Q3 2024 The Hartford Financial Services Group Inc Earnings Call
Good morning, and welcome to the Hartford Financial's third quarter 'twenty 'twenty four results conference call and webcast.
Speaker Change: All participants are in a listen only mode. After the speaker's remarks, we will conduct a question answer session.
Speaker Change: To ask a question at this time, you will need to press star followed by the number one on your telephone keypad.
Speaker Change: As a reminder, this conference call is being recorded.
Speaker Change: Now like to turn the call over to Susan Spivak Senior Vice President of Investor Relations. Thank you. Please go ahead.
Susan Spivak: Good morning, and thank you for joining us today for our call and webcast on third 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, followed by Beth Costello.
Susan Spivak: 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.
Now just a few comments before Chris begins todays 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.
Susan Spivak: Statements provided on this call investors should also consider the risks and uncertainties that could cause actual results to differ from these statements. A detailed description of those risks and uncertainties can be found in our SEC filings. Our commentary today includes non-GAAP financial measures.
Susan Spivak: <unk> and reconciliations of these measures to the comparable GAAP measures are also included in our SEC filings as well as in the news release and financial supplement. Finally, please note that no portion of this conference call may be reproduced or rebroadcast in any form without the hartford's prior written consent.
Susan Spivak: 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 Swift: Good morning, and thank you for joining us today.
Chris Swift: Before we discuss our results I want to extend our heartfelt thoughts and prayers, everyone affected by Hurricanes Milton and Helene.
Chris Swift: Dorms had been wide ranging and devastating.
Chris Swift: Like these I'm, especially proud of the Hartford claims handlers adjusters and leaders.
Chris Swift: The team is working tirelessly to support every customer impacted by these storms.
Chris Swift: Turning to our results the Hartford's third quarter performance is a powerful example of sustained financial excellence.
Chris Swift: Even in the face of industry wide elevated catastrophe losses and liability severity trends.
Chris Swift: Our excellent performance reflects the effectiveness of our strategy and ongoing investments to differentiate ourselves in the marketplace.
Chris Swift: We remain focused on disciplined underwriting pricing execution, expanding product and distribution breadth.
Chris Swift: Developing exceptional talent and delivering a superior customer experience.
Chris Swift: Highlights from the third quarter include topline growth in commercial lines of 9% with double digit new business growth strong renewal written pricing increases and a very strong underlying combined ratio of $88 six.
Chris Swift: Personal lines topline growth of 12%.
Chris Swift: With over five points of underlying margin improvement.
Chris Swift: An impressive group benefits core earnings margin of eight 7%.
Chris Swift: And continued solid performance in our investment portfolio.
Chris Swift: All of these items contributed to an outstanding trailing 12 month core earnings Roe of.
Chris Swift: 17, 4%.
Chris Swift: In addition, yesterday, we were pleased to announce an 11% increase in our common quarterly dividend payable on January three 2025.
Chris Swift: This is a continuation of our track record of annual dividend increases.
Chris Swift: And another proof point of earnings power and strong capital generation.
Chris Swift: Now, let me share a few details from the quarter commercial.
Chris Swift: Commercial lines continues to produce excellent results.
Chris Swift: With strong topline growth and an underlying combined ratio below 90% for the 14th straight quarter.
Chris Swift: <unk>, our industry, leading underwriting tools.
Pricing expertise in data science advancements new.
Chris Swift: New business growth in small commercial and middle market was once again well into double digits.
Chris Swift: Retention was steady and the environment remains conducive for growth.
Chris Swift: As I've highlighted in the past the breadth of our product offerings and extensive distribution network and strategic investments in technology allow us to provide comprehensive and tailored solutions, which gives us a competitive advantage with small and medium sized enterprises.
Chris Swift: Our emphasis on ease simplicity and speed ensures that our customers and distribution partners experience seamless interactions and quick response.
Chris Swift: These strengths enable us to offer more precise and competitive pricing enhancing our market position.
Chris Swift: Additionally, our product capabilities help us to support customers as their businesses grow.
Chris Swift: We expect to continue to gain market share, while maintaining highly profitable margins.
Chris Swift: A prime example of Hartford's SME market leadership is our small commercial business.
Which once again had an outstanding quarter with strong topline growth and margins.
Chris Swift: New business premium was up 26% in the quarter in part driven by a 31% increase in quotes and a doubling of E&S binding premium.
Chris Swift: Business, where we continue to see tremendous opportunity.
Chris Swift: We take pride in our robust business system and associated insights, which drives our rate strategy and segmentation, giving us significant edge, that's a challenge for others to match.
Chris Swift: With another quarter of exceptional results and relentless advancement of our capabilities I remain incredibly bullish on the outlook for our small commercial business.
Chris Swift: Moving to the middle and large commercial third quarter performance was strong, including 8% topline growth paired with an underlying margin that is consistently hovered around 90 or better for the past eight quarters.
Chris Swift: We continue to take advantage of elevated submission flow driven in part by investments made to expand our product capabilities and the efficiency.
Chris Swift: The broker and agent experience.
Chris Swift: Written premium growth reflects strong renewal rate execution, along with a 28% increase in middle market, new business with growth across nearly all products led by property.
Chris Swift: We have built a track record of delivering meaningful growth, while consistently maintaining underlying margins.
Chris Swift: A result, we expect to sustain going forward.
Chris Swift: In global specialty we achieved excellent results with underlying margins in the mid eighties.
Chris Swift: And a record quarterly earned premium approaching $850 million.
Chris Swift: Strong topline growth reflects our competitive position diverse product offerings and solid renewal pricing.
Chris Swift: Gross written premium growth of 9% was driven by a 17% increase in our wholesale business <unk>.
Including 10% in property as well as significant contributions from auto and excess casualty.
Chris Swift: And global reinsurance.
Chris Swift: Across commercial lines.
Chris Swift: Our continued emphasis on property expansion has resulted in premium growth of approximately 20% this quarter.
Chris Swift: Putting us on track to achieve our full year target of $3 billion.
We remain confident in and continue to capitalize on market conditions that support earning strong risk adjusted returns through a disciplined strategy, while maintaining a stable and consistent approach to catastrophe risk management.
Chris Swift: As for pricing in commercial lines renewal written pricing excluding workers' compensation.
Chris Swift: Of nine 5% was relatively consistent with the second quarter.
