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Hartford Financial Services (HIG)

Participants
Susan Spivak Senior Vice President, Investor Relations
Chris Swift Chairman & Chief Executive Officer
Beth Costello Chief Financial Officer
Doug Elliot President
Greg Peters Raymond James
Elyse Greenspan Wells Fargo
Mark Dwelle RBC
Tracy Benguigui Barclays
Brian Meredith UBS
Mike Zaremski Credit Suisse
David Motemaden Evercore ISI
Jim Bhullar JPMorgan
Josh Shanker Bank of America
Meyer Shields KBW
Call transcript
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Operator

Good day and welcome to Hartford's First Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I'd now like to turn the conference over to Susan Spivak. Please go ahead.

Susan Spivak

Ian. you, Thank thank call and joining today us Good webcast you on our and earnings. first for morning for quarter XXXX we posted and on reported the morning materials our all earnings-related website. This of results

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

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

note begins. the Just a of that defined include under Private forward-looking conference be Litigation will portion call XXXX. few consent. without final in reproduced no Please Hartford's Today's comments this of or statements call prior written before any Act Securities Chris The Reform may as form rebroadcast

do this that should our these those uncertainties found that can the could and obligation to not differ All statements we risks of A statements performance be cause today update risks information detailed of call. actual and or are from the on also to be of filings. not description forward-looking uncertainties could future statements. We assume guarantees results Investors results provided consider any and make different. materially SEC actual in

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

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

Chris Swift

of Hartford. results. that infrequent I have there quarter, to want morning. In about that the joining items never the saying for first excited you Thank this reported by I us been impacted The more future were start

businesses for now growth positioned Doug in The the key to that the and some Hartford over deliver of provide our environment so margins. strength performance current targets growth XXXX about and and their we in shareholders. industry half improving remarks, am I'm initiatives combined on reflect the The business execution call XXXX. outlook the our extremely today. turn prospects After attractive here to commentary with quarter. further the to second and the margin more of favors more accelerated provide bullish However, on can on returns I continues they strong expansion of going to and underlying of our macroeconomic I we are and details will disclosed Beth, our financial and

I'll that, with to So, Beth turn call the you. over

Beth Costello

earnings Earlier impact first the $XXX significant were Chris. million core today, primarily quarter per items. share. three diluted of or reported in we of quarter down to $X.XX Thank due earnings you, XX% the Core

development P&C impact development the we business, auto. the Partially the Lines agreement of compensation, the workers' in other unfavorable with component announced week. primarily First settlement offsetting recognized was prior development before last largest unfavorable and adverse America favorable in $XXX package of development lines, Scouts The Boy Personal was of the tax. year we million of that

reinsurance. of were million first Texas catastrophes winter in includes This of from storms areas. net our other $XXX quarter results February by million the Second impacted $XXX and

totaling the $XXX of and compensation COVID-related benefits tax in losses was by before financial in and mortality Third, quarter excess million group lines workers' million. impacted $XX

XXXX. the Small underlying Aside the points very first combined remained of the in quarter from X.X of and loss In from In including of XX.X% improvements ratio from of the performance combined strong. point these ratios. Commercial, three quarter improved improved items both in expense businesses first XX.X% our by underlying quarter the XXXX, ratio our X P&C,

Next. quarter our driven of largely first underlying from XXXX, Middle XX.X% improved points losses, combined by Excluding Hartford Hartford lower initiatives. from X.X was ratio Commercial's from expenses Next & also COVID margin benefiting improvement Large

improved from rate ratio the and frequency by combined XX.X% In costs points of increases the margin as XX.X% Lines, effect XX.X% earn-in contributed XXXX loss ratio underlying an the loss continue X.X auto. non-cat to in COVID ratio by Next combined by lower than AARP ratio expenses offset were the the to Global to Hartford improvement across Personal and direct marketing points in points Expenses the X.X by X.X driven businesses. and XX to In continued addition, quarter earned as of basis compensation points, Specialty, improved increased low the In improved more property ex initiatives improved to premium. lower losses in first increase quarter as results. expansion due workers' lower underlying

Now turning to Group Benefits.

growth. the Top lower year approximately were X.X and of Paid first million As Since Sales for continued losses. strong time reflected and Results year, mortality XXXX, were margin loss us and the in reflect continues excess core solid The resulted growth and ratio increasing premium was Based in COVID-XX. to was $XXX prior for all-cause impact the and in incidences. quarter to a And points the mortality by impacted offset quarter the since core earnings of deaths $XX the range increase US was business the claim down year with Funds, as Hartford flat and January from quarter and second last XX.X%, XX%. of and and a a million the prior mortality peaking expected, million, year the reported prior were million of loss in combined on of related effects excess was additional medical higher of on than by the focus since in relatively Mutual quarter. quarter a quarter. in for of reflecting excess vaccination contributor slowly to we largely results rates, to Persistency $XXX in favorable. current were to net the first the points. market the increase direct increase earnings the $XX $XX the have family block quarter for million year reported excess X.X be declines At include the costs. segments. of million impacted Disability COVID declined. sales. for higher employers' reflect quarter prior for adversely reported greater all of we million of indirect was were market by mortality in number the and leave of end relates quarter significantly second an year-over-year $XXX $XX for which higher recoveries expect persistencies. results flows sales million, $X positive fee the claim line and levels the operating disability income results for in The to mortality fund

