UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2021~~2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From ____________ to _____________

Commission File Number ~~1-6541~~1-06541

LOEWS CORPORATION

(Exact name of registrant as specified in its charter)

~~Delaware~~	~~13-2646102~~
Delaware		13-2646102
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

667 Madison Avenue, New York, NY 10065-8087

(Address of principal executive offices) (Zip Code)

(212) 521-2000

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	L	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or ~~15 (d)~~15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☒

No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☒

No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐


			Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

No ☒

As of ~~October~~July 29, ~~2021,~~2022, there were ~~253,684,412~~240,947,343 shares of the registrant’s common stock outstanding.

~~INDEX~~

	~~Page~~
			~~No.~~1

Table of c o ntents

INDEX


		Page
		No.

Part I. Financial Information

Item 1. Financial Statements (unaudited)

Consolidated Condensed Balance Sheets		3
~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~ 2021


Consolidated Condensed Statements of Operations	4
Three and six months ended June 30, 2022 and 2021

~~Three and nine months ended September 30, 2021 and 2020~~

Consolidated Condensed Statements of Comprehensive ~~Income (Loss)~~ Loss	5
Three and six months ended June 30, 2022 and 2021

Consolidated Condensed Statement of Equity		6
Three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021

~~Consolidated Condensed Statements of Equity~~		6
~~Three and nine months ended September 30, 2021 and 2020~~

Consolidated Condensed Statements of Cash Flows	8
Six months ended June 30, 2022 and 2021

~~Nine months ended September 30, 2021 and 2020~~

Notes to Consolidated Condensed Financial Statements	9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		37 38

Item 3. Quantitative and Qualitative Disclosures about Market Risk		57

Item 4. Controls and Procedures		57 58

Part II. Other Information		58

Item 1. Legal Proceedings		58

Item 1A. Risk Factors		58

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		61 58

Item 6. Exhibits		62 59


			2

~~Index~~Table of c o ntents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)

September 30, December 31,
2021 2020
(Dollar amounts in millions, except per share data)

Assets:

Investments:
Fixed maturities, amortized cost of $40,342 and $38,963, less allowance for credit loss of $31 and $40
$ 45,069 $ 44,646
Equity securities, cost of $1,552 and $1,456
1,660 1,561
Limited partnership investments 1,996 1,798
Other invested assets, primarily mortgage loans, less allowance for credit loss of $26 and $26
1,140 1,165
Short term investments 4,178 4,674
Total investments 54,043 53,844
Cash 811 478
Receivables 9,187 7,833
Property, plant and equipment 9,878 10,451
Goodwill 349 785
Deferred non-insurance warranty acquisition expenses 3,418 3,068
Deferred acquisition costs of insurance subsidiaries 721 708
Other assets 3,319 3,069
Total assets $ 81,726 $ 80,236

Liabilities and Equity:

Insurance reserves:
Claim and claim adjustment expense $ 23,832 $ 22,706
Future policy benefits 13,198 13,318
Unearned premiums 5,577 5,119
Total insurance reserves 42,607 41,143
Payable to brokers 665 92
Short term debt 187 37
Long term debt 8,925 10,072
Deferred income taxes 1,089 1,065
Deferred non-insurance warranty revenue 4,443 4,023
Other liabilities 4,680 4,623
Total liabilities 62,596 61,055

Commitments and contingent liabilities 0 0

Preferred stock, $0.10 par value:

Authorized – 100,000,000 shares
0 0

Common stock, $0.01 par value:

Authorized – 1,800,000,000 shares

Issued – 269,574,153 and 269,360,973 shares
3 3
Additional paid-in capital 3,120 3,133
Retained earnings 15,336 14,150
Accumulated other comprehensive income 191 581
18,650 17,867
Less treasury stock, at cost (15,807,106 and 150,000 shares)
(833 ) (7 )
Total shareholders’ equity 17,817 17,860
Noncontrolling interests 1,313 1,321
Total equity 19,130 19,181
Total liabilities and equity $ 81,726 $ 80,236


	June 30,		December 31,
	2022		2021
(Dollar amounts in millions, except per share data)

Assets:

Investments:
Fixed maturities, amortized cost of $41,261 and $39,952, less allowance for credit loss of $5 and $18	$	39,431	$	44,380
Equity securities, cost of $1,545 and $1,546	1,364		1,674
Limited partnership investments	1,941		1,933
Other invested assets, primarily mortgage loans, less allowance for credit loss of $16 and $16	1,048		1,091
Short term investments	4,291		4,860
Total investments	48,075		53,938
Cash	951		621
Receivables	9,701		9,273
Property, plant and equipment	9,962		9,888
Goodwill	346		349
Deferred non-insurance warranty acquisition expenses	3,593		3,476
Deferred acquisition costs of insurance subsidiaries	792		737
Other assets	3,651		3,344
Total assets	$	77,071	$	81,626

Liabilities and Equity:

Insurance reserves:
Claim and claim adjustment expense	$	24,559	$	24,174
Future policy benefits	10,926		13,236
Unearned premiums	6,289		5,761
Total insurance reserves	41,774		43,171
Payable to brokers	320		90
Short term debt	839		93
Long term debt	8,443		8,986
Deferred income taxes	350		1,079
Deferred non-insurance warranty revenue	4,638		4,503
Other liabilities	4,486		4,529
Total liabilities	60,850		62,451

Commitments and contingent liabilities

Preferred stock, $0.10 par value:
Authorized – 100,000,000 shares
Common stock, $0.01 par value:
Authorized – 1,800,000,000 shares
Issued – 248,622,439 and 248,467,051 shares	2		2
Additional paid-in capital	2,869		2,885
Retained earnings	15,261		14,776
Accumulated other comprehensive income (loss)	(2,510)		186
	15,622		17,849
Less treasury stock, at cost (6,398,767 and 50,000 shares)	(386)		(3)
Total shareholders’ equity	15,236		17,846
Noncontrolling interests	985		1,329
Total equity	16,221		19,175
Total liabilities and equity	$	77,071	$	81,626

See accompanying Notes to Consolidated Condensed Financial Statements.


			3

~~Index~~Table of c o ntents

Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended						Nine Months Ended							Three Months Ended				Six Months Ended
	September 30,						September 30,							June 30,
	2021			2020			2021			2020				2022		2021		2022		2021
(In millions, except per share data)													(In millions, except per share data)

Revenues:													Revenues:
Insurance premiums	$	2,059		$	1,953		$	6,056		$	5,672		Insurance premiums	$	2,155	$	2,035	$	4,214	$	3,997
Net investment income		483			540			1,649			1,347		Net investment income	366		616		798		1,166
Investment gains (losses) (Note 2)		22			46			657			(1,312	)
Investment gains (losses)													Investment gains (losses)	(59)		578		(70)		635
Non-insurance warranty revenue		357			317			1,054			926		Non-insurance warranty revenue	392		359		774		697
Operating revenues and other		450			609			1,580			2,241		Operating revenues and other	534		415		1,074		1,130
Total		3,371			3,465			10,996			8,874		Total	3,388		4,003		6,790		7,625

Expenses:													Expenses:
Insurance claims and policyholders’ benefits		1,632			1,616			4,684			4,683		Insurance claims and policyholders’ benefits	1,583		1,546		3,038		3,052
Amortization of deferred acquisition costs		368			360			1,084			1,046		Amortization of deferred acquisition costs	374		357		718		716
Non-insurance warranty expense		330			293			973			859		Non-insurance warranty expense	367		332		721		643
Operating expenses and other		638			876			2,208			3,894		Operating expenses and other	715		656		1,406		1,570
Interest		99			137			324			404		Interest	96		100		192		225
Total		3,067			3,282			9,273			10,886		Total	3,135		2,991		6,075		6,206
Income (loss) before income tax		304			183			1,723			(2,012	)
Income tax (expense) benefit		(58	)		(21	)		(391	)		284
Net income (loss)		246			162			1,332			(1,728	)
Income before income tax													Income before income tax	253		1,012		715		1,419
Income tax expense													Income tax expense	(51)		(219)		(143)		(333)
Net income													Net income	202		793		572		1,086
Amounts attributable to noncontrolling interests		(26	)		(23	)		(97	)		400		Amounts attributable to noncontrolling interests	(22)		(39)		(54)		(71)
Net income (loss) attributable to Loews Corporation	$	220		$	139		$	1,235		$	(1,328	)
Net income attributable to Loews Corporation													Net income attributable to Loews Corporation	$	180	$	754	$	518	$	1,015

Basic net income (loss) per share	$	0.86		$	0.50		$	4.71		$	(4.70	)

Diluted net income (loss) per share	$	0.85		$	0.50		$	4.70		$	(4.70	)
Basic net income per share													Basic net income per share	$	0.73	$	2.87	$	2.10	$	3.83
Diluted net income per share													Diluted net income per share	$	0.73	$	2.86	$	2.09	$	3.82

Weighted average shares outstanding:													Weighted average shares outstanding:
Shares of common stock		256.76			279.40			262.27			282.63		Shares of common stock	245.45		262.76		246.70		265.06
Dilutive potential shares of common stock		0.54			0.09			0.50					Dilutive potential shares of common stock	0.49		0.58		0.50		0.49
Total weighted average shares outstanding assuming dilution		257.30			279.49			262.77			282.63		Total weighted average shares outstanding assuming dilution	245.94		263.34		247.20		265.55

See accompanying Notes to Consolidated Condensed Financial Statements.


			4

~~Index~~Table of c o ntents

Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	Three Months Ended						Nine Months Ended							Three Months Ended				Six Months Ended
	September 30,						September 30,							June 30,
	2021			2020			2021			2020				2022		2021		2022		2021
(In millions)													(In millions)

Net income (loss)	$	246		$	162		$	1,332		$	(1,728	)
Net income													Net income	$	202	$	793	$	572	$	1,086

Other comprehensive income (loss), after tax													Other comprehensive income (loss), after tax
Changes in:													Changes in:
Net unrealized gains (losses) on investments with an allowance for credit losses					6						(3	)
Net unrealized losses on investments with an allowance for credit losses													Net unrealized losses on investments with an allowance for credit losses	(2)		0		(6)		0
Net unrealized gains (losses) on other investments		(138	)		207			(465	)		354		Net unrealized gains (losses) on other investments	(1,346)		300		(2,957)		(327)
Total unrealized gains (losses) on investments		(138	)		213			(465	)		351		Total unrealized gains (losses) on investments	(1,348)		300		(2,963)		(327)
Unrealized gains (losses) on cash flow hedges		2			1			14			(18	)
Unrealized gains on cash flow hedges													Unrealized gains on cash flow hedges	6		8		24		12
Pension and postretirement benefits		16			7			32			27		Pension and postretirement benefits	5		7		12		16
Foreign currency translation		(33	)		38			(19	)		(17	)	Foreign currency translation	(68)		11		(83)		14

Other comprehensive income (loss)		(153	)		259			(438	)		343		Other comprehensive income (loss)	(1,405)		326		(3,010)		(285)

Comprehensive income (loss)		93			421			894			(1,385	)	Comprehensive income (loss)	(1,203)		1,119		(2,438)		801

Amounts attributable to noncontrolling interests		(9	)		(49	)		(49	)		363		Amounts attributable to noncontrolling interests	124		(72)		260		(40)

Total comprehensive income (loss) attributable to Loews Corporation	$	84		$	372		$	845		$	(1,022	)	Total comprehensive income (loss) attributable to Loews Corporation	$	(1,079)	$	1,047	$	(2,178)	$	761

See accompanying Notes to Consolidated Condensed Financial Statements.


			5

~~Index~~Table of c o ntents

~~Loews Corporation and Subsidiaries~~

~~CONSOLIDATED CONDENSED STATEMENTS OF~~ ~~EQUITY~~

~~(Unaudited)~~

Loews Corporation Shareholders
Accumulated Common
Additional Other Stock
Common Paid-in Retained Comprehensive Held in Noncontrolling
Total Stock Capital Earnings Income (Loss) Treasury Interests
(In millions)

Balance, July 1, 2020 $ 18,413 $ 3 $ 3,371 $ 14,316 $ 5 $ (491 ) $ 1,209
Net income
162 139 23
Other comprehensive income 259 233 26
Dividends paid ($0.0625 per share)
(27 ) (17 ) (10 )
Purchases of Loews Corporation treasury stock (195 ) (195 )
Stock-based compensation 8 8
Other 0 (1 ) 1
Balance, September 30, 2020
$ 18,620 $ 3 $ 3,379 $ 14,437 $ 238 $ (685 ) $ 1,248

Balance, July 1, 2021 $ 19,398 $ 3 $ 3,121 $ 15,132 $ 327 $ (500 ) $ 1,315
Net income 246 220 26
Other comprehensive loss
(153 ) (136 ) (17 )
Dividends paid ($0.0625 per share)
(27 ) (16 ) (11 )
Purchases of Loews Corporation treasury stock (333 ) (333 )
Stock-based compensation (2 ) (2 )
Other 1 1
Balance, September 30, 2021
$ 19,130 $ 3 $ 3,120 $ 15,336 $ 191 $ (833 ) $ 1,313

~~See accompanying Notes to Consolidated Condensed Financial Statements.~~

~~Index~~

Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF EQUITY

(Unaudited)

Loews Corporation Shareholders
Accumulated Common
Additional Other Stock
Common Paid-in Retained Comprehensive Held in Noncontrolling
Total Stock Capital Earnings Income (Loss) Treasury Interests
(In millions)

Balance, January 1, 2020, as reported $ 21,930 $ 3 $ 3,374 $ 15,823 $ (68 ) $ (13 ) $ 2,811
Cumulative effect adjustment from change in accounting standards (5 ) (5 )
Balance, January 1, 2020, as adjusted 21,925 3 3,374 15,818 (68 ) (13 ) 2,811
Net loss (1,728 ) (1,328 ) (400 )
Other comprehensive income 343 306 37
Dividends paid ($0.1875 per share)
(141 ) (53 ) (88 )
Deconsolidation of Diamond Offshore (1,087 ) (1,087 )
Purchases of Loews Corporation treasury stock (673 ) (673 )
Purchases of subsidiary stock from noncontrolling interests (37 ) 5 (42 )
Stock-based compensation 17 (1 ) 18
Other 1 1 1 (1 )
Balance, September 30, 2020
$ 18,620 $ 3 $ 3,379 $ 14,437 $ 238 $ (685 ) $ 1,248

Balance, January 1, 2021 $ 19,181 $ 3 $ 3,133 $ 14,150 $ 581 $ (7 ) $ 1,321
Net income 1,332 1,235 97
Other comprehensive loss (438 ) (390 ) (48 )
Dividends paid ($0.1875 per share)
(103 ) (49 ) (54 )
Purchases of Loews Corporation treasury stock (826 ) (826 )
Purchases of subsidiary stock from noncontrolling interests (18 ) (18 )
Stock-based compensation 5 (11 ) 16
Other (3 ) (2 ) (1 )
Balance, September 30, 2021
$ 19,130 $ 3 $ 3,120 $ 15,336 $ 191 $ (833 ) $ 1,313


			Loews Corporation Shareholders
	Total		Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Common Stock Held in Treasury		Noncontrolling Interests
(In millions)

Balance, April 1, 2021	$	18,537	$	3	$	3,119	$	14,394	$	34	$	(280)	$	1,267
Net income	793						754						39
Other comprehensive income	326								293				33
Dividends paid ($0.0625 per share)	(27)						(16)						(11)
Purchase of subsidiary stock from noncontrolling interests	(15)												(15)
Purchases of Loews Corporation treasury stock	(219)										(219)

Stock-based compensation	3				2								1
Other	—										(1)		1
Balance, June 30, 2021	$	19,398	$	3	$	3,121	$	15,132	$	327	$	(500)	$	1,315

Balance, April 1, 2022	$	17,695	$	2	$	2,859	$	15,097	$	(1,251)	$	(132)	$	1,120
Net income	202						180						22
Other comprehensive loss	(1,405)								(1,259)				(146)
Dividends paid ($0.0625 per share)	(26)						(15)						(11)


Purchases of Loews Corporation treasury stock	(255)										(255)
Stock-based compensation	12				11								1
Other	(2)				(1)		(1)				1		(1)
Balance, June 30, 2022	$	16,221	$	2	$	2,869	$	15,261	$	(2,510)	$	(386)	$	985

See accompanying Notes to Consolidated Condensed Financial Statements.


			6

~~Index~~Table of c o ntents

Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF ~~CASH FLOWS~~EQUITY

(Unaudited)

Nine Months Ended September 30 2021 2020
(In millions)

Operating Activities:

Net income (loss) $ 1,332 $ (1,728 )
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities, net (85 ) 2,503
Changes in operating assets and liabilities, net:
Receivables (1,115 ) (273 )
Deferred acquisition costs (15 ) (36 )
Insurance reserves 1,891 1,479
Other assets (853 ) (411 )
Other liabilities 701 238
Trading securities (180 ) (481 )
Net cash flow provided by operating activities 1,676 1,291

Investing Activities:

Purchases of fixed maturities (7,127 ) (8,466 )
Proceeds from sales of fixed maturities 2,510 5,023
Proceeds from maturities of fixed maturities 3,360 2,706
Purchases of equity securities (242 ) (373 )
Proceeds from sales of equity securities 237 275
Purchases of limited partnership investments (281 ) (144 )
Proceeds from sales of limited partnership investments 239 305
Purchases of property, plant and equipment (327 ) (584 )
Dispositions 52 47
Sale of interest in Altium Packaging 417
Deconsolidation of Diamond Offshore (483 )
Change in short term investments 725 706
Other, net 13 (120 )
Net cash flow used by investing activities (424 ) (1,108 )

Financing Activities:

Dividends paid (49 ) (53 )
Dividends paid to noncontrolling interests (54 ) (88 )
Purchases of Loews Corporation treasury stock (825 ) (678 )
Purchases of subsidiary stock from noncontrolling interests (18 ) (37 )
Principal payments on debt (1,154 ) (1,157 )
Issuance of debt 1,199 2,393
Other, net (12 ) (13 )
Net cash flow (used) provided by financing activities (913 ) 367

Effect of foreign exchange rate on cash (6 )

Net change in cash 333 550
Cash, beginning of period 478 336
Cash, end of period $ 811 $ 886


			Loews Corporation Shareholders
	Total		Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Common Stock Held in Treasury		Noncontrolling Interests
(In millions)

Balance, January 1, 2021	$	19,181	$	3	$	3,133	$	14,150	$	581	$	(7)	$	1,321
Net income	1,086						1,015						71
Other comprehensive loss	(285)								(254)				(31)
Dividends paid ($0.125 per share)	(76)						(33)						(43)
Purchase of subsidiary stock from noncontrolling interests	(18)												(18)
Purchases of Loews Corporation treasury stock	(493)										(493)

Stock-based compensation	7				(9)								16
Other	(4)				(3)						0		(1)
Balance, June 30, 2021	$	19,398	$	3	$	3,121	$	15,132	$	327	$	(500)	$	1,315

Balance, January 1, 2022	$	19,175	$	2	$	2,885	$	14,776	$	186	$	(3)	$	1,329
Net income	572						518						54
Other comprehensive loss	(3,010)								(2,696)				(314)
Dividends paid ($0.125 per share)	(110)		0				(31)						(79)

Purchase of subsidiary stock from noncontrolling interests	(21)		0		(1)								(20)
Purchases of Loews Corporation treasury stock	(384)										(384)
Stock-based compensation	2				(14)								16
Other	(3)				(1)		(2)				1		(1)
Balance, June 30, 2022	$	16,221	$	2	$	2,869	$	15,261	$	(2,510)	$	(386)	$	985

See accompanying Notes to Consolidated Condensed Financial Statements.


			7

~~Index~~Table of c o ntents

Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)


Six Months Ended June 30	2022		2021
(In millions)

Operating Activities:

Net income	$	572	$	1,086
Adjustments to reconcile net income to net cash provided by operating activities, net	505		(187)







Changes in operating assets and liabilities, net:
Receivables	(634)		(1,087)
Deferred acquisition costs	(63)		(12)
Insurance reserves	1,376		1,373
Other assets	(360)		(720)
Other liabilities	87		598
Trading securities	(37)		(508)
Net cash flow provided by operating activities	1,446		543

Investing Activities:

Purchases of fixed maturities	(6,251)		(4,615)
Proceeds from sales of fixed maturities	3,293		1,846
Proceeds from maturities of fixed maturities	1,715		2,104
Purchases of equity securities	(195)		(181)
Proceeds from sales of equity securities	193		193
Purchases of limited partnership investments	(168)		(169)
Proceeds from sales of limited partnership investments	134		185
Purchases of property, plant and equipment	(312)		(183)

Dispositions	0		52
Sale of interest in Altium Packaging	0		417
Change in short term investments	739		405
Other, net	66		39
Net cash flow (used) provided by investing activities	(786)		93

Financing Activities:

Dividends paid	(31)		(33)
Dividends paid to noncontrolling interests	(79)		(43)
Purchases of Loews Corporation treasury stock	(380)		(484)
Purchases of subsidiary stock from noncontrolling interests	(21)		(18)
Principal payments on debt	(301)		(1,146)
Issuance of debt	498		1,199
Other, net	(4)		(12)
Net cash flow used by financing activities	(318)		(537)

Effect of foreign exchange rate on cash	(12)		1

Net change in cash	330		100
Cash, beginning of period	621		478
Cash, end of period	$	951	$	578

See accompanying Notes to Consolidated Condensed Financial Statements.


			8

Table of c o ntents

Loews Corporation and Subsidiaries

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

Loews Corporation is a holding company. Its consolidated operating subsidiaries are engaged in the following lines of business: commercial property and casualty insurance (CNA Financial Corporation (“CNA”), an ~~89.6~~%89.6% owned subsidiary); transportation and storage of natural gas and natural gas liquids (Boardwalk Pipeline Partners, LP (“Boardwalk Pipelines”), a wholly owned subsidiary); and the operation of a chain of hotels (Loews Hotels Holding Corporation (“Loews Hotels & Co”), a wholly owned subsidiary). Unless the context otherwise requires, the term “Company” ~~as used herein~~ means Loews Corporation including its consolidated subsidiaries, the term “Parent Company” means Loews Corporation excluding its subsidiaries, the term “Net income (loss) attributable to Loews Corporation” ~~as used herein~~ means Net income (loss) attributable to Loews Corporation shareholders and the term “subsidiaries” means Loews Corporation’s consolidated subsidiaries.

On April 1, 2021, Loews Corporation sold 47% of ~~its interest in~~ Altium Packaging LLC (“Altium Packaging”), previously a 99% owned ~~subsidiary. See~~subsidiary, for $420 million in cash consideration, and following the transaction Loews Corporation deconsolidated Altium Packaging. Effective April 1, 2021, Loews Corporation’s investment in Altium Packaging is accounted for under the equity method of accounting, with the investment reported in Other assets on the Consolidated Condensed Balance Sheets and equity income (loss) reported in Operating expenses and other on the Consolidated Condensed Statements of Operations. The transaction resulted in a gain of $555 million ($438 million after tax) for the six months ended June 30, 2021, which was recorded in Investment gains (losses) on the Consolidated Condensed Statement of Operations. For additional information regarding the deconsolidation of Altium Packaging, see Note 2 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for ~~further discussion.~~the year ended December 31, 2021.

In the opinion of management, the accompanying unaudited Consolidated Condensed Financial Statements reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the Company’s financial position as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021 and results of operations, comprehensive income (loss) and changes in shareholders’ equity for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 and cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021. Net income ~~(loss)~~ for the ~~third~~second quarter and first ~~nine months~~half of each of the years is not necessarily indicative of net income ~~(loss)~~ for that entire year. These Consolidated Condensed Financial Statements should be read in conjunction with the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

The Company presents basic and diluted net income (loss) per share on the Consolidated Condensed Statements of Operations. Basic net income (loss) per share excludes dilution and is computed by dividing net income (loss) attributable to common stock by the weighted average number of common shares outstanding for the period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the three and ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 there were 0no shares attributable to employee stock-based compensation awards excluded from the diluted weighted average shares outstanding amounts because the effect would have been antidilutive.

Recently issued ~~ASUs~~Accounting Standards Updates (“ASUs”) – In August of 2018,, the Financial Accounting Standards Board (“FASB”) issued ~~Accounting Standards Update (“ASU”)~~ASU 2018-12,, “Financial Services – Insurance (Topic ~~944~~)944): Targeted Improvements to the Accounting for Long-Duration Contracts.” The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts. ~~The guidance requires entities~~For the Company, this includes CNA’s long term care and fully-ceded single premium immediate annuity business. Entities will be required to review, and update ~~annually~~if there is a change, cash flow assumptions ~~including~~(including morbidity and ~~persistency,~~persistency) at least annually and to update quarterly discount rate assumptions using an upper-medium grade fixed-income instrument yield. The effect of changes in cash flow assumptions will be recorded in Net income and the effect of changes in discount rate assumptions will be recorded in Other comprehensive income (“OCI”). ~~This~~The guidance is effective for interim and annual periods beginning after December 15, 2022, with early adoption ~~permitted. The guidance~~permitted, and may be applied using either a modified retrospective transition method or a full retrospective transition method. ~~The guidance requires restatement of~~Financial statements for prior periods ~~presented.~~ presented will be adjusted to reflect the effects of applying the new accounting guidance.

The Company ~~plans to~~will adopt on the new guidance effective ~~date,~~January 1, 2023, using the modified retrospective method applied as of the transition ~~method~~date of January 1, 2021. A published spot rate curve constructed from A+, A and ~~is currently evaluating~~A- rated U.S. dollar denominated corporate bonds matched to the duration of the corresponding insurance liabilities will be used to calculate discount rates. Long-duration contracts will be grouped into calendar year cohorts based on the contract issue date and product line. Long term care contracts will be grouped separately from the fully-ceded single premium immediate annuity contracts.


			9

Table of c o ntents

The most significant impact at the transition date will be the effect of updating the ~~updated guidance~~discount rate assumption to reflect an upper-medium grade fixed-income instrument yield, which will ~~have on its consolidated financial statements, including~~be partially offset by the ~~increased disclosure requirements.~~de-recognition of Shadow Adjustments associated with long-duration contracts. The ~~annual updating~~Company expects the net impact of these changes will be a $2.0 billion - $2.3 billion (after tax and noncontrolling interests) decrease in Accumulated other comprehensive income (“AOCI”) as of the transition date of January 1, 2021. There is a minimal transition impact expected to retained earnings.

The requirement to review, and update if there is a change, cash flow assumptions at least annually is expected to ~~increase income statement volatility.~~change the pattern of earnings being recognized. Adoption will also significantly expand the Company’s disclosures, and will impact systems, processes and controls. While the requirements of the new guidance represent a material change from existing accounting guidance, the new guidance will not impact capital and surplus under statutory accounting practices, cash flows, or the underlying economics of the ~~business and related cash flows will be unchanged.~~

2. ~~Significant Transactions~~

~~Altium Packaging~~

On April 1, 2021, Loews Corporation sold 47% of its interest in Altium Packaging to GIC, Singapore’s sovereign wealth fund, for $420 million in cash consideration. Loews Corporation shares certain participating rights with GIC related to capital allocation and other decisions by Altium Packaging. Therefore, in accordance with Accounting Standards Codification (“ASC”) 810, “Consolidation,” Altium Packaging was deconsolidated from Loews Corporation’s consolidated financial statements effective as of April 1, 2021. Effective April 1, 2021, Loews Corporation’s investment in Altium Packaging is accounted for under the equity method of accounting, with the investment reported in Other assets on the Consolidated Condensed Balance Sheets and equity income (loss) reported in Operating expenses and other on the Consolidated Condensed Statements of Operations.

business.

~~Index~~

The ~~transaction resulted~~Company continues to make progress in ~~a gain~~connection with these matters and is in the process of $555 million ($438 million after tax) for the nine months ended September 30, 2021, which is recorded in Investment gains (losses) on the Consolidated Condensed Statement of Operations. Loews Corporation’s retained investment in Altium Packaging was recorded at an estimated fair value of $473 million. The difference between the fair value of Loews Corporation’s investment in Altium Packagingrefining key accounting policy decisions, technology solutions and ~~Loews Corporation’s 53% share~~updates to internal controls associated with adoption of the ~~carrying value~~new guidance. These in-progress activities include modifications of ~~Altium Packaging’s net assets was attributed to definite lived intangible assets~~actuarial valuation systems, data sourcing, analytical procedures and goodwill. The amortization of the amounts attributed to definite lived intangible assets will be recognized as a component of equity income (loss) reported in Operating expenses and other on the Consolidated Condensed Statements of Operations. The assets and liabilities deconsolidated from the Consolidated Condensed Balance Sheets were property, plant and equipment of $490 million, goodwill of $436 million, intangible assets of $488 million, other assets of approximately $370 million, long term debt of $1.1 billion and other liabilities of approximately $380 million.reporting processes.

