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Hartford Financial Services (HIG)

Participants
Sabra Purtill Head of IR
Chris Swift Chairman and CEO
Doug Elliot President
Beth Bombara CFO
Brian Meredith UBS
Ryan Tunis Autonomous Research
Elyse Greenspan Wells Fargo
Mike Zaremski Credit Suisse
Tom Gallagher Evercore ISI
Paul Newsome Sandler O'Neil
Kai Pan Morgan Stanley
Josh Shanker Deutsche Bank
Yaron Kinar Goldman Sachs
Amit Kumar Buckingham Research
Meyer Shields KBW
Jimmy Bhullar J.P. Morgan
Call transcript
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Operator

Good morning. My name is Shelby, and I will be your conference operator for today. At this time, I'd like to welcome everyone to The Hartford announces Fourth Quarter and Full-Year 2018 Financial Results as well as 2019 Outlook 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. like the now Ms. over I'd Instructions] to call turn to [Operator Purtill, Relations. of Sabra Investor Head ahead, go Please ma'am.

Sabra Purtill

our be the Good New and which for for Year. you. fourth Thank to Thank morning XXXX you joining and end released all quarter and results news as us financial metric key slides February, available are The The presentation Web well. business financial site XXXX happy full-year the investor were Chinese release, webcast outlook, afternoon. filed XX-K XX. will on of yesterday discuss financial supplement, results by today our and

Our and are Swift, Beth of CEO President; Chief speakers Costello, today Officer. Financial Chairman Hartford; and Bombara Elliot, Chris Doug The

prepared remarks, will their Q&A we period. a Following have

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

transcript The the well year. site in this comparable webcast to Hartford's commentary one are or will this Our official conference as of reconciliations portion and release included written any filings, prior today may of consent. rebroadcast form includes supplement. non-GAAP GAAP No in an on measure for the as our Explanations these Replays Hartford's available be measures and The financial of measures. in reproduced financial SEC be news Web call and without

on will addition, XX, AM. the over the on an Finally, chat at be please of a innovations day. Officer, Lynch Merrill be turn Conference will AM with John that Chief Chris. that XX:XX will and Strategy And be Both call XX:XX and Bank in starts February Insurance to America at fireside panel now our Wilcox, Ventures that Beth Chris note I'll at webcast.

Chris Swift

$X.XX Good income had net share, The including joining or up results and consecutive cost billion, for accomplishments ROE XXXX were excellent year We despite you The catastrophe in Hartford. our of and us capital. the year was another billion per numerous at a losses. financial great well high core XX%. morning was thank earnings year was Full-year $X.X of $X.X core for XX.X%, XXXX of second earnings excess diluted today.

catastrophe combined Lines industry two production, insurance wildfire best and the Personal ratio combined among year, by our underlying losses, and XX.X, small income. U.S. basis impacted improved Lines Commercial the better underlying Commercial in loss industry. were in new retention. negatively commercial performance, line With had exception of Lines or results, business with an Benefits Group including outstanding experience disability and about than expected underwriting to results largest history. metrics business in strong XX than were The superb the hurricanes points investment delivered outlook. better the

ratio of XXXX. than line underlying points two Personal XX.X combined and However, better in the outlook, our Lines with was

collaborative. aligns focus book Personal quality ages AARP's partnership, up years, unique service, we Lines with year, New with a which membership with on together are products grow provide is is a the working this goal key XX AARP in truly We were approaching to XX and cohort, was business levels to that which This XX. younger and their objectives. our and unique

consistent execution operational I our In pleased addition to XXXX. financial with results, and am in effective

technology, and enhancing people, investments make speed. in processes, to continue and quality service We

lab promoter that we scores enhanced and continue ratings an them. on launch customers climb, the Net the of progress agenda, made innovation claims purchase year, expanded sharing small business to demand New the product broader bringing the our specializing a also economy. capabilities, in York including Our in value appetite of digital in This and and partners risk City, located in Y-Risk, are we offerings, to company quality distribution innovation and strong. are the

Related Finally, a the we is structure activities the in integration Navigators acquisition, planning organizational and global The and in Lines after sales the The Hartford's businesses will in distribution quickly with major the underway, announcement experience Group on of relationships. of progress with Navigators global yesterday, U.S. and XXXX aligns Benefits, This teams and operating Talcott, strategic and optimize model market new the new closing. announced formation Commercial new of included substantial underwriting the specialty of The operations, the out and the well structure acquisition. Integration business. will be to

said a but five remains Overall, metrics relatively strong in will parts expect In a other we key U.S. to earnings I annual core more in within its amortization our it of accomplishments cover for in years In some to closing. we expect U.S. few we perform financial and expect slowdown Europe contributions, economy will incremental addition before an intangibles generate observations. attractive build business to return momentum. and strategic well. our outlook to macro the the economy. of world. XXXX, approximately have after we million with $XXX Doug on four detail, businesses the position to That of compared

Brexit modest Lines, we lower underlying growth, underlying trade remain margins to particularly and unresolved, for very uncertainty slowing and With XXXX. Commercial we and some margins with in workers' global tailwinds Personal volatile and on performance. become headwinds and investment remain we maybe improve markets, expect attractive, about but pressure to In underwriting In with generally, addition, equity bond margins global continued earnings still healthy. strong expect catastrophe to Lines losses, previous P&C, tariffs, expect In comp. remain to

consistent Benefits with down returns the partnership our very remain from to Finally, XXXX although projected view. margin core we lower to long-term expect earnings limited strong, due Group slightly

will core consistent Achieving to common cost our creation. capital. For drive will equity and above shareholder value well share XXXX, earnings AOCI priorities remain strategic long-term value book growing our along and with ROEs dividends maintain this, of strive we per excluding

Turning to operational appetite our risk strategy. pillars of capabilities and expanding goals, remain product key

