Loews (NYSE: L) net income drops 39.3% as CNA reserve charge weighs on quarter

What happened

Loews Corporation (NYSE: L) said third-quarter net income fell to $306 million from $504 million, mostly because of a CNA long-term care reserve charge. Per-share earnings were $1.50, against $2.43 a year earlier. OptimistFi calculates the net income decline at 39.3%.

The first nine months were softer too. Net income fell 14.1% from the same period of 2025, and per-share earnings slid to $5.29 from $6.03.

CNA Financial Corporation (NYSE: CNA) took a $125 million hit, after tax and noncontrolling interest, from its annual update of long-term care reserve assumptions. The release also cites weaker Property and Casualty underwriting results and higher catastrophe losses at CNA.

Key numbers

Metric	Latest	Change	Source
Q3 net income attributable to Loews	$306 million	from $504 million, -39.3%	SEC 8-K, Exhibit 99.1 (change calculated by OptimistFi)
Q3 net income per share	$1.50	from $2.43, -38.3%	Calculated from SEC 8-K, Exhibit 99.1
CNA net income attributable to Loews, Q3	$180 million	from $371 million, -51.5%	Calculated from SEC 8-K, Exhibit 99.1
CNA Property and Casualty combined ratio, Q3	97.0%	from 92.8%, +4.2 percentage points	SEC 8-K, Exhibit 99.1
Loews Hotels adjusted EBITDA, Q3	$86 million	from $69 million, +25%	SEC 8-K, Exhibit 99.1
Book value per share (prior figure is Dec. 31, 2025)	$90.24	from $90.71, -$0.47	Calculated from SEC 8-K, Exhibit 99.1

Read more: Loews (L) company research

The long-term care charge

CNA raised its long-term care reserves by $173 million before tax, mainly because it expects claim costs to inflate faster. CEO Ben Tisch said so in the earnings remarks filed with the release.

Tisch said accounting rules adopted under LDTI make CNA recognize higher expected claim inflation immediately. The same rules bar it from reflecting the higher investment yields now available.

Loews says higher yields from recent portfolio moves will almost entirely offset the charge. The benefit will flow through investment income over time.

Tisch said CNA completed more than $1.3 billion of trades during 2026. It swapped shorter-duration, BBB-rated bonds yielding 5.5% for longer-duration, A-rated bonds yielding 6.2%. The offset is expected, not yet reported in earnings.

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Segment results

CNA contributed $180 million of net income to Loews, down from $371 million. Its core income fell to $203 million from $409 million.

Underwriting weakened beyond the reserve review. CNA's Property and Casualty combined ratio rose 4.2 points to 97.0% from 92.8%. The underlying combined ratio rose to 94.2% from 91.3%.

The underlying loss ratio of 64.1% was 2.2 points above a year earlier. CNA blamed higher loss cost trends and lower-than-expected rate in certain lines. Net written premiums grew 3%.

Tisch said the market remains competitive and called this a time for underwriting discipline, not for chasing growth.

Boardwalk Pipelines earned $85 million, down from $94 million. EBITDA slipped to $262 million from $267 million. Two items explain the drop: $10 million of net unrealized losses at Continuum and a $9 million impairment tied to moving Boardwalk's corporate office.

Without those two items, net income rose $5 million and EBITDA rose $14 million on higher gas transportation revenue.

Boardwalk's revenue backlog grew by almost $600 million in the quarter, largely from the Carthage Crossing project, where Tisch said the expected investment is about $90 million. The existing project backlog stands at $3.6 billion.

Loews Hotels swung to net income of $16 million from a $3 million loss. Adjusted EBITDA rose 25% to $86 million from $69 million. Higher average daily rates and more occupied room nights drove the gain.

The gain was strongest at the Loews Miami Beach Hotel, whose renovation ended at the end of 2025, and at the Arlington properties. CFO Jane Wang said several hotels, including the Arlington complex, also benefited from the World Cup.

Lower equity income from joint ventures, tied to the Universal Orlando Resort, partly offset the gain.

The corporate segment earned $25 million, down from $42 million, on lower investment income from the parent company trading portfolio.

Cash and buybacks

Book value per share slipped to $90.24 on Sept. 30 from $90.71 on Dec. 31, 2025. Excluding AOCI, it rose to $100.67 from $95.89.

Wang said higher interest rates during the quarter increased unrealized losses on CNA's fixed income investments. These show up in AOCI.

The parent company ended September with $4.4 billion of cash and investments and $1.8 billion of debt. Loews repurchased 1.6 million shares for $167 million in the quarter and another 0.6 million shares for $67 million from Oct. 1 to Oct. 30.

Shares outstanding fell to 202.9 million from 206.0 million at year-end.

Subsidiaries sent the parent $194 million in the quarter, Wang said. That included $119 million of dividends from CNA and $75 million of distributions from Boardwalk.

Why it matters

OptimistFi has argued that Loews's value rests on CNA underwriting discipline, Boardwalk's infrastructure cash flows, hotel-cycle recovery and how well management redeploys subsidiary cash.

The quarter is mixed evidence. Boardwalk's backlog growth, the hotel gains and steady buybacks support that view. CNA's underwriting results cut against it.

Management expects investment income to offset the reserve charge. Tisch argued that premiums invested in longer-tail casualty lines can keep returns attractive at lower underwriting margins.

Still, combined ratios worsened both in the quarter and over nine months, and catastrophe losses were higher. Underwriting remains a drag in a market Tisch calls competitive.

What's next

Loews's next quarterly report is the test. It will show whether CNA's underlying loss ratio holds at its 2026 level and whether investment income begins to absorb the long-term care charge, as management expects.

A further rise in the underlying loss ratio would weaken the case. Visible gains in investment income would support management's offset claim. Tisch also said construction of Americana by Loews Hotels in Arlington is on time and on budget.

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