Q3 2025 The Hartford Financial Services Group Earnings Call

Conduct a question and answer session.

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I'd now like to turn the call over to keep Jordan Senior Vice President Treasurer and head of Investor Relations. Thank you. Please go ahead.

Good morning, and thank you for joining us today for our third quarter 2025 earnings call and webcast.

Speaker #1: Good morning and welcome to the HARTFORD INSURANCE GROUP, INC. Third Quarter 2020 Earnings Call and Webcast . All participants are in a listen only mode .

Yesterday, we reported results and posted all earnings related materials on our website before.

Before we begin please note that our presentation includes forward looking statements, which are not guarantees of future performance and may differ materially from actual results. We do not assume any obligation to update these statements.

Investors should consider the risks and uncertainties detailed in our recent SEC filings news release and financial supplement which are available on the Investor Relations section of the Hartford Dot com.

Our commentary includes non-GAAP financial measures with explanations GAAP reconciliations are available in our recent SEC filings news release and financial supplement.

Now I'd like to introduce our speakers, Chris Swift, Chairman and Chief Executive Officer, and Best Costello, Chief Financial Officer. After their remarks, we will take your questions assisted by several members of our management team and now I will turn the call over to Chris.

Good morning, and thank you for joining us today, the Hartford delivered outstanding third quarter results with core earnings of $1 1 billion or $3 78 per diluted share both records for the company.

These results reflect the strength of our franchise.

Disciplined execution of our strategy.

We continue to grow top line, while maintaining strong margins.

A dynamic environment.

Ported by investments that advance our underwriting discipline, while deepening relationships with customers and distribution partners.

Highlights from the quarter include written premium growth in business insurance of 9%.

With an underlying combined ratio of $89 four.

In personal insurance and underlying combined ratio of 93, seven point improvement over prior year.

Employee benefits.

<unk> core earnings margin of eight 3%.

Continued solid performance in the investment portfolio.

All of these items contributed to an outstanding trailing 12 month core earnings Roe.

18, 4%.

Let's take a closer look at third quarter performance.

In business insurance third quarter results reflect excellent growth with strong underlying margins sustaining momentum from the first half of the year.

Our small business franchise continues to set the standard for growth and profitability in the industry delivering record breaking new business premium.

With strong underlying combined ratios.

Written premium growth of 11% was fueled by double digit increases in our industry, leading packaged product and auto.

E&S binding also delivered exceptional results with written premium up 47%, reaching over $100 million in the quarter.

These results reflect the power of our underwriting expertise.

AI driven capabilities and strong digital platforms built on years of strategic investments.

Written premium is expected to exceed $6 billion in 2025, representing 10% growth over prior year.

Turning to middle and large business growth was outstanding with solid underlying margins.

Written premium.

Increased 10% underscoring the strength of our diversified portfolio.

Performance was fueled by robust new business generation.

Strong retention levels and.

And solid pricing execution across the lines.

Our underwriting approach continues to guide us towards opportunities.

That deliver attractive risk adjusted returns.

While ensuring we remain selective and disciplined.

Shifting to global specialty results were excellent with another quarter of underlying margins in the mid eighties.

This performance reflects targeted growth strategies, alongside strong risk and pricing fundamentals.

Net written premium grew by 5% driven by U S financial lines.

Bond.

And across international partially offset by a 3% dip in wholesale primarily due to a decline in new construction projects.

Within global specialty we are taking advantage of innovative solutions that combine our specialized underwriting expertise with advanced technology and broad distribution of our small business franchise.

Through our one Hartford approach agents and customers can seamlessly quote and bind comprehensive coverages and a single unified experience.

For example, this approach is resonating with small and midsize business customers, who require professional and management liability coverage not addressed by the standard package product.

We remain focused on helping all business customers succeed by using digital capabilities.

Leveraging our broad distribution network and offering a comprehensive product suite that meet more of their needs.

Moving to pricing business insurance renewal written pricing excluding workers' compensation.

Was seven 3% above.

Above overall loss trend.

Pricing execution remains highly disciplined.

General liability remained firm.

And above loss trend supported by rate increases and proactive underwriting actions focused on segmentation.

Limits management.

And geographic optimization.

Excess and umbrella lines delivered double digit pricing increases in.

And primary lines moderated slightly.

Still in the high single digits.

Despite modest easing this quarter auto pricing remained near 11%, while workers' compensation pricing was slightly up from the second quarter.

The cross business insurance property written premium grew 11% to $800 million with expectations for full year premium to reached $3 3 billion.

Over the past three years through the team's thoughtful and disciplined strategy, including Cat management.

Business insurance property book grew 50%.

And small business property pricing within the packaged product remained strong achieving 12% renewal written price increases.

In General industries.

Property pricing was relatively consistent with the second quarter and above loss trend.

Other property lines, primarily E&S and large representing approximately 20% of the property book.

<unk> renewal pricing increases of 1.2%.

Up nearly two points from the second quarter.

Turning to personal insurance results continued to improve over prior year homeowner.

Homeowners had a strong quarter highlighted by 10% written premium growth and mid seventies underlying combined ratio.

Renewal written pricing remained flat to the second quarter at 12, 6% driven by net rate and insured value increases.

Auto underlying results improved by three six points in the quarter with a year to date underlying combined ratio in the mid nineties.

While personal insurance underlying margins are at targeted levels total Pip growth continues to be impacted by a highly competitive market.

We are pleased with growth in agency, where policies in force grew 17% over prior year, including 4% in auto.

In the third quarter, we introduced prevail to retail distribution.

A new product technology and experiences to our agency partners.

We are now live in six states and we will continue to rollout prevail agency over time.

With 30 state launches planned by early 2027.

Initial results are positive with agents excited about our improved performance and competitive positioning.

With preferred market customers.

Prevail represents a meaningful investment in our businesses.

Now benefiting both direct and retail channels.

Earlier this month.

<unk> senior leadership team attended the CIA.

Insurance leadership Forum.

Premier property and casualty industry event.

We met with more than 50 key distributors and reinforced our commitment to consistent execution and strategic alignment.

<unk> and agents recognize our industry, leading digital capabilities, that's clear Differentiators, we left a forum with increased confidence in the strength of our independent distribution relationships.

<unk> us to capture additional market share over time.

Moving on to employee benefits the core earnings margin of eight 3% was driven by excellent life and strong disability results.

Persistency remained strong in the low nineties, while fully insured premium and sales were flat year over year, reflecting a competitive market and lower large case sales in 2025.

Quote activity and known sales for 2026 are trending very favorably as.

As recent investments in technology and customer facing tools gain traction in the marketplace.

In terms of capital management yesterday, we announced a 15% increase in the common quarterly dividend.

Continuing a track record of annual dividend increases supported by earnings power and strong capital generation.

In addition, we are pleased that both S&P and Moody's upgraded the debt and financial strength ratings of the Hartford.

Commentary from the agencies highlighted our effective risk selection and sophisticated pricing strategies.

Which have positively impacted underwriting performance across business cycles with expectations for continued strength supported by well diversified revenues and earnings.

In closing as we enter the final quarter of 2025, our financial strength disciplined execution and strategic investments position the company to sustain strong results.

By leveraging industry, leading tools underwriting expertise and advanced data science, we are confident in our ability to continue to navigate a dynamic market cycle and deliver superior returns for our shareholders.

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

Thank you Chris core earnings for the quarter were $1 billion 77 million or $3 78 per diluted share with a trailing 12 month core earnings ROE of 18, 4%.

In business insurance core earnings were $723 million with written premium growth of 9% and an underlying combined ratio of $89 four.

Small business continues to deliver excellent results with written premium growth of 11% and an underlying combined ratio of $89 eight.

Middle and large business had another strong quarter with written premium growth of 10% and an underlying combined ratio of 91 four.

Global specialties third quarter was solid with written premium growth of 5% and an underlying combined ratio of 85 eight.

The business insurance expense ratio of $31. One was relatively flat from the 2024 period. However increased sequentially as the impact of earned premium leverage was offset by higher incentive compensation and benefit costs.

In personal insurance core earnings were $143 million with an underlying combined ratio of 90.

Homeowners delivered an underlying combined ratio of $74 for a one point improvement over the prior year.

Auto underlying results improved by three six points in the quarter and remain in line with expectations, reflecting typical seasonality as the year progresses.

The personal insurance third quarter expense ratio of $25 eight was relatively flat from the 2024 period.

Written premium and personal insurance increased 2% in the third quarter.

We achieved written pricing increases of 11, 3% in auto and 12, 6% in homeowners.

With respect to catastrophes P&C current accident year losses were $70 million before tax for one six combined ratio points, which included 37 million of favorable prior quarter development through September 30th we have reached the $750 million attachment point for <unk>.

Aggregate property catastrophe treaty, which means that cat losses of up to $200 million in the fourth quarter would be covered by the treaty.

As a reminder, the aggregate cover it does not include losses from the global reinsurance business, which purchases its own retro sessional coverage.

Total P&C net favorable prior accident year development within core earnings was $95 million before tax primarily due to reserve reductions in workers' compensation and personal auto liability and physical damage.

We recorded $8 million of deferred gain amortization related to the navigators ADC, which has now been fully amortized.

As a reminder, the E N E. ADC cover was exhausted in 2024, so any development from the fourth quarter any study will impact core earnings.

