Q1 2025 Selective Insurance Group Inc Earnings Call
Speaker Change: Good day, and welcome to the Selective Insurance Group First Quarter 2025 earnings conference call. At this time, all participants are in a listening mode.
Speaker Change: After the speaker's presentation, there will be a question in the intercession, instructions will be given at that time. As a reminder, this call may be recorded. I would like to turn the call over to Brad Wilson, Senior Vice President, Invest Relations and Treasurer. Please go ahead. Good morning. Thank you for joining Selective's first quarter, 2025 Earnings Conference Call.
Speaker Change: Yesterday, we posted our earnings press release, Financial Supplement, and Investor Presentation on Selective.com's Investor Section. A replay of the webcast will be available there shortly after this call.
Speaker Change: John Marchioni, our Chairman of the Board, President and Chief Executive Officer, and Patrick Brennan, Executive Vice President and Chief Financial Officer, will discuss first quarter results and take your questions.
Speaker Change: John and Patrick will reference non-GAAP measures that we and the investment community use to make it easier to evaluate our insurance business.
Speaker Change: These non-GAAP measures include operating income, operating return on common equity, and adjusted book value for common share.
Speaker Change: The financial supplements on our website include gap reconciliation to any reference non-GAAP financial measures.
Speaker Change: We will also make statements and projections about our future performance.
Speaker Change: These are four looking statements under the Private Security's Litigation Reform Act of 1995, not guarantees of future performance.
Speaker Change: These statements are subject to risks and uncertainties that we disclose in our annual, quarterly, and current reports filed with the SEC.
Speaker Change: We undertake no obligations to update or revise any forward-looking statements.
Now, I'll turn the call over to John.
John Marchioni: Thanks, Brad, and good morning. We delivered a solid start to the year with an overall combined ratio of 96.1, an after-tax debt investment income of $96 million.
Return on Equity and Operating Return on Equity were 14.4 percent.
John Marchioni: NetPree is written in words 7% driven by excesses surplus lines and standard commercial lines.
John Marchioni: Patrick will provide more detail on these results in our 2025 guidance, which still points to a full year combined ratio between 96 and 97 and an underlying combined ratio of 90 to 91.
John Marchioni: While our full-year guidance implies a mid-teens operating ROE, we remain focused on improving our underwriting margins, which have been pressuratively due to the widespread impacts of social inflation on average casualty severities.
John Marchioni: We are absolutely focused on restoring our profile as a company that delivers consistent under-ready margins and operating ROE's.
John Marchioni: We are confident that our approach to addressing the elevated loss trend environment, to our reserving, planning, underwriting, and pricing actions will quickly restore that profile.
John Marchioni: In the first quarter, overall renewal for your pricing across our three insurance segments was 10.3% of 2.2 points from a year ago.
John Marchioni: Overall, renewal of pure pricing is approximately three points above our lost trend assumption.
Assuming this trend continues, it implies future margin expansion.
Turning to Segment Performance.
Standard Commercialized Report of the 96.4 Combined Ratio
John Marchioni: Renewable pure price increase to 9.1%, driven by general liability at 12%.
Retention was stable at 85%
John Marchioni: Market Dynamics and Pricing Rationality, Barry Byline, and we continue to deliver elevated renewal pure price increases.
John Marchioni: in Commercial Property and Commercial Auto, both of which have seen it 10%.
Renewal Pura Price, Excluding Workers' Compensation, was 10.5 percent.
John Marchioni: Access and surplus lines driven by average renewal of pure price increases of 8.7% and strong policy
John Marchioni: at 20% net praise written growth in the quarter with a 92.5 combined ratio and 81 underlying combined ratio. We see continued growth opportunities for this segment.
John Marchioni: I want to hear that market remains competitive and we will continue to prioritize our profitability objectives as we pursue growth.
John Marchioni: Personalized Deliberate of Combined Ratio of 98, approximately seven points better than a year ago, as our rating and non-rating actions to reposition the book, advanced profitability improvement.
Renewal pure price was 24.1% in a quarter.
John Marchioni: While Target is this crew 11% in a quarter, total personal lines net printings were and decreased due to deliberate profit and proven actions.
