swap curves. Specifically for asset-backed securities, key inputs include prepayment and default projections based on past performance of the underlying collateral and current market data. Fixed maturity securities are primarily assigned to Level 3 in cases where broker/dealer quotes are significant inputs to the valuation, and there is a lack of transparency as to whether these quotes are based on information that is observable in the marketplace. Level 3 securities also include private placement debt securities whose fair value is determined using internal models with some inputs that are not market observable.
Equity Securities
Level 1 securities include publicly traded securities valued using quoted market prices. Level 2 securities are primarily valued using pricing for similar securities, recently executed transactions and other pricing models utilizing market observable inputs. Level 3 securities are primarily priced using broker/dealer quotes and internal models with some inputs that are not market observable.
Derivative Financial Instruments
Equity options are valued using quoted market prices and are classified within Level 1 of the fair value hierarchy. Over-the-counter derivatives, principally interest rate swaps, currency forwards, total return swaps, commodity swaps, equity warrants and options, are valued using inputs including broker/dealer quotes and are classified within Level 2 or Level 3 of the valuation hierarchy, depending on the amount of transparency as to whether these quotes are based on information that is observable in the marketplace.
Short Term and Other Invested Assets
Securities that are actively traded or have quoted prices are classified as Level 1. These securities include money market funds, treasury bills and exchange traded open-end funds valued using quoted market prices. Level 2 primarily includes commercial paper, for which all inputs are market observable. Fixed maturity securities purchased within one year of maturity are classified consistent with fixed maturity securities discussed above. Short term investments as presented in the tables above differ from the amounts presented in the Consolidated Condensed Balance Sheets because certain short term investments, such as time deposits, are not measured at fair value.
21
Index
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 , 2021
Estimated
Fair Value
Valuation
Techniques
Unobservable
Inputs
Range
(Weighted
Average)
(In millions)
Fixed maturity securities
$
1,067
Discounted cash flow
Credit spread
1 % – 8 % ( 2
%)
December 31 , 2020
Fixed maturity securities
$
966
Discounted cash flow
Credit spread
1 % – 8 % ( 3
%)
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
Estimated Fair Value
June 30 , 2021
Amount
Level 1
Level 2
Level 3
Total
(In millions)
Assets:
Other invested assets, primarily mortgage loans
$
1,006
$
1,079
$
1,079
Liabilities:
Short term debt
121
125
125
Long term debt
8,982
$
9,397
621
10,018
December 31 , 2020
Assets:
Other invested assets, primarily mortgage loans
$
1,068
$
1,151
$
1,151
Liabilities:
Short term debt
35
$
19
17
36
Long term debt
10,042
10,482
765
11,247
5. Claim and Claim Adjustment Expense Reserves
Property and casualty insurance 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, as well as court decisions and economic conditions, including inflation and public attitudes. All of these factors can affect the estimation of claim and claim adjustment expense reserves.
22
Index
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. 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. The Company reported catastrophe losses, net of reinsurance, of $ 54 million and $ 301 million for the three months ended June 30, 2021 and 2020 and $ 179 million and $ 376 million for the six months ended June 30, 2021 and 2020. Net catastrophe losses for the three and six months ended June 30, 2021 were related primarily to severe weather-related events. Net catastrophe losses for the three months ended June 30, 2020 included $ 182 million related to the coronavirus (“COVID-19”) pandemic, $ 61 million related to civil unrest and $ 58 million related primarily to severe weather-related events. Net catastrophe losses for the six months ended June 30, 2020 included $ 195 million related to the COVID-19 pandemic, $ 61 million related to civil unrest and $ 120 million related primarily to severe weather-related events.
Liability for Unpaid Claim and Claim Adjustment Expenses
The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves of other insurance operations.
