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Hartford Financial Services (HIG)

Participants
Chris Swift Chairman, Chief Executive Officer
Doug Elliot President
Beth Costello Chief Financial Officer
Susan Spivak Bernstein Senior Vice President, Investor Relations
Elyse Greenspan Wells Fargo
Brian Meredith UBS
Ryan Tunis Autonomous Research
Jimmy Bhullar JP Morgan
Mike Zaremski Credit Suisse
David Motemaden Evercore ISI
Tracy Benguigui Barclays
Meyer Shields KBW
Yaron Kinar Goldman Sachs
Call transcript
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Operator

Good morning everyone and welcome to the Hartford Financial Services Group Incorporated fourth quarter 2020 financial results webcast. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one. event recorded. today’s note also is being Please At call over I’d like the conference to turn to this time, Ms. Susan Spivak, Relations. Senior Vice President of Investor please go Ma’am, ahead.

Susan Spivak Bernstein

us posted year-end XXXX Good you We our reported and Jamie. website. and yesterday earnings. earnings on today afternoon related results joining on and webcast and you call the for quarter Thank fourth our our all morning for thank materials

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

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

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

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

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

Chris Swift

you thank for us joining Good today. morning and

more is by $XXX or emotional one climate reckoning been fourth XXX a saying and challenges, most of years Hartford increasing changing. share in results and we of the the challenge recent diluted continued trailing The years with our wake extraordinary per vivid pandemic including strong racial of to reminders core its million fallout; and Let that continues me America, $X.XX circumstances to shaped and set a history, in turbulent XX-month XX.X. earnings economic worst of deliver the ROE earnings which by Despite devastating inequality quarter been than in have through that for has an these start core collective with

year, I the solid per their share, or while were diluted time Hartford. book our share stakeholders resiliency my for our to to company’s incredibly priorities, balancing excluding of future by per employees and proud up strength demands the earnings across businesses, all family. our commitment success. For strategic AOCI, X% want colleagues the $XX.XX, foundation was thank core work The during The this our $X.X XXXX. the sustainable our I and $X.XX billion execution value from performance am on a builds diluted reflects demonstrated of of and Hartford’s and unusual

to and performances XXXX and and turning full with the the business fourth both and underwriting XXXX, in year for the results casualty lines. personal significantly Now in underlying strong commercial improved both quarter outlook, property

in more social margins workers’ year X.X better pricing expect continues or in operating improvement higher underlying in underwriting the X.X pressure lines expanded excluding and Excluding the lines, we than commercial the impact by efficiencies. provided guidance compensation, pricing, we on goal strategic fourth met were and rate interest track. and is line from XXXX, transaction number The and global rate increases In all of from quarter Small in executing lines, points of results additional Navigators have the and is middle fronts. disciplines, offset momentum teams to inflation, well lines, on across a These nearly strongly needed financial and our the timed COVID, persistent a XXXX, were In from acquisition the points In to market well businesses. with continue as to all is frequent us and by driven coming of commercial was with In adherence the pricing our and it providing commercial to results is low XXXX integration events, specialty, breadth catastrophe environment. product to a proceeding specialty. are we global market expanded performance commercial remain improving perspective. second of compared excellent. in the our ago half business acquire

coverage. The managing advantages in earlier business experience competitive and new the position. in buying We of policy for and market continue owners raised to our customer year launch strengthen bar our leadership the

points Going will grow to continue maintain to experience. innovation completed due our forward, and will about I we to grow improved what of middle accomplish our digital verticals. ratio. transform industry-leading invest compared business. to year, one this prior commercial, to plan a a three-year excited experience, year specialized process, the robust we through underwriting and provide product lower X.X differentiated In a in large the fourth primarily strategy quarter, to we margins and customer underlying expense have by continue to am In

our deeper and improved drive and margins. broader set and growth addition, product further In will enhanced analytics

that and non-cat personal value improved proposition underlying reduced expenses. we through end benefiting incurred XXXX, margins demographic. extended relationship property with and lines, year, in solidifying to of AARP from continued contract over auto both XX new the quarter favorable our Moving runs frequency, In XXXX, losses, a for the fourth the the our lower and unique

in we and population. months. market in expecting digital more in a lines in new financial home XXXX performance With broader launch of the improve excluding encouraged to summary the to points for The that lines, will losses. return business combined When XX.X. about approximately In by We strong patterns we assumption our expansion excited XXXX, we the our it’s and outlook an commercial expect to also XXXX begin ambitious In detail, more range but projected normal our COVID Doug is are and platform has expect workers’ in a expected coupled take COVID impact at pandemic margin XX.X very with an of three in result and the achieve P&C, bullish faster initially more line I products. outcome. for products protection time personal increase a outlook, top are our underlying we mix, past levels significant. to ratio, XX. next years, alone from of COVID the this and am are that learning begun, with was new more continued and historical losses I driving modest am challenges we XX incorporates provide results over despite while combined are XXXX vaccine lines, and will In to six to than administer will to and than achievable our growth investing have of across rate years. experienced are property is the ratio underlying to about results the trends. line The rollout an we five compensation range it the to our both potential auto

customer While underwriting environment, brand, some pricing people, growth share. opportunity of utilize excellence this and increasing market reflects a enhanced to to capture service in the we capabilities, positive our see

