American Financial Group, Inc. (AFG) 2024 Q1 法說會逐字稿

Thank you for standing by, and welcome to American Financial Group's First Quarter 2024 Earnings Conference Call. (Operator Instructions)

感謝各位稍候，歡迎參加美國金融集團（American Financial Group）2024 年第一季財報電話會議。（接線員指示）

I would now like to hand the call over to Diane Weidner, Vice President, Investor Relations. Please go ahead.

現在我想將電話交給投資人關係副總裁 Diane Weidner。請開始。

Thank you. Good morning, and welcome to American Financial Group's First Quarter 2024 Earnings Results Conference Call. We released our 2024 first quarter results yesterday afternoon. Our press release, investor supplement and webcast presentation are posted on AFG's website under the Investor Relations section. These materials will be referenced during portions of today's call.

謝謝。各位早安，歡迎參加美國金融集團 2024 年第一季財報結果電話會議。我們已於昨天下午發布 2024 年第一季業績。我們的新聞稿、投資人補充資料及網路直播簡報已張貼於 AFG 官網的投資人關係專區。今天電話會議的部分內容將引用這些資料。

I'm joined this morning by Carl Lindner III and Craig Lindner, Co-CEOs of American Financial Group, and Brian Hertzman, AFG's CFO.

今天早上與我一同出席的有 American Financial Group 共同執行長 Carl Lindner III 與 Craig Lindner，以及 AFG 財務長 Brian Hertzman。

Before I turn the discussion over to Carl, I would like to draw your attention to the notes on Slide 2 of our webcast. Some of the matters to be discussed today are forward-looking. These forward-looking statements involve certain risks and uncertainties that could cause our actual results and/or financial condition to differ materially from these statements. A detailed description of these risks and uncertainties can be found in AFG's filings with the Securities and Exchange Commission, which are also available on our website.

在我把討論交給 Carl 之前，我想請各位注意我們網路直播第 2 張投影片的附註。今天將討論的部分事項屬於前瞻性陳述。這些前瞻性陳述涉及若干風險與不確定性，可能導致我們的實際結果及／或財務狀況與這些陳述有重大差異。關於這些風險與不確定性的詳細說明，請參閱 AFG 向美國證券交易委員會提交的文件；這些文件亦可於我們網站取得。

We may include references to core net operating earnings, a non-GAAP financial measure, in our remarks or responses to questions. A reconciliation of net earnings to core net operating earnings is included in our earnings release.

我們在發言或回答問題時，可能會提及核心淨營運盈餘（core net operating earnings），此為非 GAAP 財務衡量指標。淨盈餘與核心淨營運盈餘之調節表已包含於我們的財報新聞稿中。

And finally, if you're reading a transcript of this call, please note that it may not be authorized or reviewed for accuracy, and as a result, it may contain factual or transcription errors that could materially alter the intent or meaning of our statements.

最後，如果您正在閱讀本次電話會議的逐字稿，請注意該逐字稿可能未經授權或未經審閱以確認其準確性，因此可能包含事實或轉錄錯誤，並可能對我們陳述的意圖或含義造成重大影響。

Now I'm pleased to turn the call over to Carl Lindner III to discuss our results.

現在我很高興把電話交給 Carl Lindner III，請他說明我們的業績。

Good morning. I'll begin my remarks by sharing a few highlights of AFG's 2024 First Quarter, after which Craig and I will walk through more details. We will then open it up for Q&A, where Craig, Brian and I will respond to your questions.

各位早安。我將先分享 AFG 2024 年第一季的幾項重點，之後 Craig 與我會進一步說明細節。接著我們將開放問答，由 Craig、Brian 與我回覆各位的問題。

AFG's financial performance during the first quarter was excellent. In addition to producing an annualized first quarter operating return on equity of 20%, net written premiums grew by 8% year-over-year.

AFG 在第一季的財務表現非常出色。除了第一季年化營運股東權益報酬率達 20% 外，簽單保費（net written premiums）亦較去年同期成長 8%。

Our compelling mix of specialty insurance businesses, an entrepreneurial culture, disciplined operating philosophy and an astute team of in-house investment professionals, collectively have enabled us to outperform many of our peers over time. Craig and I thank God, our talented management team, and our great employees for helping us to achieve these results.

我們具吸引力的專業保險業務組合、創業家文化、嚴謹的經營理念，以及精明的內部投資專業團隊，綜合起來使我們長期以來能優於許多同業。Craig 與我感謝上帝，也感謝我們優秀的管理團隊與全體員工，協助我們達成這些成果。

I'll now turn the discussion over to Craig to walk us through some of the details.

接下來我把討論交給 Craig，請他帶我們看一些細節。

Thanks, Carl. Please turn to Slides 3 and 4 for a summary of earnings information for the quarter. AFG reported core net operating earnings of $2.76 per share in the 2024 first quarter. The year-over-year decrease reflects lower returns in AFG's alternative investment portfolio when compared to the very strong performance of this portfolio in the prior year period.

謝謝，Carl。請翻到第 3 與第 4 張投影片，以查看本季盈餘資訊摘要。AFG 於 2024 年第一季的核心淨營運盈餘為每股 2.76 美元。與去年同期相比的下降，反映 AFG 的另類投資組合報酬較低；相較之下，該投資組合在去年同期表現非常強勁。

Now I'd like to turn to an overview of AFG's investment performance, financial position and share a few comments about AFG's capital and liquidity.

接下來我想概述 AFG 的投資表現與財務狀況，並就 AFG 的資本與流動性分享幾點看法。

The details surrounding our $15.3 billion investment portfolio are presented on Slides 5 and 6. Looking at results for the first quarter, Property & Casualty net investment income was approximately 1% lower than the comparable 2023 period. Excluding the impact of alternative investments, net investment income in our P&C insurance operations for the three months ended March 31, 2024, increased by 16% year-over-year as a result of the impact of higher interest rates and higher balances of invested assets.

我們 153 億美元投資組合的相關細節列於第 5 與第 6 張投影片。就第一季結果而言，產險（Property & Casualty）淨投資收益較 2023 年同期約下降 1%。若排除另類投資的影響，截至 2024 年 3 月 31 日止三個月，我們產險營運的淨投資收益年增 16%，主要受較高利率與較高投資資產餘額所帶動。

As you'll see on Slide 6, approximately 68% of our portfolio is invested in fixed maturities. In the current interest rate environment, we're able to invest in fixed maturity securities at yields of approximately 6%. Current reinvestment rates compare favorably to the nearly 5% yield earned on fixed maturities in our P&C portfolio during the first quarter of 2024.

