Grade: B+ — Healthy, Strong Insurance Core
Framework: Insurance holding company analysis + Schilit principles
Data: SEC EDGAR 10-K (Filed 2026-02-10) + Yahoo Finance
Auditor: Deloitte & Touche LLP — Clean opinion
One-line verdict: Loews is a diversified holding company dominated by its 92%-owned subsidiary CNA Financial (the 7th largest U.S. commercial P&C insurer). Net income attributable to Loews grew 18% to $1.67 billion ($7.97 diluted EPS), with CNA contributing $1.17 billion — a 33% increase driven by improved underwriting results and higher net investment income. The P&C combined ratio improved to 94.7% (underlying 91.8%), and cash flow conversion is strong at 1.97x net income. The balance sheet carries minimal goodwill ($0.3 billion = 2% of equity), and there are no signs of earnings manipulation. The only watch item is cash covering 84% of debt, which is normal for an insurance holding company. Boardwalk Pipelines contributed $444 million and Loews Hotels $31 million. This is a conservatively run conglomerate with transparent subsidiary accounting.
| Metric | Result |
|---|---|
| Red Flags (Engine) | **0** |
| Watch Items | **1** (C4 — cash/debt coverage) |
| Checks Completed | **12/18** (6 N/A — several checks insufficient for insurance) |
| Beneish M-Score | **N/A** (not applicable to insurance holding companies) |
| F-Score (Fraud Probability) | **1.65** (0.61% probability) |
| Altman Z-Score | **N/A** (not applicable to insurance/financial holding companies) |
| Auditor | Deloitte & Touche LLP — Unqualified opinion |
| Fiscal Year | 2025 (ended December 31, 2025) |
| Report Date | 2026-04-05 |
Important note on financial companies: The Beneish M-Score and Altman Z-Score were designed for manufacturing and commercial enterprises and are not applicable to insurance holding companies. Insurance earnings quality is assessed through combined ratios, reserve adequacy, investment income stability, and capital strength.
Consolidated Results: CNA Dominates
Per the Consolidated Statements of Operations:
| Metric | 2023 | 2024 | 2025 | Trend |
|---|---|---|---|---|
| Insurance Premiums | $9,480M | $10,211M | **$10,900M** | +6.7% |
| Net Investment Income | $2,395M | $2,780M | **$2,779M** | Flat |
| Total Revenue | $15,901M | $17,510M | **$18,454M** | +5.4% |
| Total Expenses | $13,905M | $15,636M | **$16,171M** | +3.4% |
| Net Income | $1,545M | $1,494M | **$1,772M** | +18.6% |
| Net Income to Loews | $1,434M | $1,414M | **$1,667M** | +17.9% |
| Basic EPS | $6.30 | $6.42 | **$7.98** | +24.3% |
| Diluted EPS | $6.29 | $6.41 | **$7.97** | +24.3% |
Per the 10-K, the subsidiary contributions:
| Subsidiary | 2025 NI | 2024 NI | Change |
|---|---|---|---|
| CNA Financial | $1,173M | $879M | +33.4% |
| Boardwalk Pipelines | $444M | $413M | +7.5% |
| Loews Hotels & Co | $31M | $70M | -55.7% |
| Corporate | $19M | $52M | -63.5% |
| **Total** | **$1,667M** | **$1,414M** | **+17.9%** |
The 10-K notes: "Net income attributable to Loews Corporation for 2024 includes a $265 million after-tax and noncontrolling interests pension settlement charge for CNA. Excluding this pension charge, CNA's increase is primarily due to higher property and casualty underwriting income and net investment income."
CNA Financial: The Core Engine
Per the 10-K P&C metrics:
| Metric | 2025 |
|---|---|
| Net Earned Premiums (P&C) | $10,478M |
| Underwriting Gain | $551M |
| Combined Ratio | **94.7%** |
| Underlying Combined Ratio | **91.8%** |
| Loss Ratio | 64.6% |
| Expense Ratio | 29.7% |
| Catastrophe Impact | 2.3% |
The combined ratio improved across all segments:
| Segment | Combined Ratio | Underlying Combined Ratio |
|---|---|---|
| Specialty | 95.3% | 94.2% |
| Commercial | 95.2% | 90.5% |
| International | 91.2% | 91.3% |
| **Total** | **94.7%** | **91.8%** |
Rate increases of 3% (with specialty at 3%, commercial at 5%, and international at -4%) indicate continued pricing discipline. The underlying combined ratio of 91.8% demonstrates profitable underwriting, with catastrophe losses of 2.3 points and unfavorable development of 0.6 points.