Six Months Ended June 30
2021
2020
(In millions)
Reserves, beginning of year:
Gross
$
22,706
$
21,720
Ceded
4,005
3,835
Net reserves, beginning of year
18,701
17,885
Reduction of net reserves due to the excess workers’ compensation loss portfolio transfer
( 632
)
Net incurred claim and claim adjustment expenses:
Provision for insured events of current year
2,930
2,899
Increase (decrease) in provision for insured events of prior years
( 78
)
19
Amortization of discount
95
98
Total net incurred (a)
2,947
3,016
Net payments attributable to:
Current year events
( 317
)
( 256
)
Prior year events
( 1,949
)
( 2,342
)
Total net payments
( 2,266
)
( 2,598
)
Foreign currency translation adjustment and other
( 5
)
( 35
)
Net reserves, end of period
18,745
18,268
Ceded reserves, end of period
4,735
4,002
Gross reserves, end of period
$
23,480
$
22,270
(a)
Total net incurred above 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, the loss on the excess workers’ compensation loss portfolio transfer, uncollectible reinsurance and benefit expenses related to future policy benefits, which are not reflected in the table above .
23
Index
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 $ 11 million and $ 28 million was recorded for commercial property and casualty operations (“Property & Casualty Operations”) for the three months ended June 30, 2021 and 2020 and favorable net prior year loss reserve development of $ 26 million and $ 43 million was recorded for the six months ended June 30, 2021 and 2020. Unfavorable net prior year loss reserve development of $ 40 million and $ 50 million was recorded for CNA’s operations outside of Property & Casualty Operations (“Other Insurance Operations”) for the three and six months ended June 30, 2021 and 2020.
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
June 30,
Six Months Ended
June 30,
2021
2020
2021
2020
(In millions)
Medical professional liability
$
8
$
10
Other professional liability and management liability
$
10
$
( 9
)
10
( 6
)
Surety
( 23
)
( 38
)
( 30
)
Commercial auto
30
15
30
24
Workers’ compensation
( 42
)
( 61
)
( 42
)
( 74
)
Property and other
14
27
6
33
Other insurance operations
40
50
40
50
Total pretax (favorable) unfavorable development
$
29
$
22
$
14
$
7
Three Months
2021
Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in recent accident years.
Unfavorable development in commercial auto was due to higher than expected claim severity in CNA’s construction and middle market businesses in recent 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 due to higher than expected emergence in mass tort exposures in older accident years primarily related to abuse.
2020
Unfavorable development in commercial auto was due to unfavorable claim severity in CNA’s middle market and construction businesses in accident years 2017 through 2019.
Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in multiple accident years.
Unfavorable development in property and other was primarily due to higher than expected large loss activity in CNA’s middle market, national accounts and marine business units in accident year 2019.
Unfavorable development in other insurance operations was due to higher than expected emergence in mass tort exposures in older accident years primarily related to abuse.
24
Index
Six Months
2021
Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in recent accident years.
Unfavorable development in commercial auto was due to higher than expected claim severity in CNA’s construction and middle market businesses in recent 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 primarily due to higher than expected emergence in mass tort exposures in older accident years primarily related to abuse.
2020
Favorable development in surety was primarily due to lower than expected frequency for accident years 2017 and prior.
Unfavorable development in commercial auto was due to unfavorable claim severity in CNA’s middle market and construction businesses in accident years 2017 through 2019.
Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in multiple accident years.
Unfavorable development in property and other was primarily due to higher than expected large loss activity in CNA’s middle market, national accounts and marine business units in accident year 2019.
Unfavorable development in other insurance operations was due to higher than expected emergence in mass tort exposures in older accident years primarily related to abuse.
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 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 on the Consolidated Condensed Statements of Operations.
25
Index
The impact of the LPT on the Consolidated Condensed Statements of Operations was the recognition of a retroactive reinsurance benefit of $ 12 million and $ 20 million for the three months ended June 30, 2021 and 2020 and $ 22 million and $ 34 million for the six months ended June 30, 2021 and 2020. As of June 30, 2021 and December 31, 2020, the cumulative amounts ceded under the LPT were $ 3.3 billion. The unrecognized deferred retroactive reinsurance benefit was $ 376 million and $ 398 million as of June 30, 2021 and December 31, 2020 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 $ 2.9 billion as of June 30, 2021 . 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 the majority of the A&EP claims.
