Hartford Financial Services (HIG) 2 May 192019 Q1 Earnings call transcript

Good morning. My name is Amy and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quarter 2019 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. Head Relations, Purtill, your may Sabra conference. Instructions] of you Investor begin [Operator

thank us the for first morning our you Good and joining including XX-Q yesterday and website. materials quarter afternoon today. posted related all earnings the on XXXX reported We

of note we your Navigators For than results bit that for we you finding for morning usual us a now. of by later the such reported acquisition on busy joining having and earnings time live those appreciate us calls. closed expectation Please a

that also will closing. all after which We as on our be work about post launch complete expect acquisition previous earnings a the we than integration will releases financial reporting week later we schedule

date in July. our early practice As announce per our release usual will we second earnings quarter

speakers your Before XK I two recent draw wanted to to filings. attention introducing the

permit We and the York for quarter for morning, date outside as results. XX, to will agreement to to the have Navigators requirements, Form will that from the in file First, acquisition provided note our we with required a close public terms the they that all an automatically from days approval materials receive close Services the is we process. for if and XX, of would have approval New of the financial five filed of result the be information. that. a accordance approval will to still SEC before yesterday an after first announcing May extended when has X-K filing The XX-Q There the of that requested July as filing XX, via been receive acquisition the May XK business even were noted yet X-K Financial be we a the Navigators been and with which acquisition in extension Department only regulatory merger

does he, any along the company's for strategy, announced not a brokerage relating him a and morning and on Mr. McGill have executives our of with arise resignation has that service thank launched on any matter that his resigned as other We board. today disagreement McGill's new from Stephen or result our the Board this appreciate operations, practices. effective announcement experienced policies McGill partners. to we insurance Second, from firm,

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

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

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

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

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

Core first thank quarter core reported up XXXX. you today. for and earnings XX% over of per quarter Yesterday earnings morning diluted share. Good $X.XX were $XXX us million we joining first

to our First toward results financial making the quarter businesses results well strong of progress were achievement and the performed Hartford's goals. contributions strategic all and meaningful

significant level earnings basis XX.X%, result in XXXX. was ROE XX-month a considering catastrophe is very trailing strong a core which the Our losses on calculated of

Personal headwinds. the dividends. for pricing wanted for flows XX.X% am XX% X% despite was last illustrate including but ROE AOCI of earnings lines more shareholder written lines Benefits of Commercial the was strong positive. do the clearly pleased to power segment in driving highlight multiyear diluted year the on underlying members. total per efficiency retention value distribution points consistent was and a consistent and sales With our key that few business Workers' from average. Beth focused Group higher up to our financial more initiatives of improved which strength focused quarter. property objective loss share and creation to XX% and growth year best core Doug is although XX.X it the expense lines underwriting the franchise. excluding prior lines rose Hartford Marine agency the quarter the with as results capabilities I momentum in to Funds personal the over premiums combined much to strategic both in margins value prior and recent Book in our cover combination net on with segments. Commercial annualized over by $XX.XX rose a Our year, due had growth data a planned actions, after ratio topline among was detail, ratio our were enhanced earnings quarter, such return than interfaces our including will building also the I sales and company and rebuilt enables through enhanced in in AARP portal expectations partners. easier to market, long-term with expectations, digital us The pricing to with severity an increased our make our while investments Compensation

of earnings continues XX now The with is cornerstone efforts closing were proceeding accident from ratio. marketing pleased this deliver well. Margins sales partnership acquisition points up loss XX% were peers. ratio relative were both metrics with Other Core and quite resulting of up quarter. impact the by impact positive good personal were expectations. integration last we very with overall the solid a after also million half. and and because the the improving The track in but to Benefits Core expanded acquisition the expectations. were favorable am fourth of operational planned XX% is year I earnings our have quarter year X.X results on home improved. the on sales disability trends. and quarter had lines expense flows substantially performance year business. prior in performance exceeded activities Group targets in line to line offset of in operational extremely favorable to before which which investment down the auto from for the the initiatives although with year a by remain performance net persistency Cats related dropped AARP margin over market Funds $XXX strong impact and in a marketing excellent included continued of our its expense Hartford Our months XXth with

of market to significant was Another go the pending announced acquisition structure focus deal the hit the running Navigators. to The when the and this quarter earlier was well leadership year are ground prepared closes. this area of teams

to to the hear very positive distribution feedback agents combined later offerings this our continue partners to month. look at meeting expanded We from product annual summit introducing and and top and teams our brokers forward

on a commercial lines' of strengthen potential bringing focused of excited the underwriting effective alignment are teams which and two presence. Near-term timely the are very about the We achieving organizations we together. the will

our margins, of that addition, long-term financial confident and is we we underwriting growth, improved a straightforward investment revenue Hartford's returns, achieve objectives will In expense through overall combination and unchanged. higher savings. strategy are higher

focus a abilities First, particular underwriting our of we on the achieving acquisitions. the product the on expertise and remain focused with full integration of potential

company easier partners deliver to become improve and we including customers. distribution do Second, data, with invest in digital we experience continue technology, for future an investments and to capabilities that the in analytics to business to the

depends ability talent. the and develop to Third, on success continued long-term retain, attract, top