John Marchioni: Notably, new business decreased by 58% as we focused on profitable growth in states where our rate levels are adequate. We expect rate changes will remain above loss trends, but moderate compared to our re-increases in 2024.
John Marchioni: We do not have filed rates that support our necessary path to profitability in certain states, including New Jersey, our largest state.
and we significantly prevailed production in those states.
John Marchioni: I'll close with a few comments on our corporate strategy, risks and opportunities as we navigate this highly dynamic macroeconomic environment.
John Marchioni: As an insurer, we create value by assuming risk for our customers, allowing it to operate their businesses and live their lives with the knowledge that their assets are protected.
John Marchioni: The contingent capital we provide is an essential social utility, and our independent agents and wholesale brokers value us as a stable partner.
John Marchioni: Over time, we were your work share holders through strategic execution, prudent enterprise risk management, and profitable growth.
John Marchioni: We often highlight how our differentiated operating model and empowered decision makers deliver our products and value-edit services to our distribution partners to our customers.
John Marchioni: Every year, several of our executives and regional management teams host six regional agency council meetings with a cross-section of our distribution partners
John Marchioni: This year, their feedback reinforced that our differentiated approach continues to resonate with our business partners and customers.
John Marchioni: Our open and dynamic discussions about customer expectations, the insurance market, talent, technology, and artificial intelligence to firm that despite the risk in the external environment, significant market opportunities exist for selective and our partners.
John Marchioni: We may be impacted by whatever changes ultimately current these areas.
John Marchioni: Nonetheless, we will be able to face these challenges by focusing on our long-term value proposition and by focus strategic execution in the areas we control.
John Marchioni: As always, we will carefully navigate the uncertainty in the environment, responding prudently as new information emerges.
John Marchioni: Our significant investments in recent years to support scalable and profitable growth provide us with many opportunities to increase our market share while meeting or exceeding our profitability targets.
John Marchioni: We remain disciplined underwriters unwilling to trade that profitability for growth.
John Marchioni: You business moderated in recent quarters, including this one, as we push pricing higher, resulting in reduced hit ratios.
John Marchioni: However, policy retention has remained strong as we execute our pricing strategy in a granular fashion.
John Marchioni: In our existing footprint, we are focused on growing with existing partners and strategically appointing new agency vocations.
John Marchioni: In the first quarter, we added 30. In 2024, we had a net increase of 200.
Careful and deliberate geographic expansion continues to provide lift
John Marchioni: Since 2017, we've added 13 space to our standard commercialized footprint with five last year.
John Marchioni: In 2024, these 13 states accounted for two points of growth, adding $350 million of premiums written for approximately 10% of standard commercial lines production.
Profitability in these expansion states is meeting our expectations.
John Marchioni: Technology investments are critical to ensure efficiency and scale. We are actively developing and executing artificial intelligence use cases focused on underwriting scalability and improving
John Marchioni: We've also made considerable progress, modernizing our excess and surplus lines, commercial lines, and claim systems.
John Marchioni: For example, an EMS system and process enhancements have improved operational efficiency with the segment's premium production up significantly with limited head count growth
Patrick Brennan: Now I'll turn it over to Patrick who will provide more details about our financial results.
Michael Zaremski,
Patrick Brennan: Thanks, Jon. Good morning, everyone. Net income available to common stockholders increased 34% in the quarter.
Patrick Brennan: Fully diluted EPS and non-GAF operating EPS were both $1.76 and as a result, our return on equity and operating return on equity were both 14.4%.
Patrick Brennan: Our underlying combined ratio is 92, 150 basis points above the midpoint of our full-year guidance.
Patrick Brennan: However, we believe our full year underwriting combined ratio will meet our original 90 to 91% expectation, as the first quarter underlying combined ratio tends to be higher than other quarters due to normal seasonality. [inaudible]
Patrick Brennan: Turning to capital. Our capital position remains strong, with $3.3 billion of gap equity and $3.2 billion dollars of statutory surplus at March 31st.
Patrick Brennan: Book Value per share increased 5% in a quarter driven by our profitability in a $1.6% per share reduction and aftertax net unrealized fixed income security losses.
