Loews Corporation (NYSE:L) Q3 2019 Earnings Conference Call - Final Transcript

Oct 28, 2019 • 11:00 am ET


Loews Corporation (NYSE:L) Q3 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to the Loews Corporation Q3 2019 Earnings Conference Call. [Operator Instructions] Thank you.

I will now turn the call over to Mary Skafidas, Vice President of Investor Relations and Corporate Communications.

Mary Skafidas

Thank you, Laurie, and good morning, everyone. Welcome to Loews Corporation's third quarter earnings conference call. A copy of our earnings release, earnings supplement and company overview may be found on our website, loews.com.

On the call this morning, we have our Chief Executive Officer, Jim Tisch and our Chief Financial Officer, David Edelson. Following our prepared remarks this morning, we will have a question-and-answer session, which will include questions from shareholders.

Before we begin, however, I will remind you that this conference call might include statements that are forward-looking in nature. Actual results achieved by the company may differ materially from those made or implied in any forward-looking statements due to a wide range of risks and uncertainties, including those set forth in our SEC filings. Forward-looking statements reflect circumstances at the time they are made. The company expressly disclaims any obligation to update or revise any forward-looking statements. This disclaimer is only a brief summary of the company's statutory forward-looking statements disclaimer, which is included in the company's filings with the SEC. During the call today, we might also discuss non-GAAP financial measures. Please refer to our security filings and earnings supplement for reconciliation to the most comparable GAAP measures.

In a few minutes, our CFO, David Edelson, will walk you through the key drivers for the quarter. But before he does, Jim Tisch, our CEO, will kick off the call. Jim, over to you.

James S. Tisch

Thank you, Mary, and good morning. Loews had much better quarter than the numbers might indicate with our largest subsidiary CNA contributing positively to our results. CNA is continuing to see solid growth in rate, which increased about 6% across the P&C business. Even as rate increased, retention remained in line with past quarters at 83%. New business also increased 10% over last year's third quarter. While higher rates and new business growth are already flowing through net written premiums, which are up about 8% compared to the prior year, the full positive impact will take time to be reflected in earned premiums.

Additionally, the third quarter is the time when CNA reviews its long-term care book of business. For the first time, since 2015, CNA's assumptions were unlocked, resulting in a third quarter after tax charge at CNA of $170 million. The charge predominantly relates to expectations for lower interest rates in both the short and long-term. As a reminder, this is a GAAP charge that has no impact on statutory capital. Also this charge was partially offset by a $44 million after-tax relief from CNA's long-term care claims reserves.

As is my custom, every quarter I pick a few key topics to talk about. This quarter, I'd like to focus on capital allocation and the growth prospects for several of our