Q2 2024 The Hartford Financial Services Group Inc Earnings Call

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Operator: Thank you for standing by, and welcome to the Hartford Financial second quarter 2020 results conference call and webcast. All lines have been placed on mute to prevent any background noise.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again, press star number one. Thank you. I'd now like to turn the call over to Susan Spivak, Senior Vice President, Investor Relations. You may begin.

Christopher J. Swift: Good morning, and thank you for joining us today for our call and webcast on <unk> second quarter 2024 earnings yesterday, we reported results and posted all the earnings related materials on our website now I'd like to introduce our speakers to start we have Chris Swift, Chairman and Chief Executive Officer.

Susan Spivak Bernstein: Good morning, and thank you for joining us today for our call and webcast on second quarter 2024 earnings. Yesterday we reported results and posted all of the earnings-related materials on our website. Now I'd like to introduce our speakers.

Susan Spivak Bernstein: To start, we have Chris Swift, Chairman and Chief Executive Officer, followed by Beth Costello, our Chief Financial Officer. After their prepared remarks, we will begin taking your questions. Just a few comments before Chris begins.

Speaker Change: Followed by Beth Costello, our Chief Financial Officer. After their prepared remarks, we will begin taking your question also to assist US with your questions are several members of our management team.

Speaker Change: Just a few comments before Chris begins todays call includes forward looking statements as defined under the private Securities Litigation Reform Act of 1995.

Susan Spivak Bernstein: Today's call includes forward-looking statements as defined under the Private Securities 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 obligation to update information or forward-looking statements provided in this call.

They 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.

Susan Spivak Bernstein: 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 includes non-GAAP financial measures. Explanations and reconciliations of these measures to comparable GAAP measures 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 Hartford's prior written consent.

Speaker Change: A detailed description of those risks and uncertainties can be found in our SEC filings. Our commentary today includes non-GAAP financial measures explanations and reconciliations of these measures to the comparable GAAP measures are included in our SEC filings.

Speaker Change: This 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.

Chris: Good morning, and thank you for joining us today, the Hartford second quarter results were outstanding contributing to excellent financial performance in the first half of the year.

Christopher J. Swift: Good morning, and thank you for joining us today. The Hartford's second quarter results were outstanding, contributing to excellent financial performance in the first half of the year. These results reflect the effectiveness of our strategy and ongoing investments to differentiate The Hartford in the marketplace. We remain focused on disciplined underwriting and pricing execution, and expanding Product and Distribution Breadth.

Chris: These results reflect the effectiveness of our strategy and ongoing investments to differentiate the Hartford in the marketplace.

Chris: We remain focused on disciplined underwriting and pricing execution.

Chris: Landing product and distribution breadth.

Christopher J. Swift: Developing exceptional talent and delivering a superior customer experience. Highlights from the second quarter include top-line growth in commercial lines of 11% with strong renewal written pricing increases and an underlying combined ratio of 87.4, personal lines top-line growth of 14% with improving margin on exceptional group benefits, core earnings margin of 10%, and solid performance in our investment portfolio. All of these items contributed to an outstanding and industry-leading trailing 12-month core earnings ROE of 17.4%. I'm also pleased to announce that with continued strong capital generation from our business, the Board of Directors approved a new share repurchase authorization of $3.3 billion.

Chris: Developing exceptional talent and delivering a superior customer experience.

Chris: Highlights from the second quarter include top line growth in commercial lines of 11% with strong renewal written pricing increases.

Chris: And an underlying combined ratio of 87 four.

Chris: Personal lines top line growth of 14% with improving margins.

Chris: An exceptional group benefits core earnings margin of 10%.

Chris: And solid performance in our investment portfolio.

Chris: All of these items contributed to an outstanding and industry, leading trailing 12 month core earnings ROE of 17, 4%.

Chris: I'm also pleased to announce that with continued strong capital generation from our businesses. The board of directors approved a new share repurchase authorization of $3 3 billion.

Christopher J. Swift: We will continue to balance growth, investing in our businesses, and returning excess capital to shareholders through repurchases and dividends. Now, let me share a few details from the quarter. Commercial lines produced exceptional results with double-digit top-line growth in an underlying combined ratio below 90 for the 13th straight quarter. We are using our industry-leading underwriting tools, pricing expertise, and Data Science Advancements to drive profitable double-digit new business growth. The tension was steady, and the broader economic environment remains conducive to growth, small business, and our unique and superior market position.

Chris: We will continue to balance growth investing in our businesses and returning excess capital to shareholders through repurchases and dividends.

Chris: Now, let me share a few details from the quarter.

Chris: Commercial lines produced exceptional results with double digit top line growth.

Chris: The underlying combined ratio below 90 for the 13th straight quarter.

Chris: We are using our industry, leading underwriting tools pricing expertise in data science advancements to drive profitable double digit new business growth.

Chris: Retention was steady and the broader economic environment remains conducive for growth.

Chris: In small commercial with our unique and superior market position industry, leading products unmatched customer experience and unrivaled pricing accuracy, we continued to deliver exceptional results, including strong topline growth and outstanding margins.

Christopher J. Swift: Industry Leading Products, unmatched customer experience, and unrivaled pricing accuracy. We continue to deliver exceptional results, including strong top line growth and outstanding margin. New business premium was a record of 23% in the quarter, in part driven by a 36% increase in quotes and nearly 90% growth in ENS bindings, where we continue to see tremendous opportunity with another quarter of exceptional results and relentless advancement of our capability. I remain incredibly bullish on the outlook for our small commercial business.

New business premium was a record up 23% in the quarter in part driven by a 36% increase in quotes and nearly 90% growth in E&S binding.

Chris: Where we continue to see tremendous opportunity.

Chris: With another quarter of exceptional results and relentless advancement of our capabilities.

Chris: We remain incredibly bullish on the outlook for our small commercial business.

Chris: Moving to middle and large commercial second quarter performance was excellent.

Christopher J. Swift: Moving to middle and large commercial, second quarter performance was excellent, including double-digit top-line growth paired with a strong underlying margin. We continue to take advantage of elevated submission flow, driven in part by investments made to expand our product capabilities and the efficiency of the broker and agent experience. Written premium growth reflects strong renewal rate execution, along with double-digit new business growth, primarily in property and liability coverage. We have built a track record of delivering meaningful growth while consistently maintaining underlying margins, a result we expect to sustain going forward.

Chris: <unk> double digit topline growth paired with a strong underlying margin.

Chris: We continue to take advantage of elevated submission flow.

Chris: And in part by investments made to expand our product capabilities and the efficiency of the broker and agent experience.

Chris: Written premium growth reflects strong renewal rate execution, along with double digit new business growth, primarily in property and liability coverages.

Chris: We have built a track record of delivering meaningful growth.

Consistently maintaining underlying margins.

Chris: As a result, we expect to sustain going forward.

Chris: In global specialty for the first time, we achieved over $1 billion and quarterly written premium and maintained underlying margins in the mid eighties.

Christopher J. Swift: In global specialty, for the first time, we achieved over a billion in quarterly written premium and maintained underlying margins in the mid-80s. Our double-digit top line growth reflects our competitive position, diverse product offerings, and solid renewal prices. Written premium growth was propelled by a 38% increase in global reinsurance. 14% increase in our wholesale business, with significant contributions from primary and excess casualty lines and Double-Digit Growth in Commercial and Construction Shirts.

Chris: Our double digit topline growth reflects our competitive position diverse product offerings and solid renewal pricing.

Chris: Written premium growth was propelled by a 38% increase in global reinsurance <unk>.

Chris: A 14% increase in our wholesale business with.

Chris: With significant contributions from primary and excess casualty lines.

Chris: And double digit growth in commercial and construction surety.

Christopher J. Swift: We are particularly pleased with wholesale construction projects bound in the quarter, as well as overall increased emission flow, both meaningful drivers of new business growth. The Global Specialty Business, with our expanding position in the wholesale and reinsurance market. Our broadened product portfolio and enhanced risk selection tools have developed into a meaningful, profitable growth engine for the Hartford family. As I've highlighted in the past, we continue to focus on property across commercial lines, with written premium growth of approximately 20% in the quarter. We are capitalizing on favorable market conditions with a disciplined approach, including a stable and consistent catastrophe risk appetite. Turning to pricing, commercial lines renewal written pricing accelerated to 6.6% in the quarter, 9.5% excluding workers' compensation.

Chris: We are particularly pleased with wholesale construction projects bound in the quarter as well as overall increased submission flow.

Chris: Both meaningful drivers of new business growth.

Chris: The global specialty business with our expanding position in the wholesale and reinsurance market.

Chris: Our broadened product portfolio and enhanced risk selection tools has developed into a meaningful profitable growth engine for the Hartford.

Chris: As I've highlighted in the past we continue to focus on property across commercial lines with written premium growth of approximately 20% in the quarter.

Chris: We are capitalizing on favorable market conditions.

Chris: With a disciplined approach, including a stable and consistent catastrophe risk appetite.

Turning to pricing commercial lines renewal written pricing accelerated to six 6% in the quarter nine 5% excluding workers' compensation.

Chris: Low teens pricing in auto and high single digits, and general liability, including 14% in excess and umbrella is responding to societal trends.

Christopher J. Swift: Low teens, pricing, and auto, and high single digits in general liability, including 14% in excess and umbrella, are responding to societal trends. Overall, commercial property pricing has begun to moderate, but was strong in the low double digits. All in, X comp, renewal, written pricing, and commercial lines remain comfortably above the lost cost trend. Workers' compensation pricing remains slightly positive in the quarter.

Chris: Overall commercial property pricing has begun to moderate but was strong in the low double digits.

Chris: All in ex comp renewal written pricing in commercial lines remained comfortably above loss cost trends.

Chris: Workers' compensation pricing remained slightly positive in the quarter.

