Item 1. Financial Statements.

Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)

			September 30,						December 31,
			2022						2021
(Dollar amounts in millions, except per share data)
Assets:
Investments:
Fixed maturities, amortized cost of $41,588 and $39,952, less allowance for credit loss of $3 and $18			$	37,504					$	44,380
Equity securities, cost of $1,581 and $1,546			1,340						1,674
Limited partnership investments			1,975						1,933
Other invested assets, primarily mortgage loans, less allowance for credit loss of $24 and $16			1,053						1,091
Short term investments			4,125						4,860
Total investments			45,997						53,938
Cash			886						621
Receivables			9,458						9,273
Property, plant and equipment			9,949						9,888
Goodwill			344						349
Deferred non-insurance warranty acquisition expenses			3,653						3,476
Deferred acquisition costs of insurance subsidiaries			787						737
Other assets			4,037						3,344
Total assets			$	75,111					$	81,626
Liabilities and Equity:
Insurance reserves:
Claim and claim adjustment expense			$	24,700					$	24,174
Future policy benefits			10,454						13,236
Unearned premiums			6,195						5,761
Total insurance reserves			41,349						43,171
Payable to brokers			359						90
Short term debt			814						93
Long term debt			8,475						8,986
Deferred income taxes			245						1,079
Deferred non-insurance warranty revenue			4,706						4,503
Other liabilities			4,510						4,529
Total liabilities			60,458						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 – 248,665,240 and 248,467,051 shares			2						2
Additional paid-in capital			2,886						2,885
Retained earnings			15,377						14,776
Accumulated other comprehensive income (loss)			(3,803)						186
			14,462						17,849
Less treasury stock, at cost (10,515,975 and 50,000 shares)			(616)						(3)
Total shareholders’ equity			13,846						17,846
Noncontrolling interests			807						1,329
Total equity			14,653						19,175
Total liabilities and equity			$	75,111					$	81,626

See accompanying Notes to Consolidated Condensed Financial Statements.

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Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

			Three Months Ended									Nine Months Ended
			September 30,									September 30,
			2022						2021			2022						2021
(In millions, except per share data)
Revenues:
Insurance premiums			$	2,221					$	2,059		$	6,435					$	6,056
Net investment income			404						483			1,202						1,649
Investment gains (losses)			(96)						22			(166)						657
Non-insurance warranty revenue			399						357			1,173						1,054
Operating revenues and other			533						450			1,607						1,580
Total			3,461						3,371			10,251						10,996
Expenses:
Insurance claims and policyholders’ benefits			1,665						1,632			4,703						4,684
Amortization of deferred acquisition costs			383						368			1,101						1,084
Non-insurance warranty expense			371						330			1,092						973
Operating expenses and other			760						638			2,166						2,208
Interest			92						99			284						324
Total			3,271						3,067			9,346						9,273
Income before income tax			190						304			905						1,723
Income tax expense			(47)						(58)			(190)						(391)
Net income			143						246			715						1,332
Amounts attributable to noncontrolling interests			(13)						(26)			(67)						(97)
Net income attributable to Loews Corporation			$	130					$	220		$	648					$	1,235
Basic net income per share			$	0.54					$	0.86		$	2.65					$	4.71
Diluted net income per share			$	0.54					$	0.85		$	2.64					$	4.70
Weighted average shares outstanding:
Shares of common stock			240.37						256.76			244.57						262.27
Dilutive potential shares of common stock			0.39						0.54			0.46						0.50
Total weighted average shares outstanding assuming dilution			240.76						257.30			245.03						262.77

See accompanying Notes to Consolidated Condensed Financial Statements.

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Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

			Three Months Ended									Nine Months Ended
			September 30,									September 30,
			2022						2021			2022						2021
(In millions)
Net income			$	143					$	246		$	715					$	1,332
Other comprehensive income (loss), after tax
Changes in:
Net unrealized losses on investments with an allowance for credit losses			(2)									(8)
Net unrealized losses on other investments			(1,327)						(138)			(4,284)						(465)
Total unrealized losses on investments			(1,329)						(138)			(4,292)						(465)
Unrealized gains on cash flow hedges			4						2			28						14
Pension and postretirement benefits			6						16			18						32
Foreign currency translation			(106)						(33)			(189)						(19)
Other comprehensive loss			(1,425)						(153)			(4,435)						(438)
Comprehensive income (loss)			(1,282)						93			(3,720)						894
Amounts attributable to noncontrolling interests			119						(9)			379						(49)
Total comprehensive income (loss) attributable to Loews Corporation			$	(1,163)					$	84		$	(3,341)					$	845

See accompanying Notes to Consolidated Condensed Financial Statements.