~~Diamond Offshore~~

As a result of the April 26, 2020 (“the Filing Date”) bankruptcy filing of Diamond Offshore Drilling, Inc. (“Diamond Offshore”) and certain of its subsidiaries and applicable accounting principles generally accepted in the United States of America (“GAAP”), Diamond Offshore was deconsolidated from Loews Corporation’s consolidated financial statements in the second quarter of 2020. Through the Filing Date, Diamond Offshore’s results were included in Loews Corporation’s consolidated financial statements and Loews Corporation recognized in its earnings its proportionate share of Diamond Offshore’s losses through such date. The deconsolidation resulted in the recognition of a loss of $1.2 billion ($957 million after tax) during the nine months ended September 30, 2020, which is reported within Investment gains (losses) on the Consolidated Condensed Statements of Operations. During the nine months ended September 30, 2020, Diamond Offshore also recorded an aggregate asset impairment charge of $774 million ($408 million after tax and noncontrolling interests), which is reported within Operating expenses and other on the Consolidated Condensed Statements of Operations. For additional information regarding the deconsolidation of Diamond Offshore and the Diamond Offshore asset impairments, see Notes 2 and 6 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

3.2. Investments

Net investment income is as follows:


	Three Months Ended								Nine Months Ended									Three Months Ended				Six Months Ended
	September 30,								September 30,									June 30,
	2021				2020				2021				2020					2022		2021		2022		2021
(In millions)																	(In millions)

Fixed maturity securities		$	425			$	432			$	1,278			$	1,300		Fixed maturity securities	$	441	$	425	$	870	$	853
Limited partnership investments			89				71				285				26		Limited partnership investments	7		149		27		196
Short term investments			1				2				1				11

Equity securities			4				18				53				24		Equity securities	(11)		20		(9)		49
Income (loss) from trading portfolio (a)			(30	)			22				46						Income (loss) from trading portfolio (a)	(62)		26		(77)		76
Other			12				14				42				44		Other	13		14		28		30
Total investment income			501				559				1,705				1,405		Total investment income	388		634		839		1,204
Investment expenses			(18	)			(19	)			(56	)			(58	)	Investment expenses	(22)		(18)		(41)		(38)
Net investment income		$	483			$	540			$	1,649			$	1,347		Net investment income	$	366	$	616	$	798	$	1,166

~~(a)~~
~~Net~~(a)			During the three and six months ended June 30, 2022, $95 and $120 of net investment ~~income~~losses were recognized due to the change in fair value onof securities still held as of ~~September~~June 30, 2022. During the three and six months ended June 30, 2021, $28 and ~~2020~~$58 of net investment income was $~~(55)~~ ~~and $~~11 ~~for~~recognized due to the ~~three months ended September~~change in fair value of securities still held as of June 30, ~~2021 and 2020~~ ~~and~~ ~~$(9) and $13 for the nine months ended September 30, 2021 and 2020.~~2021.


			10

~~Index~~Table of c o ntents

Investment gains (losses) are as follows:


	Three Months Ended						Nine Months Ended							Three Months Ended				Six Months Ended
	September 30,						September 30,							June 30,
	2021			2020			2021			2020				2022		2021		2022		2021
(In millions)													(In millions)

Fixed maturity securities:													Fixed maturity securities:
Gross gains	$	50		$	44		$	159		$	175		Gross gains	$	45	$	51	$	71	$	109
Gross losses		(28	)		(18	)		(68	)		(207	)	Gross losses	(60)		(20)		(88)		(40)
Investment gains (losses) on fixed maturity securities		22			26			91			(32	)	Investment gains (losses) on fixed maturity securities	(15)		31		(17)		69
Equity securities		(2	)		25			17			(45	)	Equity securities	(71)		17		(109)		19
Derivative instruments		2			(2	)		7			(7	)	Derivative instruments	26		(12)		55		5
Short term investments and other					(3	)		2			(17	)	Short term investments and other	1		(13)		1		(13)
Altium Packaging (see Note 2)								555
Diamond Offshore (see Note 2)								(15	)		(1,211	)
Altium Packaging (see Note 1)													Altium Packaging (see Note 1)	0		555		0		555
Investment gains (losses) (a)	$	22		$	46		$	657		$	(1,312	)	Investment gains (losses) (a)	$	(59)	$	578	$	(70)	$	635

~~(a)~~
(a)			During the three and ~~nine~~six months ended ~~September~~June 30, ~~2021, $2~~2022, $70 and $108 of investment losses were recognized due to the change in fair value of non-redeemable preferred stock still held as of June 30, 2022. During the three and six months ended June 30, 2021, $15 of investment gains were recognized due to the change in fair value of non-redeemable preferred stock still held as of ~~September~~June 30, 2021. During the three and nine months ended September 30, 2020, $25 of investment gains and $44 of investment losses were recognized due to the change in fair value of non-redeemable preferred stock still held as of September 30, 2020.

The following tables present the activity related to the allowance on available-for-sale securities with credit impairments and purchased credit-deteriorated (“PCD”) assets. Accrued interest receivables on available-for-sale fixed maturity securities totaled ~~$387~~$374 million, ~~$371~~$369 million and ~~$390~~$374 million as of ~~September~~June 30, ~~2021,~~2022, December 31, ~~2020~~2021 and ~~September~~June 30, ~~2020~~2021 and are excluded from the estimate of expected credit losses and the amortized cost basis in the tables within this Note.

	Corporate and		Asset-
Three months ended September 30, 2021	Other Bonds		backed		Total
Three months ended June 30, 2022							Three months ended June 30, 2022	Corporate and Other Bonds		Asset-backed		Total
(In millions)							(In millions)

Allowance for credit losses:							Allowance for credit losses:
Balance as of July 1, 2021	$	24	$	21	$	45
Balance as of April 1, 2022							Balance as of April 1, 2022	$	12	$	5	$	17
Additions to the allowance for credit losses:							Additions to the allowance for credit losses:
Securities for which credit losses were not previously recorded

Available-for-sale securities accounted for as PCD assets		2				2	Available-for-sale securities accounted for as PCD assets	0		3		3

Reductions to the allowance for credit losses:							Reductions to the allowance for credit losses:
Securities sold during the period (realized)

Write-offs charged against the allowance		16				16	Write-offs charged against the allowance	12		0		12

Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period
Additional decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period							Additional decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period	0		(3)		(3)
Total allowance for credit losses	$	10	$	21	$	31	Total allowance for credit losses	$	—	$	5	$	5

Three months ended September 30, 2020

Allowance for credit losses:
Balance as of July 1, 2020
$ 39 $ 12 $ 51
Additions to the allowance for credit losses:
Securities for which credit losses were not previously recorded 4
4
Available-for-sale securities accounted for as PCD assets 1 1

Reductions to the allowance for credit losses:
Securities sold during the period (realized) 9 9
Write-offs charged against the allowance

Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period (1 ) 1
Total allowance for credit losses $ 34 $ 13 $ 47


			11

~~Index~~Table of c o ntents


Three months ended June 30, 2021	Corporate and Other Bonds		Asset-backed		Total

Allowance for credit losses:
Balance as of April 1, 2021	$	27	$	16	$	43
Additions to the allowance for credit losses:


Available-for-sale securities accounted for as PCD assets	0		4		4





Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period	(3)		1		(2)
Total allowance for credit losses	$	24	$	21	$	45


Six months ended June 30, 2022

Allowance for credit losses:
Balance as of January 1, 2022	$	11	$	7	$	18
Additions to the allowance for credit losses:

Available-for-sale securities accounted for as PCD assets	0		3		3

Reductions to the allowance for credit losses:


Write-offs charged against the allowance	12		0		12

Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period	1		(5)		(4)
Total allowance for credit losses	$	—	$	5	$	5


Six months ended June 30, 2021

Allowance for credit losses:
Balance as of January 1, 2021	$	23	$	17	$	40
Additions to the allowance for credit losses:

Securities for which credit losses were not previously recorded	14		0		14
Available-for-sale securities accounted for as PCD assets	2		4		6

Reductions to the allowance for credit losses:
Securities sold during the period (realized)	6		0		6


Additional decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period	(9)		0		(9)
Total allowance for credit losses	$	24	$	21	$	45

Corporate and
Asset-

Nine months ended September 30, 2021 Other Bonds backed Total
(In millions)

Allowance for credit losses:
Balance as of January 1, 2021
$ 23 $ 17 $ 40
Additions to the allowance for credit losses:
Securities for which credit losses were not previously recorded 14 14
Available-for-sale securities accounted for as PCD assets 4 4 8

Reductions to the allowance for credit losses:
Securities sold during the period (realized) 6 6
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis
Write-offs charged against the allowance
16 16

Additional increases or (decrease) to the allowance for credit losses on securities that had an allowance recorded in a previous period (9 ) (9 )
Total allowance for credit losses $ 10 $ 21 $ 31


			12

Nine months ended September 30, 2020

Allowance for credit losses:
Balance as of January 1, 2020 $ 0 $ 0 $ 0
Additions to the allowance for credit losses:
Impact of adopting ASC 326 6 6
Securities for which credit losses were not previously recorded 62 12 74
Available-for-sale securities accounted for as PCD assets 3 3

Reductions to the allowance for credit losses:
Securities sold during the period (realized) 15 15
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis 1 1
Write-offs charged against the allowance

Additional increases or (decrease) to the allowance for credit losses on securities that had an allowance recorded in a previous period (21 ) 1 (20 )
Total allowance for credit losses $ 34 $ 13 $ 47

Table of c o ntents

The components of available-for-sale impairment losses (gains) recognized in earnings by asset type are presented in the following table. The table includes losses (gains) on securities with an intention to sell and changes in the allowance for credit losses on securities since acquisition date:

Three Months Ended Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
(In millions)

Fixed maturity securities available-for-sale:
Corporate and other bonds

$ 4 $ 5 $ 94
Asset-backed $ 11 1 11 14
Impairment losses recognized in earnings $ 11 $ 5 $ 16 $ 108


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions)

Fixed maturity securities available-for-sale:
Corporate and other bonds	$	21	$	(2)	$	29	$	5
Asset-backed	(1)		1		1		0
Impairment losses (gains) recognized in earnings	$	20	$	(1)	$	30	$	5

There were ~~$3 million and $16 million of losses on mortgage loans recognized during the three and nine months ended September 30, 2020 primarily due to changes in expected credit losses. There were 0~~no losses recognized on mortgage loans during the three and ~~nine~~six months ended ~~September~~June 30, 2022 or 2021.

~~Index~~

The amortized cost and fair values of fixed maturity securities are as follows:

Cost or

Gross

Gross

Allowance

Amortized Unrealized Unrealized for Credit
Estimated
September 30, 2021
Cost Gains Losses Losses Fair Value
(In millions)

Fixed maturity securities:
Corporate and other bonds $ 21,608 $ 2,967 $ 42 $ 10 $ 24,523
States, municipalities and political subdivisions 10,384 1,610 15 11,979
Asset-backed:
Residential mortgage-backed 3,176 89 6 3,259
Commercial mortgage-backed 2,064 85 16 17 2,116
Other asset-backed 2,429 76 4 4 2,497
Total asset-backed 7,669 250 26 21 7,872
U.S. Treasury and obligations of government-sponsored enterprises 139 1 4 136
Foreign government 521 19 2 538
Redeemable preferred stock
12 12
Fixed maturities available-for-sale 40,333 4,847 89 31 45,060
Fixed maturities trading 9 9
Total fixed maturity securities $ 40,342 $ 4,847 $ 89 $ 31 $ 45,069

December 31, 2020

Fixed maturity securities:
Corporate and other bonds $ 20,792 $ 3,578 $ 22 $ 23 $ 24,325
States, municipalities and political subdivisions 9,729 1,863 11,592
Asset-backed:
Residential mortgage-backed 3,442 146 1 3,587
Commercial mortgage-backed 1,933 93 42 17 1,967
Other asset-backed 2,179 81 9 2,251
Total asset-backed 7,554 320 52 17 7,805
U.S. Treasury and obligations of government-sponsored enterprises 339 2 3 338
Foreign government 512 32 544
Fixed maturities available-for-sale 38,926 5,795 77 40 44,604
Fixed maturities trading 37 5 42
Total fixed maturity securities $ 38,963 $ 5,800 $ 77 $ 40 $ 44,646


June 30, 2022	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
(In millions)

Fixed maturity securities:
Corporate and other bonds	$	22,606	$	499	$	1,440	0		$	21,665
States, municipalities and political subdivisions	9,822		492		676		0		9,638
Asset-backed:
Residential mortgage-backed	3,034		14		305		0		2,743
Commercial mortgage-backed	1,995		6		164		0		1,837
Other asset-backed	3,063		4		220		$	5	2,842
Total asset-backed	8,092		24		689		5		7,422
U.S. Treasury and obligations of government sponsored enterprises	115		1		7		0		109
Foreign government	577		1		30		0		548
Redeemable preferred stock	3		0		0		0		3
Fixed maturities available-for-sale	41,215		1,017		2,842		5		39,385
Fixed maturities trading	46		0		0		0		46
Total fixed maturity securities	$	41,261	$	1,017	$	2,842	$	5	$	39,431


			13

Table of c o ntents


December 31, 2021	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
(In millions)

Fixed maturity securities:
Corporate and other bonds	$	21,444	$	2,755	$	56	$	11	$	24,132
States, municipalities and political subdivisions	10,358		1,599		14		0		11,943
Asset-backed:
Residential mortgage-backed	2,893		71		8		0		2,956
Commercial mortgage-backed	1,987		63		19		0		2,031
Other asset-backed	2,561		54		10		7		2,598
Total asset-backed	7,441		188		37		7		7,585
U.S. Treasury and obligations of government sponsored enterprises	132		1		3		0		130
Foreign government	570		15		2		0		583

Fixed maturities available-for-sale	39,945		4,558		112		18		44,373
Fixed maturities trading	7		0				0		7
Total fixed maturity securities	$	39,952	$	4,558	$	112	$	18	$	44,380

The net unrealized gains and losses on available-for-sale investments included in the tables above are recorded as a component of ~~Accumulated other comprehensive income (loss) (“AOCI”).~~AOCI. When presented in AOCI, these amounts are net of tax and noncontrolling interests and any required Shadow Adjustments. To the extent ~~that~~there are unrealized gains on fixed income securities supporting ~~long term care~~the reserves of certain products ~~and structured settlements not funded by annuities~~within the Life & Group business that would result in a premium deficiency, or would impact the reserve balance if ~~those gains were~~ realized, a related increase in Insurance reserves is recorded, net of tax and noncontrolling interests, as a reduction of net unrealized gains (losses) through Other comprehensive income (loss) (“Shadow Adjustments”). As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the net unrealized gains and losses on investments included in AOCI were correspondingly reduced by Shadow Adjustments of ~~$2.2 billion~~$432 million and ~~$2.5~~$2.2 billion (after tax and noncontrolling interests).


			14

~~Index~~Table of c o ntents

The available-for-sale securities in a gross unrealized loss position for which an allowance for credit losses has not been recorded are as follows:

Less than
12 Months

12 Months or Longer Total
Gross Gross
Gross

Estimated Unrealized Estimated
Unrealized Estimated
Unrealized
September 30, 2021
Fair Value Losses Fair Value Losses Fair Value Losses
(In millions)

Fixed maturity securities:
Corporate and other bonds $ 1,853 $ 37 $ 88 $ 5 $ 1,941 $ 42
States, municipalities and political subdivisions 885 15 885 15
Asset-backed:
Residential mortgage-backed 1,295 6
1,295 6
Commercial mortgage-backed 317 4 194 12 511 16
Other asset-backed 439 3 58 1 497 4
Total asset-backed 2,051 13 252 13 2,303 26
U.S. Treasury and obligations of government-sponsored enterprises 65 4 1 66 4
Foreign government 73 2 73 2
Total fixed maturity securities $ 4,927 $ 71 $ 341 $ 18 $ 5,268 $ 89

December 31, 2020

Fixed maturity securities:
Corporate and other bonds $ 609 $ 21 $ 12 $ 1 $ 621 $ 22
States, municipalities and political subdivisions 33 33
Asset-backed:
Residential mortgage-backed 71 1 11 82 1
Commercial mortgage-backed 533 40 28 2 561 42
Other asset-backed 344 9 13 357 9
Total asset-backed 948 50 52 2 1,000 52
U.S. Treasury and obligations of government-sponsored enterprises 63 3 63 3
Foreign government 13 13
Total fixed maturity securities $ 1,666 $ 74 $ 64 $ 3 $ 1,730 $ 77


	Less than 12 Months				12 Months or Longer				Total
June 30, 2022	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	$	14,827	$	1,366	$	322	$	74	$	15,149	$	1,440
States, municipalities and political subdivisions	4,121		666		32		10		4,153		676
Asset-backed:
Residential mortgage-backed	2,374		305		3		0		2,377		305
Commercial mortgage-backed	1,552		143		149		21		1,701		164
Other asset-backed	2,354		214		85		6		2,439		220
Total asset-backed	6,280		662		237		27		6,517		689
U.S. Treasury and obligations of government-sponsored enterprises	82		6		3		1		85		7
Foreign government	436		28		23		2		459		30
Total fixed maturity securities	$	25,746	$	2,728	$	617	$	114	$	26,363	$	2,842

December 31, 2021

Fixed maturity securities:
Corporate and other bonds	$	2,389	$	48	$	136	$	8	$	2,525	$	56
States, municipalities and political subdivisions	730		14		0		0		730		14
Asset-backed:
Residential mortgage-backed	1,043		8		0		0		1,043		8
Commercial mortgage-backed	527		7		167		12		694		19
Other asset-backed	840		10		62		0		902		10
Total asset-backed	2,410		25		229		12		2,639		37
U.S. Treasury and obligations of government-sponsored enterprises	69		3		5		0		74		3
Foreign government	97		2		0		0		97		2
Total fixed maturity securities	$	5,695	$	92	$	370	$	20	$	6,065	$	112


			15

Table of c o ntents

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


	June 30, 2022				December 31, 2021
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In millions)

U.S. Government, Government agencies and Government-sponsored enterprises	$	2,150	$	223	$	898	$	8
AAA	1,232		205		368		6
AA	4,078		581		875		17
A	5,454		493		1,516		23
BBB	11,806		1,111		1,812		42
Non-investment grade	1,643		229		596		16
Total	$	26,363	$	2,842	$	6,065	$	112

Based on current facts and circumstances, the ~~Company believes the~~ unrealized losses presented in the ~~September~~June 30, ~~2021~~2022 securities in athe gross unrealized loss position table above are not believed to be indicative of the ultimate ~~collectability~~collectibility of the current amortized cost of the securities, but rather are primarily attributable to changes in risk-free interest rates and a general market widening of credit spreads. In reaching this determination, the recent volatility in risk-free rates and credit spreads, ~~and other factors. There~~as well as the fact that the unrealized losses are concentrated in investment grade issuers, were considered. Additionally, there is no current intent to sell securities with unrealized losses, nor is it more likely than not that sale will be required prior to recovery of amortized cost; accordingly, it was determined that there are0 no additional impairment losses to be recorded at ~~September~~June 30, ~~2021.~~2022.

Contractual Maturity

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

September 30, 2021 December 31, 2020
Cost or

Estimated

Cost or

Estimated

Amortized

Fair

Amortized

Fair

Cost Value Cost Value
(In millions)

Due in one year or less $ 1,648 $ 1,656 $ 1,456 $ 1,458
Due after one year through five years 10,776 11,517 12,304 13,098
Due after five years through ten years 13,628 14,794 12,319 13,878
Due after ten years 14,281 17,093 12,847 16,170
Total $ 40,333 $ 45,060 $ 38,926 $ 44,604


	June 30, 2022				December 31, 2021
	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value
(In millions)

Due in one year or less	$	1,150	$	1,153	$	1,603	$	1,624
Due after one year through five years	9,330		9,154		10,637		11,229
Due after five years through ten years	14,434		13,549		13,294		14,338
Due after ten years	16,301		15,529		14,411		17,182
Total	$	41,215	$	39,385	$	39,945	$	44,373

Actual maturities may differ from contractual maturities because certain securities may be called or prepaid. Securities not due at a single date are allocated based on weighted average life.


			16

~~Index~~Table of c o ntents

Mortgage Loans

The following table presents the amortized cost basis of mortgage loans for each credit quality indicator by year of origination. The primary credit quality indicators utilized are debt service coverage ratios (“DSCR”) and loan-to-value (“LTV”) ratios.

	Mortgage Loans Amortized Cost Basis by Origination Year (a)
As of September 30, 2021	2021		2020		2019		2018		2017		Prior		Total
																Mortgage Loans Amortized Cost Basis by Origination Year (a)
As of June 30, 2022															As of June 30, 2022	2022		2021		2020		2019		2018		Prior		Total
(In millions)															(In millions)

DSCR ≥1.6x															DSCR ≥1.6x
LTV less than 55%	$	8	$	75	$	16	$	37	$	116	$	203	$	455	LTV less than 55%	$	9	$	14	$	112	$	21	$	54	$	280	$	490
LTV 55% to 65%				38		15		18				1		72	LTV 55% to 65%	0		0		0		8		0		0		8
LTV greater than 65%		17				14		7				23		61	LTV greater than 65%	18		11		0		0		0		0		29
DSCR 1.2x - 1.6x															DSCR 1.2x - 1.6x
LTV less than 55%		13		15		95				5		58		186	LTV less than 55%	0		49		14		78		10		44		195
LTV 55% to 65%		25						24		10		4		63	LTV 55% to 65%	28		0		24		0		0		8		60
LTV greater than 65%				24		9				8				41	LTV greater than 65%	15		0		0		0		0		0		15
DSCR ≤1.2x															DSCR ≤1.2x
LTV less than 55%						35				30				65	LTV less than 55%			0		0		52		0		17		69
LTV 55% to 65%						42								42	LTV 55% to 65%	0		0		0		55		0		0		55
LTV greater than 65%				9		56						7		72	LTV greater than 65%	10		21		0		6		0		7		44
Total	$	63	$	161	$	282	$	86	$	169	$	296	$	1,057	Total	$	80	$	95	$	150	$	220	$	64	$	356	$	965

~~(a)~~
(a)			The values in the table above reflect DSCR on a standardized amortization period and LTV ratios based on the most recent appraised values trended forward using changes in a commercial real estate price index.

~~Derivative Financial Instruments~~

A summary of the aggregate contractual or notional amounts and gross estimated fair values related to derivative financial instruments follows. The contractual or notional amounts for derivatives are used to calculate the exchange of contractual payments under related agreements and may not be representative of the potential for gain or loss on these instruments. Gross estimated fair values of derivative positions are currently presented in Equity securities, Receivables and Payable to brokers on the Consolidated Condensed Balance Sheets.

September 30, 2021 December 31, 2020
Contractual/ Contractual/
Notional Estimated Fair Value Notional Estimated Fair Value
Amount Asset (Liability) Amount Asset (Liability)
(In millions)

With hedge designation:
Interest rate swaps

$
675

$ (26 )

Without hedge designation:
Equity markets:
Options – purchased $ 1 135 $ 3
Interest rate swaps 100 $ (1 ) 100 (3 )
Embedded derivative on funds withheld liability 272 (11 ) 190 (19 )

~~Investment Commitments~~

As part of the overall investment strategy, investments are made in various assets which require future purchase, sale or funding commitments. These investments are recorded once funded, and the related commitments may include future capital calls from various third-party limited partnerships, signed and accepted mortgage loan applications and obligations related to private placement securities. As of September 30, 2021, commitments to purchase or fund were approximately $1.3 billion and to sell were approximately $55 million under the terms of these investments.

~~Index~~

~~4. Fair Value~~

Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable:

●

~~Level 1 – Quoted prices for identical instruments in active markets.~~

●

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.

●

~~Level 3 – Valuations derived from valuation techniques in which one or more significant inputs are not observable.~~

~~Prices~~ may fall within Level 1, 2 or 3 depending upon the methodology and inputs used to estimate fair value for each specific security. In general, securities are priced using third party pricing services. Securities not priced by pricing services are submitted to independent brokers for valuation and, if those are not available, internally developed pricing models are used to value assets using a methodology and inputs that market participants presumably would use to value the assets. Prices obtained from third-party pricing services or brokers are not adjusted.

Control procedures are performed over information obtained from pricing services and brokers to ensure prices received represent a reasonable estimate of fair value and to confirm representations regarding whether inputs are observable or unobservable. Procedures may include: (i) the review of pricing service methodologies or broker pricing qualifications, (ii) back-testing, where past fair value estimates are compared to actual transactions executed in the market on similar dates, (iii) exception reporting, where period-over-period changes in price are reviewed and challenged with the pricing service or broker based on exception criteria and (iv) detailed analysis, where an independent analysis of the inputs and assumptions used to price individual securities is performed.

~~Assets and liabilities~~ measured at fair value on a recurring basis are summarized in the following tables. Corporate bonds and other includes obligations of the U.S. Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock.

September 30, 2021
Level 1 Level 2 Level 3 Total
(In millions)

Fixed maturity securities:
Corporate bonds and other $ 146 $ 24,186 $ 877 $ 25,209
States, municipalities and political subdivisions 11,922 57 11,979
Asset-backed 7,394 478 7,872
Fixed maturities available-for-sale 146 43,502 1,412 45,060
Fixed maturities trading 9 9
Total fixed maturities $ 146 $ 43,511 $ 1,412 $ 45,069

Equity securities $ 890 $ 745 $ 25 $ 1,660
Short term and other 4,063 4,063
Payable to brokers (118 ) (1 ) (119 )

December 31, 2020

Fixed maturity securities:
Corporate bonds and other $ 355 $ 24,082 $ 770 $ 25,207
States, municipalities and political subdivisions 11,546 46 11,592
Asset-backed 7,497 308 7,805
Fixed maturities available-for-sale 355 43,125 1,124 44,604
Fixed maturities trading 34 8 42
Total fixed maturities $ 355 $ 43,159 $ 1,132 $ 44,646

Equity securities $ 796 $ 722 $ 43 $ 1,561
Short term and other 4,538 39 4,577
Payable to brokers (14 ) (29 ) (43 )

~~Index~~

~~The following tables present reconciliations for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and~~ ~~nine months ended September 30, 2021 and 2020~~:

Unrealized
Gains
Unrealized (Losses)
Gains Recognized in
Net Realized (Losses) Other
Investment Gains Recognized in Comprehensive
(Losses) and Net Change Net Income Income (Loss)
in Unrealized Investment (Loss) on Level on Level 3
Gains (Losses) 3 Assets and Assets and
Included in Transfers Transfers Liabilities Liabilities
Balance, Net Income Included in into out of Balance, Held at Held at
2021 July 1 (Loss) OCI Purchases Sales Settlements Level 3 Level 3 September 30 September 30 September 30
(In millions)

Fixed maturity securities:
Corporate bonds and other $ 883 $ 1 $ 1 $ 55
$ (11 ) $
(52 ) $ 877 $ 2
States, municipalities and political subdivisions 57 57
Asset-backed 410 1 1 83 $
(9 ) (11 ) $ 41
(38 ) 478
Fixed maturities available-for-sale 1,350 2 2 138 (9 ) (22 ) 41 (90 ) 1,412 $ 0 2
Fixed maturities trading 0 0
Total fixed maturities $ 1,350 $ 2 $ 2 $ 138 $ (9 ) $ (22 ) $ 41 $ (90 ) $ 1,412 $ 0 $ 2

Equity securities $ 36 $ (2 ) $ 1 $ (11 ) $
11 $
(10 ) $ 25 $
(3 )

~~Index~~

Unrealized

Gains

Unrealized

(Losses)

Gains

Recognized in

Net Realized

(Losses)

Other

Investment Gains

Recognized in

Comprehensive

(Losses) and Net Change

Net Income

Income (Loss)

in Unrealized Investment

(Loss) on Level

on Level 3

Gains (Losses)

3 Assets and

Assets and
Included in Transfers Transfers Liabilities Liabilities
Balance, Net Income Included in into out of Balance, Held at Held at
2020 July 1 (Loss) OCI Purchases Sales Settlements Level 3 Level 3 September 30 September 30 September 30
(In millions)

Fixed maturity securities:
Corporate bonds and other $ 555 $ 5 $ 129 $ (3 )
$
8
$ 694 $ 5
States, municipalities and political subdivisions 0 45 45
Asset-backed 222 9 20

(14 ) $ (2 ) 235 8
Fixed maturities available-for-sale 777 $ 0 14 194 $
0 (17 )
8 (2 ) 974 $ 0 13
Fixed maturities trading 4 4 8 4
Total fixed maturities $ 781 $ 4 $ 14 $ 194 $
0 $ (17 ) $ 8 $ (2 ) $ 982 $ 4 $ 13

Equity securities $ 27

$ 12

$ 39

~~Index~~

Unrealized
Gains
Unrealized (Losses)
Gains Recognized in
Net Realized

(Losses) Other
Investment Gains

Recognized in Comprehensive
(Losses) and Net Change

Net Income Income (Loss)
in Unrealized Investment

(Loss) on Level on Level 3
Gains (Losses)

3 Assets and Assets and
Included in Transfers Transfers Liabilities Liabilities
Balance, Net Income Included in into out of Balance, Held at Held at
2021 January 1 (Loss) OCI Purchases Sales Settlements Level 3 Level 3 September 30 September 30 September 30
(In millions)

Fixed maturity securities:
Corporate bonds and other $ 770 $ (9 ) $ (23 ) $ 219 $ (3 ) $ (35 ) $ 10 $ (52 ) $ 877 $ (22 )
States, municipalities and political subdivisions 46 12 (1 ) 57
Asset-backed 308 4 (4 ) 197 (9 ) (38 ) 71 (51 ) 478 (5 )
Fixed maturities available-for-sale 1,124 (5 ) (27 ) 428 (12 ) (74 ) 81 (103 ) 1,412 $ 0 (27 )
Fixed maturities trading 8 (6 ) (2 ) 0
Total fixed maturities $ 1,132 $ (11 ) $ (27 ) $ 428 $ (12 ) $ (76 ) $ 81 $
(103 ) $ 1,412 $ 0 $ (27 )

Equity securities $ 43 $ (15 ) $ 11 $ (15 ) $ 11 $ (10 ) $ 25 $ (1 )

~~Index~~

Unrealized
Gains
Unrealized (Losses)
Gains Recognized in

Net Realized (Losses) Other
Investment Gains Recognized in
Comprehensive

(Losses) and Net Change Net Income Income (Loss)

in Unrealized Investment (Loss) on Level on Level 3
Gains (Losses) 3 Assets and Assets and

Included in Transfers Transfers Liabilities Liabilities
Balance, Net Income Included in into out of Balance, Held at Held at
2020 January 1 (Loss) OCI Purchases Sales Settlements Level 3 Level 3
September 30

September 30

September 30

(In millions)

Fixed maturity securities:
Corporate bonds and other $ 468 $ 27 $ 200 $ (9 ) $
8
$ 694 $ 29
States, municipalities and political subdivisions
0
45 45
Asset-backed 165 18 100 $ (9 ) (22 ) $ (17 ) 235 19
Fixed maturities available-for-sale 633 $ 0 45 345 (9 ) (31 )
8 (17 ) 974 $ 0 48
Fixed maturities trading 4 4 8 4
Total fixed maturities $ 637 $ 4 $ 45 $ 345 $ (9 ) $ (31 ) $ 8 $ (17 ) $ 982 $ 4 $ 48

Equity securities $ 19 $ (7 ) $ 12 $ 15 $ 39 $ (7 )

~~Net investment gains and losses are reported in Net income (loss) as follows:~~

~~Major Category of Assets and Liabilities~~	~~Consolidated Condensed Statements of Operations Line Items~~

~~Fixed maturity securities available-for-sale~~	~~Investment gains (losses)~~
~~Fixed maturity securities trading~~	~~Net investment income~~
~~Equity securities~~	~~Investment gains (losses) and Net investment income~~
~~Other invested assets~~	~~Investment gains (losses) and Net investment income~~
~~Derivative financial instruments held in a trading portfolio~~	~~Net investment income~~
~~Derivative financial instruments, other~~	~~Investment gains (losses) and Operating revenues and other~~

~~Index~~

Securities may be transferred in or out of levels within the fair value hierarchy based on the availability of observable market information and quoted prices used to determine the fair value of the security. The availability of observable market information and quoted prices varies based on market conditions and trading volume.