As year contingent million to included a loss investment acquisition lower a insurance benefit associated the XXXX to by million related reminder, reduction The expenses, lower in the of Lattice. $XX of corporate prior partially due the and prior quarter in loss with quarter the consideration tax was first core million expense $XX compared interest year income. quarter $XX and lower net offset of a in of to operating costs before other

to the versus share, portfolio to and equity diluted was by higher year Book partnership of billion returns. from first XX.X% rates. in from limited year quarter, $XXX maturities at billion quarter, XX returns. excluding for unrealized total XX.X% interest strong rose since for compared gains quarter yield the core annualized in XX, tax benefiting prior before tax, Net driven the March prior first to X.X% quarter, million Turning our higher before return The investment quarter down Net $XX.XX per XXXX. X.X% partnership was the value at was was from was X.X% earnings the fixed December March XX-month annualized up XX.X%. The XX% to investments. income private limited on XXXX ROE XX, $X.X $X.X trailing due AOCI,

million of authorization quarter the shareholders has and the Hartford repurchase bringing announced in million $X through repurchases $X.X authorization the $XXX million we Board Today including XXXX During to common billion. that $XXX by the paid. to The share share billion increased dividends $XXX returned

call market to now Our billion XXXX over repurchase expectation to Doug. to $X.X is subject I'll turn approximately conditions. the in

Doug Elliot

Beth. Thanks

Over of and a in product is reshaping priorities success of benefit The important customers, of supported way. the consistent ex-COVID our years, points updates the capabilities pandemic underwriters. environment for we certainly margin for new those point inflection investing increasing and have producing efforts creating portfolio I've underlying providing been in our series expansion an shared firm our distribution including partners X.X the To pricing summarize interrupted for potential ex-workers' in offerings, the depth XXXX. and top by The XXXX compensation past a global few line of momentum along the X. breadth quarter

quarter tailwinds relationships our with the million quarter and growth new our were business level combined first continued a with look of Commercial strong XX.X% grew new X%. into Personal First expectations. of quarter Census retention underwriting robust in our XX.X% In behind business quarter led $XX premium first April the had and increased of the board. X% growth underlying Navigators of we in applications headlines breadth Spectrum's underlying fueled largely ex between by US the excellent of Commercial and formations. few premium cross-sell business Lines Property of largest up lines are months with the with portends four the as with a of XX.X%. by strong in record written and new also XX% of COVID diving P&C deal also brokers. Casualty improved now Specialty actions deepened strong driven rest Specialty business business beating new With XX% micro start during & acquisition. specialty Re and of franchise of stellar business for outstanding. of international. Small business XX%. financial since I'm XX% gross XX% quarter grew before to XX% premium the has story. first been underlying Global have ratio deeper Global Commercial written premium retail with new $XXX by success across XX%. outperforming Small the ratio been I'll new original our a According Commercial the a Market momentum ratio three written the very written result produced US combined what growth as XXXX. it new including capabilities, year. This XX% pleased million an in Lines the underlying drove business Lines Cross-sell well Global premium Across and has contributed was The the by ever. activities broadened results of business Middle XX% increasing in was wholesale, to quarter an premium encouraged combined contributing new new us, first the our of in growth quarter. quarter

Over months of retail XX have the XXXX Middle generated over our customers Global accounts $XX over capabilities books. million Specialty remarkable XXX getting lines are we excess added cross-sell and nearly span we and newly for and last that The Further, have have just premium. results been started. both product acquired Market our

have since to develop deeper a few not expectations deal part our nearly of lines the customers. for set. financial Commercial original years acquisition ago million broader a we and premium Although product A of our we added out $XX Small also set

With are team results. more in and line integrated, fully set the solutions Navigators of benefits expansive a our realizing delivering top the we

Moving to several materially the firming performance. underwriting improved performance. loss prices with of continued and have actions/ After we strong pricing. pleased I'm years

result. points loss last pricing COVID and strong exceed loss XX% count was X.X improved points a quarter US retention compensation the four proof surprisingly last from pricing XX% In international. one quarter Policy policy the cost two Commercial first quarter Small ex our us, a very reflecting down lines, rates underwriting Specialty another points over Middle initiatives continues underlying this As first in change as approximately ratio certain in is was Commercial Not than flattened of competitive had although ex-workers' of behind up measurably. the year. of of X% in in from to Market XX.X%, X points point of with Middle Market has adequacy quarter quarter market. up rate XXXX Global X year. trend better strong retention most Line's quarter

the sales. new and Turning part quarter, miles declined to by violations vehicle Personal in X% endorsements for decreases moving in Lines, written driven, driven lower in lower premium

to As expected to three lift top these rebound, a provide the to continues line. are economy all factors of