We inclusive opportunities proud have our our top time. recognized XXth which engagement be for career by recognized culture workplace are for we attractive diverse providing employee in to [indiscernible] to decile and and ethical that's the a recognize commitment scores

drive to value creation long-term unchanged. goals also shareholder financial are Our

well grow profitably cost strong generating businesses of our capital. to excess of First, while equity our returns in

over acreatively capital support and through businesses businesses by the communities agents, Boys all protecting and Achievement, goals and like positive policyholders, our and management incomes, is programs Girls sustainable performing their and to making and To segments results grow actions, in we business in to these also strong share or families to our contributions the Every with How achieve of book Junior deploy to were common of capital organizations society Hartford employees time. important. addiction. Second, well. address City conclude, support value support Club, dividends including day of per excess finally first quarter drug our we and

forward look the with XXXX results, operationally remain to balance robust. achievements Our our both quarter financially on beyond. and the first remainder I pleased and and sheet generation very building of and capital during am

I'll the Doug. over call turn Now to

good you, quarter Chris Property and Thank morning and and for solid This a everyone. Casualty Group was Benefits.

results financial The of led our to above as were by and Benefits of line in in our core by outstanding business units with last Group disability. primarily Benefits effectively. combined were earnings trends and driven year, P&C expectations favorable Group execute Our earnings continued in each

higher ratio results. XX.X in was from was business excludes The versus catastrophes due compression deterioration right expenses, ratio as increasing combined X.X combined prior-year points to development first XXXX. Commercial The Compensation into X.X underlying both get was and margins quarter XX.X me Let and increasing Lines our Workers' which XXXX. points expected. primarily

higher also We quarter. quarter which can from losses property non-catastrophe experienced fluctuate to

was quarter auto and double-digit single-digit NCCI where with pricing an March loss February. Compensation margin in pricing lead fourth-quarter mid remains standard and pricing XXXX; submit negative continues Comp no are other excluding continues lines Workers' in bureaus way X.X% to state pressure Workers' the filings. low and as written the commercial over competitive showed Liability nearly however, General costs and Property For the Commercial encouraging January range. to improvement with the consistent gains.

Workers' healthy quarter in days we trends the XXXX give selections. confident for competing begun The frequency in of us to year favorable by data with our and XX we margins are continue foundation marketplace. another loss accident observed XXXX the Our and a last fourth flatten and strong Compensation early ratio had year look in uptick to remain

and a strong strong combined on Let of had XX.X. new ratio $XXX details our underlying another million quarter an me small beginning business few commercial posting of premium more Written very retention. with businesses X% sure commercial which grew with

As XXXX. had XX.X combined successfully projects. the inland of mainly first construction several convert large due we quarter market increasing marine including from an and with business a foremost rights adverse property on deal. from X.X quarter fires volatility renewal is difficult lines points experienced continue non-catastrophe property which This to ratio underlying Middle to

XX% million, of fees, premium expectations our reductions underwriting to by Workers' cost in In across by driven in trends a and higher teams in the mid our XX.X reductions see solid increased X% single increased combined performance written partially underlying a expenses. of favorable in investment offset and compression of commissions to driven range. financial X/XX in In low auto also lines addition an was in technology driven production was in to as ago. times primarily and underlying X.X continued by the to We $XXX improved point and Written margin producing remain our commercial, by and XX.X, underlying employment bond marine. Loss core Compensation XX.X taxes and our business combined six strong from in combined book from ratio offset than licenses, performance better energy licenses of ratio negative digit we're new ratio continue frequencies specialty by pleased of partially within Expenses Shifting over personal on increased lines, severity with Strong and and improving the lines based had fees. year business retentions expected. premium of taxes, XXXX. with first of all points products. contributions growth we operations

New to quarter. auto for direct business XX% AARP for the grew

Our increases delivering spend higher responses. expected is in marketing the

conversion Our continuous by driven experience. to ratio has enhancements the and sales more competitive pricing also improved

business. this adequacy, the and cost per projected with rate we improved pleased profit our profile Given conversion, of retentions are

Our middle voluntary at phases this of across segments will with the to claims solid $XXX of sales property and the throughout increase customers $XXX another Group market casually driven and business remain approximately well closing, rate XXXX prior life was focused a insured quarter our sales results was expect in Fully Conversion disability with and and offerings. of The Benefits, second adjustments quarter will we our continue excellent conversion deliver our year was further another year commenced progress X%, product pricing and market-leading product, with terrific steady year. process, advantage Shifting quarters. and disability margin group case over quarter. our continued core book reflects on recent were for I intangibles and XXXX. the the quarter The ratio growth. the XX%. strong versus Overall million. with by continuing lines and favorable In million has fees, lower ongoing with Group into for earnings a new slightly was Aetna's to licenses, of of businesses in platform momentum amortization product and integration. favorable and of was mortality across it completing consistent and lower taxes, our by employer disability several business our results, block incidence market large life ability expectations combined Group to our in accident offset elevated in line in over last The Persistency on all acquisition years reductions experience of recovery business. in the trends loss Benefits first entered and continue

