Hartford Financial Services (HIG)

Susan Spivak Bernstein SVP, IR
Chris Swift Chairman and CEO
Doug Elliot President
Beth Costello CFO
Michael Phillips Morgan Stanley
Elyse Greenspan Wells Fargo
Josh Shanker Bank of America
Brian Meredith UBS
Meyer Shields KBW
Yaron Kinar Goldman Sachs
Jimmy Bhullar JPMorgan
David Motemaden Evercore ISI
Call transcript
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Good morning, and welcome to The Hartford Third Quarter 2020 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note today's event is being recorded. I would now like to turn the conference over to Susan Spivak Bernstein, Senior Vice President, Investor Relations. ahead. go Please

Susan Spivak Bernstein

posted Good today Andrew. quarter thank for afternoon you earnings. on related Thank website. our our morning call us and yesterday results for reported third the and joining earnings 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 Elliott, are Chairman President; and

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

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

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

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

Chris Swift

serving from share, $X.XX trailing and deliver XXXX. our the strong ROE These beginning catastrophes review of core quarter, highlights strong the Today, partners. third of growth customers initiatives, In joining XX-month to today. I'll unusually of AOCI and execution, the encouraging business. the in demonstrates diluted the of the to and year-end progress pricing the share, core The very and with top on thank line, a dedication book $XXX quarter, per quarter, pandemic our P&C earnings resilience Hartford earnings for and and excluding signs third continued value high distribution including our employees you diluted us in a morning margins. results of saw the million key or midst X% XX.X% our Good strategic per results, we In of

First, the written total premium stabilized.

down compared the substantially was second business year prior new quarter, from Although to quarter. up

standard Commercial from ex-COVID, Lines workers' as margins each finally, for track all market losses, than the increase strong the underwriting XXXX trends. COVID of the P&C in $XX first the and reflected $XX improved which Lines also lines. COVID primarily In actions The not claims points losses losses actions benefited lines reported versus the stable the quarter. nine for were the quarter. momentum ratio In and firming. by trends Casualty was Connecticut of underlying workers' the Lines, and profitability well improved million As wildfire pricing, comp Overall, the integration activity from to has of year. X.X%, $XXX Catastrophe improve to margins combined million points million the saw prior relate team's and quarter nearly year. also the margin quarter workers' million and our margins Lines, improved The experienced third estimates was from of compensation. very with losses COVID $XX improvement ratio began significantly excluding business actions XXXX. losses compensation combined Commercial this the XX.X catastrophe quarter. in And months performance, most these financial Commercial Specialty, loss full prior second were our implementing X.X margin is recent Expanded losses New quarter COVID and underlying retroactive strong platform. lines, in expense Global ex Hartford achieve remaining in up three segment goal. of Global at overall the reflect quarters we incurred largest include XX.X across These increase catastrophe Specialty prior in on our Jersey workers' improved the and any underlying underlying storm highest rate last am in third increases strong, I Included Personal or margin year excluding its year, driven improvement do pretax level X.X XX%, quarter of margins, of to as cost standard the pleased from our continued compensation our and pricing U.S. the offset third efficiency in The with second better favorable and previously to legal points In to pretax accrual. are platform. the were across points during Benefits. the presumptive prior as by with Property industry losses & to excluding taken Group since significant underlying during

discipline. Hartford's imply, The these share events was market from loss less our would reflecting strong impact management and risk However, than underwriting

by to very that dealing this results, turning are with posed say our year. the our those much many challenges with thoughts let extraordinary investment Before all just me

public-private individuals XXXX a issues have the the pandemics. recover like from has by it of believe it industry. highlighted weather to industry of also inherent businesses, partnership once the helping catastrophes, insurance I changing again While the be and when need pivotal to highlighted and the played patterns There continues communities limitations comes for in events healthy role the

industry a solutions public are to the partners find and challenges industry. are to result, insurance the capacity sustainable committed beyond officials working we As to with these of that capital

materially Net income valuations from up driven second investment the as results. our to contributions $XXX was back quarter, partnership by Turning million, investments limited improved. from

program. Next on During Hartford also made we our the quarter, progress significant

million underway to to of a shared. now We are on effectiveness competitiveness. will the costs, rate remain including lower operations, Hartford our expenses, previously reducing run new automation deliver while Next workflows. and improve you in program, $XXX improved track overall recall, on our As as Initiatives transformational investing increasing multiyear, is focused

to disability were and X.X% Core $XXX point a to Benefits. million for The pretax was life a million $X losses. short-term quarter million of X/XXth with COVID including margin, Turning quarter prior claim with recoveries recoveries of disability Group the of short-term earnings of pretax to long-term claim up our difficult losses $XX and loss year in favorable XX.X%, performance COVID ratio due book incidence trends. benefited more disability from comparison The favorable quite a disability. underlying and strong disability the remains business that of