Patrick Brennan: debt to capital increased to 21.7% at quarter end due to February's successful $400 million senior notes issuance.
Patrick Brennan: The transaction receives strong investor support, and we are using the proceeds for general corporate purposes, including supporting discipline and profitable growth, which we consider the most prudent way to create long term value for our investors.
Patrick Brennan: We return capital to shareholders through regular quarterly dividends, and from time to time, we also engage in opportunistic share repurchases [inaudible]
Patrick Brennan: During the first quarter, we were purchased $19.4 million of common stock at an average price of $82.87 per share.
Patrick Brennan: As of March 31, 2025, $56 million remain under our Repurchase Authorization.
Patrick Brennan: First quarter after tax net investment income was $96 million, up 12% from a year ago.
Patrick Brennan: This generated 12.8 points of return on equity up 50 basis points from 12.3% in the first quarter of 2024.
Patrick Brennan: Our strong operating cash flow and the senior notes proceeds resulted in a very attractive first quarter, allowing us to invest over $900 million of new money.
The average new purchase yield was an attractive 6% pre-tax [inaudible]
Patrick Brennan: Consequently, the quarter-end average pre-tax book yield increased to 5%.
Patrick Brennan: We expect our fixed-income portfolios embedded book yield will provide durable investment income.
Patrick Brennan: However, the volatile external environment presents downside risk to our net investment income guidance, particularly related to alternative investments.
Patrick Brennan: Over our investment horizon, we expect alternative investments will produce at least a ten percent return. However, the asset class has inherent economic variability due to its higher risk of return profile and higher accounting variability because market value changes flow through the income statement.
Patrick Brennan: Overall, our investment portfolio remains conservatively positioned. Total fixed income and short-term investments represented 92% of the portfolio at quarter-end, with an average credit quality of A-plus, an adoration of 4.1 years.
Patrick Brennan: Our overall investment strategy is to maximize the economic value of our portfolio by achieving stable, risk adjusted, after tax net investment income, and contributing to long-term growth in book value per share.
Patrick Brennan: We do not expect to change our investment strategy or allocations meaningfully, but our portfolio's positioning enables us to evaluate and act upon opportunities that market dislocations or volatility may present.
Patrick Brennan: Pulling together what we've discussed, we are reaffirming our original 2025 guidance, which is as follows [inaudible]
Patrick Brennan: We expect our 2025 GAP combined ratio will be between 96 and 97 percent, including six points of catastrophe losses.
Patrick Brennan: As a reminder, our long-standing practice is to not assume any additional prior accident to your reserve development in our forward guidance.
Patrick Brennan: At this time, we are not revising our after-tax net investment income guidance of $405 million. A higher asset base from our senior notes issuance proceeds should benefit net investment income. However, alternative investments could face valuation headwinds in the coming months.
Patrick Brennan: Depending on the ultimate outcome and timing of tariffs, economic uncertainty and financial market volatility, there's heightened risk that alternative investment income could come under pressure when we report second quarter earnings.
Patrick Brennan: As a reminder, we report alternative investment income on a one-quarter lag. We remain comfortable with the long-term performance expectations of the asset class and our 4% allocation.
Patrick Brennan: Our guidance includes an overall effective tax rate of approximately 21.5% and an estimated 61.5 million fully deluded.
Patrick Brennan: Weighted Average Shares, including those repurchased in the first quarter, and assumes no additional repurchases under our existing Shares-Purchased Authorization.
Operator, please start our question and answer session.
Patrick Brennan: Thank you. If you'd like to ask a question, please press star 111. If your question has been answered and you'd like to remove yourself from the queue, please press star 111 again.
Speaker Change: Our first question comes from Michael Phillips with Oppenheimer. Your line is open.
Michael Phillips: All right, thanks. Good morning. John , your opening comments you talked about overall pricing to 10.3 and how that was probably about three or three points above lost trends overall. Could you could you drill down to, I guess, the casualty side and what you're seeing any updates there on your lost trends assumptions and how that might compare to the pricing was up in GL, which is good, but maybe just comments on what you're seeing for GL lost trends. Thank you.