We the Navigators action. put closing are our to into to looking deal forward being plans on and integration able

have hit organization with combined underwriting running the deep one preparing broad expertise. as a to We capabilities on been and day ground

focused Our in solutions areas. three primarily will combined commercial be insurance

market our specialized will of and particularly leading small business First, from deliver market will benefit commercial the world-class area. the small the and to capabilities to professional services continue business product liability in products Navigators,

And and science surety forward commercial to our middle I Compensation financial primarily package for global scale speak capabilities. have the breadth, products compete umbrella are our to will capabilities about quarters excited the capabilities teammates reinsurance that environmental ahead. in as array. look such products adding specialty future. wholesale have our our and and will this expanded Second, liability third, business large Workers' our on existing marine in you markets. I expertise and I and Also will the updating business say our life international my We know product add when very to to progress we and

now call me the turn Let to over Beth.

from lower X.X% annualized in XXXX outlook strong The from about first but Limited return very double XXXX. portfolio, portfolio our corporate, cover assumption in slightly for posted exceptionally investment you, with with XX% yields. from before $X quarter but equity quarter low were the and was last sheet Funds generated but Doug. to on returns Real after-tax Hartford perform up significantly million down Funds holding a the also LP returns, portfolio Private first quarter from high and The was year X% fourth company on impairments well strong were yield and year. stable to resources. continues quarter. returns million going I'm Net LPs. the the first investment down tax very and and of update to XXXX, before first balance X.X% income the Thank results investment for provide down from an items impairments, consistent investment generally for and strong, the performance quarter XX% due quarter prior Estate up tax. $XXX relatively returns quarter, partnerships quarter annualized the investment

before included generated annualized from after-tax. Excluding was and million prior fixed million net LPs up yield rose net an unrealized quarter year in which rates the slightly after-tax Strong equity significantly market portfolio the first after-tax also to on unrealized basis. tax, X.X% maturities gains year-end Lower $XXX with of impacted performance flat to $XXX XXXX in which interest income. on gains quarter X.X% are the

result average last down of Funds, $XX Turning to of $XX due investment AUM. were lower as million year lower fee primarily earnings a core to Hartford from revenue million

market and X% AUM up quarter year-end first from and favorable positive strong, $XXX performance. average investment flows very down was the metrics market due the performance was performance quarterly daily Although of prior the first were year quarter net from good year impact X% million prior Other to was AUM of very the with levels.

Funds short-term corporate so few capital higher markets Corporate Talcott have all large earnings. provided XX% the XXst, of on more been earned quarter loss million of March are run the level company five-year slides impact the of components Due last for peers is income of of second income reduce Navigators have in $XX a XXXX. at quarters, core acquisition, in we cash holding quarter purchased to million the had at company income from improved million to of on by that company resulting of table Holdings, million volatile which closing $XX Talcott subsidiary, and net will in $XX fairly in Corporate XXXX Hartford quarter decrease principal fourth quarter high quarter the unrealized billion a from quarter XXXX. holding down The a and income A As significantly from in $X has was resources on results. our is compared due about the rate. of former breaks gains in investment key will core to outperformed investments held corporate the net Upon basis. that $X.X decline, first this holding driver investment Hopmeadow improvement fourth hedges which first included net the first purchase. funds the which net zero

after-tax and XXXX million the past $XX in over in quarter XX the interest preferred were dividends stock in from reflecting $XX down first Finally, debt preferred issuance net both months. the million of reduction

corporate core results. per first had expense In up core of to interest from and due after which total $XX earnings better higher As from Benefits quarter share Navigators a annual closing increase reminder, X% interest to due XXXX $X.XX earnings first diluted million Group quarter expense. slightly will senior notes were

on value X% and December in share Turning net from $XX.XX increases gains due balance maturities. XX to the income grew net to unrealized diluted fixed per of sheet, book

a Book is excluding on XX-month trailing uses therefore high diluted trailing and earnings. $XX.XX in XX.X% Our share net also was core losses XX.X% and per based ROE ROE the includes the AOCI impact was the income of the half XXXX. earnings was net second income XX-month which value catastrophe of X% up which

debt debt Our to with a growth equity. debt from capital ago and this XX, improved XX.X% quarter excluding about a of points in down to leverage stock-holders net ratios March due year X ratio at reduction AOCI

