Q3 2023 The Hartford Financial Services Group Inc Earnings Call

Good morning, Ladies and gentlemen, my name is Robbie and I will be your conference operator today.

At this time I would like to welcome everyone to the third quarter 2023, the Hartford financial results webcast.

Today's call is being recorded in all lines have been placed on mute to prevent any background noise.

After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question during that time simply press. The star key followed by the number one on your telephone keypad.

If you would like to withdraw your question Press Star one a second time.

Thank you and I will now turn the conference over to Susan Spivak Senior Vice President Investor Relations you may begin.

Good morning, and thank you for joining us today for our call and webcast on third quarter 2023 earnings yesterday, we reported results and posted all the earnings related material on our website for the call. Today are participants are Chris Swift, Chairman and CEO of the Hartford, Beth Costello, Chief Financial Officer.

Jonathan Bennett group benefits, Stephanie Bush small commercial and personal lines, and most Tucker middle and large commercial and global specialty.

Just a few comments before Chris begins todays call includes forward looking statements as defined under the private Securities Litigation Reform Act of 1095. These statements are not guarantees of future performance and actual results could be materially different we do not assume any obligation to update information or.

Forward looking statements provided on this call investors should also consider the risks and uncertainties that could cause actual results to differ from these statements. A detailed description of those risks and uncertainties can be found in our SEC filings. Our commentary today include non-GAAP financial measures.

Explanations and reconciliations of these measures to the comparable GAAP measure are included in our SEC filings as well as in the news release and financial supplement.

Finally, please note that no portion of this conference call may be reproduced or rebroadcast in any form without the hartford's prior written consent.

Replays of this webcast and an official transcript will be available on the Hartford's website for one year I'll now turn the call over to Chris.

Good morning, and thank you for joining us.

Hartford's third quarter financial and operational performance.

Builds upon the momentum achieved in the first half of the year.

Once again commercial lines and group benefits, which in aggregate represent over 85% of earned premium delivered exceptional results.

We continue to expand our strong competitive position.

That's really executing on priorities and delivering superior returns for shareholders.

Let me now call your attention to highlights from the third quarter.

Topline growth in commercial lines of 8%.

With an underlying combined ratio of 87 eight.

Strong pricing across PMC, including double digit increases in commercial property.

Personal lines auto and home.

Group benefits fully insured premium growth of 8% with a core earnings margin of nine 8%.

Strong investment performance with reinvestment rates climbing to 6%.

Higher portfolio yield.

The trailing 12 month core earnings ROE of 14, 9%.

These results are outstanding and keep us on track to deliver a full year core earnings Roe.

And the range of 14% to 15%.

As I look across the markets. The U S economy has remained resilient.

<unk> data points, including robust payroll strong retail sales and solid levels of industrial production.

200 environment, which continues to be supportive of the hartford's businesses.

Now, let me dive deeper into the third quarter performance by business.

In small commercial written premiums were $1 2 billion with 16% growth in new business and another sub 90 underlying margin.

Our best in class package product, which we call spectrum continues to outperform in a competitive marketplace.

Contributing new business premium of approximately $100 million up 20% over prior year.

In addition, written premium for excess and surplus lines grew 34% in the quarter with new business growth of over 50%.

Operator: Good morning, ladies and gentlemen.

Abby: My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the third quarter 2023, the Hartford Financial Results webcast. Today's call is being recorded and all lines have been placed on mute to prevent any background noise.

We expect E&S premium to approach $200 million for the full year.

Okay.

I am incredibly pleased with the overall performance in small commercial which continues to deliver outstanding results with industry, leading products and unmatched ease of conducting business and unrivaled pricing accuracy.

Abby: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time.

This business is poised to exceed $5 billion of written premium this year.

Middle and large commercial had another great quarter written premiums grew 5%.

Susan Speevak: Thank you, and I will now turn the conference over to Susan Speevak, Senior Vice President Investor Relations. You may begin. Good morning, and thank you for joining us today for our call and webcast on third quarter 2023 earnings. Yesterday we reported results and posted all the earnings related material on our web site. For the call today, our participants are Chris Swift, Chairman and CEO of the Hartford, Beth Castello, Chief Financial Officer, Jonathan Bennett, Group Benefits, Stephanie Bush, Small Commercial and Personal Line, and Moe Tooker, Middle and Large Commercial and Global Specialty.

Reflecting strong rate execution, and new business growth in our excess lines.

Our general Industries property book grew 13%, while large property grew 15%.

Looking across commercial lines, we are taking a thoughtful and disciplined approach to grow property premium within favorable market conditions to the level of approaching $2 5 billion for the full year or a 25% increase.

We are focused on managing our cat exposure as evidenced by our year to date cat losses, which were lower than our market share.

Susan Speevak: Just a few comments before Chris begins. Today's call includes forward-looking statements as defined under the Private Security's Litigation Reform Act of 1995. These statements are not guarantees of future performance and actual results could be materially different. We do not assume any obligations to update information or forward-looking statements provided on this call. Investors should also consider the risks and uncertainties that could cause actual results to differ from these statements. A detailed description of those risks and uncertainties can be found in our SEC filing. Our commentaries today include non-gap financial measures, explanations and reconciliation of these measures, to the comparable gap measure are included in our SEC filings as well as in the news release and financial supplement.

Yes.

Coming back to middle and large commercial underlying margins were exceptional reflecting the advancements made in data science capabilities pricing and underwriting tools.

Margins also benefited from favorable property losses.

Those advancements combined with our best in class talent position.

Position us well to sustain profitable growth in this business.

Global specialty continues to deliver outstanding results with net written premiums up 11% driven by new business growth and strong renewal written pricing in a number of key lines.

Submission flow and the U S was up 11% in the quarter, including 15% growth in wholesale.

Susan Speevak: Finally, please note that no portion of this conference call may be reproduced or rebroadcast in any form without the Hartford's prior written consent. Replays of this webcast and an official transcript will be available on the Hartford's website for one year.

And the international saw strong new business growth in marine and energy.

Within renewal written pricing momentum has been building in the wholesale excess market.

Property pricing has been above 20% all year and international casualty is above 10%.

Chris Swift: I'll now turn the call over to Chris. Good morning, and thank you for joining us. The Hartford's third quarter financial and operational performance builds upon the momentum achieved in the first half of the year. Once again, commercial lines and group benefits which in aggregate represent over 85% of earned premium delivered exceptional results. We continue to expand our strong competitive position successfully executing on priorities and delivering superior returns for shareholders.

In addition, we remain excited about the ongoing benefits to the top line from our expansive product portfolio.

Our underwriting discipline, along with enhanced capabilities developed over the past few years in global specialty.

We're driving targeted market share gains with a stellar underlying combined ratio that has hovered in the mid <unk> for the past six quarters.

In short our execution has never been stronger.

Chris Swift: Let me now call your attention to highlights from the third quarter. Top line growth and commercial lines of 8% with an underlying combined ratio of 87.8. Strong pricing across P&C including double digit increases in commercial property, personal lines auto and home. Group benefits fully ensured premium growth of 8% with a core earnings margin of 9.8%. Strong investment performance with reinvestment rates, climbing to 6 percent, driving higher portfolio yield, and a trailing 12-month core earnings ROE of 14.9 percent.

Turning to pricing commercial lines renewal written pricing was five 4%.

With the second quarter.

Excluding workers' compensation renewal written pricing rose to 8% up four tenths sequentially with strong pricing and property.

So in general liability.

Across commercial property pricing is over 10% with auto and general liability nearing that level as well.

Pricing in other liability and casualty lines also remained strong.

While public D&O is still pressured.

And workers compensation renewal written pricing continues to exceed expectations.

Chris Swift: These results are outstanding and keep us on track to deliver a full year core earnings ROE in the range of 14 to 15 percent. As I look across the markets, the U.S, economy has remained resilient, and recent data points, including robust payroll, strong retail sales, and solid levels of industrial production, point to an environment which continues to be supportive of the Hartford businesses.

Turning slightly positive in the quarter.

All in <unk>.

<unk> comp renewal written pricing in commercial lines remains on top of loss cost trends.

Reinforcing my confidence in achieving our margin expectations for the year in.

In summary.

Mentum persist in commercial lines.

I expect topline growth at highly profitable margins to continue.

Chris Swift: Now, let me dive deeper into the third quarter performance by business. In small commercial, written premiums were 1.2 billion, with 16 percent growth in new business, and another sub 90 underlying margin. Our best in class package product, which we call Spectrum, continues to outperform in a competitive marketplace, contributing new business premium of approximately $100 million, up 20 percent over prior year. In addition, written premium for excess and surplus lines grew 34 percent in the quarter, with new business growth of over 50 percent.

Moving to personal lines.

I'm pleased with our continued response to elevated loss cost in both auto and home.

In this challenging environment, our focus objectives and execution are unwavering during the quarter, we achieved auto renewal written price increases of nearly 20%.

Which we expect to continue at that rate into the fourth quarter.

Current accident year loss trend expectations for the third quarter.

As updated in June held.

Promising development as we finished the year.

In homeowners.

Chris Swift: We expect the NS premium to approach $200 million for the full year. I am incredibly pleased with the overall performance in small commercial, which continues to deliver outstanding results with industry leading products, and unmatched ease of conducting business, and unrivaled pricing accuracy. This business is poised to exceed $5 billion of written premium this year.

Written pricing of 14, 1% comprised of net rate and insured value increases outpaced underlying loss cost trends.

This is the fifth consecutive quarter of double digit pricing increases in this book.