Moving to employee benefits core earnings of $149 million and a core earnings margin of eight 3% reflect excellent group life and strong disability performance.

The group life loss ratio of 74 point to improved three three points, reflecting lower mortality across both term and accidental life products.

The group disability loss ratio of 76 increased two seven points from the prior year.

Last year included a benefit of 2.2 points related to the long term disability recovery rate assumption update while current year long term disability trends were slightly higher as expected.

This was partially offset by pricing increases, earning into our paid family and medical leave products.

The employee benefits expense ratio of $26 seven increased one four points, primarily driven by higher staffing costs, including increased incentive compensation and benefits.

Increased investments in technology, and a higher commission ratio due to premium mix.

Turning to investments our diversified portfolio continues to produce solid results.

Net investment income of $759 million increased 100 million from third quarter 2024, due to income from limited partnership and other alternative investments.

A higher level of invested assets.

And reinvesting at higher interest rates, partially offset by a lower yield on the variable rate securities.

Total annualized portfolio yield excluding limited partnerships was four 6% before tax consistent with the second quarter.

We continue to strategically manage the portfolio balancing risk while pursuing accretive trading opportunities.

In the quarter, we reinvested at 50 basis points above sales at maturity yield, reflecting increased call and paydown activity on higher yielding corporate bonds and certain structured securities.

We remain focused on our ability to reinvest above the current portfolio yield.

As expected our third quarter annualized LP returns of six 7% before tax were higher than the first half of the year, reflecting increased returns from our private equity portfolio.

While still early we anticipate fourth quarter results to be in a similar range to third quarter.

Turning to capital management as Chris mentioned, we increased our common quarterly dividend by 15% to <unk> 60 per share payable on January five 2026.

Over the past decade, we have delivered a dividend increases averaging approximately 11% per year.

The step up in our dividend demonstrates our confidence in the sustained earnings power and capital generation of the organization.

Holding company resources totaled $1 3 billion at quarter end.

During the quarter, we repurchased three 1 million shares under our share repurchase program for $400 million and we expect to remain at that level of repurchases in the fourth quarter.

As of September 30th we had 195 billion remaining on our share repurchase authorization through December 31 2026.

In summary, we are pleased with our outstanding 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 and enhance value for all stakeholders.

I'll now turn the call back to Kate.

Thank you Beth we will now take your questions operator, 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.

Interest of time, we ask that you. Please limit yourself to one question one follow up and rejoin the queue for any additional questions. Thank you.

Our first question will come from Brian Meredith from UBS. Please go ahead. Your line is open.

Yes, Thanks, Chris I Wonder if you could talk a little bit about workers' comp it looks like we're starting to see some price increases there, which is which is great.

Do you expect that trend to continue here.

There will be at a point here in the next call. It 12 to 18 months, where we're maybe rate there is in line with trend and where are we right now rate versus trend.

Yes, thanks for the question and joining us.

I would say.

Workers comp market remains consistent.

When we talked about pricing this quarter.

It was really up.

<unk> from slightly negative to a slight positive so that's really not a meaningful move in.

If you look at sort of state filings.

Regulatory activity across all the states.

I don't I don't see much right.

Increases set up for 2026 at this point in time, primarily because as you know Brian I mean, some highly profitable line is still behaving pretty well.

Loss trends are stable and predictable.

It doesn't set itself up for meaningful rate increases I think you are aware of one state at a fairly meaningful rate increase in California, because their loss trends were a little outsized compared to.

To others. So, yes, I would say, it's steady as she goes and.

We feel good about the.

The profitability of the overall profitability of the book, whether it be on an accident year basis, our calendar year, particularly when you look at our reserve releases over the last three years have been pretty steady and predictable.

Makes sense and then I wonder if we could just dig into a little bit more into the underlying loss ratio and in business insurance commercial insurance. So I understand that most of the year be deterioration is is due to the workers comp, but if I think about the other lines of business you talk about rate has been in excess of trend of pricing is back to its trend.

Kate Jorens: Listen-only mode. After the speaker's remarks, we will conduct a question-and-answer session. To ask a question at this time, you'll need to press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to Kate Jorens, Senior Vice President, Treasurer, and Head of Investor Relations. Thank you. Please go ahead.

For a long time.

Are you holding those picks kind of constant right now given where we are with tort inflation.

Maybe potential impacts of tariffs or are we actually seeing improvement there and they are just being more than offset by comp.

Operator: Good morning, and thank you for joining us today for our third quarter 2025 earnings call and webcast. Yesterday, we reported results and posted all earnings-related materials on our website. Before we begin, please note that our presentation includes forward-looking statements, which are not guarantees of future performance and may differ materially from actual results. We do not assume any obligation to update these statements. Investors should consider the risks and uncertainties detailed in our recent SEC filings, news release, and financial supplements, which are available on the Investor Relations section of TheHartford.com. Our commentary includes non-GAAP financial measures with explanations, GAAP reconciliations available in our recent SEC filings, news release, and financial supplements. Now, I'd like to introduce our speakers: Christopher Swift, Chairman and Chief Executive Officer, and Beth Costello, Chief Financial Officer. After their remarks, we will take your questions, assisted by several members of our management team.

Yes.

Really meaningful, uh, rate increase in California because they're lost Trends, you know, we're a little outsized, you know, compared to to others. So, you know, I would say it's Steady As She Goes and, um, you know, we feel good about the, the profitability, the overall profitability, the book, whether it be on an action year basis or calendar year, particularly when you look at our re Reserve releases over the last 3 years have been pretty steady and predictable,

I think.

What I'd like to do and I know <unk> study, our data, but let's look at the nine month year over year underlying combined ratio.

Currently it's running 88 six versus 88 one.

And I would say within those numbers comp is performing as we expected. So there is no change in sort of anything that we've done with with comp in this accident. Erin obviously prior accident years continue to develop favorably I think if I really attribute the difference.

And run rates through nine months.

Makes sense. And then I wonder if we could just dig in a little bit more into the underlying loss ratio and, uh, and business insurance commercial insurance. So, I understand that, you know, most of the Year be deterioration is, is due to the worker's comp, but if I think about the other lines of business you talk about, you know, rate has been in excess of trend of pricing as an excess trend for, for a long time. Um, are you holding those pics kind of constant right now, given you know, where we are with torque inflation? And, um, you know, maybe potential impacts of tariffs or, or we actually seeing Improvement there and they're just being more than offset by comp.

It's really incentive compensation, so an expense component not a loss component.

yeah, I I I I think um,

Is higher than we plan just given overall.

you know what, I what I'd like to do and I and I know you've studied our our data but let's look at the 9-month year-over-year underlying combined ratio.

Shown on row, we're generating and overall profitability.

Currently, it's running 886 versus 881.

So if you are sort of back that out we are within a few tenths.

What we think would be sort of a consistent.

Generally consistent.

Operator: Now, I'll turn the call over to Christopher.

The expectation at that 88, one and then I would even add.

Christopher Swift: Good morning, and thank you for joining us today. The Hartford delivered outstanding third-quarter results with core earnings of $1.1 billion or $3.78 per diluted share, both records for the company. These results reflect the strength of our franchise and disciplined execution of our strategy. We continue to grow top line while maintaining strong margins in a dynamic environment, supported by investments that advance our underwriting discipline while deepening relationships with customers and distribution partners. Highlights in the quarter include written premium growth in business insurance of 9%, with an underlying combined ratio of 89.4. In personal insurance, an underlying combined ratio of 90, a 3.7 point improvement over prior year. In employee benefits, an outstanding core earnings margin of 8.3% and continued solid performance in the investment portfolio. All these items contributed to an outstanding trailing 12-month core earnings ROE of 18.4%.

Further attribution, if you really look at the <unk>.

Book.

We mixed in property at a good level you saw the 10%.

Both.

We did mix in more national account business.

Which tends to have a higher <unk>.

Underlying combined ratio both for comp and GL.

That obviously impacted another few tenths and then if I really want to quibble and look at it even more in our refined basis, we probably had slightly more favorable non cat property experienced last year compared to this year.

Put that all together and you were dealing with sort of a half a point.

And I would even share with you as I think about the fourth quarter and the full year.

I think we'll come in slightly below 88 six.

And call it a very productive high quality year and feel very good.

Great. Thank you.

Yes.

Yeah.

Our next question comes from Andrew <unk> from TD Cowen. Please go ahead. Your line is open.

Christopher Swift: Let's take a closer look at third-quarter performance. In business insurance, third-quarter results reflect excellent growth with strong underlying margins, sustaining momentum from the first half of the year. Our small business franchise continues to set the standard for growth and profitability in the industry, delivering record-breaking new business premium with strong underlying combined ratios. Written premium growth of 11% was fueled by double-digit increases in our industry-leading package product and auto. E&S Binding also delivered exceptional results with written premium up 47%, reaching over $100 million in the quarter. These results reflect the power of our underwriting expertise, AI-driven capabilities, and strong digital platforms built on years of strategic investments. Written premium is expected to exceed $6 billion in 2025, representing 10% growth over prior year. Turning to middle and large business, growth was outstanding with solid underlying margins.

Good morning so.

I'd like to start out with.

Terrific.

New business growth of 11% and 20% in small and mid and large respectively.

Those are phenomenal numbers in this environment.

I know you touched on property, a little bit, but maybe you could talk to the lines that were most strong in each of those two segments and.

Why you were able to to see that kind of growth in that.

And that's somewhat softening market.

