Company: L
Filing Date: 2025-08-04
Form Type: 10-Q
Source: 0000060086-25-000166
Chunk: 21

Company: LOEWS CORP
Filing Date: 2025-08-04
Form: 10-Q
Item: Part I, Item 1
Chunk 21
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O and cyber businesses.Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in multiple accident years.Unfavorable development in warranty was primarily due to higher than expected frequency and severity in a recent accident year.Unfavorable development in commercial auto was due to higher than expected claim severity in recent accident years.Unfavorable development in general liability was due to higher than expected claim severity in multiple accident years going back to 2014 and prior.Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in multiple accident years.Favorable development in other property and casualty operations was primarily due to favorable loss emergence in casualty coverages associated with healthcare products.  Unfavorable development in other insurance operations was largely associated with legacy mass tort abuse reserves.

Asbestos & Environmental Pollution (“A&EP”) ReservesIn 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 their 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 

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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