disability COVID-related unemployment elevated increased life well of The long-term as ratio of watching million pretax closely in the reserving trends reported for due to claims. loss X.X are for of light as updated XXXX $XX losses quarter We points late third levels. XX.X% of assumptions

a is their response on cases and quarter to line, remains premium is versus several for to XX%. sales, approximately with strong from total persistency up wins. our Benefits results. the perspective, were in bottom book due Group lower line pleased All persistency reduced year, On decline in, I'm very at prior in-force pressures. as line employee down driven recessionary top X.X%. businesses by base This premium in Sales solid top the XX% national account Despite

digital adoption businesses. through in an and our years we able the important achieved the to we January, has As environment, of the a Despite journey maintain future. success last operating remote by customers over agents in service quarter will current been increase have is for The crucial outstanding XXXX, we move of part have a distribution Hartford's final significant support several our tools that and customers, our it be and of across been to and partners. brokers Since digital clear

increase online, quotes our endorsements that an in AARP start online of Small XX% Lines online Some for XX% completion XX% examples in include: a a Personal audits. increase premium rate and Commercial processed for

a for months. behind XX social the firming in hardening In At which I continue for P&C a market. customer-facing the first the study. very I addition, for Factors beginning business signs the year inflation, the I concern a with capabilities firming Commercial on XXXX, close plays ago pricing Small for market digital a hardening some for see a driving the now than are XX comments runway. forecasted row, the rates, would to industry, environment annual our performance about continued include: price improvement, second more of impact operating Canova the our challenges many remains a on in for will ongoing threatens as I underwriting losses the started. deal one are of the and initiatives and first quarters in when targeting the real higher levels continues of patterns; to lost longer pandemic Current on watching market need potential the conditions as even coming we and to weather as for and serve industry margin optimistic interest up that economy yield. added In efficiencies to Hartford's country, profits and rate from for increased am weigh benefit spite environment, of expense with exposure; low make and remain prolonged putting a improved human face changing an catastrophe that customers health; the us better we above-average pressure need enables a reductions. we The innovation results that year

Now I'll over turn the Doug. to call

Doug Elliot

progressing as to and the Nevertheless, were morning, Casualty pricing, also included of emerging for Property premium was with underlying good the provided progress X.X we're Across ratio quarter, to The challenge million activity on or manage $XX levels I year. a expense management, points we catastrophes COVID underwriting underlying and losses core $X this pleased lower improved contributed on three including Multiple pandemic. than our global comment focused and much remain from Chris, and you, of XX.X economic billion, many trajectory the Overall, top initiatives, quarterly results. still quarter, everyone. added our year. continue fundamentals, X% down of $XXX last we the to will the impacts XXXX achieved written combined morning. during million on the earnings line Thank & prior points business, of while the was of

losses, underlying improvement. businesses of our each reported Excluding margin COVID

the Before underwriting workers' down incurred CATs took Gross let prior quarter. $XX from and COVID this the year significantly I compensation get to million losses, were with me Commercial quarter COVID into details, COVID the were primarily the workers' of Lines, presumptive summarize development. second gross $XX we losses non-COVID-specific was segment and and respect In million, million. $XX million, and actions million lines Offsetting loss losses frequency continued Connecticut. Jersey favorable in E&O. Financial impact including were compensation of of retroactive net D&O driving for a provision other for $XX $XX a New losses coverage

We Coast derecho Midwest the wildfires, event. Industry losses due in to million $XXX to elevated catastrophes. part storm, Hurricane incurred large the and also tropical were Turning in Pacific quarter. Laura,

advances We capabilities. and in made underwriting modeling have significant our CAT

to due lower confident our previously. underwriting we're specific losses in example, the were For wildfire actions incurred taken quarter

Over the prior XX% same last million. our and time two years, reduced is period. Net that policy favorable the was footprint California count year costliest wildfires homeowners XX%, this five approximately our $XX overall down we have quarter the in for development season over

We liability continue Spectrum U.S. liability. to favorable auto Lines compensation, Personal developing is Small experience activity workers' also liability favorably. emergence Commercial in loss and professional claim

Navigators construction. business, year The the adverse million was entire increase reserves development wholesale prior increased in we Within the primarily $XX cover. by reinsured

comments Turning expense X.X few now book. third a and marine offset losses international ratio slightly results results. to by the Lines lower XX.X, few COVID combined line business Specialty losses prior large ratio in year. Global The than ratio. for partially A underlying the a Favorable expense better quarter property was our were about points Commercial and

to travel we some program, and reduced into from incentive modest subsequent actions year; our quarters; starting reduce finally, early from Hartford compensation are acquisition see will took we're to benefit First, transformation wins contributors which this to continue year carry second, Next we this and costs.

pivot to pricing to pricing, achieve I continue we gains. excellent As

with renewal standard pricing commercial flat was For lines written X.X%, the quarter, in nearly in QX.