With meeting need, relationships focused the and we have broader potential, needs. distribution intensely combined a and we will including be deepening realizing on acquisitions, array recent what will the of customer

In take addition talent to ability ethical customer as with. breadth, to well and workforce also strategy us to that company a make inclusive an easier our emphasizes attract in strong with focus product and depth talent business our a and and as We pride do having diverse management, retain building and culture. capabilities

for being Ethical Most consecutive including the Company Recently ranking Best Ethisphere equality. of designated the their were years leadership and named for by on Gender We fourth year. member gender past are Bloomberg first these Equality areas, consistently the World's Women Index in a the Employer for by for recognized XX we in Forbs a

business generation will our about expect that To with want operating announced remain our in XXXX balance investing execution in we and returning sheet, remain has beyond, to philosophy and our exceed balance discuss requirements. using billion fund year, XXXX and growth, and performance capital not mindset. businesses organic repurchase conclude, help shareholders an to continue authorization Finally, management the that the was to yesterday. in we will profitable for emphasize our to changed. which excess We really plan, $X I a capital approach pleased excellent to capital will committed Beth strong strong share the I'm but

We and with the sharing are you. working maintain look results progress to hard and momentum of the expand forward to

Doug. to Now, the call I'll over turn

Doug Elliot

exceeding earnings. Group for Each good everyone. Sales or Benefits. and major Aetna customer were continue to Chris, we set It of very Group Commercial the delivered was Benefits. excellent In for outstanding continue you, record we Thank strong to the a performance & morning Property was all and businesses. small units on XXXX for initiatives. Lines, integration. We're an bar year core our hit year service and targets performance, underlying operationally meeting financial superior delivered of year for business underwriting Casualty aggressive and among strong, and milestones an our we

brokers and results the our are gaining to and verticals new acquisition are Navigators industry and Lines, suite underwriting market of our In an product middle deepen traction, customers with expertise. Our poised relationships Personal with with we expanded by severe marked growth for both This business auto the business and XXXX. strong, a and losses positioned in and in home were activity. new row is year wildfire underwriting better is auto hurricane the second

Our aftermath to in claims continue respond tragic team our events. enterprise with and professionalism entire of and care these the

quarter fourth were results. losses significant to the However, our

exposure to risk evolve on focus increased This in loss strategies transfer risk based includes of our guidelines recent years loss limits, on refinement continue management underwriting our events catastrophe the with wildfire. and arrangements. models, We

performed given will refine cat and catastrophe pleased book generally are tornado, of and of business risk program wildfire overall XXXX, how continue While our we approach. management underwriting events with to our hail we the

ratio extent improved our XXXX were financial I'll relative underwriting core at sales for ratio which lesser XXXX. remained pricing. an mix our Group on core emergence the the The year of persistency block but years, limited XXXX favorable for Disability larger slightly This trends Let was me partnership by points accident we insured The loss prior loss simply the And from thoughts ongoing the margin up X%. favorable was accounts teams. million and to with Life with and was and some recent the summarize expectations posted slightly to business of outlook sales launch XX%. versus pivot income. our ratio. was now solid, year mainly This our carry most exceeding employer from the points approximately a of outstanding to for performance $XXX year million then Benefits, a higher from conclude year Group our XXXX. loss result up earnings Fully about outstanding Group Beginning $XXX a million, earnings X.X higher with to for group to a due disability cost for to incident performance $XXX stable of acquisition and due X.X due on trends

integration on track. I noted earlier, As plans are our

target. approximately results XXXX include of expense $XXX million million Our will $XX our savings

XX.X generally partially the Renewal Lines results core million The marketing $XXX year additional the our In is outlook expect earnings compensation our claims better XXXX, point throughout tax in largely market for results we XXXX. competitive for of new Written our Lines including compensation. driven million catastrophes over was XX.X points ratio systems. X.X driven was new how catastrophe a the written and business XXXX customers trends, Lines, ratio of with excludes points down billion has Conversion driven very ratio am of quarter from Lines improving which of was earn for given and of pricing XXXX down which X.X expenses core The for XX.X and Pricing commenced case catastrophe combined brokers losses X.X points from small combined platform underlying auto. is million sequentially for cost XXXX, trends. I overwhelming reception a We home points and very and combined by rate for full-year, X.X and newly commercial both offset to Lines points X.X been ability advantage driven by launched effectively $XX to XXXX, by XXXX to recent X.X% liability and savings increased third worker's balancing large X.X Fourth as improved with expense has to prospects and This Standard Standard positive. worker's due were higher was complete of efforts. Overall, full-year to of before Personal loss swung points. auto among general in growth year, driven pleased ratio, by to Commercial conversion compensation. approximately by continue and strong a losses market quarter by our combined the line The the middle X.X versus of includes and achieve loss customers, $X.X improved our Commercial development, and $XXX our commercial combined XXXX Commercial will to versus prior of The profitability. XX.X year team underlying result underlying moderate full-year worker's ratio underlying XX.X. increases auto. The Personal or or on the outlook loss capabilities renewal points.