billion our plan line plan billion tax $X of and Futures dividends. begin we will purchase of that in range will total of to our increase Navigators Our we at repayment with for authorization used the repurchase $X.X $X.X billion. with line remaining in the by approximately our continue price million the in was use and to months in holding holding due the which debt closing At the discretion to to quarter. of in due $XXX to company capital equity ratios expect over liquidity earnings acquisition by to March with ratio dividends high-end interest resources company million the be totaled mid-XXXX resources and senior expect targeted combination agency range. subsidiary of slightly receipts majority will stockholder back the funds rating decreased notes $XXX repurchase be program increases period. these the forward provide debt, our with in XXXX. the of second March expenses assumed will related targeted of roughly share but XXXX for We balance XX, of the the At to target from expect XX and XX.X% and After the

update wanted soon. we process completion the Navigators is approval to on Before closing The expecting regulatory and final acquisition. you I are nearing approval

cover Hartford greater on the closing upon an announced development the any As which provide National of loss about will potential development from will into yesterday adverse certainty Navigators with reserves. enter Indemnity we impact

earnings. in-depth point closing premium million is that approximately $XXX net the Navigators' upon review to an income closing reserves within exposures of review in XX, pay intend attachment and million we cover complete our August review XX Navigators' coverage December XX recognized views. for make we current as will We this The $XXX on our for would the complete will information After above million closing the we with XXXX not but reflect carried to subject claims. to our of $XX that to in and want cover. core reserves be of update to will and days consistent adjustments indication most We in

second businesses lines commercial middle the a As middle specialty small commercial the The commercial, business in commercial beginning and impacts lines lines three which reminder, will large and will quarter, specialty. and market in commercial. of global in be change, primarily

metrics all operating We will have To businesses. provide businesses we the a our start historical of summarize, well, strong year. restatements performing for to of our these with

remain and now of growth begin and possible where of strong and to Navigators. our can margins combination achieve goals Our so improve we and the the to lines with call I'll maintain commercial to a consistent business timely Q&A topline session. effective over Sabra turn

you, Thank Beth.

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

Elyse [Operator with Instructions] from Greenspan Wells Fargo. Elyse, Your first question comes open. is your line

you the Hi, level get us you've guys Good you cover being in guys said remarks last My question sense the of have is the Navigators. Berkshire? how which you million about you you $XXX trying morning. with adverse on right came to that in-depth your that of for so due cover with development a to before, transaction guys that thanks. had been up I'm just with the bought closes, reserves the told after review night as the first Beth, announced

Elyse, it's Chris.

me Let additional will start ask Beth her to I and just add then color.

we was always balance losses a plan to and on Navigators to apply So sheet we needed I since to and establishing transaction. carried views conclusion the that ultimate think we've known part announced that that transaction our of pretty be and methodologies our been consistent practices regarding

call. certainty wanted accomplishes think obviously that we development that [indiscernible] deal with as greater on regarding a outcome So, we ultimately negotiated their and loss decided into got the we that it, I

was But additional? would So, it. anything came how you up approach the add we with that philosophically and Beth,

No I think that it summarizes very nicely.

the see market found we we to that protection be and terms in our just on what might Hartford. look thought provided As in believe have the look could we available an this what focused Chris the discussions to was to protection place were as attractive we at and to type put and the been into impact again the certainty be it greater area that appropriate be indicated, which of them on provides

it Okay, you prepared in have my comp outlook you that might is see question within outside non-cash said commercial can about for thanks. mine, quarter, commercial the as trend just guys the And And the balance remarks of got broad-based in possible that loss then price comp? the you it's in just year second I then the also you. we and depending of what level you great? we kind and on, what an if do you Thank within are be better think upon of and could would know really seeing in from away marine quantify March, property losses of

Elyse, good morning.

GL and firming still toward we into Hartford property, up Cat largely the individual exposed pieces rights Again book [ph], parts the at you as first by with our the feeling, a encouraged of sure, on quarter see digit commercial I encouraged property what and core particularly are range noncompliance do of that and on won't all a auto but I are country. the as take the here line is we the commented my amplitude other me and end by in the the of single we depends play for some Let see them. middle what areas, where markets best think some I we're probably specialty we're we remind segments of would seeing but it wind we upon moving saw in in mid the small

think someday? where to had because initial both we we outside momentum disappointing or continued of know property Do XX product to going but rather be compete, do side the that So, it's think you I expect address results momentum as that we'll boundaries that's with I I No think see in and to XX issue the need and continue. particularly pricing. we've I

and trend, our our to do would and by say I to we'll book thought quarter-by-quarter XXX and we're Relative I So evaluation. at and we'll or we days that's XX how about XXXX, would where march risk they we're has think days think look similar pricing nicely, pleased a thereabout that and medical that Comp going severity for around be loss risks we at expected be, satisfied with improving to frequency, book and We're we're book. about not at in in we our all Workers' still settled wages auto what working hard see the is and liability performance. about property so our where and risk something

Beth, few on surprises very add So, want you from front the the top? anything my exposure perspective. to over do

sort out a of I middle ratios. some year-over-year did what non-Cat we saw we in market an lines did impact of compare. and more about we obviously market that pull Yes, of in point on definitely the call kind had When have mean through probably that of the elevated losses property that middle you the combined commercial total is it