Michael Phillips: Yeah, thanks, Mike. So our view of lost trend is unchanged from the beginning of the year and when we when we put together guidance as you recall, we had all in casualty lost trend.
at about eight and a half percent.
Michael Phillips: And again, that's all in. So, you know, GL and workers' top and commercial liability are all in that number.
Michael Phillips: And we've talked about GL in the 9% kind of range, all driven by severity.
That continues to be our view.
Michael Phillips: And I think it's important to remember that our 25 guidance and what we're applying that loss trend to is includes the 24 year where we acted pretty quickly to increase our expected loss ratio in the GL line by over seven, almost seven and a half points.
Michael Phillips: So, that trend is now reflective of what we have observed in actual severity changes over the last few years and as a result of that we continue to stay with that as our trend expectation.
Michael Phillips: Okay, thank you. It's like a drill down to one line in commercial auto. You've talked about there how pricing is set up higher for longer, and that's been kind of helping to ward off any potential reserve charges so far, so good there. I guess I was surprised to see, maybe, maybe surprised to start a word, but your loss pick in the quarter came down on about three points, and maybe just you can drill down to kind of what's behind that.
Michael Phillips: You're talking specifically on commercial auto? Yes, if I am, Joe.
John Marchioni: Yeah, so I think again I remember this is this is a multi-year [inaudible]
John Marchioni: pricing change. I think I might have gone through this last quarter. If you focus on commercial a lot of B.I., our average change over the last four years is a little over 10%.
John Marchioni: and then you saw that 10% remain in the quarter. So just roughly speaking, assuming that longer-term trend that we've pointed to in the 8% is kind of range, you've had a number of years now where your earn rate level has been running slightly above.
That Elevated Lost Friend
and that's gonna be the probably a larger driver. [inaudible]
John Marchioni: But also remember, autophysical damage is in that line in total, and we've continued to generate strong ray on autophysical damage, and that loss trend tracks closer with our property trends, which has been in the call of three and a half kind of range.
John Marchioni: So you definitely have more improvement on the auto physical damage side than you might see it necessarily on the auto BI side that might be a little bit more flatish and those are how the pieces come together.
John Marchioni: Okay, now thank you. I'll circle back if I need to. Thanks, John .
Thank you, Mike.
John Marchioni: Thank you. Our next question comes from Mike Zaremski with BMO. Your line is open.
Hey, Morning God Gentleman.
Mike Zaremsky: The first question I have is on the seasonality comments. If I look at kind of the historical descendality, you know, we can see it.
Mike Zaremsky: and I'm doing the math quickly, but it seems like this year's seasonality is more pronounced, maybe more than two times the historical level. Any thoughts on what's causing the greater seasonality this year than in the past?
No, I think you know, that's...
Mike Zaremsky: The seasonality we're anticipating is largely driven by non-cap property, and when you look back historically, that's held up pretty well. Now there's expense ratio movement that also could impact what you see on a historical basis.
Mike Zaremsky: and that might vary from year to year, but on the non-cap property side, this is pretty much what we've seen on a historical basis.
Okay, got it. Okay. It seems like it was a...
Mike Zaremsky: 150 base points by the midpoint this year of your guide, and it's certainly been more like 60 basis points above it in one cue, so...
Speaker Change: just to make sure you're saying that you didn't, you're not, you're just seeing kind of typical.
Mike Zaremsky: A normal seasonality for you all in this quarter if I just want to clip five.
Mike Zaremsky: Correct, and if you break down the difference in terms of 2024's underlying combined ratio and the guidance, I'm sorry the Q1 result, there's about a two and a half point difference, about a point of that is seasonality.
Okay. Okay, got it.
Worker Cap,
Mike Zaremsky: I know you know we can see that you're bucking [inaudible]
Speaker Change: above 100 now. I know you've called out, Worker's Count is becoming last favorable in quarters last year, but it seems like a pretty conservative pick of any color on what you're seeing there.
