Q1 2025 Quarterly Prepared Remarks

Loews Corporation First Quarter 2025 Earnings Remarks

Ben Tisch, President & CEO:

Loews reported $370 million of net income in the first quarter versus $457 million in the same

quarter a year ago. While a headline net income reduction of almost 20% doesn’t feel great, it’s

my belief that the goings-on underneath the surface continue to represent strong growth, robust

underlying fundamentals, and a tremendous opportunity set within each of our three core

business units. The single biggest driver impacting the year-over-year decline in net income was

a $63 million P&C reserve charge incurred at CNA. With your indulgence, I’d like to spend a few

minutes talking about this charge and our philosophical approach to reserving more broadly.

P&C insurance accounting can best be described as a self-graded exam. In a given accident year,

only 15% to 20% of the total claims that will eventually be incurred are settled and paid out in

that year. In many classes of business, we won’t even know exactly how many claims will

eventually come through for three to five years, and in some classes of business it’s even longer

than that. Therefore, the insurance industry is unique in that a company doesn’t know its cost of

goods sold until many years after the books are closed.

Each quarter our actuaries are tasked with two enormous challenges. First, based on the business

written in the quarter, they must estimate to the second decimal place what percentage of

premiums will eventually be paid out as losses: the loss pick. Second, our actuaries re-evaluate

all the previous accident years’ loss picks taking into account actual cost settlement values and

new claims in the door. If, in total, the actuaries turned out to have overestimated our prior

year(s) loss pick (i.e., we hold too many reserves), this triggers a reserve release or an addition to

earnings. If, on the other hand, the loss picks proved too optimistic (low) an increase in aggregate

reserves is required, which results in a reserve strengthening or a reduction in earnings.

As a general rule, I prefer conservative (i.e., pessimistic) actuaries. While a conservative loss pick

can cost you some growth in a competitive market (you price the business too high to win), an

aggressive loss pick, where you don’t recognize your mistake for a number of years, can destroy

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your balance sheet. History is littered with defunct insurance companies that surely didn’t think

they were writing unprofitable business when, in fact, they were busy selling it.

The first quarter was one of a small handful of times over the past 20 years that, in aggregate, our

accident year loss picks didn’t prove conservative enough. As a result, we recorded a $63 million

pretax development charge largely related to accident year 2024’s commercial auto line of

business. This charge reflects higher bodily injury loss cost inflation, driven by escalating litigation

expenses. While commercial auto may be the poster child for the costs of social inflation on the

insurance industry, it’s important to highlight that its insidious impacts are felt broadly

throughout our casualty portfolio. Our loss cost trends have increased just about every year for

the past seven years, largely on the back of ever-increasing settlement values and jury awards.

With our conservative reserving practices, we heretofore were able to absorb these costs within

our accident year loss pick. However, with this latest lurch forward in loss cost trends, our

actuaries felt it prudent to boost our prior year’s loss pick beyond management’s previous best

estimate . . . and thus the charge.

Over the past decade, commercial auto and general liability loss costs have increased at more

than five times the rate of inflation. While the industry was perhaps slow to react, the current

pricing environment remains quite rational and casualty class prices are broadly increasing by

double digits. This trend will likely continue so long as the inflationary cost pressures brought on

by legal system abuse remain. While some states have taken steps to contain the most egregious

forms of tort malfeasance, more extensive and serious reforms will be needed in order to slow

the current pace of social inflation. In absence of those reforms, premiums will continue to rise,

as the industry simply can’t afford not to pass these costs through. If past is prologue, the media

and the consumer will rebuke the industry when, in reality, they should be directing their ire

towards their local trial attorney.

We remain confident that CNA will be able to continue its trajectory of profitable growth,

notwithstanding the challenging tort environment. Doug Worman and the management team at

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early. This enables CNA to quickly adjust its underwriting strategy in challenging lines of business,

thereby preserving the strength of our balance sheet.

During the first quarter, the company reported catastrophe losses associated with the California

wildfires that were significantly lower than its competitors ($53 million or 2.1 points), which is a

testament to the management teams’ unwavering underwriting discipline.

On the subject of growth, Boardwalk and Loews Hotels also remain bright spots. Boardwalk has

been performing particularly well over the past couple of years due to surging natural gas demand

for both power and industrial use. In particular, gas demand for electricity has risen substantially

after years of little growth due to an increase in domestic manufacturing and a surge in data

center construction. Now, for the first time in many years, Boardwalk is evaluating a number of

large scale growth projects. At the end of last year, the company made final investment decisions

on two such projects, both of which are underpinned by long-term contracts with utility

customers. The company is also evaluating several other large organic growth opportunities. With

Boardwalk’s strong cash flow profile, we expect that they will be able to self-finance these

investments.