如第 6 張投影片所示，我們的投資組合約有 68% 配置於固定到期證券（fixed maturities）。在目前利率環境下，我們能以約 6% 的殖利率投資固定到期證券。目前再投資利率，相較於 2024 年第一季我們產險投資組合固定到期證券近 5% 的殖利率，更具吸引力。

The duration of our P&C fixed maturity portfolio, including cash and cash equivalents, was 2.9 years at March 31, 2024. We've strategically managed duration to take advantage of market opportunities as interest rates have increased from recent historic lows.

截至 2024 年 3 月 31 日，我們產險固定到期投資組合（包含現金及約當現金）的存續期間（duration）為 2.9 年。隨著利率自近期歷史低點上升，我們已策略性管理存續期間，以把握市場機會。

The annualized return on alternative investments in our P&C portfolio was approximately 9.0% for the 2024 first quarter compared to 14.2% for the prior year quarter. Strong returns related to our traditional private equity portfolio were offset by lower returns on investments tied to multi-family housing, which represent about half of our alternative investment portfolio, and where we continued to experience headwinds from the impact of increased supply and the leveling out of rental rates on these investments.

我們產險投資組合中另類投資的年化報酬率於 2024 年第一季約為 9.0%，相較去年同期為 14.2%。與傳統私募股權投資組合相關的強勁報酬，被與多戶住宅（multi-family housing）連結之投資較低的報酬所抵銷；多戶住宅約占我們另類投資組合的一半，而我們持續受到供給增加及租金成長趨於持平對該類投資造成的逆風影響。

We expect these headwinds may continue throughout the remainder of 2024. Longer term, we remain optimistic regarding the prospects of our investments in multi-family housing, as these properties continue to generate strong net operating income and have desirable geographic positioning and high occupancy rates. The average annual return on alternative investments over the five calendar years ended December 31, 2023, was approximately 13%.

我們預期這些逆風可能在 2024 年剩餘期間持續。長期而言，我們仍對多戶住宅投資前景保持樂觀，因為這些資產持續產生強勁的淨營運收入，且具備理想的地理位置與高入住率。截至 2023 年 12 月 31 日止五個曆年，我們另類投資的平均年報酬率約為 13%。

Please turn to Slide 7, where you will find a summary of AFG's financial position at March 31, 2024. During the quarter, we returned $269 million to our shareholders through the payment of our regular $0.71 per share quarterly dividend, as well as a $2.50 per share special dividend. We expect our operations to continue to generate significant excess capital throughout the remainder of 2024, which provides ample opportunity for additional special dividends or share repurchases over the next year.

請翻到第 7 張投影片，您將看到 AFG 截至 2024 年 3 月 31 日的財務狀況摘要。本季我們透過發放每股 0.71 美元的例行季度股利，以及每股 2.50 美元的特別股利，合計向股東返還 2.69 億美元。我們預期 2024 年剩餘期間營運將持續產生可觀的超額資本，為未來一年額外特別股利或庫藏股買回提供充足空間。

We continue to view total value creation as measured by growth in book value plus dividends as an important measure of performance over the long term. For the three months ended March 31, 2024, AFG's growth in book value per share excluding AOCI plus dividends was 5.1%.

我們持續將「總價值創造」視為長期重要的績效衡量指標，其衡量方式為帳面價值成長加上股利。就截至 2024 年 3 月 31 日止三個月而言，AFG 每股帳面價值（排除 AOCI）成長加上股利為 5.1%。

I'll now turn the call back over to Carl to discuss the results of our P&C operations.

接下來我把電話交回 Carl，請他說明我們產險營運的結果。

Thank you, Craig. Please turn to Slides 8 and 9 of the webcast, which include an overview of our first quarter results. As you'll see on Slide 8, our Specialty Property & Casualty Insurance businesses generated a strong 90.1% combined ratio in the first quarter of '24, about a point higher than the 89.2% reported in the first quarter of last year. Results for the 2024 first quarter included 2.3 points of catastrophe losses, compared to 2.2 points in last year's first quarter, and 3.3 points of favorable prior year reserve development, compared to 4.5 points in the first quarter of 2023.

謝謝你，Craig。請翻到網路直播第 8 與第 9 張投影片，其中包含我們第一季結果概覽。如第 8 張投影片所示，我們的專業產險（Specialty Property & Casualty Insurance）業務在 2024 年第一季的綜合比率（combined ratio）為強勁的 90.1%，較去年第一季的 89.2% 高約 1 個百分點。2024 年第一季結果包含 2.3 個百分點的巨災損失（catastrophe losses），去年第一季為 2.2 個百分點；並包含 3.3 個百分點的有利前期準備金發展（favorable prior year reserve development），去年第一季為 4.5 個百分點。

First quarter 2024 gross and net written premiums were both up 8% when compared to the same period last year. Year-over-year growth was reported within each of the Specialty Property and Casualty groups as a result of additional crop premiums from Crop Risk Services acquisition, new business opportunities, increased exposures, and a good renewal rate environment. Along those lines average renewal pricing across our Property & Casualty Group, excluding our workers' comp businesses, was up 8% for the quarter, accelerating about 1% from the previous quarter. Including workers' compensation, renewal rates were up 6% overall, in line with the previous quarter.

2024 年第一季的毛簽單保費與淨簽單保費，與去年同期相比皆成長 8%。各專業產險事業群皆呈現年增，主要來自 Crop Risk Services 收購帶來的額外農作物保費、新的業務機會、曝險增加，以及良好的續保費率環境。就此而言，本季我們產險事業群（不含勞工補償業務）的平均續保定價上升 8%，較前一季加速約 1%。若包含勞工補償，整體續保費率上升 6%，與前一季一致。

This is our 31st consecutive quarter to report overall renewal rate increases and we believe we're achieving overall renewal rate increases in excess of prospective loss ratio trends to meet or exceed targeted returns. In addition to renewal pricing, we continue to focus on insured values in our property-related businesses to ensure that our premiums reflect inflationary considerations.