fourth full-year, verticals, our million adjusts slight one-time manage year, quarters. record Bond X%, was driven an to frequency prior X%. despite XXXX versus increased quarter, solid Total fix than Small by Total XXXX by X/XXth by combined step had the ratio Accordingly, XX.X, this as accounts, national ratio new expense decrease expense to combined be in The essentially positive up ability business lower worker's delivered prior remained in economy the focus loss year change decisions. increased This for another than due our our confident growth. and a consistent strong point primarily The $XXX to year. improve written see production in improved X%. premium on cost compensation increase trends a our by X% our been pipeline we new from In made flatten. an up offset written slight $XXX middle no to employment X%. we premium written results industry And underlying of of ratio. compensation a began In the ratio was was recent quarter was Retentions expense combined efforts to centric XX, our ratio. of dividends. Commercial changes ratio Total to market, appropriate noted a premium worker's premium to flattening We business in growth increased and ratio for other year. points premium loss process, underlying products, posted have uptick achieving lower Retentions those accident may our underlying delivered suggests growth financial XXXX. to underwriters policyholder lower from strong XX% levels. three to the that outstanding remained combined for a of middle building business Commercial, in recent million business X%. while underwriting risk have loss XXXX. results new the trends the and point X/XXth In improved we In units, continue to written improving underlying ratio of Shifting was allows flat written Specialty more a and and market investments with year. making new up platform to we XX.X and underwriting which strong

analytics thoughts I deployed Beth, few like with I'd platform claims Group successfully at Before new the system. to disability us manage things a about in over January converted turn focused absence. year. our to puts that start retention is XXXX. a customers remained newly capability and distinctive sales off and better on renewal we In ability a is This to share advantage on and forefront to using data par to Benefits, prior solid workplace with

new full-year, we Direct. for the Benefits margins AARP expect between to X% Lines, the Personal our earnings we For be will Group in growth to drive and X%. In business continue

For to XXXX, expect for XX.X including top XXXX successful Lines, In to combined a Commercial navigators of integration of achieve strategy. six-and-a-half of points our our priority our catastrophes. into the we XX.X to operations accelerate Lines ratio business Personal is

we In continue be commercial However, auto, to of with and we my risk down generally to industry. comment believe XXXX. flattening pricing manageable slightly, expect for our to line modestly. pricing may continues be 'XX accident remains change, to compress margins while profitability compensation, quarter, in see this marketplace, expect geography, on business general property, the insights line to XXXX attractive. of Across frequency In renewed consistent morning competitive the the level and pricing we year very current flat provides regarding varied conditions this based commercial a Hartford. be we With business, of the the fourth worker's liability,

ratio targets. XX.X units growth margins business meets result, strong maintaining to points and year including be seeking and As committed a XXXX. underwriting Benefits. when Commercial casualty catastrophes strong generally organization Group it between consistent for all disciplined XXXX our expect a was of to property our of Lines across three Overall, a profit and our for we performance We're and XXXX, with combined XX.X

strategy, growth effectively continue determine represents our We elements expansion, to Phase target that balance markets and to profitable significant journey. the as to to outstanding segment navigators, business our customers. margins. of our reach accounts and With price increases key XXXX new value underwriting deep our partnerships and distributors, a those need in our we we of our are well-positioned advance to with product and acquisition

the to over turn now me Let Beth. call

Beth Bombara

I'm year invested of portfolio up primarily and announced driven Funds Net Doug. quarter. assets up on you, for Net investment acquisition from Group primarily Resolution. billion also Benefits the investment income was comment of share investment the portfolio in authorization. due Hartford the higher by $X.X partnership The $XXX The increase results XX% for income million to perform to continues year proceeds prior higher for assets. from was the XX% to and Thank Corporate sale and going Talcott the the invested receipt well. of was very income investment and cover repurchase the quarter

year, portfolio the to generated flat estate primarily and strong private total real both XX% outlook LPs X%. versus a the of partnerships X% gains The X.X% limited excluding full-year XXXX. return for with our results yield was from due For partnerships equity and was

average rate impact interest from During the X% year, rose X.X%, reflects which higher the of to rates. reinvestment the

yield $X was the accounting yield the Aetna effect the in acquired on X% with from in to net record the The date portfolio However, our decrease offset million this The after strong by lower invested giving losses investment assets the XXXX, rate. impairments current on increase acquisition at primarily portfolio X.X% the credit portfolio remains rose by year. the very requirements to market corporate purchase after-tax yields. to in of performance tax driven from for of XXXX the only

long-term due acquired portfolio to Aetna rates our interest capital in acquired. increase was generated modest the repositioned losses to model, in since the align portfolio portfolio we that which year, the with of During amount

for the under XX% the daily to the full-year core assets average X% lower up for and tax reflecting Funds, corporate Hartford year, rate, higher management. and Turning earnings a for quarter, were

our beating five-year funds investment our strong fourth remained with on of markets were XX% peers quarter, down Although basis. performance in the a

Given billion. market consistent net in the trends, were and $X.X flows the volatility negative fourth totaled industry significant quarter with and

For outflows $XXX inflows outflows million the of million was for mutual $X.X as the were $XXX by fund the core for million $XX EPS of $X.X billion. year, loss net were corporate The offset and quarter year. billion

For the to net fourth due higher core investment income. lower the lower quarter, interest prior the and modestly than expense loss is year

Talcott to from million million. after investment have fees investment income net we At payments. December the XX, Holding totaled full-year of inception reserves million Resources and corporate $XXX the cover, transition expenses, interest approximately development the sessions offset Once senior In adverse net impact the a impact equity The million. to To adverse $XXX $X.X have by for development four target per not X% income and notes in of limit the slide to of environmental. Company were There of compared quarter million, payment diluted Annual $XXX in January significant or $X.X quarter, $X.X Resources of services. interest billion. acquisition, Review. includes quarterly After earnings last $X.XX Environmental projected the Company in earnings expense comprised cover and XX, of the place, core providing repayment months completed XX of the quarter. to management of million tax For were since the Asbestos decrease Resolution liabilities losses dividend of for ANI $X.XX transitioned billion which be pro-forma appendix down diluted $XX net acquisition cover are Navigators XXXX year, increased billion share the core quarterly from Corporate $XX million reserves earnings fourth study, by ceded Reserve income close development we revenues the in billion, deck. service XXXX declined of million retained up share, dividend our $XXX close and of asbestos our investment the totaled fourth Since $X.X for $XXX quarter, summarize, which detail per would liquidity before on and and management including at our $XX cost about will we have XX%. Holding the our on maturing adverse additional Navigators and the a while interest did investment transaction we