Excess Workers’ Compensation LPT
On February 5, 2021, CNA completed a transaction with Cavello Bay Reinsurance Limited (“Cavello”), a subsidiary of Enstar Group Limited, under which certain legacy excess workers’ compensation (“EWC”) liabilities were ceded to Cavello. Under the terms of the transaction, based on reserves in place as of January 1, 2020, approximately $ 690 million of net EWC claim and allocated claim adjustment expense reserves were ceded to Cavello under a loss portfolio transfer (“EWC LPT”) with an aggregate limit of $ 1.0 billion. Cavello was paid a reinsurance premium of $ 697 million, less claims paid between January 1, 2020 and the closing date of the agreement of $ 64 million. After transaction costs, a loss of approximately $ 11 million (after tax and noncontrolling interest) was recognized in Other Insurance Operations in the first quarter of 2021 related to the EWC LPT.
As of June 30, 2021, the cumulative amounts ceded under the EWC LPT were $ 690 million and the remaining amount available under the $ 1.0 billion aggregate limit was $ 310 million.
Cavello established a collateral trust account as security for its obligations, which will be maintained at 105 % of outstanding reserves.
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.
26
Index
6. Shareholders’ Equity
Accumulated other comprehensive income (loss)
The tables below present the changes in AOCI by component for the three and six months ended June 30, 2020 and 2021:
Net Unrealized
Gains (Losses)
Total
on Investments
Net Unrealized
Unrealized
Accumulated
with an
Gains (Losses)
Gains (Losses)
Pension and
Foreign
Other
Allowance for
on Other
on Cash Flow
Postretirement
Currency
Comprehensive
Credit Losses
Investments
Hedges
Benefits
Translation
Income (Loss)
(In millions)
Balance, April 1, 2020
$
( 10
)
$
( 15
)
$
( 25
)
$
( 842
)
$
( 201
)
$
( 1,093
)
Other comprehensive income (loss) before reclassifications, after tax of $ 0 , $( 321 ), $ 2 , $ 0 and $ 0
( 2
)
1,209
( 1
)
( 2
)
29
1,233
Reclassification of (income) losses from accumulated other comprehensive income, after tax of $( 1 ), $ 4 , $( 1 ), $( 2 ) and $ 0
4
( 18
)
1
8
( 5
)
Other comprehensive income
2
1,191
-
6
29
1,228
Amounts attributable to noncontrolling interests
( 126
)
( 1
)
( 3
)
( 130
)
Balance, June 30, 2020
$
( 8
)
$
1,050
$
( 25
)
$
( 837
)
$
( 175
)
$
5
Balance, April 1, 2021
$
-
$
1,002
$
( 19
)
$
( 869
)
$
( 80
)
$
34
Other comprehensive income (loss) before reclassifications, after tax of $ 0 , $( 82 ), $( 1 ), $ 0 and $ 0
1
323
8
( 2
)
11
341
Reclassification of (income) losses from accumulated other comprehensive income, after tax of $ 0 , $ 7 , $ ( 1 ) , $ ( 3 ) and $ 0
( 1
)
( 23
)
9
( 15
)
Other comprehensive income
-
300
8
7
11
326
Amounts attributable to noncontrolling interests
( 31
)
( 1
)
( 1
)
( 33
)
Balance, June 30, 2021
$
-
$
1,271
$
( 11
)
$
( 863
)
$
( 70
)
$
327
27
Index
Net Unrealized
Gains (Losses)
Total
on Investments
Net Unrealized
Unrealized
Accumulated
with an
Gains (Losses)
Gains (Losses)
Pension and
Foreign
Other
Allowance for
on Other
on Cash Flow
Postretirement
Currency
Comprehensive
Credit Losses
Investments
Hedges
Benefits
Translation
Income (Loss)
(In millions)
Balance, January 1, 2020
$
-
$
918
$
( 6
)
$
( 855
)
$
( 125
)
$
( 68
)
Other comprehensive income (loss) before reclassifications, after tax of $ 13 , $( 34 ), $ 8 , $ 0 and $ 0
( 50
)
143
( 20
)
( 1
)
( 55
)
17
Reclassification of losses from accumulated other comprehensive income, after tax of $ ( 11 ) , $ ( 2 ) , $ ( 1 ) , $ ( 5 ) and $ 0