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Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF EQUITY

(Unaudited)

									Loews Corporation Shareholders
			Total						Common Stock						Additional Paid-in Capital						Retained Earnings						Accumulated Other Comprehensive Income (Loss)						Common Stock Held in Treasury						Noncontrolling Interests
(In millions)
Balance, 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
Balance, July 1, 2022			$	16,221					$	2					$	2,869					$	15,261					$	(2,510)					$	(386)					$	985
Net income			143																		130																		13
Other comprehensive loss			(1,425)																								(1,293)												(132)
Dividends paid ($0.0625 per share)			(23)																		(15)																		(8)
Purchase of subsidiary stock from noncontrolling interests			(45)												5																								(50)
Purchases of Loews Corporation treasury stock			(230)																														(230)
Stock-based compensation			9												8																								1
Other			3												4						1																		(2)
Balance, September 30, 2022			$	14,653					$	2					$	2,886					$	15,377					$	(3,803)					$	(616)					$	807

See accompanying Notes to Consolidated Condensed Financial Statements.

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Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF EQUITY

(Unaudited)

									Loews Corporation Shareholders
			Total						Common Stock						Additional Paid-in Capital						Retained Earnings						Accumulated Other Comprehensive Income (Loss)						Common Stock Held in Treasury						Noncontrolling Interests
(In millions)
Balance, January 1, 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)
Purchase of subsidiary stock from noncontrolling interests			(18)																																				(18)
Purchases of Loews Corporation treasury stock			(826)																														(826)
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
Balance, January 1, 2022			$	19,175					$	2					$	2,885					$	14,776					$	186					$	(3)					$	1,329
Net income			715																		648																		67
Other comprehensive loss			(4,435)																								(3,989)												(446)
Dividends paid ($0.1875 per share)			(133)																		(46)																		(87)
Purchase of subsidiary stock from noncontrolling interests			(66)												4																								(70)
Purchases of Loews Corporation treasury stock			(614)																														(614)
Stock-based compensation			11												(6)																								17
Other			—												3						(1)												1						(3)
Balance, September 30, 2022			$	14,653					$	2					$	2,886					$	15,377					$	(3,803)					$	(616)					$	807

See accompanying Notes to Consolidated Condensed Financial Statements.

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Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine Months Ended September 30			2022						2021
(In millions)
Operating Activities:
Net income			$	715					$	1,332
Adjustments to reconcile net income to net cash provided by operating activities, net			779						(85)
Changes in operating assets and liabilities, net:
Receivables			(447)						(1,115)
Deferred acquisition costs			(66)						(15)
Insurance reserves			1,743						1,891
Other assets			(486)						(853)
Other liabilities			161						701
Trading securities			293						(180)
Net cash flow provided by operating activities			2,692						1,676
Investing Activities:
Purchases of fixed maturities			(8,768)						(7,127)
Proceeds from sales of fixed maturities			4,885						2,510
Proceeds from maturities of fixed maturities			2,095						3,360
Purchases of equity securities			(245)						(242)
Proceeds from sales of equity securities			230						237
Purchases of limited partnership investments			(265)						(281)
Proceeds from sales of limited partnership investments			156						239
Purchases of property, plant and equipment			(437)						(327)
Dispositions			16						52
(Investment in) sale of interest in Altium Packaging			(79)						417
Change in short term investments			568						725
Other, net			65						13
Net cash flow used by investing activities			(1,779)						(424)
Financing Activities:
Dividends paid			(46)						(49)
Dividends paid to noncontrolling interests			(87)						(54)
Purchases of Loews Corporation treasury stock			(611)						(825)
Purchases of subsidiary stock from noncontrolling interests			(66)						(18)
Principal payments on debt			(327)						(1,154)
Issuance of debt			532						1,199
Other, net			(16)						(12)
Net cash flow used by financing activities			(621)						(913)
Effect of foreign exchange rate on cash			(27)						(6)
Net change in cash			265						333
Cash, beginning of period			621						478
Cash, end of period			$	886					$	811

See accompanying Notes to Consolidated Condensed Financial Statements.

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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”), a 90% 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” means Loews Corporation including its consolidated subsidiaries, the term “Parent Company” means Loews Corporation excluding its subsidiaries, the term “Net income (loss) attributable to Loews Corporation” means Net income (loss) attributable to Loews Corporation shareholders and the term “subsidiaries” means Loews Corporation’s consolidated subsidiaries.

On April 1, 2021, Loews Corporation sold 47% of Altium Packaging LLC (“Altium Packaging”), previously a 99% owned 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 nine months ended September 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 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 30, 2022 and December 31, 2021 and results of operations, comprehensive income (loss) and changes in shareholders’ equity for the three and nine months ended September 30, 2022 and 2021 and cash flows for the nine months ended September 30, 2022 and 2021, in each case in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Net income for the third quarter and first nine months of each of the years is not necessarily indicative of net income 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, 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 months ended September 30, 2022 and 2021 there were no shares attributable to employee stock-based compensation awards excluded from the diluted weighted average shares outstanding amounts because the effect would have been antidilutive.