Chris Swift: Low teens pricing in auto and high single digits and general liability are responding to societal trends.
Chris Swift: Umbrella and excess pricing was in the mid teens.
Overall commercial property pricing remained strong in the low double digits with mid to upper teens property pricing within our small commercial package product.
Chris Swift: Commercial lines overall loss trends are stable with some moderation in both property and financial lines severity.
Offset by higher severity and liability.
Chris Swift: All in ex comp renewal written pricing in commercial lines remained above loss cost trends.
Chris Swift: Workers' compensation pricing was slightly positive in the quarter.
Chris Swift: Turning to personal lines, our third quarter financial performance demonstrates continued margin improvement we.
Chris Swift: We saw a seven point improvement in the auto underlying combined ratio and are on track to achieve target margins in mid 2025.
Chris Swift: Auto renewal written price increases remained very strong at.
Chris Swift: At approximately 20%.
Chris Swift: Pricing declines from peak levels remained consistent with our view of moderating loss trends for the remainder of the year.
In homeowners renewal written pricing of 15% during the quarter comprised of net rate and insured value increases outpaced underlying loss cost trends.
Chris Swift: Turning to group benefits core earnings margin was an impressive eight 7% for the quarter.
Chris Swift: Continued strong group life results and long term disability execution are the primary drivers.
Chris Swift: Fully insured ongoing premium growth of 2% consistent with the first half of the year reflects strong book persistency still above 90% and sales of $105 million in the quarter.
Chris Swift: Moving to investments the portfolio continues to support the Hartford financial and strategic goals performing well across a range of asset classes and market conditions.
Speaker Change: Beth will provide more details.
Speaker Change: Before I turn the call over to Beth.
Speaker Change: To share some insights from this year's council of insurance agents and brokers annual conference last.
Speaker Change: Last year, we provided an update on CIB, where the strength of our franchise was a consistent theme.
Speaker Change: This year, our partners amplified that strength, highlighting our innovative digital tools.
Speaker Change: Comprehensive product offerings, and our robust innovation agenda.
Speaker Change: They praised our consistent strategy and execution over the years.
Speaker Change: Additionally, they expressed a strong desire to expand their business with us.
Speaker Change: Viewing our team as best in class and noting that our relationships have never been stronger.
Speaker Change: In summary, the Hartford delivered an excellent quarter, a testament to our execution strategy talent and the impact of ongoing investments in our business.
Speaker Change: As I've said before.
We continued to build on our market differentiating capabilities and broad product offerings, all while becoming more efficient.
Speaker Change: Our disciplined underwriting and pricing execution.
Speaker Change: <unk> talent and innovative customer centric technology are expected to sustain superior results.
Speaker Change: And we've continued to proactively manage our excess capital.
Speaker Change: All of these factors contributed 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.
Beth Costello: Thank you Chris core earnings for the quarter were $752 million or $2 53 per diluted share with a trailing 12 month core earnings ROE of 17, 4%.
Beth Costello: Commercial lines had an excellent quarter with core earnings of $534 million written premium growth of 9% and an underlying combined ratio of $88 six.
Beth Costello: Through the first nine months the underlying combined ratio of $88. One is in line with the prior year and our expectations.
Beth Costello: Small commercial continues to deliver outstanding results with written premium growth of 10% and an underlying combined ratio of $89 three slightly better than the prior year. These.
Beth Costello: These results were driven by favorable non cat property losses, somewhat offset by a higher loss ratio and general liability both within our package product.
Beth Costello: Middle and large commercial delivered strong results as written premiums rose, 8% and new business growth accelerated.
Beth Costello: The third quarter underlying combined ratio of 92 compares to $88 one in the prior year, reflecting a level of non cat property losses, more consistent with our expectations compared to favorable experience in the prior year and an increase in the general liability and auto loss ratio.
Beth Costello: Yes.
Partially offset by a shift in business mix towards property lines and the positive impact of premium leverage on the expense ratio.
Beth Costello: Global specialty results include written premium growth of 9% and an excellent underlying combined ratio of $85 three.
Beth Costello: The underlying combined ratio increased one point over the prior year quarter, primarily due to a higher loss ratio in global reinsurance driven by losses in Latin America, where we have taken underwriting actions to reduce our exposure to these risk profiles.
Beth Costello: And a higher expense ratio compared to prior year due to a higher commission ratio driven by changes in mix of business.
Beth Costello: Written premium and personal lines increased 12% over the prior year driven by rate execution.
Beth Costello: In auto we achieved written pricing increases of 28% and earned pricing increases of 22, 7% in.
Beth Costello: In homeowners written pricing increases were 15, 2% and 14, 8% on an earned basis.
Beth Costello: In personal lines, the underlying combined ratio of $93 seven improved five three points from the prior year.
Beth Costello: The homeowners underlying combined ratio of 75, four improved two seven points, primarily due to the impact of double digit earned pricing outpacing loss cost, partially offset by a higher expense ratio.
Beth Costello: We are very pleased with the progress in our auto results.
Beth Costello: For the quarter the auto underlying combined ratio of 101.5 improved seven points from $108 five in third quarter 2023.
Beth Costello: Through September 30, the underlying combined ratio of 103, six is four nine points lower than the prior year period, including five three points of loss ratio improvement.
Beth Costello: The personal lines expense ratio of $25 six increased one four points, primarily driven by higher planned direct marketing costs and higher incentive compensation and benefit costs, partially offset by the impact of higher earned premium.
Beth Costello: P&C current accident year cats were $247 million before tax or six combined ratio points, which compares to 184 million or four nine points on the combined ratio in the prior year period.
Beth Costello: We continue to actively manage our cat exposure through aggregation management and underwriting discipline.
Beth Costello: Additionally, we have a robust and comprehensive reinsurance program on both a per occurrence and aggregate basis.
Beth Costello: As a reminder, we have a 200 million aggregate cover which attaches when subject losses and expenses exceed $750 million.
Beth Costello: Through September 30th catastrophe losses subject to the treaty, where $660 million, leaving $90 million before we reach the attachment point.
The aggregate cover does not include losses from the global reinsurance business, which purchases its own retro sessional coverage.
Beth Costello: Our estimated losses for Hurricane Milan are in the range of $65 million to $110 million pre tax which includes $25 million to $40 million for global re.
