Hartford Financial Services (HIG)

Susan Spivak Bernstein SVP, IR
Christopher Swift Chairman and CEO
Douglas Elliot President
Beth Costello CFO
David Motemaden Evercore ISI
Ryan Tunis Autonomous Research
Elyse Greenspan Wells Fargo
Jimmy Bhullar JPMorgan
Mike Zaremski Credit Suisse
Brian Meredith UBS
Yaron Kinar Goldman Sachs
Call transcript
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Good day and welcome to Second Quarter 2020 The Hartford Financial Results Webcast. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note today's event is being recorded. I would now like to turn the conference over to Susan Spivak, Senior Vice President, Investor Relations for Hartford. ahead. go Please

Susan Spivak Bernstein

posted Good today Andrew. quarter thank for afternoon you earnings. on earnings-related Thank website. our our morning call us and yesterday results for reported second of and joining the We materials you, our and all webcast XXXX on

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

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

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

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

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

Christopher Swift

this pandemic. families us Good morning. during safe trust remain you and today. you I healthy your joining for Thank and

that that begin time, at and COVID-XX the some comments. eventually or of affect health the how of there scope, weeks global of and Our we the grieving, the were the stay-at-home of When confronting we beginning At was most hearts as my go crisis. certainty I ill, those consequences would sweeping develop orders of the spoke country of may overarching considerable the wave to end much only into market to just of a would April, be. last economic with remarks and out duration, the impact globe to sense economic hardships. was

we original same At product and to our talent on strategies, and time, have full attracting execute underwriting talented including the an safety we becoming XXXX our company retaining the with, team. and do elevating launched achieving our of strategic measured work, XXXX customer of routines, of for new as long-term remote goals, approximately in program million simplifying success. on focused off business we expense world, we and as on employees of Hartford as distribution together. encouraged the navigated dedication well I we to and States although across serving country a tremendous our unprecedented the United focused has taking by a health the have progress of during the half in am the crisis as times appropriate XXXX, has working extraordinary this made remained the customers, Now, to closely areas, persist. want unknowns their host needs, support transformational have savings these realizing second our capabilities safeguard easier expertise, business The our thank steps enter the number and crisis, around this partners $XXX challenges as leveraging I further many and base. need with of for continued XXXX, In this Throughout partners, of potential a expense

while initiative, and continuing While service to refer her financial as which as environment. and competitiveness provide applicable details to represents operational the will Next, next increase the it current is the agents predates the we about responsive Beth the outstanding in impact more in the our step and drive our additional it commentary. focus customers. to of provide efficiencies, all work pandemic, this to on am to excited program Hartford initial I this

policies. and $X.XX to Now, favorable leverage underlying strong of share, quarter. incidents per XX.X%. strength trailing areas share performance million, The related was of results let a core are a These of book broader of with number solid the or growth the XX-month providing earnings end AOCI the excluding value on me group exhaustive the benefits. that $XXX earnings diluted sales. Casualty, In reflect is fundamental of applicable results of COVID-XX of pricing product our Property benefits in challenges $XXX $XX market our momentum and an demonstrate and million, Casualty Group the is quarter faced, ROE impacted many turn attributed and expanded delivered core results trends year we our to per Despite for and incurred items, all opportunities review million to the Property offerings by to positive of more distribution from hardening. losses to X.X% in $XXX are unusual million based including which we in business loss XXXX continued incurred our businesses.

P&C losses broader and global commercial relate specific business as policies range such property and crisis $XXX performance of the disruption. handful large to unique within to specialty middle workers' incurred On for relate or small million which were a million to side, Of businesses, compensation, a intended lines. our particular, primarily provide needs, coverage reserves are policies, financial attributed $XXX and COVID-XX property, there to P&C, of in the of number management a for

have coverage. coverage them not We arising small our out physical a that this believe we direct do established physical number highly that our property property requirement a cover claims contain of appropriately policies damage well, context, trigger nearly clear group contain loss to property Put addition, interruption, of manuscript requirement. for a damage a reserves must occur or business to portfolio. of of the XX% policies small of include policies into In all

have the of finally, In policies. specific addition property also that majority claims. BI a also coverage requirement, this exclusion related our standard of we exclusions on preclude to we with COVID-XX these coverage contain policies XX% virus believe for And vast

before, well customer doing we it to many who and claims I've at times responding As heart the is of are. said

we're We to believe and covered does of COVID-XX spread, property, from that is Unfortunately, damage. are exactly various it property cause damage not business business it to self-evident we that's doing. resulting when what direct interruption and stay-at-home pandemic, this not the that claims community or reduce physical to were in comes the paying loss claims prevent to orders issued

terms our covered. As scope are not a result, policy the are related conditions simply outside and COVID-XX claims of and

We our in interruption business put are confident positions of costs and in the legal language. $XX in our estimated million contract coverage language cover up reserves defending to have highly policy

market from XX-month underlying decades. and profitability to with as XX what quarter, to benefit momentum, cycle, of the efficiencies, improve shared At results in period and to continue outlook significant can underwriting lines XXXX, beginning actions anticipating of in items unusual a the for my pricing Excluding drive along the characterized I premium commercial rate the be hardest accelerating increases.

