2019
Delaware | 13-2646102 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
Stock,stock, par value $0.01 per share
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of RegulationS-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form10-K or any amendment to this Form10-K. [ X ].
$14,174,000,000.
2019
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Item 1. | Business. |
On May 22, 2017, we completed the acquisition of CCC Acquisition Holdings, Inc. for $1.2 billion, subject to post-closing adjustments. CCC Acquisition Holdings, Inc., through its wholly owned subsidiary, Consolidated Container Company LLC (“Consolidated Container”), is a rigid plastic packaging and recycled resins manufacturer that provides packaging solutions to end markets such as beverage, food and household chemicals through a network of manufacturing locations across North America. The acquisition was funded with approximately $620 million of Parent Company cash and debt financing proceeds at Consolidated Container of $600 million. For further information about this acquisition, see Notes 2 and 11 of the Notes to Consolidated Financial Statements included under Item 8.
2017.
states.
other consumer goods. Service contracts are generally distributed by commission-based independent representatives and sold by auto dealerships and retailers in North America to customers in conjunction with the purchase of a new or used vehicle or new consumer goods. Additionally, CNA’s insurance companies may issue contractual liability insurance policies or guaranteed asset protection reimbursement insurance policies to cover the liabilities of these service contracts issued by affiliated entities or third parties.
Property and Casualty Structure
CNA’s Property and Casualty Operations field structure consists of 49 underwriting locations across the United States of America (“U.S.”). In addition, there are five consists of field underwriting locations and centralized processing operations which handle policy processing, billing and collection activities and also act as call centers to optimize service. CNA’s claim operations presence in the U.S. consists of six primary locations where it handles multiple claim types and key business functions. Additionally,functions, as well as regional claim maintains regional offices which are aligned with CNA’s underwriting field structure. CNA also has a presenceproperty & casualty underwriting operations in Canada, the United Kingdom (“U.K.”) and Continental Europe, and Singapore consisting of 17 branch operations andas well as access to business placed at Lloyd’s through Hardy Syndicate 382.
Direct Written Premiums by Geographic Concentration
Set forth below is the distribution of CNA’s direct written premiums by geographic concentration.
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||||
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California | 9.7% | 9.5% | 9.1% | |||||||||||
Texas | 8.5 | 8.2 | 8.1 | |||||||||||
New York | 7.2 | 6.9 | 7.1 | |||||||||||
Illinois | 6.4 | 7.6 | 7.5 | |||||||||||
Florida | 5.7 | 5.8 | 5.7 | |||||||||||
Pennsylvania | 3.8 | 3.7 | 3.8 | |||||||||||
New Jersey | 3.2 | 3.1 | 3.2 | |||||||||||
Canada | 2.2 | 1.9 | 2.2 | |||||||||||
All other states, countries or political subdivisions | 53.3 | 53.3 | 53.3 | |||||||||||
100.0% | 100.0% | 100.0% | ||||||||||||
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Approximately 7.7%, 7.9% and 8.0% of CNA’s direct written premiums were derived from outside of the United States for the years ended December 31, 2017, 2016 and 2015.
There are approximately 2,600 individual companies that sell CNA is one of the largest commercial property and casualty insurance companies in the United States. Based on 2016 statutory net written premiums, CNA is the eighth largest commercial insurer in the United States of America.
U.S.
approval by insurance regulators, depending on the size of such transfers and payments in relation to the financial position of the insurance subsidiaries making the transfertransfers or payment.
payments.
As
state legislatures that continue to expand liability for insurers and their policyholders.
However, thereis developing a global insurance capital standard for insurance groups. While the general parameters of ComFrame have been finalized, many critical areas of the global insurance capital standard are still under consideration. Certain jurisdictional regulatory regimes are subject to revision in response to these global developments.
will become effective upon the U.K.’s exit from the E.U.
2017.
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Fleet Enhancements and Additions: Diamond Offshore’s long-term strategy is to upgrade its fleet to meet customer demand for advanced, efficient and high-tech rigs by acquiring or building new rigs when possible to do so at attractive prices. Diamond Offshore’s most recent fleet enhancement cycle was completed in 2016 with the delivery of theOcean GreatWhite.
2020.
Pressure Control by the Hour: In 2016, Diamond Offshore entered into aten-year collaborative arrangement with a subsidiary of GE Oil & Gas (“GE”) to monitor the blowout preventer equipment and proactively manage the maintenance, certification and reliability of such equipment on its rigs. In connection with the services agreement with GE, Diamond Offshore sold the equipment to a GE affiliate and leased back such equipment under four separateten-year operating leases.
the Middle East.
Diamond Offshore actively markets its rigs worldwide.
2017.
Competition:
Operations Outside the United States: Diamond Offshore’s operations outside the U.S. accounted for approximately 58%, 66% and 79%
We own approximately 51% of Boardwalk Pipeline comprised of 125,586,133 common units and a 2% general partner interest. 2017.
Boardwalk PipelinePipelines owns and operates approximately 13,88013,610 miles of interconnected natural gas pipelines directly serving customers in 13 states and indirectly serving customers throughout the northeastern and southeastern U.S. through numerous interconnections with unaffiliated pipelines. Boardwalk PipelinePipelines also owns and operates approximately 455445 miles of NGL pipelines in Louisiana and Texas. In 2017,2019, its pipeline systems transported approximately 2.32.9 trillion cubic feet (“Tcf”) of natural gas and approximately 64.786.6 million barrels (“MMBbls”) of NGLs. Average daily throughput on Boardwalk Pipeline’sPipelines’ natural gas pipeline systems during 20172019 was approximately 6.48.0 billion cubic feet (“Bcf”). Boardwalk Pipeline’sPipelines’ natural gas storage facilities are comprised of 14 underground storage fields located in four states with aggregate working gas capacity of approximately 205.0 Bcf and Boardwalk Pipeline’sPipelines’ NGL storage facilities consist of nine11 salt dome storage caverns located in Louisiana with an aggregate storage capacity of approximately 24.531.8 MMBbls. Boardwalk PipelinePipelines also owns threeseven salt dome caverns and related brine infrastructure for use in providing brine supply services and to support the NGL storage operations.
The Gulf Crossing pipeline system is located in Texas and runs approximately 375 miles into Louisiana. The pipeline system has apeak-day delivery capacity of 1.9 Bcf per day and average daily throughput for the year ended December 31, 2017 was 1.1 Bcf per day.
approximately 2.64.2 billion pounds of ethylene per year between Texas and Louisiana, where it interconnects with its ethylene distribution system. Throughput for Louisiana Midstream was 64.786.6 MMBbls for the year ended December 31, 2017.
2019.
Customers:Boardwalk PipelinePipelines’ growth projects are secured by long-term firm contracts.
Competition: Boardwalk PipelinePipelines’ delivery market has diversified over time, with more deliveries going to
Seasonality: Boardwalk Pipeline’s revenues can be affected by weather, natural gas price levels, gas price differentials between locations on its pipeline systems (basis spreads), gas price differentials between time periods, such as winter to summer (time period price spreads) and natural gas price volatility. Weather impacts natural gas demand for heating needs and power generation, which in turn influences the short term value of transportation and storage across Boardwalk Pipeline’s pipeline systems. Colder than normal winters can result in an increase in the demand for natural gas for heating needs and warmer than normal summers can impact cooling needs, both of which typically result in increased pipeline transportation revenues and throughput. While traditionally peak demand for natural gas occurs during the winter months driven by heating needs, the increased use of natural gas for cooling needs during the summer months has partially reduced the seasonality of revenues. In 2017, approximately 53% of Boardwalk Pipeline’s operating revenues were recognized in the first and fourth quarters of the year.
storage of natural gas in interstate commerce and the extension, enlargement or abandonment of facilities under its jurisdiction. Where required, Boardwalk Pipeline’sPipelines’ natural gas pipeline subsidiaries hold certificates of public convenience and necessity issued by the FERC covering certain of their facilities, activities and services. The maximum rates that may be charged by Boardwalk Pipeline’sPipelines’ subsidiaries operating under the FERC’s jurisdiction, for all aspects of the natural gas transportation services they provide, are established through the FERC’scost-of-service cost-based rate-making process. Key determinants in the FERC’scost-of-service cost-based rate-making process are the costs of providing service, the volumes of gas being transported, the rate design, the allocation of costs between services, the capital structure and the rate of return a pipeline is permitted to earn. The maximum rates that may be charged by Boardwalk Pipeline
Boardwalk Pipelines also expects new pipeline safety legislation to be proposed and finalized in 2020 that will reauthorize PHMSA pipeline safety programs, which under the 2016 Act expired at the end of September 2019.
Number of | |||||
Name and Location | Rooms | ||||
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Owned: | |||||
Loews Chicago Hotel, Chicago, Illinois | 400 | ||||
Loews Chicago O’Hare Hotel, Chicago, Illinois | 556 | ||||
Loews Coronado Bay Resort, San Diego, California | 439 | ||||
Loews Hotel 1000, Seattle, Washington | 120 | ||||
Loews Hotel Vogue, Montreal, Canada | 142 | ||||
Loews Miami Beach Hotel, Miami Beach, Florida | 790 | ||||
Loews Minneapolis Hotel, Minneapolis, Minnesota | 251 | ||||
Loews Philadelphia Hotel, Philadelphia, Pennsylvania | 581 | ||||
Loews Regency New York Hotel, New York, New York | 379 | ||||
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Loews Vanderbilt Hotel, Nashville, Tennessee | 340 | ||||
Loews Ventana Canyon Resort, Tucson, Arizona | 398 | ||||
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Hard Rock Hotel, at Universal Orlando, Orlando, Florida | 650 | ||||
Live! by Loews, Arlington, Texas | 300 | ||||
Loews Atlanta Hotel, Atlanta, Georgia | 414 | ||||
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Loews Hollywood Hotel, Hollywood, California | 628 | ||||
Loews Portofino Bay Hotel, at Universal Orlando, Orlando, Florida | 750 | ||||
Loews Royal Pacific Resort, at Universal Orlando, Orlando, Florida | 1,000 | ||||
Loews Sapphire Falls Resort, at Universal Orlando, Orlando, Florida | 1,000 | ||||
Universal’s Aventura Hotel, Orlando, Florida | 600 | ||||
Universal’s Cabana Bay Beach Resort, Orlando, Florida | 2,200 | ||||
Universal’s Endless Summer Resort – Surfside Inn and Suites, Orlando, Florida | 750 | ||||
Management Contract: | |||||
Bisha Hotel and Residences, Toronto, Canada | 96 | ||||
Loews Boston Hotel, Boston, Massachusetts | 225 | ||||
Loews New Orleans Hotel, New Orleans, Louisiana | 285 | ||||
Loews San Francisco Hotel, San Francisco, California | 155 | ||||
Loews Santa Monica Beach Hotel, Santa Monica, California | 347 |
Note: | Two owned hotels and many of the joint venture hotels are subject to |
remain competitive.
In 2018, Universal Orlando’s Aventura2019, the sale of Loews San Francisco Hotel a 600 guestroom hotel,in San Francisco, California, was completed. Loews Hotel & Co continues to serve as manager, which it is expected to open.do through March of 2020;
In 2019, Live! By Loews in Arlington, Texas, an approximately 300 guestroom hotel in which Loews Hotels & Co has a manager and joint venture interest, is expected to be completed;
In 2019 and 2020, two hotels to be named at Universal Orlando, with approximately 2,800 guestrooms, are expected to open. As with Loews Hotels & Co’s other properties at Universal Orlando, Loews Hotels & Co has a manager and 50% joint venture interest in these hotels;
during 2019, 2018 or 2017.CONSOLIDATED CONTAINER COMPANYmanufactures rigid plasticCompany LLC announced that it has rebranded the company as Altium Packaging LLC (together with its subsidiaries, “Altium Packaging”). In addition, Tri State Distribution Inc., a pharmaceutical packaging and recycled resins to providemanufacturer that Altium Packaging acquired in June of 2019, has been rebranded as Altium Healthcare Inc. Altium Packaging is a packaging solutions to end markets such as beverage, foodprovider and manufacturer in North America. The business specializes in customizedthrough a network of manufacturing locations across North America. Consolidated Containerfood/nutraceuticals, industrial/specialty chemicals, water and beverage/juice segments. Altium Packaging develops, manufactures and markets a wide range of extrusion blow-molded and injection molded plastic containers for target markets. In addition, Consolidated ContainerAltium Packaging manufactures commodity and differentiated plastic resins from recycled plastic materials for a variety of end markets. Consolidated ContainerAltium Packaging accounted for 6.2%, 6.2% and 3.6% of our consolidated total revenue for the yearyears ended December 31, 2019, 2018 and 2017.Consolidated ContainerAltium Packaging sells its products to approximately 1,2809,400 customers throughout North America. Consolidated Container’sAltium Packaging’s largest customers for rigid packaging include a diverse customer base of many nationally recognized branded food, beverage, and consumer products and pharmaceutical companies. The recycled resins customer base is primarily domestic with customers in several end markets such as packaging, automotive, industrial and consumer goods. Dean Foods Company represented approximately 11% of Altium Packaging’s net sales for the year ended December 31, 2018 and 11% of its net sales, since the date of acquisition, for the year ended December 31, 2017. No other customer accounted for 10% or more of Consolidated Container’sAltium Packaging’s net sales for the period.
Name | Position and Offices Held | Age | First Became Officer | |||
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Marc A. Alpert | Senior Vice President, General Counsel and Secretary | 55 | 2016 | |||
David B. Edelson | Senior Vice President and Chief Financial Officer | 58 | 2005 | |||
Richard W. Scott | Senior Vice President and Chief Investment Officer | 64 | 2009 | |||
Kenneth I. Siegel | Senior Vice President | 60 | 2009 | |||
Andrew H. Tisch | Office of the President,Co-Chairman of the Board and Chairman of the Executive Committee | 68 | 1985 | |||
James S. Tisch | Office of the President, President and Chief Executive Officer | 65 | 1981 | |||
Jonathan M. Tisch | Office of the President andCo-Chairman of the Board | 64 | 1987 |
First | ||||||||||
Became | ||||||||||
Name | Position and Offices Held | Age | Officer | |||||||
Marc A. Alpert | Senior Vice President, General Counsel and Secretary | 57 | 2016 | |||||||
David B. Edelson | Senior Vice President and Chief Financial Officer | 60 | 2005 | |||||||
Richard W. Scott | Senior Vice President and Chief Investment Officer | 66 | 2009 | |||||||
Kenneth I. Siegel | Senior Vice President | 62 | 2009 | |||||||
Andrew H. Tisch | Office of the President, Co-Chairman of the Board | 70 | 1985 | |||||||
and Chairman of the Executive Committee | ||||||||||
James S. Tisch | Office of the President, President and | 67 | 1981 | |||||||
Chief Executive Officer | ||||||||||
Jonathan M. Tisch | Office of the President and Co-Chairman of the Board | 66 | 1987 |
This Annual Report on Form
Certain risks and uncertainties associated with CNA’s insurance reserves are outlined in the Insurance Reserves and Critical Accounting Estimates sections of MD&A in Item 7.
Emerging or potential claim and coverage issues include, but are not limited to, uncertainty in future medical costs in workers’ compensation. In particular, medical cost inflation could be greater than expected due to new treatments, drugs and devices; increased health care utilization; and/or the future costs of health care facilities. In addition, the relationship between workers’ compensation and government and private health care providers could change, potentially shifting costs to workers’ compensation.
If CNA’s estimated reserves are insufficient for any reason, including changes in assumptions, the required increase in reserves would be recorded as a charge against earnings in the period in which reserves are determined
Catastrophematerial losses from natural and systemic losses are unpredictable and could result in material losses.
Claim frequency and severity for some lines
analysis.
consolidation and new market entrants, resulting in increased pressures on CNA’s ability to remain competitive, particularly in implementingobtaining pricing that is both attractive to CNA’s customer base and risk appropriate to CNA.
funds from these investments. The timing and amount of income or losses on such investments is inherently variable and can contribute to volatility in reported earnings.
investments, all of which would result in a charge to CNA’s earnings.
Globally, insurance regulators are working cooperatively to develop
result in elevated expenses.
2019, and there continues a protracted downturn in its industry.
An increase
New
In addition, some shipyards own rigs recently constructed or under construction, which are not currently marketed, which, if acquired by Diamond Offshore or its competitors, would further exacerbate the oversupply of rigs. In addition, during industry downturns like the one Diamond Offshore is currently experiencing, rig operators may take lower dayrates and shorter contract durations to keep their rigs operational.
Currently,
contracts. Additionally, because of depressed commodity prices, restricted credit markets, economic downturns, changes in priorities or strategy or other factors beyond Diamond Offshore’s control, a customer may no longer want or need a rig that is currently under contract or may be able to obtain a comparable rig at a lower dayrate. For these reasons, customers have sought and may in the future seek to renegotiate the terms of Diamond Offshore’s existing drilling contracts, terminate their contracts without justification or repudiate or otherwise fail to perform their obligations under the contracts. As a result of such contract renegotiations or terminations, Diamond Offshore’s contract backlog has been and may in the future be adversely impacted, it might not recover any compensation (or any recovery it obtains may not fully compensate it for the loss of the contract) and it may be required to idle one or more rigs for an extended period of time.
If a decision is made to cold stack a rig, Diamond Offshore’s operating costs for the rig are typically reduced, however, it will incur additional costs associated with cold stacking the rig (particularly if it cold stacks a newer rig, such as a drillship or other DP semisubmersible rig, for which cold stacking costs are typically substantially higher than for an older
● | it may have difficulty satisfying its obligations with respect to its outstanding debt and, given the challenges to its business presented by the protracted industry downturn, its operational obligations; |
● | it may have difficulty obtaining financing, including refinancing for its existing indebtedness upon maturity in the future for working capital, capital expenditures, acquisitions or other purposes; |
● | it may need to use a substantial portion of available cash flow from operations to pay interest and principal on its debt, which would reduce the amount of money available to fund working capital requirements, capital expenditures and other general corporate or business activities; |
● | vulnerability to the effects of general adverse economic conditions, such as the continuing protracted industry downturn, and adverse operating results, including negative cash flows, could increase; |
● | flexibility in planning for, or reacting to, changes in its business and in its industry in general could be limited; |
● | it may not have the ability to pursue business opportunities that become available; |
● | the amount of debt and the amount it must pay to service its debt obligations could place Diamond Offshore at a competitive disadvantage compared to its competitors that have less debt; and |
● | customers may react adversely to its significant debt level and seek alternative service providers. |
operations are also subject to numerous local, state and federal laws and regulations in the United StatesU.S. and in foreign jurisdictions concerning the containment and disposal of hazardous materials, the remediation of contaminated properties and the protection of the environment. Laws and regulations protecting the environment have become increasingly stringent, and may in some cases impose “strict liability,” rendering a person liable for environmental damage without regard to negligence or fault on the part of that person. Failure to comply with such laws and regulations could subject Diamond Offshore to civil or criminal enforcement action, for which it may not receive contractual indemnification or have insurance coverage, and could result in the issuance of injunctions restricting some or all of Diamond Offshore’s activities in the affected areas. Diamond Offshore may be required to make significant expenditures for additional capital equipment or inspections and recertifications to comply with existing or new governmental laws and regulations. It is also possible that these laws and regulations may, in the future, add significantly to Diamond Offshore’s operating costs or result in a substantial reduction in revenues associated with downtime required to install such equipment, or may otherwise significantly limit drilling activity.
Diamond Offshore’s consolidated effective income tax rate may vary substantially from one reporting period to another.
Diamond Offshore’s consolidated effective income tax rate is impacted by the mix between its domestic and internationalpre-tax earnings or losses, as well as the mix of the international tax jurisdictions in which it operates. Diamond Offshore cannot provide any assurances as to what its consolidated effective income tax rate will be in the future due to, among other factors, uncertainty regarding the nature and extent of its business activities in any particular jurisdiction in the future and the tax laws of such jurisdictions, as well as potential changes in U.S. and foreign tax laws, regulations or treaties or the interpretation or enforcement thereof, changes in the administrative practices and precedents of tax authorities or any reclassification or other matter (such as changes in applicable accounting rules) that increases the amounts Diamond Offshore has provided for income taxes or deferred tax assets and liabilities in its consolidated financial statements. This variability may cause its consolidated effective income tax rate to vary substantially from one reporting period to another.
Diamond Offshore may be required to accrue additional tax liability on certain of its foreign earnings.
Certain of Diamond Offshore’s international rigs are owned and operated, directly or indirectly, by Diamond Foreign Asset Company (“DFAC”), a Cayman Islands subsidiary that it owns. It is Diamond Offshore’s intention to continue to indefinitely reinvest the earnings of DFAC and its foreign subsidiaries to finance its foreign activities. Diamond Offshore does not expect to provide for U.S. taxes on any earnings generated by DFAC and its foreign subsidiaries, except to the extent that these earnings are immediately subjected to U.S. federal income tax, such as under the Tax Cut and Jobs Act of 2017 (the “Tax Act”). Should a future distribution be made from any unremitted earnings of this subsidiary, Diamond Offshore may be required to record additional U.S. income taxes and/or withholding taxes in certain jurisdictions; however, it is not practical to estimate this potential liability.
Diamond Offshore’s debt levels may limit its liquidity and flexibility in obtaining additional financing and in pursuing other business opportunities.
Diamond Offshore’s business is highly capital intensive and dependent on having sufficient cash flow and/or available sources of financing in order to fund its capital expenditure requirements. As of December 31, 2017, Diamond Offshore had outstanding $2 billion of senior notes, maturing at various times from 2023 through 2043. As of February 9, 2018, Diamond Offshore had no outstanding borrowings and $1.5 billion available under its revolving credit facility to meet its short term liquidity requirements. Diamond Offshore may incur additional indebtedness in the future and borrow from time to time under its revolving credit facility to fund working capital or other needs, subject to compliance with its covenants.
Diamond Offshore’s ability to meet its debt service obligations is dependent upon its future performance, which is subject to general economic conditions, industry cycles and financial, business and other factors affecting its operations, many of which are beyond its control. High levels of indebtedness could have negative consequences to Diamond Offshore, including:
it may not have the ability to pursue business opportunities that become available;
the amount of debt and the amount it must pay to service its debt obligations could place Diamond Offshore at a competitive disadvantage compared to its competitors that have less debt;
customers may react adversely to its significant debt level and seek alternative service providers; and
failure to comply with the restrictive covenants in its debt instruments that, among other things, require Diamond Offshore to maintain a specified ratio of its consolidated indebtedness to total capitalization and limit the ability of its subsidiaries to incur debt, could result in an event of default that, if not cured or waived, could have a material adverse effect on its business.
In addition, Diamond Offshore’s $1.5 billion revolving credit facility matures on October 22, 2020, except for $40 million of commitments that mature on March 17, 2019 and $60 million of commitments that mature on October 22, 2019. Diamond Offshore’s ability to renew or replace its revolving credit facility is dependent on numerous factors, including its financial condition and prospects at the time and the then current state of the bank and capital markets in the U.S. Diamond Offshore’s liquidity may be adversely affected if it is unable to replace the revolving credit facility upon acceptable terms when it matures.
In July of 2017, Moody’s downgraded Diamond Offshore’s corporate credit rating to Ba3 with a negative outlook from Ba2 with a stable outlook. In October of 2017, S&P downgraded Diamond Offshore’s corporate credit rating to B+ fromBB- with a negative outlook. These credit ratings are below investment grade and could raise the cost of financing. As a consequence, Diamond Offshore may not be able to issue additional debt in amounts and/or with terms that it considers to be reasonable.
Diamond Offshore’s revolving credit facility bears interest at variable rates, based on its corporate credit rating and market interest rates. If market interest rates increase, Diamond Offshore’s cost to borrow under its revolving credit facility may also increase. Although Diamond Offshore may employ hedging strategies such that a portion of the aggregate principal amount outstanding under this credit facility would effectively carry a fixed rate of interest, any hedging arrangement put in place may not offer complete protection from this risk.
Risks Related to Us and Our Subsidiary, Boardwalk Pipeline Partners, LP
Pipelines
Each year, a portion of Boardwalk Pipeline’s firm natural gas transportation contracts expire and need to be replaced or renewed. Over the past several years, as a result of current market conditions, Boardwalk Pipeline has renewed some expiring contracts at lower rates or for shorter terms than in the past. In addition to normal contract expirations, in the 2018 to 2020 timeframe, transportation agreements associated with Boardwalk Pipeline’s Gulf South, Texas Gas and Gulf Crossing Pipeline expansion projects, which were placed into service in 2008 and 2009, will expire. These projects were large, new pipeline expansions that were developed to serve growing production in Texas, Oklahoma and Louisiana and anchored primarily byten-year firm transportation agreements with producers and priced based on then current market conditions. As the terms of these remaining expansion contracts expire in 2018 through 2020, Boardwalk Pipeline will have significantly more transportation contract expirations than it has had during the past several years. If these contracts are renewed, Boardwalk Pipeline expects that the new contracts will be at lower rates and for shorter contract terms than the contracts they are replacing. If these contracts are renewed at current market rates, the revenues earned from these transportation contracts would be materially lower than they are today. For a discussion of current developments, see the Firm Transportation Agreements portion of the Results of Operations – Boardwalk Pipeline section of MD&A under Item 7.
The narrowing of the price differentials between natural gas supplies and market demand for natural gas has reduced the transportation rates that Boardwalk Pipeline can charge.
The transportation rates Boardwalk Pipeline is able to charge customers are heavily influenced by market trends (both short and longer term), including the available supply, geographical location of natural gas production, the competition between producing basins, competition with other pipelines for supply and markets, the demand for gas byend-users such as power plants, petrochemical facilities and LNG export facilities and the price differentials between the gas supplies and the market demand for the gas (basis differentials). Current market conditions have resulted in a sustained narrowing of basis differentials on certain portions of Boardwalk Pipeline’s pipeline system, which has reduced transportation rates that can be charged in the affected areas and adversely affected the contract terms Boardwalk Pipeline can secure from its customers for available transportation capacity and for contracts being renewed or replaced. The prevailing market conditions may also lead some of its customers to seek to renegotiate existing contracts to terms that are less attractive to Boardwalk Pipeline; for example, seeking a current price reduction in exchange for an extension of the contract term. Boardwalk Pipeline expects these market conditions to continue.
Boardwalk Pipeline’s actual construction and development costs could exceed its forecasts, its anticipated cash flow from construction and development projects will not be immediate and its construction and development projects may not be completed on time or at all.
Boardwalk Pipeline is engaged in multiple significant construction projects involving its existing assets and the construction of new facilities for which it has expended or will expend significant capital. Boardwalk Pipeline expects to continue to engage in the construction of additional growth projects and modifications of its system. When Boardwalk Pipeline builds a new pipeline or expands or modifies an existing facility, the design, construction and development occurs over an extended period of time, and it will not receive any revenue or cash flow from that project until after it is placed in service. Typically, there are several years between when the project is announced and when customers begin using the new facilities. During this period, Boardwalk Pipeline spends capital and incurs costs without receiving any of the financial benefits associated with the projects. The construction of new assets involves regulatory (federal, state and local), landowner opposition, environmental, activist, legal, political, materials and labor costs, as well as operational and other risks that are difficult to predict and beyond Boardwalk Pipeline’s control. Any of these projects may not be completed on time or at all due to a variety of factors, may be impacted by significant cost overruns or may be materially changed prior to completion as a result of developments or circumstances that Boardwalk Pipeline is not aware of when it commits to the project, including the inability of any shipper to provide adequate credit support or to otherwise perform their obligations under any precedent agreements. Any of these events could result in material unexpected costs or have a material adverse effect on Boardwalk Pipeline’s ability to realize the anticipated benefits from its growth projects.
Boardwalk Pipeline’sPipelines’ natural gas transportation and storage operations are subject to extensive regulation by the FERC, including rules and regulations related to the rates it can charge for its services and its ability to construct or abandon facilities. Boardwalk PipelinePipelines may not be able to recover the full cost of operating its pipelines, including earning a reasonable return.
taxes in the rates of an interstate pipeline that operates as a master limited partnership. The ultimate outcome of this proceedingand/or Boardwalk Pipelines’ customers could impactchallenge the maximum applicable rates Boardwalk Pipeline canthat any of its regulated pipelines are allowed to charge on its FERC regulated pipelines. The FERC has not finalized this proceeding.
Enacted on December 22, 2017, the Tax Act changed several provisionsin accordance with Section 5 of the federal tax code, including a reduction inNGA. The Tax Cuts and Jobs Act of 2017 and the maximum corporate tax rate. Since the Tax ActRevised Policy Statement that was signed into law, filings have been made atissued by the FERC requestingin 2018 may increase the likelihood of such a challenge. Pending legislation that the FERC require pipelines to lower their transportation rates to account for lower corporate taxes. Following the effective datewould amend Section 5 of the law,NGA to add refund provisions could increase the FERC orders granting certificateslikelihood of such a challenge. If such a challenge is successful for any of Boardwalk Pipelines’ pipelines, the revenues associated with transportation and storage services the pipeline provides pursuant to construct proposed pipeline facilities have directed pipelines proposing new
In December of 2017, the FERC announced it will review its 1999 Policy Statement on Certification of New Interstate Natural Gas Pipeline Facilities that is used in the determination of whether to grant certificates for new pipeline projects. Boardwalk Pipeline is unable to predict what, if any, changes may be proposed that will affect its natural gas pipeline business or when such proposals, if any, might become effective. Boardwalk Pipeline does not expect that any change in this policy would affect it in a materially different manner than any other natural gas pipeline company operating in the U.S.
going forward.
For example, in 2016, PHMSA published a proposed rulemaking that would impose new or more stringent requirements for certain natural gas pipelines including, among other things, expanding certain of PHMSA’s current regulatory safety programs for natural gas lines in newly defined MCAs that do not qualify as HCAs and requiring MAOP validation through
up to 0.80 of the pipeline’s SMYS.SMYS under issued permits with specific conditions. PHMSA retains discretion to withdraw or modify this authority. If PHMSA were to withdraw or materially modify such authority, it could affect Boardwalk Pipeline’sPipelines’ ability to transport all of its contracted quantities of natural gas on these pipeline assets and it could incur significant additional costs to reinstate this authority or to develop alternate ways to meet its contractual obligations.
Natural gas producers comprise a significant portion of Boardwalk Pipeline’s revenues and support several of its growth projects, including those recently placed into service. In 2017, approximately 46% of Boardwalk Pipeline’s revenues were generated from contracts with natural gas producers. For existing customers on its interstate pipelines, FERC gas tariffs limit the amount of credit support Boardwalk Pipeline can obtain. Over the past several years, the prices of oil and natural gas have been unstable. If oil and natural gas prices continue to remain unstable for a sustained period of time, Boardwalk Pipeline’s producer customers will be adversely affected, which could lead some customers to default on their obligations to Boardwalk Pipeline or file for bankruptcy.
Boardwalk Pipeline’sPipelines recently had a customer declare bankruptcy for which it was able to use the credit support to cover a portion of the customer’s remaining long term commitment.
Boardwalk Pipeline relies on a limited number
A significant portion of
Aability to meet its obligations and may otherwise restrict its activities.
or at all, depending on numerous factors, including its financial condition and prospects at the timefacility and the then current state of the bankingindentures governing its notes, to incur additional debt, subject to certain limitations under its revolving credit facility and, capital markets in the U.S.
case of unsecured debt, under the indentures governing the notes. If Boardwalk Pipelines incurs additional debt, its increased leverage could also result in the consequences described above.
Pipeline’sPipelines’ ability to replace expiring gas storage contracts at attractive rates or on a long-term basis and to sell short-term services at attractive rates or at all are subject to market conditions.PipelinePipelines owns and operates substantial natural gas storage facilities. The market for the storage and PAL services that it offers is impacted by the factors and market conditions discussed above for Boardwalk Pipeline’sPipelines’ transportation services, and is also impacted by natural gas price differentials between time periods, such as winter to summer (time period price spreads), and the volatility in time period price spreads. When market conditions cause a narrowing of time period price spreads and a decline in the price volatility of natural gas, these factors adversely impact the rates Boardwalk PipelinePipelines can charge for its storage and PAL services.Pipeline’sPipelines’ operations are subject to catastrophic losses, operational hazards and unforeseen interruptions for which it may not be adequately insured.some of which could have catastrophic consequences. Additionally, the nature and location of Boardwalk Pipeline’sPipelines’ business may make it susceptible to catastrophic losses from hurricanes or other named storms, particularly with regard to its assets in the Gulf Coast region, windstorms, earthquakes, hail, and other severe winter weather. Any of these or other similar occurrences could result in the disruption of Boardwalk Pipeline’sPipelines’ operations, substantial repair costs, personal injury or loss of human life, significant damage to property, environmental pollution, impairment of its operations and substantial financial losses. The location of pipelines in HCAs, which includes populated areas, residential areas, commercial business centers and industrial sites, could significantly increase the level of damages resulting from some of these risks.PipelinePipelines currently possesses property, business interruption, cyber threat and general liability insurance, but proceeds from such insurance coverage may not be adequate for all liabilities or expenses incurred or revenues lost. Moreover, such insurance may not be available in the future at commercially reasonable costs and terms. The insurance coverage Boardwalk PipelinePipelines does obtain may contain large deductibles or fail to cover certain events, hazards or all potential losses.Climate change legislation and regulations restricting emissions
& Co
of the firstthird quarter of each year than in eachthree subsequentother quarters. In addition, the hospitality industry is cyclical and demand generally follows the general economy on a lagged basis. The seasonality and cyclicality of its industry may contribute to fluctuation in Loews Hotels & Co’s results of operations and financial condition.lodginghospitality industry is highly competitive. Loews Hotels & Co’s properties compete with other hotels and alternative accommodations based on a number of factors, including room rates, quality of accommodations, service levels and amenities, location, brand affiliation, reputation and reservation systems. New hotels may be constructed and these additions to supply create new competitors, in some cases without corresponding increases in demand for hotel rooms. Some of its competitors also have greater financial and marketing resources than Loews Hotels & Co. In addition, travelers can book stays on websites that facilitate the short-term rental of homes and apartments from owners, thereby providing an alternative to hotel rooms.
Loews Hotels & Co’s reputation may also suffer as a result of negative publicity regarding its hotels, including as a result of social media reports, regardless of the accuracy of such publicity. The continued expansion of media and social media formats has compounded the potential scope of negative publicity and has made it more difficult to control and effectively manage negative publicity.
anticipated, Loews Hotels & Co’s profits could be reduced. Further, due to the lengthy development cycle, intervening adverse economic conditions in general and as they apply to Loews Hotels & Co and its development partners may alter or impede the development plans, thereby resulting in incremental costs or potential impairment charges. In addition, using multiple sources of capital to develop new properties reduces or eliminates the ability of Loews Hotels & Co to cease commenced projects if the overall economic environment conditions change. Moreover, during the early stages of operations, charges related to interest expense and depreciation may substantially detract from, or even outweigh, the profitability of certain new property investments.
Consolidated Container’sAltium Packaging
Consolidated Container
Altium Packaging.
Consolidated Container’sAltium Packaging.
exist.
other consumer-facing businesses, have been subject to various cyber attacks targeting payment card and other sensitive consumer information. Breaches of our and our subsidiaries’ computer security infrastructure can result from actions by our employees, vendors, third party administrators or by unknown third parties, and may disrupt our or their operations, cause significant damage to our or their assets and surrounding areas, cause loss of life or serious bodily injury and impact our or their data framework or cause a failure to protect personal information of customers or employees.
Price Range of Common Stock
2017 | 2016 | |||||||||||||||
High | Low | High | Low | |||||||||||||
First Quarter | $ | 47.88 | $ | 45.25 | $ | 39.62 | $ | 33.84 | ||||||||
Second Quarter | 48.39 | 45.62 | 41.09 | 37.25 | ||||||||||||
Third Quarter | 49.58 | 45.01 | 42.07 | 39.67 | ||||||||||||
Fourth Quarter | 51.02 | 47.64 | 48.05 | 40.61 |
“L”.
2012 | 2013 | 2014 | 2015 | 2016 | 2017 | |||||||||||||||||||
Loews Common Stock | 100.0 | 119.03 | 104.29 | 95.92 | 117.70 | 126.40 | ||||||||||||||||||
S&P 500 Index | 100.0 | 132.39 | 150.51 | 152.59 | 170.84 | 208.14 | ||||||||||||||||||
Loews Peer Group (a) | 100.0 | 125.98 | 132.68 | 125.62 | 145.82 | 150.20 |
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | ||||||||
Loews Common Stock | 100.0 | 91.98 | 112.86 | 121.21 | 110.84 | 128.46 | |||||||
S&P 500 Index | 100.0 | 101.38 | 113.51 | 138.29 | 132.23 | 173.86 | |||||||
Loews Peer Group (a) | 100.0 | 94.68 | 109.90 | 113.20 | 106.21 | 130.57 |
(a) | The Loews Peer Group consists of the following companies that are industry competitors of our principal operating subsidiaries: Chubb Limited (name change from ACE Limited after it acquired The Chubb Corporation on January 15, 2016), W.R. Berkley Corporation, The Chubb Corporation (included through January 15, 2016 when it was acquired by ACE Limited), Energy Transfer Partners L.P. (included through October 18, 2018 when it merged with Energy Transfer Equity, L.P.), |
Dividend Information
We have paid quarterly cash dividends in each year since 1967. Regular dividends
Number of | |||||||||||||||
securities remaining | |||||||||||||||
Number of | available for future | ||||||||||||||
securities to be | issuance under | ||||||||||||||
issued upon exercise | Weighted average | equity compensation | |||||||||||||
of outstanding | exercise price of | plans (excluding | |||||||||||||
options, warrants | outstanding options, | securities reflected | |||||||||||||
Plan category | and rights | warrants and rights | in the first column) | ||||||||||||
Equity compensation plans approved by security holders (a) | 4,852,639 | $ | 40.05 | 5,825,173 | |||||||||||
Equity compensation plans not approved by security holders (b) | N/A | N/A | N/A |
Number of | ||||||||||||
securities remaining | ||||||||||||
Number of | available for future | |||||||||||
securities to be | issuance under | |||||||||||
issued upon exercise | Weighted average | equity compensation | ||||||||||
of outstanding | exercise price of | plans (excluding | ||||||||||
options, warrants | outstanding options, | securities reflected | ||||||||||
Plan category | and rights | warrants and rights | in the first column) | |||||||||
Equity compensation plans approved by security holders (a) | 3,025,294 | $ �� 41.11 | 5,597,156 | |||||||||
Equity compensation plans not approved by security holders (b) | N/A | N/A | N/A |
(a) | Reflects |
(b) | We do not have equity compensation plans that have not been approved by our shareholders. |
Period | (a) Total number of shares purchased | (b) Average price paid per share | (c) Total number of part of publicly | (d) Maximum number of shares of shares that may yet be purchased under the plans or | ||||||||||||||||
October 1, 2017 - October 31, 2017 | N/A | N/A | N/A | N/A | ||||||||||||||||
November 1, 2017 - November 30, 2017 | 1,401,545 | $49.60 | N/A | N/A | ||||||||||||||||
December 1, 2017 - December 31, 2017 | 3,228,573 | 49.97 | N/A | N/A |
Period | (a) Total number of shares purchased | (b) Average price paid per share | (c) Total number of shares purchased as part of publicly announced plans or programs | (d) Maximum number of shares (or approximate dollar value) of shares that may yet be purchased under the plans or programs (in millions) | ||||||||||||
October 1, 2019 - October 31, 2019 | 2,565,169 | $ 49.76 | N/A | N/A | ||||||||||||
November 1, 2019 - November 30, 2019 | 2,161,832 | 50.38 | N/A | N/A | ||||||||||||
December 1, 2019 - December 31, 2019 | 3,562,239 | 50.78 | N/A | N/A |
Year Ended December 31 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
| ||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||
Results of Operations: | ||||||||||||||||||||
Revenues | $ | 13,735 | $ | 13,105 | $ | 13,415 | $ | 14,325 | $ | 14,613 | ||||||||||
Income before income tax | $ | 1,582 | $ | 936 | $ | 244 | $ | 1,810 | $ | 2,277 | ||||||||||
Income from continuing operations | $ | 1,412 | $ | 716 | $ | 287 | $ | 1,353 | $ | 1,621 | ||||||||||
Discontinued operations, net | (391 | ) | (552) | |||||||||||||||||
| ||||||||||||||||||||
Net income | 1,412 | 716 | 287 | 962 | 1,069 | |||||||||||||||
Amounts attributable to noncontrolling interests | (248 | ) | (62 | ) | (27 | ) | (371 | ) | (474) | |||||||||||
| ||||||||||||||||||||
Net income attributable to Loews Corporation | $ | 1,164 | $ | 654 | $ | 260 | $ | 591 | $ | 595 | ||||||||||
| ||||||||||||||||||||
| ||||||||||||||||||||
Net income attributable to Loews Corporation: | ||||||||||||||||||||
Income from continuing operations | $ | 1,164 | $ | 654 | $ | 260 | $ | 962 | $ | 1,149 | ||||||||||
Discontinued operations, net | (371 | ) | (554) | |||||||||||||||||
| ||||||||||||||||||||
Net income | $ | 1,164 | $ | 654 | $ | 260 | $ | 591 | $ | 595 | ||||||||||
| ||||||||||||||||||||
| ||||||||||||||||||||
Diluted Net Income Per Share: | ||||||||||||||||||||
Income from continuing operations | $ | 3.45 | $ | 1.93 | $ | 0.72 | $ | 2.52 | $ | 2.95 | ||||||||||
Discontinued operations, net | (0.97 | ) | (1.42) | |||||||||||||||||
| ||||||||||||||||||||
Net income | $ | 3.45 | $ | 1.93 | $ | 0.72 | $ | 1.55 | $ | 1.53 | ||||||||||
| ||||||||||||||||||||
Financial Position: | ||||||||||||||||||||
Investments | $ | 52,226 | $ | 50,711 | $ | 49,400 | $ | 52,032 | $ | 52,945 | ||||||||||
Total assets | 79,586 | 76,594 | 76,006 | 78,342 | 79,913 | |||||||||||||||
Debt | 11,533 | 10,778 | 10,560 | 10,643 | 10,318 | |||||||||||||||
Shareholders’ equity | 19,204 | 18,163 | 17,561 | 19,280 | 19,458 | |||||||||||||||
Cash dividends per share | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 | |||||||||||||||
Book value per share | 57.83 | 53.96 | 51.67 | 51.70 | 50.25 | |||||||||||||||
Shares outstanding | 332.09 | 336.62 | 339.90 | 372.93 | 387.21 |
Year Ended December 31 | 2019 | 2018 | 2017 (a) | 2016 (a) | 2015 (a) | |||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||
Results of Operations: | ||||||||||||||||||||
Revenues | $ | 14,931 | $ | 14,066 | $ | 13,735 | $ | 13,105 | $ | 13,415 | ||||||||||
Income before income tax | $ | 1,119 | $ | 834 | $ | 1,582 | $ | 936 | $ | 244 | ||||||||||
Net income | $ | 871 | $ | 706 | $ | 1,412 | $ | 716 | $ | 287 | ||||||||||
Amounts attributable to noncontrolling interests | 61 | (70 | ) | (248 | ) | (62 | ) | (27) | ||||||||||||
Net income attributable to Loews Corporation | $ | 932 | $ | 636 | $ | 1,164 | $ | 654 | $ | 260 | ||||||||||
Diluted net income per share | $ | 3.07 | $ | 1.99 | $ | 3.45 | $ | 1.93 | $ | 0.72 | ||||||||||
Financial Position: | ||||||||||||||||||||
Investments | $ | 51,250 | $ | 48,186 | $ | 52,226 | $ | 50,711 | $ | 49,400 | ||||||||||
Total assets | 82,243 | 78,316 | 79,586 | 76,594 | 76,006 | |||||||||||||||
Debt | 11,533 | 11,376 | 11,533 | 10,778 | 10,560 | |||||||||||||||
Shareholders’ equity | 19,119 | 18,518 | 19,204 | 18,163 | 17,561 | |||||||||||||||
Cash dividends per share | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 | |||||||||||||||
Book value per share | 65.71 | 59.34 | 57.83 | 53.96 | 51.67 | |||||||||||||||
Shares outstanding | 290.97 | 312.07 | 332.09 | 336.62 | 339.90 |
(a) | On January 1, 2018, the Company adopted Accounting Standard Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” and ASU2016-01, “Financial Instruments – Overall (Subtopic825-10); Recognition and Measurement of Financial Assets and Financial Liabilities.” Prior period revenues were not adjusted for the adoption of either of these standards. |
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Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
| ||||||||||||
(In millions) | ||||||||||||
CNA Financial | $ | 801 | $ | 774 | $ | 433 | ||||||
Diamond Offshore | (27) | (186) | (156) | |||||||||
Boardwalk Pipeline | 380 | 89 | 74 | |||||||||
Loews Hotels & Co | 64 | 12 | 12 | |||||||||
Corporate | (54) | (35) | (103) | |||||||||
| ||||||||||||
Net income attributable to Loews Corporation | $ | 1,164 | $ | 654 | $ | 260 | ||||||
| ||||||||||||
| ||||||||||||
Basic net income per common share | $ | 3.46 | $ | 1.93 | $ | 0.72 | ||||||
| ||||||||||||
| ||||||||||||
Diluted net income per common share | $ | 3.45 | $ | 1.93 | $ | 0.72 | ||||||
| ||||||||||||
|
20172018:
Year Ended December 31 | 2019 | 2018 | ||||||
(In millions, except per share) | ||||||||
CNA Financial | $ | 894 | $ | 726 | ||||
Diamond Offshore | (175) | (112) | ||||||
Boardwalk Pipelines | 209 | 135 | ||||||
Loews Hotels & Co | (31) | 48 | ||||||
Corporate | 35 | (161) | ||||||
Net income attributable to Loews Corporation | $ | 932 | $ | 636 | ||||
Basic net income per common share | $ | 3.08 | $ | 1.99 | ||||
Diluted net income per common share | 3.07 | 1.99 | ||||||
2018
2018.