a which double just up of the Property, quarter Global pricing solid XX.X%, quarter, commercial X.X written digits. third pricing in excluding holding we're In Market, slightly strong our In of result. in and lines XX% in XXX U.S., portfolio, from basis Excluding near quarter the in or quarter second very in strong was workers' book quarter, the the our point while increased steady continued and renewal mid-XXs quarter. in the pricing are gains workers' casualty quarter is X.X%, than very international than lines achieved with Specialty, in points and well last gains and a wholesale wholesale from ex-workers U.S. second U.S. brings U.S. was liability also Auto pricing XX of in points higher steady Pricing and professional portfolio layering low teens, Global as Specialty approximately point both pricing above over compensation, international Middle points strong strong comp for book slightly excess are ahead the rate Lloyd's. five written Lines seeing primarily casualty are compensation, in auto to property the general two. XXXX. up as energy excess remained The in Property one now cargo. mid-XXs. higher Both lines, approximately third results

result impacted somewhat COVID continue Commercial X% it's XX% Let business Driven new Commercial growth prior to businesses. record an COVID point will Small was result Commercial a ratio versus a much XX year. was lower year, on details new quarter Small our premium Small impacts expected me point Spectrum, on excluded. versus versus economy. commercial our quarter. yet industry-leading combined the favorable XXXX the written we than prior now share X% up a premiums, X/XXth as better more are better audit line ago. business a September. underlying declined of few packaged of the X.X sequential second when third saw in days XX.X, be of products, losses of exposures than Top by by XX% posted down and

Our individual risks transparent the agent thrilled to delivers I uses tailored new the prefill information classify insurance and outstanding received quoting for experience. agents. unparalleled and feedback to Spectrum and an product businesses, analytics our coverage recommendations from results advanced small am underwriting pricing with real-time,

of average Street billing largely the two these hold the the policy from Commercial strong. Commercial. lower, extent, reflecting also As lesser expected, was segment Small declined, on but retention past quarter. premium America of pandemic Combining canceled in the actions driven quarters, quarter, policies was impact policy by remains of the as Small average Main and micro retention retention second to a Premium the lower the in

excluding improvement. an combined X.X Turning lower largely ratio, margin than of exposure. national favorable losses year expense in of by X% & COVID non-CAT A points. Written prior the drove and ratio third to lower of property COVID premium impact account insured quarter, Middle the declined reported We Large XX.X improved the driven after quarter, better underlying points Commercial. X.X the ex in losses

premium Market levels. quarter Middle Market over XX% XX% our in Submission in all and core down versus improved up business year New was flow, quarter. the prior Middle from second but hit book ratio second average

driven We continue to be underwriting and by pleased with the our pricing margin actions. improvement,

do Written lines, declined X% actions The prior international combined solid points ratio than underlying excluding international points book. Tilbury Moving see profitability this X.X as not a in losses X% and quarter. was whether premiums were wholesale $XX incur the points. this ratio to in Margin by losses The trend, I of losses lower U.S. the including U.S. expense large quarter, by driven to expect improvement domestic losses explosions. XX%, book to COVID Specialty. better in Route time large Global while premium from the the or business with grew contributions time. XX.X partially million to two a X.X offset in after underwriting and Bay we improve most port declined year marine four from across the book, of written these

We points be in with Year-to-date, was losses. XXX%, Global continue the COVID underlying to expansion X.X combined for pleased including ratio Specialty. margin

impacted from the improvement of book. the Written the Navigators almost partly catch-up Lines. from extension, along COVID, to second in of result quarter. continued points coming in over cancellations X% XXXX, declines grace the from agency entirely the premiums The we've the second impact book. with seen four by declined the of the period Personal approximately Excluding half quarter's was Shifting

which X% lower to in industry, strong quarter up Lines Personal XX.X by XX.X very another increase with better underlying Responses rates. ratio prior were responses, results. driven Consistent than had so an outweighed frequency the we auto, of lower the combined XX%, XXXX. declined strong expected. second continues In premium quarter, was below year. underwriting was Despite of in decline conversion business some well points a run the this growth, New of

third has quarter plus the of However, our results. better due industry XX% our reduction frequency base, customer demographics to than been of

with expect the and year, better combined historical XX% points return the for trend driven levels XXXX. underlying We targeted of a predominantly was by ratio of favorable than adoption vaccine to the this to of In home, therapeutics introduction X.X prior non-CAT in weather the quarter.

challenging a strong, I with We and for I'm continues very not nearly to Before view Commercial trends workers' exceeding cost the second over all quarter, XXXX number year actions Market Specialty progress, cost we With written loss third After changed. of across let materially Pricing continued Middle a by trends call clearly pricing picked momentum performance levels. across to turn have accident quarter, and to our forward compensation, our close in will our strong our momentum continued on downward fronts. on loss are me the business and lines, almost books. on Beth, except and achieved that offset most our after and by improved income, new demonstrating Lines encouraged progress pressure Beth back you written premium underwriting premium books written saying be as are in gaining traction underwriting need to I results look updating to Global of prior describe. the up year-end. investment of