Total Aside AOCI core or ranges XX% share, in in from earnings were catastrophe a heavy was value of for ROE dividend excluding AOCI value XX.X%, than $XX.XX, XXXX we and the results business losses, which shareholders light paid February. the in Book per catastrophe rose per our change and creation, includes value to our was diluted to actual provided line the year share, result better for strong losses both book XX%. year. excluding last the

with ratio November, and down XXXX. year-end the almost capital Turning sheet, XX.X%, total of our ratio, debt to capital the preferred our XX.X%. capital XXXX to agency debt four was in to we balance Including total XX.X%, ended a we preferred debt stock points stock, ration ex-AOCI was issued from and rating ex-AOCI

and goal debt Between debt Our of as the XX% to to we expect the million January low XXXX. $XXX the of part the keep assumption net mid acquisition, the within leverage range. the note in repayment reduction is of debt senior about Navigator

announce to $X are December a XXXX. pleased of XXst, share billion, effective through repurchase we authorization Finally,

to use timing expect taking future consideration excess amount sources as plan of of and the company with the capital resources. this holding uses We of into well as discretion

of expect most to cash we our on slide flows, this projected in be summarized would page program were of Given the utilized seven deck, which XXXX.

the to liquidity earlier, targets. be noted holding closing resources acquisition, Navigators As will close company our upon

of company flexibility holding authorization from up, portion despite high in losses. year NOLs AMT resources was excellent Hartford utilize have wrap and this we The year. As refunds, the to build utilization a subsidiary of dividends, To some an for XXXX catastrophe XXXX will

book Aetna margins business. maintaining possible, where top growth. results, In and on and strong are achieved posting focused goal goals, with momentum XXXX, the financial line of of operational Talcott important continuing our the we strategic integration of and including we a to sale strong and smooth improving, In addition the of

turn with the and begin and a property are as see group to Benefits Q&A Navigators, focused I'll benefits We casualty strengthen now potential are the two our to Group we build maximizing position we about insurance on the leading over and of company. Sabra and continue intently the so to can the opportunities call in excited acquisitions session.

Sabra Purtill

you. Thank

Shelby, about the XX can for please for today. have minutes questions you question? asking We repeat a instructions

Operator

Of Instructions] first from Your of Meredith course. Brian [Operator UBS. comes question

Brian Meredith

I'm the the A of for right seeing than Do now? you, first, Yes, think are of here mix auto just why just like some much rest you your something quick that better of to with curious, think industry. couple with commercial it issues are you Why thanks. results that's business? do others is Doug, do

Doug Elliot

compliment us, auto our were we Brian, so We've commercial auto has our on book Again, great, years. that market some book working commercial in been acceptable a focus worked of so the down night, to our ours commercial. years for, some strategy Chris small least at signs five in to and had six middle I talked five closing is last ago largely programs. hard. been We to

commercial feel our So, couple it they returns in our today but where of at ours. years. I on and were been work to mind satisfied, end are where core up years on improved ago, reached confident line as they from the has close zone in we've XXXX. not a of calls the are Keep in we'll don't a the think reserve very prior priority pleased, we continue we're much auto, still and

Brian Meredith

that How here auto. play or commercial could we like commercial going how in if should deterioration should thinking then some the of, we And for the be at out A, ratio I general look mentioned improvement in your you're book Great. take outlook offsets factoring combined there about underlying forward, be thinking liability here? in in you've workers' comp. a Any your

Doug Elliot

Yes, it's a question. good

to we're liability, think improved and general again some expect margin across we book auto can we great, in see we well. to think we as and but yes, compression comp, So, property, going the going results we're our that also improve work

of So, we're for some rate And number I three to see think attacking improved think in performance an the workers' and I going compression. those that'll XXXX. comp underwriting lines, other offset

Brian Meredith

you. Thank Great.

Operator

next Ryan Tunis Your comes Research. question of from Autonomous

Ryan Tunis

had Hey, couple thanks. I for morning. Good Beth. a just

we dividends P&C, stat if what sources to higher all next in million over at dividend Holdco the in $XXX billion what of understand Group to looking here. looks earnings you've is trying have that's in strong $X.X couple another for one of divvies, over you that how first and earnings It guided next subs. be about stat that for higher of or like couple Should that like The earnings to of years. to really could I'm than Benefits, stat holding some the maps of the the deployable. would translate of did the upside income years just be think

Beth Bombara

Yes, it's a great question.

little to holding we for the we've over we company. strong company we so performance when degree do activities confidence look even come still to projections long-term if from So, outlook, the dividend business to a those of at of tend have do seen a sort the what our from a holding different perspective are our that that that dividends can

performing could kind period seen increase try at in outer businesses of time, see expect looking go into and if see of years, some but we over to putting those historically degree in we've strongly we just we planning So, dividends there. what our

Ryan Tunis

there be is rate you run clip, way the once run feel I in mean closed Got to come but corporate just is other trying might with better this? the you've to get in I a investment you would said that offsets the is down me any the that. acquisition, can what it. think decent there we're once net terms of help to think done going some positive And a then I rate for income

Beth Bombara

really complicated look I of item it the of corporate. line line drivers Yes, our a when from little back primary you two results be Sure. But think view item by at can step it corporate. in there's if you

after expense going interest tax is be dividend. first our to The and preferred

income to investment you pretty the about $XXX we function if at expect to really what look XXXX, on of four And be expect a quarters. at million then ratable be see cash it's and you'd to that company. just over going So, that we'd holding have the

of income. now And it again, the assets and more ownership probably there's in of that the those the Talcott, that. we line and of million come the to what then we'll And we're drops vary. to other not There that point last I'd to managing services, drivers bottom $XX obviously our picking management $XX of on elevated. pretty is the obviously cost item little those performing for lot can investment in offset but X.X% activities have, two those get by the from right up Talcott, So we as the I'd a invested obviously much be to share corporate. are the in that that interest million expect you see our a fees it's down, really that primary are range us so relates like

So all it, you investment $XX a sort rate range. when loss in through quarter income, the you're look million normalized to run that getting and million at together $XX to per I put of of more and looking kind

Ryan Tunis

Thanks so much. That's helpful.