Net income attributable to Loews in 20172019 increased as compared to the prior year partially due to the net benefit from the Tax Act discussed above. Absent this benefit, net income increased $310 million primarily from higher earnings at CNA, Loews Hotels & Co and Diamond Offshore. Net income for 2017 and 2016 included asset impairment charges at Diamond Offshore of $32 million and $267 million (both after tax and noncontrolling interests).
2016 Compared with 2015
Consolidated net income attributable to Loews Corporation for 2016 was $654 million, or $1.93 per share, compared to $260 million, or $0.72 per share, in 2015.
Net income for 2016 included asset impairment charges of $267 million (after tax and noncontrolling interests) at Diamond Offshore. In 2015, net income included asset impairment charges at Diamond Offshore of $341 million (after tax and noncontrolling interests) and a reserve charge of $177 million (after tax and noncontrolling interests) related to the long term care business at CNA.
Net income attributable to Loews Corporation in 2016 increased compared to the prior year primarily due to the impact of the reserve charge at CNA in 2015 and the asset impairment charges at Diamond Offshore which were lower in 2016 compared to 2015. Absent these charges, net income increased $143 million due to higher earnings at CNA and Boardwalk Pipeline and improved results from the Parent CompanyPipelines, as well as higher parent company net investment portfolio.income. These increases were partially offset by lower earningsresults at Diamond Offshore.
Offshore and Loews Hotels & Co.
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
| ||||||||||||
(In millions) | ||||||||||||
Revenues: | ||||||||||||
Insurance premiums | $ | 6,988 | $ | 6,924 | $ | 6,921 | ||||||
Net investment income | 2,034 | 1,988 | 1,840 | |||||||||
Investment gains (losses) | 122 | 62 | (71) | |||||||||
Other revenues | 439 | 410 | 411 | |||||||||
| ||||||||||||
Total | 9,583 | 9,384 | 9,101 | |||||||||
| ||||||||||||
Expenses: | ||||||||||||
Insurance claims and policyholders’ benefits | 5,310 | 5,283 | 5,384 | |||||||||
Amortization of deferred acquisition costs | 1,233 | 1,235 | 1,540 | |||||||||
Other operating expenses | 1,523 | 1,558 | 1,469 | |||||||||
Interest | 203 | 167 | 155 | |||||||||
| ||||||||||||
Total | 8,269 | 8,243 | 8,548 | |||||||||
| ||||||||||||
Income before income tax | 1,314 | 1,141 | 553 | |||||||||
Income tax expense | (419) | (279) | (71) | |||||||||
| ||||||||||||
Net income | 895 | 862 | 482 | |||||||||
Amounts attributable to noncontrolling interests | (94) | (88) | (49) | |||||||||
| ||||||||||||
Net income attributable to Loews Corporation | $ | 801 | $ | 774 | $ | 433 | ||||||
| ||||||||||||
|
2017
Year Ended December 31 | 2019 | 2018 | ||||||||||
(In millions) | ||||||||||||
Revenues: | ||||||||||||
Insurance premiums | $ | 7,428 | $ | 7,312 | ||||||||
Net investment income | 2,118 | 1,817 | ||||||||||
Investment gains (losses) | 49 | (57 | ) | |||||||||
Non-insurance warranty revenue | 1,161 | 1,007 | ||||||||||
Operating revenues and other | 32 | 55 | ||||||||||
Total | 10,788 | 10,134 | ||||||||||
Expenses: | ||||||||||||
Insurance claims and policyholders’ benefits | 5,806 | 5,572 | ||||||||||
Amortization of deferred acquisition costs | 1,383 | 1,335 | ||||||||||
Non-insurance warranty expense | 1,082 | 923 | ||||||||||
Other operating expenses | 1,141 | 1,203 | ||||||||||
Interest | 152 | 138 | ||||||||||
Total | 9,564 | 9,171 | ||||||||||
Income before income tax | 1,224 | 963 | ||||||||||
Income tax expense | (224 | ) | (151 | ) | ||||||||
Net income | 1,000 | 812 | ||||||||||
Amounts attributable to noncontrolling interests | (106 | ) | (86 | ) | ||||||||
Net income attributable to Loews Corporation | $ | 894 | $ | 726 | ||||||||
2018
2016 Compared with 2015
Net income increased $380 million in 2016 as compared with 2015, primarily as a result of a $305 million ($177 million after taxthird quarter 2019 gross premium valuation (“GPV”) and noncontrolling interests) charge in 2015 related to increasing long term care active life and claim reserves. As the active life reserve assumptions were unlocked in 2015, long term care results in 2016 improved significantly. Results in 2016 also reflectlower favorable net prior yearperiod loss reserve development of $314 million as compared to $218 million recorded in 2015. Further information on net prior year development is included in Note 8 of the Notes to Consolidated Financial Statements under Item 8. In addition, net investment income increased $148 million and investment results improved $133 million in 2016 as compared with 2015, driven by improved limited partnership investments and fixed maturity securities income, lower other-than-temporary impairment (“OTTI”) losses recognized in earnings and higher net realized investment gains on sales of securities. These increases were partially offset by an increase in the current accident year loss ratio and higher underwriting expenses.
year.
What we previously referred to as Net operating income (loss) for CNA in our public disclosures, is now called Core income (loss). With this terminology change,Non-Core operations is now called Other Insurance Operations. The fourth quarter 2017 net deferred tax asset remeasurement was excluded from core income (loss) for the year ended December 31, 2017. Otherwise, there were no changes to the calculation
evaluate its insurance operations.
the percentage of net incurred claim and claim adjustment expenses to net earned premiums. The expense ratio is the percentage of insurance underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums. The dividend ratio is the ratio of policyholders’ dividends incurred to net earned premiums. The combined ratio is the sum of the loss, expense and dividend ratios. In addition, CNA also utilizes renewal premium change, rate, retention and new business in evaluating operating trends. Renewal premium change represents the estimated change in average premium on policies that renew, including rate and exposure changes. Rate represents the average change in price on policies that renew excluding exposure changes.change. For certain products within Small Business, where quantifiable, rate includes the influence of new business as well. Exposure represents the measure of risk used in the pricing of the insurance product. Retention represents the percentage of premium dollars renewed in comparison to the expiring premium dollars from policies available to renew. Renewal premium change, rate and retention presented for the prior year are updated to reflect subsequent activity on policies written in the period. New business represents premiums from policies written with new customers and additional policies written with existing customers.
Gross written premiums, excluding third party captives, represents gross written premiums excluding business which is mostly ceded to third party captives, including business related to large warranty programs.
Year Ended December 31, 2017 | Specialty | Commercial | International | Total | ||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
(In millions, except %) | ||||||||||||||||||||||||||||||||
Net written premiums | $ | 2,771 | $ | 2,882 | $ | 881 | $ | 6,534 | ||||||||||||||||||||||||
Net earned premiums | 2,753 | 2,840 | 857 | 6,450 | ||||||||||||||||||||||||||||
Net investment income | 538 | 642 | 52 | 1,232 | ||||||||||||||||||||||||||||
Core income | 610 | 341 | 8 | 959 | ||||||||||||||||||||||||||||
Other performance metrics: | ||||||||||||||||||||||||||||||||
Loss and loss adjustment expense ratio | 55.8 | % | 67.9 | % | 67.0 | % | 62.6 | % | ||||||||||||||||||||||||
Expense ratio | 32.0 | 35.2 | 37.8 | 34.2 | ||||||||||||||||||||||||||||
Dividend ratio | 0.2 | 0.6 | 0.3 | |||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
Combined ratio | 88.0 | % | 103.7 | % | 104.8 | % | 97.1 | % | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
Rate | 0% | 0% | 0% | 0% | ||||||||||||||||||||||||||||
Renewal premium change | 2 | 2 | 2 | 2 | ||||||||||||||||||||||||||||
Retention | 88 | 86 | 80 | 86 | ||||||||||||||||||||||||||||
New business (a) | $ | 251 | $ | 559 | $ | 275 | $ | 1,085 | ||||||||||||||||||||||||
Year Ended December 31, 2016 | ||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
Net written premiums | $ | 2,780 | $ | 2,841 | $ | 821 | $ | 6,442 | ||||||||||||||||||||||||
Net earned premiums | 2,779 | 2,804 | 806 | 6,389 | ||||||||||||||||||||||||||||
Net investment income | 516 | 638 | 51 | 1,205 | ||||||||||||||||||||||||||||
Core income | 650 | 311 | 21 | 982 | ||||||||||||||||||||||||||||
Other performance metrics: | ||||||||||||||||||||||||||||||||
Loss and loss adjustment expense ratio | 52.8 | % | 68.7 | % | 61.0 | % | 60.8 | % | ||||||||||||||||||||||||
Expense ratio | 32.0 | 36.8 | 38.1 | 34.9 | ||||||||||||||||||||||||||||
Dividend ratio | 0.2 | 0.3 | 0.2 | |||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
Combined ratio | 85.0 | % | 105.8 | % | 99.1 | % | 95.9 | % | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
Rate | 1% | (2)% | (1)% | (1)% | ||||||||||||||||||||||||||||
Renewal premium change | 2 | 3 | (1) | 2 | ||||||||||||||||||||||||||||
Retention | 88 | 84 | 76 | 85 | ||||||||||||||||||||||||||||
New business (a) | $ | 249 | $ | 520 | $ | 240 | $ | 1,009 |
Net written premiums Net earned premiums Net investment income Core income Other performance metrics: Loss and loss adjustment expense ratio Expense ratio Dividend ratio Combined ratio Rate Renewal premium change Retention New business (a)Year Ended December 31, 2015 Specialty Commercial International Total (In millions, except %) $ 2,781 $ 2,818 $ 822 $ 6,421 2,782 2,788 804 6,374 474 593 52 1,119 560 369 37 966 57.4% 65.1% 59.5% 61.0% 31.1 36.1 38.1 34.2 0.2 0.3 0.2 88.7% 101.5% 97.6% 95.4% 1% 1% (1)% 1% 3 4 87 78 76 81 $ 279 $ 552 $ 111 $ 942
|
20172018.
Year Ended December 31, 2019 | Specialty | Commercial | International | Total | ||||||||||||||
(In millions, except %) | ||||||||||||||||||
Gross written premiums | $ 6,900 | $ 3,693 | $ 1,111 | $ 11,704 | ||||||||||||||
Gross written premiums excluding third party captives | 3,015 | 3,609 | 1,111 | 7,735 | ||||||||||||||
Net written premiums | 2,848 | 3,315 | 971 | 7,134 | ||||||||||||||
Net earned premiums | 2,773 | 3,162 | 974 | 6,909 | ||||||||||||||
Net investment income | 556 | 654 | 63 | 1,273 | ||||||||||||||
Core income | 671 | 489 | 30 | 1,190 | ||||||||||||||
Other performance metrics: | ||||||||||||||||||
Loss and loss adjustment expense ratio | 57.5 | % | 67.3 | % | 64.1 | % | 62.9 | % | ||||||||||
Expense ratio | 32.5 | 32.9 | 37.7 | 33.5 | ||||||||||||||
Dividend ratio | 0.2 | 0.6 | 0.3 | |||||||||||||||
Combined ratio | 90.2 | % | 100.8 | % | 101.8 | % | 96.7 | % | ||||||||||
Rate | 5% | 3% | 8% | 5% | ||||||||||||||
Renewal premium change | 6 | 5 | 7 | 6 | ||||||||||||||
Retention | 87 | 86 | 71 | 84 | ||||||||||||||
New business | $ 367 | $ 683 | $ 273 | $ 1,323 |
Year Ended December 31, 2018 | ||||||||||||||||||||
Gross written premiums | $ 6,904 | $ 3,350 | $ 1,150 | $ 11,404 | ||||||||||||||||
Gross written premiums excluding third party captives | 2,834 | 3,267 | 1,150 | 7,251 | ||||||||||||||||
Net written premiums | 2,744 | 3,060 | 1,018 | 6,822 | ||||||||||||||||
Net earned premiums | 2,732 | 3,050 | 1,001 | 6,783 | ||||||||||||||||
Net investment income | 439 | 500 | 57 | 996 | ||||||||||||||||
Core income (loss) | 629 | 357 | (19 | ) | 967 | |||||||||||||||
Other performance metrics: | ||||||||||||||||||||
Loss and loss adjustment expense ratio | 55.9 | % | 67.3 | % | 69.8 | % | 63.1 | % | ||||||||||||
Expense ratio | 32.1 | 33.1 | 36.7 | 33.2 | ||||||||||||||||
Dividend ratio | 0.2 | 0.7 | 0.4 | |||||||||||||||||
Combined ratio | 88.2 | % | 101.1 | % | 106.5 | % | 96.7 | % | ||||||||||||
Rate | 2% | 1% | 4% | 2% | ||||||||||||||||
Renewal premium change | 5 | 5 | 6 | 5 | ||||||||||||||||
Retention | 85 | 85 | 77 | 84 | ||||||||||||||||
New business | $ 353 | $ 566 | $ 307 | $ 1,226 |
2018
premiums for International.
and $26 million, Commercial had net catastrophe losses of $154 million and $193 million and International had net catastrophe losses of $10 million and $33 million.
Commercial’s combined ratio improved 2.1 points in 2017 as compared with 2016.2018. The loss ratio improved 0.85.7 points, primarily due to the favorable period over period effect ofdriven by improved current accident year underwriting results partially offset by unfavorable net prior year loss reserve development partially offset by higher net catastrophe losses. Net catastrophe losses were $267 million, or 9.4 points ofin the losscurrent year. The expense ratio increased 1.0 point in 2017,2019 as compared with $116 million, or 4.1 points of the loss ratio, in 2016. The loss ratio, excluding catastrophes and development, improved 1.9 points. The expense ratio improved 1.6 points in 2017 as compared with 2016 reflecting both CNA’s ongoing efforts to improve productivity and the actions taken in last year’s third and fourth quarters to reduce expenses.
International’s combined ratio increased 5.7 points in 2017 as compared with 2016. The loss ratio increased 6.0 points primarily due to lower favorable net prior year loss reserve development and higher net catastrophe losses, partially offset2018 driven by lower current accident year large losses. Net catastrophe losses were $64 million, or 7.9 points of the loss ratio, in 2017, as compared to $31 million, or 3.9 points of the loss ratio, in 2016. The loss ratio excluding catastrophes and development improved 3.0 points. The expense ratio improved 0.3 points in 2017 as compared with 2016 primarily due to the higher net earned premiums.
2016 Compared with 2015
Net written premiums increased $21 million in 2016 as compared with 2015. Net written premiums for Commercial increased $23 million in 2016 as compared with 2015, driven by strong retention in Middle Markets, partially offset by a decrease in Small Business, which included a premium rate adjustment, as discussed in Note 18 of the Notes to Consolidated Financial Statements under Item 8. Net written premiums for Specialty in 2016 were consistent with 2015 as growth in warranty was offset by a decrease in management and professional liability and health care due to underwriting actions undertaken in certain business lines. Net written premiums for International in 2016 were consistent with 2015 and include favorable period over period premium development of $24 million. Excluding the effect of foreign currency exchange rates and premium development, net written premiums increased 1.4% in 2016 in International. The increase in net earned premiums was consistent with the trend in net written premiums in Commercial. Excluding the effect of foreign currency exchange rates and premium development, the increase in net earned premiums was consistent with the trend in net written premiums in International.
Core income increased $16 million in 2016 as compared with 2015. The increase in core income was primarily due to higher favorable net prior year reserve development and net investment income, partially offset by an increase in the current accident year loss ratio and higher underwriting expenses. Net catastrophe losses were $111 million (after tax) in 2016 as compared to catastrophe losses of $95 million (after tax) in 2015.
Favorable net prior year development of $316 million and $218 million was recorded in 2016 and 2015. Specialty recorded favorable net prior year development of $305 million and $152 million in 2016 and 2015, Commercial recorded unfavorable net prior year development of $53 million in 2016 as compared with favorable net prior year development of $30 million in 2015 and International recorded favorable net prior year development of $64 million and $36 million in 2016 and 2015. Further information on net prior year development is included in Note 8 of the Notes to Consolidated Financial Statements included under Item 8.
Specialty’s combined ratio decreased 3.7 points in 2016 as compared with 2015. The loss ratio decreased 4.6 points due to higher favorable net prior year reserve development, partially offset by a higher current accident year loss ratio. Specialty’s expense ratio increased 0.9 points in 2016 as compared with 2015 due to higher employee costs and higher information technology (“IT”) spending primarily related to new underwriting platforms.
Commercial’s combined ratio increased 4.3 points in 2016 as compared with 2015. The loss ratio increased 3.6 points due to the unfavorable period over period effect of net prior year reserve development and a higher current accident year loss ratio due to higher large losses. Commercial’s expense ratio increased 0.7 points in 2016 as compared with 2015 due to higher employee costs and higher IT spending primarily related to a new underwriting platform.
International’s combined ratio increased 1.5 points in 2016 as compared with 2015. The loss ratio increased 1.5 points primarily due to an increase in the current accident year loss ratio driven by a higher level of large losses related to political risk, property and financial institutions, partially offset by higher favorable net prior year development. International’s expense ratio was consistent with 2015.
Years Ended December 31 | 2017 | 2016 | 2015 | |||||||||
| ||||||||||||
(In millions) | ||||||||||||
Net earned premiums | $ 539 | $ 536 | $ 548 | |||||||||
Net investment income | 802 | 783 | 721 | |||||||||
Core loss | (40 | ) | (158 | ) | (451) |
20172018.
Years Ended December 31 | 2019 | 2018 | ||||||||||||||
(In millions) | ||||||||||||||||
Net earned premiums | $ | 520 | $ | 530 | ||||||||||||
Net investment income | 845 | 821 | ||||||||||||||
Core loss | (211 | ) | (122 | ) |
2018
The effective tax rate for the long term care business is generally a function of the U.S. federal corporate income tax rate and the relative proportion of tax exempt investment income on municipal bonds supporting liabilities to the overall pretax income of the business. The reduction in the U.S. federal corporate income tax rate effective January 1, 2018 will reduce the tax benefit on the long term care business’s pretax losses.
2016 Compared with 2015
Core loss decreased $293 million in 2016 as compared to 2015. In 2015, CNA recognized a $198 million(after-tax) charge relatingtransition to a premium deficiency and claim reserve strengthening in its long term care business. The December 31, 2015 Gross Premium Valuation (“GPV”) indicated a premium deficiency of $296 million. The indicated premium deficiency necessitated a charge to income that was effected by the write off of the entire long term care deferred acquisition cost of $289 million and an increase to active life reserves of $7��million. Due to the recognition of the premium deficiency and resetting of actuarial assumptions in the fourth quarter of 2015, the operating results of CNA’s long term care business in 2016 reflect the variance between actual experience and the expected results contemplated in its best estimate reserves.
In 2016, the long term care business recorded Core income of $20 million, driven by a favorable release of claim reserves resulting from the annual claims experience study and higher net investment income due to an increase in the invested asset base. The long term care results were generally in line with expectations, as the impact of favorable morbidity was partially offset by unfavorable persistency. In 2015, results of CNA’s long term care business reflected variances between actual experience and actuarial assumptions that werelocked-in at policy issuance. As a result of the reserve assumption unlocking, the 2016 and 2015 results are not comparable. For further discussion of the GPV and premium deficiency, see the Insurance Reserves section of this MD&A.
Core income in 2016 and 2015 was also negatively affected by $83 million and $55 million (after tax) charges related to the application of retroactive reinsurance accounting to adverse reserve development ceded under the 2010 A&EP loss portfolio transfer, as further discussed in Note 8 of the Notes to Consolidated Financial Statements included under Item 8.
new IT infrastructure service provider.
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
| ||||||||||||
(In millions) | ||||||||||||
Core income (loss): | ||||||||||||
Property and Casualty Operations | $ 959 | $ 982 | $ 966 | |||||||||
Other Insurance Operations | (40 | ) | (158 | ) | (451) | |||||||
Total core income (loss) | 919 | 824 | 515 | |||||||||
Realized investment gains (losses) (after tax) | 82 | 43 | (38) | |||||||||
Charge related to the Tax Act | (87 | ) | ||||||||||
Consolidating adjustments including purchase accounting and noncontrolling interests | (113 | ) | (93 | ) | (44) | |||||||
| ||||||||||||
Net income attributable to Loews Corporation | $ 801 | $ 774 | $ 433 |
Referendum on2018:
�� | ||||||||||||||||
Year Ended December 31 | 2019 | 2018 | ||||||||||||||
(In millions) | ||||||||||||||||
Core income (loss): | ||||||||||||||||
Property & Casualty Operations | $ | 1,190 | $ | 967 | ||||||||||||
Other Insurance Operations | (211 | ) | (122 | ) | ||||||||||||
Total core income | 979 | 845 | ||||||||||||||
Investment gains (losses) (after tax) | 37 | (43 | ) | |||||||||||||
Consolidating adjustments including purchase accounting and noncontrolling interests | (122 | ) | (76 | ) | ||||||||||||
Net income attributable to Loews Corporation | $ | 894 | $ | 726 | ||||||||||||
In 2016, the United Kingdom (“U.K.”) held a referendum in which voters approved an exit from the European Union (“E.U.”), commonly referred to as “Brexit.” As a result of the referendum, in 2017 the British government formally commenced the process to leave the E.U. and began negotiating the terms of treaties that will govern the U.K.’s future relationship with the E.U. Although the terms of any future treaties are unknown, CNA believes changes in its international operating platform will be required to allow CNA to continue to write business in the E.U. after the completion of Brexit. Therefore CNA has begun the process of establishing a new European subsidiary in Luxembourg. As a result of these changes, the complexity and cost of regulatory compliance of CNA’s European business is likely to increase.
Overview
Oilpast several years, crude oil prices have partially rebounded from the historical12-year lowbeen volatile, reaching a high of less than $30$115 per barrel in January2014 but dropping to $55 per barrel by the end of 2014. In 2015, oil prices continued to decline, closing at $37 per barrel at the end of the year, and continuing to fall to a low of $28 per barrel during 2016 before recovering to nearly $57 per barrel by the upper $60send of 2016. The price of crude oil continued to fluctuate in 2017 and 2018, with oil prices in the $60 per barrel range at the endbeginning of January2019. As of 2018. The increasethe date of this Report, Brent crude oil prices were in the mid $50 per barrel range, having started 2020 in the
programs remain primarily short term in nature, with options for future wells. Industry analysts have reported that capital investments are expected to increase slightly in 2017, for2020 compared to recent years, but forecasted spending in 2020 remains lower than previous spending levels. Dayrates remain low and pricing power currently remains with the third consecutive year,customer, as some industry analysts have indicated that, based on historical data, utilization rates must increase to the global80%-range before pricing power shifts to the drilling contractor.
Givendate of this Report. In addition, over the next twelve months, more than 60 currently contracted floaters are estimated to roll off their contracts, further adding to the oversupply of rigs, competition for the limited numberfloaters. This combination of factors points to a continued, challenging offshore drilling jobs remains intense. In some cases, dayrates have been negotiated at break-even or below-cost levels in order to enablemarket and a continuation of the drilling contractor to recover a portion of operating costs for rigs that would otherwise be uncontracted or cold stacked. In addition, customers have indicated a preference for “hot” rigs rather than reactivated cold-stacked rigs. This preference incentivizes the drilling contractor to contract rigs at lower rates for the sole purpose of maintaining the rigs in an active state and allowing for at least partial cost recovery.
Diamond Offshore’s results of operations and cash flows for the three years ended December 31, 2017 have been materially impacted by continuing depressed market conditions in the offshore drilling industry. protracted industry downturn.
Historically, the longer a drilling rig remains cold stacked, the higher the cost of reactivation and, depending on the age, technological obsolescence and condition of the rig, the lower the likelihood that the rig will be reactivated at a future date. As of January 29, 2018, five rigs in Diamond Offshore’s fleet were cold stacked.
customers.
2022 through 2023. Contract drilling backlog excludes a future gross margin commitment of approximately $25 million in 2020 and an aggregate of approximately $75 million for the three year period ending December 31, 2023, payable by a customer in the form of a guarantee of gross margin to be earned on future contracts or by direct payment at the end of each of the two respective periods, pursuant to terms of an existing contract.
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
| ||||||||||||
(In millions) | ||||||||||||
Revenues: | ||||||||||||
Contract drilling revenues | $ 1,451 | $ 1,525 | $ 2,360 | |||||||||
Net investment income | 2 | 1 | 3 | |||||||||
Investment losses | (12 | ) | ||||||||||
Other revenues | 47 | 75 | 65 | |||||||||
| ||||||||||||
Total | 1,500 | 1,589 | 2,428 | |||||||||
| ||||||||||||
Expenses: | ||||||||||||
Contract drilling expenses | 802 | 772 | 1,228 | |||||||||
Other operating expenses | ||||||||||||
Impairment of assets | 100 | 680 | 881 | |||||||||
Other expenses | 471 | 518 | 627 | |||||||||
Interest | 149 | 90 | 94 | |||||||||
| ||||||||||||
Total | 1,522 | 2,060 | 2,830 | |||||||||
| ||||||||||||
Loss before income tax | (22 | ) | (471 | ) | (402) | |||||||
Income tax benefit | 4 | 111 | 117 | |||||||||
Amounts attributable to noncontrolling interests | (9 | ) | 174 | 129 | ||||||||
| ||||||||||||
Loss attributable to Loews Corporation | $ (27 | ) | $ (186 | ) | $ (156) | |||||||
| ||||||||||||
2017
Year Ended December 31 | 2019 | 2018 | ||||||||||||||
(In millions) | ||||||||||||||||
Revenues: | ||||||||||||||||
Net investment income | $ | 6 | $ | 8 | ||||||||||||
Contract drilling revenues | 935 | 1,060 | ||||||||||||||
Other revenues | 47 | 25 | ||||||||||||||
Total | 988 | 1,093 | ||||||||||||||
Expenses: | ||||||||||||||||
Contract drilling expenses | 793 | 723 | ||||||||||||||
Other operating expenses: | ||||||||||||||||
Impairment of assets | 27 | |||||||||||||||
Other expenses | 474 | 446 | ||||||||||||||
Interest | 123 | 123 | ||||||||||||||
Total | 1,390 | 1,319 | ||||||||||||||
Loss before income tax | (402 | ) | (226 | ) | ||||||||||||
Income tax benefit | 60 | 30 | ||||||||||||||
Amounts attributable to noncontrolling interests | 167 | 84 | ||||||||||||||
Net loss attributable to Loews Corporation | $ | (175 | ) | $ | (112 | ) | ||||||||||
2018
Netlower contract drilling revenue discussed above. The results improved $159 million in 2017 as compared with 2016, primarily due to a lower aggregate impairment charge recognized in 2017 of $100 million ($32 million after taxes and noncontrolling interests) as compared with $680 million ($267 million after taxes and noncontrolling interests) in 2016 and reducedfor 2019 also reflect higher depreciation expense primarily due to a lower depreciable asset base as a resultcapital expenditures and the completion of asset impairments recognizedsoftware implementation projects in 2016 and 2017. In addition, results reflect a net reduction in rig operating results for2019, partially offset by the floater andjack-up rigs and an increase in interest expense due to a lossabsence of $35 million ($11 million after tax and noncontrolling interests)costs related to the redemption of debt in 2017, as discussed in Note 11 of the Notes to Consolidated Financial Statements included under Item 8, and a reduction in interest capitalized during 2017 due to the completion of construction projects in 2016.
The income tax provision for the year ended December 31, 2017 includes a $36 millionone-time charge related to the Tax Act, which consisted of: (i) a $75 million charge for the mandatory, deemed repatriation of foreign earnings, inclusive of the utilization of certain tax attributes offset by a provisional liability for uncertain tax positions related to such attributes, (ii) a $74 million credit resulting from the remeasurement of net deferred tax liabilities at the lower corporate tax rate and (iii) a $35 million charge recorded at the Loews level for the difference between the book basis and tax basis in Diamond Offshore.
2016 Compared with 2015
Contract drilling revenue decreased $835 million in 2016 as compared with 2015 due to depressed market conditions in all floater markets and for thejack-up rig, reflecting an aggregate of 2,577 fewer revenue earning days and lower average daily revenue earned by the ultra-deepwater and deepwater floater fleets. Average daily revenue increased for themid-water andjack-up fleets primarily due to the favorable settlement of a contractual dispute and
receipt ofloss-of-hire insurance proceeds, eachlegal claim in 2016. Contract drilling expense decreased $456 million in 2016 as compared with 2015, reflecting Diamond Offshore’s lower cost structure due to additional rigs idled, cold stacked or retired during 2015 and 2016, as well as the favorable impact of cost control initiatives.
Net results decreased $30 million in 2016 as compared with 2015, primarily due to lower utilization of the rig fleet, which reduced both contract drilling revenue and expense for the year. Results for 2016 also reflected an aggregate impairment charge of $680 million ($267 million after taxes and noncontrolling interests) compared to impairment charges aggregating $861 million ($341 million after taxes and noncontrolling interests) in 2015. The results were also impacted by a $12 million ($4 million after tax and noncontrolling interests) loss on an investment in privately-held corporate bonds. These unfavorable variances were partially offset by decreased depreciation expense, as a result of the impairment charges in 2015 and 2016 and resulting lower depreciable asset base, the absence of a $20 million impairment charge in 2015 towrite-off all goodwill associated with the Company’s investment in Diamond Offshore2018 and a favorable $43 millionhigher income tax adjustment primarily related to Diamond Offshore’s Egyptian liability for uncertain tax positions related to the devaluation of the Egyptian pound.
Pipelines
As of December 31, 2019 | ||||||
(In millions) | ||||||
Total projected operating revenues under committed firm agreements as of December 31, 2018 | $ | 9,133 | ||||
Adjustments for: | ||||||
Actual revenues recognized from firm agreements in 2019 (a) | (1,157 | ) | ||||
Firm agreements entered into in 2019 | 1,353 | |||||
Total projected operating revenues under committed firm agreements as of December 31, 2019 | $ | 9,329 | ||||
(a) | Reflects an increase of $73 million in Boardwalk Pipelines’ actual 2019 revenues recognized from fixed fees under firm agreements as compared with its expected 2019 revenues from fixed fees under firm agreements, including agreements for transportation, storage and other services as of December 31, 2018, primarily due to an increase from contract renewals that occurred in 2019. |
As of December 31, 2017 | ||||
| ||||
(In millions) | ||||
2017 | $ | 1,070 | ||
2018 | 970 | |||
2019 | 950 |
In the third quarter2019.
The table below shows a reconciliation of the actual committed firm transportation revenues for 2017 and expected revenues under committed firm transportation agreements for 2018 from the table shown above to the amounts disclosed in the Results of Operations – Boardwalk Pipeline section of our MD&A included under Item 7 of our Annual Report on Form10-K for the year ended December 31, 2016, taking into account the Southwestern transaction discussed above, the sale of a processing plant and related assets in the second quarter of 2017 discussed in Note 6 of the Notes to Consolidated Financial Statements included under Item 8 and contracts entered into since December 31, 2016. The table does not include additional revenues Boardwalk Pipeline has recognized and may receive under firm transportation agreements based on actual utilization of the contracted pipeline capacity, any expected revenues for periods after the expiration dates of the existing agreements, execution of precedent agreements associated with growth projects or other events that occurred or will occur subsequent to December 31, 2017.
As of December 31, 2017 | ||||||||
2017 | 2018 | |||||||
| ||||||||
(In millions) | ||||||||
Expected revenues under committed firm transportation agreements as reported in our 2016 Annual Report on Form10-K | $ | 1,055 | $ | 975 | ||||
Adjustments for: | ||||||||
Southwestern contract restructuring | (7 | ) | (44) | |||||
Sale of processing plant and related assets | (5 | ) | (8) | |||||
Firm transportation agreements entered into in 2017 | 27 | 47 | ||||||
Actual/expected revenues under committed firm transportation agreements | $ | 1,070 | $ | 970 | ||||
|
In the 2018 to 2020 timeframe, the agreements associated with the East Texas to Mississippi Pipeline, Southeast Expansion, Gulf Crossing Pipeline and Fayetteville and Greenville Laterals, which were placed into service in 2008 and 2009, will expire. These projects were large, new pipeline expansions, developed to serve growing production in Texas, Oklahoma, Arkansas and Louisiana and anchored primarily byten-year firm transportation agreements with producers. Since these projects went into service, gas production from the Utica and Marcellus area in the Northeast has grown significantly and has altered the flow patternsavailable supply, geographical location of natural gas in North America. Overproduction, the last few years,competition between producing basins, competition with other pipelines for supply and markets, the demand for gas production from other basins by
Partially If the market perceives the value of Boardwalk Pipelines’ available capacity to be lower than its long term view of the capacity, Boardwalk Pipelines may seek to shorten contract terms until market perception improves.
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
| ||||||||||||
(In millions) | ||||||||||||
Revenues: | ||||||||||||
Other revenue, primarily operating | $ 1,325 | $ 1,316 | $ 1,253 | |||||||||
Net investment income | 1 | |||||||||||
| ||||||||||||
Total | 1,325 | 1,316 | 1,254 | |||||||||
| ||||||||||||
Expenses: | ||||||||||||
Operating | 861 | 835 | 851 | |||||||||
Interest | 171 | 183 | 176 | |||||||||
| ||||||||||||
Total | 1,032 | 1,018 | 1,027 | |||||||||
| ||||||||||||
Income before income tax | 293 | 298 | 227 | |||||||||
Income tax (expense) benefit | 232 | (61 | ) | (46) | ||||||||
Amounts attributable to noncontrolling interests | (145 | ) | (148 | ) | (107) | |||||||
| ||||||||||||
Net income attributable to Loews Corporation | $ 380 | $ 89 | $ 74 | |||||||||
|
2017
Year Ended December 31 | 2019 | 2018 | ||||||||||||
(In millions) | ||||||||||||||
Revenues: | ||||||||||||||
Operating revenues and other | $ | 1,300 | $ | 1,227 | ||||||||||
Total | 1,300 | 1,227 | ||||||||||||
Expenses: | ||||||||||||||
Operating and other | 840 | 820 | ||||||||||||
Interest | 179 | 176 | ||||||||||||
Total | 1,019 | 996 | ||||||||||||
Income before income tax | 281 | 231 | ||||||||||||
Income tax expense | (72 | ) | (28 | ) | ||||||||||
Amounts attributable to noncontrolling interests | (68 | ) | ||||||||||||
Net income attributable to Loews Corporation | $ | 209 | $ | 135 | ||||||||||
2018
expirations that were recontracted at overall lower average rates.
As a result of the Tax Act, we recorded aone-time decrease to income tax expense of $294 million at the holding company level. This decrease was a result of remeasuring the net deferred tax liabilities at the lower corporate tax rate.
2016 Comparedabove and the impact of the Company owning 100% of Boardwalk Pipelines, which increased from 51% with 2015
Total revenues increased $62 million in 2016 as compared with 2015. Excluding the net effectpurchase of $13 millionBoardwalk Pipelines common units on July 18, 2018.
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
| ||||||||||||
(In millions) | ||||||||||||
Revenues: | ||||||||||||
Operating revenue | $ 577 | $ 557 | $ 527 | |||||||||
Revenues related to reimbursable expenses | 105 | 110 | 77 | |||||||||
| ||||||||||||
Total | 682 | 667 | 604 | |||||||||
| ||||||||||||
Expenses: | ||||||||||||
Operating | 502 | 489 | 467 | |||||||||
Reimbursable expenses | 105 | 110 | 77 | |||||||||
Depreciation | 63 | 63 | 54 | |||||||||
Equity income from joint ventures | (81 | ) | (41 | ) | (43) | |||||||
Interest | 28 | 24 | 21 | |||||||||
| ||||||||||||
Total | 617 | 645 | 576 | |||||||||
| ||||||||||||
Income before income tax | 65 | 22 | 28 | |||||||||
Income tax expense | (1 | ) | (10 | ) | (16) | |||||||
| ||||||||||||
Net income attributable to Loews Corporation | $ 64 | $ 12 | $ 12 | |||||||||
|
2017
Year Ended December 31 | 2019 | 2018 | ||||||||||
(In millions) | ||||||||||||
Revenues: | ||||||||||||
Operating revenues | $ | 578 | $ | 628 | ||||||||
Gain on sale of owned hotel | 23 | |||||||||||
Revenues related to reimbursable expenses | 114 | 104 | ||||||||||
Total | 692 | 755 | ||||||||||
Expenses: | ||||||||||||
Operating and other: | ||||||||||||
Operating | 493 | 533 | ||||||||||
Asset impairments | 99 | 22 | ||||||||||
Reimbursable expenses | 114 | 104 | ||||||||||
Depreciation | 61 | 67 | ||||||||||
Equity income from joint ventures | (69 | ) | (73 | ) | ||||||||
Interest | 22 | 29 | ||||||||||
Total | 720 | 682 | ||||||||||
Income (loss) before income tax | (28 | ) | 73 | |||||||||
Income tax expense | (3 | ) | (25 | ) | ||||||||
Net income (loss) attributable to Loews Corporation | $ | (31 | ) | $ | 48 | |||||||
2018
Hotels considers events or changes in circumstances that indicate the carrying amount of a long-lived asset may not be recoverable. During 2019 and 2018, Loews Hotels determined that certain properties, each of which represent an asset group, had carrying values that were not recoverable, and therefore recorded impairment charges of $99 million and $22 million to reduce these properties carrying values to their estimated fair values. There were four properties identified in 2019 and two in 2018.
Interest expense increased $4 million in 2017 as compared with 2016 primarily due to property-level debt incurred to fund acquisitions in 2016 along with reduced capitalized interest.
Loews Hotels & Co recorded a $27 million decrease to income tax expense resulting from the effect of the lower U.S. federal corporate tax rate on its net deferred tax liabilities.
Net income increased $52 million primarily due to the changes discussed above.
2016 Compared with 2015
Operating revenues increased $30 million in 2016 as compared with 2015 primarily due to the acquisition of one hotel during 2016 and the acquisition of two hotels during 2015, partially offset by a decrease in revenue at the Loews Miami Beach Hotel due to renovations during 2016.
Operating and depreciation expenses increased $22 million and $9 million in 2016 as compared with 2015 primarily due to the acquisition of one hotel during 2016 and the acquisition of two hotels during 2015.
Equity income from joint ventures in 2016 was impacted by costs associated with opening one new hotel during 2016 and the $13 million impairment of an equity interest in a joint venture hotel property.
Interest expense increased $3 million in 2016 as compared with 2015 primarily due to new property-level debt incurred to fund acquisitions.
Net income was consistent in 2016 as compared with 2015 due to the increases in revenues and expenses discussed above.
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
| ||||||||||||
(In millions) | ||||||||||||
Revenues: | ||||||||||||
Net investment income | $ 146 | $ 146 | $ 22 | |||||||||
Other revenues | 499 | 3 | 6 | |||||||||
| ||||||||||||
Total | 645 | 149 | 28 | |||||||||
| ||||||||||||
Expenses: | ||||||||||||
Operating | 618 | 131 | 116 | |||||||||
Interest | 95 | 72 | 74 | |||||||||
| ||||||||||||
Total | 713 | 203 | 190 | |||||||||
| ||||||||||||
Loss before income tax | (68 | ) | (54 | ) | (162) | |||||||
Income tax benefit | 14 | 19 | 59 | |||||||||
| ||||||||||||
Net loss attributable to Loews Corporation | $ (54) | $ (35) | $ (103) | |||||||||
|
2017
Year Ended December 31 | 2019 | 2018 | ||||||||||
(In millions) | ||||||||||||
Revenues: | ||||||||||||
Net investment income (loss) | $ | 230 | $ | (10 | ) | |||||||
Operating revenues and other | 933 | 867 | ||||||||||
Total | 1,163 | 857 | ||||||||||
Expenses: | ||||||||||||
Operating and other | 1,004 | 956 | ||||||||||
Interest | 115 | 108 | ||||||||||
Total | 1,119 | 1,064 | ||||||||||
Income (loss) before income tax | 44 | (207 | ) | |||||||||
Income tax (expense) benefit | (9 | ) | 46 | |||||||||
Net income (loss) attributable to Loews Corporation | $ | 35 | $ | (161 | ) | |||||||
2018
Otherportfolio, partially offset by lower income from limited partnership investments as a result of lower invested balances.
Operating expenses increased $487 million in 2017 as compared with 2016 primarily due to $479 million of expenses for Consolidated Container’s operations for the period since the acquisition date. In addition, operating expenses increased due to costs related to the acquisition of Consolidated Container,acquisitions in 2018 and 2019, partially offset by lower cost of goods sold due to lower volumes and lower resin prices.
increased $23 millionsubsidiaries in 2017 as compared with 2016 primarily due to interest expense associated with Consolidated Container’s $605 million term loan from the date of acquisition.
Corporate recorded an $8 million increase to income tax expense resulting from the effect of the lower corporate tax rate on net deferred tax assets.
Net results decreased $19 million in 2017 as compared with 2016 primarily due to the changes discussed above.
2016 Compared with 2015
Net investment income increased $124 million in 2016 as compared with 2015 primarily due to improved performance of equity based investments and fixed income investments in the trading portfolio and improved results from limited partnership investments.
Operating expenses increased $15 million in 2016 as compared with 2015 primarily due to expenses related to the 2016 Incentive Compensation Plan, which was approved by shareholders on May 10, 2016.
Net results improved $68 million in 2016 as compared with 2015 primarily due to the changes discussed above.
As of February 2, 2018, there were 328,825,271 shares of Loews common stock outstanding. Depending on market and other conditions, we may purchase our shares and shares of our subsidiaries’ outstanding common stock in the open market or otherwise. In 2017, we purchased 4.8 million shares of Loews common stock. As of February 9, 2018, we had purchased an additional 4.3 million shares of Loews common stock in 2018 at an aggregate cost of $218 million. Wealso have an effective Registration Statement on Form
We are not responsible for the liabilities and obligations of our subsidiaries and there are no Parent Company guarantees.
The declaration and payment of future dividends to holders of our common stock will be at the discretion of our Board of Directors and will depend on many factors, including our earnings, financial condition and business needs.
operating activities reflected lower income taxes paid and increased receipts relating to returns on limited partnerships offset by higher net claim and expense payments.
collected as compared with 2018.
For 2018, Diamond Offshore has budgeted approximately $220 million for capital expenditures.reactivation and upgrade of the
Asoperations, which arise during the normal course of December 31, 2017, Diamond Offshore had no outstanding borrowings under its credit agreement and was in compliance with all covenant requirements thereunder. business.
In July of 2017, Moody’s downgradedgeneral corporate purposes, including investments, acquisitions and capital expenditures. During 2019, Diamond Offshore’s corporatecash and cash equivalents and marketable securities decreased an aggregate $301 million and during 2018 increased an aggregate $74 million. Based on Diamond Offshore’s cash flow forecast, as of the date of this Report, it expects to generate aggregate negative cash flows for 2020 and to begin to utilize borrowing under its credit ratingagreements in the first half of 2020 to Ba3meet its liquidity requirements. Diamond Offshore anticipates ending 2020 with a drawn balance under its $950 million credit agreement. If market conditions do not improve, Diamond Offshore could continue to generate aggregate negative outlook from Ba2 with a stable outlook. cash flows in future periods.
opportunities or to refinance its indebtedness as it matures.
debt or equity securities will be dependent on its results of operations, current financial condition, current credit ratings, current market conditions and other factors beyond its control.
control at such time.