這是我們連續第 31 個季度回報整體續保費率上升；我們相信，為達成或超越目標報酬，我們取得的整體續保費率上升幅度已超過預期損失率趨勢。除續保定價外，我們也持續關注與財產相關業務的承保價值（insured values），以確保保費反映通膨因素。

Now I'd like to turn to Slide 9 to review a few highlights from each Specialty Property and Casualty business groups. Details are included in our earnings release, so I'll focus on our summary results here.

接下來我想請各位看第 9 張投影片，回顧各專業產險事業群的幾項重點。我們的財報新聞稿中已包含詳細資訊，因此我在此將聚焦於摘要結果。

The businesses in the Property and Transportation Group achieved an 89.0% calendar year combined ratio overall in the first quarter of 2024, an improvement of 2.0 points from the 91.0% reported in the comparable 2023 period.

物業與運輸事業群在2024年第一季整體達成89.0%的曆年綜合比率，較2023年同期報告的91.0%改善2.0個百分點。

First quarter 2024 gross and net written premiums in this group were 10% and 7% higher, respectively, than the comparable prior year period. Additional crop premium associated with the CRS acquisition, as well as new business opportunities, a favorable rate environment and strong account retentions in our commercial auto and ocean marine businesses were the primary drivers of the increase in premiums.

本事業群2024年第一季的毛簽保費與淨簽保費分別較去年同期增加10%與7%。與CRS收購相關的額外農作物保費，以及新業務機會、有利的費率環境，並且我們商業汽車與海運保險業務的保單續保率強勁，是保費成長的主要驅動因素。

Overall renewal rates in this group increased approximately 9% on average in the first quarter of 2024, an increase of about two points from the previous quarter. I'm particularly pleased with renewal rates that need in our commercial auto liability line of business where rates were up 21%.

本事業群在2024年第一季的整體續保費率平均上調約9%，較前一季增加約2個百分點。我特別高興的是，我們商業汽車責任險業務線的續保費率上調21%。

The businesses in our Specialty Casualty Group achieved a strong 89.8% calendar year combined ratio in the first quarter of 2024, 2.3 points higher than the 87.5% reported in the comparable period last year. Cat losses added 2.2 points to the Specialty Casualty Group first quarter 2024 combined ratio and were the result of a winter storm that affected a large social services account in the northwestern part of the country. I'm particularly pleased with the continued very strong underwriting margins in our executive liability and workers' comp businesses.

我們專業責任險事業群在2024年第一季達成強勁的89.8%曆年綜合比率，較去年同期報告的87.5%高出2.3個百分點。巨災損失使專業責任險事業群2024年第一季綜合比率增加2.2個百分點，主要來自一場冬季風暴，影響了全國西北部地區的一個大型社會服務客戶。我特別高興的是，我們高階主管責任險與勞工補償險業務持續維持非常強勁的核保利潤率。

First quarter 2024 gross and net written premiums increased 3% and 4%, respectively, when compared to the same prior year period. While most of the businesses in this group reported premium growth during the first quarter, the higher year-over-year premiums resulted primarily from the growth in our excess and surplus lines and excess liability businesses, as a result of rate increases and new business opportunities. Higher rates, strong account retention and new business opportunities in several of our targeted markets businesses contributed to the year-over-year growth to a lesser extent.

2024年第一季毛簽保費與淨簽保費分別較去年同期增加3%與4%。雖然本事業群多數業務在第一季皆呈現保費成長，但年增保費主要來自我們超額與剩餘線（E&S）以及超額責任險業務的成長，原因包括費率上調與新業務機會。若干目標市場業務的較高費率、強勁續保留存與新業務機會，亦在較小程度上推動年增成長。

Now renewal pricing for this group, excluding our workers' comp businesses, was up approximately 8% in the first quarter and was up about 5% overall, with both measures up about 1% from the renewal pricing in the previous quarter. I'm particularly pleased that we achieved renewal rate increases in excess of 10% in several of our social inflation exposed businesses during the quarter, including our public entity, social services and excess liability businesses.

本事業群的續保定價（不含勞工補償險業務）在第一季約上調8%，整體約上調5%；兩項指標皆較前一季的續保定價提高約1%。我特別高興的是，本季我們在多項受社會通膨影響的業務中達成超過10%的續保費率上調，包括公共機構、社會服務以及超額責任險業務。

The Specialty Financial Group continued to achieve excellent underwriting margins and reported an 86.3% combined ratio for the first quarter of 2024, a slight improvement from the comparable period in 2023.

專業金融事業群持續達成優異的核保利潤率，並在2024年第一季報告86.3%的綜合比率，較2023年同期略有改善。

First quarter 2024 gross and net written premiums were up 26% and 27%, respectively, when compared to the same 2023 period. While most businesses in this group reported year-over-year growth, our financial institutions business was the primary driver of the higher premiums, representing a continuation of the growth we reported in both of our lender-placed and residential investor business products in the second half of 2023. Renewal pricing in this group was up approximately 7% in the first quarter.

2024年第一季毛簽保費與淨簽保費分別較2023年同期增加26%與27%。雖然本事業群多數業務皆呈現年增成長，但金融機構業務是保費增加的主要驅動因素，延續了我們在2023年下半年於「貸款人置入保險」與「住宅投資人」兩項產品所報告的成長。本事業群第一季續保定價約上調7%。

Craig and I are pleased to report these strong results for the first quarter, and we're proud of our proven track record of long-term value creation. Our insurance professionals have exercised their Specialty Property and Casualty knowledge and experience to skillfully navigate the marketplace, and our in-house investment team has been both strategic and opportunistic in the management of our $15 billion investment portfolio. We're well positioned to continue to build long-term value for our shareholders for the remainder of 2024 and beyond.

Craig和我很高興報告第一季的強勁成果，也為我們長期創造價值的良好實績感到自豪。我們的保險專業團隊運用其在專業財產與意外險方面的知識與經驗，熟練地因應市場環境；而我們的內部投資團隊在管理150億美元投資組合時，兼具策略性與機會性。我們已做好充分準備，在2024年剩餘期間及未來持續為股東創造長期價值。

We'll now open the lines for the Q&A portion of today's call. Craig and Brian and I would be happy to respond to your questions.