Recently issued Accounting Standards Updates (“ASUs”) – In August of 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-12, “Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts.” The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts. 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 if there is a change, cash flow assumptions (including morbidity and 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”). The guidance is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted, and may be applied using either a modified retrospective transition method or a full retrospective transition method. Financial statements for prior periods presented will be adjusted to reflect the effects of applying the new accounting guidance.

The Company will adopt the new guidance effective January 1, 2023, using the modified retrospective method applied as of the transition date of January 1, 2021. A published spot rate curve constructed from A+, A and 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

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product line. Long term care contracts will be grouped separately from the fully-ceded single premium immediate annuity contracts.

The most significant impact at the transition date will be the effect of updating the discount rate assumption to reflect an upper-medium grade fixed-income instrument yield, which will be partially offset by the de-recognition of Shadow Adjustments associated with long-duration contracts. The Company expects the net impact of these changes will be a decrease of approximately $2.1 billion (after tax and noncontrolling interests) 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 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.

The Company continues to make progress in connection with these matters and is in the process of refining key accounting policy decisions, technology solutions and updates to internal controls associated with adoption of the new guidance. These in-progress activities include modifications of actuarial valuation systems, data sourcing, analytical procedures and reporting processes.

2. Investments

Net investment income is as follows:

			Three Months Ended									Nine Months Ended
			September 30,									September 30,
			2022						2021			2022						2021
(In millions)
Fixed maturity securities			$	454					$	425		$	1,324					$	1,278
Limited partnership investments			(32)						89			(5)						285
Equity securities (a)			2						4			(7)						53
Income (loss) from trading portfolio (a)			(18)						(30)			(95)						46
Other			19						13			47						43
Total investment income			425						501			1,264						1,705
Investment expenses			(21)						(18)			(62)						(56)
Net investment income			$	404					$	483		$	1,202					$	1,649
(a) Net investment income (loss) recognized due to the change in fair value of equity and trading portfolio securities held as of September 30, 2022 and 2021			$	(68)					$	(55)		$	(179)					$	(9)

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Investment gains (losses) are as follows:

			Three Months Ended									Nine Months Ended
			September 30,									September 30,
			2022						2021			2022						2021
(In millions)
Fixed maturity securities:
Gross gains			$	23					$	50		$	94					$	159
Gross losses			(134)						(28)			(222)						(68)
Investment gains (losses) on fixed maturity securities			(111)						22			(128)						91
Equity securities (a)			(2)						(2)			(111)						17
Derivative instruments			24						2			79						7
Short term investments and other			(7)									(6)						(13)
Altium Packaging (see Note 1)																		555
Investment gains (losses)			$	(96)					$	22		$	(166)					$	657
(a) Investment gains (losses) recognized due to the change in fair value of non-redeemable preferred stock included within equity securities held as of September 30, 2022 and 2021			$	(2)					$	(2)		$	(109)					$	15

Investment gains (losses) for the three months ended September 30, 2022 in the table above include a $35 million net loss related to the expected novation of a coinsurance agreement on CNA’s legacy annuity business, which was transacted on a funds withheld basis and gave rise to an embedded derivative. The net loss of $35 million is comprised of a $59 million loss on the fixed maturity securities supporting the funds withheld liability to recognize unrealized losses which had been included in AOCI since the inception of the coinsurance agreement, partially offset by a $24 million gain on the associated embedded derivative. Taken together, this net loss is the final recognition of changes in the valuation of the funds held assets and offsets previously recognized investment gains on the associated embedded derivative.

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,
			2022						2021			2022						2021
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds			$	24								$	53					$	5
Asset-backed			1						$	11		2						11
Impairment losses (gains) recognized in earnings			$	25					$	11		$	55					$	16

There were $8 million of losses on mortgage loans recognized during the three and nine months ended September 30, 2022 primarily due to changes in expected credit losses. There were no losses recognized on mortgage loans during the three and nine months ended September 30, 2021.

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The following tables present a summary of fixed maturity securities:

September 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			$	23,082					$	231					$	2,398											$	20,915
States, municipalities and political subdivisions			9,244						259						1,080												8,423
Asset-backed:
Residential mortgage-backed			3,153						6						470												2,689
Commercial mortgage-backed			1,921						4						237												1,688
Other asset-backed			3,264						2						349						$	3					2,914
Total asset-backed			8,338						12						1,056						3						7,291
U.S. Treasury and obligations of government sponsored enterprises			107						3						1												109
Foreign government			544						2						48												498
Redeemable preferred stock			3																								3
Fixed maturities available-for-sale			41,318						507						4,583						3						37,239
Fixed maturities trading			270												5												265
Total fixed maturity securities			$	41,588					$	507					$	4,588					$	3					$	37,504