Uh huh.

Thank you Andrew for the question.

Give us some highlights but I'd like motor.

Cover his point of view is too but.

Besides the major segments, you can see those growth numbers, if you pulled back.

Our spectrum product in small commercial it was up 13% in the quarter.

Global <unk> was up 14% business insurance auto was up 10% I referenced national accounts, before which was up 17% in the quarter really pleased with that.

The book is performing.

Christopher Swift: Written premium increased 10%, underscoring the strength of our diversified portfolio. This performance was fueled by robust new business generation, strong retention levels, and solid pricing execution across the lines. Our underwriting approach continues to guide us towards opportunities that deliver attractive risk-adjusted returns while ensuring we remain selective and disciplined. Shifting to global specialty, results were excellent, with another quarter of underlying margins in the mid-80s. This performance reflects targeted growth strategies alongside strong risk and pricing fundamentals. That written premium grew by 5%, driven by U.S. financial lines, bond, and across international, partially offset by a 3% dip in wholesale, primarily due to a decline in new construction projects. Within global specialty, we are taking advantage of innovative solutions that combine our specialized underwriting expertise with advanced technology in broad distribution of our small business franchise.

More importantly, our reputation in the marketplace and that National account area. So I would say it was broad based.

I wouldn't even say our excess liability lines.

20%.

Workers' comp I think grew 3% year over year so.

I'd say it was just broad based strong performance by the team.

And Andrew you've heard us myself in my talk.

The team to focus on margins.

And maintain those margins as we head into <unk>.

It's executed here in 2025.

I really feel like the team is executing flawlessly.

Hi.

Draw lines in the sand and say no and move on but also our capabilities our digital capabilities all of the investments that we've made across all our business segments I think are performing well.

Yeah, maybe I'll just add a couple of pieces, Chris Yeah, I think flow Andrew remains really good in both businesses, both in small and middle and small that's admitted and non admitted to the flow. We're seeing you saw the Chris quoted a plus 47% growth in the E&S lines binding in small business the flow and admitted and non admitted channels remain.

Really strong and small and I think that's just a sign of how well the technology, we're creating efficiency for our agents and we see further opportunity for consolidation in the small business space.

Christopher Swift: Through our One Hartford approach, agents and customers can seamlessly quote and bind comprehensive coverages in a single unified experience. For example, this approach is resonating with small and mid-sized business customers who require professional and management liability coverage not addressed by the standard package product. We remain focused on helping all business customers succeed by using digital capabilities, leveraging our broad distribution network, and offering a comprehensive product suite that meets more of their needs. Moving to pricing, business insurance renewal written pricing, excluding workers' compensation, was 7.3% above overall loss trend. Pricing execution remains highly disciplined. General liability remained firm and above loss trend, supported by rate increases and proactive underwriting actions focused on segmentation, limits management, and geographic optimization. Access and umbrella lines delivered double-digit pricing increases, and primary lines moderated slightly while still in the high single digits.

And then the middle space I think Chris referenced it but again, we've got real specialization. We built the technology, we have in small as we're taking it into middle to make that process more efficient for agents.

However, I think the middle results will be more lumpy. We had we showed a plus 5% in Q2, we're showing as you saw plus 10 in Q3 I think we're really.

Making decisions there that we just add them up at the end of the quarter and sometimes it's going to be a great number sometimes it can be an okay number. So we feel really confident about the small and the consistency of the growth. There I just feel like the middle maybe a little bit more choppy and more dependent on market conditions.

Okay.

Super helpful.

Shifting over to personal lines.

The auto line came in at 97 point.

Nine and I know Theres a lot of seasonality there.

But maybe.

Maybe you can talk about.

Where where you'd like that to kind of center like what would be the kind of range, where you'd be very comfortable and now that you've got the.

Prevailed chassis kind of rolling out <unk>.

Do you see the policy count starting to pick up in the near future.

Christopher Swift: Despite modest easing this quarter, auto pricing remained near 11%, while workers' compensation pricing was slightly up from the second quarter. Across business insurance, property written premium grew 11% to $800 million, with expectations for a full-year premium to reach $3.3 billion. Over the past three years, through the team's thoughtful and disciplined strategy, including CAT management, the business insurance property book grew 50%. In small business, property pricing within the package product remains strong, achieving 12% renewal written price increases. In general industries, property pricing was relatively consistent with the second quarter and above loss trend. Other property lines, primarily E&S and large, representing approximately 20% of the property book, achieved renewal pricing increases of 1.2%, up nearly two points from the second quarter. Turning to personal insurance, results continue to improve over prior year.

Yeah.

Andrew Im wondering.

I would say is as I said in my prepared remarks, we're at target margins today.

And feel good with what Melinda and the team have done to sort of restore our margins as you know we have <unk>.

12 month policy, so theres, a little bit of a <unk>.

Lag that we have to manage so.

And I would say and I think we've talked about it in the past if for an auto book, if we if we could run the underlying combined out at 95.

With two points of cat.

I feel good and we are then and go mode.

To grow which we are now we are pivoting to.

To growth, particularly in 2006.

The real opportunity I think for growth will be our new agency offering.

Which as I said, we're in six states now.

Early 'twenty, seven which will add to incremental growth.

In addition to our AARP.

Response, but a lot of our good competition is also pivoting to growth. So it's not it's not going be a lay up we're going to have to break a sweat and differentiate ourselves but.

When we think about growing we think about bundling auto and home.

Christopher Swift: Homeowners had a strong quarter, highlighted by 10% written premium growth and mid-70s underlying combined ratio. Renewal written pricing remained flat to the second quarter at 12.6%, driven by net rate and insured value increases. Auto underlying results improved by 3.6 points in the quarter, with a year-to-date underlying combined ratio in the mid-90s. While personal insurance underlying margins are at targeted levels, total PIF growth continues to be impacted by a highly competitive market. We are pleased with growth in agency, where policies in force grew 17% over prior year, including 4% in auto. In the third quarter, we introduced Prevail to retail distribution, bringing new product, technology, and experiences to our agency partners. We are now live in six states and will continue to roll out Prevail agency over time, with 30 state launches planned by early 2027.

And.

We still need to maintain sort of the law.

Loss cost environment.

Yes.

We see lots of costs going so all I would say is I think it's balanced.

I'm pleased where we're at.

Linda I don't know if you would add any additional color.

Correctly I think that's all accurate and I would just add that in addition to that the new business efforts in the competitive environment, where we're experiencing there.

Retention certainly is another dynamic influencing growth and we still have double digit renewal price change on being felt by our customers. So as that drops into single digits in the fourth quarter and continues to moderate in 2006 that will help alleviate pressure on the retention and top line dynamics.

Andrew It's that's the only other thing that I would just add is when we talk about being at an underlying combined ratio in auto of 95 that would be for the full year and I just want to remind you again that we see seasonality in our auto results under normal conditions, where it increases roughly two to three.

Christopher Swift: Initial results are positive, with agents excited about our improved performance and competitive positioning with preferred market customers. Prevail represents a meaningful investment in our businesses, now benefiting both direct and retail channels. Earlier this month, the Hartford Senior Leadership Team attended the CIAB Insurance Leadership Forum, a premier property and casualty industry event. We met with more than 50 key distributors and reinforced our commitment to consistent execution and strategic alignment. Brokers and agents recognized our industry-leading digital capabilities as clear differentiators. We left the forum with increased confidence in the strength of our independent distribution relationships, positioning us to capture additional market share over time. Moving on to employee benefits, the core earnings margin of 8.3% was driven by excellent life and strong disability results.

Clients over the course of the year. So it's not as if every quarter would be at 95, we'd expect the first half of the year to be lower in the second half of the year to be higher when we think about that in total.

Great.

Okay.

Our.

Next question comes from Gregory Peters from Raymond James. Please go ahead. Your line is open.

Good morning, everyone.

So.

The first question.

On pricing.

You mentioned in your press release in the comments the seven 3%.

Benefit in the quarter.

And.

Yes.

There's been a lot of growing chatter around.

Increasing price competition.

Maybe it's not as relevant in the small market, but maybe you can talk about some pressure points you are seeing on price maybe from your distribution partners as it relates to the middle of a large business or maybe it's even sitting inside the global specialty.

Youre correct. Thanks for joining us youre right the 73.

Christopher Swift: Persistency remained strong in the low 90s, while fully insured premium and sales were flat year over year, reflecting a competitive market and lower large case sales in 2025. Quote activity and known sales for 2026 are trending very favorably, as recent investments in technology and customer-facing tools gain traction in the marketplace. In terms of capital management, yesterday we announced a 15% increase in the common quarterly dividend, continuing a track record of annual dividend increases supported by earnings power and strong capital generation. In addition, we are pleased that both S&P and Moody’s upgraded the debt and financial strength ratings of The Hartford Financial Services Group. Commentary from the agencies highlighted our effective risk selection and sophisticated pricing strategies, which have positively impacted underwriting performance across business cycles, with expectations for continued strength supported by well-diversified revenues and earnings.

Called out this quarter as ex workers' comp.

We'll call it standard.

Insurance businesses.

If you're interested I would say in small business ex comp it's 93.

Middle and large ex comp seven three.

And roughly that's down a point or so from prior quarters sequentially.

And some of that is.

It's to be expected.

Just given the overall performance of certain lines, particularly led.

Led by property.