~~Valuation Methodologies and Inputs~~

The following section describes the valuation methodologies and relevant inputs used to measure different financial instruments at fair value, including an indication of the level in the fair value hierarchy in which the instruments are generally classified.

~~Fixed Maturity Securities~~

Level 1 securities include highly liquid government securities and exchange traded bonds valued using quoted market prices. Level 2 securities include most other fixed maturity securities as the significant inputs are observable in the marketplace. All classes of Level 2 fixed maturity securities are valued using a methodology based on information generated by market transactions involving identical or comparable assets, a discounted cash flow methodology or a combination of both when necessary. Common inputs for all classes of fixed maturity securities include prices from recently executed transactions of similar securities, marketplace quotes, benchmark yields, spreads off benchmark yields, interest rates and U.S. Treasury or swap curves. Specifically for asset-backed securities, key inputs include prepayment and default projections based on past performance of the underlying collateral and current market data. Fixed maturity securities are primarily assigned to Level 3 in cases where broker/dealer quotes are significant inputs to the valuation, and there is a lack of transparency as to whether these quotes are based on information that is observable in the marketplace. Level 3 securities also include private placement debt securities whose fair value is determined using internal models with some inputs that are not market observable.

~~Equity Securities~~

Level 1 securities include publicly traded securities valued using quoted market prices. Level 2 securities are primarily valued using pricing for similar securities, recently executed transactions and other pricing models utilizing market observable inputs. Level 3 securities are primarily priced using broker/dealer quotes and internal models with some inputs that are not market observable.

Derivative Financial Instruments

~~Equity options are valued using quoted market prices and are classified within Level 1~~A summary of the aggregate contractual or notional amounts and gross estimated fair ~~value hierarchy. Over-the-counter~~values related to derivative financial instruments follows. The contractual or notional amounts for derivatives ~~principally interest rate swaps, currency forwards, total return swaps, commodity swaps, equity warrants~~are used to calculate the exchange of contractual payments under related agreements and ~~options, are valued using inputs including broker/dealer quotes and are classified within Level 2 or Level 3~~may not be representative of the ~~valuation hierarchy, depending~~potential for gain or loss on ~~the amount~~these instruments. Gross estimated fair values of ~~transparency as to whether these quotes~~derivative positions are ~~based on information that is observable in the marketplace.~~

~~Short Term and Other Invested Assets~~

Securities that are actively traded or have quoted prices are classified as Level 1. These securities include money market funds, treasury bills and exchange traded open-end funds valued using quoted market prices. Level 2 primarily includes commercial paper, for which all inputs are market observable. Fixed maturity securities purchased within one year of maturity are classified consistent with fixed maturity securities discussed above. Short term investments ascurrently presented in ~~the tables above differ from the amounts presented in~~Equity securities, Receivables and Payable to brokers on the Consolidated Condensed Balance ~~Sheets because certain short term~~Sheets.


	June 30, 2022					December 31, 2021
	Contractual/Notional Amount		Estimated Fair Value			Contractual/Notional Amount		Estimated Fair Value
			Asset		(Liability)			Asset	(Liability)
(In millions)

Without hedge designation:





Interest rate swaps	$	240	$	12	0	$	100	0	0


Embedded derivative on funds withheld liability	285		41		0	270		0	$	(12)
Other	178		10		0	0		0	0


			17

Table of c o ntents

Investment Commitments

As part of the overall investment strategy, investments ~~such as time deposits,~~ are ~~not~~made in various assets which require future purchase, sale or funding commitments. These investments are recorded once funded, and the related commitments may include future capital calls from various third-party limited partnerships, signed and accepted mortgage loan applications and obligations related to private placement securities. As of June 30, 2022, commitments to purchase or fund were approximately $1.5 billion and to sell were approximately $25 million under the terms of these investments.

3. Fair Value

Assets and liabilities measured at fair ~~value.~~value on a recurring basis are summarized in the following tables. Corporate bonds and other includes obligations of the U.S. Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock.


June 30, 2022	Level 1		Level 2		Level 3		Total
(In millions)

Fixed maturity securities:
Corporate bonds and other	$	118	$	21,361	$	846	$	22,325
States, municipalities and political subdivisions	0		9,592		46		9,638
Asset-backed	0		6,781		641		7,422
Fixed maturities available-for-sale	118		37,734		1,533		39,385
Fixed maturities trading	0		46		0		46
Total fixed maturities	$	118	$	37,780	$	1,533	$	39,431

Equity securities	$	713	$	604	$	47	$	1,364
Short term and other	3,987		188		0		4,175
Receivables	0		12		0		12
Payable to brokers	(75)		0		0		(75)

December 31, 2021	Level 1		Level 2		Level 3		Total
(In millions)

Fixed maturity securities:
Corporate bonds and other	$	140	$	23,768	$	937	$	24,845
States, municipalities and political subdivisions	0		11,887		56		11,943
Asset-backed	0		7,029		556		7,585
Fixed maturities available-for-sale	140		42,684		1,549		44,373
Fixed maturities trading	0		7		0		7
Total fixed maturities	$	140	$	42,691	$	1,549	$	44,380

Equity securities	$	924	$	721	$	29	$	1,674
Short term and other	4,696		74		0		4,770

Payable to brokers	(70)		0		0		(70)


			18

~~Index~~Table of c o ntents

The following tables present reconciliations for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2022 and 2021:


			Net Realized Investment Gains (Losses) and Net Change in Unrealized Investment Gains (Losses)																Unrealized Gains (Losses) Recognized in Net Income (Loss) on Level 3 Assets and Liabilities Held at June 30		Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30
2022	Balance, April 1		Included in Net Income		Included in OCI		Purchases		Sales		Settlements		Transfers into Level 3		Transfers out of Level 3		Balance, June 30
(In millions)

Fixed maturity securities:
Corporate bonds and other	$	915	$	(1)	$	(82)	$	51	0		$	(37)	0		0		$	846	0		$	(81)
States, municipalities and political
subdivisions	51		0		(5)		0		0		0		0		0		46		0		(5)
Asset-backed	604		8		(52)		92		$	(2)	(23)		$	14	0		641		0		(52)
Fixed maturities available-for-sale	1,570		7		(139)		143		(2)		(60)		14		—		1,533		—		(138)
Fixed maturities trading	—		0		0		0		0		0		0		0		—		0		0
Total fixed maturities	$	1,570	$	7	$	(139)	$	143	$	(2)	$	(60)	$	14	$	—	$	1,533	$	—	$	(138)

Equity securities	$	44	$	(3)	0		0		$	(3)	$	9	0		0		$	47	$	(3)	0


			19

Table of c o ntents


			Net Realized Investment Gains (Losses) and Net Change in Unrealized Investment Gains (Losses)																Unrealized Gains (Losses) Recognized in Net Income (Loss) on Level 3 Assets and Liabilities Held at June 30		Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30
2021	Balance, April 1		Included in Net Income		Included in OCI		Purchases		Sales		Settlements		Transfers into Level 3		Transfers out of Level 3		Balance, June 30
(In millions)

Fixed maturity securities:
Corporate bonds and other	$	767	$	3	$	16	$	122	$	(3)	$	(22)	0		0		$	883	0		$	16
States, municipalities and political
subdivisions	44		0		2		12		0		(1)		0		0		57		0		2
Asset-backed	315		1		4		84		0		(10)		$	21	$	(5)	410		0		4
Fixed maturities available-for-sale	1,126		4		22		218		(3)		(33)		21		(5)		1,350		—		22
Fixed maturities trading	5		(3)		0		0		0		(2)		0		0		—		0		0
Total fixed maturities	$	1,131	$	1	$	22	$	218	$	(3)	$	(35)	$	21	$	(5)	$	1,350	$	—	$	22

Equity securities	$	45	$	(15)	0		$	10	$	(4)	0		0		0		$	36	0		0


			20

Table of c o ntents


			Net Realized Investment Gains (Losses) and Net Change in Unrealized Investment Gains (Losses)																Unrealized Gains (Losses) Recognized in Net Income (Loss) on Level 3 Assets and Liabilities Held at June 30		Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30
2022	Balance, January 1		Included in Net Income		Included in OCI		Purchases		Sales		Settlements		Transfers into Level 3		Transfers out of Level 3		Balance, June 30
(In millions)

Fixed maturity securities:
Corporate bonds and other	$	937	$	(2)	$	(153)	$	118	$	(5)	$	(59)	$	10	0		$	846	0		$	(153)
States, municipalities and political
subdivisions	56		0		(10)		0		0		0		0		0		46		0		(10)
Asset-backed	556		11		(84)		232		(2)		(40)		19		$	(51)	641		0		(83)
Fixed maturities available-for-sale	1,549		9		(247)		350		(7)		(99)		29		(51)		1,533		—		(246)
Fixed maturities trading	—		0		0		0		0		0		0		0		—		0		0
Total fixed maturities	$	1,549	$	9	$	(247)	$	350	$	(7)	$	(99)	$	29	$	(51)	$	1,533	$	—	$	(246)

Equity securities	$	29	0		0		$	12	$	(3)	$	9	0		0		$	47	$	(1)	0


			21

Table of c o ntents


			Net Realized Investment Gains (Losses) and Net Change in Unrealized Investment Gains (Losses)																Unrealized Gains (Losses) Recognized in Net Income (Loss) on Level 3 Assets and Liabilities Held at June 30		Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30
2021	Balance, January 1		Included in Net Income		Included in OCI		Purchases		Sales		Settlements		Transfers into Level 3		Transfers out of Level 3		Balance, June 30
(In millions)

Fixed maturity securities:
Corporate bonds and other	$	770	$	(10)	$	(24)	$	164	$	(3)	$	(24)	$	10	0		$	883	0		$	(24)
States, municipalities and political subdivisions	46		0		0		12		0		(1)		0		0		57		0		0
Asset-backed	308		3		(5)		114		0		(27)		30		$	(13)	410		0		(5)
Fixed maturities available-for-sale	1,124		(7)		(29)		290		(3)		(52)		40		(13)		1,350		—		(29)
Fixed maturities trading	8		(6)		0		0		0		(2)		0		0		—		0		0
Total fixed maturities	$	1,132	$	(13)	$	(29)	$	290	$	(3)	$	(54)	$	40	$	(13)	$	1,350	$	—	$	(29)

Equity securities	$	43	$	(13)	0		$	10	$	(4)	0		0		0		$	36	$	2	0

Net investment gains and losses are reported in Net income as follows:


Major Category of Assets and Liabilities			Consolidated Condensed Statements of Operations Line Items

Fixed maturity securities available-for-sale			Investment gains (losses)
Fixed maturity securities trading			Net investment income
Equity securities			Investment gains (losses) and Net investment income
Other invested assets			Investment gains (losses) and Net investment income
Derivative financial instruments held in a trading portfolio			Net investment income
Derivative financial instruments, other			Investment gains (losses) and Operating revenues and other


			22

Table of c o ntents

Significant Unobservable Inputs

The following tables present quantitative information about the significant unobservable inputs utilized in the fair value measurement of Level 3 assets. Valuations for assets and liabilities not presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of unobservable inputs from these broker quotes is neither provided nor reasonably available. The weighted average rate is calculated based on fair value.

Range
Estimated

Valuation

Unobservable

(Weighted
September 30, 2021
Fair Value Techniques Inputs Average)
(In millions)

Fixed maturity securities $ 1,154 Discounted cash flow Credit spread 1% – 7% (2%)

December 31, 2020

Fixed maturity securities $ 966 Discounted cash flow Credit spread 1% – 8% (3%)


June 30, 2022	Estimated Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Average)
	(In millions)

Fixed maturity securities	$	1,117	Discounted cash flow	Credit spread	1%	—	9%	(3%)

December 31, 2021

Fixed maturity securities	$	1,225	Discounted cash flow	Credit spread	1%	—	7%	(2%)

For fixed maturity securities, an increase to the credit spread assumptions would result in a lower fair value measurement.

Financial Assets and Liabilities Not Measured at Fair Value

The carrying amount, estimated fair value and the level of the fair value hierarchy of the financial assets and liabilities which are not measured at fair value on the Consolidated Condensed Balance Sheets are presented in the following tables. The carrying amounts and estimated fair values of short term debt and long term debt exclude finance lease obligations. The carrying amounts reported on the Consolidated Condensed Balance Sheets for cash and short term investments not carried at fair value and certain other assets and liabilities approximate fair value due to the short term nature of these items.

	Carrying		Estimated Fair Value
September 30, 2021	Amount		Level 1	Level 2		Level 3		Total
											Carrying Amount		Estimated Fair Value
June 30, 2022										June 30, 2022	Carrying Amount		Level 1	Level 2		Level 3		Total
(In millions)										(In millions)

Assets:										Assets:
Other invested assets, primarily mortgage loans	$	1,031				$	1,106	$	1,106	Other invested assets, primarily mortgage loans	$	949	0	0		$	915	$	915

Liabilities:										Liabilities:
Short term debt		186					190		190	Short term debt	838		0	$	797	39		836
Long term debt		8,919		$	9,319		554		9,873	Long term debt	8,438		0	7,472		645		8,117

December 31, 2020
December 31, 2021										December 31, 2021

Assets:										Assets:
Other invested assets, primarily mortgage loans	$	1,068				$	1,151	$	1,151	Other invested assets, primarily mortgage loans	$	973	0	0		$	1,018	$	1,018

Liabilities:										Liabilities:
Short term debt		35		$	19		17		36	Short term debt	93		0	0		93		93
Long term debt		10,042			10,482		765		11,247	Long term debt	8,981		0	$	9,170	611		9,781


			23

Table of c o ntents

5.4. Claim and Claim Adjustment Expense Reserves

Property and casualty insurance claim and claim adjustment expense reserves represent the estimated amounts necessary to resolve all outstanding claims, including incurred but not reported (“IBNR”) claims as of the reporting date. Reserve projections are based primarily on detailed analysis of the facts in each case, experience with similar cases and various historical development patterns. Consideration is given to historical patterns such as claim reserving trends and settlement practices, loss payments, pending levels of unpaid claims and product mix, as well as court decisions and economic conditions including inflation and public attitudes. All of these factors can affect the estimation of claim and claim adjustment expense reserves.

~~Index~~

Establishing claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves for catastrophic events that have occurred, is an estimation process. Many factors can ultimately affect the final settlement of a claim and, therefore, the necessary reserve. Changes in the law, results of litigation, medical costs, the cost of repair materials and labor rates can affect ultimate claim costs. In addition, time can be a critical part of reserving determinations since the longer the span between the incidence of a loss and the payment or settlement of the claim, the more variable the ultimate settlement amount can be. Accordingly, short-tail claims, such as property damage claims, tend to be more reasonably estimable than long-tail claims, such as workers’ compensation, general liability and professional liability claims. Adjustments to prior year reserve estimates, if necessary, are reflected in the results of operations in the period that the need for such adjustments is determined. There can be no assurance that the ultimate cost for insurance losses will not exceed current estimates.

Catastrophes are an inherent risk of the property and casualty insurance business and have contributed to material period-to-period fluctuations in the Company’s results of operations and/or equity. The Company reported catastrophe losses, net of reinsurance, of ~~$178~~$37 million and ~~$160~~$54 million for the three months ended ~~September~~June 30, 2022 and 2021 and ~~2020 and $357~~of $57 million and ~~$536~~$179 million for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, and 2020. Net catastrophe losses for the three months ended September 30, 2021 included $114 million for Hurricane Ida. Net catastrophe losses for the nine months ended September 30, 2021 were driven by severe weather-related events, primarily Hurricane Ida and Winter Storms Uri and Viola. Net catastrophe losses for the three months ended September 30, 2020 were driven by severe weather-related events, primarily Hurricanes Laura, Isaias and Sally and the Midwest derecho. Net catastrophe losses for the nine months ended September 30, 2020 included $273 millionin each case primarily related to severe ~~weather-related events, $195 million~~weather related ~~to the COVID-19 pandemic and $68 million related to civil unrest.~~events.


			24

Table of c o ntents

Liability for Unpaid Claim and Claim Adjustment Expenses

The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves of ~~other insurance~~operations outside CNA’s commercial property and casualty operations.


Six Months Ended June 30	2022		2021
(In millions)

Reserves, beginning of year:
Gross	$	24,174	$	22,706
Ceded	4,969		4,005
Net reserves, beginning of year	19,205		18,701

Reduction of net reserves due to the excess workers’ compensation loss portfolio transfer	0		(632)

Net incurred claim and claim adjustment expenses:
Provision for insured events of current year	2,974		2,930
Decrease in provision for insured events of prior years	(69)		(78)
Amortization of discount	90		95
Total net incurred (a)	2,995		2,947

Net payments attributable to:
Current year events	(245)		(317)
Prior year events	(2,330)		(1,949)
Total net payments	(2,575)		(2,266)

Foreign currency translation adjustment and other	(222)		(5)

Net reserves, end of period	19,403		18,745
Ceded reserves, end of period	5,156		4,735
Gross reserves, end of period	$	24,559	$	23,480

Nine Months Ended September 30
2021 2020
(In millions)

Reserves, beginning of year:
Gross $ 22,706
$
21,720

Ceded 4,005
3,835

Net reserves, beginning of year 18,701
17,885

Reduction of net reserves due to the excess workers’ compensation loss portfolio transfer (632 )

Net incurred claim and claim adjustment expenses:
Provision for insured events of current year 4,474
4,425

Increase (decrease) in provision for insured events of prior years (130 )
(68
)
Amortization of discount 137
143

Total net incurred (a) 4,481
4,500

Net payments attributable to:
Current year events (629 )
(556
)
Prior year events (2,874 )
(3,285
)
Total net payments (3,503 )
(3,841
)

Foreign currency translation adjustment and other (51 )
39

Net reserves, end of period 18,996
18,583

Ceded reserves, end of period 4,836
3,951

Gross reserves, end of period $ 23,832
$
22,534

~~(a)~~
(a)			Total net incurred above does not agree to Insurance claims and policyholders’ benefits as reflected on the Consolidated Condensed Statements of Operations due to amounts related to retroactive reinsurance deferred gain accounting, the loss on the excess workers’ compensation loss portfolio transfer, uncollectible reinsurance and benefit expenses related to future policy benefits, which are not reflected in the table above.

~~Index~~

Net Prior Year Development

Changes in estimates of claim and claim adjustment expense reserves, net of reinsurance, for prior years are defined as net prior year loss reserve development. These changes can be favorable or unfavorable.

Favorable net prior year ~~loss reserve~~ development of ~~$10~~$37 million and ~~$15~~$11 million was recorded for commercial property and casualty operations (“Property & Casualty Operations”) for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 and favorable net prior year ~~loss reserve~~ development of ~~$36~~$49 million and ~~$58~~$26 million was recorded for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021. Unfavorable net prior year loss reserve development of ~~$40~~$64 million and ~~$50~~$40 million was recorded infor CNA’s operations outside of Property & Casualty Operations (“Other Insurance Operations”) for the ~~nine~~three and six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~ 2021.


			25

Table of c o ntents

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions)

Medical professional liability	$	1	0		$	9	$	8
Other professional liability and management liability	13		$	10	13		10
Surety	(19)		(23)		(28)		(38)
Commercial auto	21		30		21		30
General liability	41		0		41		0
Workers’ compensation	(82)		(42)		(84)		(42)
Property and other	(12)		14		(21)		6
Other insurance operations	64		40		64		40
Total pretax (favorable) unfavorable development	$	27	$	29	$	15	$	14

Three Months Ended Nine Months Ended
September 30,
September 30,
2021 2020 2021 2020
(In millions)

Medical professional liability $ 8 $ 25 $ 16
$
35

Other professional liability and management liability 10 (6 )
Surety (15 ) (40 ) (53 ) (70 )
Commercial auto
9
30
33

General liability 15 15
Workers’ compensation 2
(23
) (40 ) (97 )
Property and other (5 )
(1
) 1
32

Other insurance operations 40
50

Total pretax (favorable) unfavorable development $ (10 )
$
(15
) $ 4
$
(8
)

Three Months

2022

~~2021~~

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

~~2020~~

Unfavorable development in ~~medical professional liability~~commercial auto was ~~primarily~~ due to higher than expected ~~frequency of large losses~~claim severity in ~~recent~~CNA’s construction business in multiple accident ~~years and unfavorable development on a latent claim for an older accident year.~~

~~Favorable development in surety was due to lower than expected frequency and lack of systemic activity for accident years 2019 and prior.~~years.

Unfavorable development in general liability was ~~primarily~~ due to ~~increased bodily injury severities in accident years 2012 through 2016 and~~ higher than expected ~~frequency and~~claim severity in ~~CNA’s umbrella~~construction, middle market and small business inacross multiple accident ~~years 2015 through 2019.~~years.

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

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

~~Nine Months~~

2021

~~Unfavorable development in medical professional liability was due to higher than expected frequency of large losses in recent accident years.~~

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

~~Index~~

Unfavorable development in commercial auto was due to higher than expected claim severity in CNA’s construction and middle market businesses in recent accident years.

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

Unfavorable development in property and other was due to higher than expected claim severity in CNA’s medical treatment business mostly offset by favorable development due to lower than expected loss emergence across multiple accident years in property, energy and marine.

Unfavorable development in other insurance operations was due to ~~higher than expected emergence in~~legacy mass tort exposures, ~~in older accident years~~ primarily related to abuse.


			26

Table of c o ntents

~~2020~~Six Months

2022

Unfavorable development in medical professional liability was primarily due to higher than expected frequency of large losses in recent accident years, unfavorable development on a latent claim for an older accident year and unfavorable outcomes on specific claims in accident years 2015 and 2016 in CNA’s aging services business.

Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity ~~for~~in recent accident ~~years 2019 and prior.~~years.

Unfavorable development in commercial auto was due to ~~unfavorable~~higher than expected claim severity in CNA’s ~~middle market and~~ construction ~~businesses~~business in multiple accident ~~years 2017 through 2019.~~years.

Unfavorable development in general liability was ~~driven by increased bodily injury severities in accident years 2012 through 2016 and~~due to higher than expected ~~frequency and~~claim severity in ~~CNA’s umbrella~~construction, middle market and small business inacross multiple accident ~~years 2015 through 2019.~~years.

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

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

2021

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

Unfavorable development in ~~property and other~~commercial auto was ~~primarily~~ due to higher than expected ~~large loss activity~~claim severity in CNA’s construction and middle market ~~national accounts and marine business units~~businesses in recent accident ~~year 2019.~~years.

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

Unfavorable development in other insurance operations was due to ~~higher than expected emergence in~~legacy mass tort exposures, ~~in older accident years~~ primarily related to ~~abuse.~~abuse.

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

In 2010, Continental Casualty Company (“CCC”) together with several insurance subsidiaries completed a transaction with National Indemnity Company (“NICO”), a subsidiary of Berkshire Hathaway Inc., under which substantially all of their legacy A&EP liabilities were ceded to NICO through a loss portfolio transfer (“LPT”). At the effective date of the transaction, approximately $1.6 billion of net A&EP claim and allocated claim adjustment expense reserves were ceded to NICO under a retroactive reinsurance agreement with an aggregate limit of $4.0 billion. The $1.6 billion of claim and allocated claim adjustment expense reserves ceded to NICO was net of $1.2 billion of ceded claim and allocated claim adjustment expense reserves under existing third party reinsurance contracts. The NICO LPT aggregate reinsurance limit also covers credit risk on the existing third party reinsurance related to these liabilities. NICO was paid a reinsurance premium of $2.0 billion and billed third party reinsurance receivables related to A&EP claims with a net book value of $215 million were transferred to NICO, resulting in total consideration of $2.2 billion.

~~Index~~

In years subsequent to the effective date of the LPT, adverse prior year development on A&EP reserves was recognized resulting in additional amounts ceded under the LPT. As a result, the cumulative amounts ceded under the LPT have exceeded the $2.2 billion consideration paid, resulting in the NICO LPT moving into a gain position, requiring retroactive reinsurance accounting. Under retroactive reinsurance accounting, this gain is deferred and only recognized in earnings in proportion to actual paid recoveries under the LPT. Over the life of the contract, there is no economic impact as long as any additional losses incurred are within the limit of the LPT. In a period in which a change in the estimate of A&EP reserves is recognized that increases or decreases the amounts ceded under the LPT, the proportion of actual paid recoveries to total ceded losses is affected and the change in the deferred gain is recognized in earnings as if the revised estimate of ceded losses was available at the effective date of the LPT. The effect of the deferred retroactive reinsurance benefit is recorded in Insurance claims and policyholders’ benefits on the Consolidated Condensed Statements of Operations.

The impact of the LPT on the Consolidated Condensed Statements of Operations was the recognition of a retroactive reinsurance benefit of $8$11 million and $9$12 million for the three months ended ~~September~~June 30, 2022 and 2021 and ~~2020~~$23 million and ~~$30 million and $43~~$22 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021. As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the cumulative amounts ceded under the LPT were ~~$3.3~~$3.4 billion. The unrecognized deferred retroactive reinsurance benefit was ~~$368~~


			27

Table of c o ntents

$406 million and ~~$398~~$429 million as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 and is included within Other liabilities on the Consolidated Condensed Balance Sheets.

NICO established a collateral trust account as security for its obligations under the LPT. The fair value of the collateral trust account was $~~2.9~~$2.4 billion as of ~~September~~June 30, ~~2021.~~2022. In addition, Berkshire Hathaway Inc. guaranteed the payment obligations of NICO up to the aggregate reinsurance limit as well as certain of NICO’s performance obligations under the trust agreement. NICO is responsible for claims handling and billing and collection from third-party reinsurers related to the majority of the A&EP claims.

~~Excess Workers’ Compensation LPT~~

On February 5, 2021, CNA completed a transaction with Cavello Bay Reinsurance Limited (“Cavello”), a subsidiary of Enstar Group Limited, under which certain legacy excess workers’ compensation (“EWC”) liabilities were ceded to Cavello. Under the terms of the transaction, based on reserves in place as of January 1, 2020, approximately $690 million of net EWC claim and allocated claim adjustment expense reserves were ceded to Cavello under a loss portfolio transfer (“EWC LPT”) with an aggregate limit of $1.0 billion. Cavello was paid a reinsurance premium of $697 million, less claims paid between January 1, 2020 and the closing date of the agreement of $64 million. After transaction costs, a loss of approximately $11 million (after tax and noncontrolling interest) was recognized in Other Insurance Operations in the first quarter of 2021 related to the EWC LPT.

~~As of September 30, 2021, the cumulative amount ceded under the EWC LPT was $690 million.~~

~~Cavello established a collateral trust account as security for its obligations, which will be maintained at 105% of outstanding reserves.~~

Credit Risk for Ceded Reserves

The majority of CNA’s outstanding voluntary reinsurance receivables are due from reinsurers with financial strength ratings of A- or higher. Receivables due from reinsurers with lower financial strength ratings are primarily due from captive reinsurers and are backed by collateral arrangements.


			28

~~Life & Group Policyholder Reserves~~

CNA’s Life & Group business includes its run-off long term care business as well as structured settlement obligations not funded by annuities related to certain property and casualty claimants. Long term care policies provide benefits for nursing homes, assisted living facilities and home health care subject to various daily and lifetime caps. Generally, policyholders must continue to make periodic premium payments to keep the policy in force and CNA has the ability to increase policy premiums, subject to state regulatory approval.