In 2017 and 2016, Boardwalk Pipeline declared and paid distributions to its common unitholders of record of $0.40 per common unit and an amount to the general partner on behalf of its 2% general partner interest. In February of 2018, the Partnership declared a quarterly cash distribution to unitholders of record of $0.10 per common unit.
As of February 13, 2018, Boardwalk Pipeline had $445 million of outstanding borrowings under its revolving credit facility. During 2017, Boardwalk Pipeline extended the maturity date of its revolving credit facility by one year to May 26, 2022. Boardwalk Pipeline has a subordinated loan agreement with a subsidiary of the Company under which it could borrow up to $300 million until December 31, 2018. As of February 13, 2018, Boardwalk Pipeline had no outstanding borrowings under the subordinated loan agreement.
For 2017 and 2016, Boardwalk Pipeline’sPipelines’ capital expenditures were $708$416 million and $590$468 million, consisting of a combination of growth and maintenance capital. During 2019 and 2018, Boardwalk PipelinePipelines purchased $13 million and $19 million of natural gas to be used as base gas for its pipeline system. Boardwalk Pipelines expects total capital expenditures to be approximately $550$475 million in 20182020, including approximately $155 million for maintenance capital and $320 million related to growth projects and pipeline system maintenance expenditures.
projects.
Item 8 for further discussion.
Payments Due by Period | ||||||||||||||||||||
Less than | More than | |||||||||||||||||||
December 31, 2017 | Total | 1 year | 1-3 years | 3-5 years | 5 years | |||||||||||||||
| ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
Debt (a) | $ | 16,749 | $ | 1,000 | $ | 2,021 | $ | 2,488 | $ | 11,240 | ||||||||||
Operating leases | 729 | 76 | 141 | 128 | 384 | |||||||||||||||
Claim and claim adjustment expense reserves (b) | 23,478 | 5,246 | 6,431 | 3,347 | 8,454 | |||||||||||||||
Future policy benefit reserves (c) | 28,160 | (439) | (258) | 413 | 28,444 | |||||||||||||||
Purchase and other obligations | 980 | 460 | 143 | 138 | 239 | |||||||||||||||
| ||||||||||||||||||||
Total (d) | $ | 70,096 | $ | 6,343 | $ | 8,478 | $ | 6,514 | $ | 48,761 | ||||||||||
|
Payments Due by Period | ||||||||||||||||||||||||
Less than | More than | |||||||||||||||||||||||
December 31, 2019 | Total | 1 year | 1-3 years | 3-5 years | 5 years | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Debt (a) | $ | 16,279 | $ | 616 | $ | 2,620 | $ | 4,185 | $ | 8,858 | ||||||||||||||
Operating leases | 860 | 114 | 215 | 170 | 361 | |||||||||||||||||||
Claim and claim adjustment expense reserves (b) | 22,814 | 5,512 | 5,928 | 2,994 | 8,380 | |||||||||||||||||||
Future policy benefit reserves (c) | 27,539 | (350 | ) | 55 | 813 | 27,021 | ||||||||||||||||||
Purchase and other obligations | 485 | 262 | 83 | 80 | 60 | |||||||||||||||||||
Total | $ | 67,977 | $ | 6,154 | $ | 8,901 | $ | 8,242 | $ | 44,680 | ||||||||||||||
(a) | Includes estimated future interest payments. |
(b) |
|
(c) |
|
|
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||||||
| ||||||||||||||||
(In millions) | ||||||||||||||||
Taxable fixed income securities | $ | 1,397 | $ | 1,424 | $ | 1,387 | ||||||||||
Tax-exempt fixed income securities | 427 | 405 | 376 | |||||||||||||
| ||||||||||||||||
Total fixed income securities | 1,824 | 1,829 | 1,763 | |||||||||||||
Limited partnership investments | 207 | 155 | 92 | |||||||||||||
Other, net of investment expense | 3 | 4 | (15 | ) | ||||||||||||
| ||||||||||||||||
Pretax net investment income | $ | 2,034 | $ | 1,988 | $ | 1,840 | ||||||||||
| ||||||||||||||||
Fixed income securities after tax and noncontrolling interests | $ | 1,185 | $ | 1,186 | $ | 1,146 | ||||||||||
| ||||||||||||||||
Net investment income after tax and noncontrolling interests | $ | 1,308 | $ | 1,280 | $ | 1,192 | ||||||||||
| ||||||||||||||||
Effective income yield for the fixed income securities portfolio, before tax | 4.7 | % | 4.8 | % | 4.7 | % | ||||||||||
Effective income yield for the fixed income securities portfolio, after tax | 3.4 | % | 3.5 | % | 3.4 | % |
Year Ended December 31 | 2019 | 2018 | ||||||||
(In millions) | ||||||||||
Fixed income securities: | ||||||||||
Taxable fixed income securities | $ | 1,538 | $ | 1,449 | ||||||
Tax-exempt fixed income securities | 318 | 384 | ||||||||
Total fixed income securities | 1,856 | 1,833 | ||||||||
Limited partnership and common stock investments | 226 | (42 | ) | |||||||
Other, net of investment expense | 36 | 26 | ||||||||
Pretax net investment income | $ | 2,118 | $ | 1,817 | ||||||
Fixed income securities after tax and noncontrolling interests | $ | 1,358 | $ | 1,351 | ||||||
Net investment income after tax and noncontrolling interests | $ | 1,543 | $ | 1,341 | ||||||
Effective income yield for the fixed income securities portfolio, before tax | 4.8% | 4.7% | ||||||||
Effective income yield for the fixed income securities portfolio, after tax | 3.9% | 3.9% | ||||||||
Limited partnership and common stock return | 11.7% | (1.9)% |
following table:
Year Ended December 31 | 2019 | 2018 | ||||||||||||||
(In millions) | ||||||||||||||||
Investment gains (losses): | ||||||||||||||||
Fixed maturity securities: | ||||||||||||||||
Corporate and other bonds | $ (8 | ) | $ | 26 | ||||||||||||
States, municipalities and political subdivisions | 13 | 36 | ||||||||||||||
Asset-backed | (11 | ) | (58 | ) | ||||||||||||
Total fixed maturity securities | (6 | ) | 4 | |||||||||||||
Non-redeemable preferred stock | 66 | (74 | ) | |||||||||||||
Short term and other | (11 | ) | 13 | |||||||||||||
Total investment gains (losses) | 49 | (57 | ) | |||||||||||||
Income tax (expense) benefit | (12 | ) | 14 | |||||||||||||
Amounts attributable to noncontrolling interests | (4 | ) | 5 | |||||||||||||
Net investment gains (losses) attributable to Loews Corporation | $ 33 | $ | (38 | ) | ||||||||||||
Net Realized Investment Gains (Losses)
The components of CNA’s net realized investment results are presented in the following table:
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Realized investment gains (losses): | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
Corporate and other bonds | $ | 111 | $ | 31 | $ | (55 | ) | |||||||||||||||||
States, municipalities and political subdivisions | 14 | 29 | (22 | ) | ||||||||||||||||||||
Asset-backed | (6 | ) | (2 | ) | 10 | |||||||||||||||||||
Foreign government | 3 | 1 | ||||||||||||||||||||||
U.S. Treasury and obligations of government-sponsored enterprises | 3 | 5 | ||||||||||||||||||||||
Total fixed maturity securities | 122 | 66 | (66 | ) | ||||||||||||||||||||
Equity securities | (5 | ) | (23 | ) | ||||||||||||||||||||
Derivatives | (4 | ) | (2 | ) | 10 | |||||||||||||||||||
Short term investments and other | 4 | 3 | 8 | |||||||||||||||||||||
Total realized investment gains (losses) | 122 | 62 | (71 | ) | ||||||||||||||||||||
Income tax (expense) benefit | (40 | ) | (19 | ) | 33 | |||||||||||||||||||
Amounts attributable to noncontrolling interests | (9 | ) | (4 | ) | 4 | |||||||||||||||||||
Net realized investment gains (losses) attributable to Loews Corporation | $ | 73 | $ | 39 | $ | (34 | ) | |||||||||||||||||
Net realized investment gains improved $34 million in 2017 as compared with 2016, primarily driven by lowerhigher OTTI losses recognized in earnings. Net realized investment results improved $73 million in 2016 as compared with 2015, driven by lower OTTI losses recognized in earnings and higher net realized investment gains on sales of securities.
December 31, 2017 | December 31, 2016 | |||||||||||||||||||
Estimated Fair Value | Net Unrealized Gains (Losses) | Estimated Fair Value | Net Unrealized Gains (Losses) | |||||||||||||||||
(In millions) | ||||||||||||||||||||
U.S. Government, Government agencies and Government-sponsored enterprises | $ | 4,514 | $ | 21 | $ | 4,212 | $ | 32 | ||||||||||||
AAA | 1,954 | 152 | 1,881 | 110 | ||||||||||||||||
AA | 8,982 | 914 | 8,911 | 750 | ||||||||||||||||
A | 9,643 | 952 | 9,866 | 832 | ||||||||||||||||
BBB | 13,554 | 1,093 | 12,802 | 664 | ||||||||||||||||
Non-investment grade | 2,840 | 140 | 3,233 | 156 | ||||||||||||||||
Total | $ | 41,487 | $ | 3,272 | $ | 40,905 | $ | 2,544 | ||||||||||||
December 31, 2019 | December 31, 2018 | |||||||||||||||||||
Estimated Fair Value | Net Unrealized Gains (Losses) | Estimated Fair Value | Net Unrealized Gains (Losses) | |||||||||||||||||
(In millions) | ||||||||||||||||||||
U.S. Government, Government agencies and Government-sponsored enterprises | $ | 4,136 | $ | 95 | $ | 4,334 | $ | (24 | ) | |||||||||||
AAA | 3,254 | 349 | 3,027 | 245 | ||||||||||||||||
AA | 6,663 | 801 | 6,510 | 512 | ||||||||||||||||
A | 9,062 | 1,051 | 8,768 | 527 | ||||||||||||||||
BBB | 16,839 | 1,684 | 14,205 | 274 | ||||||||||||||||
Non-investment grade | 2,253 | 101 | 2,702 | (73 | ) | |||||||||||||||
Total | $ | 42,207 | $ | 4,081 | $ | 39,546 | $ | 1,461 | ||||||||||||
AAA rated securities included $1.5 billion and $1.3 billion of
December 31, 2017 | Estimated Fair Value | Gross Unrealized Losses | ||||||||||
(In millions) | ||||||||||||
U.S. Government, Government agencies and | $ | 2,050 | $ | 33 | ||||||||
AAA | 177 | 6 | ||||||||||
AA | 363 | 5 | ||||||||||
A | 629 | 11 | ||||||||||
BBB | 1,226 | 22 | ||||||||||
Non-investment grade | 530 | 10 | ||||||||||
Total | $ | 4,975 | $ | 87 | ||||||||
December 31, 2019 | Estimated Fair Value | Gross Unrealized Losses | ||||||||
(In millions) | ||||||||||
U.S. Government, Government agencies and Government-sponsored enterprises | $ | 271 | $ | 3 | ||||||
AAA | 91 | 2 | ||||||||
AA | 165 | 1 | ||||||||
A | 667 | 6 | ||||||||
BBB | 832 | 13 | ||||||||
Non-investment grade | 394 | 20 | ||||||||
Total | $ | 2,420 | $ | 45 | ||||||
December 31, 2017 | Estimated Fair Value | Gross Unrealized Losses | ||||||||||
(In millions) | ||||||||||||
Due in one year or less | $ | 85 | $ | 2 | ||||||||
Due after one year through five years | 1,079 | 19 | ||||||||||
Due after five years through ten years | 3,363 | 57 | ||||||||||
Due after ten years | 448 | 9 | ||||||||||
Total | $ | 4,975 | $ | 87 | ||||||||
December 31, 2019 | Estimated Fair Value | Gross Unrealized Losses | ||||||||
(In millions) | ||||||||||
Due in one year or less | $ | 77 | $ | 1 | ||||||
Due after one year through five years | 613 | 15 | ||||||||
Due after five years through ten years | 1,367 | 16 | ||||||||
Due after ten years | 363 | 13 | ||||||||
Total | $ | 2,420 | $ | 45 | ||||||
December 31, 2017 | December 31, 2016 | |||||||||||||||||||
|
| |||||||||||||||||||
Estimated Fair Value | Effective Duration (In Years) | Estimated Fair Value | Effective Duration (In Years) | |||||||||||||||||
(In millions of dollars) | ||||||||||||||||||||
Investments supporting Other Insurance | ||||||||||||||||||||
Operations | $ | 16,797 | 8.4 | $ | 15,724 | 8.7 | ||||||||||||||
Other investments | 26,817 | 4.4 | 26,669 | 4.6 | ||||||||||||||||
|
|
| ||||||||||||||||||
Total | $ | 43,614 | 5.9 | $ | 42,393 | 6.1 | ||||||||||||||
|
|
|
The duration of the total portfolio is aligned with the cash flow characteristics of the underlying liabilities.
December 31, 2019 | December 31, 2018 | |||||||||||||||||
Estimated Fair Value | Effective Duration (In Years) | Estimated Fair Value | Effective Duration (In Years) | |||||||||||||||
(In millions of dollars) | ||||||||||||||||||
Investments supporting Other Insurance Operations | $ | 18,015 | 8.9 | $ | 16,212 | 8.4 | ||||||||||||
Other investments | 26,813 | 4.1 | 25,428 | 4.4 | ||||||||||||||
Total | $ | 44,828 | 6.0 | $ | 41,640 | 6.0 | ||||||||||||
December 31 | 2017 | 2016 | ||||||||||
(In millions) | ||||||||||||
Short term investments: | ||||||||||||
Commercial paper | $ | 905 | $ | 733 | ||||||||
U.S. Treasury securities | 355 | 433 | ||||||||||
Money market funds | 44 | 44 | ||||||||||
Other | 132 | 197 | ||||||||||
Total short term investments | $ | 1,436 | $ | 1,407 | ||||||||
December 31 | 2019 | 2018 | ||||||||
(In millions) | ||||||||||
Short term investments: | ||||||||||
Commercial paper | $ | 1,181 | $ | 705 | ||||||
U.S. Treasury securities | 364 | 185 | ||||||||
Other | 316 | 396 | ||||||||
Total short term investments | $ | 1,861 | $ | 1,286 | ||||||
of operations in the period that the need for such adjustments is determined. The carried case and IBNR reserves as of each balance sheet date are provided in the discussion that follows and in Note 8 of the Notes to Consolidated Financial Statements included under Item 8.
gain and the amount of remaining reinsurance limit.
inclusion of case reserves can lead to distortions if changes in case reserving practices have taken place, and the use of case incurred losses may not eliminate the issues associated with estimating the incurred loss pattern subsequent to the most mature point available.
exposures, the paid and incurred development methods can often be relied on sooner primarily because CNA’s history includes a sufficient number of years to cover the entire period over which paid and incurred losses are expected to change. However, CNA may also use the loss ratio, Bornhuetter-Ferguson and/or frequency times severity methods for short-tail exposures.
2019.
2019.
2019.
December 31 | 2017 | 2016 | ||||||
(In millions) | ||||||||
Gross Case Reserves | $ | 6,913 | $ | 7,164 | ||||
Gross IBNR Reserves | 9,156 | 9,207 | ||||||
Total Gross Carried Claim and Claim Adjustment Expense Reserves | $ | 16,069 | $ | 16,371 | ||||
Net Case Reserves | $ | 6,343 | $ | 6,582 | ||||
Net IBNR Reserves | 8,232 | 8,328 | ||||||
Total Net Carried Claim and Claim Adjustment Expense Reserves | $ | 14,575 | $ | 14,910 | ||||
December 31 | 2019 | 2018 | ||||||||
(In millions) | ||||||||||
Gross Case Reserves | $ | 6,276 | $ | 6,671 | ||||||
Gross IBNR Reserves | 9,494 | 9,287 | ||||||||
Total Gross Carried Claim and Claim Adjustment Expense Reserves | $ | 15,770 | $ | 15,958 | ||||||
Net Case Reserves | $ | 5,645 | $ | 6,063 | ||||||
Net IBNR Reserves | 8,508 | 8,290 | ||||||||
Total Net Carried Claim and Claim Adjustment Expense Reserves | $ | 14,153 | $ | 14,353 | ||||||
December 31 | 2017 | 2016 | ||||||
(In millions) | ||||||||
Gross Case Reserves | $ | 1,371 | $ | 1,524 | ||||
Gross IBNR Reserves | 1,065 | 1,090 | ||||||
Total Gross Carried Claim and Claim Adjustment Expense Reserves | $ | 2,436 | $ | 2,614 | ||||
Net Case Reserves | $ | 94 | $ | 94 | ||||
Net IBNR Reserves | 111 | 136 | ||||||
Total Net Carried Claim and Claim Adjustment Expense Reserves | $ | 205 | $ | 230 | ||||
December 31 | 2019 | 2018 | ||||||||
(In millions) | ||||||||||
Gross Case Reserves | $ | 1,137 | $ | 1,208 | ||||||
Gross IBNR Reserves | 1,097 | 1,217 | ||||||||
Total Gross Carried Claim and Claim Adjustment Expense Reserves | $ | 2,234 | $ | 2,425 | ||||||
Net Case Reserves | $ | 92 | $ | 96 | ||||||
Net IBNR Reserves | 83 | 96 | ||||||||
Total Net Carried Claim and Claim Adjustment Expense Reserves | $ | 175 | $ | 192 | ||||||
In developing the claim and claim adjustment expense reserve estimates for CNA’s structured settlement obligations, CNA’s actuaries monitor mortality experience on an annual basis. Both elements of long term care reserves are discounted as discussed in Note 1 to the Consolidated Financial Statements included under Item 8.
operations in the period in which the need for such adjustment is determined,determined. If the GPV required reserves are less than the existing recorded reserves, the assumptions remain locked in and could materially adversely affect our results of operations and equity and CNA’s business and insurer financial strength and corporate debt ratings. no adjustment is required.
Theearly 2019, validated the assumption setting process and confirmed the best estimate assumptions appropriately reflected the experience data at that time.
(In millions) | ||||||||
Long term care active life reserve - change in estimated reserve margin | ||||||||
| ||||||||
| ||||||||
| ||||||||
| ||||||||
| ||||||||
| ||||||||
| ||||||||
September 30, 2018 estimated margin | $ | 182 | ||||||
Changes in underlying discount rate assumptions | (280 | ) | ||||||
Changes in underlying morbidity assumptions | 32 | |||||||
Changes in underlying persistency assumptions and inforce policy inventory | (234 | ) | ||||||
Changes in underlying premium rate action assumptions | 58 | |||||||
Changes in underlying expense and other assumptions | 26 | |||||||
September 30, 2019 Premium Deficiency | $ (216 | ) | ||||||
The annual
be completed in the third quarter of 2020.
| |||||
| |||||
| |||||
| |||||
| |||||
2019 GPV | Estimated Reduction to Pretax Income | ||||
(In millions) | |||||
Hypothetical revisions | |||||
Morbidity: | |||||
5% increase in morbidity | $ | 664 | |||
10% increase in morbidity | 1,329 | ||||
Persistency: | |||||
5% decrease in active life mortality and lapse | $ | 208 | |||
10% decrease in active life mortality and lapse | 427 | ||||
Discount rates: | |||||
50 basis point decline in | $ | 309 | |||
100 basis point decline in | 675 | ||||
Premium rate actions: | |||||
25% decrease in anticipated future premium rate increases | $ | 58 | |||
50% decrease in anticipated future premium rate increases | | 115 |
As reflected in the long term care active life reserve - change in estimated reserve margin table on the preceding page, the reduction in the U.S federal corporate income tax rate adversely affected the value of the tax benefit received on tax exempt municipal investments and thus the rate at which CNA discounts its long term care active life reserves. Any future reduction in income tax rates could further adversely affect CNA’s GPV discount rates.
December 31, 2017 | Claim and claim adjustment expenses | Future policy benefits | Total | |||||||||
| ||||||||||||
(In millions) | ||||||||||||
Long term care | $ | 2,568 | $ | 8,959 | $ | 11,527 | ||||||
Structured settlement annuities | 547 | 547 | ||||||||||
Other | 16 | 16 | ||||||||||
Total | 3,131 | 8,959 | 12,090 | |||||||||
Shadow adjustments (a) | 159 | 1,990 | 2,149 | |||||||||
Ceded reserves (b) | 209 | 230 | 439 | |||||||||
Total gross reserves | $ | 3,499 | $ | 11,179 | $ | 14,678 | ||||||
December 31, 2016 | ||||||||||||
Long term care | $ | 2,426 | $ | 8,654 | $ | 11,080 | ||||||
Structured settlement annuities | 565 | 565 | ||||||||||
Other | 17 | 17 | ||||||||||
Total | 3,008 | 8,654 | 11,662 | |||||||||
Shadow adjustments (a) | 101 | 1,459 | 1,560 | |||||||||
Ceded reserves (b) | 249 | 213 | 462 | |||||||||
Total gross reserves | $ | 3,358 | $ | 10,326 | $ | 13,684 | ||||||
December 31, 2019 | Claim and claim adjustment expenses | Future policy benefits | Total | |||||||||
(In millions) | ||||||||||||
Long term care | $ | 2,863 | $ | 9,470 | $ | 12,333 | ||||||
Structured settlement annuities | 515 | 515 | ||||||||||
Other | 12 | 12 | ||||||||||
Total | 3,390 | 9,470 | 12,860 | |||||||||
Shadow adjustments (a) | 167 | 2,615 | 2,782 | |||||||||
Ceded reserves (b) | 159 | 226 | 385 | |||||||||
Total gross reserves | $ | 3,716 | $ | 12,311 | $ | 16,027 | ||||||
December 31, 2018 | Claim and claim adjustment expenses | Future policy benefits | Total | |||||||||
(In millions) | ||||||||||||
Long term care | $ | 2,761 | $ | 9,113 | $ | 11,874 | ||||||
Structured settlement annuities | 530 | 530 | ||||||||||
Other | 14 | 14 | ||||||||||
Total | 3,305 | 9,113 | 12,418 | |||||||||
Shadow adjustments (a) | 115 | 1,250 | 1,365 | |||||||||
Ceded reserves (b) | 181 | 234 | 415 | |||||||||
Total gross reserves | $ | 3,601 | $ | 10,597 | $ | 14,198 | ||||||
(a) | To the extent that unrealized gains on fixed income securities supporting long term care products and annuity contracts would result in a premium deficiency if those gains were realized, an increase in Insurance reserves is recorded, after tax and noncontrolling interests, as a reduction of net unrealized gains through Other comprehensive income (loss) (“Shadow Adjustments”). |
(b) | Ceded reserves relate to claim or policy reserves fully reinsured in connection with a sale or exit from the underlying business. |
CATASTROPHE
We classify fixed
expected near-term and long term prospects of the issuer, or the underlying collateral, the relevant industry conditions and trends, and whether CNA expects to receive cash flows sufficient to recover the entire amortized cost basis of the security. Further information on CNA’s process for evaluating impairments is included in Note 1 of the Notes to Consolidated Financial Statements included under Item 8.
Long Term Care Policies
Future policy benefit reserves for CNA’s long term care policies are based on certain assumptions including morbidity, persistency, inclusive
We have not established deferred tax liabilities for certain of our foreign earnings as we intend to indefinitely reinvest those earnings to finance foreign activities. However, if these earnings become subject to U.S. federal tax, any required provision could have a material impact on our financial results.
statement that does not directly relate to any historical or current fact and may project, indicate or imply future results, events, performance or achievements. Such statements may contain the words “expect,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “will be,” “will continue,” “will likely result,” and similar expressions. In addition, any statement concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible actions taken by us or our subsidiaries are also forward-looking statements as defined by the Act. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to a variety of risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those anticipated or projected.
2018.
Category of risk exposure: | Fair Value Asset (Liability) | Market Risk | ||||||||||||||
| ||||||||||||||||
December 31 | 2017 | 2016 | 2017 | 2016 | ||||||||||||
| ||||||||||||||||
(In millions) | ||||||||||||||||
Equity prices (1): | ||||||||||||||||
Equity securities – long | $ 517 | $ 425 | $ | (129) | $ | (106) | ||||||||||
– short | (5 | ) | (36) | 1 | 9 | |||||||||||
Options – purchased | 12 | 14 | 16 | 8 | ||||||||||||
– written | (7 | ) | (8) | (15) | (4) | |||||||||||
Other derivatives | 1 | 1 | 67 | 56 | ||||||||||||
Interest rate (2): | ||||||||||||||||
Fixed maturities – long | 649 | 601 | (1) | (1) | ||||||||||||
Short term investments | 2,745 | 3,064 | ||||||||||||||
Other invested assets | 60 | 55 | (1) |
|
Increase (Decrease) | ||||||||||||||||
December 31, 2019 | Fair Value Asset (Liability) | Interest Rate Risk | Equity Price Risk | |||||||||||||
(In millions) | ||||||||||||||||
Fixed maturities – long | $ | 53 | ||||||||||||||
Equity securities – long | 440 | $ | (110) | |||||||||||||
– short | (17 | ) | 4 | |||||||||||||
Options – purchased | 1 | 3 | ||||||||||||||
– written | (1 | ) | (5) | |||||||||||||
Other invested assets | 7 | |||||||||||||||
Short term investments | 2,521 | $ | (5 | ) |
Category of risk exposure: | Fair Value Asset (Liability) | Market Risk | ||||||||||||||
| ||||||||||||||||
December 31 | 2017 | 2016 | 2017 | 2016 | ||||||||||||
| ||||||||||||||||
(In millions) | ||||||||||||||||
Equity prices (1): | ||||||||||||||||
Equity securities: | ||||||||||||||||
General accounts (a) | $ 695 | $ 110 | $ | (174) | $ | (28) | ||||||||||
Limited partnership investments | 3,278 | 3,220 | (464) | (449) | ||||||||||||
Interest rate (2): | ||||||||||||||||
Fixed maturities (a) | 41,484 | 40,893 | (2,559) | (2,571) | ||||||||||||
Short term investments (a) | 1,901 | 1,701 | (1) | (1) | ||||||||||||
Other invested assets, primarily mortgage loans | 844 | 594 | (40) | (30) | ||||||||||||
Interest rate swaps (b) | 4 | 26 | ||||||||||||||
Other derivatives | (3 | ) | 3 | 17 | 13 | |||||||||||
Foreign exchange (3): | ||||||||||||||||
Other invested assets | 44 | 36 | (7) | (5) | ||||||||||||
|
Increase (Decrease) | ||||||||||||||||||
December 31, 2019 | Fair Value Asset (Liability) | Interest Rate Risk | Foreign Currency Risk | Equity Price Risk | ||||||||||||||
(In millions) | ||||||||||||||||||
Fixed maturities (a) | $ | 42,187 | $ | (2,669 | ) | $ | (458 | ) | ||||||||||
Equity securities | 865 | (28 | ) | (3 | ) | $ | (45) | |||||||||||
Limited partnership investments | 2,004 | (238) | ||||||||||||||||
Other invested assets | 65 | (11 | ) | |||||||||||||||
Mortgage loans | 1,025 | (45 | ) | |||||||||||||||
Short term investments | 2,107 | (1 | ) | (27 | ) | |||||||||||||
Interest rate swaps (b) | (8 | ) | 11 | |||||||||||||||
Other derivatives | (7 | ) | 16 |
(a) | ||
|
(b) |
| |
|
(Liability)
Risk $ $ ) $ ) ) ) ) )
(Liability)
Risk
Risk $ $ ) $ ) ) ) $ ) ) ) ) (a) The market risk at December 31, 2018 will generally be offset by recognition of the underlying hedged transaction.
Page No. | ||||
Management’s Report on Internal Control Over Financial Reporting | 87 | |||
88 | ||||
90 | ||||
92 | ||||
93 | ||||
94 | ||||
96 | ||||
98 | ||||
1. | Summary of Significant Accounting Policies | 98 | ||
2. | Acquisitions and Divestitures | 106 | ||
3. | Investments | 108 | ||
4. | Fair Value | 113 | ||
5. | Receivables | 121 | ||
6. | Property, Plant and Equipment | 121 | ||
7. | Goodwill and Other Intangible Assets | 123 | ||
8. | Claim and Claim Adjustment Expense Reserves | 123 | ||
9. | Leases | 138 | ||
10. | Income Taxes | 139 | ||
11. | Debt | 143 | ||
12. | Shareholders’ Equity | 146 | ||
13. | Statutory Accounting Practices | 147 | ||
14. | Benefit Plans | 148 | ||
15. | Reinsurance | 155 | ||
16. | Quarterly Financial Data (Unaudited) | 157 | ||
17. | Legal Proceedings | 157 | ||
18. | Commitments and Contingencies | 158 | ||
19. | Segments | 159 |
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92 | ||||||
93 | ||||||
94 | ||||||
96 | ||||||
98 | ||||||
1. | 98 | |||||
2. | 108 | |||||
3. | 109 | |||||
4. | 114 | |||||
5. | 120 | |||||
6. | 120 | |||||
7. | 122 | |||||
8. | 123 | |||||
9. | 138 | |||||
10. | 139 | |||||
11. | 143 | |||||
12. | 146 | |||||
13. | 147 | |||||
14. | 148 | |||||
15. | 149 | |||||
16. | 155 | |||||
17. | 156 | |||||
18. | 157 | |||||
19. | 157 | |||||
20. | 158 |
statements and included an explanatory paragraph regarding the Company’s change in its method of accounting for recognition and measurement of equity securities in 2018.
/s/ DELOITTE & TOUCHE LLP
New York, NY
February 15, 2018
/s/ DELOITTE & TOUCHE LLP |
New York, NY |
February 11, 2020 |
/s/ DELOITTE
New York, NY
February 15, 2018
Casualty — Refer to Notes 1 and 8 to the consolidated financial statements.
○ | We developed a range of independent estimates of P&C claim and claim adjustment expense reserves and compared our estimates to the recorded reserves. |
○ | We compared our prior year estimates of expected incurred losses to actual experience during the most recent year to identify potential bias in the Company’s determination of P&C claim and claim adjustment expense reserves. |
○ | We independently recalculated a sample of LTC future policy benefit reserves and compared our estimates to the recorded reserves. |
○ | We evaluated the key assumptions applied in the GPV analysis, including comparing those assumptions to the Company’s historical experience, the underlying investment portfolio yield and market data. |
○ | We assessed the Company’s projection of future cash flows to evaluate the reasonableness of the 2019 charge related to unlocking LTC future policy benefit reserves to recognize a premium deficiency as a result of the most recently completed GPV. |
○ | Corroborating information used to identify impairment indicators through independent inquiries of offshore drilling marketing and operations personnel and by performing an independent assessment of potential indicators of impairment utilizing the individual drilling rig history, asset class history for dayrates, backlog and potential drilling rig opportunities. |
○ | Considering industry and analysts reports and the impact of macroeconomic factors, such as future oil and gas prices, on the Company’s process for identifying indicators of impairment. |
○ | Comparing the timing of impairments recorded by the Company with the timing of impairments recorded by the Company’s peers. |
○ | Evaluating the reasonableness of the dayrate assumptions utilized in the Company’s probability-weighted undiscounted cash flow analyses by evaluating potential drilling rig opportunities and considering industry reports and data. |
○ | Comparing the assumptions used in the Company’s previous undiscounted probability-weighted cash flow analyses to the assumptions used in the current undiscounted probability-weighted cash flow analyses to assess for management bias. |
/s/ DELOITTE & TOUCHE LLP |
New York, NY |
February 11, 2020 |
Assets: | ||||||||
December 31 | 2017 | 2016 | ||||||
(Dollar amounts in millions, except per share data) | ||||||||
Investments: | ||||||||
Fixed maturities, amortized cost of $38,861 and $38,947 | $ | 42,133 | $ | 41,494 | ||||
Equity securities, cost of $1,177 and $571 | 1,224 | 549 | ||||||
Limited partnership investments | 3,278 | 3,220 | ||||||
Other invested assets, primarily mortgage loans | 945 | 683 | ||||||
Short term investments | 4,646 | 4,765 | ||||||
Total investments | 52,226 | 50,711 | ||||||
Cash | 472 | 327 | ||||||
Receivables | 7,613 | 7,644 | ||||||
Property, plant and equipment | 15,427 | 15,230 | ||||||
Goodwill | 659 | 346 | ||||||
Other assets | 2,555 | 1,736 | ||||||
Deferred acquisition costs of insurance subsidiaries | 634 | 600 | ||||||
Total assets | $ | 79,586 | $ | 76,594 | ||||
Assets: |
December 31 | 2019 | 2018 | ||||||
(Dollar amounts in millions, except per share data) | ||||||||
Investments: | ||||||||
Fixed maturities, amortized cost of $38,157 and $38,234 | $ | $ | 39,699 | |||||
Equity securities, cost of $1,244 and $1,479 | 1,306 | 1,293 | ||||||
Limited partnership investments | 2,004 | 2,424 | ||||||
Other invested assets, primarily mortgage loans | 1,072 | 901 | ||||||
Short term investments | 4,628 | 3,869 | ||||||
Total investments | 51,250 | 48,186 | ||||||
Cash | 336 | 405 | ||||||
Receivables | 7,675 | 7,960 | ||||||
Property, plant and equipment | 15,568 | 15,511 | ||||||
Goodwill | 767 | 665 | ||||||
Deferred non-insurance warranty acquisition expenses | 2,840 | 2,513 | ||||||
Deferred acquisition costs of insurance subsidiaries | 662 | 633 | ||||||
Other assets | 3,145 | 2,443 | ||||||
Total assets | $ | 82,243 | $ | 78,316 | ||||
Liabilities and Equity: | ||||||||
December 31 | 2017 | 2016 | ||||||
(Dollar amounts in millions, except per share data) | ||||||||
Insurance reserves: | ||||||||
Claim and claim adjustment expense | $ | 22,004 | $ | 22,343 | ||||
Future policy benefits | 11,179 | 10,326 | ||||||
Unearned premiums | 4,029 | 3,762 | ||||||
Total insurance reserves | 37,212 | 36,431 | ||||||
Payable to brokers | 60 | 150 | ||||||
Short term debt | 280 | 110 | ||||||
Long term debt | 11,253 | 10,668 | ||||||
Deferred income taxes | 749 | 636 | ||||||
Other liabilities | 5,466 | 5,238 | ||||||
Total liabilities | 55,020 | 53,233 | ||||||
Commitments and contingent liabilities | ||||||||
Shareholders’ equity: | ||||||||
Preferred stock, $0.10 par value: | ||||||||
Authorized – 100,000,000 shares | ||||||||
Common stock, $0.01 par value: | ||||||||
Authorized – 1,800,000,000 shares | ||||||||
Issued – 332,487,815 and 336,621,358 shares | 3 | 3 | ||||||
Additionalpaid-in capital | 3,151 | 3,187 | ||||||
Retained earnings | 16,096 | 15,196 | ||||||
Accumulated other comprehensive loss | (26 | ) | (223) | |||||
19,224 | 18,163 | |||||||
Less treasury stock, at cost (400,000 shares) | (20 | ) | ||||||
Total shareholders’ equity | 19,204 | 18,163 | ||||||
Noncontrolling interests | 5,362 | 5,198 | ||||||
Total equity | 24,566 | 23,361 | ||||||
Total liabilities and equity | $ | 79,586 | $ | 76,594 | ||||
Liabilities and Equity: |
December 31 | 2019 | 2018 | ||||||
(Dollar amounts in millions, except per share data) | ||||||||
Insurance reserves: | ||||||||
Claim and claim adjustment expense | $ | 21,720 | $ | 21,984 | ||||
Future policy benefits | 12,311 | 10,597 | ||||||
Unearned premiums | 4,583 | 4,183 | ||||||
Total insurance reserves | 38,614 | 36,764 | ||||||
Payable to brokers | 108 | 42 | ||||||
Short term debt | 77 | 17 | ||||||
Long term debt | 11,456 | 11,359 | ||||||
Deferred income taxes | 1,168 | 841 | ||||||
Deferred non-insurance warranty revenue | 3,779 | 3,402 | ||||||
Other liabilities | 5,111 | 4,505 | ||||||
Total liabilities | 60,313 | 56,930 | ||||||
Commitments and contingent liabilities | ||||||||
Shareholders’ equity: | ||||||||
Preferred stock, $0.10 par value: | ||||||||
Authorized – 100,000,000 shares | ||||||||
Common stock, $0.01 par value: | ||||||||
Authorized – 1,800,000,000 shares | ||||||||
Issued – 291,210,222 and 312,169,189 shares | 3 | 3 | ||||||
Additional paid-in capital | 3,374 | 3,627 | ||||||
Retained earnings | 15,823 | 15,773 | ||||||
Accumulated other comprehensive loss | (68 | ) | (880 | ) | ||||
19,132 | 18,523 | |||||||
Less treasury stock, at cost (240,000 and 100,000 shares) | (13 | ) | (5 | ) | ||||
Total shareholders’ equity | 19,119 | 18,518 | ||||||
Noncontrolling interests | 2,811 | 2,868 | ||||||
Total equity | 21,930 | 21,386 | ||||||
Total liabilities and equity | $ | 82,243 | $ | 78,316 | ||||
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
(In millions, except per share data) | ||||||||||||
Revenues: | ||||||||||||
Insurance premiums | $ | 6,988 | $ | 6,924 | $ | 6,921 | ||||||
Net investment income | 2,182 | 2,135 | 1,866 | |||||||||
Investment gains (losses): | ||||||||||||
Other-than-temporary impairment losses | (14 | ) | (81 | ) | (156) | |||||||
Other net investment gains | 136 | 131 | 85 | |||||||||
Total investment gains (losses) | 122 | 50 | (71) | |||||||||
Contract drilling revenues | 1,451 | 1,525 | 2,360 | |||||||||
Other revenues | 2,992 | 2,471 | 2,339 | |||||||||
Total | 13,735 | 13,105 | 13,415 | |||||||||
Expenses: | ||||||||||||
Insurance claims and policyholders’ benefits | 5,310 | 5,283 | 5,384 | |||||||||
Amortization of deferred acquisition costs | 1,233 | 1,235 | 1,540 | |||||||||
Contract drilling expenses | 802 | 772 | 1,228 | |||||||||
Other operating expenses (Note 6) | 4,162 | 4,343 | 4,499 | |||||||||
Interest | 646 | 536 | 520 | |||||||||
Total | 12,153 | 12,169 | 13,171 | |||||||||
Income before income tax | 1,582 | 936 | 244 | |||||||||
Income tax (expense) benefit | (170 | ) | (220 | ) | 43 | |||||||
Net income | 1,412 | 716 | 287 | |||||||||
Amounts attributable to noncontrolling interests | (248 | ) | (62 | ) | (27) | |||||||
Net income attributable to Loews Corporation | $ | 1,164 | $ | 654 | $ | 260 | ||||||
Basic net income per common share | $ | 3.46 | $ | 1.93 | $ | 0.72 | ||||||
Diluted net income per common share | $ | 3.45 | $ | 1.93 | $ | 0.72 | ||||||
Dividends per share | $ | 0.25 | $ | 0.25 | $ | 0.25 | ||||||
Basic weighted average number of shares outstanding | 336.61 | 337.95 | 362.43 | |||||||||
Diluted weighted average number of shares outstanding | 337.50 | 338.31 | 362.69 |
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions, except per share data) | ||||||||||||
Revenues: | ||||||||||||
Insurance premiums | $ | 7,428 | $ | 7,312 | $ | 6,988 | ||||||
Net investment income | 2,355 | 1,817 | 2,182 | |||||||||
Investment gains (losses): | ||||||||||||
Other-than-temporary impairment losses | (44 | ) | (21 | ) | (14 | ) | ||||||
Other net investment gains (losses) | 93 | (36 | ) | 136 | ||||||||
Total investment gains (losses) | 49 | (57 | ) | 122 | ||||||||
Non-insurance warranty revenue | 1,161 | 1,007 | 390 | |||||||||
Operating revenues and other | 3,938 | 3,987 | 4,053 | |||||||||
Total | 14,931 | 14,066 | 13,735 | |||||||||
Expenses: | ||||||||||||
Insurance claims and policyholders’ benefits | 5,806 | 5,572 | 5,310 | |||||||||
Amortization of deferred acquisition costs | 1,383 | 1,335 | 1,233 | |||||||||
Non-insurance warranty expense | 1,082 | 923 | 299 | |||||||||
Operating expenses and other | 4,950 | 4,828 | 4,665 | |||||||||
Interest | 591 | 574 | 646 | |||||||||
Total | 13,812 | 13,232 | 12,153 | |||||||||
Income before income tax | 1,119 | 834 | 1,582 | |||||||||
Income tax expense | (248 | ) | (128 | ) | (170 | ) | ||||||
Net income | 871 | 706 | 1,412 | |||||||||
Amounts attributable to noncontrolling interests | 61 | (70 | ) | (248 | ) | |||||||
Net income attributable to Loews Corporation | $ | 932 | $ | 636 | $ | 1,164 | ||||||
Basic net income per common share | $ | 3.08 | $ | 1.99 | $ | 3.46 | ||||||
Diluted net income per common share | $ | 3.07 | $ | 1.99 | $ | 3.45 | ||||||
Basic weighted average number of shares outstanding | 302.70 | 319.06 | 336.61 | |||||||||
Diluted weighted average number of shares outstanding | 303.35 | 319.93 | 337.50 |
Statements.