Speaker Change: Yeah, I think a couple of points I'll highlight there. You know, if you look back to last year on an accident year basis for us, we were in that 97 to 98 range when you back out the impact of favorable development from prior years. [inaudible]
Speaker Change: And honestly, when you look at it on an industry basis, I think you'll see the 24-activity or an industry basis is in that neighborhood of 100.
Speaker Change: Now granted, the older accident years have continued to emerge favorably albeit maybe a little bit more lightly favorable and I think that's also been an industry wide trend so let's just assume that high high 90s.
Speaker Change: for us, industry kind of 100 starting point on an accident in your basis.
Speaker Change: Our written rate last year was around negative three. Our first quarter rate is around negative three. So let's just assume you've got an
Speaker Change: As we've done, we pointed to this last year, we've started to see a flattening of frequency trends, so on a roll-forward basis 24 to 25, we're assuming flat frequencies and then you've got the impact of severity inflation largely driven by medical
Speaker Change: And that, you know, let's put it somewhere in the mid-single digit range in terms of where we anticipate.
Medical Siveries on a Go Forward basis.
Speaker Change: You combine that with flat frequencies and a negative free-earn rate, and that's how you roll it forward and I think that applies on an industry basis as well [inaudible]
Speaker Change: Now, to the extent, the prior years continue to emerge favorably and in particular to the extent 23 and 24.
Speaker Change: Ultimately, emerged favorably, which we haven't recognized anything there at this point because they're immature, but to the extent that continues, that might prove a conservative assumption, but we think based on where we are today, that's the appropriate way for us to establish the ELR, the expected loss ratio for 2025.
Okay, I appreciate the candidness. I guess we haven't.
Speaker Change: Heard other peers, but maybe they just haven't been asked about seeing the flattening frequency. I know you guys have called that out, so I guess in our seats we're trying to figure out if it's a mixed thing that's specific to SIGGI, I'm so happy I'm sorry, or it's an industry-wide phenomenon, I think you're saying it's more industry-wide, so we'll dig into that more.
. . . .
Speaker Change: Okay, you know, lastly, just trying to, you know, think I know this is also an industry issue impact, but on tariffs, on the commercial property side. And if you have any views on kind of.
Speaker Change: how many points that that could cause the industry to need to
Speaker Change: to push price if, you know, if the current tariff regime dixand, and comes into play, any thoughts there? I feel like most, most management teams so far have been willing to say, you know, they don't have an impact, but, but no really quantification.
Speaker Change: Yeah, so first of all, I'm not sure I'm going to give you anything other than what you haven't already heard, which I think has been some some accurate commentary out there for some of our peers.
Speaker Change: First of all, it's early, and understanding where tariffs ultimately settle is very much an open question at this point, but I would say, and I'll talk about it overall, and I'll certainly hit your question on commercial property specifically, but I would say overall when you factor in the various mitigants.
It is a manageable impact from a lost-cost perspective. [inaudible]
Speaker Change: So the primary impacts obviously are auto physical damage lines, full personal commercial, and then property at home.
Speaker Change: But I think when you look at the various mitigants, the first one would be what are the lost cost of labor versus materials?
Speaker Change: And if you look at it on an auto basis historically, the loss costs are about 60% labor and on the property side both commercial and personal blended.
Speaker Change: Labor in the neighborhood of 55% or so percent of the cost. So that's an impact that sort of mitigates the impact of tariffs. And then you've got the consideration relative to materials that are coming from imports versus those that are produced and sourced.
Speaker Change: Domestically, and if you look at auto parts, it's as much as 40% of those are produced and sourced domestically, so there's a balancing there, and then on lumber, which is a big input on both commercial and personal property, a significant more than half of that is produced and sourced domestically. So that lowers the impact.
Speaker Change: And then on with the property line in particular, you've got the inflation sensitive exposure basis for both commercial property and home, which allows you to respond with regard to insurance to value or total insured values in addition to price.
and that's a relatively quick-
Speaker Change: Triggering item that as we see that, those lost costs start to come through. You can respond relatively quickly from an exposure basis perspective. So I think, you know, if you put all those pieces together, I think there's any question personal one of physical damage is probably the biggest. [inaudible]
Speaker Change: Impact on a line basis, that's obviously a smaller impact for us, and then it works down from there and you're probably looking at something in the low single digits on an overall basis.