CNA maintains both claim and claim adjustment expense reserves as well as future policy benefit reserves for policyholder benefits for its Life & Group business. Claim and claim adjustment expense reserves consist of estimated reserves for long term care policyholders that are currently receiving benefits, including claims that have been incurred but are not yet reported. In developing the claim and claim adjustment expense reserve estimates for long term care policies, CNA’s actuaries perform a detailed claim reserve review on an annual basis. The review analyzes the sufficiency of existing reserves for policyholders currently on claim and includes an evaluation of expected benefit utilization and claim duration. In addition, claim and claim adjustment expense reserves are also maintained for the

~~Index~~Table of c o ntents

structured settlement obligations. In developing the claim and claim adjustment expense reserve estimates for structured settlement obligations, CNA’s actuaries review mortality experience on an annual basis. CNA’s recorded claim and claim adjustment expense reserves reflect management’s best estimate after incorporating the results of the most recent reviews.

CNA completed its annual claim reserve reviews in the third quarters of 2021 and 2020 resulting in $40 million and $37 million pretax reductions in long term care reserves primarily due to lower claim severity than anticipated in the reserve estimates and $2 million and $46 million pretax increases in the structured settlement claim reserves primarily due to lower discount rate assumptions and mortality assumption changes.

Future policy benefit reserves consist of active life reserves related to CNA’s long term care policies for policyholders that are not currently receiving benefits and represent the present value of expected future benefit payments and expenses less expected future premium. The determination of these reserves requires management to make estimates and assumptions about expected investment and policyholder experience over the life of the contract. Since many of these contracts may be in force for several decades, these assumptions are subject to significant estimation risk.

The actuarial assumptions that CNA believes are subject to the most variability are morbidity, persistency, discount rates and anticipated future premium rate increases. Morbidity is the frequency and severity of injury, illness, sickness and diseases contracted. Persistency is the percentage of policies remaining in force and can be affected by policy lapses, benefit reductions and death. Discount rates are influenced by the investment yield on assets supporting long term care reserves which is subject to interest rate and market volatility and may also be affected by changes to the Internal Revenue Code. Future premium rate increases are generally subject to regulatory approval, and therefore the exact timing and size of the approved rate increases are unknown. As a result of this variability, CNA’s long term care reserves may be subject to material increases if actual experience develops adversely to CNA’s expectations.

Annually, in the third quarter, CNA assesses the adequacy of its long term care future policy benefit reserves by performing a gross premium valuation (“GPV”) to determine if there is a premium deficiency. Under the GPV, management estimates required reserves using best estimate assumptions as of the date of the assessment without provisions for adverse deviation. The GPV required reserves are then compared to the existing recorded reserves. If the GPV required reserves are greater than the existing recorded reserves, the existing assumptions are unlocked and future policy benefit reserves are increased to the greater amount. Any such increase is reflected in the Company’s results of operations in the period in which the need for such adjustment is determined. If the GPV required reserves are less than the existing recorded reserves, assumptions remain locked in and no adjustment is required.

The GPV for the long term care future policy benefit reserves, performed in the third quarter of 2021, indicated the recorded reserves included a pretax margin of approximately $72 million as of September 30, 2021.

The GPV for the long term care future policy benefit reserves performed in the third quarter of 2020 indicated a premium deficiency primarily driven by lower discount rate assumptions. Recognition of the premium deficiency resulted in a $74 million pretax increase in policyholders’ benefits reflected in the Company’s results of operations for the three and nine months ended September 30, 2020.

~~Index~~

6.5. Shareholders’ Equity

Accumulated other comprehensive income (loss)

The tables below present the changes in AOCI by component for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2021:~~2022:

Net Unrealized
Gains (Losses) Total
on Investments Net Unrealized Unrealized Accumulated
with an Gains (Losses) Gains (Losses) Pension and Foreign Other
Allowance for on Other on Cash Flow Postretirement Currency Comprehensive
Credit Losses Investments Hedges Benefits Translation Income (Loss)
(In millions)

Balance, July 1, 2020 $ (8 ) $ 1,050 $ (25 ) $ (837 ) $ (175 ) $ 5
Other comprehensive income (loss) before reclassifications, after tax of $0, $(63), $0, $0 and $0
2 231 (2 ) (2 ) 38 267
Reclassification of (income) losses from accumulated other comprehensive income, after tax of $(1), $7, $0, $(3) and $0
4 (24 ) 3 9 (8 )
Other comprehensive income 6 207 1 7 38 259
Amounts attributable to noncontrolling interests (1 ) (22 )
(3 ) (26 )
Balance, September 30, 2020
$ (3 ) $ 1,235 $ (24 ) $ (830 ) $ (140 ) $ 238


	Net Unrealized Gains (Losses) on Investments with an Allowance for Credit Losses		Net Unrealized Gains (Losses) on Other Investments		Unrealized Gains (Losses) on Cash Flow Hedges		Pension and Postretirement Benefits		Foreign Currency Translation		Total Accumulated Other Comprehensive Income (Loss)
(In millions)








Balance, April 1, 2021	$	—	$	1,002	$	(19)	$	(869)	$	(80)	$	34
Other comprehensive income (loss) before reclassifications, after tax of $0, $(82), $(1), $0 and $0	1		323		8		(2)		11		341
Reclassification of (gains) losses from accumulated other comprehensive income, after tax of $0, $7, $(1), $(3) and $0	(1)		(23)		0		9		0		(15)
Other comprehensive income	—		300		8		7		11		326
Amounts attributable to noncontrolling interests	0		(31)		0		(1)		(1)		(33)

Balance, June 30, 2021	$	—	$	1,271	$	(11)	$	(863)	$	(70)	$	327

Balance, April 1, 2022	$	(6)	$	(513)	$	12	$	(630)	$	(114)	$	(1,251)
Other comprehensive income (loss) before reclassifications, after tax of $(1), $359, $5, $2 and $0	(1)		(1,360)		6		(2)		(68)		(1,425)
Reclassification of (gains) losses from accumulated other comprehensive loss, after tax of $1, $(3), $2, $(1) and $0	(1)		14		0		7		0		20
Other comprehensive income (loss)	(2)		(1,346)		6		5		(68)		(1,405)
Amounts attributable to noncontrolling interests	1		138		0		0		7		146
Balance, June 30, 2022	$	(7)	$	(1,721)	$	18	$	(625)	$	(175)	$	(2,510)

Balance, July 1, 2021 $ 0 $ 1,271 $ (11 ) $ (863 ) $ (70 ) $ 327
Other comprehensive income (loss) before reclassifications, after tax of $0, $32, $0, $0 and $0
(121 ) 1 3 (33 ) (150 )
Reclassification of (income) losses from accumulated other comprehensive income, after tax of $0, $5, $0, $(2) and $0
(17 ) 1 13 (3 )
Other comprehensive income (loss)
(138 ) 2
16 (33 ) (153 )
Amounts attributable to noncontrolling interests 14 (1 ) 4 17
Balance, September 30, 2021
$ 0 $ 1,147 $ (9 ) $ (848 ) $ (99 ) $ 191


			29

~~Index~~Table of c o ntents

Net Unrealized
Gains (Losses) Total
on Investments Net Unrealized Unrealized Accumulated
with an Gains (Losses) Gains (Losses) Pension and Foreign Other
Allowance for on Other on Cash Flow Postretirement Currency Comprehensive
Credit Losses Investments Hedges Benefits Translation Income (Loss)
(In millions)

Balance, January 1, 2020 $ 0 $ 918 $ (6 ) $ (855 ) $ (125 ) $ (68 )
Other comprehensive income (loss) before reclassifications, after tax of $13, $(97), $8, $0 and $0
(48 ) 374 (22 ) (3 ) (17 ) 284
Reclassification of losses from accumulated other comprehensive income, after tax of $(12), $5, $(1), $(8) and $0
45 (20 ) 4 30 59
Other comprehensive income (loss) (3 ) 354 (18 ) 27 (17 ) 343
Amounts attributable to noncontrolling interests (37 ) (2 ) 2 (37 )
Balance, September 30, 2020
$ (3 ) $ 1,235 $ (24 ) $ (830 ) $ (140 ) $ 238

Balance, January 1, 2021 $ 0 $ 1,563 $ (23 ) $ (877 ) $ (82 ) $ 581
Other comprehensive income (loss) before reclassifications, after tax of $1, $104, $(3), $0 and $0
(2 ) (391 ) 12 1 (19 ) (399 )
Reclassification of (income) losses from accumulated other comprehensive income, after tax of $(1), $20, $(2), $(7) and $0
2 (74 ) 2 31 (39 )
Other comprehensive income (loss) 0 (465 ) 14 32 (19 ) (438 )
Amounts attributable to noncontrolling interests 49 (3 ) 2 48
Balance, September 30, 2021
$ 0 $ 1,147 $ (9 ) $ (848 ) $ (99 ) $ 191


	Net Unrealized Gains (Losses) on Investments with an Allowance for Credit Losses		Net Unrealized Gains (Losses) on Other Investments		Unrealized Gains (Losses) on Cash Flow Hedges		Pension and Postretirement Benefits		Foreign Currency Translation		Total Accumulated Other Comprehensive Income (Loss)
(In millions)








Balance, January 1, 2021	$	—	$	1,563	$	(23)	$	(877)	$	(82)	$	581
Other comprehensive income (loss) before reclassifications, after tax of $1, $72, $(3), $0 and $0	(2)		(270)		11		(2)		14		(249)
Reclassification of (gains) losses from accumulated other comprehensive income, after tax of $(1), $15, $(2), $(5) and $0	2		(57)		1		18		0		(36)
Other comprehensive income (loss)	—		(327)		12		16		14		(285)
Amounts attributable to noncontrolling interests	0		35		0		(2)		(2)		31

Balance, June 30, 2021	$	—	$	1,271	$	(11)	$	(863)	$	(70)	$	327

Balance, January 1, 2022	$	(2)	$	930	$	(6)	$	(636)	$	(100)	$	186
Other comprehensive income (loss) before reclassifications, after tax of $0, $784, $3, $0 and $0	(5)		(2,972)		21		0		(83)		(3,039)
Reclassification of (gains) losses from accumulated other comprehensive loss, after tax of $1, $(4), $1, $(3) and $0	(1)		15		3		12		0		29
Other comprehensive income (loss)	(6)		(2,957)		24		12		(83)		(3,010)
Amounts attributable to noncontrolling interests	1		306		0		(1)		8		314
Balance, June 30, 2022	$	(7)	$	(1,721)	$	18	$	(625)	$	(175)	$	(2,510)

Amounts reclassified from AOCI shown above are reported in Net income (loss) as follows:


Major Category of AOCI		Affected Line Item

Net unrealized gains (losses) on investments with an allowance for credit losses and Net
unrealized gains (losses) on ~~investments with OTTI losses and Net unrealized gains~~
~~(losses) on~~ other investments	Investment gains (losses)
Unrealized gains (losses) on cash flow hedges		Operating revenues and other, Interest expense and Operating expenses and other
Pension and postretirement benefits		Operating expenses and other


			30

~~Index~~Table of c o ntents

Treasury Stock

Loews Corporation repurchased~~15.7~~ 6.3 million and ~~16.1~~9.5 million shares of its common stock at an aggregate ~~cost~~costs of $~~826~~$384 million and $~~673~~$493 million during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021.

6. Debt

In February of 2022, Boardwalk Pipelines completed a public offering of $500 million aggregate principal amount of its 3.6% senior notes due September 1, 2032. Boardwalk Pipelines used the proceeds to retire the outstanding $300 million aggregate principal amount of its 4.0% senior notes due June 2022 in March of 2022, to fund growth capital expenditures and for general corporate purposes.

7. Revenue from Contracts with Customers

Disaggregation of revenues –Revenue from contracts with customers, other than insurance premiums, is reported as Non-insurance warranty revenue and within Operating revenues and other on the Consolidated Condensed Statements of Operations. The following table presents revenues from contracts with customers disaggregated by revenue type along with the reportable segment and a reconciliation to Operating revenues and other as reported in Note 11:

Three Months Ended

Nine Months Ended
September 30,
September 30,
2021 2020 2021 2020
(In millions)

Non-insurance warranty – CNA Financial $ 357 $ 317 $ 1,054 $ 926

Transportation and storage of natural gas and NGLs and other services – Boardwalk Pipelines 296 280 959 898
Lodging and related services – Loews Hotels & Co 129 36 279 194
Rigid plastic packaging and recycled resin – Corporate (a) 253 280 753
Contract drilling – Diamond Offshore (b)

300
Total revenues from contracts with customers 425 569 1,518 2,145
Other revenues 25 40 62 96
Operating revenues and other $ 450 $ 609 $ 1,580 $ 2,241

~~(a)~~

R~~evenues presented for Corporate reflect the periods prior to the deconsolidation of Altium Packaging in the second quarter of 2021. See Note 2 for further discussion.~~

~~(b)~~

~~Revenues presented for Diamond Offshore reflect the period prior to its deconsolidation in the second quarter of 2020. See Note 2 for further discussion.~~


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions)

Non-insurance warranty – CNA Financial	$	392	$	359	$	774	$	697

Transportation and storage of natural gas and NGLs and other services – Boardwalk Pipelines	$	315	$	302	$	684	$	663
Lodging and related services – Loews Hotels & Co	190		94		336		150
Rigid plastic packaging and recycled resin – Corporate (a)	0		0		0		280

Total revenues from contracts with customers	505		396		1,020		1,093
Other revenues	29		19		54		37
Operating revenues and other	$	534	$	415	$	1,074	$	1,130

(a)Revenues presented reflect the consolidated results of Altium Packaging through March 31, 2021.

Receivables from contracts with customers – As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, receivables from contracts with customers were approximately ~~$118~~$141 million and ~~$246~~$145 million and are included within Receivables on the Consolidated Condensed Balance Sheets.

Deferred revenue – As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, deferred revenue resulting from contracts with customers was approximately ~~$4.5~~$4.7 billion and ~~$4.1~~$4.6 billion and is reported as Deferred non-insurance warranty revenue and within Other liabilities on the Consolidated Condensed Balance Sheets. Approximately ~~$916~~$723 million and ~~$839~~$624 million of revenues recognized during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 were included in deferred revenue as of December 31, ~~2020~~2021 and ~~2019.~~2020.

Performance obligations– As of ~~September~~June 30, ~~2021,~~2022, approximately $~~13.3~~$13.4 billion of estimated operating revenues is expected to be recognized in the future related to outstanding performance obligations. The balance relates primarily to revenues for transportation and storage ofservices for natural gas and natural gas liquids and hydrocarbons (“NGLs”) ~~services~~at Boardwalk Pipelines and non-insurance warranty ~~revenue.~~ revenue at CNA. Approximately $~~0.7~~$1.4 billion will be recognized during the remaining ~~three~~six months of ~~2021, $2.3~~2022, $2.4 billion in ~~2022~~2023 and the remainder in following years. The actual timing of recognition may vary due to factors outside of the Company’s control.


			31

~~Index~~Table of c o ntents

8. Benefit Plans

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

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

Pension Benefits
Three Months Ended Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
(In millions)

Service cost $ 1
$ 2 $ 2
Interest cost 17 $ 24 53 70
Expected return on plan assets (41 ) (43 ) (127 ) (130 )
Amortization of unrecognized net loss 12 12 37 35
Amortization of unrecognized prior service cost 1
Settlement charge 1 2 8
Regulatory asset decrease
1 1
Net periodic benefit $ (10 ) $ (6 ) $ (32 ) $ (14 )


	Pension Benefits
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions)

Service cost	0		0		$	1	$	1
Interest cost	$	18	$	18	37		36
Expected return on plan assets	(40)		(43)		(83)		(86)
Amortization of unrecognized net loss	8		13		16		25

Settlements	1		2		2		2
Regulatory asset decrease	1		0		2		0
Net periodic benefit	$	(12)	$	(10)	$	(25)	$	(22)

The net periodic benefit for other postretirement benefits was $1 million for the three months ended September 30, 2021 and the nine months ended September 30, 2021 and 2020. There was 0 net periodic benefit for the three months ended September 30, 2020.


	Other Postretirement Benefits
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions)


Interest cost	$	1	$	1	$	1	$	1
Expected return on plan assets	(1)		0		(1)		(1)




Net periodic benefit	$	—	$	1	$	—	$	—

9. Legal Proceedings

Boardwalk Pipelines Litigation

On May 25, 2018, plaintiffs Tsemach Mishal and Paul Berger (on behalf of themselves and the purported class, “Plaintiffs”) initiated a purported class action in the Court of Chancery of the State of Delaware (the ~~“Court”~~“Trial Court”) against the following defendants: Boardwalk Pipelines, Boardwalk GP, LP (“General Partner”), Boardwalk GP, LLC and Boardwalk Pipelines Holding Corp. (“BPHC”) (together, “Defendants”), regarding the potential exercise by the General Partner of its right to purchase all of the issued and outstanding common units representing limited partnership interests in Boardwalk Pipelines not already owned by the General Partner or its affiliates.

On June 25, 2018, Plaintiffs and Defendants entered into a Stipulation and Agreement of Compromise and Settlement, subject to the approval of the Trial Court (the “Proposed Settlement”). Under the terms of the Proposed Settlement, the lawsuit would be dismissed, and related claims against the Defendants would be released by the Plaintiffs, if BPHC, the sole member of the General Partner, elected to cause the General Partner to exercise its right to purchase the issued and outstanding common units of Boardwalk Pipelines pursuant to Boardwalk Pipelines’ Third Amended and Restated Agreement of Limited Partnership, as amended (“Limited Partnership Agreement”), within a period specified by the Proposed Settlement. On June 29, 2018, the General Partner elected to exercise its right to purchase all of the issued and outstanding common units representing limited partnership interests in Boardwalk Pipelines not already owned by the General Partner or its affiliates pursuant to the Limited Partnership Agreement within the period specified by the Proposed Settlement. The transaction was completed on July 18, 2018.


			32

Table of c o ntents

On September 28, 2018, the Trial Court denied approval of the Proposed Settlement. On February 11, 2019, a substitute verified class action complaint was filed in this ~~proceeding.~~proceeding, which among other things, added the Parent Company as a Defendant. The Defendants filed a motion to dismiss, which was heard by the Trial Court in July of 2019. In October of 2019, the Trial Court ruled on the motion and granted a partial dismissal, with certain aspects of the case proceeding to trial. A trial was held the week of February 22, 2021 and post-trial oral arguments were held on July 14, ~~2021~~.2021.

On November 12, 2021, the Trial Court issued a ruling in the case. The Trial Court held that the General Partner breached the Limited Partnership Agreement and awarded Plaintiffs approximately $690 million, plus pre-judgment interest (approximately $166 million), post-judgment interest and attorneys’ fees.

The Company believes that the Trial Court ruling includes factual and legal errors. Therefore on January 3, 2022, the Defendants appealed the Trial Court’s ruling to the Supreme Court of the State of Delaware (the “Supreme Court”). On January 17, 2022, the Plaintiffs filed a cross-appeal to the Supreme Court contesting the calculation of damages by the Trial Court. Oral arguments have been set for this case on September 14, 2022.

At this time, given the Trial Court’s ruling and the pending appeals, the Company believes that it is reasonably possible that a loss has occurred, although the Company is unable to estimate any potential loss as it may range from zero up to the full amount of the Trial Court’s award of $690 million, plus pre- and post-judgment interest and attorneys’ fees, or more, depending on the extent of the Defendants’ and Plaintiffs’ success on appeal. The Company has not recorded a liability related to this matter.

As litigation is inherently unpredictable, if an unfavorable final outcome occurs, there is a possibility of a material adverse impact to the Company’s consolidated financial statements in the period in which the effects become known.

Other Litigation

The Company is from time to time party to other litigation arising in the ordinary course of business. While it is difficult to predict the outcome or effect of any litigation, management does not believe that the outcome of any such pending litigation ~~including the Boardwalk Pipelines matter described above,~~ will materially affect the Company’s results of operations or equity.

~~Index~~

10. Commitments and Contingencies

CNA ~~Data Breach-related Contingency~~

As previously disclosed, CNA sustained a sophisticated cybersecurity attack in March of 2021 involving ransomware. CNA’s investigation revealed that an unauthorized third party copied some personal information relating to certain current and former employees, contractor workers and their dependents and certain other persons, including some policyholders. In July of 2021, CNA provided notifications to the impacted individuals and to regulators, in accordance with applicable law. CNA may be subject to subsequent investigations, fines or penalties, as well as other legal claims and actions, related to the foregoing. The likelihood is reasonably possible, but the amount of such fines, penalties or costs, if any, cannot be estimated at this time.

Guarantees

~~CNA~~
~~Guarantees~~

CNA has provided guarantees, if the primary obligor fails to perform, to holders of structured settlement annuities issued by a previously owned subsidiary. As of ~~September~~June 30, ~~2021,~~2022, the potential amount of future payments CNA could be required to pay under these guarantees was approximately $1.6 billion, which will be paid over the lifetime of the annuitants. CNA does not believe any payment is likely under these guarantees, as CNA is the beneficiary of a trust that must be maintained at a level that approximates the discounted reserves for these annuities.

11. Segments

Loews Corporation has 4 reportable segments comprised of 3 individual consolidated operating subsidiaries, CNA, Boardwalk Pipelines and Loews Hotels & Co; and the Corporate segment. ~~In the first quarter of 2020, Diamond Offshore was a reportable segment; it was deconsolidated during the second quarter of 2020.~~ The Corporate segment is primarily comprised of Loews Corporation, excluding its subsidiaries, ~~and~~ the consolidated operations of Altium Packaging through March 31, ~~2021. On April 1,~~ 2021 ~~Loews Corporation sold 47% of its interest in Altium Packaging~~ and as a result, Altium Packaging was deconsolidated from Loews Corporation’s consolidated financial results. Subsequent to deconsolidation, Loews Corporation’s investment in Altium Packaging is accounted for under the equity method of accounting with Equity income (loss) reported in Operating expenses and other on the Consolidated Condensed Statements of Operations in the Corporate segment. For further discussion on the deconsolidations of Diamond Offshore andfor Altium Packaging ~~see Note 2.~~

subsequent to its deconsolidation on April 1, 2021. Each of the operating subsidiaries is headed by a chief executive officer who is responsible for the operation of its business and has the duties and authority commensurate with that position. For additional disclosures regarding the composition of Loews Corporation’s segments, see Note 2019 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

The following tables present the reportable segments and their contribution to the Consolidated Condensed Statements of Operations. Amounts presented will not necessarily be the same as those in the individual financial statements of the subsidiaries due to adjustments for purchase accounting, income taxes and noncontrolling interests.


			33

~~Index~~Table of c o ntents

Statements of Operations by segment are presented in the following tables.

	CNA			Boardwalk			Loews
Three Months Ended September 30, 2021	Financial			Pipelines			Hotels & Co			Corporate			Total
Three Months Ended June 30, 2022																Three Months Ended June 30, 2022	CNA Financial		Boardwalk Pipelines		Loews Hotels & Co		Corporate		Total
(In millions)																(In millions)

Revenues:																Revenues:

Insurance premiums	$	2,059											$	2,059		Insurance premiums	$	2,155	0		0		0		$	2,155
Net investment income (loss)		513								$	(30	)		483		Net investment income (loss)	432		0		$	(1)	$	(65)	366
Investment gains		22												22
Investment losses																Investment losses	(59)		0		0		0		(59)
Non-insurance warranty revenue		357												357		Non-insurance warranty revenue	392		0		0		0		392
Operating revenues and other		8		$	307		$	134			1			450		Operating revenues and other	6		$	325	201		2		534
Total		2,959			307			134			(29	)		3,371		Total	2,926		325		200		(63)		3,388

Expenses:																Expenses:

Insurance claims and policyholders’ benefits		1,632												1,632		Insurance claims and policyholders’ benefits	1,583		0		0		0		1,583
Amortization of deferred acquisition costs		368												368		Amortization of deferred acquisition costs	374		0		0		0		374
Non-insurance warranty expense		330												330		Non-insurance warranty expense	367		0		0		0		367
Operating expenses and other		287			215			109			27			638		Operating expenses and other	329		231		132		23		715
Interest		28			40			8			23			99		Interest	28		42		4		22		96
Total		2,645			255			117			50			3,067		Total	2,681		273		136		45		3,135
Income (loss) before income tax		314			52			17			(79	)		304		Income (loss) before income tax	245		52		64		(108)		253
Income tax (expense) benefit		(59	)		(14	)		(4	)		19			(58	)	Income tax (expense) benefit	(40)		(13)		(20)		22		(51)
Net income (loss)		255			38			13			(60	)		246		Net income (loss)	205		39		44		(86)		202
Amounts attributable to noncontrolling interests		(26	)											(26	)	Amounts attributable to noncontrolling interests	(22)		0		0		0		(22)
Net income (loss) attributable to Loews Corporation	$	229		$	38		$	13		$	(60	)	$	220		Net income (loss) attributable to Loews Corporation	$	183	$	39	$	44	$	(86)	$	180


			34

~~Index~~Table of c o ntents


Three Months Ended June 30, 2021	CNA Financial		Boardwalk Pipelines		Loews Hotels & Co		Corporate		Total
(In millions)

Revenues:

Insurance premiums	$	2,035	0		0		0		$	2,035
Net investment income	591		0		$	1	$	24	616
Investment gains	38		0		0		540		578
Non-insurance warranty revenue	359		0		0		0		359
Operating revenues and other	6		$	312	97		0		415
Total	3,029		312		98		564		4,003

Expenses:

Insurance claims and policyholders’ benefits	1,546		0		0		0		1,546
Amortization of deferred acquisition costs	357		0		0		0		357
Non-insurance warranty expense	332		0		0		0		332
Operating expenses and other	302		209		115		30		656
Interest	29		40		9		22		100
Total	2,566		249		124		52		2,991
Income (loss) before income tax	463		63		(26)		512		1,012
Income tax (expense) benefit	(94)		(16)		5		(114)		(219)
Net income (loss)	369		47		(21)		398		793
Amounts attributable to noncontrolling interests	(39)		0		0		0		(39)
Net income (loss) attributable to Loews Corporation	$	330	$	47	$	(21)	$	398	$	754

CNA
Boardwalk
Loews

Three Months Ended September 30, 2020
Financial Pipelines Hotels & Co Corporate (a) Total
(In millions)

Revenues:

Insurance premiums $ 1,953 $ 1,953
Net investment income 517 $ 23 540
Investment gains
46 46
Non-insurance warranty revenue 317 317
Operating revenues and other 7 $ 289 $ 60 253 609
Total 2,840 289 60 276 3,465

Expenses:

Insurance claims and policyholders’ benefits 1,616 1,616
Amortization of deferred acquisition costs 360 360
Non-insurance warranty expense 293 293
Operating expenses and other 268 219 114 275 876
Interest 52 44 8 33 137
Total 2,589 263 122 308 3,282
Income (loss) before income tax 251 26 (62 ) (32 ) 183
Income tax (expense) benefit (36 ) (6 ) 15 6 (21 )
Net income (loss) 215 20 (47 ) (26 ) 162
Amounts attributable to noncontrolling interests (23 ) (23 )
Net income (loss) attributable to Loews Corporation $ 192 $ 20 $ (47 ) $ (26 ) $ 139

~~(a)~~
			35

Table of c o ntents


Six Months Ended June 30, 2022	CNA Financial		Boardwalk Pipelines		Loews Hotels & Co		Corporate		Total
(In millions)

Revenues:

Insurance premiums	$	4,214	0		0		0		$	4,214
Net investment income (loss)	880		0		$	(1)	$	(81)	798
Investment losses	(70)		0		0		0		(70)
Non-insurance warranty revenue	774		0		0		0		774
Operating revenues and other	13		$	706	353		2		1,074
Total	5,811		706		352		(79)		6,790

Expenses:

Insurance claims and policyholders’ benefits	3,038		0		0		0		3,038
Amortization of deferred acquisition costs	718		0		0		0		718
Non-insurance warranty expense	721		0		0		0		721
Operating expenses and other	655		448		258		45		1,406
Interest	56		84		8		44		192
Total	5,188		532		266		89		6,075
Income (loss) before income tax	623		174		86		(168)		715
Income tax (expense) benefit	(105)		(44)		(27)		33		(143)
Net income (loss)	518		130		59		(135)		572
Amounts attributable to noncontrolling interests	(54)		0		0		0		(54)
Net income (loss) attributable to Loews Corporation	$	464	$	130	$	59	$	(135)	$	518


			36

Table of c o ntents


Six Months Ended June 30, 2021	CNA Financial		Boardwalk Pipelines		Loews Hotels & Co		Corporate (a)		Total
(In millions)

Revenues:

Insurance premiums	$	3,997							$	3,997
Net investment income	1,095				$	1	$	70	1,166
Investment gains	95						540		635
Non-insurance warranty revenue	697								697
Operating revenues and other	11		$	684	154		281		1,130
Total	5,895		684		155		891		7,625

Expenses:

Insurance claims and policyholders’ benefits	3,052								3,052
Amortization of deferred acquisition costs	716								716
Non-insurance warranty expense	643								643
Operating expenses and other	587		426		219		338		1,570
Interest	57		81		17		70		225
Total	5,055		507		236		408		6,206
Income (loss) before income tax	840		177		(81)		483		1,419
Income tax (expense) benefit	(160)		(45)		17		(145)		(333)
Net income (loss)	680		132		(64)		338		1,086
Amounts attributable to noncontrolling interests	(71)								(71)
Net income (loss) attributable to Loews Corporation	$	609	$	132	$	(64)	$	338	$	1,015


(a)			Amounts ~~presented for Corporate~~ include the ~~operating results of Altium Packaging prior to the deconsolidation.~~

~~Index~~

CNA

Boardwalk

Loews

Nine Months Ended September 30, 2021 Financial Pipelines Hotels & Co Corporate (b) Total
(In millions)

Revenues:

Insurance premiums $ 6,056 $ 6,056
Net investment income 1,608 $ 1 $ 40 1,649
Investment gains 117 540 657
Non-insurance warranty revenue 1,054 1,054
Operating revenues and other 19 $ 991 288 282 1,580
Total 8,854 991 289 862 10,996

Expenses:

Insurance claims and policyholders’ benefits 4,684 4,684
Amortization of deferred acquisition costs 1,084 1,084
Non-insurance warranty expense 973 973
Operating expenses and other 874 641 328 365 2,208
Interest 85 121 25 93 324
Total 7,700 762 353 458 9,273
Income (loss) before income tax 1,154 229 (64 ) 404 1,723
Income tax (expense) benefit (219 ) (59 ) 13 (126 ) (391 )
Net income (loss) 935 170 (51 ) 278 1,332
Amounts attributable to noncontrolling interests (97 ) (97 )
Net income (loss) attributable to Loews Corporation $ 838 $ 170 $ (51 ) $ 278 $ 1,235

~~(b)~~

~~Amounts presented for Corporate include the operating~~consolidated results of Altium Packaging through March 31, 2021. Beginning April 1, 2021, Altium Packaging is recorded as an equity method investment.