Our focus on the preferred market within personal lines business is a competitive advantage with our modern innovative and digitally enhanced offering prevail.

This product will be available in 39 states by the end of this month and we are optimistic about future prospects for growth.

Chris Swift: Middle and large commercial had another great quarter. Written premiums grew 5 percent, reflecting strong rate execution, and new business growth in our excess lines. Our general industry's property book grew 13 percent, while large property grew 15 percent. Looking across commercial lines, we are taking a thoughtful and disciplined approach to grow property premium within favorable market conditions to a level approaching $2.5 billion for the full year, or a 25 percent increase. We are focused on managing our cat exposure, as evidenced by our year-to-date cat losses, which were lower than our market share.

In the fourth quarter, we expect to achieve auto new business rate adequacy and over half the states representing two thirds of new business premium.

I am confident in the pricing actions we are taking.

Return this business to targeted profitability in 2025.

In group benefits premium growth of 8% and a core earnings margin of nine 8% were both outstanding.

Core earnings of $170 million was a quarterly record.

<unk> focused execution improved mortality trends and continued strong disability results.

Chris Swift: Coming back to middle and large commercial, underlying margins were exceptional, reflecting the advancements made in data science capabilities, pricing, and underwriting tools, margins also benefited from favorable property losses. Those advancements, combined with our best in class talent, position as well to sustain profitable growth in this business.

This quarter's disability loss ratio reflects historically low long term disability incidence trends.

And favorable claim recoveries.

In group life mortality trends have improved both sequentially and year over year, but remain above pre pandemic levels.

Chris Swift: Global specialty continues to deliver outstanding results with net written premiums up 11 percent, driven by new business growth, and strong renewal written pricing in a number of key lines. Submission flow in the U.S, was up 11 percent in the quarter, including 15 percent growth in wholesale and international saw strong new business growth in marine and energy. Within renewal, written pricing, momentum has been building in the wholesale access market. Property pricing has been above 20 percent all year and international casualty is above 10 percent.

Looking at the topline.

Growth was driven by book persistency above 90% plus strong year to date sales.

Overall, the strength of our group benefits diversified product portfolio as well as our commitment to outstanding customer experience.

Through the use of data and technology resonates in this marketplace cementing our leadership position.

Before I turn the call over to Beth let me share some takeaways from the recent council of insurance agents and brokers annual conference.

Throughout the course of the 60, plus meetings and touch points at CIB.

Chris Swift: In addition, we remain excited about the ongoing benefits to the top line from our expansive product portfolio. Our underwriting discipline, along with enhanced capabilities developed over the past few years in global specialty, are driving targeted market share gains with a stellar underlying combined ratio that has hovered in the mid 80s for the past six quarters.

We heard a consistent acknowledgment of the strength of our franchise.

Partners called out our unique digital tools.

Broad product set.

The strength of our innovation agenda, and the consistent execution of our strategy over a number of years.

They also expressed their desire to grow their business with us and they have come to view our team is best in class with relationships that have never been stronger.

Chris Swift: In short, our execution has never been stronger. Turning to pricing, commercial lines renewal written pricing was 5.4 percent flat with the second quarter. Excluding workers' compensation, we know written pricing rose to 8 percent up 4.10 sequentially with strong pricing in property, auto in general liability. Across commercial, property pricing is over 10 percent with auto in general liability, narrowing that level as well. Pricing in other liability and casualty lines also remains strong while public D&L is still pressured.

Confirmation from distribution partners that we are delivering on our strategy is strong validation of our leading position in the market.

Through those relationships combined with enhanced capabilities.

The state of the art technology and digital tools, we are taking market share while delivering industry leading returns.

With that track record I am confident in our ability to consistently deliver core earnings Roe.

In the 14% to 15% range.

Now I'll turn the call over to Beth to provide more detailed commentary on the quarter.

Thank you Chris.

Core earnings for the quarter were $708 million or $2 29 per diluted share.

Chris Swift: In workers' compensation, renewal written pricing continues to exceed expectations remaining slightly positive in the quarter. All in, ex-comp renewal written pricing in commercial lines remains on top of lost cost trends, reinforcing my confidence in achieving our margin expectations for the year.

Commercial lines had a very strong quarter with core earnings of 542 million and an underlying combined ratio of 87 eight.

Mall commercial continues to deliver excellent results with premium growth of 9% and an underlying combined ratio of $89 seven which includes some elevated non cat property losses.

Chris Swift: In summary, momentum persists in commercial lines where I expect top line growth at highly profitable margins to continue.

This is the 13th consecutive quarter with an underlying combined ratio of below 90.

Chris Swift: Moving to personal lines, I am pleased with our continued response to elevated lost cost in both auto and home. In this challenging environment, our focus, objectives, and execution are unwavering. During the quarter, we achieved auto renewal written pricing increases of nearly 20 percent which we expect to continue at that rate into the fourth quarter. Current accident near lost trend expectations for the third quarter as updated in June held a promising development as we finished the year.

Middle and large commercial delivered another quarter of written premium over 1 billion and an exceptional underlying combined ratio of $88 one.

This was a five six point improvement from the prior year, including favorable non cat property losses and expense ratio improvement.

Global specialties underlying margin was a strong $84 three a 20 basis point improvement from a year ago, primarily due to lower loss ratios in global reinsurance and international lines, partially offset by higher loss ratios in the U S financial lines due to public deal.

Chris Swift: In homeowners, renewal written pricing of 14.1 percent comprised of net rate and ensured value increases outpaced underlying lost cost trends. This is the fifth consecutive quarter of double digit pricing increases in this book. Our focus on the preferred market within personal lines business is a competitive advantage with our modern, innovative, and digitally enhanced offering prevail. This product will be available in 39 states by the end of this month and we are optimistic about future prospects for growth.

On a rate pressure and marine driven by a couple of large losses as well as higher policyholder dividends in Bonn due to the strong profitability of the book.

In personal lines core loss for the quarter was 8 million with an underlying combined ratio of 99.

Homeowners underlying combined ratio of $78 one was in line with expectations.

The auto underlying combined ratio was 108 five for the quarter, which is consistent with our expectation from second quarter.

Chris Swift: In the fourth quarter, we expect to achieve auto, new business rate adequacy in over half the states representing two thirds of new business premium. I am confident in the pricing actions we are taking will return this business to targeted profitability. In group benefits, premium growth of 8% and a core earnings margin of 9.8% were both outstanding. Core earnings of 170 million was a quarterly record, reflecting focused execution, improved mortality trends and continued strong disability results.

Accordingly, we made no adjustments to loss picks from the first half of the year and prior accident years.

As Chris indicated we continue to pursue rate increases to offset the loss cost trends we are experiencing.

Written premium and personal lines increased 8% over the prior year, driven by steady and successful rate actions.

In auto we achieved written pricing increases of 19, 7% and earned pricing increases of 11, 7%.

In homeowners pricing increases were 14, 1% on a written basis and 13, 7% on earns.

The expense ratio improved by two nine points, primarily driven by lower marketing spend.

Chris Swift: This quarter's disability loss ratio reflects historically low long-term disability incidence trends and favorable claim recoveries. In group life, mortality trends have improved both sequentially and year over year but remain above pre-pandemic levels. Looking at the top line, growth was driven by book persistency above 90%, plus strong year-to-date sales. Overall, the strength of our group benefits, diversified product portfolio, as well as our commitment to outstanding customer experience through the use of data and technology resonates in this marketplace, cementing our leadership position.

With respect to cats P&C current accident year catastrophes were $184 million before tax, which compares to catastrophe losses of $293 million in the prior year quarter, which included hurricane and losses of $214 million.

Although cat losses were elevated for the industry again this quarter. Our results were in line with our expectations as we believe that our effective aggregation management and underwriting discipline has helped to limit our losses from the increased number of convective storms.

Total net favorable prior accident year development was $43 million with $46 million in commercial lines as reserve reductions in workers' compensation and package businesses were modestly offset by reserve increases in general liability.

Chris Swift: Before I turn the call over to Beth, let me share some takeaways from the recent Council of Insurance Agents and Brokers Annual Conference. Throughout the course of the 60-plus meetings and touch points at CIAB, we heard a consistent acknowledgement of the strength of our franchise. Partners called out our unique digital tools, broad product set, the strength of our innovation agenda, and the consistent execution of our strategy over a number of years.

Moving to group benefits core earnings in the third quarter were 170 million with a core earnings margin of nine 8%, reflecting strong premium growth and long term disability results.

Group disability continues to deliver strong results with a loss ratio of 67, three for the quarter down one one points from prior year.

Chris Swift: They also expressed their desire to grow their business with us and have come to view our team as best in class with relationships that have never been stronger. Confirmation from distribution partners that we are delivering on our strategy is strong validation of our leading position in the market. Through those relationships, combined with enhanced capabilities, state-of-the-art technology, and digital tools, we are taking market share while delivering industry leading returns.

The group life loss ratio of 82 improved two nine points versus prior year, reflecting an improving mortality trends.

The expense ratio improved one four points and reflects strong top line performance and expense efficiencies somewhat offset by continued investments to meet our customers' evolving needs and drive greater efficiency.

Fully insured ongoing sales in the quarter of 143 million contributed to a year to date sales total of $768 million.

Chris Swift: With that track record, I am confident in our ability to consistently deliver core earnings are always in the 14-15% range.

This combined with excellent persistency at above 90% resulted in fully insured ongoing premium growth of 8% for the third quarter.