Beth Costello: Therefore at the high end of the range, we would be just under the aggregate attachment point.
Beth Costello: Total net favorable prior accident year development within core earnings was $24 million, primarily due to reserve reductions in workers' compensation and personal auto physical damage, partially offset by reserve increases in general liability and commercial auto liability.
The increase of general liability reserve of 32 million reflects a higher frequency of large losses, including losses and more recent accident years.
Beth Costello: We continue to monitor liability trends closely making minor adjustments to our underwriting and pricing strategies, including adjustments that are incorporated in our current year loss picks.
Yeah.
Beth Costello: We recorded $26 million before tax of deferred gain amortization related to the navigators ADC, which positively impacted net income with no impact on core earnings.
Beth Costello: As a reminder, we conduct our annual asbestos and environmental study in the fourth quarter we.
Beth Costello: We have $62 million of coverage remaining on the A&D ADC, so any development over that amount will impact core earnings.
Beth Costello: Turning to group benefits, we had another strong quarter with a core earnings margin of eight 7%.
Beth Costello: Results demonstrate ongoing strength in group life and long term disability, along with growth in fully insured premiums.
Beth Costello: The group life loss ratio of 77.5 improved by two seven points compared to prior year due to lower mortality.
Beth Costello: The group disability loss ratio of 67, nine increased 60 basis points due to a higher loss ratio and paid family and medical leave products largely offset by a favorable change in the long term disability recovery rate assumptions.
Beth Costello: Fully insured ongoing premium growth of 2% was consistent with the first half of the year and reflects positive exposure growth and strong book persistency at over 90%.
Beth Costello: The group benefits expense ratio of $25 three increased one three points from the prior year third quarter, primarily due to higher staffing costs, including higher incentive compensation and benefit costs and increased investments in technology.
Beth Costello: Turning to investments our diversified and growing portfolio continues to produce solid results.
Beth Costello: The overall credit quality of the portfolio remained strong with an average credit rating of a plus and no net credit losses in the quarter.
Beth Costello: For the quarter net investment income was $659 million.
Beth Costello: The total annualized portfolio yield excluding limited partnerships was four 5% before tax 10 basis points above second quarter.
Beth Costello: We continue to benefit from higher rates security selection and accretive trading activity as evidenced by the third quarter reinvestment yield exceeding the sales and maturity yield by 110 basis points.
Beth Costello: As anticipated our annualized LP returns of 3% were higher than the first half of the year as private equity and real estate performance continues to improve.
Beth Costello: We remain confident that over the long term Lps will generate returns consistent with historical levels.
Speaker Change: Turning to capital management as Chris mentioned, we increased our common quarterly dividend by 11%.
Speaker Change: During the quarter, we repurchased three 7 million shares under our share repurchase program for $400 million.
Speaker Change: And we expect to remain at that level of repurchases in the fourth quarter.
Speaker Change: In summary, we are very pleased with our excellent financial performance for the third quarter and first nine months of the year.
We believe we are well positioned to continue to deliver industry, leading returns, thereby enhancing value for all our stakeholders I will now turn the call back to Susan.
Susan Spivak: Thank you we have about 30 minutes for questions can you. Please repeat the instructions for asking a question.
As a reminder to ask a question. Please press star followed by the number one on your telephone keypad and the interest of time, we ask that you. Please limit yourself to one question and one follow up thank you.
Speaker Change: Our first question comes from Brian Meredith from UBS. Please go ahead. Your line is open.
Speaker Change: Yes. Thanks.
Brian Meredith: Two questions here the first one.
General liability the increase in loss picks this quarter was there any kind of current year development in that increase.
Brian Meredith: The underlying loss ratio in <unk>.
Brian Meredith: Commercial this quarter.
Speaker Change: Brian Thanks for the question.
Speaker Change: Beth answer that but I think I just would want you to add a little context.
Speaker Change: What we saw this quarter that required that.
Speaker Change: $32 million adjustment in it.
Beth Costello: I would say, it's just two simple things are data is just simply showing more attorney representation.
Claims of all sizes so.
Beth Costello: The percentage of claims coming in with attorney representation is high and is getting higher.
Beth Costello: And we talked about it in the past you know the average settlement rate of claims or the dollars that we're paying for average claims including sort of simple slip and falls is increasing rapidly. So you put those two components together and Thats ultimately why we adjusted our prior year pick and Beth I think you could.
Beth Costello: A little bit more detail.
Beth Costello: Yes, Thank you Chris.
So Brian on your question on the increase that we recorded in the current year for liability in the quarter.
Beth Costello: Yes that would include some true up for the first and second quarter.
Beth Costello: I would quantify that as you think about in the quarter, we probably booked a little bit over a point.
Beth Costello: From the prior year and two thirds of that would relate to the first six months.
Brian Meredith: Makes sense and then on that Chris just kind of.
Speaker Change: How are you thinking about given given what you are talking about with with GL development.
Speaker Change: Obviously going up a little bit does it make you pause at all about some of the new business that you're putting on and the growth you are putting on in the middle market area.
Speaker Change: To make sure that your.
Speaker Change: Adequately capturing what kind of real trend is looking like in your pricing.
Speaker Change: Terms and conditions in that business.
Speaker Change: Yes, I would just say simply no we're very confident in the new business, we're putting on I'm looking at Mohit can give you a little bit of a history lesson that we've talked about in the really the improvement that we've made in our data science.
Speaker Change: Analytics, our pricing tools, our segmentation and all of that improvement we've made in the book.
I still feel good about where we're at most I don't know if you would add anything else I know, Brian a couple of additions I mean, I think we've talked to you a lot about the work that we've done, especially in the middle and large commercial and global specialty to reduce.
And some of the areas that we were worried about so we've been working on limits management, we've been working on jurisdictions, you've been working on kind of the underlying fleet sizes, and certainly a lot of rate and I think thats paying off when you look at our frequency.
Speaker Change: Claims, it's down and it has been when you look at the 'twenty to 'twenty three versus the prior year's.
Speaker Change: Frequency of claims is down so its paying off what we're seeing is to Chris's point.
Where the lawyers are involved.
Less and so we watch this environment in real time.
Speaker Change: And.
Speaker Change: We've got a higher pricing standard for all of the commercial lines underwriters.