~~Index~~

CNA
Boardwalk
Loews

Diamond

Nine Months Ended September 30, 2020
Financial Pipelines Hotels & Co Corporate (a) Offshore (c) Total
(In millions)

Revenues:

Insurance premiums $ 5,672 $ 5,672
Net investment income (loss) 1,380 $ (33 ) 1,347
Investment losses (101 ) (1,211 ) (1,312 )
Non-insurance warranty revenue 926 926
Operating revenues and other 20 $ 926 $ 236 754 $ 305 2,241
Total 7,897 926 236 (490 ) 305 8,874

Expenses:

Insurance claims and policyholders’ benefits 4,683 4,683
Amortization of deferred acquisition costs 1,046 1,046
Non-insurance warranty expense 859 859
Operating expenses and other 851 633 404 810 1,196 3,894
Interest 114 127 24 96 43 404
Total 7,553 760 428 906 1,239 10,886
Income (loss) before income tax 344 166 (192 ) (1,396 ) (934 ) (2,012 )
Income tax (expense) benefit (40 ) (43 ) 48 293 26 284
Net income (loss) 304 123 (144 ) (1,103 ) (908 ) (1,728 )
Amounts attributable to noncontrolling interests (32 ) 432 400
Net income (loss) attributable to Loews Corporation $ 272 $ 123 $ (144 ) $ (1,103 ) $ (476 ) $ (1,328 )

~~(c)~~

~~Amounts presented for Diamond Offshore reflect the period prior to the deconsolidation.~~

~~Index~~

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~37

Table of c o ntents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management’s discussion and analysis of financial condition and results of operations (“MD&A”) should be read in conjunction with our Consolidated Condensed Financial Statements included under Item 1 of this Report ~~Risk Factors included under Part II, Item 1A of this Report, Risk Factors included in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021~~ and the Consolidated Financial Statements, Risk Factors, and MD&A included in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. This MD&A is comprised of the following sections:


		Page No.

Overview		37 38
Results of Operations		38 39
Consolidated Financial Results		38 39
CNA Financial		39 40
Boardwalk Pipelines		48 47
Loews Hotels & Co		49 50
Corporate		50 51
~~Diamond Offshore~~		51
Liquidity and Capital Resources	51 52
Parent Company		51 52
Subsidiaries		52
Investments		53
Critical Accounting Estimates		56 57
Accounting Standards Update		57
Forward-Looking Statements		57

OVERVIEW

Loews Corporation is a holding company and has four reportable segments comprised of three individual consolidated operating subsidiaries, CNA Financial Corporation (“CNA”), Boardwalk Pipeline Partners, LP (“Boardwalk Pipelines”) and Loews Hotels Holding Corporation (“Loews Hotels & Co”); and the Corporate segment. ~~In the first quarter of 2020, Diamond Offshore Drilling Inc. (“Diamond Offshore”) was a reportable segment; Diamond Offshore was deconsolidated during the second quarter of 2020.~~ The Corporate segment is primarily comprised of Loews Corporation, excluding its operating subsidiaries, ~~and~~ the consolidated operations of Altium Packaging LLC (“Altium Packaging”) through March 31, ~~2021. On April 1,~~ 2021 Loews Corporation sold 47% of its interest in Altium Packaging to GIC, Singapore’s sovereign wealth fund, for $420 million in cash consideration. As a result of the terms of this transaction, Loews Corporation shares certain participating rights with GIC related to capital allocation and other decisions and was therefore required to deconsolidate Altium Packaging as of the date of the sale under accounting principles generally accepted in the United States of America (“GAAP”). Subsequent to deconsolidation, Loews Corporation’s investment in Altium Packaging is accounted for under the equity method of accounting with Equity income (loss) reported in Operating expenses and other on the Consolidated Condensed Statements of Operations in the Corporate segment. For further information on the deconsolidations of Diamond Offshore andfor Altium Packaging ~~see~~subsequent to its deconsolidation on April 1, 2021. For information regarding the deconsolidation of Altium Packaging see Note 2 of the ~~Notes to~~ Consolidated ~~Condensed~~ Financial Statements ~~included under Item 1 of this Report.~~in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Unless the context otherwise requires, the term “Company” ~~as used herein~~ means Loews Corporation including its consolidated subsidiaries, the terms “Parent Company,” “we,” “our,” “us” or like terms ~~as used herein~~ mean Loews Corporation excluding its subsidiaries, the term “Net income (loss) attributable to Loews Corporation” ~~as used herein~~ means Net income (loss) attributable to Loews Corporation shareholders and the term “subsidiaries” means Loews Corporation’s consolidated subsidiaries.

We rely upon our invested cash balances and distributions from our subsidiaries to generate the funds necessary to meet our obligations and to declare and pay any dividends to our shareholders. The ability of our subsidiaries to pay dividends is subject to, among other things, the availability of sufficient earnings and funds in such subsidiaries, applicable state laws, including in the case of the insurance subsidiaries of CNA, laws and rules governing the payment of dividends by regulated insurance companies ~~(see~~(see Note 14 of ~~the~~the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, ~~2020)~~2021) and compliance with covenants in their respective loan agreements. Claims of creditors of our subsidiaries will generally have priority as to the assets of such subsidiaries over our claims and those of our creditors and shareholders.


			38

~~Index~~Table of c o ntents

RESULTS OF OPERATIONS

Consolidated Financial Results

The following table summarizes net income (loss) attributable to Loews Corporation by segment and net income (loss) per share attributable to Loews Corporation for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~2021:


														Three Months Ended				Six Months Ended
	Three Months Ended September 30,						Nine Months Ended September 30,							June 30,
	2021			2020			2021			2020				2022		2021		2022		2021
(In millions, except per share data)													(In millions, except per share data)

CNA Financial	$	229		$	192		$	838		$	272		CNA Financial	$	183	$	330	$	464	$	609
Boardwalk Pipelines		38			20			170			123		Boardwalk Pipelines	39		47		130		132
Loews Hotels & Co		13			(47	)		(51	)		(144	)	Loews Hotels & Co	44		(21)		59		(64)
Corporate		(60	)		(26	)		278			(1,103	)	Corporate	(86)		398		(135)		338
Diamond Offshore											(476	)
Net income (loss) attributable to Loews Corporation	$	220		$	139		$	1,235		$	(1,328	)

Basic net income (loss) per share	$	0.86		$	0.50		$	4.71		$	(4.70	)
Net income attributable to Loews Corporation													Net income attributable to Loews Corporation	$	180	$	754	$	518	$	1,015

Diluted net income (loss) per share	$	0.85		$	0.50		$	4.70		$	(4.70	)
Basic net income per share													Basic net income per share	$	0.73	$	2.87	$	2.10	$	3.83

Diluted net income per share													Diluted net income per share	$	0.73	$	2.86	$	2.09	$	3.82

Net income attributable to Loews Corporation for the three months ended ~~September~~June 30, ~~2021~~2022 was ~~$220~~$180 million, or ~~$0.85~~$0.73 per share, compared to ~~$139~~$754 million, or ~~$0.50~~$2.86 per share in the comparable ~~2020~~2021 period. Net income attributable to Loews Corporation for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 was ~~$1.2 billion,~~$518 million, or ~~$4.70~~$2.09 per share, compared to ~~a net loss of $1.3~~$1.0 billion, or ~~$4.70~~$3.82 per share in the comparable ~~2020~~2021 period.

Each of the company’s consolidated subsidiaries, CNA Financial Corporation, Boardwalk Pipelines, and Loews Hotels & Co, contributed meaningfully to the year-over-year increase in Loews’s 2021 third quarter net income as compared to the comparable 2020 period. As compared to the third quarter of 2020, CNA benefited from higher Property & Casualty non-catastrophe current accident year underwriting results and improved Life & Group business results primarily due to the absence of the active life premium deficiency charge recorded in the third quarter of 2020, partially offset by higher net catastrophe losses and lower investment gains. Loews Hotels & Co posted significantly improved year-over-year third quarter results due to the continuing rebound in leisure travel, especially at resort destinations. Boardwalk Pipelines revenues for the third quarter of 2021 increased compared to the comparable prior year period, reflecting the impact of recently completed growth projects and higher system utilization. The ~~parent company investment portfolio experienced lower net investment income in the third quarter of 2021 compared to the comparable prior year period.~~

The improved results for the nine months ended September 30, 2021 compared to the comparable 2020 period are due to higher Property & Casualty non-catastrophe current accident year underwriting results at CNA, improved results for CNA’s Life & Group business which benefited from the absence of the active life premium deficiency charge recorded in the third quarter of 2020, lower net catastrophe losses at CNA, significantly higher net investment income at CNA and the parent company, and investment gains in 2021 as compared to losses in 2020 at CNA and in the parent company investment portfolio. All otherCorporate segment improvements for the nine months ended September 31, 2021 as compared to the comparable 2020 period are primarily due to the reasons discussed in the three month comparison above. In addition, the nine months ended September 30, 2021 includeincludes a gain of $438 million (after tax) related to the sale of 47% of Altium Packaging and its deconsolidation ~~on April 1,~~in the second quarter of 2021. ~~The nine~~Excluding this significant transaction, the decrease in net income attributable to Loews Corporation for the three months ended ~~September~~June 30, ~~2020 included a loss of $957 million (after tax), related~~2022 as compared to the ~~bankruptcy filing~~comparable prior year period, was primarily driven by lower net investment income from limited partnership and ~~deconsolidation of Diamond Offshore,~~common stock investments and ~~impairment charges totaling $774 million ($408 million after tax and noncontrolling interests) at Diamond Offshore~~net investment losses recognized in the ~~first~~second quarter of ~~2020,~~2022 compared to net investment gains in the comparable prior year period. This decline was partially offset by higher property & casualty underwriting income and higher net investment income from fixed income securities at CNA and significantly improved results at Loews Hotels & Co.

The drivers of the decrease in net income for the six months ended June 30, 2022 as compared to ~~deconsolidation.~~the comparable 2021 period are consistent with the three-month discussion above.


			39

~~Index~~Table of c o ntents

CNA Financial

The following table summarizes the results of operations for CNA for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report. For further discussion of Net investment income and Investment gains (losses), see the Investments section of this MD&A.


														Three Months Ended				Six Months Ended
	Three Months Ended September 30,						Nine Months Ended September 30,							June 30,
	2021			2020			2021			2020				2022		2021		2022		2021
(In millions)													(In millions)

Revenues:													Revenues:
Insurance premiums	$	2,059		$	1,953		$	6,056		$	5,672		Insurance premiums	$	2,155	$	2,035	$	4,214	$	3,997
Net investment income		513			517			1,608			1,380		Net investment income	432		591		880		1,095
Investment gains (losses)		22			46			117			(101	)	Investment gains (losses)	(59)		38		(70)		95
Non-insurance warranty revenue		357			317			1,054			926		Non-insurance warranty revenue	392		359		774		697
Other revenues		8			7			19			20		Other revenues	6		6		13		11
Total		2,959			2,840			8,854			7,897		Total	2,926		3,029		5,811		5,895
Expenses:													Expenses:
Insurance claims and policyholders’ benefits		1,632			1,616			4,684			4,683		Insurance claims and policyholders’ benefits	1,583		1,546		3,038		3,052
Amortization of deferred acquisition costs		368			360			1,084			1,046		Amortization of deferred acquisition costs	374		357		718		716
Non-insurance warranty expense		330			293			973			859		Non-insurance warranty expense	367		332		721		643
Other operating expenses		287			268			874			851		Other operating expenses	329		302		655		587
Interest		28			52			85			114		Interest	28		29		56		57
Total		2,645			2,589			7,700			7,553		Total	2,681		2,566		5,188		5,055
Income before income tax		314			251			1,154			344		Income before income tax	245		463		623		840
Income tax expense		(59	)		(36	)		(219	)		(40	)	Income tax expense	(40)		(94)		(105)		(160)
Net income		255			215			935			304		Net income	205		369		518		680
Amounts attributable to noncontrolling interests		(26	)		(23	)		(97	)		(32	)	Amounts attributable to noncontrolling interests	(22)		(39)		(54)		(71)
Net income attributable to Loews Corporation	$	229		$	192		$	838		$	272		Net income attributable to Loews Corporation	$	183	$	330	$	464	$	609

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared to the Comparable ~~2020~~2021 Period

Net income attributable to Loews Corporation ~~increased $37~~decreased $147 million for the three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020~~2021 period primarily due to ~~the absence of a $74 million charge ($52 million after tax~~lower net investment income and ~~noncontrolling interests) related to the recognition of an active life reserve premium deficiency for long term care policies in the third quarter of 2020. Results~~investment losses for the three months ended ~~September~~June 30, 2022 as compared with investment gains in the comparable 2021 ~~also included improved non-catastrophe current accident year underwriting results. The three months ended September 30, 2020 also included a $14 million charge (after tax~~period. Lower net investment income was from limited partnerships and ~~noncontrolling interests) related~~common stock and lower investment results were driven by the unfavorable change in fair value of non-redeemable preferred stock. These decreases to ~~the early retirement of debt. These increases~~net income were partially offset by ~~lower~~improved underwriting results and higher net investment ~~gains and net catastrophe~~income from fixed income securities for the three months ended June 30, 2022 as compared with the comparable 2021 period. Catastrophe losses ~~of $178~~were $37 million ($~~125~~26 million after tax and noncontrolling interests) for the three months ended ~~September~~June 30, ~~2021~~2022 as compared ~~to $160~~with $54 million ($~~112~~38 million after tax and noncontrolling interests) in the comparable ~~2020 period. Net catastrophe losses for the three months ended September 30,~~ 2021 ~~included $114 million for Hurricane Ida. Net catastrophe losses for the three months ended September 30, 2020~~period and were ~~driven by~~primarily related to severe ~~weather-related events, primarily Hurricanes Laura, Isaias and Sally and the Midwest derecho.~~weather related events.

~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 Compared to the Comparable ~~2020~~2021 Period

Net income attributable to Loews Corporation ~~increased $566~~decreased $145 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020~~2021 period primarily due to lower net investment income and investment losses for the six months ended June 30, 2022 as compared with investment gains in the comparable 2021 period. Lower net investment income was from limited partnerships and common stock and lower investment results were driven by the unfavorable change in fair value of non-redeemable preferred stock. These decreases to net income were partially offset by improved ~~current accident year~~ underwriting ~~results. Net catastrophe~~results and higher net investment income from fixed income securities for the six months ended June 30, 2022


			40

Table of c o ntents

as compared with the comparable 2021 period. Catastrophe losses were ~~$357~~$57 million ($~~251~~40 million after tax and noncontrolling interests) for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 as compared ~~to $536~~with $179 million ($~~377~~126 million after tax and noncontrolling interests) in the comparable ~~2020 period. Net catastrophe losses for the nine months ended September 30,~~ 2021 ~~were driven by severe weather-related events, primarily Hurricane Ida~~period and ~~Winter Storms Uri and Viola. Net catastrophe losses for the nine months ended September 30, 2020 included $273 million~~were primarily related to severe ~~weather-related events, $195 million~~weather related to COVID-19 and $68 million related to civil unrest. Results also reflect higher net investment income and investment gains during the nine months ended September 30, 2021 as compared with investment losses in the comparable 2020 period. Higher net investment income was driven by limited partnership and common stock returns and investment gains were driven by lower impairment losses and the favorable change in fair value of non-redeemable preferred stock for the nine months ended September 30, 2021 as compared with the comparable 2020events.

~~Index~~

period. Results for the nine months ended September 30, 2021 also reflect the absence of a $74 million charge ($52 million after tax and noncontrolling interests) related to the recognition of an active life reserve premium deficiency for long term care policies in the comparable 2020 period.

CNA’s Property & Casualty and Other Insurance Operations

CNA’s commercial property and casualty insurance operations (“Property & Casualty Operations”) include its Specialty, Commercial and International lines of business. CNA’s Other Insurance Operations outside of Property & Casualty Operations include its long term care business that is in run-off, certain corporate expenses, including interest on CNA’s corporate debt, and the results of certain property and casualty businesses in run-off, including CNA Re, ~~Asbestos & Environmental Pollution~~asbestos and environmental pollution (“A&EP”), a legacy portfolio of excess workers’ compensation (“EWC”) policies and certain legacy mass ~~tort.~~tort reserves. We believe the presentation of CNA as one reportable segment is appropriate in accordance with applicable accounting standards on segment reporting. However, for purposes of this discussion and analysis of the results of operations, we provide greater detail with respect to CNA’s Property & Casualty Operations and Other Insurance Operations to enhance the reader’s understanding and to provide further transparency into key drivers of CNA’s financial results.

Effective January 1, 2021, and in connection with the ceding of certain legacy reserves under a retroactive reinsurance agreement executed in February 2021, CNA changed the presentation of a legacy portfolio of excess workers’ compensation policies relating to business written in 2007 and prior. This business, which was previously reported as part of the Commercial business, is now reported as part of the Other Insurance Operations business. See Note 5 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report for further information on this retroactive reinsurance agreement. In addition, a determination was made to change the presentation of certain legacy mass tort reserves. Similar to the aforementioned excess workers’ compensation legacy business, these legacy mass tort reserves were previously reported in the Commercial business and are now reported as part of the Other Insurance Operations business. These changes were made to better reflect the manner in which CNA is organized for purposes of making operating decisions and assessing performance. Prior period information has been conformed to the new presentation.

In assessing its insurance operations, CNA utilizes the core income (loss) financial measure. Core income (loss) is calculated by excluding from net income (loss), investment gains or losses and any cumulative effects of changes in accounting guidance. In addition, core income (loss) excludes the effects of noncontrolling interests. The calculation of core income (loss) excludes investment gains or losses because investment gains or losses are generally driven by economic factors that are not necessarily reflective of CNA’s primary insurance operations. Core income (loss) is deemed to be a non-GAAP financial measure and management believes some investors may find this measure is useful ~~for investors~~ to evaluate ~~its~~CNA’s insurance operations. Please see the non-GAAP reconciliation of core income (loss) to net income (loss) that follows in this MD&A.

~~Recent Developments~~

As previously disclosed, CNA sustained a sophisticated cybersecurity attack in March of 2021 involving ransomware that caused a network disruption and impacted certain of its systems. CNA has incurred expenses within Other Insurance Operations related to the cybersecurity attack and expects these expenses will continue. Additionally, CNA anticipates making continued investments in technology to improve its security and infrastructure, which will increase expenses in future periods. While CNA does not believe that the March 2021 cybersecurity attack will have a material impact on its business, results of operations or financial condition, no assurances can be given at this time as it continues to assess the full impact from the incident, including costs, expenses and insurance coverage.

Property & Casualty Operations

In evaluating the results of Property & Casualty Operations, CNA utilizes the loss ratio, the loss ratio excluding catastrophes and development, the expense ratio, the dividend ratio, the combined ratio and the combined ratio excluding catastrophes and development. These ratios are calculated using GAAP financial results. The loss ratio is the percentage of net incurred claim and claim adjustment expenses to net earned premiums. The loss ratio excluding catastrophes and development excludes ~~net~~ catastrophes losses and changes in estimates of claim and claim adjustment expense reserves, net of reinsurance, for prior years from the loss ratio. 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. The combined ratio excluding catastrophes and development is the sum of the loss ratio excluding catastrophes and development, the expense ratio and the dividend ratio. In addition, renewal premium change, rate, retention and new business are also utilized 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 change.

~~Index~~

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, excluding rate and exposure changes, in comparison to the expiring premium dollars from policies available to renew. Renewal premium change, rate and retention presented for the prior period 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~~third-party captives, ~~represents gross written premiums excluding~~excludes business which is ceded to ~~third party~~third-party captives, including business related to large warranty programs.


			41

~~Index~~Table of c o ntents

The following tables summarize the results of CNA’s Property & Casualty Operations for the three and ~~nine~~six months ~~ended September~~ended June 30, ~~2021~~2022 and ~~2020:~~2021.

Three Months Ended September 30, 2021	Specialty			Commercial			International			Total

Three Months Ended June 30, 2022													Three Months Ended June 30, 2022	Specialty			Commercial			International			Total
(In millions, except %)													(In millions, except %)

Gross written premiums	$	1,953		$	1,010		$	276		$	3,239		Gross written premiums	$	1,904		$	1,429		$	382		$	3,715
Gross written premiums excluding third party captives		943			1,005			276			2,224
Gross written premiums excluding third-party captives													Gross written premiums excluding third-party captives	973			1,321			382			2,676
Net written premiums		822			831			256			1,909		Net written premiums	832			1,134			330			2,296
Net earned premiums		773			893			271			1,937		Net earned premiums	794			974			269			2,037
Net investment income		116			141			14			271		Net investment income	100			113			14			227
Core income		173			27			17			217		Core income	161			138			18			317

Other performance metrics:													Other performance metrics:
Loss ratio excluding catastrophes and development		59.1	%		61.5	%		58.9	%		60.2	%	Loss ratio excluding catastrophes and development	58.6		%	61.5		%	58.5		%	60.0		%
Effect of catastrophe impacts		0.4			18.6			3.4			9.2		Effect of catastrophe impacts	0.1			3.0			2.8			1.8
Effect of development-related items		(1.8	)		0.5			1.1			(0.3	)	Effect of development-related items	(1.2)			(1.8)			(1.8)			(1.6)
Loss ratio		57.7	%		80.6	%		63.4	%		69.1	%	Loss ratio	57.5		%	62.7		%	59.5		%	60.2		%
Expense ratio		30.6			30.4			32.1			30.7		Expense ratio	30.4			30.0			32.1			30.5
Dividend ratio		(0.1	)		0.6						0.2		Dividend ratio	0.2			0.5						0.3
Combined ratio		88.2	%		111.6	%		95.5	%		100.0	%	Combined ratio	88.1		%	93.2		%	91.6		%	91.0		%
Combined ratio excluding catastrophes and development		89.6	%		92.5	%		91.0	%		91.1	%	Combined ratio excluding catastrophes and development	89.2		%	92.0		%	90.6		%	90.8		%

Rate		9	%		6	%		13	%		8	%	Rate	7		%	5		%	7		%	6		%
Renewal premium change		8			8			12			9		Renewal premium change	8			8			10			8
Retention		80			83			79			81		Retention	85			86			85			85
New business	$	147		$	204		$	54		$	405		New business	$	132		$	280		$	88		$	500

Three Months Ended September 30, 2020

Three Months Ended June 30, 2021													Three Months Ended June 30, 2021

Gross written premiums	$	1,855		$	915		$	238		$	3,008		Gross written premiums	$	1,903		$	1,161		$	339		$	3,403
Gross written premiums excluding third party captives		861			915			238			2,014
Gross written premiums excluding third-party captives													Gross written premiums excluding third-party captives	897			1,060			339			2,296
Net written premiums		795			804			222			1,821		Net written premiums	786			831			292			1,909
Net earned premiums		734			857			236			1,827		Net earned premiums	762			881			266			1,909
Net investment income		126			151			15			292		Net investment income	134			174			14			322
Core income		168			41			27			236		Core income	188			137			26			351

Other performance metrics:													Other performance metrics:
Loss ratio excluding catastrophes and development		60.0	%		60.8	%		60.1	%		60.5	%	Loss ratio excluding catastrophes and development	59.0		%	60.1		%	59.0		%	59.5		%
Effect of catastrophe impacts		1.0			17.0			3.0			8.7		Effect of catastrophe impacts				5.8			0.8			2.8
Effect of development-related items		(2.0	)		0.6			0.1			(0.4	)	Effect of development-related items	(1.3)			0.8			(0.3)			(0.2)
Loss ratio		59.0	%		78.4	%		63.2	%		68.8	%	Loss ratio	57.7		%	66.7		%	59.5		%	62.1		%
Expense ratio		30.5			32.3			34.9			31.8		Expense ratio	30.0			32.3			33.5			31.6
Dividend ratio					0.6						0.3		Dividend ratio	0.2			0.6						0.3
Combined ratio		89.5	%		111.3	%		98.1	%		100.9	%	Combined ratio	87.9		%	99.6		%	93.0		%	94.0		%
Combined ratio excluding catastrophes and development		90.5	%		93.7	%		95.0	%		92.6	%	Combined ratio excluding catastrophes and development	89.2		%	93.0		%	92.5		%	91.4		%

Rate		13	%		11	%		17	%		12	%	Rate	12		%	8		%	14		%	10		%
Renewal premium change		15			9			15			12		Renewal premium change	12			10			14			11
Retention		87			82			69			82		Retention	85			80			77			81
New business	$	105		$	168		$	54		$	327		New business	$	121		$	201		$	71		$	393


			42

~~Index~~Table of c o ntents


Six Months Ended June 30, 2022	Specialty			Commercial			International			Total
(In millions, except %)

Gross written premiums	$	3,750		$	2,637		$	745		$	7,132
Gross written premiums excluding third-party captives	1,858			2,527			745			5,130
Net written premiums	1,603			2,135			581			4,319
Net earned premiums	1,566			1,878			533			3,977
Net investment income	203			231			28			462
Core income	324			270			44			638

Other performance metrics:
Loss ratio excluding catastrophes and development	58.7		%	61.5		%	58.6		%	60.0		%
Effect of catastrophe impacts	0.1			2.4			2.0			1.4
Effect of development-related items	(1.3)			(0.9)			(1.0)			(1.0)
Loss ratio	57.5		%	63.0		%	59.6		%	60.4		%
Expense ratio	30.7			30.3			32.4			30.7
Dividend ratio	0.2			0.5						0.3
Combined ratio	88.4		%	93.8		%	92.0		%	91.4		%
Combined ratio excluding catastrophes and development	89.6		%	92.3		%	91.0		%	91.0		%

Rate	8		%	5		%	8		%	6		%
Renewal premium change	9			8			10			9
Retention	85			86			79			84
New business	$	277		$	508		$	166		$	951


Six Months Ended June 30, 2021

Gross written premiums	$	3,697		$	2,274		$	682		$	6,653
Gross written premiums excluding third-party captives	1,713			2,171			682			4,566
Net written premiums	1,528			1,791			527			3,846
Net earned premiums	1,497			1,736			518			3,751
Net investment income	251			322			28			601
Core income	358			206			50			614

Other performance metrics:
Loss ratio excluding catastrophes and development	59.2		%	60.4		%	59.3		%	59.8		%
Effect of catastrophe impacts	0.3			9.6			1.4			4.7
Effect of development-related items	(1.6)			0.7			(0.2)			(0.3)
Loss ratio	57.9		%	70.7		%	60.5		%	64.2		%
Expense ratio	30.2			31.8			33.9			31.5
Dividend ratio	0.2			0.6						0.3
Combined ratio	88.3		%	103.1		%	94.4		%	96.0		%
Combined ratio excluding catastrophes and development	89.6		%	92.8		%	93.2		%	91.6		%

Rate	11		%	9		%	14		%	10		%
Renewal premium change	12			11			13			11
Retention	86			81			76			82
New business	$	224		$	412		$	150		$	786

Nine Months Ended September 30, 2021 Specialty Commercial International Total
(In millions, except %)

Gross written premiums $ 5,650 $ 3,284 $ 958 $ 9,892
Gross written premiums excluding third party captives 2,656 3,176 958 6,790
Net written premiums 2,350 2,622 783 5,755
Net earned premiums 2,270 2,629 789 5,688
Net investment income 367 463 42 872
Core income 531 233 67 831

Other performance metrics:
Loss ratio excluding catastrophes and development 59.1 % 60.8 % 59.2 % 59.9 %
Effect of catastrophe impacts 0.4 12.6 2.0 6.3
Effect of development-related items (1.7 ) 0.6 0.3 (0.4 )
Loss ratio 57.8 % 74.0 % 61.5 % 65.8 %
Expense ratio 30.4 31.4 33.3 31.3
Dividend ratio 0.1 0.6 0.3
Combined ratio 88.3 % 106.0 % 94.8 % 97.4 %
Combined ratio excluding catastrophes and development 89.6 % 92.8 % 92.5 % 91.5 %

Rate 10 % 8 % 13 % 10 %
Renewal premium change 10 9 12 10
Retention 84 82 76 82
New business $ 370 $ 615 $ 204 $ 1,189


			43

Nine Months Ended September 30, 2020

Gross written premiums $ 5,331 $ 3,103 $ 822 $ 9,256
Gross written premiums excluding third party captives
2,413 3,018 822 6,253
Net written premiums 2,231 2,703 680 5,614
Net earned premiums 2,124 2,470 699 5,293
Net investment income 315 354 44 713
Core income 354 113 15 482

Other performance metrics:
Loss ratio excluding catastrophes and development 59.8 % 60.1 % 60.1 % 59.9 %
Effect of catastrophe impacts 5.7 14.3 8.9 10.1
Effect of development-related items (2.1 ) 0.1 (0.4 ) (0.8 )
Loss ratio 63.4 % 74.5 % 68.6 % 69.2 %
Expense ratio 31.5 33.2 35.6 32.9
Dividend ratio 0.1 0.6 0.3
Combined ratio 95.0 % 108.3 % 104.2 % 102.4 %
Combined ratio excluding catastrophes and development 91.4 % 93.9 % 95.7 % 93.1 %

Rate 12 % 10 % 13 % 11 %
Renewal premium change 13 9 11 11
Retention 86 84 71 83
New business $ 275 $ 564 $ 184 $ 1,023

Table of c o ntents

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared to the Comparable ~~2020~~2021 Period

Gross written premiums, excluding ~~third party~~third-party captives, for Specialty increased ~~$82~~$76 million for the three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020~~2021 period driven by rate and higher new business. Net written premiums for Specialty increased ~~$27~~$46 million for the three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020~~2021 period. The increase in net earned premiums for the three months ended ~~September~~June 30, ~~2021~~2022 was consistent with the trend in net written premiums for Specialty.