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
(In millions) | ||||||||||||
Net income | $ | 1,412 | $ | 716 | $ | 287 | ||||||
Other comprehensive income (loss), after tax | ||||||||||||
Changes in: | ||||||||||||
Net unrealized gains (losses) on investments with other-than-temporary impairments | (5) | 3 | (9) | |||||||||
Net other unrealized gains (losses) on investments | 108 | 257 | (557) | |||||||||
Total unrealized gains (losses) onavailable-for-sale investments | 103 | 260 | (566) | |||||||||
Unrealized gains on cash flow hedges | 3 | 2 | 5 | |||||||||
Pension liability | 12 | 5 | (18) | |||||||||
Foreign currency translation | 100 | (114) | (139) | |||||||||
Other comprehensive income (loss) | 218 | 153 | (718) | |||||||||
Comprehensive income (loss) | 1,630 | 869 | (431) | |||||||||
Amounts attributable to noncontrolling interests | (269) | (81) | 53 | |||||||||
Total comprehensive income (loss) attributable to Loews Corporation | $ | 1,361 | $ | 788 | $ | (378) | ||||||
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Net income | $ | 871 | $ | 706 | $ | 1,412 | ||||||
Other comprehensive income (loss), after tax Changes in: | ||||||||||||
Net unrealized losses on investments with other-than-temporary impairments | (1 | ) | (14 | ) | (5 | ) | ||||||
Net other unrealized gains (losses) on investments | 949 | (798 | ) | 108 | ||||||||
Total unrealized gains (losses) on investments | 948 | (812 | ) | 103 | ||||||||
Unrealized gains (losses) on cash flow hedges | (11 | ) | 6 | 3 | ||||||||
Pension and postretirement benefits | (68 | ) | (2 | ) | 12 | |||||||
Foreign currency translation | 42 | (84 | ) | 100 | ||||||||
Other comprehensive income (loss) | 911 | (892 | ) | 218 | ||||||||
Comprehensive income (loss) | 1,782 | (186 | ) | 1,630 | ||||||||
Amounts attributable to noncontrolling interests | (38 | ) | 25 | (269 | ) | |||||||
Total comprehensive income (loss) attributable to Loews Corporation | $ | 1,744 | $ | (161 | ) | $ | 1,361 | |||||
Loews Corporation Shareholders | ||||||||||||||||||||||||||||
Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Common Held in | Noncontrolling Interests | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Balance, January 1, 2015 | $ | 24,650 | $ | 4 | $ | 3,481 | $ | 15,515 | $ | 280 | $ | - | $ | 5,370 | ||||||||||||||
Net income | 287 | 260 | 27 | |||||||||||||||||||||||||
Other comprehensive loss | (718 | ) | (638 | ) | (80) | |||||||||||||||||||||||
Dividends paid | (255 | ) | (90 | ) | (165) | |||||||||||||||||||||||
Issuance of equity securities by subsidiary | 115 | (2 | ) | 1 | 116 | |||||||||||||||||||||||
Purchases of subsidiary stock from noncontrolling interests | (31 | ) | 5 | (36) | ||||||||||||||||||||||||
Purchases of Loews treasury stock | (1,265 | ) | (1,265 | ) | ||||||||||||||||||||||||
Retirement of treasury stock | - | (1 | ) | (311 | ) | (953 | ) | 1,265 | ||||||||||||||||||||
Issuance of Loews common stock | 7 | 7 | ||||||||||||||||||||||||||
Stock-based compensation | 26 | 23 | 3 | |||||||||||||||||||||||||
Other | (6 | ) | (19 | ) | (1 | ) | 14 | |||||||||||||||||||||
Balance, December 31, 2015 | $ | 22,810 | $ | 3 | $ | 3,184 | $ | 14,731 | $ | (357 | ) | $ | - | $ | 5,249 | |||||||||||||
Net income | 716 | 654 | 62 | |||||||||||||||||||||||||
Other comprehensive income | 153 | 134 | 19 | |||||||||||||||||||||||||
Dividends paid | (218 | ) | (84 | ) | (134) | |||||||||||||||||||||||
Purchases of subsidiary stock from noncontrolling interests | (9 | ) | 3 | (12) | ||||||||||||||||||||||||
Purchases of Loews treasury stock | (134 | ) | (134 | ) | ||||||||||||||||||||||||
Retirement of treasury stock | - | (32 | ) | (102 | ) | 134 | ||||||||||||||||||||||
Stock-based compensation | 47 | 45 | 2 | |||||||||||||||||||||||||
Other | (4 | ) | (13 | ) | (3 | ) | 12 | |||||||||||||||||||||
Balance, December 31, 2016 | $ | 23,361 | $ | 3 | $ | 3,187 | $ | 15,196 | $ | (223 | ) | $ | - | $ | 5,198 | |||||||||||||
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, 2017 | $ | 23,361 | $ | 3 | $ | 3,187 | $ | 15,196 | $ | (223 | ) | $ | - | $ | 5,198 | |||||||||||||
Net income | 1,412 | 1,164 | 248 | |||||||||||||||||||||||||
Other comprehensive income | 218 | 197 | 21 | |||||||||||||||||||||||||
Dividends paid ($0.25 per share) | (223 | ) | (84 | ) | (139 | ) | ||||||||||||||||||||||
Purchases of Loews treasury stock | (237 | ) | (237 | ) | ||||||||||||||||||||||||
Retirement of treasury stock | 1 | (41 | ) | (175 | ) | 217 | ||||||||||||||||||||||
Stock-based compensation | 35 | 2 | 33 | |||||||||||||||||||||||||
Other | (1 | ) | 3 | (5 | ) | 1 | ||||||||||||||||||||||
Balance, December 31, 2017 | $ | 24,566 | $ | 3 | $ | 3,151 | $ | 16,096 | $ | (26 | ) | $ | (20 | ) | $ | 5,362 | ||||||||||||
Cumulative effect adjustments from changes in accounting standards | (91 | ) | (43 | ) | (28 | ) | (20 | ) | ||||||||||||||||||||
Balance, January 1, 2018, as adjusted | 24,475 | 3 | 3,151 | 16,053 | (54 | ) | (20 | ) | 5,342 | |||||||||||||||||||
Net income | 706 | 636 | 70 | |||||||||||||||||||||||||
Other comprehensive loss | (892 | ) | (797 | ) | (95 | ) | ||||||||||||||||||||||
Dividends paid ($0.25 per share) | (201 | ) | (80 | ) | (121 | ) | ||||||||||||||||||||||
Purchase of Boardwalk Pipelines common units | (1,718 | ) | 658 | (29 | ) | (2,347 | ) | |||||||||||||||||||||
Purchases of Loews treasury stock | (1,011 | ) | (1,011 | ) | ||||||||||||||||||||||||
Retirement of treasury stock | - | (195 | ) | (831 | ) | 1,026 | ||||||||||||||||||||||
Stock-based compensation | 31 | 19 | 12 | |||||||||||||||||||||||||
Other | (4 | ) | (6 | ) | (5 | ) | 7 | |||||||||||||||||||||
Balance, December 31, 2018 | $ | 21,386 | $ | 3 | $ | 3,627 | $ | 15,773 | $ | (880 | ) | $ | (5 | ) | $ | 2,868 | ||||||||||||
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, December 31, 2016 | $ | 23,361 | $ | 3 | $ | 3,187 | $ | 15,196 | $ | (223 | ) | $ | - | $ | 5,198 | |||||||||||||
Net income | 1,412 | 1,164 | 248 | |||||||||||||||||||||||||
Other comprehensive income | 218 | 197 | 21 | |||||||||||||||||||||||||
Dividends paid | (223 | ) | (84 | ) | (139) | |||||||||||||||||||||||
Purchases of Loews treasury stock | (237 | ) | (237 | ) | ||||||||||||||||||||||||
Retirement of treasury stock | 1 | (41 | ) | (175 | ) | 217 | ||||||||||||||||||||||
Stock-based compensation | 35 | 2 | 33 | |||||||||||||||||||||||||
Other | (1 | ) | 3 | (5 | ) | 1 | ||||||||||||||||||||||
Balance, December 31, 2017 | $ | 24,566 | $ | 3 | $ | 3,151 | $ | 16,096 | $ | (26 | ) | $ | (20 | ) | $ | 5,362 | ||||||||||||
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, December 31, 2018 | $ | 21,386 | $ | 3 | $ | 3,627 | $ | 15,773 | $ | (880 | ) | $ | (5 | ) | $ | 2,868 | ||||||||||||
Net income | 871 | 932 | (61 | ) | ||||||||||||||||||||||||
Other comprehensive income | 911 | 812 | 99 | |||||||||||||||||||||||||
Dividends paid ($0.25 per share) | (174 | ) | (76 | ) | (98 | ) | ||||||||||||||||||||||
Purchase of subsidiary stock from noncontrolling interests | | (23 | ) | (23 | ) | |||||||||||||||||||||||
Purchases of Loews treasury stock | (1,059 | ) | (1,059 | ) | ||||||||||||||||||||||||
Retirement of treasury stock | - | (248 | ) | (803 | ) | 1,051 | ||||||||||||||||||||||
Stock-based compensation | 27 | 4 | 23 | |||||||||||||||||||||||||
Other | (9 | ) | (9 | ) | (3 | ) | 3 | |||||||||||||||||||||
Balance, December 31, 2019 | $ | 21,930 | $ | 3 | $ | 3,374 | $ | 15,823 | $ | (68 | ) | $ | (13 | ) | $ | 2,811 | ||||||||||||
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
(In millions) | ||||||||||||
Operating Activities: | ||||||||||||
Net income | $ | 1,412 | $ | 716 | $ | 287 | ||||||
Adjustments to reconcile net income to net cash provided (used) by operating activities: | ||||||||||||
Investment (gains) losses | (122 | ) | (50 | ) | 71 | |||||||
Equity method investees | 25 | 221 | 182 | |||||||||
Amortization of investments | (40 | ) | (27 | ) | 17 | |||||||
Depreciation and amortization | 874 | 841 | 955 | |||||||||
Impairment of goodwill | 20 | |||||||||||
Asset impairments | 106 | 697 | 865 | |||||||||
Provision for deferred income taxes | (47 | ) | 102 | (225) | ||||||||
Othernon-cash items | 164 | 73 | 105 | |||||||||
Changes in operating assets and liabilities, net: | ||||||||||||
Receivables | 93 | 24 | 120 | |||||||||
Deferred acquisition costs | (24 | ) | (8 | ) | 311 | |||||||
Insurance reserves | 22 | 237 | 241 | |||||||||
Other assets | (95 | ) | (71 | ) | (43) | |||||||
Other liabilities | 114 | 26 | (33) | |||||||||
Trading securities | 108 | (528 | ) | 674 | ||||||||
Net cash flow operating activities | 2,590 | 2,253 | 3,547 | |||||||||
Investing Activities: | ||||||||||||
Purchases of fixed maturities | (9,065 | ) | (9,827 | ) | (8,675) | |||||||
Proceeds from sales of fixed maturities | 5,438 | 5,332 | 4,390 | |||||||||
Proceeds from maturities of fixed maturities | 3,641 | 3,219 | 4,095 | |||||||||
Purchases of limited partnership investments | (171 | ) | (355 | ) | (188) | |||||||
Proceeds from sales of limited partnership investments | 212 | 327 | 174 | |||||||||
Purchases of property, plant and equipment | (1,031 | ) | (1,450 | ) | (1,555) | |||||||
Acquisitions | (1,218 | ) | (79 | ) | (157) | |||||||
Dispositions | 79 | 330 | 33 | |||||||||
Change in short term investments | (167 | ) | 158 | 120 | ||||||||
Other, net | (373 | ) | 158 | (172) | ||||||||
Net cash flow investing activities | (2,655 | ) | (2,187 | ) | (1,935) |
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Operating Activities: | ||||||||||||
Net income | $ | 871 | $ | 706 | $ | 1,412 | ||||||
Adjustments to reconcile net income to net cash provided (used) by operating activities: | ||||||||||||
Investment (gains) losses | (49 | ) | 57 | (122) | ||||||||
Equity method investees | 20 | 572 | 25 | |||||||||
Amortization of investments | (89 | ) | (70 | ) | (40) | |||||||
Depreciation and amortization | 943 | 912 | 874 | |||||||||
Asset impairments | 99 | 44 | 106 | |||||||||
Provision for deferred income taxes | 70 | 86 | (47) | |||||||||
Other non-cash items | 87 | 72 | 164 | |||||||||
Changes in operating assets and liabilities, net: | ||||||||||||
Receivables | 114 | (131 | ) | 93 | ||||||||
Deferred acquisition costs | (26 | ) | (6 | ) | (24) | |||||||
Insurance reserves | 358 | 482 | 22 | |||||||||
Other assets | (356 | ) | (102 | ) | (95) | |||||||
Other liabilities | 193 | (102 | ) | 114 | ||||||||
Trading securities | (494 | ) | 1,702 | 108 | ||||||||
Net cash flow provided by operating activities | 1,741 | 4,222 | 2,590 | |||||||||
Investing Activities: | ||||||||||||
Purchases of fixed maturities | (8,661 | ) | (10,785 | ) | (9,065) | |||||||
Proceeds from sales of fixed maturities | 5,842 | 8,408 | 5,438 | |||||||||
Proceeds from maturities of fixed maturities | 2,997 | 2,370 | 3,641 | |||||||||
Purchases of limited partnership investments | (198 | ) | (420 | ) | (171) | |||||||
Proceeds from sales of limited partnership investments | 742 | 470 | 212 | |||||||||
Purchases of property, plant and equipment | (1,041 | ) | (995 | ) | (1,031) | |||||||
Acquisitions | (257 | ) | (37 | ) | (1,218) | |||||||
Dispositions | 140 | 113 | 79 | |||||||||
Change in short term investments | (57 | ) | (339 | ) | (167) | |||||||
Other, net | (178 | ) | (229 | ) | (373) | |||||||
Net cash flow used by investing activities | (671 | ) | (1,444 | ) | (2,655) | |||||||
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
(In millions) | ||||||||||||
Financing Activities: | ||||||||||||
Dividends paid | $ | (84 | ) | $ | (84 | ) | $ | (90) | ||||
Dividends paid to noncontrolling interests | (139 | ) | (134 | ) | (165) | |||||||
Purchases of subsidiary stock from noncontrolling interests | (8 | ) | (29) | |||||||||
Purchases of Loews treasury stock | (216 | ) | (134 | ) | (1,265) | |||||||
Issuance of Loews common stock | 7 | |||||||||||
Proceeds from sale of subsidiary stock | 114 | |||||||||||
Principal payments on debt | (2,411 | ) | (3,418 | ) | (1,929) | |||||||
Issuance of debt | 3,067 | 3,614 | 1,828 | |||||||||
Other, net | (16 | ) | (2 | ) | 4 | |||||||
Net cash flow financing activities | 201 | (166 | ) | (1,525) | ||||||||
Effect of foreign exchange rate on cash | 9 | (13 | ) | (11) | ||||||||
Net change in cash | 145 | (113 | ) | 76 | ||||||||
Cash, beginning of year | 327 | 440 | 364 | |||||||||
Cash, end of year | $ | 472 | $ | 327 | $ | 440 | ||||||
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Financing Activities: | ||||||||||||
Dividends paid | $ | (76 | ) | $ | (80 | ) | $ | (84) | ||||
Dividends paid to noncontrolling interests | (98 | ) | (121 | ) | (139) | |||||||
Purchase of Boardwalk Pipeline common units | (1,504 | ) | ||||||||||
Purchases of Loews treasury stock | (1,051 | ) | (1,026 | ) | (216) | |||||||
Purchases of subsidiary stock from noncontrolling interests | (23 | ) | ||||||||||
Principal payments on debt | (1,956 | ) | (1,043 | ) | (2,411) | |||||||
Issuance of debt | 2,076 | 865 | 3,067 | |||||||||
Other, net | (16 | ) | 74 | (16) | ||||||||
Net cash flow (used) provided by financing activities | (1,144 | ) | (2,835 | ) | 201 | |||||||
Effect of foreign exchange rate on cash | 5 | (10 | ) | 9 | ||||||||
Net change in cash | (69 | ) | (67 | ) | 145 | |||||||
Cash, beginning of year | 405 | 472 | 327 | |||||||||
Cash, end of year | $ | 336 | $ | 405 | $ | 472 | ||||||
A
The focus
CNA performs the discounted cash flow analysis using stressed scenarios to determine future expectations regarding recoverability. Significant assumptions enter into these cash flow projections including delinquency rates, probable risk of default, loss severity upon a default, over collateralization and interest coverage triggers and credit support from lower level tranches.
retain its investment for a period of time sufficient to allow for an anticipated recovery in value and (iv) general market conditions and industry or sector specific outlook.
asset may not be recoverable.
Year Ended December 31 | 2017 | 2016 | ||||||||||
(In millions) | ||||||||||||
Total assets | $ | 1,703 | $ | 1,749 | ||||||||
Total liabilities | 1,347 | 1,444 | ||||||||||
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
Revenues | $ | 731 | $ | 693 | $ | 606 | ||||||
Net income | 261 | 80 | 71 |
Year Ended December 31 | 2019 | 2018 | ||||||
(In millions) | ||||||||
Total assets | $ 2,261 | $ 1,924 | ||||||
Total liabilities | 1,727 | 1,451 |
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
Revenues | $ 804 | $ 731 | $ 731 | |||||||||
Net income | 106 | 114 | 261 |
2018.
periodic evaluations of aged receivables, historical business default data, management’s experience and current economic conditions. Insurance receivables and any related allowance are written off after collection efforts are exhausted or a negotiated settlement is reached.
Contract drilling
The majority of Boardwalk Pipelines’ revenues are from firm service contracts which are accounted for as a single promise to stand ready each month of the contract term to provide the committed capacity for either transportation or storage services. The transaction price is comprised of a fixed fee based on the capacity reserved plus a usage fee paid on the volume of commodity transported or injected and withdrawn from storage. Both the fixed and the usage fees are allocated to the single performance obligation of providing transportation or storage service and recognized over time as control is passed to the customer. These service contracts can range in term from one to 20 years and are invoiced monthly.
Guaranty fund and other insurance-related2018.
allowance analysis. Changes in the allowance for doubtful accounts on reinsurance receivables are presented as a component of Insurance claims and policyholders’ benefits on the Consolidated Statements of Income.
Reinsurance contracts that do not effectively transfer the economic risk of loss on the underlying policies are recorded using the deposit method of accounting, which requires that premium paid or received by the ceding company or assuming company be accounted for as a deposit asset or liability. CNA had $8 million and $3 million recorded as deposit assets at December 31, 2017 and 2016, and $4 million and $6 million recorded as deposit liabilities as of December 31, 2017 and 2016. Income on reinsurance contracts accounted for under the deposit method is recognized using an effective yield based on the anticipated timing of payments and the remaining life of the contract. When the anticipated timing of payments changes, the effective yield is recalculated to reflect actual payments to date and the estimated timing of future payments. The deposit asset or liability is adjusted to the amount that would have existed had the new effective yield been applied since the inception of the contract.
transfer and the change in the deferred gain is recognized in earnings.
Deferred acquisition costs related
Insurance claims and policyholders’ benefits on the Consolidated Statements of Income and Other liabilities on the Consolidated Balance Sheets.
Years | ||||
Pipeline equipment | 30 to 50 | |||
Offshore drilling equipment | 15 to 30 | |||
Other | 3 to 40 |
–Long-lived Companies with complex capital structures are required to present basic and diluted net income per share. Basic net income per share excludes dilution and is computed by dividing net income 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.2016 and 2015, approximately 0.7 million, 0.9 million 0.4 million and 0.30.9 million potential shares attributable to issuances and exercises under the Loews Corporation 2016 Incentive Compensationthose same periods, approximatelythe years ended December 31, 2019 and 2018, there were 0 shares and for the year ended December 31, 2017, there were 0.4 million, 3.7 million and 4.8 million shares attributable to employee stock-based compensation awards were not included inexcluded from the calculation of diluted net income per share because the effect would have been antidilutive.
2017.
Recently issued ASUs –In Maybalance sheet.
The standard excludesexcluded from its scope the accounting for insurance contracts, financial instruments and certain other agreements that are subject to other guidance in the FASB Accounting Standards Codification, which limitslimited the impact of this change in accounting for the Company. Upon adoption,The Company adopted the Company expectsupdated accounting guidance using the impact to be related primarily to revenue on CNA’s warranty products and services, which will be recognized more slowly under the new guidance than under the current revenue recognition pattern. At adoption, the Company anticipatesmodified retrospective method, with a cumulative effect adjustment that will decreaseto the opening balance sheet. At adoption, the cumulative effect adjustment decreased beginning Retained earnings by approximately $58$62 million (after tax and noncontrolling interests). In addition, Other revenues, resulted in a deferred tax asset of $23 million and Other operatingincreased Deferred
Statements of Income will increase significantly for those contracts for which CNA has concluded it is a principal, as the retail sellers’mark-up will now be reflected as revenue and commission expense. The estimated annualgross-up of other revenues and other operating expenses will be approximately $500 million. The relatedgross-up effect on the Consolidated Balance Sheet at adoption will be an increase of Other assets and Other liabilities of approximately $1.7 billion. Based on the Company’s assessment, the impact of adoption of the updated guidance will not have a material effect on its results of operations or financial position.
In January of 2016, the FASB issuedCompany adopted ASU “FinancialLiabilities.” Liabilities” (“ASUrequires changes to the reporting model for financial instruments. The guidance is effective for interim and annual periods beginning after December 15, 2017. The Company expects the primary change to be the requirement for CNA’s equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. The Company will recognize a cumulative effect adjustment to Retained earnings and AOCI for the amount of unrealized investment gains and losses, after tax and noncontrolling interests, related toavailable-for-sale equity securities at the date of adoption. At adoption, the Company estimates this new guidance will result in an increase to Retained earnings and a decrease to AOCI of $25 million (after tax and noncontrolling interests). Subsequent as an increase to adoption, changes inbeginning Retained earnings.
In February of 2016, the FASB issued ASU2016-02, “Leases (Topic 842).Assets Other Than Inventory.” The updated guidance requires lessees to recognize leaseamended the accounting for the income tax consequences of intra-entity transfers of assets and lease liabilities for most operating leases. In addition, theother than inventory. The Company adopted this updated guidance requires that lessors separate leaseusing the modified retrospective approach with a cumulative effect adjustment of $9 million (after noncontrolling interests) as a decrease to beginning Retained earnings with an offset to a deferred income tax liability.
investments.
For
holds, directly or indirectly, all of the limited partnership interests of Boardwalk Pipelines.
million and net income was not significant. For the year ended December 31, 2016, Consolidated Container reported total revenues of $788 million.
The acquisition was funded with approximately $620$ 620
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Customer relationships were valued using an income approach, which values the intangible asset at the present value of the related incremental after tax cash flows. The customer relationships intangible asset will be amortized over a useful life of 21 years. The trade name was valued using an income approach, which values the intangible asset based on an estimate of cost savings, or a relief from royalty. The trade name will be amortized over a useful life of 10 years. Goodwill includes value associated with the assembled workforce and Consolidated Container’s future growth and profitability. The assets acquired and liabilities assumed as part of the acquisition did not result in a step up of tax basis and approximately $94 million of goodwill is deductible for tax purposes. See Note 7 for additional information on goodwill and intangible assets as of December 31, 2017.
Loews Hotels & Co
In 2017, Loews Hotels & Co received proceeds of $31 million for the sale of two hotels, in which Loews Hotels & Co had joint venture interests. Loews Hotels & Co paid approximately $84 million to acquire a hotel in 2016 and approximately $330 million to acquire two hotels in 2015. These acquisitions were funded with a combination of cash and property-level debt.
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||
| ||||||||||
(In millions) | ||||||||||
Fixed maturity securities | $ | 1,812 | $ | 1,819 | $ 1,751 | |||||
Limited partnership investments | 277 | 199 | 119 | |||||||
Short term investments | 18 | 9 | 11 | |||||||
Equity securities | 12 | 10 | 12 | |||||||
Income from trading portfolio (a) | 87 | 112 | 2 | |||||||
Other | 35 | 45 | 34 | |||||||
| ||||||||||
Total investment income | 2,241 | 2,194 | 1,929 | |||||||
Investment expenses | (59 | ) | (59 | ) | (63) | |||||
| ||||||||||
Net investment income | $ | 2,182 | $ | 2,135 | $ 1,866 | |||||
|
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Fixed maturity securities | $ | 1,817 | $ | 1,795 | $ | 1,812 | ||||||
Limited partnership investments | 204 | 22 | 277 | |||||||||
Short term investments | 52 | 43 | 18 | |||||||||
Equity securities | 85 | 18 | 12 | |||||||||
Income (loss) from trading portfolio (a) | 216 | (54 | ) | 87 | ||||||||
Other | 56 | 54 | 35 | |||||||||
Total investment income | 2,430 | 1,878 | 2,241 | |||||||||
Investment expenses | (75 | ) | (61 | ) | (59 | ) | ||||||
Net investment income | $ | 2,355 | $ | 1,817 | $ | 2,182 | ||||||
(a) | Net unrealized gains (losses) related to changes in fair value on |
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||
| ||||||||||
(In millions) | ||||||||||
Fixed maturity securities | $ | 122 | $ | 54 | $ (66) | |||||
Equity securities | (5 | ) | (23) | |||||||
Derivative instruments | (4 | ) | (2 | ) | 10 | |||||
Short term investments and other | 4 | 3 | 8 | |||||||
| ||||||||||
Investment gains (losses) (a) | $ | 122 | $ | 50 | $ (71) | |||||
|
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Fixed maturity securities | $ | (6 | ) | $ | 4 | $ | 122 | |||||
Equity securities | 66 | (74 | ) | |||||||||
Derivative instruments | (11 | ) | 9 | (4 | ) | |||||||
Short term investments and other | 4 | 4 | ||||||||||
Investment gains (losses) (a) | $ | 49 | $ | (57 | ) | $ | 122 | |||||
(a) | Gross investment gains onavailable-for-sale securities were investment losses onavailable-for-sale securities were$ 131, $164 and $65investment g of $66 were recognized due to the change in fair value of non-redeemable preferred stock still held for the year ended December 31, 2019.ains Net investment losses of $73 were recognized due to the change in fair value of non-redeemable preferred stock still held for the year ended December 31, 2018. |
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||
| ||||||||||
(In millions) | ||||||||||
Fixed maturity securities | $ | 728 | $ | 225 | $ (1,114) | |||||
Equity securities | 32 | (2 | ) | (6) | ||||||
Other | (2 | ) | 1 | 1 | ||||||
| ||||||||||
Total net change in unrealized gains (losses) onavailable-for-sale investments | $ | 758 | $ | 224 | $ (1,119) | |||||
|
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Fixed maturity securities | $ | 2,620 | $ | (1,811 | ) | $ | 728 | |||||
Equity securities (a) | 32 | |||||||||||
Other | (2 | ) | ||||||||||
Total net change in unrealized gains (losses) on investments | $ | 2,620 | $ | (1,811 | ) | $ | 758 | |||||
(a) | Due to the adoption of ASU 2016-01 on January 1, 2018, the change in fair value of equity securities is now recognized through the income statement. See Note 1 for further discussion on the standard. |
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||
| ||||||||||
(In millions) | ||||||||||
Fixed maturity securitiesavailable-for-sale: | ||||||||||
Corporate and other bonds | $ | 12 | $ | 59 | $ 104 | |||||
States, municipalities and political subdivisions | 18 | |||||||||
Asset-backed: | ||||||||||
Residential mortgage-backed | 1 | 10 | 8 | |||||||
Other asset-backed | 3 | 1 | ||||||||
| ||||||||||
Total asset-backed | 1 | 13 | 9 | |||||||
| ||||||||||
Total fixed maturitiesavailable-for-sale | 13 | 72 | 131 | |||||||
Equity securitiesavailable-for-sale | 1 | 9 | 25 | |||||||
| ||||||||||
Net OTTI losses recognized in earnings | $ | 14 | $ | 81 | $ 156 | |||||
|
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Fixed maturity securities available-for-sale: | ||||||||||||
Corporate and other bonds | $ | 33 | $ | 12 | $ | 12 | ||||||
Asset-backed | 11 | 9 | 1 | |||||||||
Total fixed maturity securities available-for-sale | 44 | 21 | 13 | |||||||||
Equity securities available-for-sale | 1 | |||||||||||
Net OTTI losses recognized in earnings | $ | 44 | $ | 21 | $ | 14 | ||||||
Cost or | Gross | Gross | Unrealized | |||||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | OTTI Losses | ||||||||||||||||
December 31, 2017 | Cost | Gains | Losses | Fair Value | (Gains) | |||||||||||||||
| ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||
Corporate and other bonds | $ | 17,210 | $ | 1,625 | $ | 28 | $ | 18,807 | ||||||||||||
States, municipalities and political subdivisions | 12,478 | 1,551 | 2 | 14,027 | $ (11) | |||||||||||||||
Asset-backed: | ||||||||||||||||||||
Residential mortgage-backed | 5,043 | 109 | 32 | 5,120 | (27) | |||||||||||||||
Commercial mortgage-backed | 1,840 | 46 | 14 | 1,872 | ||||||||||||||||
Other asset-backed | 1,083 | 16 | 5 | 1,094 | ||||||||||||||||
| ||||||||||||||||||||
Total asset-backed | 7,966 | 171 | 51 | 8,086 | (27) | |||||||||||||||
U.S. Treasury and obligations of government- sponsored enterprises | 111 | 2 | 4 | 109 | ||||||||||||||||
Foreign government | 437 | 9 | 2 | 444 | ||||||||||||||||
Redeemable preferred stock | 10 | 1 | 11 | |||||||||||||||||
| ||||||||||||||||||||
Fixed maturitiesavailable-for-sale | 38,212 | 3,359 | 87 | 41,484 | (38) | |||||||||||||||
Fixed maturities trading | 649 | 2 | 2 | 649 | ||||||||||||||||
| ||||||||||||||||||||
Total fixed maturities | 38,861 | 3,361 | 89 | 42,133 | (38) | |||||||||||||||
| ||||||||||||||||||||
Equity securities: | ||||||||||||||||||||
Common stock | 21 | 7 | 1 | 27 | ||||||||||||||||
Preferred stock | 638 | 31 | 1 | 668 | ||||||||||||||||
| ||||||||||||||||||||
Equity securitiesavailable-for-sale | 659 | 38 | 2 | 695 | - | |||||||||||||||
Equity securities trading | 518 | 92 | 81 | 529 | ||||||||||||||||
| ||||||||||||||||||||
Total equity securities | 1,177 | 130 | 83 | 1,224 | - | |||||||||||||||
| ||||||||||||||||||||
Total | $ | 40,038 | $ | 3,491 | $ | 172 | $ | 43,357 | $ (38) | |||||||||||
|
(In millions) Fixed maturity securities: Corporate and other bonds States, municipalities and political subdivisions Asset-backed: Residential mortgage-backed Commercial mortgage-backed Other asset-backed Total asset-backed U.S. Treasury and obligations of government-sponsored enterprises Foreign government Redeemable preferred stock Fixed maturitiesavailable-for-sale Fixed maturities trading Total fixed maturities Equity securities: Common stock Preferred stock Equity securitiesavailable-for-sale Equity securities trading Total equity securities Total December 31, 2016 Cost or
Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Estimated
Fair Value Unrealized
OTTI Losses
(Gains) $ 17,711 $ 1,323 $ 76 $ 18,958 $ (1) 12,060 1,213 33 13,240 (16) 5,004 120 51 5,073 (28) 2,016 48 24 2,040 1,022 8 5 1,025 8,042 176 80 8,138 (28) 83 10 93 435 13 3 445 18 1 19 38,349 2,736 192 40,893 (45) 598 3 601 38,947 2,739 192 41,494 (45) 13 6 19 93 2 4 91 106 8 4 110 - 465 60 86 439 571 68 90 549 - $ 39,518 $ 2,807 $ 282 $ 42,043 $ (45)
December 31, 2019 | Cost Amortized Cost | Gross Unrealized Gains | Gross Unrealized Loss es | Estimated Fair Value | Unrealized OTTI (Gains) | |||||||||||||||
(In millions) | ||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||
Corporate and other bonds | $ | 19,789 | $ | 2,292 | $ | 32 | $ | 22,049 | ||||||||||||
States, municipalities and political subdivisions | 9,093 | 1,559 | 10,652 | |||||||||||||||||
Asset-backed: | ||||||||||||||||||||
Residential mortgage-backed | 4,387 | 133 | 1 | 4,519 | $ | ) | ||||||||||||||
Commercial mortgage-backed | 2,265 | 86 | 5 | 2,346 | 1 | |||||||||||||||
Other asset-backed | 1,925 | 41 | 4 | 1,962 | (3 | ) | ||||||||||||||
Total asset-backed | 8,577 | 260 | 10 | 8,827 | (19) | |||||||||||||||
U.S. Treasury and obligations of government- | 146 | 1 | 2 | 145 | ||||||||||||||||
Foreign government | 491 | 14 | 1 | 504 | ||||||||||||||||
Redeemable preferred stock | 10 | 10 | ||||||||||||||||||
Fixed maturities available-for-sale | 38,106 | 4,126 | 45 | 42,187 | (19) | |||||||||||||||
Fixed maturities trading | 51 | 2 | 53 | |||||||||||||||||
Total fixed maturities | $ | 38,157 | $ | 4,128 | $ | 45 | $ | 42,240 | $ (19) | |||||||||||
December 31, 2018 | Cost or Amortized Cost | Gross Unrealized Gains | Gross Losses | Estimated Fair Value | Unrealized OTTI Losses (Gains) | |||||||||||||||
(In millions) | ||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||
Corporate and other bonds | $ | 18,764 | $ | 791 | $ | 395 | $ | 19,160 | ||||||||||||
States, municipalities and political subdivisions | 9,681 | 1,076 | 9 | 10,748 | ||||||||||||||||
Asset-backed: | ||||||||||||||||||||
Residential mortgage-backed | 4,815 | 68 | 57 | 4,826 | $ (20 | ) | ||||||||||||||
Commercial mortgage-backed | 2,200 | 28 | 32 | 2,196 | ||||||||||||||||
Other asset-backed | 1,975 | 11 | 24 | 1,962 | ||||||||||||||||
Total asset-backed | 8,990 | 107 | 113 | 8,984 | (20 | ) | ||||||||||||||
U.S. Treasury and obligations of government-sponsored enterprises | 156 | 3 | 159 | |||||||||||||||||
Foreign government | 480 | 5 | 4 | 481 | ||||||||||||||||
Redeemable preferred stock | 10 | 10 | ||||||||||||||||||
Fixed maturities available-for-sale | 38,081 | 1,982 | 521 | 39,542 | (20 | ) | ||||||||||||||
Fixed maturities trading | 153 | 4 | 157 | |||||||||||||||||
Total fixed maturities | $ | 38,234 | $ | 1,986 | $ | 521 | $ | 39,699 | $ | (20 | ) | |||||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
|
| |||||||||||||||||||||||
December 31, 2017 | 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 | $ 1,354 | $ 21 | $ 168 | $ 7 | $ 1,522 | $ 28 | ||||||||||||||||||
States, municipalities and political subdivisions | 72 | 1 | 85 | 1 | 157 | 2 | ||||||||||||||||||
Asset-backed: | ||||||||||||||||||||||||
Residential mortgage-backed | 1,228 | 5 | 947 | 27 | 2,175 | 32 | ||||||||||||||||||
Commercial mortgage-backed | 403 | 4 | 212 | 10 | 615 | 14 | ||||||||||||||||||
Other asset-backed | 248 | 3 | 18 | 2 | 266 | 5 | ||||||||||||||||||
| ||||||||||||||||||||||||
Total asset-backed | 1,879 | 12 | 1,177 | 39 | 3,056 | 51 | ||||||||||||||||||
U.S. Treasury and obligations of government- | 49 | 2 | 21 | 2 | 70 | 4 | ||||||||||||||||||
Foreign government | 166 | 2 | 4 | 170 | 2 | |||||||||||||||||||
| ||||||||||||||||||||||||
Total fixed maturity securities | 3,520 | 38 | 1,455 | 49 | 4,975 | 87 | ||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Common stock | 7 | 1 | 7 | 1 | ||||||||||||||||||||
Preferred stock | 93 | 1 | 93 | 1 | ||||||||||||||||||||
| ||||||||||||||||||||||||
Total equity securities | 100 | 2 | - | - | 100 | 2 | ||||||||||||||||||
| ||||||||||||||||||||||||
Total | $ 3,620 | $ 40 | $ 1,455 | $ 49 | $ 5,075 | $ 89 | ||||||||||||||||||
|
Fixed maturity securities: Corporate and other bonds States, municipalities and political subdivisions Asset-backed: Residential mortgage-backed Commercial mortgage-backed Other asset-backed Total asset-backed U.S. Treasury and obligations of government- Foreign government Total fixed maturity securities Equity securities Total Less than 12 Months 12 Months or Longer Total Gross Gross Gross Estimated Unrealized Estimated Unrealized Estimated Unrealized December 31, 2016 Fair Value Losses Fair Value Losses Fair Value Losses $ 2,615 $ 61 $ 254 $ 15 $ 2,869 $ 76 959 32 23 1 982 33 2,136 44 201 7 2,337 51 756 22 69 2 825 24 398 5 24 422 5 3,290 71 294 9 3,584 80
sponsored enterprises 5 5 108 3 108 3 6,977 167 571 25 7,548 192 12 13 4 25 4 $ 6,989 $ 167 $ 584 $ 29 $ 7,573 $ 196
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
December 31, 2019 | Estimated Fair V alue | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | ||||||||||||||||||
(In millions ) | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
Corporate and other bonds | $ | 914 | $ | 21 | $ | 186 | $ | 11 | $ | 1,100 | $ | 32 | ||||||||||||
States, municipalities and political subdivisions | 34 | 34 | ||||||||||||||||||||||
Asset-backed: | ||||||||||||||||||||||||
Residential mortgage-backed | 249 | 1 | 30 | 279 | 1 | |||||||||||||||||||
Commercial mortgage-backed | 381 | 3 | 20 | 2 | 401 | 5 | ||||||||||||||||||
Other asset-backed | 449 | 3 | 33 | 1 | 482 | 4 | ||||||||||||||||||
Total asset-backed | 1,079 | 7 | 83 | 3 | 1,162 | 10 | ||||||||||||||||||
U.S. Treasury and obligations of government-sponsored enterprises | 62 | 2 | 2 | 64 | 2 | |||||||||||||||||||
Foreign government | 59 | 1 | 1 | 60 | 1 | |||||||||||||||||||
Total fixed maturity securities | $ | 2,148 | $ | 31 | $ | 272 | $ | 14 | $ | 2,420 | $ | 45 | ||||||||||||
December 31, 2018 | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
Corporate and other bonds | $ | 8,543 | $ | 340 | $ | 825 | $ | 55 | $ | 9,368 | $ | 395 | ||||||||||||
States, municipalities and political subdivisions | 517 | 8 | 5 | 1 | 522 | 9 | ||||||||||||||||||
Asset-backed: | ||||||||||||||||||||||||
Residential mortgage-backed | 1,932 | 23 | 1,119 | 34 | 3,051 | 57 | ||||||||||||||||||
Commercial mortgage-backed | 728 | 10 | 397 | 22 | 1,125 | 32 | ||||||||||||||||||
Other asset-backed | 834 | 21 | 125 | 3 | 959 | 24 | ||||||||||||||||||
Total asset-backed | 3,494 | 54 | 1,641 | 59 | 5,135 | 113 | ||||||||||||||||||
U.S. Treasury and obligations of government-sponsored enterprises | 21 | 19 | 40 | |||||||||||||||||||||
Foreign government | 114 | 2 | 124 | 2 | 238 | 4 | ||||||||||||||||||
Total fixed maturity securities | $ | 12,689 | $ | 404 | $ | 2,614 | $ | 117 | $ | 15,303 | $ | 521 | ||||||||||||
2019.
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
| ||||||||||||
(In millions) | ||||||||||||
Beginning balance of credit losses on fixed maturity securities | $ | 36 | $ | 53 | $ | 62 | ||||||
Reductions for securities sold during the period | (9 | ) | (16 | ) | (9) | |||||||
Reductions for securities the Company intends to sell or more | (1 | ) | ||||||||||
| ||||||||||||
Ending balance of credit losses on fixed maturity securities | $ | 27 | $ | 36 | $ | 53 | ||||||
|
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Beginning balance of credit losses on fixed maturity securities | $ | 18 | $ | 27 | $ | 36 | ||||||
Reductions for securities sold during the period | (8 | ) | (9 | ) | (9 | ) | ||||||
Ending balance of credit losses on fixed maturity securities | $ | 10 | $ | 18 | $ | 27 | ||||||
December 31 | 2017 | 2016 | ||||||||||||||
| ||||||||||||||||
Cost or | Cost or | |||||||||||||||
Amortized | Estimated | Amortized | Estimated | |||||||||||||
Cost | Fair Value | Cost | Fair Value | |||||||||||||
| ||||||||||||||||
(In millions) | ||||||||||||||||
Due in one year or less | $ 1,135 | $ 1,157 | $ 1,779 | $ 1,828 | ||||||||||||
Due after one year through five years | 8,165 | 8,501 | 7,566 | 7,955 | ||||||||||||
Due after five years through ten years | 16,060 | 16,718 | 15,892 | 16,332 | ||||||||||||
Due after ten years | 12,852 | 15,108 | 13,112 | 14,778 | ||||||||||||
| ||||||||||||||||
Total | $ 38,212 | $ 41,484 | $ 38,349 | $ 40,893 | ||||||||||||
|
December 31 | 2019 | 2018 | ||||||||||||||
Cost Cost | Estimated Fair Value | Cost Cost | Estimated Fair Value | |||||||||||||
(In millions) | ||||||||||||||||
Due in one year or less | $ | 1,334 | $ | 1,356 | $ | 1,350 | $ | 1,359 | ||||||||
Due after one year through five years | 9,746 | 10,186 | 7,979 | 8,139 | ||||||||||||
Due after five years through ten years | 14,892 | 15,931 | 16,859 | 16,870 | ||||||||||||
Due after ten years | 12,134 | 14,714 | 11,893 | 13,174 | ||||||||||||
Total | $ | 38,106 | $ | 42,187 | $ | 38,081 | $ | 39,542 | ||||||||
2019.
While the Company generally does not invest in highly leveraged partnerships, there2017.
December 31 | 2017 | 2016 | ||||||||||||||||||||||
| ||||||||||||||||||||||||
Contractual/ | Contractual/ | |||||||||||||||||||||||
Notional | Estimated Fair Value | Notional | Estimated Fair Value | |||||||||||||||||||||
Amount | Asset | (Liability) | Amount | Asset | (Liability) | |||||||||||||||||||
| ||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
With hedge designation: | ||||||||||||||||||||||||
Interest rate swaps | $ | 500 | $ | 4 | ||||||||||||||||||||
Without hedge designation: | ||||||||||||||||||||||||
Equity markets: | ||||||||||||||||||||||||
Options – purchased | 224 | 12 | $ 223 | $ 14 | ||||||||||||||||||||
– written | 290 | $ (7) | 267 | $ (8) | ||||||||||||||||||||
Futures – short | 265 | 1 | 225 | 1 | ||||||||||||||||||||
Commodity futures – long | 44 | 42 | ||||||||||||||||||||||
Embedded derivative on funds withheld liability | 167 | (3) | 174 | 3 |
December 31 | 2019 | 2018 | ||||||||||||||||||||||
Contractual/ | Contractual/ | |||||||||||||||||||||||
Notional | Estimated Fair Value | Notional | Estimated Fair Value | |||||||||||||||||||||
Amount | Asset | (Liability) | Amount | Asset | (Liability) | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
With hedge designation: | ||||||||||||||||||||||||
Interest rate swaps | $ | 715 | $ | (8 | ) | $ | 500 | $ | 11 | |||||||||||||||
Without hedge designation: | ||||||||||||||||||||||||
Equity markets: | ||||||||||||||||||||||||
Options – purchased | 57 | $ | 1 | 213 | 18 | |||||||||||||||||||
– written | 100 | (1) | 239 | $ | (17 | ) | ||||||||||||||||||
Commodity futures – long | 32 | |||||||||||||||||||||||
Embedded derivative on funds withheld liability | 182 | (7) | 172 | 4 |
The Company invests in various privately placed debt securities, including bank loans, as part of its overall investment strategy, the Company invests in various assets which require future purchase, sale or funding of commitments. These investments are recorded once funded, and has committedthe related commitments include future capital calls from various third-party limited partnerships, signed and accepted mortgage loan applications and obligations related to additional future purchases, sales and funding. Purchases and sales of privately placed debt securities are recorded once funded.securities. As of December 31, 2017,2019, the Company had commitments to purchase or fund additional amounts of $165approximately $945 million and sell $108approximately $85 million under the terms of such securities.
these investments.
2018.
|
|
|
securities.