Prevail Illinois Prevail are product A addition, new business launch exciting improving our is experience, XXXX contemporary auto was In and flexibility the the elements and to new platform. at digital Lines of Arizona in of all advanced this important cloud-based month. and released Personal the of data critical new levels. analytics beginning

to several results pleased forward product late very key home are early rollout hit this will The We with market summer new summer. look the states. more in a the and

comments, As my recap. I wrap-up me let

and to over led the of transparently managing pandemic exceptional. place, I our this in five acquiring claim moment every product the The marketplace feedback this and capabilities the We depth its to have issues on are our our virtual and team flexibility. the for developing difficult during agent We In Due toward set, three discussions of VIP execution ongoing taking The is our the with postponed have building last Hartford. capabilities. ranging coverage for annual pandemic, The meeting, leadership and brokers and breadth past operational scheduled the regional top our weeks joined digital talent been front advancing coming frontline broker years, nearly summit and June. again technological improving broker from we notice. and from and

commented two across we one these have the have become We go-to and "The and marketplace. has has excited about the delighted our I'm broker are the of earn call, over Hartford carrier." future. proud become, produced to our As the itself we results during transformed that with working position player years hard last

over Let me to the call now turn Chris.

Chris Swift

focused goals. you, plan, a than Almost advantage, we key It more durable Hartford Beth. years The is over two XXX was confidence. of strategic competitive and strength decade ago. a Thank brand symbol of and Doug a a source and ago, initiated which created on iconic

position individual advantages generate variable businesses, and growth annuity capital-intensive life leadership and would returns. long-term where on focus low-ROE insurance to First, businesses to market second, market-sensitive and and sustainable our superior divest competitive profitable

first XXXX. The sale culminated with in Resolution, the Talcott of

platform the the Fast-forward Lines two producing added goal acquisition enhanced the which wholesale Aetna's XXXX Then, businesses, based a was Navigators Commercial product of leader business, results. industry-leading new XXXX in-force number by premium. on, across player our acquisition depth of The today, industry and with and Group Hartford diverse an made breadth second of amplified Benefits The distribution. to is complementary us

forward, focus, profitable pursuit in move the we we growth. we As our will and remain of capabilities as relentless leverage

success, diluted produced XXX book evidence share average. return the grew we per EPS from XX%. As XXXX XXXX of peer XX%, more average to basis than value grew on of an above XX% our equity And points

accelerated provide our confident positioning emerge macroeconomic from factors returns. pandemic, that growth, the are improved and we As several tailwinds, we will meaningful business for

Commercial is expected to the excess group reduce First, and the in worker emergence our pandemic business, mortality from life Lines. compensation losses in

X% our this improving and improving rapidly of could in across expectations economy segment. by be single-digits GDP an and top in Secondly, below the businesses. mid-to-high become our drive end An workers' expected catalyst Group growth to of line growth year for employment-centric compensation, is unemployment, small additional growth commercial which will the Benefits

thereby, P&C remain Third, as strong, constructive, commercial to margins. is underwriting the environment expected remains pricing expanding renewal

a The couple Hartford favorable In to Finally, next operate This is due years. rising top strong and is we to compete the investment in from growth to incremental lines, line environment benefit an macroeconomic to to yields. rising capabilities. economic investments rates the digital portfolio over pricing, exposures provide expansion in interest commercial and benefit expect anticipated for

also anticipate expansion businesses. expenses operating reduced our drive continue We all that will margin to across

the from benefit are efficient ratios, market commercial process agents sub-XXs and market generate underwriting that sought-after small a We technology highly our strong segment. which consistently We underlying products, best-in-class the customers. combined in leader for distribution, eases

generating of launch from have of a third business sales record building since of been New quarter this next-gen Spectrum sales the product level momentum the quarter. recent XXXX,

growth In Navigators segment to business environment, the an cross-sell investments. firm and from encouraged positive potential. robust verticals large growth cross-selling retail the from along highly the and across from we performance tools success the commercial Doug benefit set benefit and lines pricing, technology in our opportunities industry margins from pricing improving I'm continued commercial, standard new specialized referenced capabilities. with accounts. across global and expanded We particularly underwriting middle business to with that enhanced stemming this continues cross-selling and In pleased are product expect specialty, by traction acquisition,

