Company: L
Filing Date: 2025-02-11
Form Type: 10-K
Source: 0000060086-25-000036
Chunk: 86

Company: LOEWS CORP
Filing Date: 2025-02-11
Form: 10-K
Item: Item 3
Chunk 86
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 Since policies may be in force for several decades, these assumptions are subject to significant estimation risk. Future policy benefit reserves are discounted as discussed in Note 1 to the Consolidated Financial Statements included under Item 8.

In addition, claim and claim adjustment expense reserves are maintained for CNA’s structured settlement obligations. In developing the claim and claim adjustment expense reserve estimates for CNA’s structured settlement obligations, CNA’s actuaries monitor mortality and expense experience on an annual basis. CNA’s recorded claim and claim adjustment expense reserves reflect CNA’s best estimate after incorporating the results of the most recent reviews. Claim and claim adjustment expense reserves for structured settlement obligations are discounted as discussed in Note 1 to the Consolidated Financial Statements included under Item 8.

The actuarial assumptions related to future policy benefit reserves for long-term care policies that management believes are subject to the most variability are morbidity, persistency and anticipated future premium rate increases. Morbidity is the frequency and severity of injury, illness, sickness and diseases contracted. Persistency is the percentage of policies remaining in force and can be affected by policy lapses, benefit reductions and death. Future premium rate increases are generally subject to regulatory approval, and therefore the exact timing and size of the approved rate increases are unknown. As a result of this variability, CNA’s long-term care reserves may be subject to material increases if actual experience develops adversely to its expectations.

The table below summarizes the estimated pretax impact on CNA’s results of operations from various hypothetical revisions to its liability for future policyholder benefits reserve assumptions. CNA has assumed that revisions to such assumptions would occur in each policy type, age and duration within each long-term care product. The impact of each sensitivity is discrete and does not reflect the impact one factor may have on another or the mitigating impact from management actions, which may include additional future premium rate increases. Although such hypothetical revisions are not currently required or anticipated, CNA believes they could occur based on past variances in experience and its expectations of the ranges of future experience that could reasonably occur. Any actual adjustment would be dependent on the specific policies affected and, therefore, may differ from the estimates summarized below. The estimated impacts to results of operations in the table below are after consideration of any net premium ratio impacts.

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For the year ended December 31, 2024Estimated Reduction to Pretax Income(In millions)   Hypothetical revisionsMorbidity:2.5% increase in morbidity$290 5% increase in morbidity