Let now me to over Beth. the call turn

Beth Costello

X.X% from in quarter partnership caused make-whole last before offset the was interest X.X%, which with review Hartford partnerships, declines yield current Thank The payments $XXX higher portfolio, you, third Doug. as the and excluding income even about returns Today, for year. Net million year tax, was investment Funds the the and Corporate. by down I'm of rates. increased quarter, results low quarter prior going for was investment limited to the limited third

XX and quarter about excluding points decline short-term payments. in the yield, and from partnerships, the lower expectations fourth investment lower reflecting the no expect for yields on make-whole to third quarter, basis limited investments We

net reduced at quarter. quarter, invested X% our total approximately investments trades of and the the represents of With During level, generation, expect short-term by cash X.X% liquidity which strong and securities loan $X.X impairments assets X% June before recognized further liquidity performance position the cash levels for on to reduce we from year. portfolio increased strong The very to tax unsettled maturities. of our the we was end and the targeting fixed end collaterals the portfolio of $X the from reduced on billion the mortgage quarter. XX. $X adjusted billion September before on We maturity to million continued fixed approximately flow Credit unrealized net reserve by gain $X XX for million tax at at

Turning is lower last to shift fee $XX to largely assets primarily This were under a average reflecting from Core expenses, fee-generating Funds. continued Hartford funds. to million earnings higher year. combined of lower X% management, decrease offset up with in by a income, due

of in As on than primarily $XX prior Funds quarter Corporate almost quarter to of and was core in the million interest the September higher impact due outperformed million a X-year XX, Hartford of the Resolution. peers of The retained loss year the XX% $XX X- equity basis. Talcott Company's

second $XX we Talcott equity the a by recorded strong hedge primarily million. experienced received dividend in cash the due In million to $XX performance. of from we a September, Talcott quarter, market For from losses quarter, loss driven pretax

$XXX XXXX, we we have the remaining adverse and Under development we development of coverage reserves. of in available environmental purchased complete asbestos in million potential a these study annual will the reserves. adverse fourth quarter, As for our reminder, in future cover

Europe. the very in loss reach agreement our that operate Continental of sale development Navigators business under we signed remaining to we as mentioned, Lloyd's $XX million to this agreement, is international legal this we market. were the the pleased With of ADC. in a We the After session, million for coverage September, $XX during $XX go-forward quarter, focus In adverse the this Doug recognized after million to As we have tax. an entities cover on agreement principally sell our Navigators. seeded of

are we our initiative. on Finally, Next executing Hartford

incurred to savings XXXX expense As our achieve by by improve X ratio with Group slightly points and expense X.X expectations. reminder, of by will approximately P&C pretax earnings, by $XX annual of recognized during were expense of points, loss costs ratio our quarter $XX operating X.X efficiency program very which our X our realized outside restructuring Next ratio overall our $XXX X.X execution and of of We reducing savings including accrued severance. to the this million a Benefits and goal to million, above XXXX, pleased Hartford from were point. core our We our million expense contributing

expense current of fourth, the to would to as be from relates well be Next. in, about about as the expect the reflecting of fourth Harford I Doug it mentioned, prior we the would quarter, X-point are of ratio XX.X, reduction P&C impacts continuation which the As impact the a operating as environment

Before programs moving overview provide to relates our to compensation workers' I wanted a it as high-level reinsurance to and Q&A, of property losses. COVID

We programs of treaty based reinsurance property an cover compensation. and excess CAT to have losses, workers' that and various including loss treaties mitigate property aggregate occurrence

as of is coverage booked of which a common an provides program activity, this unlikely occurring attach. we Based program have period a commonly compensation workers' as from loss $XXX recovery million defined for losses $XXX a to to referred it we believe on clause. time, within under hour's for of million current origin, not Our occur excess coverage

events aggregate this been U.S. program. CAT designation has requires losses by Since the by are program in for COVID not a a CAT not designated covered property the pandemic caused COVID Our PCS event, PCS

CAT date, To do reach program. we and breach property opportunity and occurrence the for not attaching hour If not losses have booked this not designation under program recovery our excess for property losses this losses we accordingly, any terms not and does pandemic. level, recovery require including from retention, in conditions a applicable of would our the clauses. contract, the $XXX This of PCS exclude Our have program does begins million.

we results recap, strength to stated and encouraged the To very of our on on in benefited confident our on details underlying that strategic be Additional programs goals. from many to financial I'm Form reinsurance businesses goals. despite can deliver right by challenges our and in our execution the place initiatives continue have XXXX, in the XX-Q. found our

we share As turn to earnings plan of the February our on I'll our can begin financial so to metrics call. session. we per practice, outlook the call XXXX in over our year-end Q&A now Susan

Susan Spivak Bernstein

Beth. you, Thank

questions. will about take have Andrew question. our for first minutes XX We


question comes Phillips first from The Michael go Stanley. Morgan of ahead. Please