41
4
1
21
67
Other comprehensive income (loss)
( 9
)
147
( 19
)
20
( 55
)
84
Amounts attributable to noncontrolling interests
1
( 15
)
( 2
)
5
( 11
)
Balance, June 30, 2020
$
( 8
)
$
1,050
$
( 25
)
$
( 837
)
$
( 175
)
$
5
Balance, January 1, 2021
$
-
$
1,563
$
( 23
)
$
( 877
)
$
( 82
)
$
581
Other comprehensive income (loss) before reclassifications, after tax of $ 1 , $ 72 , $( 3 ), $ 0 and $ 0
( 2
)
( 270
)
11
( 2
)
14
( 249
)
Reclassification of (income) losses from accumulated other comprehensive income, after tax of $( 1 ), $ 15 , $( 2 ), $( 5 ) and $ 0
2
( 57
)
1
18
( 36
)
Other comprehensive income (loss)
-
( 327
)
12
16
14
( 285
)
Amounts attributable to noncontrolling interests
35
( 2
)
( 2
)
31
Balance, June 30, 2021
$
-
$
1,271
$
( 11
)
$
( 863
)
$
( 70
)
$
327
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, Net unrealized gains (losses) on investments with OTTI 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
28
Index
Treasury Stock
Loews Corporation repurchased 9.5 million and 10.7 million shares of its common stock at an aggregate cost of $ 493 million and $ 478 million during the six months ended June 30, 2021 and 2020 .
7. 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 11:
Three Months Ended
June 30,
Six Months Ended
June 30
2021
2020
2021
2020
(In millions)
Non-insurance warranty – CNA Financial
$
359
$
308
$
697
$
609
Transportation and storage of natural gas and NGLs and other services – Boardwalk Pipelines
302
286
663
618
Lodging and related services – Loews Hotels & Co
94
16
150
158
Rigid plastic packaging and recycled resin – Corporate (a)
244
280
500
Contract drilling – Diamond Offshore (b)
71
300
Total revenues from contracts with customers
396
617
1,093
1,576
Other revenues
19
33
37
56
Operating revenues and other
$
415
$
650
$
1,130
$
1,632
(a)
R evenues presented for Corporate reflect the periods prior to the deconsolidation of Altium Packaging in the second quarter of 2021. See Note 2 for further discussion.
(b)
Revenues presented for Diamond Offshore reflect the periods prior to its deconsolidation. in the second quarter of 2020. See Note 2 for further discussion.
Receivables from contracts with customers – As of June 30, 2021 and December 31, 2020, receivables from contracts with customers were approximately $ 106 million and $ 246 million and are included within Receivables on the Consolidated Condensed Balance Sheets.
Deferred revenue – As of June 30, 2021 and December 31, 2020, deferred revenue resulting from contracts with customers was approximately $ 4.4 billion and $ 4.1 billion and is reported as Deferred non-insurance warranty revenue and within Other liabilities on the Consolidated Condensed Balance Sheets. Approximately $ 624 million and $ 574 million of revenues recognized during the six months ended June 30, 2021 and 2020 were included in deferred revenue as of December 31, 2020 and 2019.
Performance obligations – As of June 30, 2021, approximately $ 13.3 billion of estimated operating revenues is expected to be recognized in the future related to outstanding performance obligations. The balance relates primarily to transportation and storage of natural gas and natural gas liquids and hydrocarbons (“NGLs”) services and non-insurance warranty revenue. Approximately $ 1.2 billion will be recognized during the remaining six months of 2021, $ 2.2 billion in 2022 and the remainder in following years. The actual timing of recognition may vary due to factors outside of the Company’s control.