接下來我們將開放電話線進入今天的問答環節。Craig、Brian和我很樂意回覆各位的問題。

(Operator Instructions) Our first question comes from the line of Charlie Lederer of Citigroup.

（接線員指示）我們的第一個問題來自花旗集團（Citigroup）的Charlie Lederer。

Thank you. Good morning. Wondering if you guys can share more about the reserve development in the quarter, I guess, specifically in Specialty Financial and Specialty Casualty just kind of the moving pieces there? Thanks.

謝謝。早安。想請問你們是否能多分享一些本季準備金發展的情況，我想特別是在專業金融與專業責任險這兩個事業群，相關的變動因素有哪些？謝謝。

Hi Charlie, this is Brian. So to talk about the Casualty segment first. There's a few things going on there. First of all, we did continue to see favorable development coming out of our workers' comp business as well as lower severity in our executive liability business. Offsetting that is some increased severity in our excess liability businesses and some increased severity in the social services businesses. When Carl mentioned the lower profitability in the social services businesses, that's coming through prior year development. And it's just on a few a few claims there, while we don't comment on specific claims. It is over a couple of the more recent accident years.

嗨Charlie，我是Brian。先談責任險事業群。那邊有幾件事情同時在發生。首先，我們持續看到勞工補償險業務出現有利發展，同時我們高階主管責任險業務的損失嚴重度也較低。抵銷上述利多的是，我們超額責任險業務的損失嚴重度有所上升，以及社會服務業務的損失嚴重度也有所上升。Carl提到社會服務業務獲利能力較低，主要是透過前期年度發展反映出來。這只涉及少數幾件理賠案件；由於我們不評論特定案件，但它確實發生在較近期的幾個出險年度。

And then in the Financial group, there's a small amount of adverse development there, and that's related to our innovative markets business where we're seeing a little bit of increased severity there. The innovative markets business includes some coverages related to complex intellectual property.

至於金融事業群，那裡有一小部分不利發展，與我們的創新市場（innovative markets）業務相關，我們在那裡看到損失嚴重度略有上升。創新市場業務包含一些與複雜智慧財產權相關的保險保障。

Got it. Okay. That's helpful. I guess just on the commercial auto liability pricing increase, if I heard that, that kind of jumped off the page at 21%. I guess what did that compare to in the fourth quarter? And how should we think about that earning through and impacting your underlying margins in Property and Transportation as the year goes on?

了解。好的，這很有幫助。我想再問一下商業汽車責任險的定價上調，如果我沒聽錯的話，21%這個數字很醒目。那它和第四季相比如何？另外，隨著今年進行，你們應該如何看待這些費率上調的賺取（earning through）以及對物業與運輸事業群基礎利潤率的影響？

I definitely think it's a very positive result. I believe for all of 2023, it was around 11%. But I believe the fourth quarter jumped up to around 15% or so. So I definitely like the trend. It's our goal. We have solid underwriting performance for our overall commercial auto business in the first quarter and last year. But the commercial auto liability part of the business isn't where we want it with a small underwriting loss in that. So it's our objective to lower our overall commercial auto combined ratio, in particularly in commercial auto liability. So achieving rate increases at that level is very welcome at this point.

我確實認為這是非常正面的結果。我相信2023年全年大約是11%。但我認為第四季跳升到大約15%左右。所以我很喜歡這個趨勢。這是我們的目標。我們整體商業汽車業務在第一季以及去年都有穩健的核保表現，但商業汽車責任險這一部分並非我們想要的狀態，該部分仍有小幅核保虧損。因此，我們的目標是降低整體商業汽車的綜合比率，特別是商業汽車責任險。能在目前達成這樣幅度的費率上調，我們非常歡迎。

Thank you.

謝謝。

Our next question comes from the line of Michael Zaremski of BMO.

下一個問題來自BMO的Michael Zaremski。

Great, good afternoon. If we focus on the Specialty Casualty segment, the overall top line growth has been decelerating, which I guess seems like it makes sense, right? Workers' comp pricing is as it should be, not great given how great profitability is. And then on the other hand, you have some of the other lines of business pricing power appears to be moving north as the industries and AFG's reserve releases or I guess kind of dissipate a bit.

很好，午安。如果我們聚焦在專業責任險事業群，整體保費收入（top line）成長正在放緩，我想這看起來也合理，對吧？勞工補償險的定價如同它應該的那樣——考量到獲利非常好，所以定價表現不算好。另一方面，你們其他一些業務線的定價能力似乎正在走強，因為產業狀況以及AFG的準備金釋放（reserve releases）我想是有點減弱或消退。

So I guess, does this just feel kind of like the cycle is playing out? Is it as it does, the pricing kind of in certain lines or non-comp are going in the right direction up because the industry is seeing that margins are missing a bit? And I guess just trying to get a kind of does this cycle feel like it's turning the right way, with comp obviously being the -- I guess, also turning the right way, but got downwards given profits?

所以我想問，這是否只是景氣循環在發揮作用？也就是說，在某些業務線或非勞工補償險（non-comp）方面，因為產業看到利潤率有點跟不上，所以定價正在往正確方向上升？我想了解的是，這個循環是否感覺正在往正確方向轉變；而勞工補償險顯然也是——我想也是往正確方向轉，但因為獲利很高所以費率是往下走？

Yes. To address the growth side, the workers' comp part of the business, first quarter premium is roughly flat to up just a little bit. So when you exclude workers' comp and that's in the Specialty Casualty segment, we're growing about 6%. I've talked about in the past on the social inflation-exposed businesses, as I just mentioned, really glad to see that we're getting double-digit price increase on a number of those businesses, which is a real positive.

是的。先回應成長面：勞工補償險這部分業務第一季保費大致持平或僅小幅成長。因此，若排除勞工補償險（它在專業責任險事業群內），我們的成長約為6%。我過去也談過，在受社會通膨影響的業務方面，正如我剛提到的，很高興看到我們在其中多項業務取得兩位數的價格上調，這是非常正面的。

But I think because of the claims environment in a lot of those lines, our guys are trying to position us for continued success regardless of the social inflation that's going on. I think I've talked in the past, in certain businesses like public sector substantially increasing the retentions over which we're writing business in the municipal pools and moving up the towers, some with smaller limits and some of our excess liability businesses and that. So those businesses, the excess liability businesses have been very profitable for us, but our guys are trying to position us for continued success there going forward in this kind of environment in that. Continued to be very pleased with the overall workers' comp results in the first quarter. So that's a positive and then that.

