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Hartford Financial Services (HIG)

Participants
Chris Swift Chairman and CEO
Doug Elliot President
Beth Bombara CFO
Sabra Purtill Head of IR
Randy Binner B. Riley FBR
Amit Kumar Buckingham Research
Elyse Greenspan Wells Fargo
Michael Phillips Morgan Stanley
Ryan Tunis Autonomous Research
Mike Zaremski Credit Suisse
Josh Shanker Deutsche Bank
Tom Gallagher Evercore
Brian Meredith UBS
Jay Cohen Bank of America Merrill Lynch
Bob Glasspiegel Janney Montgomery Scott
Sean Reitenbach Keefe, Bruyette & Woods
Call transcript
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Operator

Good morning. My name is James and I will be your conference operator today. At this time, I’d like to welcome everyone to The Hartford’s Third Quarter 2018 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. Instructions]. [Operator you. Thank to of like call to over I’d Relations, turn Sabra Head Investor Purtill. the now the Please go ahead.

Sabra Purtill

Thank you. quarter Web today. release, the Today's were Good quarter joining yesterday investor webcast for morning released available and covers and financial thank are supplement, our XX-Q The all site. third afternoon. financial slides which you results news all for us our on

Chris Hartford; Bombara, include today Swift, Doug CFO. President; speakers CEO The Chairman Our of Beth Elliot, and and

have time will Q&A. Following their we prepared for remarks,

a Investors under of on Litigation from Today's uncertainties statements to on risks results as of Web should obligation consider Just provided cause that materially on available description the future before includes differ call be can We begins. These could site. uncertainties of which different. found few Chris any statements our the to this comments our do performance detailed update forward-looking statements results risks assume those could A and also are XXXX. SEC and forward-looking Reform filings, in information defined not are actual guarantees also be Securities actual and these Private statements. call. Act not

includes measures filings measure non-GAAP Explanations Our commentary news supplement. comparable in of are these release measures. today the reconciliations to included and and in financial SEC GAAP the our and financial

Chris. year. consent. turn Hartford's transcript The written at call call reproduced official one I'll or be available prior on this of rebroadcast and may to note form the site please Hartford's conference portion any without no now for be over Finally, The of that this least will in Web an Replays webcast

Chris Swift

results had strategic us joining Good quarter excellent morning on our Hartford you progress with significant The and a and thank great goals. today. for financial

better with from higher year. per level tax of compared U.S. $X.XX Third diluted earnings year underwriting and quarter The were Benefits up items, Funds earnings core $X.XX lower driven increased earnings results Group Mutual per for by including in Year-to-date, share in corporate last are property XXXX. $X.XX Hartford’s casualty, rate. several a and quarter were significantly share, the $X.XX this core The in and earnings

strong me items. combined XX.X in of P&C better a Doug months with over and last these of The details, the and the cover including earnings Benefits year. a Group intangibles. which margin XX.X, to ratio nine will more the and Let quarter was the with first for nine months. XX% very each rates. for earnings and ratio for improved respectively, nearly XX.X respectively, lower year-to-date acquisition details up the due quarter some underwriting core third underlying the tax remain share on margins, point acquisition-related amortization by were Margins XX.X and X.X%, XX%, combined of

year. up annualized was the continued in Funds were was December And earnings than last earnings with core quarter AOCI, core assets intangibles, XX% earnings Book X.X% XX.X%. XXst more year-to-date management. compared Excluding XX% since excluding per year-to-date grew diluted for with growth value core share, under the and X.X% the ROE margin Mutual and

both the year, pleased overall I’m our with for quarter returns and and results. earnings at Looking the very

solutions Commercial product industries their our across agents key continued made specialty geographic our advances and it with capabilities and and business in August, Leading industry strategic improve new our and and opportunities. presence to strengthen Commercial will Navigators Group. The agreement of reach the Lines we comprehensive offerings with expanded many company. progress is product we the risk leading capabilities, relationships set quarter, distribution for Navigators This of announced a This we on as accelerate operational particularly the expertise demanding are platform, Hartford. verticals forth team market our with an and goals. several team, effort access next talent In with acquire lines acquisition expands we’ll our it we E&S our financial and broadens international and our It diverse market, of work. of will strategically important This from stage deep to require acquisition Achieving important expanded industry have our in underwriting deep the and specialty A partners. and With enhances journey offerings middle expertise Lines carrier targets The verticals objectives. to presence. combination deepens The brokers

process kicked recently off integration. are on focused We planning regarding a executions and joint

We work our to go-to-market with plans. colleagues to are develop our excited future

years. that XXX earnings As will current previously will and of five the earnings four actions from begin portfolio the of straightforward million expense increase we discussed, before to intangibles from relatively impact earnings year. to come first expect half within in core Navigators rate About to generate investment run

the look growth achieved with remainder to expect of increase to improved line margins. time We forward We over our top underwriting the be and future plans progress from you. and sharing

almost continued Benefits closed today. year the is which our Group of integration Another successful acquisition a ago key accomplishment

Hartford year normal which began This management claims line our expectations, with milestone. contracts both X, the the former We’ve are platform books, financial deploying in onto quarter, we January Aetna outstanding XXXX across despite systems. important The renewing sales new and and higher disability lead is results had catastrophes. than and this another renewals,

identifying the quarter system I’m trend XXXX it’s addressing. compensation claims workers’ in trend reflects the that a capabilities frequency speed our Total advantage our of be this of elevated with to we’re pleased favorably trends team of this new our results compensation expectation, quite workers’ modest continued and from which data expanded the are Although change strong. in competitive skills. on and and diligence analytical

we which to the time few from capital capital total Finally, the away more proceeds acquisitions of turning the value. sales total, equity significant transformation from most reductions. businesses, buybacks. The over to Since of through was returned share businesses approximately a our debt and that of on XXXX, generation ones. we shareholders excess of Hartford underwriting manner prices of to XX% XXXX, have and call done began management and amount both market organic including dividends the of comments than repurchases, at before Doug. capital capital book less sensitive we in a we centric have In outstanding repurchased Since a just of more XX% balanced redeployed In shares, than