I would I would say and then I might ask mode add his color is that the real discipline that we have and is still needed is there anything liability related you could think in commercial auto you can think of primary GL excess umbrella.

And I think I gave you some of those rates, but overall from a GL basis, we're in high single digits.

Excess and umbrella low double digits, a little bit of a.

<unk> drop but still double digits.

Commercial auto is holding up in that 10% range. So.

Christopher Swift: In closing, as we enter the final quarter of 2025, our financial strength, disciplined execution, and strategic investments position the company to sustain strong results. By leveraging industry-leading tools, underwriting expertise, and advanced data science, we are confident in our ability to continue to navigate a dynamic market cycle and deliver superior returns for our shareholders. Now, I'll turn the call over to Beth Costello to provide more detailed commentary on the quarter.

Those are the highlights that I would just point out to you and ask mode add his color.

Greg I would just say that we still feel like the market is pretty.

Pretty fairly priced truly and especially in the smaller end of our of each of our books and that small middle and in the global books and.

I think it's also really important to make sure you understand our starting point, we have not been fixing anything here for two or three years, and we know that yes.

And when we looked at some of our peers, there's some rate or higher rate action coming through but I think thats a relative to their starting point over the past couple of years and so I just I feel confident in our ability to grow.

Kate Jorens: Thank you, Chris. Core earnings for the quarter were $1.77 billion or $3.78 per diluted share, with a trailing 12-month core earnings ROE of 18.4%. In business insurance, core earnings were $723 million, with written premium growth of 9% and an underlying combined ratio of 89.4. Small business continues to deliver excellent results with written premium growth of 11% and an underlying combined ratio of 89.8. Middle and large business had another strong quarter with written premium growth of 10% and an underlying combined ratio of 91.4. Global specialties third quarter was solid with written premium growth of 5% and an underlying combined ratio of 85.8. The business insurance expense ratio of 31.1 was relatively flat from the 2024 period, however, increased sequentially as the impact of earned premium leverage was offset by higher incentive compensation and benefit costs.

We've given tools to the underwriters that I think our market leading the data science the actuarial tools, so and I think the underwriters are really executing well on each of the <unk> segments.

And we've given leaders I think booked management tools that again I think are second to none in the industry. So I think all in all we're executing really well just to your point on where we are.

Seen competition I think we've talked to you before about the public D&O market I think we've proven that when the margins arent there we will pull back.

I think we've been patient on workers comp just trying to pick our spots there knowing that market has been competitive but the returns are good in the most recent example, Greg that I'll point to is our large property book in middle and large that segment, we've been pulling back just especially on some of the larger accounts in that segment, we've seen the market really get hungry for the large premium in that segment.

And then the only other thing I'll call out for you is we are watching the London market closely.

The rate movement in the quarter was.

With something that we kept our eye on and I think we'll pick our spots internationally as well.

Yeah.

Thanks for that additional color mall.

Kate Jorens: In personal insurance, core earnings were $143 million with an underlying combined ratio of 90. Homeowners delivered an underlying combined ratio of 74.4, a one-point improvement over the prior year. Auto underlying results improved by 3.6 points in the quarter and remain in line with expectations, reflecting typical seasonality as the year progresses. The personal insurance third quarter expense ratio of 25.8 was relatively flat from the 2024 period. Written premium in personal insurance increased 2% in the third quarter. We achieved written pricing increases of 11.3% in auto and 12.6% in homeowners. With respect to catastrophes, P&C current accident year losses were $70 million before tax for 1.6 combined ratio points, which included $37 million of favorable prior quarter development.

I'm going to pivot to my.

Favorite topics.

Ask you guys about from time to time, which is technology.

During the third quarter, a couple of your peers came out.

With statements about potential.

<unk>.

Technology, whether it's in production or in cost savings through head count reduction.

And.

It's certainly consuming a lot of oxygen in the industry. So.

I'd like to go back and maybe.

Can you give us a sense of how your tech budget looks for the upcoming year and maybe how you are allocating it to sustaining legacy systems versus new initiatives.

Just sort of give us.

State of the Union on your <unk> outlook.

Yes happy to.

Provide that.

Yes, Greg.

I would say to your first point on <unk>.

Kate Jorens: Through September 30, we have reached the $750 million attachment point for our aggregate property catastrophe treaty, which means that CAT losses of up to $200 million in the fourth quarter would be covered by the treaty. As a reminder, the aggregate cover does not include losses from the global reinsurance business, which purchases its own retrocessional coverage. Total P&C net favorable prior accident year development within core earnings was $95 million before tax, primarily due to reserve reductions in workers' compensation and personal auto liability and physical damage. We recorded $8 million of deferred gain amortization related to the Navigators ADC, which has now been fully amortized. As a reminder, the A&E ADC cover was exhausted in 2024, so any development from the fourth quarter A&E study will impact core earnings.

What are the impacts here I think we're early on in this.

Baseball game.

I don't know if it will be in 18 in a baseball game.

Those of you that Washington last night, but.

It's early.

And I think.

For us our guiding principles.

Any technology, whether you want to call it data science or.

Yeah.

Artificial intelligence or general.

Yes.

Intelligence.

As it relates to sort of augment our human talent not necessarily to replace it and ultimately what the objective is to create a more frictionless.

<unk> for our customers for our agents and brokers.

We can be fast accurate and.

Really differentiate ourselves on a on a just to ease of business I think when that happens I think we will.

Retention will go up I think will attract more business capture more market share.

We've been saying so that's the first premise and the premise of where we ought to go.

Kate Jorens: Moving to employee benefits, core earnings of $149 million and a core earnings margin of 8.3% reflect excellent group life and strong disability performance. The group life loss ratio of 74.2 improved 3.3 points, reflecting lower mortality across both term and accidental life products. The group disability loss ratio of 70.6 increased 2.7 points from the prior year. Last year included a benefit of 2.2 points related to the long-term disability recovery rate assumption update, while current year long-term disability trends were slightly higher as expected. This was partially offset by pricing increases earning into our paid family and medical leave products. The employee benefits expense ratio of 26.7 increased 1.4 points, primarily driven by higher staffing costs, including increased incentive compensation and benefits, increased investments in technology, and a higher commission ratio due to premium mix. Turning to investments, our diversified portfolio continues to produce solid results.

From a process side is generally three major areas claims underwriting and operations.

And so that's what we.

We're focused on.

We're trying to go as fast as we can.

We've allocated substantial resources to.

Looking at our processes and fundamentally improving them redesigning them, what sort of attack AI.

Focus from from from the get go so that's what I would say from from an outlook side.

What we're trying to do just to give you numbers, we run basically a $1 three all in.

Ron and invest budget.

And I would say a little over $500 million is sort of the invest side of that.

And its various projects some that you might be interested in we're still taking all our data and applications to the cloud.

Which were in our fourth year of a six year journey to get that done.

We are rolling out some some pretty cool stuff.

The cleanup.

Call Center activity, we're rolling out AWS connect.

Which everyone in the organizational product lines.

Kate Jorens: Net investment income of $759 million increased $100 million from third quarter 2024 due to income from limited partnerships and other alternative investments, a higher level of invested assets, and reinvesting at higher interest rates, partially offset by a lower yield on variable rate securities. The total annualized portfolio yield, excluding limited partnerships, was 4.6% before tax, consistent with the second quarter. We continue to strategically manage the portfolio, balancing risk while pursuing accretive trading opportunities. In the quarter, we reinvested at 50 basis points above the sales and maturity yield, reflecting increased call and pay down activity on higher yielding corporate bonds and certain structured securities. We remain focused on our ability to reinvest above the current portfolio yield. As expected, our third quarter annualized LP returns of 6.7% before tax were higher than the first half of the year, reflecting increased returns from our private equity portfolio.

Service centers.

We expect that to be completed in the first half of 'twenty six.

And the list can go on but.

I do want to try to refrain from giving too much detail because some of this is proprietary it's competitive we're trying to get a first mover advantage and I know you'll respect that.

Philosophy that I have but Beth would you add from them yes.

The only thing I would add and maybe just two.

Pointed out the language that you used Greg when you said how much do you spend on legacy business, our legacy systems versus in vast and Chris gave you the breakout between Ron and invest but I Wouldnt have you think that that Ron is all about legacy systems. We've been on a path for several years now of modernizing our core platforms. So those Ron.

Costs are also.

Related to more modern systems that really sets us up very well to be able to spend the dollars that we're talking about from the inverse side to make the strides that Chris talked about so I just wanted to just clarify that a little bit when you think about our platforms than what we've been doing over the last 10 years.

You gave us some new information so I appreciate it thank you.

Kate Jorens: While still early, we anticipate fourth quarter results to be in a similar range to third quarter. Turning to capital management, as Chris mentioned, we increased our common quarterly dividend by 15% to $0.60 per share, payable on January 5th, 2026. Over the past decade, we have delivered dividend increases averaging approximately 11% per year. The step up in our dividend demonstrates our confidence in the sustained earnings power and capital generation of the organization. Holding company resources totaled $1.3 billion at quarter end. During the quarter, we repurchased 3.1 million shares under our share repurchase program for $400 million, and we expect to remain at that level of repurchases in the fourth quarter. As of September 30, we had $1.95 billion remaining on our share repurchase authorization through December 31, 2026.

Our next question comes from Alex Scott from Barclays. Please go ahead. Your line is open.

Hey, good morning.