Cash Flow Quality: Strong
Per the screening engine:
For an insurance company, CFFO exceeding NI indicates premiums are being collected well ahead of claims payments, which is the hallmark of a well-run insurer with appropriate reserve practices.
Balance Sheet: Conservative
Per the screening results:
| Item | Value |
|---|---|
| Cash | $7.9B |
| Total Debt | $9.5B |
| Cash/Debt | 84% |
| Goodwill + Intangibles | $0.3B (2% of equity) |
Goodwill at 2% of equity is negligible. The company has not pursued aggressive acquisitions and carries a conservative balance sheet relative to its insurance peers.
Total equity grew from approximately $16.5 billion in 2023 to approximately $17.0 billion in 2025, reflecting retained earnings growth offset by share buybacks (Loews purchased $617 million in treasury stock in 2024).
The 18-Point Screening
| # | Check | Result | Detail |
|---|---|---|---|
| A1 | DSO Change | PASS | DSO 204 days, -3 days YoY (normal for insurance — receivables include reinsurance) |
| A2 | AR vs Revenue Growth | PASS | AR growth 4.1% vs revenue growth 5.4% |
| A3 | Revenue vs CFFO | PASS | Revenue +5.4%, CFFO +8.4% |
| B1 | Inventory vs COGS | PASS | No material inventory |
| B2 | CapEx vs Revenue | PASS | CapEx declined 8.4% |
| B3 | SG&A Ratio | N/A | Not applicable to insurance |
| B4 | Gross Margin | N/A | Not applicable to insurance |
| C1 | CFFO vs Net Income | PASS | CFFO/NI = 1.97 |
| C2 | Free Cash Flow | PASS | FCF $2.7B, FCF/NI = 1.62 |
| C3 | Accruals Ratio | PASS | -1.9%. Low accruals |
| C4 | Cash vs Debt | WATCH | Cash $7.9B covers 84% of debt $9.5B |
| D1 | Goodwill + Intangibles | PASS | $0.3B = 2% of equity |
| D2 | Leverage | N/A | Standard leverage not applicable to insurance |
| D3 | Soft Asset Growth | N/A | Not applicable to insurance |
| D4 | Asset Impairment | N/A | No write-off data |
| E1 | Serial Acquirer FCF | PASS | FCF after acquisitions positive |
| E2 | Goodwill Surge | PASS | Goodwill change -29% YoY |
| F1 | Beneish M-Score | N/A | Not applicable to insurance |
Key Risks from the 10-K
1. Catastrophe Exposure
CNA's P&C business is exposed to natural catastrophe losses. The 2025 combined ratio included 2.3 points of catastrophe impact. A major hurricane or earthquake season could significantly impact results.
2. Reserve Adequacy
The 10-K includes policy liability remeasurement losses of $104 million in 2025 ($125 million in 2024). Insurance reserve estimation is inherently uncertain, and adverse development on prior-year reserves could materially impact earnings.
3. Loews Hotels Decline
Loews Hotels' contribution fell 56% from $70 million to $31 million, suggesting the post-pandemic hospitality boom is normalizing. While small relative to CNA, it reduces diversification benefits.
4. Investment Portfolio Risk
Net investment income of $2.78 billion is a major earnings contributor. Changes in interest rates, credit spreads, or investment losses could impact this revenue stream.
Summary
Grade: B+. Healthy earnings quality. Conservative insurance holding company with strong underwriting and cash flow.
Loews is a well-run conglomerate anchored by CNA Financial's profitable P&C underwriting. The 2025 results show:
The main risks are standard insurance risks: catastrophe exposure, reserve adequacy, and investment portfolio sensitivity. There are no earnings quality red flags.
**Disclaimer**: This report is based on Loews Corporation's fiscal year 2025 10-K filed with the SEC on February 10, 2026. This is NOT investment advice.
**About EarningsGrade**: We screen earnings reports for financial red flags using an 18-point forensic framework. Grade B+ means the company shows healthy earnings quality with very minor concerns.