Beth Costello: Now I'll turn the call over to Beth to provide more detailed commentary on the quarter. Thank you, Chris. Core earnings for the quarter were $708 million or $2.29 per deluded share. Commercial lines had a very strong quarter with core earnings of $542 million and an underlying combined ratio of 87.8. Small commercial continues to deliver excellent results with premium growth of 9% and an underlying combined ratio of 89.7, which includes some elevated non-cap property losses.

Our diversified investment portfolio produced strong results for.

For the quarter net investment income was $597 million.

Our fixed income portfolio is continuing to benefit from higher interest rates and we continue to be pleased with the positive 150 basis point differential between our reinvestment rate and the yield on sales and maturities.

The total annualized portfolio yield excluding limited partnerships was four 1% before tax slightly higher than the second quarter.

Beth Costello: This is the 13th consecutive quarter with an underlying combined ratio of below 90. Middle and large commercial delivered another quarter of written premium over 1 billion and an exceptional underlying combined ratio of 88.1. This was a 5.6 point improvement from the prior year, including favorable non-cap property losses and expense ratio improvement. Global specialties underlying margin was a strong 84.3, a 20 basis point improvement from a year ago, primarily due to lower loss ratios in global reinsurance and international lines, partially offset by higher loss ratios in US financial lines due to public D&O rate pressure and marine driven by a couple of large losses, as well as higher policy holder dividends in bond due to the strong profitability of the book.

We expect the full yield excluding Lps will be about 80 basis points higher than the prior year.

Looking forward to 2024, we anticipate another 25 basis points of improvement based on the current yield curve, which will contribute to about a $200 million before tax increase in investment income excluding Lps.

Our annualized LP returns were six 3% in the quarter.

Results during the first nine months of 2023 reflect the resiliency of our private equity returns and the absence of any real estate equity sale.

The overall credit quality of the portfolio remains high with an average credit rating of a plus.

Fixed maturity valuation decrease as a result of higher interest rates.

Net credit losses, including intent to sell impairments remained insignificant along with an increase of $5 million in the allowance for credit losses on the mortgage loan portfolio.

Beth Costello: In personal lines, core loss for the quarter was 8 million with an underlying combined ratio of 99. Homeowner's underlying combined ratio of 78.1 was in line with expectations. The auto underlying combined ratio was 108.5 for the quarter, which is consistent with our expectation from second quarter. Importantly, we made no adjustments to loss picks from the first half of the year and prior action years. As Chris indicated, we continue to pursue rate increases to offset the loss cost trends we are experiencing.

All of our mortgage loans continue to be current with respect to interest and principal payments.

Turning to capital management during the quarter, we repurchased four 8 million shares under our share repurchase program for $350 million and we expect to remain at that level of repurchases in the fourth quarter.

We were also pleased to announce yesterday, an 11% increase in our common quarterly dividend payable on January 3rd.

This is the 10th increase in the dividend in the last decade, and another proof point of the consistent capital generation of the company.

Beth Costello: Written premium and personal lines increased 8% over the prior year driven by steady and successful rate actions. In auto, we achieved written pricing increases of 19.7% and earned pricing increases of 11.7%. In homeowners, pricing increases were 14.1% on a written basis and 13.7% on earned. The expense ratio improved by 2.9 points primarily driven by lower marketing spend. With respect to cats, PNC current action year catastrophe were 184 million before tax, which compares to catastrophe losses of 293 million in the prior year quarter, which included hurricane and losses of 214 million.

Our third quarter results demonstrate that our franchise continues to deliver consistent sustained industry leading results.

We believe that we have the strategies talent and technology in place to continue to succeed I will now turn the call back to Susan Thank you Beth.

We have about 30 minutes for questions. Operator, we will now take our first question.

Thank you and as a reminder, if you would like to ask a question Press Star then the number one on your telephone keypad to be able to take as many of your questions as possible. We ask that you. Please limit yourself to one question and one follow up.

And we will take our first question from Brian Meredith with UBS. Your line is open.

Good morning.

Chris about a couple of questions here first one I just wanted to dig in a little bit on the commercial lines premium growth was a little surprised at the slowdown we saw in the middle market premium broke considering with some other companies reporting this quarter and in the small commercial side I know you had a difficult comp there, but also a slowdown maybe you can unpack that a little bit and anything.

Beth Costello: Although cat losses were elevated for the industry again this quarter, our results were in line with our expectations as we believe that our effective aggregation management and underwriting discipline has helped to limit our losses from the increased number of convective storms. Total net favorable prior action year development was 43 million with 46 million in commercial lines as reserve reductions in workers compensation and package businesses were modestly offset by reserve increases in general liability.

Anything unusual going on.

Yes.

Brian Thanks for the question I think just the context here just if you really look at sort of year to date results system.

No written premium in small 10, 3% middle eight eight.

Beth Costello: Moving to group benefits, core earnings in the third quarter were 170 million with a core earnings margin of 9.8% reflecting strong premium growth and long-term disability results. Group disability continues to deliver strong results with a loss ratio of 67.3 for the quarter, down 1.1 points from prior year. The group life loss ratio of 80.2 improved 2.9 points versus prior year, reflecting and improving mortality trends. The expense ratio improved 1.4 points and reflects strong top line performance and expense efficiencies somewhat offset by continued investments to meet our customers evolving needs and drive greater efficiency.

New sales in the small 21% middle.

12%. So also results, we're really proud of them.

Im pleased with particularly at the highly profitable margins.

They're producing.

I would say the second quarter, where there is two main themes that we discussed as a management team and our mobile add his color as well.

We are remaining disciplined on price.

In underwriting and if we're not going to get the terms.

Conditions that we expect we'll let the business go and I think thats happened more times than not.

Particularly the July time period.

And then I would say that.

<unk>.

Exposure growth is still positive, but it is moderating.

Beth Costello: Fully insured ongoing sales in the quarter of 143 million contributed to a year-to-date sales total of 768 million. This combined with excellent persistency at above 90% resulted in fully insured ongoing premium growth of 8% for the third quarter.

Evidenced by lower audit premiums.

Sequential.

First half of the year basis, So again, it's still positive exposure growth, but not as.

Not as robust as it was early in the year, but what would you add.

Yes, Brian I would say that.

Beth Costello: Our diversified investment portfolio produced strong results for the quarter net investment income with 597 million. Our fixed income portfolio is continuing to benefit from higher interest rates and we continue to be pleased with the positive 150 basis point differential between our reinvestment rate and the yield on sales and maturity. The total annualized portfolio yield, excluding limited partnerships with 4.1% before tax, slightly higher than the second quarter. We expect the full yield, excluding LPs, will be about 80 basis points higher than the prior year.

Just to reiterate we feel really good about the year to date growth of 12% on new.

As you see in the quarters can be lumpy and maybe even a little bit of context there.

We equip our underwriters with tools by products by specialty area.

And then they are in the market executing on those and sometimes in some quarters, we do in specialty periodically see months, where the market is just going further then we would go.

Like our underwriters made really good decisions in the quarter and especially see those months at the beginning of the quarter when the market really heats up a little bit periodically, but broadly I think the underwriting team did a nice job.

Now these months are more of an exception, but we're watching that closely.

Great. That's helpful. Thank you and then Chris the second question I know, we've chatted about this before on conference calls but.

Beth Costello: Looking forward to 2024, we anticipate another 25 basis points of improvement based on the current yield curve, which will contribute to about a 200 million before tax increase in investment income excluding LPs. Our annualized LP returns were 6.3% in the quarter. Results during the first nine months of 2023 reflect the resiliency of our private equity return and the absence of any real estate equity sales. The overall credit quality of the portfolio remains high with an average credit rating of A-plus.

Fairly large tpa out there talked about medical cost inflation and workers' comp of 7% to 9% is what they're seeing in their in their business right now.

What youre seeing I don't believe that was the case in <unk>.

And how does that kind of playing into your comp results.

Yes.

Yes happy to sort of.

Comment on that but there's not going to be anything new I am going to share it with you.

I think again in the context that our problems.

Our workers comp is a highly profitable line of business.

Beth Costello: Fix maturity valuation decreased as a result of higher interest rates. Net credit losses, including intent to sell impairments, remain insignificant, along with an increase of 5 million in the allowance for credit losses on the mortgage loan portfolio. All of our mortgage loans continue to be current with respect to interest and principal payments.

We haven't made any changes to frequency or medical assumptions since we set them at the beginning of this year. So things are actually running.

Almost exactly as we predicted.

Medical severity as we've talked about it what we price for and collect it.

Put up on the balance sheet is 5%.

Actually what's emerging.

Beth Costello: Turning to capital management, during the quarter, we repurchased 4.8 million shares under our Sherry Purchase Program for $350 million, and we expect to remain at that level of repurchases in the fourth quarter. We were also pleased to announce yesterday an 11% increase in our Common Quarterly dividend payable on January 3rd. This is the 10th increase in the dividend in the last decade and another proof point of the consistent capital generation of the company.

For the first nine months is slightly less than that in the 2% to 3% range.

I would say, though that if.

If I look at trends last year nine months. This year nine months medical severities is probably up a little bit.

A point.

But I don't think theres any trend to call out other than just sort of maybe normal volatility we watch all of our components.

Price, whether it be hospital stays whether it be physicians.

Beth Costello: Our 3rd quarter results demonstrate that our franchise continues to deliver consistent sustained industry leading results. We believe that we have the strategies, talent and technology in place to continue to succeed.

Pharmaceuticals, and generally things are behaving as we.

So.

I don't know what to tell you other than yes.

It's steady as she goes from some from our perspective as we sit here today.

Susan Spivak: I will now turn the call back to Susan. Thank you, Beth.

The impact.