但我認為，由於許多業務線的理賠環境，我們的團隊正努力讓我們在不論社會通膨如何發展的情況下，都能維持持續成功。我過去提過，在某些業務例如公共部門，我們大幅提高了自留額（retentions），也就是在市政聯保池（municipal pools）中承保的自留層級，並往上移到更高的承保層（towers），有些採較小的承保限額（limits），以及在我們部分超額責任險業務中也是如此。因此，這些業務——超額責任險業務對我們一直非常有利可圖，但在這樣的環境下，我們的團隊正努力為未來持續成功做好布局。第一季整體勞工補償險結果仍讓我們非常滿意。所以這是正面因素，然後就是這樣。

Okay. That's helpful. And maybe a follow-up just to stay on workers' comp, given it's a good part of your business that's been remained very profitable. And is there -- when we look at -- sorry.

好的。這很有幫助。也許再追問一下，仍然聚焦在工傷保險（workers' comp），因為這是你們業務中相當重要且一直非常獲利的一塊。那麼是否有——當我們看——抱歉。

Mike, I mentioned one other in the crop business, we're happy with the -- right now, it's very early, but the crop year is starting out solid. Plantings of corn and soybeans are proceeding at a pace that exceeds the last five-year average, while the U.S. drought monitor when you look at that is better overall than April of last year. And with reduced drought conditions across much of the Western corn belt work, where some of the drought problems existed last year. Despite the rainfall, we also don't have significant concerns about floods or above-average preventative planting type of claims in that.

Mike，我再補充一點關於農作物業務（crop business）：我們對目前的情況感到滿意——現在還很早，但作物年度開局穩健。玉米與黃豆的播種進度快於過去五年平均；同時，從美國乾旱監測（U.S. drought monitor）來看，整體狀況也比去年四月更好。而且在西部玉米帶（Western corn belt）多數地區乾旱情況減輕，去年部分地區曾有乾旱問題。儘管有降雨，我們也沒有對洪水或高於平均的預防性播種（preventative planting）類型理賠產生重大疑慮。

Corn and soybean prices have been very stable, which is good. And I'm being told that the winter wheat business seems to be performing much better, potentially much better than what it was last year. So like extremely early, but like the way we're starting out there on a very significant business for us.

玉米與黃豆價格一直非常穩定，這是好事。我也聽說冬小麥（winter wheat）業務表現似乎好很多，可能比去年好得多。所以雖然還非常早，但就我們目前的開局來看，對我們而言這是一項非常重要的業務。

And the winter wheat, and I did have a follow-up on workers' comp. The winter wheat as a percentage of your portfolio, if you can remind us?

那冬小麥方面，另外我也有一個關於工傷保險的追問。冬小麥占你們投資組合的比例，如果你能提醒我們一下？

I think it's maybe 8% or something like that. I think all wheat is maybe 10% or something around that.

我想大概是 8% 左右之類的。我想所有小麥加總可能是 10% 左右，大概在那個範圍。

Okay. If I may, my follow-up was on workers' comp, which is a big and profitable business for you all. When we look at just overall industry trends versus American Financial Group last year, your workers' comp business was extremely profitable, but much less profitable year-over-year. And I'm looking at it on a combined ratio basis and your reserve releases were still high, but just decelerated. And the industry actually kind of showed an improvement, which was a surprise.

好的。如果可以的話，我的追問是關於工傷保險，這對你們來說是一項規模大且獲利的業務。當我們比較整體產業趨勢與美國金融集團（American Financial Group）去年表現時，你們的工傷保險業務非常獲利，但年對年獲利明顯下降。我是以綜合比率（combined ratio）的角度來看；你們的準備金釋放（reserve releases）仍然很高，但只是放緩了。而產業端其實出現某種程度的改善，這有點出乎意料。

But just curious specific to your book, when you reflect on what the actions you took in 2023, are some of those just due to the nature of your book maybe being more concentrated in certain states that your experience was very different than it has been relative to the industry?

但我想就你們的承保組合（book）來問：回顧你們在 2023 年採取的行動，其中有些是否只是因為你們的組合在某些州的集中度較高，導致你們的經驗與產業相比差異更大、也與你們過去相對於產業的表現不同？

I'm not sure there's that significant of a difference in that. We continued to have great results last year. Our first quarter results continued to be excellent for workers' comp. I think in our Summit business, our Strategic Comp business, our high deductible business and National Interstate's workers' comp are all performing very well. Our California business is the part of the business that has an underwriting loss, both last year and in the first quarter. So that's relatively small -- smaller part of our workers' comp business in that. But I suppose that could have some impact.

我不確定差異有那麼顯著。我們去年仍然取得很好的結果。我們第一季的工傷保險結果也依然非常出色。我認為我們的 Summit 業務、Strategic Comp 業務、高自負額（high deductible）業務，以及 National Interstate 的工傷保險都表現得非常好。我們加州業務是這塊業務中出現承保虧損（underwriting loss）的部分，去年與第一季都是如此。那部分在我們工傷保險中占比相對小——較小的一部分。不過我想這可能會有一些影響。

So we're getting a good start, have excellent comp results in the first quarter. We do think that this year that the profitability won't be as good as the previous year. One reason is the 15% rate decline in Florida, which is a significant state for one of our large comp subsidiaries, Summit.

所以我們開局不錯，第一季的工傷保險結果非常優異。我們確實認為今年的獲利性不會像前一年那麼好。其中一個原因是佛羅里達州費率下調 15%，而佛州對我們其中一家大型工傷保險子公司 Summit 來說是重要州別。

That's very helpful. Thank you.

這非常有幫助。謝謝。

Our next question comes from the line of C. Gregory Peters of Raymond James.

下一個問題來自 Raymond James 的 C. Gregory Peters。

Hey, good morning. This is Sid on for Greg. Just wanted to follow up on the growth in the Specialty Financial. I know in the prepared remarks, you highlighted the financial institutions. But curious if you could provide a little bit more information on what you're seeing as attractive in that area of your business? It feels like there's been a step change in growth. I'm just trying to get a sense if we should expect this to continue.

