Business Segments

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Business Segments

9. Business Segments

The Company’s reportable segments are primarily based on its individual operating subsidiaries. Each of the principal operating subsidiaries are headed by a chief executive officer who is responsible for the operation of its business and has the duties and authority commensurate with that position. Investment gains (losses) and the related income taxes, excluding those of CNA, are included in the Corporate and other segment.

CNA’s results are reported in four business segments: CNA Specialty, CNA Commercial, Life & Group Non-Core and Other. CNA Specialty provides a broad array of professional, financial and specialty property and casualty products and services, primarily through insurance brokers and managing general underwriters. CNA Commercial includes property and casualty coverages sold to small businesses and middle market entities and organizations primarily through an independent agency distribution system. CNA Commercial also includes commercial insurance and risk management products sold to large corporations primarily through insurance brokers. Life & Group Non-Core primarily includes the results of the life and group lines of business that are in run-off. Other includes the operations of Hardy Underwriting Bermuda Limited (“Hardy”), corporate expenses, including interest on corporate debt, and the results of certain property and casualty business primarily in run-off, including CNA Re and asbestos and environmental pollution. Hardy is a specialized Lloyd’s of London underwriter primarily of short-tail exposures in marine and aviation, non-marine property, specialty lines and property treaty reinsurance.

Diamond Offshore owns and operates offshore drilling rigs that are chartered on a contract basis for fixed terms by companies engaged in exploration and production of hydrocarbons. Offshore rigs are mobile units that can be relocated based on market demand. Diamond Offshore’s fleet consists of 45 drilling rigs, including four newbuild rigs which are under construction and one rig being constructed utilizing the hull of one of Diamond Offshore’s existing mid-water floaters. On March 31, 2014, Diamond Offshore’s drilling rigs were located offshore 11 countries in addition to the United States.

Boardwalk Pipeline is engaged in the interstate transportation and storage of natural gas and NGLs and gathering and processing of natural gas. This segment consists of interstate natural gas pipeline systems originating in the Gulf Coast region, Oklahoma and Arkansas, and extending north and east through the midwestern states of Tennessee, Kentucky, Illinois, Indiana and Ohio, natural gas storage facilities in four states and NGL pipelines and storage facilities in Louisiana, with approximately 14,450 miles of pipeline.

HighMount is engaged in the exploration, production and marketing of natural gas and oil (including condensate and NGLs), primarily located in the Permian Basin in West Texas as well as in the Mississippian Lime in Oklahoma.

Loews Hotels operates a chain of 19 hotels, 18 of which are in the United States and one is in Canada.

The Corporate and other segment consists primarily of corporate investment income, corporate interest expense and other unallocated expenses.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1 of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. In addition, CNA does not maintain a distinct investment portfolio for every insurance segment, and accordingly, allocation of assets to each segment is not performed. Therefore, a significant portion of net investment income and investment gains (losses) are allocated based on each segment’s carried insurance reserves, as adjusted. On February 10, 2014, CNA entered into a definitive agreement to sell the majority of its run-off annuity and pension business through the sale of the common stock of CAC. The business being sold, which was previously reported within Life & Group Non-Core, is now reported as discontinued operations in the Consolidated Condensed Statements of Income for the three months ended March 31, 2014 and 2013. See Notes 1 and 12 for further discussion of discontinued operations.

The following tables set forth the Company’s consolidated revenues and income (loss) by business segment:

Three Months Ended March 31	2014			2013
(In millions)
Revenues (a):
CNA Financial:
CNA Specialty	$	979		$	956
CNA Commercial		1,041			1,101
Life and Group Non-Core		331			315
Other		112			83
Total CNA Financial		2,463			2,455
Diamond Offshore		710			732
Boardwalk Pipeline		357			329
HighMount		55			68
Loews Hotels		105			94
Corporate and other		53			8
Total	$	3,743		$	3,686
Income (loss) before income tax and noncontrolling interests (a):
CNA Financial:
CNA Specialty	$	212		$	215
CNA Commercial		127			198
Life and Group Non-Core		(16	)		(23)
Other		(22	)		(40)
Total CNA Financial		301			350
Diamond Offshore		168			205
Boardwalk Pipeline		23			99
HighMount		(31	)		(139)
Loews Hotels		5
Corporate and other		17			(17)
Total	$	483		$	498
Net income (loss) (a):
CNA Financial:
CNA Specialty	$	128		$	128
CNA Commercial		77			115
Life and Group Non-Core		7
Other		(12	)		(25)
Total CNA Financial		200			218
Diamond Offshore		69			82
Boardwalk Pipeline		(18	)		33
HighMount		(20	)		(88)
Loews Hotels		3
Corporate and other		11			(11)
Income from continuing operations		245			234
Discontinued operations, net		(186	)		8
Total	$	59		$	242

(a) Investment gains included in Revenues, Income before income tax and noncontrolling interests and Net income are as follows:

Three Months Ended March 31	2014		2013
Revenues and Income before income tax and noncontrolling interests:
CNA Financial:
CNA Specialty	$	12	$	3
CNA Commercial		12		4
Life and Group Non-Core		16		9
Other		2		3
Total	$	42	$	19
Net income:
CNA Financial:
CNA Specialty	$	7	$	2
CNA Commercial		7		2
Life and Group Non-Core		9		6
Other		1		2
Total	$	24	$	12