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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 March 31, 2021
OR
☐ 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
LOEWS CORPORATION
(Exact name of registrant as specified in its charter)

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

667 Madison Avenue, New York, N.Y. 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) 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 April 30, 2021, there were 263,175,591 shares of the registrant’s common stock outstanding.

INDEX

| Page No.
Part I. Financial Information |
Item 1. Financial Statements (unaudited) |
Consolidated Condensed Balance Sheets | 3
March 31, 2021 and December 31, 2020 |
Consolidated Condensed Statements of Operations | 4
Three months ended March 31, 2021 and 2020 |
Consolidated Condensed Statements of Comprehensive Loss | 5
Three months ended March 31, 2021 and 2020 |
Consolidated Condensed Statements of Equity | 6
Three months ended March 31, 2021 and 2020 |
Consolidated Condensed Statements of Cash Flows | 7
Three months ended March 31, 2021 and 2020 |
Notes to Consolidated Condensed Financial Statements | 8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28
Item 3. Quantitative and Qualitative Disclosures about Market Risk | 42
Item 4. Controls and Procedures | 43
Part II. Other Information | 43
Item 1. Legal Proceedings | 43
Item 1A. Risk Factors | 43
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 45
Item 6. Exhibits | 46

2

Index
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)

|  | March 31, 2021 |  |  | December 31, 2020 |
(Dollar amounts in millions, except per share data) |  |  |  |  |  |
Assets: |  |  |  |  |  |
Investments: |  |  |  |  |  |
Fixed maturities, amortized cost of $39,293 and $38,963, less allowance for credit loss of $43 and $40 |  | $ | 43,584 |  |  | $ | 44,646 |
Equity securities, cost of $1,455 and $1,456 |  |  | 1,580 |  |  |  | 1,561 |
Limited partnership investments |  |  | 1,769 |  |  |  | 1,798 |
Other invested assets, primarily mortgage loans, less allowance for credit loss of $26 and $26 |  |  | 1,144 |  |  |  | 1,165 |
Short term investments |  |  | 4,282 |  |  |  | 4,674 |
Total investments |  |  | 52,359 |  |  |  | 53,844 |
Cash |  |  | 660 |  |  |  | 478 |
Receivables |  |  | 8,539 |  |  |  | 7,833 |
Property, plant and equipment |  |  | 9,921 |  |  |  | 10,451 |
Goodwill |  |  | 349 |  |  |  | 785 |
Deferred non-insurance warranty acquisition expenses |  |  | 3,149 |  |  |  | 3,068 |
Deferred acquisition costs of insurance subsidiaries |  |  | 741 |  |  |  | 708 |
Other assets |  |  | 2,501 |  |  |  | 3,069 |
Assets held for sale |  |  | 1,786 |  |  |  |  |
Total assets |  | $ | 80,005 |  |  | $ | 80,236 |
Liabilities and Equity: |  |  |  |  |  |  |  |
Insurance reserves: |  |  |  |  |  |  |  |
Claim and claim adjustment expense |  | $ | 23,056 |  |  | $ | 22,706 |
Future policy benefits |  |  | 12,772 |  |  |  | 13,318 |
Unearned premiums |  |  | 5,319 |  |  |  | 5,119 |
Total insurance reserves |  |  | 41,147 |  |  |  | 41,143 |
Payable to brokers |  |  | 310 |  |  |  | 92 |
Short term debt |  |  | 141 |  |  |  | 37 |
Long term debt |  |  | 8,996 |  |  |  | 10,072 |
Deferred income taxes |  |  | 924 |  |  |  | 1,065 |
Deferred non-insurance warranty revenue |  |  | 4,119 |  |  |  | 4,023 |
Other liabilities |  |  | 4,375 |  |  |  | 4,623 |
Liabilities held for sale |  |  | 1,456 |  |  |  |  |
Total liabilities |  |  | 61,468 |  |  |  | 61,055 |
Commitments and contingent liabilities |  |  |  |  |  |  |  |
Preferred stock, $0.10 par value: |  |  |  |  |  |  |  |
Authorized – 100,000,000 shares |  |  |  |  |  |  |  |
Common stock, $0.01 par value: |  |  |  |  |  |  |  |
Authorized – 1,800,000,000 shares |  |  |  |  |  |  |  |
Issued – 269,472,042 and 269,360,973 shares |  |  | 3 |  |  |  | 3 |
Additional paid-in capital |  |  | 3,119 |  |  |  | 3,133 |
Retained earnings |  |  | 14,394 |  |  |  | 14,150 |
Accumulated other comprehensive income |  |  | 34 |  |  |  | 581 |
|  |  | 17,550 |  |  |  | 17,867 |
Less treasury stock, at cost (5,708,164 and 150,000 shares) |  |  | (280 | ) |  |  | (7 | )
Total shareholders’ equity |  |  | 17,270 |  |  |  | 17,860 |
Noncontrolling interests |  |  | 1,267 |  |  |  | 1,321 |
Total equity |  |  | 18,537 |  |  |  | 19,181 |
Total liabilities and equity |  | $ | 80,005 |  |  | $ | 80,236 |

See accompanying Notes to Consolidated Condensed Financial Statements.
3

Index
Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended March 31 |  | 2021 |  |  | 2020 |
(In millions, except per share data) |  |  |  |  |  |
Revenues: |  |  |  |  |  |
Insurance premiums |  | $ | 1,962 |  |  | $ | 1,869 |
Net investment income |  |  | 550 |  |  |  | 163 |
Investment gains (losses) |  |  | 57 |  |  |  | (216 | )
Non-insurance warranty revenue |  |  | 338 |  |  |  | 301 |
Operating revenues and other |  |  | 715 |  |  |  | 982 |
Total |  |  | 3,622 |  |  |  | 3,099 |
Expenses: |  |  |  |  |  |  |  |
Insurance claims and policyholders’ benefits |  |  | 1,506 |  |  |  | 1,425 |
Amortization of deferred acquisition costs |  |  | 359 |  |  |  | 344 |
Non-insurance warranty expense |  |  | 311 |  |  |  | 281 |
Operating expenses and other |  |  | 914 |  |  |  | 2,026 |
Interest |  |  | 125 |  |  |  | 144 |
Total |  |  | 3,215 |  |  |  | 4,220 |
Income (loss) before income tax |  |  | 407 |  |  |  | (1,121 | )
Income tax (expense) benefit |  |  | (114 | ) |  |  | 77 |
Net income (loss) |  |  | 293 |  |  |  | (1,044 | )
Amounts attributable to noncontrolling interests |  |  | (32 | ) |  |  | 412 |
Net income (loss) attributable to Loews Corporation |  | $ | 261 |  |  | $ | (632 | )
Basic net income (loss) per share |  | $ | 0.98 |  |  | $ | (2.20 | )
Diluted net income (loss) per share |  | $ | 0.97 |  |  | $ | (2.20 | )
Weighted average shares outstanding: |  |  |  |  |  |  |  |
Shares of common stock |  |  | 267.39 |  |  |  | 287.04 |
Dilutive potential shares of common stock |  |  | 0.37 |  |  |  |  |
Total weighted average shares outstanding assuming dilution |  |  | 267.76 |  |  |  | 287.04 |

See accompanying Notes to Consolidated Condensed Financial Statements.
4

Index
Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)

Three Months Ended March 31 |  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |
Net income (loss) |  | $ | 293 |  |  | $ | (1,044 | )
Other comprehensive loss, after tax |  |  |  |  |  |  |  |
Changes in: |  |  |  |  |  |  |  |
Net unrealized losses on investments with an allowance for credit losses |  |  |  |  |  |  | (11 | )
Net unrealized losses on other investments |  |  | (627 | ) |  |  | (1,044 | )
Total unrealized losses on investments |  |  | (627 | ) |  |  | (1,055 | )
Unrealized gains (losses) on cash flow hedges |  |  | 4 |  |  |  | (19 | )
Pension and postretirement benefits |  |  | 9 |  |  |  | 14 |
Foreign currency translation |  |  | 3 |  |  |  | (84 | )
Other comprehensive loss |  |  | (611 | ) |  |  | (1,144 | )
Comprehensive loss |  |  | (318 | ) |  |  | (2,188 | )
Amounts attributable to noncontrolling interests |  |  | 32 |  |  |  | 531 |
Total comprehensive loss attributable to Loews Corporation |  | $ | (286 | ) |  | $ | (1,657 | )

See accompanying Notes to Consolidated Condensed Financial Statements.
5

Index
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, 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 |  |  | (1,044 | ) |  |  |  |  |  |  |  |  |  |  | (632 | ) |  |  |  |  |  |  |  |  |  |  | (412 | )
Other comprehensive loss |  |  | (1,144 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (1,025 | ) |  |  |  |  |  |  | (119 | )
Dividends paid ($0.0625 per share) |  |  | (87 | ) |  |  |  |  |  |  |  |  |  |  | (18 | ) |  |  |  |  |  |  |  |  |  |  | (69 | )
Purchases of Loews Corporation treasury stock |  |  | (445 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (445 | ) |  |  |  |
Purchases of subsidiary stock from non- controlling interests |  |  | (18 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (18 | )
Stock-based compensation |  |  | (4 | ) |  |  |  |  |  |  | (22 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 18 |
Other |  |  | (5 | ) |  |  |  |  |  |  | (5 | ) |  |  | (1 | ) |  |  |  |  |  |  |  |  |  |  | 1 |
Balance,March 31, 2020 |  | $ | 19,178 |  |  | $ | 3 |  |  | $ | 3,347 |  |  | $ | 15,167 |  |  | $ | (1,093 | ) |  | $ | (458 | ) |  | $ | 2,212 |
Balance, January 1, 2021 |  | $ | 19,181 |  |  | $ | 3 |  |  | $ | 3,133 |  |  | $ | 14,150 |  |  | $ | 581 |  |  | $ | (7 | ) |  | $ | 1,321 |
Net income |  |  | 293 |  |  |  |  |  |  |  |  |  |  |  | 261 |  |  |  |  |  |  |  |  |  |  |  | 32 |
Other comprehensive loss |  |  | (611 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (547 | ) |  |  |  |  |  |  | (64 | )
Dividends paid ($0.0625 per share) |  |  | (49 | ) |  |  |  |  |  |  |  |  |  |  | (17 | ) |  |  |  |  |  |  |  |  |  |  | (32 | )
Purchases of Loews Corporation treasury stock |  |  | (274 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (274 | ) |  |  |  |
Purchases of subsidiary stock from non-controlling interests |  |  | (3 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (3 | )
Stock-based compensation |  |  | 4 |  |  |  |  |  |  |  | (11 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 15 |
Other |  |  | (4 | ) |  |  |  |  |  |  | (3 | ) |  |  |  |  |  |  |  |  |  |  | 1 |  |  |  | (2 | )
Balance, March 31, 2021 |  | $ | 18,537 |  |  | $ | 3 |  |  | $ | 3,119 |  |  | $ | 14,394 |  |  | $ | 34 |  |  | $ | (280 | ) |  | $ | 1,267 |

See accompanying Notes to Consolidated Condensed Financial Statements.
6

Index
Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

Three Months Ended March 31 |  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |
Operating Activities: |  |  |  |  |  |
Net income (loss) |  | $ | 293 |  |  | $ | (1,044 | )
Adjustments to reconcile net income (loss) to net cash provided by operating activities, net |  |  | 257 |  |  |  | 1,363 |
Changes in operating assets and liabilities, net: |  |  |  |  |  |  |  |
Receivables |  |  | (736 | ) |  |  | (266 | )
Deferred acquisition costs |  |  | (32 | ) |  |  | (27 | )
Insurance reserves |  |  | 605 |  |  |  | 510 |
Other assets |  |  | (250 | ) |  |  | (116 | )
Other liabilities |  |  | 126 |  |  |  | (288 | )
Trading securities |  |  | (129 | ) |  |  | 197 |
Net cash flow provided by operating activities |  |  | 134 |  |  |  | 329 |
Investing Activities: |  |  |  |  |  |  |  |
Purchases of fixed maturities |  |  | (2,203 | ) |  |  | (1,818 | )
Proceeds from sales of fixed maturities |  |  | 907 |  |  |  | 823 |
Proceeds from maturities of fixed maturities |  |  | 1,084 |  |  |  | 799 |
Purchases of equity securities |  |  | (81 | ) |  |  | (220 | )
Proceeds from sales of equity securities |  |  | 119 |  |  |  | 98 |
Purchases of limited partnership investments |  |  | (61 | ) |  |  | (32 | )
Proceeds from sales of limited partnership investments |  |  | 49 |  |  |  | 204 |
Purchases of property, plant and equipment |  |  | (87 | ) |  |  | (233 | )
Change in short term investments |  |  | 569 |  |  |  | 837 |
Other, net |  |  | 10 |  |  |  | (31 | )
Net cash flow provided by investing activities |  |  | 306 |  |  |  | 427 |
Financing Activities: |  |  |  |  |  |  |  |
Dividends paid |  |  | (17 | ) |  |  | (18 | )
Dividends paid to noncontrolling interests |  |  | (32 | ) |  |  | (69 | )
Purchases of Loews Corporation treasury stock |  |  | (280 | ) |  |  | (458 | )
Purchases of subsidiary stock from noncontrolling interests |  |  | (3 | ) |  |  | (18 | )
Principal payments on debt |  |  | (1,073 | ) |  |  | (223 | )
Issuance of debt |  |  | 1,159 |  |  |  | 654 |
Other, net |  |  | (12 | ) |  |  | (12 | )
Net cash flow used by financing activities |  |  | (258 | ) |  |  | (144 | )
Effect of foreign exchange rate on cash |  |  |  |  |  |  | (9 | )
Net change in cash |  |  | 182 |  |  |  | 603 |
Cash, beginning of period |  |  | 478 |  |  |  | 336 |
Cash, end of period |  | $ | 660 |  |  | $ | 939 |