嗨，早安。我是 Sid，代 Greg 提問。想追問一下專業金融（Specialty Financial）業務的成長。我知道在事先準備的發言中，你們提到了金融機構（financial institutions）。但想請你們多分享一些：你們在這塊業務中看到哪些吸引人的地方？感覺成長出現了階梯式的變化。我想了解是否應該預期這種情況會持續。

I think we expect solid growth this year. I think the first quarter was very strong in that. I think different companies talk about leaning into the property opportunities. This is a business that we've done very well over a long period of time with significant underwriting profitability. With pricing going up 9%, with an industry that's focused on getting the proper insured values, there are states like Florida, a number of other states that are moving to anybody doing this business, making sure that things are insured to replacement cost value, not just the principal balance, replacement cost value could be appraised value or it could be what's called last known coverage replacement cost, which would have been maybe somebody's last homeowners policy that was written.

我想我們預期今年會有穩健成長。第一季在這方面非常強勁。我想不同公司都在談「加碼」財產險（property）的機會。這是我們長期以來做得很好的業務，承保獲利相當可觀。隨著定價上升 9%，而且產業聚焦於取得適當的保險金額（proper insured values），像佛羅里達等一些州，以及其他多個州，都在推動所有從事這項業務的人，確保保險是以重置成本（replacement cost value）投保，而不只是以本金餘額（principal balance）投保。重置成本可能是鑑價價值（appraised value），也可能是所謂的「最後已知保額的重置成本」（last known coverage replacement cost），也就是某人最後一張房屋保單（homeowners policy）所載的重置成本。

So both price and getting proper insured value competitively. There have been a number of competitors that have faltered and that have allowed us to pick up significant accounts, one in particular last year that we're continuing to benefit from. This is a lumpy business in that when you pick up an account or lose an account, it can have a decent impact on your overall, comes in lumps.

因此，無論是價格或是以具競爭力的方式取得適當的保險金額。我們有一些競爭對手表現失利，讓我們得以承接到一些重要帳戶；其中有一個特別的帳戶是去年取得的，我們目前仍持續受益。這是一個「不均勻」（lumpy）的業務：當你拿下一個帳戶或失去一個帳戶時，對整體會有不小影響，業績會呈現一塊一塊的波動。

So we're hoping that we continue to have some opportunity to pick up maybe some additional accounts. By the same token, you know what our thoughts are on business that's too catastrophe exposed. So if there are accounts that we don't think are performing or have too much catastrophe exposure or maybe we may decide not to go forward with some. So bottom line is we're pleased with how this business is starting out, very profitable, really good growth above the price increase and insured value momentum that we're getting. And I think we're excited about the business.

所以我們希望能持續有機會再拿下一些額外帳戶。另一方面，你也知道我們對於巨災曝險（catastrophe exposed）過高的業務的看法。因此，如果有些帳戶我們認為表現不佳、或巨災曝險太高，我們可能會決定不再續做。總結來說，我們對這項業務的開局感到滿意：獲利性很高，成長也很強，且高於我們所看到的價格上調與保險金額提升的動能。我想我們對這項業務感到振奮。

Okay. Thanks. And then as my follow-up, in the press release, I believe you said the returns in the alternative investment portfolio exceeded expectations for the quarter. And I know you're not providing detailed guidance anymore, but just curious if the first quarter results change your view on the expected performance of the portfolio for this year or if the 6% annualized return is still the right bogey to use for 2024?

好的，謝謝。那我的追問是：在新聞稿中，我相信你們提到另類投資組合（alternative investment portfolio）本季的報酬超出預期。我知道你們不再提供詳細指引，但想請教第一季結果是否改變你們對今年組合表現的預期？或者 2024 年仍以年化 6% 報酬作為合適的基準（bogey）？

Sure. This is Craig. On our last conference call, when we talked about assumptions that went into our plan, we talked about a 6% assumption on total return on alternatives for the year, and that was made up of a low single-digit return on our multi-family properties, which account for about half of that portfolio, and a stronger return on the other investments. And what I would say is multi-family is performing pretty much in line with our expectations.

好的。我是 Craig。在上一次電話會議中，我們談到納入計畫的假設時，提到今年另類投資的總報酬（total return）假設為 6%。其中約一半的投資組合是多戶住宅（multi-family properties），我們對那部分假設是低個位數（low single-digit）的報酬，而其他投資則假設較強的報酬。我想說的是，多戶住宅的表現大致符合我們的預期。

We're pretty much in line with what we were kind of expecting to see when we guided to or said that we were using a low single-digit return on that piece. I don't think we changed our thoughts on that, kind of given the outlook for the balance of the year on multi-family. We got off to a very good start. We had very good returns on the balance of the alternative portfolio. But as you know, that can be pretty lumpy.

我們的表現基本上與當初所預期的相符，也就是我們提到那部分採用低個位數報酬假設時所預期看到的情況。考量今年剩餘期間多戶住宅的展望，我不認為我們對那部分的看法有改變。我們開局非常好，另類投資組合其餘部分的報酬也非常好。但如你所知，那部分可能相當不均勻（lumpy）。

I think we did benefit from the very strong market in the fourth quarter of 2023. In calendar year 2023, we report the returns and marks on a quarter delayed basis. And so I think in the first quarter, we benefited from the very strong market last year. It's early in the year. Hard to predict what the market is going to do the balance of the year. So at this point in time, we would not change the assumed 6% return for the year.

我認為我們確實受益於 2023 年第四季非常強勁的市場表現。在 2023 會計年度，我們是以延後一季（quarter delayed）的方式報告報酬與估值調整（marks）。因此我認為第一季受益於去年非常強的市場。現在還在年初，很難預測今年剩餘期間市場會如何表現。所以就目前而言，我們不會調整今年假設的 6% 報酬。

Okay. Thanks for the answers.

好的。謝謝你的回答。

Our next question comes from the line of Andrew Andersen of Jefferies.

下一個問題來自 Jefferies 的 Andrew Andersen。

Hey, good morning. In the press release, you pointed to improved profitability on workers' comp. Am I correct in thinking that is due to stronger releases year-over-year and not due to the underlying loss ratio? And maybe with that, could you touch on the seasonality of perhaps how '23s workers' comp developed on a quarterly basis?