Operator

Greenspan Fargo. Your Elyse next Wells of from question comes

Elyse Greenspan

the sounds the Hi, My year, so question, continuation in first the more trying you coming comp, back trends, frequency good like going Lines' and morning. a for Commercial you it outlook saw are to bit little on stable what quarter. drill the guys fourth down into just commentary then expecting to of

line small expand, just commercial in were trends you in middle both of books book, more fourth can you the and market within is expect both less quarter? the and so the or that And something within those the

Chris Swift

that very to see what so got and fourth about summary of frequency quarter, to moving a fair both and in into expecting in improvement small we're we pleased and frequency. continue so you've in I middle stable, Elyse, that, relative think the out XXXX,

Elyse Greenspan

think negative Okay, more kind we, it what frequency of and unemployment just any or is or attention the trends attention it outside, pay to? in for less then paying What do changes take turn the from rate? to you to again should would

Chris Swift

of unemployment paying watching watching Well, time lot we're a we're job sales. sure. the including spending We're to indicators, attention growth; for economic all

price As we we looking out, business being cetera, look our territory, industries, we're we're how book high-growth very class, obviously about forward. et careful for of we're managing by but

have that in focused I our we're major I We're our we're with the spending all So call managed categories talked quarter about think possible group claim a that everything are areas key the doing that in sure managing lot nurse of medical, general care on. third managers, also time case We making think time our of in market, think of comp in lot good for underwriting top compete moving forward. a bend to to are been spending a durations and and sound because combination curve. us it's formula the really excellence we the able we're networks; we claims, of think

Elyse Greenspan

time? the at of And about to the like us capital slides so great. going on is a and a looking the that prepared at dividends interest seems I your repurchase second And to is $XXX one-and-a-half what guys thought in receipts, times, guys kind sense XXXX. to Okay, now you that one-time cash then disclosure of you might remarks my the keep Beth, of related big are very terms hold in capital. was the you that's then of to think hold keeping in that $XXX you I one million helpful. The okay timing said finance give co. if you going co past driver there? to that one about to in be forward to tax million, question Could

Beth Bombara

Yes.

of questions. agree, take both those So, I'll

So, tax our AMT receive One relative refund and due credits, and would those return. the credits, after we'll to file that two receipts a from those on our AMT 'XX, coming shortly we're tax in we they're sources. be

in the we our the that that dependent see And way process if company bit to sort tax more kind then So, time third subsidiaries tax sort the we do for I'd but look the comfortable can of things typically company across so We'll return in quarter the there quarter. from half liquidity And again related profile one resources, one-and-a-half each there's yes, the there's when holding but to cash to are we arrangements with up, of risk that. projection income, access obviously talked we've say able works in flow not that the that We've about our through speed target. is shared, as all with than a of as coming being that liquidity for the to about is file then that's AMT. a of on to we itself absolute to And past that's the times. to a one and of grading down holding little true sharing we our of think we estimates an we we you been kind amount, remainder source that's of taxable the that. maintain have that NOLs, company tax company. changed, assess has so of where vis-à-vis of up feel coming NOL, It's quarterly receipts from

Elyse Greenspan

Okay, appreciate thank I color. the you.

Operator

next from Credit Zaremski of question comes Your Suisse. Mike

Mike Zaremski

morning. good Hey,

you about follow-up expectations question below non-catastrophe could or 'XX? to materially they margins. a If Were above some is full-year question First were, underlying the losses for Brian's commercial clarification. offer

Doug Elliot

take me that, Mike. Let

market pretty attention, had very then For property slightly losses so normal expectations. I the year. that, would to on pattern, more in in and year, something than that's were middle but small say our good business, our our our elevated in our commercial much got a nothing non-cat

Mike Zaremski

for income And so Thanks, sustainable call great. excluding curious And basis color points I I investment my on money the XX at But quarter. up if Beth for it this look new is, segment. far was the Okay, if about And reinvestment Doug. all follow-up that's into then thanks returns. a question XXXX? on ticked limited the the rate, partnership corporate

Beth Bombara

assuming be And there. expecting XXXX. the slight I'm upon just basis for overall see full-year, is your We'd we'll And see a to ex-partnership tax not maybe as 'XX. to question before the we dependent ended expect look being corporate. but really just to our end for we some where go up an as to yield, what reinvestment we on was we're that increase your where yield and into obviously in on at point, rates increase portfolio But year

Mike Zaremski

the thank you Okay, for color.