Michael Phillips

And stable maybe it's loss seeing talked how including continue you that's are the about get and there about trends expansion. Chris, actions talked on some what comments, you I some amount allowed also about market COVID frequency? going your for margin maybe, XXXX, to margins, year level, had Doug, thoughts can Chris, in full pricing, we're from continue should opening trends this the expansion comments continue. margin or in Lines should the in Obviously, this with with when how XXXX? your has stable you loss you've Commercial COVID. you decent ex helped guess form underwriting into to before you in then -- started and talk your the

Chris Swift

I'll my views, share share Michael, and I know, will his. Doug,

So feel there were of the our the particularly certain we good really prior yes, were improvement, of Middle to business And we last underwriting in to highlight I over months. impact initiatives COVID execution book targeted Market. that XX for various of about aspects the even that tried

activities those prior of lot a So to COVID. started

net million we're COVID impact. $XX right you we look of if I quarter, think at what in the now, the had and seeing numbers third

relatively a and there's So a gross benefit, it's there's minor. and impact,

elevated to need last expand to from metric-driven workers' the returns underwriting margins you interest is economic all out feel Doug, or tried we to after on just add? my inflation the Michael, still are mind, least on now, lower a offsetting environment, in would that comp capital. four three as of my conclude the in our slower right what in that and at remarks, benefit there, seem activity. to factors But to social prepared And earn what that I rate catastrophes COVID-related to continue So frequency we years get adequate be impact to points losses just

Doug Elliot

COVID. you our you year look just pleased Mike, would businesses, we're to And so changes ours understand forego feel look pre that a Specialty, what that were really But when Middle, I We improvement to Market are. improving COVID, could And I I quite top add I'm underlying initiative. was line returns as some of progress. Middle gave those in and this seeing core real through those improve to both willing Global sure. we it underlying We're X.X it, ex obviously, that and feel book in Navigators I goals those for COVID underneath set and point priority is achieve the the expected.

quarters. a So I'm far. will as by talked with, trends, pleased Chris I the forward conclude about lot the quite talked nine the just of And written we ensuing pricing would months year I so and about trends. They earn in

'XX. earned we impact we as into expect So premium improving go an

Michael Phillips


defense are put still given, in that's you XQ. legal $XX you I about guess XQ. million of confident up think looks -- on How in expense. third, It question that litigation enough, concerns litigation? COVID about you your then holding you might and like Second guess, be I pick any that's seems to like COVID you on shutdowns whatever should maybe second, you of have for the exposure occur in the fourth, to near want spotlight companies that And term? for as number

Chris Swift

lot Yes. a to There's unpack there.

established this going we change. today, here litigation I'll did some we not we're accrual, clarity million with posture, the But we policy unambiguous to try. $XX terms in very sit mindset, I we use, well, of a and in COVID constructed. litigation take again, confident. The time is as That's how to resolve. that's fully confident our -- language, been would that overall remain say our So

as your now right see impacts could in however as to it as And it's second turns. last want third the frame you relates beginnings real. I the far very of the yes, it COVID As point you to in winter waves, think it, waves, question

just side. I an it a going frame So rough quarters from an would for be next is to little the are you that two economic from probably economic perspective

in contraction his to compared that Our 'XX, Doug get forecast 'XX particularly, a more expansion, economic would said get of But say we comments, could people we compared healthy. about X% the the treatments to would as economic X% see keep to end you as when into a board we to activity on in 'XX. come 'XX at X.X% as have vaccines

happen the the So we're add? But right to and that's all direction, what is hard you to near are Michael, what predict the really I trends Doug, term, but what in think bracing it's going for. would in

Doug Elliot

add. to think that Chris, well I nothing said,


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

Elyse Greenspan

side the first of on capital question things. is My

amount $X.X You billion company. guys capital, holding have a at of good the

Just trying to what around to looking get you stock? back on purchased are update for buying your return thoughts and guys when a contemplate you an

Chris Swift

Thank here unknowns capital mean, a our out during as you a sit Congress. again, is still partly little way. seven And in of foggy, coming economic that The built you're operating Elyse. deal I to policy today, fiscal right, have pandemic we come up outlook Yes. we're the by And was design environment. months. that But as relates particularly to last it any we with for noticing, excess might

plans head capital metric our a into our clarity. drivers, So with waiting then little will more say we you And for share 'XX and also bit just as on actions. we update and we're our we I business would just slightly management you

Elyse Greenspan

that And how us picks to that can of pricing sense you're within for That's give I there the helpful. Are workers' this think asset to question, little a second last your my year still Okay. quarter. a decelerating? bit decreases you And compared in more color there to seeing trends XXXX? seeing year-to-date get then book your you I comp. alluded hoping on you're then the was that