Speaker Change: Okay, yeah, that's that's excellent color and I'm hopefully okay with me as in one quick follow up to the work comp discussion earlier Of course, looking at the live transcripts. So you said negative three earned rate
Speaker Change: Inc. Does that include wage inflation? I think it does, I thought, you know, wage inflation has been really helping the earned rate in that line for the industry, given looks like wage inflation is still, you know, pretty, that's pretty healthy levels.
Speaker Change: Yeah, that's a pure rate number I'm giving you. We haven't put exposure change numbers out there for workers' comp. That's pure rate.
Speaker Change: So there's no question, there's no question, wages are an offsetting impact on that.
Thank you.
Speaker Change: Thank you. Our next question comes from Paul Newsome with research. Your line is open.
Paul Newsome: Good morning. I'm just hoping you could talk a little bit more about the competitive environment in pricing, which has become a little bit of a issue this quarter. This concerns that certain areas are softening to not.
Paul Newsome: and maybe you could put that into the context. My sense is that Selective is at this point, you know, raising rates more.
Speaker Change: and the gas majority of the containers. But maybe I'm wrong about that. And just do the thoughts you have about. So how you see yourself, we're all into others in the market and climate.
Speaker Change: Yeah, I think from a GL perspective, I think your depiction of where we are is an accurate one.
and I think, you know, our view was…
That went...
Speaker Change: We reacted to the 22 and 23 accident years in the middle part of 2024. We thought it prudent to also move 24 higher which then reset our pricing targets in order to offset that increase in expected loss ratios and our forward trend assumptions. .
Speaker Change: and I think there's no question that as a result of that, our pricing targets are probably above where the broader market is and you do see that impact.
Speaker Change: on our conversion rates and therefore our new business, which in commercial lines was flat on a year-over-year basis. Now remember, we continue to open up additional distribution points, whether it's through new states or new agents.
Speaker Change: So that, if you think about it on the same store basis, that's probably a little bit more negative in terms of where the growth is And as we've said, we've got conviction around where we're pricing from the GL perspective.
Speaker Change: And we think that's appropriate based on our incorporation of those higher run race severity trends into our forward view and our objective here is to stay ahead of the curve from a severity perspective and we're not, while we recognize that there will be an inflection point.
Speaker Change: We're social inflation starts to normalize. We're not assuming that happens in 2025, but we're pricing according to that.
Speaker Change: That makes sense, it always seems to be the right decision to be ahead of price and on price and related to that question is one of retention.
Speaker Change: and obviously there's been a pretty quick new business impact, but do you expect there should be proofing for us to be thinking that your tension will be impacted in coming quarters as well from that competitive environment and then sort of being stabilized after that? [inaudible]
Speaker Change: I think, you know, retention has held up well for a few quarters now, and, you know, the pricing change we're talking about
Speaker Change: was, you know, our run rate in the early part of, or mid part of last year.
was in the high single digits.
and now we're in the 12% kind of range.
Speaker Change: But you really want to think about it in terms of overall pricing change and we've been in that 8% all in because that's we remember we write on the package faces for the most part so this is one line and you've got other lines that are impacting the overall rate change. [inaudible]
Speaker Change: We were at 8.3% for all of last year in standard commercial lines and now we're at 9.1 so you've got different lines moving in different directions.
Speaker Change: but overall higher. So it's not such a dramatic move that it's dramatically impacted.
Speaker Change: Repentions. But again, we're at a point in the market where we think it's appropriate to focus on achieving your price target. And if that has a slight impact on retention over time, we're willing to make that trade. But I also want to highlight, and I made reference to this in my prepared remarks.
Speaker Change: We continue to execute our pricing strategy on a granular and targeted basis, which should also mitigate the overall impact from retention perspective.
Speaker Change: Thank you, your thoughts are much appreciated, really appreciate the help.
Thank you, Paul.
Speaker Change: Thank you. As a reminder, if you like to ask a question, please press star 11.
Speaker Change: And our next question comes from Meyer Shields with KBW. Your line is open.