of market the have the of in ongoing economic commercial first six even many I price a through sustainable Now, momentum, the lines that with despite the months economy. year, hardening is more conviction challenging slowing conditions

the driven results Our and and the actions increases. acquired, and exception from Navigators workers' is Global the robust renewal in reflect benefiting core specialty risk improving specialty, market global by returns acquisition expanded underwriting business as P&C taken underwriting business of adjusted rate through with middle we higher comp. prices the platform integrated

these meet momentum exceed track in pricing the and targeted margin lines, our or we earnings With are to on goals. significant

in commentary. in will largest his in rate global the provide pricing strong. within continues commercial detail increases are segment, specialty also lines lines, additional our Doug While standard renewal be our to

reflecting and $XX the XX.X tax higher Turning COVID-XX as million of previously loss Earnings our investment versus allowance uncollectible income, group with management disability year, points to improved due ratio operational benefits, a by financial The year with prior $XX am offset before margin. continued discipline. underwriting in the net incident strong and risk excellent $XXX mentioned, million driven trends. the and quarter XX.X%, I a posted losses Group X.X% in results tax down premium, execution benefits favorable of for before prior recoveries disability to partially and of pleased million related was were earnings business solid the core results. lower by performance increase versus for

a our XX.X% second million. pretax. quarter increasing losses The disability of of was loss in the from COVID We driven XXXX, $XX of points year-to-date ratio adjustment X.X $X COVID-XX life short-term million also assumptions, related resulting updated favorable by

On persistency from fully up at and topline, new prior year, XX% accounts. the solid national $XXX remains were approximately insured million, by driven sales

their to affect social evaluate recent are revenue the could impacts ahead. to pertaining stay-at-home to quarters the orders. continue and gatherings COVID-XX country, respective These results continuing spikes With in policies the in across states and

meet of respond the the our benefits business As customers. well-positioned group our while the continuing of recession to a the leader, to and economic challenges pandemic operationally market needs to is

important three Let issues a and the to few economy me industry. public comments now our with close about policy

millions legislation nation's lawsuits to ensure appropriately sizes obstacles as to and temporary against timely, Harbor First, they need all and We the states a economy; reopen. office. confidence to to safely must of I federal to work the the transition related critical businesses to believe critical back creating targeted, specific, and addressed. this need back is Be to are that Americans reopen frivolous we Safe COVID-XX transition providing of reignite will

compensation debate much around workers' Second, occurred presumptions. has

we municipalities by presumptions system. over at has efforts cost limited close that the those of are workers, COVID-XX struggling and of While the note we But to a to impose all and come well-established virus significant sacrifices the ultimately compensation story contact and borne providing be will presumption with who workers' the of suffering and those aid the accept course to for been appreciate American of by decision troubled in years. for expansive XXX to are businesses We the The time some system essential by they a them services success from recover. treatment. an important value alter it's medical when current current principles the states into

rates account any the cost ability future appropriately measures increase an tax unfair of of on the represent the industry. addition, that insurers to claims in for impede In an would in

robust as would a of has Since governments company protect or we've of of in caused we action said, to results the outbreak have that all at and industry finally, contain a the challenges of and execution pandemics other viral the virus, provide federal the released recently provide levels future the resulting to other for to equity to have magnitude agent event and normal. program Business to and relief we of immediate clear with the will shareholders. That We growth our In brought bear understand perspective. adapted unlike to emerge expertise, future and in made to replacement develop while is experienced fundamentally the the to I knowledge, pandemic should uninsurable. and operating investing interventions assistance we capabilities the against and solid is achieve funding a BCPP. that remain provides business goals. on relief should uncertainty to producing manage pandemics. our based in for response lives, the take both our strategic revenue believe sector association closely BCPP employee the remain the Any the short, trade we designed through and in solution. on unique focused to benefits second Protection form and the to Third, country. and for quarter payroll COVID-XX, solutions To businesses across widespread the it seen and Continuity in public and are Despite from adopted industry devastation confident I by well-positioned address efficiencies, is the outbreaks next support safeguard working insurance community expenses extraordinary can be top continue recap, -- returns pandemic. are These coordination federal future a solution believe such economy. crisis future, pandemics this anything and effective, a This protect demonstrate businesses events solution quartile and the help necessary we timely, affordable the Hartford critical, broker The before. of COVID-XX the Program

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

Douglas Elliot

in $XXX pleased our of also COVID points good, at and I Thank non-workers' be ratio COVID billion. of losses you, for to to earnings pricing can't of good Casualty premium and receivable. strong considering was quite million agree losses that or consists more million million. flat year core other was many I $XX morning million are $XXX Chris to impacts X.X everyone. and in written prior Property lines. with combined certainly in $XXX the XX.X% financial charges challenges charges points increase underwriting unprecedented Overall, The the and underlying X.X or allowance compensation continue were the and on contributed $X.X the of a quarter. premiums credit commercial

I year we respect of economic details, actions quarter, Recognizing segment we of cats, with Before COVID-XX, summarize reserve with highlight. the this the get let responded three to our the development. on the quarter pandemic the into took I'll me impact customers which and prior several actions, during

premium First, we commercial since over nearly of lower million XXX,XXX changes our a In exposures. customers policies for other $XX reflecting endorsed in adjust to and the payroll premium returning risk, March, related premium, losses to in underwriting middle this action, $XX When million reduction we also netted leading million our reduced reduction with a in receivable. and expected audit audit $XXX led to results. commissions, in to

quarter billing quarter trends four extended in on to a $XX were late relate points. than In for million or million, second enacted $XX policy increased challenging rate, grace commercial extension count workers' of receivable were apply. quarter five $XX for states including were for through by would the or E&O lines, quarter. Gross were otherwise company or Offsetting million the the $XX D&O, that $XX net XX% refunds certain drove Property including which policies, second in presumptive May a while million. the premium, lines premiums denials. surety million of third, provision for to points lines favorable the and and impact million, points. to underwriting and on frequency XX compensation litigation, reflecting defend was periods of historical And related quarter the losses The commercial $XX frequency million allowance auto we IBNR Property of favorable COVID $XX majority interruption legislation. gross million, the in $XXX and driving losses all other the provision $XXX business reserves small run personal that million, a primarily claims. waiving fees loss personal Financial credit losses COVID delivered and we those of losses losses, X.X retention, Casualty higher X.X Second,