In 2025, Loews Hotels opened three new properties adjacent to the new Universal Epic Universe

theme park in Orlando. These new properties added 2,000 rooms to the company’s Orlando

presence. Loews Hotels now manages and owns a 50% interest in 11 properties in Orlando, with

a combined total of 11,000 rooms. While still in the early innings, we are very optimistic about

how the addition of the Epic Universe theme park will enhance the overall performance of the

Loews Hotels at Universal Orlando.

Not surprisingly, the final topic I would like to discuss is share repurchases. As I stated last quarter,

my primary job is to increase the intrinsic value of Loews per share. Repurchasing shares when

they are trading well below intrinsic value is a tremendous risk-adjusted and absolute way of

achieving this goal. Shrinking the denominator at prices well below intrinsic value is especially

accretive when the enterprise, or the sum-of-our-parts, is growing. That is just the situation we

found ourselves in in the first quarter. As a result, we repurchased 5.1 million shares for $429

million in the first four months of this year, which represents approximately 2% of our shares

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outstanding. As a reminder, since the beginning of 2020, we have repurchased 82.6 million shares,

or 28% of our shares outstanding.

Jane Wang, CFO:

For the first quarter of 2025, Loews reported net income of $370 million or $1.74 per share,

compared with net income of $457 million or $2.05 per share in last year’s first quarter. The year-

over-year decline was driven by lower income from CNA, Loews Hotels, and parent company

investments, partially offset by higher earnings from Boardwalk Pipelines.

Book value per share increased from $79.49 at the end of 2024 to $81.73 at the end of the first

quarter of 2025, and book value per share excluding AOCI increased from $88.18 at the end of

2024 to $89.74 at the end of the first quarter of 2025.

CNA contributed net income of $252 million to Loews in the first quarter of 2025 compared with

$310 million in the first quarter of 2024. The year-over-year decline was primarily driven by lower

P&C underwriting income mainly due to commercial auto, which impacted prior period

development as well as the underlying loss ratio. CNA’s combined ratio increased by 3.8 points

to 98.4% in the first quarter of 2025 versus 94.6% in the first quarter of last year. Unfavorable

prior period development accounted for 2.7 points of that variance, primarily driven by the

continuation of elevated loss cost trends in commercial auto for accident year 2024. CNA’s

underlying combined ratio increased by 1.1 points to 92.1%, also primarily driven by elevated

loss cost trends in commercial auto. The catastrophe loss ratio was flat year-over-year at 3.8

points, despite including 2.1 points for losses related to the California wildfires in 2025’s first

quarter.

Net written premium growth was strong in the first quarter of 2025, increasing by 9% year-over-

year, driven by four points of rate, two points of exposure growth, a 7% increase in new business

and strong retention at 86%. Written premium growth was particularly strong in the commercial

segment, which experienced a 12% increase due to six points of rate and four points of exposure

growth, as well as strong new business and retention.

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CNA’s net investment income declined slightly compared to the prior period as improved fixed

income results were more than offset by weakness in the equity markets. Fixed income results

benefited from an approximately 0.1-point increase in pre-tax yields to 4.8%. The company’s LP

and common stock portfolio produced a return of 2.0% vs. 2.9% in the first quarter of 2024.

Investment losses were lower year-over-year due to lower losses from fixed income sales.

Please refer to CNA’s Investor Relations website for more details on their results.

gas demand growth. EBITDA increased by $39 million to $346 million in the first quarter of 2025

compared to $307 million in the first quarter of 2024. The increase was driven by higher re-

contracting rates, growth projects and incremental storage revenues. From a net income

perspective, Boardwalk contributed $152 million of income to Loews in 2025’s first quarter,

which represents an increase of $31 million from $121 million of net income in the first quarter

of 2024.

Loews Hotels reported Adjusted EBITDA of $81 million in the first quarter of 2025, which was

essentially unchanged year-over-year. The hotel company benefited from higher earnings from

the Loews Arlington, which was open for the full quarter and has ramped up operations. That

increase was offset by lower earnings from the Orlando properties as a result of lower occupancy

and average daily rates due in part to ongoing renovations.

The hotel company reported zero income in the first quarter of 2025 versus $16 million of income

in the prior year’s first quarter. Net income declined while Adjusted EBITDA remained flat

primarily due to an impairment charge on a joint-venture hotel property and higher interest

expense. Interest expense was impacted by a full quarter of interest at Loews Arlington, lower

capitalized interest on projects under development, and higher interest rates on debt refinanced

in 2024.

Finally, at the parent company, Loews recorded zero investment income in the first quarter of

2025, compared to $43 million in last year’s first quarter. The decline was driven by negative

returns on our common stock portfolio.

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From a cash flow perspective, Loews received $611 million in dividends from CNA and $75 million

of distributions from Boardwalk in the first quarter of 2025. Since the end of 2024, we

repurchased 5.1 million shares of our common stock at a cost of approximately $429 million,

which represents an average price of $83.78 per share. Loews ended 2025’s first quarter with

$3.5 billion in cash and short-term investments.