See accompanying Notes to Consolidated Condensed Financial Statements.
7

Index
Loews Corporation and Subsidiaries
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
Loews Corporation is a holding company. Its consolidated subsidiaries are engaged in the following lines of business: commercial property and casualty insurance (CNA Financial Corporation (“CNA”), an 89.5% owned subsidiary); transportation and storage of natural gas and natural gas liquids (Boardwalk Pipeline Partners, LP (“Boardwalk Pipelines”), a wholly owned subsidiary); the operation of a chain of hotels (Loews Hotels Holding Corporation (“Loews Hotels & Co”), a wholly owned subsidiary); and the manufacture of rigid plastic packaging solutions (Altium Packaging LLC (“Altium Packaging”), a 99% owned subsidiary). Unless the context otherwise requires, the term “Company” as used herein means Loews Corporation including its consolidated subsidiaries, the term “Net income (loss) attributable to Loews Corporation” as used herein means Net income (loss) attributable to Loews Corporation shareholders and the term “subsidiaries” means Loews Corporation’s consolidated subsidiaries.
On April 1, 2021, Loews Corporation sold 47% of its interest in Altium Packaging. See Note 2 for further discussion.
As a result of the April 26, 2020 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. Loews Corporation’s operating results for the first quarter of 2020 include the operations of Diamond Offshore. During the first quarter of 2020, Diamond Offshore recorded an aggregate asset impairment charge of $774 million ($408 million after tax and noncontrolling interests), which is reported within Operating expenses and other on the Consolidated Condensed Statements of Operations. For additional information regarding the deconsolidation of Diamond Offshore and the Diamond Offshore asset impairments, see Notes 2 and 6 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
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 March 31, 2021 and December 31, 2020 and results of operations, comprehensive loss and changes in shareholders’ equity and cash flows for the three months ended March 31, 2021 and 2020. Net income (loss) for the first quarter of each of the years is not necessarily indicative of net income (loss) for that entire year. These Consolidated Condensed Financial Statements should be read in conjunction with the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
The Company presents basic and diluted net income (loss) per share on the Consolidated Condensed Statements of Operations. Basic net income (loss) per share excludes dilution and is computed by dividing net income (loss) attributable to common stock by the weighted average number of common shares outstanding for the period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the three months ended March 31, 2021 there were no shares attributable to employee stock-based compensation awards excluded from the diluted weighted average shares outstanding amounts because the effect would have been antidilutive.
Recently issued ASUs – In August of 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-12, “Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts.” The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts. The guidance requires entities to update annually cash flow assumptions, including morbidity and persistency, and update quarterly discount rate assumptions using an upper-medium grade fixed-income instrument yield. The effect of changes in cash flow assumptions will be recorded in Net income and the effect of changes in discount rate assumptions will be recorded in Other comprehensive income (“OCI”). This guidance is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. The guidance may be applied using either a modified retrospective transition method or a full retrospective transition method. The guidance requires restatement of prior periods presented. The Company plans to adopt on the effective date, using the modified retrospective transition method and is currently evaluating the effect the updated guidance will have on its consolidated financial statements, including the increased disclosure requirements. The annual updating of cash flow assumptions is expected to increase income statement volatility. While the requirements of the new guidance represent a material change from existing accounting guidance, the underlying economics of the business and related cash flows will be unchanged.
8

Index
2. Significant Transaction
Altium Packaging
On March 12, 2021, Loews Corporation entered into a definitive agreement to sell 47% of its interest in Altium Packaging to GIC, Singapore’s sovereign wealth fund. On April 1, 2021, the transaction closed and Loews Corporation received approximately $420 million in cash consideration, subject to expenses and post-closing adjustments. Loews Corporation will share certain participating rights with GIC related to capital allocation and other decisions by Altium Packaging. Therefore, in accordance with Accounting Standards Codification (“ASC”) 810, “Consolidation,” Altium Packaging will be deconsolidated from Loews Corporation’s consolidated financial statements effective as of April 1, 2021. The assets and liabilities of Altium Packaging have been classified as held for sale at March 31, 2021, and a deferred tax liability of $35 million was recorded in the three months ended March 31, 2021. Assets held for sale of $1.8 billion primarily consist of property, plant and equipment of $0.5 billion, goodwill of $0.4 billion, intangible assets of $0.5 billion and other assets of $0.4 billion. Liabilities held for sale of $1.5 billion primarily consist of $1.1 billion of long term debt and other liabilities of $0.4 billion.
The transaction will result in a pretax gain of approximately $560 million to be recorded in the second quarter of 2021 and the retained 53% investment in Altium Packaging will initially be recorded at an estimated fair value of $475 million. The gain will be recorded in Investment gains (losses) on the Consolidated Condensed Statement of Operations. Effective April 1, 2021, Loews Corporation’s investment in Altium Packaging will be accounted for under the equity method of accounting.
3. Investments
Net investment income is as follows:

Three Months Ended March 31 |  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |
Fixed maturity securities |  | $ | 428 |  |  | $ | 438 |
Limited partnership investments |  |  | 47 |  |  |  | (102 | )
Short term investments |  |  |  |  |  |  | 7 |
Equity securities |  |  | 29 |  |  |  | (44 | )
Income (loss) from trading portfolio (a) |  |  | 50 |  |  |  | (129 | )
Other |  |  | 16 |  |  |  | 14 |
Total investment income |  |  | 570 |  |  |  | 184 |
Investment expenses |  |  | (20 | ) |  |  | (21 | )
Net investment income |  | $ | 550 |  |  | $ | 163 |

(a) | Net unrealized gains (losses) related to changes in fair value on securities still held were $32 and $(117) for the three months ended March 31, 2021 and 2020.

Investment gains (losses) are as follows:

Three Months Ended March 31 |  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |
Fixed maturity securities |  | $ | 38 |  |  | $ | (75 | )
Equity securities |  |  | 2 |  |  |  | (133 | )
Derivative instruments |  |  | 17 |  |  |  | 5 |
Short term investments and other |  |  |  |  |  |  | (13 | )
Investment gains (losses) (a) |  | $ | 57 |  |  | $ | (216 | )

(a) | Gross investment gains on available-for-sale securities were $58 and $29 for the three months ended March 31, 2021 and 2020. Gross investment losses on available-for-sale securities were $20 and $104 for the three months ended March 31, 2021 and 2020. During the three months ended March 31, 2021 and 2020, $2 of investment gains and $133 of investment losses were recognized due to the change in fair value of non-redeemable preferred stock still held as of March 31, 2021 and 2020.

9

Index
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 $389 million, $371 million and $390 million as of March 31, 2021, December 31, 2020 and March 31, 2020 and are excluded from the estimate of expected credit losses and the amortized cost basis in the tables within this Note.

Three months ended March 31, 2021 |  | Corporate and Other Bonds |  |  | Asset-backed |  |  | Total |
(In millions) |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |
Balance as of January 1, 2021 |  | $ | 23 |  |  | $ | 17 |  |  | $ | 40 |
Additions to the allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |
Securities for which credit losses were not previously recorded |  |  | 14 |  |  |  |  |  |  |  | 14 |
Available-for-sale securities accounted for as PCD assets |  |  | 2 |  |  |  |  |  |  |  | 2 |
Reductions to the allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |
Securities sold during the period (realized) |  |  | 6 |  |  |  |  |  |  |  | 6 |
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis |  |  |  |  |  |  |  |  |  |  |  |
Additional decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period |  |  | (6 | ) |  |  | (1 | ) |  |  | (7 | )
Total allowance for credit losses |  | $ | 27 |  |  | $ | 16 |  |  | $ | 43 |
Three months ended March 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |
Balance as of January 1, 2020 |  | $ | - |  |  | $ | - |  |  | $ | - |
Additions to the allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |
Impact of adopting ASC 326 |  |  | 6 |  |  |  |  |  |  |  | 6 |
Securities for which credit losses were not previously recorded |  |  | 48 |  |  |  |  |  |  |  | 48 |
Available-for-sale securities accounted for as PCD assets |  |  | 1 |  |  |  |  |  |  |  | 1 |
Reductions to the allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |
Securities sold during the period (realized) |  |  | 5 |  |  |  |  |  |  |  | 5 |
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis |  |  | 1 |  |  |  |  |  |  |  | 1 |
Total allowance for credit losses |  | $ | 49 |  |  | $ | - |  |  | $ | 49 |

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

Three Months Ended March 31 |  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |
Fixed maturity securities available-for-sale: |  |  |  |  |  |
Corporate and other bonds |  | $ | 7 |  |  | $ | 91 |
Asset-backed |  |  | (1 | ) |  |  | 1 |
Impairment losses recognized in earnings |  | $ | 6 |  |  | $ | 92 |

There were no losses recognized on mortgage loans during the three months ended March 31, 2021. During the three months ended March 31, 2020, $13 million of losses were recognized related to mortgage loans due to changes in expected credit losses.
10

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

March 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 |  | $ | 21,110 |  |  | $ | 2,644 |  |  | $ | 71 |  |  | $ | 27 |  |  | $ | 23,656 |
States, municipalities and political subdivisions |  |  | 10,041 |  |  |  | 1,590 |  |  |  | 31 |  |  |  |  |  |  |  | 11,600 |
Asset-backed: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage-backed |  |  | 3,215 |  |  |  | 108 |  |  |  | 40 |  |  |  |  |  |  |  | 3,283 |
Commercial mortgage-backed |  |  | 1,952 |  |  |  | 76 |  |  |  | 24 |  |  |  | 16 |  |  |  | 1,988 |
Other asset-backed |  |  | 2,281 |  |  |  | 71 |  |  |  | 7 |  |  |  |  |  |  |  | 2,345 |
Total asset-backed |  |  | 7,448 |  |  |  | 255 |  |  |  | 71 |  |  |  | 16 |  |  |  | 7,616 |
U.S. Treasury and obligations of government-sponsored enterprises |  |  | 138 |  |  |  | 1 |  |  |  | 7 |  |  |  |  |  |  |  | 132 |
Foreign government |  |  | 508 |  |  |  | 23 |  |  |  | 2 |  |  |  |  |  |  |  | 529 |
Redeemable preferred stock |  |  | 12 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 12 |
Fixed maturities available-for-sale |  |  | 39,257 |  |  |  | 4,513 |  |  |  | 182 |  |  |  | 43 |  |  |  | 43,545 |
Fixed maturities trading |  |  | 36 |  |  |  | 3 |  |  |  |  |  |  |  |  |  |  |  | 39 |
Total fixed maturity securities |  | $ | 39,293 |  |  | $ | 4,516 |  |  | $ | 182 |  |  | $ | 43 |  |  | $ | 43,584 |

December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate and other bonds |  | $ | 20,792 |  |  | $ | 3,578 |  |  | $ | 22 |  |  | $ | 23 |  |  | $ | 24,325 |
States, municipalities and political subdivisions |  |  | 9,729 |  |  |  | 1,863 |  |  |  |  |  |  |  |  |  |  |  | 11,592 |
Asset-backed: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage-backed |  |  | 3,442 |  |  |  | 146 |  |  |  | 1 |  |  |  |  |  |  |  | 3,587 |
Commercial mortgage-backed |  |  | 1,933 |  |  |  | 93 |  |  |  | 42 |  |  |  | 17 |  |  |  | 1,967 |
Other asset-backed |  |  | 2,179 |  |  |  | 81 |  |  |  | 9 |  |  |  |  |  |  |  | 2,251 |
Total asset-backed |  |  | 7,554 |  |  |  | 320 |  |  |  | 52 |  |  |  | 17 |  |  |  | 7,805 |
U.S. Treasury and obligations of government-sponsored enterprises |  |  | 339 |  |  |  | 2 |  |  |  | 3 |  |  |  |  |  |  |  | 338 |
Foreign government |  |  | 512 |  |  |  | 32 |  |  |  |  |  |  |  |  |  |  |  | 544 |
Fixed maturities available-for-sale |  |  | 38,926 |  |  |  | 5,795 |  |  |  | 77 |  |  |  | 40 |  |  |  | 44,604 |
Fixed maturities trading |  |  | 37 |  |  |  | 5 |  |  |  |  |  |  |  |  |  |  |  | 42 |
Total fixed maturity securities |  | $ | 38,963 |  |  | $ | 5,800 |  |  | $ | 77 |  |  | $ | 40 |  |  | $ | 44,646 |