recorded for quarter. unrest. Turning severe $XXX hail million year less storms to favorable for a The wind the quarter of prior remaining losses catastrophes, million, and was second and $XXX development civil Casualty for Property were Net including losses than typical driven included XXXX million loss estimates a by subrogation of $XXX including favorable a million and a which in contained wildfires, number catastrophe reserve actions development, $XXX California reduction of reserve XXXX net PG&E. benefit $XXX million the and primarily for from

also by and total $XX primarily development from covered Lloyd's general the of $XX economically the and development personal Continued years was And sexual and the adverse million in syndicate on lines. net liability ex-cat reserves $XXX reserves, of abuse workers' for million lines favorable development auto D&O and quarter, in domestic reserved compensation. Bond while unfavorable in million finally, of the development Navigator was commercial strengthening molestation favorable cover. strengthen claims. and XXXX we therefore, Reserves development accident auto. prior

compensation from ratio year, due COVID and from our was early to $XXX.X, our points now commercial over travel remaining points in for wins a ago. The transformation marine results, reduced a including X.X XX.X line combined lower increasing program Turning lines [ph] costs and variance losses the underlying prior some was and primarily ratio year from improved business expense incentive to charges. modest

contributes continues industry is specialty, the to a auto, achieve months. excess pricing positive six pivot gains a pricing, particularly to to casualty needed As another evident as This lines. quarter and in much strong

X.X%, standard For down one. commercial XX quarter from pricing lines points and the quarter, written basis was renewal

slightly trend second points lines is quarter strong XX%, in in energy, second XX.X%, five and more more teens, results written quarter the one. Auto over small commercial up are their better quarter Let down ratio excess which property quarter, also lines, with achieving X.X% our first and doubling than few higher. book financial to the would results I is in in renewal from ability you of an remind specialty commercial U.S. in second wholesale would each single-digits only. Property nearly are from COVID still by year, upward continued measure X.X also points in move the continue results. down global is the at In as in premium the while this driven of XXXX. non-workers' commercial general X.X% rate on the which XX% than U.S. X.X XXXX, Lloyds. first one. continue several with quarter, gains that lines. the middle increased workers' lines a and was our across in strong low achieve compensation increases negative better our However, quarter. but each high and XXX pricing the of pricing demonstrate the lines combined professional core with XX high global was market, pricing quarter achieved the quarter the in charges. result eclipsed factors. higher X% points both written share standard strong very casually auto Small compensation Adding strong the book versus excluding U.S. is The the nine ahead cargo continue basis quarter, of in and which quarter X.X%, international excluding posted very first X.X%, a points underlying of liability strong than and than pricing particularly well to pricing international rate commercial, teens. slightly was as primarily momentum gains including a These pricing now I'm in prior points pleased up Strong workers' of compensation, Pricing our our the written businesses second lines beginning pricing portfolio U.S. reshaping from specially. portfolio, me points wholesale details

expected in impacted retention. transaction. also excluding a was partially most renewal the by quotes reduction for in our spectrum strong business and ex is are I'm that XX.X expense ratio rights flow period lower XX%, for most July. XX up negative encouraged XX and underlying quarter, reported an strong lower and business from July to contributed expected premium [ph]. in large business increase with With A the points losses the June to driven ex-COVID New actions. pricing the charges. said, combined our by largely and due exposure and endorsements, points and prior Topline the audit inland underwriting marine Written Middle favorable premiums XX% by XXXX improvement. in offset commercial of and over declined declined and year business second in new ratio retention of new COVID including exceed to new quarter, X% XXXX declines

hard look is confident end, expected, those workers' decline I levels business the and expected. our also is levels us new sense see improving to increasingly compensation am during compressed than however, at that COVID to not is re-underwriting improve in competitive alone Our across the I we're portions crisis. The levels and classes, in causing larger profitability within of as commercial, I business intended in To book. marketplace. underlying large geographies. experiencing lines, business I new middle

However, sequential our low view current there business progress new with July. from through an April is of

ratio the increasing global including Moving was specially, COVID of second the XXXX, charges. XX.X points points underlying XX.X to from quarter from my XXX.X%,

full a We to this acquisition. hard product take with to much diversification position put be the offerings us advantage of The in has continue market. acquired pleased Navigators better of

X.X specialty. global in points Year-to-date, mix, improving pleased combined for considerable to XXX%, XX.X% entirely adjusted Additionally, [ph] almost our XXXX, and a lines; reducing COVID of for work, from announce combined was limits. Combining the over pricing and let impact The charges are the for of risk early the to the was half Shifting significant AARP pleased attachment May. second underlying policy I'm XX-year actions COVID raising the shifting returns of specialty Navigators we with seen including positive. the and were points the these geographic we've that with renewal Considering first me returns in global portfolio with specialty global ratio charges. ratio say industry sustained improvement including underlying continues, coming how book. personal reshaping

the improved the underwriting of appreciate and homeowners, to and the from that the XXXX. was we personalized quarter, strong had miles results increasingly shelter-in-place less the the In of led than the the underlying XX.X% shelter-in-place The number underlying loss drivers two however, in ratio do, XX.X was We've auto also during weather points the XX.X% the aforementioned non-cat our by was We points favorably better first year driven ago. in premium combined consistent the impacted Claim a resulting months $XX strong refund what orders. book. lifting guidelines severity months as ratio in of strong from down June of X.X favorable than underlying quarter. increased driven corresponding and ratio combined the had significantly of auto, performance performance better XX.X million. quarter. the of COVID six was XX.X% with of a We points a homeowners quarter. of prior predominantly Frequency favorable environment during year, in In the with expected non-cat combined