Doug Elliot


of that, Elyse. the with first start me part Let

when quarter that isn't that So start on about the really there think us. trends, pricing would anything by we I color in saying surprised

our it's less slot-rated. Small that is the in zone Our subject comp, Middle were Market, trends about flat, we one the to pricing workers' comp negative mind second digits said more as quarter book. quarter, a about And bit of saw in to small deterioration, Small quarter-to-quarter on Keeping point Commercial little that in actions, Commercial, third past, and I single workers' in for XXXX. expectation it's underwriter

surprised several a trends into deeper the by headwinds anything that negative deeper, least, comp in face get new we're our year, story. with thinking the these happened the to not, the about compensation and not pricing you expected next This quarter. ready we So line. were last as at quarters know, and spending we on side The others And in slightly make in lot time to various filings is workers' states a now. as of the

would say new on things. that's it quarter lot are Relative in workers' don't of the in my Middle. color a There happening story I was end. from guess comp. underwriting activities a So two think margins, to my I big the I

where moving don't we'll parts So are, fact, has improvement. got the of so In Middle we underwriting optimistic story beginning Small Middle you said think is expected and Commercial, at that we of XXXX, about the good we're slightly, see the that pretty forecasted compression small a we and any pressure. many because there, our in I to XXXX I And of Market, when although seeing in COVID. we underwriting feel And combination we pricing. compression see year

favorable through them. margin COVID very of when know, seeing signs that you really positive give And because, through tried to look I looking COVID. So we're pressure, you component frequency as from we've I'm

like of happening it. a it I But would a feel would with all So comp. by there our workers' lot surprising. the there in say of by over be we loss is top team we're things trends on like feel geography, our happening class. state, right that of We're are spending time by isn't issue. We anything now on lot


next from ahead. go America. of Bank Please question Josh Shanker The of comes

Josh Shanker

interest way want what also the pricing rates. regulated a other of other lag process what workers' you How rates? a driver lines been responsive there To interest lines on regulators changes To extent are of the more comp decline interest thoughts workers' right in rate-sensitive now. is talk business. in comp more what's business. six And should a approvals comp probably of a about regulators little than extent and comp? about the months think is rate think getting lines? versus XXXX in It's that? we to big push workers' since other on a lot us But leases is I about huge Workers' the that's bit. going of obviously, to Can of little than

Doug Elliot

of base very And a XXXX year that you arrears. experience the XXXX, forward right? remind Sure, We're from Josh. months now, would would the good the XXXX. extending in workers' is I'd middle start industry. much that I working be comp of past for by for changes those filings several over right a was the saying in and the for on working year filing, industry rate

one have year expectations. next pricing pretty year's side, solid on you So underlying a

you On and curve the yield in. like ourselves there's factoring no are in a the as question, that other, change companies all been described,

and forces, competing might have you state-specific. very these So I then are add,

as loss our overall will that experience, experience next in. obviously, all enter So, now And the have us experience to at we picture a that loss that we're we move state all the our COVID over in have factor with new industry of trying the several own looking quarters. dynamic,

activity, line, relative the in a states happening workers' have way taken works. presumption. lot process is lot Not presumptive the basically comp to a states So but happening the that all in

Josh Shanker

to then announced price cuts. gears other obviously some switching And state There's cutting. competitors large Lines. big Personal There's

stabilize bit? You year we business Hartford a count. in little Lines time, declining the Do Hartford haven't do long for And Personal grow that can strategies a a about even sort policy policy what on to grip we path next think see to use in numbers? its of certainly grown maybe of

Chris Swift

from question. chassis our relationship Yes, comes to and Josh, our benefit. on thanks plus of conditions would our for platform with terms them, that to commitment Obviously, business modern a the our and and renewed XX% our it build for our help benefit their contract, business ARP. anchor renewed grow I

at quite fast months. to would So platform. to number out last after and new a hard got it, for roll follow early we've been states the in We say, We've that start of I the XX on will 'XX that. product XX a auto home

digital, So our about modernizing really would about about and the just thinking marketplace, anything? say, I what add But you would Doug, telematics dramatically that's yes, thinking thinking different are we auto and offering. home

Doug Elliot

Chris. think I good, that's


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

Brian Meredith

for of you. A couple ones here

to respect Navigators And where on advantage take is a book, the that clearly the we specialty some the, pretty First one, with old substantial this where of pricing it, at all on still of lot line? re-underwriting your the are E&S actions with players to I'm top causing environment terrific of some just call curious, pressures growth? ability impacting are really seeing going

Doug Elliot

so would XX, months of XX the XX, Yes. one, round Brian, what into I through well are we clearly progression. say

not time. to activities very need has our way to to I advances pricing state of known, the pleased of of that then our standing able underwriting are do level think syndicate Lloyd's that. just we're lastly, Secondly, well we long customers I just They are it's within intend I'm price different that in going periods the achieve it. on able and achieve we're think what many to for for that a to performed profit There And not but syndicates. our clearly objective. And pressures retain

products has we top to And hoped. take that I'm will be meant advantage margin where they line we've had needs yes, improved. achieve pricing those because market of so back demand And had that and will we actions yes, going appropriate line margins it. our But it, than need be. probably to performance it, our taken the dynamic And the much that we've more to bottom pressure encouraged we're get

