Loews Corporation — 2023 Q2

SectorFinancials

Date2023-07-30

Overall sentiment-5.9

Total words338

CEO words0

CFO words0

Analyst words0

Transcript

Each turn shows the speaker, their inferred role, the section, and that turn's net sentiment (×1000).

James TischOtherPrepared remarks+0.0+0 / −0

[ The transcript was presubmitted by Loews Corporation. No live call was conducted for the second quarter earnings call. ]

As a reminder, renewal premium change consists of two componentsOtherPrepared remarks+13.7+1 / −0

rate and exposure growth. Rate is the change in price if the coverage remains the same. Exposure growth captures underwriting changes (i.e., changes in deductibles, etc.), as well as changes in the insured's characteristics, such as changes to payroll, revenue or property values. For the second quarter, higher rates contributed 5 points of renewal premium change and exposure growth added another 2 points. All in all, we are pleased with CNA's continuing solid performance.

Jane WangOtherPrepared remarks+0.0+1 / −1

For the second quarter of 2023, Loews reported net income of $360 million or $1.58 per share, compared with net income of $167 million or $0.68 per share in last year's second quarter. This year-over-year increase was driven by higher income from our consolidated subsidiaries and higher net investment income at the parent company. As a reminder and consistent with the first quarter, prior period results have been restated to reflect the adoption of the new GAAP accounting standard of "long-duration contracts targeted improvements," or LDTI. Book value per share increased from $60.81 at the end of 2022 to $64.59 at the end of the second quarter of 2023.

Finally, turning to the corporate segmentOtherPrepared remarks+20.0+2 / −1

Loews recorded after-tax investment income of $9 million this quarter compared to a $51 million loss in the prior year's second quarter. This improvement was driven by better performance within the company's common stock and LP portfolio as well as higher interest rates on our cash and short-term investment portfolio.

Unknown ExecutiveOtherPrepared remarks-75.0+0 / −3

Every quarter, we encourage shareholders to send us questions in advance of earnings that they would like us to answer in our remarks. Please see below for the questions we have received, along with some additional questions we found relevant.

James TischOtherPrepared remarks+0.0+0 / −0

Rather than comment on what's going on with inflation or the economy, this quarter I want to speak about my long-term view of interest rates.

Additionally, from 2011 until 2021, the Fed remitted over $900 billion to the Treasury or about $84 billion a year. These remittances were made possible by the spread the Fed earned on its massive balance sheet. It reflected the difference between the yield on their fixed income portfolio of about $8 trillion in government debt and the zero cost of financing those debt purchases. Of course, those happy days for the Fed are now goneOtherPrepared remarks-35.7+0 / −1

the cost of financing their low coupon debt has skyrocketed to more than 5%, leaving the Fed with enormous losses and the federal government without its annual $84 billion remittances.