Speaker Change: Great, thanks. Good morning. And thank you so much to the enhanced disclosure with the cast and reserve adult asylum, which is making a lot of year to follow.
Speaker Change: Two quick line of business questions. First, I mean ISO data, I guess the fast track data, we're seeing maybe the surprising decreases in claim frequency for physical damage coverages. And I'm wondering whether that [inaudible]
Francis N2, the staff affluent print line book said, Selective Rights.
Speaker Change: Yes, so we are seeing the same thing on both commercial auto physical damage and personal auto physical damage.
Speaker Change: And I'm sorry, but may I just want to make sure that your question related I didn't hear the full question related to the Apple and Market
Speaker Change: I think it's across the board, and we're seeing it in our target market as well [inaudible]
Speaker Change: Okay, yeah, no, that's perfect. That's really what I wanted to know. Effect questions. I hope you need to take us through the specifics of your bond book, with regard to I guess both potential claim cost inflation on construction materials and overall sensitivity to the economy. Thank you very much.
Speaker Change: I was asking about the Security Book, but welcome comments as probably as you want to make them.
Speaker Change: Yeah, I mean, the surety vote for us is a relatively small portfolio. It's in the range of
Speaker Change: $40 million. It's around one percent of our overall premium. We've been in that business a long time. The results have continued to be very strong. And obviously, to the extent we anticipate impacts from an economic perspective, we would adjust our pricing accordingly. Thank you very much.
Speaker Change: Okay, do you give your book as subject to sort of economic macroeconomic pressures?
We're not we're not writing large
Speaker Change: Contractuality. We're a small market, lower end of the mid-market player in that space.
So, you want to think about us in those terms? [inaudible]
Okay, thank you very much.
Speaker Change: Thank you. Our next question is a follow-up from Mike Zaremski with BMO. Your line is open.
Speaker Change: Hey, thanks. Just a quick follow up in commercial lines. Any puts and takes worth calling out on unreserved development in any of the lines?
Now!
Speaker Change: Now, nothing, you know, the only reserve change we we called out was the personal auto liability driven by New Jersey, severities in the 24 year, but nothing on the commercial line side.
Thank you.
Michael Phillips: Thank you. Our next question is a follow-up from Michael Phillips with Ironheimer. Your line is open.
Michael Phillips: Yeah, thanks. Just one more, kind of a softer question, John . I guess given the macro environment.
Michael Phillips: and kind of everybody's concerns of what's happened in the world of the U.S.
Michael Phillips: Have you seen any more pushback recently than normal, from insurers or agents that say, hey, you might want to ease up on pricing given our clients are under pressure too? Is that changed at all in the past couple of months or so? [inaudible]
Michael Phillips: It hasn't. Now, it's not the suggested one. And I think, you know, we continue to see strong exposure change in our commercial lines portfolio.
Michael Phillips: and, again, being a predominantly small and middle-market player, you know, not that there's not an impact there, but in terms of anticipated and impact, I would say that hasn't really changed any of the pressure points. And that's not to suggest that there's not some ongoing...
Michael Phillips: Concern relative to continued increases across the market, and I think this was the case certainly in personal lines over the last couple of years and I think it exists.
Michael Phillips: There's where there's some rate fatigue on the part of distribution partners and customers, but I think that's why the focus really needs to be on addressing the underlying causes.
Michael Phillips: of the increase in loss costs, which are driving pricing. And that's why this focus around litigation abuse is of particular importance and connecting that dot for customers so they understand what that does to the cost of insurance.
Okay, thank you. It makes sense. Appreciate it.
Michael Phillips: Thank you. I'm sure I know for the questions at this time. I'd like to turn the call back of the John for closing remarks.
John Marchioni: Thank you all for joining us. As always, we appreciate the questions and the participation, and please follow up with Brad if you have anything additional. Thank you.
John Marchioni: Thank you for your participation. This does conclude the program and you may now disconnect. Everyone, have a great day.
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Speaker Change: Kyrie Nelson, Little Missvanti, and Attila Thank you for moving the world forward Thank you for having us Thank you for the incredible works that have always been accomplished Thank you for all you've done They know only you