Chris: Before moving to personal lines, let me share a few comments we received at our recent annual agent summit.

Christopher J. Swift: Before moving to personal lines, we share a few comments we received at our recent annual agent summit, our broadened product portfolio, increased cross-selling opportunities, and exceptional talent are resonating with the Asian community, opening up new business opportunities. Feedback confirms that the marketplace and our top agents recognize our evolution and strength. They appreciate our strong culture and capability to solve customer problems as a unified commercial lines team, particularly with small business customers where we are taking advantage of disruption and engaging more than ever with our largest partners to drive efficiency. Our investments in Payson technology were described as compelling and Industry Leading.

Our broadened product portfolio.

Speaker Change: Increased cross selling opportunities and exceptional talent are resonating with the Asian community opening up new business opportunities.

Speaker Change: Feedback confirms that the marketplace and our top agents recognize our evolution and strength.

Speaker Change: They appreciate our strong culture and capability to solve customer problems.

Speaker Change: A unified commercial lines team, particularly with small business customers, where we are taking advantage of disruption and engaging more than ever with our largest partners to drive efficiency.

Our investments and Pacer, New technology were described as compelling.

Speaker Change: And industry leading.

Christopher J. Swift: And our talent strategy and succession planning was also complemented. Our exceptional commercial line's first half results and feedback from our partners make it clear that we have the team, tools, and momentum to capitalize on market opportunities. Turning to personalized,

Speaker Change: And our talent strategy and succession planning was also complimented.

Speaker Change: Our exceptional commercial lines first half results and feedback from our partners makes it clear that we have the team tools and momentum to capitalize on market opportunities.

Speaker Change: Turning to personal lines.

Christopher J. Swift: Our second quarter financial performance demonstrates continued progress toward target margin improvement; auto renewal written price increases remain very strong at nearly 24%. While below peak levels from last quarter, they remain consistent with our view of moderating loss trends for the remainder of the year. As I have mentioned, we expect auto renewal written price increases for the year to be approximately 20%. In homeowners, renewal written pricing was 15% during the quarter.

Speaker Change: Our second quarter financial performance demonstrates continued progress towards target margin improvement.

Speaker Change: Auto renewal written price increases remained very strong at nearly 24%.

Speaker Change: Well below peak levels from last quarter, they remain consistent with our view of moderating loss trends for the remainder of the year.

Speaker Change: As I've mentioned, we expect auto renewal written price increases for the year to be approximately 20%.

Speaker Change: And homeowners renewal written pricing of 15% during the quarter comprised of net rate and insured value increases outpaced underlying loss cost trends.

Christopher J. Swift: In addition, we are surprised that net rate and insured value increases outpaced underlying loss cost trends. Investments in personal lines continued with the launch of dynamic pricing inside our Trulane Telematics offering earlier this month, an enhanced price to risk matching capability aligned with our dominant product offer. As we return personal auto to profitability in 2024, capabilities like this, along with enhanced risk segmentation, and near-term pricing gain, will help in moderating lost position personal lines to reach target margins in 2025. Turning to group benefits. The core earnings margin was 10% for the quarter and 8.1% for the first half of the year.

Speaker Change: Investments in personal lines continued with the launch of dynamic pricing inside our true Lane telematics offering earlier this month.

Speaker Change: And enhanced price to risk matching capability aligned with our prevail product offering.

Speaker Change: As we return personal auto to profitability in 2024 capabilities like this along with enhanced risk segmentation near term pricing gains and moderating loss trend position personal lines to reach target margins in 2025.

Speaker Change: Turning to group benefits.

Speaker Change: Our core earnings margin was 10% for the quarter and eight 1% for the first half of the year.

Christopher J. Swift: These stellar results included a lower life loss ratio versus the prior year and continued strong long-term disability execution. Fully insured, ongoing premium growth of 2%, consistent with the first quarter, reflects strong book persistency, still above 90%, and sales of $546 million in the first half of the year. Moving to investments, the portfolio continues to support Hartford's financial and strategic goals, performing well across a range of asset classes and market conditions. Beth will provide more detail. From a macroeconomic standpoint, the U.S. environment continues to be supportive of Hartford's business.

Stellar results included a lower life loss ratio versus the prior year.

Speaker Change: Continued strong long term disability execution.

Speaker Change: Fully insured ongoing premium growth of 2% consistent with the first quarter reflects strong book persistency.

Speaker Change: Still above 90% and sales of $546 million in the first half of the year.

Speaker Change: Moving to investments the portfolio continues to support the Hartford financial and strategic goals.

Speaker Change: Performing well across a range of asset classes and market conditions.

Speaker Change: Beth will provide more details.

Beth Costello: From a macroeconomic standpoint.

Beth Costello: The U S environment continues to be supportive of the Hartford's businesses.

Christopher J. Swift: The labor market has been resilient and with continued relatively low unemployment and wage rate growth, still in the 4% range, both of which positively affect our two largest and strongest performing lines, workers' compensation and disability. In summary, Hartford delivered an outstanding quarter with sustained momentum heading into the second half of the year, a testament to our execution.

Beth Costello: The labor market has been resilient and with continued relatively low unemployment and wage rate growth.

Beth Costello: And the 4% range, both of which positively affect our two largest and strongest performing lines workers compensation and disability.

Beth Costello: In summary, the Hartford delivered an outstanding quarter with sustained momentum heading into the second half of the year.

Beth Costello: A testament to our execution strategy talent and the impact of ongoing investments in our business.

Christopher J. Swift: Strategy, Talent, and the Impact of Ongoing Investments in Our Businesses. As I said before, we continue to build on our market differentiating capabilities in broad product offering, all while becoming more efficient, and delivering disciplined underwriting and pricing execution. Exceptional talent and innovative customer-centric technology are expected to sustain superior results, and we continue to proactively manage our access. All these factors contribute to my excitement and confidence about the future of The Hartford and our ability to extend our track record of delivering industry-leading financial performance. Now, I'll turn the call over to Beth to provide more detailed commentary on the quarter. Thank you, Chris.

Beth Costello: As I said before we continue to build on our market differentiating capabilities and broad product offering all while becoming more efficient.

Beth Costello: Our disciplined underwriting and pricing execution exceptional talent and innovative customer centric technology are expected to sustain superior results.

Beth Costello: And we continue to proactively manage our excess capital.

Beth Costello: All these factors contribute to my excitement and confidence about the future of the Hartford and our ability to extend our track record of delivering industry, leading financial performance.

Beth Costello: Core earnings for the quarter were $750 million, or $2.50 per diluted share, with a trailing 12-month core earnings ROE of 17.4%. Commercial lines had an exceptional quarter with core earnings of $551 million, written premium growth of 11%, and an underlying combined ratio of 87.4. Small Commercial continues to deliver excellent results, with written premium growth of 8% and an underlying combined ratio of 86.8, further building on its impressive track record of delivering an underlying combined ratio below 90. Favorable non-capital property losses contributed to the strong results.

Beth Costello: Middle & Large Commercial also delivered outstanding results with 13% written premium growth. The strong underlying combined ratio of 89.6 reflects the positive impact of premium leverage. Industry-leading pricing and segmentation analytics and exceptional talent that continue driving profitable growth. Global Specialty's written premium growth of 14% was driven by accelerating renewal written price increases and strong new business growth, including quarterly net written premium growth of 14% in our wholesale. The underlying combined ratio was an exceptional 85.2, relatively flat to the prior year.

Beth Costello: Now I will turn the call over to Beth to provide more detailed commentary on the quarter.

Beth Costello: Thank you Chris core earnings for the quarter were $715 million or $2.50 per diluted share with a trailing 12 month core earnings ROE of 17, 4%.

Beth Costello: Commercial lines had an exceptional quarter with core earnings of $551 million written premium growth of 11% and an underlying combined ratio of 87 four.

Beth Costello: Small commercial continues to deliver excellent results with written premium growth of 8% and an underlying combined ratio of $86. Eight further building on its impressive track record of delivering an underlying combined ratio below 90.

Beth Costello: Favorable non cat property losses contributed to the strong results.

Beth Costello: Middle and large commercial also delivered outstanding results with 13% written premium growth.

Beth Costello: A strong underlying combined ratio of $89 six reflects the positive impact of premium leverage industry, leading pricing and segmentation analytics and exceptional talent that continue driving profitable growth.

Beth Costello: Global specialties written premium growth of 14% was driven by accelerating renewal written price increases and strong new business growth, including quarterly net written premium growth of 14% in our wholesale channel.

Beth Costello: The underlying combined ratio was an exceptional 85 point to relatively flat to the prior year.

Beth Costello: Written premium and personal lines increased 14% over the prior year driven by rate execution.

Beth Costello: Written premium and personal lines increased 14% over the prior year driven by rate execution. In auto, we achieved written pricing increases of 23.5% and earned pricing increases of 22.1%. In homeowners, written pricing increases were 14.9% for the quarter and 14.6% on an earned basis.

Beth Costello: In auto we achieved written pricing increases of 23, 5% and earned pricing increases of 22, 1%.

Beth Costello: And homeowners written pricing increases were 14, 9% for the quarter and 14, 6% on an earned basis.

In personal lines, the underlying combined ratio of $96 seven improved by five points from the prior year.

Beth Costello: In personal lines, the underlying combined ratio of 96.7 improved by 5 points from the prior year. Meanwhile, homeowners had another strong quarter with an underlying combined ratio of 77.8. We are very pleased with the improvement we are seeing in our auto results. Through June 30th, our underlying combined ratio of 104.7 was in line with our expectation and is 3.8 points lower than the prior year period, almost entirely due to improvement in the loss ratio.

Beth Costello: Homeowners had another strong quarter with an underlying combined ratio of 77 eight.

Beth Costello: We are very pleased with the improvement we are seeing in our auto results.

Beth Costello: Through June 30, our underlying combined ratio of $104 seven was in line with our expectations and is three eight points lower than the prior year period, almost entirely due to improvement in the loss ratio.