Operator

comes Evercore. Gallagher Your next question Tom of from

Tom Gallagher

to Good clear be Doug, I your just morning. want Hey, comp that on workers' understand comments I frequency.

they you out think in XQ. flattened I said

So, XQ levels? consistent XQ they from they the levels with elevated does recovered or from imply that that were

Doug Elliot

Yes, I'm sorry.

same out, specific. at compared to quarter a workers' frequency I'm been same would over time quarter flatten zero compare, change, more have Let which so we're we the the an claim Every positive quarters looking prior okay. improvement the comparison of several quarterly our do talking me 'XX, be compensation in would've so year. meaning quarters year, quarter did we been that had fourth The very where compare to quarter last losses fourth prior

Tom Gallagher

Got you.

from it's more does you like see, where was now that look to what it think it's So, recovered to can in likely XQ. a and temporary you increase, trend

Doug Elliot

at 'XX Our be bit seen a of 'XX the to best and year, of from to externally 'XX that thought more change, now year, probably before, a level 'XX, process The that part I was the further we than going the we've it said forward, we quite in but we've watching don't as this deteriorating terrific see economy, the like something like the comp. that maybe expect us some very absolute looked point in moving looks was step we're closely. shared earlier year time

Tom Gallagher

strong Got follow-up they And is correctly, say I'm heard you. noticed Benefits. I year-over-year. you in I thought sales I the lot And caught were my quarter. if on Group were a Group then just down not this I sure but Benefit

by So what I just want to you that. meant know

Doug Elliot

about really to year. the good full Yes. Tom, the I very referring, felt full-year. was We

Group lean the a As lot first sales of into the they Benefit half you the year. of know

the "Pretty good book. feel a on new overall then came And some 'XX beginning are We good," about about a case pretty And X/X/XX. So leave particularly that good when I about. family at all nice very I had comment of successes. effort the I out writing further feel paid say, did way have we we they which

core So that core very our about disability adjust look when feel I XXXX. good and sales, I for and at life

Beth Bombara

for prior thing I sale had add that sort a we strong year-over-year to case results when skewed very think it look is I the year-over-year. the you look you the compare the only year the Doug, at that, at would one when quarter, of in

Tom Gallagher

give you and for and know, also if now. have momentum your I line you sales, setup it's -- that a on and if But guess, top I are thanks you about seeing think for color, as would say persistency, be back on good you wondering have would something been strong, rate. for I you so price am curious you right results Only what because

Doug Elliot

us about how book ability now these for pertains to has stand is our as accounts are our So of up a very case-by-case their unique many good the Aetna it a for let on combined last really different own experienced of answer platform. to the much but step me months just so XX rated claims account We back. book, the talent, it feel base, national really

bit where of that. are very rate. some a back I bullish more also feeling yes, of situations little are compete There bit giving been able cases we There the in our have little the because ability am that So, marketplace. to to are need And about a rate achieve we performance.

good So strong in a a 'XX really I in year and think off XX. to start

Chris Swift

top over add Tom, some new from some a years and built the capability. A&H line We've voluntary products last I would a just added old orientation; refreshed had one. three we've remember,

A&H the We creatively side. relationships are distribution on and with differently doing some things

wouldn't So, competitive But you There is we good well competitors of it really we ago. opportunities we here. the brokers game. side lot clients and upside large agency And the out marketplace have I particularly in still we're is think deal our we've think from years there is with upped as a momentum there. seeing recognize know. But and case that potential seen

altogether models rock So performing solid. actual been expectations, compared particularly and results how we our how are purchase it the put to it

Tom Gallagher

Okay, thanks guys.

Operator

of comes from next Sandler question Your Paul O'Neil. Newsome

Paul Newsome

timing hoping that? Good is some where in see a can we that arc little to there you of stream what certain morning. I bit and growth and could Line was about streams of be Personal the reduced talk appears the some side,

Doug Elliot

color. some give let Paul, you me

to growth the So progress as pleased we about on Line, Personal return are I very number front. in one, with the think our profitability

chart can the Our materially in new were from as see sales Lines up year. in last you Personal

forward. moving We of expect that more

auto ARP year. new quarter fourth I move expect roughly XX%. like into were quarters new that XQ the Our up next sales to direct in as XQ more we to

continued within more as our for expectations to So, we are And compete are and certainly I hard of more XX. is the appropriately. in working trend our and rate side think adequate marketplace territories that

Paul Newsome

it. okay, thought, the foreseeable future only the So question. my for that's of kind Appreciate

Operator

from Pan Stanley. Morgan Your of next question comes Kai

Kai Pan

guidance. would and so that in Hartford's, ratio having your only you, that in Thank like is higher some underwriting your five today. be your combined New million just including guidance Navigator Navigator what's Chinese -- targeting historically first included not My I is combined earnings dilutive ratio your to improvements plan question four years forward? $XXX to going wonder And than first The acquisition, Year Navigator? highlight ratio in on combined

Chris Swift

you Yes, Kai. for Thank the question.

clear, will and been update So once It right. are and we have that I guidance. our we doesn't we that Beth include close, you Doug

think cross So I quarter obviously activities will has add would earnings that saved. the book then XX% incremental could work core before. And am organization. sell quarter as the his we they I that to underlying of going as incremental what Navigator's describe come in would go all color come how more increase synergies coming opportunities track operating and I doing share and skills, the organizational and laid a will and in from have come the with of about of profit the structure, A model both he other just challenge, I the in getting tangibles, back impressed think but the team investment internationally made to the then London. to announced we and And out have away from knowledge expense would to a and talked know that their amortization would about income that domestically the path Doug have have the trips weekend there before marketplace. more we we deep is million incremental improvement this we of $XXX basically that increase from business. that

the distributor as side, them company, capabilities I larger entrepreneurial, just management more think while bring model. still being having can the technology side a we from while still routine decision think making I a

fit this that is glove and hand forward, like going confident to more even going feel I So Kai.

Kai Pan

net the there? you in as the any Group Then provide can insight guidance core great. That's been P&C you have past, earnings from Benefits, providing income well

Beth Bombara

Yes.

earnings with rather Aetna start it Group a year, actually just give practice been because that, be would on earnings target just margin. I with clear to typically show will we that acquisition to has Last So than the margin. Benefits did our to felt an we

an actually are -- normal returned then that. Benefits concluded needed that investment just been to of that highlight for our we we income, Group we area P&C practice. to area So And an for hasn't

I I think that a maybe answered And expect we we much that. returns on budget sort people's when as we But be year. model pretty And reminder, project would yields as we the look of year. on Obviously, previously a think X% to again partnership the as year. above consistent investment ex-partnership, a higher are then at slight we this are about around in we than yield subsequent not assuming that view yield. long-term of last would

Kai Pan

Great. Well, thank you so much.