The net unrealized gains on available-for-sale investments included in the tables above are recorded as a component of Accumulated other comprehensive income (loss) (“AOCI”). When presented in AOCI, these amounts are net of tax and noncontrolling interests and any required Shadow Adjustments. To the extent that unrealized gains on fixed income securities supporting long term care products and structured settlements not funded by annuities would result in a premium deficiency if those gains were realized, a related increase in Insurance reserves is recorded, net of tax and noncontrolling interests, as a reduction of net unrealized gains through Other comprehensive income (loss) (“Shadow Adjustments”). As of March 31, 2021 and December 31, 2020, the net unrealized gains on investments included in AOCI were correspondingly reduced by Shadow Adjustments of $2.1 billion and $2.5 billion (after tax and noncontrolling interests).
11

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

|  | Less than 12 Months |  |  | 12 Months or Longer |  |  | Total |
March 31, 2021 |  | Estimated Fair Value |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |  |  | Gross Unrealized Losses |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate and other bonds |  | $ | 1,868 |  |  | $ | 66 |  |  | $ | 82 |  |  | $ | 5 |  |  | $ | 1,950 |  |  | $ | 71 |
States, municipalities and political subdivisions |  |  | 866 |  |  |  | 31 |  |  |  |  |  |  |  |  |  |  |  | 866 |  |  |  | 31 |
Asset-backed: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage-backed |  |  | 1,584 |  |  |  | 40 |  |  |  | 12 |  |  |  |  |  |  |  | 1,596 |  |  |  | 40 |
Commercial mortgage-backed |  |  | 320 |  |  |  | 9 |  |  |  | 285 |  |  |  | 15 |  |  |  | 605 |  |  |  | 24 |
Other asset-backed |  |  | 337 |  |  |  | 3 |  |  |  | 97 |  |  |  | 4 |  |  |  | 434 |  |  |  | 7 |
Total asset-backed |  |  | 2,241 |  |  |  | 52 |  |  |  | 394 |  |  |  | 19 |  |  |  | 2,635 |  |  |  | 71 |
U.S. Treasury and obligations of government-sponsored enterprises |  |  | 65 |  |  |  | 7 |  |  |  |  |  |  |  |  |  |  |  | 65 |  |  |  | 7 |
Foreign government |  |  | 45 |  |  |  | 2 |  |  |  |  |  |  |  |  |  |  |  | 45 |  |  |  | 2 |
Total fixed maturity securities |  | $ | 5,085 |  |  | $ | 158 |  |  | $ | 476 |  |  | $ | 24 |  |  | $ | 5,561 |  |  | $ | 182 |

December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate and other bonds |  | $ | 609 |  |  | $ | 21 |  |  | $ | 12 |  |  | $ | 1 |  |  | $ | 621 |  |  | $ | 22 |
States, municipalities and political subdivisions |  |  | 33 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 33 |  |  |  |  |
Asset-backed: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage-backed |  |  | 71 |  |  |  | 1 |  |  |  | 11 |  |  |  |  |  |  |  | 82 |  |  |  | 1 |
Commercial mortgage-backed |  |  | 533 |  |  |  | 40 |  |  |  | 28 |  |  |  | 2 |  |  |  | 561 |  |  |  | 42 |
Other asset-backed |  |  | 344 |  |  |  | 9 |  |  |  | 13 |  |  |  |  |  |  |  | 357 |  |  |  | 9 |
Total asset-backed |  |  | 948 |  |  |  | 50 |  |  |  | 52 |  |  |  | 2 |  |  |  | 1,000 |  |  |  | 52 |
U.S. Treasury and obligations of government-sponsored enterprises |  |  | 63 |  |  |  | 3 |  |  |  |  |  |  |  |  |  |  |  | 63 |  |  |  | 3 |
Foreign government |  |  | 13 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 13 |  |  |  |  |
Total fixed maturity securities |  | $ | 1,666 |  |  | $ | 74 |  |  | $ | 64 |  |  | $ | 3 |  |  | $ | 1,730 |  |  | $ | 77 |

Based on current facts and circumstances, the Company believes the unrealized losses presented in the March 31, 2021 securities in a gross unrealized loss position table above are not indicative of the ultimate collectability of the current amortized cost of the securities, but rather are attributable to changes in interest rates, credit spreads and other factors. There is no current intent to sell securities with unrealized losses, nor is it more likely than not that sale will be required prior to recovery of amortized cost; accordingly, it was determined that there are no additional impairment losses to be recorded at March 31, 2021.
Contractual Maturity
The following table presents available-for-sale fixed maturity securities by contractual maturity.

|  | March 31, 2021 |  |  | December 31, 2020 |
|  | Cost or Amortized Cost |  |  | Estimated Fair Value |  |  | Cost or Amortized Cost |  |  | Estimated Fair Value |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |
Due in one year or less |  | $ | 1,468 |  |  | $ | 1,473 |  |  | $ | 1,456 |  |  | $ | 1,458 |
Due after one year through five years |  |  | 10,837 |  |  |  | 11,583 |  |  |  | 12,304 |  |  |  | 13,098 |
Due after five years through ten years |  |  | 13,640 |  |  |  | 14,685 |  |  |  | 12,319 |  |  |  | 13,878 |
Due after ten years |  |  | 13,312 |  |  |  | 15,804 |  |  |  | 12,847 |  |  |  | 16,170 |
Total |  | $ | 39,257 |  |  | $ | 43,545 |  |  | $ | 38,926 |  |  | $ | 44,604 |

12

Index
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 March 31, 2021 |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | 2018 |  |  | 2017 |  |  | Prior |  |  | Total |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
DSCR ≥1.6x |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
LTV less than 55% |  |  |  |  | $ | 75 |  |  | $ | 32 |  |  | $ | 36 |  |  | $ | 114 |  |  | $ | 187 |  |  | $ | 444 |
LTV 55% to 65% |  |  |  |  |  | 14 |  |  |  | 20 |  |  |  | 14 |  |  |  | 15 |  |  |  | 11 |  |  |  | 74 |
LTV greater than 65% |  | $ | 5 |  |  |  |  |  |  |  | 5 |  |  |  |  |  |  |  |  |  |  |  | 24 |  |  |  | 34 |
DSCR 1.2x - 1.6x |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
LTV less than 55% |  |  |  |  |  |  |  |  |  |  | 16 |  |  |  |  |  |  |  | 5 |  |  |  | 77 |  |  |  | 98 |
LTV 55% to 65% |  |  |  |  |  |  | 20 |  |  |  | 40 |  |  |  | 53 |  |  |  | 27 |  |  |  |  |  |  |  | 140 |
LTV greater than 65% |  |  | 10 |  |  |  | 52 |  |  |  | 44 |  |  |  |  |  |  |  | 9 |  |  |  | 12 |  |  |  | 127 |
DSCR ≤1.2x |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
LTV less than 55% |  |  |  |  |  |  |  |  |  |  | 50 |  |  |  |  |  |  |  | 8 |  |  |  | 10 |  |  |  | 68 |
LTV 55% to 65% |  |  |  |  |  |  |  |  |  |  | 48 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 48 |
LTV greater than 65% |  |  |  |  |  |  |  |  |  |  | 29 |  |  |  |  |  |  |  |  |  |  |  | 7 |  |  |  | 36 |
Total |  | $ | 15 |  |  | $ | 161 |  |  | $ | 284 |  |  | $ | 103 |  |  | $ | 178 |  |  | $ | 328 |  |  | $ | 1,069 |

(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.

|  | March 31, 2021 |  |  | December 31, 2020 |
|  | Contractual/ Notional |  |  | Estimated Fair Value |  |  | Contractual/ Notional |  |  | Estimated Fair Value |
|  | Amount |  |  | Asset |  |  | (Liability) |  |  | Amount |  |  | Asset |  |  | (Liability) |
(In millions) |  |  |  |  | _ |  |  |  | - |  |  |  |  |  |  |  |  |  |
With hedge designation: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps (a) |  |  |  |  |  |  |  |  |  |  |  | $ | 675 |  |  |  |  |  | $ | (26 | )
Without hedge designation: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity markets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Options – purchased |  | $ | 200 |  |  | $ | 2 |  |  | _ |  |  |  | 135 |  |  | $ | 3 |  |  |  |  |
Interest rate swaps |  |  | 100 |  |  |  |  |  |  | $ | (2 | ) |  |  | 100 |  |  |  |  |  |  |  | (3 | )
Embedded derivative on funds withheld liability |  |  | 256 |  |  |  |  |  |  |  | (2 | ) |  |  | 190 |  |  |  |  |  |  |  | (19 | )

(a) | As of March 31, 2021, Interest rate swaps exclude amounts classified as held for sale. See Note 2 for further discussion.

13

Index
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 March 31, 2021, commitments to purchase or fund were approximately $1.4 billion and to sell were approximately $100 million under the terms of these investments.
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 the Company believes market participants 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.

March 31, 2021 |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds and other |  | $ | 152 |  |  | $ | 23,410 |  |  | $ | 767 |  |  | $ | 24,329 |
States, municipalities and political subdivisions |  |  |  |  |  |  | 11,556 |  |  |  | 44 |  |  |  | 11,600 |
Asset-backed |  |  |  |  |  |  | 7,301 |  |  |  | 315 |  |  |  | 7,616 |
Fixed maturities available-for-sale |  |  | 152 |  |  |  | 42,267 |  |  |  | 1,126 |  |  |  | 43,545 |
Fixed maturities trading |  |  |  |  |  |  | 34 |  |  |  | 5 |  |  |  | 39 |
Total fixed maturities |  | $ | 152 |  |  | $ | 42,301 |  |  | $ | 1,131 |  |  | $ | 43,584 |
Equity securities |  | $ | 824 |  |  | $ | 711 |  |  | $ | 45 |  |  | $ | 1,580 |
Short term and other (a) |  |  | 4,140 |  |  |  | 36 |  |  |  |  |  |  |  | 4,176 |
Payable to brokers (a) |  |  | (71 | ) |  |  | (2 | ) |  |  |  |  |  |  | (73 | )

(a) | As of March 31, 2021, Short term and other and Payable to brokers exclude amounts classified as held for sale. See Note 2 for further discussion.

14

Index

December 31, 2020 |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |
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 | )

15

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 months ended March 31, 2021 and 2020:

|  |  |  |  | Net Realized Investment Gains (Losses) and Net Change in Unrealized Investment Gains (Losses) |  |  |  |  |  |  |  |  |  |  |  | Transfers |  |  | Transfers |  |  |  |  |  | Unrealized Gains (Losses) Recognized in Net Income (Loss) on Level 3 Assets and Liabilities |  |  | Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities |
2021 |  | Balance, January 1 |  |  | Included in Net Income |  |  | Included in OCI |  |  | Purchases |  |  | Sales |  |  | Settlements |  |  | into Level 3 |  |  | out of Level 3 |  |  | Balance, March 31 |  |  | Held at March 31 |  |  | Held at March 31 |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds and other |  | $ | 770 |  |  | $ | (13 | ) |  | $ | (40 | ) |  | $ | 42 |  |  |  |  |  | $ | (2 | ) |  | $ | 10 |  |  |  |  |  | $ | 767 |  |  |  |  |  | $ | (40 | )
States, municipalities and political Subdivisions |  |  | 46 |  |  |  |  |  |  |  | (2 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 44 |  |  |  |  |  |  | (2 | )
Asset-backed |  |  | 308 |  |  |  | 2 |  |  |  | (9 | ) |  |  | 30 |  |  |  |  |  |  | (17 | ) |  |  | 9 |  |  | $ | (8 | ) |  |  | 315 |  |  |  |  |  |  | (9 | )
Fixed maturities available-for-sale |  |  | 1,124 |  |  |  | (11 | ) |  |  | (51 | ) |  |  | 72 |  |  | $ | - |  |  |  | (19 | ) |  |  | 19 |  |  |  | (8 | ) |  |  | 1,126 |  |  | $ | - |  |  |  | (51 | )
Fixed maturities trading |  |  | 8 |  |  |  | (3 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5 |  |  |  | (3 | ) |  |  |  |
Total fixed maturities |  | $ | 1,132 |  |  | $ | (14 | ) |  | $ | (51 | ) |  | $ | 72 |  |  | $ | - |  |  | $ | (19 | ) |  | $ | 19 |  |  | $ | (8 | ) |  | $ | 1,131 |  |  | $ | (3 | ) |  | $ | (51 | )
Equity securities |  | $ | 43 |  |  | $ | 2 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 45 |  |  | $ | 2 |  |  |  |  |