Beth Costello: We remain on track to achieve the five to six point full year improvement in the auto underlying loss ratio as we have previously discussed.

Beth Costello: We remain on track to achieve a 5 to 6 point full year improvement in the auto underlying loss ratio, as we have previously discussed. The total personal line's expense ratio increased by 0.7 points, driven by higher direct marketing costs, as anticipated.

Beth Costello: The total personal lines expense ratio increased by <unk> seven points, driven by higher direct marketing costs as anticipated.

Beth Costello: We have achieved an adequate new business rate, and states representing approximately 80% of new business. And our contemporary business model enables us to efficiently allocate marketing resources for growth in those states. With respect to catastrophe,

Beth Costello: We have achieved new business rate adequacy and states, representing approximately 80% of new business and our contemporary business model enables us to efficiently allocate marketing resources for growth in those states.

Beth Costello: With respect to catastrophes P&C current accident year cats for $280 million before tax or seven one combined ratio points, which compares to $226 million or six two points on the combined ratio in 2023.

Beth Costello: PNC's current accent ear caps were $280 million before tax, or 7.1 combined ratio, compared to 226 million, or 6.2 points on the combined ratio, in 2023. And while catastrophe losses were significantly elevated for the industry, our results were only slightly higher than expectations. We continue to actively manage our CAD exposure through aggregation management and underwriting discipline, especially in certain higher-risk states. Total net favorable prior accident year development within core earnings was $78 million, primarily due to reserve reductions in workers' compensation, catastrophes, personal lines, and bonds, which were partially offset by reserve increases in general liability, assumed reinsurance, and commercial auto liability. The increase in general liability reserves of $32 million was primarily related to accident years 2015 to 2019, with some modest increases in more recent years. We recorded $37 million before tax.

Beth Costello: And while catastrophe losses were significantly elevated for the industry. Our results were only slightly higher than expectations.

Beth Costello: We continue to actively manage our cat exposure to aggregation management and underwriting discipline, especially in certain higher risk state.

Beth Costello: Total net favorable prior accident year development within core earnings was $78 million, primarily due to reserve reductions in workers' compensation catastrophes personal lines and bond, which are partially offset by reserve increases in general liability assumed reinsurance.

Beth Costello: Aaron's and commercial auto liability.

Beth Costello: The increase of general liability reserve of 32 million was primarily related to accident years 2015 to 2019 with some modest increases in more recent years.

Beth Costello: We recorded $37 million before tax deferred gain amortization related to the navigators ADC, which positively impacted net income with no impact on core earnings we.

Beth Costello: The third gain amortization related to the Navigator's ADC, which positively impacted net income with no impact on core earnings. We have provided additional information in the appendix of our earnings slide deck on both this ADC and the A&E ADC for your reference. Turning to group benefits, the core earnings margin of 10% was exceptional. Results reflect strong group life and disability performance, as well as fully insured premium growth. The group life loss ratio of 74.9 was 9.2 points lower than the prior year due to lower claim severity.

Beth Costello: We have provided additional information in the appendix of our earnings slide deck on both this ADC and the A&D ADC for your reference.

Beth Costello: Turning to group benefits core earnings margin of 10% was exceptional.

Beth Costello: The group disability loss ratio of 67.1 was essentially flat with 2023, driven by lower long-term disability claim incidents and a higher New York paid family leave risk adjustment benefit, offset primarily by a higher loss ratio in paid family and medical leave products. Fully ensured ongoing premium growth of 2% was consistent with the first quarter and reflects positive exposure growth, albeit at a lower rate than in 2023, and strong book persistency at over 90%.

Beth Costello: Results reflect strong group life and disability performance as well as fully insured premium growth.

Beth Costello: The group life loss ratio of $74 nine was nine two points lower than prior year due to lower claims severity.

Beth Costello: The group disability loss ratio of 67.1 was essentially flat with 2023, driven by lower long term disability claim incidents and a higher New York paid family leave risk adjustment benefit offset primarily by a higher loss ratio.

Beth Costello: In paid family medical leave products.

Beth Costello: Fully insured ongoing premium growth of 2% was consistent with first quarter and reflects positive exposure growth, albeit at a lower rate than in 2023 and strong book persistency at over 90%.

Beth Costello: Turning to investments our diversified portfolio continues to produce solid results.

Beth Costello: Turning to investors, our diversified portfolio continues to produce solid results. The overall credit quality of the portfolio remains high, with an average credit rating of A+, and net credit losses remain insignificant. For the quarter, net investment income was $602 million.

Beth Costello: The overall credit quality of the portfolio remains high with an average credit rating of a plus and net credit losses remain insignificant.

Beth Costello: For the quarter net investment income was $602 million.

Beth Costello: The total annualized portfolio yield excludes limited partnerships and is 4.4% before tax, slightly above the first quarter. We continue to benefit from higher rates as evidenced by the second quarter reinvestment yield of 6.4 percent, up 30 basis points from our reinvestment rate in the first quarter and up 110 basis points from the year-ago period. As expected, our annualized LP returns of 1.3% were consistent with the first quarter. Although we anticipate LP returns to be somewhat stronger in the second half of 2024, the full year is likely to be below 2023 results. However, we remain confident that, over the long term, LPs will generate returns consistent with historical levels.

Beth Costello: The total annualized portfolio yield excluding limited partnerships was four 4% before tax slightly above first quarter.

Beth Costello: We continue to benefit from higher rates as evidenced by the second quarter reinvestment yield of six 4% up 30 basis points from a reinvestment rate in the first quarter and up 110 basis points from the year ago period.

As expected our annualized LP returns of one 3% were consistent with the first quarter.

Beth Costello: Although we anticipate LP returns to be somewhat stronger in the second half of 2020 for the full year is likely to be below 2023 results.

Beth Costello: However, we remain confident that over the long term L. P. 's will generate returns consistent with historical levels.

Beth Costello: Yeah.

Beth Costello: Turning to capital, Yesterday, the Board of Directors approved a new share repurchase authorization of $3.3 billion, which is 10% higher than the 2022 authorization, reflecting the strong capital generation of our business. This authorization, effective August 1, 2024, through December 31, 2026, is in addition to the existing authorization, which, as of June 30, had approximately $650 million remaining.

Speaker Change: Turning to capital yesterday, the board of directors approved a new share repurchase authorization of $3 3 billion, which is 10% higher than the 2022 authorization, reflecting the strong capital generation of our businesses.

Speaker Change: This authorization effective August one 2024 through December 31, 2026 is an addition to the existing authorization, which as of June 30th had approximately $650 million remaining.

Speaker Change: Over the last several quarters, our share repurchase activity has been very consistent at $350 million per quarter.

Beth Costello: Over the last several quarters, our share repurchase activity has been very consistent at $350 million per quarter. With our new authorization in place, we would expect quarterly share repurchase activity to be closer to $400 million beginning with the third quarter. In summary, we are very pleased with our excellent financial performance through the first six months, and these results demonstrate consistent execution in delivering profitable growth, contributing to industry-leading returns, thereby enhancing value for all stakeholders. I will now turn the call back. Thank you, Beth.

Speaker Change: With our new authorization in place, we would expect quarterly share repurchase activity to be closer to $400 million beginning with the third quarter.

Speaker Change: In summary, we are very pleased with our excellent financial performance through the first six months and these results demonstrate consistent execution and delivering profitable growth contributing to industry, leading return, thereby enhancing value for all stakeholders.

Speaker Change: I will now turn the call back to Susan.

Operator: We will now take your questions. Operator, can you please repeat the instructions for asking a question? Yes, we will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again.

Susan: Thank you Beth we now will take your questions. Operator can you. Please repeat the instructions for asking a question.

Speaker Change: Certainly we will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue. If you would like to withdraw your question simply press Star. One again. Your first question comes from the line of Elyse Greenspan from Wells Fargo. Your line is open.

Elyse Beth Greenspan: Your first question comes from the line of Elyse Greenspan from Wells Fargo. Your line is open. Hi, thanks. Good morning.

Elyse Beth Greenspan: Hi, Thanks. Good morning. My first question is on the commercial pricing environment, Chris you said.

Christopher J. Swift: My first question is on the commercial pricing environment. Chris, you said, you know, rates improve sequentially, and I think you attribute it to GL as well as excess and umbrella responding to, you know, societal issues. Given, right, that we've seen, right, reserving issues emerge across the industry, would you expect that your price, pricing trends would just, you know, continue on an upward trend from here? Thank you for the question, Elyse.

Chris: No rates improved sequentially and I think you attributed to GL as well as excess and umbrella responding to societal issues.

Elyse Beth Greenspan: Given right that we've seen right reserving issues emerge across the industry would you expect that your price pricing trends would just continue on an upward trend from here.

Elyse Beth Greenspan: Okay.

Christopher J. Swift: I would say in general, you know, we're very pleased with our pricing, as we quoted 6.6%, up 30 basis points, 9.5, up about 20 basis points. Even, you know, with some moderating, you know, property pricing, which you could talk about. But property still remains double-digit, but it's moderating. So that leaves, obviously, the liability lines, you know, which I'm very proud of our team and their ability to execute and get the needed rate to keep up with, and in most cases, stay ahead of, our lost cost trends.

Speaker Change: Thank you for the question Elyse.

Speaker Change: I'd say in general we're very pleased with our pricing is recorded six 6%.

Speaker Change: 30 basis points $9, five up about 20 basis points.

Speaker Change: Even with some moderating.

Speaker Change: Property pricing, which which you could talk about the property still remains.

Speaker Change: Double digit, but it's it's moderating so that leaves obviously, the liability lines, which again I'm very proud of our team.

Speaker Change: And their ability to execute.

Speaker Change: And get the needed rate to keep up with and in most cases stay ahead of our loss cost trends. So that's a very important.