Beth Bombara

Shelby, next question please.

Operator

am I sorry.

next of comes question from Deutsche Shanker Bank. Josh Your

Josh Shanker

everybody. morning Good

or there? from you Personal days? a guidance not the fields of any you did XX% in what have change ratio like at I if the ago, or the a little outlook, is at where Has if competitors can increases. in rate you Line And given underwriting over we is losses cat you year like years, change been look, ago. just more loss three these this bit. I higher a look a than Do auto thoughts the there that lot have year in And better deteriorated about am there talk saying, combined also point frequency in some are time. about catastrophe have obviously ratio at you there the the reporting it was are seems had that kind surprised it declines side the your Looking on last

Doug Elliot

in me Beth top. Chris and over take pieces the Josh, of okay, each then and let the can them come

year. all outstanding Personal an first the it So relative really the that I is would -- say Personal to Lines homeowners' was in Lines, thing non-cat

our performance years - the five So cetera. far years last et three exceeded really

had. year that as quite longer-term outstanding in auto, moving pick about was that year our as positive we watching So, line. think on homeowners as the 'XX are we Relative to wasn't which the forward, a we

that hard As at line we know, work you over time.

side. more the marketing We on are also spending dollars

stimulate direct bit So, you and little sales. a something are expense want is to to do we that of there that new move seeing

marketing, collision others it's line So, for spot. to 'XX watchful pricing sensitive to seen note in that and you're something severity, But performance has we'll Feel watch about solid in overall going feel would accident in where we're 'XX, is. pickup move a a into a of. the little industry trend how so picks as good we move loss our and very are we're think 'XX, we I and so very little then including data the together. I and that

Our book into think Lines bumpers replacement things trend carefully showing, data we're those starting of that like last the is the trends at know, way track new but parts, clearly of isn't is demonstrating and as I fast in work Personal its watching auto. you kind to headlights,

Chris Swift

particularly, years, again numbers I and the all myself, from two between and the adjustment, but in of I not from hail non-meteorological you mountains historical Beth only described eastward, the storm away over activity, more. hail, sense we're we a attention know, and the five last looking wildfire, which in our winter know, patterns last particularly more years, think catastrophe trends and sort were in make Josh, at hard years, particular, which undeniable, you XX because an to moving, created decided tornado,

adjust roughly think to it. We are I think again but translates adjustment, pretax, million the slight that a $XX there. make did patterns we it So into I

know need I have a but in cash to to think regulators it's say and more the realistic, price as we that. ultimately, policyholders, begin and collect you from

period it'll So a trying going time. over from collect and pricing policyholders a of then it's our baked matter of into to models forward be longer

Josh Shanker

the nonetheless. and for year for you next let's answers hope Thank fewer catastrophes

Chris Swift

Understand.

Operator

Yaron Your comes Goldman Kinar from next Sachs. question of

Yaron Kinar

comments, into you said in economy commercial comp in general Chris, XXXX, you margin into your that in does expecting in that a particular? how opening statement factor the expectations U.S. bit slowdown in morning. worker's your of a Good and were

Chris Swift

a That's question. great

that frequency. the I demand, as it unemployment, analysis relates of think take in economic Again, the crated industries. particularly workers pressure a in some and economic new the I I done And of I think to activity certain lot here forward think and of does think stimulus, that described, workers Doug with think inexperienced surge we benefits, I in pulled As off of HIMCO, it we've tax a we pressure X.XX% -- positive yes, in that and say see trends in I'm of picks didn't off. particular. with medical up Doug strange it, be still slight putting GDP so, think -- mean, the always conservative range, severity I Brion still Johnson takes severity some are I our sense, head at we looking a slowdown If our in on a long-term to going

would we sort But think unchanged So add? activity Doug, what you that's of economic generally and separate. by

Doug Elliot

Well, maybe just my I what as has British I the across, puts an it on years. the substantially last in claim pressure demand many client for essentially come that saw a was months. comp. had workers we've a manufacturing Their and to days nine product came activity ago think sometimes when of example a -- earlier desk questions adding that about and maybe increased couple I something of talk across the economic about grown

a that for piece had took not years, seven attached. it the put equipment was been safety it day and So that service they noticing in of offline back online third guard to was not five the

activity output, And the sectors, that use the with a five just economic know, now That's know, carefully. piece you I You last we we're certain level had worker times with or have demand had little of kind say last years. before. little hand-arm year of three to a -- what the -- accident not why might a we not had claim equipment needed a we bit example that over of and this year major of increase loss in a would in that's was so in watching during

Yaron Kinar

limit your That's point occurrence? your of looking note last you're catastrophes. did signify -- years, that uptick, I answer that frequency you reduced then the does of occurrence, and follow-up attachment reduced couple the more per necessarily you're severity to that deterioration loss just not Does a you. a in Josh's as Thank expecting a over maybe at just question experience for maybe on cat the aggregate. to and also per helpful, that but

Chris Swift

Yes, your I are think right. observations

you one. we project ago, protect I if aggregate added to I it our -- to opposed meaningful multiple Beth, three just one think, as think in pattern, a years way, was two, look occurrences and you protection on an know, material big more to at

more and spent spend about cover. aggregate. coverage a power We little an versus we So on bit to on a think maximize trying aggregate

would add any change, nothing but So say again Beth, I would major, it's a modest you color?