December 31, 2017 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| ||||||||||||||||
(In millions) | ||||||||||||||||
Fixed maturity securities: | ||||||||||||||||
Corporate bonds and other | $ | 128 | $ | 19,145 | $ | 98 | $ | 19,371 | ||||||||
States, municipalities and political subdivisions | 14,026 | 1 | 14,027 | |||||||||||||
Asset-backed | 7,751 | 335 | 8,086 | |||||||||||||
| ||||||||||||||||
Fixed maturitiesavailable-for-sale | 128 | 40,922 | 434 | 41,484 | ||||||||||||
Fixed maturities trading | 10 | 635 | 4 | 649 | ||||||||||||
| ||||||||||||||||
Total fixed maturities | $ | 138 | $ | 41,557 | $ | 438 | $ | 42,133 | ||||||||
| ||||||||||||||||
| ||||||||||||||||
Equity securitiesavailable-for-sale | $ | 91 | $ | 584 | $ | 20 | $ | 695 | ||||||||
Equity securities trading | 527 | 2 | 529 | |||||||||||||
| ||||||||||||||||
Total equity securities | $ | 618 | $ | 584 | $ | 22 | $ | 1,224 | ||||||||
| ||||||||||||||||
| ||||||||||||||||
Short term and other | $ | 3,669 | $ | 958 | $ | 4,627 | ||||||||||
Receivables | 1 | 4 | 5 | |||||||||||||
Payable to brokers | (12 | ) | (12) |
Fixed maturity securities: Corporate bonds and other States, municipalities and political subdivisions Asset-backed Fixed maturitiesavailable-for-sale Fixed maturities trading Total fixed maturities Equity securitiesavailable-for-sale Equity securities trading Total equity securities Short term and other Receivables Life settlement contracts Payable to brokersDecember 31, 2016 Level 1 Level 2 Level 3 Total (In millions) $ 112 $ 19,273 $ 130 $ 19,515 13,239 1 13,240 7,939 199 8,138 112 40,451 330 40,893 595 6 601 $ 112 $ 41,046 $ 336 $ 41,494 $ 91 $ 19 $ 110 438 1 439 $ 529 $ - $ 20 $ 549 $ 3,888 $ 858 $ 4,746 1 1 $ 58 58 (44 ) (44)
December 31, 2019 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Fixed maturity securities: | ||||||||||||||||
Corporate bonds and other | $ | 175 | $ | 22,065 | $ | 468 | $ | 22,708 | ||||||||
States, municipalities and political subdivisions | 10,652 | 10,652 | ||||||||||||||
Asset-backed | 8,662 | 165 | 8,827 | |||||||||||||
Fixed maturities available-for-sale | 175 | 41,379 | 633 | 42,187 | ||||||||||||
Fixed maturities trading | 49 | 4 | 53 | |||||||||||||
Total fixed maturities | $ | 175 | $ | 41,428 | $ | 637 | $ | 42,240 | ||||||||
Equity securities | $ | 629 | $ | 658 | $ | 19 | $ | 1,306 | ||||||||
Short term and other | 3,138 | 1,383 | 4,521 | |||||||||||||
Receivables | 2 | 2 | ||||||||||||||
Payable to brokers | (18 | ) | (10 | ) | (28 | ) | ||||||||||
December 31, 2018 | ||||||||||||||||
Fixed maturity securities: | ||||||||||||||||
Corporate bonds and other | $ | 196 | $ | 19,392 | $ | 222 | $ | 19,810 | ||||||||
States, municipalities and political subdivisions | 10,748 | 10,748 | ||||||||||||||
Asset-backed | 8,787 | 197 | 8,984 | |||||||||||||
Fixed maturities available-for-sale | 196 | 38,927 | 419 | 39,542 | ||||||||||||
Fixed maturities trading | 151 | 6 | 157 | |||||||||||||
Total fixed maturities | $ | 196 | $ | 39,078 | $ | 425 | $ | 39,699 | ||||||||
Equity securities | $ | 704 | $ | 570 | $ | 19 | $ | 1,293 | ||||||||
Short term and other | 2,647 | 1,111 | 3,758 | |||||||||||||
Receivables | 11 | 11 | ||||||||||||||
Payable to brokers | (23 | ) | (23) |
Purchases | Sales | Settlements | Transfers into | Transfers out of | Balance, | Unrealized Gains (Losses) Recognized in Net Income 3 Assets and Held at | ||||||||||||||||||||||||||||||||||
Net Realized Gains (Losses) and Net Change in Unrealized Gains (Losses) | ||||||||||||||||||||||||||||||||||||||||
2017 | Balance, January 1 | Included in Net Income | Included in OCI | |||||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||||||||||
Corporate bonds and other | $ | 130 | $ | 3 | $ | 18 | $ | (5 | ) | $ | (54 | ) | $ | 16 | $ | (10 | ) | $ | 98 | |||||||||||||||||||||
States, municipalities and political subdivisions | 1 | 1 | ||||||||||||||||||||||||||||||||||||||
Asset-backed | 199 | $ | 2 | 3 | 107 | (43 | ) | 153 | (86 | ) | 335 | |||||||||||||||||||||||||||||
Fixed maturitiesavailable-for-sale | 330 | 2 | 6 | 125 | (5 | ) | (97 | ) | 169 | (96 | ) | 434 | $ | - | ||||||||||||||||||||||||||
Fixed maturities trading | 6 | (2 | ) | 4 | (2) | |||||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 336 | $ | - | $ | 6 | $ | 125 | $ | (5 | ) | $ | (97 | ) | $ | 169 | $ | (96 | ) | $ | 438 | $ | (2) | |||||||||||||||||
Equity securitiesavailable-for-sale | $ | 19 | $ | 3 | $ | 1 | $ | (3 | ) | $ | 20 | |||||||||||||||||||||||||||||
Equity securities trading | 1 | $ | (1 | ) | 2 | 2 | ||||||||||||||||||||||||||||||||||
Total equity securities | $ | 20 | $ | (1 | ) | $ | 3 | $ | 3 | $ | (3 | ) | $ | - | $ | - | $ | - | $ | 22 | $ | - | ||||||||||||||||||
Life settlement contracts | $ | 58 | $ | 6 | $ | (59 | ) | $ | (5 | ) | $ | - | ||||||||||||||||||||||||||||
Derivative financial instruments, net | - | 1 | (1 | ) | - |
2016 Balance, Purchases Sales Settlements Transfers into Transfers out of Balance, Unrealized Gains (Losses) Recognized in Net Income 3 Assets and Held at (In millions) Fixed maturity securities: Corporate bonds and other States, municipalities and political subdivisions Asset-backed Fixed maturitiesavailable-for-sale Fixed maturities trading Total fixed maturities Equity securitiesavailable-for-sale Equity securities trading Total equity securities Life settlement contracts Derivative financial instruments, net
January 1
Level 3
Level 3
December 31
on Level
Liabilities
December 31 Net Realized Gains
(Losses) and Net Change
in Unrealized Gains
(Losses) Included in
Net Income Included in
OCI $ 168 $ 1 $ 1 $ 163 $ (36 ) $ (103 ) $ (64 ) $ 130 2 (1 ) 1 209 (5 ) 133 (25 ) (32 ) $ 61 (142 ) 199 379 1 (4 ) 296 (61 ) (136 ) 61 (206 ) 330 $ - 85 5 2 (86 ) 6 3 $ 464 $ 6 $ (4 ) $ 298 $ (147 ) $ (136 ) $ 61 $ (206 ) $ 336 $ 3 $ 20 $ (1 ) $ 19 $ (2) 1 1 $ (1 ) 1 $ 21 $ - $ - $ - $ (1 ) $ - $ - $ - $ 20 $ (2) $ 74 $ 5 $ (21 ) $ 58 $ (3) 3 (1 ) $ (2 ) -
2018:
Unrealized | ||||||||||||||||||||||||||||||||||||||||||||
Gains | ||||||||||||||||||||||||||||||||||||||||||||
Unrealized | (Losses) | |||||||||||||||||||||||||||||||||||||||||||
Gains | Recognized in | |||||||||||||||||||||||||||||||||||||||||||
(Losses) | Other | |||||||||||||||||||||||||||||||||||||||||||
Recognized in | Comprehensive | |||||||||||||||||||||||||||||||||||||||||||
Net Realized Investment | Net Income | Income (Loss) | ||||||||||||||||||||||||||||||||||||||||||
Gains (Losses) and Net | (Loss) on Level | on Level 3 | ||||||||||||||||||||||||||||||||||||||||||
Change in Unrealized | 3 Assets and | Assets and | ||||||||||||||||||||||||||||||||||||||||||
Investment Gains (Losses) | Transfers | Transfers | Liabilities | Liabilities | ||||||||||||||||||||||||||||||||||||||||
Balance, | Included in | Included in | into | out of | Balance, | Held at | Held at | |||||||||||||||||||||||||||||||||||||
2019 | January 1 | Net Income | OCI | Purchases | Sales | Settlements | Level 3 | Level 3 | December 31 | December 31 | December 31 | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds and other | $ | 222 | $ | 33 | $ | 256 | $ | (11) | $ | (32) | $ | 468 | $ | 28 | ||||||||||||||||||||||||||||||
Asset-backed | 197 | 8 | 48 | (16) | $ | 45 | (117) | 165 | 7 | |||||||||||||||||||||||||||||||||||
Fixed maturities available-for-sale | 419 | $ | - | 41 | 304 | $ | - | (27) | 45 | (149) | 633 | $ | - | 35 | ||||||||||||||||||||||||||||||
Fixed maturities trading | 6 | (2) | 4 | (2) | ||||||||||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 425 | $ | (2) | $ | 41 | $ | 304 | $ | - | $ | (27) | $ | 45 | $ | (149) | $ | 637 | $ | (2) | $ | 35 | ||||||||||||||||||||||
Equity securities | $ | 19 | $ | (2) | $ | 2 | $ | 19 | $ | (2) |
Unrealized | ||||||||||||||||||||||||||||||||||||||||||||
Gains | ||||||||||||||||||||||||||||||||||||||||||||
Unrealized | (Losses) | |||||||||||||||||||||||||||||||||||||||||||
Gains | Recognized in | |||||||||||||||||||||||||||||||||||||||||||
(Losses) | Other | |||||||||||||||||||||||||||||||||||||||||||
Recognized in | Comprehensive | |||||||||||||||||||||||||||||||||||||||||||
Net Realized Investment | Net Income | Income (Loss) | ||||||||||||||||||||||||||||||||||||||||||
Gains (Losses) and Net | (Loss) on Level | on Level 3 | ||||||||||||||||||||||||||||||||||||||||||
Change in Unrealized | 3 Assets and | Assets and | ||||||||||||||||||||||||||||||||||||||||||
Investment Gains (Losses) | Transfers | Transfers | Liabilities | Liabilities | ||||||||||||||||||||||||||||||||||||||||
Balance, | Included in | Included in | into | out of | Balance, | Held at | Held at | |||||||||||||||||||||||||||||||||||||
2018 | January 1 | Net Income | OCI | Purchases | Sales | Settlements | Level 3 | Level 3 | December 31 | December 31 | December 31 | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds and other | $ | 98 | $ | (1) | $ | (4) | $ | 117 | $ | (5) | $ | (9) | $ | 35 | $ | (9) | $ | 222 | $ | (5 | ) | |||||||||||||||||||||||
States, municipalities and political subdivisions | 1 | (1) | - | |||||||||||||||||||||||||||||||||||||||||
Asset-backed | 335 | 5 | (8) | 162 | (72) | (64) | 42 | (203) | 197 | $ | (2) | (4 | ) | |||||||||||||||||||||||||||||||
Fixed maturities available-for-sale | 434 | 4 | (12) | 279 | (77) | (74) | 77 | (212) | 419 | (2) | (9 | ) | ||||||||||||||||||||||||||||||||
Fixed maturities trading | 4 | 3 | (1) | 6 | 2 | |||||||||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 438 | $ | 7 | $ | (12) | $ | 279 | $ | (78) | $ | (74 ) | $ | 77 | $ | (212) | $ | 425 | $ | - | $ | (9 | ) | |||||||||||||||||||||
Equity securities | $ | 22 | $ | (2) | $ | (1) | $ | 19 | $ | (2) |
Major Category of Assets and Liabilities | Consolidated Statements of Income 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 | |
|
Exchange traded derivatives
Life Settlement Contracts
Historically, the fair value
December 31, 2017 | Estimated Fair Value | Valuation Techniques | Unobservable Inputs | Range (Weighted | ||||||||||
(In millions) | ||||||||||||||
Fixed maturity securities | $ | 136 | | Discounted cash flow |
| Credit spread | 1% – 12% | (3%) | ||||||
December 31, 2016 | Estimated Fair Value | Valuation Techniques | Unobservable Inputs | Range (Weighted Average) | ||||||||||
(In millions) | ||||||||||||||
Fixed maturity securities | $ | 106 | | Discounted cash flow |
| Credit spread | 2% – 40% | (4%) |
fair value.
Range | ||||||||||||||||
Estimated | Valuation | Unobservable | (Weighted | |||||||||||||
December 31, 2019 | Fair Value | Techniques | Inputs | Average) | ||||||||||||
(In millions) | ||||||||||||||||
Fixed maturity securities | $ 525 | Discounted cashflow | Creditspread | 1 % –6%(2%) | ||||||||||||
December 31, 2018 | ||||||||||||||||
Fixed maturity securities | $ 228 | Discounted cashflow | Credit spread | 1% – 12% (3% ) |
Carrying | Estimated Fair Value | |||||||||||||||||||
December 31, 2017 | Amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
(In millions) | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Other invested assets, primarily mortgage loans | $ | 839 | $ | 844 | $ | 844 | ||||||||||||||
Liabilities: | ||||||||||||||||||||
Short term debt | 278 | $ | 156 | 122 | 278 | |||||||||||||||
Long term debt | 11,236 | 10,966 | 525 | 11,491 | ||||||||||||||||
December 31, 2016 | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Other invested assets, primarily mortgage loans | $ | 591 | $ | 594 | $ | 594 | ||||||||||||||
Liabilities: | ||||||||||||||||||||
Short term debt | 107 | $ | 104 | 3 | 107 | |||||||||||||||
Long term debt | 10,655 | 10,150 | 646 | 10,796 |
The following methods and assumptions were used in estimating the fair value
Carrying | Estimated Fair Value | |||||||||||||||||||
December 31, 2019 | Amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
(In millions) | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Other invested assets, primarily mortgage loans | $ | 994 | $ | 1,025 | $ | 1,025 | ||||||||||||||
Liabilities: | ||||||||||||||||||||
Short term debt | 75 | $ | 9 | 66 | 75 | |||||||||||||||
Long term debt | 11,443 | 10,884 | 626 | 11,510 | ||||||||||||||||
December 31, 2018 | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Other invested assets, primarily mortgage loans | $ | 839 | $ | 827 | $ | 827 | ||||||||||||||
Liabilities: | ||||||||||||||||||||
Short term debt | 15 | $ | 14 | 14 | ||||||||||||||||
Long term debt | 11,345 | 10,111 | 653 | 10,764 |
Fair value
December 31 | 2017 | 2016 | ||||||
(In millions) | ||||||||
Reinsurance (Note 15) | $ | 4,290 | $ | 4,453 | ||||
Insurance | 2,336 | 2,255 | ||||||
Receivable from brokers | 69 | 178 | ||||||
Accrued investment income | 413 | 410 | ||||||
Federal income taxes | 52 | 7 | ||||||
Other, primarily customer accounts | 533 | 431 | ||||||
| ||||||||
Total | 7,693 | 7,734 | ||||||
Less: allowance for doubtful accounts on reinsurance receivables | 29 | 37 | ||||||
allowance for other doubtful accounts | 51 | 53 | ||||||
| ||||||||
Receivables | $ | 7,613 | $ | 7,644 | ||||
December 31 | 2019 | 2018 | ||||||
(In millions) | ||||||||
Reinsurance (Note 16) | $ | 4,204 | $ | 4,455 | ||||
Insurance | 2,481 | 2,365 | ||||||
Receivable from brokers | 124 | 296 | ||||||
Accrued investment income | 395 | 394 | ||||||
Federal income taxes | 14 | 52 | ||||||
Other, primarily customer accounts | 520 | 477 | ||||||
Total | 7,738 | 8,039 | ||||||
Less: allowance for doubtful accounts on reinsurance receivables | 25 | 29 | ||||||
allowance for other doubtful accounts | 38 | 50 | ||||||
Receivables | $ | 7,675 | $ | |||||
December 31 | 2017 | 2016 | ||||||
(In millions) | ||||||||
Pipeline equipment (net of accumulated depreciation of $2,453 and $2,174) | $ | 7,857 | $ | 7,631 | ||||
Offshore drilling equipment (net of accumulated depreciation of $2,797 and $3,310) | 5,226 | 5,693 | ||||||
Other (net of accumulated depreciation of $1,009 and $873) | 1,886 | 1,527 | ||||||
Construction in process | 458 | 379 | ||||||
| ||||||||
Property, plant and equipment | $ | 15,427 | $ | 15,230 | ||||
| ||||||||
|
The balance of other property, plant and equipment as of December 31, 2017 includes $366 million for Consolidated Container.
December 31 | 2019 | 2018 | ||||||
(In millions) | ||||||||
Pipeline equipment (net of accumulated depreciation of $3,075 and $2,761) | $ | 8,229 | $ | |||||
Offshore drilling equipment (net of accumulated depreciation of $2,885 and $3,067) | 5,119 | 5,144 | ||||||
Other (net of accumulated depreciation of $1,114 and $1,056 ) | 1,625 | 1,812 | ||||||
Construction in process | 595 | 317 | ||||||
Property, plant and equipment | $ | 15,568 | $ | |||||
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||||||||||||||
Depre- ciation | Capital Expend. | Depre- ciation | Capital Expend. | Depre- ciation | Capital Expend. | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
CNA Financial | $ | 80 | $ | 101 | $ | 67 | $ | 128 | $ | 74 | $ | 123 | ||||||||||||
Diamond Offshore | 349 | 113 | 384 | 629 | 494 | 812 | ||||||||||||||||||
Boardwalk Pipeline | 325 | 689 | 321 | 648 | 327 | 390 | ||||||||||||||||||
Loews Hotels & Co | 63 | 57 | 63 | 164 | 54 | 389 | ||||||||||||||||||
Corporate | 37 | 30 | 6 | 3 | 6 | 4 | ||||||||||||||||||
Total | $ | 854 | $ | 990 | $ | 841 | $ | 1,572 | $ | 955 | $ | 1,718 | ||||||||||||
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||||||||||||||
Depre- | Capital | Depre- | Capital | Depre- | Capital | |||||||||||||||||||
ciation | Expend. | ciation | Expend. | ciation | Expend. | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
CNA Financial | $ | 64 | $ | 26 | $ | 76 | $ | 99 | $ | 80 | $ | 101 | ||||||||||||
Diamond Offshore | 356 | 345 | 332 | 222 | 349 | 113 | ||||||||||||||||||
Boardwalk Pipelines | 348 | 418 | 346 | 487 | 325 | 689 | ||||||||||||||||||
Loews Hotels & Co | 60 | 216 | 67 | 139 | 63 | 57 | ||||||||||||||||||
Corporate | 70 | 53 | 59 | 48 | 37 | 30 | ||||||||||||||||||
Total | $ | 898 | $ | 1,058 | $ | 880 | $ | 995 | $ | 854 | $ | 990 | ||||||||||||
2017.
Purchase of Assets
In 2016, Diamond Offshore took delivery of one ultra-deepwater semisubmersible rig. The net book value of this newly constructed rig was $774 million at December 31, 2016.
Sale of Assets
In 2016, Diamond Offshore entered into aten-year agreement with a subsidiary of GE Oil & Gas (“GE”) to provide services with respect to certain blowout preventer and related well control equipment on four drillships. Such services include management of maintenance, certification and reliability with respect to such equipment. In connection with the contractual services agreement with GE, Diamond Offshore completed four sale and leaseback transactions with a GE affiliate during 2016 with respect to the well control equipment on its four drillships and received an aggregate of $210 million in proceeds, which was less than the carrying value of the equipment. The resulting difference was recorded as prepaid rent with no gain or loss recognized on the transactions, and will be amortized over the terms of the operating leases. Future commitments under the operating leases and contractual services agreements are estimated to aggregate approximately $550 million over the remaining term of the agreements.
For the years ended December 31, 2017 and 2016, Diamond Offshore recognized $62 million and $34 million in aggregate expense related to the well control equipment leases and contractual services agreement.
noncontrolling interests) to recognize a reduction in fair value of the
Diamond Offshore recorded aggregate asset impairment charges of $672$100 million ($263 million after tax and noncontrolling interests for the year ended December 31, 2016. See Note 6 of the Consolidated Financial Statements in the Company’s Annual Report on Form10-K for the year ended December 31, 2016 for further discussion of Diamond Offshore’s 2016 asset impairments. Diamond Offshore recorded aggregate asset impairment charges of $861 million ($34132 million after tax and noncontrolling interests) for the year ended December 31, 2015. See Note 6 of the Consolidated Financial Statements in the Company’s Annual Report on Form10-K for the year ended December 31, 2015 for further discussion of Diamond Offshore’s 2015 asset impairments. The asset impairment charges recorded during the years ended December 31, 2017, 2016 and 2015 are reported within Other operating expenses on the Consolidated Statements of Income.
2017.
Pipelines
Total | CNA Financial | Diamond Offshore | Boardwalk Pipeline | Loews Hotels & Co | Corporate | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Balance, December 31, 2015 | $ | 351 | $ | 114 | $ | - | $ | 237 | $ | - | $ | - | ||||||||||||
Other adjustments | (5 | ) | (5 | ) | ||||||||||||||||||||
Balance, December 31, 2016 | 346 | 109 | - | 237 | - | - | ||||||||||||||||||
Acquisition | 310 | 310 | ||||||||||||||||||||||
Other adjustments | 3 | 3 | ||||||||||||||||||||||
Balance, December 31, 2017 | $ | 659 | $ | 112 | $ | - | $ | 237 | $ | - | $ | 310 | ||||||||||||
CNA | Boardwalk | |||||||||||||||
Financial | Pipelines | Corporate | Total | |||||||||||||
(In millions) | ||||||||||||||||
Balance, December 31, 2017 | $ | 112 | $ | 237 | $ | 310 | $ | 659 | ||||||||
Acquisition | 8 | 8 | ||||||||||||||
Other adjustments | (2 | ) | (2) | |||||||||||||
Balance, December 31, 2018 | 110 | 237 | 318 | 665 | ||||||||||||
Acquisition s | 100 | 100 | ||||||||||||||
Other adjustments | 2 | 2 | ||||||||||||||
Balance, December 31, 2019 | $ | 112 | $ | 237 | $ | 418 | $ | 767 | ||||||||
An impairment charge of $20 million was recorded in Other operating expenses in 2015 to write off all goodwill attributable to Diamond Offshore.
these acquisitions.
December 31, 2017 | December 31, 2016 | |||||||||||||||
|
|
|
| |||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||
| ||||||||||||||||
(In millions) | ||||||||||||||||
Finite-lived intangible assets: | ||||||||||||||||
Customer relationships | $ | 518 | $ | 22 | $ | 59 | $ | 8 | ||||||||
Other | 74 | 13 | 21 | 7 | ||||||||||||
| ||||||||||||||||
Total finite-lived intangible assets | 592 | 35 | 80 | 15 | ||||||||||||
| ||||||||||||||||
Indefinite-lived intangible assets | 81 | 77 | ||||||||||||||
| ||||||||||||||||
Total other intangible assets | $ | 673 | $ | 35 | $ | 157 | $ | 15 | ||||||||
| ||||||||||||||||
|
December 31, 2019 | December 31, 2018 | |||||||||||||||
Gross | Gross | |||||||||||||||
Carrying | Accumulated | Carrying | Accumulated | |||||||||||||
Amount | Amortization | Amount | Amortization | |||||||||||||
(In millions) | ||||||||||||||||
Finite-lived intangible assets: | ||||||||||||||||
Customer relationships | $ | 611 | 76 | $ | 532 | 47 | ||||||||||
Other | 71 | 34 | 72 | 20 | ||||||||||||
Total finite-lived intangible assets | 682 | 110 | 604 | 67 | ||||||||||||
Indefinite-lived intangible assets | 75 | 74 | ||||||||||||||
Total other intangible assets | $ | 757 | 110 | $ | 678 | 67 | ||||||||||
Catastrophes are an inherent risk of the
A&EP.
December 31 | 2019 | |||
(In millions) | ||||
Net liability for unpaid claim and claim adjustment expenses: | ||||
Property & Casualty Operations | $ | 14,153 | ||
Other Insurance Operations (a) | 3,732 | |||
Total net claim and claim adjustment expenses | 17,885 | |||
Reinsurance receivables: (b) | ||||
Property & Casualty Operations | 1,617 | |||
Other Insurance Operations (c) | 2,218 | |||
Total reinsurance receivables | 3,835 | |||
Total gross liability for unpaid claims and claims adjustment expenses | $ | 21,720 | ||
(a) | Other Insurance Operations amounts are primarily related to long term care claim reserves, which are long duration insurance contracts, but also include amounts related to unfunded structured settlements arising from short duration insurance contracts. |
(b) | Reinsurance receivables presented are gross of the allowance for uncollectible reinsurance and do not include reinsurance receivables related to paid losses. |
(c) | The Other Insurance Operations reinsurance receivables are primarily related to A&EP claims covered under the loss portfolio transfer ( “ LPT ” ) |
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
(In millions) | ||||||||||||
Reserves, beginning of year: | ||||||||||||
Gross | $ | 22,343 | $ | 22,663 | $ | 23,271 | ||||||
Ceded | 4,094 | 4,087 | 4,344 | |||||||||
Net reserves, beginning of year | 18,249 | 18,576 | 18,927 | |||||||||
Net incurred claim and claim adjustment expenses: | ||||||||||||
Provision for insured events of current year | 5,201 | 5,025 | 4,934 | |||||||||
Decrease in provision for insured events of prior years | (381 | ) | (342 | ) | (255) | |||||||
Amortization of discount | 179 | 175 | 166 | |||||||||
Total net incurred (a) | 4,999 | 4,858 | 4,845 | |||||||||
Net payments attributable to: | ||||||||||||
Current year events | (975 | ) | (967 | ) | (856) | |||||||
Prior year events | (4,366 | ) | (4,167 | ) | (4,089) | |||||||
Total net payments | (5,341 | ) | (5,134 | ) | (4,945) | |||||||
Foreign currency translation adjustment and other | 163 | (51 | ) | (251) | ||||||||
Net reserves, end of year | 18,070 | 18,249 | 18,576 | |||||||||
Ceded reserves, end of year | 3,934 | 4,094 | 4,087 | |||||||||
Gross reserves, end of year | $ | 22,004 | $ | 22,343 | $ | 22,663 | ||||||
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Reserves, beginning of year: | ||||||||||||
Gross | $ | 21,984 | $ | 22,004 | $ | 22,343 | ||||||
Ceded | 4,019 | 3,934 | 4,094 | |||||||||
Net reserves, beginning of year | 17,965 | 18,070 | 18,249 | |||||||||
Net incurred claim and claim adjustment expenses: | ||||||||||||
Provision for insured events of current year | 5,356 | 5,358 | 5,201 | |||||||||
Decrease in provision for insured events of prior years | (127 | ) | (179 | ) | (381 | ) | ||||||
Amortization of discount | 184 | 176 | 179 | |||||||||
Total net incurred (a) | 5,413 | 5,355 | 4,999 | |||||||||
Net payments attributable to: | ||||||||||||
Current year events | (992 | ) | (1,046 | ) | (975 | ) | ||||||
Prior year events | (4,584 | ) | (4,285 | ) | (4,366 | ) | ||||||
Total net payments | (5,576 | ) | (5,331 | ) | (5,341 | ) | ||||||
Foreign currency translation adjustment and other | 83 | (129 | ) | 163 | ||||||||
Net reserves, end of year | 17,885 | 17,965 | 18,070 | |||||||||
Ceded reserves, end of year | 3,835 | 4,019 | 3,934 | |||||||||
Gross reserves, end of year | $ | 21,720 | $ | 21,984 | $ | 22,004 | ||||||
(a) | Total net incurred above does not agree to Insurance claims and policyholders’ benefits as reflected |
Paid development: The paid development method estimates ultimate losses by reviewing paid loss patterns and applying them to accident years with further expected changes in paid losses.
Incurred development: The incurred development method is similar to the paid development method, but it uses case incurred losses instead
Loss ratio: The loss ratio method multiplies premiums by an expected loss ratio to produce ultimate loss estimates for each accident year.
Bornhuetter-Ferguson using premiums and paid loss: The Bornhuetter-Ferguson using premiums and paid loss method is a combination of the paid development approach and the loss ratio approach. This method normally determines expected loss ratios similar to the approach used to estimate the expected loss ratio for the loss ratio method.
Bornhuetter-Ferguson using premiums and incurred loss: The Bornhuetter-Ferguson using premiums and incurred loss method is similar to the Bornhuetter-Ferguson using premiums and paid loss method except that it uses case incurred losses.
Frequency times severity: The frequency times severity method multiplies a projected number of ultimate claims by an estimated ultimate average loss for each accident year to produce ultimate loss estimates.
Stochastic modeling: The stochastic modeling produces a range of possible outcomes based on varying assumptions related to the particular product being modeled.
● | Paid development |
● | Incurred development |
● | Loss ratio |
● | Bornhuetter-Ferguson using premiums and paid loss |
● | Bornhuetter-Ferguson using premiums and incurred loss |
● | Frequency times severity |
● | Stochastic modeling |
Future Policy Benefit Reserves
Reserves
Certain claim liabilities are more difficult to estimate and have differing methodologies and considerations which are described below.
Mass Tort and A&EP Reserves
CNA’s mass tort and A&EP reserving methodologies are similar as both are based on detailed account reviews of large accounts with estimates of ultimate payments based on ultimate payments considering the facts in each case and CNA’s view of applicable law and coverage litigation.
Property | Other | |||||||||||
and Casualty | Insurance | |||||||||||
December 31, 2019 | Operations | Operations | Total | |||||||||
(In millions) | ||||||||||||
Gross Case Reserves | $ | 6,276 | $ | 4,713 | $ | 10,989 | ||||||
Gross IBNR Reserves | 9,494 | 1,237 | 10,731 | |||||||||
Total Gross Carried Claim and Claim Adjustment Expense Reserves | $ | 15,770 | $ | 5,950 | $ | 21,720 | ||||||
Net Case Reserves | $ | 5,645 | $ | 3,533 | $ | 9,178 | ||||||
Net IBNR Reserves | 8,508 | 199 | 8,707 | |||||||||
Total Net Carried Claim and Claim Adjustment Expense Reserves | $ | 14,153 | $ | 3,732 | $ | 17,885 | ||||||
December 31, 2018 | ||||||||||||
Gross Case Reserves | $ | 6,671 | $ | 4,724 | $ | 11,395 | ||||||
Gross IBNR Reserves | 9,287 | 1,302 | 10,589 | |||||||||
Total Gross Carried Claim and Claim Adjustment Expense Reserves | $ | 15,958 | $ | 6,026 | $ | 21,984 | ||||||
Net Case Reserves | $ | 6,063 | $ | 3,460 | $ | 9,523 | ||||||
Net IBNR Reserves | 8,290 | 152 | 8,442 | |||||||||
Total Net Carried Claim and Claim Adjustment Expense Reserves | $ | 14,353 | $ | 3,612 | $ | 17,965 | ||||||
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Medical professional liability | $ | 75 | $ | 47 | $ | 30 | ||||||
Other professional liability and management liability | (69) | (127) | (126) | |||||||||
Surety | (92) | (70) | (84) | |||||||||
Commercial auto | (25) | 1 | (35) | |||||||||
General liability | 54 | 32 | (24) | |||||||||
Workers’ compensation | (13) | (32) | (63) | |||||||||
Other | (3) | (32) | (6) | |||||||||
Total pretax favorable development | $ | (73) | $ | (181) | $ | (308) | ||||||
Property and Casualty Reserve Reviews
CNA’s actuarial reserve analyses result in point estimates. Each quarter, the results of detailed reserve reviewsperiods presented. Also presented are summarized and discussed with CNA’s senior management to determine management’s best estimate of reserves. CNA’s senior management considers many factors in making this decision. The factors include, but are not limited to, the historical pattern and volatility of the actuarial indications, the sensitivity of the actuarial indications to changes in paid and incurred loss patterns, the consistency of claims handling processes, the consistency of case reserving practices, changes in CNA’s pricing and underwriting, pricing and underwriting trends in the insurance market and legal, judicial, social and economic trends. CNA’s recorded reserves reflect its best estimate as of a particular point in time based upon known facts, consideration of the factors cited above and its judgment. The carried reserve differs from the actuarial point estimate as the result of CNA’s consideration of the factors noted above as well as the potential volatility of the projections associated with the specific product being analyzed and other factors affecting claims costs that may not be quantifiable through traditional actuarial analysis.
Development Tables
The loss reserve development tables presented hereinthat illustrate the change over time of reserves established for claim and allocated claim adjustment expenses arising from short duration insurance contracts for certain lines of business within CNA’s Property and& Casualty Operations. Not all lines of business are presented based on their context to CNA’s overall loss reserves, calendar year reserve development, or calendar year net earned premiums. Insurance contracts are considered to be short duration contracts when the contracts are not expected to remain in force for an extended period of time. The Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses tables, reading across, show the cumulative net incurred claim and allocated claim adjustment expenses relating to each accident year at the end of the stated calendar year. Changes in the cumulative amount across time are the result of CNA’s expanded awareness of additional facts and circumstances that pertain to the unsettled claims. The Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses tables, reading across, show the cumulative amount paid for claims in each accident year as of the end of the stated calendar year. The Net Strengthening or (Releases) of Prior Accident Year Reserves tables, reading across, show the net increase or decrease in the cumulative net incurred accident year claim and allocated claim adjustment expenses during each stated calendar year and indicates whether the reserves for that accident year were strengthened or released.
disposition, the effects of the disposition are reported on a retrospective basis by removing the balances associated with it.
The following tables present CNA does not establish case reserves for allocated loss adjusted expenses (ALAE), therefore ALAE reserves are also included in the grossestimate of IBNR.
December 31, 2017 | Property and Casualty Operations | Other Insurance Operations | Total | |||||||||
(In millions) | ||||||||||||
Gross Case Reserves | $ | 6,913 | $ | 4,757 | $ | 11,670 | ||||||
Gross IBNR Reserves | 9,156 | 1,178 | 10,334 | |||||||||
Total Gross Carried Claim and Claim Adjustment Expense Reserves | $ | 16,069 | $ | 5,935 | $ | 22,004 | ||||||
Net Case Reserves | $ | 6,343 | $ | 3,302 | $ | 9,645 | ||||||
Net IBNR Reserves | 8,232 | 193 | 8,425 | |||||||||
Total Net Carried Claim and Claim Adjustment Expense Reserves | $ | 14,575 | $ | 3,495 | $ | 18,070 | ||||||
December 31, 2016 | ||||||||||||
(In millions) | ||||||||||||
Gross Case Reserves | $ | 7,164 | $ | 4,696 | $ | 11,860 | ||||||
Gross IBNR Reserves | 9,207 | 1,276 | 10,483 | |||||||||
Total Gross Carried Claim and Claim Adjustment Expense Reserves | $ | 16,371 | $ | 5,972 | $ | 22,343 | ||||||
Net Case Reserves | $ | 6,582 | $ | 3,045 | $ | 9,627 | ||||||
Net IBNR Reserves | 8,328 | 294 | 8,622 | |||||||||
Total Net Carried Claim and Claim Adjustment Expense Reserves | $ | 14,910 | $ | 3,339 | $ | 18,249 | ||||||
Net Prior Year Development
Changeshigher than expected severity in estimatesaccident year 2017 in the dentists business.
Favorable net prior year development of $89 million, $43 million and $50 million was recorded for Other Insurance Operations for the years ended December 31, 2017, 2016 and 2015. The favorable net prior year development for the year ended December 31, 2017in other coverages was driven by lower than expected claim severity.
Premium development can occurseverity in catastrophes in accident year 2017 for property in Commercial, better than expected frequency in the Property and Casualty Operations when there is a change in exposure on auditable policies or when premium accruals differ from processed premium. Audits on policies usually occur in a period after the expiration dateliability portion of the policy.
The following tablepackage business in Canada and discussion presents detail ofgeneral liability in Europe in casualty and better than expected large loss frequency in the netenergy book in accident year 2017, as well as a reduction in incurred losses within the Europe marine discontinued portfolio in energy and marine and lower than expected frequency in accident years 2015 and prior in Europe in healthcare and technology for International. This was partially offset by unfavorable development primarily driven by higher than expected severity in Canada and higher than expected frequency in Hardy, both in accident year claim2017 in property and claim adjustment expense reserve developmentincreased loss severity in CNA’s Property and Casualty Operations:
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
(In millions) | ||||||||||||
Medical professional liability | $ | 5 | $ | (37 | ) | $ | (43) | |||||
Other professional liability and management liability | (131 | ) | (130 | ) | ||||||||
Surety | (84 | ) | (63 | ) | (69) | |||||||
Commercial auto | (38 | ) | (46 | ) | (22) | |||||||
General liability | (28 | ) | (33) | |||||||||
Workers’ compensation | (65 | ) | 150 | 80 | ||||||||
Other | 5 | (134 | ) | (123) | ||||||||
Total pretax (favorable) unfavorable development | $ | (308 | ) | $ | (288 | ) | $ | (210) | ||||
the accident year 2017
in Europe professional indemnity in specialty for International.
from a prior exposure year.
2016
Favorable development for medical professional liability was primarily due to lower than expected severities for individual health care professionals, allied facilities and hospitals in accident years 2011 and prior and better than expected severity in medical products liability in accident years 2010 through 2015. This was partially offset by unfavorable development in accident years 2012 and 2013 related to higher than expected large loss emergence in hospitals and higher than expected frequency and severity in accident years 2014 and 2015 in the aging services business.
Favorable development in other professional liability and management liability was primarily due to favorable settlements on closed claims and lower than expected frequency of claims in accident years 2010 through 2014 related to professional services and financial institutions. This was partially offset by unfavorable development related to a specific financial institutions claim in accident year 2014, higher management liability severities in accident year 2015 and deterioration on credit crises-related claims in accident year 2009.
Favorable development in surety coverages was primarily due to lower than expected frequency of large losses in accident years 2014 and prior.
Favorable development for commercial auto was primarily due to favorable settlements on claims in accident years 2010 through 2014 and lower than expected severities in accident years 2012 through 2015.
Favorable development for general liability was primarily due to better than expected claim settlements in accident years 2012 through 2014 and better than expected severity on umbrella claims in accident years 2010 through 2013. This was partially offset by unfavorable development related to an increase in reported claims prior to the closing of the three year window set forth by the Minnesota Child Victims Act in accident years 2006 and prior.
Unfavorable development for workers’ compensation was primarily due to higher than expected severity for Defense Base Act contractors that largely resulted from a reduction of expected future recoveries from the U.S. Department of Labor under the War Hazard Act. Further unfavorable development was due to the impact of recent Florida court rulings for accident years 2008 through 2015. These were partially offset by favorable development related to lower than expected frequencies related to the ongoing Middle Market and Small Business results for accident years 2009 through 2014.
Favorable development for other coverages was due to better than expected claim frequency and claim severity in accident years 2010 through 2015, better than expected loss frequency in accident years 2013 through 2015, better than expected severity on the December 2015 United Kingdom floods, better than expected attritional losses and large loss experience on accident years 2013 through 2015 for Hardy business and favorable settlements on claims in accident years 2013 and prior related to CNA’s Canadian package business. Additional favorable development was due to a commutation of exposures in marinerun-off classes on CNA’s Europe business and lower than expected frequency of large losses related to CNA’s Europe business in accident years 2013 and 2015. This was partially offset by unfavorable development related to higher than expected severity from a fourth quarter 2015 catastrophe event.
2015
Overall, favorable development for medical professional liability was related to lower than expected severity in accident years 2012 and prior. Unfavorable development was recorded related to increased claim frequency and severity in the aging services business in accident years 2013 and 2014.
Favorable development in other professional liability and management liability related to better than expected large loss emergence in financial institutions primarily in accident years 2011 through 2014. Additional favorable development related to lower than expected severity for professional services in accident years 2011 and prior. Unfavorable development was recorded related to increased frequency of large claims on public company management liability in accident years 2012 through 2014.
Favorable development for surety coverages was primarily due to lower than expected frequency of large losses in accident years 2013 and prior.
Favorable development for commercial auto was primarily due to lower than expected severity in accident years 2009 through 2014.
Favorable development for general liability was primarily due to favorable settlements on claims in accident years 2010 through 2013.
Unfavorable development for workers’ compensation was primarily due to higher than expected severity related to Defense Base Act contractors in accident years 2008 through 2014.
Favorable development for other coverages was due to better than expected claim frequency in accident year 2014, better than expected claim emergence from 2012 and 2014 catastrophe events, better than expected large loss emergence in accident years 2012 and prior and better than expected individual large loss emergence and favorable settlements on large claims in accident years 2013 and 2014. This was partially offset by unfavorable development due to higher than expected large losses in financial institutions and political risk, primarily in accident year 2014.