Let the reflect business the step results what on half year. from our me expect might back now we of for second and

strong As new reopening commercial plans can the difficult. large total written we've status new changing, mitigate commercial, remain as pricing and impact state I of non-workers' Within its middle versus constantly compensation this expect and predicting country. of moderately The virus lower and premium prior and quarter be are course be pandemic renewal appear across incredibly business lines will seen could the year. economic small levels. and down specially third hotspots for

yet will quarter as depend quarter extraordinary. been look insurance done our dynamic the in While drive strong has reopening results. respect have of encouraging and talent our platform years of and and been be is gradual on the new In conditions. work And the responsive closing, signs through new premium COVID-XX also with cash diversified. the July and macro-economic business endorsements, risk impacts past success in to will results growth for business, I business, June the have is poised and over Yet foundation market. collections, capitalize actual certainly underwriting upon there the five we to risk our management the opportunities on a thoughtful with solid to The and second

to call turn Let the now me Beth. over

Beth Costello

Thank Doug. you,

take for review moment investments, Hartford funds, I process and Before establishing and I our a for to loss further the discuss corporate, results like would reserves.

objective incurred estimates but establish not develop multiple reported loss project estimates unprecedented a claims yet of is is the Our looking time. formulate always techniques establishing to for and and appropriate of techniques claims pandemic Obviously, cover considering cost incurred reported. Typically, by claims We ultimate trends upon expected COVID-XX both view our these reserves how to-date. patterns rely views, over actuarial to reserve to an and historical event. at will the those

of estimates, base to degree quarter. there's COVID-XX. our the We estimates the claim loss uncertainty reserve data took determining in loss developing higher which reserves Given reserve lack associated into on with a for account of historical in this

extended reporting is over which represent our of given usual as pandemic. expect disruption by the claim higher created estimate, reserves the for than IBNR example, patterns, we XX% For economic

written Additionally, the for through and strain quarter, $XX liability XXth. allowance million premiums. reflecting collection P&C, estimate claims of aged D&O, the losses of on on credit effect the million also including in June by increased $XX tax, and economic reported basis $XX amount a in a expected on of benefits, higher premiums our before and receivables group receivable are million made and based employment is or loss we noticed E&O reserve claims on In policies our practices

primarily Now, for turning million investment to the was $XXX loss by from on XXXX, the million quarter, down investments. driven of Net second quarter partnerships. limited income $XXX a

lag. results LPs investments reminder, a other alternative quarter a on reported and for are As

quarter. second fund the first the reflects loss decline in underlying quarter So, and the valuations

X.X%, markets fundamentals partnerships at the low quarter. underlying current While given expecting from market excluding before continued was in muted we better, improved, exposure X.X% multiples the and quarter, a reflects and a This deterioration have up The equity in first tax earlier are but second investment still yield more during in economic and valuation X.X% limited results funds. down be the uncertainty, to year recovery from relatively the public loss business the equity in LP a third quarter.

investment the yield the yield rates. before X.X% over remainder tax reinvestment LPs We quarter. impacted the in second excluding than about has points by of lower been basis rates XXXX to expect XX and earned be lower The the lower portfolio short-term

by our X% mentioned impacted liquid efforts assets in quarter, been normal also quarter. the have in liquidity. with benchmarks our liquid to Last we in increase second and assets. that We carrying I almost were yields ended investments continues Our of more our the that quarter

the end, X.X% would increased to before income decline use rates, equity third $XXX levels. recorded year on reflecting for partially improved operating million capital due valuations in expect offset in the $XX position market flows, gain we to cash The $X million by that tax statement, an to wider credit spreads. billion within Given reduce of the Unrealized after-tax increase roughly in maturities quarter. by were from net realized unrealized driven are net interest and by fixed securities, a gains which in realized higher gains quarter, on in equity

our of recorded we economic million forecasts on for based available pretax in our losses credit increase increase a and million of for quarter, revised fixed investment allowance allowance on million updated values. the portfolio, $XX commercial loan $XX and credit losses the in on portfolio consisting sale During maturities a credit mortgage the on $XX losses for property

with three the is of an diversified investment-grade A of portfolio A Our broadly rated fixed or investment and high better. rating is overall nearly maturity XX% quality quarters that credit average of plus. portfolio with

core AUM, of resulting Harford lower the was of management quarter decrease XXXX. of to core reported funds in interest loss in corporate X% the compared of retained average lower driver assets increased second in contributed second the program. year-over-year. from the $X partially equity outflows net Turning driven of the in still [Indiscernible] Hartford funds under of and COVID-XX. income by driven largely the earnings The outflows a quarter from compared were in before of $XXX core in income $XXX however, expenses. The the were result up million fee income, operating [Indiscernible] down $X of they second XX% biggest economic million Net lag on quarter million $XX investment the from $XX income quarter a The quarter the to daily $XX million variable quarter, reflecting effects first quarter which were [Indiscernible] million quarter is reflects funds, in the million were compared hedging with XXXX, movement a one of down second compared of of XXXX. loss primarily by offset tax, to XXXX, with million by in XX%

quarter, Given second increased our third markets to reporting. that give quarter expect how about a gain of in during we back would equity the third

Moving as on March. activity paused share our repurchase know, capital we in you to management,

not and repurchases AOCI XX.X%. $XX.XX XX-month monitor resumed value was was ROE from share cents, and excluding increase a the core economic of year The earnings we'll COVID-XX. other an have impacts continue of representing to and Book per We XXXX. X.X% end X.X% share increase year-over-year diluted the of

