Loews faces renewed insurance pressure after profit falls 39%

CNA reserve review drives sharp earnings decline

Loews’ third-quarter profit fell by nearly two-fifths, with the group’s insurance arm absorbing the main blow. Net income attributable to Loews Corporation dropped to US$306 million, or US$1.50 a share, from US$504 million, or US$2.43 a share, in the same quarter last year.

CNA Financial’s contribution fell to US$180 million from US$371 million. Its annual long-term care review produced a US$173 million pre-tax increase in reserves, reducing Loews’ earnings by US$125 million after tax and non-controlling interests. Management said the change primarily reflected higher expected cost-of-care inflation and unfavourable morbidity, partly offset by premium rate actions.

Loews’ chief executive Ben Tisch said the charge should be viewed alongside CNA’s investment portfolio changes. During 2026, CNA completed more than US$1.3 billion of trades that exchanged shorter-duration BBB-rated bonds yielding 5.5% for longer-duration A-rated bonds yielding 6.2%. Management expects the resulting increase in investment income to substantially, or almost entirely, offset the reserve impact over time. That is an expectation about future income, however, rather than an offset recognised in the current quarter.

CNA underwriting faces higher claims pressure

The insurance result was also weaker before the long-term care charge. CNA’s property and casualty combined ratio rose to 97.0% from 92.8%, while its underlying combined ratio, a non-GAAP measure that excludes catastrophe and development-related effects, increased to 94.2% from 91.3%. The underlying loss ratio climbed to 64.1% from 61.9%, which CNA attributed mainly to higher loss-cost trends and lower-than-expected rates in some lines.

Net written premiums still grew 3%, with retention at 83%, but management described the market as competitive and said it was prioritising underwriting discipline over chasing growth. The filing therefore presents a mixed insurance picture: premium growth and higher fixed-income yields on one side, but rising claims pressure and a sizeable reserve reset on the other.

Hotels improve while pipelines absorb one-off charges

Loews Hotels provided the clearest operating bright spot. Net income improved to US$16 million from a US$3 million loss, while adjusted EBITDA, a non-GAAP measure, rose 25% to US$86 million. Higher average daily rates and more occupied room nights helped across the portfolio, particularly at the renovated Loews Miami Beach Hotel and the Arlington properties. Results were partly offset by lower equity income from Universal Orlando joint ventures.

Boardwalk Pipelines’ net income eased to US$85 million from US$94 million and EBITDA fell to US$262 million from US$267 million. The result included US$7 million after-tax charges from Continuum’s unrealised losses and an office relocation impairment. Excluding those items, management said earnings improved on higher transportation rates and pipeline utilisation. Boardwalk also said its revenue backlog grew by almost US$600 million, helped by the proposed US$90 million Carthage Crossing compression project, while its broader project backlog stood at US$3.6 billion.

Loews ended September with US$4.4 billion in cash and investments against US$1.8 billion of debt. It repurchased 1.6 million shares for US$167 million during the quarter and bought another 0.6 million shares for US$67 million in October. Book value per share slipped to US$90.24 from US$90.71 at the end of 2025, although book value excluding accumulated other comprehensive income rose to US$100.67 from US$95.89.