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Accident Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Accident Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented $ 1,652 Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2008 Liability for unallocated claim adjustment expenses for accident years presented Total net liability for unpaid claim and claim adjustment expenses Net Strengthening or (Releases) of Prior Accident Year Reserves Accident Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total net development for the accident years presented above Total net development for accident years prior to 2008 Total unallocated claim adjustment expense development Total Medical Professional Liability December 31, 2017 Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses Cumulative Number of December 31 2008 (a) 2009 (a) 2010 (a) 2011 (a) 2012 (a) 2013 (a) 2014 (a) 2015 (a) 2016 (a) 2017 IBNR Claims (In millions, except reported claims data) $ 426 $ 451 $ 496 $ 480 $ 468 $ 468 $ 467 $ 455 $ 442 $ 438 $ 4 14,102 462 469 494 506 480 471 463 432 422 3 15,594 483 478 478 486 470 446 403 398 9 15,239 486 492 507 533 501 491 491 16 17,481 526 529 575 567 559 563 39 18,503 534 540 560 567 573 44 19,777 511 548 585 564 78 19,764 480 539 543 164 17,690 469 527 268 14,743 452 370 11,137 Total $ 4,971 $ 995 Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses $ 9 $ 90 $ 207 $ 282 $ 332 $ 377 $ 395 $ 409 $ 428 $ 431 9 75 180 278 328 353 377 396 408 11 93 186 273 338 361 371 380 18 121 225 315 379 407 435 15 121 236 359 428 475 18 121 259 364 429 25 149 274 374 22 105 241 18 126 20 Total $ 3,319 20 28 $ 1,700 Years Ended December 31 Total $ 25 $ 45 $ (16) $ (12) $ (1) $ (12) $ (13) $ (4) $ 12 7 25 12 $ (26) (9) (8) (31) (10) (40) (5) 8 (16) (24) (43) (5) (85) 6 15 26 (32) (10) 5 3 46 (8) (8) 4 37 6 20 7 6 39 37 37 (21) 53 59 4 63 58 58 (27) (2) 32 (16) (35) (19) - - (8) $ (43) $ (37) $ 5
December 31 | 2019 | |||
(In millions) | ||||
Medical professional liability | $ | 1,429 | ||
Other professional liability and management liability | 2,739 | |||
Surety | 369 | |||
Commercial auto | 404 | |||
General liability | 3,176 | |||
Workers’ compensation | 3,932 | |||
Other | 2,104 | |||
Total net liability for unpaid claim and claim adjustment expenses | $ | 14,153 | ||
December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses | Cumulative | |||||||||||||||||||||||||||||||||||||||||||||||
Number of | ||||||||||||||||||||||||||||||||||||||||||||||||
December 31 | 2010 (a) | 2011 (a) | 2012 (a) | 2013 (a) | 2014 (a) | 2015 (a) | 2016 (a) | 2017 (a) | 2018 (a) | 2019 | IBNR | Claims | ||||||||||||||||||||||||||||||||||||
(In millions, except reported claims data) | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | 402 | $ | 412 | $ | 423 | $ | 426 | $ | 415 | $ | 395 | $ | 365 | $ | 360 | $ | 356 | $ | 369 | $ | 1 | 14,624 | |||||||||||||||||||||||||
2011 | 429 | 437 | 443 | 468 | 439 | 434 | 437 | 437 | 439 | 2 | 16,526 | |||||||||||||||||||||||||||||||||||||
2012 | 464 | 469 | 508 | 498 | 493 | 484 | 493 | 499 | 8 | 17,724 | ||||||||||||||||||||||||||||||||||||||
2013 | 462 | 479 | 500 | 513 | 525 | 535 | 545 | 27 | 19,510 | |||||||||||||||||||||||||||||||||||||||
2014 | 450 | 489 | 537 | 530 | 535 | 529 | 16 | 19,723 | ||||||||||||||||||||||||||||||||||||||||
2015 | 433 | 499 | 510 | 494 | 488 | 29 | 18,029 | |||||||||||||||||||||||||||||||||||||||||
2016 | 427 | 487 | 485 | 499 | 63 | 15,823 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 412 | 449 | 458 | 127 | 14,636 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 404 | 429 | 216 | 13,760 | ||||||||||||||||||||||||||||||||||||||||||||
2019 | 430 | 364 | 10,467 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 4,685 | $ | 853 | ||||||||||||||||||||||||||||||||||||||||||||
Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | 10 | $ | 86 | $ | 173 | $ | 257 | $ | 306 | $ | 326 | $ | 337 | $ | 346 | $ | 350 | $ | 353 | ||||||||||||||||||||||||||||
2011 | 17 | 109 | 208 | 295 | 347 | 375 | 398 | 409 | 414 | |||||||||||||||||||||||||||||||||||||||
2012 | 14 | 117 | 221 | 323 | 388 | 427 | 457 | 479 | ||||||||||||||||||||||||||||||||||||||||
2013 | 17 | 119 | 255 | 355 | 414 | 462 | 495 | |||||||||||||||||||||||||||||||||||||||||
2014 | 23 | 136 | 258 | 359 | 417 | 472 | ||||||||||||||||||||||||||||||||||||||||||
2015 | 22 | 101 | 230 | 313 | 384 | |||||||||||||||||||||||||||||||||||||||||||
2016 | 18 | 121 | 246 | 339 | ||||||||||||||||||||||||||||||||||||||||||||
2017 | 19 | 107 | 235 | |||||||||||||||||||||||||||||||||||||||||||||
2018 | 21 | 115 | ||||||||||||||||||||||||||||||||||||||||||||||
2019 | 17 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,303 | ||||||||||||||||||||||||||||||||||||||||||||||
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented | $ | 1,382 | ||||||||||||||||||||||||||||||||||||||||||||||
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2010 | 22 | |||||||||||||||||||||||||||||||||||||||||||||||
Liability for unallocated claim adjustment expenses for accident years presented | 25 | |||||||||||||||||||||||||||||||||||||||||||||||
Total net liability for unpaid claim and claim adjustment expenses | $ | 1,429 | ||||||||||||||||||||||||||||||||||||||||||||||
Net Strengthening (Releases) of Prior Accident Year Reserves | ||||||||||||||||||||||||||||||||||||||||||||||||
Years Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
December 31 | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | 10 | $ | 11 | $ | 3 | $ | (11 | ) | $ | (20 | ) | $ | (30 | ) | $ | (5 | ) | $ | (4 | ) | $ | 13 | $ | (33 | ) | ||||||||||||||||||||||
2011 | 8 | 6 | 25 | (29 | ) | (5 | ) | 3 | - | 2 | 10 | |||||||||||||||||||||||||||||||||||||
2012 | �� | 5 | 39 | (10 | ) | (5 | ) | (9 | ) | 9 | 6 | 35 | ||||||||||||||||||||||||||||||||||||
2013 | 17 | 21 | 13 | 12 | 10 | 10 | 83 | |||||||||||||||||||||||||||||||||||||||||
2014 | 39 | 48 | (7 | ) | 5 | (6 | ) | 79 | ||||||||||||||||||||||||||||||||||||||||
2015 | 66 | 11 | (16 | ) | (6 | ) | 55 | |||||||||||||||||||||||||||||||||||||||||
2016 | 60 | (2 | ) | 14 | 72 | |||||||||||||||||||||||||||||||||||||||||||
2017 | 37 | 9 | 46 | |||||||||||||||||||||||||||||||||||||||||||||
2018 | 25 | 25 | ||||||||||||||||||||||||||||||||||||||||||||||
Total net development for the accident years presented above | 65 | 39 | 67 | |||||||||||||||||||||||||||||||||||||||||||||
Total net development for accident years prior to 2010 | (28 | ) | 9 | 6 | ||||||||||||||||||||||||||||||||||||||||||||
Total unallocated claim adjustment expense development | (7 | ) | (1 | ) | 2 | |||||||||||||||||||||||||||||||||||||||||||
Total | $ | 30 | $ | 47 | $ | 75 | ||||||||||||||||||||||||||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses | Cumulative | |||||||||||||||||||||||||||||||||||||||||||||||
Number of | ||||||||||||||||||||||||||||||||||||||||||||||||
December 31 | 2010 (a) | 2011 (a) | 2012 (a) | 2013 (a) | 2014 (a) | 2015 (a) | 2016 (a) | 2017 (a) | 2018 (a) | 2019 | IBNR | Claims | ||||||||||||||||||||||||||||||||||||
(In millions, except reported claims data) | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | 828 | $ | 828 | $ | 848 | $ | 848 | $ | 847 | $ | 837 | $ | 824 | $ | 827 | $ | 821 | $ | 821 | $ | 9 | 17,891 | |||||||||||||||||||||||||
2011 | 880 | 908 | 934 | 949 | 944 | 911 | 899 | 888 | 885 | 21 | 18,738 | |||||||||||||||||||||||||||||||||||||
2012 | 923 | 909 | 887 | 878 | 840 | 846 | 833 | 831 | 18 | 18,499 | ||||||||||||||||||||||||||||||||||||||
2013 | 884 | 894 | 926 | 885 | 866 | 863 | 850 | 45 | 17,928 | |||||||||||||||||||||||||||||||||||||||
2014 | 878 | 898 | 885 | 831 | 835 | 854 | 74 | 17,553 | ||||||||||||||||||||||||||||||||||||||||
2015 | 888 | 892 | 877 | 832 | 807 | 120 | 17,390 | |||||||||||||||||||||||||||||||||||||||||
2016 | 901 | 900 | 900 | 904 | 188 | 17,890 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 847 | 845 | 813 | 308 | 18,015 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 850 | 864 | 460 | 19,468 | ||||||||||||||||||||||||||||||||||||||||||||
2019 | 837 | 714 | 16,722 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 8,466 | $ | 1,957 | ||||||||||||||||||||||||||||||||||||||||||||
Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | 31 | $ | 204 | $ | 405 | $ | 541 | $ | 630 | $ | 670 | $ | 721 | $ | 752 | $ | 784 | $ | 790 | ||||||||||||||||||||||||||||
2011 | 71 | 314 | 503 | 605 | 683 | 726 | 781 | 796 | 828 | |||||||||||||||||||||||||||||||||||||||
2012 | 56 | 248 | 400 | 573 | 651 | 711 | 755 | 792 | ||||||||||||||||||||||||||||||||||||||||
2013 | 54 | 249 | 447 | 618 | 702 | 754 | 771 | |||||||||||||||||||||||||||||||||||||||||
2014 | 51 | 223 | 392 | 515 | 647 | 707 | ||||||||||||||||||||||||||||||||||||||||||
2015 | 60 | 234 | 404 | 542 | 612 | |||||||||||||||||||||||||||||||||||||||||||
2016 | 64 | 248 | 466 | 625 | ||||||||||||||||||||||||||||||||||||||||||||
2017 | 57 | 222 | 394 | |||||||||||||||||||||||||||||||||||||||||||||
2018 | 54 | 282 | ||||||||||||||||||||||||||||||||||||||||||||||
2019 | 64 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 5,865 | ||||||||||||||||||||||||||||||||||||||||||||||
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented | $ | 2,601 | ||||||||||||||||||||||||||||||||||||||||||||||
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2010 | 88 | |||||||||||||||||||||||||||||||||||||||||||||||
Liability for unallocated claim adjustment expenses for accident years presented | 50 | |||||||||||||||||||||||||||||||||||||||||||||||
Total net liability for unpaid claim and claim adjustment expenses | $ | 2,739 | ||||||||||||||||||||||||||||||||||||||||||||||
Years Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
December 31 | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | - | $ | 20 | $ | - | $ | (1 | ) | $ | (10 | ) | $ | (13 | ) | $ | 3 | $ | (6 | ) | $ | - | $ | (7 | ) | |||||||||||||||||||||||
2011 | 28 | 26 | 15 | (5 | ) | (33 | ) | (12 | ) | (11 | ) | (3 | ) | 5 | ||||||||||||||||||||||||||||||||||
2012 | (14 | ) | (22 | ) | (9 | ) | (38 | ) | 6 | (13 | ) | (2 | ) | (92 | ) | |||||||||||||||||||||||||||||||||
2013 | 10 | 32 | (41 | ) | (19 | ) | (3 | ) | (13 | ) | (34 | ) | ||||||||||||||||||||||||||||||||||||
2014 | 20 | (13 | ) | (54 | ) | 4 | 19 | (24 | ) | |||||||||||||||||||||||||||||||||||||||
2015 | 4 | (15 | ) | (45 | ) | (25 | ) | (81 | ) | |||||||||||||||||||||||||||||||||||||||
2016 | (1 | ) | - | 4 | 3 | |||||||||||||||||||||||||||||||||||||||||||
2017 | (2 | ) | (32 | ) | (34 | ) | ||||||||||||||||||||||||||||||||||||||||||
2018 | 14 | 14 | ||||||||||||||||||||||||||||||||||||||||||||||
Total net development for the accident years presented above | (92 | ) | (76 | ) | (38 | ) | ||||||||||||||||||||||||||||||||||||||||||
Total net development for accident years prior to 2010 | (27 | ) | (44 | ) | (17 | ) | ||||||||||||||||||||||||||||||||||||||||||
Total unallocated claim adjustment expense development | (7 | ) | (7 | ) | (14 | ) | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | (126 | ) | $ | (127 | ) | $ | (69 | ) | |||||||||||||||||||||||||||||||||||||||
(a) | Data presented for these calendar years is required supplemental information, which is unaudited. |
Accident Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses Accident Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2008 Liability for unallocated claim adjustment expenses for accident years presented Total net liability for unpaid claim and claim adjustment expenses Net Strengthening or (Releases) of Prior Accident Year Reserves Accident Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total net development for the accident years presented above Total net development for accident years prior to 2008 Total unallocated claim adjustment expense development Total Other Professional Liability and Management Liability December 31, 2017 Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses Cumulative Number of December 31 2008 (a) 2009 (a) 2010 (a) 2011 (a) 2012 (a) 2013 (a) 2014 (a) 2015 (a) 2016 (a) 2017 IBNR Claims (In millions, except reported claims data) $ 916 $ 933 $ 954 $ 924 $ 915 $ 880 $ 850 $ 845 $ 827 $ 818 $ 26 16,331 829 873 903 898 891 900 895 903 901 32 17,274 825 827 850 848 846 836 823 826 31 17,805 876 904 933 948 944 910 898 71 18,643 907 894 876 870 833 832 73 18,262 844 841 879 840 824 83 17,362 841 859 854 798 158 16,984 847 851 832 296 16,603 859 859 426 17,004 810 701 15,206 Total $ 8,398 $ 1,897 $ 39 $ 181 $ 376 $ 515 $ 600 $ 641 $ 678 $ 719 $ 741 $ 753 37 195 358 550 638 719 769 798 821 31 203 404 541 630 670 721 753 71 313 502 604 682 726 781 57 248 398 570 648 698 51 240 426 583 667 51 212 375 494 48 209 377 60 236 52 Total $ 5,632 $ 2,766 79 67 $ 2,912 Years Ended December 31 Total $ 17 $ 21 $ (30) $ (9) $ (35) $ (30) $ (5) $ (18) $ (9) $ (98) 44 30 (5) (7) 9 (5) 8 (2) 72 2 23 (2) (2) (10) (13) 3 1 28 29 15 (4) (34) (12) 22 (13) (18) (6) (37) (1) (75) (3) 38 (39) (16) (20) 18 (5) (56) (43) 4 (19) (15) - - 26 (134) (112) (26) 4 (14) - - (5) $ - $ (130) $ (131)
December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses | Cumulative | |||||||||||||||||||||||||||||||||||||||||||||||
Number of | ||||||||||||||||||||||||||||||||||||||||||||||||
December 31 | 2010 (a) | 2011 (a) | 2012 (a) | 2013 (a) | 2014 (a) | 2015 (a) | 2016 (a) | 2017 (a) | 2018 (a) | 2019 | IBNR | Claims | ||||||||||||||||||||||||||||||||||||
(In millions, except reported claims data) | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | 112 | $ | 112 | $ | 111 | $ | 84 | $ | 76 | $ | 66 | $ | 63 | $ | 59 | $ | 61 | $ | 61 | $ | - | 5,982 | |||||||||||||||||||||||||
2011 | 120 | 121 | 116 | 87 | 75 | 70 | 66 | 62 | 62 | 2 | 5,813 | |||||||||||||||||||||||||||||||||||||
2012 | 120 | 122 | 98 | 70 | 52 | 45 | 39 | 38 | 1 | 5,568 | ||||||||||||||||||||||||||||||||||||||
2013 | 120 | 121 | 115 | 106 | 91 | 87 | 83 | 3 | 5,062 | |||||||||||||||||||||||||||||||||||||||
2014 | 123 | 124 | 94 | 69 | 60 | 45 | 4 | 5,078 | ||||||||||||||||||||||||||||||||||||||||
2015 | 131 | 131 | 104 | 79 | 63 | 11 | 4,976 | |||||||||||||||||||||||||||||||||||||||||
2016 | 124 | 124 | 109 | 84 | 36 | 5,379 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 120 | 115 | 103 | 54 | 5,496 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 114 | 108 | 76 | 5,451 | ||||||||||||||||||||||||||||||||||||||||||||
2019 | 119 | 102 | 3,549 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 766 | $ | 289 | ||||||||||||||||||||||||||||||||||||||||||||
Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | 13 | $ | 34 | $ | 50 | $ | 55 | $ | 57 | $ | 58 | $ | 55 | $ | 52 | $ | 52 | $ | 53 | ||||||||||||||||||||||||||||
2011 | 19 | 42 | 55 | 58 | 60 | 60 | 56 | 57 | 57 | |||||||||||||||||||||||||||||||||||||||
2012 | 5 | 32 | 34 | 35 | 35 | 36 | 37 | 37 | ||||||||||||||||||||||||||||||||||||||||
2013 | 16 | 40 | 69 | 78 | 78 | 78 | 77 | |||||||||||||||||||||||||||||||||||||||||
2014 | 7 | 30 | 38 | 36 | 38 | 38 | ||||||||||||||||||||||||||||||||||||||||||
2015 | 7 | 26 | 38 | 40 | 42 | |||||||||||||||||||||||||||||||||||||||||||
2016 | 5 | 37 | 45 | 45 | ||||||||||||||||||||||||||||||||||||||||||||
2017 | 23 | 37 | 41 | |||||||||||||||||||||||||||||||||||||||||||||
2018 | 5 | 25 | ||||||||||||||||||||||||||||||||||||||||||||||
2019 | 12 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 427 | ||||||||||||||||||||||||||||||||||||||||||||||
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented | $ | 339 | ||||||||||||||||||||||||||||||||||||||||||||||
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2010 | 10 | |||||||||||||||||||||||||||||||||||||||||||||||
Liability for unallocated claim adjustment expenses for accident years presented | 20 | |||||||||||||||||||||||||||||||||||||||||||||||
Total net liability for unpaid claim and claim adjustment expenses | $ | 369 | ||||||||||||||||||||||||||||||||||||||||||||||
Years Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
December 31 | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | - | $ | (1 | ) | $ | (27 | ) | $ | (8 | ) | $ | (10 | ) | $ | (3 | ) | $ | (4 | ) | $ | 2 | $ | - | $ | (51 | ) | |||||||||||||||||||||
2011 | 1 | (5 | ) | (29 | ) | (12 | ) | (5 | ) | (4 | ) | (4 | ) | - | (58 | ) | ||||||||||||||||||||||||||||||||
2012 | 2 | (24 | ) | (28 | ) | (18 | ) | (7 | ) | (6 | ) | (1 | ) | (82 | ) | |||||||||||||||||||||||||||||||||
2013 | 1 | (6 | ) | (9 | ) | (15 | ) | (4 | ) | (4 | ) | (37 | ) | |||||||||||||||||||||||||||||||||||
2014 | 1 | (30 | ) | (25 | ) | (9 | ) | (15 | ) | (78 | ) | |||||||||||||||||||||||||||||||||||||
2015 | - | (27 | ) | (25 | ) | (16 | ) | (68 | ) | |||||||||||||||||||||||||||||||||||||||
2016 | - | (15 | ) | (25 | ) | (40 | ) | |||||||||||||||||||||||||||||||||||||||||
2017 | (5 | ) | (12 | ) | (17 | ) | ||||||||||||||||||||||||||||||||||||||||||
2018 | (6 | ) | (6 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Total net development for the accident years presented above | (82 | ) | (66 | ) | (79 | ) | ||||||||||||||||||||||||||||||||||||||||||
Total net development for accident years prior to 2010 | 1 | (4 | ) | (3 | ) | |||||||||||||||||||||||||||||||||||||||||||
Total unallocated claim adjustment expense development | (3 | ) | - | (10 | ) | |||||||||||||||||||||||||||||||||||||||||||
Total | $ | (84 | ) | $ | (70 | ) | $ | (92 | ) | |||||||||||||||||||||||||||||||||||||||
(a) | Data presented for these calendar years is required supplemental information, which is unaudited. |
Accident Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Accident Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2008 Liability for unallocated claim adjustment expenses for accident years presented Total net liability for unpaid claim and claim adjustment expenses Net Strengthening or (Releases) of Prior Accident Year Reserves Accident Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total net development for the accident years presented above Total net development for accident years prior to 2008 Total unallocated claim adjustment expense development Total Surety December 31, 2017 Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses Cumulative Number of December 31 2008 (a) 2009 (a) 2010 (a) 2011 (a) 2012 (a) 2013 (a) 2014 (a) 2015 (a) 2016 (a) 2017 IBNR Claims (In millions, except reported claims data) $ 114 $ 114 $ 73 $ 68 $ 61 $ 52 $ 48 $ 45 $ 44 $ 44 7,199 114 114 103 85 68 59 52 53 53 $ 1 6,679 112 112 111 84 76 66 63 59 7 5,962 120 121 116 87 75 70 66 9 5,795 120 122 98 70 52 45 9 5,519 120 121 115 106 91 10 4,993 123 124 94 69 25 4,938 131 131 104 63 4,670 124 124 84 4,707 120 97 2,901 Total $ 775 $ 305 Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses $ 9 $ 27 $ 35 $ 39 $ 42 $ 43 $ 43 $ 43 $ 43 $ 43 13 24 34 41 43 45 46 47 47 13 34 50 55 57 58 55 52 19 42 55 58 60 60 56 5 32 34 35 35 36 16 40 69 78 78 7 30 38 36 7 26 38 5 37 23 Total $ 446 $ 329 9 30 $ 368 Years Ended December 31 Total $ - $ (41) $ (5) $ (7) $ (9) $ (4) $ (3) $ (1) $ - $ (70) (11) (18) (17) (9) (7) 1 - (61) (1) (27) (8) (10) (3) (4) (53) 1 (5) (29) (12) (5) (4) (54) 2 (24) (28) (18) (7) (75) 1 (6) (9) (15) (29) 1 (30) (25) (54) (27) (27) - - (65) (65) (82) (4) 2 1 - - (3) $ (69) $ (63) $ (84)
December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses | Cumulative | |||||||||||||||||||||||||||||||||||||||||||||||
Number of | ||||||||||||||||||||||||||||||||||||||||||||||||
December 31 | 2010 (a) | 2011 (a) | 2012 (a) | 2013 (a) | 2014 (a) | 2015 (a) | 2016 (a) | 2017 (a) | 2018 (a) | 2019 | IBNR | Claims | ||||||||||||||||||||||||||||||||||||
(In millions, except reported claims data) | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | 267 | $ | 283 | $ | 287 | $ | 291 | $ | 298 | $ | 293 | $ | 289 | $ | 288 | $ | 288 | $ | 288 | $ | 1 | 48,035 | |||||||||||||||||||||||||
2011 | 268 | 281 | 288 | 302 | 300 | 294 | 294 | 294 | 291 | - | 47,909 | |||||||||||||||||||||||||||||||||||||
2012 | 275 | 289 | 299 | 303 | 307 | 299 | 299 | 297 | 3 | 46,288 | ||||||||||||||||||||||||||||||||||||||
2013 | 246 | 265 | 265 | 249 | 245 | 245 | 241 | 2 | 39,429 | |||||||||||||||||||||||||||||||||||||||
2014 | 234 | 223 | 212 | 205 | 205 | 201 | 3 | 33,622 | ||||||||||||||||||||||||||||||||||||||||
2015 | 201 | 199 | 190 | 190 | 183 | 7 | 30,418 | |||||||||||||||||||||||||||||||||||||||||
2016 | 198 | 186 | 186 | 186 | 7 | 30,414 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 199 | 198 | 200 | 9 | 30,850 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 229 | 227 | 47 | 33,959 | ||||||||||||||||||||||||||||||||||||||||||||
2019 | 257 | 128 | 31,455 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 2,371 | $ | 207 | ||||||||||||||||||||||||||||||||||||||||||||
Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | 74 | $ | 141 | $ | 203 | $ | 246 | $ | 271 | $ | 281 | $ | 286 | $ | 287 | $ | 287 | $ | 287 | ||||||||||||||||||||||||||||
2011 | 79 | 145 | 199 | 248 | 274 | 284 | 287 | 289 | 289 | |||||||||||||||||||||||||||||||||||||||
2012 | 78 | 160 | 220 | 259 | 282 | 285 | 290 | 291 | ||||||||||||||||||||||||||||||||||||||||
2013 | 74 | 135 | 168 | 200 | 225 | 234 | 238 | |||||||||||||||||||||||||||||||||||||||||
2014 | 64 | 102 | 137 | 166 | 187 | 196 | ||||||||||||||||||||||||||||||||||||||||||
2015 | 52 | 96 | 130 | 153 | 172 | |||||||||||||||||||||||||||||||||||||||||||
2016 | 52 | 93 | 126 | 154 | ||||||||||||||||||||||||||||||||||||||||||||
2017 | 58 | 107 | 150 | |||||||||||||||||||||||||||||||||||||||||||||
2018 | 66 | 128 | ||||||||||||||||||||||||||||||||||||||||||||||
2019 | 77 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 1,982 | ||||||||||||||||||||||||||||||||||||||||||||||
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented | $ | 389 | ||||||||||||||||||||||||||||||||||||||||||||||
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2010 | 1 | |||||||||||||||||||||||||||||||||||||||||||||||
Liability for unallocated claim adjustment expenses for accident years presented | 14 | |||||||||||||||||||||||||||||||||||||||||||||||
Total net liability for unpaid claim and claim adjustment expenses | $ | 404 | ||||||||||||||||||||||||||||||||||||||||||||||
Years Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
December 31 | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | 16 | $ | 4 | $ | 4 | $ | 7 | $ | (5 | ) | $ | (4 | ) | $ | (1 | ) | $ | - | $ | - | $ | 21 | |||||||||||||||||||||||||
2011 | 13 | 7 | 14 | (2 | ) | (6 | ) | - | - | (3 | ) | 23 | ||||||||||||||||||||||||||||||||||||
2012 | 14 | 10 | 4 | 4 | (8 | ) | - | (2 | ) | 22 | ||||||||||||||||||||||||||||||||||||||
2013 | 19 | - | (16 | ) | (4 | ) | - | (4 | ) | (5 | ) | |||||||||||||||||||||||||||||||||||||
2014 | (11 | ) | (11 | ) | (7 | ) | - | (4 | ) | (33 | ) | |||||||||||||||||||||||||||||||||||||
2015 | (2 | ) | (9 | ) | - | (7 | ) | (18 | ) | |||||||||||||||||||||||||||||||||||||||
2016 | (12 | ) | - | - | (12 | ) | ||||||||||||||||||||||||||||||||||||||||||
2017 | (1 | ) | 2 | 1 | ||||||||||||||||||||||||||||||||||||||||||||
2018 | (2 | ) | (2 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Total net development for the accident years presented above | (41 | ) | (1 | ) | (20 | ) | ||||||||||||||||||||||||||||||||||||||||||
Total net development for accident years prior to 2010 | 4 | 1 | (4 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Total unallocated claim adjustment expense development | 2 | 1 | (1 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | (35 | ) | $ | 1 | $ | (25 | ) | ||||||||||||||||||||||||||||||||||||||||
(a) | Data presented for these calendar years is required supplemental information, which is unaudited. |
Commercial Auto
December 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses | Cumulative | |||||||||||||||||||||||||||||||||||||||||||||||
Number of | ||||||||||||||||||||||||||||||||||||||||||||||||
December 31 | 2008 (a) | 2009 (a) | 2010 (a) | 2011 (a) | 2012 (a) | 2013 (a) | 2014 (a) | 2015 (a) | 2016 (a) | 2017 | IBNR | Claims | ||||||||||||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||
(In millions, except reported claims data)
| ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2008 | $ | 322 | $ | 323 | $ | 316 | $ | 306 | $ | 309 | $ | 305 | $ | 298 | $ | 298 | $ | 296 | $ | 297 | 56,424 | |||||||||||||||||||||||||||
2009 | 287 | 272 | 274 | 278 | 281 | 277 | 275 | 272 | 272 | 47,343 | ||||||||||||||||||||||||||||||||||||||
2010 | 262 | 274 | 279 | 283 | 291 | 286 | 281 | 280 | $ | 1 | 46,335 | |||||||||||||||||||||||||||||||||||||
2011 | 262 | 273 | 279 | 293 | 290 | 285 | 285 | 3 | 46,691 | |||||||||||||||||||||||||||||||||||||||
2012 | 270 | 282 | 292 | 296 | 300 | 292 | 7 | 45,288 | ||||||||||||||||||||||||||||||||||||||||
2013 | 242 | 259 | 257 | 241 | 237 | 10 | 38,539 | |||||||||||||||||||||||||||||||||||||||||
2014 | 231 | 221 | 210 | 204 | 19 | 33,029 | ||||||||||||||||||||||||||||||||||||||||||
2015 | 199 | 197 | 187 | 35 | 29,924 | |||||||||||||||||||||||||||||||||||||||||||
2016 | 196 | 183 | 53 | 29,745 | ||||||||||||||||||||||||||||||||||||||||||||
2017 | 196 | 117 | 25,173 | |||||||||||||||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 2,433 | $ | 245 | ||||||||||||||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||
Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses | ||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2008 | $ | 83 | $ | 158 | $ | 210 | $ | 244 | $ | 274 | $ | 289 | $ | 291 | $ | 292 | $ | 293 | $ | 295 | ||||||||||||||||||||||||||||
2009 | 72 | 128 | 188 | 229 | 257 | 269 | 270 | 270 | 271 | |||||||||||||||||||||||||||||||||||||||
2010 | 72 | 137 | 197 | 240 | 265 | 274 | 279 | 280 | ||||||||||||||||||||||||||||||||||||||||
2011 | 78 | 141 | 193 | 241 | 264 | 275 | 277 | |||||||||||||||||||||||||||||||||||||||||
2012 | 77 | 157 | 214 | 253 | 276 | 278 | ||||||||||||||||||||||||||||||||||||||||||
2013 | 73 | 132 | 164 | 195 | 219 | |||||||||||||||||||||||||||||||||||||||||||
2014 | 63 | 100 | 135 | 163 | ||||||||||||||||||||||||||||||||||||||||||||
2015 | 52 | 95 | 128 | |||||||||||||||||||||||||||||||||||||||||||||
2016 | 51 | 91 | ||||||||||||||||||||||||||||||||||||||||||||||
2017 | 58 | |||||||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 2,060 | ||||||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented | $ | 373 | ||||||||||||||||||||||||||||||||||||||||||||||
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2008 | 6 | |||||||||||||||||||||||||||||||||||||||||||||||
Liability for unallocated claim adjustment expenses for accident years presented | 10 | |||||||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Total net liability for unpaid claim and claim adjustment expenses | $ | 389 | ||||||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Net Strengthening or (Releases) of Prior Accident Year Reserves
| ||||||||||||||||||||||||||||||||||||||||||||||||
Years Ended December 31 | Total | |||||||||||||||||||||||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2008 | $ | 1 | $ | (7) | $ | (10) | $ | 3 | $ | (4) | $ | (7) | $ | (2) | $ | 1 | $ | (25) | ||||||||||||||||||||||||||||||
2009 | (15) | 2 | 4 | 3 | (4) | $ | (2) | (3) | - | (15) | ||||||||||||||||||||||||||||||||||||||
2010 | 12 | 5 | 4 | 8 | (5) | (5) | (1) | 18 | ||||||||||||||||||||||||||||||||||||||||
2011 | 11 | 6 | 14 | (3) | (5) | - | 23 | |||||||||||||||||||||||||||||||||||||||||
2012 | 12 | 10 | 4 | 4 | (8) | 22 | ||||||||||||||||||||||||||||||||||||||||||
2013 | 17 | (2) | (16) | (4) | (5) | |||||||||||||||||||||||||||||||||||||||||||
2014 | (10) | (11) | (6) | (27) | ||||||||||||||||||||||||||||||||||||||||||||
2015 | (2) | (10) | (12) | |||||||||||||||||||||||||||||||||||||||||||||
2016 | (13) | (13) | ||||||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Total net development for the accident years presented above | (18) | (40) | (41) | |||||||||||||||||||||||||||||||||||||||||||||
Total net development for accident years prior to 2008 | (4) | (6) | 1 | |||||||||||||||||||||||||||||||||||||||||||||
Total unallocated claim adjustment expense development | - | - | 2 | |||||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | (22) | $ | (46) | $ | (38) | ||||||||||||||||||||||||||||||||||||||||||
|
|
December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses | Cumulative | |||||||||||||||||||||||||||||||||||||||||||||||
Number of | ||||||||||||||||||||||||||||||||||||||||||||||||
December 31 | 2010 (a) | 2011 (a) | 2012 (a) | 2013 (a) | 2014 (a) | 2015 (a) | 2016 (a) | 2017 (a) | 2018 (a) | 2019 | IBNR | Claims | ||||||||||||||||||||||||||||||||||||
(In millions, except reported claims data) | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | 646 | $ | 664 | $ | 658 | $ | 709 | $ | 750 | $ | 726 | $ | 697 | $ | 691 | $ | 691 | $ | 690 | $ | 19 | 44,229 | |||||||||||||||||||||||||
2011 | 591 | 589 | 631 | 677 | 676 | 681 | 670 | 669 | 667 | 20 | 39,361 | |||||||||||||||||||||||||||||||||||||
2012 | 587 | 611 | 639 | 636 | 619 | 635 | 635 | 630 | 31 | 35,219 | ||||||||||||||||||||||||||||||||||||||
2013 | 650 | 655 | 650 | 655 | 613 | 623 | 620 | 27 | 33,570 | |||||||||||||||||||||||||||||||||||||||
2014 | 653 | 658 | 654 | 631 | 635 | 658 | 57 | 27,877 | ||||||||||||||||||||||||||||||||||||||||
2015 | 581 | 576 | 574 | 589 | 600 | 73 | 23,834 | |||||||||||||||||||||||||||||||||||||||||
2016 | 623 | 659 | 667 | 671 | 166 | 23,817 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 632 | 632 | 632 | 226 | 21,114 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 653 | 644 | 408 | 17,889 | ||||||||||||||||||||||||||||||||||||||||||||
2019 | 680 | 602 | 12,916 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 6,492 | $ | 1,629 | ||||||||||||||||||||||||||||||||||||||||||||
Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | 27 | $ | 145 | $ | 280 | $ | 429 | $ | 561 | $ | 611 | $ | 642 | $ | 652 | $ | 656 | $ | 667 | ||||||||||||||||||||||||||||
2011 | 28 | 148 | 273 | 411 | 517 | 568 | 602 | 622 | 638 | |||||||||||||||||||||||||||||||||||||||
2012 | 28 | 132 | 247 | 374 | 454 | 510 | 559 | 579 | ||||||||||||||||||||||||||||||||||||||||
2013 | 31 | 128 | 240 | 352 | 450 | 510 | 551 | |||||||||||||||||||||||||||||||||||||||||
2014 | 31 | 119 | 247 | 376 | 481 | 547 | ||||||||||||||||||||||||||||||||||||||||||
2015 | 19 | 110 | 230 | 357 | 446 | |||||||||||||||||||||||||||||||||||||||||||
2016 | 32 | 163 | 279 | 407 | ||||||||||||||||||||||||||||||||||||||||||||
2017 | 23 | 118 | 250 | |||||||||||||||||||||||||||||||||||||||||||||
2018 | 33 | 107 | ||||||||||||||||||||||||||||||||||||||||||||||
2019 | 25 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 4,217 | ||||||||||||||||||||||||||||||||||||||||||||||
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented | $ | 2,275 | ||||||||||||||||||||||||||||||||||||||||||||||
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2010 | 836 | |||||||||||||||||||||||||||||||||||||||||||||||
Liability for unallocated claim adjustment expenses for accident years presented | 65 | |||||||||||||||||||||||||||||||||||||||||||||||
Total net liability for unpaid claim and claim adjustment expenses | $ | 3,176 | ||||||||||||||||||||||||||||||||||||||||||||||
Years Ended December 31 | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | 18 | $ | (6 | ) | $ | 51 | $ | 41 | $ | (24 | ) | $ | (29 | ) | $ | (6 | ) | $ | - | $ | (1 | ) | $ | 44 | |||||||||||||||||||||||
2011 | (2 | ) | 42 | 46 | (1 | ) | 5 | (11 | ) | (1 | ) | (2 | ) | 76 | ||||||||||||||||||||||||||||||||||
2012 | 24 | 28 | (3 | ) | (17 | ) | 16 | - | (5 | ) | 43 | |||||||||||||||||||||||||||||||||||||
2013 | 5 | (5 | ) | 5 | (42 | ) | 10 | (3 | ) | (30 | ) | |||||||||||||||||||||||||||||||||||||
2014 | 5 | (4 | ) | (23 | ) | 4 | 23 | 5 | ||||||||||||||||||||||||||||||||||||||||
2015 | (5 | ) | (2 | ) | 15 | 11 | 19 | |||||||||||||||||||||||||||||||||||||||||
2016 | 36 | 8 | 4 | 48 | ||||||||||||||||||||||||||||||||||||||||||||
2017 | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
2018 | (9 | ) | (9 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Total net development for the accident years presented above | (32 | ) | 36 | 18 | ||||||||||||||||||||||||||||||||||||||||||||
Total net development for accident years prior to 2010 | - | - | 29 | |||||||||||||||||||||||||||||||||||||||||||||
Total unallocated claim adjustment expense development | 8 | (4 | ) | 7 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | (24 | ) | $ | 32 | $ | 54 | |||||||||||||||||||||||||||||||||||||||||
(a) | Data presented for these calendar years is required supplemental information, which is unaudited. |
Accident Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses Accident Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Net Strengthening or (Releases) of Prior Accident Year Reserves December 31 Accident Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total net development for the accident years presented above Total net development for accident years prior to 2008 Total unallocated claim adjustment expense development General Liability December 31, 2017 Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses Cumulative Number of December 31 2008 (a) 2009 (a) 2010 (a) 2011 (a) 2012 (a) 2013 (a) 2014 (a) 2015 (a) 2016 (a) 2017 IBNR Claims (In millions, except reported claims data) $ 611 $ 604 $ 630 $ 647 $ 633 $ 632 $ 613 $ 600 $ 591 $ 592 $ 13 $ 44,655 591 637 634 633 629 623 619 622 627 18 44,038 566 597 599 649 695 675 659 654 19 43,472 537 534 564 610 611 621 615 29 38,216 539 563 579 570 558 569 34 34,249 615 645 634 643 604 62 33,255 627 634 635 627 131 27,478 573 574 585 208 23,082 622 647 351 21,893 627 547 15,375 Total $ 6,147 $ 1,412 $ 31 $ 129 $ 261 $ 390 $ 473 $ 528 $ 550 $ 560 $ 567 $ 574 33 112 270 392 486 532 557 584 596 27 139 267 414 530 577 608 618 27 135 253 389 484 534 562 27 127 233 340 417 473 33 135 257 377 469 29 115 245 379 31 132 247 34 163 27 �� Total $ 4,108 Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented $ 2,039 Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2008 1,026 Liability for unallocated claim adjustment expenses for accident years presented 58 Total net liability for unpaid claim and claim adjustment expenses $ 3,123 Years Ended Total $ (7) $ 26 $ 17 $ (14) $ (1) $ (19) $ (13) $ (9) $ 1 $ (19) 46 (3) (1) (4) (6) (4) 3 5 36 31 2 50 46 (20) (16) (5) 88 (3) 30 46 1 10 (6) 78 24 16 (9) (12) 11 30 30 (11) 9 (39) (11) 7 1 (8) - 1 11 12 25 25 (49) (13) (5) 16 (15) (2) - - 7 Total $ (33) $ (28) $ -
December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses | Cumulative | |||||||||||||||||||||||||||||||||||||||||||||||
Number of | ||||||||||||||||||||||||||||||||||||||||||||||||
December 31 | 2010 (a) | 2011 (a) | 2012 (a) | 2013 (a) | 2014 (a) | 2015 (a) | 2016 (a) | 2017 (a) | 2018 (a) | 2019 | IBNR | Claims | ||||||||||||||||||||||||||||||||||||
(In millions, except reported claims data) | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | 583 | $ | 632 | $ | 654 | $ | 676 | $ | 698 | $ | 710 | $ | 730 | $ | 733 | $ | 732 | $ | 735 | $ | 55 | 49,333 | |||||||||||||||||||||||||
2011 | 607 | 641 | 647 | 659 | 651 | 676 | 676 | 674 | 688 | 40 | 45,959 | |||||||||||||||||||||||||||||||||||||
2012 | 601 | 627 | 659 | 669 | 678 | 673 | 671 | 668 | 67 | 42,586 | ||||||||||||||||||||||||||||||||||||||
2013 | 537 | 572 | 592 | 618 | 593 | 582 | 561 | 93 | 38,688 | |||||||||||||||||||||||||||||||||||||||
2014 | 467 | 480 | 479 | 452 | 450 | 446 | 99 | 33,480 | ||||||||||||||||||||||||||||||||||||||||
2015 | 422 | 431 | 406 | 408 | 394 | 130 | 31,861 | |||||||||||||||||||||||||||||||||||||||||
2016 | 426 | 405 | 396 | 382 | 144 | 31,945 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 440 | 432 | 421 | 138 | 33,029 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 450 | 440 | 185 | 34,647 | ||||||||||||||||||||||||||||||||||||||||||||
2019 | 452 | 257 | 29,795 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 5,187 | $ | 1,208 | ||||||||||||||||||||||||||||||||||||||||||||
Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | 97 | $ | 251 | $ | 359 | $ | 442 | $ | 510 | $ | 542 | $ | 577 | $ | 615 | $ | 625 | $ | 631 | ||||||||||||||||||||||||||||
2011 | 99 | 249 | 358 | 438 | 478 | 522 | 564 | 571 | 581 | |||||||||||||||||||||||||||||||||||||||
2012 | 87 | 232 | 342 | 416 | 470 | 509 | 524 | 536 | ||||||||||||||||||||||||||||||||||||||||
2013 | 80 | 213 | 300 | 370 | 417 | 419 | 411 | |||||||||||||||||||||||||||||||||||||||||
2014 | 61 | 159 | 215 | 258 | 282 | 290 | ||||||||||||||||||||||||||||||||||||||||||
2015 | 51 | 131 | 180 | 212 | 231 | |||||||||||||||||||||||||||||||||||||||||||
2016 | 53 | 129 | 169 | 198 | ||||||||||||||||||||||||||||||||||||||||||||
2017 | 63 | 151 | 207 | |||||||||||||||||||||||||||||||||||||||||||||
2018 | 68 | 163 | ||||||||||||||||||||||||||||||||||||||||||||||
2019 | 71 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,319 | ||||||||||||||||||||||||||||||||||||||||||||||
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented | $ | 1,868 | ||||||||||||||||||||||||||||||||||||||||||||||
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2010 | 2,061 | |||||||||||||||||||||||||||||||||||||||||||||||
Other (b) | (22 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Liability for unallocated claim adjustment expenses for accident years presented | 25 | |||||||||||||||||||||||||||||||||||||||||||||||
Total net liability for unpaid claim and claim adjustment expenses | $ | 3,932 | ||||||||||||||||||||||||||||||||||||||||||||||
Years Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
December 31 | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | $ | 49 | $ | 22 | $ | 22 | $ | 22 | $ | 12 | $ | 20 | $ | 3 | $ | (1 | ) | $ | 3 | $ | 152 | |||||||||||||||||||||||||||
2011 | 34 | 6 | 12 | (8 | ) | 25 | - | (2 | ) | 14 | 81 | |||||||||||||||||||||||||||||||||||||
2012 | 26 | 32 | 10 | 9 | (5 | ) | (2 | ) | (3 | ) | 67 | |||||||||||||||||||||||||||||||||||||
2013 | 35 | 20 | 26 | (25 | ) | (11 | ) | (21 | ) | 24 | ||||||||||||||||||||||||||||||||||||||
2014 | 13 | (1 | ) | (27 | ) | (2 | ) | (4 | ) | (21 | ) | |||||||||||||||||||||||||||||||||||||
2015 | 9 | (25 | ) | 2 | (14 | ) | (28 | ) | ||||||||||||||||||||||||||||||||||||||||
2016 | (21 | ) | (9 | ) | (14 | ) | (44 | ) | ||||||||||||||||||||||||||||||||||||||||
2017 | (8 | ) | (11 | ) | (19 | ) | ||||||||||||||||||||||||||||||||||||||||||
2018 | (10 | ) | (10 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Total net development for the accident years presented above | (100 | ) | (33 | ) | (60 | ) | ||||||||||||||||||||||||||||||||||||||||||
Adjustment for development on a discounted basis | (3 | ) | - | 3 | ||||||||||||||||||||||||||||||||||||||||||||
Total net development for accident years prior to 2010 | 39 | 8 | 21 | |||||||||||||||||||||||||||||||||||||||||||||
Total unallocated claim adjustment expense development | 1 | (7 | ) | 23 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | (63 | ) | $ | (32 | ) | $ | (13 | ) | |||||||||||||||||||||||||||||||||||||||
(a) | Data presented for these calendar years is required supplemental information, which is unaudited. |
Accident Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Accident Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented $ 1,826 Net Strengthening or (Releases) of Prior Accident Year Reserves December 31 Accident Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total net development for the accident years presented above Adjustment for development on a discounted basis Total net development for accident years prior to 2008 Total unallocated claim adjustment expense development Total Workers’ Compensation December 31, 2017 Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses Cumulative Number of December 31 2008 (a) 2009 (a) 2010 (a) 2011 (a) 2012 (a) 2013 (a) 2014 (a) 2015 (a) 2016 (a) 2017 IBNR Claims (In millions, except reported claims data) $ 558 $ 575 $ 593 $ 606 $ 608 $ 612 $ 622 $ 630 $ 638 $ 652 $ 34 59,911 583 587 594 596 600 611 617 625 632 34 51,161 576 619 641 663 683 697 717 721 33 48,144 593 628 637 648 642 666 668 23 44,691 589 616 648 661 671 667 63 41,756 528 563 584 610 584 57 38,153 459 474 474 448 106 33,072 416 426 401 154 31,470 421 399 200 31,310 434 254 27,929 Total $ 5,606 $ 958 Cumulative Net Paid Claim and Allocated Claim Adjustment Expenses $ 92 $ 233 $ 323 $ 381 $ 425 $ 461 $ 489 $ 505 $ 520 $ 541 88 223 315 381 435 468 495 516 539 94 245 352 433 500 531 565 603 97 245 353 432 471 515 557 86 229 338 411 465 503 79 211 297 366 413 60 157 213 256 50 130 179 52 127 62 Total $ 3,780 Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2008 2,216 Other (b) (37) Liability for unallocated claim adjustment expenses for accident years presented 7 Total net liability for unpaid claim and claim adjustment expenses $ 4,012 Years Ended Total $ 17 $ 18 $ 13 $ 2 $ 4 $ 10 $ 8 $ 8 $ 14 $ 94 4 7 2 4 11 6 8 7 49 43 22 22 20 14 20 4 145 35 9 11 (6) 24 2 75 27 32 13 10 (4) 78 35 21 26 (26) 56 15 (26) (11) 10 (25) (15) (22) (22) 71 106 (76) (2) 1 (4) 11 43 14 1 $ 80 $ 150 $ (65)
(b) | Other includes the effect of discounting lifetime claim reserves. |
The table below reconciles the net liability for unpaid claim and claim adjustment expenses for Property and Casualty Operations to the amount presented in the Consolidated Balance Sheets.
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Average Annual Percentage Payout of Ultimate Net Incurred Claim and Allocated Claim Adjustment Expenses in Year: | ||||||||||||||||||||||||||||||||||||||||||||
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1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | Total | ||||||||||||||||||||||||||||||||||
Medical professional liability | 3.3 | % | 18.9 | % | 23.5 | % | 19.8 | % | 12.7 | % | 7.2 | % | 4.5 | % | 3.3 | % | 3.6 | % | 0.7 | % | 97.5 | % | ||||||||||||||||||||||
Other professional liability and management liability | 5.9 | % | 21.0 | % | 21.1 | % | 17.3 | % | 9.9 | % | 6.0 | % | 5.6 | % | 4.0 | % | 2.6 | % | 1.5 | % | 94.9 | % | ||||||||||||||||||||||
Surety (a) | 21.4 | % | 38.4 | % | 17.7 | % | 7.5 | % | 3.4 | % | 2.0 | % | (2.3 | )% | (1.1 | )% | - | - | 87.0 | % | ||||||||||||||||||||||||
Commercial auto | 28.1 | % | 22.9 | % | 18.4 | % | 14.1 | % | 9.2 | % | 3.4 | % | 0.9 | % | 0.2 | % | 0.4 | % | 0.7 | % | 98.3 | % | ||||||||||||||||||||||
General liability | 4.9 | % | 16.6 | % | 20.7 | % | 20.8 | % | 15.2 | % | 8.4 | % | 4.2 | % | 2.5 | % | 1.5 | % | 1.2 | % | 96.0 | % | ||||||||||||||||||||||
Workers’ compensation | 13.5 | % | 21.2 | % | 14.4 | % | 10.7 | % | 7.8 | % | 5.5 | % | 4.9 | % | 3.7 | % | 3.0 | % | 3.2 | % | 87.9 | % |
Average Annual Percentage Payout of Ultimate Net Incurred Claim and Allocated Claim Adjustment Expenses in Year: | ||||||||||||||||||||||||||||||||||||||||||||
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | Total | ||||||||||||||||||||||||||||||||||
Medical professional liability | 3.8 | % | 20.0 | % | 24.3 | % | 19.4 | % | 12.4 | % | 7.8 | % | 5.1 | % | 3.1 | % | 1.1 | % | 0.8 | % | 97.8 | % | ||||||||||||||||||||||
Other professional liability and management liability | 6.6 | 22.6 | 21.7 | 16.9 | 10.5 | 6.0 | 4.9 | 3.3 | 3.8 | 0.7 | 97.0 | |||||||||||||||||||||||||||||||||
Surety (a) | 20.0 | 44.5 | 21.0 | 4.4 | 2.2 | 0.9 | (2.5 | ) | (1.1 | ) | 1.6 | 91.0 | ||||||||||||||||||||||||||||||||
Commercial auto | 28.6 | 24.0 | 18.6 | 14.3 | 9.4 | 3.2 | 1.5 | 0.4 | 100.0 | |||||||||||||||||||||||||||||||||||
General liability | 4.3 | 15.8 | 19.0 | 20.1 | 15.7 | 8.7 | 6.0 | 2.5 | 1.5 | 1.6 | 95.2 | |||||||||||||||||||||||||||||||||
Workers’ compensation | 14.1 | 21.4 | 13.9 | 10.3 | 7.0 | 3.7 | 2.9 | 2.7 | 1.4 | 0.8 | 78.2 |
(a) | Due to the nature of the Surety business, average annual percentage payout of ultimate net incurred claim and allocated claim adjustment expenses has been calculated using only the payouts of mature accident years presented in the loss reserve development tables. |
Subsequent
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 CNA recognizes a change in the estimate of A&EP reserves 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 inon the Consolidated Statements of Income.