was addition, strengthen In XX% us cover and in sheet the These used the liability. reduction actions repayment, pension asbestos debt a balance in almost process. our to upgrades purchase the which credit environmental reinsurance earned included several

billion X was goals or met for several Navigators, acquisitions, which Lastly, strategic used the remaining financial targets. our have including XX% and

of in am track I back As this proud we our balance the capital. on deployment I record, that of have reflect struck

to sheet repositioned businesses lines where whilst portfolio we shareholders. inorganic, returning our to underwriting our both centric have our of balance and investments we product made have strengthening capital and this have and done deliberate We organic

and to the look Navigators future, achieving goal the and operational of consume near-term expected acquisitions these of Aetna exceeding time I As will returns focus our is being. much the of integrations for on investments. with bandwidth on our integration squarely successful ultimately our the These

this shareholder expect forward, to we value. businesses capital Looking will continue medium to over create long in our deliberate the we will continue time. deploying capital to to be excess In term, generate

will remain do we capital consistent. around philosophy As so, management our

financial and our investing includes will made in conclude, goals with businesses against returns We year. strategic management a to progress past which tremendous capital capital, evaluate Hartford the on To continue excess and leverage the including of to amount our reducing both objectives. opportunities strategic deploy focus over

with Looking are And sharing forward, over move now, to on build by the we forward we Doug. opportunities you. we look momentum to progress our into excited We turn as see call I’ll the the XXXX. to

Doug Elliot

very were increasingly Group everyone. posted quarter loss and rates strong trends pleased are markets compensation Personal morning, favorable performance Chris, under strong also million year property ago. wind, than of wildfire This Current contributing in workers’ our but And In there remained the catastrophes, this losses but quarter We losses. returns, was In quarter quarter on below our another particularly new in hail and quarter you, margins auto Florence Lines, we’re improved. and the remain business as good events Group a and the and Benefits. number less we Hurricane active year results single third casualty cat for totaled execute to a It plans. well as event XXX largest million, continue integration Thank Commercial losses Benefits was in were growth pressure. of year, competitive and rates Lines, XXXX. remain with and to XXX

low emerged fundamentals driven trends moderate years. five for quarter last earnings business period from by and quite Before compensation from units, I the been over The our economic on Loss I’d severity have industry cover over competitive have we the as market trends with strong Great negative second the returns frequency Recession. trends, briefly our same favorable cost results as my remains to updating workers’ been call. comment observations like

or positive this at full near this turned economy in small year. our economic than on employment, frequency business. business and just broader has trend Based commercial our the view analysis, middle we as of book our market With and

or jobs XXXX, With was This the have the time risk ratio is it a Many versus to to workers beginning struggling first of to and the of payroll, year injury tracked. for more months, qualified ratio generally the last unemployed below this ago. six workplace to for would two first employees continued say metric add compared X are the unemployment increasing the has rate X% now businesses workers since new open year find decline. their to what been below

in produces employee Additionally, work for less the more training compounding resulting labor less the injury fatigue for the often time workers. tightening hours risk experience market of and

on among this includes we and as All-in-all, The it both in of is frequency workers. manageable ours. underwriting, been frequency times very moderate The increase experienced managing less we the uptick in now has as cycle and and industry is be a XXXX which turning broader loss selections. levels tenured economic more making of are a in This see appropriate positive what basis. cycle. to that pricing comparable change pronounced book part Our a can rolling business frequency shift the several of XX-month to as experienced large employees actual ratio adjustments shift

accident accident than inside analytics is middle accident and important cost risk and year are workers’ as market industry across XXXX overall us. is our in trend our our workers’ prior. for view higher class, No size, ratio estimates. loss a compensation within XXXX deep and profitability geographies, loss small profile compensation been loss year remain very points measures current recent Workers’ Based trends has We changed this to XXXX. changes compensation our X.X experience. not This line frequency commercial years have analysis, on accounts of

of the levers all exactly manage us continue on the tools market have we to challenges and and to top available expertise, trends. We stay address these data of we these to will types as

middle in adverse liability our offset for Lines, which and continued the was development prior compensation I favorable largely due prior in was react a prior points commercial results in segments. largely year year the products. year deteriorating workers’ Let by and years results The results lines, frequency losses accident development. non-cat and prior described a from development, proactively ratio from to was me last commercial year year catastrophe healthy. to into we as but general now and still financial trends to favorable from favorable combined XX.X workers’ by XX.X business compression small improved In excludes higher XX.X change compensation for in shift market favorable in auto. point to earlier and combined margin due ratio trends Commercial XXXX very emergence prior commercial, underlying and catastrophes half the The This driven property lower

in the Line by quarter. XX.X. ratio Commercial X.X% increasing losses partially we to year as offset up margin expenses. with Looking downward its quarter essentially Standard business units, standard in by continued and the was pricing, of renewal excluding commercial basis pressure Lines auto, rates was Commercial non-cat and by an with have policy renewal pricing was quarter, driven second small pricing, XXXX. in points. compensation was our competitive improvement market reflects partially second deal, competitive This Lines underlying driven combined slightly for Written premium down approach rights commercial at The workers’ having to been our from by both throughout XXXX disciplined compensation workers’ environment. X.X%, growth. business in and profitable the Foremost higher the This strong compensation, general business flows liability our performance slightly by property Small sequentially was conditions higher on line offset and counts last XXX declined renewal. Within quarter-over-quarter from workers’ see begin heavily new Commercial written versus

our Over the we’ve made auto to we’ve Likewise, commercial returns. packaged profitability. our reduced to business small years, improve policy adjustments appetite improve of last two book to

commercial margins business and is as are in new for small service. Our our leading industry platform