and pre-tax total of the date of we achieve savings XXXX, to of on in to This savings. produce million and Across detailed strong a $XXX Hartford Next Based our trends mortality from estimating To efficiencies more of margins we date, a million is specialty to pivotal driven below is expected of combined in profits. group we a global Navigators in quarter, miles improved expansion. driving of sales operating and the and delivered million to and million program the less the XX%. The and In businesses, pandemic. success new lines new second critical the be the XXXX. continue beginning underlying growth by growth during business, growth to program's stable growth expected savings a savings $XXX in XXXX. business each improving of cloud-based voluntary XXXX personal is Personal driving and growth in in expense as of benefits enhanced lines, And acquisition by written were by This strong our was to certainly produced higher employment helped XXXX launch to deliver anticipate ratio products. technology. half in core levels, underwriting driven and and second $XXX auto be by A&H expect the to program are plans ratio premium $XXX normal increasing more In levels, XXXX. products, efficiencies with efficiencies. returns the will expense underwriting has new approximately XX% earnings homeowners the be our driver In by post-pandemic margins quarter to is margin profitable we of lower operating growth and driven

the we share in environment, capital $X macroeconomic and financial With increased the billion. by expectations for have by part strong improving repurchase authorization driven generation performance our

impact management, and the in the pricing top-line XXXX earnings strong our meaningfully outperform operating XXXX plan peers. expectation approximately across $X.X targeting trends earned into Our balance ROE to us continued XX% efficiencies, With for billion in COVID a is capital business, are loss repurchase of This to XXXX. we of remaining cost, and XX% growth to a in core and ROE reduced excess XXXX. positions

the Hartford Q&A, to Before of cash back bids letter received additional unsolicited have call recent per an Chubb let proposal XX. we to since over announced March we most me turning The their two in of address from The Chubb. $XX outlined the on delivered the share $XX letters rejection and stock. offer

letters transaction in confidence reaffirmed Hartford interest and our Form shareholders. has with best today. We strategic that and its The Board its and financial unanimously business the Board have a disclosed filing The each conviction in engaging advisers discussions and and X-K the in is in letter proposal execution regarding company legal rejected the of its each reviewed continued not The consultation in plan. strategic of concluded

As The executing is a its further not comment will and Hartford on on matter. I goals the result, and against singularly Chubb objectives focused

from excited better extremely stand-alone The As I'm to about Hartford Hartford The never plan. thrive. the succeed has and positioned We remarks of future confident I the highly remain said and been our my of outset optimistic. in franchise incredibly

financial Q&A. industry-leading our begin the for We to stakeholders. while expect to creating that deliver value the all Susan call I'll to to turn over With continue performance,

Susan Spivak

Chris. you, Thank

the questions. have please you We for Operator, your instructions could take to a asking now repeat question? time

Operator

Greg from Please James. from Instructions] Peters our Raymond question first proceed. And [Operator comes

Greg Peters

everyone. morning, Good

that your to and Can -- So, give aside or presentation. posture targets you're what's some and with listening of out I last public just was you XXXX the confidence or comments you give us to watching Chris the And has I Chubb we sense couple these changed shifted months reading a -- the us ROE give XXXX? offers as about shifted. guess, your in your higher what think come maybe has

Chris Swift

Sure, Greg, happy to.

basically I thought the worst we quarter our midst in of I think of the XXXX in still the I when pandemic. plan of fourth we were built mean the

were If increasing. trends they you look mortality at

It's particularly cautious. put be here obviously. sort story growth disclosed continued rethink robust at, It's just be still the quarter we which what margin in capital environment a the all was it out we look excess today, we think you completed And to If just we very and it have to future a positive first got pricing I after that of a macro of together you efficiency little expense into felt an disclose But It's we more particularly it story we first the turns news. of, coming just time XXXX investors and story. was a as tell very expansion and to the is wanted quarter. story. P&C really to appropriate a ROE it with And environment. a out the

Greg Peters

Got Lines chart. more the is the you comments about especially, trends. trends? your pivot the sense. on going slide to some at were investor us rate it. I'd Doug, And Commercial give loss increase And where price, different about the the a approached you And in cost relates you it know, price adequacy. of that deck Can I one slide it segments Yes, talk you what's context in makes to as lot lines of looking on made talking of results. like to rate of was X color I And have the

Doug Elliot

Sure.

of way this the and occurred markets that our couple Middle about think, over sits a I pricing as, in and years specialty much I has the know, last know, Market in the the you So activity positive franchises.

So we'll with start specialty.

Commercial. deliver we're trends, to market, staying even from now But we've a the them about loss needed about in combination points some pricing given trends. a strong We of top I pricing if portfolio we actions look quite we quite like very still and we're And look margin at across specialty If performance work the some the products is into that those over bit re-underwriting feel just we as that and same of you better just a true pricing, in state. that couple think lines, think that and a through selections our your years. you renewal. feel in much sense. Middle on and trends, about you Loss of last has point, our seen third way strong strong to see Large largely have improved you pricing The the at ROE think good moving

our over six go across a of strong you pricing, XXXX trends feel quarters, or actions run across more with that we've is ex as five and rate-adequate coupled our shared back geographies. we If good comp into we latter half sectors, the look look particularly at that book much today workers' And underwriting into XXXX.

