American Financial Group, Inc. (AFG) 2024 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the 2024 second-quarter American Financial Group earning results call. (Operator Instructions)

各位早安，感謝您撥冗等候。歡迎參加 American Financial Group 2024 年第二季財報結果電話會議。(接線員指示)

Please be advised that today's conference is being recorded. I would now like to hand conference over to your first speaker today, Diane Weidner, Vice President, Investor Relations. Please go ahead.

請注意，今天的會議將被錄音。現在我想將會議交給今天的第一位講者：投資人關係副總裁 Diane Weidner。請開始。

Thank you. Good morning, and welcome to American Financial Group's second quarter 2024 earnings results conference call. We released our 2024 second 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 American Financial Group 2024 年第二季財報結果電話會議。我們已於昨天下午發布 2024 年第二季業績。我們的新聞稿、投資人補充資料與網路直播簡報已發布於 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. 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. 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.

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。在我把討論交給 Carl 之前，我想請各位留意我們網路直播第 2 張投影片上的註記。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。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）這一項非 GAAP 財務衡量指標。淨盈餘與核心淨營運盈餘之間的調節表已包含於我們的財報新聞稿中。

And finally, if you are 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，若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審閱以確保正確性，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.

現在我很高興將電話會議交給 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 second quarter, after which Craig and I will walk through some 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 年第二季的幾項重點，之後 Craig 和我會進一步說明一些細節。接著我們將開放問答，由 Craig、Brian 和我回覆各位的提問。

I'm pleased to report an annualized second quarter core operating return on equity of 18.5%. Underwriting margins in our specialty property and casualty insurance businesses were strong, and higher [interest] rates increased property and casualty net investment income, excluding alternatives, by 15% year over year. Growth in the quarter was impacted by a few things, including the timing of premium recognition in our crop business and some underwriting actions we've taken to proactively manage exposures in our most social inflation-exposed businesses. We will talk a little bit more about that later.

我很高興報告，第二季年化核心營運股東權益報酬率為 18.5%。我們的專業型財產與意外險業務承保利差強勁，而較高的[利率]使財產與意外險淨投資收益（不含替代性投資）年增 15%。本季成長受到幾項因素影響，包括我們農作物保險業務保費認列時點，以及我們為主動管理在社會通膨影響較大的業務中之曝險而採取的一些承保措施。我們稍後會再多談一些。

Our strong operating results, coupled with effective capital management and our entrepreneurial, opportunistic culture and disciplined operating philosophy enable us to continue to create value for our shareholders. Craig and I thank God, our talented management team, and our great employees for helping us to achieve these results.

我們強勁的營運成果，加上有效的資本管理、我們具企業家精神且善於把握機會的文化，以及嚴謹的營運理念，使我們得以持續為股東創造價值。Craig 和我感謝上帝、我們優秀的管理團隊，以及所有傑出的員工，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.

接下來我將把討論交給 Craig，請他帶我們深入了解一些細節。

Thank you, Carl. Please turn to slides 3 and 4 for a summary of earnings information for the quarter. AFG's reported core net operating earnings of $2.56 per share in the 2024 second quarter. Meaningfully higher P&C underwriting profit and higher P&C investment income excluding alternative investments, were partially offset by lower returns in AFG's alternative investment portfolio, when compared to the prior year period.

謝謝你，Carl。請翻到第 3 與第 4 張投影片，查看本季盈餘資訊摘要。AFG 於 2024 年第二季所報告的核心淨營運盈餘為每股 2.56 美元。相較去年同期，財產與意外險（P&C）承保利潤顯著提高，以及不含替代性投資的 P&C 投資收益增加，部分被 AFG 替代性投資組合報酬較低所抵銷。

Now I'd like to turn to an overview of AFG's investment performance and financial position and share a few comments about AFG's capital and liquidity. The details surrounding our $15.3 billion investment portfolio are presented on slides 5 and 6. Looking at results for the second quarter, property and 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 June 30, 2024, increased 15% year over year as a result of higher interest rates and higher balances of invested assets.

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。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。就第二季結果而言，財產與意外險淨投資收益較 2023 年同期約低 1%。若排除替代性投資的影響，截至 2024 年 6 月 30 日止三個月，我們 P&C 保險營運的淨投資收益因利率較高及投資資產餘額增加而年增 15%。

As you'll see on slide 6, approximately 67% 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 5.5%. Current reinvestment rates compare favorably to the 5% yield earned on fixed maturities in our P&C portfolio during the second quarter of 2024.