for national and such of liability In financial general adjustment and to X.X% XX points accident verticals specialty We’re ratio premiums accounts Written XXX.X XXXX as of up offset ratio production expenses, lower reflect segment line combined construction of in offset that increase declines very accounts in year slight in workers’ and middle prospects by underlying due workers’ improved combined ratio well property margin points was over in this higher driven points underlying In by with and products. such growth current X.X as excited on as an about energy, commercial, the compression our from rated long-term compensation. the as the increased retrospectively by last premium solid market, with of market. and X.X to loss year compensation. higher X.X

ratio efforts auto driven earned increased cost Personal The X.X expense in Moving points both homeowner in in ratio, lower underlying new of combined versus where The experience. of improvement is auto loss increases over marketing partially ratio. and and improvement Direct increase underlying expense trends homeowners year X.X ratio loss ratio our an business the on to last AARP to the improved results Lines, non-cat loss retention. and XX.X by and in and primarily earned offset we favorable premiums the reflected points focused by representing due growth are higher pricing is

up in XX% New auto. AARP business Direct over was

Our adjustments to continue gain to competitiveness marketing improve. our measures and spend continue and product traction

through business We long-term prior trends. a this and continue still footprint of increases premium encouraged Retention our total profile of underlying as new growth, to the remains business. was pleased targets Despite are by written the book agency down with our growth work below and reduced improvement X.X%. improving strong rate in

with provide XXX million However, is year lower as those a strong new Benefits foundation of quarter. our our last increase trends primarily growth. is future tax retention addition of changes versus business rate decelerate, growth, was will rates. X.X%. And and driven organic strong Group improving. excellent another earnings for the XXXX coupled delivered a with The by Core margin acquisition

recent at disability our quarters. block Persistency continue group are including Although and accident which was start ratio and group loss years. from on recoveries, XXX employer the up slightly accounts improved very see national volatile firming of sales from XX% sales adverse the unusually XX% in versus life insured approximately emergence to group of a steady were strong loss year favorable prior claim to disability experienced last XXXX ongoing we business we recent trends experienced strong fully slightly ratio in high results from expect up up million January remains year. next year. The

differentiated employers. service is team resonating in and Our value clearly our is proposition expanded with sales executing very and market the effectively claims

the marketplace. positioned business is We’re excited in how this about

remain of Aetna We Benefits integration Group very will overall the pleased business. with the

Conversion to December Aetna to of platform the middle the to We small Benefits In Hartford casualty customers summary, was and throughout Hartford case property in and XXXX. have platform. XXXX large our business begin across Group and this and market customers of businesses. quarter former a the solid will on very is completed and track continue conversion

and trends with competitive pricing against executing loss and appropriate disciplined actions underwriting. are market effectively plans, to cost our responding We dynamics

excellent and to of a contribute product for and platform make continue years We ahead. progress competitive our the to initiatives all which technology, operations on

with very encouraged about announced Navigators. our also of possibilities are acquisition We the

we shared, integration disciplines Chris across an business has As time. at off more will appropriate share kicked details activities we and have all

to the Beth. over call turn Let me now

Beth Bombara

Thank funds as you, going results, to well and as investment I’m corporate mutual book value earnings and cover ROEs. Doug.

assets have XX a I level into quarter Limited company year’s Starting investment meaningfully tax, million, a of third for addition, quarter In down did XXX last impact million updates compared a invested acquisition up totaled Navigators invested net prior acquisitions. XXXX compares from and income Group primarily partnership holding over income not XX% with was quarter X in investments, the in resources. increase as XXXX. as few due the third LP of on income The Benefits X% higher result year the million with assets

yield annualized in interest of The yield investment from up short-term quarter P&C to and the reported slightly LPs, impact holding down in level primarily to held was X.X% the XXXX acquired X.X%, was portfolio Benefits third to yields Excluding the assets largely rates. modestly resources being X.X% market due higher the higher Group company investments. due at of

the on about quarter roughly the the strong. flat investments. higher well on comparable taxable exposure portfolio portfolio, investment the new during quarter, reflected the an XXX after yield quarter as sales points. interest the Net money given third exceeded rate million, favorable quarter reduction by This yields basis in with average on The as tax and consolidated the credit million municipal average For investment performance maturities X rates XX totaled XXXX. to in a very remains impairments

funds. mutual to Turning

Talcott items months. billion by earnings corporate five-year peers Third quarter. XX%. positive beat Core and assets that last the last higher X.X from management, by quarter, the the were a million to year. down affected This in XX were as Funds last management remains a up quarter, as third ongoing and performance nearly assets three market quarter excludes at from funds and of which billion million of XX% in this their XX both under under a respectively. core were XX strong basis, growth over net Total results of and flows XX% few on end fund losses appreciation ETP year as up was XX% to mutual the XX Resolution, due XXX was related well lower tax driven assets principally million, rate. There

million by declined tax both of million on sequential net before over to XXX basis of period repayment the XX eighth XXXX including June expense a XXXX [ph]. a had compared coupon percent with and an eight debt call third and quarter interest of which First, due the hybrids

income share there this three-month equity income on to In items private including Hartford’s were a ownership Similar of from is related reported investment interest. investments, several the on other addition, our X.X% lag. Talcott to its

income full income recorded closed you of XXXX of of on end which of three results this fluctuate As million. June include the conditions Fourth X be reflect of The was month months amount sale which quarter’s hedging. quarter at the of net May, can a the the based for know about quarter market results. income, as each Talcott’s X.X% will and impact will

In investments addition, to managing for revenue related corresponding fee investment offset full X about income million million in Talcott corporate for approximately was tax. before a expenses. included XX Talcott. Stranded This were of quarter costs of by management

eliminated costs next these be over expect We months. XX to the

sale Finally, million net net The proceeds In quarter investment X.X on of million, diluted due income for third income the received business billion. quarter rate. from Talcott a core segments, earnings earnings were the benefit share from Core the the including quarter of XXX total, Hartford’s third each per XXX to included tax up main corporate company’s were earnings in XXXX in lower the of higher $X.XX.