Speaker Change: Certain jurisdictions in certain classes. So we feel really pretty good about our ability to execute to this we're watching it closely and maybe a little bit of context to finish.
Speaker Change: With the growth that we've put on over the past three years, our nine months underlying combined ratio is right on where it was last year.
Speaker Change: And we think that's evidence of us executing pretty well on our pricing strategies.
Speaker Change: Makes sense. Thank you.
Okay.
Speaker Change: Our next our next question comes from Gregory Peters from Raymond James. Please go ahead. Your line is open.
Gregory Peters: Alright, well good morning, everyone.
Gregory Peters: The first question I'll focus on the personal lines results.
Speaker Change: Yeah, let's see improvement gradually.
Gregory Peters: Emerging.
Gregory Peters: Just curious.
Speaker Change: How you think about your longer term combined ratio target.
Gregory Peters: The personal lines business I know some of your competitors have.
Gregory Peters: Very specific numbers in terms of like 96 or 95 or.
Gregory Peters: Et cetera, So maybe you could provide some perspective on where you think thats going to go to.
Gregory Peters: Okay.
Chris Swift: Correct, it's Chris I would.
Chris Swift: I'm going to refrain from giving you exact targets.
Chris Swift: Other than what we've always talked about getting back to overall profitability back to our targets and that's roughly.
Chris Swift: <unk> 15 to <unk>.
Chris Swift: 17% Roe.
Targeting that does have a <unk>.
Chris Swift: Corresponding.
Chris Swift: And bind ratio, including cat load even for auto so.
Speaker Change: I'm, just kind of hesitated a little bit about just jumping out a number just because.
Speaker Change: That's the first priority is that we want to continue to improve.
Speaker Change: Our profitability, we're about 85% of the states in the country right adequate now so we're feeling good about.
Speaker Change: Getting the rate that we need into the book and executing to that but.
I'm going to I'm going to pause on giving you any targets, especially for next year.
Okay, that's fair enough I guess.
Speaker Change: I will just come at it from a slightly different angle just on.
If I look at the homeowners business.
Speaker Change: The underlying improvement in the combined ratio there was some but if I look at the right slide that you put up in your supplement.
Speaker Change: <unk>.
Speaker Change: Mid teens types of rate increases that you're getting in homeowners consistently quarter after quarter, I guess I'm surprised that the underlying combined ratio has improved more.
Speaker Change: So maybe you could provide some perspective on that.
Speaker Change: Yes.
Speaker Change: Thanks, John I think we feel really good about.
Speaker Change: Our overall trends are in homeowners, both from an attritional side, even a cat side.
We're pretty close to hitting our target margins there in total Greg so.
Speaker Change: I don't know how to respond to your sort of disappointment, but.
Gregory Peters: Loss cost trends are increasing thats why.
Speaker Change: Putting the right in there.
Speaker Change: Our Attritional is behaving and obviously cat was elevated.
Speaker Change: During the quarter and it's a little elevated for the full year and homeowners, but overall, we still like what we're doing with that book of business and particularly with our new product and chassis. We call prevail that I know you are familiar with.
Speaker Change: I think it's I think it's performing very nicely from a new business.
Speaker Change: I'm looking at Melinda Thompson, and I will just ask Melinda would you add any color I think you've covered it well Chris the only thing I would add is that as you look at the rate and increases to value that we put into market. We feel that they're comfortably ahead of loss trend.
Speaker Change: Okay Fair enough I wouldn't characterize my questions is disappointment, just trying to understand the numbers, but thanks for your answers.
Speaker Change: Yeah.
Speaker Change: Our next question comes from Andrew <unk> from TD Cowen. Please go ahead. Your line is open.
Speaker Change: Good morning.
Speaker Change: Looking at the commercial net written premium pretty pretty solid growth, 10% small.
Speaker Change: Mid March 9% specialty and then when I looked at the.
Speaker Change: The rate increases that you described.
Speaker Change: In workers' comp, but back of the envelope I get about 3%.
Speaker Change: Policy in force growth could you could you talk about the <unk>.
Speaker Change: <unk> to gain share and maybe each of those three.
<unk> is a commercial and the outlook for growth there.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: We tag team and I'll start and Mo you could.
Speaker Change: Ed your color I would say.
Speaker Change: Hey, Colin.
Across all the commercial Andrew.
Speaker Change: Andrew We're just really pleased you could look at.
Speaker Change: Small and see sort of the quotes up.
So we are cross selling more of our global specialty products into there were growing E&S very rapidly.
Speaker Change: Strong margins likewise with large and small commercial submission flows up.
Speaker Change: Hit rates are relatively stable.
Speaker Change: But again all the investments we've made in <unk>.
Speaker Change: Our pricing and our data science everything we just talked about I think is paying off and then global specialty, particularly the wholesale division there.
Speaker Change: As our main E&S chassis.
Speaker Change: It's performing at a high level, it's growing rapidly with.
Speaker Change: Some of our most highly partnered E&S brokers, so I put it all together Moe and.
Speaker Change: We feel good.
Speaker Change: You said.
We're still in an environment.
Speaker Change: Andrew I think is very conducive to growth whether it be in the standard lines.
Speaker Change: Yes.
Speaker Change: Lines.
Speaker Change: And I believe we are taking market share with our differentiated capabilities.
Speaker Change: What would you add maybe to reinforce a couple of points I mean, I think Andrew the slow in all three businesses as we've talked about in prior quarters remains strong.
Speaker Change: As Chris was talking about the pricing environment as we've been conducive supportive I would say the pricing environment is largely consistent with what we talked about last quarter and then that's a good environment.
Speaker Change: You won't see us growing workers' comp you asked specifically about workers' comp you won't hear us growing that.
Speaker Change: Much different patients basically are flat in the quarter from a written premium perspective.
And maybe just to build on Christmas CIA viewpoint and coming out of that meeting it gave us great confidence that those flows to us will continue and we feel really good.
Speaker Change: With those opportunity flows the way our underwriters and sales teams are executing that will take advantage of it.
Speaker Change: Yes.
Speaker Change: Excellent.
Speaker Change: Shifting over to group benefits.
Speaker Change: You again came in at.
Speaker Change: Our compelling margin of eight 7% well above your six.
Speaker Change: 6% to 7% guidance can you talk about kind of.
Speaker Change: The trajectory of going back to that level.
The competitive landscape that you're seeing in group benefits.