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												11,943
Asset-backed:
Residential mortgage-backed			2,893						71						8												2,956
Commercial mortgage-backed			1,987						63						19												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												130
Foreign government			570						15						2												583
Fixed maturities available-for-sale			39,945						4,558						112						18						44,373
Fixed maturities trading			7																								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 AOCI. When presented in AOCI, these amounts are net of tax and noncontrolling interests and any required Shadow Adjustments. To the extent there are unrealized gains on fixed income securities supporting the reserves of certain products within the Life & Group business that would result in a premium deficiency, or would impact the reserve balance if realized, a related increase in Insurance reserves is recorded as a reduction of net unrealized gains (losses), net of tax and noncontrolling interests, through Other comprehensive income (loss) (“Shadow Adjustments”). As of September 30, 2022

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and December 31, 2021, the net unrealized gains and losses on investments included in AOCI were correspondingly reduced by Shadow Adjustments of $41 million and $2.2 billion (after tax and noncontrolling interests).

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
September 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			$	16,707					$	2,117					$	914					$	281					$	17,621					$	2,398
States, municipalities and political subdivisions			4,793						1,029						128						51						4,921						1,080
Asset-backed:
Residential mortgage-backed			2,582						462						17						8						2,599						470
Commercial mortgage-backed			1,372						194						233						43						1,605						237
Other asset-backed			2,433						307						233						42						2,666						349
Total asset-backed			6,387						963						483						93						6,870						1,056
U.S. Treasury and obligations of government-sponsored enterprises			61						1																		61						1
Foreign government			446						42						25						6						471						48
Total fixed maturity securities			$	28,394					$	4,152					$	1,550					$	431					$	29,944					$	4,583
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																		730						14
Asset-backed:
Residential mortgage-backed			1,043						8																		1,043						8
Commercial mortgage-backed			527						7						167						12						694						19
Other asset-backed			840						10						62												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												74						3
Foreign government			97						2																		97						2
Total fixed maturity securities			$	5,695					$	92					$	370					$	20					$	6,065					$	112

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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.

			September 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			$	2,360					$	360					$	898					$	8
AAA			1,566						318						368						6
AA			4,430						917						875						17
A			6,548						838						1,516						23
BBB			13,394						1,902						1,812						42
Non-investment grade			1,646						248						596						16
Total			$	29,944					$	4,583					$	6,065					$	112

Based on current facts and circumstances, the unrealized losses presented in the September 30, 2022 securities in the gross unrealized loss position table above are not believed to be indicative of the ultimate 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, as well as the fact that the unrealized losses are concentrated in investment grade issuers, were considered. Additionally, there is no current intent to sell securities with unrealized losses, nor is it more likely than not that sale will be required prior to recovery of amortized cost; accordingly, it was determined that there are no additional impairment losses to be recorded at September 30, 2022.

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 $401 million, $369 million and $387 million as of September 30, 2022, December 31, 2021 and September 30, 2021 and are excluded from the estimate of expected credit losses and the amortized cost basis in the tables within this Note.

Three months ended September 30, 2022			Corporate and Other Bonds						Asset-backed						Total
(In millions)
Allowance for credit losses:
Balance as of July 1, 2022			$	—					$	5					$	5
Additions to the allowance for credit losses:
Available-for-sale securities accounted for as PCD assets															—
Reductions to the allowance for credit losses:
Write-offs charged against the allowance															—
Additional decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period									(2)						(2)
Total allowance for credit losses			$	—					$	3					$	3

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Three months ended September 30, 2021			Corporate and Other Bonds						Asset-backed						Total
(In millions)
Allowance for credit losses:
Balance as of July 1, 2021			$	24					$	21					$	45
Additions to the allowance for credit losses:
Available-for-sale securities accounted for as PCD assets			2												2
Reductions to the allowance for credit losses:
Write-offs charged against the allowance			16												16
Total allowance for credit losses			$	10					$	21					$	31

Nine months ended September 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									3						3
Reductions to the allowance for credit losses:
Write-offs charged against the allowance			12												12
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period			1						(7)						(6)
Total allowance for credit losses			$	—					$	3					$	3

Nine months ended September 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												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
Write-offs charged against the allowance			16												16
Additional decreases 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

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Contractual Maturity

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

			September 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			$	952					$	948					$	1,603					$	1,624
Due after one year through five years			9,487						9,000						10,637						11,229
Due after five years through ten years			14,323						12,765						13,294						14,338
Due after ten years			16,556						14,526						14,411						17,182
Total			$	41,318					$	37,239					$	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.

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, 2022			2022						2021						2020						2019						2018						Prior						Total
(In millions)
DSCR ≥1.6x
LTV less than 55%			$	9					$	13					$	112					$	29					$	54					$	275					$	492
LTV 55% to 65%																																							—
LTV greater than 65%			18						11																														29
DSCR 1.2x - 1.6x
LTV less than 55%			5						49						18						56						10						42						180
LTV 55% to 65%			87												20																		8						115
LTV greater than 65%																																							—
DSCR ≤1.2x
LTV less than 55%																					57																		57
LTV 55% to 65%									21												44																		65
LTV greater than 65%			10																		22												7						39
Total			$	129					$	94					$	150					$	208					$	64					$	332					$	977

(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

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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, 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					$	19											$	100
Embedded derivative on funds withheld liability			220						1												270												$	(12)
Other			127						7

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, 2022, commitments to purchase or fund were approximately $1.6 billion and to sell were approximately $100 million under the terms of these investments.