Abby: We have about 30 minutes for questions operator. We will now take our first question. Thank you.

The longer term is still to play out, but as we've talked about before Brian I mean, our claims team is world class.

We have fee schedules in place networks in place that sort of provide a buffer.

And long term things.

Continue to be elevated.

Brian Meredith: And we will take our first question from Brian Meredith with UBS. Your line is open. Good morning. Chris, about a couple of questions here. First one, I just wanted to dig in a little bit on the commercial lines premium growth. I was a little surprised at the slowdown we saw in the middle market premium growth considering which some other companies have been importing this quarter. And the small commercial side, I know you had a difficult comp there, but also slowdown.

The reaction function within our system.

<unk> will allow us to raise prices.

And deal with it appropriately so I don't think we're going to get surprised.

Any way shape or form on medical severity running away from us.

And with respect to loss control, probably helps you relative to the industry as well right.

Clearly, we've got a lot of capabilities embedded in claim embedded in our engineering group. So.

Brian Meredith: Maybe we can unpack that a little bit and anything unusual going on. Brian, thanks for the question. I think just the context here, just if you really look at sort of year-to-date results, just done written premium in small, 10.3% middle, 8.8, new sales in small, 21% middle, 12%. So it also results, you know, we're really proud of and pleased with, particularly at the highly profitable margins that they're producing. I would say the second quarter, you know, there's two main themes that we discussed as a management team in Moe at his color is remaining discipline on price and underwriting.

Yes.

And again being the second largest writer.

Brighter you would expect us to have those capabilities.

Thank you very helpful.

Okay.

And we will take our next question from Elyse Greenspan with Wells Fargo. Your line is open.

Hi, Thanks, good morning.

I wanted first to start with your response to Brian's first question you guys said that you just saw some competitive and some competitive forces in July and it sounds like that corrected over the rest of the quarter I want to confirm that but then can you give us a sense of what lines I guess, specifically within the middle market.

We're seeing folks become more competitive in July.

Lisa I might have no comment on that.

Brian Meredith: And if we're not going to get the terms and conditions that we expect, we'll let the business go. And I think that happened more times than not in the particularly the July time period. And then I would say that the overall exposure growth is still positive, but it is moderating evidence by lower auditor premiums on a sequential first half of the year basis. So again, still positive exposure growth, but not as robust as it was early in the year.

Yes.

I would just say that July was the month, we felt it the most.

And then it was on the larger and I won't get into specific areas. I've. Just spoke of larger accounts segment is really where we felt the most competition during the months.

Yes.

Okay and then.

With the with the reserve development in the quarter.

Total favorable development was driven by comp there was a little bit of adverse development in NGL anything.

Anything you want to highlight there or any specific year or is there anything you guys are seeing.

Brian Meredith: But Moe, what would you add? Brian, I would say that just to reiterate, we feel really good about the year-to-date growth of the 12% on new. But as you see in the quarter can be lumpy and maybe a little bit of context there. We equip our underwriters with tools by product, by specialty area. And then they are in the market executing on those. And sometimes in some quarters we do, and especially periodically see months where the market's just going further than we would go.

Paul number, but just looking for some color there.

Yes, Lisa it's Beth.

<unk> in particular to call out a couple of large losses.

We saw an umbrella and one large national account that spread over several years. So you know.

Again, as you pointed out relatively small.

Impact in the quarter and nothing thats indicative of a new trend or anything like that.

Brian Meredith: So I feel like our underwriters made really good decisions in the quarter. And you especially see those months at the beginning of a quarter when the market really heats up a little bit periodically, but broadly, I think the underwriting team did a nice job. And right now these months are more of an exception, but we're watching that closely. Great, that's helpful. Thank you. And then Chris, second question. I know we've said about this before on conference calls, but fairly large TPA out there talked about medical cost inflation and workers comp of 79% is what they're saying, and their business right now.

Okay.

Okay.

And we will take our next question from Mike Ward with Citi. Your line is open.

Thanks, guys good morning.

I was wondering just with the growth in property.

How should we think about your non cap property volatility going forward and like has the range of outcomes on your underlying loss ratio widened or changed materially.

Mike Thanks for the question.

Brian Meredith: If that was your seeing, I don't believe that was the case. And how did that kind of play into your comp results? Yeah, I'm happy to sort of comment on that, but there's not going to be anything new I'm going to share with you. I think, again, the context that our workers comp is a highly profitable line of business. We haven't made any changes in the frequency or medical assumptions since we set them at the beginning of this year.

As I said in my prepared remarks, I mean, we're trending towards $2 5 billion.

Commercial property premium across our businesses, which would be about it.

25% increase from prior year, and we feel very good about how we're executing both from a <unk>.

Growth in pricing side I'll give you just a couple of numbers for you.

The third quarter here and our spectrum property component of growth was 13.

<unk>, 13% in pricing at 11, 5% up.

Brian Meredith: So things are actually running almost exactly as we predicted. Medical severity as we've talked about it, what we price for and collect and put up on the balance sheet is 5%. Actually, what's emerging for the first nine months is slightly less than that in the two to three percent range. I would say, though, that if I look at trends last year, nine months, this year, nine months, medical severity is probably up a little bit, say a point.

Our general property and middle market.

<unk> growth was 13% and pricing was up 12, 9% large property grew 16% with pricing up 16% also.

So I think in total we're executing very well we grew property, 12% this quarter with pricing up 14%.

<unk> said before I mean, this isn't a cap strategy.

We'll obviously take on a little chat, but we're looking at all the perils, particularly the aspire to build a national book.

Brian Meredith: But I don't think there's any trend to call out other than just sort of maybe normal volatility. We watch all our components of price, whether it be hospital stays, whether it be physicians, whether it be pharmaceuticals. And generally, things are behaving as we expect. So I don't know what to tell you other than it's steady as she goes from our perspective as we sit here today. I think the impact on the longer term is still to play out, but as we've talked about before, Brian, our claims team is world class.

Book of more property exposure.

And.

I think we're getting paid for.

Mental volatility from quarter to quarter.

I'd say the story.

This quarter.

Particularly with non cat commercial property losses, there were in total at expectations.

And about a point better than prior year.

With elevated losses in small commercial offset by lower losses expected in middle and large so.

I think I think our strategy as well.

Brian Meredith: We have fee schedules in place, networks in place that sort of provide a buffer. And if long term things continue to be elevated, the reaction function within our system, I think will allow us to raise prices and deal with it appropriately. So I don't think we're going to get surprised in any way shape or form on medical severity running away from us. Yeah, I would expect your lost control probably helps you roll through the industry as well, right?

Well I don't know if you would add anything as far as the execution or any color from the marketplace. I'm. Overall pleased yes, we just continue to build a talent base. We're attracting people just based on how we're going about going after property. The toolset continues to improve.

And we're talking to retail and wholesale here, we're continuing to see an opportunity rates generally hanging in their terms and conditions are hanging in there.

Dr. <unk> are improving so I think broadly we feel really optimistic about our ability to continue to chase the market.

Firstly, what would you add in small commercial property.

And in E&S color, Yeah, I think you framed it well from the spectrum perspective is that we have.

Brian Meredith: Yeah, clearly, you know, we got a lot of capabilities embedded in claim embedded in our engineering group. So yeah, I, and again, being the second largest writer, you would expect us to have those capabilities. Yeah, thank you, really helpful.

Some volatility, but as you reference we've taken rate.

Just recently over many years to stay at or ahead of loss trend for the property portion of our BOP product and as Chris stated.

Elyse Greenspan: And we'll take our next question from Elise Greenspan with Wells Fargo. Your line is open. Hi, thanks. Good morning. I wanted first to start with your response to Brian's first question. You guys said that, you know, you just saw some competitive forces in July. And it sounds like that corrected over the rest of the quarter. I want to confirm that, but then can you do a sense of what lines, I guess specifically within the middle market, you were seeing folks become more competitive in July?

Double digits in terms of what we accomplished in the third quarter, which is higher than our longer term property trends.

And I will remind everybody that we did have our 13th quarter in a row with an underlying combined in.

Elyse Greenspan: Elise, I might have more coming on that. Yeah, Elise, I I would just say that July was the month we felt it the most, and then it was on the larger end. I won't get into specific areas. I would just put the larger account segment is really where we felt the most competitions are in the month. Okay, and then, you know, with the, with the reserve development of the quarter, you know, I thought, you know, total stable development was driven by comp.

Under 90 from an E&S perspective, E&S binding, which continues to be a growing and profitable portion of our book of business.

Strong risk selection.

<unk> of 30 points of property right in the quarter and growing so all in really proud of the team's execution.

Okay.

Awesome. Thank you guys.

On personal lines real quick and the seasonality.

Just wondering.

Should we expect a typical pressure in <unk> or do you think the rate that youre that youre pushing can actually maybe mute that.

Seasonality.

Yes, so I'll take that and this is about in personal lines and if we break it out between auto and home and auto we'd expect fourth quarter to be higher than what we've seen year to date and probably in that sort of six to eight point range.

Elyse Greenspan: There was a little bit of adverse development in, in GL, anything, anything you want to highlight there, any specific areas. New years or anything you guys are seeing, I know, is a small number, but just looking for some color there. Yeah, at least it's a bath. Nothing in particular, I'd call out, you know, a couple of large losses that we saw on umbrella and one large national account that spread over several years. So, you know, again, as you pointed out, relatively small impact in the quarter and nothing that's indicative of a new trend or anything like that.

Where it comes out will really be.