~~Index~~

Gross written premiums for Commercial increased ~~$95~~$268 million for the three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020~~2021 period driven by ~~rate and~~ higher new ~~business.~~business and retention. Net written premiums for Commercial increased ~~$27~~$303 million for the three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020~~2021 period. The prior period included a one-time written premium catch-up resulting from the addition of a quota share treaty to CNA’s property reinsurance program. Excluding the impact of the written premium catch-up in the prior period, net written premiums increased $191 million for the three months ended June 30, 2022 as compared with the comparable 2021 period. Prior period written premiums were also unfavorably impacted by the March 2021 cybersecurity attack. The increase in net earned premiums for the three months ended ~~September~~June 30, ~~2021~~2022 was consistent with the trend in net written premiums for Commercial.

Gross written premiums for International increased $43 million for the three months ended June 30, 2022 as compared with the comparable 2021 period. Excluding the effect of foreign currency exchange rates, gross written premiums increased $59 million driven by retention and rate. Net written premiums for International increased $38 million for the three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020~~2021 period. Excluding the effect of foreign currency exchange rates, gross written premiums increased $26 million driven by rate and retention. Net written premiums for International increased $34 million for the three months ended September 30, 2021 as compared with the comparable 2020 period. Excluding the effect of foreign currency exchange rates, net written premiums increased ~~$23~~$52 million for the three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020~~2021 period. The increase in net earned premiums for the three months ended ~~September~~June 30, ~~2021~~2022 was consistent with the trend in net written premiums for International.

~~Total core~~Core income for Property & Casualty Operations decreased ~~$19~~$34 million for the three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020~~2021 period primarily due to ~~higher net catastrophe losses and~~ lower net investment income driven by limited partnership and common stock results, partially offset by improved ~~non-catastrophe current accident year~~ underwriting results.

Total ~~net~~ catastrophe losses were ~~$178~~$37 million for the three months ended ~~September~~June 30, ~~2021~~2022 as compared with ~~$160~~$54 million infor the comparable ~~2020~~2021 period. For the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, Specialty had ~~net~~$1 million of catastrophe losses, Commercial had catastrophe losses of $3$29 million and ~~$7 million, Commercial had net catastrophe losses of $166 million and $146~~$51 million and International had ~~net~~ catastrophe losses of $9$7 million and $7$2 million.

Favorable net prior year loss reserve development of ~~$10~~$37 million and ~~$15~~$11 million was recorded for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021. For the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, Specialty recorded favorable net prior year loss reserve development of ~~$15~~$10 million ~~and $16 million,~~in each period, Commercial recorded ~~unfavorable~~favorable net prior year loss reserve development of ~~$2 million and $1 million and International recorded unfavorable net prior year loss reserve development of $3~~$22 million and no net prior year loss reserve ~~development.~~development and International recorded favorable net prior year loss reserve development of $5 million and $1 million. Further information on net prior year loss reserve development is included in Note 54 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

Specialty’s combined ratio ~~improved 1.3~~increased 0.2 points for the three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020~~2021 period due to a ~~1.3~~0.4 point increase in the expense ratio partially offset by a 0.2 point improvement in the loss ~~ratio driven by improved current accident year underwriting results.~~

Commercial’s combined ratio increased 0.3 points for the three months ended September 30, 2021 as compared with the comparable 2020 period due to a 2.2 point increase in the loss ratio largely offset by a 1.9 improvement in the expense ratio. The increase in the loss ratio was driven by higher net catastrophe losses, which were 18.6 points of the loss ratio for the three months ended September 30, 2021 as compared with 17.0 points of the loss ratio in the comparable 2020 period. The improvement in the expense ratio was primarily due to higher net earned premiums and lower acquisition costs driven by ceded commissions.

International’s combined ratio improved 2.6 points for the three months ended September 30, 2021 as compared with the comparable 2020 period primarily due to a 2.8 point improvement in the expense ratio. The improvement in the expense ratio was driven by higher ~~net earned premiums and~~underwriting expenses partially offset by lower acquisition costs.

~~Nine Months Ended September 30, 2021 Compared to the Comparable 2020 Period~~

Gross written premiums, excluding third party captives, for Specialty increased $243 million for the nine months ended September 30, 2021 as compared with the comparable 2020 period driven by rate and higher new business. Net written premiums for Specialty increased $119 million for the nine months ended September 30, 2021 as compared with the comparable 2020 period. The increase in net earned premiums for the nine months ended September 30, 2021 was consistent with the trend in net written premiums for Specialty.

Gross written premiums for Commercial increased $181 million for the nine months ended September 30, 2021 as compared with the comparable 2020 period driven by rate and higher new business. Net written premiums for Commercial decreased $81 million for the nine months ended September 30, 2021 as compared with the comparable 2020 period driven by the impact of the June 1, 2021 written premium catch-up resulting from the addition of the quota share treaty to the property reinsurance program. Excluding the impact of the June 1, 2021 written premium catch-up, net written premiums increased $31 million for the nine months ended September 30, 2021 as compared with the comparable 2020 period. Net earned premiums for Commercial increased $159 million for the nine months

~~Index~~

ended September 30, 2021 as compared with the comparable 2020 period. The increase in net earned premiums for the nine months ended September 30, 2021 was partially impacted by a reduction in estimated audit premiums related to COVID-19 in 2020 for Commercial.

Gross written premiums for International increased $136 million for the nine months ended September 30, 2021 as compared with the comparable 2020 period. Excluding the effect of foreign currency exchange rates, gross written premiums increased $82 million driven by rate and higher new business. Net written premiums for International increased $103 million for the nine months ended September 30, 2021 as compared with the comparable 2020 period. Excluding the effect of foreign currency exchange rates, net written premiums increased $57 million for the nine months ended September 30, 2021 as compared with the comparable 2020 period. The increase in net earned premiums for the nine months ended September 30, 2021 was consistent with the trend in net written premiums for International.

Total core income increased $349 million for the nine months ended September 30, 2021 as compared with the comparable 2020 period primarily due to improved current accident year underwriting results and higher net investment income driven by limited partnership and common stock returns.

Total net catastrophe losses were $357 million for the nine months ended September 30, 2021 as compared with $536 million in the comparable 2020 period. For the nine months ended September 30, 2021 and 2020, Specialty had net catastrophe losses of $9 million and $120 million, Commercial had net catastrophe losses of $332 million and $354 million and International had net catastrophe losses of $16 million and $62 million.

Favorable net prior year loss reserve development of $36 million and $58 million was recorded for the nine months ended September 30, 2021 and 2020. For the nine months ended September 30, 2021 and 2020, Specialty recorded favorable net prior year loss reserve development of $40 million and $47 million, Commercial recorded unfavorable net prior loss reserve development of $2 million and favorable net prior year loss reserve development of $8 million and International recorded unfavorable net prior year loss reserve development of $2 million and favorable net prior year loss reserve development of $3 million. Further information on net prior year loss reserve development is included in Note 5 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

Specialty’s combined ratio improved 6.7 points for the nine months ended September 30, 2021 as compared with the comparable 2020 period due to a 5.6 point improvement in the loss ratio and a 1.1 point improvement in the expense ratio. The improvement in the loss ratio was primarily ~~due to lower net catastrophe losses and~~driven by improved non-catastrophe current accident year underwriting results. Net catastrophe losses were 0.4 points of the loss ratio for the nine months ended September 30, 2021, as compared with 5.7 points of the loss ratio in the comparable 2020 period. The improvement in the expense ratio was driven by higher net earned premiums.

Commercial’s combined ratio improved ~~2.3~~6.4 points for the ~~nine~~three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020~~2021 period primarily due to a 1.8 point improvement in the expense ratio. The improvement in the expense ratio was primarily due to higher net earned premiums and a favorable acquisition ratio. Net catastrophe losses were 12.6 points of the loss ratio for the nine months ended September 30, 2021 as compared with 14.3 points of the loss ratio for the comparable 2020 period.

~~International’s combined ratio improved 9.4 points for the nine months ended September 30, 2021 as compared with the comparable 2020 period due to a 7.1~~4.0 point improvement in the loss ratio and a 2.3 point improvement in the expense ratio. The improvement in the loss ratio was driven by lower ~~net~~ catastrophe losses which were 3.0 points of the loss ratio for the three months ended June 30, 2022, as compared with 5.8 points of the loss ratio in the comparable 2021 period and favorable net prior year loss reserve development. The combined ratio excluding catastrophes and development improved 1.0 point for the three months ended June 30, 2022 as compared with the comparable 2021 period. The improvement in the expense ratio of 2.3 points was driven by lower acquisition costs and higher net earned premium partially offset by an increase in underwriting expenses. The loss ratio excluding catastrophes and development increased 1.4 points primarily driven by a shift in mix of business associated with the property quota share treaty purchased during June of 2021. Property coverages, which have a lower underlying loss ratio than most other commercial coverages, now represent a smaller proportion of net earned premiums.


			44

Table of c o ntents

International’s combined ratio improved 1.4 points for the three months ended June 30, 2022 as compared with the comparable 2021 period due to a 1.4 point improvement in the expense ratio driven by lower acquisition costs. The loss ratio for the three months ended June 30, 2022 was consistent with the comparable 2021 period as favorable net prior year loss reserve development and improved non-catastrophe current accident year underwriting results were offset by higher catastrophe losses. Catastrophe losses were 2.8 points of the loss ratio for the three months ended June 30, 2022, as compared with 0.8 points of the loss ratio in the comparable 2021 period.

Six Months Ended June 30, 2022 Compared to the Comparable 2021 Period

Gross written premiums, excluding third-party captives, for Specialty increased $145 million for the six months ended June 30, 2022 as compared with the comparable 2021 period driven by rate and higher new business. Net written premiums for Specialty increased $75 million for the six months ended June 30, 2022 as compared with the comparable 2021 period. The increase in net earned premiums for the six months ended June 30, 2022 was consistent with the trend in net written premiums for Specialty.

Gross written premiums for Commercial increased $363 million for the six months ended June 30, 2022 as compared with the comparable 2021 period driven by higher new business and retention. Net written premiums for Commercial increased $344 million for the six months ended June 30, 2022 as compared with the comparable 2021 period. The prior period included a one-time written premium catch-up resulting from the addition of a quota share treaty to CNA’s property reinsurance program. Excluding the impact of the prior period written premium catch-up, net written premiums increased $232 million for the six months ended June 30, 2022 as compared with the comparable 2021 period. The increase in net earned premiums for the six months ended June 30, 2022 was consistent with the trend in net written premiums for Commercial.

Gross written premiums for International increased $63 million for the six months ended June 30, 2022 as compared with the comparable 2021 period. Excluding the effect of foreign currency exchange rates, gross written premiums increased $90 million driven by retention and rate. Net written premiums for International increased $54 million for the six months ended June 30, 2022 as compared with the comparable 2021 period. Excluding the effect of foreign currency exchange rates, net written premiums increased $78 million for the six months ended June 30, 2022 as compared with the comparable 2021 period. The increase in net earned premiums for the six months ended June 30, 2022 was consistent with the trend in net written premiums for International.

Core income for Property & Casualty Operations increased $24 million for the six months ended June 30, 2022 as compared with the comparable 2021 period primarily due to improved underwriting results largely offset by lower net investment income driven by limited partnership and common stock results.

Total catastrophe losses were $57 million for the six months ended June 30, 2022 as compared with $179 million for the comparable 2021 period. For the six months ended June 30, 2022 and 2021, Specialty had catastrophe losses of $1 million and $6 million, Commercial had catastrophe losses of $45 million and $166 million and International had catastrophe losses of $11 million and $7 million.

Favorable net prior year loss reserve development of $49 million and $26 million was recorded for the six months ended June 30, 2022 and 2021. For the six months ended June 30, 2022 and 2021, Specialty recorded favorable net prior year loss reserve development of $20 million and $25 million, Commercial recorded favorable net prior year loss reserve development of $24 million and no net prior year loss reserve development and International recorded favorable net prior year loss reserve development of $5 million and $1 million. Further information on net prior year loss reserve development is included in Note 4 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

Specialty’s combined ratio increased 0.1 point for the six months ended June 30, 2022 as compared with the comparable 2021 period due to a 0.5 point increase in the expense ratio largely offset by a 0.4 point improvement in the loss ratio. The increase in the expense ratio was driven by higher underwriting expenses partially offset by higher net earned premiums. The improvement in the loss ratio was primarily driven by improved current accident year underwriting results. Catastrophe losses were 0.1 point of the loss ratio for the six months ended June 30, 2022, as compared with 0.3 points of the loss ratio in the comparable 2021 period.

Commercial’s combined ratio improved 9.3 points for the six months ended June 30, 2022 as compared with the comparable 2021 period primarily due to a 7.7 point improvement in the loss ratio and a 1.5 point improvement in the expense ratio. The improvement in the loss ratio was driven by lower catastrophe losses which were 2.4 points of the loss ratio for the six months ended June 30, 2022, as compared with 9.6 points of the loss ratio in the comparable 2021 period, and favorable net prior year loss reserve development. The combined ratio excluding catastrophes and development improved 0.5 points for the six months ended June 30, 2022 as compared with the comparable 2021 period. The


			45

Table of c o ntents

improvement in the expense ratio was driven by lower acquisition costs and higher net earned premiums partially offset by an increase in underwriting expenses. The loss ratio excluding catastrophes and development increased 1.1 points primarily driven by a shift in mix of business associated with the property quota share treaty purchased during June of 2021. Property coverages, which have a lower underlying loss ratio than most other commercial coverages, now represent a smaller proportion of net earned premiums.

International’s combined ratio improved 2.4 points for the six months ended June 30, 2022 as compared with the comparable 2021 period due to a 1.5 point improvement in the expense ratio and a 0.9 point improvement in the loss ratio. The improvement in the expense ratio was driven by lower acquisition costs. The improvement in the loss ratio was driven by favorable net prior year loss reserve development and improved non-catastrophe current accident year underwriting results, partially offset by higher net catastrophe losses. Catastrophe losses were 2.0 points of the loss ratio for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022, as compared with ~~8.9~~1.4 points of the loss ratio in the comparable ~~2020 period, and improved non-catastrophe current accident year underwriting results. The improvement in the expense ratio was driven by a favorable acquisition ratio and higher net earned premiums.~~2021 period.

~~Index~~

Other Insurance Operations

The following table summarizes the results of CNA’s Other Insurance Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~2021.


												Three Months Ended				Six Months Ended
	Three Months Ended September 30,					Nine Months Ended September 30,						June 30,
	2021		2020			2021		2020				2022		2021		2022		2021
(In millions)											(In millions)

Net earned premiums	$	123	$	127		$	369	$	380		Net earned premiums	$	118	$	126	$	238	$	246
Net investment income		242		225			736		667		Net investment income	205		269		418		494
Core income (loss)		20		(43	)		10		(82	)
Core loss											Core loss	(72)		(10)		(77)		(10)

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared to the Comparable ~~2020~~2021 Period

Core results ~~improved $63~~for Other Insurance Operations decreased $62 million for the three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020 period. Results~~2021 period primarily due to lower net investment income and a $51 million charge for the three months ended ~~September~~June 30, 2021 included no unlocking event for active life reserves as a result of the gross premium valuation (“GPV”). Core results for the three months ended September 30, 2021 included a $31 million favorable impact from the reduction in long term care claim reserves resulting from the annual claim reserve reviews in the third quarter of 2021. Core results for the three months ended September 30, 2020 included a $59 million charge2022 related to the recognition of an active life reserve premium deficiency for long term care policies. The results for the three months ended September 30, 2020 also included a $36 million charge related to the increase in structured settlement claim reserves partially offset by a $30 million favorable impact from the reduction in long term care claim reserves, both resulting from the annual claim reserve reviews in the third quarter of 2020.

~~Nine Months Ended September 30, 2021 Compared to the Comparable 2020 Period~~

Core results improved $92 million for the nine months ended September 30, 2021 as compared with the comparable 2020 period. The drivers of the improved results were generally consistent with the three month discussion above. In addition, core results for the nine months ended September 30, 2021 included lower unfavorable net prior year loss reserve development ~~related to~~largely associated with legacy mass tort ~~exposures~~abuse claims as compared with a $32 million charge in the comparable 2021 period. Net prior year loss reserve development is further discussed in Note 4 of the Notes to Consolidated Condensed Financial Statements included under Item 1.

Six Months Ended June 30, 2022 Compared to the Comparable 2021 Period

Core results for Other Insurance Operations decreased $67 million for the six months ended June 30, 2022 as compared with the comparable ~~2020 period. Core~~2021 period primarily due to lower net investment income and higher net prior year loss reserve development associated with legacy mass tort abuse claims. These results ~~for~~were partially offset by the ~~nine months ended September 30, 2021 also reflect expenses related to the March 2021 cybersecurity attack, the~~prior period recognition of a $12 million loss resulting from the legacy excess workers’ compensation loss portfolio transfer (“EWC LPT”) and lower amortization of the deferred gain related to the A&EP Loss Portfolio Transfer (“LPT”) as compared with the comparable 2020 period. For further information on the A&EP LPT, EWC LPT and net. Net prior year loss reserve development ~~see~~is further discussed in Note 54 of the Notes to Consolidated Condensed Financial Statements included under Item ~~1 of this Report.~~1.

~~Life & Group Policyholder Reserves~~

Annually, in the third quarter, CNA assesses the adequacy of its long term care future policy benefit reserves by performing a GPV to determine if there is a premium deficiency. See the Insurance Reserves section of our MD&A included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2020 for further information on the reserving process.


			46

~~Index~~Table of c o ntents

The September 30, 2021 GPV indicated that the recorded reserves included a margin of approximately $72 million. A summary of the changes in the estimated reserve margin is presented in the table below:

(In millions)

Long term care active life reserve - change in estimated reserve margin

September 30, 2020 estimated margin $ -

Changes in underlying discount rate assumptions (a) 65
Changes in underlying morbidity assumptions 205
Changes in underlying persistency assumptions (233 )
Changes in underlying premium rate action assumptions 27
Changes in underlying expense and other assumptions 8

September 30, 2021 Estimated Margin $ 72

~~(a)~~

~~Including cost of care inflation assumption.~~

The increase in the margin in 2021 was primarily driven by changes in discount rate assumptions due to higher near term expected reinvestment rates and favorable changes to underlying morbidity assumptions. These favorable drivers were partially offset by unfavorable changes to underlying persistency assumptions.

~~CNA has determined that additional future policy benefit reserves for profits followed by losses are not currently required based on the most recent projections.~~

The table below summarizes the estimated pretax impact on CNA’s results of operations from various hypothetical revisions to its active life reserve assumptions. The annual GPV process involves updating all assumptions to management’s then current best estimate, and historically all significant assumptions have been revised each year. In the table below, CNA has assumed that revisions to such assumptions would occur in each policy type, age and duration within each policy group and would occur absent any changes, mitigating or otherwise, in the other assumptions. Although such hypothetical revisions are not currently required or anticipated, CNA believes they could occur based on past variances in experience and its expectations of the ranges of future experience that could reasonably occur. Any required increase in the recorded reserves resulting from a hypothetical revision in the table below would first reduce the margin in the carried reserves before it would affect results from operations. Any actual adjustment would be dependent on the specific policies affected and, therefore, may differ from the estimates summarized below. The estimated impacts to results of operations in the table below are after consideration of the existing margin.

September 30, 2021
Estimated Reduction
to Pretax Income

(In millions)

Hypothetical revisions
Morbidity:
2.5% increase in morbidity $ 300
5% increase in morbidity 600
Persistency:
5% decrease in active life mortality and lapse $ 100
10% decrease in active life mortality and lapse 300
Discount rates:
25 basis point decline in new money interest rates $ 100
50 basis point decline in new money interest rates 200
Premium rate actions:
25% decrease in anticipated future premium rate increases $ -
50% decrease in anticipated future premium rate increases -

~~Index~~

Non-GAAP Reconciliation of Core Income ~~(Loss)~~ to Net Income

The following table reconciles core income ~~(loss)~~ to net income attributable to Loews Corporation for ~~the~~the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~2021:


														Three Months Ended				Six Months Ended
	Three Months Ended September 30,						Nine Months Ended September 30,							June 30,
	2021			2020			2021			2020				2022		2021		2022		2021
(In millions)													(In millions)

Core income (loss):													Core income (loss):
Property & Casualty Operations	$	217		$	236		$	831		$	482		Property & Casualty Operations	$	317	$	351	$	638	$	614
Other Insurance Operations		20			(43	)		10			(82	)	Other Insurance Operations	(72)		(10)		(77)		(10)
Total core income		237			193			841			400		Total core income	245		341		561		604
Investment gains (losses)		18			36			94			(81	)	Investment gains (losses)	(40)		27		(43)		76
Consolidating adjustments including noncontrolling interests		(26	)		(37	)		(97	)		(47	)	Consolidating adjustments including noncontrolling interests	(22)		(38)		(54)		(71)
Net income attributable to Loews Corporation	$	229		$	192		$	838		$	272		Net income attributable to Loews Corporation	$	183	$	330	$	464	$	609

Boardwalk Pipelines

A significant portion of Boardwalk Pipelines’ revenues ~~are~~is fee-based, being derived from capacity reservation charges under firm agreements with customers, which do not vary significantly period to period, but are impacted by longer term trends in its business such as ~~lower~~changes in pricing on contract renewals and other factors. Boardwalk Pipelines’ operating costs and expenses do not vary significantly based upon the amount of products transported, with the exception of costs recorded in fuel and transportation expense, which are netted with fuel retained on our Consolidated Condensed Statements of Operations. For further information on Boardwalk Pipelines’ revenue recognition policies see Note 1 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

The following table summarizes the results of operations for Boardwalk Pipelines for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021, as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this ~~Report:~~Report.Boardwalk Pipelines also utilizes earnings before interest, income tax expense, depreciation and amortization (“EBITDA”), a non-GAAP measure, as a financial measure to assess its operating and financial performance and return on invested capital. Management believes some investors may find this measure useful in evaluating Boardwalk Pipelines’ performance.

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021 2020 2021 2020
(In millions)

Revenues:
Operating revenues and other $ 307 $ 289 $ 991 $ 926
Total 307
289
991
926

Expenses:
Operating and other 215
219
641
633

Interest 40
44
121
127

Total 255
263
762
760

Income before income tax 52
26
229
166

Income tax expense (14 )
(6
)
(59 )
(43
)
Net income attributable to Loews Corporation $ 38 $ 20 $ 170 $ 123


			47

Table of c o ntents


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions)

Revenues:
Operating revenues and other	$	325	$	312	$	706	$	684
Total	325		312		706		684
Expenses:
Operating and other:
Operating costs and expenses	132		116		254		241
Depreciation and amortization	99		93		194		185
Interest	42		40		84		81
Total	273		249		532		507
Income before income tax	52		63		174		177
Income tax expense	(13)		(16)		(44)		(45)
Net income attributable to Loews Corporation	$	39	$	47	$	130	$	132

EBITDA	$	193	$	196	$	452	$	443

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared to the Comparable ~~2020~~2021 Period

~~Total revenues increased $18~~Net income attributable to Loews Corporation decreased $8 million for the three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020~~2021 period. ~~Including fuel and transportation expense, revenues increased $21 million, primarily driven by revenues from recently completed growth projects and higher utilization-based revenues.~~

~~Operating and other expenses~~EBITDA decreased $4$3 million for the three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020~~2021 period. ~~Excluding fuel and transportation expense, which was offset with operating revenues, operating and other expenses were essentially flat.~~

~~Index~~

~~Interest expenses decreased $4~~Total revenues increased $13 million for the three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020 period,~~ 2021 period. Including the items in fuel and transportation expense, operating revenues increased $9 million, primarily driven by an increase in storage and parking and lending revenues of $5 million due to ~~lower average interest rates~~favorable market conditions and ~~lower average outstanding long term debt balances.~~an increase in transportation revenues of $4 million due to recently completed growth projects.

~~Nine Months Ended September 30, 2021 Compared to the Comparable 2020 Period~~

~~Total revenues~~Operating costs and expenses increased ~~$65~~$16 million for the ~~nine~~three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020 period, primarily driven by recently completed growth projects~~2021 period. Excluding items offset with operating revenues, operating costs and ~~higher system utilization from colder winter weather experienced during the first quarter of 2021.~~

~~Operating and other~~ expenses increased $8$12 million, primarily due to increased costs from maintenance projects associated with the requirements of the Pipeline and Hazardous Materials Safety Administration Mega Rule (“PHMSA Mega Rule”).

Depreciation and amortization expenses increased $6 million for the ~~nine~~three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020~~2021 period ~~primarily~~ due to an increased asset base from recently completed growth ~~projects.~~projects and a change in the estimated life of certain assets.

Interest ~~expense decreased $6~~expenses increased $2 million for the ~~nine~~three months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020~~2021 period, primarily due to ~~lower average interest rates and lower~~higher average outstanding ~~long term debt balances.~~long-term debt.

Six Months Ended June 30, 2022 Compared to the Comparable 2021 Period

Net income attributable to Loews Corporation decreased $2 million for the six months ended June 30, 2022 as compared with the comparable 2021 period. EBITDA increased $9 million for the six months ended June 30, 2022 as compared with the comparable 2021 period.

Total revenues increased $22 million for the six months ended June 30, 2022 as compared with the comparable 2021 period, primarily driven by an increase in transportation revenues of $16 million due to recently completed growth projects and an increase in storage and parking and lending revenues of $6 million due to favorable market conditions.

Operating costs and expenses increased $13 million for the six months ended June 30, 2022 as compared with the comparable 2021 period primarily due to increased costs from maintenance projects associated with the requirements of the PHMSA Mega Rule.


			48

Table of c o ntents

Depreciation and amortization expenses increased $9 million for the six months ended June 30, 2022 as compared with the comparable 2021 period due to an increased asset base from recently completed growth projects and a change in the estimated life of certain assets.

Interest expense increased $3 million for the six months ended June 30, 2022 as compared with the comparable 2021 period primarily due to higher average outstanding long-term debt.

Non-GAAP Reconciliation of Net Income attributable to Loews Corporation to EBITDA

The following table for Boardwalk Pipelines presents a reconciliation of net income attributable to Loews Corporation to EBITDA for the three and six months ended June 30, 2022 and 2021:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions)


Net income attributable to Loews Corporation	$	39	$	47	$	130	$	132
Income tax expense	13		16		44		45
Depreciation and amortization	99		93		194		185
Interest	42		40		84		81
EBITDA	$	193	$	196	$	452	$	443


			49

Table of c o ntents

Loews Hotels & Co

The following table summarizes the results of operations for Loews Hotels & Co for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021, as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this ~~Report:~~Report.


														Three Months Ended				Six Months Ended
	Three Months Ended September 30,						Nine Months Ended September 30,							June 30,
	2021			2020			2021			2020				2022		2021		2022		2021
(In millions)													(In millions)

Revenues:													Revenues:
Operating revenue	$	107		$	22		$	222		$	140		Operating revenue	$	168	$	76	$	291	$	115
Gain on sale of assets					24						37

Revenues related to reimbursable expenses		27			14			67			59		Revenues related to reimbursable expenses	32		22		61		40
Total		134			60			289			236		Total	200		98		352		155
Expenses:													Expenses:
Operating and other:													Operating and other:
Operating		93			53			231			219		Operating	123		80		231		138
Asset impairments					10						30
Asset impairment													Asset impairment	14				14
Reimbursable expenses		27			14			67			59		Reimbursable expenses	32		22		61		40
Depreciation		15			15			47			45
Depreciation and amortization expense													Depreciation and amortization expense	16		16		31		32
Equity (income) loss from joint ventures		(26	)		22			(17	)		51		Equity (income) loss from joint ventures	(53)		(3)		(79)		9
Interest		8			8			25			24		Interest	4		9		8		17
Total		117			122			353			428		Total	136		124		266		236
Income (loss) before income tax		17			(62	)		(64	)		(192	)	Income (loss) before income tax	64		(26)		86		(81)
Income tax (expense) benefit		(4	)		15			13			48		Income tax (expense) benefit	(20)		5		(27)		17
Net income (loss) attributable to Loews Corporation	$	13		$	(47	)	$	(51	)	$	(144	)	Net income (loss) attributable to Loews Corporation	$	44	$	(21)	$	59	$	(64)

Net income (loss) attributable to Loews Corporation improved by $65 million and $123 million for the three and six months ended June 30, 2022 as compared to the comparable prior year periods.

