Good day everyone and welcome to today’s Loews Corporation Q3 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions]. Please note the call maybe recorded and I will be standing by should you need any assistance. It is now my pleasure to turn today’s call over to Mary Skafidas, Vice President of Investor Relations and Corporate Communications. Please go ahead.

Thank you, Ashley and good morning, everyone and 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. Also posted on the Home Page of the Loews website is the company’s 2021 Virtual Investor Day Presentations from Loews and CNA. The Loews presentation narrated by James Tisch the company’s CEO focusses on strategic capital allocation. CNA's strategic discussion is hosted by its CEO, Dino Robusto and its Interim CFO, Larry Haefner. We invite you each to access these presentations. We look forward to your feedback and hope you find the presentations informative. On the call this morning, we have our Chief Executive Officer, James Tisch, and our Chief Financial Officer, David Edelson. Following our prepared remarks this morning, we will have a question-and-answer session with questions from our 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're 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 filing with the SEC. During the call today, we might also discuss non-GAAP financial measures. Please refer to our security filings in earnings supplement for reconciliation to the most comparable GAAP measures. With that, I'd like to turn the call over to Jim. Jim, over to you.

Thank you Mary and good morning. Before we review the quarter I want to acknowledge someone who has been instrumental to Loews’ success. Andrew Tisch has decided to step away from his Executive responsibilities at Loews Corporation at the end of December. I could not have asked for a better partner than Andy who has served Loews with complete dedication for the last 50 years. During his tenure he has successfully led a number of our subsidiaries and functional areas while also fostering open communication, collaboration, and respect throughout the organization. We are all fortunate to have been the beneficiaries of his wisdom and expertise and we are grateful that he will continue to serve as Co-Chairman of the Loews Board and as a member of the CNA Board. Turning to earnings, Loews had another strong quarter across the board with good performance from each of our consolidated subsidiaries. CNA continues to be a success story for Loews. The company’s underlying combined ratio decreased by 1.5 points driven by the expense ratio which was 30.7% compared to 31.8% in the prior year quarter. The underlying loss ratio was also lower at 60.2% compared to 60.5% in the prior year. CNA's P&C gross written premiums increased by 10% and net written premiums increased by 5%. Note that the increase in net written premiums is lower than for gross written premiums due to additional reinsurance that the company has purchased in its strategy to protect the insurance portfolio from large loss events. The value of this incremental protection was fully on display this past quarter with the mitigated losses CNA reported on Hurricane Ida. CNA had pretax investment income of $513 million pretty much flat with the prior year's quarter. Limited partnerships had a great quarter and the fixed income portfolio continues…

Thank you Jim and good morning everyone. For the third quarter Loews reported net income of 220 million or $0.85 per share compared to net income of 139 million or $0.50 per share in last year's third quarter. Let me describe the quarter in a net shell before getting into more detail. CNA's performance was driven by strong property casualty underwriting income before catastrophe losses, healthy net investment income, and a net reserve release in the life and group segment. These positives were partially offset by significant weather related catastrophe losses. Boardwalks operating results benefited from strong transportation revenues generated by its growth projects and increased utilization throughout its system. And Loews Hotels continued to emerge from the COVID induced downturn with its resort properties especially those in Florida leading the charge. Loews Hotels generated positive net income for the first time since the fourth quarter of 2019. Let me know dig more deeply into the third quarter and the year-over-year comparison. All three of our consolidated subsidiaries CNA, Boardwalk, Loews Hotels recorded materially higher year-over-year net income contributions with CNA leading the charge. CNA held its earnings call earlier this morning. I would encourage you to review the transcript for more details. In the meantime, let me provide a few highlights. CNA contributed net income of 229 million up from 192 million in Q3 2020. The main drivers of the year-over-year increase were higher property casualty underwriting income before cat losses and the absence of three charges that occurred last year, two of which were in the life and group segment. A charge from the unlocking of the long-term care active life reserve, a charge from strengthening the structured settlement claim reserve, and a less significant charge from the early retirement of debt. Conversely higher catastrophe losses than in…

Thank you David. Before we go to the Q&A, we announced this morning that David will be stepping down as CFO in May of 2022 and will be succeeded by Loews veteran Jane Wang who is a subsidiary liaison and Corporate Development Executive. We've got plenty more time with David as CFO so more about him and Jane at a later date. And now Mary back to you.

Thanks Jim. Moving to the Q&A portion of the call we have a number of questions from shareholders. The first one is to you Jim, what do you believe will be the role of natural gas in the transition to clean energy?