Christopher J. Swift: So that's a very important mission guidance that we talk to the team about, you know, monthly and quarterly. And I'm looking at Mo. I don't know if you would add anything special, Mo, but your team's doing a great job getting the needed rate, given the environment. No, I would echo that, Chris.

Speaker Change: Mission guidance that we talked to the team about monthly and quarterly.

Speaker Change: Im looking at Moe I don't know if you would add anything special know, but your team's doing a great job getting the needed rate given the environment.

Mo: The only additional data point I would give you, Elyse, is that our access and umbrella rates were up 160 basis points quarter over quarter, so second quarter over the first quarter. So we continue to work really hard at getting enough rates into the book to respond to the trends that we're seeing. So, Elyse, I don't think the environment's going to let up, so you should expect us to continue to be disciplined in risk selection and disciplined in pushing for rate, you know, in the book. And whether that's at an increasing or a consistent pace, I'm not going to quibble with you, but we're going to be disciplined. Thanks.

Moe: With that Christie only additional data point I would give you have leases that are excess and umbrella rates were up 160 basis points quarter over quarter. So second quarter over the first quarter. So we continue to work really hard at getting enough rate into the book to respond to the trends that we're seeing.

Moe: So at least I don't I don't think the environment is going to let up so you should expect us to continue to be disciplined in risk selection and discipline and pushing for rate in the book and whether that's at an increasing or a consistent pace.

Moe: I'm not going to quibble with you, but we're going to be disciplined.

Speaker Change: Thanks, and then my second question is on the new authorization.

Beth Costello: And then my second question is on the new authorization, which you know, Beth, and I appreciate you giving us the right number, the new quarterly kind of run rate on buybacks, is the, you know, incremental uplift, is that all being driven by dividends out of your property casualty entities? Or, I guess, how should we think about the incremental cash flow over the next couple of years? Yeah, I would say it's really across our businesses. As we said, the fact that the authorization was increased from the previous authorization is really reflective of just the strong earnings generation.

Beth Costello: Beth and I. Appreciate you gave US right the new quarterly kind of run rate of buybacks is the incremental uplift is that all being driven by dividends.

Speaker Change: Your property casualty entities or I guess, how should we think about the incremental cash flow over the next couple of years.

Speaker Change: Yeah, I would say, it's really across our businesses as we said the fact that the authorization was increased from the previous authorization really is reflective of just the strong earnings generation as you know dividends, you know quarter to quarter and year to year.

Speaker Change: Can fluctuate a bit as we manage the various legal entities that we have but we feel very good about the capital generation that we're seeing and we would expect to see our dividends.

Speaker Change: Dividends reflect that.

Speaker Change: Okay.

Speaker Change: Thank you.

Andrew Scott Kligerman: Your next question comes from the line of Andrew <unk> from TD Cowen Your line is open.

Andrew Scott Kligerman: As you know, dividends, quarter to quarter and year to year, can fluctuate a bit as we manage the various legal entities that we have. But we feel very good about the capital generation that we're seeing, and we would expect to see our dividends reflect that. Thank you. Your next question comes from a line of Andrew Kligerman from TD Cowen. Your line is open. Hey, good morning. The first question is around Inc., a terrific 85.2 underlined, and 14% growth. I'm wondering if you could share with us where you're growing up.

Andrew Scott Kligerman: Hey, good morning.

Speaker Change: First question is around specialty.

Speaker Change: Terrific 85, two underlying combined.

Andrew Scott Kligerman: The 14% growth I'm wondering if you could share with us.

Speaker Change: Yeah.

Speaker Change: Where you are growing and particularly I'm interested in the reinsurance area too.

Christopher J. Swift: And particularly, I'm interested in the reinsurance area, too, what lines of business you're looking at there, too. You know, Andrew, um... Thank you for joining us today. You know, I would say our specialty business is quite diversified. But if I look at, you know, its biggest component, it's wholesale. E&S Wholesale, which again uses the full range of our liability and, you know, property products. So, you know, feel good about what we're doing there.

Speaker Change: What lines of business Youre looking at there too.

Speaker Change: Okay.

Speaker Change: Andrew.

Thank you for joining us today I would say.

Speaker Change: Our specialty business.

Speaker Change: Diversified, but if I look at it is biggest component its wholesale.

Speaker Change: Wholesale, which again uses the full range of our <unk>.

Speaker Change: A liability.

Speaker Change: Property products, so feel good about.

Speaker Change: What we're what we're doing there.

Christopher J. Swift: You know, rates, you know, are strong, you know, we've been increasing the rate that we're seeking on, you know, various aspects of that book, particularly the liability books. So again, new distribution relationships, we're expanding the wholesale distribution relationships. And as I said, it culminated in the first time ever going above a billion dollars in rent and premiums.

Speaker Change: Rates are.

Speaker Change: Our strong we've been.

Speaker Change: Increasing.

Speaker Change: The rate.

Speaker Change: Speaking on various aspects of that book, particularly the liability books, So again, new distribution relationships, we're expanding.

Speaker Change: Sale distribution relationships.

Speaker Change: As I said it culminated in the first time ever going above $1 billion.

Speaker Change: Written premium so we feel really good about that.

Christopher J. Swift: So we feel really good about that. I'll make a comment on reinsurance and then ask Mo if he wants to add anything, but our reinsurance business, I would say, on a global basis is growing about 18%. I would say 45% of that global reinsurance business is property, which is growing at 24%. And then our non-property casualty lines are growing at 12%. I think I've characterized this before, you know, Andrew, this is going to be a run rate business for us of about $850 million this year. So it's something that we're proud of.

Speaker Change: I'll make a comment on reinsurance and then ESMO if he wants to add anything but.

Speaker Change: Our reinsurance business.

Speaker Change: I'd say on a global basis is growing about 18%.

Speaker Change: I would say 45% of the global reinsurance business is about is property.

Speaker Change: Which is growing at 24%.

ESMO: And then our nonprofit pretty casualty lines is growing at 12%.

Speaker Change: I'd characterize as before Andrew this is going to be a run rate.

Speaker Change: Business for us.

Speaker Change: $150 million this year so.

Something that we're proud of it.

Christopher J. Swift: It's a niche, it's being very disciplined and taking advantage of dislocation in the marketplace and producing outstanding, superior, risk-adjusted returns. Andrew, maybe I'll just add a little bit more on the wholesale in global specialty. And I think overall flow continues to be really strong in every product line. We continue to invest in the teams, and the teams are executing really well.

Speaker Change: Nishu.

Speaker Change: <unk> been very disciplined in taking advantage of dislocation in the marketplace and producing outstanding superior risk adjusted returns.

Speaker Change: Andrew maybe I'll, just add a little bit more on the wholesale in global specialty I mean, I think overall slow continues to be really strong in every product line, we're continuing to invest in the teams. The teams are executing really well we are known for our construction casualty prowess.

Mo: We are known for our construction casualty prowess. We are underweight in the other parts of wholesale, and we're pushing into. Certainly property on a wider spread, marine, so just know that we see that there's more upside there, pretty impressive for a business that had a lot of doubters five years ago when it acquired it. So my next question. Actually, you know what, let me just sneak something in unless I get bounced out that rate, you're talking about the pricing of nine and a half percent ex-workers comp. Is that a pure rate, or is that also inclusive? exposure in terms of conditions

Speaker Change: Our underweight in the other parts of wholesaling, we're pushing into.

Speaker Change: Certainly property NOI.

Speaker Change: <unk> Marine So just know that we said theres more upside there.

Speaker Change: Yes.

Pretty impressive for a business that had a lot of doubters five years ago when you acquire.

Speaker Change: Acquired it so my next question.

Actually you know what let me, let me just sneak something unless I get bounced up that rate.

Speaker Change: You've talked in the pricing of 95% ex workers' comp is that pure rate.

Speaker Change: Or is that also inclusive of exposure in terms of conditions.

Speaker Change: Conditions.

Andrew Scott Kligerman: Yeah, what we typically comment upon if there's a question is, we call it, Exposure, that access rate, I would say of the 9.5 is about 2.2% this quarter, fairly consistent with, you know, prior quarters. Got it. I just wanted to make sure about that. And then my other question is, I guess, reading about the reserves, focusing on the more difficult adverbs. 32 million in GL; that was all 16 to 19.

Speaker Change: Yes, what we typically comment upon if there's a question as we call it.

Speaker Change: Exposure that access rate I would say is of the 95 is about two 2% this quarter.

Speaker Change: Fairly fairly consistently.

Speaker Change: Prior to prior quarters.

Got it I just wanted to make sure on that and then my other question is.

Speaker Change: I guess reading about the reserves.

Speaker Change: Now focusing on the more difficult adverse $32 million NGL that was all 16 to 19 and I think it's heading into Q modest 21 to 'twenty three so that doesn't seem like an impact.

Andrew Scott Kligerman: And I think it's setting the queue modestly at 21 to 23. So that doesn't seem like it has an impact. Commercial Auto was 10 million adverse in the quarter, but that was 2022. Anything we should read into that, Chris, or you feel pretty good about your reserving on the casualty lines and, Commercial Auto? I'll let Beth add some detailed commentary, Andrew, but from my chair, knowing our management mechanisms quarterly, what we've debated, how we've picked, I think, very, very appropriate loss trends over a five, six-year period of time, the resulting balance sheet, I think, is very healthy, with high confidence.

Speaker Change: Auto was $10 million adverse in the quarter, but that was 2022.

Speaker Change: We should read into that Chris.

Chris: Do you feel pretty good about your reserving on the casualty lines.

Chris: The commercial auto.

Chris: Yes, yes.

Chris: All right.

Chris: Ed some detailed commentary Andrew but from from my chair.

Knowing our management mechanisms quarterly what we've debated.

Speaker Change: We've picked I think very very appropriate loss trends over a five six year period of time, the resulting bal.