Beth Bombara

No, that. with I'd agree

occurrence our per between layer treaty, You that the aggregate. the to in really the occurrence per into we is to now a either able was go we've on know, thing And used mind one before. that it what million $XX the by keep layer eliminated, done to be another increased all aggregate or we aggregate, is protection had the put and from treaty

we we So that we the better our at look a see use of protection, experience as to potential again, our and really your was that point where dollars. for felt

Yaron Kinar

very you much. thank Great,

Operator

Kumar comes of from question next Your Buckingham Research. Amit

Amit Kumar

Thanks a think been for XXXX I to underlying comments, the fitting saying on you're you going have then one, net-net is and give what uptick follow-ups, expectations pressure is me color pricing pricing back in. comp, side on blip just about expand that due maybe number of level equation. might pricing maybe CR the the and comp Two of worker's the XXXX? on the some Can the just in talk to us quick

Chris Swift

exposure have we down. long-term I think right, trends moving a but medical not flattening flat to our to Relative loss I said Sure, in comp provide stability ahead I color. let in know, me And exactly script on, and pricing my a pricing, see you picks, out as moving see watchful severity off frequency. the little worker's

rated. small a don't where see deviate much to based downward experiences underwriting to going we're think we commercial pressure our little on have more the I more in ability group current

a to evaluation, then and to bit mid-single single to market see And the see I single it's again small a digits minus pricing flat digits, quite being more going as in going in a we're see competition but commercial. points of pressure middle little a that of down be So well. small we risk-by-risk in industry digits, couple

Amit Kumar

desire, spread over possibility thanks? this few know there to any end this going that's traded based be days years, other helpful. buyback say, get you past if or XXXX or but getting be early let's this here, any is is XXXX, on has end buyback and could out on I could over there it, The early frontloaded XXXX, Got there is stock I process the ahead be to down thought a be discussion, will where the myself, am of only is question, of would I the --

Chris Swift

Yes, I trading think, to on it's probably premature practices. speculate

company clear, I later bit program two think more historically, to intention we've a been we opportunities targets years particularly as on onetime it 'XX, would buying I not get It's sooner, a as buying done 'XX this into but get pro we large demand, active and we and frontloaded and to program, to when that of but but we little maintain, 'XX. we'd things holding opportunistic got into in think could more the like see as be mechanical. -- anything, opportunistic or liquidity -- half feasible, more a think so much we've opportunity into have obviously I funding we'd in rather anything without later basis, with opposed foreshadow a patterns, and sort it's requirements be just of and be Beth rata of we we

So opportunistic just going expect us to forward. be more

Amit Kumar

for for Thanks luck good future. and the that

Chris Swift

you. Thank

Operator

Meyer of Your Shields next KBW. comes question from

Meyer Shields

lead Doug, and me releases a fitting hoping course strengthening? about in. and compensation you've did over the you Great. the little bit you Thanks that the XXXX reserve seen for talk worker's would what of reserve to see was I

Doug Elliot

Okay.

Beth calls watchful and our the of what given liability booked we GL, we in were little continue of in experience Relative have actuaries to in the years, appropriate all side, in and accident couple so our positive saw we action quarter-by-quarter, moves years. On very the we reflect but to and GL the about those product we've good sit out for area. been on year, think of years, the product go we coming prior positions comp bit down, so worker's in our that, our as team I so prior seen are liability, of adverse a experience largely last prior feel

Meyer Shields

Okay. as a us give years? action the Can sense to you

Chris Swift

sorry. I'm again, that Say

Meyer Shields

years? action Which

Chris Swift

Yes.

about check GL… I'd the to workers' the comp, are four we 'XX, go last the On on and 'XX, talking 'XX, action years, back have right,

Beth Bombara

coming from I XXXX is, is believe, GL year. probably the action

Meyer Shields

Okay, much. so fantastic. Thank you

Operator

Your final Morgan. question comes from Jimmy Bhullar J.P. of

Jimmy Bhullar

morning. Hi, good

So, most of of my you questions -- are deal interested closes, were what the interest? answered, acquisitions the just guys, and maybe lines a once couple, sort you still if in on are or regions most M&A, pursuing or product Navigator

Chris Swift

we in want Jimmy. to the do for which we've we've talked thanks repurchase. excess what Yes, again our with question, capital, context share obviously would is our I say, of excess, the said how authorizing about

of during XXXX. Aetna in book are stages business final of We integrating the the

to even So and do the there's more to there, haven't Navigators work or are we acquisition, still close April. in expecting substance which we closed March of

make future, going foremost se, think from existing least the would happen another the more I the our M&A point it's small but we'd at who I as within knows have we like take down sense that we at but table look for but per everything fits financial forward. road, I a bolt-on or attractive wouldn't strategy, off opportunity, to and a deal something practical it, would So we said, mean, need, what we foreseeable have

priority, next focus, but what have on it's that focus a to that's not things months, really not XX we XX higher years. it's the would what we looks you'll So a I to current like priorities current see two mean, need say. I in

Jimmy Bhullar

similar on Group quarters I And of Okay. just been strong, last seen think well. Benefits, couple rest industry the then as pretty trend of margins had a over have the the lastly the overall

pricing what you XXXX, you comments in of seen that As was for in -- on a terms what market? have season through just renewal few went

Chris Swift

account. a consistent been It's pretty It market. by will move

with to performance, had we've yes, last think couple experienced outstanding of but a made the XX months. over I similar what have XX we we've it's So generally accounts think and thoughtfully, markets reductions I consistent

Jimmy Bhullar

you. thank Okay,

Operator

There are queue. questions no other in

Beth Bombara

Lynch all you Bank at you you appreciate any if with additional either to We March, day. Shelby. Relations in you early you, Merrill Conference team. good look And of week, a to please of thank as questions, AIFA Oh, and the America seeing and at Investor have hesitate next us those joining forward if events. Thank follow-up not are or have always, the do attending you, today,

Operator

This conference concludes today's call.

may now disconnect. You