3. Fair Value

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

September 30, 2022			Level 1						Level 2						Level 3						Total
(In millions)
Fixed maturity securities:
Corporate bonds and other			$	118					$	20,605					$	802					$	21,525
States, municipalities and political subdivisions									8,381						42						8,423
Asset-backed									6,575						716						7,291
Fixed maturities available-for-sale			118						35,561						1,560						37,239
Fixed maturities trading			183						82												265
Total fixed maturities			$	301					$	35,643					$	1,560					$	37,504
Equity securities			$	685					$	625					$	30					$	1,340
Short term and other			3,847						163												4,010
Receivables									19												19
Payable to brokers			(90)																		(90)

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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									11,887						56						11,943
Asset-backed									7,029						556						7,585
Fixed maturities available-for-sale			140						42,684						1,549						44,373
Fixed maturities trading									7												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												4,770
Payable to brokers			(70)																		(70)

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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, 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 September 30						Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at September 30
2022			Balance, July 1						Included in Net Income						Included in OCI						Purchases						Sales						Settlements						Transfers into Level 3						Transfers out of Level 3						Balance, September 30
(In millions)
Fixed maturity securities:
Corporate bonds and other			$	846					$	1					$	(50)					$	9											$	(4)																	$	802											$	(51)
States, municipalities and political
subdivisions			46												(4)																																				42												(4)
Asset-backed			641						7						(38)						116												(14)						$	47					$	(43)					716												(38)
Fixed maturities available-for-sale			1,533						8						(92)						125						$	—					(18)						47						(43)						1,560						$	—					(93)
Fixed maturities trading			—																																																—
Total fixed maturities			$	1,533					$	8					$	(92)					$	125					$	—					$	(18)					$	47					$	(43)					$	1,560					$	—					$	(93)
Equity securities			$	47					$	(7)																																			$	(10)					$	30					$	(7)

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									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 September 30						Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at September 30
2021			Balance, July 1						Included in Net Income						Included in OCI						Purchases						Sales						Settlements						Transfers into Level 3						Transfers out of Level 3						Balance, 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						$	—					2
Fixed maturities trading			—																																																—
Total fixed maturities			$	1,350					$	2					$	2					$	138					$	(9)					$	(22)					$	41					$	(90)					$	1,412					$	—					$	2
Equity securities			$	36					$	(2)											$	1					$	(11)											$	11					$	(10)					$	25					$	(3)

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									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 September 30						Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at September 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, September 30
(In millions)
Fixed maturity securities:
Corporate bonds and other			$	937					$	(1)					$	(203)					$	127					$	(5)					$	(63)					$	10											$	802											$	(203)
States, municipalities and political
subdivisions			56												(14)																																				42												(14)
Asset-backed			556						18						(122)						348						(2)						(54)						66						$	(94)					716												(121)
Fixed maturities available-for-sale			1,549						17						(339)						475						(7)						(117)						76						$	(94)					1,560						$	—					(338)
Fixed maturities trading			—																																																—
Total fixed maturities			$	1,549					$	17					$	(339)					$	475					$	(7)					$	(117)					$	76					$	(94)					$	1,560					$	—					$	(338)
Equity securities			$	29					$	(7)											$	12					$	(3)					$	9											$	(10)					$	30					$	(8)

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									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 September 30						Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at September 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, 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						$	—					(27)
Fixed maturities trading			8						(6)																								(2)																		—
Total fixed maturities			$	1,132					$	(11)					$	(27)					$	428					$	(12)					$	(76)					$	81					$	(103)					$	1,412					$	—					$	(27)
Equity securities			$	43					$	(15)											$	11					$	(15)											$	11					$	(10)					$	25					$	(1)

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

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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.

September 30, 2022			Estimated Fair Value						Valuation Techniques						Unobservable Inputs						Range (Weighted Average)
			(In millions)
Fixed maturity securities			$	1,111					Discounted cash flow						Credit spread						1%			—			11%			(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 Amount						Estimated Fair Value
September 30, 2022						Level 1						Level 2						Level 3						Total
(In millions)
Assets:
Other invested assets, primarily mortgage loans			$	953																	$	880					$	880
Liabilities:
Short term debt			813												$	794					14						808
Long term debt			8,470												7,135						666						7,801
December 31, 2021
Assets:
Other invested assets, primarily mortgage loans			$	973																	$	1,018					$	1,018
Liabilities:
Short term debt			93																		93						93
Long term debt			8,981												$	9,170					611						9,781

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4. Claim and Claim Adjustment Expense Reserves and Future Policy Benefit 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.