Greg Peters

us of Makes release part haven't these approach a sense. that announced you competitors. still come comment we I cases know the relating this Scouts. on probably the regarding business standpoint Can And give -- then interruption? because settlement interruption. how earnings thing for to whether the with preannouncement some was lingering and what other reserve the you it's to accounts, your as deal don't specific lot a -- but they sense bankruptcy to business want of there's seen you case uncertainty litigation doing about your or news you other really as Just from up your a from you're Boy

helpful? an updated Just give us would perspective be

Chris Swift

of culminated Greg, a lengthy these discussions for 'XXs, really then what would us. during in of I a say policies settlement that you policies the as lengthy were I were Scouts, regarding risk really this looked parties. was And second that situation. going providing you most these just negotiations those ultimately would of couple for of when Because and it sort been behind thought into on meaningful all Scouts of and aggregated puts obviously at a with some on very a fair in Boy BI. them time. policies one We've with -- and intense risk issued Boy they the back I is unique share period time points the

if you sexual of facts there. good terms molestation of -- just there the industry nature the it are not think in So being

settlement would costly, on Now ourselves. other trying felt have that defend that to lengthy. be and we seized opportunity we And optimistic to this Scouts approved are The and work postures later bankruptcy the would Boy the defenses approval. But emerge had bankruptcy did. it with needs we to that settlement will we're to them been we get court prudent develop have legal as been but the an to from ultimately hand, was still it ultimately there year,

our Scouts we the would portfolio share what Boy books particularly with close exposures the to sexual So don't feel see on in reserves today. are. I about molestation have types any I we the I resembling that you exposures, reserves the that else good carry what but anything of for

BI is everything it's pretty the not hearing because think honestly you're I matter, going why On quite well.

the think I we've vast as are anticipated. language courts the interpreting federal policy majority of both and state

play I not I policy think ultimately physical you've unambiguous. does heard cause time. over out reasons. virus me to the is were it damage will say clear And our continue that think favorably language The to property. Shutdowns governments-ordered safety for

reserve our posture. changed haven't We

But for We exposures. losses for not to reserves interruption incurred we carry continue expense carry any litigation. do business

Greg Peters

Got and for guidance XXXX. for XXXX the thank it. you the answers for Well and

Chris Swift

you. Thank

Susan Spivak

question? Next

Operator

Wells of Our next question proceed. Greenspan comes Fargo. from Elyse Please

Elyse Greenspan

morning. buyback is Hi, thanks, first on My good the front. question

added guys you're what repurchase raised to to So, both in years. authorization and today the going you

a over what So, those year is incrementally holding the to more excess you bullish company? give subs you at of be incremental this from expecting us it the for can the sense or capital your coming the buyback just years? for changed, capital from dividends, on to changed And next finance, the just then you're return to two have

Chris Swift

why Beth the comment on sort comment and I'll Elyse, then of the details. could Yes. on

more the I -- economy encouraged our recovery. -- as in just on and the to opening So, we're as tried this say it we just got year, into

orientation. You our could feel growth

quarter first it of when the from greater moving Board our the side. And just our all we in results, the that have and together, pandemic and ultimately see certainty number that we looked a really supported. And share really could authorization topline put rearview growth upped in the out over You where is it you years mirror. clarity is we

Beth Costello

of as combination the year funding, it as that subsidiary. holding Elyse, company, Then well cash for a as this to expect dividend repurchases is using the the slightly Yes. P&C share we'd it from increasing relates at the really

said million about $X.X And to the we had million. $XXX like to be So more probably in billion $XXX to we're $XXX this million year. going for

Elyse Greenspan

And also so $X.X good be expectations think about of year, the XXXX kind billion $XXX baseline? would we million for this as to that

Beth Costello

Yes. what in thinking I maybe to But slightly higher. see would definitely that even that's range yes, about. it we're

Elyse Greenspan

give Okay. loss And Hartford much you pricing margin, within Commercial guidance? that us terms -- of underlying what XXXX. two you assumptions that Next? from versus the Can of help expense sense how ratio-driven ratio-driven embedded pricing improvement is out in a underlying commercial Lines guys point that you for margin target And have then the laid is a of

Beth Costello

I'll as So, ratio I'll think would follow start roughly But say half I let between and and those loss about half then -- and it's we two improvement. points up. that expense Doug ratio

Doug Elliot

in deal off move specific think although quarter. expect about shape the in we first as as see what And saw not pricing to our we probably disclose think Elyse, And and 'XX, disclose of did a we work generally, bit, loss little cost we through but with the as 'XX, details, more will all trend to lines. come various pricing, not in into we way we we will still

Elyse Greenspan

workers' Does guidance inflection that environment? comp within the assume XXXX an pricing

Doug Elliot

to in comp there, but 'XX on pricing we'll we several as and environment. side, quarter. XXXX workers' And slightly have then, improving it get suggests Certainly, the a first that generally I about like stable 'XX think look see the written quarters

Elyse Greenspan

the for color. Thanks

Doug Elliot

you. Thank

Operator

comes Mark of RBC. question our proceed. Dwelle And Mark, next from please

Mark Dwelle

Yes.