Speaker Change: Balance sheet, I think is very healthy high confidence.

Andrew Scott Kligerman: So yeah, these are the things that we work on every quarter and every planning cycle. And we pride ourselves on trying to be realistic and get it right, because if you don't, it has the cumulative effect of you going to be, you know, chasing your tail, as they would say. But, Beth, what would you add?

Speaker Change: So yes. These are the things.

Speaker Change: You work on every quarter in every planning cycle.

Speaker Change: We pride ourselves on trying to be realistic and get it right.

Speaker Change: Because if your tone it has a cumulative effect of youre going to be chasing.

Speaker Change: Chasing your tail as I would say, but thats what would you add any further detailed commentary, yes, well I agree overall with your comments, Chris as it relates specifically to the reserve increases that we took in commercial auto really related to a couple of accounts and feel really good that we've already taken action.

Beth Costello: Any further detailed commentary? Yes, well, I agree, you know, overall with your comments, Chris, as it relates specifically to the reserve increases that we took in commercial auto, really related to a couple of accounts, and I feel really good that we've already taken action on those accounts. So, you know, as you know, we look at our reserves in detail by subline, and where we think we see the need to make an adjustment, we will.

Speaker Change: On those accounts. So you know as you know we look at our reserves in detail by sub line and where we think we see.

Speaker Change: The need to make an adjustment, we will but again I'll echo chris's comments and when you step back and look at it in total we do feel very good about where we are.

Beth Costello: But again, I'll echo Chris's comments: when we step back and look at it in total, we do feel very good about where we are. Great. Your next question comes from a line Brian Meredith from UBS Financial. Your line is open.

Speaker Change: Awesome. Thanks.

Speaker Change: Your next question comes from the line of Brian Meredith from UBS Financial Your line is open.

Brian Meredith: Thanks. First question, just quickly. So Chris and Mo, there was some legislation recently passed in Florida talking about increasing Medicare reimbursements for doctors. And I know that a lot of workers comp reimbursement schedules are kind of predicated on that. Can you talk a little bit about what the potential impact is on workers comp, call it severity trends here going forward? Are there offsetting factors? Maybe give us a little bit of explanation on that. Yeah, Brian.

Brian Meredith: Thanks first question just quickly so Chris.

Speaker Change: There was some let's just inflation I think recently Plaza in Florida are talking about increasing Medicare reimbursements for doctors and I know that a lot of kind of workers' comp.

Speaker Change: <unk> schedules is kind of predicated on that can you talk a little bit about what the potential impact is on workers' comp call. It severity trends here going forward are there offsetting factors, maybe give us a little bit of explanation on that.

Yes, Brian.

Christopher J. Swift: It's Chris. I would say, you know, first, what did they pass? They passed a law that, you know, is sort of effective on January 1 of 2025.

Chris: Chris I would say.

Chris: No.

First what do they pass the passed a law that sort of effective.

Chris: January one of 2025.

Christopher J. Swift: So it does have some applicability for the back book. But we think that's relatively modest for us. But as you said, it's really physician services across a broad range of services that, you know, they're getting basically a pay check. I don't think it really moves the needle on anything materially in Florida. What we then need to do is obviously work with the rating bureaus to make sure that these loss estimates are getting into their...

Speaker Change: So it does have some upside.

Speaker Change: Almost like a ability for the back book. So we think that's relatively modest for us.

As you said, it's really physician services across them.

Speaker Change: Rod range of services that they're getting basically.

Speaker Change: The.

Speaker Change: Increase in pay rates.

Speaker Change: Right.

Speaker Change: So I don't think it really.

Speaker Change: Moves the needle.

Speaker Change: On anything materially in Florida.

Speaker Change: Then need to do is obviously work with.

Speaker Change: The rating bureaus to make sure that these loss estimates are getting into there.

Speaker Change: Guidance.

Speaker Change: And obviously then.

Speaker Change: Making the appropriate rate filings.

Speaker Change: Getting paid for that so it's a little bit of a lag.

Christopher J. Swift: But I wouldn't say it's going to change anything from an underwriting appetite or execution. We just need to sort of make sure it gets into filings that the bureaus approve of, and we'll be off to the races. Great, thanks for the answer.

Speaker Change: But I wouldn't say, it's going to change anything from an underwriting appetite or execution. We just we just need to sort of make sure. It gets into its into filings that the bureaus approved into our pricing.

We'll be off to the races.

Speaker Change: Great. Thanks for the answer and then I guess my second question Chris.

Brian Meredith: And then I guess my second question, Chris. You made this comment in response to one of Elyse's questions, did property still see double-digit rates? It'd be helpful maybe if you talked about what it looks like from property rates, you know, large account all the way down to small account, because we've heard a lot more that large account is kind of flat and is getting more competitive right now. So it was a little surprising when I heard you say double digit rate. Yeah, I would, I'm going to resist giving you Competitive Intel, but I still want to address your question, Brian.

Speaker Change: You made this comment just your thoughts on one of our leases question did property still seeing double digit rate.

Speaker Change: It would be helpful. Maybe if you talk about you know.

Chris: What it looks like from property rate loss.

Speaker Change: Account, all the way down to smaller cap because we've heard a lot more of that larger count is kind of flat to getting more competitive right. Now so it was a little surprising when I heard.

Speaker Change: You say double digit rate.

Speaker Change: Yes, I would I'm going to resist giving you.

Speaker Change: Competitive Intel, but I still want to address your question Brian.

Christopher J. Swift: So, I would say, again, last quarter, first quarter, in aggregate. XR, Global Reinsurance Property Business, you know, we had rates going up 14.1%, this quarter, on the same basis, like for like. 12.4.

I would say again last quarter first quarter in.

Speaker Change: In aggregate.

Speaker Change: Our global reinsurance property business, where we had rates going up 14, 1%.

Speaker Change: This quarter on a same same basis like for like $12 four.

Christopher J. Swift: And I would say that the rate increase that we're seeing across our portfolio is in our Bob product for small commercial, or E&S Binding Division within Small Commercial. And then I would say everything else is sort of in the high single digits. So, again, I think it is quite disciplined and quite appropriate in those lines of business. So I think, again, as I said, the team is executing well. But Mo, what would you add?

Speaker Change: And I would say that.

Speaker Change: Highest.

Speaker Change: The rate increase that we're seeing across our portfolio is in our.

Speaker Change: <unk> product for small commercial.

Speaker Change: Our E&S binding division within small commercial.

And then I would say everything else is sort of in the high single digits.

Speaker Change: So again I think quite disciplined.

Speaker Change: Quite appropriate.

Speaker Change: And those lines of business. So I think again as I said the team is executing well, but what would you add.

Mo: No, Brian, I would just say we don't have a lot that we do in the shared and layered space. But we have a little bit in our middle and large commercial book of shared and layered, and a little bit in our wholesale, property, and global, especially, and that's the place we're seeing the most competition where we write a hundred percent, and we're kind of a middle market writer. It's hanging in really well. Great, thank you. Your next question comes from a line by Gregory Peters from Raymond James. Your line is open.

Speaker Change: So Brian I would just say.

Brian Meredith: So we don't have a lot that we do in the shared and layered space, but in we have a little bit in our middle and large commercial book of shared and layered in a little bit in our wholesale.

Brian Meredith: Property and global specialty and that's the place we're seeing the most competition, where we write a 100% kind of a middle market writings, it's hanging in really well.

Speaker Change: Great. Thank you.

Speaker Change: Your next question comes from the line of Gregory Peters from Raymond James Your line is open.

Gregory Peters: Well good morning, everyone.

Gregory Peters: So for the first question I think I'm going to focus on the personal lines business, Chris in your comments you said.

Gregory Peters: Chris, in your comments, you said target margins and personal lines by 2025. Is that, like, the end of the year 2025, or is it the beginning of the year, or for the full year? And I guess the reason why...

Chris: That you expect to hit the target margins in personal lines by 2025.

Gregory Peters: Is that like end of the year of 2025 or is it the beginning easier or for the full year and I guess the reason why I'm thinking about this isn't on slide 17 of your investor deck.

Christopher J. Swift: Thinking about this is on slide 17 of your investor deck. We're looking at the sequential trends and the auto underlying and the homeowners underlying combined ratio, and it looked like it ticked up a little bit sequentially from the March quarter. So any color there on how you see that cadence developing over the next 18 months would be helpful. Yeah, happy to comment there. I would say just a couple things.

Speaker Change: We're looking at the sequential trends in the auto underlying in the homeowners underlying combined ratio and it looks like it ticked up a little bit sequentially from the March quarter. So any color there on how you see that.

Speaker Change: Cadence developing over the next 18 months would be helpful.

Christopher J. Swift: Just context. Your sequential trend is primarily impacted by expense. I think we were pretty clear in our statements that, particularly now that we're on a countrywide basis, with new business rate adequate, we've turned back on marketing in a holistic way, whether that be TV, whether it be print, whether it be paid, whether it be advertising and ARP. So that, I would say, is reverting back to.., to normal.

Speaker Change: Yes.

Speaker Change: Happy to.

Speaker Change: Comments, there I would say just a couple of things.

Speaker Change: Just context.

Sequential trend is primarily impacted by expense.

Speaker Change: We were pretty clear.

Speaker Change: Our statements, particularly now that we're on a countrywide basis, new business rate adequate we've turned back on marketing.

In a holistic way whether that would be yes.

Speaker Change: Yes, TV, whether it be print whether it be paid.

Speaker Change: Whether it be advertising in AARP so.

Speaker Change: That I would say is reverting back to Tim.

Normal.