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. Catastrophe losses, net of reinsurance, of $114 million and $178 million were recorded for the three months ended September 30, 2022 and 2021 and $171 million and $357 million were recorded for the nine months ended September 30, 2022 and 2021. Catastrophe losses for the three and nine months ended September 30, 2022 were driven primarily by severe weather related events, including $87 million for Hurricane Ian. Catastrophe losses for the three months ended September 30, 2021 included $114 million for Hurricane Ida. 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.

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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 the Life & Group business.

Nine Months Ended September 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									(632)
Net incurred claim and claim adjustment expenses:
Provision for insured events of current year			4,638						4,474
Decrease in provision for insured events of prior years			(144)						(130)
Amortization of discount			131						137
Total net incurred (a)			4,625						4,481
Net payments attributable to:
Current year events			(523)						(629)
Prior year events			(3,371)						(2,874)
Total net payments			(3,894)						(3,503)
Foreign currency translation adjustment and other			(383)						(51)
Net reserves, end of period			19,553						18,996
Ceded reserves, end of period			5,147						4,836
Gross reserves, end of period			$	24,700					$	23,832

(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.

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.

For commercial property and casualty operations (“Property & Casualty Operations”) favorable net prior year development of $17 million and $10 million was recorded for the three months ended September 30, 2022 and 2021 and favorable net prior year development of $66 million and $36 million was recorded for the nine months ended September 30, 2022 and 2021. Unfavorable net prior year loss reserve development of $64 million and $40 million was recorded for CNA’s operations outside of Property & Casualty Operations (“Other Insurance Operations”) for the nine months ended September 30, 2022 and 2021.

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

			Three Months Ended									Nine Months Ended
			September 30,									September 30,
			2022						2021			2022						2021
(In millions)
Medical professional liability			$	8					$	8		$	17					$	16
Other professional liability and management liability			9									22						10
Surety			(20)						(15)			(48)						(53)
Commercial auto												21						30
General liability												41
Workers’ compensation			(2)						2			(86)						(40)
Property and other			(12)						(5)			(33)						1
Other insurance operations												64						40
Total pretax (favorable) unfavorable development			$	(17)					$	(10)		$	(2)					$	4

Three Months

2022

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

2021

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

Nine Months

2022

Unfavorable development in medical professional liability was due to higher than expected large loss activity in recent accident years.

Unfavorable development in other professional liability and management liability was due to higher than expected claim severity and frequency in CNA’s cyber and professional errors and omissions businesses in multiple accident years.

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

Unfavorable development in commercial auto was due to higher than expected claim severity in CNA’s construction business in multiple accident years.

Unfavorable development in general liability was due to higher than expected claim severity in construction, middle market and small business across multiple accident years.

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

Favorable development in property and other was mainly due to lower than expected loss emergence in a recent accident year for warranty.

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

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.

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 commercial.

Unfavorable development in other insurance operations was due to legacy mass tort exposures, primarily related to abuse.

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

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

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

The impact of the LPT on the Consolidated Condensed Statements of Operations was the recognition of a retroactive reinsurance benefit of $17 million and $8 million for the three months ended September 30, 2022 and 2021 and $40 million and $30 million for the nine months ended September 30, 2022 and 2021. As of September 30, 2022 and December 31, 2021, the cumulative amounts ceded under the LPT were $3.4 billion. The unrecognized deferred retroactive reinsurance benefit was $389 million and $429 million as of September 30, 2022 and December 31, 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 $2.3 billion as of September 30, 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.

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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.

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 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’s most recent annual claim reserve reviews were completed in the third quarter of 2022. The long term care claim reserve review resulted in a $25 million pretax reduction in reserves driven by a $107 million favorable impact from the release of all remaining IBNR reserves established during 2020 and 2021 in response to the COVID-19 pandemic partially offset by an $82 million unfavorable impact from higher claim severity, including utilization and cost of care inflation, than anticipated in the reserve estimates. The structured settlement claim reserve review resulted in a $5 million pretax reduction in reserves due to discount rate assumption changes. CNA’s 2021 annual claim reserve reviews were completed in the third quarter of 2021 resulting in a $40 million pretax reduction in long term care reserves primarily due to lower claim severity than anticipated in the reserve estimates and a $2 million pretax increase 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 made.

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The GPV for the long term care future policy benefit reserves, performed in the third quarters of 2022 and 2021, indicated recorded reserves included a pretax margin of approximately $125 million and $72 million as of September 30, 2022 and 2021.