$XXX expense ratio our achieve million approximately $XXX goal to XXXX million of as have expense As by million be ratio not to and improve initiated benefits to program half ratio P&C through X.X these will by will achieve our two and a savings which of will point. efficiency two a our classified in half annual earnings. points, included by operating our XXXX, and in savings, we expect expense overall points, be $XXX group indicated, $XXXmillion we restructuring core our Chris which and approximately reducing expense expense costs to contribute To to with claim two spend of a

breakout we of the the updating to costs. progress. quarters, detailed included by year reductions and coming provides you which expense a have We earnings look in summary more on a forward related In slides, the estimated table our

the As States second recovery. restrictions business the it rise many to to putting we going of back the relaxed guidelines that stay-at-home look the restrictions XXXX, economic states on businesses place. half inflections now COVID-XX and recent lessen are the in of is country forecast into difficult forward, surrounding uncertainty in climate and given had

in commercial lines to in amount see losses impacts As and expect periods. terms is our such, in of particularly to the future a COVID-XX scenarios range there we of might topline, of

loss could losses to premiums incidents compensation As workers' in moderately. like From see will areas we down new and written benefits. COVID additional Doug group noted, a be perspective, due

the We by related will pandemic. financial continue strain claims economic to created the lines monitor to within

see could of actions federal in experience are be the magnitude effectiveness of impacted that lines. and frequency the the progresses trends impact the how the these The stimulus the of the the to reduce virus impacts economic affected from and we virus all Additionally, to items taken government. will by

over virus, our our well-positioned as is call the to the as full begin invest objectives. strong While turn there now underlying in strong achieve as this weather we we liquidity so businesses as Hartford The sheet pandemic Q&A of well performance, to and impact Susan, is uncertainty with to a with the I'll session. continue to the balance ample can strategic

Susan Spivak Bernstein

question. Thank you, the take Beth. first we'll Andrew,


Yes, go Please Motemaden we session. the begin ahead. from [Operator David question ISI. will Instructions] of first Evercore question-and-answer now The comes

David Motemaden

XX deal a the just accident lines year to roughly XX ex-cat look the loss the quarters accident I'm at year COVID points, been ratio XX% of commercial for you around I few question ex-cat. a and the over morning. to than take of and I Doug. If XX. loss since ratio That's close out it's Hi, Navigators charges good I get better last

driving attritional benefit from any wondering So, that I that's there's losses non-COVID guess and what was improvement lower if that? through I'm flowing just

Douglas Elliot

move did casualty We charts our we did recognize. comp we our a did quarter, on with is the that variable frequency workers' you very immature. David, COVID lines, in in pics had share we year the still essentially not that our

But like you make We ongoing we So, you made loss ex-COVID. the was still loss trends. that had them ex-cat about we it adjustment you've to where essentially, in numbers. talked feel asked essentially trends sure expected our that are for today your XXXX right I'd see to

no, so no material changes. And

David Motemaden

X.X program. I Okay, by points just great. could ratio X and to group of P&C question and the to on And XXXX. I ask think expense a I just then improvement, if in X.X benefits points in about if X And cost the guess,

X in -- guess, potential than million XXXX? know, for you line levels XXX the think or think about that to on about the X.X view I of the for to, what I cost benefits the is points should in get to P&C greater wondering group Just to and the, X in should by top reduction I saves within order expectation X.X

Christopher Swift

it's in may out up you the a XXXX, we where down, fixed But combination, as joining would or to fact we is which we extract fluctuate right, it's looking also are of us closed consider for premium cost David, Yeah, Though, Chris. measurement from the of savings Thank question. in base. cognizant we're XXXX. the outlined, in volumes we $XXX million what that

it any at close to out ratio we And we are in expense in if adjustments, other have cost want couple go I'll lower variables years, for we'll and premiums closer other least to make to as So, achieve ratio is the that premiums we'll XX% the have our all get as commercial fixed means, to to the the we'll that mark. end next day, to greater, that of take in less through, to call look are appropriate a because result.

David Motemaden

Thanks. Great.

more So of expense questions. of costs. than amount taking terms the for ratio helpful. in -- Thanks dollar the the thanks for That's anchored


Tunis from ahead. go Next comes question Ryan Please Research. Autonomous of

Ryan Tunis

Hey, thanks. morning. Good

questions. policies? of affordable quite fall this is And is with just the when is Next, then I just XXXX? it of ultimately should And to genesis game costs, little offsets clearly it purely along if long that's, is to us think, part. Or might be are think longer what guess, the Chris, me can a that we $XXX enhance that, mean, bit driver your you couple I in the million we over bottom give Just thinking Is all, on the first offer know, You that's like, a view what's think RV your what perspective line about here? about? could I Hartford time, first I Thanks. bit this. more you term the of a on more the

Christopher Swift

and be is, you you look think, we've genesis just significantly be I data robotics, I if it been the back over know, think the productive. and underwriting, Sure. capabilities, more continue be in questions how our in in in But quite whether last mean, the and be five could appropriately, platform, investing product, I platforms, to whether years, it digital, analytics, whether IT we it

you those culmination saying, then we of the Everyone's have a So, we I date to businesses we shared stepping company we and you a everyone involved this all back to think wide all probably just services. need investing gains years of want rally it's gains. and to effort. want harvest know, more is and know, And, in and harvest to

our benchmarking, detailed quarter, all action quarters, specific you add in point our think And think But is we do bottom I I I'm color. in really, organic want the growth, areas I drop initial plans, initial fourth a you might would you to areas, and now is, or majority I line. more we was more, my small to to either of be about And had and judgment, basis. first in know, what the would the particularly but this say And dropping to the in second know, could timing right and existing growth, do the really, doing Beth the right and at able we thinking this line. to is of view capture fortuitous. share, potentially, Beth develop know, the, really to about, new least bottom now her team or then the, say, thinking

still the our in is But investments also, separation out it, when cost here I, separate. with in the So technology over you think needed. in we're that look side cost, that And we the that to felt primarily make comfortable, today you that are when know, term. bring to savings long the platform are there the essence appropriate going of at investments obviously announcing structural

I with you that's Brian, would would you, if know share and Beth, don't So I anything. add what

Beth Costello

Yes. Thanks, to comment a pick thing just is. Chris on that I'd The made that up only Chris. add,

working on the and this planning for first course over have We been of the second for quarter. efforts the

determine as very really plans, and these aspects years. if you as to mode. as benefits will the execution is So This over our that we go are know, we Chris is the XXX reduce said, next but business, of in plans couple said, now we're how executing planning I to you detailed we'll we Well update to to have over we we of And across and individual tracking all as our on have be that we initiatives, are achieve progress detailed will them. costs,

Christopher Swift

Off an running.