Hartford upon group moving against want the suits and to to the loss comment Before The business briefly industry. benefits, I brought interruption

difficulties pandemic, scope are the of are outside we insureds claims to the faced all the the with sympathetic by against policies. our our extremely dealing us While and businesses

require cause litigation policies or and loss subject virus coverage, not clearly our of to to the All physical loss or trigger property plainly damage. direct COVID-XX damage does such

the the direct make some pleased these majority trigger overwhelming or coverage. insurance and it loss is to not physical cycle cases, have country a decisions favor we life carriers are federal courts virus of the in Although for presence the across still of of recognized the date that held by early of state in of does the and damage

these against the trial that Nevertheless, Given am highly Where coverage of strength in of it’s remain will body be coverage not arguments. of or the cases properly rulings the in rulings appellate this industry. likely industry. change positions. exposure I gone our our will does a of language have lawsuits, appealed favor not have confident and contract consider few the We unfavorable and initial been court number confident precedent courts our growing the or of view some appropriate, surprising

been a coverage useful and is commentary The the not Hartford about other new XX% of against company, counts withdrawals. assess of pending in the through do In number of filed initial pace slowed to of variables. players. against defenses, date reduced combination number motions and a some against against has industry lawsuits and Finally, portfolio lawsuits approximately We to of the is by now the way profiles, versus more Since significantly The analyze there outsized believe case ways been has mix exposure the other meantime, and to peers. simply comparing line appropriate Hartford cases [indiscernible] with have lawsuits us the wave

X.X%. quarter the was earnings of included by an related the in as attributable full is individuals prior to directly our warning quarter down has points earnings amounted core year mortality both we regular quarters. prior reduced $XX year benefits, but result and X.X conditions long development. effect and All likely margin fourth been mortality group deaths was problem the The to there were favorable believe core year of treatments by X.X fourth which to the tax quarter care. of or experienced disability, of to year to impacts excess chronic XX.X, loss included Obviously prior signs COVID indirect a impact our we points before most XXXX mortality the cause also excess impacted million which which of ratio tolerating ongoing for seeking is results full million, the deferring higher as too year than higher for claims $XXX before mortality health attributable rates, fourth million excess pandemic. in of In full $XXX to Turning is patients quarter

benefiting year full from strong lesser by X.X extent, loss XX.X, and, the to the incidence. a XXXX, to recoveries improved favorable ratio For points

effective premiums clients workforce line, year economic by quarter at and pressures for top strong Sales off was the driven On sales slightly to to year and solid fully and associated in payrolls. full X/X XXXX more sales responded than driven the ongoing national XXXX to our the with exceeding ongoing reducing insured XX% X% by were accounts are prior were in approximately $XXX pandemic up XX%. down favorable XX%. the million start their insured by fully dated as a persistency

transformation, we to digital remain demands expect benefits the customer marketplace dynamic XXXX, into Looking as product innovation, and group accelerate.

X.X favorable impacts excess the pandemic-related the results That Our of be loss pandemic, total prior mortality. pandemic into points on competitive reserves market mortality we to by earning heavily pace, mortality affect routine and many waiver leadership. still said, our lower relates its rates therefore, to on road Actual rates any claims, mortality investment future the effects, earnings reduced of and development expect ex-COVID picks in the the questions account our the period cause map trends surrounding the mortality given expect on will lower near all and higher are XXXX in only. deaths advantages net and strengthen more uncertainties economy; primarily of care. surround and population and life isolate the term The basing X% the actual impacted rather than on expected core investment returning Taking core we between margins income. and to mutations the by excluding be we the X%. COVID-related from mortality LTD continued trying broader to historical to margin Based margin vaccine decrease expected be expectations, virus, rollout medical will

In degree short-term norms. expect historic to compared we elevated disability smaller much addition, to a claims

to the in these impact Lastly, our mortality XXXX. results of we disability first predominantly expect claims and higher half short-term

XXXX, Hartford, As the the heart I do. about of At books achievement close future. optimistic what is the we underwriting human on we am at The

help positive to patterns, fostering is as work committed deliver everyone and and the successful, stakeholders. mitigate am people, safer element for helping as important we on a using our success. and resources it society of business influence has to are XXXX, respected, and our are and today. We happen our where welcome which right I all by making an and this where as in essential ongoing the sustainable of is impact our workplace thing, live confident challenge strategy portfolio, to Heading climate and making Hartford, to our we Across value The our changing a communities make doing never more into been always

Doug. the I’ll Now turn call over to

Doug Elliot

and Thank morning good you everyone. Chris,

to significantly and unrest our As customers challenges Chris losses was broker The unprecedented year XXXX contributed in the and civil referenced, The along and an global for with pandemic casualty the property agency we to presented our Hartford. industry partners. and serve,

overall a their Despite XXXX throughout tireless the every X%. huge point by for that you over was just Property and came grew our written challenges, deserve quite efforts and thank obstacle difficult this I their improved tackling margins underlying one pleased performance. employees year, Our way. with casualty in premiums

we from made year, progress another commercial, a workers’ outperform compensation, to substantial of key ratio. the also continued combined margin compression expected business initiatives. COVID with and despite sub-XX small In During number on charges underlying we

the pricing commercial, last the of book. In new During intended underwriting The Strong profitability, to Spectrum, underwriting and our four year actions in year, the core driven Hartford’s efficiency was and months and industry-leading first improved address journey have XXXX from levels. product, large achieved the package business profitability experience. record middle of customer transformation

off for and distribution investments In paying underwriters and in are partners. addition, data technology

time accelerated underwriting the by effectiveness. which experience goals. financial pace we’re earnings quote pricing turnaround exceptional five re-shaping. poised simultaneously years specialty, about equates are results driven improving Our In the and and close nearing improving to since book new Underlying to and business Navigators days, while acquisition by core are and has exceed two global XX%,

to commercial delivered been has retail an prior have additional of acquisition. million new that the not $XXX to deepen partners would distribution relationships premium across possible Continued progress with lines