Loews Hotels & Co’s results ~~have been~~ significantly ~~impacted by~~improved for the three and six months ended June 30, 2022 as compared with the comparable 2021 periods as overall travel demand and resulting business levels were considerably higher in 2022. Travel, particularly to resort destinations, has significantly rebounded from the impacts of the COVID-19 ~~pandemic. By April 2020, most hotel properties owned and/or operated~~pandemic causing overall occupancy rates to improve.

Operating revenues improved by ~~Loews Hotels & Co had temporarily suspended operations. These hotel properties gradually resumed operations at various times, culminating with all hotels having resumed operations~~$92 million and $176 million and operating expenses increased by $43 million and $93 million for the three and six months ended June 30, ~~2021. During~~2022 as compared with the comparable 2021 occupancy rates have gradually improved as social distancing restrictions were scaled back and vaccinations helped reduce infection rates, with hotel properties located in resort destinations improving sooner than hotel properties located in city centers. However, occupancy levels have not reached pre-pandemic levels at many hotels owned and/or operated by Loews Hotels & Co.

~~Index~~

periods. The increase in operating revenues ~~of $85 million~~was driven by stronger occupancy levels and ~~the increase~~higher average daily rates at many hotels in ~~operating expenses of $40 million for the three months ended September 30, 2021~~2022 as compared ~~with the comparable 2020 period, when operations were significantly impacted by the pandemic, was due~~ to ~~improved performance. For the nine months ended September 30, 2021 operating revenues improved by $82 million and operating~~2021. Operating expenses increased $12 million as compared with the comparable 2020 period. The nine-month comparison is impacted by pre-pandemic business levels prior to mid-March 2020 followed by results that were significantly impacted by the pandemic for the remainder of 2020. Through 2021, occupancy levels have ~~gradually~~likewise increased ~~leading to improved revenues at most hotel properties, with operating expenses also increasing~~ to support the ~~increased~~higher demand ~~levels. As all properties have not resumed all~~ levels and resumption of additional pre-pandemic ~~service offerings, hotel operating expenses, including staffing levels, will increase as those return.~~services.

Equity (income) loss from joint ventures improved ~~$48~~$50 million and ~~$68~~$88 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020 periods driven by the resumption of operations and associated occupancy~~2021 periods. This improvement ~~at all joint venture hotels. The three months ended September 30, 2021~~ was the ~~first quarter during which~~result of having all 9,000 rooms ~~that are part of~~available at the Universal Orlando Resort ~~joint ventures were open for~~in the ~~full quarter. In addition, pre-opening costs included in equity (income) loss from joint ventures decreased $1 million~~first half of 2022 along with greater occupancy levels and ~~$8 million for~~higher average daily rates, particularly at the ~~three and nine months ended September 30, 2021 as compared with~~Universal Orlando Resort.

During the ~~comparable 2020 periods.~~

~~Loews Hotels & Co considers events or changes in circumstances that indicate the carrying amount~~second quarter of ~~its assets may not be recoverable. For the three and nine months ended September 30, 2020,~~2022, Loews Hotels & Co recorded an impairment ~~charges~~charge of ~~$10 million and $30~~$14 million to reduce the carrying value of ~~certain assets~~an asset to ~~their~~its estimated fair value.

~~Loews Hotels & Co recorded gains on the sale of assets of $24~~Interest expense decreased $5 million and ~~$37~~$9 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020 related~~2022 as compared with the comparable 2021 periods due primarily to ~~sales~~the increase in fair value of an ~~office building~~interest rate cap that was executed in the ~~third~~first quarter of 2022, higher capitalized interest on a project under development, and ~~an owned hotel in the second quarter.~~lower average debt balances.


			50

Table of c o ntents

Corporate

Corporate operations consist primarily of investment income, interest expense and administrative costs at the Parent Company. Investment income includes earnings on cash and short term investments held at the Parent Company to meet current and future liquidity needs, as well as results of ~~limited partnership investments and~~ the trading portfolio held at the Parent Company. Corporate also includes the ~~operating results~~consolidated operations of Altium Packaging through March 31, 2021 and the ~~loss related to the Parent Company’s~~ equity method ~~investment in~~of accounting for Altium Packaging ~~beginning~~subsequent to its deconsolidation on April 1, 2021, as a result of the sale of 47% of the Parent Company’s interest in Altium Packaging and the resulting deconsolidation. See Note 2 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report for further information.2021.

The following table summarizes the results of operations for Corporate for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021 2020 2021 2020
(In millions)

Revenues:
Net investment income (loss) $ (30 ) $ 23 $ 40 $ (33 )
Investment gains (losses) 540
(1,211
)
Operating revenues and other 1
253
282
754

Total (29 )
276
862
(490
)
Expenses:
Operating and other 27
275
365
810

Interest 23
33
93
96

Total 50
308
458
906

Income (loss) before income tax (79 )
(32
)
404
(1,396
)
Income tax (expense) benefit 19
6
(126 )
293

Net income (loss) attributable to Loews Corporation $ (60 ) $ (26 ) $ 278
$
(1,103
)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions)

Revenues:
Net investment income (loss)	$	(65)	$	24	$	(81)	$	70
Investment gains			540				540
Operating revenues and other	2				2		281
Total	(63)		564		(79)		891
Expenses:
Operating and other	23		30		45		338
Interest	22		22		44		70
Total	45		52		89		408
Income (loss) before income tax	(108)		512		(168)		483
Income tax (expense) benefit	22		(114)		33		(145)
Net income (loss) attributable to Loews Corporation	$	(86)	$	398	$	(135)	$	338

~~Index~~

Net investment ~~loss~~losses for the Parent Company ~~was $30~~were $65 million and $81 million for the three and six months ended ~~September~~June 30, ~~2021~~2022 as compared with ~~net investment~~ income of ~~$23~~$24 million and $70 million for the comparable ~~2020 period,~~2021 periods, primarily due to ~~lower results from~~the decline in fair value of equity based investments in the Parent Company trading portfolio. Net investment income for the Parent Company for the nine months ended September 30, 2021 was $40 million as compared with a net investment loss of $33 million for the comparable 2020 period, primarily due to improved results from equity based investments in the Parent Company trading portfolio.investments.

Investment gains of $540 million for the ~~nine~~three and six months ended ~~September~~June 30, 2021 were primarily due to a gain of $555 million ($438 million after tax) on the sale of 47% of Altium ~~Packaging. Investment loss of $1.2 billion ($957 million after tax) for the nine months ended September 30, 2020 was due to the loss recognized upon~~Packaging and deconsolidation ~~of Diamond Offshore as a result of its Chapter 11 Filing.~~on April 1, 2021.

Operating revenues and other for the six months ended June 30, 2021 include $280 million of consolidated operating revenues for Altium Packaging ~~revenues of $280 million for 2021, prior to its deconsolidation on April 1, 2021, and $253 million and $753 million for the three and nine months ended September 30, 2020.~~through March 31, 2021.

Operating and other expenses decreased ~~by $248 million and $445~~$7 million for the three ~~and nine~~ months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020 periods~~2021 period, primarily due to the deconsolidation of Altium Packaging as the three and nine months ended September 30, 2020 included $247 million and $729 million of Operating and other expenses for Altium Packaging. Operating and other expenses also include legal and otherlower corporate overhead expenses at the Parent Company. ~~In addition, pursuant to the deconsolidation of Altium Packaging, the related loss related to the Parent Company’s investment in Altium Packaging is included in~~ Operating and other ~~expenses.~~

~~Interest~~ expenses decreased ~~$10~~$293 million for the ~~three~~six months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020~~2021 period, primarily due to ~~the deconsolidation~~$279 million of operating expenses for Altium Packaging asthrough March 31, 2021 prior to its deconsolidation and use of the ~~three~~equity method for Altium Packaging since its deconsolidation. In addition, there were lower corporate overhead and legal expenses at the Parent Company for the six months ended ~~September~~June 30, ~~2020 included $12 million of interest expense for Altium packaging. Interest expenses decreased $3 million for the nine months ended September 30, 2021~~2022 as compared with the comparable ~~2020~~2021 period ~~primarily~~ .

Interest expenses decreased $26 million for the six months ended June 30, 2022 as compared with the comparable 2021 period due to ~~the deconsolidation of~~consolidated interest expenses for Altium Packaging ~~as of April 1,~~through March 31, 2021, ~~partially offset by the May 2020 issuance of the Parent Company’s $500 million 3.2% senior notes and~~which included a charge of approximately $14 million to write off debt issuance costs for the early retirement of ~~debt at Altium Packaging in the first quarter of 2021.~~debt.

Income tax expense ~~was $126~~of $114 million and $145 million for the ~~nine~~three and six months ended ~~September~~June 30, 2021 ~~as compared with an income tax benefit of $293 million for the comparable 2020 period. The income tax expense for the nine months ended September 30, 2021 is primarily due to~~ includes the recognition of $117 million of taxes on the investment gain related to the sale of 47% of Altium ~~Packaging and~~Packaging. The income tax


			51

Table of c o ntents

expense for the six months ended June 30, 2021 also ~~includes~~included the recognition of a $40 million deferred tax liability resulting from the asset held for sale designation of Altium Packaging in the first quarter of 2021. The income tax benefit for the nine months ended September 30, 2020 is primarily due to the recognition of taxes on the investment loss related to the ~~deconsolidation~~sale of ~~Diamond Offshore.~~

~~Diamond Offshore~~

Amounts presented for Diamond Offshore for the nine months ended September 30, 2020 reflect the periods prior to its deconsolidation in the second quarter of 2020. Contract drilling revenues and contract drilling expenses were $287 million and $254 million for the nine months ended September 30, 2020. Operating and other expenses for the nine months ended September 30, 2020 included an aggregate asset impairment charge of $774 million ($408 million after tax and noncontrolling interests) recognized in the first quarter of 2020. ~~For more information on the deconsolidation of Diamond Offshore see Note 2 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.~~Altium Packaging.

LIQUIDITY AND CAPITAL RESOURCES

Parent Company

Parent Company cash and investments, net of receivables and payables, totaled ~~$3.6~~$3.5 billion at ~~September~~June 30, ~~2021~~2022 as compared to ~~$3.5~~$3.4 billion at December 31, ~~2020.~~2021. During the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~ 2022, we received ~~$460~~$681 million in cash dividends from CNA, including a special cash dividend of ~~$182~~$486 million. ~~We also received a $199 million dividend from Altium Packaging in February of 2021.~~ Cash outflows during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~ 2022 included the payment of ~~$825~~$380 million to fund treasury stock purchases, ~~$49~~$31 million of cash dividends to our shareholders and ~~$32~~$33 million of cash contributions to Loews Hotels & Co. ~~On April 1, 2021, Loews Corporation sold its 47% interest in Altium Packaging to GIC and received $420 million in cash consideration.~~ As a holding company we depend on dividends from our subsidiaries and returns on our investment portfolio to fund our obligations. We

~~Index~~

also have an effective ~~Registration Statement~~shelf registration statement on file with the Securities and Exchange Commission (“SEC”) registering the future sale of an ~~unlimited~~unspecified amount of our debt, ~~and~~ equity or hybrid securities from time to time. We are not responsible for the liabilities and obligations of our subsidiaries and there are no Parent Company guarantees.

Depending on market and other conditions, we may purchase our shares and shares of our ~~subsidiaries’~~subsidiaries outstanding common stock in the open market, in privately negotiated transactions or otherwise. During the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, we purchased ~~15.7~~6.3 million shares of Loews Corporation common stock. As of ~~October~~July 29, ~~2021,~~2022, we had purchased an additional ~~0.1~~1.3 million shares of Loews Corporation common stock in ~~2021~~2022 at an additional aggregate cost of $5$75 million. As of ~~October~~July 29, ~~2021,~~2022, there were ~~253,684,412~~240,947,343 shares of Loews Corporation common stock outstanding.

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

Subsidiaries

CNA’s cash provided by operating activities was ~~$1,354 million~~$1.3 billion for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~$1,408~~$685 million for the comparable ~~2020~~2021 period. The ~~decrease~~increase in cash provided by operating activities was driven by the prior year payment of the EWC LPT premium, increased ceded premiums paid and higher taxes paid, partially offset by an increase in gross premiums collected, lower claim payments and a higher level of distributions from limited partnerships. For further information on the EWC LPT see Note 5 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.premium.

CNA paid cash dividends of ~~$1.89~~$2.80 per share on its common stock, including a special cash dividend of ~~$0.75~~$2.00 per share, during the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. On ~~October~~July 29, ~~2021,~~2022, CNA’s Board of Directors declared a quarterly cash dividend of ~~$0.38~~$0.40 per share payable ~~December 2, 2021~~September 1, 2022 to shareholders of record on ~~November~~August 15, ~~2021.~~2022. CNA’s declaration and payment of future dividends is at the discretion of its Board of Directors and will depend on many factors, including CNA’s earnings, financial condition, business needs and regulatory constraints. CNA believes that its present cash flows from operating, investing and financing activities are sufficient to fund its current and expected working capital and debt obligation needs and does not expect this to change in the near term.

Dividends to CNA from Continental Casualty Company (“CCC”), a subsidiary of CNA, are subject to the insurance holding company laws of the State of Illinois, the domiciliary state of CCC. Under these laws, ordinary dividends, or dividends that do not require prior approval by the Illinois Department of Insurance (the “Department”), are determined based on the greater of the prior year’s statutory net income or 10% of statutory surplus as of the end of the prior year, as well as the timing and amount of dividends paid in the preceding 12 months. Additionally, ordinary dividends may only be paid from earned surplus, which is calculated by removing unrealized gains from unassigned surplus. As of ~~September~~June 30, ~~2021,~~2022, CCC was in a positive earned surplus position. CCC paid dividends of ~~$600~~$690 million and ~~$855~~$480 million during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021. The actual level of dividends paid in any year is determined after an assessment of available dividend capacity, holding company liquidity and cash needs as well as the impact the dividends will have on the statutory surplus of the applicable insurance company.

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

Boardwalk Pipelines’ cash provided by operating activities increased ~~$26~~$35 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021 as~~2022 compared to the comparable ~~2020~~2021 period, primarily due to the ~~change in net income.~~timing of receivables and prepaids.

For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, Boardwalk Pipelines’ capital expenditures were ~~$239~~$122 million and ~~$351~~$138 million, consisting ~~primarily of a combination~~ of growth capital expenditures of $76 million and $86 million and maintenance ~~capital.~~capital

~~In May 2021, Boardwalk Pipelines entered into an amended revolving credit agreement to decrease~~


			52

Table of c o ntents

expenditures of $39 million and $52 million. During the borrowing capacity from $1.5 billion to $1.0 billion and extend the maturity date to May 27, 2026, although the maturity date may be further extended for two one-year extensions at Boardwalk Pipelines’ election. As of Septembersix months ended June 30, ~~2021, Boardwalk Pipelines had no outstanding borrowings under its revolving credit facility. In the second quarter of~~ 2022, Boardwalk Pipelines ~~expects~~also spent $7 million on natural gas to be used in its integrated natural gas pipeline system.

Boardwalk Pipelines anticipates that its existing capital resources, including its cash on hand, revolving credit facility and cash flows from operating activities, will be adequate to fund its operations and capital expenditures for 2022 and to retire the outstanding $300 million ~~outstanding~~ aggregate principal amount of its ~~4.0%~~3.4% senior notes ~~at maturity through available capital resources, including, but not limited to, using available cash, borrowing under its revolving credit facility or publicly issuing debt securities.~~due in February of 2023. Boardwalk Pipelines also has an effective shelf registration statement on file with the SEC under which it may publicly issue $1.0 billion of debt securities, warrants or rights from time to time.

52In February of 2022, Boardwalk Pipelines completed a public offering of $500 million aggregate principal amount of its 3.6% senior notes due September 1, 2032, which utilized $500 million of capacity under its shelf registration statement. Boardwalk Pipelines used the proceeds to retire the outstanding $300 million aggregate principal amount of its 4.0% senior notes due June 2022 in March of 2022, to fund growth capital expenditures and for general corporate purposes.

~~Index~~In June of 2022, Boardwalk Pipelines’ revolving credit facility was amended to, among other things, extend the maturity date by one year to May 27, 2027, while preserving the two one-year extensions that can be exercised at Boardwalk Pipelines’ election and complete a full transition to interest rates based on the term Secured Overnight Financing Rate (“SOFR”).

~~Certain~~As of June 30, 2022, Boardwalk Pipelines had no outstanding borrowings and all of the ~~hotels wholly or partially owned by subsidiaries~~$1.0 billion available borrowing capacity under its revolving credit facility.

As of June 30, 2022, Loews Hotels & Co, are financed by debt facilities, with a number of different lenders. Each of the loan agreements underlying these facilities contain a variety of financial and operational covenants. As a result of the impacts of COVID-19, Loews Hotels & Cothrough its subsidiaries, has proactively requested certain lenders, where applicable, to (1) temporarily waive certain covenants to avoid an event of default and/or further restriction of the hotel’s cash balances through the establishment of lockboxes and other measures; (2) temporarily allow funds previously restricted directly or indirectly under the hotel’s underlying loan agreement for the renewal, replacement and addition of building improvements, furniture and fixtures to be used instead for hotel operations and maintenance; and/or (3) defer certain interest and/or principal payments while the hotels operations were temporarily suspended or significantly impacted by a decline in occupancy. Loews Hotels & Co also continues to work with lenders on loans that are being reviewed for extension. These discussions with lenders are ongoing and may require Loews Hotels & Co to make principal paydowns, establish restricted cash reserves or provide guaranties of a subsidiary’s debt to otherwise avoid an event of default. Through the date of this Report, none of Loews Hotels & Co’s subsidiaries is in default on any of its loans.

~~As of September 30, 2021, Loews Hotels & Co has three subsidiaries with mortgage~~ loans that mature within twelve months and is actively working with lenders to refinance ~~$190~~$13 million in current maturities of ~~long-term~~long term debt.

~~In October 2021~~ Extending these loans, along with certain loans of unconsolidated joint venture partnerships, may require Loews Hotels & Co ~~announced~~to make principal pay downs, establish restricted cash reserves or provide guaranties of a subsidiary’s debt. Through the ~~development~~date of the Loews Arlington Hotel and Convention Center in Arlington, Texas. The hotel, for which Loews Hotels & Co will serve as manager and hold a majority equity interest, is expected to open in early 2024 with approximately 888 guestrooms and over 250,000 square feet of function space. The approximately $550 million hotel project will be funded through a mix of partner contributions in 2021 and 2022 before drawing on a $300 million construction loan. Based on the timing of construction relative to the seasonalitythis Report, none of Loews Hotels & Co’s ~~business, a Loews Corporation capital contribution may be required.~~subsidiaries are in default on any of their loans.

Through ~~October~~July 29, ~~2021,~~2022, Loews Hotels & Co received capital contributions ~~in 2021~~ of ~~$32~~$33 million from Loews ~~Corporation.~~Corporation to fund development projects.

INVESTMENTS

Investment activities of our non-insurance subsidiaries primarily consist of investments in fixed income securities, including short term investments. The Parent Company portfolio also includes equity securities, including short sales and derivative instruments, and investments in limited partnerships. ~~These~~Certain of these types of Parent Company investments generally have greater volatility, less liquidity and greater risk than fixed income investments and are included within Results of Operations – Corporate.

The Parent Company enters into short sales and invests in certain derivative instruments that are used for asset and liability management activities, income enhancements to its portfolio management strategy and to benefit from anticipated future movements in the underlying markets. If such movements do not occur as anticipated, then significant losses may occur. Monitoring procedures include senior management review of daily reports of existing positions and valuation fluctuations to seek to ensure that open positions are consistent with the portfolio strategy.

Credit exposure associated with non-performance by counterparties to derivative instruments is generally limited to the uncollateralized change in fair value of the derivative instruments recognized in the Consolidated Condensed Balance Sheets. The risk of non-performance is mitigated by monitoring the creditworthiness of counterparties and diversifying derivatives by using multiple counterparties. Collateral is occasionally required from derivative investment counterparties depending on the amount of the exposure and the credit rating of the counterparty.

Insurance

CNA maintains a large portfolio of fixed maturity and equity securities, including large amounts of corporate and government issued debt securities, residential and commercial mortgage-backed securities, other asset-backed securities and investments in limited partnerships which pursue a variety of long and short investment strategies across a broad array of asset classes. CNA’s investment portfolio supports its obligation to pay future insurance claims and provides investment returns which are an important part of CNA’s overall profitability.


			53

~~Index~~Table of c o ntents

Net Investment Income

The significant components of CNA’s net investment income are presented in the following table. Fixed income securities, as presented, include both fixed maturity securities and non-redeemable preferred stock.


														Three Months Ended				Six Months Ended
	Three Months Ended September 30,						Nine Months Ended September 30,							June 30,
	2021			2020			2021			2020				2022		2021		2022		2021
(In millions)													(In millions)

Fixed income securities:													Fixed income securities:
Taxable fixed income securities	$	360		$	363		$	1,075		$	1,094		Taxable fixed income securities	$	385	$	356	$	753	$	715
Tax-exempt fixed income securities		77			80			236			238		Tax-exempt fixed income securities	66		79		139		159
Total fixed income securities		437			443			1,311			1,332		Total fixed income securities	451		435		892		874
Limited partnership and common stock investments		77			71			294			30		Limited partnership and common stock investments	(15)		156		(7)		217
Other, net of investment expense		(1	)		3			3			18		Other, net of investment expense	(4)				(5)		4
Net investment income	$	513		$	517		$	1,608		$	1,380		Net investment income	$	432	$	591	$	880	$	1,095

Effective income yield for the fixed income securities portfolio		4.3	%		4.5	%		4.3	%		4.6	%
Limited partnership and common stock return		3.8	%		4.1	%		16.4	%		1.7	%


Effective income yield for the fixed income securities portfolio	4.3	%	4.3	%	4.3	%	4.4	%
Limited partnership and common stock return	(0.7)%		8.3	%	(0.3)%		12.1	%

CNA’s net investment income ~~increased $228~~decreased $159 million and $215 million for the ~~nine~~three and six months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020 period,~~2021 periods, driven by unfavorable limited partnership and common stock ~~returns~~results, partially offset by ~~lower yields in the~~higher income from fixed income ~~portfolio.~~securities.

Investment Gains (Losses)

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


														Three Months Ended				Six Months Ended
	Three Months Ended September 30,						Nine Months Ended September 30,							June 30,
	2021			2020			2021			2020				2022		2021		2022		2021
(In millions)													(In millions)

Investment gains (losses):													Investment gains (losses):
Fixed maturity securities:													Fixed maturity securities:
Corporate and other bonds	$	36		$	14		$	115		$	(105	)	Corporate and other bonds	$	(30)	$	43	$	(27)	$	79
States, municipalities and political subdivisions		1			6						39		States, municipalities and political subdivisions	19				22		(1)
Asset-backed		(15	)		6			(24	)		34		Asset-backed	(4)		(12)		(12)		(9)
Total fixed maturity securities		22			26			91			(32	)	Total fixed maturity securities	(15)		31		(17)		69
Non-redeemable preferred stock		(2	)		25			17			(45	)	Non-redeemable preferred stock	(71)		17		(109)		19
Short term and other		2			(5	)		9			(24	)	Short term and other	27		(10)		56		7
Total investment gains (losses)		22			46			117			(101	)	Total investment gains (losses)	(59)		38		(70)		95
Income tax (expense) benefit		(4	)		(10	)		(23	)		20		Income tax (expense) benefit	19		(11)		27		(19)
Amounts attributable to noncontrolling interests		(2	)		(3	)		(10	)		9		Amounts attributable to noncontrolling interests	4		(3)		4		(8)
Investment gains (losses) attributable to Loews Corporation	$	16		$	33		$	84		$	(72	)	Investment gains (losses) attributable to Loews Corporation	$	(36)	$	24	$	(39)	$	68


			54

Table of c o ntents

CNA’s investment ~~gains (losses)~~results decreased ~~$24~~$97 million and $165 million for the three and six months ended ~~September~~June 30, ~~2021~~2022 as compared with the comparable ~~2020 period.~~

~~CNA’s investment gains (losses) increased $218 million for the nine months ended September 30,~~ 2021 ~~as compared with the comparable 2020 period~~periods, driven by ~~lower impairment losses and~~ the ~~favorable~~unfavorable change in fair value of non-redeemable preferred stock.

Further information on CNA’s investment gains and losses is set forth in Note 32 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

~~Index~~

Portfolio Quality

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

September 30, 2021 December 31, 2020

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
$ 2,938 $ 57 $ 3,672 $ 117
AAA 3,778 371 3,627 454
AA 7,737 833 7,159 1,012
A 9,538 1,159 9,543 1,390
BBB 18,505 2,215 18,007 2,596
Non-investment grade 2,573 123 2,623 149
Total $ 45,069 $ 4,758 $ 44,631 $ 5,718


	June 30, 2022				December 31, 2021
	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	$	2,455	$	(217)	$	2,600	$	42
AAA	2,644		(87)		3,784		360
AA	7,136		(335)		7,665		823
A	8,825		(195)		9,511		1,087
BBB	16,317		(784)		18,458		2,043
Non-investment grade	2,008		(207)		2,362		91
Total	$	39,385	$	(1,825)	$	44,380	$	4,446

As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, 1% of CNA’s fixed maturity portfolio was rated internally. AAA rated securities included ~~$1.7~~$0.6 billion and ~~$1.8~~$1.7 billion of pre-refunded municipal bonds as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

The following table presents CNA’s available-for-sale fixed maturity securities in a gross unrealized loss position by ratings distribution:

September 30, 2021	Estimated Fair Value		Gross Unrealized Losses

June 30, 2022					June 30, 2022	Estimated Fair Value		Gross Unrealized Losses
(In millions)					(In millions)

U.S. Government, Government agencies and Government-sponsored enterprises	$	1,200	$	9	U.S. Government, Government agencies and Government-sponsored enterprises	$	2,150	$	223
AAA		388		5	AAA	1,232		205
AA		906		16	AA	4,078		581
A		1,191		18	A	5,454		493
BBB		1,187		31	BBB	11,806		1,111
Non-investment grade		396		10	Non-investment grade	1,643		229
Total	$	5,268	$	89	Total	$	26,363	$	2,842


			55

Table of c o ntents

The following table presents the maturity profile for these available-for-sale fixed maturity securities. Securities not due to mature on a single date are allocated based on weighted average life:

September 30, 2021
Estimated
Fair Value

Gross
Unrealized
Losses

(In millions)

Due in one year or less $ 133 $ 5
Due after one year through five years 709 13
Due after five years through ten years 2,639 33
Due after ten years 1,787 38
Total $ 5,268 $ 89


June 30, 2022	Estimated Fair Value		Gross Unrealized Losses
(In millions)

Due in one year or less	$	408	$	8
Due after one year through five years	6,043		272
Due after five years through ten years	10,821		1,145
Due after ten years	9,091		1,417
Total	$	26,363	$	2,842

~~Index~~

Duration

A primary objective in the management of CNA’s investment portfolio is to optimize return relative to the corresponding liabilities and respective liquidity needs. CNA’s views on the current interest rate environment, tax regulations, asset class valuations, specific security issuer and broader industry segment conditions as well as domestic and global economic conditions, are some of the factors that enter into an investment decision. CNA also continually monitors exposure to issuers of securities held and broader industry sector exposures and may from time to time adjust such exposures based on its views of a specific issuer or industry sector.

A further consideration in the management of CNA’s investment portfolio is the characteristics of the corresponding liabilities and the ability to align the duration of the portfolio to those liabilities and to meet future liquidity needs, minimize interest rate risk and maintain a level of income sufficient to support the underlying insurance liabilities. For portfolios where future liability cash flows are determinable and typically long term in nature, CNA segregates investments for asset/liability management purposes. The segregated investments support the long term care and structured settlement liabilities in Other Insurance Operations.

The effective durations of CNA’s fixed income securities and short term investments are presented in the following table. Amounts presented are net of payable and receivable amounts for securities purchased and sold, but not yet settled.


	September 30, 2021			December 31, 2020				June 30, 2022			December 31, 2021
	Estimated Fair Value		Effective Duration (Years)	Estimated Fair Value		Effective Duration (Years)		Estimated Fair Value		Effective Duration (Years)	Estimated Fair Value		Effective Duration (Years)
(In millions of dollars)							(In millions of dollars)

Investments supporting Other Insurance Operations	$	18,431	9.3	$	18,518	9.2	Investments supporting Other Insurance Operations	$	15,433	9.7	$	18,458	9.2
Other investments		28,520	5.1		28,839	4.5	Other investments	25,608		5.0	28,915		4.9
Total	$	46,951	6.7	$	47,357	6.3	Total	$	41,041	6.8	$	47,373	6.6

The effective duration of investments supporting Other Insurance Operations liabilities at June 30, 2022 lengthened as compared with December 31, 2021, reflecting strategic repositioning to capitalize on higher rates and reduce reinvestment risk.

CNA’s investment portfolio is periodically analyzed for changes in duration and related price risk. Certain securities have duration characteristics that are variable based on market interest rates, credit spreads and other factors that may drive variability in the amount and timing of cash flows. Additionally, CNA periodically reviews the sensitivity of the portfolio to the level of foreign exchange rates and other factors that contribute to market price changes. A summary of these risks and specific analysis on changes is included in the Quantitative and Qualitative Disclosures about Market Risk included under Item 7A of our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

~~Short Term Investments~~


			56

Table of c o ntents

~~The carrying value of the components of CNA’s Short term investments are presented in the following table:~~

September 30,
2021

December 31,
2020

(In millions)

Short term investments:
U.S. Treasury securities $ 916 $ 1,702
Other 219 205
Total short term investments $ 1,135 $ 1,907

CRITICAL ACCOUNTING ESTIMATES

Certain accounting policies require us to make estimates and judgments that affect the amounts reflected in the Consolidated Condensed Financial Statements. Such estimates and judgments necessarily involve varying, and possibly significant, degrees of uncertainty. Accordingly, certain amounts currently recorded or disclosed in the financial statements will likely be adjusted in the future based on new available information and changes in other facts and circumstances. See the Critical Accounting Estimates and the Insurance Reserves sections of our MD&A included under Item 7 of our Annual Report on Form 10-K for the year ~~ended~~ended December 31, ~~2020~~2021 for further information.