Brian Meredith

really as the outlook there term you far as not as for But the business good near these at you. continue least new Got fixes? probably

Doug Elliot

that new we're actively the say in would business. involved I

it profile activity. and to our has Now our fit

some I made that and see from away we've just further moved toward we away we process behind that way marine will of reunderwriting this to the behind think Brian, choices But is as countries, some you are do largely we've and not move open other others, classes we a professional from growth out see core get some lines So European our profitability. and in us. for business,

Brian Meredith

is of pivoting Benefits. like? you now? environment continue core stellar. that margins that Great. The COVID Kind of to normalized there of then kind of right kind so in we're you a business And be of over kind think How in to looks rethought much have the do what Group ex margin just

Chris Swift

good a is it yes, It's good. margin. Brian,

COVID, into I a that just If it's you maybe equates margin X% through I capital. would point really this a to year. returns guide good on for up remind slightly did X.X% think anchor to on strong long-term still this look to to that's comparable last we margin quarter. you, compared business

printing that side. competitive could there's from good say. a we particularly numbers building, So now. that's what are, we're I would the Right it now, feels but right feel pressures I


KBW. comes question next Please from with ahead. Shields The go Meyer

Meyer Shields

share hoping like course coverage the you parts your over or I what Beth, to didn't. of with works and reinsurance positive negatives was on look as over XXXX, parts could what thoughts expected, regard

Beth Costello

worked Yes, we I reinsurance would that exactly and risk programs to for looking characterize in. that exactly designed the overall, mitigate as have our were coverages

there's so point that with line not in expectations. And our nothing our to are say that contracts would I that would

Meyer Shields


from I that going changes can don't anticipate you that into So major XXXX?

Beth Costello

we're to to those expect at types I of the renewals, very still the that obviously, the structurally way looking of is designed exposure it program in mitigate, looking now, consistent. we be process we're and that would mean right but the in

Meyer Shields

else. Chris, Okay. of question philosophical And in very to think then you've reserve defenses been bad make confidence decisions? some your that just in a the than more going BI, -- for do you But likelihood how against I courts consistent anything are

Chris Swift

-- we we yes, not said we put did BI-specific any reserves So the in as quarter, up. second

I the policy not So said, ambiguous, defend we think language, going we're is it's and to clear, ourselves. as

was we're overhang, reviewing quick and legal very approach. rid this play way wish time. still take hours And through litigation time. sort of in spent Meyer, I've of work of work. we So get to a the fix this many mean have going so this, just patient to little to to we'll lawyers our with and not as but a our you're unfortunately, going see strategy I I how that's out be early longer a there over just And things period just have systems environment. to it's And


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

Yaron Kinar

coming long-term you of short-term in began. some we're of we've the expect from over of seen next couple mark, with And kind you maybe relative quarter magnitude crisis those far? to or talk what in One, questions. so disability the could A claims I seeing about when Do to disability the X? the XXX-day COVID crisis, start to hitting regards think, the Benefits, now Group

Chris Swift

we Yes. Yaron, obviously, recoveries, incidents is important, which remain prepared as remarks, said bolts the on new plus in our trends strong.

on only the any see that essence, this to But trend, incidences time. point period. XXX-day right I'm as premium we're You're It's of out trends new not quarter. obviously we quarter in don't a emerging LTD watch I this in And in in earned at I it's new clearly elimination before, mean, point that you one just increase time. of, first the in is said can coming we've but saying here a declared But watching modest that slight just closely a at see data, area.

Yaron Kinar

And to Okay. question respond here Personal with then the Josh's you could regards curious, to was side. if Lines earlier I business

be, area think didn't necessarily I most guess, that think that be the digital if and would you into guess telematics. looking you that you're market, intuitively, I an conducive mentioned that I will. AARP I would necessarily to

rate And distribution So would do be telematics AARP about market? think you're thinking that. and what on you digital on curious the just the how take-up for I'm

Chris Swift

on add digital, this calling want more is I a let bringing marketplace. up. And think, his space. a of a does joint mature in in part from sort Doug credit there's Yaron, future lesson have them of in are XX- with to future all segment. I'm insurance to Hartford We Obviously, call XX-year-old, you grow strategy, COVID trend, in And all me AARP about underwriting customer. of side digital-naive? want concerns honesty, changing it's grow In the to some taught mobile, and you it, using the different I'll it's regulators of some the Are part I'll the of telematics then obviously, AARP environment, our commentary. can demand the that has perspectives. in that of and number

part of strategy forward. all to going platform it's So our modernize that


comes of ahead. go Bhullar Please question next The JPMorgan. from Jimmy

Jimmy Bhullar

block. of or capital your for acquisitions sell just plan competitors affinity on your question Doug, that's on first maybe Beth affinity a of in is had Lines an one deployment? of fall I whole sort There block where Chris, to Personal trying

you're at for acquisition level terms on persistency, is your you interested client outlook the case in in the currently? secondly, seeing both Benefits, at more importantly, premiums and And high that level of something are then So given what and Group unemployment?