AARP driven lines, capabilities be personal of the product a renewed we results impact number will expectations. pandemic’s April. end. contract below products while new the in be by Homeowners with improved strong, largely XXXX and driving on on extremely launched will brand Finally auto Underlying were miles new the by both with through launching year summer business remains by a in digital states

for accident a of XX.X. year with of year million of for $X.X or conclude losses core covered $XXX Let XXXX were X.X Property X.X This points me ratio performance or now then about and catastrophe pivot with thoughts I’ll XXXX. losses and billion current to some financial points. summarize earnings our million combined casualty includes the and $XXX

in both each losses, much lines. million frequency. COVID the the driven workers’ the benefit lower workers’ fourth Excluding from year business $XX expense $XX underlying for the pandemic-related losses COVID for improvement quarter including significant includes financial ratio. compensation million, The improvement the in margin were reported quarter, which was compensation and charge by of favorable and

primarily unfavorable and year well quarter, million from we expectations. convective $XXX million remarks. in X.X incurred the points. Net $XX year or our year points cats, the Turnings to which development, quarter or in the her X.X was prior for Beth we million storms, will In of hurricanes development prior within favorable net fourth reported $XXX cover

still the consistent and XXXX’s workers’ words compression pricing a to by renewal while fourth written partially nearly COVID primarily high excluding in few results XX.X%. achieved property property continued non-cat excellent lower XX% also margin steady A was account improving basis favorable robust in with XX.X% year, [indiscernible] global quarter, the doubling the specialty, increased a double general by pricing written results the result. remains results, pricing U.S. U.S. XX line the was and losses points driven auto XX for favorable year, I’m the Small stable quarter, consistent increase the excluded. and in professional improvements quarter. in approximately auto in compensation. very compensation moved the excluding in by few ratio, quarter, XXXX. and profitability lines XXs, while firm for low workers’ underlying points commercial third increased from small and the on was business combined and mid-XXs In the expense wholesale offset third improvement workers’ digits Middle a third in pricing. persisting margin the and line XX.X%, the in at result middle was in liability are ratio the points, three. Property balanced Pricing single the Excess quarter, when held driven The our pleased pricing price pricing, our lines in X.X with commercial quarter the into marine pandemic, impact improved gains very written how the Overall, now lines generally while effectively pricing digits. book quarter with Turning workers’ U.S. The In compensation XX.X in has the pricing from of with U.S. ratings the mid-teens. solid are XXXX compensation a market strong international in quarter. market with in pricing. was states. has team remained low is an the negative, portfolio for lines

commercial. workers’ compensation details better had premium economic offset point premium a prior the fourth results excluded. strong partially new more quarter COVID small with year. expense last margin a written declined to Let The business to XX.X was historical losses the ratio a year retention non-cat Total X% few by policy Lower essentially prior one due for me the are the written was After on second flat year, In very starting in challenging months when six shutdown, strong losses returned underlying quarter, compression. ratio were commercial the year. another the combined to year. levels. and and share commercial property businesses, Small than for favorable were

unfavorably the of payrolls. premium lower $XXX due prior Our retention second four up versus by half was business lower the was XX% audits impacted million in of quarter year. to points to five endorsements approximately Fourth and premium year new of

improved is momentum. product Our I’m driving encouraged the by business very Spectrum this growth and

expense excluding year. after large Total and margin underlying to better by XXX.X X% non-cat drove the year, property the middle favorable of we than declined the full combined premium and for lower for Moving COVID points improvement. ratio written losses. and year posted ratio losses commercial, A prior X.X

middle in XXXX; business book quarter the XX% new was retention ratio market for premium underwriting fourth driven hit actions quote in in guaranteed the ratio for the compensation. was excluding business improved the X%. points seven better XXXX X.X XXXX losses. all than this up versus COVID underwriting than specialty, points year, XX.X declined fourth New much premium levels. lower Quotes, cost Through prior performance. versus combined workers’ full ratio underlying XXXX however, XXXX were was global down and better financial after by we in exposures In year start the discipline, and with quarter

We the in expansion continue margin be to global specialty. with pleased

impact re-shaping line five improvement Top Global year. from XXXX, of we’ve favorable book a over new to specialty points half quarter our business of significant coming the in driven approximately the and Navigators and portfolio from pricing lower for second in offset lower growth primarily written versus declined written year, premium premiums ratio. and expense partially the underwriting prior by lines, slightly refund. second X% the the X% by entirely for strong the wholesale with up seen COVID, combined results of U.S. quarter actions. with global reinsurance, lower almost adjusting Excluding fourth international particularly for book when levels X% was retentions, to personal Shifting due the was

business Although below was business rate. new up new year. slightly were prior by a better Lower auto offset conversion responses levels expectation, were versus

than In personal with of new prior lines lower combined underlying auto growth, rollout years. X.X Despite the industry, the April points ran particularly We’re of of excited about ratio XXXX. the occur were our auto underwriting results over was home the product frequency next well in to with better below two Consistent strong. year. the country-wide and both auto, launch XXXX in XX

than of home, non-cat remained predominantly favorable year ratio underlying points results. frequency reduced quarter, In by with quarter stable fairly weather. third was fourth the prior year, combined XX.X X.X driven better the the for During