Christopher J. Swift: I would say, again, context, we ended 2023 with a loss cost trend in sort of the mid-teens. And we do expect, and we've said, lost cost trends are moderating, but in essence, on a full year basis, you know, we still think they're going to be low double digits. And that's what we're recording in our financial statement. And then all I would say is, you know, from a target margin perspective, We still see 25 and I would say mid-25 we could get back to our target margins and the five to six point improvement that we talked about this year. I think we're on track, particularly as we continue to earn in rate and, as you know, lost cost and continue to moderate in the second half of the year Yeah, I agree with everything that you said, Chris.

Speaker Change: I would say again context, we ended 2023.

Speaker Change: With the loss cost trends and sort of the mid teens.

Speaker Change: And we do expect and we've said loss cost trends are moderating.

Speaker Change: But in essence on a full year basis, we still thinks they're going to be low double digits and that's what's we're recording in our financial statements.

Speaker Change: And then all I would say is from a target margin perspective.

Speaker Change: We still see 25, and I would say mid 'twenty five.

Speaker Change: We could get back to our target margins.

Speaker Change: And the five to six point improvement that we talked about this year I think we're on track for it, particularly as we continue to earn in rate and as loss cost continue to moderate in the second half of the year, but what would you say.

Beth Costello: One thing that I would point out when you look at the sequential underlying combined ratio and auto, just keep in mind that the first quarter is typically our lowest loss ratio quarter, and we typically see a couple points every quarter as we go through the year. So when you put that into the mix, combined with what Chris said about the, you know, little, maybe less than one point of expense increase because of turning marketing on, I think that shows you that we are making progress relative to that trend. You just have to take seasonality into consideration. That makes sense.

Speaker Change: Yes, I agree with everything that you said, Chris one thing that I would point out when you look at the sequential underlying combined ratio in auto auto is just keep in mind that first quarter is tough is typically our lowest.

Speaker Change: Our loss ratio quarter than we typically see a couple of points every quarter as we go through the year. So when you put that into the mix combined with what Chris said about the.

Speaker Change: Little maybe less than one point of expense increase because of turning marketing on I think that shows you that we are making progress relative to that trend you just have to taken the seasonality enter into consideration.

Gregory Peters: Okay, for my follow-up question, I'm going to pivot to the benefit. And I know you called out... 10%, core margin result for the second quarter. Is that how we should think about what your objective is in that business over the course of the year? And then, related to that, you know, I was looking at some of the sales stats. And your supplement? It looks like, at least for the June quarter, sales were a little bit down on a year-over-year basis.

Speaker Change: That makes sense, Okay for my follow up question I'm going to pivot to the benefits business.

Speaker Change: And I know you've called out the 10%.

Speaker Change: Core margin result for the.

Speaker Change: For the second quarter is is that is that how we should think about what your objective is in that business over the course of the year and then related to that you know I was looking at some of the sales staff.

Speaker Change: In your supplement it looks like at least for the June quarter sales were a little bit down on a year over year basis. So.

Speaker Change: Some color on the benefits business would be helpful.

Speaker Change: Sure.

Christopher J. Swift: You know, I would just start by saying we're very, very pleased with a 10% core margin, sort of 8.1 through the six months range, which is, you know, above our six to seven guide on a long-term basis. But I've always reminded people, Brian, or excuse me, Greg, that that guide is based on making rate guarantees over the next, you know, three, four years in certain cases for our products. So we want to be, you know, thoughtful about what can happen, you know, over that period of time.

Speaker Change: I would just start by saying, we're very very pleased with the 10% core margin.

Brian Meredith: Eight one through the six months range, which is above our 6% to seven guide on a long term basis, but I've always reminded people Brian.

Greg: Gives me Greg that.

Greg: That guide us.

Greg: Just on making rate guarantees over the next three four years in certain cases for our products. So we want to be.

Brian Meredith: Thoughtful about what can happen over over that period of time.

Christopher J. Swift: You know, but that said, we did call out that mortality really improved this quarter, and that's, that's, it's great to see, particularly coming out of the, you know, the pandemic, but we still believe we're sort of in an endemic state where mortality will be a little higher over the next couple of years. But I would say we had an outsized benefit this time in terms of mortality.

Speaker Change: But that said we did call out your mortality really improved this quarter.

Greg: It's great to see particularly coming out of the pandemic, but we still believe we are.

Sort of in an endemic state that mortality.

Greg: A little higher over the over the next couple of years, but I would say we had an outsized.

Speaker Change: Benefit this time.

Speaker Change: And the mortality, but everything else is performing well.

Speaker Change: Disability.

Speaker Change: <unk> continues to be very steady and a consistent performer so.

Christopher J. Swift: But everything else is performing well, you know, disability continues to be very steady and a consistent performer. So I would expect, for the remainder of the year, for us to continue to outperform our long-term guidance and obviously end the year above the 6 to 7. But I'm not going to comment on any specifics or any numbers at that point in time. And we'll see then what holds for 25.

Speaker Change: I would expect for the remainder of the year.

Speaker Change: To continue to outperform our long term guidance and obviously end of the year above the six to seven but I am not going to comment on any specifics or any numbers at that point in time and we'll.

Speaker Change: We will see then what holds for 25.

Christopher J. Swift: On the top line in sales, I'd like Jonathan to comment particularly on market conditions, which I generally describe and when he and I talk on a monthly and quarterly basis. I mean, the market is competitive. And I think that there are some impacts on our sales and top line there that we could talk about. But Jonathan, what would you add?

Speaker Change: On the top line in sales I'd like Jonathan to comment, particularly on market conditions, which.

Jonathan: Generally described in one hand.

Jonathan: It's all kind of a monthly and quarterly basis I mean, the market is competitive.

Jonathan: And I think that there is some impacts on our sales.

Jonathan: Top line, there that we could talk about but Jonathan what would you add.

Jonathan Ross Bennett: premium and top line. I think those are the right comments, Chris. When we think about competition right now, I would say it is heightened. We have in our marketplace a number of capable competitors, some of them relatively new entrants, and any one of them can have different business objectives based on their strategy. I can't speculate on that.

Jonathan: Premium and top line.

Jonathan Ross Bennett: And there's always room for reasonable people to have differing views on future loss trends. But, you know, our customers are quite sophisticated, their needs are vast and differentiated. We compete on far more than price. We have absence management capabilities, digital tools, and deep customer focus are all things that distinguish The Hartford.

Jonathan: Those are the right comments Chris.

Jonathan: Let me thinking about competition right now I would say it is heightened.

Jonathan: We got in our marketplace, a number of capable competitors some of them relatively new entrants.

Speaker Change: And any one of them can have different business objectives based on their strategy I can't speculate on that and there is always room for reasonable people to have differing views on future loss trend.

Jonathan: But.

Jonathan: Our customers are quite sophisticated their needs.

Jonathan: Our vast and differentiated we compete on far more than price, we have absence management capabilities digital tools.

Jonathan: And deep customer focus are all things that distinguish the Hartford, so when we put it all together.

Jonathan Ross Bennett: So when we put it all together, we think we're navigating the market quite well. We're adapting to competitive situations, competing for the business that we believe we want to obtain. We're maintaining underwriting and pricing discipline, which is crucial. We'd always like to be growing faster, but we're focused on the fundamentals of the business. Got it. Thanks for the detail. Your next question comes from a line of Josh Shanker from Bank of America. Your line is open.

Jonathan: We think we're navigating the market quite well, we're adapting to competitive situations competing for the business.

Jonathan: We believe we want to obtain.

We're maintaining underwriting and pricing discipline, which is crucial.

Jonathan: We'd always like to be growing faster, but we're focused on the fundamentals of the business.

Jonathan: Yeah.

Speaker Change: Got it thanks for the detail.

Speaker Change: Okay.

Speaker Change: Your next question comes from the line of Josh Shanker from Bank of America. Your line is open.

Speaker Change: Okay.

Joshua David Shanker: Yes, thank you very much. Maybe this isn't so surprising here, maybe it is for some workers comp continues to be favorable. Does that mean that when you think about the going forward margins, you are making changes to your current view of margin workers comp, and the loss picks are coming down on current years? Or maybe you're just skeptical that this favorability can last forever?

Joshua David Shanker: Yes. Thank you very much so maybe not so surprising or maybe it is for some of our workers' comp continues to be favorable does that mean that when you think about the go forward margins you are making changes to your <unk>.

Speaker Change: Current view of margins in workers' comp and the loss picks are coming down and current years or maybe youre youre skeptical that this favorably can last forever.

Speaker Change: How do you thinking about that Actuarially and how does that play into the stability or actually improvement in your commercial loss picks overall for compared to a year ago.

Speaker Change: Yeah.

Christopher J. Swift: How do you think about that actuarially? And how does that play into the stability or actually improvement in your commercial loss picks overall compared to a year ago? Josh, Beth, and I are a tag team here.

Speaker Change: Josh and I will tag team here.

Speaker Change: I would generally say.

Speaker Change: Again, what we.

Joshua David Shanker: When we entered this year, so where we are today.

Joshua David Shanker: We're virtually right on where we thought.

Christopher J. Swift: I would generally say, again, when we entered this year, to where we are today, we're virtually right where we thought. And remember, we did make some commentary that we thought we would experience some modest margin contraction, you know, heading into 2024. And I would say, you know, that continues to be maybe less modest or more modest, depending on how you want to say it. But, you know, it's obviously a line that, you know, we know well and, you know, know the components.

Speaker Change: And remember we did make some commentary that we thought we would experience some modest.

Speaker Change: <unk> contraction.

Speaker Change: Into 2024.

Speaker Change: I would say that continues to BB, maybe even less models.

Speaker Change: More modest than depending on how you want to say it but.

Speaker Change: Yes.

Speaker Change: So obviously a line that we know well and yes or no.

Speaker Change: The components. So I think it's all working as expected I'm sure beats.

Christopher J. Swift: So I think it's all working as expected. I'm sure between Beth and I, we could tell you that our frequency and severity assumptions are holding. Our wage inflation assumptions were probably a little light, and we're outperforming, you know, there. So you put it all together, and it works.