Impacted by just where loss trend goes on the other hand home typically fourth quarter is more favorable than the year to date on usually by 5% to six points and we'd be expecting that again this quarter.

Okay.

Thanks, guys.

Okay.

And we will take our next question from Alex Scott with Goldman Sachs. Your line is open.

Yes.

Hi, Good morning, first one I had is just to follow up on the workers' comp.

Mike Work: And we will take our next question from Mike work with city. Your line is open. Thanks guys.

I hear you on.

Chris Swift: Good morning. I was wondering, just with the growth in property. How should we think about your non cap property volatility going forward and it like has the range of outcomes on your underlying loss ratio. So why did it change materially? Mike, thanks for the question. As I said in my prepared remarks, I mean, we're trending towards two and a half billion of commercial, you know, property premium across our businesses, which would be about a 25% increase from from prior year.

How do you feel about the profitability of the business and certainly the reserve development has been great. I guess, just helping us think through the CCI you sort of indications are pointing down another mid single digits and you mentioned I think the 5% loss cost trend so.

How should we think about.

The margin drag that that creates going into next year. I mean can you help us think through like even just relative to the headwind that you got from that this year does it.

Does it get worse I mean this is us.

So sort of a moving target in terms of the baseline that you sort of start off with when you do that math I, just any help with would be would be great.

Chris Swift: And we feel very good about how we're executing both from a growth in pricing side. I'll give you just a couple of numbers for the third quarter here in our spectrum property component. Our growth was 13% in pricing and 11.5% up in our general property and middle market growth was 13% in pricing was up 12.9% large property. Groups 16% with pricing up 16% also. So I think in total we're executing very well.

Alex I hate to disappoint, you, but we're not going to talk about next year at this point, we will we'll talk about next year. Once we finished this year and what we see.

You are right I mean.

There are there is going to be continued pressure coming.

From some pricing.

I think the setup is going to be very similar to this year as much as there is pricing pressure.

Frequencies will I believe continue to improve.

Chris Swift: We grew property 12% this quarter with pricing up 14%. And as I said before, I mean, this isn't a cat strategy. I mean, you know, we'll obviously take on a little cat, but we're looking at all the perils, particularly the fire to build a national book of more property exposure. And I think we're getting paid for, you know, that incremental volatility from quarter to quarter. I would say the story, you know, line, you know, this quarter, particularly with non cat commercial property losses, it were in total at expectations and about a point better than prior year with elevated losses in small commercial offset by lower losses expected in middle and large.

We'll pick up.

Same medical severity, most likely in that 5% range.

But knowing that it's performing better.

We've been able to out execute on our rate plan this year, which is providing a modest benefit.

So theres always the opportunity to outperform our rate plan in spite of what the NCC is putting out.

And again, it's still put all the math and mechanics together, it's still going to be a profitable line of business for us in the industry.

And I think it's very manageable.

From our point of view at least heading into 2024.

Got it.

Question I had is just on the ROE range Youll talk about I mean, you're sort of hitting the upper end of it right now and.

Chris Swift: So I think I think our strategy is well. Well, I don't know if you would add anything as far as, you know, the execution or any color from the marketplace that I'm overall pleased. Yeah, we just continue to build a talent base. We're attracting people just based on how we're going about going after property. The tool set continues to improve. Yeah, I think you framed it well from the spectrum perspective is that we have experienced some volatility.

Personal lines isn't making money right now and with the rate Youre, taking it should start to again.

Net investment income you talked about being a bigger contributor next year or so and I just when I think through all of that the ROE guide and Im sure Youre not going to adjust your long term targets is going to be periods that youre, earning more or less in the target potentially but is that the right way to think about it that as a longer term ROE guide in the.

Youre not suggesting that there is some offset to those things necessarily.

We may go through a period, where your over the top end of it.

I think you got it right.

We've said.

Chris Swift: But as you referenced, we've taken rate not just recently over many years to stay at or ahead of lost trend for the property portion of our our product and as Chris stated, you know, it's double digits in terms of what we accomplished in the third quarter, which is higher than our longer term property trends. And I will remind everybody that we did have our 13th quarter in a row with an underlying combined in the under 90 from an E and S perspective in as binding, which continues to be a growing and profitable portion of our book of business. You know, strong risk selection, you know, achievement of 30 points of property rate in the quarter and growing. So all in really proud of how the teams execution. Awesome.

About our franchise, we are becoming more consistent more predictable.

And all our businesses.

Whether it be property casualty, whether it be group benefits.

Personal lines is going through.

Tough slog, but we do see.

Our return to profitability in 2025, there. So yes the range is the range.

<unk> added the word consistently to that range its not a limit.

We'll try to overachieve and.

Outperform that but I think that is.

That 15 is particularly a good anchor point plus or minus.

And.

You can always try hard too.

Outperform and do our very best.

We are sensitive just to a little bit of rate fatigue that may or may not be happening in the marketplace with customers and agents and brokers.

Chris Swift: Thank you guys. Maybe on personal lines real quick and the seasonality. Just wondering, should we expect the typical pressure in 4Q or you think the rate that you're that you're pushing can actually maybe mute that. Yeah, so I'll take that and this is about in personal lines and if we break it out between auto and home in auto, we'd expect fourth quarter to be higher than what we've seen here today and probably in that sort of six to eight point range where it comes out will really be impacted by just where where lost trend goes. On the other hand, home typically fourth quarter is more favorable than the year to date, usually by five to six points and we'd be expecting that again this quarter. Thanks, guys.

I think we've educated people well enough over over the years, Alex at least from our perspective on the components of of loss cost.

Cost trends.

Why we need to continue to be disciplined with rate whether it be commercial auto whether it be property, whether it be GL with all of the factors that have been discussed by many over a long period of time so.

I think thats still.

Puts the industry in <unk>.

Conducive place.

As we head into 2024, with particularly a rising yield environment and investment returns.

Coming through the portfolio. So you put it all together and I still think Thats, a good range, but it's not a limit for us to try to outperform.

Got it thank you.

Alex Scott: And we will take our next question from Alex Scott with Goldman Sachs. Your line is open. Hi, good morning. First one I had to just to follow up on on the workers comp. You know, I hear you on on how you feel about the property of the business and, you know, certainly the reserve development has been great. I guess just hoping to think through, you know, the NCCI sort of indications are pointing down another mid single digits and, you know, you mentioned I think the 5% loss cost trend.

And we will take our next question from Greg Peters with Raymond James Your line is open.

Good morning.

I'm going to pivot to the group benefits business.

If I look at.

Page 21 of your supplement.

A nice step up in ROE over the last several quarters.

Can you can you remind us of.

What kind of economic sensitivity that business has because there is obviously some noise in the marketplace about what the economy might look like next year and then secondly, when I look at the results.

Alex Scott: So how should we think about, you know, the margin drag that that creates going into next year? I mean, can you help us think through like even just relative to the headwind that you got from that this year? Does it, does it get worse? I mean, there's also sort of a moving target in terms of the baseline that you sort of start off with when you do that math.

Particularly in the third quarter I'm wondering if there's anything you'd want to call out unusual good guys that helped that.

Boosting number higher thanks.

Greg I'll start and then I'll pass.

Yes, Jonathan to add his commentary, yes, you are right to point out to 13, 8% ROE very proud of that.

Chris Swift: So I just in any help would be would be great. Alex, I hate to disappoint you, but we're not going to talk about next year at this point. We'll talk about next year once we finish this year and what we see, but you're right. There is going to be continued pressure coming from pricing. But I think the setup is going to be very similar to this year. As much as there's pricing pressure, frequencies, I believe, continue to improve.

Obviously mortality is trending back to normal which is providing a tailwind I would say the mortality on a year to date basis is still maybe slightly ahead of our expectations, but again trending in the right way and we've talked about it for a while that we're trying to put additional rate into that life insurance book and the team I think is execute.

Well in the marketplace.

Other thing I, just always like to convert is that 13 eight GAAP Roe.

Chris Swift: We'll pick our same medical severity most likely in that 5% range, but knowing that it's performing better, we've been able to out execute on our rate plan this year, which is providing a modest benefit. There's always the opportunities to outperform a rate plan, in spite of what the NCC is putting out. Again, you still put all the math and mechanics together. It's still going to be a profitable line of business for us in the industry. I think it's very manageable from our point of view, at least heading into 2024.

Probably translates into a 17% tangible.

ROE on a tangible basis, just given some of the goodwill that we've added.

With acquisitions over the years so.

<unk> basis it is a.

A meaningful contributor.

Earnings power is getting back to what I think would be somewhat.

Normal.

The investment performance will contribute so I think it's a stellar business for us it's one of the industry leaders.

Rowing nicely.

Injunction generally with economic conditions, whether it be employment payroll gains.

The disability claims function that we have as I think world class.

Chris Swift: Got it. The second question I have is, just in the ROE range you will talk about, you're sort of hitting the upper end of it right now, and personal lines isn't making money right now. With the rate you're taking, it should start to again. In that investment income, you talked about being a bigger contributor next year. When I think through all that, I hear the ROE guide, and I'm sure you're not going to adjust your long-term targets, it's going to be periods that you're earning more or less in the target potentially.

<unk> added new capabilities.

Our voluntary product suite and the number of paid family leave.

Ponant I could go on and on because I think it's a valuable business that.

People should look at it maybe a little differently then.

You today, but.

Jonathan what would you add from overall performance side and a trend.

That is a terrific overview, Chris Paul lots of agreement with all of that I think Greg you asked a bit about some of the economic drivers and that often get subscribed to the LCD line.