16

Index

|  |  |  |  | Net Realized Investment Gains (Losses) and Net Change in Unrealized Investment Gains (Losses) |  |  |  |  |  |  |  |  |  |  |  | Transfers |  |  | Transfers |  |  |  |  |  | Unrealized Gains (Losses) Recognized in Net Income (Loss) on Level 3 Assets and Liabilities |  |  | Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities |
2020 |  | Balance, January 1 |  |  | Included in Net Income |  |  | Included in OCI |  |  | Purchases |  |  | Sales |  |  | Settlements |  |  | into Level 3 |  |  | out of Level 3 |  |  | Balance, March 31 |  |  | Held at March 31 |  |  | Held at March 31 |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds and other |  | $ | 468 |  |  |  |  |  | $ | (37 | ) |  | $ | 67 |  |  |  |  |  | $ | (2 | ) |  |  |  |  |  |  |  | $ | 496 |  |  |  |  |  | $ | (35 | )
Asset-backed |  |  | 165 |  |  |  |  |  |  | (9 | ) |  |  | 45 |  |  |  |  |  |  | (3 | ) |  |  |  |  | $ | (1 | ) |  |  | 197 |  |  |  |  |  |  | (9 | )
Fixed maturities available-for-sale |  |  | 633 |  |  | $ | - |  |  |  | (46 | ) |  |  | 112 |  |  | $ | - |  |  |  | (5 | ) |  | $ | - |  |  |  | (1 | ) |  |  | 693 |  |  | $ | - |  |  |  | (44 | )
Fixed maturities trading |  |  | 4 |  |  |  | (1 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3 |  |  |  | (1 | ) |  |  |  |
Total fixed maturities |  | $ | 637 |  |  | $ | (1 | ) |  | $ | (46 | ) |  | $ | 112 |  |  | $ | - |  |  | $ | (5 | ) |  | $ | - |  |  | $ | (1 | ) |  | $ | 696 |  |  | $ | (1 | ) |  | $ | (44 | )
Equity securities |  | $ | 19 |  |  | $ | (3 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 16 |  |  | $ | (3 | ) |  |  |  |

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

17

Index
Securities may be transferred in or out of levels within the fair value hierarchy based on the availability of observable market information and quoted prices used to determine the fair value of the security. The availability of observable market information and quoted prices varies based on market conditions and trading volume.
Valuation Methodologies and Inputs
The following section describes the valuation methodologies and relevant inputs used to measure different financial instruments at fair value, including an indication of the level in the fair value hierarchy in which the instruments are generally classified.
Fixed Maturity Securities
Level 1 securities include highly liquid government securities and exchange traded bonds valued using quoted market prices. Level 2 securities include most other fixed maturity securities as the significant inputs are observable in the marketplace. All classes of Level 2 fixed maturity securities are valued using a methodology based on information generated by market transactions involving identical or comparable assets, a discounted cash flow methodology or a combination of both when necessary. Common inputs for all classes of fixed maturity securities include prices from recently executed transactions of similar securities, marketplace quotes, benchmark yields, spreads off benchmark yields, interest rates and U.S. Treasury or swap curves. Specifically for asset-backed securities, key inputs include prepayment and default projections based on past performance of the underlying collateral and current market data. Fixed maturity securities are primarily assigned to Level 3 in cases where broker/dealer quotes are significant inputs to the valuation, and there is a lack of transparency as to whether these quotes are based on information that is observable in the marketplace. Level 3 securities also include private placement debt securities whose fair value is determined using internal models with some inputs that are not market observable.
Equity Securities
Level 1 securities include publicly traded securities valued using quoted market prices. Level 2 securities are primarily valued using pricing for similar securities, recently executed transactions and other pricing models utilizing market observable inputs. Level 3 securities are primarily priced using broker/dealer quotes and internal models with some inputs that are not market observable.
Derivative Financial Instruments
Equity options are valued using quoted market prices and are classified within Level 1 of the fair value hierarchy. Over-the-counter derivatives, principally interest rate swaps, currency forwards, total return swaps, commodity swaps, equity warrants and options, are valued using inputs including broker/dealer quotes and are classified within Level 2 or Level 3 of the valuation hierarchy, depending on the amount of transparency as to whether these quotes are based on information that is observable in the marketplace.
Short Term and Other Invested Assets
Securities that are actively traded or have quoted prices are classified as Level 1. These securities include money market funds, treasury bills and exchange traded open-end funds valued using quoted market prices. Level 2 primarily includes commercial paper, for which all inputs are market observable. Fixed maturity securities purchased within one year of maturity are classified consistent with fixed maturity securities discussed above. Short term investments as presented in the tables above differ from the amounts presented in the Consolidated Condensed Balance Sheets because certain short term investments, such as time deposits, are not measured at fair value.
18

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

March 31, 2021 | Estimated Fair Value |  | Valuation Techniques |  | Unobservable Inputs |  | Range (Weighted Average)
| (In millions) |  |  |  |  |  |
Fixed maturity securities | $ | 936 |  | Discounted cash flow |  | Credit spread |  | 1% – 8% (2%)
December 31, 2020 |  |  |  |  |  |  |  |
Fixed maturity securities | $ | 966 |  | Discounted cash flow |  | Credit spread |  | 1% – 8% (3%)

For fixed maturity securities, an increase to the credit spread assumptions would result in a lower fair value measurement.
Financial Assets and Liabilities Not Measured at Fair Value
The carrying amount, estimated fair value and the level of the fair value hierarchy of the financial assets and liabilities which are not measured at fair value on the Consolidated Condensed Balance Sheets are presented in the following tables. The carrying amounts and estimated fair values of short term debt and long term debt exclude finance lease obligations. The carrying amounts reported on the Consolidated Condensed Balance Sheets for cash and short term investments not carried at fair value and certain other assets and liabilities approximate fair value due to the short term nature of these items.

|  | Carrying |  |  | Estimated Fair Value |
March 31, 2021 |  | Amount |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
(In millions) |  |  |  |  |  | - |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other invested assets, primarily mortgage loans |  | $ | 1,043 |  |  |  |  |  |  |  |  |  | $ | 1,107 |  |  | $ | 1,107 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Short term debt (a) |  |  | 140 |  |  |  |  |  |  |  |  |  |  | 144 |  |  |  | 144 |
Long term debt (a) |  |  | 8,990 |  |  |  |  |  |  | $ | 9,204 |  |  |  | 622 |  |  |  | 9,826 |
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other invested assets, primarily mortgage loans |  | $ | 1,068 |  |  |  |  |  |  |  |  |  |  | $ | 1,151 |  |  | $ | 1,151 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Short term debt |  |  | 35 |  |  |  |  |  |  | $ | 19 |  |  |  | 17 |  |  |  | 36 |
Long term debt |  |  | 10,042 |  |  |  |  |  |  |  | 10,482 |  |  |  | 765 |  |  |  | 11,247 |

(a) | As of March 31, 2021, Short and Long term debt exclude amounts classified as held for sale. See Note 2 for further discussion.

5. Claim and Claim Adjustment Expense Reserves
Property and casualty insurance claim and claim adjustment expense reserves represent the estimated amounts necessary to resolve all outstanding claims, including incurred but not reported (“IBNR”) claims as of the reporting date. Reserve projections are based primarily on detailed analysis of the facts in each case, experience with similar cases and various historical development patterns. Consideration is given to historical patterns such as claim reserving
19

Index
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. The Company reported catastrophe losses, net of reinsurance, of $125 million and $75 million for the three months ended March 31, 2021 and 2020. Net catastrophe losses for the three months ended March 31, 2021 were primarily driven by Winter Storms Uri and Viola. Net catastrophe losses for the three months ended March 31, 2020 included $13 million related to the coronavirus (“COVID-19”) pandemic, with the remaining $62 million related primarily to U.S. weather related events.
Liability for Unpaid Claim and Claim Adjustment Expenses
The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves of other insurance operations.

Three Months Ended March 31 |  | 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 |  |  | 1,474 |  |  |  | 1,355 |
Increase (decrease) in provision for insured events of prior years |  |  | (54 | ) |  |  | (8 | )
Amortization of discount |  |  | 50 |  |  |  | 51 |
Total net incurred (a) |  |  | 1,470 |  |  |  | 1,398 |
Net payments attributable to: |  |  |  |  |  |  |  |
Current year events |  |  | (85 | ) |  |  | (72 | )
Prior year events |  |  | (1,067 | ) |  |  | (1,218 | )
Total net payments |  |  | (1,152 | ) |  |  | (1,290 | )
Foreign currency translation adjustment and other |  |  | (32 | ) |  |  | (88 | )
Net reserves, end of period |  |  | 18,355 |  |  |  | 17,905 |
Ceded reserves, end of period |  |  | 4,701 |  |  |  | 3,967 |
Gross reserves, end of period |  | $ | 23,056 |  |  | $ | 21,872 |

(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.

20

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 development of $15 million was recorded for commercial property and casualty operations (“Property & Casualty Operations”) for the three months ended March 31, 2021 and 2020.
The following table and discussion present details of the net prior year claim and claim adjustment expense reserve development in Property & Casualty Operations:

Three Months Ended March 31 |  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |
Medical professional liability |  | $ | 8 |  |  | $ | 10 |
Other professional liability and management liability |  |  |  |  |  |  | 3 |
Surety |  |  | (15 | ) |  |  | (30 | )
Commercial auto |  |  |  |  |  |  | 9 |
Workers’ compensation |  |  |  |  |  |  | (13 | )
Property and other |  |  | (8 | ) |  |  | 6 |
Total pretax (favorable) unfavorable development |  | $ | (15 | ) |  | $ | (15 | )

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 was primarily due to unfavorable outcomes on specific claims in accident years 2015 and 2016 in the aging services business.
Favorable development in surety was primarily due to lower than expected frequency for accident years 2017 and prior.
Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in accident years 2016 through 2018.
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 the 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.
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Index
The impact of the LPT on the Consolidated Condensed Statements of Operations was the recognition of a retroactive reinsurance benefit of $10 million and $14 million for the three months ended March 31, 2021 and 2020. As of March 31, 2021 and December 31, 2020, the cumulative amounts ceded under the LPT were $3.3 billion. The unrecognized deferred retroactive reinsurance benefit was $388 million and $398 million as of March 31, 2021 and December 31, 2020 and is included within Other liabilities on the Consolidated Condensed Balance Sheets.
NICO established a collateral trust account as security for its obligations under the LPT. The fair value of the collateral trust account was $4.6 billion and $4.2 billion as of March 31, 2021 and December 31, 2020. 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 Company’s 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 the Other Insurance Operations business for the three months ended March 31, 2021 related to the EWC LPT.
Cavello established a collateral trust account as security for its obligations, which will be maintained at 105% of outstanding reserves. As of March 31, 2021, the remaining amount available under the $1.0 billion aggregate limit of the EWC LPT was $310 million on an incurred basis.
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.
6. Debt
On February 3, 2021, Altium Packaging entered into a $1.05 billion seven-year secured term loan. The term loan is a variable rate facility which bears interest at a floating rate equal to the London Interbank Offered Rate (“LIBOR”) plus an applicable margin of 2.75%, subject to a 0.5% LIBOR floor. The proceeds were used to pay the outstanding principal balances of its variable rate term loans and lending facility and a dividend of $200 million.
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Index
7. Shareholders’ Equity
Accumulated other comprehensive income (loss)
The tables below present the changes in AOCI by component for the three months ended March 31, 2020 and 2021:

|  | 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, 2020 |  | $ | - |  |  | $ | 918 |  |  | $ | (6 | ) |  | $ | (855 | ) |  | $ | (125 | ) |  | $ | (68 | )
Other comprehensive income (loss) before reclassifications, after tax of $13, $287, $6, $0 and $0 |  |  | (48 | ) |  |  | (1,066 | ) |  |  | (19 | ) |  |  | 1 |  |  |  | (84 | ) |  |  | (1,216 | )
Reclassification of losses from accumulated other comprehensive income, after tax of $(10), $(6), $0, $(3) and $0 |  |  | 37 |  |  |  | 22 |  |  |  |  |  |  |  | 13 |  |  |  |  |  |  |  | 72 |
Other comprehensive income (loss) |  |  | (11 | ) |  |  | (1,044 | ) |  |  | (19 | ) |  |  | 14 |  |  |  | (84 | ) |  |  | (1,144 | )
Amounts attributable to noncontrolling interests |  |  | 1 |  |  |  | 111 |  |  |  |  |  |  |  | (1 | ) |  |  | 8 |  |  |  | 119 |
Balance, March 31, 2020 |  | $ | (10 | ) |  | $ | (15 | ) |  | $ | (25 | ) |  | $ | (842 | ) |  | $ | (201 | ) |  | $ | (1,093 | )