Speaker Change: Yes.
Speaker Change: I'll start Andrew and then I'll ask Mike fish to add his.
Speaker Change: Market.
Color, Yeah, I would say I'm pleased with our performance in total.
Speaker Change: Whether it be on a margin side and underwriting side.
Speaker Change: Sales are down a little bit 15% from prior year, but we sort of signaled that we felt we were operating in a highly competitive environment and.
Speaker Change: And that we might have a different point of view on mortality trends, where we're still pricing foreign endemic state, which you can see in our numbers our life sales are down a little bit.
Speaker Change: Im really pleased with a lot of the new products that we're bringing to market, particularly in the absence area and all are paid family and paid medical leave.
Speaker Change: Alex that are just having a little bit of a compare challenge between years, where we had a lot more new business opportunities and paid family medical leave.
Speaker Change: That are not run ratable going forward, but.
Speaker Change: Mike Fish, what would you add as far as your market color.
Mike Fish: Chris I would add just a couple of comments there.
Mike Fish: It's a competitive market and but I would also say on new business activity is strong. So our sales team is active in the market with our brokers you noted in the life side pricing for that endemic states. So that is putting a bit of pressure on the new life sales front.
Mike Fish: But I would end by saying our persistency is strong we're still well north of 90%, which is on the high end of the historical range.
Mike Fish: And really we're looking to avoid situations where price is the only driver and we're going to compete fiercely when we have an opportunity to sell our product and service capabilities.
Mike Fish: Yeah.
Speaker Change: Thanks, a lot.
Speaker Change: Yeah.
Our next question comes from Ryan Tunis from Autonomous Research. Please go ahead. Your line is open.
Speaker Change: Hey, thanks.
Ryan Tunis: I guess, just a follow up on that last one obviously first quarter pretty big renewal on the on the group side.
Speaker Change: Things are more competitive what does that mean.
Ryan Tunis: In terms of what we should expect.
Speaker Change: Pricing this upcoming renewal.
Yeah.
Speaker Change: Okay.
Speaker Change: Hi, Brian good to hear your voice.
Brian Meredith: I would say the 120 fives.
Brian Meredith: Particularly from a national account perspective is largely done.
Brian Meredith: We'll give you a little bit more color.
Brian Meredith: On our next quarterly results, but I feel good about them.
Brian Meredith: Where we're at and how we competed.
Brian Meredith: How we're differentiating ourselves with some of our service capabilities.
Brian Meredith: So that's all I'm going to say right now until we officially close out the year.
Brian Meredith: But it is a competitive market Ive said, its Mike Fisher said, it and we're trying to pick our spots, where we think we could.
Brian Meredith: Good margins over a longer period of time with appropriate rate guarantees.
Brian Meredith: And inherently there is some conservatism in our in our pricing when you think of three to four to five year rate guarantee so.
Brian Meredith: But again generally very very pleased.
Speaker Change: Got it and then I guess just a follow up.
Brian Meredith: Thinking about group disability.
Speaker Change: Obviously been a volatile macro environment.
Speaker Change: To what extent are you have you seen any new trends emerge this year from a claims perspective on the disability side I mean have you or is it just kind of been more of the same as what you saw in 'twenty three 'twenty two.
Speaker Change: Yes, I would say more of the St Louis and anything to call out.
Speaker Change: I mentioned, our absence in paid family leave in medical.
Speaker Change: Plan. So we're in six states.
Speaker Change: We'd like that product line, it's very complementary to what we're doing with disability.
Speaker Change: Actually a product line that consumers are more aware of and are using it and employers value. It. So.
Speaker Change: That's probably the only new new thing I would say over the last.
Speaker Change: Two or three years worth calling out at this point in time Brian.
Speaker Change: Sure.
Brian Meredith: Thanks, Chris.
Speaker Change: Our next our next question comes from Bob Huang from Morgan Stanley. Please go ahead. Your line is open.
Bob Huang: Hi, good morning, maybe.
Bob Huang: Maybe one on workers' comp.
Bob Huang: Our reserving it looks like workers comp release has been the highest over the last several quarters.
Bob Huang: As we look at the post Covid cohorts start to age a little bit can you give us maybe a little bit of color on how that book is developing should we expect similar level of reserve releases for reserve development, rather going forward from that part of the book.
Speaker Change: Yes, I'll, let Beth and her color, but I would say less or more and more we're making less of a distinction between.
Covid years post Covid pre COVID-19.
Running.
Speaker Change: I'll call it on an aggregate basis and looking at aggregate trends, but perhaps what would you add.
Beth Costello: Yeah, I would I would say is on workers' comp as it relates to and this relates to all of our reserves, we evaluate them every quarter and we will make adjustments accordingly.
Beth Costello: I can't offer any predictions on what reserve development would be in the future as it relates to years post COVID-19. So I think it's sort of even out 'twenty one 'twenty two 'twenty three.
Beth Costello: Those reserves are still.
Beth Costello: Very young and so typically we wait to see how those season before we would start to make any adjustments.
Speaker Change: Okay got it no that's helpful. But maybe one other thing on workers comp really is the weaker or perhaps even a negative pricing environment.
As you think about the business going forward is still incredibly profitable what are some of the key focuses that we should really look into are you. Also are you really worried about the rising medical cost inflation and things of that nature out workers comp.
Speaker Change: Yes, I would.
Speaker Change: Share with you there isn't really anything new.
Speaker Change: I think everything that you've talked about we would say the trends are generally stable.
Speaker Change: Particularly on the medical severity side, we're still within our.
Speaker Change: Our assumption of 5% from a long term side.
It can bounce around from quarter to quarter, but the overall trend I still think is encouraging and as you said it I mean, it's a highly profitable line.
Speaker Change: Particularly for those that lead the industry, which we think we're one of.
Speaker Change: The leaders in the industry.
Speaker Change: So we'll be selective on new business.
Speaker Change: It's going to be sensitive on states that are maybe taking bigger price adjustments going forward, but.
Speaker Change: From an overall side.
Speaker Change: Still like it like it is contributing mightily to our earnings growth and profile and generally we feel good on all the assumptions that we manage to bus but is there anything you would call out.
Speaker Change: No I think you covered off on all of it.
Speaker Change: Excellent. Thank you.
Our next question comes from David Barden from Evercore. Please go ahead. Your line is open.