Ryan Tunis

to mostly charge for cost Beth, defense BI we of follow this Thanks. the of what $XX encompassing isn't Is about was that cost -- you? your took, am $XX but going A think that this how I guessing portion how you the that How know, that view do is encompassing the you million. how, or is ultimately that? Thanks. is it Or probably of charge? I guess million

Christopher Swift

that and isn't were we know, I It's in legal away Ryan. mean, is go counsel, our very thoughtful encompassing. disputes, to and I policy about you mean, this to going going defend be team, think be recognizing working it, our it's very overnight. this going general period conjunction with terms where spend multi-year what litigation vigorously are going our we conditions. there's of to to to time we extended an a of view

Ryan Tunis

Thank you.


of The next Please Fargo. Greenspan question comes from Wells go Elyse ahead.

Elyse Greenspan

XX.X -- impacts the question, that's I that My morning. COVID back that's your basis year-over-year points, some about no if on points Good thanks. underlying XXX first out Hi, improvement. commercial of

of comments. COVID some nothing in like quarter. from guess, kind together It there sounds tie one-off, the was I just earlier the So of away

level margin know, could is So that for now? right of the about the kind just, you improvement of balance think of year underlying kind given of and, we the what

Christopher Swift

points to it's just of respond that. couple a to Elyse,

variance some expense was related. is, First of thing that

our see side. addition the in terms that's printed for the remind adjust we doubtful of number you account million you debt So quarterly the charge, we a gave change. sheet on also And you what know numbers. could quarter also expense allowance out the for in bad -- took you that $XX that had to in on I'd quarter you the good we

middle Secondly, losses we the being marine talk in did commercial inland about in better quarter.

laid have there So, on side essentially, metal. the I property good yeah, is well some it, news think But in out. you

Elyse Greenspan

market compensation rated guys the some there? workers' could might been positive and we question, when And might bottoming. timeframe some some to we Thanks. we've color Do know be to we get And hearing my about, how of thoughts have then see a about, as think Okay. artists? start kind potentially you on second flat

Douglas Elliot

add joining I isolate would it me in agree forward matters We would very filings. be Sure, bottoming that's we're you And different great. factor if now in assumption any yield our would the color some our pricing. that, the we all start be, company. Beth just workers' will one good new think news. deeply a to and want obviously, seeing the that if let curve a That's that Chris -- and going that to add factors, comp all filings is

yield ago, at In minus, on XX, XX months, just to fact, rate probably you basis know, points to just plus for look up today the changed year you if XX curve. versus or months about year-to-year, last we're and alone go talking three five need over the maybe filing points XXX have

stimulants, the the works, through and So one the way process. curve yield its experience the will as be of then

look We a to expect trend to that I and upward scenario. fair flattening, more is see slightly a Chris? maybe at think recovery, but

Christopher Swift

some Doug. well today. various said approaching numbers, looked California, we New just maybe at were at -- XXX% states, York, ratio aggregate it's think combined I I Yeah,

know, interest to, think the of of our six you that is to rates, is beginning out, an intense, at really continue but inflection points it view, I in a point. So very said, behave well, to only get as, least four you pressure foreshadow quarters all although point you going more particularly far a as frequencies in as could there to

Elyse Greenspan

question And one expenses. program helpful. on core That's number to quick savings last on the the Okay.

month laid your that you segment? segments out, charges the hit through that six your corporate those over So

Beth Costello


costs, run restructuring that through business segments. would core, would the So, those expenses the in really are considered corporate run segments the the

Elyse Greenspan

the Okay. Thanks color. for


ahead. Next question comes from JPMorgan. Jimmy Please Bhullar of go

Jimmy Bhullar

Hi, good morning.

claims will business. concerns are you There disability expectations First, a the on as wondering, about just your I economy up are investors the in that trends claims go them among weaker and versus weakens get of had Do question see you do interplay expect improving net-net? despite from potentially disability worse? the you economy home sort margins work the see weaker environment to economy of the the or and

Christopher Swift

know, it's watch you clearly area. Jimmy,

go to elimination tell usually does long disability show not XXX As disability on day you any you term But data side one, know, would our I short historically, claims the period. has and term term long rises, up. unemployment that, remember both tend pressure.

time. So it longer some new could that does incidences, a then time before would two period see take of translate into more you claims over

in our again there might insurance continue trends be low be, although year low XX to certain So in at very all hiccups some time modest levels, levels segments.