As I think about the transition to renewable energy in the U.S. and also in the world, it's my strong belief that we will not be able to snap our metaphorical fingers and get it done overnight. 70% of energy consumed in the U.S. is from oil and natural gas and the notion that we can replace that amount of energy with renewables in just a few short years is in my opinion a pipe dream. I believe this transition will be measured in decades. I'm not alone in my belief that over the next several years demand for natural gas will increase both domestically and also internationally. Most forecasts call for natural gas production in the United States to increase over the next three decades by anywhere from 15% to 40%. Natural gas is an important energy source that has meaningfully reduced greenhouse gas emissions. In the U.S. CO2 emissions from power generation are down 40% over the last 20 years as power plants switched from coal to natural gas. Energy production needs to be low cost, reliable, and green. We need to approach the energy transition in a rational and balanced way and natural gas is playing an important role in the clean, low cost reliable option. Currently global demand growth for natural gas is driven by China and India where coal still accounts for more than 60% of their power generation. Energy transition targets in those countries will likely accelerate natural gas demand to replace coal usage. U.S. LNG is well positioned to meet that demand. In the U.S. natural gas has an important role to play in reducing emissions through the displacement of coal and as a backup to renewable energy by providing reliable power for times when the sun doesn't shine and the wind doesn't…

Thank you Jim. Next question is also to you, can you please comment on the performance of CNA share price?

Sure. I am disappointed by CNA’s share price level. At the end of 2017, CNA traded at about $53 per share whereas on Friday it traded for less than $45 per share. The stock price notwithstanding CNA today is a much stronger company than it was 3.5 years ago. Over that time CNA has meaningfully reduced its expense ratio, has made steady improvement in its underlying loss ratio, has built a deep underwriting culture, optimized distribution by expanding its broker network, and continues to attract, develop, and retain top talent. Additionally, the company maintains a robust balance sheet through its conservative capital structure and debt profile. The company has ample liquidity and what S&P refers to as AAA level of capital. Its investment portfolio has a carrying value of about $50 billion. We work with CNA to maintain a high quality portfolio with an average A credit rating. The portfolio also has consistent fixed income earnings, solid limited partnerships, and common equity returns. Of course no discussion of CNA would be complete without talking about long-term care. The company has worked tirelessly to mitigate the risk there, something I believe the stock market does not give CNA enough credit for. On their call earlier today, CNA announced the findings of their annual review of long-term care book of business, here are some of the highlights. CNA has actively managed the portfolio to reduce policy count and level of benefits while working to provide better care for their policy holders. The company closed the group book of business in 2016 so no new policies have been issued since then which has helped drive a 35% reduction in policies enforced since year-end 2015. CNA has initiated several innovative benefit reduction strategies resulting in over 60,000 policy holders electing to reduce their benefits since 2017. In conclusion and to finally answer your question, over the last 12 months CNA earned about $1.2 billion which means that CNA is trading at about 10 times net income. In the context of the S&P 500, trading at more than twice the multiple CNA seems to me to be dirt cheap.

Thank you Jim. Next question related to Boardwalk. David, this one is for you. Can you please tell us how Boardwalk was impacted by recent hurricanes?

Sure Mary. The Boardwalk team did an incredible job. Many, many planning hours were dedicated to preparation and its pipelines had no major disruptions as the hurricanes swept through this year. The company is continually focused on operating as pipeline safely and reliably for its customers. Now let me also note that Boardwalk has invested in making its operations more environmentally friendly by reducing methane emissions through upgrading equipment and improving leak detection efforts. So back to you Mary.

Okay, thank you David. Next question is for Jim. Jim, labor shortages are affecting a number of industries, are these shortages affecting any of Loews’ subsidiaries?

Yeah, so both Altium and Loews Hotels has had labor shortages. For example, at one point during the pandemic, the management teams at some of Loews Hotels’ properties were making beds and cleaning rooms. Luckily that situation is improving. Loews Hotels has had a 20% increase in headcount since the end of the second quarter and more than double the active headcount at the beginning of the year. Two thirds of the Loews Hotels’ current work force was with the company prior to the pandemic. So while onboarding team members is an ongoing effort, the company is lucky to have had so many team members remain active throughout the pandemic or return to Loew's after a leave of absence. In terms of Altium, labor continuity continues to be a challenge in some manufacturing locations. To address this challenge Altium is offering sign on retention and employee referral bonuses. They have also adjusted base wages to keep up with the market. Overall while labor shortages have impacted a few of our subsidiaries, we're seeing gradual improvement in the labor situation. And Mary, I think that’s the end of our questions, so I would just like to make a few comments on what I see going on in the economy. For the past two quarters I've spoken about inflation and interest rates. Both times I spoke about how I thought we are beginning a cycle of inflation and how interest rates were much too low. And even though interest rates on 10 year notes have basically doubled in the past 12 months, those rates are still too low. Although it's been developing for several quarters, what is currently in plain view are shortages. Just take a look at what's happening to the likes of computer chips, the containers, the labor, the trucking…

Thank you Jim. That concludes the Loews call for today. As always thank you for your continued interest. Please feel free to reach out to me with any additional questions at mskafidas@loews.com. A replay will be available on our website loews.com in approximately two hours.

Thank you and this does conclude today’s program. Thank you for your participation. You may disconnect at any time.