David Barden: Hey, Thanks, good morning.
David Barden: Just wanted to follow up on the underlying loss ratio in commercial lines, if I take out the current year prior quarter.
Speaker Change: Yes, still look solid at 56, six or 56 seven.
That sort of range or is there anything else in there that you would characterize as being one offer.
Speaker Change: On sustainable either way I know there were a few moving pieces.
Speaker Change: Between small commercial and middle market and large with the non cat property losses, but I just wanted to make sure I understand the baseline here. Thank you.
Speaker Change: Yes, I'll ask Beth.
Speaker Change: Provide.
Speaker Change: Her insights, David but I would say.
Speaker Change: Our expense ratio in there to come up with $88 one through.
Speaker Change: Through the nine months, which we feel terrific about Mo mentioned that before that means we're executing well.
Speaker Change: It is generally consistent with prior year that we've talked about.
Speaker Change: I would say from a macro side.
Speaker Change: We feel good about the non cat property losses. This year I would say maybe there is just.
Speaker Change: Slightly ahead of our expectations.
And then offset by some of the GL movements, we've made there, but you put those two pieces together and still come up with an 88 one.
Speaker Change: The fourth quarter to go.
David Barden: It seems feels really good about that David but that's what would you say.
Yeah, David the only thing I would point out, which which you referenced was when you look at all in on commercial lines, a little bit of a favorability in non cat property, primarily in small commercial but I mean, we're talking about.
David Barden: Tens of basis points here, nothing significant that I would call out.
David Barden: Okay. Yeah. That's helpful. Nothing nothing big there okay. Thanks for that and then.
David Barden: So not big numbers, but commercial auto.
Speaker Change: He also continues to develop adversely I know back last quarter you spoke about.
Speaker Change: Those reserve increases being related to abuse.
Pacific accounts.
Speaker Change: I guess it was the same story.
Speaker Change: This quarter.
Speaker Change: What sort of what would it take for you guys do I take a step back and think about.
If some of those trends that are impacting a few accounts would start to be more pervasive across the board.
Speaker Change: Yes, so I would characterize what we saw this quarter is very consistent with last quarter.
Speaker Change: So again on some specific accounts within certain lines and I'll just remind you that.
We increased our loss pick on commercial auto in the fourth quarter of last year.
Speaker Change: Just sort of addressing sort of the more macro trends and so when we look at where we are with the current year, we feel very good with with our loss picks and feel that we've incorporated.
Speaker Change: Some of the sort of the broader I would say market impacts, but Mo would you add anything else maybe just.
Speaker Change: From an underwriting perspective, I think we've talked about it but.
Speaker Change: We've certainly been managing accounts that were impacting us neither accident years 'twenty through 'twenty three as a reminder.
Speaker Change: We've been we either moving them to loss sensitive if they've got a larger fleet, we're moving them out altogether, certainly were pushing rate and continue to push rate hard in the auto lines and just maybe the last piece is.
Speaker Change: The only place we really add any heavy trucking exposure is in our wholesale book.
Speaker Change: Book.
Speaker Change: Less than $150 million an hour.
Speaker Change: We're very transactional in that space. So I think we really feel good about the underlying our exposure across commercial lines.
Speaker Change: Okay.
Speaker Change: Great. Thank you.
Speaker Change: Yeah.
Speaker Change: Our next question comes from Mike Zaremski from BMO Capital markets. Please go ahead. Your line is open.
Mike Zaremski: Hey, good morning. Thanks.
Mike Zaremski: Clearly the results overall are are excellent.
Mike Zaremski: We're going to get lots of questions on general liability. So I wanted to focus a another question there.
Speaker Change: In the prepared remarks, you gave us good color about more attorney Rep.
Speaker Change: On all claims cycle.
Speaker Change: Is there any way you could kind of parse it out and works I think that what we're seeing in industry if that would be on the small commercial side more so than a large commercial side, we're seeing more that the loss trend rise more so than in the large account space because there's just more attorney involvement.
Speaker Change: I've learned historically on the on larger clients like larger fortune 500 clients.
Speaker Change: Wanted to better understand if you're if you are seeing the higher GL trends.
Speaker Change: And any.
Speaker Change: I think pockets based on account size or maybe type of.
Speaker Change: An employer or a business.
Speaker Change: Thanks, Brad.
Speaker Change: Okay.
Speaker Change: Mike All I would say Theres lawyers everywhere.
Speaker Change: <unk>.
Speaker Change: All 50 states all the territories obviously.
We're looking for clients any which way they can from advertising or.
Speaker Change: One 800 numbers, so I'm being facetious, obviously, because we don't see any discernible trend.
Speaker Change: I think what we called out and what we're reacting to us.
More higher percentage of claims coming in the door with attorneys already in tow and Thats driving up overall settlement rates no matter what business what country.
Speaker Change: <unk> and <unk>.
Speaker Change: That's what we see but no.
Speaker Change: Anything from the underwriting side, you would comment on.
Speaker Change: I'd say I don't think we should need to get into the details, but just know that we're deep in every jurisdiction were in by class. We're in by the type of accidents. So I think theres a lot of nuances here, but Christmas overall pointed there's more lawyers around but certainly when we get to the underwriting we're tailoring it by industry by state by County.
Speaker Change: Certainly any any underperforming areas are getting the necessary rate action and book management activity.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: That's helpful.
Speaker Change: Just switching gears a bit to the overall commercial rate environment.
Speaker Change: It feels like the industry is being extremely disciplined we're seeing.
Pricing.
Speaker Change: Increase a bit.
Speaker Change: Many lines. Despite overall industry return on equity levels being healthy to excellence.
Speaker Change: Would you say that the.
Speaker Change: <unk>.
Speaker Change: The pricing environment is really being driven more by by loss ratio then.
Speaker Change: You're.
Speaker Change: Folks and your peers aren't really taking into account the IND.
Speaker Change: That's an income benefit as much as it was I think maybe some investors thought.
Speaker Change: Would take place.
Speaker Change: In recent years, just kind of curious about the competitive environment.
Speaker Change: Yes, I would say again, I think it's rational and thoughtful.
Speaker Change: And principally driven by loss trends right I mean, I can't I can't speak to any other.
Our competitors, how they really think or manage but at least from our side.
Speaker Change: We start with trends.