Speaker Change: Between Beth and I, we can tell you that our frequency and severity assumptions are holding.

Speaker Change: Wage inflation assumptions or probably a little.

Speaker Change: Right and we're outperforming there so you put it all together and it works. It's working it's still a highly profitable line of business for us that contributes meaningfully.

Christopher J. Swift: It's working. It's still a highly profitable line of business for us that contributes meaningfully. And yeah, we're watching all the, you know, the drivers of lost cost trends very, very closely, as you would expect a company of our expertise and skills in this area. But Beth, what would you add?

Speaker Change: Yes.

Speaker Change: We are watching all the the drivers of loss cost trends very very closely as you would expect a company of our expertise and skills in this area, but that's what would you add.

Beth Costello: Yeah, again, Chris, I agree with how you characterized it. And what I would say, Josh, is that, you know, we take into consideration that this is a long-tailed line. So when we make our picks relative to the loss trend, we take that into consideration; we have to look at what's happening in the near term. But, you know, one of the areas we've talked about in the past is medical inflation. We still are holding that 5% trend in our reserves and our pricing; we've seen, you know, some continue to see some frequency benefit, and we build some of that in as well.

Chris: Yeah again, Chris I agree with you characterized it and what I would say Josh as you know we've taken into consideration. This is a long tailed line. So when we make our picks relative to loss trend, we take that into consideration as they look at what's happening in the near term, but you know one of the areas I know we've talked about in the <unk>.

Speaker Change: As medical inflation, we still are holding that 5% trend in our reserves and our pricing. We've seen some continue to see some frequency benefit and we built some of that in as well, but we our philosophy is we just need to be steady as we think about those those loss trends and then obviously we've been talking about what we are.

Beth Costello: But we, our philosophy is that we just need to be steady as we think about those, those loss trends. And then, obviously, we've been talking about what we're seeing on the rate side. So that's why we're feeling a little bit of that compression, but we again understand this is a long-tailed line. And we want to be very thoughtful with our loss picks. Just to synthesize the two things you said, so the pick is slightly higher, but that's pricing driven. Is that right?

Speaker Change: Being on the right side. So that's why we're feeling a little bit of that compression, but we.

Speaker Change: We again understand this is a long tailed line and we want to be very thoughtful with our loss picks.

Speaker Change: Just to synthesize the two things et cetera. So the ticket is slightly higher but that pricing driven is that right.

Christopher J. Swift: I would say it's loss-cost driven, impacted by the rate environment. So, when we said we're expecting... some margin compression, our loss trends, which are generally consistent, have the rate effect of pricing. So when pricing continues to be sort of less than positive and is not covering your cost of goods sold on an assumption basis, you're going to have some slight margin compression, and that's what we're feeling. Okay, so that's actually where I'm going.

Speaker Change #100: I would say its loss cost driven impacted by the rate environment. So when we said we were expecting.

Speaker Change #100: Some margin compression.

Speaker Change #100: Loss trends, which are generally consistent.

Speaker Change #101: Are impacting.

Speaker Change #101: Yes.

Speaker Change #101: The rate effect of <unk>.

Speaker Change #101: Pricing so when.

Speaker Change #101: When pricing is continues to be sort of less than positive.

Speaker Change #102: It's not covering your cost of goods sold on an assumption basis youre going to have some slight margin compression and that's what we're feeling.

Joshua David Shanker: So, obviously, the numbers are getting better. So, in general liability, and I guess attritional property, are the initial picks improving at the backdrop of a little bit more caution on the workers' comp picks? I'm just going to try and look at the moving pieces on where the trend is. Are things getting better right now?

Speaker Change #101: Okay.

Ron: Sure Ron.

Ron: Obviously, the numbers are getting better so in general liability and I guess attritional property or the missile picks improving.

Speaker Change #104: The backdrop of a little bit more caution on the workers.

Speaker Change #105: Workers comp picks I'm, just trying to look at the moving pieces on where the trend is are things getting better right now I ask this because arguably some of your competitors might have something before you reported the quarter that give people the impression that things are getting worse.

Christopher J. Swift: I ask this because, arguably, some of your competitors might have said things before you reported the quarter that gave people the impression that things were getting worse. And yeah, I'm trying to figure out if that's right or wrong. Well, you're smart; you'll figure it out. But again, from a pure comp line, I would say it's steady. And then the nine-mile longer tail line.

Speaker Change #105: Yes.

Speaker Change #106: If that's right or wrong.

Speaker Change #105: Okay.

Speaker Change #107: You're smart you will figure it out but.

Speaker Change #108: Again from a pure comp line I would say it's steady.

Speaker Change #108: And then the nurse Samson longer tail lines.

Christopher J. Swift: Now, again, those are those are very detailed conversations by by product line. But I would characterize them, at least. You know, views of where we're at and how we're executing. My view is that we have appropriate and compelling loss trends baked into our picks going back five years and our ability to execute on the rate side. Consistently. And in those, you know, strong double digits, particularly in the liability lines, over an extended period of time, puts us in a good place because I always comment every quarter that I think we're staying ahead of the trend, lost trend, with our pricing. I'll look at Beth and or more, Mo, if they want to add anything additional.

Speaker Change #108: Oh.

Speaker Change #108: Again those are those are very detailed conversations by by product line.

But I would characterize.

Speaker Change #108: At least our.

Speaker Change #108: Views of where we're at and how we're executing.

Speaker Change #108: View is I think we have appropriate.

Speaker Change #108: And compelling loss trends baked into our picks.

Speaker Change #108: Going back five years.

Speaker Change #108: And our ability to execute on our rate side.

Speaker Change #108: Consistently.

Speaker Change #108: And in those strong double digits, particularly in our liability lines over an extended period of time.

Speaker Change #108: Puts us in a good place because I always comment every quarter.

Speaker Change #108: We are staying ahead of trend loss trend with our pricing.

Speaker Change #109: So I'll look at Bath <unk> more known if they want to add anything additional.

Beth Costello: Yeah, I'll add a couple points. So again, on the liability lines, as you know Chris has said, we feel very good about the loss trend that we've been building into our picks. And pricing has been above that, as well as the fact that we've been taking underwriting actions for a number of years, which also has the effect of sort of stabilizing those loss picks. So all that feels very good.

Bath: Yeah, I'll, just add I'll add a couple of points. So again on the liability lines as Chris has said.

Speaker Change #111: We feel very good about the loss trend that we've been building into our picks and pricing has been above that as well as the fact that we've been taking underwriting actions for a number of years, which also.

Speaker Change #112: Has the has the effect of sort of stabilizing those those loss picks. So all of that feel very good and then the one area that we called out relative to performing slightly better than our expectations. This quarter was in the non cat property line, primarily in small commercial and that line quarter to quarter. We you know you can.

Beth Costello: And then the one area that we called out relative to performing slightly better than our expectations this quarter was in the non-capital property line, primarily small commercial. And that line, you know, quarter to quarter, we you can see, you know, some just normal volatility in that. But overall, I would say when you look at all of our loss picks and what we anticipated at the beginning of the year, things are in line with that. Thank you very much.

Speaker Change #111: Nancy.

Speaker Change #111: Some just normal volatility in that but overall I would say when you look at all of our loss picks and what we anticipated at the beginning of the year things are in line with that.

Speaker Change #113: Thank you very much I appreciate the detail on the face of all my questions.

Yaron Joseph Kinar: Your next question comes from the line of Yaron <unk> from Jefferies. Your line is open.

Joshua David Shanker: I appreciate the detail in the face of my question. Your next question comes from the line of Yaron Kinar from Jeffreys. Your line is open. Thank you. Good morning.

Yaron Joseph Kinar: I don't know if you'd be willing to share maybe one level deeper here on the forum, but I was curious to hear more about maybe each of the severity levels. I know that overall loss can be moved up a little bit but is still remaining below the long, Love to kill them. Yeah, I think we said it pretty clearly. Yaron, I don't know what to say, you know, other than. You know, you know, our 5% long-term medical inflation trend or below that.

Yaron: Thank you good morning, maybe.

Speaker Change #119: Maybe staying on workers comp for a second.

Yaron Joseph Kinar: I don't know if you'd be willing to share maybe one level deeper here on in a public forum, but I was curious to hear more about maybe each of the severity and frequency trends that youre seeing there and expectations. There I know that overall loss trends, maybe moved up a little bit but still remaining below the.

Speaker Change #116: Long term expectation.

Speaker Change #122: Would love to Peel, the onion, a little bit if we could.

Speaker Change #127: I think we said it pretty clearly.

Speaker Change #117: I don't.

Speaker Change #118: Now what to say other than.

Speaker Change #118: Our 5% long term medical inflation trend.

Speaker Change #120: We're below that.

Yaron Joseph Kinar: We've said in the past that, you know, maybe the medical trend is ticked up just a little bit from, you know, two-ish to maybe three-ish, which I think, you know, still applies. We never talked about frequency trends just because we don't. So, sorry to disappoint you, but I think we've given you enough. Okay. No, I figured it was.

Speaker Change #121: We've said in the past that maybe medical trend has ticked up just a little bit from.

Speaker Change #121: Two ish to maybe three ish, which I think.

Speaker Change #121: So still still applies we never talked about.

Speaker Change #121: Frequency trends, just because we don't.

Speaker Change #121: So.

Speaker Change #123: Sorry to disappoint, you, but I think we've given you enough.

Speaker Change #121: Okay.

Speaker Change #124: I figured it would be worth a try.

Christopher J. Swift: And then maybe moving to group benefits. And I know I asked about this last quarter. So I apologize for harping on this. I don't mean, but I do think that as underwriters I'll be... The art is balancing between margin and growth and considering. Transcribed by https://otter.ai, I would be curious to hear more about maybe why not give a little bit more on the pricing in order to achieve more growth. And I know that last quarter you talked about life pricing going up a bit because of the endemic, Uh, but are you overshooting there? No.