the down the increase As higher Book a to and a announced to to rates by of businesses. $XX.XX, dividend the largely of July the sale. our as value fair from due related of increase XX% December investment annual our was common Talcott XX the impact per value XX, diluted in interest the portfolio of removal September AOCI share, we at share from an X% quarterly reminder, per on in earnings result sixth stronger consecutive $X.XX

strong as reform. of part to in due results Talcott related increased ROE, of earnings year X XX-month AOCI, since from up equity XXXX, lower XX.X% per on operating well including benefit of of share rate fourth calculated as the lower corporate in tax average the than points December a diluted quarter rolling quarter book which last value sale third basis, is more was the to Core charge Excluding and $XX.XX tax XX. a XX% to

Our annualized was XXXX core year-to-date XX.X%. earnings ROE

without meeting go have The required your any Navigators antitrust and acquisition UK a week taking waiting with Belgium. provide period and filed filed shareholder with control Group bids their The the acquisition. on and I’ll an Navigators proxy update under New York, November regulators, date have The shop of under XX. change the and questions, the we expired the Before competing period expected agreement brief including expired last Hart-Scott-Rodino materials

it half those expect the to to XXXX first and continue in of approvals team. begun integration We with subject activities and planning Navigators closing have The

does September approximately to filed quarter to will including a our liquidity P&C compared XXXX at maturity. of XX levels dividend liquidity interest dividend acquisition financing not financial to purchase were week, Last January billion company the with financing request This X.X closing. expense support company provide we the contingency, evaluate billion we payments approximately and post X While alternatives and dividend Holding XXXX to X.X with of the Insurance help fourth bond Connecticut of appropriate expenses. maintain of resources billion a flexibility Department holding have a to cash price XXXX. accelerate dividend planned XXXX and continue

have we past, liquidity company. framework capital in a we had discussed evaluating around across and robust requirements the margins our As

stress Importantly, P&C for typical. catastrophe scenarios, maintain begins those Benefits companies and on in are capital maintaining stress based models we our a our at In approach contemplate Group S&P credit operating and level XXX% an to AA much capital higher seek RBC. insurance that sufficient than capital losses scenarios and liquidity with at

large businesses flow liquidity other to catastrophes. stress scenarios. seek evaluated are the Capital also company maintain We meet operating company for company requirements cash of sufficient resources begin We the target million as as holding investments can as stresses provision holding this liquidity related such sufficient cash and with short-term debt at XXX for minimum to of with begin The the part into the XXXX. for level Based excess latter Navigators XXXX rebuild will philosophy, projections, after resources in on Consistent to opportunities the current transaction capital and our we will to also of what and of closing dividend redeployed to continue including segments months longstanding management on we with our the and is are excess Benefits Hartford and financing and the for excess earnings some Capital cover expect steady evaluate level consider of currently, opportunity. at of our on above quarter maturities core depending use our integration. Group well plans. upcoming investment strong interest of next results capital underwriting in The resources another the our any this and each we conclude, growth progress which To business and XX be about capital for for marked main opportunities. investing payment

we interest with Looking quarter are we although closing rising million currently be and or before on tax. claims on XXXX Hurricane to Michael forward, about losses margins XX healthy less sustained optimistic strong Michael. expect by a benefit results impacted and the received fourth be inspected note to-date, our rates, Hurricane of Based will

our was about As cat quarter million a fourth pre-tax. original XX reminder, for estimate

So that we the any and number quarter. in additional come our activity above may depending cat final for on for Michael estimate

I’ll turn a provide will February business metric we call we report can quarter so session. the over now years operator in outlook we begin results. Q&A the when prior with the XXXX fourth consistent Finally, to

Operator

Instructions]. [Operator

from from of Please line Binner question Riley Randy first ahead. go Your comes FBR. the B.

Randy Binner

that today picks appreciate you comp. way straightforward Good to driving and be loss think I I question the morning. guess seems what around commentary communicated the it. I is the and the Thanks. high stock workers’ And

something falls, pretty is and it higher book. question it accidents, kind broad have of have slip claims Is kind And and pick. basic it you auto so else? of You are are the about we is is loss here? a you making a what are it addressing I talking So

of workers? you experience helpful I me less So others hurting for are think it to will what be losses and with kind understand

Chris Swift

start Doug I’ll commentary. will his Randy, it’s Chris. add and

sensed on position. is context performing the us think is large It’s very you and well. product in we’re a commentary the country. product from discussion good our have a a starting insights where that line across hopefully data we for line is great I whole the This

market, So as particularly overall context trying middle through say. Doug in line to trend of a a we’re through little and the adjustments pressure see we ascribe would an in it adjustments is pricing, underwriting in small as manageable when

that this is frequency. So investors and is I not starting our runaway and would you the a loss it’s and cost to point like train with healthy situation understand trends strong,

we’re can on of you some the Doug, color claims seeing? So, types add

Doug Elliot

I will.

falls, Randy, when and looking I frequency see and contusions, et cetera, in injury across across time and look about So, types. I think general fractures, we types injury all uptick across spent we sprains, slips those have

I’ve as we book. you, deeply So described looking to are the in

some seeing on the But and both done of I and here defined position in It workers today bit broad-based We’re less and worker trends a by it’s those injury only small here the more a a more of reviews suggest in couple elevated data middle. can’t we’ve the and based than sit types. looks experience in bit one year.

Randy Binner

type that attorneys I is or costs were from it follow frequency, and the thing? kind medical then those is claims, having frequency kind trial just And if guess severity comp up higher I a workers’ of have that lower is there more of inflation

Doug Elliot

our in severity like is pretty feel now certainly We right shape. good

ratio carefully. I inside and feel numbers external This And which it injury there. experience litigation don’t factor. driving isolated of as frequency looks that We’re us watching accidents that is and the are a up as looks a I feel factor. to like

Randy Binner

All right. Thank you.