I on that I question provides what in there. So we sort the had think that of seeing you were think

you Okay, much. thank very

Riley is with Your of Randy B. line next open. the line question FBR. Binner comes your from Randy,

Group Hi pretty Ryan for be or forward to toward of that coming had Benefits Aceto have strong something expect on the quarters we your morning. to everyone, wanted last turn the this we Randy Is I back could this two end are going margins. going year? actually toward to is guidance

continue But that rates term, performing in adjustments saw think we're that in Benefits quarter core see do the levels at very little we from a continues trending overall long year. being previous over provided it as when and probably that improvements go be And point pleased we we'll driven book Yes, that well. but know with very very favorable also we're the incidence trends these Group to as ourselves block. to to we the our the range incidence it disability obviously higher inner economic with we how about make levels recovery the provided the and through range really the you we as as bit to watch and on year, we're beginning of performance pleased activity this quarter in we'll and the earnings continue by so saw we the out margin from is you in and tied they're we with

– Great, call, on supposed first I second timing the with if I the that may did missed and guess of door, payments? didn’t I'm through or then sorry see to quarter I coming tax was be pushed be your to the touch payment you on

Yes.

may we'll file the timing by when did with so you is be to process, did review dependent our the refund a not get I quarter. is the the await IRS, so our finalized, through So think first to in tax IRS on which those tax we receipts we receive but and will AMT, referring receipt somewhat return already, on come return this

And XXX to expect you still XXX?

million that's But to will our still the receipts the company holding So for in the proceeds of the NOLs. that will of company the as not again, holding quarter. the our anticipating subsidiaries And pay our those overall million. beginning also throughout for I'll NOLs, use you have second settlements to company coming $XXX is we tax net of basically year, just yes, the anticipation operating the year. utilize million over we tax subsidiaries about course $XXX those million we're with do year, we of holding remind our so $XXX $XXX to operating AMT, the

you Thank very much.

with is Your open. comes the Brian line line from Meredith next question your of Brian, UBS.

you. thanks. couple quick here questions of Yes, for A

pricing seeing impact a are favorable as Group are Benefits curious, you on back any disability coming through? just result the on I'm of results discussion, Just the you

the shape. marketplace. a suggest results I been that own including but competitive clearly very it's across are Brian, good It's industry, in fairly our the disability would competitive,

enhanced of I So think a now. nothing norm bit competition, outside the there's

on Navigators. curious, kind Doug, your for of Great. looking just is, question second And thoughts market are what like now right my conditions I'm the then

and You going thought expect seeing you do announced there you et what's are Lloyd, bit people made it's kind that today, or is hearing from the obviously than other it? out know - when of maybe same of cetera you have the little acquisition better Navigators we're the a businesses, pricing actually through, and you of type would

the over in and in first with Yes, so we generally what to Obviously, some their quarter. But months Brian, pretty closed had for I'm encouraged. of and to would all that visits to see Doug three, and four discussions they're going I their it's team operations, London Chris. Lloyd's say last between can't numerous report firsthand we've the the myself speak haven't Navigators we yet,

I me and deal strategic think the for team of of the there makes certain underwriters market of probably market, am and that long the in are I their the a domestically knowledge beginning and would where still play encouraging is to develop us and sense overdue. Doug, very seeing amount tremendous aspects what But to add? really in - again quite you Lloyd's tailwinds and they the particularly honestly and quality the that of

and got Chris of couple the small us for of some core I the upward again of terrific distributor my a comments, movement middle also just lines. Boston. to some with in we're is days I timing and our risks leading seeing and spent launching. think and some We from back relative our although partners key

more the the and I think to little coming expect that over specialty see areas is of some in a that the in the marketplace need quarters. we're going I advanced

of good for deal upon that a think now us part the to of completion So about a come think and Hartford the good Brian, you I excited I time here. together, The start have will become expertise

Great, thank you.

Bank. question is line line open. comes with Josh, your of the Shanker Your Deutsche next from Josh

you. thank Yes,

the ADC reserves right and the we with the $XX we reserves. Berkshire terms deterioration took need Can of probably in some they loss and in the So to that's under you're talk close wheel has when looked now ROI it closed when has the ADC to you back the yet, deteriorated? you the deal material the you've here, if your is, you anything you million Navigators, after million materially perspective So of this you but initial signing did $XX a know your think after-tax deal? return haven't what bit, from has changed did about deal return you deteriorated little perspective

and help to Chris. $XX was just would the willing seller. maybe share price couple negotiated points Obviously negotiated you. we per a price, that it's a obviously I Josh, willing buyer add a

the said, very components still we in strategic As about I transaction. and of just this commentary, the prior financial feel good