Balance, January 1, 2021 |  | $ | - |  |  | $ | 1,563 |  |  | $ | (23 | ) |  | $ | (877 | ) |  | $ | (82 | ) |  | $ | 581 |
Other comprehensive income (loss) before reclassifications, after tax of $1, $154, $(2), $0 and $0 |  |  | (3 | ) |  |  | (593 | ) |  |  | 3 |  |  |  |  |  |  |  | 3 |  |  |  | (590 | )
Reclassification of (gains) losses from accumulated other comprehensive income, after tax of $(1), $8, $(1), $(2) and $0 |  |  | 3 |  |  |  | (34 | ) |  |  | 1 |  |  |  | 9 |  |  |  |  |  |  |  | (21 | )
Other comprehensive income (loss) |  |  | - |  |  |  | (627 | ) |  |  | 4 |  |  |  | 9 |  |  |  | 3 |  |  |  | (611 | )
Amounts attributable to noncontrolling interests |  |  |  |  |  |  | 66 |  |  |  |  |  |  |  | (1 | ) |  |  | (1 | ) |  |  | 64 |
Balance, March 31, 2021 |  | $ | - |  |  | $ | 1,002 |  |  | $ | (19 | ) |  | $ | (869 | ) |  | $ | (80 | ) |  | $ | 34 |

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

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

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Index
Treasury Stock
Loews Corporation repurchased 5.6 million and 9.7 million shares of its common stock at an aggregate cost of $274 million and $445 million during the three months ended March 31, 2021 and 2020.
8. Revenue from Contracts with Customers
Disaggregation of revenues – Revenue from contracts with customers, other than insurance premiums, is reported as Non-insurance warranty revenue and within Operating revenues and other on the Consolidated Condensed Statements of Operations.The following table presents revenues from contracts with customers disaggregated by revenue type along with the reportable segment and a reconciliation to Operating revenues and other as reported in Note 12:

Three Months Ended March 31 |  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |
Non-insurance warranty - CNA Financial |  | $ | 338 |  |  | $ | 301 |
Transportation and storage of natural gas and NGLs and other services - Boardwalk Pipelines |  |  | 361 |  |  |  | 332 |
Lodging and related services - Loews Hotels & Co |  |  | 56 |  |  |  | 142 |
Rigid plastic packaging and recycled resin – Corporate |  |  | 280 |  |  |  | 256 |
Contract drilling – Diamond Offshore |  |  |  |  |  |  | 229 |
Total revenues from contracts with customers |  |  | 697 |  |  |  | 959 |
Other revenues |  |  | 18 |  |  |  | 23 |
Operating revenues and other |  | $ | 715 |  |  | $ | 982 |

Receivables from contracts with customers – As of March 31, 2021 and December 31, 2020, receivables from contracts with customers were approximately $251 million and $246 million and are included within Receivables on the Consolidated Condensed Balance Sheets.
Deferred revenue – As of March 31, 2021 and December 31, 2020, deferred revenue resulting from contracts with customers was approximately $4.2 billion and $4.1 billion and is reported as Deferred non-insurance warranty revenue and within Other liabilities on the Consolidated Condensed Balance Sheets. Approximately $316 million and $297 million of revenues recognized during the three months ended March 31, 2021 and 2020 were included in deferred revenue as of December 31, 2020 and 2019.
Performance obligations – As of March 31, 2021, approximately $13.3 billion of estimated operating revenues is expected to be recognized in the future related to outstanding performance obligations. The balance relates primarily to transportation and storage of natural gas and natural gas liquids and hydrocarbons (“NGLs”) services and non-insurance warranty revenue. Approximately $1.9 billion will be recognized during the remaining nine months of 2021, $2.1 billion in 2022 and the remainder in following years. The actual timing of recognition may vary due to factors outside of the Company’s control.
9. Benefit Plans
The Company has several non-contributory defined benefit plans and postretirement benefit plans covering eligible employees and retirees.
The following table presents the components of net periodic benefit for these plans:

|  | Pension Benefits |  |  | Other Postretirement Benefits |
Three Months Ended March 31 |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 1 |  |  | $ | 1 |  |  |  |  |  |  |
Interest cost |  |  | 18 |  |  |  | 23 |  |  |  |  |  |  |
Expected return on plan assets |  |  | (43 | ) |  |  | (43 | ) |  | $ | (1 | ) |  | $ | (1 | )
Amortization of unrecognized net loss |  |  | 12 |  |  |  | 11 |  |  |  |  |  |  |  |  |
Settlement charge |  |  |  |  |  |  | 4 |  |  |  |  |  |  |  |  |
Net periodic benefit |  | $ | (12 | ) |  | $ | (4 | ) |  | $ | (1 | ) |  | $ | (1 | )

24

Index
10. Legal Proceedings
On May 25, 2018, plaintiffs Tsemach Mishal and Paul Berger (on behalf of themselves and the purported class, “Plaintiffs”) initiated a purported class action in the Court of Chancery of the State of Delaware (the “Court”) against the following defendants: Boardwalk Pipelines, Boardwalk GP, LP (“General Partner”), Boardwalk GP, LLC and Boardwalk Pipelines Holding Corp. (“BPHC”) (together, “Defendants”), regarding the potential exercise by the General Partner of its right to purchase all of the issued and outstanding common units representing limited partnership interests in Boardwalk Pipelines not already owned by the General Partner or its affiliates.
On June 25, 2018, Plaintiffs and Defendants entered into a Stipulation and Agreement of Compromise and Settlement, subject to the approval of the Court (the “Proposed Settlement”). Under the terms of the Proposed Settlement, the lawsuit would be dismissed, and related claims against the Defendants would be released by the Plaintiffs, if BPHC, the sole member of the General Partner, elected to cause the General Partner to exercise its right to purchase the issued and outstanding common units of Boardwalk Pipelines pursuant to Boardwalk Pipelines’ Third Amended and Restated Agreement of Limited Partnership, as amended (“Limited Partnership Agreement”), within a period specified by the Proposed Settlement. On June 29, 2018, the General Partner elected to exercise its right to purchase all of the issued and outstanding common units representing limited partnership interests in Boardwalk Pipelines not already owned by the General Partner or its affiliates pursuant to the Limited Partnership Agreement within the period specified by the Proposed Settlement. The transaction was completed on July 18, 2018.
On September 28, 2018, the Court denied approval of the Proposed Settlement. On February 11, 2019, a substitute verified class action complaint was filed in this proceeding. The Defendants filed a motion to dismiss, which was heard by the Court in July of 2019. In October of 2019, the Court ruled on the motion and granted a partial dismissal, with certain aspects of the case proceeding to trial. A trial was held the week of February 22, 2021 and post-trial oral arguments are scheduled for July 14, 2021.
The Company is from time to time party to other litigation arising in the ordinary course of business. While it is difficult to predict the outcome or effect of any litigation, management does not believe that the outcome of any pending litigation, including the Boardwalk Pipelines matter described above, will materially affect the Company’s results of operations or equity.
11. Commitments and Contingencies
CNA Guarantees
CNA has provided guarantees, if the primary obligor fails to perform, to holders of structured settlement annuities issued by a previously owned subsidiary. As of March 31, 2021, the potential amount of future payments CNA could be required to pay under these guarantees was approximately $1.6 billion, which will be paid over the lifetime of the annuitants. CNA does not believe any payment is likely under these guarantees, as CNA is the beneficiary of a trust that must be maintained at a level that approximates the discounted reserves for these annuities.
12. Segments
Loews Corporation has four reportable segments comprised of three individual consolidated operating subsidiaries, CNA, Boardwalk Pipelines and Loews Hotels & Co; and the Corporate segment. In the first quarter of 2020 Diamond Offshore was a reportable segment. The Corporate segment is primarily comprised of Loews Corporation excluding its subsidiaries and the operations of Altium Packaging. Diamond Offshore was deconsolidated during the second quarter of 2020. Each of the operating subsidiaries and Diamond Offshore are headed by a chief executive officer who is responsible for the operation of its business and has the duties and authority commensurate with that position. For additional disclosures regarding the composition of Loews Corporation’s segments, see Note 20 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
The following tables present the reportable segments and their contribution to the Consolidated Condensed Statements of Operations. Amounts presented will not necessarily be the same as those in the individual financial statements of the subsidiaries due to adjustments for purchase accounting, income taxes and noncontrolling interests.
25

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

Three Months Ended March 31, 2021 |  | CNA Financial |  |  | Boardwalk Pipelines |  |  | Loews Hotels & Co |  |  | Corporate |  |  | Total |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Insurance premiums |  | $ | 1,962 |  |  |  |  |  |  |  |  |  |  |  | $ | 1,962 |
Net investment income |  |  | 504 |  |  |  |  |  |  |  |  | $ | 46 |  |  |  | 550 |
Investment gains |  |  | 57 |  |  |  |  |  |  |  |  |  |  |  |  |  | 57 |
Non-insurance warranty revenue |  |  | 338 |  |  |  |  |  |  |  |  |  |  |  |  |  | 338 |
Operating revenues and other |  |  | 5 |  |  | $ | 372 |  |  | $ | 57 |  |  |  | 281 |  |  |  | 715 |
Total |  |  | 2,866 |  |  |  | 372 |  |  |  | 57 |  |  |  | 327 |  |  |  | 3,622 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Insurance claims and policyholders’ benefits |  |  | 1,506 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,506 |
Amortization of deferred acquisition costs |  |  | 359 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 359 |
Non-insurance warranty expense |  |  | 311 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 311 |
Operating expenses and other |  |  | 285 |  |  |  | 217 |  |  |  | 104 |  |  |  | 308 |  |  |  | 914 |
Interest |  |  | 28 |  |  |  | 41 |  |  |  | 8 |  |  |  | 48 |  |  |  | 125 |
Total |  |  | 2,489 |  |  |  | 258 |  |  |  | 112 |  |  |  | 356 |  |  |  | 3,215 |
Income (loss) before income tax |  |  | 377 |  |  |  | 114 |  |  |  | (55 | ) |  |  | (29 | ) |  |  | 407 |
Income tax (expense) benefit |  |  | (66 | ) |  |  | (29 | ) |  |  | 12 |  |  |  | (31 | ) |  |  | (114 | )
Net income (loss) |  |  | 311 |  |  |  | 85 |  |  |  | (43 | ) |  |  | (60 | ) |  |  | 293 |
Amounts attributable to noncontrolling interests |  |  | (32 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (32 | )
Net income (loss) attributable to Loews Corporation |  | $ | 279 |  |  | $ | 85 |  |  | $ | (43 | ) |  | $ | (60 | ) |  | $ | 261 |

26

Index

Three Months Ended March 31, 2020 |  | CNA Financial |  |  | Boardwalk Pipelines |  |  | Loews Hotels & Co |  |  | Corporate |  |  | Diamond Offshore |  |  | Total |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Insurance premiums |  | $ | 1,869 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 1,869 |
Net investment income (loss) |  |  | 329 |  |  |  |  |  |  |  |  | $ | (166 | ) |  |  |  |  |  | 163 |
Investment losses |  |  | (216 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (216 | )
Non-insurance warranty revenue |  |  | 301 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 301 |
Operating revenues and other |  |  | 8 |  |  | $ | 341 |  |  | $ | 142 |  |  |  | 257 |  |  | $ | 234 |  |  |  | 982 |
Total |  |  | 2,291 |  |  |  | 341 |  |  |  | 142 |  |  |  | 91 |  |  |  | 234 |  |  |  | 3,099 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Insurance claims and policyholders’ benefits |  |  | 1,425 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,425 |
Amortization of deferred acquisition costs |  |  | 344 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 344 |
Non-insurance warranty expense |  |  | 281 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 281 |
Operating expenses and other |  |  | 300 |  |  |  | 211 |  |  |  | 167 |  |  |  | 268 |  |  |  | 1,080 |  |  |  | 2,026 |
Interest |  |  | 31 |  |  |  | 42 |  |  |  | 8 |  |  |  | 31 |  |  |  | 32 |  |  |  | 144 |
Total |  |  | 2,381 |  |  |  | 253 |  |  |  | 175 |  |  |  | 299 |  |  |  | 1,112 |  |  |  | 4,220 |
Income (loss) before income tax |  |  | (90 | ) |  |  | 88 |  |  |  | (33 | ) |  |  | (208 | ) |  |  | (878 | ) |  |  | (1,121 | )
Income tax (expense) benefit |  |  | 28 |  |  |  | (23 | ) |  |  | 8 |  |  |  | 43 |  |  |  | 21 |  |  |  | 77 |
Net income (loss) |  |  | (62 | ) |  |  | 65 |  |  |  | (25 | ) |  |  | (165 | ) |  |  | (857 | ) |  |  | (1,044 | )
Amounts attributable to noncontrolling interests |  |  | 7 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 405 |  |  |  | 412 |
Net income (loss) attributable to Loews Corporation |  | $ | (55 | ) |  | $ | 65 |  |  | $ | (25 | ) |  | $ | (165 | ) |  | $ | (452 | ) |  | $ | (632 | )