Operator

Your Kumar ahead, next comes question Amit the from Go Research. from Buckingham of line please.

open. is line Your

Amit Kumar

top or I a Randy’s be make to hazard on to this classes remind Thanks are on morning. either what had possible NCCI workers’ back compensation up are talk book? Would what the it top that good color Thanks follow even up classes question. the which us the and compensation. ties workers’ and for your

Doug Elliot

NCCI. of book just of a you to share business. me do the profile work I’ll our of let Amit, try let

classes; few Essentially market we’re obviously So in book space our manufacturing, very construction, middle market exceptions. wholesale. entire with extensive so retail, the is middle

commercial based few as small certainly we So extensive product be don’t a market well. broad would pretty and and our the case there very are for that We offer it’s touch. that of the sectors economy

the case here is into that So or with like based three Code. indeed our we’re two talking about not a market book. SIC lasered not it’s specialty sitting That’s

Amit Kumar

unrelated very for the else. actually and might Chris other this of But be sort or someone That’s helpful. question

bit process? about you Navigators differently obviously update Thanks. might last on and we on versus looked you that call have You few And harmonizing reserves. Do about talked feel a the months. you a whatsoever Is the quarter there talked that any or what time? now at a any had spent

Chris Swift

I may integration closing in that commentary, my be prepared and and as look the process closing. our at think and with does adjustments at Navigators it realistic said beginning Yes, between any we’ll I what to now would we’re positions assume reserve planning

there that comment upon own we So we is nothing property. now can really until the

Amit Kumar

Thanks answers. for the

Operator

Your of Wells line from Go from Fargo. comes question ahead, please. Elyse next Greenspan the

Your line is open.

Elyse Greenspan

morning. Good Hi.

Sorry, of disclosure. Doug, questions a comp. the I workers’ had I also on couple appreciate

kind we’re You’ve tried are workplace. guys were guys this attributing unemployment low to where workers more in Yet to you back pretty you to levels, of obviously in inexperience XXXX. say the

unemployment is in than So it was lower obviously what rate XXXX. the

So what worse? do when that will you look out guys get we you’re not and seeing book this your at there, how know

Doug Elliot

playing These the sense for on can’t claims is 'XX. we lands the XXXX great It’s out. suggest within world’s I long I to out into side. we’ll play where of year exactly handle we do a quarter you that estimates think in the not two know door. XXXX how a or accident in frequency have frequency are have developing What good Elyse, I is the I how to say that guess going on promise or would XXXX. a

quarter is mature 'XX. relatively right from first The now

maturing Second quarter we is speak. as

and speak you and it’s work we’ll doing our line measure. we when on in trying why bring of make XXXX. which altogether 'XX going to as The talk February terms we’re our in fast a of And is predictions best give for assessment to it predict is we so

Elyse Greenspan

you given the and in that’s even still industry the as Okay. increases, be actuarial declines business will just uptick have rate ability in margins get seem strong or price frequency still the give others just of we where And you to still still the think given this that see attractive pretty do to justified here? declines. from guys often frequency you comp well seen then said the higher we’ve very lot this possibility a Can of rate in that

Doug Elliot

Elyse, and that of across The level demonstrates well. very certainly our you’re sectors absolute right across comp performance as healthy is now book right. multiple

and that The dropping cost by industry multipliers ourselves own top, like and experience are they’re the are trends experience on as our the over are worked using other periods. prior fact and NCCI across is filed rates the carriers adopting loss

and are look as So still various states 'XX, they’re out changes years across which into for dates the various very at prior healthy. the I looking the about I back dropping think effective

balancing we’re So that.

sense trends underwriting levers in own where greatest machines have to sure that sense working obviously our trying underwriters are. we make We’re our the of

our cetera, experience when not on match won’t know the account, renew feel class, the price to the bringing based or quote all adjusting and what offer to et cetera, we to and a choices write, either goals. We’re fundamental et bear economic like making about to that we

Elyse Greenspan

market pricing in Okay, comp. fourth you Overall great. give QX what levels And going then one from of a away to continue you and prices and the the Lines would question. for quarter? decelerate just on Commercial market small Can broadly expect into last middle the would did what’s be us sense

Doug Elliot

and non-comp quarter. lines pretty see across environment all into see to stable Yes, the other expect I I fourth that the a

So of also the to on pricing terms weather that I don’t property see continue to country see in and maybe of change we I of with the exception one and see expect a based. geography side in the tightening any parts certain drivers in bit

Elyse Greenspan

Thank very Okay. you much.

Operator

line next ahead, Stanley. the comes Mike Your Morgan question Phillips from of from please. Go

is line open. Your

Michael Phillips

morning, you. Yes. Thank Good everybody.

there, last on Elyse’s follow could more First at level up guess question about. if you kind higher of I a talk to question

commercial the middle been and clearly margins are than the Your have market. small in better

between environment you So in see higher market the any in if more general shifts small versus competitive book? book two just in a the could landscape the competitive at for the you level difference if middle

Doug Elliot

where Relative carrier to want cetera, what customers long and in age would acumen, retail XX/X serviced out who to reach that small a a ways. platform, time. It’s a world we although of that different been et new are continues small is formula in a digital be and business combination I underwriting for this refreshing focused speed we say relationships, automation, for have

So is that formula. the

more think forward we the it’s success In slightly a continue I going been middle, will great clearly to think competitive. we with and that’s that’s make. our foundation adjustments driven

over the have of think a I career least bit We case has – that to them see we see cycles more had lot that been in time. my competition at the a do amplitude there. maybe

been think we’ve successful. I

Chris in dimension. product growing clearly our seven breadth. years are to We our add the about what last The five to you has talked Navigators to will

think as got long that key I upside improve. it’s great a see in player we’ve our think us but I market and term. to challenging a for the continues Yes, acumen underwriting I environment

going what shorter-term excited middle kind our What’s think I these a I’m So terrific and of prospects. that see I happening there. our way doing we’re love I challenges but through now? to be player about we’ll work as we’re in