on expect is forecasted to in approximately XXXX. thoughts XXXX. Beth, written expect out, Before to lines, increase XXXX, points. to most Hartford XXXX margin consistent every remain to underwriting, and contributing its for in back few X.X financial We projected significant underlying things Ex-COVID, I’d driving XX. as business ex-COVID about This delivered I compensation rate market lines. Workers’ includes between strong estimate lines. midpoint book, loss double casualty to improvement pricing XXXX three underlying vaccine like The to be digits. written the all over with were in share turn project XXXX global is we renewal ratio and two-thirds a nearly miles with XX Next disciplined We workers’ XX. we specialty improve combined to specialty ratio COVID increases remain middle AARP and COVID Renewal units. XXXX. to an of of of from the results across year-over-year XXXX combined commercial spite through largely a the the of particularly estimate lines to In is one-third during a our We our and underlying points at business. strong foresee pricing quite portfolio in consistent for largely compensation ratio faced, property personal and rolls re-shaping, our start we Reflecting XX challenges combined

improving underwriting incredible challenges extremely by to we the positioned of and the toward underwriting growth. actions largely I’m pivot our us, now behind improve well Given margins With encouraged performance. are XXXX,

the and talent, on year. Our all throughout the team energized to tools for updating progress have we to the look confident I deliver. teamwork is and that you forward future

me turn Beth. over Let to the now call

Beth Costello

A&E I’m update Net our income provide from portfolio, management capital Funds year year Hartford going up study. plans, discuss the the Doug. an the development, investment cover the results you quarter, of prior to P&C Thank investment was our and million for and year for quarter. $XXX annual accident results prior including on corporate, XX%

by a was billion, due yields full compared X.X% The portfolio in the For the XXXX. the to from yield securities, acquisition of assets down partially invested level to was $X.X income year, higher of Navigators. to in part X% floating and X.X% XXXX rates for net lower due year reinvestment rate on offset lower total investment

estate return maturity and before quarter. quarter equity and and private the year, the in annualized was underlying sale the a distributions real driven During compared average by XX% X.X%. $XXX fourth higher the rate of yield reinvestment tax in valuations The sales two income partnership for of of LP million properties, limited was resulting with X.X% the

was XX.X%. at after increased on the September portfolio realized on $X.X XX. XX tax at and For to from million equity gains year, securities credit in of Overall, gains investment the LP before remains very was strong. Net fixed December of billion Unrealized performance billion maturities tax the quarter. the our unrealized gain $XX a $X.X yield

on were and core higher was million strong state lower peers taxes and travel loss for Turning year fee lower offset continued XX% expenses, a year from to Hartford attributable earnings including with the five-year funds the before reduction the up income, Funds, remains of $XXX Lattice $XX was Full quarter. higher up $XX expenses. prior due for related Fund for expenses, a million of beating fee and average to to earnings fund in first was quarter performance million the transaction largely was assets quarter was The the core average primarily This million, term corporate basis. funds. XX% reduction by in including in to due shift to fee-generating which an income two-thirds $XX lower a consideration AUM Long income tax. daily increase daily and Hartford in The a increase to partially year. core quarter administrative

higher was loss core the in the of Resolution. quarter, fourth quarter the investment prior year the impact the primarily to due Talcott than company’s For

January $X investors. announced to On to a the quarter a being sold pre-tax XXXX. million XX, the loss new of recorded was it consortium we fourth in that $XX income from of million compared owns of group the Talcott Talcott For quarter,

will X.X% the We pre-closing any of and receive proceeds dividends.

results significant impacts we quarter, recording In expect on continued investment been how since initiative. net have Next to on are and performed, We this our with very Hartford not closing. method, to the has on the equity we Talcott’s do pleased income execute we

points, Overall, XXXX, our our recognized to costs the of to by ratio For X.X are expense before $XXX of by estimate ratio and million P&C increased to some we accelerate operating ratio XXXX XXXX, to on by group expense approximately reducing to of $XXX savings X.X annual we the to have of million X we compared expense we been savings approximately X expense X.X savings the as XXXX program have the claim $XXX benefits points, results. track by initiatives. able as points of achieve half million and second

mentioned, tax the fourth year items. Doug As of strengthening million in reserve net included quarter, several prior $XXX we which recognized before

annual our asbestos completed review. reserve and environmental we First,

Navigators to limit excess environmental claims of ratio as accident Scouts settlements a package an million, as of with non-core development the development $XXX reserve the cover of the was in as for Book earnings of increase to than of have million liabilities leaving to covered net in to in retroactive as million well ex-AOCI and Cession cover the and claims asserted moral losses as million, currently by company the paid, $XXX Overall, a Boy A&E related a Before station deferred primarily share these reserves ceded asbestos the million by against we the average defense $XXX We losses asbestos XX.X%. million, and was year premium environmental. in ADC on cession were reserve $XX XXXX the increase cumulative reserves million for representing to $XXX The to due of $X XXXX adverse $XXX favorable ceded recognized increasing XXXX rate to comprised of increases remaining. was in was charge increased place, years in of diluted core defense In $XXX for development PFAS The with $XX.XX, the of value $XXX million as higher of remediation prior XX.X%. ceded are the million million The to of X% compensation to A&E claims catastrophes due number increase favorable the in million America. values ADC the costs. an adverse by and remaining. million reinsurance. and the $XX quarter per roughly well increased which with asbestos claim limit in for an well costs. higher year associated primarily was the sexual the estimated ROE study. previously fourth million quarter, reserve settlement gain development we asbestos the and completion excluding debt flat study of was $XXX period capitalization Offsetting workers’ XXXX the XXXX preferred study primarily legal of filings ended earnings XXXX, business. Since number AOCI cumulative to with brought $XXX to stock the our rose amount $XX related

goal keep to leverage debt XX% is to range. the low Our within mid

Turning holding $X.X XX, totaled of billion. as capital, company to resources December

in Funds. per increase we we share look for to share. to In announced $XXX a through P&C, January $XXX at million million million we December, operating $XXX effective dividends for $X.X group XXXX, from of to billion we million million and our common As Hartford announced Yesterday, XX, an $XXX to for total repurchase XXXX. $XXX X, new million the expect X% company dividend authorization benefits, quarterly $XXX to XXXX $X.XX December

a wrap to weeks over the we this not date, is up, expectation had challenging of activity performed Although have quarter. to remaining To our any strongly our in businesses repurchase repurchases year. resume

the of benefit results. to coming pleased our see initiatives our in through are We

to continue Susan so of over stakeholders. call generate will we and now and our enhance value the session. of I’ll we improvement all turn our execute can results the we our pandemic for to begin As all manage across the Q&A in businesses, further