27

Index
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 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. This MD&A is comprised of the following sections:

| Page
| No.
Overview |  | 28
Results of Operations |  | 29
Consolidated Financial Results |  | 29
CNA Financial |  | 30
Boardwalk Pipelines |  | 34
Loews Hotels & Co |  | 35
Corporate |  | 36
Diamond Offshore |  | 37
Liquidity and Capital Resources |  | 37
Parent Company |  | 37
Subsidiaries |  | 37
Investments |  | 38
Critical Accounting Estimates |  | 42
Accounting Standards Update |  | 42
Forward-Looking Statements |  | 42

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. The Corporate segment is primarily comprised of Loews Corporation excluding its subsidiaries and the operations of Altium Packaging LLC (“Altium Packaging”). Diamond Offshore was deconsolidated during the second quarter of 2020. For more information see Note 2 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2020. Each of the operating subsidiaries and Diamond Offshore are 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.
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 and the term “Net income (loss) attributable to Loews Corporation” as used herein means Net income (loss) attributable to Loews Corporation shareholders.
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 shareholders. The ability of 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 Note 14 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2020) 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.
28

Index
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 months ended March 31, 2021 and 2020:

Three Months Ended March 31 |  | 2021 |  |  | 2020 |
(In millions, except per share data) |  |  |  |  |  |
CNA Financial |  | $ | 279 |  |  | $ | (55 | )
Boardwalk Pipelines |  |  | 85 |  |  |  | 65 |
Loews Hotels & Co |  |  | (43 | ) |  |  | (25 | )
Corporate |  |  | (60 | ) |  |  | (165 | )
Diamond Offshore |  |  |  |  |  |  | (452 | )
Net income (loss) attributable to Loews Corporation |  | $ | 261 |  |  | $ | (632 | )
Basic net income (loss) per common share |  | $ | 0.98 |  |  | $ | (2.20 | )
Diluted net income (loss) per common share |  | $ | 0.97 |  |  | $ | (2.20 | )

Net income attributable to Loews Corporation for the three months ended March 31, 2021 was $261 million, or $0.97 per share, compared to net loss of $632 million, or $2.20 per share in the comparable 2020 period.
Loews Corporation’s net income for the first three months of 2021 was driven by CNA, which had improved net investment income, net investment gains, and solid non-catastrophe current accident year property and casualty underwriting results. Boardwalk Pipelines also contributed positively to Loews Corporation’s 2021 quarterly results.
Loews Hotels & Co posted a net loss for the first three months of 2021 due to the continued negative impact on travel of the COVID-19 pandemic. Last year’s first quarter results included a significant loss related to Diamond Offshore, which is no longer a subsidiary.
On April 1, 2021 Loews Corporation sold 47% of its interest in Altium Packaging for approximately $420 million in cash consideration, subject to expenses and post-closing adjustments. As a result of the terms of this transaction, Loews Corporation will share certain participating rights with GIC related to capital allocation and other decisions and is required to deconsolidate Altium Packaging as of the date of the sale under accounting principles generally accepted in the United States of America (“GAAP”). In connection with the sale and subsequent deconsolidation, Loews Corporation expects to recognize a pretax gain of approximately $560 million in the second quarter of 2021.
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Index
CNA Financial
The following table summarizes the results of operations for CNA for the three months ended March 31, 2021 and 2020 as presented in Note 12 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 March 31 |  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |
Revenues: |  |  |  |  |  |
Insurance premiums |  | $ | 1,962 |  |  | $ | 1,869 |
Net investment income |  |  | 504 |  |  |  | 329 |
Investment gains (losses) |  |  | 57 |  |  |  | (216 | )
Non-insurance warranty revenue |  |  | 338 |  |  |  | 301 |
Other revenues |  |  | 5 |  |  |  | 8 |
Total |  |  | 2,866 |  |  |  | 2,291 |
Expenses: |  |  |  |  |  |  |  |
Insurance claims and policyholders’ benefits |  |  | 1,506 |  |  |  | 1,425 |
Amortization of deferred acquisition costs |  |  | 359 |  |  |  | 344 |
Non-insurance warranty expense |  |  | 311 |  |  |  | 281 |
Other operating expenses |  |  | 285 |  |  |  | 300 |
Interest |  |  | 28 |  |  |  | 31 |
Total |  |  | 2,489 |  |  |  | 2,381 |
Income (loss) before income tax |  |  | 377 |  |  |  | (90 | )
Income tax (expense) benefit |  |  | (66 | ) |  |  | 28 |
Net income (loss) |  |  | 311 |  |  |  | (62 | )
Amounts attributable to noncontrolling interests |  |  | (32 | ) |  |  | 7 |
Net income (loss) attributable to Loews Corporation |  | $ | 279 |  |  | $ | (55 | )

Net income attributable to Loews Corporation was $279 million for the three months ended March 31, 2021 as compared with a net loss of $55 million in the comparable 2020 period. The improvement was due to higher net investment income, investment gains for the three months ended March 31, 2021 as compared with investment losses in the comparable 2020 period and improved non-catastrophe current accident year underwriting results. Higher net investment income in the first three months of 2021 was driven by limited partnership and common stock returns. Investment gains were driven by the favorable relative change in the fair value of non-redeemable preferred stock and lower impairment losses. These results were partially offset by higher net catastrophe losses of $125 million ($88 million after tax and noncontrolling interests) for the three months ended March 31, 2021 as compared with $75 million ($53 million after tax and noncontrolling interests) 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, certain property and casualty businesses in run-off, including CNA Re, A&EP, excess workers’ compensation and legacy mass tort. 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.
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Index
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 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 this measure is useful for investors to evaluate its insurance operations. Please see the non-GAAP reconciliation of core income (loss) to net income (loss) that follows in this MD&A.
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. For certain products within Small Business, where quantifiable, rate includes the influence of new business as well. Exposure represents the measure of risk used in the pricing of the insurance product. Retention represents the percentage of premium dollars renewed in comparison to the expiring premium dollars from policies available to renew. Renewal premium change, rate and retention presented for the prior 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 captives, represents gross written premiums excluding business which is ceded to third party captives, including business related to large warranty programs.
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Index
The following tables summarize the results of CNA’s Property & Casualty Operations for the three months ended March 31, 2021 and 2020:

Three Months Ended March 31, 2021 |  | Specialty |  |  | Commercial |  |  | International |  |  | Total |
(In millions, except %) |  |  |  |  |  |  |  |  |  |  |  |
Gross written premiums |  | $ | 1,794 |  |  | $ | 1,113 |  |  | $ | 343 |  |  | $ | 3,250 |
Gross written premiums excluding third |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
party captives |  |  | 816 |  |  |  | 1,111 |  |  |  | 343 |  |  |  | 2,270 |
Net written premiums |  |  | 742 |  |  |  | 960 |  |  |  | 235 |  |  |  | 1,937 |
Net earned premiums |  |  | 735 |  |  |  | 855 |  |  |  | 252 |  |  |  | 1,842 |
Net investment income |  |  | 117 |  |  |  | 148 |  |  |  | 14 |  |  |  | 279 |
Core income |  |  | 170 |  |  |  | 69 |  |  |  | 24 |  |  |  | 263 |
Other performance metrics: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loss ratio excluding catastrophes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
and development |  |  | 59.4 | % |  |  | 60.8 | % |  |  | 59.6 | % |  |  | 60.1 | %
Effect of catastrophe impacts |  |  | 0.7 |  |  |  | 13.4 |  |  |  | 2.0 |  |  |  | 6.8 |
Effect of development-related items |  |  | (2.1 | ) |  |  | 0.5 |  |  |  | (0.1 | ) |  |  | (0.6 | )
Loss ratio |  |  | 58.0 | % |  |  | 74.7 | % |  |  | 61.5 | % |  |  | 66.3 | %
Expense ratio |  |  | 30.6 |  |  |  | 31.4 |  |  |  | 34.4 |  |  |  | 31.5 |
Dividend ratio |  |  | 0.2 |  |  |  | 0.6 |  |  |  |  |  |  |  | 0.3 |
Combined ratio |  |  | 88.8 | % |  |  | 106.7 | % |  |  | 95.9 | % |  |  | 98.1 | %
Combined ratio excluding catastrophes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
and development |  |  | 90.2 | % |  |  | 92.8 | % |  |  | 94.0 | % |  |  | 91.9 | %
Rate |  |  | 10 | % |  |  | 10 | % |  |  | 14 | % |  |  | 11 | %
Renewal premium change |  |  | 9 |  |  |  | 8 |  |  |  | 11 |  |  |  | 9 |
Retention |  |  | 86 |  |  |  | 84 |  |  |  | 74 |  |  |  | 83 |
New business |  | $ | 103 |  |  | $ | 211 |  |  | $ | 80 |  |  | $ | 394 |

Three Months Ended March 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |
Gross written premiums |  | $ | 1,714 |  |  | $ | 1,062 |  |  | $ | 307 |  |  | $ | 3,083 |
Gross written premiums excluding third |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
party captives |  |  | 741 |  |  |  | 1,059 |  |  |  | 307 |  |  |  | 2,107 |
Net written premiums |  |  | 694 |  |  |  | 950 |  |  |  | 219 |  |  |  | 1,863 |
Net earned premiums |  |  | 685 |  |  |  | 818 |  |  |  | 239 |  |  |  | 1,742 |
Net investment income |  |  | 56 |  |  |  | 42 |  |  |  | 15 |  |  |  | 113 |
Core income |  |  | 96 |  |  |  | 23 |  |  |  | 2 |  |  |  | 121 |
Other performance metrics: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loss ratio excluding catastrophes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
and development |  |  | 59.5 | % |  |  | 60.8 | % |  |  | 60.3 | % |  |  | 60.2 | %
Effect of catastrophe impacts |  |  | 1.1 |  |  |  | 7.0 |  |  |  | 4.3 |  |  |  | 4.3 |
Effect of development-related items |  |  | (1.5 | ) |  |  |  |  |  |  | (0.1 | ) |  |  | (0.7 | )
Loss ratio |  |  | 59.1 | % |  |  | 67.8 | % |  |  | 64.5 | % |  |  | 63.8 | %
Expense ratio |  |  | 32.0 |  |  |  | 33.2 |  |  |  | 35.4 |  |  |  | 33.1 |
Dividend ratio |  |  | 0.2 |  |  |  | 0.6 |  |  |  |  |  |  |  | 0.4 |
Combined ratio |  |  | 91.3 | % |  |  | 101.6 | % |  |  | 99.9 | % |  |  | 97.3 | %
Combined ratio excluding catastrophes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
and development |  |  | 91.7 | % |  |  | 94.6 | % |  |  | 95.7 | % |  |  | 93.7 | %
Rate |  |  | 10 | % |  |  | 8 | % |  |  | 9 | % |  |  | 9 | %
Renewal premium change |  |  | 11 |  |  |  | 9 |  |  |  | 9 |  |  |  | 9 |
Retention |  |  | 83 |  |  |  | 86 |  |  |  | 70 |  |  |  | 82 |
New business |  | $ | 74 |  |  | $ | 198 |  |  | $ | 68 |  |  | $ | 340 |