Michael Phillips

Okay, great. Thanks.

if over Let Lines in switch could to personal specifically. I auto Personal side, me

in a a you a kind margins, You’re from the little seeing where core be And still landscape. you by what [ph], the maybe bit. maybe position. competitive core want means Are to pits decent pretty kind rate or your getting Thanks. on bit that a drop-in you with combines profitability that personal XX auto? maybe there, competitive where you’re of what throwing down so line plus And of sequentially. But your

Doug Elliot

are; pleased From a book. about about we’re the pleased about our our in very where pleased we perspective, profit we see trends performance,

that just So today. comment we’re yes, performance very pleased an about aggregate

side is The other bit growing a we’d to be more. like

in adjust changes the health stimulated. to piece, back have get to as made get continue new business profitability know to we so got to the And we’ve we gone through, our

of the with hard I’ve as keenly engine. make and have what on and to quarters seen our talked sales over ARP we working evidenced numbers about couple that of as of aware the that focused last our direct doing now are we’re the prior So happen. What quarters. I’ve continue in on on progress that inside I every I’ve that, shared new actuarial through we’re growth to working working auto front that, side I expect we’re

Chris Swift

response out are up, stimulate up. Doug, more too spending we to conversions pointed I are that business really think you – period-over-period responses is are new up,

my market And growth able more way about start view. begin ARP been with working kick 'XX particular can or in, point partnerships’ never differently their meaningful how to in Mike. of will membership The think I vibrant be see, We’re stronger in to to that to more a you’ll base. we

Michael Phillips

great. Okay, Thanks.

Operator

the from line of Ryan ahead, Autonomous comes Go question please. next Research. from Tunis Your

line open. Your is

Ryan Tunis

Hi. Thanks. Good morning.

First one for Doug.

Just workers’ up this trying to and get for then another quarter quarter. some brought be taking there’s not comp, charge to next you second quarter confidence going we’re that another charge this

needs are to you have to for what Where you what – now? exactly understand assuming to Are take up happen assuming you frequency So trying are pick to exactly loss just your again? positive we?

Doug Elliot

it feel for assumptions year will comp, solid across trends assuming of lines that of and it those we in our our Ryan, accident in repeat solid about and QX. our XXXX very business estimate we’re itself is all pick

I need also we’re So that’s surprises next a about share. any we’re feel frequency don’t but I world we three like can I going what on don’t in the negative top to all return to. think months. I see of expect to

Ryan Tunis

think just I one every the Chris guidance just exceed in other for stock And going to and guys it’s you’re more really about you gave you, underperformance and it’s I Got segment. guidance single February guess the in basically is year-to-date, okay. price –

look that next the is or Thanks. anything I You’ve differently you better there that months differently of Hartford think guess be just could be how you over plan maybe helpful? doing kind that you you on has that deployed working, XX at capital. you doing could And think been do when could stock the

Chris Swift

we I’m a going I’ll prior on is into Doug’s fourth It’s onto to an it 'XX. comment not rate on level of quote numbers frequency change. of numeric Remember just last heading question quarter Sure. the and tag call basically absolute the frequency.

we time with see rate at is change training continued does a not skills. low increase So of given should help job my employment levels or noneconomic even analysis

long general down as watch say, a to Doug with But sectors workforce is to, data in analytics in the lag and we’re as which the it’s X.X% So in the think advanced stability range education employment again, over. of our that mentioned. something there I doesn’t level all again training

things to stock could and to that the spend we continue value we’re doing we’re read particularly to time going the on share right create a of and frustration, commentary price, communicating, bit do will being crystal a And believe We think investors execution priorities, is we the shareholder is more your do forward. only with going I the I on Beth what think between your longer little thing just I if time over period right. lines. clear

we I at point thing that probably in that this that’s the could big see So do time.

Ryan Tunis

workers’ too think that take I comp material the to reading you is a this into that Hartford? So market as mean at issue much problem

Chris Swift

a been changing. I can’t building the doing point add intrinsic or earnings or do. been points putting I meaningfully numbers a think still value, think again, we’ve about we lines 'XX. forward, about in if in think head the believe I The that If benefits all isn’t up going to I modest in broad there, product margin a if I right fundamentals and will particularly on at are All based possible Yes, is in views. things we’ve pull cash look ratio as look control we’re really business loss two try as the expect. If back at be going we’re business our to if this ROEs I to short-term flows, as and to about that people’s starting I margins, all is and consistent organic the fluctuations shareholders that do results long-term mark-to-markets producing and of

Ryan Tunis

Chris. Thanks,

Operator

Your next question of please. the Zaremski Suisse. from Go comes line Credit ahead, from Mike

line Your is open.

Mike Zaremski

Thanks. Good morning.

a than maybe expectations. whether Benefits. wanted we shouldn’t of were better a on It run take that things remarks get rate like to of favorably I and First kind I expected. were sense Group level? know ahead development there it’s the is loss question the kind just been more running feels about of some for prepared trending is as ratio

Beth Bombara

I’ll take Yes. that.

longer-term that. we lot a experience and have yes, perspective to we’d kind indicate some here so if accident in to you making of so type P&C has expect on definitely have It’s years recent experience, we term. current book expect of development at there been you short more look trends. today a again expected. different that favorable would that But sitting from old our So loss then continuation you of higher it you’re than think the seen Again, to of adjustments when sort disability maybe on see related very is ratio where sort liabilities don’t continue that of continued of our experience

pleased how with we’re see. very So we that is that like momentum and performing overall the book

Mike Zaremski

peers any and peers a more couple Beth. didn’t. the they that the helpful, in That’s you of guys that mentioned seeing think negatively But terms we’ve also those your impacting had saw fire the – of homeowners; gears book? Are losses. water in of kind underlying, deterioration Switching some space guys broader to trends you in of were