嗨，早安。新聞稿中你們提到工傷保險的獲利性改善。我理解這是因為年對年準備金釋放更強，而不是因為基礎損失率（underlying loss ratio）改善，這樣理解正確嗎？另外也想請你談談季節性：例如 2023 年工傷保險在各季的發展（developed）情況大概是怎樣？

So the combined ratio is fairly similar in workers' comp in the quarter-over-quarter as well as development. So there was a little bit of growth in workers' comp this year, but the underlying loss ratios were similar in that business. There can be some lumpiness in the development, in the first quarter of 2024, it was similar to the first quarter of 2023.

所以本季工傷保險的綜合比率（combined ratio）在季對季比較上，以及發展（development）方面，都相當接近。今年工傷保險有一些成長，但該業務的基礎損失率相近。發展在不同季度可能會有些不均勻（lumpiness）；2024 年第一季的情況與 2023 年第一季相似。

Okay.

好的。

I don't think our press release said we had increased margins there. I think it just said we did well. And I think that's what my earlier comment was that we had a strong quarter.

我不認為我們的新聞稿有說我們在那裡提高了利潤率。我想它只是說我們表現不錯。而我先前的評論也是這個意思，也就是我們這一季表現強勁。

Okay. Thank you. And then maybe looking at some Schedule P accident year picks for other liability claims-made seemed to improve year-over-year and occurrence was kind of flat year-over-year for accident year '23. I guess I would have thought there'd be maybe a little bit more conservatism just given the loss trend environment. But can you kind of help us think through these picks here?

好的，謝謝。接著，或許看看 Schedule P 的事故年度選取值，其他責任險的索賠申報制（claims-made）似乎年比年有所改善，而事故年度 '23 的事故發生制（occurrence）則大致持平。我想在目前損失趨勢的環境下，我原本以為會更保守一點。你們能否幫我們梳理一下這些選取值的思路？

Sure. So on the general liability occurrence, I think it's important to know there can be changes in mix of business. And we also have been getting significant rate increases there. And then in some of like our excess businesses, we've also been looking at higher attachment points and higher deductibles. So there's really a change of mix of business that's happening that kind of mutes the impact on the loss pick changes. In the claims made, we tend to be conservative early on and then that sets us up for more changes of favorable development there.

當然。就一般責任險的事故發生制而言，我認為重要的是要知道業務組合可能會有變化。而且我們在那裡也取得了顯著的費率上調。另外，在我們的一些超額業務中，我們也在採用更高的起賠點（attachment points）和更高的自負額（deductibles）。因此，業務組合確實正在發生變化，這在某種程度上會削弱損失選取值變動的影響。至於索賠申報制，我們通常在早期會採取較保守的做法，這也讓我們在後續更容易出現較多有利的準備金發展（favorable development）。

Okay. Thank you.

好的，謝謝。

Our next question comes from the line of Meyer Shields of Keefe, Bruyette & Woods.

下一個問題來自 Keefe, Bruyette & Woods 的 Meyer Shields。

Great, thanks. I think earlier, Carl, in your comments, you talked about 20% plus rate increases in commercial auto. And I'm wondering how we should think about that impacting demand for captive solutions as opposed to maintaining same insurance programs that companies have had?

很好，謝謝。我想先前 Carl 在你的評論中提到商用車險（commercial auto）有 20% 以上的費率上調。我想了解，我們應該如何看待這對企業採用自保公司（captive）方案的需求之影響，相較於維持公司既有的保險方案？

I don't think it probably has that big of an impact one way or the other. I mean, the whole marketplace is struggling with social inflation in the commercial auto liability side. And the market is allowing increases now. On specific captive accounts, that the experience is better, then it wouldn't be the 21%. There's probably some accounts and some businesses that got lower price increases and those that haven't had great results higher.

我不認為這在任何一個方向上會有很大的影響。我的意思是，整個市場在商用車險責任端都在承受社會通膨（social inflation）的壓力，而市場現在也允許費率上調。對於特定的自保公司帳戶，如果其經驗較好，那就不會是 21%。可能有些帳戶和某些業務拿到較低的漲價幅度，而那些結果不太好的則會更高。

Okay. So then, I guess where I'm going with this is to just infer that as those rate increases earn in the improving underwriting profit should basically emerge in a typical fashion instead of being sort of offset by clients retaining significantly more risk?

好的。那我想我想表達的是：隨著這些費率上調逐步賺入（earn in），承保利潤的改善應該會以典型的方式浮現，而不是被客戶顯著提高自留風險所抵消，對嗎？

Yes. Again, it's our goal to improve the commercial liability combined ratios over the next year or two and hence, having stronger overall commercial auto results. And as I mentioned in some of the Specialty Casualty lines, we're a very underwriting profit driven company. I mean in commercial auto, we're probably outperforming the market by five or six points at least and we're serious about getting the right returns on that business. So if anything, on that part of the business, I'd say our guys are serious on getting the pricing terms changes and the selection of business that achieves our goal of improving things over the next year or two. So definitely, our guys would be more focused on improving that result than growing a ton right now.

是的。同樣地，我們的目標是在未來一到兩年改善商業責任險的綜合率（combined ratios），因此也會帶來更強的整體商用車險結果。正如我在某些專業意外險（Specialty Casualty）產品線提到的，我們是一家非常以承保利潤為導向的公司。我的意思是，在商用車險方面，我們至少比市場好 5 到 6 個點，我們也很認真要在這項業務上取得適當的回報。所以如果要說的話，在這部分業務上，我會說我們的團隊很認真在推動定價與條款的調整，以及業務選擇，以達成我們在未來一到兩年改善的目標。因此，我們的團隊現在肯定更專注於改善結果，而不是大幅成長。

Okay. Perfect. And if I can switch gears briefly. Is the growth in Specialty Financial likely to impact the amount of reinsurance that you want to carry for the rest of the year?

好的，很好。如果我可以稍微換個話題：專業金融（Specialty Financial）的成長，是否可能影響你們今年剩餘期間想要持有的再保量？

Definitely, that's something that as that business has grown, that we definitely are monitoring. I think, in fact, I believe we're looking at purchasing some gap insurance to cover the gap between our underlying cat tower and the catastrophe bond that we have.