I wanted to go back to personal lines and just some of the comments you made about retention.

Just kind of getting into <unk> and you're starting to lap some of the bigger rate increases are you seeing shopping rates come down at all for the policy is for you or not.

Taking as much price I'm, just trying to get a sense of how much is that.

Driven by great you're taking versus maybe the environment also still kind of just getting competitive with price decreases in some pockets.

Particularly <unk> direct to consumer and so forth.

Yes, Alex I'll, let melinda at her color, but I would say shopping is still elevated across.

Just across.

The business, whether it be auto or home.

I think people have been somewhat conditioned to shop, and obviously digital makes it tough a lot.

Kate Jorens: In summary, we are pleased with our outstanding 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 and enhance value for all stakeholders. I will now turn the call back to Kate.

Year.

You saw our price increases in auto.

This quarter I would say as we get into the fourth quarter and early 2006, I think by the fourth quarter those loss or those pricing numbers will probably drop into the high single double single digits and we will continue then to moderate in early 'twenty six and throughout 'twenty six.

Operator: Thank you, Beth. We will now take your questions. Operator, please repeat the instructions for asking a question.

Kate Jorens: As a reminder, to ask a question, please press star followed by the number one on your telephone keypad. In the interest of time, we ask that you please limit yourselves to one question and one follow-up and rejoin the queue for any additional questions. Thank you. Our first question will come from Brian Meredith from UBS. Please go ahead. Your line is open.

Which gives us the opportunity to us.

To be competitive and try to grow.

So our Pip count, but Linda what would you add.

Thank you Chris.

No I don't think that shopping behavior in our book is any different than the broader industry and I would say no switching behavior has been higher driven by the multiple cycles of rate that again, the industry has put a not anything specific to the Hartford.

[Analyst]: Yes, thanks. Chris, I wonder if you could talk a little bit about workers' compensation. Looks like we're starting to see some price increases there, which is great. Do you expect that trend to continue here? Do you think there will be at a point here in the next, call it, 12 to 18 months where maybe rate there is in line with trend? Where are we right now, rate versus trend?

But I would point out in our retention is stable and.

We are certainly reflective of the environment and we have put implemented a number of initiatives to really focus on policyholder education and experience as things to help them think about coverage counseling adjustments that they can make billing reminders and other assistance. So we do a lot to try to create seamless experiences and a lot of connection with our customer as.

Christopher Swift: Yeah, thanks for the question and joining us. I would say, you know, the workers' compensation insurance market remains consistent. When we talked about pricing this quarter, it was really up 0.4%, from a slight negative to a slight positive. That's really not a meaningful move. If you look at sort of state filings and regulatory activity across all the states, I don't see much rate increases set up for 2026 at this point in time, primarily because, as you know, Brian, it's a highly profitable line and still behaving pretty well. Loss trends are stable and predictable, and it doesn't set itself up for meaningful rate increases. I think you're aware one state had a fairly meaningful rate increase in California because their loss trends were a little outsized compared to others.

We navigate.

This period of time with more accelerated switching behavior.

Yes.

Helpful.

Next thing I wanted to touch on was the.

The capital position of the company.

Just interested in the bigger increase in the common dividend in particular I wanted to get your thinking around.

What gives you the confidence on that what are you seeing in the business.

Is it the growth environment is slowing or do you feel like kind of the.

Capital position is strong enough that you can sort of.

Both in terms of increase in your capital distributions.

So continuing again.

Kind of growth again this quarter.

Yeah, Alex I'll I'll take that.

It really is about the fundamentals we see in.

Christopher Swift: I would say it's steady as she goes, and we feel good about the profitability, the overall profitability of the book, whether it be on an accident year basis or a calendar year, particularly when you look at our reserve releases over the last three years that have been pretty steady and predictable.

Our businesses and the earnings power that we have we've been very focused through the years and looking to maintain a competitive dividend and when we look at where earnings growth has been we felt very comfortable increasing it by the 15% and I think I think it just speaks to.

[Analyst]: Makes sense. I wonder if we could just dig in a little bit more into the underlying loss ratio in business insurance, commercial insurance. I understand that most of the year of your deterioration is due to the workers' compensation insurance. If I think about the other lines of business, you talk about rate has been in excess of trend, and pricing has been in excess of trend for a long time. Are you holding those picks kind of constant right now given where we are with port inflation and maybe potential impacts of tariffs, or are we actually seeing improvement there and they're just being more than offset by comp?

The strength of our underlying businesses it still provides us.

Plenty of opportunity to continue to invest for growth. So I wouldn't look at the change is that any sort of signal and change in focus and how we think about it.

The prospects for our underlying businesses.

Got it thank you.

Our next question comes from Elyse Greenspan from Wells Fargo. Please go ahead. Your line is open.

Hi, Thanks, Good morning my.

Christopher Swift: Yeah, I think, you know, what I'd like to do, and I know you've studied our data, but let's look at the nine-month year-over-year underlying combined ratio. Currently, it's running 88.6% versus 88.1%. I would say within those numbers, comp is performing as we expected. There is no change in sort of anything that we've done with comp, you know, in this accident year. Obviously, prior accident years continue to develop favorably. I think what, if I really attribute, you know, the difference in run rates through nine months, is really incentive compensation. An expense component, not a loss component, is higher than, you know, we planned, just given overall strong ROEs that we're generating and overall profitability.

My first question I want to start on personal auto again.

I was just curious if you guys saw any.

Any impact of tariffs on results in the quarter and then you know.

Is there any expectation that you will see.

An impact going forward right when you're point.

Is that embedded within your your expectation that you guys are now back at target margins.

Okay.

I would say very negligible.

This quarter and really for the whole year I think as we.

As discussed in prior calls a lease and then as we turn.

The clock into 2026.

Yes, we will.

Make the appropriate trend picks for our loss costs are giving.

Christopher Swift: If you've sort of backed that out, you know, we're within a few tenths of, you know, what we think would be sort of a consistent, generally consistent, you know, expectation at that 88.1%. I would even add further, you know, attribution. If we really look at the book, you know, we might mix in property at a good level. You saw the 10% growth. We did mix in more national account business, you know, which tends to have a higher underlying combined ratio, both for comp and general liability insurance, you know, that obviously impacted another few tenths. If I really want to quibble and look at it even more on a refined basis, we probably had a slightly more favorable non-CAT property experience last year compared to this year. You put that all together and you were dealing with sort of a half a point.

Two credence to any tariff pressure, particularly in property or.

Physical damage coverages, but.

At this point I don't think there'll be significant and I think I think we will know how to make the appropriate estimates and judgments. So I don't think theres anything unusual here. It's just another factor that will have to consider in our loss trends.

Yeah.

Thanks, and then my follow up was also on capital, but I guess on the different side buyback right has been kind of within this 400 million quarterly level for more than a year.

As you know earnings growth or strong any capital over so strong at the company what would you need to see I guess the increase.

From that 400 million baseline and would that be I guess when do you think through that is that with the capital plan when Youll update us next quarter for next year potentially.

Just coming off the $400 million.

Christopher Swift: I would even share with you, as I think about the fourth quarter and the full year, I think we'll come in slightly below 88.6% and call it a very productive, high-quality, you know, year and feel very good.

Yeah, Lisa I'll, let.

But that her perspective.

You've heard us talk before we'd like to be steady predictable.

And.

Any changes, we would have to contemplate but I feel good about.

Really what we are.

We are doing with our excess capital that we're generating.

[Analyst]: Great. Thank you.

Our companies are well capitalized obviously recognized by me.

Kate Jorens: Our next question comes from Andrew Kligerman from TD Cowen. Please go ahead. Your line is open.

Moody's and S&P, we're funding meaningful growth, which we want to continue to do so again with the right margins with the right mindset.

[Analyst]: Good morning. I'd like to start out with the terrific new business growth of 11% and 20% in small and then mid and large, respectively. I mean, those are phenomenal numbers in this environment. I know you touched on property a little bit, but maybe you could talk to the lines that were most strong in each of those two segments and why you're able to see that kind of growth in a somewhat softening market.

Profitable growth and then you.

See our healthy dividend that Beth comment upon and you put it all together.

No.

It's still a good use of excess capital and if we change the numbers are amounts, we'll let you know when we.

We make those decisions, but we haven't made any of those decisions.

Okay.

Thank you.

Our next question comes from Ryan Tunis from Cantor Fitzgerald. Please go ahead. Your line is open.

Hi, Thanks, good morning.

Christopher Swift: Thank you, Andrew, for the question. I'll give some highlights, but I'd like Mo to cover his point of views too. Besides the major segments, you can see those growth numbers. If you pull back our Spectrum product in small commercial, it was up 13% in the quarter. Global Re was up 14%. Business insurance auto was up 10%. I referenced national accounts before, which was up 17% in the quarter. Really pleased with how that book is performing and, more importantly, our reputation in the marketplace in that national account area. I would say it was broad-based. I would even say our excess liability line was up 20%. Workers' comp, I think, grew 3% year over year. I would say it was just broad-based, strong performance by the team. Andrew, you've heard us and myself and Mo talk.

I guess, just taking a look at the supplement.

Scott you said it looks like any type of underlying combined ratio pressure, we had in business insurance. This quarter was was in middle markets.

Not sure if I'm thinking about that right, but just some commentary I guess on.

The underlying combined ratio deterioration there.

Okay.