Doug Elliot

really four Mike, year. our this homeowners’ sound last to book has worked years. on three for been running the We’ve that

we rebuilding also we as health and lot the product, were the auto of homeowner. work So doing in both at financial a

a volatility couple of is and attribute quarter. good years. I earned the actions, strong over So then our one, pricing And performance, the the last there’s number underwriting always pretty to this actions

And running good So favorable is the moment. going very pretty ex-cat I’m but to weather our ever we’re not feel homeowners’ line to our that I in at have again line. not about suggest volatility going

Mike Zaremski

be If that? Talcott that choppy and from way be could can run rate. for to It in categorize the Is last capital the Beth. forward I some sneak this one from like not one the might prepared right and remarks sounds had that Okay. benefit going markets

Beth Bombara

at more again, net $X their the take oftentimes I And and we so be at could pointed bit total a would Talcott assume to that volatile month we million wouldn’t of our be someone period-to-period, you share hedging. which and it for just But picking earnings one again numbers, of go the which of include of sort income look and on up rate. core if focus any look impact run Yes, back when that’s net income owned want XXX% little because people we’ll predictable. are again

Mike Zaremski

Thanks. it. appreciate I

Operator

Your next question Bank. the from comes Josh Deutsche ahead, please. from Shanker Go line of

is Your open. line

Josh Shanker

you. questions. Two Thank

if reset haven’t, dollar know great. you workers’ would have reset. at of that. the said XQ notes XQ is for you I’m you’ve comp quick might one and my first the don’t a I if looking The in if be value the one it. said number But versus

Doug Elliot

year Josh, that that. of accident A 'XX market I that our We I that’s middle year in did just couple math. is move accident have say the is X.X. don’t it’s up have dollar quarter. number, number of don’t 'XX that over in component I points but did the points. X.X the What

So it’s X million not tens of millions.

Josh Shanker

all And that’s workers’ comp?

Doug Elliot

That talking was what I’m we the did. comp about workers’

Josh Shanker

little a second question, the I’ll in bit. And Okay. dig maybe

I With the of With business those it sale fund talk you the of Talcott, is Talcott? kind strong related going what corporate any think results, still of the power of earnings same loss, and that business risk mutual of post Is that the And very type earnings of guess continue? the mostly which looks power. I sort I there corporate producing it’s guess? a are and lot go the dovetails forward pieces can that think fund Talcott like mutual away segment you is if I funds moving going there’s into to about

Chris Swift

million-ish But XX corporate stable. talk – Beth about the AUM let can been mutual Talcott roughly excuse me, the I you see I’ll billion, again segment. think funds, on pretty

relationship. our still to by So and managed to will by new Those change ownership that itself are by that in just funds there not inside should change going owners and Wellington. the VAs

right your views on stable. if pretty I change the you there should is happens run -- can Josh, be how on now. in don’t much off market changes thing, performance. block what any quickly It only and Beth, conditions AUM the color see has and there’s add that So to just your But

Beth Bombara

the so quarter. couple you of Yes, pieces were as a piece, again, moving corporate this out on pointed there

we an biggest the ongoing in some interest you that balances those think Talcott think of kind lot the revenue I the kind have. when think perspective. referenced, about is of net I the the out one versus really reduction of cost with of that expense I from that A

obviously I then this said a I around happens see it quarter, of for would pickup million. being million the what of bounce So when going debt rate at And the cost because bit. place to forward to probably is and that depending the quarter loss quarter-to-quarter we from of safe that with actual look piece, be. XX that what run I I change Talcott kind kind QX, a around will get expect again a on X as income was XX-ish

Josh Shanker

the Okay. Thank you answers. for

Operator

from Your Tom Evercore. line Gallagher next ahead, question comes the Go of please. from

line Your open. is

Tom Gallagher

comp pickup with small in just that do questions. Good you saw, morning. also pronounced a that The just or you comeback market most in was to in Doug, workers’ see middle that commercial? frequency few

Doug Elliot

in saw well, yes. Tom, commercial as small also we the pickup

Tom Gallagher

it a that Was went frequency, small can positive negative bit Got when small wider, a a it. positive negative And mentioned you to to from bit? you it a band? quantify the or

Doug Elliot

six, five, back but that negative. been have and longer seven going really trend’s frequency years, favorable The than generally even

that’s So our overall the as book performed industry equally has certainly well. and

That we this So we’re move time. talking moved did small-single single accident year. digits digit back moderate into minuses in to mid-single going single XXXX digits, as digits,

Tom Gallagher

or just And would still that Has favorably in side, inflation expect while. claimed for then a favorably side? you and it. Got that’s been durations is develop the severity of to think that coming that on the lack on wage been severity really I trend

Doug Elliot

check. separate much severity about we severity when non-medical from the of think the pretty we parts in and Tom, medical both look

our about feel think our and inside compensation with good the lot inside feel executives resources – workers’ aggressively medical about environment. workers’ our to a are we networks, good medical are doing claim and So managing the talented side claim that, compensation I costs strategies control our and medical good the about feel

trends expectation non-medical, and we’re seeing our what very moderated. On is the our in

the top of we’re line those about trends, right basis what pleased So on an as pretty in much estimates are and with seeing. all-in expectations severity

good So story. I end about feel the of the severity

Tom Gallagher

Thanks. Okay.