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Index
Total gross written premiums increased $167 million for the three months ended March 31, 2021 as compared with the comparable 2020 period. Total net written premiums increased $74 million for the three months ended March 31, 2021 as compared with the comparable 2020 period.
Gross written premiums, excluding third party captives, for Specialty increased $75 million for the three months ended March 31, 2021 as compared with the comparable 2020 period driven by higher new business and strong rate. Net written premiums for Specialty increased $48 million for the three months ended March 31, 2021 as compared with the comparable 2020 period. The increase in net earned premiums for the three months ended March 31, 2021 was consistent with the trend in net written premiums for Specialty.
Gross written premiums for Commercial increased $51 million for the three months ended March 31, 2021 as compared with the comparable 2020 period driven by higher new business and strong rate. Net written premiums for Commercial increased $10 million for the three months ended March 31, 2021 as compared with the comparable 2020 period. The increase in net earned premiums for the three months ended March 31, 2021 was consistent with the trend in net written premiums in recent quarters for Commercial.
Gross written premiums for International increased $36 million for the three months ended March 31, 2021 as compared with the comparable 2020 period. Excluding the effect of foreign currency exchange rates, gross written premiums increased $19 million driven by growth in Europe and Canada. Net written premiums for International increased $16 million for the three months ended March 31, 2021 as compared with the comparable 2020 period. Excluding the effect of foreign currency exchange rates, net written premiums increased $3 million for the three months ended March 31, 2021 as compared with the comparable 2020 period. The increase in net earned premiums for the three months ended March 31, 2021 was consistent with the trend in net written premiums for International.
Total core income increased $142 million for the three months ended March 31, 2021 as compared with the comparable 2020 period primarily due to higher net investment income driven by limited partnership and common stock returns and improved non-catastrophe current accident year underwriting results, partially offset by higher net catastrophe losses.
Total net catastrophe losses were $125 million for the three months ended March 31, 2021 as compared with $75 million for the comparable 2020 period. For the three months ended March 31, 2021 and 2020, Specialty had net catastrophe losses of $5 million and $8 million, Commercial had net catastrophe losses of $115 million and $57 million and International had net catastrophe losses of $5 million and $10 million.
Favorable net prior year loss reserve development of $15 million was recorded for the three months ended March 31, 2021 and 2020. For the three months ended March 31, 2021 and 2020, Specialty recorded favorable net prior year loss reserve development of $15 million and $11 million. For the three months ended March 31, 2021, Commercial recorded no net prior year loss reserve development as compared with favorable net prior year loss reserve development of $4 million in the comparable 2020 period. There was no net prior year loss reserve development recorded for International for the three months ended March 31, 2021 and 2020. 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.
Specialty’s combined ratio improved 2.5 points for the three months ended March 31, 2021 as compared with the comparable 2020 period due to a 1.4 point improvement in the expense ratio and a 1.1 point improvement in the loss ratio. The improvement in the loss ratio was primarily due to higher favorable net prior year loss reserve development and lower net catastrophe losses. The improvement in the expense ratio was driven by higher net earned premiums.
Commercial’s combined ratio increased 5.1 points for the three months ended March 31, 2021 as compared with the comparable 2020 period due to a 6.9 point increase in the loss ratio, partially offset by a 1.8 point improvement in the expense ratio. The increase in the loss ratio was primarily due to higher net catastrophe losses, which were 13.4 points of the loss ratio for the three months ended March 31, 2021 as compared with 7.0 points of the loss ratio in the comparable 2020 period. The improvement in the expense ratio was driven by favorable acquisition expenses and higher net earned premiums.
International’s combined ratio improved 4.0 points for the three months ended March 31, 2021 as compared with the comparable 2020 period due to a 3.0 point improvement in the loss ratio and a 1.0 point improvement in the expense ratio. The improvement in the loss ratio was driven by improved current accident year underwriting results. The improvement in the expense ratio was driven by favorable commission rates and higher net earned premiums.
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Index
Other Insurance Operations
The following table summarizes the results of CNA’s Other Insurance Operations for the three months ended March 31, 2021 and 2020:

Three Months Ended March 31 |  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |
Net earned premiums |  | $ | 120 |  |  | $ | 127 |
Net investment income |  |  | 225 |  |  |  | 216 |
Core income (loss) |  |  | - |  |  |  | (13 | )

Core results improved $13 million for the three months ended March 31, 2021 as compared with the comparable 2020 period driven by better than expected morbidity in the long term care business and higher net investment income, driven by returns in the limited partnership portfolio. Further, during the first three months of 2021, relative to expectations, CNA experienced lower new claim frequency, higher claim terminations and more favorable claim severity in the long term care business amid the effects of the coronavirus disease (“COVID-19”). Given the uncertainty of these trends, CNA increased its incurred but not reported (“IBNR”) reserves in anticipation of increased claim activity as the COVID-19 pandemic abates.
Results for the three months ended March 31, 2021 also reflect the recognition of a $12 million loss resulting from the legacy excess workers’ compensation loss portfolio transfer (“EWC LPT”). For further information on the EWC LPT see Note 5 of the Notes to Consolidated Condensed Financial Statements included under Item 1.
Non-GAAP Reconciliation of Core Income (Loss) to Net Income (Loss)
The following table reconciles core income (loss) to net income (loss) attributable to Loews Corporation for the three months ended March 31, 2021 and 2020:

Three Months Ended March 31 |  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |
Core income (loss): |  |  |  |  |  |
Property & Casualty Operations |  | $ | 263 |  |  | $ | 121 |
Other Insurance Operations |  |  |  |  |  |  | (13 | )
Total core income |  |  | 263 |  |  |  | 108 |
Investment gains (losses) |  |  | 49 |  |  |  | (170 | )
Consolidating adjustments including noncontrolling interests |  |  | (33 | ) |  |  | 7 |
Net income (loss) attributable to Loews Corporation |  | $ | 279 |  |  | $ | (55 | )

Boardwalk Pipelines
Results of Operations
A significant portion of Boardwalk Pipelines’ revenues are 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 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.
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Index
The following table summarizes the results of operations for Boardwalk Pipelines for the three months ended March 31, 2021 and 2020 as presented in Note 12 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report:

Three Months Ended March 31 |  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |
Revenues: |  |  |  |  |  |
Operating revenues and other |  | $ | 372 |  |  | $ | 341 |
Total |  |  | 372 |  |  |  | 341 |
Expenses: |  |  |  |  |  |  |  |
Operating and other |  |  | 217 |  |  |  | 211 |
Interest |  |  | 41 |  |  |  | 42 |
Total |  |  | 258 |  |  |  | 253 |
Income before income tax |  |  | 114 |  |  |  | 88 |
Income tax expense |  |  | (29 | ) |  |  | (23 | )
Net income attributable to Loews Corporation |  | $ | 85 |  |  | $ | 65 |

Total revenues increased $31 million for the three months ended March 31, 2021 as compared with the comparable 2020 period. Including the effect of fuel and transportation expense, operating revenues increased $28 million driven primarily by recently completed growth projects and higher system utilization from colder winter weather experienced during the first three months of 2021, partially offset by higher fuel and transportation expense.
Operating expenses increased $6 million for the three months ended March 31, 2021 as compared with the comparable 2020 period. Excluding items offset with operating revenues, operating costs increased $3 million, primarily due to an increased asset base and the colder winter weather experienced during the first three months of 2021.
Loews Hotels & Co
The following table summarizes the results of operations for Loews Hotels & Co for the three months ended March 31, 2021 and 2020 as presented in Note 12 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report:

Three Months Ended March 31 |  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |
Revenues: |  |  |  |  |  |
Operating revenue |  | $ | 39 |  |  | $ | 109 |
Revenues related to reimbursable expenses |  |  | 18 |  |  |  | 33 |
Total |  |  | 57 |  |  |  | 142 |
Expenses: |  |  |  |  |  |  |  |
Operating and other: |  |  |  |  |  |  |  |
Operating |  |  | 58 |  |  |  | 116 |
Reimbursable expenses |  |  | 18 |  |  |  | 33 |
Depreciation |  |  | 16 |  |  |  | 14 |
Equity loss from joint ventures |  |  | 12 |  |  |  | 4 |
Interest |  |  | 8 |  |  |  | 8 |
Total |  |  | 112 |  |  |  | 175 |
Loss before income tax |  |  | (55 | ) |  |  | (33 | )
Income tax benefit |  |  | 12 |  |  |  | 8 |
Net loss attributable to Loews Corporation |  | $ | (43 | ) |  | $ | (25 | )

Loews Hotels & Co’s results declined mainly due to the continuing adverse impact of the COVID-19 pandemic on its operations. Beginning in mid-March 2020, occupancy rates declined significantly, and most hotel properties owned and/or operated by Loews Hotels & Co temporarily suspended operations by the end of March or early April 2020. While almost all of these hotel properties resumed operations during 2020, occupancy rates in the first three months of 2021 were considerably lower than the prior year period before mid-March 2020. Occupancy rates have been gradually improving since June of 2020 with hotel properties located in resort destinations experiencing improvement at a faster pace than hotel properties located in urban centers.
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Index
Although Loews Hotels & Co has enacted significant measures to adjust the operating cost structure of each hotel during the COVID-19 pandemic, deferred a significant amount of capital expenditures and reduced the operating costs of its management company, it has not been able to fully offset the lost revenues resulting from lower occupancies. This has resulted in the decrease in operating revenues of $70 million, the decrease in operating expenses of $58 million, and the increase in equity loss from joint ventures of $8 million for the three months ended March 31, 2021 as compared with the comparable 2020 period.
Pre-opening costs included in equity loss from joint ventures decreased $5 million for the three months ended March 31, 2021 as compared with the comparable 2020 period.
Corporate
Corporate operations consist primarily of investment income at the Parent Company, operating results of Altium Packaging, Parent Company interest expense and other Parent Company administrative costs. 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.
The following table summarizes the results of operations for Corporate for the three months ended March 31, 2021 and 2020 as presented in Note 12 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report:

Three Months Ended March 31 |  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |
Revenues: |  |  |  |  |  |
Net investment income (loss) |  | $ | 46 |  |  | $ | (166 | )
Operating revenues and other |  |  | 281 |  |  |  | 257 |
Total |  |  | 327 |  |  |  | 91 |
Expenses: |  |  |  |  |  |  |  |
Operating and other |  |  | 308 |  |  |  | 268 |
Interest |  |  | 48 |  |  |  | 31 |
Total |  |  | 356 |  |  |  | 299 |
Loss before income tax |  |  | (29 | ) |  |  | (208 | )
Income tax (expense) benefit |  |  | (31 | ) |  |  | 43 |
Net loss attributable to Loews Corporation |  | $ | (60 | ) |  | $ | (165 | )

Net investment income for the Parent Company for the three months ended March 31, 2021 was $46 million as compared with a loss of $166 million for the comparable 2020 period, primarily due to improved results from equity based investments in the Parent Company trading portfolio.
Operating revenues and other include Altium Packaging revenues of $280 million and $256 million for the three months ended March 31, 2021 and 2020. The increase of $24 million for the three months ended March 31, 2021 as compared with the comparable 2020 period reflects higher year-over-year resin prices and an increase of $7 million related to an acquisition in 2020, partially offset by lower volumes, primarily due to the impact of the winter storms in 2021. Altium Packaging’s contracts with its customers provide for price adjustments for changes in resin prices on a prospective basis. Due to fluctuations in resin prices, over time resin raw material costs are generally offset by the change in revenues, so that Altium Packaging’s gross margins return to the same level as prior to the change in prices.
Operating and other expenses include Altium Packaging operating expenses of $279 million and $246 million for the three months ended March 31, 2021 and 2020. The increase in operating expenses of $33 million for the three months ended March 31, 2021 as compared with the comparable 2020 period is primarily due to the increase in resin prices, an increase of $4 million related to an acquisition in 2020 and increased labor costs.
Corporate Operating and other expenses were $29 million and $22 million for the three months ended March 31, 2021 and 2020. The increase of $7 million for the three months ended March 31, 2021 as compared with the comparable 2020 period is primarily due to legal and other corporate overhead expenses.
Interest expenses increased $17 million for the three months ended March 31, 2021 as compared with the comparable 2020 period due to the May of 2020 issuance of the Parent Company’s $500 million aggregate principal amount of 3.2% senior notes due May 15, 2030 and a charge of approximately $14 million to write off debt issuance costs for the early retirement of debt at Altium Packaging in the current year period.
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Index
Income tax expense was $31 million for the three months ended March 31, 2021 as compared with an income tax benefit of $43 million for the comparable 2020 period. The income tax expense for the three months ended March 31, 2021 is primarily due to the recognition of a $35 million deferred tax liability resulting from the asset held for sale designation of Altium Packaging related to the sale of 47% of the Company’s interest in Altium Packaging. For more information on the sale see Note 2 of the Notes to Consolidated Condensed Financial Statements included under Item 1.
Diamond Offshore
Amounts presented for Diamond Offshore for the three months ended March 31, 2020 reflect the period prior to its deconsolidation in the second quarter of 2020. Contract drilling revenues were $218 million and Contract drilling expenses were $185 million for the three months ended March 31, 2020. Operating and other expenses include 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 Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2020.
LIQUIDITY AND CAPITAL RESOURCES
Parent Company
Parent Company cash and investments, net of receivables and payables, totaled $3.6 billion at March 31, 2021 as compared to $3.5 billion at December 31, 2020. During the three months ended March 31, 2021, we received $275 million in dividends from CNA, including a special dividend of $182 million. We also received a $199 million dividend from Altium Packaging in February of 2021. Cash outflows during the three months ended March 31, 2021 included the payment of $280 million to fund treasury stock purchases, $17 million of cash dividends to our shareholders and $32 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 approximately $420 million in cash consideration, subject to expenses and post-closing adjustments. As a holding company we depend on dividends from our subsidiaries and returns on our investment portfolio to fund our obligations. We also have an effective Registration Statement on file with the Securities and Exchange Commission (“SEC”) registering the future sale of an unlimited amount of our debt and equity 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 outstanding common stock in the open market or otherwise. During the three months ended March 31, 2021, we purchased 5.6 million shares of Loews Corporation common stock. As of April 30, 2021, we had purchased an additional 0.6 million shares of Loews Corporation common stock in 2021 at an aggregate cost of $32 million. As of April 30, 2021, there were 263,175,591 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 $82 million for the three months ended March 31, 2021 and $212 million for the comparable 2020 period. The decrease in cash provided by operating activities was driven by the payment of the EWC LPT premium, partially offset by lower net claim payments and an increase in premiums collected. For further information on the EWC LPT see Note 5 of the Notes to Consolidated Condensed Financial Statements included under Item 1.
CNA paid a quarterly cash dividend of $0.38 per share on its common stock and a special cash dividend of $0.75 per share on its common stock in the first quarter of 2021. On April 30, 2021, CNA’s Board of Directors declared a quarterly cash dividend of $0.38 per share, payable June 3, 2021 to shareholders of record on May 17, 2021. 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.
Dividends 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
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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 March 31, 2021, CCC was in a positive earned surplus position. CCC paid dividends of $330 million and $670 million during the three months ended March 31, 2021 and 2020. 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 debt, equity or hybrid securities from time to time.
Boardwalk Pipelines’ cash provided by operating activities increased $40 million for the three months ended March 31, 2021 compared to the comparable 2020 period, primarily due to the change in net income.
For the three months ended March 31, 2021 and 2020, Boardwalk Pipelines’ capital expenditures were $53 million and $101 million, consisting primarily of a combination of growth and maintenance capital.
As of March 31, 2021, Boardwalk Pipelines had $10 million of outstanding borrowings under its credit facility. As of April 30, 2021, Boardwalk Pipelines had no outstanding borrowings and approximately $1.5 billion of available borrowing under its credit facility. Boardwalk Pipelines anticipates that its existing capital resources, including its credit facility and cash flows from operating activities, will be adequate to fund its operations and capital expenditures for 2021. Boardwalk Pipelines has an effective shelf registration statement on file with the SEC under which it may publicly issue debt securities, warrants or rights from time to time.
Certain of the hotels wholly or partially owned by 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 & Co 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 are 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 or provide guaranties of a subsidiary’s debt to otherwise avoid an event of default. Through the date of this Report, Loews Hotels & Co is not in default on any of its loans.
Additionally, due to temporary suspension of operations and lost revenues in certain joint venture entities, Loews Hotels & Co has received capital call notices in accordance with the underlying joint venture agreements to support the properties’ operations. Through April 30, 2021, Loews Hotels & Co funded approximately $13 million to these joint ventures in 2021. Additional capital calls are anticipated from certain joint ventures during 2021 and will depend on future occupancy levels and cash needs.
Through April 30, 2021, Loews Hotels & Co received capital contributions of $32 million from Loews Corporation. Additional funding from Loews Corporation during the remainder of 2021 will be needed and will depend on numerous factors, including how quickly properties are able to return to sustainable operating levels as well as any strategically aligned development opportunities.
On February 3, 2021, Altium Packaging entered into a $1.05 billion seven-year secured term loan. The term loan is a variable rate facility which bears interest at a floating rate equal to the London Interbank Offered Rate (“LIBOR”) plus an applicable margin of 2.75%, subject to a 0.5% LIBOR floor. The proceeds were used to pay the outstanding principal balances of its variable rate term loans and lending facility and a dividend of $200 million.
INVESTMENTS
Investment activities of 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 types of investments generally present greater volatility, less liquidity and greater risk than fixed income investments and are included within Results of Operations – Corporate.
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We enter into short sales and invest in certain derivative instruments that are used for asset and liability management activities, income enhancements to the 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. We mitigate the risk of non-performance by monitoring the creditworthiness of counterparties and diversifying derivatives by using multiple counterparties. We occasionally require collateral 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.
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 March 31 |  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |
Fixed income securities: |  |  |  |  |  |
Taxable fixed income securities |  | $ | 359 |  |  | $ | 371 |
Tax-exempt fixed income securities |  |  | 80 |  |  |  | 78 |
Total fixed income securities |  |  | 439 |  |  |  | 449 |
Limited partnership investments |  |  | 43 |  |  |  | (70 | )
Common stock |  |  | 18 |  |  |  | (55 | )
Other, net of investment expense |  |  | 4 |  |  |  | 5 |
Net investment income |  | $ | 504 |  |  | $ | 329 |