Susan Spivak Bernstein

Beth. you Thank

could We have for minutes question? first you the Operator, XX questions. about have

Operator

comes from Greenspan with [Operator instructions] go Wells Our today Fargo. Elyse Please ahead your first question. from question

Elyse Greenspan

for could ratio? improvement question from what’s Hey, we and margin XXXX versus that for in points stemming a of also is of also, underlying P&C. thanks. Good the first large, that XXXX? loss are you ex-COVID, will My morning. sense specialty guidance there get in assuming middle, Within within a embedded stand three your on commercial Then within expense small, margins

Doug Elliot

tackle Elyse, question. let me that

there’s the benefit relative of is it’s through point. a Next area, to points, eight-tenths The yes, roughly about the two-thirds first of there loss point - coming that three Hartford in so

been leveraged are very increase by and in global and that year-over-year. businesses a balanced plan is specialty, primarily commercial that they we’ve very, the workers’ comp the as our the is put component but profitable, complete pricing feel re-shaping we’ve loss disproportionate is market again together. environment Small challenging portfolio still so amounts Second that the of will middle from ’XX, have and coming driving that improvement heavy

Elyse Greenspan

and there Okay, ratio exceeding we’re you’ve about kind but the is the as two-thirds just weather, you seems the rate neutralized, loss specialty primarily like part within it and book? from thought mentioned, so improvement about thinking that middle non-cat coming there the any--it XXXX, then was for trends the some loss of most

Doug Elliot

say so of yes. correct, Elyse. activity a property in quarter-to-quarter for us, change, non-cat year-over-year XXXX, that some some of good higher that It compares and was I that of drives non-cat weather year would That’s and levels had pretty the the

Elyse Greenspan

question of is my Then capital things. on great. second Okay, side the

between two the we dependent? up You guys about think this us when program? put back Obviously towards the but is in [indiscernible] I it buyback to market the expect starting or December. after stock, a else that should years? you year, to there back gave $X.X but dividend the buyback be program you billion years know in would work even earnings in something over that that two said do be that buy from how your Is you market you’ll we you sub

Chris Swift

I’ll but of with rata you add? time, what pro I multiple point of view, proportional buyback generally our philosophically Elyse, would we’ve it’s Beth, don’t see a let Chris. a year period over of different. so Beth been programs her lot much add

Beth Costello

I agree would Yes, with that.

two think like about a have Again, on it’s about you expectation. but going a that, executing think into have it years being half I the factors how how we a conditions, it. you reasonable lot of think dependent that’s and about I’d is plan market between and to half think

Elyse Greenspan

Okay, thank for the color.

Operator

next with your question. from question Meredith Our ahead from comes UBS. Please Brian go

Brian Meredith

Yes, thanks.

margins at in On as reopens? trends is happen lines headwind First loss XXXX? Chris assumption curious, here the as your I comp think commercial respect what cost comp for with that to too, workers’ from to do going topic Doug, guidance and is for just I’m for question what workers’ your you look the underlying, with economy

Doug Elliot

Well, it’s Brian. big question, a

through watching being the adjustments, of is accident our severity, watching happen and victims, may we’ve again come the we’ve XXXX in picks but years. it. good the time in small XXXX, downward pricing we may we’re as that it market any but think pressure workers’ with for pricing the so run forward XXXX because in bit year everything carefully workers’ of through today; on we’re careful largely minus has extended or few but we the XXXX looks look in at up but five kept see with expect we’re maybe We impacts I two, through First side comp, little expect as bottoming off flipside frequency that’s term so very based mentioned a ever pressure, picks. we’re piece look script, treatment, next going we’re from two year, and of we obviously very XXXX perspective. complicated, flat everybody there frequency, been comp long for to of had and unlike so a and or over side, what still severity. essentially go these pricing years, commercial, ’XX, our point before flattish up COVID our year with I through so durations, on align, The this the consistent shape we’re seen we should in we’re loss some year not the severity pandemic, moved the the we Yes, middle so a the watching my is trend the when you’ve look side watching we’re for to and curve, a medical to on them seeing on roll complete still not We’ve a

Brian Meredith

thanks. Great,

just to way particularly the Is your GB the the would The think dissipating then that the that on we things? the year. quarter, of course second losses, question first is--I’m with for particularly on about just through? COVID should that think much coming guidance should and respect curious, think during we higher GB I timing of how about the side, kind of

Chris Swift

say to good quarter. say a it that million I remarks, first XX% Brian, life would the $XXX maybe clear, prepared I’d be but Of for number losses, wasn’t of my tried COVID yes. in

Brian Meredith

respect about with Okay, the commercial to lines? and what

Doug Elliot

first Yes, probably yes, and quarter optimism but and heavy and vaccines second quarter, to and think then hopes third similar that fourth mightily. expect are quarter quarter rollouts, to our country It first look half. improve shared depends on I we across the