considered guess, of question the options the related further you to And buyback, growth to popular billion best and share the $X Just valuation are compared and why is very in of with I to usually capital. of the internal billion use a that use other opportunities? investors I have buybacks know buyback. accretive funds to additional front good given an as But increasing pursuing or you, seem the growth $X.X just of acquisitions a

Chris Swift

all would fund capital Yes, our Mark. plenty we growth I of say, to have ambitions.

it -- decision. I'll So, it's a not either-or call

We have capital to grow.

colloquially with there. I our I've to are a understand it's really shocks building I capital during capital sure priority we everything wise I making as a in brokers all for to simple that, be and our over consistent. but the maturing compete – might And fully reason we future, think we the absorb just development right And that's I that's capabilities or I it's It's expect added and It's where strategy believe then as can relates focused say pandemic agents sure fact and it, any to making priority that it generate we is, now. We M&A, additional that And built, have right pretty out what for potential us have we've been think low low now. been, over our I and the years, is, think term. the appropriate still in thought an long the in our that on. we're the the

Mark Dwelle

Okay. That question was only I you. had. Thank the

Operator

Our next question comes proceed. from Barclays. Tracy Please of Benguigui

Tracy Benguigui

side but if due the of correspondences and got diligence. seeing ever The your meaningful Chubb your the one discussion between Appreciate Evan room engage in to not out? a you story. the a guy letters actually there's human you. I hear Chris Hartford Why a mean, Thank in thing, in together and written are Wondering in X-K.

Chris Swift

Yeah. the plan. interest mean, we clear of not pretty out, commitment that a no with executing did still so and look I it's has in had you the conviction share pandemic, our our around that we're you really in happen. statements that, our and ultimately messages at because I would Board doing if And business just put that,

Tracy. say, would I what that's So

Tracy Benguigui

Okay.

that mentioned pandemic virtually speaking happen? the So didn't even you

Chris Swift

It's been mostly letter correspondence.

Tracy Benguigui

Scouts then settlement depending how that was mention a on And of actually would discount shapes on there get up. else sorry, Association Chubb, up Okay. settlement. What a that settlement you all And Chubb in Boy direct report, is mediation Chubb's where your dug something we about?

Chris Swift

their favor Yeah. just to that ultimately all versus equitable and the characterize carriers with a I generally would it to as condition agreed and be not Scouts tried exposures, that Boy group term one in other.

clause. a type it So works most-favored-nations as

Tracy Benguigui

Okay. Thank you.

Operator

Brian, UBS. Our please question of next Brian from proceed. comes Meredith

Brian Meredith

Thanks. Yeah.

here. two questions So

The Are of just up interest ROE what I'm guidance, versus versus curious, money you the book first yields one, interest on your rate How assumption targets? rates here? is about are Beth new rates yields? on assuming the kind

Beth Costello

Yeah.

even look again, to forward benefit and the we portfolio when outer what at following see our though the really sort just make we there. are some curve, expect So going And of would But way to years, because see marginal our we the that. given just projections, rates they're we'd out that that near expect the term, from going really in up comes in over. just up, turns

the sort two we consistent of I I And years, next where see with ex investment sort it, partnerships are kind of think of yield today. about so when over limited

Brian Meredith

just this, a Board the question, talk would then to want is Terrific. second I appreciate And take they've the you my Thank guess, acquirer? my obligation you that about believe to a potential But I'm you. to fiduciary question talk curious, to situation. I Chubb got for it think don't because what

Chris Swift

Yeah, as duties. talk and clear right. our know statements you're We as I'm our you're views. our Brian, Yeah, about think going intentions, not our to because I fiduciary right. unambiguous far it, are

to that's say, So Brian. I'm going all

Brian Meredith

Okay. Thanks. Appreciate it.

Operator

Zaremski Mike, proceed. And our next question comes Credit from Suisse. of Mike please

Mike Zaremski

XX% know morning. I I you're if – Good was XX%. past kind saying there's color been the to anchor good the I lot now ROE focusing, – Maybe XX% Thanks. on of a around guidance, in said, and And of the think was – look and it you again, at Hey. you questions

Chris Swift

XX% to XX%, Mike.

Mike Zaremski

XX%, okay. to XX%

Chris Swift

sure. to XX% make to XX% just

Mike Zaremski

you. Yes. Thank busy been morning. It's a

at XXs, for I looking consensus, if at. high consensus example I'm So for is look I 'XX what think

big a seems delta. be And to so there

the underappreciating versus upped on if this be consensus -- guidance buyback curious morning? clearly other the So opinions I'm you what have than where may you've consensus

Chris Swift

Yes. It's the probably biggest item.

everything and back will into think your I models update you've today your about got be we put I that models, just talked go very think So you pleased. to

Mike Zaremski

Okay.