Yeah, Ryan if youre looking at sort of sequential I would just call out we had a strong national accounts quarter that put some pressure on that.

The booking ratio there tends to be a little higher just given it's a long duration and I don't know if it was any favorable or.

Are there any property impact Mel Im looking at here, but yes, I would just call out the national accounts.

Mix that we had a strong quarter and national accounts, yes, there is some slight favorability in property, but it was pretty minor overall.

Non cat property.

Alright, and then I guess just in group disability sounds like Theres, some paid family leave comp stuff, but I'm just curious if.

Christopher Swift: We've asked the team to focus on margins and maintain those margins as we head into or as we executed here in 2025. I really feel like the team is executing flawlessly. They know how to draw lines in the sand and say no and move on. Also, our capabilities, our digital capabilities, all the investments that we've made across all our business segments, Mo, I think are performing well.

Any new trends worth pointing out there.

Well.

Trends in sort of just the lead product in totality paid family or medical.

I think our encouraging people.

I want these products.

I think it's.

Fairly.

Great forward product to sort of price and understand.

[Analyst]: Maybe I'll just add a couple of pieces, Chris. I think flow, Andrew, remains really good in both businesses, both in small and middle. In small, that's admitted and not admitted. The flow we're seeing, you saw that Chris quoted a +47% growth in the E&S lines binding in small business. The flow in admitted and non-admitted channels remains really strong in small. I think that's just a sign of how well the technology we're creating is driving efficiency for our agents. We see further opportunity for consolidation in the small business space. In the middle space, I think Chris referenced it. We've got real specialization. The technology we have in small is being taken into middle to make that process more efficient for agents. However, I think the middle results will be more lumpy. We showed a +5% in Q2. We're showing, as you saw, a +10% in Q3.

Yes.

After we've seen people use them, just a little bit more and Thats what were.

Making some of the.

Profit actions and pricing actions that we're taking there but.

That's a fast cycling business generally one or two year.

Rate guarantees so we think we could be reactive.

And that book is a little over 500 million for us today, Mike fish and so on.

I don't know if you would call anything out on leave but I think the main difference.

Talked about in the quarter for LTV was the basis study that we did last year that didn't reoccur and generally LTV is behavior, maybe we saw a little tick up in severity.

This quarter so the people that went out on.

On LCD tended to be a little more higher salary folks, but that can bounce around from quarter to quarter, So, but Mike what would you add yes, Chris I think I would just maybe add a couple of points I think on the on the lease side. As you noted we're seeing some increase in utilization of those benefits. So we're pricing that in both wound cases come.

[Analyst]: I think we're really making decisions there that we just add up at the end of the quarter. Sometimes it's going to be a great number. Sometimes it's going to be an okay number. We feel really confident about the small and the consistency of the growth there. I just feel like the middle may be a little bit more choppy and more dependent on market conditions. Oh.

For renewal as well as our new business price pack. So again, we'll continue to do that and we.

[Analyst]: That was super helpful. Shifting over to personal lines, the auto line came in at a 97.9. I know there's a lot of seasonality there, but maybe you could talk about where you'd like that to kind of center. What would be the kind of range where you'd be very comfortable? Now that you've got the Prevail chassis kind of rolling out, do you see the policy count starting to pick up in the near future?

We do expect utilization to level out probably in the next couple of years, but again as employees you can see the value of those benefits.

We're making sure we're including that increased utilization in our premium rates and then Chris as you noted on the overall long term disability disability book of business. We're very pleased with the performance. There. So again, even though loss ratio up a bit quarter over quarter I would say in <unk>.

Total, we're still performing well within pricing expectations.

We saw some very and we've talked about this in past quarters, some very favorable incidence trends back last year and prior and 23, So I would almost characterize it as a bit more of a normalization as we expected to see in the loss ratio this year.

Christopher Swift: Andrew, what I would say is, as I said in my prepared remarks, we're at target margins today. I feel good with what Melinda and the team have done to sort of restore our margins. As you know, we have 12-month policy, so there's a little bit of a lag that we have to manage. I think we've talked about it in the past, if for an auto book, if we can run an underlying combined at 95, with two points of CAT, I feel good. We're then in go mode to grow, which we are now. We are pivoting to growth, particularly in 2026. The real opportunity, I think, for growth will be our new agency offering, which is, as I said, we're in six states now, 30 by early 2027, which will add to incremental growth, particularly in addition to our ARP response.

Understood. Thanks.

Okay.

Okay.

Our next question comes from Mike Zaremski from BMO Capital markets. Please go ahead. Your line is open.

Hey, Thanks, good morning.

Focusing on the smaller commercial and.

Mo made some comments about that further opportunity for consolidation in that space.

If you could elaborate that'd be great and just related.

I'm curious.

Is there if you look at the.

I'll ask three or four or five year trend I think I think it's fair to assume that.

Some players maybe just you all you can correct me if I've taken a lot of market share. There is there a level of market share in small commercial what where are you start to see some some kind of friction where you just have a good issue just too much market share with some of your agency partners. Thanks.

Christopher Swift: A lot of our good competition is also pivoting to growth. It's not going to be a layup. We're going to have to break a sweat and differentiate ourselves. When we think about growing, we think about bundling auto and home. We still need to maintain the loss cost environment where we see loss costs going. All I would say is I think it's balanced. I'm pleased where we're at. Melinda, I don't know if you would add any additional color.

Yeah, our market share today, Mike is less than 5% and then the small business space. So I don't think we felt that in any way so far but to give you to give you a little more context on what we're feeling.

I think coming out of CIB, Chris referenced in October earlier. This month, there was some really terrific feedback just about again the continued themes of how good our technology is how much time it saves relative to our competitors also once a small business placement is with us our appetite has been consist.

Kate Jorens: Chris, I think that's all accurate. I would just add that in addition to the new business efforts and the competitive environment we're experiencing there, retention certainly is another dynamic influencing growth. We still have double-digit renewal price change being felt by our customers. As that drops into single digits in the fourth quarter and continues to moderate in 2026, that will help alleviate pressure on the retention and top line dynamics. Andrew, it's Beth. The only other thing that I would just add is when we talk about being at an underlying combined ratio in auto of 95, that would be for the full year. I just want to remind you again that we see seasonality in our auto results under normal conditions where it increases roughly 2 to 3 points over the course of the year. It's not as if every quarter would be at 95.

For years, so we're not pushing it back into the market as there has been some disruption in that space. So there is a consistency of appetite that again keeps in Asia from having to touch that policy again.

We get feedback on the service capabilities that we built we actually take time out of the <unk>.

Agencies office, and we do that servicing for them. So that we're saving them a couple of dollars on every policy. So I can I can I can keep going here, but I think broadly our digital our service our placement capabilities and small and the feedback that we get just a better experience all around so we expect to be able to continue to grow at a reasonable pace in that small to this space and to take market share.

Got it.

Follow up is more high level on the.

Pricing power levels and small to mid commercial I guess.

The increasing questions, we get I'm sure you got yours, whereby pricing go it seems to be consensus that that pricing will continue to decelerate.

Kate Jorens: We'd expect the first half of the year to be lower and the second half of the year to be higher when we think about that in total.

Would you say.

[Analyst]: Our next question comes from Gregory Peters from Raymond James. Please go ahead. Your line is open.

Folks and our seat might be focusing a bit too much on the ROE of the industry being healthy.

Whereas loss cost trend appears to be.

[Analyst]: Good morning, everyone. The first question, on pricing, you mentioned in your press release and your comments the 7.3% benefit in the quarter. I guess there's been a lot of growing chatter around increasing price competition. Maybe it's not as relevant in the small market, but maybe you can talk about some pressure points you're seeing on price, maybe from your distribution partners as it relates to the middle or large business, or maybe it's even sitting inside the global specialty.

Much more elevated than it has historically.

You'd want to add.

How we should think about kind of the forward trajectory what's impacting pricing.

Yes, I would say Mike.

Again.

Honestly selfishly I mean, I think the industry ROE are good are healthy, but when if you look at other financial services companies I mean, they generate really really high.

Hi, Roe's compared to us So you can look at.

Banks or other.

Other others that participate in.

That side of the business I mean, our business is one of taking risk, we're taking long term risk.

Christopher Swift: Yeah, Greg, thanks for joining us. You're right. The 7.3, we called out this quarter as ex-workers' comp in our, I'll call it, standard insurance businesses. If you're interested, I would say in small business ex-comp, it's 9.3. Middle and large ex-comp, it's 7.3. Roughly, that's down a point or so from prior quarters sequentially. Some of that is to be expected, just given the overall performance of certain lines, particularly led by property. I would say, and then I'm going to ask Mo to add his color, that the real discipline that we have, and it is still needed, is anything liability-related. You could think in commercial auto. You could think of primary GL, excess, umbrella. I think I gave you some of those rates. Overall, from a GL basis, we're in high single digits. Excess and umbrella is low double digits.

We have a lot of variability in our loss cost trends. So there's margins margins and prudence that we try to price into our products. So you put it all together I think were earning a fair return and.

As you've heard us talk in along with US I mean, we're trying to maintain these margins.

And keep up with loss cost trends.

It sounds simple I know, it's hard to do in a competitive environment, but if we can do that and compound that over a longer period of time. That's a that's a win for our shareholders. So do I feel like Youre focused on.

Wrong things now I think youre focused on the right question on on trend and in growth in sort of that balancing the equation, but it's more just said it all depends where you start right and if you have lines like workers' comp where.