Speaker Change #124: And then maybe moving to <unk> group benefits and I know I asked about this last quarter. So I apologize if it sounds like I'm harping on this.

Speaker Change #126: Don't mean to.

Speaker Change #125: I do think that as underwriters, obviously, the art is balancing between margin and growth.

Speaker Change #125: And considering just the what seems to be like sustainable outperformance on the margin side.

Speaker Change #128: I would be curious to hear more about maybe why not give a little bit more on the pricing in order to achieve more growth and I know that last quarter you talked about.

Speaker Change #129: The life pricing up a bit because of BV endemic expectations.

Speaker Change #130: But are you overshooting there.

Speaker Change #129: No.

Speaker Change #129: No.

Christopher J. Swift: Well, you know, and again, looking at Jonathan too, again, I understand, and we do, you know, art and science, but you remember, particularly in this, you know, life area, generally, these contracts are four to five to six years with rate guarantees. So, you know, the margin for error there is really, really tight, and Jonathan, what would you add? Chris, only that... I'd like it to be more like a dial, and I could turn it two clicks, and I could trigger something to that effect.

Speaker Change #129: Yes.

Speaker Change #129: And again.

Speaker Change #129: We're looking at Jonathan too.

Speaker Change #129: Again.

Speaker Change #129: I understand and we do art and science, but.

Speaker Change #129: Remember, particularly.

Speaker Change #129: In this life area.

Speaker Change #131: These contracts are Florida, five to six year with with great guarantees so the margin.

Speaker Change #129: Or are there is really really tight and.

Speaker Change #129: We don't we don't want to have any error. So we don't want to have any lipsey. So.

Speaker Change #129: That discipline is there.

Speaker Change #129: Disabilities are generally three year rate guarantees so.

Speaker Change #132: A little different than sort of short tail P&C businesses, what should you get to reprice every six or 12 months. So that's where the additional caution and mechanisms come into play when youre, making those medium term.

Speaker Change #132: Commitments, but Jonathan what would you add.

Jonathan: Chris only that.

Jonathan: I'd like it to be more like a dial in I could turn it to clicks and <unk>.

Jonathan: Could trigger something to that effect, we are and it doesn't really work that way. So we get into this in particular when you're in some of the larger market.

Jonathan Ross Bennett: But, Yaron, it doesn't really work that way. So we get into this, in particular, when you're in some of the larger markets. You know, the cases do have data credibility. We get a lot of information. We pour through that. And, you know, we position ourselves to compete hard. So there is no shortage of work on our part to be digging into that environment and winning those cases. And we'll keep at it. If we find ourselves off by more than we feel comfortable with, then we feel like the discipline of walking away is the right answer.

Jonathan: The cases do have data credibility, we get a lot of information, we pour through that and we.

Jonathan: We position ourselves to compete hard so there is no shortage of work on our part to be digging into that environment and and to win those cases, and we will keep at it if we find ourselves off by more than we feel comfortable with and we feel like the discipline of of walking away is is the right answer and we will.

Jonathan Ross Bennett: And we'll continue to exercise that prudence. But make no mistake about it; we're interested in competing hard for growth. And we will continue to work at that, staying true to our outlook on trends and our expectations and requirements for profitability as well. Thank you.

Jonathan: To exercise that prudence.

Jonathan: Make no mistake about it we're interested in competing hard for the growth and we will continue to work at that staying true to our outlook on trend and our expectations and requirements for profitability as well.

Speaker Change #133: Thank you.

Speaker Change #133: No.

Peter Knutson: Your next question comes from a line Peter Knutson from Evercore ISI. Your line is open. Good morning, thanks for taking my question. Just following up on comments and prepared remarks about, you know, Hartford's continued mixed shift to property, and maybe, you know, versus, you know, a prior comment about some pressure from workers' comp on commercial margins. Could you talk a little bit about how that mixed shift might help those margins? And, if you know, that's potentially enough to offset any of that pressure?

Speaker Change #133: Your next question comes from the line of Peter Nielsen from Evercore ISI. Your line is open.

Peter Nielsen: Good morning, Thanks for taking my question.

Speaker Change #135: Just following up on comments in the prepared remarks about.

Speaker Change #135: The Hartford's continued mix shift to property.

Speaker Change #136: And maybe you know.

Speaker Change #135: Versus.

Speaker Change #137: Our prior comments about some pressure from workers' comp.

Speaker Change #138: <unk> margins could you talk a little bit about how that mix shift Mike.

Speaker Change #139: Help those margins.

Speaker Change #140: Thats potentially enough to offset any of that pressure.

Speaker Change #139: Okay.

Speaker Change #139: Yes, I would share with you Peter obviously.

Christopher J. Swift: Yeah, I would share with you, Peter, obviously, it depends on your view of loss picks. But generally, property is going to have a lower loss ratio, combined ratio, than comp, given its long tail duration. So that's just the obvious.

Speaker Change #141: Depends on your review of loss picks, but generally property is going to have a lower.

Speaker Change #141: Loss ratio combined ratio than comp given its long tail duration. So that's just the obvious if you mix more of that in the overall.

Christopher J. Swift: If you mix more of that in, the overall, your portfolio of underlying combined ratio, particularly will go down. I think we've talked about it, you know, in the past that we are willing to grow in property principally because we've made so many investments that allow us to compete thoughtfully and earn, you know, good returns with good risk management tools with a diversified portfolio that doesn't, you know, have an outside cat in it. So again, it's just it's just not because we want to grow. I mean, we have to have the capabilities to do so.

Portfolio of underlying combined ratio, particularly Wil will go down.

Speaker Change #142: I think we've talked about it in the past that we are.

Speaker Change #142: Willing to grow and property principally because we've made so many investments that allow us to compete thoughtfully and earn good returns with good risk management tools with a diversified portfolio that doesn't have outsized cat to us. So again, it's just it's just.

Speaker Change #142: Not.

Christopher J. Swift: And we have worked really, really hard and invested a lot of time and energy over the last five years to put ourselves in a position to compete today to earn good risk-adjusted returns. So I think that's an important component. I think the other component I'll just give you is that I think we're on track to come close to $3 billion of written premium this year, which would be up from $2 billion a couple of years ago and growing nicely in sort of that 20 percent range, as I said in my prepared remarks.

Speaker Change #142: Just because we want to grow I mean, we have to have the capabilities to and we have worked really really hard and invested a lot of time and energy over the last five years to put ourselves in a position to compete today to earn good.

Risk adjusted returns so I think that's an important component.

The other component I will just give you is I think we're on track to come close to $3 billion of <unk>.

Speaker Change #142: Written premium this year, which would be up from $2 billion.

Speaker Change #142: A couple of years back.

Speaker Change #142: Growing nicely and sort of that 20% range I think I said in my prepared remarks.

Christopher J. Swift: So you put it all together, and it's... We're competing well in an environment where there's a lot of disruption and a lot of, you know, complexity, but we're able to navigate it because of the investments and skills and talented people we have in the building today. Okay, great.

Speaker Change #142: So you put it all together and it's.

Speaker Change #142: We're competing well in an environment, where there's a lot of disruption and a lot of complexity, but we're able to navigate it because of the investments in skills and <unk>.

Speaker Change #142: Talented people, we have in the building today.

Speaker Change #142: Okay.

Peter Knutson: Thank you. And just following up on a prior question, I know we talked about, you know, national account pricing. So I won't get into that.

Okay, great. Thank you and.

Speaker Change #143: Just following up on that on a prior question.

Speaker Change #144: I know we've talked about national account.

Speaker Change #144: Pricing, so I won't get into that but national accounts to see large growth. This quarter is an acceleration from the first quarter.

Peter Knutson: But, you know, national accounts did see large growth this quarter, decent acceleration from the first quarter. So I'm wondering if maybe you guys could just talk a little bit about the opportunity you're seeing there and what was driving it. Yeah, Peter, it's Mo.

Speaker Change #145: So I'm wondering if maybe you guys could just talk a little bit about the opportunity youre seeing.

Speaker Change #145: There.

Speaker Change #146: And what was driving that.

Peter Nielsen: Yeah Peter.

Mo: The national accounts business, which is really our large casualty business with deductibles. [inaudible] I think the quarter-over-quarter compare for the sequential quarter is a hard compare because the renewal dates really differ. That business has chunky renewal dates, so I would think the year-over-year quarter comparison is a better one. But overall, we feel incredibly good about the National Accountants Book. That is a disciplined underwriting process. The teams are doing well. We want to grow it. We did win some new business in the second quarter, but I think the best comparison is the second quarter of last year.

Peter Nielsen: The national accounts business, which is really our large casualty business with deductibles.

Peter Nielsen:

Speaker Change #147: I think the quarter over quarter compares to the sequential quarter as a hard compare because the renewal dates really differ that that business has chunky renewal date. So I would think that the year over year quarter compares a better one but overall, we feel incredibly good about the national accounts book that is a <unk>.

Speaker Change #147: <unk> underwriting process. The teams are doing well, we want to grow it we did win some new business in the second quarter, but I think the best compares to the second quarter of last year.

Speaker Change #147: Okay.

Speaker Change #147: Okay.

Speaker Change #147: And we have now reached the end of our question and answer session I will now turn the call over to Susan Spivak for closing remarks.

Susan Spivak Bernstein: And we have now reached the end of our question and answer session. I will now turn the call over to Susan Spivak for closing remarks. Thank you all for joining us today. And, as always, please reach out with any additional questions. Have a great day. This concludes today's conference call. Thank you for your participation. You may now disconnect.

Susan Spivak Bernstein: Thank you all for joining us today and as always please reach out with any additional questions have a great day.

Speaker Change #149: This concludes today's conference call. Thank you for your participation you may now disconnect.

Susan Spivak Bernstein: Okay.

Susan Spivak Bernstein: Yeah.