I there's get guess kind element to I be one and -- there's it's fully that so might for side. think the at I And us release appreciate tougher which of reserve on

an you is So The could underappreciating? don't element Street that think be

Chris Swift

estimates point don't And understand a their do a releases. own most how is that as will and reserving reserve and set do positive. really take to we've you likely to we that every project our the make analysts and view But their because of couple picks do the potential and think I our some last view those we releases quarter. guide homework and know I think best come Obviously, homework reserves years over philosophy on

Beth Costello

that that that's to is, add road folks we would think I for factor do absorb. lines we've the I thing I map think there what underlying given for color to provided expect only margin another on at. be think I provided we again, looked The And improvement to some in commercial and

Mike Zaremski

my feel kind function the is I like my about pull about that bit a gas levels was personal free. too kind on guess of just a And pricing margin carrier a curious is market the or to feel talk last to one to would down are are of they're Hartford in on commercial a is Okay. is little Kind Thank little I you're second different And from very more Hartford it than causing too both? basically mix you. rates off plays gas improvement. fall, carrier But question environment. or guess off enable feels conditions to comment you if growth, being is the pull lines and willing that to it to of pricing it of kind -- levels. healthy saying because of they good coming willing pricing it of of question a sandbox healthy the

dynamics? of on the kind there if So color market any just curious

Doug Elliot

more There's in tried There question are answer. all generally it. our in today. there's is different business, And that, opening say to books would there's say of a multifaceted I answer I to across much my geography, dynamics we are feeling it's size. rate-adequate a what class,

account it competitive does answer and hard mode that past the made re-underwriting is specialty we to that that so part I over give our driven marketplace. months transformed one of There's a just fits the you priorities progress also of performance set business can in is it's everything. global And in power by there. different that by like see experience driven our the is it So offer will line, loss themselves a we've But then books today. of much the have very change retuning you the these XX all and have so

all et across those move how the very and the use of cetera. I never like solid I would now our the latter deeply of retentions don't segments, I manage key that. foot as when customer returns What off we accelerator. our line, segmentation our indicators. words books our care about about I half into And XXXX strategies by So look where right feel is think across I are we we about it

Mike Zaremski

Thank you.

Operator

Evercore And ISI. from please our of next comes David proceed. Motemaden question David,

David Motemaden

ex-COVID. just seem guess guide bit I'm XXXX. to in I -- on consistent you question first morning. in where a just Good to it's save. I margin why guide, X% benefits the Hi. group a that XXXX X% with guess, wondering does just like still the down your was expense is XXXX more it But guide versus have

bit. that you a if just unpack So wondering little could

Chris Swift

Sure, David.

in in the answer think, being of going revert favorable driven the back incidences and be five current in years sort is were simple improvements we our to ratios And established down talked recoveries loss year ultimate what developments, higher. they prior to year-over-year about developments we've means closer is the to quite all is, past I it mean. and a a that essence, that are accident -- when going were than that they year, in really ago year bit to favorable accident

still X% IRRs So it's margin still business -- ROE. solid margin a in X% a are double-digit a strong. to that produces

a healthy lower. it's the just because just particularly current that a So we releases, But don't are established forward, our all prior lot margin. going see picks reserve with year happening

David Motemaden

is, and cash could you specifically million about I'm what just Mutual importance the wondering every understand thinking I the around me the wondering organization the -- of an it at coming context of side you gaps feel about of million to in it. to guess, year. $XXX $XXX That to the if it broader Chris, response of Mutual there Funds does thing Hartford. produce just bit other product just question, guess, in it Got I spoke any makes like remind the is, Funds Okay. business at I And business, strategic from of then I'm really sense. one you aren't how earlier guess a I HIG.

just maybe your you. me businesses. an it So think that's fits strategically obviously important But with just help how consideration. Thank other

Chris Swift

unit is It doesn't It's I as high think, you I much get It's of and good nice business time. mean, long a it It name of with as IRR, creating of happy the we means sort is in relevant, a stand-alone totally, Pennsylvania, And independent enjoy take own investment a investment, value. the view something an it shares business. adviser It's the an value. but growing a benefits think unit Hartford it business. dividends. business. returns they Philadelphia. space And a I we're Yes, sort brand it That got so we creating us. in remain David. it. business as It's that ROE value I to management And growing shareholder very investment. in right. -- We view as

Operator

from Bhullar next And comes proceed. Please question Jim JPMorgan. our of

Jim Bhullar

Hi. Good morning.

$XX is. best a a offer you for shareholders. Chris. that what On basis just for the your discuss the that had interest in not question I of So, could first, statement if is like wondering I'm

receive, your other if up, losses you in talk is trends. basis a workers' for about could do whatever then If Thanks. an how for you statement? uptick you continues And heat secondly, earnings that to power, think If in about think of that likelihood the else offers line? compensation, could is or it like, -- Doug, loss you on there's economy you based the

Chris Swift

start. I'm Again, I'll to comment. Jimmy, not going

on as what going beyond further, any think Jimmy. why it Board far to our disclosures did. crystal again, And went were comment I I'm and as the through clear, not that this, it what decided

Doug Elliot

it, We've On we of I see surge come or severity. second either our a yes, frequency the expect couple through relative little into a out bit normal we XXXX come years, we for and comp for trend we're side haulers the question, pandemic the more the severity. parts on watching and severity of just out as in not we our to have COVID, say had return half wondering, levels, we assumptions And, frequency last back long of might do platform. as But to would our Jimmy, loss this, long-range on other will off of get eye carefully XXXX. workers'

Jim Bhullar

Okay. Thanks.