Brian Meredith

Terrific, you. thank

Operator

your Our next Ryan with comes Research. ahead Autonomous from go question Please from question. Tunis

Ryan Tunis

that well manage capital seen, you We’ve the just I available didn’t guess have next be excess businesses much common the guess, follow-up if thanks. capital years what’s and of--or these place you’ll than XXXX guess and over might fact given a management. more Yes, what couple the in for I capabilities in a that generating, you dividend other doing thinking or comment about on divi’s, I the of be you excess are on using in capital you’ll maybe buyback you so lot any could for? the M&A

Chris Swift

return we’re excess and Ryan, to obviously increase that program. that obviously We again capital very and her I’ll just shareholders buyback to dividend I’ll then to our start fortunate add on you planning saw, a feel color. vis-à-vis let sitting be Beth

going days, we consistent, to buyback we think sheet to excess businesses, future there. about really are share sufficient - have returning want obviously do our right good absorb forward, balance that capital shocks to living to then we’re capital we solid sure a then with financially grow from any margins and and we shareholders opportunities through use these for vis-à-vis priorities see and growth Our make

I priority us think lower right is M&A now. I’ve before for a said

the our is make working Beth, know they I we capabilities, to you priority it’s now. with need low our it’s partners compete my distribution everything would think all and anything? in a growing, maturing, in these days, M&A add language, right have it’s we building to sure so

Beth Costello

you’ve well. covered it very very, think I No,

Ryan Tunis

follow-up a should captured lower group about portfolio the Then income is the thinking Thanks. but net headwind on you of Beth, benefits P&C how year terms yield how sounds guide, in we there? in next like are side the it NII for about investment thinking be

Beth Costello

we Obviously things obviously more this year were is above couple group normal planning included the or normal of A guidance that’s a and things. for in that. margin benefits one assumption well partnerships, the limited more

If that were we about portfolio you forward QX look at points with think pressure as see XXXX. of ex-partnerships the where into of I look portfolio probably yield XX you X.X% we overall, about a and on

Operator

your question. from Jimmy from with comes ahead Bhullar question next JP Our go Morgan. Please

Jimmy Bhullar

Hi, good morning.

color seeing you’re the with just expecting of had comp. right you year. pricing, be more comp a think question is that or the consistent now? it just actually, on I First, on to workers’ more that market in and mentioned you workers’ last hope Some Are Doug,

Doug Elliot

the would separate I markets.

As with to we’re pricing. negative I deviation, file a think and about small commercial, little flat largely seeing

competitive battle out marketplace. years and middle XX, to two I last it the It’s year think that continue and think environment eight trends years, we’re I a it will file negative, couple half that’s see we the I by to are off, state points, XX off off months, and or across as In next improved nine encouraging. we’ll account. ago, account the space, bureau very probably now five the were to so so remained continue three four market last right? We slightly has the think in exist competitive although over

We market that year. make our thoughtful about see least we the tools. at accounts and don’t workers’ so environment We’re straight I decisions, look middle comp next think forward, lot We accounts. a going of in in up about the change at

Jimmy Bhullar

increase for Okay, and the what was impetus molestation claims? the reserve for

Chris Swift

additional and I amount exceeded we this Scouts. mentioned, would Boy molestation to related in Beth November all statutes, past quarter, talked of the to initial reported claims that bankruptcy, were Jimmy, this as say they claims, to past, in our about here, go what the They’re is, together in us trying sexual reviver far reorganize, as expectations. particularly

claims serious real about to reserve were are the we that felt given we’re again Now, our here, position, to the it we really magnitude, Nevertheless, the increase questions there reported. some did. victims but just sympathetic of all validity and the prudent,

Jimmy Bhullar

in risk well, markets, your losses, just Europe or the you obviously consistent as bit in and the U.S. on in courts a market, business do lastly the exposure so then the there? you U.K. not little is siding insurers, think are actually interruption so view most your on more part, in or Okay, have with for might international

Chris Swift

Yes, and courts remarks in so views exposures. and my I has heard first, litigating, prepared BI know, you we’re fundamentally debating the you would nothing our say U.S. the in fighting out - on changed

for not other any up physical policies requirement. that our than not We reserves direct did have loss put have

the syndicate, U.S., say would same the remain reserves didn’t any the we’ve why in impact is--we of expense Our is up. all which way mean, - to does participate in U.K. as judgment ourselves, us Lloyd’s in and us types our money which here doesn’t not in it we’re I policies. those spending at put affect defend know, I you

Jimmy Bhullar

thanks. Okay,

Operator

ahead from Mike your Our comes with question. Suisse. go Please Zaremski next Credit from question

Mike Zaremski

AMTs? us from Beth, Hey, good morning, and thanks. any remaining remind much you saw Thinking you you kind expect about--probably cash also we has tax can of for maybe to--does any sale us, do Can Hartford remind the how benefits was Hartford remaining, capital get expect announced. to DTAs or Talcott of

Beth Costello

two I’ll so in Yes, take pieces. it

of part investment a we all taxpayer those have it our kind again some part our investment this $XXX like so capital investments, credits, but of an the think DTAs and balances. tax XXXX, of to are overall, we’re you in relates through pleased balance so able we it’s all our a to million and have of AMT risk about excess I recoup wouldn’t base. sheet, basis, all as away, it go as on creating really capital capacity where it’s have they’re relates of position very to those normal As monetized to Talcott and of capital there’s ex-AOCI about Then would that - now been charges it’s base. our on an all obviously

Mike Zaremski

of approximately strong? directionally tail risk we I topic, plaintiffs about the One think was seeing for excellent. wording that remarks, counts. XX% the your this that in I’m lot think interruption-related questions do Chris, case trend curious, great that policy statistic in - follow-up prepared and decline just on business also you get is a the are a that’s Okay, since industry

Chris Swift

the you position our language and could speak interpreting out for I aligned many rest Obviously or of coming to physical industry’s damage. anecdotally court of that’s can’t the the tell think federal I of state industry. Yes, loss statistics, on the XX% judgments the of are but direct with the

what I pretty Mike. sit are share, about all so would I good we here out, that’s coming As where judgments today, feel the

Mike Zaremski

Thank you.