Operator

from question the please. Brian line from Your of UBS. Go next Meredith comes ahead,

open. is line Your

Brian Meredith

A Thank of you. questions quick couple here. Yes.

what’s you I inflation maybe your workers’ bit a claims this rate some First, as getting rest some about curious here aside offsets of of and from I’m know you commercial the comp reasonable going talked it guys Doug is perhaps said some on through, GL rate haven’t comes still little But earned picks book as the look call. underlying comp? are views versus loss there forward about and your forward. kind with concerns are going happening what you I with that

Doug Elliot

have D&O. book is lines. others our talked Brian, for have our not time across on talked we’re in liability all we’re others the I of product, We’ve with But across talked about a about us. watchful line across yes, the general area and watchful have seen industry about bit loss look that. in comp our but our the in basically little expectations across trends And for and It’s year. the trends non-workers’ spending I the line past just in a loss

Brian Meredith

And now workers’ then excess of are comp? from rate seeing right trend you aside in

Doug Elliot

to we say there it’s more side would grips about in And off trend this that a aggregate. with, all again, have the property I the come cat to of equal story is with to right. to

et our in cat underwriting, results aside, holding We’re cat our But lines. our have to margins cetera. do serve and our and pricing, cat that we’re in think relative work to generally disappointed non-comp our in some I

Brian Meredith

with way? then Do it is read has that maybe question, And the the to just Great. comp good what’s one you area, over Group to perhaps situation. the on Benefits of do lower sort real employment through quick something going on other kind maybe any of about with there think incidence

Doug Elliot

question. carefully. for actually watch obviously that We Good

know continue see in and incidence what but we’re that anywhere anything disability are Our workers’ we comp don’t group or our near to on business. strong, seeing trends we But that run group well we’re very in like but watchful. as

Chris Swift

unemployment versus true in injuries Brian, high uncorrelated Generally, scenarios. disabilities except are

Brian Meredith

Got you. you. Thank

Operator

from Go comes Lynch. question next the Bank Cohen please. America Your line of of from Jay ahead, Merrill

is Your line open.

Jay Cohen

questions Two workers’ you. on compensation. Thank

pick Did commercial. I and in if changed thought pick maybe change that right? correct me said you the is I’m I first middle you not that you your did loss The hear in wrong. but small market loss

Doug Elliot

is correct, Jay. That

Jay Cohen

But you increased small middle market. well as told are commercial somebody just seeing in frequency you else as

Doug Elliot

all-in year in we’re Yes, in a frequency first including in trends of the year. small the our pick uptick nine estimated in little months and we in as the contains seeing total everything pricing loss

Jay Cohen

then what you specifically investments those past. of give And system, in you’ve to that claims sort it. Can the how you – you a the that actually worked? that Got of you you’ve on did allowed identified up because might make of suggested trends? pick secondly sense than have claims, us made changes in quicker What trends you the

Doug Elliot

dice in sentences our throughout or conversation. But claim have a to ability a new we and try to And claim. top We’ll we and what over were watch where installed at be I’ll and and this your call access It’s less. years your now structured of much do five it on the metrics much advanced ago. or platform to from X,XXX data longer six look essentially to five slice trends and desk is

very so And in were five top on candidly years they be. try sitting have to them to were than and trends around slower that and we but we’re get our we’d weekly arms monthly to nature discussions like of to ago manual

leading I and it’s a outstanding to one that is claim think so environment performance. And completely different

Jay Cohen

later, I’ll topic on topic. but thanks the interesting an insight. that It’s offline follow-up for

Sabra Purtill

Jay. Thanks,

past in running but there’s call, know o’clock bit on finish time a little up will think queue. I and up. more we queue finish those questioners we’ll two our so we’re XX the I and the we have a

Operator

Thank you.

Your next Scott. comes ahead, Go from Bob of Montgomery from Glasspiegel the Janney please. line question

Bob Glasspiegel

for Good morning, you thank Hartford, in. squeezing and me

seems year-over-year in market, on overstated was up middle your catch year-to-date it deterioration QX, by sequentially comp the adjustments. On like QX

you points how increase, XXX up can of the – much for any that So basis was do plus comp? sequential it catch that way

Doug Elliot

half And change that two the the in much. of quarters quarters, half Bob, QX points because X.X QX. QX primarily and essentially last the occurred was change change in of three over it of So, didn’t

have So quarters related the to impact year change of a terms change QX of thirds the in in couple in points, of two first that quarter. of of the would our two

Bob Glasspiegel

just within comp. Okay. And that’s

I overall you think comp the said. – was of you XX% take So deterioration

Doug Elliot

comp Beth? holding that. don’t I that I only accident is about the other that that are But to an say and and said think our in I current we’ve back if go made math. adjustment essentially know primarily. year I’ll lines the did line

Bob Glasspiegel

up follow Thank afterwards. you. I’ll Sean with Great.

Operator

comes from from next Reitenbach Go ahead, the of Your line please. question KBW. Sean

open. is line Your

Sean Reitenbach

and pricing Thank workers going How into underwriting can incorporate comp Hi. inexperienced well trend you of the forward? you. workers’

Doug Elliot

as cetera. questions and sales side, of machinery to and this et if where by today how lot clients trying on a fast at at looking workers to do Good they’ve need many We more can a Sean, ask clients little growing they you speak the those how can and trying projections, certainly kind we’re they’re prospective new or their do a desk leaning those are sense payroll that the their sectors level question. level. inexperienced of rate that of all the at more we payroll our into clients expect? get renewable So understand environment the and got

Sean Reitenbach

on question book around keep that you Personal is Okay. Lines agency guys other Thanks. That’s second to to expect that shrinking? are the helpful. we My book, looking turn or something growth in should

Doug Elliot

discontinued book it’s We got Sean. forward. it probably going per XXX% but AARP don’t have. I want in runoff of think to se call It’s the energy we a latter, attention has it’s or Yes, plus our –

Sean Reitenbach

Okay. Thank you very much.

Operator

with back Thank to turn Sabra Purtill I’d you. like to that, closing some remarks. for the call And

Sabra Purtill

you us today Thank that look joined seeing in you. we all We future. and appreciate you to the forward

with questions, have up If Relations have additional good a you please you hesitate Investor the Thank any follow day. don’t to team. and

Operator

today’s conference concludes call. This

now You disconnect. may