Operator

next And our Bank Please comes Josh of from Shanker proceed. question America. of

Josh Shanker

everyone. how morning, they pool, you new change of to I in my We've detect way about business. customer Personal there non-renew is And Lines an not AARP trends, if turn been the in any a taking customer don't for Good types. really question. allowing the inflection? that Thanks Yes. the come the to last calls couple who customers in out into talked be is coming detect, attractive implemented yet? we'll that in Has acquisition as

Doug Elliot

effective states our of of take product to our product have first implemented the homeowners' big the to those time little auto Prevail activity that most pricing, It's bit obviously, and mid-summer. component a new now Josh, it's we in. relative And of way that going year. of work a for to its

that So, future, made we expect but a the going we've impact profile forward. from, only in of in not changes see number product more the you'll

Josh Shanker

a very led I of development quarter then, we very, And GL. And the on that? if net to disclosure years, maybe looks what in favorable Can just it about, me talk I'm I'm was maturing? line by charge, it they're -- to And it. Boy -- favorable for Okay. on Scouts out business, sort of accident the how misreading

Beth Costello

Yeah.

that. you're think, I Josh, So misreading

significant Boy I that. Scouts. general the a liability piece of tell it haven't can But We disclosed what component specifically, piece of was you was

it do general to more I as significant a read-through, years wouldn't current relates So liability. for

Josh Shanker

quarter very the But saying that's... for math in that that, out broadly speaking am it a works like I seems you? It favorable was right

Beth Costello

… for general liability?

Josh Shanker

all... it's maybe commercial, in broadly Or not

Beth Costello

Yeah. No.

think agree. broadly I in commercial, I

general piece development we If continue see have and the compensation out that, back to you favorable in you liability package and business. can workers'

our I in yeah, are clearly laid pretty supplement. think out So, trends the investor financial

Josh Shanker

question, so of But are the to mean, a way years what this? different back causing like have how coming be you is so I there sort maturing? of don't about, And to specific. really thinking are years

Beth Costello

Yeah.

those the more, and where because thing a to business the it's more takes would the limited piece, XXXX prior. again very little So say And coming really is it with I workers' current from, in for for bit that is same and compensation it's favorability the prior, years, XXXX in the package season.

Josh Shanker

Thank you very much.

Doug Elliot

just would little to just we I reserves for know add Maybe haven't BSA this to been We but carrying need quarters, disclosed be a several the those et analysis. should all years this quarter, several cetera. prior just were last Josh, your activities that following So particulars, over this. right? you part of That will help the bit. we've

Josh Shanker

very That's helpful.

Operator

Shields comes please of proceed. from question Meyer, Meyer last our And KBW.

Meyer Shields

we're A about recovery lines government and heading of morning. workers' unanticipated you Good question for guess reversal to the the if Doug frequency? Thanks. unprecedented besides I pandemic begin, risk of stimulus. seeing other talk with I possibly an the compensation Great. Can into economic guess,

Doug Elliot

signals begin to up think obviously. optimism And clearly more morning our we've to We're watching we we those shared have dockets we're we're relative Meyer, top courts But market. the work line this through. all way in as approach. becoming loss liability, trends their watching watching and open, automobile as fill and

practices liability, on watching lines. et more We're so our across expect we're watching the cars cetera, D&O, specialty employment highways, watching frequency management We cetera. et our lines there. all We're

adjust first is XXXX. we'll of have active than encouraged well. an and time. we'll XXXX on and But severity pricing vigilant. we the This of stay our months as the we're frequency accordingly. feel different, component backside The look yes, eye And appetite will So, six and the dynamic we

Meyer Shields

that we on your into wages and really no a translate just book? question. yes helpful severity the compensation rise That's of workers' Okay. component see in then, or does indemnity If

Doug Elliot

Wage, … without pure wage,

Meyer Shields

Yeah.

Doug Elliot

trend, should merit mean so, whether it's a wage just employees? …number Okay. pure pure X%. wage, hedge of be I X.X%, against loss of

dynamic to is with. we way severity Now, due that different wages that about will a we and if talk workers of manage our through frequency number

Meyer Shields

you Thank perfect. so much. Okay,

Operator

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

Susan Spivak

We joining Thank next if morning, to short And Ian. us relatively me, to notice. you forward contact this Please on questions. do appreciate follow-up hesitate of any quarter. you, look all you not speaking have

Operator

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

You now disconnect. may