Speaker Change: We've always said, we're trying to hold margins, where we're at today underwriting margins feel good that again were generally consistent with last year and we will start to talk about 25, a little bit more but.
Speaker Change: We don't from an underwriting side, we don't think about net investment income.
All our metrics are sort of lastly, except when you get into maybe the national account book of business that does have a little bit more there, but I think it is.
Speaker Change: Loss cost driven Moe and we're executing to what we're trying to do from a consistency perspective, yes.
Speaker Change: Yes, but that doesn't mean, it's easy I just wanted to make sure you understand it's a difficult underwriting environment. If you don't give the right tools to underwriters, if you aren't making investments in data science and the feedback loops of Sitos stuffs youre going to Miss it.
Speaker Change: And so I just wanted to make sure we are talking about the difficult choices, we're making every day and I think our team is doing a terrific job navigating the market.
Yeah.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Elyse Greenspan from Wells Fargo. Please go ahead. Your line is open.
Elyse Greenspan: Hi, Thanks, good morning.
Elyse Greenspan: My first question I guess going into on the premium growth side within Midland large growth.
Did slow a little bit in the quarter and I know with.
A little.
Elyse Greenspan: You know an easier comp last year, especially right when I look at growth within the middle market right around 7% this quarter, a little lower than what we saw so far year to date.
Elyse Greenspan: Can you just give a little bit more color on what you were seeing there on the quarter and how we should expect that to trend from here.
Speaker Change: Yes, you're right on we had that we certainly commented on July last year hit the market just didn't come our way, but we're really excited about it I think our year to date growth in middle and large commercial is nine 9%. We're really excited about that as we talked about a minute ago. The flow continues to be really strong our underwriters are active in the.
Elyse Greenspan: A marketplace.
Speaker Change: And again coming out of CIB that is.
As a reference point since it's so recent.
I think our agents are really talking about their desire to consolidate carriers and that would we would benefit from that in the middle and large commercial space. So I think as long as we can get paid for risk in the market holds up we feel really good about the growth possibilities in middle and large commercial.
Speaker Change: Yes.
Speaker Change: Thanks, and then I just.
Speaker Change: I want to come back to GL for a second as well right. So we saw.
Speaker Change: Adverse development right on some more recent years this quarter last quarter with some softer here or is it sounds like it was just Chris the attorney representation that you were talking to that kind of was the driver of both can you just and I know you touched on in prior remarks give us a sense of the severity kind of assumptions that you're assuming with NGL.
Speaker Change: And is there like a buffer that you like give us a sense of the buffer you have on top of kind of what youre seeing just so we can you know that.
Speaker Change: That you would expect not to see additional movements from here.
Speaker Change: Okay.
Speaker Change: Yes, I would share with you Lisa and thanks for the question.
I'm going to talk about buffers.
Speaker Change: We manage sort of in total but.
Yes, Youre right.
Speaker Change: The data that we're reacting to this quarter as rep rates and settlement rates, particularly on our bread and butter.
Speaker Change: Small commercial and middle market accounts.
Speaker Change: Slip and falls, particularly.
Speaker Change: That type of claims seems to have the most explosive growth and settlement values. There. So I think that's the color that I would provide bath, but would you add anything else.
Speaker Change: No I think you covered it well I mean, we reacted to what we saw and incorporated that as well as our projections for what we would see going forward.
Speaker Change: The adverse development that we took in 'twenty, two and 'twenty three and then how that informed our view of changing our peg for 24, so from our perspective, we've taken all of those inputs.
Speaker Change: And made our best call.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Meyer Shields from Cape VW. Please go ahead. Your line is open.
Speaker Change: Hi, good morning.
Speaker Change: Omer.
Speaker Change: Hello Christian.
Speaker Change: The lines expense ratio.
Speaker Change: Tick tick up.
Speaker Change: Year over year decline sequentially.
Speaker Change: Anything you'd see <unk> fall.
Speaker Change: Last quarter in terms of marketing.
Speaker Change: I'll just seasonal for lung, Jason just wanted to make sure I didn't miss anything.
Speaker Change: Thank you.
Speaker Change: I think the expense ratio, there's nothing I'd call out I think last quarter, we called out we were started or restarted our national advertising.
Speaker Change: And solicitation through.
Speaker Change: For our direct response business.
Speaker Change: I would expect it to.
Speaker Change: To normalize and go down over time, particularly as we have more operating leverage as we start to grow again.
Speaker Change: So.
Speaker Change: That's about that's about it.
Speaker Change: Got it thank you.
Speaker Change: My second question is on yes growth.
You previously targeted 300 million.
Speaker Change: Finally, Diana.
Speaker Change: The year.
Could you provide an update on the progress and discuss Linda.
Social media.
Again, driving more submission to the U S channel.
Speaker Change: Yes, I think the overall trend.
Speaker Change: E&S continuing to be a meaningful channel for both casualty and property products is.
Speaker Change: Very strong.
Speaker Change: Obviously, they are capturing more of the.
Speaker Change: The flow on the small side in the middle market side, we're happy to participate.
Speaker Change: What do you think is a pretty good offering and a pretty good mousetrap.
Speaker Change: We're on track to achieve our $300 million goal, we set this year, particularly in small commercial E&S binding and it's an important channel for us to continue.
Speaker Change: Continue to develop capabilities.
Speaker Change: Underwriting skills to support over the long term, but would you add anything no I agree with everything on E&S binding and I would just reinforce we are seeing the same momentum in the wholesale space within global specialty in.
Speaker Change: In property and inland Marine.
Speaker Change: And construction in casualty in total so we feel really really good about the progress in both segments.
Speaker Change: Okay.
Speaker Change: Got it very helpful. Thank you so much.
Speaker Change: Our next question comes from Josh Shanker from Bank of America. Please go ahead. Your line is open.
Speaker Change: Okay.
Josh Shanker: Thank you I'd like to talk about group benefits, if we can change the subject.
Speaker Change: How's everyone doing this morning.
Speaker Change #100: That's great to hear your voice, Josh what's on your mind with Goodyear.
Speaker Change #101: Talk about the sales growth looked a little weak year over year, but these are a lot of times multiyear sales cycle. So the year over year comparison might not be apt and of course, the first quarter is more important than the third quarter.
Josh Shanker: Can we talk a little bit about sales conversion.