So rate it's obviously lower emerging clearly, this particularly guarantees, a three yet. rate but environment. additional now, a year make watch we're incidences, and we're in ourselves an buffer season XXX margin we not right data item, provide into or taking more as But it's consideration in interest our to all the for additional one potentially

Jimmy Bhullar

wide, increasing industry sustain of uptake levels, improve pricing in of recent your on workers' improve, they and potentially do your the does really pricing the combined business margins which sort to stabilize margins good. the think from are could you even ratio been pretty mentioned good? If comp, potentially been sort And have you where have given

Douglas Elliot

prices conversation, XXXX, relative that's talked being is are small compression comp a And about workers' not to now. which prepared and XXXX now bit have We've into we a you're XXXX those margins. some we're premature. experiencing That's, out the our book where right Think commercial year, to that's negative.

improve but today. you, update to workers' I think comp continue about will it's little talk and we margins premature a to So

Christopher Swift

my comments just year. geared accident would were more at again, results not year I calendar add

but I'm airbase. sure geared comment accident what at mine clearly were was not So your

Jimmy Bhullar

them. least the it your was the -- lag but. reversed, was implied as opposed I think weak I But correctly? market of gains, that at a year assuming in actually then more effect And I that the loss, in that beyond, well. lot maybe negative. be and all did, and XQ, will losses obviously, was hear still On the I QX of marks to this you recovered, that -- about had you given thinking next of but not see because would that's market QX as that near then year Am the I year was LPs a had XXXX, of Yeah, equity

Beth Costello


when hear we know, forward be are we to look QX. large don't of expect not it the did are Jimmy, of loss earnings You just you based at in correctly, it, had as also valuations some equity and a But, them again, forth. that so we on look on markets, as of based

still given bit to see again, into would we some I little of potentially as referenced, we that a So loss of go items there QX. a the expect

Jimmy Bhullar

you. Thank Okay.


Mike from Zaremski Next Credit of Please Suisse. ahead. go question comes

Mike Zaremski

If presumption largely on morning. Hey, comp, presumption, about only changes, Great, are the thanks. focusing we and the COVID-XX. can workers' issue changes, talk Good

permanent of hopefully or us are So, be of when any going also regarding this forward. or the behind -- this pandemic is it'll virus kind over, presumption of kind -- changes will kind sickness be

over. we rate so different be in maybe future, the claims about pandemics And even should the a thinking this when

Douglas Elliot

targeted would Mike, on that guidelines let's parse I COVID. say, And apart. sunset clauses presumption backside. by in them have most of at general, new the state the are

lot paying to particular are we by of attention the state. state a So

several I think very XX important and for as of June us. of were states XX, states, them big there were

think we in make we all line. that ongoing various understand and the our matter to working there COVID states about And about important we're are sure think be ongoing certainly trades discussions context teams compensation it's today So with and to here it nuances. as workers' an our in continue the because of

Mike Zaremski

interruption. and That's Okay. for And the lastly, XX-Q it. helpful. the Got on thanks disclosure business

that's more kind has on of of case there than we on poking lawyers businesses interruption disproportionate others? is pool. you there's anything or like and to number there color the IBNR had thinking bit guys you anything clearly We kind somewhat it think Hartford XXX I reason any a the of -- data a should than like overall cases. involved that based the seems good whatnot. more levels why But out just versus be the -- It seems talked little cases in Is we about? at

Douglas Elliot

with on I I've seen agree Mike, Yeah, completely. don't I think know that. your if report it I

picked us but counting, you how I'm wouldn't been fair draw counsel, any not have to on comment upon for it's specific any conclusion going I being But I think. to might litigation. things given game think everyone. I Just by

I I these we going time. to an in line, our prepared opportunity it sued conditions to areas are some terms of remarks, language in peers. over and are a of get bottom think as these But of equal defend lot my said in I highly to mean, days with period confident there's extended have our policy

Mike Zaremski


to investors all have see been far sided think the I happy have so the courts with industry.

very you thank So much.

Douglas Elliot

Thank you.


next go question Brian The UBS. comes ahead. of from Please Meredith

Brian Meredith

Yeah, thank questions. Two you.

a talk bit the better little so actions quarter. reserving in some one, of First the about we hopefully Doug

amount we're above auto effect auto going is the commercial there. on First, and the still I development, just fair surprise currently? loss that little covered, that development coming a then liability, still expectations got andloss there? adverse M&A seeing, know And well of navigators, stop liability, it also, picks what's a but where's from it's Is

Douglas Elliot

liability. So we'll start auto with

little light. tech just a was XXXX sorry, I'm XXXX, XXXX, Our

So last we to has liability the top up, for had over auto we felt been Commercial seven to that us like area five a frustrating years. Brian.

think, a work. We have, underwriting done I lot of

aggressively. We haven't have the caught we Obviously, trends. priced all

it. think top on of I we're

in our now mentioned in the my our I market middle our As pricing book teens is even in in specialty global script, and stronger book.

felt of describe DNO get would position. the navigators, a yes, little adjustments on we we I a we just about just the we that think top that issue reserves. then, and nagging liability, case our just There to to tail we're to if I And better talk backside I in our for I international book, understand Beth some Relative had reserves bit of adequate. the not on our general in wanted curves. a of situations make were strengthen as And So it, specific factors it's U.S. in certain of. our like reserved cases been that were

areas feel we today two made the in we where are that certainly NAV, about we that think appropriate did with. deeply I day we and are. good purchased adjustments the than it, understand book we those I the Again, more So

Beth Costello

to does associated how is current not book of your just making improving And it feel good the would Ryan, that. other our on profitability that picks, performing, good progress we change we're very I questions our that that very about the add with with accident feel year view

standpoint, from there. So that no change

Douglas Elliot

again, willing talent then to timing you if we it purchased through acquisition, to knew feel. had pleased take just when talked overall And I at really other transaction, think We didn't we going side. really this really that we first all we million, transact go remember were with loss there. be that a market, we know from with a about. Brian continue that of overall an our third-party the just the were team, one comment, we'll announced obviously that short. little the to because ADC the their transfer the layer was call our on cover absorb but we're to a of I really, the tail a did but performance hard reserves risk Modestly, good, XXX wind

the they're thinking not how did where why they the That's to ADC. ADC. the were now. and of that's deal, specifically we context Honestly, knew But short. it's about see we the at we're So surprising right