29
Index
8. 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 these plans:
Pension Benefits
Three Months Ended
June 30,
Six Months Ended
June 30,
2021
2020
2021
2020
(In millions)
Service cost
$
1
$
1
$
2
Interest cost
$
18
23
36
46
Expected return on plan assets
( 43
)
( 44
)
( 86
)
( 87
)
Amortization of unrecognized net loss
13
12
25
23
Amortization of unrecognized prior service cost
1
1
Settlement charge
2
3
2
7
Net periodic benefit
$
( 10
)
$
( 4
)
$
( 22
)
$
( 8
)
Other Postretirement Benefits
Three Months Ended
June 30,
Six Months Ended
June 30,
2021
2020
2021
2020
(In millions)
Interest cost
$
1
$
1
$
1
$
1
Expected return on plan assets
( 1
)
( 1
)
( 2
)
Net periodic (benefit) cost
$
1
$
-
$
-
$
( 1
)
9. Legal Proceedings
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 “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 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.
On September 28, 2018, the Court denied approval of the Proposed Settlement. On February 11, 2019, a substitute verified class action complaint was filed in this proceeding. The Defendants filed a motion to dismiss, which was heard by the Court in July of 2019. In October of 2019, the 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 .
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.
30
Index
10. Commitments and Contingencies
CNA Data Breach-related Contingency
As previously disclosed, CNA sustained a sophisticated cybersecurity attack in March of 2021 involving ransomware. CNA’s investigation revealed that an unauthorized third party copied some personal information relating to certain current and former employees, contractor workers and their dependents and certain other persons, including some policyholders. In July of 2021, CNA provided notifications to the impacted individuals and to regulators, in accordance with applicable law. CNA may be subject to subsequent investigations, fines or penalties, as well as other legal claims and actions, related to the foregoing. The likelihood is reasonably possible, but the amount of such fines, penalties or costs, if any, cannot be estimated at this time.
Based on the information currently known, CNA does not believe that the March 2021 cybersecurity attack will have a material impact on its business, results of operations or financial condition, but no assurances can be given as it continues to assess the full impact from the incident, including costs, expenses and insurance coverage.
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, 2021, the potential amount of future payments CNA could be required to pay under these guarantees was approximately $ 1.6 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.
11. 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. In the first quarter of 2020 Diamond Offshore was a reportable segment and was deconsolidated during the second quarter of 2020. The Corporate segment is primarily comprised of Loews Corporation excluding its subsidiaries, and the operations of Altium Packaging through March 31, 2021. On April 1, 2021, Loews Corporation sold 47 % of its interest in Altium Packaging and as a result, Altium Packaging was deconsolidated from Loews Corporation’s consolidated financial results. Subsequent to deconsolidation, Loews Corporation’s investment in Altium Packaging is accounted for under the equity method of accounting, with Equity income (loss) reported in Operating expenses and other on the Consolidated Condensed Statements of Operations in the Corporate segment. For further discussion on the deconsolidations of Diamond Offshore and Altium Packaging see Note 2.
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 20 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
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.
31
Index
Statements of Operations by segment are presented in the following tables.
Three Months Ended June 30 , 2021
CNA
Financial
Boardwalk
Pipelines
Loews
Hotels & Co
Corporate
Total
(In millions)
Revenues:
Insurance premiums
$
2,035
$
2,035
Net investment income
591
$
1
$
24
616
Investment gains
38
540
578
Non-insurance warranty revenue
359
359
Operating revenues and other
6
$
312
97
415
Total
3,029
312
98
564
4,003
Expenses:
Insurance claims and policyholders’ benefits
1,546
1,546
Amortization of deferred acquisition costs
357
357
Non-insurance warranty expense
332
332
Operating expenses and other
302
209
115
30
656
Interest
29
40
9
22
100
Total
2,566
249
124
52
2,991
Income (loss) before income tax
463
63
( 26
)
512
1,012
Income tax (expense) benefit
( 94
)
( 16
)
5
( 114
)
( 219
)
Net income (loss)
369
47
( 21
)
398
793
Amounts attributable to noncontrolling interests
( 39
)
( 39
)
Net income (loss) attributable to Loews Corporation
$
330
$
47
$
( 21
)
$
398
$
754
32
Index
Three Months Ended June 30 , 2020
CNA
Financial
Boardwalk
Pipelines
Loews
Hotels & Co
Corporate (a)
Diamond
Offshore (b)
Total
(In millions)
Revenues:
Insurance premiums
$
1,850
$
1,850
Net investment income
534
$
110
644
Investment gains (losses)
69
( 1,211
)
( 1,142
)
Non-insurance warranty revenue
308
308
Operating revenues and other
5
$
296
$
34
244
$
71
650
Total
2,766
296
34
( 857
)
71
2,310
Expenses:
Insurance claims and policyholders’ benefits
1,642
1,642
Amortization of deferred acquisition costs
342
342
Non-insurance warranty expense
285
285
Operating expenses and other
283
210
123
260
116
992
Interest
31
41
8
32
11
123
Total
2,583
251
131
292
127
3,384
Income (loss) before income tax
183
45
( 97
)
( 1,149
)
( 56
)
( 1,074
)
Income tax (expense) benefit
( 32
)
( 11
)
25
241
5
228
Net income (loss)
151
34
( 72
)
( 908
)
( 51
)
( 846
)
Amounts attributable to noncontrolling interests
( 16
)
27
11
Net income (loss) attributable to Loews Corporation
$
135
$
34
$
( 72
)
$
( 908
)
$
( 24
)
$
( 835
)
(a)
Amounts presented for Corporate include the operating results of Altium Packaging prior to the deconsolidation.