prepared net as I that in savings. contributions first see clearly, price price the of global keep in end and and their property income, in and four at my we period specialty forward X.X, a of has a revenue to but we five-year of improvements paid But very day. once nothing a we as a results valid cross-sell, own going special So that underwriting results, excited $XXX range for quarter of the components to fundamentally paid investment said identity of own the book metrics time, and integrate remarks, the operation, changed. its we're earnings in expense generation remain million full value probably But that

very I IRRs probably learned down I period actually more point half that. four points feel rate little the range. what to that $XXX there's deal run since So, maybe and bit, we've improvement That point given said, those on a a then and time is and a our beyond achievable opportunity think million in have five-year come yes, the a all

long not that the terribly as IRR. means I'm our far But end at it's term. about probably what the of So as yes, for little a low expectations an concerned

came share? Okay, income appreciate should Talcott what income should on give I that's you that your Talcott, some guess XQ question answers. to sort the run in in favor And we you going then in in in Beth from and 'XX hedges in walk a as the a on Can through XQ item 'XX. maybe work rate the I XQ corporate considering math of be can generation obviously through line as which we consider for back 'XX, the the

I million quarter. little could pretty and that's this I is as you in think share second it quarter gains kind is saw X to to flat to of that appreciate, recover. volatility be for yes because around unfortunately would bit, to can I'm first hedging that impact And a $X obviously because not quarter, the at expect pick our up have would sure going of Sure, when going say that a and as to point the their about be answer, a we difficult its what of because of losses the just that. an level in to kind inherent bounce some it we hedging and of we your markets definitely range,

of noise see once will slide the dividend we which is that why the provided obviously So and to And I again interest other pretty income, kind being which think I you complete line think summarize this the that should come items line then of line. those, in down some preferred interest expect item. within are Navigators purchase straightforward, we corporate in

Okay, for answers. the thanks

Your next question Paul comes with Paul, of from O'Neill. Sandler the Newsome is line line your open.

was personalized Personal call Progressive everyone. for from yesterday the their seeing they in competitive put - thanks seeing shareholder thing? you're and are I if few what us a of a give seeing could you letter you're that The morning same if the in market. and Good market more kind comments a Lines perspective wondering on

last would competitive years I space. Line Personal few in Paul, suggest that the been the have

X the X X, years. last XXX So contrast I'm the could or sure I with prior or XX days not last

across Obviously how we are day. think front each and good work that I more leaning the terrific into and so every we street marketplace our more to progress the understand every we capabilities sales customers made both and they that's but the feeling competitors the some investing the this front, the just and in companies are marketplace face we've competitive into are or done reach product be day. and see and better in

range, in but it wondering the that point, to is down expense back at second that with that thoughts you that question, I not guess maybe, ticked you something any made eventually of my specific? kind if a was timeline, I ratio investments one or nothing would up some you've get updated on little that have whether And was bit kicked the XX

pleased Chris. we've maybe would internal it's bit Paul yes, expense I been little on data team of approach and disciplined we've, my rationalizing of in more said really we're journey cuts, the technology, the I guess, very a been together we've X with here, new up investments I'm but continuing. I last really spiked aspects they've our savings, technology think in invest systems And needed modern has that say, X, generating deliberate and as been digital our years, and we've and multi-year the claim remarks, been to infrastructure the over about to conscious analytics, the since capabilities. prepared years over in pretty certain our expense a infrastructure,

a trend, invest, I believe that any Doug, one customer greater right Beth and and committed bit, the long-term to very, but from in still it on, little very path we're a could experience around we or the because the still one long for have bounce term. it's basis, efficiency, comp better So the quarter in on

we on the we're level to at probably kind are capabilities I the we be agenda in and the we expense Yes, look see and relative to very that that critical of are our the we're agree with that that core operations definitely the think our continue committed primarily strongly on for is around compete of the to there it that year and and focusing making compete feel we to saw that improvements at. we where and this will when we quarter, increase in is remainder at the an lines, ratio commercial what

would I help fundamental aggressively compete has add data is here that a become working markets external our intend be more internal thoughtful initiative in with three thinking One maybe science with and will thoughts. of data how data, terms looking to and about move key about we working into. us and

than spending be long-term pay so, we're are equal our and to in I what clearly science. we And data have will be there But yes, a more reach believe now. that will dollars extended more investing

of bit pain be long-term So there gain. I think is will a for short-term what

years, new with into in That has things to Benefits earlier our question in Secondly, spent verticals, started those the lot et that into cases voluntary which like construction X the of and now around accelerated products and extended money suite invest the and of some with Navigators. cetera. NAV, ties continue we progress last have Group now gets a energy, over through

thirdly, reach into the practice much we absolutely but lot, needed that point life both be environmental we're intend we talks dial. now they'll slight that to spent are practices specialized full two. and that be market commercial a a player put because upward that cost building and And Chris So small and about be also in like to saves have space, a think science we that's practice different pressure commissions, we then area the is for. there, our products that standing to space fact necessary some on the in there and defend up be suite on middle to speed standing the as I to now, was feel up product we And expenses,

it. So of we're aware

we've but think Beth about as complementary our term, pick long X to and compete to I we share thoughtful those areas relative Chris spots been how I shared expenses. to what

on you questions quarter. and the congrats Thank the for

Thanks.