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||||||||||||||
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(In millions) | ||||||||||||||||||||||||
Net A&EP adverse development before consideration of LPT | $ | 60 | $ | 200 | $ | 150 | ||||||||||||||||||
Retroactive reinsurance benefit recognized | (68 | ) | (107 | ) | (85 | ) | ||||||||||||||||||
| ||||||||||||||||||||||||
Pretax impact of A&EP reserve development and the LPT | $ | (8 | ) | $ | 93 | $ | 65 | |||||||||||||||||
|
Based upon CNA’s annual A&EP reserve review, net
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Additional amounts ceded under LPT: | ||||||||||||
Net A&EP adverse development before consideration of LPT | $ | 150 | $ | 178 | $ | 60 | ||||||
Provision for uncollectible third-party reinsurance on A&EP | (25 | ) | (16 | ) | ||||||||
Total additional amounts ceded under LPT | 125 | 162 | 60 | |||||||||
Retroactive reinsurance benefit recognized | (107 | ) | (114 | ) | (68 | ) | ||||||
Pretax impact of deferred retroactive reinsurance | $ | 18 | $ | 48 | $ | (8 | ) | |||||
2018 and is included within Other liabilities on the Consolidated Balance Sheets.
Leases
As of December 31, 2019 | Operating Leases | |||
(In millions) | ||||
2020 | $ | 114 | ||
2021 | 113 | |||
2022 | 102 | |||
2023 | 89 | |||
2024 | 81 | |||
Thereafter | 361 | |||
Total | 860 | |||
Less: discount | 166 | |||
Total lease liabilities | $ | 694 | ||
As of December 31, 2019 | ||||
Weighted average remaining lease term | 9.4 | Y ears | ||
Weighted average discount rate | 4.7 | % |
Future Minimum Lease | ||||||||
Year Ended December 31 | Payments | Receipts | ||||||
| ||||||||
(In millions) | ||||||||
2018 | $ | 76 | $ | 6 | ||||
2019 | 70 | 5 | ||||||
2020 | 71 | 5 | ||||||
2021 | 69 | 4 | ||||||
2022 | 59 | 4 | ||||||
Thereafter | 384 | 16 | ||||||
| ||||||||
Total | $ | 729 | $ | 40 | ||||
|
Future Minimum Lease | ||||||||
Year Ended December 31 | Payments | Receipts | ||||||
(In millions) | ||||||||
2019 | $ | 75 | $ | 6 | ||||
2020 | 79 | 5 | ||||||
2021 | 79 | 5 | ||||||
2022 | 68 | 4 | ||||||
2023 | 57 | 4 | ||||||
Thereafter | 344 | 14 | ||||||
Total | $ | 702 | $ | 38 |
2015.
The Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB 118”) which allows companies to report the income tax effectseffect of the Tax Act as a provisional amount based on a reasonable estimate, which would be subject to adjustment during a reasonable measurementin the period not to exceed twelve months, until the accounting and analysis under ASC 740 is complete. Due totax rate change was signed into law. Consequently, the timing of the enactment of the Tax Act, there continues to be a significant amount of uncertainty as to the appropriate application of a number of the underlying provisions, pending further guidance and clarification from the relevant authorities. The Company will continue to monitor developments in this area and adjust its provisional estimates throughout the year in 2018, as and if necessary, as additional guidance and clarification becomes available.
The Company recorded aone-timenon-cash
U.S. federal income tax purposes no later than financial accounting purposes and the transition adjustment from existing law, which will also have no impact on the effective tax rate.
Any adjustments to these provisional amounts will be reported as a component of Income tax (expense) benefit in the reporting period in which such adjustments are determined, which will be no later than the fourth quarter of 2018.
noncontrolling interests) respectively.
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||||||||||||||
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(In millions) | ||||||||||||||||||||||||
Income tax expense (benefit): | ||||||||||||||||||||||||
Federal: | ||||||||||||||||||||||||
Current | $ | 157 | $ | 71 | $ | 79 | ||||||||||||||||||
Deferred | (63 | ) | 102 | (234 | ) | |||||||||||||||||||
State and city: | ||||||||||||||||||||||||
Current | 22 | 13 | 21 | |||||||||||||||||||||
Deferred | 17 | 13 | 5 | |||||||||||||||||||||
Foreign | 37 | 21 | 86 | |||||||||||||||||||||
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Total | $ | 170 | $ | 220 | $ | (43 | ) | |||||||||||||||||
|
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Income tax expense (benefit): | ||||||||||||
Federal: | ||||||||||||
Current | $ | 108 | $ | 6 | $ | 157 | ||||||
Deferred | 47 | 85 | (63 | ) | ||||||||
State and city: | ||||||||||||
Current | 18 | 15 | 22 | |||||||||
Deferred | 22 | 9 | 17 | |||||||||
Foreign | 53 | 13 | 37 | |||||||||
Total | $ | 248 | $ | 128 | $ | 170 | ||||||
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Income before income tax: | ||||||||||||||||||||||||
U.S. | $ | 1,322 | $ | 1,207 | $ | 543 | ||||||||||||||||||
Foreign | 260 | (271 | ) | (299 | ) | |||||||||||||||||||
Total | $ | 1,582 | $ | 936 | $ | 244 | ||||||||||||||||||
Income tax expense at statutory rate | $ | 554 | $ | 328 | $ | 86 | ||||||||||||||||||
Increase (decrease) in income tax expense resulting from: | ||||||||||||||||||||||||
Effect of the Tax Act | (190 | ) | ||||||||||||||||||||||
Exempt investment income | (134 | ) | (126 | ) | (126 | ) | ||||||||||||||||||
Foreign related tax differential | (36 | ) | 40 | (18 | ) | |||||||||||||||||||
Amortization of deferred charges associated with intercompany | ||||||||||||||||||||||||
rig sales to other tax jurisdictions | 38 | |||||||||||||||||||||||
Taxes related to domestic affiliate | 1 | (14 | ) | (10 | ) | |||||||||||||||||||
Partnership earnings not subject to taxes | (51 | ) | (52 | ) | (38 | ) | ||||||||||||||||||
Allowance for foreign tax credits | 7 | 62 | ||||||||||||||||||||||
Unrecognized tax positions, settlements and adjustments relating to prior years | (8 | ) | (42 | ) | 1 | |||||||||||||||||||
Other (a) | 27 | 24 | 24 | |||||||||||||||||||||
Income tax expense (benefit) | $ | 170 | $ | 220 | $ | (43 | ) | |||||||||||||||||
|
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Income ( before income tax:loss ) | ||||||||||||
U.S. | $ | 1,145 | $ | 775 | $ | 1,322 | ||||||
Foreign | (26 | ) | 59 | 260 | ||||||||
Total | $ | 1,119 | $ | 834 | $ | 1,582 | ||||||
Income tax expense at statutory rate | $ | 235 | $ | 175 | $ | 554 | ||||||
Increase (decrease) in income tax expense resulting from: | ||||||||||||
Effect of the Tax Act | (14 | ) | (6 | ) | (190 | ) | ||||||
Exempt investment income | (50 | ) | (64 | ) | (134 | ) | ||||||
Foreign related tax differential | (55 | ) | 1 | (36 | ) | |||||||
Taxes related to domestic affiliate | (15 | ) | (7 | ) | 1 | |||||||
Partnership earnings not subject to taxes | (14 | ) | (51 | ) | ||||||||
Valuation allowance | 12 | 12 | 7 | |||||||||
Unrecognized tax positions, settlements and adjustments relating to prior years | 97 | 2 | (8 | ) | ||||||||
State taxes | 37 | 20 | 23 | |||||||||
Other | 1 | 9 | 4 | |||||||||
Income tax expense | $ | 248 | $ | 128 | $ | 170 | ||||||
The potential unrecorded liability associated with the outside basis difference is approximately $95 million.
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Balance at January 1 | $ | 35 | $ | 54 | $ | 57 | ||||||||||||||||||
Additions for tax positions related to the current year | 51 | 4 | 7 | |||||||||||||||||||||
Additions for tax positions related to a prior year | 5 | 1 | ||||||||||||||||||||||
Reductions for tax positions related to a prior year | (1 | ) | (20 | ) | (3 | ) | ||||||||||||||||||
Lapse of statute of limitations | (6 | ) | (4 | ) | (7 | ) | ||||||||||||||||||
Balance at December 31 | $ | 84 | $ | 35 | $ | 54 | ||||||||||||||||||
In 2016, the $20
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Balance at January 1 | $ | 58 | $ | 84 | $ | 35 | ||||||
Additions for tax positions related to the current year | 86 | 3 | 51 | |||||||||
Additions for tax positions related to a prior year | 2 | 20 | 5 | |||||||||
Reductions for tax positions related to a prior year | (23 | ) | (48 | ) | (1 | ) | ||||||
Lapse of statute of limitations | (2 | ) | (1 | ) | (6 | ) | ||||||
Balance at December 31 | $ | 121 | $ | 58 | $ | 84 | ||||||
December 31 | 2017 | 2016 | ||||||||||||||
(In millions) | ||||||||||||||||
Deferred tax assets: | ||||||||||||||||
Insurance reserves: | ||||||||||||||||
Property and casualty claim and claim adjustment expense reserves | $ | 74 | $ | 125 | ||||||||||||
Unearned premium reserves | 142 | 206 | ||||||||||||||
Receivables | 13 | 26 | ||||||||||||||
Employee benefits | 243 | 407 | ||||||||||||||
Life settlement contracts | - | 56 | ||||||||||||||
Deferred retroactive reinsurance benefit | 68 | 117 | ||||||||||||||
Net operating loss carryforwards | 169 | 178 | ||||||||||||||
Tax credit carryforwards | 199 | 289 | ||||||||||||||
Basis differential in investment in subsidiary | 15 | 17 | ||||||||||||||
Other | 211 | 246 | ||||||||||||||
Total deferred tax assets | 1,134 | 1,667 | ||||||||||||||
Valuation allowance | (169 | ) | (210 | ) | ||||||||||||
Net deferred tax assets | 965 | 1,457 | ||||||||||||||
Deferred tax liabilities: | ||||||||||||||||
Deferred acquisition costs | (77 | ) | (120 | ) | ||||||||||||
Net unrealized gains | (263 | ) | (295 | ) | ||||||||||||
Property, plant and equipment | (765 | ) | (1,019 | ) | ||||||||||||
Basis differential in investment in subsidiary | (364 | ) | (409 | ) | ||||||||||||
Other liabilities | (220 | ) | (235 | ) | ||||||||||||
Total deferred tax liabilities | (1,689 | )�� | (2,078 | ) | ||||||||||||
Net deferred tax liabilities (a) | $ | (724 | ) | $ | (621 | ) | ||||||||||
December 31 | 2019 | 2018 | ||||||
(In millions) | ||||||||
Deferred tax assets: | ||||||||
Insurance reserves: | ||||||||
Property and casualty claim and claim adjustment expense reserves | $ | 129 | $ | 108 | ||||
Unearned premium reserves | 153 | 108 | ||||||
Receivables | 11 | 13 | ||||||
Employee benefits | 212 | 222 | ||||||
Deferred retroactive reinsurance benefit | 82 | 79 | ||||||
Net operating loss carryforwards | 275 | 251 | ||||||
Tax credit carryforwards | 47 | 101 | ||||||
Net unrealized losses | 24 | |||||||
Basis differential in investment in subsidiary | 8 | 8 | ||||||
Disallowed interest deduction | 41 | 16 | ||||||
Other | 179 | 181 | ||||||
Total deferred tax assets | 1,137 | 1,111 | ||||||
Valuation allowance | (187 | ) | (175 | ) | ||||
Net deferred tax assets | 950 | 936 | ||||||
Deferred tax liabilities: | ||||||||
Deferred acquisition costs | (83 | ) | �� | (78 | ) | |||
Net unrealized gains | (263 | ) | ||||||
Property, plant and equipment | (848 | ) | (840 | ) | ||||
Basis differential in investment in subsidiary | (679 | ) | (586 | ) | ||||
Other liabilities | (208 | ) | (236 | ) | ||||
Total deferred tax liabilities | (2,081 | ) | (1,740 | ) | ||||
Net deferred tax liabilities (a) | $ | (1,131 | ) | $ | (804 | ) | ||
(a) | Includes 37 of deferred tax assets reflected in Other assets in the Consolidated Balance Sheets at December 31, |
2030, and $2 million can be carried forward indefinitely.
December 31 | 2017 | 2016 | ||||||
| ||||||||
(In millions) | ||||||||
Loews Corporation (Parent Company): | ||||||||
Senior: | ||||||||
2.6% notes due 2023 (effective interest rate of 2.8%) (authorized, $500) | $ | 500 | $ | 500 | ||||
3.8% notes due 2026 (effective interest rate of 3.9%) (authorized, $500) | 500 | 500 | ||||||
6.0% notes due 2035 (effective interest rate of 6.2%) (authorized, $300) | 300 | 300 | ||||||
4.1% notes due 2043 (effective interest rate of 4.3%) (authorized, $500) | 500 | 500 | ||||||
CNA Financial: | ||||||||
Senior: | ||||||||
7.0% notes due 2018 (effective interest rate of 7.1%) (authorized, $150) | 150 | 150 | ||||||
7.4% notes due 2019 (effective interest rate of 7.5%) (authorized, $350) | 350 | |||||||
5.9% notes due 2020 (effective interest rate of 6.0%) (authorized, $500) | 500 | 500 | ||||||
5.8% notes due 2021 (effective interest rate of 5.9%) (authorized, $400) | 400 | 400 | ||||||
7.3% debentures due 2023 (effective interest rate of 7.3%) (authorized, $250) | 243 | 243 | ||||||
4.0% notes due 2024 (effective interest rate of 4.0%) (authorized, $550) | 550 | 550 | ||||||
4.5% notes due 2026 (effective interest rate of 4.5%) (authorized, $500) | 500 | 500 | ||||||
3.5% notes due 2027 (effective interest rate of 3.6%) (authorized, $500) | 500 | |||||||
Variable rate note due 2036 (effective interest rate of 4.9% and 4.3%) | 30 | 30 | ||||||
Capital lease obligation | 3 | 5 | ||||||
Diamond Offshore: | ||||||||
Senior: | ||||||||
Variable rate revolving credit facility due 2020 (effective interest rate of 1.9%) | 104 | |||||||
5.9% notes due 2019 (effective interest rate of 6.0%) (authorized, $500) | 500 | |||||||
3.5% notes due 2023 (effective interest rate of 3.6%) (authorized, $250) | 250 | 250 | ||||||
7.9% notes due 2025 (effective interest rate of 8.0%) (authorized, $500) | 500 | |||||||
5.7% notes due 2039 (effective interest rate of 5.8%) (authorized, $500) | 500 | 500 | ||||||
4.9% notes due 2043 (effective interest rate of 5.0%) (authorized, $750) | 750 | 750 | ||||||
Boardwalk Pipeline: | ||||||||
Senior: | ||||||||
Variable rate revolving credit facility due 2022 (effective interest rate of 2.7% and 2.0%) | 385 | 180 | ||||||
5.5% notes due 2017 (effective interest rate of 5.6%) (authorized, $300) | 300 | |||||||
6.3% notes due 2017 (effective interest rate of 6.4%) (authorized, $275) | 275 | |||||||
5.2% notes due 2018 (effective interest rate of 5.4%) (authorized, $185) | 185 | 185 | ||||||
5.8% notes due 2019 (effective interest rate of 5.9%) (authorized, $350) | 350 | 350 | ||||||
4.5% notes due 2021 (effective interest rate of 5.0%) (authorized, $440) | 440 | 440 | ||||||
4.0% notes due 2022 (effective interest rate of 4.4%) (authorized, $300) | 300 | 300 | ||||||
3.4% notes due 2023 (effective interest rate of 3.5%) (authorized, $300) | 300 | 300 | ||||||
5.0% notes due 2024 (effective interest rate of 5.2%) (authorized, $600) | 600 | 600 | ||||||
6.0% notes due 2026 (effective interest rate of 6.2%) (authorized, $550) | 550 | 550 | ||||||
4.5% notes due 2027 (effective interest rate of 4.6%) (authorized, $500) | 500 | |||||||
7.3% debentures due 2027 (effective interest rate of 8.1%) (authorized, $100) | 100 | 100 | ||||||
Capital lease obligation | 9 | 9 | ||||||
Loews Hotels & Co: | ||||||||
Senior debt, principally mortgages (effective interest rates approximate 4.2%) | 648 | 650 | ||||||
Consolidated Container: | ||||||||
Senior debt, variable rate term loan due 2024 (effective interest rate of 5.5%) | 604 | |||||||
Capital lease obligation | 6 | |||||||
| ||||||||
11,653 | 10,871 | |||||||
Less unamortized discount and issuance costs | 120 | 93 | ||||||
| ||||||||
Debt | $ | 11,533 | $ | 10,778 | ||||
|
Loews Corporation CNA Financial Diamond Offshore Boardwalk Pipeline Loews Hotels & Co Consolidated Container TotalDecember 31, 2017 Principal Unamortized
Discount and
Issuance
Costs Net Short Term
Debt Long Term
Debt (In millions) $ 1,800 $ 24 $ 1,776 $ 1,776 2,876 15 2,861 $ 151 2,710 2,000 28 1,972 1,972 3,719 31 3,688 1 3,687 648 5 643 122 521 610 17 593 6 587 $ 11,653 $ 120 $ 11,533 $ 280 $ 11,253
December 31 | 2019 | 2018 | ||||||
(In millions) | ||||||||
Loews Corporation (Parent Company): | ||||||||
Senior: | ||||||||
2.6% notes due 2023 (effective interest rate of 2.8%) (authorized, $ 500 ) | $ | 500 | $ | 500 | ||||
3.8% notes due 2026 (effective interest rate of 3.9%) (authorized, $ 500 ) | 500 | 500 | ||||||
6.0% notes due 2035 (effective interest rate of 6.2%) (authorized, $ 300 ) | 300 | 300 | ||||||
4.1% notes due 2043 (effective interest rate of 4.3%) (authorized, $ 500 ) | 500 | 500 | ||||||
CNA Financial: | ||||||||
Senior: | ||||||||
5.9% notes due 2020 (effective interest rate of 6.0%) (authorized, $ 500 ) | 500 | |||||||
5.8% notes due 2021 (effective interest rate of 5.9%) (authorized, $ 400 ) | 400 | 400 | ||||||
7.3% debentures due 2023 (effective interest rate of 7.3%) (authorized, $ 250 ) | 243 | 243 | ||||||
4.0% notes due 2024 (effective interest rate of 4.0%) (authorized, $ 550 ) | 550 | 550 | ||||||
4.5% notes due 2026 (effective interest rate of 4.5%) (authorized, $ 500 ) | 500 | 500 | ||||||
3.5% notes due 2027 (effective interest rate of 3.5%) (authorized, $ 500 ) | 500 | 500 | ||||||
3.9% notes due 2029 (effective interest rate of 3.9%) (authorized, $ 500 ) | 500 | |||||||
F inance | 1 | |||||||
Diamond Offshore: | ||||||||
Senior: | ||||||||
3.5% notes due 2023 (effective interest rate of 3.5%) (authorized, $ 250 ) | 250 | 250 | ||||||
7.9% notes due 2025 (effective interest rate of 8.0%) (authorized, $ 500 ) | 500 | 500 | ||||||
5.7% notes due 2039 (effective interest rate of 5.8%) (authorized, $ 500 ) | 500 | 500 | ||||||
4.9% notes due 2043 (effective interest rate of 4.9%) (authorized, $ 750 ) | 750 | 750 | ||||||
Boardwalk Pipelines: | ||||||||
Senior: | ||||||||
Variable rate revolving credit facility due 2022 (effective interest rate of 3.0% and 3.7%) | 295 | 580 | ||||||
5.8% notes due 2019 (effective interest rate of 5.9%) (authorized, $ 350 ) | 350 | |||||||
4.5% notes due 2021 (effective interest rate of 5.0%) (authorized, $ 440 ) | 440 | 440 | ||||||
4.0% notes due 2022 (effective interest rate of 4.4%) (authorized, $ 300 ) | 300 | 300 | ||||||
3.4% notes due 2023 (effective interest rate of 3.5%) (authorized, $ 300 ) | 300 | 300 | ||||||
5.0% notes due 2024 (effective interest rate of 5.2%) (authorized, $ 600 ) | 600 | 600 | ||||||
6.0% notes due 2026 (effective interest rate of 6.2%) (authorized, $ 550 ) | 550 | 550 | ||||||
4.5% notes due 2027 (effective interest rate of 4.6%) (authorized, $ 500 ) | 500 | 500 | ||||||
7.3% debentures due 2027 (effective interest rate of 8.1%) (authorized, $ 100 ) | 100 | 100 | ||||||
4.8% notes due 2029 (effective interest rate of 4.9%) (authorized, $ 500 ) | 500 | |||||||
Finance lease obligation | 7 | 8 | ||||||
Loews Hotels & Co: | ||||||||
Senior debt, principally mortgages (effective interest rates approximate 4.7% and 4.4% ) | 712 | 653 | ||||||
Altium Packaging : | ||||||||
Senior: | ||||||||
Variable rate asset based lending facility due 2022 (effective interest rate of 5.5%) | 9 | |||||||
Variable rate term loan due 2024 (effective interest rate of 4.9% and 5.0%) | 591 | 597 | ||||||
Variable rate term loan due 2026 (effective interest rate of 5.3%) | 249 | |||||||
Finance lease obligation | 6 | 7 | ||||||
11,643 | 11,488 | |||||||
Less unamortized discount and issuance costs | 110 | 112 | ||||||
Debt | $ | 11,533 | $ | 11,376 | ||||
December 31, 2019 | Principal | Unamortized Discount and Issuance Costs | Net | Short Term Debt | Long Term Debt | |||||||||||||||
(In millions) | ||||||||||||||||||||
Loews Corporation | $ | 1,800 | $ | 21 | $ | 1,779 | $ | 1,779 | ||||||||||||
CNA Financial | 2,693 | 14 | 2,679 | 2,679 | ||||||||||||||||
Diamond Offshore | 2,000 | 24 | 1,976 | 1,976 | ||||||||||||||||
Boardwalk Pipelines | 3,592 | 26 | 3,566 | 3,566 | ||||||||||||||||
Loews Hotels & Co | 712 | 7 | 705 | $ | 67 | 638 | ||||||||||||||
Altium Packaging | 846 | 18 | 828 | 10 | 818 | |||||||||||||||
Total | $ | 11,643 | $ | 110 | $ | 11,533 | $ | 77 | $ | 11,456 | ||||||||||
2019.
In the third quarter
Diamond Offshore has a $1.5 billion senior unsecured revolving credit facility that matures in October of 2020, except for $40 million of commitments that mature in March of 2019 and $60 million of commitments that mature in October of 2019. In addition, Diamond Offshore also has the option to increase the revolving commitments under the revolving credit facility by up to an additional $500 million from time to time, upon receipt of additional commitments from new or existing lenders, and to request one additionalone-year extension of the maturity date. Up to $250 million of the facility may be used for the issuance of performance or other standby letters of credit and up to $100 million may be used for swingline loans. As of December 31, 2017, there were no outstanding borrowings under the credit agreement and Diamond Offshore was in compliance with all covenants.
Boardwalk Pipeline
In the first quarter of 2017, Boardwalk Pipeline completed a public offering of $500$350 million aggregate principal amount of its 4.5%Boardwalk Pipelines’ 5.8% senior notes due July 15, 2027 and used the net proceeds to repay the entire $275 million outstanding principal amount of its 6.3% senior notes due August 15, 2017 and to fund growth capital expenditures.
In the first quarter of 2017, Boardwalk Pipeline retired at maturity the $300 million
revolving credit facility
Boardwalk Pipeline has a subordinated loan agreement with a subsidiary
Consolidated Container
In the second quarter of 2017, Consolidated Container 2019,
OTTI Gains (Losses) | Unrealized Gains (Losses) on Investments | Cash Flow Hedges | Pension Liability | Foreign Currency Translation | Total Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Balance, January 1, 2015 | $ | 32 | $ | 846 | $ | (6 | ) | $ | (641 | ) | $ | 49 | $ | 280 | ||||||||||||
Other comprehensive loss before reclassifications, after tax of $13, $313, $1, $16 and $0 | (23 | ) | (600 | ) | (2 | ) | (31 | ) | (139 | ) | (795 | ) | ||||||||||||||
Reclassification of losses from accumulated other comprehensive income, after tax of $(8), $(31), $(2), $(11) and $0 | 14 | 43 | 7 | 13 | 77 | |||||||||||||||||||||
Other comprehensive income (loss) | (9 | ) | (557 | ) | 5 | (18 | ) | (139 | ) | (718 | ) | |||||||||||||||
Issuance of equity securities by subsidiary | 1 | 1 | ||||||||||||||||||||||||
Amounts attributable to noncontrolling interests | 1 | 58 | (2 | ) | 9 | 14 | 80 | |||||||||||||||||||
Balance, December 31, 2015 | 24 | 347 | (3 | ) | (649 | ) | (76 | ) | (357 | ) | ||||||||||||||||
Other comprehensive income (loss) before reclassifications, after tax of $(4), $(133), $0, $9 and $0 | 9 | 283 | (22 | ) | (114 | ) | 156 | |||||||||||||||||||
Reclassification of (gains) losses from accumulated other comprehensive income, after tax of $3, $16, $0, $(15) and $0 | (6 | ) | (26 | ) | 2 | 27 | (3 | ) | ||||||||||||||||||
Other comprehensive income (loss) | 3 | 257 | 2 | 5 | (114 | ) | 153 | |||||||||||||||||||
Amounts attributable to noncontrolling interests | (28 | ) | (1 | ) | (2 | ) | 12 | (19 | ) | |||||||||||||||||
Balance, December 31, 2016 | 27 | 576 | (2 | ) | (646 | ) | (178 | ) | (223 | ) | ||||||||||||||||
Other comprehensive income (loss) before reclassifications, after tax of $1, $(106), $(2), $4 and $0 | (3 | ) | 190 | 1 | (18 | ) | 100 | 270 | ||||||||||||||||||
Reclassification of (gains) losses from accumulated other comprehensive income, after tax of $1, $38, $0, $(16) and $0 | (2 | ) | (82 | ) | 2 | 30 | (52 | ) | ||||||||||||||||||
Other comprehensive income (loss) | (5 | ) | 108 | 3 | 12 | 100 | 218 | |||||||||||||||||||
Amounts attributable to noncontrolling interests | (11 | ) | (1 | ) | 1 | (10 | ) | (21 | ) | |||||||||||||||||
Balance, December 31, 2017 | $ | 22 | $ | 673 | $ | - | $ | (633 | ) | $ | (88 | ) | $ | (26 | ) |
2019:
Net Unrealized Gains (Losses) on Investments with OTTI Losses | Net Other Unrealized Gains (Losses) on Investments | 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, 2017 | $ | 27 | $ | 576 | $ | (2 | ) | $ | (646 | ) | $ | (178 | ) | $ | (223 | ) | ||||||||
Other comprehensive income (loss) before reclassifications, after tax of $1, $(106), $(2), $4 and $0 | (3 | ) | 190 | 1 | (18 | ) | 100 | 270 | ||||||||||||||||
Reclassification of (gains) losses from accumulated other comprehensive loss, after tax of $1, $38, $0, $(16) and $0 | (2 | ) | (82 | ) | 2 | 30 | (52 | ) | ||||||||||||||||
Other comprehensive income (loss) | (5 | ) | 108 | 3 | 12 | 100 | 218 | |||||||||||||||||
Amounts attributable to noncontrolling interests | (11 | ) | (1 | ) | 1 | (10 | ) | (21 | ) | |||||||||||||||
Balance, December 31, 2017 | 22 | 673 | – | (633 | ) | (88 | ) | (26 | ) | |||||||||||||||
Cumulative effect adjustment from changes in accounting standards , after tax of $0, $8, $0, $0 and $0 | 4 | 98 | (130 | ) | (28 | ) | ||||||||||||||||||
Balance, January 1, 2018, as adjusted | 26 | 771 | – | (763 | ) | (88 | ) | (54 | ) | |||||||||||||||
Other comprehensive income (loss) before reclassifications, after tax of $2, $213, $(2), $9 and $0 | (7 | ) | (801 | ) | 4 | (34 | ) | (84 | ) | (922 | ) | |||||||||||||
Reclassification of (gains) losses from accumulated other comprehensive loss, after tax of $2, $(2), $0, $(6) and $0 | (7 | ) | 3 | 2 | 32 | 30 | ||||||||||||||||||
Other comprehensive income (loss) | (14 | ) | (798 | ) | 6 | (2 | ) | (84 | ) | (892 | ) | |||||||||||||
Amounts attributable to noncontrolling interests | 2 | 84 | 9 | 95 | ||||||||||||||||||||
Purchase of Boardwalk Pipelines common units | (1 | ) | (28 | ) | (29 | ) | ||||||||||||||||||
Balance, December 31, 2018 | 14 | 57 | 5 | (793 | ) | (163 | ) | (880 | ) | |||||||||||||||
Other comprehensive income (loss) before reclassifications, after tax of $3, $(256), $5, $28 and $0 | (13 | ) | 957 | (11 | ) | (102 | ) | 42 | 873 | |||||||||||||||
Reclassification of (gains) losses from accumulated other comprehensive loss, after tax of $(3), $1, $0, $(9) and $0 | 12 | (8 | ) | 34 | 38 | |||||||||||||||||||
Other comprehensive income (loss) | (1 | ) | 949 | (11 | ) | (68 | ) | 42 | 911 | |||||||||||||||
Amounts attributable to noncontrolling interests | (101 | ) | 6 | (4 | ) | (99 | ) | |||||||||||||||||
Balance, December 31, 2019 | $ | 13 | $ | 905 | $ | (6 | ) | $ | (855 | ) | $ | (125 | ) | $ | (68 | ) | ||||||||
Major Category of AOCI | Affected Line Item | |
Net unrealized gains (losses) on investments with OTTI losses | Investment gains (losses) | |
Net other unrealized gains (losses) on investments | Investment gains (losses) | |
Unrealized gains (losses) on | Operating revenues and other, Interest expense and Operating expenses and other | |
Pension and postretirement benefits | Operating expenses and | |
2017.
Year Ended December 31 | 2019 | 2018 | 2017 (a) | |||||||||
(In millions) | ||||||||||||
Non-insurance warranty – CNA Financial | $ | 1,161 | $ | 1,007 | $ | 390 | ||||||
Contract drilling – Diamond Offshore | $ | 981 | $ | 1,083 | $ | 1,486 | ||||||
Transportation and storage of natural gas and NGLs and other services – Boardwalk Pipelines | 1,266 | 1,206 | 1,298 | |||||||||
Lodging and related services – Loews Hotels & Co | 691 | 730 | 682 | |||||||||
Rigid plastic packaging and recycled resin – Corporate | 932 | 867 | 498 | |||||||||
Total revenues from contracts with customers | 3,870 | 3,886 | 3,964 | |||||||||
Other revenues | 68 | 101 | 89 | |||||||||
Operating revenues and other | $ | 3,938 | $ | 3,987 | $ | 4,053 | ||||||
(a) | Prior period amounts have not been adjusted under the modified retrospective method of adoption for ASU 2014-09. |
The 2015 long term care premium deficiency discussed in Note 1 was recorded on a GAAP basis. There was no premium deficiency for statutory accounting purposes. Statutory accounting principles requires the use of prescribed discount rates in calculating the reserves for long term care future policy benefits which are lower than the discount rates used on a GAAP basis and results in higher carried reserves relative to GAAP reserves.
2018.
Statutory Capital and Surplus | Statutory Net Income | |||||||||||||||||||
December 31 | Year Ended December 31 | |||||||||||||||||||
2017(a) | 2016 | 2017(a) | 2016 | 2015 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Combined Continental Casualty Companies | $ 10,726 | $ 10,748 | $ 1,029 | $ 1,033 | $ 1,148 |
Statutory Capital and Surplus | Statutory Net Income | |||||||||||||||||||
December 31 | Year Ended December 31 | |||||||||||||||||||
2019(a) | 2018 | 2019(a) | 2018 | 2017 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Combined Continental Casualty Companies | $ | 10,787 | $ | 10,411 | $ | 1,062 | $ | 1,405 | $ | 1,029 |
(a) | Information derived from the statutory-basis financial statements to be filed with insurance regulators. |
bargaining unitsagreements vary by each unit and contract. Benefits for certain retirees are in the form of a Company health care account.
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
December 31 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | ||||||||||||||||||
Discount rate | 3.5% | 3.9% | 4.0% | 3.4% | 3.7% | 3.7% | ||||||||||||||||||
Expected long term rate of return on plan assets | 7.5% | 7.5% | 7.5% | 5.3% | 5.3% | 5.3% | ||||||||||||||||||
Rate of compensation increase | 3.9% to 5.5% | 3.9% to 5.5% | 3.5% to 5.5% |
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
December 31 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
Discount rate | 3.0 | % | 4.1 | % | 3.5 | % | 3.0 | % | 4.1 | % | 3.4 | % | ||||||||||||
Expected long term rate of return on plan assets | 7.5 | % | 7.5 | % | 7.5 | % | 3.6 | % | 5.3 | % | 5.3 | % | ||||||||||||
Interest crediting rate | 3.7 | % | 3.8 | % | 3.7 | % | ||||||||||||||||||
Rate of compensation increase | 3.0% to 5.5 | % | 3.9% to 5.5 | % | 3.9% to 5.5 | % |
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
Year Ended December 31 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | ||||||||||||||||||
Discount rate | 3.8% | 4.0% | 3.8% | 3.7% | 3.7% | 3.4% | ||||||||||||||||||
Expected long term rate of return on plan assets | 7.5% | 7.5% | 7.5% | 5.3% | 5.3% | 5.3% | ||||||||||||||||||
Rate of compensation increase | 3.9% to 5.5% | 3.5% to 5.5% | 3.5% to 5.5% |
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
Year Ended December 31 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
Discount rate | 4.0 | % | 3.6 | % | 3.8 | % | 4.0 | % | 3.4 | % | 3.7 | % | ||||||||||||
Expected long term rate of return on plan assets | 7.5 | % | 7.5 | % | 7.5 | % | 3.6 | % | 5.3 | % | 5.3 | % | ||||||||||||
Interest crediting rate | 3.7 | % | 3.7 | % | 3.7 | % | ||||||||||||||||||
Rate of compensation increase | 3.0% to 5.5 | % | 3.9% to 5.5 | % | 3.9% to 5.5 | % |
December 31 | 2017 | 2016 | 2015 | |||||||||
Health care cost trend rate assumed for next year | 4.0% to 7.0% | 4.0% to 7.0% | 4.0% to 7.5% | |||||||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 4.0% to 5.0% | 4.0% to 5.0% | 4.0% to 5.0% | |||||||||
Year that the rate reaches the ultimate trend rate | 2018-2022 | 2017-2021 | 2016-2021 |
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. An increase or decrease in the assumed health care cost trend rate
December 31 | 2019 | 2018 | 2017 | |||||||||
Health care cost trend rate assumed for next year | 4.0% to 8.0% | 4.0% to 6.5 | % | 4.0% to 7.0 | % | |||||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 4.0% to 5.0% | 4.0% to 5.0 | % | 4.0% to 5.0 | % | |||||||
Year that the rate reaches the ultimate trend rate | 2021-2026 | 2019-2022 | 2018-2022 |
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
|
| |||||||||||||||||||||||
Year Ended December 31 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | ||||||||||||||||||
| ||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Service cost | $ | 8 | $ | 8 | $ | 12 | $ | 1 | $ | 1 | $ | 1 | ||||||||||||
Interest cost | 119 | 128 | 127 | 2 | 3 | 3 | ||||||||||||||||||
Expected return on plan assets | (173 | ) | (177 | ) | (193 | ) | (5 | ) | (5 | ) | (5) | |||||||||||||
Amortization of unrecognized net loss | 43 | 46 | 42 | 1 | ||||||||||||||||||||
Amortization of unrecognized prior service benefit | (1 | ) | (1 | ) | (2 | ) | (3 | ) | (10) | |||||||||||||||
Settlement | 11 | 3 | 3 | |||||||||||||||||||||
| ||||||||||||||||||||||||
Net periodic benefit cost | $ | 8 | $ | 7 | $ | (10 | ) | $ | (4 | ) | $ | (4 | ) | $ | (10) | |||||||||
|
In 2016, the CNA Retirement Plan paid $88 million to settle its obligation to certain retirees through the purchase of a group annuity contract from a third party insurance company. The transaction reduced the plan’s projected benefit obligation by $86 million.
In 2015, CNA eliminated future benefit accruals associated with the CNA Retirement Plan effective June 30, 2015. This amendment resulted in a $55 million curtailment which is a decrease in the plan benefit obligation liability and a reduction of the unrecognized actuarial losses included in AOCI.
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
Year Ended December 31 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Service cost | $ | 7 | $ | 8 | $ | 8 | $ | 1 | $ | 1 | ||||||||||||||
Interest cost | 117 | 110 | 119 | $ | 2 | 2 | 2 | |||||||||||||||||
Expected return on plan assets | (159 | ) | (179 | ) | (173 | ) | (3 | ) | (5 | ) | (5 | ) | ||||||||||||
Amortization of unrecognized | ||||||||||||||||||||||||
net loss | 45 | 42 | 43 | (1 | ) | (1 | ) | |||||||||||||||||
Amortization of unrecognized prior | ||||||||||||||||||||||||
service benefit | (2 | ) | (2 | ) | ||||||||||||||||||||
Settlements and curtailments | 1 | 9 | 11 | |||||||||||||||||||||
Net periodic benefit cost | $ | 11 | $ | (10 | ) | $ | 8 | $ | ) | $ | (5 | ) | $ | (4 | ) | |||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||
|
| |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
| ||||||||||||||||
(In millions) | ||||||||||||||||
Change in benefit obligation: | ||||||||||||||||
Benefit obligation at January 1 | $ | 3,131 | $ | 3,227 | $ | 66 | $ | 82 | ||||||||
Acquisitions | 103 | |||||||||||||||
Service cost | 8 | 8 | 1 | 1 | ||||||||||||
Interest cost | 119 | 128 | 2 | 3 | ||||||||||||
Plan participants’ contributions | 5 | 5 | ||||||||||||||
Amendments | 1 | |||||||||||||||
Actuarial (gain) loss | 100 | 72 | (1 | ) | (13) | |||||||||||
Benefits paid from plan assets | (192 | ) | (188 | ) | (11 | ) | (12) | |||||||||
Settlements | (37 | ) | (101 | ) | ||||||||||||
Foreign exchange | 10 | (16 | ) | |||||||||||||
| ||||||||||||||||
Benefit obligation at December 31 | 3,242 | 3,131 | 62 | 66 | ||||||||||||
| ||||||||||||||||
Change in plan assets: | ||||||||||||||||
Fair value of plan assets at January 1 | 2,423 | 2,500 | 86 | 86 | ||||||||||||
Acquisitions | 75 | |||||||||||||||
Actual return on plan assets | 247 | 211 | 5 | 3 | ||||||||||||
Company contributions | 51 | 19 | 3 | 4 | ||||||||||||
Plan participants’ contributions | 5 | 5 | ||||||||||||||
Benefits paid from plan assets | (192 | ) | (188 | ) | (11 | ) | (12) | |||||||||
Settlements | (37 | ) | (103 | ) | ||||||||||||
Foreign exchange | 10 | (16 | ) | |||||||||||||
| ||||||||||||||||
Fair value of plan assets at December 31 | 2,577 | 2,423 | 88 | 86 | ||||||||||||
| ||||||||||||||||
Funded status | $ | (665 | ) | $ | (708 | ) | $ | 26 | $ | 20 | ||||||
| ||||||||||||||||
Amounts recognized in the Consolidated Balance Sheets consist of: | ||||||||||||||||
Other assets | $ | 4 | $ | 4 | $ | 47 | $ | 44 | ||||||||
Other liabilities | (669 | ) | (712 | ) | (21 | ) | (24) | |||||||||
| ||||||||||||||||
Net amount recognized | $ | (665 | ) | $ | (708 | ) | $ | 26 | $ | 20 | ||||||
| ||||||||||||||||
Amounts recognized in Accumulated other comprehensive income (loss), not yet recognized in net periodic (benefit) cost: | ||||||||||||||||
Prior service credit | $ | (3 | ) | $ | (3 | ) | $ | (3 | ) | $ | (6) | |||||
Net actuarial loss | 1,069 | 1,097 | (3 | ) | (2) | |||||||||||
| ||||||||||||||||
Net amount recognized | $ | 1,066 | $ | 1,094 | $ | (6 | ) | $ | (8) | |||||||
| ||||||||||||||||
Information for plans with projected and accumulated benefit obligations in excess of plan assets: | ||||||||||||||||
Projected benefit obligation | $ | 3,132 | $ | 3,103 | ||||||||||||
Accumulated benefit obligation | 3,117 | 3,089 | $ | 21 | $ | 24 | ||||||||||
Fair value of plan assets | 2,462 | 2,391 |
Pension Benefits | Other Postretirement Benefits | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In millions) | ||||||||||||||||
Change in benefit obligation: | ||||||||||||||||
Benefit obligation at January 1 | $ | 2,919 | $ | 3,242 | $ | 53 | $ | 62 | ||||||||
Acquisitions | ||||||||||||||||
Service cost | 7 | 8 | 1 | |||||||||||||
Interest cost | 117 | 110 | 2 | 2 | ||||||||||||
Plan participants’ contributions | 4 | 4 | ||||||||||||||
Amendments | 1 | |||||||||||||||
Actuarial (gain) loss | 299 | (212 | ) | 3 | (6 | ) | ||||||||||
Benefits paid from plan assets | (191 | ) | (187 | ) | (10 | ) | (10 | ) | ||||||||
Settlements and curtailments | (19 | ) | (35 | ) | ||||||||||||
Foreign exchange | 4 | (7 | ) | |||||||||||||
Benefit obligation at December 31 | 3,137 | 2,919 | 52 | 53 | ||||||||||||
Change in plan assets: | ||||||||||||||||
Fair value of plan assets at January 1 | 2,304 | 2,577 | 85 | 88 | ||||||||||||
Acquisitions | ||||||||||||||||
Actual return on plan assets | 328 | (83 | ) | 8 | ||||||||||||
Company contributions | 146 | 39 | 3 | 3 | ||||||||||||
Plan participants’ contributions | 4 | 4 | ||||||||||||||
Benefits paid from plan assets | (191 | ) | (187 | ) | (10 | ) | (10 | ) | ||||||||
Settlements | (15 | ) | (35 | ) | ||||||||||||
Foreign exchange | 4 | (7 | ) | |||||||||||||
Fair value of plan assets at December 31 | 2,576 | 2,304 | 90 | 85 | ||||||||||||
Funded status | $ | (561 | ) | $ | (615 | ) | $ | 38 | $ | 32 | ||||||
Pension | Other Postretirement Benefits | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In millions) | ||||||||||||||||
Amounts recognized in the Consolidated Balance Sheets consist of: | ||||||||||||||||
Other assets | $ | 5 | $ | 9 | $ | 54 | $ | 49 | ||||||||
Other liabilities | (566 | ) | (624 | ) | (16 | ) | (17 | ) | ||||||||
Net amount recognized | $ | (561 | ) | $ | (615 | ) | $ | 38 | $ | 32 | ||||||
Amounts recognized in Accumulated other comprehensive income (loss), not yet recognized in net periodic (benefit) cost: | ||||||||||||||||
Prior service credit | $ | (2 | ) | $ | (1 | ) | $ | (1 | ) | |||||||
Net actuarial loss | $ | 1,144 | 1,065 | (4 | ) | (3 | ) | |||||||||
Net amount recognized | $ | 1,144 | $ | 1,063 | $ | (5 | ) | $ | (4 | ) | ||||||
Information for plans with projected and accumulated benefit obligations in excess of plan assets: | ||||||||||||||||
Projected benefit obligation | $ | 3,021 | $ | 2,825 | ||||||||||||
Accumulated benefit obligation | 3,014 | 2,813 | $ | 16 | $ | 18 | ||||||||||
Fair value of plan assets | 2,456 | 2,201 |
2018. Changes for the years ended December 31, 2019 and 2018 include actuarial (gains) losses of $300 million and $(212) million primarily driven by changes in the discount rate used to determine the benefit obligations.