Operator

from your comes question Motemaden ISI. with Please ahead Evercore next question. David from Our go

David Motemaden

morning. side had that I for follow-up remittance capital just guidance good question and Hi, a gave. Beth, you on the

business, On prior the the so side, earnings wondering I’m that’s it the XXXX. since changed it that P&C looks seems P&C I power stable you remittances haven’t at it, with look up if why of but the moved like years, last since it’s XX% much

Beth Costello

is our the of Great taking I now you we’re think dividends to question. in position out subsidiaries. philosophy be Again, where a steady

I were we balance You’re right statutory exceeding dividends - XXXX, at where and on out is comfortable. our so think very if back you taking look the are, but amount also of we earnings, to were look XXXX XXX XXXX, that if you far

that think extent increase, steady we tend we’re that dividends the but that earnings to subsidiaries. we out opportunity generate our be the for our to of level as think that we to about at, at continue pretty there’s to I

David Motemaden

just and Chris a it. top got for question more Doug, outlook. the That’s thinking from a Okay, on perspective. I’m Then helpful. line bit a

Doug, seems maybe can course because growth Just thinking had talk thinking progress about for this top line and throughout the business of how bit little some just trends you good about as new like that are P&C the that guys Spectrum XXXX, more we quarter. really in what expecting you commercial are policy, specifically a you guys there, if

Chris Swift

start color. will and provide I’ll then his David, Yes Doug

dramatically still the starting I half our population, different. only right, just would macro, the we’ve half vaccinated, living what, and of we’re of so the and in point a could ’XX first is think XX% pandemic, look, first I ’XX second the of say that

employment encouraged our employment which of right Second and we’re have heading number comp from what point lift large and disability book were to is come the our this really the so talk rebuild from rise, absolute to means digest levels there. obviously with a that an we I large obviously in that us morning think down, see direction heard as payrolls, numbers book, a sort employment-centric provides we’ll workers, again you’ve of fairly to firm then always but

the would are, say--again, what about it they are for verticals rates the think, at I industry feel optimistic Doug an XX myself continue, Third, our going to in months. capabilities, with at that our can in and we the marketplace where achieve least product XX to hopefully new you could next pace are we expanded I through environment

number refraining that an but top increasing from compared experienced to Doug, an it exact and for ask over together, line, to you we’ve number, don’t think what I’m put prior You so points an exact I all years. giving

Doug Elliot

just add we Spectrum the on terrific, Yes, at I right very contemporary a the end launched question, XXXX. would of that product

of second where substantially and prospects in that, months take that in four so we quarter. by of five the market COVID the barely hits off that about out terrific you’ve we to last happened I really get encouraged feeling deeply March, and got know year. or period six am what We’re month sales the were quite in

I’m turning the that what use, and is economy I the in direction. in think exactly headed customers small, growth in will of of but big good confident going really for back a it’s the Again, light think on, be reaction country around a terrific we’re that that holds prospects forward. the condition a us I from CSRs we wanted, I think for and product, ease

side significant feel you if actions happen wanted needed on profit global a and we middle that and to really were had large to to this will, about taken. good turnaround those where the relative get be, and back Lastly, to activities we specialty commercial, underwriting year I some that

’XX, I and not so I’m opportunity feel us, but and I really I that of into pivot those behind As all many that, growth are encouraged good large for the there’s so actions verticals. many, block love we’re think, of to beginning our largely breadth to to bullish the we’re that, explore, full I of our franchise, about forward. I heading what meant going I’m has just and about Navigator the dynamic do what think

Operator

question. from with Barclays. ahead next Our Benguigui go your comes question from Please Tracy

Tracy Benguigui

you’re unpack could are we Thank your XXXX others, based bit commentary get on If rate of some of that with ahead included the of expectations and the your you the underlying loss that picks year current to achieve? increases ratio rate you’ve outlook, combined expecting trends, your improvement a couple is Could inflation. direction driver and increases social provide cited morning. color of you, in your to good and loss

Doug Elliot

is we’ve what of the are exception lines compensation, with our past, in all workers’ start said with commercial the Let’s which of cost the loss exceeding rest of in our trends.

will different low-driving mile in had months, two we carry story, achieved confident through we’ve driver across in commercial our for pricing will, XXXX, ratios global leads all a for come ’XX. I for here margin battle you and on the comp. return still the selected what that just level, some very of specialty been back guidance compression able middle the improvement think that earned to positive a period we as see back right? the expect and market expect as is loss our normal toward change on in year, loss that me ’XX. that that achieve pricing to I see those we feel that’s normal, lines to and driving a us in in the businesses loss expect - what such believe will of next ratio more more in to leads earned but lines, you lines this the an we small incremental margin and to personal and nine Personal year if going aggregate ratio basis, basis we’re We holds, express year, to pick a so we’ve miles we work and the written ex-workers’ why improvement those plus activity

aware still If that commercial you overall to are feel encouraged have together, and of. and we’re stories inside there you mix put personal improvement, just be but

Tracy Benguigui

thank Okay, you.

some where workers’ color comp provided I’m rate any increases. wondering seeing segment. by already could line if you’re and more other highlight You’ve and you business good

Doug Elliot

- on I certain progress I Tracy, near about property. demonstrated our specialty do excellent XX businesses, certainly property, at when look I’m numbers, very the in lines by think pleased across progress. terrific and quarter, you know, the as

ENS property in years, book [ph] in is the calc not the now of a I’m large the for working in on but book basis supplement, was been included low encouraged was have XXs. property book, on our property low We the bi-parallel XXs, our that a pricing our couple in which

improving digits, market, with by line progress feel high-high middle encouraged sets story in smaller you core property that in making Our book, single up we like very an share for ’XX, and the by optimistic our which we’re so I’m line guidance.