Producing good good returns and results just because you are.

Youre getting.

Lower price increase there that's not necessarily.

The bad thing because that's a product that everyone needs to lead product that we use into account round and sell other products. So it's all part of the equation.

Christopher Swift: A little bit of a sequential drop, but still double digits. Commercial auto is holding up in that 10% range. I think those are the highlights that I would just point out to you and ask Mo to add his color.

Pricing your products individually, but also keeping an eye on accounts.

You are trying to do for agents brokers and customers.

[Analyst]: Greg, I'd just say that we still feel like the market is pretty, pretty fairly priced, really, especially in the smaller end of each of our books, and that would be small, middle, and the global books. I think it's also really important to make sure you understand our starting point. We have not been fixing anything here for two or three years. We know that, again, when we looked at some of our peers, there's some higher rate action coming through, but I think that's relative to their starting point over the past couple of years. I just, I feel confident in our ability to grow. We've given tools to the underwriters that I think are market-leading, the data science, the actuarial tools. I think that the underwriters are really executing well in each of the BI segments.

Thank you.

Our next question comes from Rob Cox from Goldman Sachs. Please go ahead. Your line is open.

Hey, Thanks for taking my question.

I was just hoping you guys could remind us where you're trending some of the bigger lines of business to the extent you could share and I. Appreciate the comments on the national accounts, but also just curious if you'd touched up any of the loss trend assumptions across business insurance this quarter.

Okay.

I think.

Okay.

I mean, I think the trends that we talked about Rob.

[Analyst]: We've given leaders, I think, book management tools that, again, I think are second to none in the industry. I think all in all, we're executing really well. Just to your point on where we've seen competition, I think we've talked to you before about the public D&O market. I think we've proven that when the margins aren't there, we'll pull back. I think we've been patient on workers' compensation insurance, just trying to pick our spots there, knowing that market has been competitive, but the returns are good. The most recent example, Greg, that I'll point to is our large property book in middle and large, that segment. We've been pulling back, especially on some of the larger accounts in that segment. We've seen the market really get hungry for the large premium in that segment.

Worth.

Repeating is the liability trends are still.

Elevated.

You can judge by what we're doing from a pricing there.

The overall point, though I'll just emphasize it again, particularly ex comp we feel like we're on top of loss cost trends as we sit here today, and we will try to maintain that on top position.

And going forward.

There's nothing really new in comp.

Our particularly on severity trends.

Our behavior at least compared to our assumptions.

[Analyst]: The only other thing I'll call out for you is we are watching the London market closely. The rate movement in the quarter was something that we kept our eye on. I think we'll pick our spots internationally as well.

So I.

I don't think there is a new piece of data.

We can share with you that we.

Having already talked about but small or Beth would you add anything no I would just say the trends are relatively stable and I think what we're.

[Analyst]: Thanks for that additional color, Mo. I'm going to pivot to my favorite topic that I'd like to ask you guys about from time to time, which is technology. During the third quarter, a couple of your peers came out with statements about the potential benefits of technology, whether it's in production or in cost savings through headcount reduction. It's certainly consuming a lot of oxygen in the industry. I'd like to go back and maybe, can you give us a sense of how your tech budget looks for the upcoming year and maybe how you're allocating it to sustaining legacy systems versus new initiatives to sort of give us a state of the union on your tech outlook?

Especially on the liability lines, so think anything Geo anything auto the teams are key.

Keeping rates above loss cost in it and I think that's going to continue for some time, we are really pushing hard to make sure that we don't fall behind on those lines, knowing how the trend has been elevated over the past couple of years and we intend to stay ahead of that.

Yeah.

Okay perfect.

And just as a follow up.

Just curious on the component.

Your 5.2% all in pricing or a 7.3 ex comp.

The exposure related portion of that how is that been trending versus.

Pure renewal rate are you guys still getting a solid contribution there from the exposure component.

Yes.

The quarter I would call it at $1 eight that's been sort of consistent 75% rate and.

Christopher Swift: Yeah, happy to provide that, Greg. I would say to your first point on the impacts here, I think we're early on in this baseball game. I don't know if it'll be an 18-8 baseball game for those of you that watched it last night, but it's early. I think for us, our guiding principles on any technology, whether you want to call it data science or artificial intelligence or general intelligence, is really to augment our human talent, not necessarily to replace it. Ultimately, the objective is to create a more frictionless experience for our customers, for our agents, and brokers, where we can be fast, accurate, and really differentiate ourselves on just ease of business. I think when that happens, retention will go up. I think we'll attract more business, capture more market share, as we've been saying. That's the first premise.

25% exposure as we break that down so just to be clear that's that's it.

703.

Ex comp rate that I quoted before.

Thank you.

We are at a time for questions today, I would like to turn the call back over to Kate Jordan's for closing remarks.

Thank you for joining us today, please reach out with any additional questions and have a great day.

This concludes today's conference call. Thank you for your participation you may now.

Christopher Swift: The premise of where we ought to go from a process side is generally three major areas: claims, underwriting, and operations. That's what we're focused on. We're trying to go as fast as we can. We've allocated substantial resources to looking at our processes and fundamentally improving them, redesigning them with a tech AI focus from the get-go. That's what I would say from an outlook side, what we're trying to do. Just to give you numbers, we run basically a $1.3 billion all-in IT run and invest budget. I would say a little over $500 million is the invest side of that. It's various projects, some that you might be interested in. We're still taking all our data and applications to the cloud, which we're in our fourth year of a six-year journey to get that done. We are rolling out some pretty cool stuff.

Christopher Swift: Particularly in the call center activity, we're rolling out AWS Connect, which everyone in the organization, all product lines, all service centers will use. We expect that to be completed in the first half of 2026. The list could go on, but I do want to try to refrain from giving too much detail because some of this is proprietary. It's competitive. We're trying to get a first-mover advantage. I know you'll respect that philosophy that I have. Beth, what would you add from a?

Kate Jorens: Yeah, the only thing I would add, and maybe just to point out the language that you used, Greg, when you said, you know, how much do you spend on legacy business systems versus invest? Chris gave you the breakout between run and invest. I wouldn't have you think that that run is all about legacy systems. We've been on a path for several years now of modernizing our core platforms. Those run costs are also related to more modern systems, which really sets us up very well to be able to spend the dollars that we're talking about from the invest side to make the strides that Chris talked about. I just wanted to clarify that a little bit when you think about our platforms and what we've been doing over the last 10 years.

[Analyst]: You gave us some new information, so I appreciate it. Thank you.

Kate Jorens: Our next question comes from Alex Scott from Barclays. Please go ahead. Your line is open.

[Analyst]: Good morning. I wanted to go back to personal lines and just some of the comments you made about retention. As you're kind of getting into Q4 and you're starting to lap some of the bigger rate increases, are you seeing shopping rates come down at all for the policies where you're not taking as much price? I'm just trying to get a sense of how much is that being driven by the rate you're taking versus maybe the environment also still kind of just getting competitive with price decreases in some pockets, particularly direct to consumer and so forth.

Christopher Swift: Yeah, Alex, I'll let Melinda add her color. I would say shopping is still elevated across the business, whether it be auto or home. I think people have been somewhat conditioned to shop. Obviously, digital makes it a lot easier. You saw our price increases in auto this quarter. I would say as we get into the fourth quarter and early 2026, I think by the fourth quarter, those pricing numbers will probably drop into the high single digits. We'll continue then to moderate in early 2026 and throughout 2026, which gives us, again, the opportunity to be competitive and try to grow our PIF count. Melinda, what would you add?

Kate Jorens: Thank you, Chris. No, I don't think that shopping behavior in our book is any different than the broader industry. I would say, you know, switching behavior has been higher driven by, you know, the multiple cycles of rate that, again, the industry has put in, not anything specific to The Hartford. I would point out, you know, our retention is stable. We're certainly reflective of the environment. We've implemented a number of initiatives to really focus on policyholder education and experiences, things to help them think about, you know, coverage counseling, adjustments that they can make, billing reminders, and other assistance. We do a lot to try to create seamless experiences and a lot of connection with our customer as we navigate this period of time with more accelerated switching behavior.

[Analyst]: Got it. Helpful. Next thing I wanted to touch on was the capital position of the company. I was just interested in the bigger increase in the common dividend in particular and wanted to get you thinking around, you know, what gave you the confidence on that? What do you see in the business? Is it the growth environment is slowing, or do you feel like, you know, the capital position was strong enough that you can sort of do both in terms of increasing your capital distributions while still continuing to get kind of growth you got this quarter?

Kate Jorens: Yeah, Alex, I'll take that. It really is about the fundamentals we see in our businesses and the earnings power that we have. We've been very focused through the years and looking to maintain a competitive dividend. When we look at where earnings growth has been, we felt very comfortable increasing it by the 15%. I, again, think it just speaks to the strengths of our underlying businesses. It still provides us plenty of opportunity to continue to invest for growth. I wouldn't look at the change as any sort of signal in change in focus and how we think about the prospects for our underlying businesses.

[Analyst]: Got it. Thank you.

Kate Jorens: Our next question comes from Elise Greenspan from Wells Fargo. Please go ahead. Your line is open.

[Analyst]: Hi, thanks. Good morning. My first question, I want to start on personal auto again. I just was curious if you guys saw any impact of tariffs on results in the quarter. Is there any expectation that you'll see an impact going forward, right, when you point? Is that embedded within your expectation that you guys are now back at target margins?