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5. Shareholders’ Equity

Accumulated other comprehensive income (loss)

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

			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, July 1, 2021			$	—					$	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 (gains) 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			$	—					$	1,147					$	(9)					$	(848)					$	(99)					$	191
Balance, July 1, 2022			$	(7)					$	(1,721)					$	18					$	(625)					$	(175)					$	(2,510)
Other comprehensive income (loss) before reclassifications, after tax of $1, $381, $0, $0 and $0									(1,429)						6												(106)						(1,529)
Reclassification of (gains) losses from accumulated other comprehensive loss, after tax of $0, $(11), $(1), $(2) and $0			(2)						102						(2)						6												104
Other comprehensive income (loss)			(2)						(1,327)						4						6						(106)						(1,425)
Amounts attributable to noncontrolling interests			(1)						124												(1)						10						132
Balance, September 30, 2022			$	(10)					$	(2,924)					$	22					$	(620)					$	(271)					$	(3,803)

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			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, $104, $(3), $0 and $0			(2)						(391)						12						1						(19)						(399)
Reclassification of (gains) losses from accumulated other comprehensive income, after tax of $(1), $20, $(2), $(7) and $0			2						(74)						2						31												(39)
Other comprehensive income (loss)			—						(465)						14						32						(19)						(438)
Amounts attributable to noncontrolling interests									49												(3)						2						48
Balance, September 30, 2021			$	—					$	1,147					$	(9)					$	(848)					$	(99)					$	191
Balance, January 1, 2022			$	(2)					$	930					$	(6)					$	(636)					$	(100)					$	186
Other comprehensive income (loss) before reclassifications, after tax of $1, $1,165, $3, $0 and $0			(5)						(4,401)						27												(189)						(4,568)
Reclassification of (gains) losses from accumulated other comprehensive loss, after tax of $1, $(15), $0, $(5) and $0			(3)						117						1						18												133
Other comprehensive income (loss)			(8)						(4,284)						28						18						(189)						(4,435)
Amounts attributable to noncontrolling interests									430												(2)						18						446
Balance, September 30, 2022			$	(10)					$	(2,924)					$	22					$	(620)					$	(271)					$	(3,803)

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

Major Category of AOCI			Affected Line Item
Net unrealized gains (losses) on investments with an allowance for credit losses and Net unrealized gains (losses) on other investments			Investment gains (losses)
Unrealized gains (losses) on cash flow hedges			Operating revenues and other, Interest expense and Operating expenses and other
Pension and postretirement benefits			Operating expenses and other

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Treasury Stock

Loews Corporation repurchased 10.5 million and 15.7 million shares of its common stock at aggregate costs of $614 million and $826 million during the nine months ended September 30, 2022 and 2021. Loews Corporation purchased 0.7 million shares of CNA’s common stock at an aggregate cost of $26 million during the nine months ended September 30, 2022.

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,
			2022						2021			2022						2021
(In millions)
Non-insurance warranty – CNA Financial			$	399					$	357		$	1,173					$	1,054
Transportation and storage of natural gas and NGLs and other services – Boardwalk Pipelines			$	329					$	296		$	1,013					$	959
Lodging and related services – Loews Hotels & Co			171						129			507						279
Rigid plastic packaging and recycled resin – Corporate (a)																		280
Total revenues from contracts with customers			500						425			1,520						1,518
Other revenues			33						25			87						62
Operating revenues and other			$	533					$	450		$	1,607					$	1,580

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

Receivables from contracts with customers – As of September 30, 2022 and December 31, 2021, receivables from contracts with customers were approximately $144 million and $145 million and are included within Receivables on the Consolidated Condensed Balance Sheets.

Deferred revenue – As of September 30, 2022 and December 31, 2021, deferred revenue resulting from contracts with customers was approximately $4.8 billion and $4.6 billion and is reported as Deferred non-insurance warranty revenue and within Other liabilities on the Consolidated Condensed Balance Sheets. Approximately $1.0 billion and $916 million of revenues recognized during the nine months ended September 30, 2022 and 2021 were included in deferred revenue as of December 31, 2021 and 2020.

Performance obligations – As of September 30, 2022, approximately $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 services for natural gas and natural gas liquids and hydrocarbons (“NGLs”) at Boardwalk Pipelines and non-insurance warranty revenue at CNA. Approximately $0.8 billion will be recognized during the remaining three months of 2022, $2.7 billion in 2023 and the remainder in following years. The actual timing of recognition may vary due to factors outside of the Company’s control.

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8. Benefit Plans

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

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

			Pension Benefits
			Three Months Ended																		Nine Months Ended
			September 30,																		September 30,
			2022						2021												2022						2021
(In millions)
Service cost			$	1					$	1											$	2					$	2
Interest cost			20						17												57						53
Expected return on plan assets			(41)						(41)												(124)						(127)
Amortization of unrecognized net loss			8						12												24						37
Settlements																					2						2
Regulatory asset (increase) decrease			(1)						1												1						1
Net periodic benefit			$	(13)					$	(10)											$	(38)					$	(32)

			Other Postretirement Benefits
			Three Months Ended																		Nine Months Ended
			September 30,																		September 30,
			2022						2021												2022						2021
(In millions)
Interest cost																					$	1					$	1
Expected return on plan assets									$	(1)											(1)						(2)
Net periodic benefit			$	—					$	(1)											$	—					$	(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 “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.