Effective income yield for the fixed income securities portfolio |  |  | 4.4 | % |  |  | 4.6 | %
Limited partnership and common stock return |  |  | 3.4 | % |  |  | (7.0 | )%

CNA’s net investment income for the three months ended March 31, 2021 increased $175 million as compared with the comparable 2020 period, driven by increased limited partnership and common stock returns.
Investment Gains (Losses)
The components of CNA’s investment gains (losses) are presented in the following table:

Three Months Ended March 31 |  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |
Investment gains (losses): |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |
Corporate and other bonds |  | $ | 36 |  |  | $ | (79 | )
States, municipalities and political subdivisions |  |  | (1 | ) |  |  |  |
Asset-backed |  |  | 3 |  |  |  | 4 |
Total fixed maturity securities |  |  | 38 |  |  |  | (75 | )
Non-redeemable preferred stock |  |  | 2 |  |  |  | (133 | )
Short term and other |  |  | 17 |  |  |  | (8 | )
Total investment gains (losses) |  |  | 57 |  |  |  | (216 | )
Income tax (expense) benefit |  |  | (8 | ) |  |  | 46 |
Amounts attributable to noncontrolling interests |  |  | (5 | ) |  |  | 18 |
Net investment gains (losses) attributable to Loews Corporation |  | $ | 44 |  |  | $ | (152 | )

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CNA’s investment gains (losses) increased $273 million for the three months ended March 31, 2021 as compared with the comparable 2020 period driven by the favorable relative change in fair value of non-redeemable preferred stock and lower impairment losses.
Further information on CNA’s investment gains and losses is set forth in Note 3 of the Notes to Consolidated Condensed Financial Statements included under Item 1.
Portfolio Quality
The following table presents the estimated fair value and net unrealized gains (losses) of CNA’s fixed maturity securities by rating distribution:

|  | March 31, 2021 |  |  | December 31, 2020 |
|  |  |  |  | Net |  |  |  |  |  | Net |
|  |  |  |  | Unrealized |  |  |  |  |  | Unrealized |
|  | Estimated |  |  | Gains |  |  | Estimated |  |  | Gains |
|  | Fair Value |  |  | (Losses) |  |  | Fair Value |  |  | (Losses) |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government, Government agencies and |  |  |  |  |  |  |  |  |  |  |  |
Government-sponsored enterprises |  | $ | 3,149 |  |  | $ | 36 |  |  | $ | 3,672 |  |  | $ | 117 |
AAA |  |  | 3,589 |  |  |  | 385 |  |  |  | 3,627 |  |  |  | 454 |
AA |  |  | 7,221 |  |  |  | 802 |  |  |  | 7,159 |  |  |  | 1,012 |
A |  |  | 9,380 |  |  |  | 1,057 |  |  |  | 9,543 |  |  |  | 1,390 |
BBB |  |  | 17,692 |  |  |  | 1,920 |  |  |  | 18,007 |  |  |  | 2,596 |
Non-investment grade |  |  | 2,548 |  |  |  | 131 |  |  |  | 2,623 |  |  |  | 149 |
Total |  | $ | 43,579 |  |  | $ | 4,331 |  |  | $ | 44,631 |  |  | $ | 5,718 |

As of March 31, 2021 and December 31, 2020, 1% of CNA’s fixed maturity portfolio was rated internally. AAA rated securities included $1.9 billion and $1.8 billion of pre-refunded municipal bonds as of March 31, 2021 and December 31, 2020.
The following table presents CNA’s available-for-sale fixed maturity securities in a gross unrealized loss position by ratings distribution:

|  |  |  |  | Gross |
|  | Estimated |  |  | Unrealized |
March 31, 2021 |  | Fair Value |  |  | Losses |
(In millions) |  |  |  |  |  |
U.S. Government, Government agencies and |  |  |  |  |  |
Government-sponsored enterprises |  | $ | 1,631 |  |  | $ | 47 |
AAA |  |  | 202 |  |  |  | 9 |
AA |  |  | 896 |  |  |  | 29 |
A |  |  | 1,096 |  |  |  | 33 |
BBB |  |  | 1,372 |  |  |  | 47 |
Non-investment grade |  |  | 364 |  |  |  | 17 |
Total |  | $ | 5,561 |  |  | $ | 182 |

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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:

|  |  |  |  | Gross |
|  | Estimated |  |  | Unrealized |
March 31, 2021 |  | Fair Value |  |  | Losses |
(In millions) |  |  |  |  |  |
Due in one year or less |  | $ | 135 |  |  | $ | 5 |
Due after one year through five years |  |  | 672 |  |  |  | 21 |
Due after five years through ten years |  |  | 3,090 |  |  |  | 82 |
Due after ten years |  |  | 1,664 |  |  |  | 74 |
Total |  | $ | 5,561 |  |  | $ | 182 |

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.

| March 31, 2021 |  | December 31, 2020
| Estimated Fair Value | Effective Duration (Years) |  | Estimated Fair Value | Effective Duration (Years)
(In millions of dollars) |  |  |  |  |  |  |
Investments supporting Other Insurance Operations | $ | 17,952 | 9.1 |  | $ | 18,518 | 9.2
Other investments |  | 27,666 | 4.9 |  |  | 28,839 | 4.5
Total | $ | 45,618 | 6.5 |  | $ | 47,357 | 6.3

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

|  | March 31, |  |  | December 31, |
|  | 2021 |  |  | 2020 |
(In millions) |  |  |  |  |  |
Short term investments: |  |  |  |  |  |
U.S. Treasury securities |  | $ | 1,109 |  |  | $ | 1,702 |
Other |  |  | 225 |  |  |  | 205 |
Total short term investments |  | $ | 1,334 |  |  | $ | 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 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 December 31, 2020 for further information.
ACCOUNTING STANDARDS UPDATE
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.
FORWARD-LOOKING STATEMENTS
Investors are cautioned that certain statements contained in this Report as well as in other 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 and Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020 and in our other filings with the SEC, could cause our 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 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.
There were no material changes in our market risk components as of March 31, 2021. 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 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.
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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 March 31, 2021.
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 March 31, 2021 that have materially affected or that are reasonably likely to materially affect the Company’s internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Information on our legal proceedings is set forth in Note 10 to the Consolidated Condensed Financial Statements included under Part I, Item 1.
Item 1A. Risk Factors.
Our Annual Report on Form 10-K for the year ended December 31, 2020 includes a detailed discussion of certain risk factors facing the company. Except as described below, there have been no material changes to the 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.
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 and processing and paying claims and other obligations. 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 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.
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The foregoing risks could also expose CNA to monetary and reputational damages. Potential exposures resulting from the March of 2021 cybersecurity attack, described in the following risk factor, as well as any future incidents may include substantially increased compliance costs and required computer system upgrades and security-related investments. 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.
Based on the information currently known, CNA does not believe that the March of 2021 cybersecurity attack will have a material impact on its business, results of operations or financial condition. However, no assurances can be given, and CNA may be subject to future incidents that could have a material adverse effect or result in operational impairments and financial losses, as well as significant harm to its reputation.
Any significant breach in CNA’s data security infrastructure 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.
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. Any such breach of CNA’s 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. Promptly 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. As of the date of this report, CNA has restored network systems and resumed normal operations. CNA is continuing to assess the full extent of the impact from the incident, as well as determining any additional actions it may take to improve its existing systems.
Although the investigation is ongoing, should CNA determine that personal information was impacted, it is possible that notification to individuals, other parties and/or regulators may be required based on applicable law. As a result or otherwise related to the incident, CNA may be subject to subsequent investigations, claims or actions in addition to other costs, fines, penalties, or other obligations.
Although CNA maintains cybersecurity insurance coverage insuring against costs resulting from cyber attacks (including the attack described above), it is possible losses may exceed the amount available under CNA’s coverage and its coverage policy may not cover all losses. Further, future cybersecurity insurance coverage may be difficult to obtain or may only be available at significantly higher costs to CNA.
Based on the information currently known, CNA does not believe that the March of 2021 cybersecurity attack will have a material impact on its business, results of operations or financial condition. However, no assurances can be given, and CNA may be subject to future incidents that could have such a material adverse effect or may result in operational impairments and financial losses, as well as significant harm to CNA’s reputation.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Items 2 (a) and (b) are inapplicable.
(c) STOCK REPURCHASES

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) |
January 1, 2021 - |  |  |  |  |  |  |  |  |  |  |  |
January 31, 2021 |  |  | 1,836,740 |  |  | $ | 45.96 |  |  |  | N/A |  |  |  | N/A |
February 1, 2021 - |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
February 28, 2021 |  |  | 344,380 |  |  |  | 46.24 |  |  |  | N/A |  |  |  | N/A |
March 1, 2021 - |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
March 31, 2021 |  |  | 3,377,044 |  |  |  | 51.27 |  |  |  | N/A |  |  |  | N/A |

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Item 6. Exhibits.

| Exhibit
Description of Exhibit | Number
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.
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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)
Dated: May 7, 2021 | By: | /s/ David B. Edelson
|  | DAVID B. EDELSON
|  | Senior Vice President and
|  | Chief Financial Officer
|  | (Duly authorized officer
|  | and principal financial
|  | officer)

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