當然，隨著那項業務成長，這確實是我們正在密切監控的事情。事實上，我相信我們正在考慮購買一些缺口保險（gap insurance），以填補我們的基礎巨災再保塔（underlying cat tower）與我們持有的巨災債券（catastrophe bond）之間的缺口。

Okay. Perfect. Thank you very much.

好的，很好。非常感謝。

(Operator Instructions) Our next question comes from the line of Charlie Lederer of Citigroup.

（接線員指示）下一個問題來自花旗集團（Citigroup）的 Charlie Lederer。

Hey, thanks. Just one follow-up. You mentioned the alternative markets business a little bit. We've heard about certain specialty peers kind of scaling it back after experiencing losses there. I know it's relatively small dollars for you. But curious if you can share whether your thoughts have changed on that business.

嗨，謝謝。只有一個追問。你提到了一點替代市場（alternative markets）業務。我們聽說某些專業同業在那裡經歷損失後有點縮減。我知道對你們來說金額相對不大，但想請教你們對那項業務的看法是否有所改變？

I assume you're referring to the innovative markets business, where we talked about having the...

我猜你指的是創新市場（innovative markets）業務，也就是我們談到的那個……

Yes. I misspoke. I said alternative. Yes, sorry, innovative markets, the IP business.

是的。我口誤了。我說成 alternative。對不起，是創新市場（innovative markets），也就是 IP 業務。

So in that business, we're evaluating the opportunities there and some of the particular programs that have those losses are things that we are no longer offering new coverage in.

在那項業務上，我們正在評估相關機會，而其中一些出現損失的特定方案，我們已經不再提供新的承保。

Okay. Thank you.

好的，謝謝。

Charlie, while we have you, on your question earlier about prior year development in the Specialty Casualty, I think it's important also when you're looking at that to put it in context, where we're coming from in those results. So when you look at the businesses that we had some adverse development in, those are still very profitable businesses for us.

Charlie，既然你在線上，針對你先前關於專業意外險（Specialty Casualty）前期年度準備金發展（prior year development）的问题，我認為也很重要的是在看這個時要把它放在我們這些結果的背景脈絡中。也就是說，當你看我們出現一些不利發展（adverse development）的業務時，那些對我們而言仍然是非常有利可圖的業務。

For example, for the full year 2023 most of our more social inflation exposed businesses had a calendar year underwriting profit despite some of the noise there. And only one of them had a return on equity that wasn't double digits. In fact, when you look at our excess and surplus businesses overall, all 3 of those had calendar year ROEs above 20% in 2023. So I thought it might be just good to remember when you're thinking about some of the lumps in prior development that those are in businesses that are generally very profitable over a long number of years.

例如，就 2023 全年而言，我們大多數較暴露於社會通膨的業務，即使有一些雜訊，按日曆年度（calendar year）口徑仍然有承保利潤。而且只有其中一項的股東權益報酬率（ROE）不是雙位數。事實上，當你看我們整體的超額與剩餘（excess and surplus）業務，2023 年這三項的日曆年度 ROE 都超過 20%。所以我覺得在你思考前期發展的一些起伏時，記得這些起伏發生在長期而言通常非常有利可圖的業務中，可能會有幫助。

Great. Thank you.

很好，謝謝。

Our next question comes from the line of Michael Zaremski of BMO.

下一個問題來自 BMO 的 Michael Zaremski。

Great, thanks. Just a quick follow-up, probably for Craig. But on the real estate returns. I guess I probably should know this, but I don't think we all fully appreciate it. Is it a mark-to-market there? Or how does that work? I think we appreciate how private equity works and sometimes a lag and how the private equity firms mark that, which I think are third parties. But can you remind us how are the marks created on your real estate portfolio?

很好，謝謝。快速追問一下，可能是問 Craig。關於不動產報酬，我想我應該知道，但我覺得我們並沒有完全理解。那是按市價評價（mark-to-market）嗎？或是它是怎麼運作的？我想我們理解私募股權（private equity）的運作方式，有時會有滯後，以及私募股權公司如何（我想是由第三方）進行估值。但你能否提醒我們，你們不動產投資組合的估值是如何產生的？

Sure. It is similar to the private equity investments and that the general partners with our multi-family investments review the valuation on a quarterly basis and mark them to market on a quarterly basis.

當然。它與私募股權投資類似，我們多戶型（multi-family）投資的普通合夥人（general partners）會按季度檢視估值，並按季度進行按市價評價（mark to market）。

Okay. Got it. So the interest rate -- so it's -- so just as a follow-up, could there be -- historically, has there been more volatility on the PE or the real estate, if there's a way to kind of just high-level size up whether we should maybe be thinking about maybe there can be some lumpy quarters that actually come from real estate, whereas I thought it usually came from private equity?

好的，了解。那利率——所以——再追問一下，是否可能——從歷史上看，私募股權或不動產哪一個波動更大？如果可以高層次地比較一下，我們是否應該考慮其實不動產也可能帶來一些波動較大的季度，而我原本以為通常是私募股權帶來的？

Yes. I mean, if you look over a long period of time, there -- actually, the multi-family returns have been very predictable. We obviously have been in a somewhat unusual environment here in the last six, nine months with a very large increase in interest rates. The operating income of the multi-family properties continues very strong. We're very pleased with the performance, but cap rates have moved up because of an increase in interest rates.

是的。我的意思是，如果你看很長一段時間，其實多戶型的報酬一直非常可預測。當然，過去六到九個月我們處在一個相對不尋常的環境，利率大幅上升。多戶型資產的營運收入仍然非常強勁，我們對其表現很滿意，但由於利率上升，資本化率（cap rates）也上移了。

Okay. That's all I have. Appreciate it.

好的，我就這些。感謝。

Thank you. I would now like to turn the conference back to Diane Weidner for closing remarks. Madam?

謝謝。現在我想把電話會議交回給 Diane Weidner 作結語。女士？

Thank you all for joining us today as we discussed our first quarter results. We look forward to talking to you again next quarter, and hope you all have a great day.

感謝各位今天加入我們，一起討論第一季業績。我們期待在下個季度再次與各位交流，也祝各位有美好的一天。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝各位參與。您現在可以掛線。