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

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

The Company 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 were held 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 will materially affect the Company’s results of operations or equity.

10. Commitments and Contingencies

CNA Guarantees

CNA has provided guarantees, if the primary obligor fails to perform, to holders of structured settlement annuities issued by a previously owned subsidiary. As of September 30, 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.

Loews Hotels & Co

In October of 2022, Loews Hotels & Co contributed $34 million as an initial investment in two joint venture development projects expected to open in 2025. These projects are currently estimated to require an aggregate investment of approximately $200 million in capital contributions from Loews Hotels & Co.

11. Segments

Loews Corporation has four reportable segments comprised of three individual consolidated operating subsidiaries, CNA, Boardwalk Pipelines and Loews Hotels & Co; and the Corporate segment. The Corporate segment is primarily comprised of Loews Corporation, excluding its subsidiaries, the consolidated operations of Altium Packaging through March 31, 2021 and the equity method of accounting for Altium Packaging 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 19 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 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.

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

Three Months Ended September 30, 2022			CNA Financial						Boardwalk Pipelines						Loews Hotels & Co						Corporate												Total
(In millions)
Revenues:
Insurance premiums			$	2,221																													$	2,221
Net investment income (loss)			422						$	1											$	(19)											404
Investment losses			(96)																														(96)
Non-insurance warranty revenue			399																														399
Operating revenues and other			11						338						$	180					4												533
Total			2,957						339						180						(15)												3,461
Expenses:
Insurance claims and policyholders’ benefits			1,665																														1,665
Amortization of deferred acquisition costs			383																														383
Non-insurance warranty expense			371																														371
Operating expenses and other			346						250						147						17												760
Interest			28						42						(1)						23												92
Total			2,793						292						146						40												3,271
Income (loss) before income tax			164						47						34						(55)												190
Income tax (expense) benefit			(36)						(13)						(9)						11												(47)
Net income (loss)			128						34						25						(44)												143
Amounts attributable to noncontrolling interests			(13)																														(13)
Net income (loss) attributable to Loews Corporation			$	115					$	34					$	25					$	(44)											$	130

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Three Months Ended September 30, 2021			CNA Financial						Boardwalk Pipelines						Loews Hotels & Co						Corporate												Total
(In millions)
Revenues:
Insurance premiums			$	2,059																													$	2,059
Net investment income (loss)			513																		$	(30)											483
Investment gains			22																														22
Non-insurance warranty revenue			357																														357
Operating revenues and other			8						$	307					$	134					1												450
Total			2,959						307						134						(29)												3,371
Expenses:
Insurance claims and policyholders’ benefits			1,632																														1,632
Amortization of deferred acquisition costs			368																														368
Non-insurance warranty expense			330																														330
Operating expenses and other			287						215						109						27												638
Interest			28						40						8						23												99
Total			2,645						255						117						50												3,067
Income (loss) before income tax			314						52						17						(79)												304
Income tax (expense) benefit			(59)						(14)						(4)						19												(58)
Net income (loss)			255						38						13						(60)												246
Amounts attributable to noncontrolling interests			(26)																														(26)
Net income (loss) attributable to Loews Corporation			$	229					$	38					$	13					$	(60)											$	220

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Nine Months Ended September 30, 2022			CNA Financial						Boardwalk Pipelines						Loews Hotels & Co						Corporate												Total
(In millions)
Revenues:
Insurance premiums			$	6,435																													$	6,435
Net investment income (loss)			1,302						$	1					$	(1)					$	(100)											1,202
Investment losses			(166)																														(166)
Non-insurance warranty revenue			1,173																														1,173
Operating revenues and other			24						1,044						533						6												1,607
Total			8,768						1,045						532						(94)												10,251
Expenses:
Insurance claims and policyholders’ benefits			4,703																														4,703
Amortization of deferred acquisition costs			1,101																														1,101
Non-insurance warranty expense			1,092																														1,092
Operating expenses and other			1,001						698						405						62												2,166
Interest			84						126						7						67												284
Total			7,981						824						412						129												9,346
Income (loss) before income tax			787						221						120						(223)												905
Income tax (expense) benefit			(141)						(57)						(36)						44												(190)
Net income (loss)			646						164						84						(179)												715
Amounts attributable to noncontrolling interests			(67)																														(67)
Net income (loss) attributable to Loews Corporation			$	579					$	164					$	84					$	(179)											$	648

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Nine Months Ended September 30, 2021			CNA Financial						Boardwalk Pipelines						Loews Hotels & Co						Corporate (a)												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

(a)			Amounts include the consolidated results of Altium Packaging through March 31, 2021. Beginning April 1, 2021, Altium Packaging is recorded as an equity method investment.

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