question your Your line from Tom, line with is next comes Gallagher open. ISI. Evercore the Tom of

Good morning.

at becomes, to billion say couple attachment, you're extra Just on $XXX that this, million, purchase $X little way ADC you the think as adjustments priced the do to originally think ADC transaction? that about price, it a IRR be fair or make this question about that for I to the deal add if a interpreting just maybe conservatism million the fair way question the of plus an you, to than think it's assumptions, then to up it, fair and a the acquisition can look paying is you price should add is did the over relates when XX% the to So you your way we you hundred the premium the I that? thought it's XX% on in worse any have to you would and

path understand I math and your Chris. it's your points, concepts. your your and Tom,

it the the to how think of rate the get sort is enhanced fast $XXX I earnings announced change power than million run anything to add future might we wouldn't I to deal. since So other

Navigators in the of I agree would deal your So, with investments the but sort as as basis, far the concepts.

you just team on going couple looking then is Group of flattish and XX% year-over-year. and your And year-over-year a things at there, I'm retention in thanks. premium earned Okay, Doug sales down Benefits, followup for about a line with expectations, on said about

then you've in the underlying sales the has how about is also, there. curious what I block, one noticed persistence just thing you been line with So trending expected? success And other on the

were The other sales strong. quite

over you think, Benefits. on that I'm Voluntary Can that's comment what's happening I Thanks. maybe up XX%. assuming there?

Yes.

voluntary back progress, to around, come of that Act feel run product, you comments, that New that's of XXXX. just certainly then we are that feel my adjust A about I'll start couple the prior, new XXXX. our and just last we comments for certainly about When and you year which remind not Paid and rate where that start XX/XX/XXXX, our Leave products good program. pretty I about So the initiated a to but good $XX nail sales, plus that we about had Family York so is a was more million would reflective of the

about our one-time make that around think I in a you think New anticipated to one, some change was shock did two, the It When three-year scenarios the build we York. adjustment. I law Aetna deal. So with in retention, to need

with And we about is out I line in experienced I view Chris, largely so, playing to and when basically think be expected. what what

first for So, setup. years. good couple the shock not rate, Through with run say but about feel that we accounts what good I pretty a little I would bit of feel of normalized the about retaining. pretty the we're

fall that on working any out As already there of surprises you are line. XXXX, the backside we're know, so think don't I major of

Chris. it's Tom,

modifications think that is term another expertise we claims inherited our we embedded and the claims be be my it retention, about I said sales, it or from an As our expectations it operational prepared the Ability key that differentiator feel system talk don't something often Advantage, all whether maybe Doug whether side, is, our made expenses, and the meeting I long too we organization exceeding that in we about. terrific be plus whether remarks, in

Tom, you understand mean, I know that book. and you

was and of account be to accounted good that. as lumpy national chunk book a book So you therefore time, one need accounts can lose have you and move through progress you XX% plus that for you Aetna the

rest really fast and and about Very about we brand year. will we're way and 'XX and that So we with to then XXXX solid year market forward. to brought think started I of what excited compete and was now back retention next looking look the the we and new our a I forward I'm platform pleased how going pretty building the claims

guys. Okay, thanks

of comes question open. Ransom the line Dowling Partners. is your from & next Your Gary, Gary line with

Yes, middle I could you've get a might places little in bit. on you're or about be in good in little versus seeing have differences more to states been color just maybe a morning. pressure, question and where there lot the the a we I small wanted whether drill seeing Comp you Workers' a that talking line? more pressure down and on Are

good Gary, morning.

few comments path direct you Let me make can forward. the a and

we I'd Compensation make our did the as market quarter that move pick. middle relative to First -- Workers' comment adjust XXXX, is through we

have was to year. actions So bit quarter quarter of a of XXXX first first that compare a not this quarter a did 'XX the the little difficult comparing recorded rest the that through happened

So just with all-in think you numbers start posted. I'll the we when about that

accounts et ability to bit have we safety Secondly, I've the account, discretion adjust used have cetera. size, commented to process on some a habits, cetera, also they engineering based through underwriters but underwriting market et larger underwriting therefore in more have the are middle past where cetera, stay Compensation, more filings, views, in et per and experienced that the Workers'

we flexibility and that driven little less a making we bit and at more market the in at world, So, margin. a forward small by commercial better middle on margin conditions, will more you is and say move by on where one to able pressure we bit in appropriate one pricing at be there are to judgments accounts job I looking looking do would a the the see as there

small is is the needs and attract if get you you not quickly level to price quite individual to business, that business there, be can just maybe the can - Yes, piece in to mean it coming I there to customer? where facility pricing is get to where adjust the on have of look commercial flexibility, a say the at you new if is less you account in the side had you

a you're I in think now class effective process inside so makes by the us wheels and what about the Well, class you're of talking marketplace. really

in this yes, is appetite we And a bit state territories and different micro even certain more classes So, are of regional and there the basis. have classes classes that inside probably with referral areas have a spend we changed process, absolutely. all and on time

and inside says So rated negative do focused of preserve of now we you're the view gave day I out product, got just that doing given we protect that bit a can prices it's everything small granular you to little that on where how small. that across inside the commercial and and we're what making bit in of feet margins XX,XXX seeing day a to happening fact sure we're future. a a our go very the we've nature spot is we're more

core in treated All for be that, you're little you terms very The how is right, thank just had question. one much. non-core of ADC of earnings? that other I million to premium paying the is versus going $XX