The table below presents the estimated amounts to be recognized from AOCI into net periodic cost (benefit) during 2018.
Other | ||||
Pension | Postretirement | |||
Benefits | Benefits | |||
| ||||
(In millions) | ||||
Amortization of net actuarial (gain) loss | $ 42 | $ (1) | ||
Amortization of prior service credit | (2) | |||
| ||||
Total estimated amounts to be recognized | $ 42 | $ (3) | ||
| ||||
|
Other | ||||
Pension | Postretirement | |||
Expected future benefit payments | Benefits | Benefits | ||
| ||||
(In millions) | ||||
2018 | $ 231 | $ 5 | ||
2019 | 213 | 5 | ||
2020 | 214 | 5 | ||
2021 | 215 | 5 | ||
2022 | 217 | 4 | ||
2023 – 2027 | 1,057 | 18 |
2019.
Expected future benefit payments | Pension Benefits | Other Postretirement Benefits | ||||||
(In millions) | ||||||||
2020 | $ | 234 | $ | 5 | ||||
2021 | 211 | 5 | ||||||
2022 | 215 | 4 | ||||||
2023 | 217 | 4 | ||||||
2024 | 212 | 3 | ||||||
2025 – 2029 | 1,001 | 14 |
December 31, 2017 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||
(In millions) | ||||||||||||||||||||||
Plan assets at fair value: | ||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||
Corporate and other bonds | $ | 522 | $ | 10 | $ | 532 | ||||||||||||||||
States, municipalities and political subdivisions | 62 | 62 | ||||||||||||||||||||
Asset-backed | 182 | 182 | ||||||||||||||||||||
Total fixed maturities | $ | - | 766 | 10 | 776 | |||||||||||||||||
Equity securities | 449 | 122 | 571 | |||||||||||||||||||
Short term investments | 29 | 11 | 40 | |||||||||||||||||||
Fixed income mutual funds | 96 | 96 | ||||||||||||||||||||
Other assets | 13 | 9 | 22 | |||||||||||||||||||
Total plan assets at fair value | $ | 587 | $ | 908 | $ | 10 | $ | 1,505 | ||||||||||||||
Plan assets at net asset value: (a) | ||||||||||||||||||||||
Limited partnerships | 990 | |||||||||||||||||||||
Collective investment trust funds | 82 | |||||||||||||||||||||
Total plan assets | $ | 587 | $ | 908 | $ | 10 | $ | 2,577 | ||||||||||||||
December 31, 2016 | ||||||||||||||||||||||
Plan assets at fair value: | ||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||
Corporate and other bonds | $ | 500 | $ | 10 | $ | 510 | ||||||||||||||||
States, municipalities and political subdivisions | 63 | 63 | ||||||||||||||||||||
Asset-backed | 186 | 186 | ||||||||||||||||||||
Total fixed maturities | $ | - | 749 | 10 | 759 | |||||||||||||||||
Equity securities | 404 | 105 | 509 | |||||||||||||||||||
Short term investments | 18 | 35 | 53 | |||||||||||||||||||
Fixed income mutual funds | 92 | 92 | ||||||||||||||||||||
Other assets | 15 | 37 | 52 | |||||||||||||||||||
Total plan assets at fair value | $ | 529 | $ | 926 | $ | 10 | $ | 1,465 | ||||||||||||||
Plan assets at net asset value: (a) | ||||||||||||||||||||||
Limited partnerships | 958 | |||||||||||||||||||||
Total plan assets | $ | 529 | $ | 926 | $ | 10 | $ | 2,423 | ||||||||||||||
December 31, 2019 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Plan assets at fair value: | ||||||||||||||||
Fixed maturity securities: | ||||||||||||||||
Corporate and other bonds | $ | 587 | $ | 10 | $ | 597 | ||||||||||
States, municipalities and political subdivisions | 51 | 51 | ||||||||||||||
Asset-backed | 154 | 154 | ||||||||||||||
Total fixed maturities | $ | – | 792 | 10 | 802 | |||||||||||
Equity securities | 541 | 128 | 669 | |||||||||||||
Short term investments | 74 | 7 | 81 | |||||||||||||
Fixed income mutual funds | 128 | 128 | ||||||||||||||
Other assets | 11 | 9 | 20 | |||||||||||||
Total plan assets at fair value | $ | 754 | $ | 936 | $ | 10 | $ | 1,700 | ||||||||
Plan assets at net asset value: (a) | ||||||||||||||||
Limited partnerships | 876 | |||||||||||||||
Total plan assets | $ | 754 | $ | 936 | $ | 10 | $ | 2,576 | ||||||||
December 31, 2018 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Plan assets at fair value: | ||||||||||||||||
Fixed maturity securities: | ||||||||||||||||
Corporate and other bonds | $ | 472 | $ | 10 | $ | 482 | ||||||||||
States, municipalities and political subdivisions | 58 | 58 | ||||||||||||||
Asset-backed | 165 | 165 | ||||||||||||||
Total fixed maturities | $ | – | 695 | 10 | 705 | |||||||||||
Equity securities | 406 | 110 | 516 | |||||||||||||
Short term investments | 36 | 54 | 90 | |||||||||||||
Fixed income mutual funds | 120 | 120 | ||||||||||||||
Other assets | 9 | 9 | ||||||||||||||
Total plan assets at fair value | $ | 562 | $ | 868 | $ | 10 | $ | 1,440 | ||||||||
Plan assets at net asset value: (a) | ||||||||||||||||
Limited partnerships | 864 | |||||||||||||||
Total plan assets | $ | 562 | $ | 868 | $ | 10 | $ | 2,304 | ||||||||
(a) | Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table for these investments are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. |
2019.
December 31, 2017 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||
(In millions) | ||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||
Corporate and other bonds | $ | 18 | $ | 18 | ||||||||||||||||||
States, municipalities and political subdivisions | 42 | 42 | ||||||||||||||||||||
Asset-backed | 12 | 12 | ||||||||||||||||||||
Total fixed maturities | $ | - | 72 | $ | - | 72 | ||||||||||||||||
Short term investments | 2 | 2 | ||||||||||||||||||||
Fixed income mutual funds | 14 | 14 | ||||||||||||||||||||
Total | $ | 16 | $ | 72 | $ | - | $ | 88 | ||||||||||||||
December 31, 2016 | ||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||
Corporate and other bonds | $ | 19 | $ | 19 | ||||||||||||||||||
States, municipalities and political subdivisions | 44 | 44 | ||||||||||||||||||||
Asset-backed | 15 | 15 | ||||||||||||||||||||
Total fixed maturities | $ | - | 78 | $ | - | 78 | ||||||||||||||||
Short term investments | 3 | 3 | ||||||||||||||||||||
Fixed income mutual funds | 5 | 5 | ||||||||||||||||||||
Total | $ | 8 | $ | 78 | $ | - | $ | 86 | ||||||||||||||
December 31, 2019 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Fixed maturity securities: | ||||||||||||||||
Corporate and other bonds | $ | 22 | $ | 22 | ||||||||||||
States, municipalities and political subdivisions | 16 | 16 | ||||||||||||||
Asset-backed | 31 | 31 | ||||||||||||||
Total fixed maturities | $ | - | 69 | $ | - | 69 | ||||||||||
Short term investments | 3 | 3 | ||||||||||||||
Fixed income mutual funds | 18 | 18 | ||||||||||||||
Total | $ | 21 | $ | 69 | $ | - | $ | 90 | ||||||||
December 31, 2018 | ||||||||||||||||
Fixed maturity securities: | ||||||||||||||||
Corporate and other bonds | $ | 24 | $ | 24 | ||||||||||||
States, municipalities and political subdivisions | 11 | 11 | ||||||||||||||
Asset-backed | 30 | 30 | ||||||||||||||
Total fixed maturities | $ | - | 65 | $ | - | 65 | ||||||||||
Short term investments | 4 | 4 | ||||||||||||||
Fixed income mutual funds | 16 | 16 | ||||||||||||||
Total | $ | 20 | $ | 65 | $ | - | $ | 85 | ||||||||
2018.
2017.
$
December 31 | 2017 | 2016 | ||||||||
(In millions) | ||||||||||
Reinsurance receivables related to insurance reserves: | ||||||||||
Ceded claim and claim adjustment expenses | $ | 3,934 | $ | 4,094 | ||||||
Ceded future policy benefits | 230 | 212 | ||||||||
Reinsurance receivables related to paid losses | 126 | 147 | ||||||||
Reinsurance receivables | 4,290 | 4,453 | ||||||||
Less allowance for doubtful accounts | 29 | 37 | ||||||||
Reinsurance receivables, net of allowance for doubtful accounts | $ | 4,261 | $ | 4,416 | ||||||
December 31 | 2019 | 2018 | ||||||
(In millions) | ||||||||
Reinsurance receivables related to insurance reserves: | ||||||||
Ceded claim and claim adjustment expenses | $ | 3,835 | $ | 4,019 | ||||
Ceded future policy benefits | 226 | 233 | ||||||
Reinsurance receivables related to paid losses | 143 | 203 | ||||||
Reinsurance receivables | 4,204 | 4,455 | ||||||
Less allowance for doubtful accounts | 25 | 29 | ||||||
Reinsurance receivables, net of allowance for doubtful accounts | $ | 4,179 | $ | 4,426 | ||||
2018.
Direct | Assumed | Ceded | Net | Assumed/ Net % | ||||||||||||||||
| ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
Year Ended December 31, 2017 | ||||||||||||||||||||
Property and casualty | $ | 10,447 | $ | 317 | $ | 4,315 | $ | 6,449 | 4.9% | |||||||||||
Long term care | 489 | 50 | 539 | 9.3 | ||||||||||||||||
| ||||||||||||||||||||
Earned premiums | $ | 10,936 | $ | 367 | $ | 4,315 | $ | 6,988 | 5.3% | |||||||||||
| ||||||||||||||||||||
Year Ended December 31, 2016 | ||||||||||||||||||||
Property and casualty | $ | 10,400 | $ | 258 | $ | 4,270 | $ | 6,388 | 4.0% | |||||||||||
Long term care | 486 | 50 | 536 | 9.3 | ||||||||||||||||
| ||||||||||||||||||||
Earned premiums | $ | 10,886 | $ | 308 | $ | 4,270 | $ | 6,924 | 4.4% | |||||||||||
| ||||||||||||||||||||
Year Ended December 31, 2015 | ||||||||||||||||||||
Property and casualty | $ | 9,853 | $ | 274 | $ | 3,754 | $ | 6,373 | 4.3% | |||||||||||
Long term care | 498 | 50 | 548 | 9.1 | ||||||||||||||||
| ||||||||||||||||||||
Earned premiums | $ | 10,351 | $ | 324 | $ | 3,754 | $ | 6,921 | 4.7% | |||||||||||
|
Direct | Assumed | Ceded | Net | Assumed/ Net % | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Year Ended December 31, 2019 | ||||||||||||||||||||
Property and casualty | $ | 11,021 | $ | 288 | $ | 4,401 | $ | 6,908 | 4.2 | % | ||||||||||
Long term care | 470 | 50 | 520 | 9.6 | ||||||||||||||||
Earned premiums | $ | 11,491 | $ | 338 | $ | 4,401 | $ | 7,428 | 4.6 | % | ||||||||||
Year Ended December 31, 2018 | ||||||||||||||||||||
Property and casualty | $ | 10,857 | $ | 305 | $ | 4,380 | $ | 6,782 | 4.5 | % | ||||||||||
Long term care | 480 | 50 | 530 | 9.4 | ||||||||||||||||
Earned premiums | $ | 11,337 | $ | 355 | $ | 4,380 | $ | 7,312 | 4.9 | % | ||||||||||
Year Ended December 31, 2017 | ||||||||||||||||||||
Property and casualty | $ | 10,447 | $ | 317 | $ | 4,315 | $ | 6,449 | 4.9 | % | ||||||||||
Long term care | 489 | 50 | 539 | 9.3 | ||||||||||||||||
Earned premiums | $ | 10,936 | $ | 367 | $ | 4,315 | $ | 6,988 | 5.3 | % | ||||||||||
2017 Quarter Ended | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||||||||
| ||||||||||||||||
(In millions, except per share data) | ||||||||||||||||
Total revenues | $ | 3,555 | $ | 3,521 | $ | 3,359 | $ 3,300 | |||||||||
Net income (a) | 481 | 157 | 231 | 295 | ||||||||||||
Per share-basic | 1.43 | 0.46 | 0.69 | 0.88 | ||||||||||||
Per share-diluted | 1.43 | 0.46 | 0.69 | 0.87 | ||||||||||||
2016 Quarter Ended | ||||||||||||||||
| ||||||||||||||||
Total revenues | $ | 3,338 | $ | 3,287 | $ | 3,307 | $ 3,173 | |||||||||
Net income (loss) (b) | 290 | 327 | (65 | ) | 102 | |||||||||||
Per share-basic and diluted | 0.86 | 0.97 | (0.19 | ) | 0.30 |
2019 Quarter Ended | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||||||||
(In millions, except per share data) | ||||||||||||||||
Total revenues | $ | 3,876 | $ | 3,675 | $ | 3,623 | $ | 3,757 | ||||||||
Net income (a) (b) | 217 | 72 | 249 | 394 | ||||||||||||
Per share-basic and diluted | 0.73 | 0.24 | 0.82 | 1.27 |
2018 Quarter Ended | ||||||||||||||||
Total revenues | $ | 3,287 | $ | 3,608 | $ | 3,590 | $ | 3,581 | ||||||||
Net income (loss) ( c ) | (165 | ) | 278 | 230 | 293 | |||||||||||
Per share-basic and diluted | (0.53 | ) | 0.88 | 0.72 | 0.89 |
(a) | Net income for the fourth quarter of 2019 includes net i $116 million (after tax and noncontrolling interests) related ton vestment income of limited partnership ofs and equity securities partially offsetby asset impairment charges$69 million (after tax). |
(b) | Net income for the third quarter of 2019 included a $151 million (after tax and noncontrolling interests) charge related to the recognition of an active life reserve premium deficiency as a result of the third quarter GPV. |
( c ) | Net loss for the fourth quarter of |
|
early 2021.17.18. Legal ProceedingsCNA FinancialIn September2016,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.against CCC, Continental Assurance Company (“CAC”) (a former subsidiaryin this proceeding. CCC), CNA,2019. In October of 2019, the Investment CommitteeCourt ruled on the motion and granted a partial dismissalCNA 401(k) Plus Plan (“Plan”),case proceeding to trial. The Northern Trust Company and John Does1-10 (collectively “Defendants”) related to the Plan. The complaint alleges that Defendants breached fiduciary duties to the Plan and caused prohibited transactionscase will be set for trial in violation of the Employee Retirement Income Security Act of 1974 when the Plan’s Fixed Income Fund’s annuity contract with CAC was canceled. The plaintiff alleges he and a proposed class of the Plan participants who had invested in the Fixed Income Fund suffered lower returns in their Plan investments as a consequence of these alleged violations and seeks relief on behalf of the putative class. The Plan trustees have provided notice to their fiduciary coverage insurance carriers.Through mediation, the plaintiff, Defendants and the Plan’s fiduciary insurance carriers reached an agreement in principle to settle this matter. Upon completion of a definitive settlement agreement, plaintiff and Defendants will propose a class settlement for court approval. Based on the agreement in principle, management has recorded its best estimate of CNA’s probable loss and the Company does not believe that the ultimate resolution of this matter will have a material impact on its condensed consolidated financial statements.Other Litigation18.19. Commitments and ContingenciesIn the course of selling business entities and assets to third parties, agreed to guarantee the performance of certain obligations of previously owned subsidiaries and to indemnify purchasers for losses arising out of breaches of representation and warranties with respect to the business entities or assets sold, including, in certain cases, losses arising from undisclosed liabilities or certain named litigation. Such guarantee and indemnification agreements in effect for sales of business entities, assets and third party loans may include provisions that survive indefinitely. As of December 31, 2017, the aggregate amount related to quantifiable guarantees was $375 million and the aggregate amount related to quantifiable indemnification agreements was $252 million. In certain cases, should CNA be required to make payments under any such guarantee, it would have the right to seek reimbursement from an affiliate of a previously owned subsidiary.In addition, CNA agreed to provide indemnification to third party purchasers for certain losses associated with sold business entities or assets that are not limited by a contractual monetary amount. As of December 31, 2017, CNA had outstanding unlimited indemnifications in connection with the sales of certain of its business entities or assets that included tax liabilities arising prior to a purchaser’s ownership of an entity or asset, defects in title at the time of sale, employee claims arising prior to closing and in some cases losses arising from certain litigation and undisclosed liabilities. Certain provisions of the indemnification agreements survive indefinitely while others survive until the applicable statutes of limitation expire, or until the agreed upon contract terms expire.CNA also provided 2017,2019, the potential amount of future payments CNA could be required to pay under these guarantees was approximately $1.8$1.7 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.CNA Small Business Premium Rate AdjustmentIn 2016 and 2017, CNA identified rating errors related to its multi-peril package product and workers’ compensation policies within its Small Business unit and determined that it would voluntarily issue premium refunds along with interest on affected policies. After the rating errors were identified, written and earned premium have been reported net
rigs
Year Ended December 31, 2017 | CNA Financial | Diamond Offshore | Boardwalk Pipeline | Loews Hotels & Co | Corporate | Total | ||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Insurance premiums | $ | 6,988 | $ | 6,988 | ||||||||||||||||||||
Net investment income | 2,034 | $ | 2 | $ | 146 | 2,182 | ||||||||||||||||||
Investment gains | 122 | 122 | ||||||||||||||||||||||
Contract drilling revenues | 1,451 | 1,451 | ||||||||||||||||||||||
Other revenues | 439 | 47 | $ | 1,325 | $ | 682 | 499 | 2,992 | ||||||||||||||||
Total | 9,583 | 1,500 | 1,325 | 682 | 645 | 13,735 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Insurance claims and policyholders’ benefits | 5,310 | 5,310 | ||||||||||||||||||||||
Amortization of deferred acquisition costs | 1,233 | 1,233 | ||||||||||||||||||||||
Contract drilling expenses | 802 | 802 | ||||||||||||||||||||||
Other operating expenses | 1,523 | 571 | 861 | 589 | 618 | 4,162 | ||||||||||||||||||
Interest | 203 | 149 | 171 | 28 | 95 | 646 | ||||||||||||||||||
Total | 8,269 | 1,522 | 1,032 | 617 | 713 | 12,153 | ||||||||||||||||||
Income (loss) before income tax | 1,314 | (22 | ) | 293 | 65 | (68) | 1,582 | |||||||||||||||||
Income tax (expense) benefit | (419) | 4 | 232 | (1 | ) | 14 | (170) | |||||||||||||||||
Net income (loss) | 895 | (18 | ) | 525 | 64 | (54) | 1,412 | |||||||||||||||||
Amounts attributable to noncontrolling interests | (94) | (9 | ) | (145) | (248) | |||||||||||||||||||
Net income (loss) attributable to Loews Corporation | $ | 801 | $ | (27 | ) | $ | 380 | $ | 64 | $ | (54) | $ | 1,164 | |||||||||||
December 31, 2017 | ||||||||||||||||||||||||
Total assets | $ | 56,539 | $ | 6,251 | $ | 8,972 | $ | 1,558 | $ | 6,266 | $ | 79,586 |
Revenues: Insurance premiums Net investment income Investment gains (losses) Contract drilling revenues Other revenues Total Expenses: Insurance claims and policyholders’ benefits Amortization of deferred acquisition costs Contract drilling expenses Other operating expenses Interest Total Income (loss) before income tax Income tax (expense) benefit Net income (loss) Amounts attributable to noncontrolling interests Net income (loss) attributable to Loews Corporation Total assetsYear Ended December 31, 2016 CNA
Financial Diamond
Offshore Boardwalk
Pipeline Loews
Hotels & Co Corporate Total (In millions) $ 6,924 $ 6,924 1,988 $ 1 $ 146 2,135 62 (12) 50 1,525 1,525 410 75 $ 1,316 $ 667 3 2,471 9,384 1,589 1,316 667 149 13,105 5,283 5,283 1,235 1,235 772 772 1,558 1,198 835 621 131 4,343 167 90 183 24 72 536 8,243 2,060 1,018 645 203 12,169 1,141 (471) 298 22 (54) 936 (279) 111 (61) (10 ) 19 (220) 862 (360) 237 12 (35) 716 (88) 174 (148) (62) $ 774 $ (186) $ 89 $ 12 $ (35) $ 654 December 31, 2016 $ 55,207 $ 6,371 $ 8,706 $ 1,498 $ 4,812 $ 76,594
Revenues: Insurance premiums Net investment income Investment losses Contract drilling revenues Other revenues Total Expenses: Insurance claims and policyholders’ benefits Amortization of deferred acquisition costs Contract drilling expenses Other operating expenses Interest Total Income (loss) before income tax Income tax (expense) benefit Net income (loss) Amounts attributable to noncontrolling interests Net income (loss) attributable to Loews CorporationYear Ended December 31, 2015 CNA
Financial Diamond
Offshore Boardwalk
Pipeline Loews
Hotels & Co Corporate Total (In millions) $ 6,921 $ 6,921 1,840 $ 3 $ 1 $ 22 1,866 (71) (71) 2,360 2,360 411 65 1,253 $ 604 6 2,339 9,101 2,428 1,254 604 28 13,415 5,384 5,384 1,540 1,540 1,228 1,228 1,469 1,508 851 555 116 4,499 155 94 176 21 74 520 8,548 2,830 1,027 576 190 13,171 553 (402 ) 227 28 (162) 244 (71) 117 (46) (16 ) 59 43 482 (285 ) 181 12 (103) 287 (49) 129 (107) (27) $ 433 $ (156 ) $ 74 $ 12 $ (103) $ 260
Year Ended December 31, 2019 | CNA Financial | Diamond Offshore | Boardwalk Pipelines | Loews Hotels & Co | Corporate | Total | ||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Insurance premiums | $ | 7,428 | $ | 7,428 | ||||||||||||||||||||
Net investment income | 2,118 | $ | 6 | $ | 1 | $ | 230 | 2,355 | ||||||||||||||||
Investment gains | 49 | 49 | ||||||||||||||||||||||
Non-insurance warranty revenue | 1,161 | 1,161 | ||||||||||||||||||||||
Operating revenues and other | 32 | 982 | $ | 1,300 | 691 | 933 | 3,938 | |||||||||||||||||
Total | 10,788 | 988 | 1,300 | 692 | 1,163 | 14,931 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Insurance claims and policyholders’ benefits | 5,806 | 5,806 | ||||||||||||||||||||||
Amortization of deferred acquisition costs | 1,383 | 1,383 | ||||||||||||||||||||||
Non-insurance warranty expense | 1,082 | 1,082 | ||||||||||||||||||||||
Operating expenses and other | 1,141 | 1,267 | 840 | 698 | 1,004 | 4,950 | ||||||||||||||||||
Interest | 152 | 123 | 179 | 22 | 115 | 591 | ||||||||||||||||||
Total | 9,564 | 1,390 | 1,019 | 720 | 1,119 | 13,812 | ||||||||||||||||||
Income (loss) before income tax | 1,224 | (402 | ) | 281 | (28 | ) | 44 | 1,119 | ||||||||||||||||
Income tax (expense) benefit | (224 | ) | 60 | (72 | ) | (3 | ) | (9 | ) | (248 | ) | |||||||||||||
Net income (loss) | 1,000 | (342 | ) | 209 | (31 | ) | 35 | 871 | ||||||||||||||||
Amounts attributable to noncontrolling interests | (106 | ) | 167 | 61 | ||||||||||||||||||||
Net income (loss) attributable to Loews Corporation | $ | 894 | $ | (175 | ) | $ | 209 | $ | (31 | ) | $ | 35 | $ | 932 | ||||||||||
December 31, 2019 | ||||||||||||||||||||||||
Total assets | $ | 60,583 | $ | 5,834 | $ | 9,248 | $ | 1,728 | $ | 4,850 | $ | 82,243 |
Year Ended December 31, 2018 | CNA Financial | Diamond Offshore | Boardwalk Pipelines | Loews Hotels & Co | Corporate | Total | ||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Insurance premiums | $ | 7,312 | $ | 7,312 | ||||||||||||||||||||
Net investment income (loss) | 1,817 | $ | 8 | $ | 2 | $ | (10 | ) | 1,817 | |||||||||||||||
Investment losses | (57 | ) | (57 | ) | ||||||||||||||||||||
Non-insurance warranty revenue | 1,007 | 1,007 | ||||||||||||||||||||||
Operating revenues and other | 55 | 1,085 | $ | 1,227 | 753 | 867 | 3,987 | |||||||||||||||||
Total | 10,134 | 1,093 | 1,227 | 755 | 857 | 14,066 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Insurance claims and policyholders’ benefits | 5,572 | 5,572 | ||||||||||||||||||||||
Amortization of deferred acquisition costs | 1,335 | 1,335 | ||||||||||||||||||||||
Non-insurance warranty expense | 923 | 923 | ||||||||||||||||||||||
Operating expenses and other | 1,203 | 1,196 | 820 | 653 | 956 | 4,828 | ||||||||||||||||||
Interest | 138 | 123 | 176 | 29 | 108 | 574 | ||||||||||||||||||
Total | 9,171 | 1,319 | 996 | 682 | 1,064 | 13,232 | ||||||||||||||||||
Income (loss) before income tax | 963 | (226 | ) | 231 | 73 | (207 | ) | 834 | ||||||||||||||||
Income tax (expense) benefit | (151 | ) | 30 | (28 | ) | (25 | ) | 46 | (128 | ) | ||||||||||||||
Net income (loss) | 812 | (196 | ) | 203 | 48 | (161 | ) | 706 | ||||||||||||||||
Amounts attributable to noncontrolling interests | (86 | ) | 84 | (68 | ) | (70 | ) | |||||||||||||||||
Net income (loss) attributable to Loews Corporation | $ | 726 | $ | (112 | ) | $ | 135 | $ | 48 | $ | (161 | ) | $ | 636 | ||||||||||
December 31, 2018 | ||||||||||||||||||||||||
Total assets | $ | 57,123 | $ | 6,036 | $ | 9,131 | $ | 1,812 | $ | 4,214 | $ | 78,316 |
Year Ended December 31, 2017 | CNA Financial | Diamond Offshore | Boardwalk Pipelines | Loews Hotels & Co | Corporate | Total | ||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Insurance premiums | $ | 6,988 | $ | 6,988 | ||||||||||||||||||||
Net investment income | 2,034 | $ | 2 | $ | 146 | 2,182 | ||||||||||||||||||
Investment gains | 122 | 122 | ||||||||||||||||||||||
Non-insurance warranty revenue | 390 | 390 | ||||||||||||||||||||||
Operating revenues and other | 49 | 1,498 | $ | 1,325 | $ | 682 | 499 | 4,053 | ||||||||||||||||
Total | 9,583 | 1,500 | 1,325 | 682 | 645 | 13,735 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Insurance claims and policyholders’ benefits | 5,310 | 5,310 | ||||||||||||||||||||||
Amortization of deferred acquisition costs | 1,233 | 1,233 | ||||||||||||||||||||||
Non-insurance warranty expense | 299 | 299 | ||||||||||||||||||||||
Operating expenses and other | 1,224 | 1,373 | 861 | 589 | 618 | 4,665 | ||||||||||||||||||
Interest | 203 | 149 | 171 | 28 | 95 | 646 | ||||||||||||||||||
Total | 8,269 | 1,522 | 1,032 | 617 | 713 | 12,153 | ||||||||||||||||||
Income (loss) before income tax | 1,314 | (22 | ) | 293 | 65 | (68 | ) | 1,582 | ||||||||||||||||
Income tax (expense) benefit | (419 | ) | 4 | 232 | (1 | ) | 14 | (170 | ) | |||||||||||||||
Net income (loss) | 895 | (18 | ) | 525 | 64 | (54 | ) | 1,412 | ||||||||||||||||
Amounts attributable to noncontrolling interests | (94 | ) | (9 | ) | (145 | ) | (248 | ) | ||||||||||||||||
Net income (loss) attributable to Loews Corporation | $ | 801 | $ | (27 | ) | $ | 380 | $ | 64 | $ | (54 | ) | $ | 1,164 | ||||||||||
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. |
Item 9A. | Controls and Procedures. |
2019.
Item 9B. | Other Information. |
Item 10. Directors, Executive Officers and Corporate Governance.
Information about our directors and persons nominated to become directors is contained under the caption “Election of Directors” in our Proxy Statement for our 2018 Annual Meeting of Shareholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2017 (the “2018 Proxy Statement”) and is incorporated herein by reference.
Item 10. | Directors, Executive Officers and Corporate Governance. |
Information about beneficial ownership reporting compliance is contained under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” in our 2018 Proxy Statement and is incorporated herein by reference.
Information about the procedures
Item 11. Executive Compensation.
Information about director and executive officer compensation, Compensation Committee interlocks and the Compensation Committee Report is contained in our 2018 Proxy Statement under the captions “Director Compensation,” “Compensation Discussion and Analysis,” “Compensation Committee Report on Executive Compensation,” and “Compensation Committee Interlocks and Insider Participation” and is incorporated herein by reference.
Information about the number of shares of our common stock beneficially owned
Item 15. | Exhibits and Financial Statement Schedules. |
Page Number | |||||
2. Financial Statement Schedules: | |||||
| |||||
Loews Corporation and Subsidiaries: | |||||
170 | |||||
| |||||
172 |
Description | Exhibit Number | |||||||
3. Exhibits: | ||||||||
|
| |||||||
(3) | Articles of Incorporation and By-Laws | |||||||
| ||||||||
3.01 | ||||||||
3.02 | ||||||||
(4) | Instruments Defining the Rights of Security Holders, Including Indentures | |||||||
4.01* | ||||||||
Registrant hereby agrees to furnish to the Commission upon request copies of instruments with respect to long term debt, pursuant to Item 601(b)(4)(iii) of Regulation S-K | 4.02 | |||||||
(10) | Material Contracts | |||||||
10.01 + |
Description | Exhibit Number | |||||||
|
| |||||||
10.02 + | ||||||||
10.03 + | ||||||||
10.04 + | ||||||||
10.05 + | ||||||||
10.06 + | ||||||||
10.07 + | ||||||||
10.08* | + | |||||||
10.09 + | ||||||||
10.10 + | ||||||||
10.11 |
Description | Exhibit Number | |||||||
|
| |||||||
10.12 + | ||||||||
10.13+ | ||||||||
10.14+ | ||||||||
10.15+ | ||||||||
10.16 + | ||||||||
10.17 + | ||||||||
10.18+ | ||||||||
10.19 + | ||||||||
|
| |||||||
10.20 + |
Description |
(21) | Subsidiaries of the Registrant | |||||||
|
| |||||||
| ||||||||
21.01* | ||||||||
(23) | Consent of Experts and Counsel | |||||||
| ||||||||
23.01* | ||||||||
(24) | 24.01* | |||||||
(31) | Rule 13a-14(a)/15d-14(a) Certifications | |||||||
|
| |||||||
31.01* | ||||||||
31.02* | ||||||||
(32) | Section 1350 Certifications | |||||||
| ||||||||
32.01* | ||||||||
32.02* | ||||||||
(100) | XBRL Related Documents | |||||||
XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
| 101.INS* | ||||||
Inline XBRL Taxonomy Extension Schema |
| 101.SCH* | ||||||
Inline XBRL Taxonomy Extension | 101.CAL* | |||||||
Inline XBRL Taxonomy Extension | 101.DEF* | |||||||
Inline XBRL Taxonomy Label Linkbase |
| 101.LAB* | ||||||
Inline XBRL Taxonomy Extension Presentation Linkbase |
| 101.PRE* | ||||||
(Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
| 104* |
Filed herewith. |
* Filed herewith.
+ Management contract or compensatory plan or arrangement.
+ | Management contract or compensatory plan or arrangement. |
Item 16. | Form 10-K Summary. |
LOEWS CORPORATION | ||||||
Dated: February | By | * | ||||
(David B. Edelson, Senior Vice President and | ||||||
Chief Financial Officer) |
Dated: February | By | * | ||||
(James S. Tisch, President, | ||||||
Chief Executive Officer and Director) | ||||||
Dated: February | By | * | ||||
(David B. Edelson, Senior Vice President and | ||||||
Chief Financial Officer) | ||||||
Dated: February | By | * | ||||
(Mark S. Schwartz, Vice President and | ||||||
Chief Accounting Officer) | ||||||
Dated: February | By | * | ||||
( | ||||||
Dated: February | By | * | ||||
( | ||||||
Dated: February | By | * | ||||
(Charles D. Davidson, Director) |
Dated: February 11, 2020 | By | * | ||||
( |
Dated: February | By | * | ||||
( | ||||||
Dated: February | By | * | ||||
( | ||||||
Dated: February | By | * | ||||
( | ||||||
Dated: February | By | * | ||||
( | ||||||
Dated: February | By | * | ||||
( | ||||||
Dated: February | By | * | ||||
( | ||||||
Dated: February | By | * | ||||
( |
*By: |
/s/ Marc A. Alpert | |||||
| ||||||
| ||||||
| ||||||||
|
December 31 | 2017 | 2016 | ||||||
(In millions) | ||||||||
Current assets, principally investment in short term instruments | $ | 2,755 | $ | 3,096 | ||||
Investments in securities | 2,144 | 1,931 | ||||||
Investments in capital stocks of subsidiaries, at equity | 16,303 | 15,114 | ||||||
Other assets | 506 | 389 | ||||||
Total assets | $ | 21,708 | $ | 20,530 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities | $ | 182 | $ | 140 | ||||
Long term debt | 1,776 | 1,775 | ||||||
Deferred income tax and other | 546 | 452 | ||||||
Total liabilities | 2,504 | 2,367 | ||||||
Shareholders’ equity | 19,204 | 18,163 | ||||||
Total liabilities and shareholders’ equity | $ | 21,708 | $ | 20,530 | ||||
December 31 | 2019 | 2018 | ||||||
(In millions) | ||||||||
Current assets, principally investment in short term instruments | $ | 2,550 | $ | 2,050 | ||||
Investments in securities | 734 | 1,112 | ||||||
Investments in capital stocks of subsidiaries, at equity | 18,123 | 17,556 | ||||||
Other assets | 24 | 402 | ||||||
Total assets | $ | 21,431 | $ | 21,120 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities | $ | 77 | $ | 109 | ||||
Long term debt | 1,779 | 1,778 | ||||||
Deferred income tax and other | 456 | 715 | ||||||
Total liabilities | 2,312 | 2,602 | ||||||
Shareholders’ equity | 19,119 | 18,518 | ||||||
Total liabilities and shareholders’ equity | $ | 21,431 | $ | 21,120 | ||||
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
(In millions) | ||||||||||||
Revenues: | ||||||||||||
Equity in income of subsidiaries (a) | $ | 1,199 | $ | 655 | $ | 302 | ||||||
Interest and other | 167 | 165 | 74 | |||||||||
Total | 1,366 | 820 | 376 | |||||||||
Expenses: | ||||||||||||
Administrative | 134 | 127 | 108 | |||||||||
Interest | 72 | 72 | 74 | |||||||||
Total | 206 | 199 | 182 | |||||||||
Income before income tax | 1,160 | 621 | 194 | |||||||||
Income tax (expense) benefit | 4 | 33 | 66 | |||||||||
Net income | 1,164 | 654 | 260 | |||||||||
Equity in other comprehensive income (loss) of subsidiaries | 197 | 134 | (638) | |||||||||
Total comprehensive income (loss) | $ | 1,361 | $ | 788 | $ | (378) | ||||||
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Revenues: | ||||||||||||
Equity in income of subsidiaries (a) | $ | 867 | $ | 819 | $ | 1,199 | ||||||
Net investment income (loss), interest and other | 239 | (11 | ) | 167 | ||||||||
Total | 1,106 | 808 | 1,366 | |||||||||
Expenses: | ||||||||||||
Administrative | 83 | 127 | 134 | |||||||||
Interest | 72 | 72 | 72 | |||||||||
Total | 155 | 199 | 206 | |||||||||
Income before income tax | 951 | 609 | 1,160 | |||||||||
Income tax (expense) benefit | (19 | ) | 27 | 4 | ||||||||
Net income | 932 | 636 | 1,164 | |||||||||
Equity in other comprehensive income (loss) of subsidiaries | 812 | (797 | ) | 197 | ||||||||
Total comprehensive income (loss) | $ | 1,744 | $ | (161 | ) | $ | 1,361 | |||||
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
(In millions) | ||||||||||||
Operating Activities: | ||||||||||||
Net income | $ | 1,164 | $ | 654 | $ | 260 | ||||||
Adjustments to reconcile net income to net cash provided (used) by operating activities: | ||||||||||||
Equity method investees | (405 | ) | 115 | 488 | ||||||||
Provision for deferred income taxes | 77 | 10 | 113 | |||||||||
Changes in operating assets and liabilities, net: | ||||||||||||
Receivables | 4 | 2 | (6 | ) | ||||||||
Accounts payable and accrued liabilities | (20 | ) | 52 | 71 | ||||||||
Trading securities | 100 | (614 | ) | 718 | ||||||||
Other, net | (41 | ) | (15 | ) | (8 | ) | ||||||
879 | 204 | 1,636 | ||||||||||
Investing Activities: | ||||||||||||
Investments in and advances to subsidiaries | 12 | 50 | (285 | ) | ||||||||
Change in investments, primarily short term | 30 | (127 | ) | |||||||||
Acquisition | (620 | ) | ||||||||||
Other | (1 | ) | (2 | ) | (4 | ) | ||||||
(579 | ) | (79 | ) | (289 | ) | |||||||
Financing Activities: | ||||||||||||
Dividends paid | (84 | ) | (84 | ) | (90 | ) | ||||||
Issuance of common stock | 7 | |||||||||||
Purchases of treasury shares | (216 | ) | (134 | ) | (1,265 | ) | ||||||
Principal payments in debt | (400 | ) | ||||||||||
Issuance of debt | 495 | |||||||||||
Other | (2 | ) | 1 | |||||||||
(300 | ) | (125 | ) | (1,347 | ) | |||||||
Net change in cash | - | - | - | |||||||||
Cash, beginning of year | ||||||||||||
Cash, end of year | $ | - | $ | - | $ | - | ||||||
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Operating Activities: | ||||||||||||
Net income | $ | 932 | $ | 636 | $ | 1,164 | ||||||
Adjustments to reconcile net income to net cash provided (used) by operating activities: | ||||||||||||
Equity method investees | 36 | 401 | (405 | ) | ||||||||
Provision for deferred income taxes | 106 | 113 | 77 | |||||||||
Changes in operating assets and liabilities, net: | ||||||||||||
Receivables | 1 | 3 | 4 | |||||||||
Accounts payable and accrued liabilities | (29 | ) | 92 | (20 | ) | |||||||
Trading securities | (478 | ) | 1,702 | 100 | ||||||||
Other, net | 36 | 19 | (41 | ) | ||||||||
604 | 2,966 | 879 | ||||||||||
Investing Activities: | ||||||||||||
Investments in and advances to subsidiaries | 183 | (135 | ) | 12 | ||||||||
Change in investments, primarily short term | 326 | (187 | ) | 30 | ||||||||
Purchase of Boardwalk Pipelines common units | (1,504 | ) | ||||||||||
Acquisition | (620 | ) | ||||||||||
Other | (2 | ) | (1 | ) | ||||||||
509 | (1,828 | ) | (579 | ) | ||||||||
Financing Activities: | ||||||||||||
Dividends paid | (76 | ) | (80 | ) | (84 | ) | ||||||
Purchases of treasury shares | (1,051 | ) | (1,026 | ) | (216 | ) | ||||||
Other | (5 | ) | (3 | ) | ||||||||
(1,132 | ) | (1,109 | ) | (300 | ) | |||||||
Net change in cash | (19 | ) | 29 | - | ||||||||
Cash, beginning of year | 29 | |||||||||||
Cash, end of year | $ | 10 | $ | 29 | $ | - | ||||||
(a) | Cash dividends paid to the Company by affiliates amounted to |
V
Valuation and Qualifying Accounts
Column A | Column B | Column C | Column D | Column E | ||||||||||||||||
Additions | ||||||||||||||||||||
Balance at | Charged to | Charged | Balance at | |||||||||||||||||
Beginning | Costs and | to Other | End of | |||||||||||||||||
Description | of Period | Expenses | Accounts | Deductions | Period | |||||||||||||||
(In millions) | ||||||||||||||||||||
For the Year Ended December 31, 2017 | ||||||||||||||||||||
Deducted from assets: | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 90 | $ | - | $ | - | $ | 10 | $ | 80 | ||||||||||
Total | $ | 90 | $ | - | $ | - | $ | 10 | $ | 80 | ||||||||||
For the Year Ended December 31, 2016 | ||||||||||||||||||||
Deducted from assets: | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 96 | $ | - | $ | - | $ | 6 | $ | 90 | ||||||||||
Total | $ | 96 | $ | - | $ | - | $ | 6 | $ | 90 | ||||||||||
For the Year Ended December 31, 2015 | ||||||||||||||||||||
Deducted from assets: | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 117 | $ | - | $ | - | $ | 21 | $ | 96 | ||||||||||
Total | $ | 117 | $ | - | $ | - | $ | 21 | $ | 96 | ||||||||||
LOEWS CORPORATION AND SUBSIDIARIES
Consolidated Property and Casualty Operations | ||||||||
December 31 | 2017 | 2016 | ||||||
(In millions) | ||||||||
Deferred acquisition costs | $ | 632 | $ | 599 | ||||
Reserves for unpaid claim and claim adjustment expenses | 22,004 | 22,343 | ||||||
Discount deducted from claim and claim adjustment expense reserves above (based on interest rates ranging from 3.5% to 8.0%) | 1,434 | 1,572 | ||||||
Unearned premiums | 4,029 | 3,762 |
Year Ended December 31 | 2017 | 2016 | 2015 | |||||||||
(In millions) | ||||||||||||
Net written premiums | $ | 7,069 | $ | 6,988 | $ | 6,962 | ||||||
Net earned premiums | 6,988 | 6,924 | 6,921 | |||||||||
Net investment income | 1,992 | 1,952 | 1,807 | |||||||||
Incurred claim and claim adjustment expenses related to current year | 5,201 | 5,025 | 4,934 | |||||||||
Incurred claim and claim adjustment expenses related to prior years | (381 | ) | (342 | ) | (255) | |||||||
Amortization of deferred acquisition costs | 1,233 | 1,235 | 1,540 | |||||||||
Paid claim and claim adjustment expenses | 5,341 | 5,134 | 4,945 |
175
Consolidated Property and Casualty Operations |
December 31 | 2019 | 2018 | ||||||
(In millions) | ||||||||
Deferred acquisition costs | $ | 662 | $ | 633 | ||||
Reserves for unpaid claim and claim adjustment expenses | 21,720 | 21,984 | ||||||
Discount deducted from claim and claim adjustment expense | ||||||||
reserves above (based on interest rates ranging from 3.5% to 7.6%) | 1,321 | 1,388 | ||||||
Unearned premiums | 4,583 | 4,183 |
Year Ended December 31 | 2019 | 2018 | 2017 | |||||||||
(In millions) | ||||||||||||
Net written premiums | $ | 7,656 | $ | 7,345 | $ | 7,069 | ||||||
Net earned premiums | 7,428 | 7,312 | 6,988 | |||||||||
Net investment income | 2,063 | 1,751 | 1,992 | |||||||||
Incurred claim and claim adjustment expenses related to current year | 5,356 | 5,358 | 5,201 | |||||||||
Incurred claim and claim adjustment expenses related to prior years | (127 | ) | (179 | ) | (381 | ) | ||||||
Amortization of deferred acquisition costs | 1,383 | 1,335 | 1,233 | |||||||||
Paid claim and claim adjustment expenses | 5,576 | 5,331 | 5,341 |