(b)
Amounts presented for Diamond Offshore reflect the periods prior to the deconsolidation.
33
Index
Six Months Ended June 30, 2021
CNA
Financial
Boardwalk
Pipelines
Loews
Hotels & Co
Corporate (c)
Total
(In millions)
Revenues:
Insurance premiums
$
3,997
$
3,997
Net investment income
1,095
$
1
$
70
1,166
Investment gains
95
540
635
Non-insurance warranty revenue
697
697
Operating revenues and other
11
$
684
154
281
1,130
Total
5,895
684
155
891
7,625
Expenses:
Insurance claims and policyholders’ benefits
3,052
3,052
Amortization of deferred acquisition costs
716
716
Non-insurance warranty expense
643
643
Operating expenses and other
587
426
219
338
1,570
Interest
57
81
17
70
225
Total
5,055
507
236
408
6,206
Income (loss) before income tax
840
177
( 81
)
483
1,419
Income tax (expense) benefit
( 160
)
( 45
)
17
( 145
)
( 333
)
Net income (loss)
680
132
( 64
)
338
1,086
Amounts attributable to noncontrolling interests
( 71
)
( 71
)
Net income (loss) attributable to Loews Corporation
$
609
$
132
$
( 64
)
$
338
$
1,015
(c)
Amounts presented for Corporate include the operating results of Altium Packaging through March 31, 2021. Beginning April 1, 2021, Altium Packaging is recorded as an equity method investment.
34
Index
Six Months Ended June 30 , 2020
CNA
Financial
Boardwalk
Pipelines
Loews
Hotels & Co
Corporate (a)
Diamond
Offshore (b)
Total
(In millions)
Revenues:
Insurance premiums
$
3,719
$
3,719
Net investment income (loss)
863
$
( 56
)
807
Investment losses
( 147
)
( 1,211
)
( 1,358
)
Non-insurance warranty revenue
609
609
Operating revenues and other
13
$
637
$
176
501
$
305
1,632
Total
5,057
637
176
( 766
)
305
5,409
Expenses:
Insurance claims and policyholders’ benefits
3,067
3,067
Amortization of deferred acquisition costs
686
686
Non-insurance warranty expense
566
566
Operating expenses and other
583
421
290
528
1,196
3,018
Interest
62
83
16
63
43
267
Total
4,964
504
306
591
1,239
7,604
Income (loss) before income tax
93
133
( 130
)
( 1,357
)
( 934
)
( 2,195
)
Income tax (expense) benefit
( 4
)
( 34
)
33
284
26
305
Net income (loss)
89
99
( 97
)
( 1,073
)
( 908
)
( 1,890
)
Amounts attributable to noncontrolling interests
( 9
)
432
423
Net income (loss) attributable to Loews Corporation
$
80
$
99
$
( 97
)
$
( 1,073
)
$
( 476
)
$
( 1,467
)
35
Index
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