Yes, be so on be course. in that the be income of in premium after-tax non-core, but will earnings, we'll will not so net core pay will basis obviously it in an

thank right, very All you much.

Gary. Thanks

of your is Your Meyer Shields open. next KBW. the comes line from line Meyer, question from

underwriting to to quick that is is a come one, corporate results? expenditure? really ADC Great, In other P&C questions, reflect thanks. Two the premium words is out going or it that of going

few underwriting a to exposures the So reflected not cover ADC A&E we be how years it again, results, we similar treated for ago. bought in will that

this consecutive on could was little but you then development I adverse few and talk you've quarters Okay, and a nitpicky, is of going Liability what's had hoping a there? through in General

small. a in attention cases think way picky older concern. Yes, to. and my It's I had of that has I that we've nothing it's added of think it's product couple pretty the We've liability

I So pretty good about feel our sheet. balance

about think I feel I quarter think strong, XXXX finished good we and we ahead. our and first march we XXXX position

Okay, much. very thank you

in interest take question. Amy, I we of think one more can time the

Certainly.

Amit, of last Your open. line question Research. Kumar the from your Buckingham is line with Amit comes

me thank and for Thanks fitting in. you

that Workers' loss? on exactly question Gary's XXXX to comp was back going Compensation, what quickly, very Just

pretty at be to asked to the just no, fully just I'm may know Amit, 'XX, when environments the but some also is, frequency helpful cost subsequent in our Doug Workers' of environment, I aware outlook, question we pricing, perspective that you may I've because that looks you thought expect wanted and we loss clearly we established and composed in and I were glad or severity particularly compression were trends said we we of when clear of for outlook/guidance as not add a Comp. and our range in did established that that the FT-friendly I margin

to to is we see there to first nothing the general as comparison today, flattish expand us year encouraged and here grow, just in nothing of we sit we the next as lesser the look wood be that quarter there down to that going is a margin and surprised we can environment we change was we're your could a that So and three margins that's the at would than and on quarters, pricing so our Doug surprise us the feel specialty as on with though, or environment expand this encouraged The in continue Property and thought knock guidance. be XX. for in the that actually we year-over-year maybe said views and extent margins to GL said, original we primarily world, pricing but basis rest we slightly very Commercial, Auto, offset

market managing or give to environment. we this point. are out want really that if judge have So this that's well, Doug, number know think very the the at I in you But I we don't if it appropriately context,

lot one Well, does I guess is I our Compensation couple number of total a sense. Workers' make of think parts,

small and is that We I so, is in the excess and a with the are adding as part we that middle of XXXX the had pressure of didn’t national the year. we compare the to on before, commented that point in point the and first Workers' margin relevant what's Workers' adjustments quarter quarter accounts we quarter about made of had that later from have me in fact Comp Comp

Beth I'm gap it teams our watch about. I as and of of that carefully our the has to line surprised in there with that I started about I So, we're pricing, progresses and is so Chris are what thought year we that talking about about was. trend the the and view going think expectations, is think And view XXXX largely or our way nothing the

and will it XX see slight we So book. every compression, and watch major not what days our with share in we you

better where turning? a thinking its sort substantially on than book differently E&S piece operations Navigators commercial, curious, piece been was two in substantial be one there pricing of on terms that any quick you in Chris surprised about is how is by very thoughts U.S. of has that right quickly Thanks just markets and and how Doug I are you it's have or discussion that tale Navigators a positively and lot of E&S now or may followup of are a

first I say, when lines. about We'd and Yes, on close We as RIMS their I been results we closed, we they know read times rapidly it Doug But to changing I in it are for said before Boston. and unfair specialty quarter. very as that them whatever were market in and is don't a will once E&S general is certain conditions, yes said, obviously numerous to rates haven’t first environment, would so or at the one rising Conference London orientation us wholesale dynamic rapidly them comment you publish in he in Navigators and trends the happens. where

feel tailwind Navigators about that forward. going our So we of and start that we good that's as about talked the ownership we

Purtill now Sabra call I for session. back question-and-answer closing our concludes This will to the remarks. turn

any joining and if Thank do contact day. busy followup not day a Please earnings. to you. you Thank you today on particularly such good hesitate questions. for all have We us us appreciate you

call. conference today's concludes This

You now disconnect. may