Chris Swift: Is that the right way to think about it, that that is a longer-term ROE guide, and that you're not suggesting that there's some offset to those things necessarily, and that we may go through a period where you're over the top end of it? I think you got it right. We've said about our franchise, we're becoming more consistent, more predictable, in all our businesses, whether it be profit and casualty, whether it be group benefits, personal lines is going through a tough slog, but we do see a return to profitability in 2025 there.

Linked with employment levels, obviously, right now unemployment at very low levels.

Currently that is contributing we think too.

Some of the performance of the business.

The outlook right now around unemployment not something that we see as being.

A real negative drag into the future even if levels were to increase there is always a bit of a delay between when we see that and if there is going to be any effect on LCD, but even that effect. We would we would say this is pretty loose.

A it's Lincoln is just not a hard connection and we think that even if unemployment levels were to increase moderately we're probably still operating at attractive levels. So things seem to be in good shape on the LCD side.

Chris Swift: The range is the range. We've added the word consistently to that range. It's not a limit. We'll try to over-achieve and outperform that, but I think that 15 is particularly a good anchor point, plus or minus, and we'll always try hard to outperform and do our very best. We are sensitive just to a little bit of rate fatigue that may or may not be happening in the marketplace with customers and agents and brokers.

Your other point about in the third quarter.

Chris outlined solid net investment income I'm pleased with that result, the mortality is probably one of the more notable things for us.

We've had sequential improvement over the last four quarters, that's been terrific on mortality.

This quarter, we got down to a level that we think of as being more in the in line with endemic state post pandemic and so we're pleased to see that will wash that one again in the fourth quarter, but that bodes well for the business moving forward.

Chris Swift: I think we've educated people well enough over the years, Alex, at least from our perspective on the components of lost-cost trends, and why we need to continue to be disciplined with rate, whether it be commercial auto, whether it be property, whether it be GL, with all the factors that have been discussed by many over a long period of time. I think that's still.., puts the industry in a conducive place, particularly as we head into 2024 with particularly a rising yield environment and investment returns coming through the portfolio. So, yeah, you put it all together, and I still think that's a good range, but it's not a limit for us to try to outperform.

And then on the disability side LTV again.

<unk> levels.

Attractive at this moment.

Our claims team just doing a phenomenal job around recoveries. So we think our expertise there is really coming through one of the things about the Hartford is we understand medical management.

Chris Swift: Thank you.

Whether that's comp or LTV, and we think that comes through in our execution on both sides of the organization. So.

We're really pleased with that outcome, where that trends in the future I think.

We'll continue to monitor and obviously adapt ourselves quickly.

As necessary, but we're pretty pleased with the performance of the business year to date.

Okay.

That makes sense, thanks for the detail on that I.

I guess as my follow up.

Greg Peters: And we will take our next question from Greg Peters with Raymond James. Your line is open.

Pivot to the personal lines business.

And what.

What I was.

Greg Peters: Good morning.

Interested in is that if I look at your prior accident year development table.

Greg Peters: I'm going to pivot to the group benefits business. If I look at, you know, page 21 of your supplement, a nice step up in R.O.E, over the last several quarters, can you, can you remind us of what kind of economic sensitivity that business has? Because there's obviously some noise in the marketplace about what the economy might look like next year.

Where we're seeing other companies report adverse development inside personal lines, we're not really seeing it the Hartford. So maybe you could spend a minute and just talk to us about why your trends or maybe a little bit different from some of the others that are reporting problems in terms of reserve development.

Okay.

Yes, so I'll start so so first of all in Q3 as we said in our.

Jonathan Bennett: And then secondly, when I look at the results and particularly in the third quarter, wondering if there's anything you want to call out, unusual, good guys that helped that boost the number higher. Thanks. Greg, I'll start and then I'll ask Jonathan to add his commentary. Yeah, you're right, you know, to point out that 13.8% R.O.E, are very proud of that. Obviously, mortality is trending back to normal, which is providing a tailwind.

Our remarks, we did not make any adjustments to prior accident years for the auto line for.

Auto liability or auto physical damage.

I'll remind you if you go back to the first half of the year.

In the first quarter, we did record.

$20 million related to physical damage.

For the 2022 year.

And also in the first quarter and second quarter, we increased our estimates for auto liability for the 2022 year, but those were offset by releases for years 'twenty, one and prior so that's why that.

Jonathan Bennett: I would say the mortality on a year-to-date basis is still maybe slightly ahead of our expectations, but again, trending in the right way. And we've talked about it for a while that we're trying to put additional rate into that life insurance book and the team, I think, is executing, you know, well in the marketplace. The other thing I just always like to convert is that 13.8% gap R.O.E, probably translates into a 17% tangible R.O.E, on a tangible basis, just given some of the goodwill that we've added with acquisitions over the years.

Element on a net basis is not showing up in that table. So we were experiencing.

Some of the same trends that others were seeing we reacted to them as I said, we're very pleased that in the third quarter, our loss picks for prior accident years as well as the first half of the year.

Jonathan Bennett: So on a tangible basis, it is a meaningful contributor. Earnings power is getting back to what I think would be somewhat normal. You know, the investment performance will contribute. So I think it's stellar business for us. It's one of the industry leaders. It's growing, you know, nicely in conjunction generally with economic conditions, whether it be employment, payroll gains. You know, the disability claims function that we have is, I think, world class.

Did remain unchanged and the last thing that I'll just point out on that because I know some have looked at sort of our year over year results in auto.

And I'll, just remind you that because we have booked prior year development for the 22 year in 2003, when you look at that third quarter reported underlying loss ratio for auto it.

It would probably be about four to five points higher.

Selecting some of that P y D. We've seen so hopefully that helps some people who are looking at sort of that year over year comparison in the underlying auto ratio.

Jonathan Bennett: You know, we've added new capabilities, you know, with our voluntary products suite and the number of paid family leave components. I could go on and on because I think it's a valuable business that people should look at maybe a little differently than its value today. But Jonathan, what would you add from overall performance side in a trend? That is a terrific overview, Chris. A lot of agreement with all of that. I think Greg, you asked a bit about some of the economic drivers.

Okay.

Thank you very much for that detail.

Okay.

And we will take our next question from Josh Shanker with Bank of America. Your line is open.

Yes, thank you very much.

I'm looking at all of this auto stuff.

One thing that was the big change that mirrors, the geico really improved a lot in their margins and at the same time the churn of a significant portion of their book of business. One of the things that you were looking forward to improve profitability long term the AARP business was the opportunity to non renew.

Jonathan Bennett: And that often gets described to the LTD line and linked with employment levels. Obviously, right now, unemployment at very low levels. Certainly, that is contributing. We think to some of the performance of the business. The outlook right now around unemployment, not something that we see as being, and a real negative drag into the future. Even if levels were to increase, there's always a bit of a delay between when we see that and if there is going to be any effect on LTD.

Jonathan Bennett: But even that effect, we would say is pretty loose in terms of its linkage. It's not a hard connection. And we think that even if unemployment levels were to increase moderately, we're probably still operating at attractive levels. So things seem to be in good shape on the LTD side. Your other point about in the third quarter, as Chris outlined, solid investment income, pleased with that result. The mortality is probably one of the more notable things for us.

Customers, who shouldnt be renewed or to what extent do you think there is a solution in your profitability.

A combination of non renewing customers as opposed to achieving two rate alone.

Yeah.

Josh It's Chris I'll start and then I'll ask Stephanie to add her color.

We're very proud of the AARP relationship for over the last 35 years I think.

You will recall, we did renew.

Contract and extended it to.

2033.

Part of that then we launched the prevail product and platform.

But the in force business, both auto and home. It does have lifetime continuity agreements still on on the policy.

That prohibits us from just canceling.

Jonathan Bennett: We've had sequential improvement over the last four quarters. That's been terrific on mortality. But this quarter, we got down to a level that we think of as being more in line with endemic state, post-pandemic. And so we're pleased to see that. We'll watch that one again in the fourth quarter, but that bodes well for the business moving forward. And then on the disability side, LTD again, incidence levels are pretty attractive at this moment.

<unk> unless the risk profile, particularly in our homeowners line really changed that's different with prevail, but.

That's going to take some time to sort of worked its way all into the in force business is 90% of the business that we still have on the books and relates to.

Lifetime continuity agreement. So we have to be sensitive there. That's why we're pushing for rate as aggressively as we've had in I think Stephanie and the team the numbers and the results speak for themselves and that will begin to.

Jonathan Bennett: And our claim team just doing a phenomenal job around recovery. So we think our expertise there is really coming through. One of the things about the Hartford is we understand medical management, whether that's comp or LTD. And we think that comes through and our execution on both sides of the organization. So really pleased with that outcome.

To earn in but Stephanie what would you add.

I think you framed it really well, Chris when you think about really where our focus Josh is responding to the loss trend environment.

Chris Swift: Where that trends in the future, I think, you know, we'll continue to monitor and obviously adapt ourselves quickly as necessary, but we're pretty pleased with the performance of the business year to date. That makes sense.

You see that materializing and our rate actions.

Also deploying our prevail product 39 states and market as of today.

About 50% of our new written premium is on the prevail product, but that is a very small portion of our in force. So just to go back to underscore Chris's com.

Chris Swift: Thanks for the detail on that.

Chris Swift: I guess it's my follow up.

Tracy Dolin: I'll pivot to the personalized business. And what I was interested in is that if I look at your prior accident year development table, you know, where we're seeing other companies report adverse development inside personalized. We're not really seeing it the Hartford.

Comment on the overall in force the lion's share of that does have a lifetime continuation endorsement.