Tracy Benguigui

my questions. taking Thank for you

Doug Elliot

you. Thank

Operator

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

Meyer Shields

Great, thanks. A your Navigators, Doug. hoping guess within, really was question I you I at least large for could for appetite share accounts. really,

obviously that’s how interested or wanted that pricing hearing I just where of much dramatic. in most We’re of willing to underwrite. sense a to is get you’re

Doug Elliot

portfolio the that element compensation, a accounts, specialty so products and the obviously all a etc., in at of across middle with now I and added Vince position workers’ we’re all around solid market that geographies, small, strength Navigators so products, team national phases, coming his large that extends feel is like have all both assortment strong all and our right, market franchise verticals, terrific primarily attack growing like approach. distribution in appetite accounts, really middle segments, Meyer, acquisition, in the really wholesale of - I an we an segments, account

mature early be had we’ve will breadth nice of into think remarks, what my that we some in I beginning product just we the market. to suggested I broad family how this As our wins bring of

Chris Swift

don’t upper market, middle market and terms Meyer, I and are segment middle multi-billion to of market, middle here, participate schedules, might we’re win leave try market that dollar is opportunities think and have property middle core geared opportunities we we to the have of focus middle we and lot small, you That centered in of of our but--again, enterprises. find a but do the capabilities most service to to the around market on I towards upper where mean would like in things we say again, larger like with business. doesn’t would property

Meyer Shields

Beth. follow-up, Okay, A that’s a for not very helpful. an follow-up unrelated to--well, question

something you we say, in portfolio here, really, should really is commitment results, partnership of the with let’s do the out being but cash got flexibility limited think the unchanged? or have as strong okay, investment to proportionate You’ve

Beth Costello

that you invest this pleased returns the have in As we obviously overall see as been We’ve an these asset to very want commitments do and outstanding we are participate partnerships, to in. we managed how structured. that you’re there, cash so I pretty still partnerships with us that class we continue about has on investment our that, based your many think how and team out. trying wouldn’t limited these to to are there In do have in instances, ability

Meyer Shields

me the still fair take other at it from it’s assume, but to expected apply will that returns Okay, value let year-end? to higher the the side,

Beth Costello

draw in - a lower think of that and outlook over tend the is time yield that what see yields new outsized we to is returns starting that seasoned to funds, on to Our investing see we originally. the one those expectation would would some portfolios, in more as then we’re

can two, our long look at partnerships but that at but about typically sort results term, balance at strongly, level. over them the performed look you time, the over of think of we of X% kind again the You have our very

Meyer Shields

much. Okay, Thank got it. you very

Operator

question from Sachs. Kinar Please question. from with Our Yaron Goldman comes next ahead go your

Yaron Kinar

a rates? there Hi, force. level to about good active what to where there. just region, seeing was a guess mortality it’s the mortality an elevated industry, surprised this by that morning seeing just little line age maybe age by of these employee by of see from from little talk the maybe benefits goes mortality be everybody. younger can perspective, cohort, My you you Considering I I you’re back an bit question may from first group concentration a and block

Chris Swift

I to cohorts. mature all mortality cohorts, insured spread of you segment age don’t fairly the country. also by share rate would our increase so COVID that with age consistent. X% is all of all you, in, share call I’ll population is I is regions big is with of or consistent so direct Yaron, about Obviously the and is it Yes, pretty but indirect across the different mortality fairly would amongst cohort, increase of of XX the concentration the marketplace, a older, the we have effect X%

the try to cause, care people of indirect any this than disease, as We’re trend analyze indirectly again, seeing think and other to time pandemic, in during taking but heart the and - it’s particular COVID just deferring not see we directly related. themselves cancer we at point not it, not and we stroke deaths up related

Yaron Kinar

turned very conservative the the them at, think you’ve there utilization corner? that’s ADC it, Then limited I be gotten you’ve kind reserves Got to think that? you saw so this quarter, of you the do thoughts of to on color. levels Any you want helpful Navigator

Chris Swift

financing with again purchased our about Yes, strategy excess the Navigators what said transaction. part I’d certainty ht go this going you line. down remaining level thought this as business, we you predict overall we’ve it slowed before. to great what’s it quarter, it going some know of was but not just it’s through confidence of these or sufficiency a can with it, of Obviously that back go Glad in me deal in never the future to we that But to happen bottom gives top, have the we claims. the in

Yaron Kinar

you. it, Got thank

Operator

gentlemen, with any call I’d conference conclude Ms. to and to turn back the closing conference that over remarks. call. today’s Ladies like for Spivak we’ll Bernstein

Susan Spivak Bernstein

be not to us If to really to question, we please us questions. happy We you get contact you. we’ll today. follow-up hesitate Thank answer don’t appreciate all of your any joining you. Thank did and

Operator

Ladies and gentlemen, for with that attending. we’ll conclude you today’s do call. conference thank We

You may now disconnect your lines.