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Loews Corp L
Q1 2013 Earnings Call Transcript

Transcript Call Date 04/29/2013

Operator: Good morning. My name is Jackie and I will be your conference operator today. At this time I would like to welcome everyone to Loews First Quarter 2013 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you.

I would now like to turn the call over to Mary Skafidas, Vice President of Investor and Public Relations. Please go ahead.

Mary Skafidas - IR: Thank you Jackie, and good morning everyone. We'd like to welcome you to Loews Corporation's first quarter 2013 earnings conference call. A copy of our earnings release may be found on our website, loews.com.

On this call this morning, we have our Chief Executive Officer, Jim Tisch; and our Chief Financial Officer, Peter Keegan. Following their prepared remarks this morning, we will have a question-and-answer session. 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 projections made in any forward-looking statements. Forward-looking statements reflect circumstances at the time they are made and the Company expressly disclaims any obligations 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 securities filings for reconciliation to the most comparable GAAP measures.

I will now turn the call over to Loews' Chief Executive Officer, Jim Tisch.

James S. Tisch - Office of the President, President and CEO: Thank you, Mary. Good morning and thank you all for joining us today. Loews had net income of $242 million or $0.62 per share for the first quarter of 2013 as compared to $367 million or $0.92 per share for the same quarter last year.

Results for the quarter were impacted by an after-tax ceiling test impairment charge at HighMount of $92 million as compared to an impairment charge of $28 million in the prior year. Absent these charges, which Pete will describe in more detail later in the call, our net income for the quarter would have been $334 million or $0.85 per share in 2013 as compared to $395 million or $0.99 per share in the first quarter of 2012. The decrease in net income for the quarter is due to reduced investment income at Loews and slightly lower earnings at Diamond.

Let's take a closer look at the results and progress at each of our subsidiaries, starting with CNA. CNA had a good quarter and continued to improve its underwriting performance through risk reduction and pricing discipline, while generating premium growth. Excluding catastrophes and prior year development, CNA saw continued improvement in P&C combined ratio with a year-over-year decrease of just over 1 point and 2.2 point improvement over the last quarter. Overall, net premium growth for the Company's core P&C operation exceeded 10%. Rate increases contributed to this premium growth, averaging 7.7% across P&C operations for the quarter (as contrasted to) 4% during the first quarter of 2012. The inclusion of holiday in the first quarter contributed approximately 3 points of CNA's 10% premium growth. While we're pleased with CNA's growth momentum, we expect CNA to remain focused on improving its underwriting margin. As you're heard on recent CNA calls, this margin improvement is expected to come from rate increases, writing profitable new business in target segments and cycling off of inadequately priced business.

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