And then the preponderance of our in force book being 12 month policies. It takes time for that rate to earn in but wholly focused on bringing the book back to profitability.

Beth Costello: So maybe you could spend a minute and talk to us about why your friends are maybe a little bit different from some of the others that are reporting problems in terms of reserve development that is. Yes, so I'll start. So first of all, in Q3, as we said in our remarks, we did not make any adjustments to prior accident years for the auto line for, you know, auto liability or auto physical damage.

And when we look at that new business.

Is.

The rate increases similar between what's going through on the per available and what's going on the lifetime continuity book.

Yes, absolutely what I would share with you is that on the in force book you see the written rate the rate has an earn in but as we've shared in previous calls. We look also look at new business rate adequacy. So when.

Beth Costello: If you are reminded to go back to the first half of the year in the first quarter, we did record about $20 million related to physical damage for the 2022 year. And also in the first quarter and second quarter, we increased our estimates for auto liability for the 2022 year. But those were offset by releases for years 21 and prior. So that's why that development on a net basis is not showing up in that table.

What is the right level of new business and we expect based on all of our actions that more than half of our states by this year by year end will be new business rate adequate and that makes up about 65% of our new business volume and so again that gives us a.

Degree of confidence in terms of continuing to market to drive and new So you have to think about new business being rate adequate given all of our rate actions and then on the in force that that book is going to earn in that rate over time.

Beth Costello: So we were experiencing some of the same trends that others were seeing. We reacted to them. As I said, we're very pleased that in the third quarter our last picks for prior accident years, as well as the first half of the year did remain unchanged. And the last thing that I'll just point out on that because I know some have looked at sort of our year over year results in auto. And I'll just remind you that because we have looked prior year development for the 22 year in 23, when you look at that third quarter reported underlying loss ratio for auto, it would probably be about four to five points higher. We're reflecting some of that PYD we've seen. So hopefully that helps some people who are looking at sort of that year over year comparison and that underlying auto ratio. Thank you very much for that detail.

Thank you for the details appreciate it.

And we will take our next question from Michael <unk> with BMO capital markets. Your line is open.

Hi, Good morning, this is Jack on for Mike.

Just one question on the commercial insurance competitive environment excluding.

Excluding workers comp are you surprised at all that commercial pricing has continued to increase.

Any thoughts on how we should think about pricing into 2024 once higher reinsurance costs in the system and we're seeing some declines in certain core CPI gauges.

Yes, Jack Thanks for the question I'll start and I'll have no no.

No I don't I don't think theres, any and a surprise I.

I thought I tried to address it debt.

Just given the environment.

The continuation of.

Right.

Being disciplined.

Reinsurance costs, probably increasing.

All point to answer as you need to be disciplined on rate and work with our distribution partners and customers to make sure they understand.

Joshua Shanker: We will take our next question from Josh Shanker with Bank of America. Your line is open. Yeah, thank you very much. I'm looking at all this auto stuff. You know, one thing that was the big change I'm here is that Geico really improved a lot in their margins and at the same time they churned a significant portion of their book of business. One of the things that you were looking forward to improve profitability long-term in the ARP business was the opportunity to non-renew customers who shouldn't be renewed. To what extent do you think there's a solution in your profitability, a combination of non-renewing customers as opposed to achieving to rate alone?

Why.

So that there can be an element of explanation back to the end customers. So I see more of the same as we head into 'twenty four at this point in time, but what would you add on the commercial side.

No I would say that the reinsurance market feels fairly stable fairly predictable and I think thats getting priced and ahead of renewal dates I would say second.

The rate environment is still pretty can.

Conducive, we think is constructive and we think that will continue.

And then third again I talked before about we have months periodically where we just think the market is competitive it's just lumpy that way and oddly right. Now October is feeling really good and so it just things bounce around a little bit and that's just.

Chris Swift: Josh, it's Chris. I'll start and then I'll ask Stephanie to add her color. Again, we're very proud of the ARP relationship for over the last 35 years. I think you will recall, you know, we did renew a contract and extended it to, you know, in 2033. Part of that then we launched a prevailed product and platform. But the enforced business, both auto and home, it does have lifetime continuity agreement still on the policy that prohibits us from just canceling a customer.

We're going to be really disciplined about it but we're looking to grow it in a really responsible fashion.

Yeah.

Thank you.

Okay.

And we will take our next question from Tracy <unk> with Barclays. Your line is open.

Okay.

Thank you good morning.

There's a big debate on what is the best definition of pricing is it pure rate or exposure that acts like rate.

Your 19, 7% pricing increase for personal auto was a great achievement I'm not really hearing that pricing level from your peers. So just to get grounded.

Chris Swift: Unless their risk profile, particularly in the homeowners line, really changed. That's different with prevail, but that's going to take some time to sort of work its way all into the, you know, the enforced business. Because 90% of the business that, you know, we still have on the books, it relates to lifetime continuity agreement. So we have to be sensitive there. That's why we're pushing, you know, for rate as aggressively as we've had. And I think Stephanie and the team, the numbers and their results, you know, speak for themselves. And that will begin to, you know, to earn in.

Including exposure in there and if you are how does auto exposure Act quickly.

<unk>.

Tracy I would add some commentary and then ask Stephanie.

My commentary is going to be more on commercial just so you have that.

Somewhat unique in personal lines auto home home, we talk about the rate that we're achieving both includes pure rate and ITV which we think works in tandem but.

Stephanie Bush: But Stephanie, what would you add? Yeah, I think you framed it really well across, you know, when you think about really where our focus Josh is responding to the lost time environment, you see that materializing in our rate actions. We're also deploying our prevailed product, 39 states and market as of today. About 50% of our new written premium is on the prevailed product, but that is a very small portion of our enforced.

I think we disclosed.

I talked about it in my prepared remarks ex comp our renewal written pricing was 8% in the quarter up four tenths.

And I would say.

The component of exposure that acts like rate. There I think you could think of it as basically 225 points to six points to be precise.

For one third exposure.

And then two thirds sort of net rate that's on commercial and I would ask Stephanie to explain to you the auto.

Stephanie Bush: So just to go back to underscore Chris's comment on the overall enforced, the lion's share of that does have the lifetime continuation endorsement. And then the preponderance of our enforced book being told month policies, you know, takes time for that rate to earn in. But holy focus on bringing this book back to profitability. And when we look at that new business is the rate increases similar between what's going through on the prevail book and what's going on the lifetime continuity book.

Tracy I think.

Think about personal auto is largely the right and I appreciate your comments.

Stephanie Bush: Yeah, absolutely. What I would share with you is that on the enforced book, you know, you see the written rate, the rate has to earn in. But as we've shared in previous calls, we look also look at new business rate adequacy. So when, you know, what is the rate level of new business. And we expect based on all of our actions that more than half of our states by this year, by year and will be new business rate adequate.

Really our results that we were able to realize in some.

Great perspective is largely driven by the loss results are evident in their fully supportable in our filings we.

We have strong relationships with regulators and then it was just truly outstanding execution by the team, but if I take you over to homeowners.

Chris described it that is a combination of both rate and then what we're seeing in terms of the inflationary factors and you bring those two together and that gave US a 14 one.

Yes.

Yes, it was more on personal auto they appreciate that in group benefits specifically disability could.

Could you see yourself being more competitive on pricing at one one renewals given what you said historically low long term disability incidents trends and favorable claims recovery.

Stephanie Bush: And that makes up about 65% of our new business volume. And so again, that gives us a degree of confidence in terms of continuing to market to drive in new. So you have to think about new business being rate adequate, given all of our rate actions. And then on the enforce that that book is going to earn in that rate over time. Thank you for the details appreciated.

Okay.

Hey, Jonathan.

His commentary but.

The market is pretty competitive and pretty efficient. So I don't think we have to make a conscious decision.

Decision too.

To be more competitive on price.

We have our targets.

Obviously it will reflect.

New disability trends, both incidences and terminations for that cohort, we do expect a reversion to the mean there Tracy so that will put some upward pressure on.

Michael Zaremski: And we will take our next question from Michael Zaremski with B&L Capital Markets. Your line is open. Hi, good morning. This is Jack on from Mike. Just one question on the commercial insurance competitive environment. Excluding workers comp, are you surprised at all that commercial pricing has continued to increase any cost and how we should think about pricing in the 2024 one's higher reinsurance cost of the system. And we're seeing some declines in certain core CPI gauges. Yeah, Jack, thanks for the question.

Pricing just from where we are today.

But I wouldn't say there is a conscious <unk>.

<unk> set at 124 to do anything different than we've been doing in the past, but Jonathan what would you say I would agree with that Chris I think that's the outlook that we bring to the market.

We can.

Talk about when we look forward into 2024.

Chris Swift: I'll start and I'll have no add now. I don't I don't think there's any any surprise. I thought I tried to address it that just given the environment. I think the continuation of, you know, rate, you know, being disciplined. You know, reinsurance costs, probably increasing. All point. You know, there's a need to be disciplined on rate and work with our distribution partners and customers to to make sure they understand, you know, why. Yeah, so that there can be an element of explanation back to the end customer. So I see more the same as we head into 24 at this point in time.

We find the market to be competitive all the time I don't feel as though there's any particular change in the nature of competition in the market.

And for US a fair portion of our book is upmarket larger accounts and there is a there is credibility in the data often by account there and so we're looking at those trends on an account specific basis and have been doing that continue to do that that's the way we compete in the marketplace and.

So I think that we factor all of this insight into those selections so.

I don't think Theres any particular change in if the underlying question is is this a moment.