Christopher Swift

in talked just were working on that I general And Brian wanted close, an more liability It the on We organically. pieces, liability we we've our would publicly. portfolio. about expertise area liability, was this

product we've loss way. the to that throughout time we along adjustments of make family, as so fundamental is which their we do And that, the increased we trend had a navigator, in some and a acquire core understand

So I sets quarters. happened last think all what the couple QX of and that in up over

Brian Meredith

second Great. Thanks. question, Chris. And then

carrier don't initial mean, maybe there that you that your protect your it? federal it policy in pickup curious, anything we think stimulus can kind activity? is a the you you kind that pickup contemplate mean, picks today. just commercial are industry -- get Just about litigious I'm a there's any it yourself going casualty the from forward, an article potential Is safe as see does doing that do of we current in comments I some that And in this to in the as or that lawsuits? in something needs. of if about with that going we some what journal way back you of wording the that about harbors

Christopher Swift

think inflation I great experiencing talking it would it's of everyone's point, Brian, Yeah, only to the that impact today add that a we're social about.

go people a the reopen get isn't would temporary try isn't relief, to right. now it to it's bad mean, and forward, want I and we vast death yeah, there that to say And still going So, could I bad work if back has worse negligence I there's as know don't each players, behavior people about forward, returning feasible needs morning. this would to of know what's and/or hear called I going as think in as day gross as claims economy. more better, happened protection. be long think -- but more or wrongful said there just and level majority litigation as far litigation I I to as work

and take general communicable at of conditions our we just disease terms we'll a already be looking appropriate and policy necessary are appropriate what action thoughtful a we're proactive I continue and policy think in terms take But conditions. and means policies to policies. is and in in particularly lot really liability with our stance all exclusions it

Brian Meredith

Thank you. Great.


Next question comes from Sachs. ahead. the Kinar Goldman go Yaron of Please

Yaron Kinar

for morning, good Thanks Hi, us me everybody. here. squeezing in

if questions. results, of we I commercial, to COVID still out think got, impacted improvement. you looking a couple check One, got of at items couple year-over-year some small that think year-over-year we those a Just out I call

hear favorable Doug another talking earlier, were were, you appreciated? in but offsets improvements, to in think about small color can you want commercial will I ratio any So question be to offer what expense potential the response

Douglas Elliot

XXX, COVID, days. by looking at really you and we xx. for is, I competitive, commercial, an were assuming COVID-XX, small and production, about answer commented you're we quarterly underlying I'm our think, think in terrific impacted to their the adjust commented a have that we that tool saw that underwriters and made watched coming, adjustments glass classes our we of share I sure referrals Essentially, will early quarter, for you we that just So when flow the which also I'm you to expected get eyes first that of a the business. during with for margin bit the wanted I March, thing on XX glass we the on certain sets underwriting that when I'll extra and this relative influenced

have watching understand reopening said, we all participate we economy country. that lot we of but large. So, this the in are we've made, to on that there our And have that our go how about the factors were we the I a go business, forward underlying subtle margin, With into run that all the feel carefully adjustments do can't we prospects. ourselves, good very in and across to

Yaron Kinar

commercial. I was out in the the once what Doug, since margin, losses, curious to improved some of underlying were? And as you I of trying actually out out -- I the was called take favorable negatives, small to what you've think COVID the offsets is, just some margin get the

Douglas Elliot

I expense the we many picks. bit the news side. other on side, little of a there's adjust didn't And on loss largely Well, would of say the good

about of this commented as COVID on that commercial. to points. quite relative Yaron there's to We're bit significant one. opposed about But a talking talk tense comp workers' small would I else we to don't news be So much think and the

Yaron Kinar


by you this I'm And from I'll more. came really thought that. the And the for COVID I was were with a portion thank always question, my off in physical property -- you're policies nature, million you're yet policies full on also specifically COVID I those for just curious looking physical curious greedy a regards the why start saying -- excellent on damage so just another damage triggers a or so keeping quarter, that in the just to disclosures saying losses physical kind that then just majority. you $XXX loss, second without But have Were that limit of qualitative, the as Okay. little around quantitative disclosure And there? policies, taking taking to virus XX% vast trigger. approach of more around the

Just wondering treaty around what's the was? two thought different process the between the

Christopher Swift

Yaron, Chris. it's

call it it would reinforce basically I policies, a sort have on physical standard share does in business is what most interruption So the that of to you loss but XX%. requirement. It's I'll with

that welfare. second been is bar besides human direct about vast were And constructed. people that third pollutants that's which think coverage we threatens to then we the we is exclusions policies, are also those XX% sort how the again for health virus requirement, really layer in policies -- any exclusions have or point our the like said, is material policies we contamination loss majority and exclusion of and physical the virus, that, we of how that broad of have making the will The we listen and

And a and how works. it waterfall. And I almost think really sort conditions as of terms and the it

So a virus, don't physical you the don't I get you in the loss. And it of that's last even direct why waterfall. have sort if put

Yaron Kinar


Christopher Swift

you. activity We aggregate. say. We that claim policy to might it going know and in million at and as time I the We did come are. mean, that's for analysis limits just know looked our I'm I'm we in things upon. as far far detail what as what going and that, number, the X XXX to all at exposure in that in on it coming policy additional future not claims point million As are any comment and limits that's like

Yaron Kinar

you. Thank Okay.


question turn like to session. closing over remarks. Spivak Susan This and conference would the concludes I back for our any answer to

Susan Spivak Bernstein

appreciate we you today. next didn't us We me on happy question Talk and the we you. please Thank are all to follow-up. call, get your again If joining to contact quarter. to you


conference for you has attending The concluded. Thank today's now presentation.

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