~~Index~~

ACCOUNTING STANDARDS UPDATE

In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-12, “Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts.” The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts. For the Company, this includes CNA’s long term care and fully-ceded single premium immediate annuity business.

The most significant impact will be the effect of updating the discount rate assumption quarterly to reflect an upper-medium grade fixed-income instrument yield, rather than the expected investment portfolio yield. This will be partially offset by the de-recognition of Shadow Adjustments associated with long-duration contracts. The net impact of these changes is expected to be a $2.0 billion - $2.3 billion (after tax and noncontrolling interests) decrease in Accumulated other comprehensive income as of the transition date of January 1, 2021. To illustrate the sensitivity of this adjustment, had the interest rates in effect as of June 30, 2022 been used in the calculation, the transition impact would have been a $0.3 billion - $0.6 billion (after tax and noncontrolling interests) decrease in Accumulated other comprehensive income.

For a discussion of accounting standards updates that have been adopted or will be adopted in the future, please read Note 1 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report.

FORWARD-LOOKING STATEMENTS

Investors are cautioned that certain statements contained in this Report as well as in other of our and our subsidiaries’ SEC filings and periodic press releases and certain oral statements made by us and our subsidiaries and our and their officials during presentations may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). Forward-looking statements include, without limitation, any 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.

Developments in any of the risks or uncertainties facing us or our subsidiaries, including those described under Part ~~II, Item 1A, Risk Factors in this Report, Part~~ I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2020, Part II, Item 1A, Risk Factors in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 and June 30,~~ 2021 and in our and our subsidiaries’ other filings with the SEC, could cause our and our subsidiaries’ results to differ materially from results that have been or may be anticipated or projected. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made and we and our subsidiaries expressly disclaim any obligation or undertaking to update these statements to reflect any change in ~~our~~ expectations or beliefs or any change in events, conditions or circumstances on which any forward-looking statement is based.

~~Item 3.~~

~~Quantitative and Qualitative Disclosures about Market Risk.~~

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

There were no material changes in our market risk components as ~~of September~~of June 30, ~~2021.~~2022. See the Quantitative and Qualitative Disclosures about Market Risk included under Item 7A of our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 for further information. Additional information related to portfolio duration and market conditions is discussed in the Investments section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included under Part I, Item 2.

~~Item 4.~~	~~Controls and Procedures.~~
			57

Table of c o ntents

Item 4. Controls and Procedures.

The Company maintains a system of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), which is designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, including this Report, is recorded, processed, summarized and reported on a timely basis. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Company under the Exchange Act is accumulated and communicated to the Company’s management on a timely basis to allow decisions regarding required disclosure.

The Company’s management, including the Company’s principal executive officer (“CEO”) and principal financial officer (“CFO”) conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Report and, based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as ~~of September~~of June 30, ~~2021.~~2022.

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended ~~September~~June 30, ~~2021~~2022 that have materially affected or that are reasonably likely to materially affect the Company’s internal control over financial reporting.

~~Index~~

PART II. OTHER INFORMATION

~~Item 1.~~

~~Legal Proceedings.~~

Item 1. Legal Proceedings.

Information on our legal proceedings is set forth in Note 9 to the Consolidated Condensed Financial Statements included under Part I, Item 1.

~~Item 1A.~~

~~Risk Factors.~~

Item 1A. Risk Factors.

Our business and the businesses of our subsidiaries face many risks and uncertainties. These risks and uncertainties could lead to events or circumstances that have a material adverse effect on our business, results of operations, cash flows, financial condition or equity and/or the business, results of operations, cash flows, financial condition, or equity of one or more of our subsidiaries.

Our Annual Report on Form 10-K for the year ended December 31, ~~2020 and our Quarterly Reports on Form 10-Q for the quarters ended March 31,~~ 2021 ~~and June 30, 2021 include detailed discussions~~includes a discussion of ~~certain~~material risk factors facing the ~~company. Except as described below, there~~Company. There have been no material changes to ~~the~~such risk factors previously disclosed in Part I, Item 1A, Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2020 and Part II, Item 1A. Risk Factors of our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021.

~~Risks Related to Us and Our Subsidiary, CNA Financial Corporation (“CNA”)~~

Any significant interruption in the operation of CNA’s business functions, facilities and systems or its vendors’ facilities and systems could result in a materially adverse effect on its operations.

~~CNA’s business is highly dependent upon its ability to perform, in an efficient and uninterrupted manner, through its employees or vendor relationships, necessary business functions, such~~ as ~~internet support and 24-hour call centers, processing new and renewal business, processing and paying claims and other obligations and issuing financial statements.~~

CNA’s, or its vendors’, facilities and systems could become unavailable, inoperable, or otherwise impaired from a variety of causes, including natural events, such as hurricanes, tornadoes, windstorms, earthquakes, severe winter weather and fires, or other events, such as explosions, terrorist attacks, computer security breaches or cyber attacks, riots, hazardous material releases, medical epidemics or pandemics, utility outages, interruptions of CNA’s data processing and storage systems or the systems of third-party vendors, or unavailability of communications facilities. An interruption of CNA’s system availability occurred in March of 2021 as a result of a cybersecurity attack sustained by CNA. Please refer to the immediately following risk factor for further information regarding this incident. Likewise, CNA could experience a significant failure, interruption or corruption of one or more of its vendors’ information technology, telecommunications, or other systems for various reasons, including significant failures or interruptions that might occur as existing systems are replaced or upgraded. The shut-down or unavailability of one or more of CNA’s or its vendors’ systems or facilities for these and other reasons could significantly impair CNA’s ability to perform critical business functions on a timely basis.

In addition, because CNA’s information technology and telecommunications systems interface with and depend on third-party systems, CNA could experience service denials if demand for such service exceeds capacity or a third-party system fails or experiences an interruption. If sustained or repeated, such events could result in a deterioration of CNA’s ability to write and process new and renewal business, provide customer service, pay claims in a timely manner, or perform other necessary business functions, including the ability to issue financial statements in a timely manner.

The foregoing risks could also expose CNA to monetary and reputational damages. Potential exposures resulting from the March 2021 cybersecurity attack, described in the immediately following risk factor, as well as any future incidents may include substantially increased compliance costs, as well as increased costs relating to investments in computer system and security-related upgrades, with those costs potentially not recoverable under relevant insurance coverage. CNA anticipates making continued investments to improve its security and infrastructure. These expenses are not recoverable under relevant insurance coverage. If CNA’s business continuity plans or system security do not sufficiently address these risks, they could have a material adverse effect on CNA’s business, results of operations and financial condition.

~~Index~~

Based on the information currently known, CNA does not believe that the March 2021 cybersecurity attack will have a material impact on its business, results of operations or financial condition, but no assurances can be given as it continues to assess the full impact from the incident, including costs, expenses and insurance coverage. CNA may also be subject to future incidents that could have a material adverse effect on its business, results of operations or financial condition or may result in operational impairments and financial losses, as well as significant harm to its reputation.

Any significant breach in CNA’s data security infrastructure or its vendors’ facilities and systems could disrupt business, cause financial losses and damage its reputation, and insurance coverage may not be available for claims related to a breach.

A significant breach of CNA’s data security infrastructure may result from actions by its employees, vendors, third-party administrators, or unknown third parties or through cyber attacks. The risk of a breach can exist whether software services are in CNA’s data centers or CNA uses cloud-based software services. Breaches have occurred, and may occur again, in CNA’s systems and in the systems of its vendors and third party administrators.

Such a breach could affect CNA’s data framework or cause a failure to protect the personal information of its customers, claimants or employees, or sensitive and confidential information regarding its business and may result in operational impairments and financial losses, as well as significant harm to its reputation. The breach of confidential information also could give rise to legal liability and regulatory action under data protection and privacy laws, as well as evolving regulation in this regard. During the third quarter of 2021, CNA was notified of a breach of certain systems of a third party administrator, which resulted in breach notifications sent by such administrator to potentially impacted persons, including a limited number of CNA claimants. While CNA does not believe such notifications and resultant actions will have a material adverse effect on its business, this or similar incidents, or any other such breach of CNA’s or its vendors’ data security infrastructure could have a material adverse effect on its business, results of operations and financial condition.

CNA sustained a sophisticated cybersecurity attack in March of 2021 involving ransomware that caused a network disruption and impacted certain of its systems. Upon detection, CNA undertook steps to address the incident, including engaging a team of third-party forensic experts and notifying law enforcement and key regulators. CNA restored network systems and resumed normal operations. CNA is continuing to assess all actions that it will take to improve its existing systems.

CNA’s investigation revealed that an unauthorized third party copied some personal information relating to certain current and former employees, contractor workers and their dependents and certain other persons, including some policyholders. In July of 2021, CNA provided notifications to the impacted individuals and to regulators, in accordance with applicable law. Although CNA currently has no indication that the impacted data has been misused, or that CNA or its policyholder data was specifically targeted by the unauthorized third party, it may be subject to subsequent investigations, claims or actions in addition to other costs, fines, penalties, or other obligations related to impacted data, whether or not such data is misused. In addition, the misuse, or perceived misuse, of sensitive or confidential information regarding its business or policyholders could cause harm to CNA’s reputation and result in the loss of business with existing or potential customers, which could adversely impact its business, results of operations and financial condition.

Although CNA maintains cybersecurity insurance coverage insuring against costs resulting from cyber attacks (including the March 2021 attack), CNA does not expect that the amount available under its coverage and/or its coverage policy to cover all losses. Costs and expenses incurred and likely to be incurred by CNA in connection with the March 2021 attack include both direct and indirect costs and not all may be covered by its insurance coverage. In addition, potential disputes with its insurers about the availability of insurance coverage for claims relating to the March 2021 attack or any future incident could occur. Further, both as a result of the ~~March 2021 attack~~date of this Report.

Item 2. Unregistered Sales of Equity Securities and ~~industry trends generally, CNA will incur higher costs for the replenishment~~Use of ~~its current policy through the end of the term, as well as future cybersecurity insurance coverage beyond the current term.~~Proceeds.

~~Index~~

~~Risks Related to Us and Our Subsidiaries Generally~~

~~Failures or interruptions in or breaches to our or our subsidiaries’ computer systems or those of our third party vendors could materially and adversely affect our or our subsidiaries’ operations.~~

We and our subsidiaries are dependent upon information technologies, computer systems and networks, including those maintained by us and our subsidiaries and those maintained and provided to us and our subsidiaries by third parties (for example, “software-as-a-service” and cloud solutions), to conduct operations and are reliant on technology to help increase efficiency in our and their businesses. We and our subsidiaries are dependent upon operational and financial computer systems to process the data necessary to conduct almost all aspects of our and their businesses. Any failure of our or our subsidiaries’ computer systems, or those of our or their customers, vendors or others with whom we and they do business, could materially disrupt business operations.

Computer, telecommunications and other business facilities and systems could become unavailable or impaired from a variety of causes, including cyber attacks or other cyber incidents, storms and other natural disasters, terrorist attacks, fires, utility outages, theft, design defects, human error or complications encountered as existing systems are replaced or upgraded. Cyber attacks and other cyber incidents are occurring more frequently, are constantly evolving in nature, are becoming more sophisticated and are being carried out by groups and individuals with a wide range of expertise and motives. The U.S. government has issued public warnings that indicate energy assets may be specific targets of cyber attacks, which can have catastrophic consequences, and hotel chains, among other consumer-facing businesses, have been subject to various cyber attacks targeting payment card and other sensitive consumer information. Cyber attacks and cyber incidents take many forms, including cyber extortion, denial of service, social engineering, introduction of viruses or malware, exploiting vulnerabilities in hardware, software or other infrastructure, hacking, website defacement, theft of passwords and other credentials, unauthorized use of computing resources for digital currency mining and business email compromise. CNA was recently subjected to a cybersecurity incident. In addition, one of CNA’s vendors also recently experienced a cybersecurity incident. For additional information about these incidents see “~~Risks Related to Us and Our Subsidiary, CNA Financial Corporation” above under this Part II, Item 1A.~~

As with other large companies, we and our subsidiaries and our and their third party vendors have experienced cyber attacks and other cyber incidents and expect this to continue. If we and our subsidiaries and our and their third party vendors do not allocate and effectively manage the resources necessary to continue to build and maintain our and their information technology security infrastructure, or if we or our subsidiaries or our or our subsidiaries’ vendors fail to timely identify or appropriately respond to cyber attacks or other cyber incidents, then this may disrupt our and our subsidiaries’ operations, cause significant damage to our or their assets and surrounding areas, cause loss of life or serious bodily injury, impact our or their data framework or cause a failure to protect personal information of customers or employees.

The foregoing risks relating to disruption of service, interruption of operations and data loss could impact our and our subsidiaries’ ability to timely perform critical business functions, resulting in disruption or deterioration in our and our subsidiaries’ operations and business and expose us and our subsidiaries to significant financial losses and monetary and reputational damages. In addition, potential exposures include substantially increased compliance costs and required computer system upgrades and security related investments. The breach of confidential information also could give rise to legal liability and regulatory action under data protection and privacy laws and regulations, both in the U.S. and foreign jurisdictions.

~~Index~~

~~Item 2.~~

~~Unregistered Sales of Equity Securities and Use of Proceeds.~~

Items 2 (a) and (b) are inapplicable.

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)

July 1, 2021 -
July 31, 2021

2,590,255

$
54.01

N/A

N/A

August 1, 2021 -
August 31, 2021

1,730,048

54.60

N/A

N/A

September 1, 2021 -
September 30, 2021

1,834,131

53.74

N/A

N/A

Period

(a) Total number

of shares

purchased

(b) Average

price paid per

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)

April 1, 2022 - April 30, 2022

294,349

64.15

N/A

May 1, 2022 - May 31, 2022

1,142,397

62.92

N/A

June 1, 2022 - June 30, 2022

2,766,365

59.04

N/A


			58

~~Index~~Table of c o ntents

Item 6. Exhibits.

~~Item 6.~~

~~Exhibits.~~

Description of Exhibit			Exhibit Number
By-Laws of Registrant as amended and restated as of May 10, 2022, incorporated herein by reference to Exhibit 3.02 to Registrant’s Report on Form 8-K filed with the SEC on May 11, 2022 (File No. 001-06541)			~~Exhibit~~ ~~Number~~3.1

Certification by the Chief Executive Officer of the Company pursuant to Rule 13a-14(a) and Rule 15d-14(a)			31.1*

Certification by the Chief Financial Officer of the Company pursuant to Rule 13a-14(a) and Rule 15d-14(a)			31.2*

Certification by the Chief Executive Officer of the Company pursuant to 18 U.S.C. Section 1350 (as adopted by Section 906 of the Sarbanes-Oxley Act of 2002)			32.1*

Certification by the Chief Financial Officer of the Company pursuant to 18 U.S.C. Section 1350 (as adopted by Section 906 of the Sarbanes-Oxley Act of 2002)			32.2*

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 Calculation Linkbase			101.CAL *

Inline XBRL Taxonomy Extension Definition Linkbase			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.


			59

~~Index~~Table of c o ntents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.

	~~LOEWS CORPORATION~~
			~~(Registrant)~~ LOEWS CORPORATION
			(Registrant)
~~Dated: November 1, 2021~~			~~By:~~	~~/s/ David B. Edelson~~
Dated: August 1, 2022			By:	~~DAVID B. EDELSON~~ /s/ Jane J. Wang
				JANE J. WANG
				Senior Vice President and
		Chief Financial Officer
		(Duly authorized officer
		and principal financial officer)


			60			~~officer)~~

				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, July 1, 2020	$	18,413		$	3	$	3,371		$	14,316		$	5		$	(491	)	$	1,209
Net income		162								139									23
Other comprehensive income		259											233						26
Dividends paid ($0.0625 per share)		(27	)							(17	)								(10	)
Purchases of Loews Corporation treasury stock		(195	)													(195	)
Stock-based compensation		8					8
Other		0								(1	)					1
Balance, September 30, 2020	$	18,620		$	3	$	3,379		$	14,437		$	238		$	(685	)	$	1,248

Balance, July 1, 2021	$	19,398		$	3	$	3,121		$	15,132		$	327		$	(500	)	$	1,315
Net income		246								220									26
Other comprehensive loss		(153	)										(136	)					(17	)
Dividends paid ($0.0625 per share)		(27	)							(16	)								(11	)
Purchases of Loews Corporation treasury stock		(333	)													(333	)
Stock-based compensation		(2	)				(2	)
Other		1					1
Balance, September 30, 2021	$	19,130		$	3	$	3,120		$	15,336		$	191		$	(833	)	$	1,313

Nine Months Ended September 30	2021			2020
(In millions)

Operating Activities:

Net income (loss)	$	1,332		$	(1,728	)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities, net		(85	)		2,503
Changes in operating assets and liabilities, net:
Receivables		(1,115	)		(273	)
Deferred acquisition costs		(15	)		(36	)
Insurance reserves		1,891			1,479
Other assets		(853	)		(411	)
Other liabilities		701			238
Trading securities		(180	)		(481	)
Net cash flow provided by operating activities		1,676			1,291

Investing Activities:

Purchases of fixed maturities		(7,127	)		(8,466	)
Proceeds from sales of fixed maturities		2,510			5,023
Proceeds from maturities of fixed maturities		3,360			2,706
Purchases of equity securities		(242	)		(373	)
Proceeds from sales of equity securities		237			275
Purchases of limited partnership investments		(281	)		(144	)
Proceeds from sales of limited partnership investments		239			305
Purchases of property, plant and equipment		(327	)		(584	)
Dispositions		52			47
Sale of interest in Altium Packaging		417
Deconsolidation of Diamond Offshore					(483	)
Change in short term investments		725			706
Other, net		13			(120	)
Net cash flow used by investing activities		(424	)		(1,108	)

Financing Activities:

Dividends paid		(49	)		(53	)
Dividends paid to noncontrolling interests		(54	)		(88	)
Purchases of Loews Corporation treasury stock		(825	)		(678	)
Purchases of subsidiary stock from noncontrolling interests		(18	)		(37	)
Principal payments on debt		(1,154	)		(1,157	)
Issuance of debt		1,199			2,393
Other, net		(12	)		(13	)
Net cash flow (used) provided by financing activities		(913	)		367

Effect of foreign exchange rate on cash		(6	)

Net change in cash		333			550
Cash, beginning of period		478			336
Cash, end of period	$	811		$	886

Three months ended September 30, 2020

Allowance for credit losses:
Balance as of July 1, 2020	$	39		$	12	$	51
Additions to the allowance for credit losses:
Securities for which credit losses were not previously recorded		4					4
Available-for-sale securities accounted for as PCD assets		1					1

Reductions to the allowance for credit losses:
Securities sold during the period (realized)		9					9
Write-offs charged against the allowance

Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period		(1	)		1
Total allowance for credit losses	$	34		$	13	$	47

	Corporate and			Asset-
Nine months ended September 30, 2021	Other Bonds			backed		Total
(In millions)

Allowance for credit losses:
Balance as of January 1, 2021	$	23		$	17	$	40
Additions to the allowance for credit losses:
Securities for which credit losses were not previously recorded		14					14
Available-for-sale securities accounted for as PCD assets		4			4		8

Reductions to the allowance for credit losses:
Securities sold during the period (realized)		6					6
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis
Write-offs charged against the allowance		16					16

Additional increases or (decrease) to the allowance for credit losses on securities that had an allowance recorded in a previous period		(9	)				(9	)
Total allowance for credit losses	$	10		$	21	$	31

Nine months ended September 30, 2020

Allowance for credit losses:
Balance as of January 1, 2020	$	0		$	0	$	0
Additions to the allowance for credit losses:
Impact of adopting ASC 326		6					6
Securities for which credit losses were not previously recorded		62			12		74
Available-for-sale securities accounted for as PCD assets		3					3

Reductions to the allowance for credit losses:
Securities sold during the period (realized)		15					15
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis		1					1
Write-offs charged against the allowance

Additional increases or (decrease) to the allowance for credit losses on securities that had an allowance recorded in a previous period		(21	)		1		(20	)
Total allowance for credit losses	$	34		$	13	$	47

	Cost or		Gross		Gross		Allowance
	Amortized		Unrealized		Unrealized		for Credit		Estimated
September 30, 2021	Cost		Gains		Losses		Losses		Fair Value
(In millions)

Fixed maturity securities:
Corporate and other bonds	$	21,608	$	2,967	$	42	$	10	$	24,523
States, municipalities and political subdivisions		10,384		1,610		15				11,979
Asset-backed:
Residential mortgage-backed		3,176		89		6				3,259
Commercial mortgage-backed		2,064		85		16		17		2,116
Other asset-backed		2,429		76		4		4		2,497
Total asset-backed		7,669		250		26		21		7,872
U.S. Treasury and obligations of government-sponsored enterprises		139		1		4				136
Foreign government		521		19		2				538
Redeemable preferred stock		12								12
Fixed maturities available-for-sale		40,333		4,847		89		31		45,060
Fixed maturities trading		9								9
Total fixed maturity securities	$	40,342	$	4,847	$	89	$	31	$	45,069

	Less than				12 Months
	12 Months				or Longer				Total
			Gross				Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
September 30, 2021	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
(In millions)

Fixed maturity securities:
Corporate and other bonds	$	1,853	$	37	$	88	$	5	$	1,941	$	42
States, municipalities and political subdivisions		885		15						885		15
Asset-backed:
Residential mortgage-backed		1,295		6						1,295		6
Commercial mortgage-backed		317		4		194		12		511		16
Other asset-backed		439		3		58		1		497		4
Total asset-backed		2,051		13		252		13		2,303		26
U.S. Treasury and obligations of government-sponsored enterprises		65		4		1				66		4
Foreign government		73		2						73		2
Total fixed maturity securities	$	4,927	$	71	$	341	$	18	$	5,268	$	89

December 31, 2020

Fixed maturity securities:
Corporate and other bonds	$	609	$	21	$	12	$	1	$	621	$	22
States, municipalities and political subdivisions		33								33
Asset-backed:
Residential mortgage-backed		71		1		11				82		1
Commercial mortgage-backed		533		40		28		2		561		42
Other asset-backed		344		9		13				357		9
Total asset-backed		948		50		52		2		1,000		52
U.S. Treasury and obligations of government-sponsored enterprises		63		3						63		3
Foreign government		13								13
Total fixed maturity securities	$	1,666	$	74	$	64	$	3	$	1,730	$	77

	September 30, 2021						December 31, 2020
	Contractual/						Contractual/
	Notional		Estimated Fair Value				Notional		Estimated Fair Value
	Amount		Asset	(Liability)			Amount		Asset		(Liability)
(In millions)

With hedge designation:
Interest rate swaps							$	675			$	(26	)

Without hedge designation:
Equity markets:
Options – purchased	$	1						135	$	3
Interest rate swaps		100		$	(1	)		100				(3	)
Embedded derivative on funds withheld liability		272			(11	)		190				(19	)

					Range
	Estimated		Valuation	Unobservable	(Weighted
September 30, 2021	Fair Value		Techniques	Inputs	Average)
	(In millions)

Fixed maturity securities	$	1,154	Discounted cash flow	Credit spread	1% – 7% (2%)

December 31, 2020

Fixed maturity securities	$	966	Discounted cash flow	Credit spread	1% – 8% (3%)

	Net Unrealized
	Gains (Losses)															Total
	on Investments			Net Unrealized			Unrealized									Accumulated
	with an			Gains (Losses)			Gains (Losses)			Pension and			Foreign			Other
	Allowance for			on Other			on Cash Flow			Postretirement			Currency			Comprehensive
	Credit Losses			Investments			Hedges			Benefits			Translation			Income (Loss)
(In millions)

Balance, July 1, 2020	$	(8	)	$	1,050		$	(25	)	$	(837	)	$	(175	)	$	5
Other comprehensive income (loss) before reclassifications, after tax of $0, $(63), $0, $0 and $0		2			231			(2	)		(2	)		38			267
Reclassification of (income) losses from accumulated other comprehensive income, after tax of $(1), $7, $0, $(3) and $0		4			(24	)		3			9						(8	)
Other comprehensive income		6			207			1			7			38			259
Amounts attributable to noncontrolling interests		(1	)		(22	)								(3	)		(26	)
Balance, September 30, 2020	$	(3	)	$	1,235		$	(24	)	$	(830	)	$	(140	)	$	238

Balance, July 1, 2021	$	0	$	1,271		$	(11	)	$	(863	)	$	(70	)	$	327
Other comprehensive income (loss) before reclassifications, after tax of $0, $32, $0, $0 and $0				(121	)		1			3			(33	)		(150	)
Reclassification of (income) losses from accumulated other comprehensive income, after tax of $0, $5, $0, $(2) and $0				(17	)		1			13						(3	)
Other comprehensive income (loss)				(138	)		2			16			(33	)		(153	)
Amounts attributable to noncontrolling interests				14						(1	)		4			17
Balance, September 30, 2021	$	0	$	1,147		$	(9	)	$	(848	)	$	(99	)	$	191

Balance, January 1, 2021	$	0		$	1,563		$	(23	)	$	(877	)	$	(82	)	$	581
Other comprehensive income (loss) before reclassifications, after tax of $1, $104, $(3), $0 and $0		(2	)		(391	)		12			1			(19	)		(399	)
Reclassification of (income) losses from accumulated other comprehensive income, after tax of $(1), $20, $(2), $(7) and $0		2			(74	)		2			31						(39	)
Other comprehensive income (loss)		0			(465	)		14			32			(19	)		(438	)
Amounts attributable to noncontrolling interests					49						(3	)		2			48
Balance, September 30, 2021	$	0		$	1,147		$	(9	)	$	(848	)	$	(99	)	$	191

	CNA			Boardwalk			Loews						Diamond
Nine Months Ended September 30, 2020	Financial			Pipelines			Hotels & Co			Corporate (a)			Offshore (c)			Total
(In millions)

Revenues:

Insurance premiums	$	5,672														$	5,672
Net investment income (loss)		1,380								$	(33	)					1,347
Investment losses		(101	)								(1,211	)					(1,312	)
Non-insurance warranty revenue		926															926
Operating revenues and other		20		$	926		$	236			754		$	305			2,241
Total		7,897			926			236			(490	)		305			8,874

Expenses:

Insurance claims and policyholders’ benefits		4,683															4,683
Amortization of deferred acquisition costs		1,046															1,046
Non-insurance warranty expense		859															859
Operating expenses and other		851			633			404			810			1,196			3,894
Interest		114			127			24			96			43			404
Total		7,553			760			428			906			1,239			10,886
Income (loss) before income tax		344			166			(192	)		(1,396	)		(934	)		(2,012	)
Income tax (expense) benefit		(40	)		(43	)		48			293			26			284
Net income (loss)		304			123			(144	)		(1,103	)		(908	)		(1,728	)
Amounts attributable to noncontrolling interests		(32	)											432			400
Net income (loss) attributable to Loews Corporation	$	272		$	123		$	(144	)	$	(1,103	)	$	(476	)	$	(1,328	)

Nine Months Ended September 30, 2020

Gross written premiums	$	5,331		$	3,103		$	822		$	9,256
Gross written premiums excluding third party captives		2,413			3,018			822			6,253
Net written premiums		2,231			2,703			680			5,614
Net earned premiums		2,124			2,470			699			5,293
Net investment income		315			354			44			713
Core income		354			113			15			482

Other performance metrics:
Loss ratio excluding catastrophes and development		59.8	%		60.1	%		60.1	%		59.9	%
Effect of catastrophe impacts		5.7			14.3			8.9			10.1
Effect of development-related items		(2.1	)		0.1			(0.4	)		(0.8	)
Loss ratio		63.4	%		74.5	%		68.6	%		69.2	%
Expense ratio		31.5			33.2			35.6			32.9
Dividend ratio		0.1			0.6						0.3
Combined ratio		95.0	%		108.3	%		104.2	%		102.4	%
Combined ratio excluding catastrophes and development		91.4	%		93.9	%		95.7	%		93.1	%

Rate		12	%		10	%		13	%		11	%
Renewal premium change		13			9			11			11
Retention		86			84			71			83
New business	$	275		$	564		$	184		$	1,023

(In millions)

Long term care active life reserve - change in estimated reserve margin

September 30, 2020 estimated margin	$	-

Changes in underlying discount rate assumptions (a)		65
Changes in underlying morbidity assumptions		205
Changes in underlying persistency assumptions		(233	)
Changes in underlying premium rate action assumptions		27
Changes in underlying expense and other assumptions		8

September 30, 2021 Estimated Margin	$	72

September 30, 2021	Estimated Reduction to Pretax Income
(In millions)

Hypothetical revisions
Morbidity:
2.5% increase in morbidity	$	300
5% increase in morbidity		600
Persistency:
5% decrease in active life mortality and lapse	$	100
10% decrease in active life mortality and lapse		300
Discount rates:
25 basis point decline in new money interest rates	$	100
50 basis point decline in new money interest rates		200
Premium rate actions:
25% decrease in anticipated future premium rate increases	$	-
50% decrease in anticipated future premium rate increases		-

	September 30, 2021		December 31, 2020
(In millions)

Short term investments:
U.S. Treasury securities	$	916	$	1,702
Other		219		205
Total short term investments	$	1,135	$	1,907