Dropped pricing and to grow aggressively that's not the outlook to Hartford brings really in any of its lines of business. So the discipline is there it remains there.

Moe Tooker: But what would you add on the commercial side? Yeah, no, I would say that the reinsurance market feels fairly stable, fairly predictable. So I think that's getting priced in the head of renewal dates. I would say second. The rate environment is still pretty conducive. We think it's constructive. We think that will continue. And then, third, again, I talked before about we have months periodically where we just think the market's competitive. It just is lumpy that way.

Our efforts are to continue to grow the book profitably and make sure that we take care of our clients and a world class fashion.

Thanks, you did mention reversion to the mean.

Crystal ball when will you see that happening.

Okay.

We'll tell you when we get there Tracy.

Moe Tooker: And, you know, oddly right now, October is feeling really good. And so just things bounce around a little bit. And that's just we're going to be really disciplined about it. But we're looking to grow in a really responsible fashion.

Trayfeeb: Thank you.

Okay.

We price for a reversion.

Obviously, we hope it's somewhat different given just the economic conditions, but.

I don't know when the realized reversion to the mean will actually happen, but we've got to be prepared for it.

Chris Swift: And we will take our next question from Trayfeeb and geeking with Barclays. Your line is open. Thank you. Good morning. There is a big debate on what is the best definition of pricing? Is it pure rate or exposure that acts like rate? Your 19.7% pricing increase for personal auto is a great achievement. I'm not really hearing that pricing level from your peers. So just think it grounded. Are you including exposure in there?

Thank you, yes, I think I think that's fair.

Fair summary Christian.

Our pricing methodology includes a multiyear view of trend.

Chris Swift: And if you are, how does auto exposure act like rate? You know, Trayfeeb, I would add some commentary and then ask Stephanie. But my commentary is going to be more on commercial just so you have that. It's somewhat unique in personal lines auto. Home we talk about, you know, the rate that we're achieving both includes pure rate and ITV which we think works in tandem. But I think we disclosed. I know I talked about it in my prepared remarks.

In that Chris as we're thinking about it.

We see that incidence levels are likely to be increasing over time.

I think that horizon is always something that we're working on and debating here ourselves and thinking about the right way to position ourselves in the market from a pricing standpoint.

Yeah.

Yes.

And we will take our final question from Yaron <unk> with Jefferies. Your line is open.

Thank you good morning.

Just wanted to go back to some of the reserve.

Inventory earlier on the call.

Can you maybe talk a little more about accident years 2016 through 19, I think a lot of investors are.

Honed in on those years, specifically in what Youre seeing there for lines like <unk> and Mike.

All lines as well.

Chris Swift: For example, our renewal rate and pricing was 8% in the quarter up 4.10s. And I would say the component of exposure that acts like rate there. I think you could think of it as basically two and a half points, two points, six points to be precise, for one third exposure and then two third sort of net rate. That's on commercial and I would ask Stephanie to explain to you the auto. I try to see, you know, think about personal auto is largely the rate and I appreciate your comments.

Yeah, I mean as it relates to the quarter as I said.

A small amount of relative increases I think if you go back and look at them.

Over the last several quarters, you've seen us take some increases in NGL lines and I'd say a lot of that has been in those years that you are.

You are indicating and we take that experience into consideration as we think about our loss picks and pricing for those lines going forward. So I don't really have much more color to add to that Iran. Unless there's anything else specific you were you were looking at.

Chris Swift: Really are results that we were able to realize and from a weight perspective is largely driven by the loss results are evident and they're fully supportable in our filings. We have strong relationships with regulators and then it was just truly outstanding execution by the team. But if I take you over to homeowners, you know, how prist described it that is a combination of both rate and then what we're seeing in terms of the inflationary factors and you bring those two together and that gave us the 14 one. Okay.

I guess and maybe this is becoming a little too granular for a call and I apologize if so.

I'm just trying to hone in on specifically those years and understand maybe the.

The net numbers that youre talking about are actually a larger gross loss from those years offset by maybe some favorability from IV.

Yeah, I mean, there can be some back and forth I wouldn't call out anything significant on that I mean on a more current years, especially.

Jonathan Bennett: Yes, but it was more on personal auto that appreciate that in group benefits, specifically disability. Could you see yourself being more competitive and pricing at 11 renewals given what you said historically low long term disability incidents trends and favorable claims recovery? I'm going to have Jonathan, you know, add to his commentary, but the market's pretty competitive and pretty efficient. So I don't think we have to make a conscious decision to be more competitive on price.

Especially in lines like GL, we do tend to hold our loss picks longer we definitely you know.

Through several quarters had seen some improvement that we recognized on the 2020 here.

But again nothing that significance that I would call out.

Okay.

Then the other question I had was on the Navigators book, So I think at the time of the acquisition the U S casualty book with about 40% of the business.

What is it that come to as of today.

Jonathan Bennett: You know, we have our targets. Obviously will reflect, you know, new disability trends, both incidents and determinations, you know, for that cohort. We do expect a reversion to the mean they're Tracy, so that'll put some upward pressure on pricing just from where we are today. But I wouldn't say there's a conscious mindset at 1124 to do anything different than we've been doing in the past. But Jonathan, what would you say? I would agree with that Chris.

Either premium wines or as a percentage of.

We're all specialty book.

Okay.

I'm going to disappoint you I don't have those numbers in front of me and I'm not going to try to guess, we'll just.

Worked through.

Susan that get you that number if that's important to you.

Great I appreciate it thank you.

Okay.

And ladies and gentlemen that is all the time, we have for questions I will now turn the call back to Ms. Susan Spivak for closing remarks.

Jonathan Bennett: I think that's the outlook that we bring to the market. You know, we can talk about when we look forward into 2024. We find the market to be competitive all the time. I don't feel as though there's any particular change in the nature of competition in the market. And for us, you know, a fair portion of our book is up market, larger accounts. And there's credibility in the data often by account there.

Yes.

Yes.

Thank you Ravi just wanted to thank everyone for joining us today and as always please reach out with additional questions. If we didn't get to your question I am available. This afternoon and look forward to speaking with you then have a great day.

Okay.

Ladies and gentlemen, this concludes today's call and we thank you for your participation you may now disconnect.

Yeah.

Jonathan Bennett: And so we're looking at those trends on an account specific basis and have been doing that continue to do that. That's the way we compete in the marketplace. And so I think that, you know, we factor all of this insight into those selections. So I don't think there's any particular change. And if the underlying question is, is this a moment to drop pricing and to grow aggressively? That's not the outlook the Hartford brings really in any of its lines of business.

Yeah.

Yeah.

Yeah.

Jonathan Bennett: So the discipline is there. It remains there. And our efforts are to continue to grow the book profitably and make sure that we take care of our clients in a world class fashion. Thanks. You did mention reversion to the median. If you had a crystal ball when will you see that happening? We'll tell you when we get there tracing. I mean, we put we put we price for a reversion. Obviously, we hope it's somewhat different, you know, given just the economic conditions, but I don't know when realized the reversion to the mean will actually happen, but we've got to be prepared for it.

Yeah.

Jonathan Bennett: Thank you. I think that's a fair summary, Chris, and our pricing methodology includes a multi-year view of trend. And I think in that, Chris, as we're thinking about it, we see that incidence levels are likely to be increasing over time. But I think that horizon is always something that we're working on and debating here ourselves and thinking about the right way to position ourselves in the market from a pricing standpoint.

Okay.

Yaron Kinar: And we will take our final question from Yaron Kinar with Jeffries.

Yaron Kinar: Your line is open. Thank you.

Yaron Kinar: Good morning. I want to go back to some of the reserve commentary earlier on the call. Can you maybe talk a little more about accident years, 16 to 19? I think a lot of investors are honed in on those years specifically. And what you're seeing there for minds like GL and financial lines as well. Yeah, I mean, as it relates to the quarter, as I said, we have a very small amount of relative increases.

Yaron Kinar: I think if you go back and look at over the last several quarters, you've seen us take some increases in GL lines. And I say a lot of that has been in those years that you are indicating. And we take that experience into consideration as we think about our loss picks and pricing for those lines going forward. So I don't really have much more color to add to that, Yaron, unless there's something else specific you were looking at.

Yaron Kinar: I guess, and maybe this is becoming a little too granular for a call and I apologize it. So I'm just trying to hone in on specifically those years and understand maybe the next number is that you're talking about or actually a larger gross loss from those years offset by maybe some favorability from other years. Yeah, I mean, there can be some back and forth. I wouldn't call out anything significant on that.

Yaron Kinar: I mean, on our more current years, especially on lines like GL, we do tend to hold our loss picks longer. You know, we definitely, you know, through several quarters had seen some improvements that we recognize on the 2020 year. But again, nothing that significance that I would call out.

Beth Costello: Okay.

Beth Costello: And then the other question I had was on the navigators book. So I think at the time the acquisition, the US casualty book was about 40% of the business. What does that come to as of today either premium wise or as a percentage of the overall specialty book? I'm going to disappoint you. I don't have those numbers in front of me and I'm not going to try to guess we'll just work through choosing to catch you that number if that's important to you. Great. I appreciate it. Thank you.

Abby: And ladies and gentlemen, that is all the time we have for questions.

Susan Spivak: I will now turn the call back to Ms. Susan Spivak for closing remarks. Thank you, Abby. Just want to thank everyone for joining us today, and as always, please reach out with additional questions.

Susan Spivak: If we didn't get to your question, I am available this afternoon and look forward to speaking with you then. Have a great day.

Operator: Ladies and gentlemen, this concludes today's call and we thank you for your participation. You may now.