Christopher Swift: Yeah, I would say very negligible this quarter and really for the whole year, I think, as we discussed in prior calls, Elise. As we turn the clock into 2026, we'll make the appropriate trend picks for our loss costs, giving due credence to any tariff pressure, particularly in property or physical damage coverages. At this point, I don't think there'll be significant. I think we will know how to make the appropriate estimates and judgments. I don't think there's anything unusual here. It's just another factor that we'll have to consider in our loss trends.

[Analyst]: Thanks. My follow-up was also on capital, but I guess the different side, you know, buyback, right, has been kind of within this $400 million quarterly level, right, for more than a year. You know, as you know, earnings growth are strong and the capital levers are strong at the company. What would you need to see, I guess, to increase, you know, from that $400 million baseline? Would that be, I guess, when do you think through that? Is that with a capital plan when you'll update us next quarter for next year, potentially, just coming off the $400 million?

Christopher Swift: Elise, I'll let Beth add her perspective. You've heard us talk before. We'd like to be steady, predictable. Any changes, you know, we would have to contemplate. I feel good about really what we're doing with our excess capital that we're generating. Our companies are well capitalized, obviously recognized by Moody’s and S&P. We're funding meaningful growth, which we want to continue to do, with the right margins, with the right mindset on profitable growth. You see our healthy dividend that Beth commented upon. You put it all together, it's still a good use of excess capital. If we change the numbers or amounts, we'll let you know when we make those decisions. We haven't made any of those decisions.

[Analyst]: Thank you.

Kate Jorens: Our next question comes from Ryan Tunis from Cantor Fitzgerald. Please go ahead. Your line is open.

[Analyst]: Hey, thanks. Good morning. I guess just taking a look at the supplement, at face value, it sort of looks like any type of underlying combined ratio pressure. We had business insurance this quarter was in middle markets. Not sure if I'm thinking about that right, but just some commentary, I guess, on the underlying combined ratio deterioration there.

Christopher Swift: Yeah, Ryan, if you're looking at sort of sequential, I would just call out we had a strong national accounts quarter that put some pressure on the booking ratio. There tends to be a little higher, just given it's a long duration. I don't know if it was any favorable or if there's any property impact, Mo, I'm looking at you. I would just call out the national account mix that we had a strong quarter in national accounts.

[Analyst]: Yeah, there was some slight favorability in property, but it was pretty minor overall. Non-CAT property. All right. In group disability, it sounded like there was some paid family leave comp stuff, but I'm just curious if, you know, any new trends worth pointing out there.

Christopher Swift: The trends in sort of just the leave product in totality, you know, paid family or medical, I think are encouraging. People want these products. I think it's a fairly straightforward product to sort of price and understand. After we've seen people use them just a little bit more, that's where we're making some of the profit, actions and pricing actions that we're taking there. It's a fast-cycling business. It's generally one or two-year rate guarantees. We think we could be reactive. That book is a little over $500 million for us today, Mike Fish. I don't know if you would call anything out on leave, but I think the main difference, as we talked about in the quarter for LTD, was the basis study that we did last year that didn't reoccur. Generally, LTD is behaving. Maybe we saw a little tick up in severity this quarter.

Christopher Swift: The people that went out on LTD tended to be a little more higher salary folks. That can bounce around from quarter to quarter. Mike, what would you add?

[Analyst]: Yeah, Chris, I think I'd just maybe add a couple of points. I think on the leave side, as you noted, we're seeing some increase in utilization of those benefits. We're pricing that in both when cases come up for renewal as well as our new business price picks. We'll continue to do that. You know, we do expect utilization to level out probably in the next couple of years. As employees just see the value of those benefits, we're making sure we're including that increased utilization in our premium rates. Chris, as you noted on the overall long-term disability book of business, we're very pleased with the performance there. Even though loss ratio up a bit quarter over quarter, I'd say in total, we're still performing well within pricing expectations.

[Analyst]: We saw some very, and we've talked about this in past quarters, some very favorable incidence trends back last year and prior in 2023. I'd almost characterize it as a bit more of a normalization as we expected to see in the loss ratio this year.

Christopher Swift: Understood. Thanks.

Kate Jorens: Our next question comes from Mike Zaremski from BMO Capital Markets. Please go ahead. Your line is open.

[Analyst]: Hey, thanks. Good morning. Focusing on the smaller commercial end, Mo made some comments about further opportunity for consolidation in that space. If you could elaborate, that'd be great. Just related, you know, I'm curious, you know, is there, you know, if you look at the last three, four, five-year trend, I think it's fair to assume that some players, maybe just you all, you can correct me, have taken a lot of market share there. Is there a level of market share in small commercial where you start to see some kind of friction where you just have a good issue, just too much market share with some of your agency partners? Thanks.

Christopher Swift: Yeah, our market share today, Mike, is less than 5% in the small business space. I don't think we felt that in any way so far. To give you a little bit more context on what we're feeling, coming out of CIB that Chris referenced in October earlier this month, there was some really terrific feedback just about, again, the continued themes of how good our technology is, how much time it saves relative to our competitors. Once a small business placement is with us, our appetite has been consistent for years. We're not pushing it back into the market as there's been some disruption in that space. There's a consistency of appetite that, again, keeps an agent from having to touch that policy again. We get feedback on the service capabilities that we built.

Christopher Swift: We actually take time out of the agency's office, and we do that servicing for them so that we're saving them a couple of dollars on every policy. I can keep going here, but broadly, our digital, our service, our placement capabilities in small, and the feedback that we get, just it's a better experience all around. We expect to be able to continue to grow at a reasonable pace in that small business space and to take market share.

[Analyst]: Got it. My follow-up is more high level on the pricing power levels in small to mid-commercial. The increasing questions we get, I'm sure you get too, are where will pricing go? It seems to be a consensus that pricing will continue to decelerate. Would you say folks in our seat might be focusing a bit too much on the ROE of the industry being healthy, whereas loss cost trend appears to be much more elevated than it has historically? Any kind of insights you'd want to add into how we should think about the forward trajectory, what's impacting pricing? Thanks.

Christopher Swift: Yeah, I would say, Mike, honestly, selfishly, I mean, I think the industry ROEs are good, are healthy. I mean, if you look at other financial services companies, they generate really, really high ROEs compared to us. You look at, you know, banks or others that participate in that side of the business. I mean, our business is one of taking risk. We're taking long-term risk. We have a lot of variability in our loss cost trends. There are margins and prudence that we try to price into our products. You put it all together, I think we're earning a fair return. As you've heard Mo and I talk along with Beth, we're trying to maintain these margins and keep up with loss cost trends. That sounds simple. I know it's hard to do in a competitive environment.

Christopher Swift: If we could do that and compound that over a longer period of time, that's a win for our shareholders. Do I feel like you're focused on the wrong things? No, I think you're focused on the right question on trend and growth and sort of that balancing equation. As Mo just said, it all depends where you start, right? If you have lines like workers' compensation insurance where you are producing good returns and results just because you're getting a lower price increase there, that's not necessarily a bad thing because that's a product that everyone needs. It's a lead product that we use then to account round and sell other products. It's all part of the equation of pricing your products individually, but also keeping an eye on accounts and what you're trying to do for agents, brokers, and customers.

[Analyst]: Thank you.

Kate Jorens: Our next question comes from Rob Cox from Goldman Sachs. Please go ahead. Your line is open.

[Analyst]: Hey, thanks for taking my question. I was just hoping you guys could remind us where you're trending some of the bigger lines of business to the extent you could share. I appreciate the comments on the national accounts, but also just curious if you touched up any of the loss trend assumptions across business insurances for it.

Christopher Swift: I think the trends that we talked about, Rob, that are worth repeating is the liability trends are still elevated. You could judge by what we're doing from a pricing there. I think the overall point, though, I'll just emphasize it again, particularly ex-comp, we feel like we're on top of loss cost trends as we sit here today, and we'll try to maintain that on-top position going forward. There's nothing really new in comp. Particularly on severity, trends are behaving, at least compared to our assumptions. I don't think there's a new piece of data that we could share with you that we haven't already talked about. Mo or Beth, would you add anything?

[Analyst]: I would just say the trends are relatively stable. I think what we're, especially on the liability lines, so think anything general liability, anything auto, the teams are keeping rates above loss costs. I think that's going to continue for some time. We are really pushing hard to make sure that we don't fall behind on those lines, knowing how the trend has been elevated over the past couple of years, and we intend to stay ahead of that.

[Analyst]: Okay, perfect. Just as a follow-up, I was just curious on the component of your 5.2% all-in pricing or a 7.3% ex-comp, the exposure-related portion of that, how has that been trending versus the pure renewal rate? Are you guys still getting a solid contribution there from the exposure component?

Christopher Swift: Yes. The quarter, I would call it at 1.8, and it's been sort of consistent of, you know, 75% rate and 25% exposure as we break that down. Just to be clear, that's at the 7.3 ex-comp rate that I quoted before.

[Analyst]: Thank you.

Kate Jorens: We are out of time for questions today. I would like to turn the call back over to Kate Jorens for closing remarks.

Operator: Thank you for joining us today. Please reach out with any additional questions, and have a great day.

Kate Jorens: This concludes today's conference call. Thank you for your participation. You may now disconnect.