Chris Swift

first Yes, say would us on right is I now. what the Sure. Jimmy, is for M&A a one, priority low

XX% say, would the Navigators at finish need activities completed in of integration I that. have, point We at to time. We this

focused we're value. be in are beautiful capital wonderful relation a talk there about we when time growth particularly early management with that buying and And on think our in I alluded I to shares excess opportunities organic our as 'XX, capital. I to, think intrinsic to it's back,

put opportunity doesn't to market, and to I our opportunity, capital allocate it So a referring in M&A to I time. think all incremental Particularly, together, and this mass profile is you're at Lines a the fit that point is Personal just low priority.

GB it the pleased generally remarks, year. XX% my as that's in persistency, about relates I'm to the through with prepared I persistency said As

all normal seeing, whether are we it most it, priority but Middle monthly returning new are accounts created persistency, accounts activities So or trend of be end levels, with persistency in the call that's are slightly in what automatically, People happens overall, although seen, a or and up unemployment of drag I'll segments, shock going reducing is premiums, Market down. fashion. account payrolls that business but we've down to the are coming that national is that it and just good, smaller

So that's share you, would what I with Jimmy.


go ahead. comes from Motemaden Evercore David Please ISI. question next The form

David Motemaden

follow-up a ex it take year was If look I out, Commercial Lines. the for accident Doug at and question CAT, ratio COVID on I loss around XX%. Just

favorable was all quarter, steady just guys second wondering points comp? picks workers' still you but casualty ex frequency that holding XX to from you quarter, at still up guys basis down your there? was This any year-over-year. did lines benefit Or XX are I'm from on

Doug Elliot

trend see lines. or the our -- holding immature lines. such, year accident those casualty David, those there. years want deeper we feel XXXX pick in largely And as steady like our to we inside are maturity still We casualty is

David Motemaden

Got it. sense. That makes

forward, XX loss is for going of year-over-year thinking so XXXX? And points good sort we underlying about should a basis just XX think ratio in baseline improvement how about to

Doug Elliot

there's it basis and of lines I to tighter. different a I stories reason we've roll up. would that that are points loss of where help hundred say you on the is many Commercial got with so it's are there There going ahead lines a are we're days. to back our pricing trend, that Part XX in several inside lot written basis question where Lines, say more

to what we with and clearly plans, final pricing fourth pull as into we're next share achieving get a better these with of at gains. kind together relative of strong look year And all leaning lines, details our it but we we improvement are that we in XXXX is you, margin so will where quarter about terms

David Motemaden

Okay. Commercial. it. That Small if would have I -- Got could sense. there. makes more just line thought than The And fair. just was my That's question, I on top second a bit resilient what

the that's accounts can top like I'm wondering that you great and sounded thinking how if just It to premium about accounts. helped top there going see. the lower line maybe But you're line So commercial small expand anything else forward? loss were on

Doug Elliot

Yes. Good question.

wherever can go And do me go. then with you that. Let we things to want two

CSRs some definitely eight past our activity, away we First hit, would on taking When had increased of us thing certainly online of the impact over referral bind to us strategy referral an quote I the activity, these line. adjusted is underwriter that we've and say top COVID underwriting to that and abilities months. our

that about eight as side us more underwriting of our and the as punch last little on given modified think that's virus, we've course protocols. bit of the the And we've Over I back months, positive through learned that we've QX. the a of worked such,

there. start I'd So

we were state, look second month PIF we impact quarter Secondly, downward saw we've that with into July, detail of retention, depending in at And because upon quarter. essentially, Page all our we retention, on because lifted during third the small tried benefiting had you supplement particularly XX, on the the accounts in give with they at look the you nonpaying as as commercial, those to that describe in-depth cancellation as some where folks you for moratorium. June holds of were our we

if with going premium that's stable same impact together, at is put throughout PIF consistent prior very on So look a The you QX the years. you retention, really and year and QX retention. with

And happening payroll the of So at QX. this is in small pressure a our we're things exposure I'm sup. calc, in again, a in dollar looking in XX feeling lots QX and retention. were bit down commercial little from of the But

Small, as So that I IFS into don't all look in with and happens shared, share I about that subject economic at to closed particularly I we the about feel the the in our headwinds good capabilities. what and QX. our caveat, very the QX I where fundamentals bullish pretty of now well underneath pandemic on the we product, that the challenges, described, I'm But And jump this say I environment. feel very supplement encouraging, into. fully as side, going momentum face Spectrum solid engine. we as out and go control digital really understood Chris with like we're to environment as is appreciated we COVID


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

Susan Spivak Bernstein

please We us, to any Thank do Andrew. of follow-up you, have if hesitate you. Thank appreciate you me all you joining and questions. contact not


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

disconnect. now may You