Josh Shanker: But given the number of companies number one hundreds of them come up for renewal, how well you did this year.
Josh Shanker: And what the August core in the future, especially maybe how many contracts are coming up for renewal in 2000.
Yes, we're not going to talk too much about 25, right now Josh but.
We'll give you plenty of color once it's all tidied up.
Josh Shanker: I would say in my official add his perspective, we still feel good about obviously, our sales team and we're able to do in the marketplace in all our broker relationships.
It's quite an ecosystem that you have to to manage with feet on the street and relationships. So many we get a lot of opportunities.
Josh Shanker: I think the comp issue that I talked about we had some one time.
Josh Shanker: Tfl.
Josh Shanker: <unk> sales last year, so thats distorting it you take it out we're still down but were down just slightly.
Speaker Change #102: And Mike I don't know what you would.
Speaker Change #102: Provide to Josh to give them comfort that we're competing every day as hard as we can but.
Speaker Change #103: We're also trying to make money and we're being disciplined with our pricing also Chris those are the right points I'd just add a couple of a couple of items here on the renewal side.
Speaker Change #103: Think of it this way a little under a third of our book comes up for renewal every year and I noted earlier in my comments, Ron Fisher's persistency North of 90% now that's on the whole book, so renewal as a subset, but again I think that just speaks to the fact that we're able to compete certainly on our enforce in keeping those customers on the new side or <unk>.
Speaker Change #103: Following him of quotes that we're seeing is consistent year over year.
Speaker Change #103: What I would sort of if I double click under that when you look on the larger end those opportunities can ebb and flow over the years and essentially when we're looking to lineup with our underwriting appetite, we're going to be a bit more selective on the large end, but again I don't think theres anything unique to note. This year very consistent with what we've seen in past years.
Speaker Change #104: I just wanted to get your comment Chris.
Speaker Change #104: We are here.
Speaker Change #106: Here to make money and I think that's right you.
Speaker Change #106: You definitely are making money in the group benefits business the margins are fantastic.
Speaker Change #108: Is that showing up and not necessarily the Hartford.
<unk>.
Speaker Change #108: Cutting prices at this point being willing to tolerate a higher benefits ratio than they might have a year or two ago.
Yeah.
Yes, I don't I don't want to speculate I don't want to say I really don't know honestly Josh so.
Speaker Change #108: You'll have to ask them that.
Speaker Change #108: I know what we're trying to do every day.
Speaker Change #108: Again, we want to be thoughtful we want to compete.
Speaker Change #108: We want to maintain our margins.
Speaker Change #108: <unk> said this before and you of all people know it and get it I mean, we're making three to five year rate guarantees depending on product line.
Speaker Change #108: And we can't we can't go upside down with.
Speaker Change #108: Those types of guarantees out there so we're going to be thoughtful and disciplined in.
Speaker Change #108: Try to try to do the best we can but there is certain.
Speaker Change #108: <unk>, we're just not going to cross and.
Speaker Change #108: So all I can say is yes, we want to we want to be relevant we are relevant in the marketplace. There isn't a national account opportunity that doesn't come our way.
Speaker Change #108: And we're going to compete thoughtfully, but were also willing just to put the pencil down and say that's enough.
Speaker Change #109: Thank you for all the answers.
Speaker Change #109: Yes.
Speaker Change #110: Our last question will come from Alex Scott from Barclays. Please go ahead. Your line is open.
Alex Scott: Hi, Thanks for taking me in.
Alex Scott: So I wanted to ask about property pricing actually.
Alex Scott: I thought it was pretty striking this small to mid.
Alex Scott: Area anyway.
Speaker Change #112: The pricing is still yes.
Speaker Change #112: Pretty elevated can.
Speaker Change #112: Can you talk about some of the dynamics there that are allowing for that kind of price action. When we're seeing sort of at the larger and more global property and things slowing down more significantly.
Speaker Change #113: Yeah, Alex let me.
Speaker Change #113: Just give you a data point or two and then ask Moda ad.
Speaker Change #113: Add his color.
Speaker Change #113: Our total property.
Speaker Change #113: Capabilities spread across all of the crossover organized all of our businesses ex global re.
Speaker Change #113: Pricing actually accelerated 60 basis points.
Speaker Change #113: During the quarter from <unk>.
Speaker Change #113: 12, two to 12 eight.
Speaker Change #113: And I would say the two largest segments from our premium volume.
Speaker Change #113: Led the way spectrum pricing is.
Speaker Change #113: Up 60 basis points also 17, six in our general industry property K.
Speaker Change #113: Capabilities is up another 60 basis points to eight 5%.
Speaker Change #113: So again feel really good as far as our sweet spot of being in that SME space and pricing remaining.
Firm and.
Speaker Change #113: Actually expanding a little bit that's not true in some of the larger.
Speaker Change #114: Large property or E&S, Mo, but what would you add your color.
No I think we're watching the reaction to the storms and trying to understand how that impacts the marketplace. We certainly in the reinsurance renewals, but generally with the favorable market that we would look to take advantage of it.
Speaker Change #114: Yeah.
Speaker Change #114: Okay.
Speaker Change #114: Yeah.
Speaker Change #115: Got it that's helpful and maybe if I could sneak one last one in.
Speaker Change #116: When I think through the A&E Reserve review and <unk>, I know, you're probably not ready to give like a number or something like that but could you help us think youre right. Some of the underlying trends you see with those claims and so forth that could help us at least directionally understand.
Speaker Change #115: Which way things are going there.
Speaker Change #117: I'll, let beth or color, but.
Speaker Change #118: We need to finish the review the study I mean, we will announce.
Speaker Change #119: Obviously with the fourth quarter, but there is nothing to speculate right now because we haven't completed our work.
Speaker Change #120: Yeah, I would agree with what Chris is saying.
We'll complete the study and report.
Speaker Change #120: Report on the trends in underlying.
Speaker Change #120: Exposure that we see there at that time.
Speaker Change #121: Understood. Thank you.
Speaker Change #122: We have no further questions I'd like to turn the call back over to Susan Spivak for any closing remarks.
Susan Spivak: Thank you all for joining us today and as always please reach out with any additional questions and have a great weekend.
Speaker Change #123: This concludes today's conference call webcast. Thank you for your participation you may now disconnect.
Speaker Change #123: Yeah.