如第 6 張投影片所示，我們的投資組合約有 67% 配置於固定到期證券。在目前的利率環境下，我們能以約 5.5% 的殖利率投資固定到期證券。目前的再投資利率，相較於 2024 年第二季我們 P&C 投資組合固定到期證券所賺取的 5% 殖利率更具優勢。

The duration of our P&C fixed maturity portfolio, including cash and cash equivalents, was 2.9 years at June 30, 2024. The annualized return on alternative investments in our P&C portfolio was approximately 5.1% for the 2024 second quarter compared to 9.6% for the prior year quarter. Within our alternative investment portfolio, both our traditional private equity investments and multi-family related investments produced mid-single digit annualized returns for the quarter.

截至 2024 年 6 月 30 日，我們 P&C 固定到期投資組合（含現金及約當現金）的存續期間為 2.9 年。2024 年第二季，我們 P&C 投資組合中替代性投資的年化報酬率約為 5.1%，相較之下去年同期為 9.6%。在替代性投資組合中，我們的傳統私募股權投資與多戶住宅相關投資於本季均產生中個位數的年化報酬。

Longer term, we continue to remain optimistic regarding the prospects of attractive returns from our alternative investment portfolio, with an expectation of annual returns averaging 10% or better. The average annual return on our alternative investments over the five calendar years ended December 31, 2023, was approximately 13%.

從較長期來看，我們對替代性投資組合取得具吸引力報酬的前景仍保持樂觀，預期年化報酬平均可達 10% 或更高。截至 2023 年 12 月 31 日止的五個曆年期間，我們替代性投資的平均年化報酬約為 13%。

Please turn to slide 7, where you'll find a summary of AFG's financial position at June 30, 2024. During the quarter, we returned $59 million to our shareholders through the payment of our regular $0.71 per share quarterly dividend. We expect our operations to continue to generate significant excess capital throughout the remainder of 2024, which provides ample opportunity for 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 6 月 30 日的財務狀況摘要。本季我們透過支付每股 0.71 美元的例行季度股利，向股東返還 5,900 萬美元。我們預期在 2024 年剩餘期間，營運將持續產生可觀的超額資本，為未來一年發放特別股利或回購股份提供充足空間。

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 six months ended June 30, 2024, AFG's growth in book value per share excluding AOCI plus dividends was approximately 10%.

我們持續將「總價值創造」（以帳面價值成長加上股利衡量）視為長期重要的績效衡量指標。截至 2024 年 6 月 30 日止六個月，AFG 每股帳面價值（不含 AOCI）成長加上股利約為 10%。

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

接下來我將把電話會議交回 Carl，請他說明我們 P&C 營運的結果。

Thank you, Craig. Before we discuss Property and Casualty Group results, I wanted to briefly cover the CrowdStrike event from a few weeks ago. We believe we have minimal loss exposure to claims related to the widespread systems outage, and I'm pleased to report that our own business operations experienced very little disruption.

謝謝你，Craig。在我們討論財產與意外險事業群（Property and Casualty Group）結果之前，我想先簡要說明幾週前的 CrowdStrike 事件。我們認為，對於與大規模系統中斷相關的理賠，我們的損失曝險極小；同時我也很高興報告，我們自身的業務營運幾乎未受影響。

Turning our discussion to the quarter, I'll be referring to slides 8 and 9 of the webcast, which include an overview of our second quarter results. As you'll see on slide 8, our Specialty Property and Casualty insurance businesses generated a strong 90.5% combined ratio in the second quarter of 2024, an improvement of 1.4 points from what we reported in the second quarter of 2023.

回到本季的討論，我將參考網路直播第 8 與第 9 張投影片，其中包含我們第二季結果概覽。如第 8 張投影片所示，我們的專業型財產與意外險業務於 2024 年第二季產生強勁的 90.5% 綜合比率，較 2023 年第二季所報告的數字改善 1.4 個百分點。

Results for the 2024 second quarter include 2.3 points of catastrophe losses, compared to 3.5 points in the 2023 second quarter. Results in the second quarter benefited from 2.3 points of favorable prior year reserve development, compared to 4.0 points in the second quarter of 2023.

2024 年第二季結果包含 2.3 個百分點的巨災損失，相較之下 2023 年第二季為 3.5 個百分點。第二季結果亦受惠於 2.3 個百分點的前期年度準備金有利發展，相較之下 2023 年第二季為 4.0 個百分點。

We continue to feel good about the strength of our reserves and are especially pleased to see favorable prior year development from our commercial property, agricultural, executive liability, workers' comp and other businesses, which more than offset some adverse development in selected casualty businesses.

我們持續對準備金的充足性深具信心，並且特別樂見商業財產、農業、董監事責任、勞工補償及其他業務出現有利的前期年度發展，足以抵銷部分特定意外險業務的不利發展。

Second quarter 2024 gross and net written premiums were up 2% and 1%, respectively, when compared to the same period in 2023. We continue to achieve year-over-year premium growth as a result of a combination of new business opportunities, increased exposures, and a good renewal rate environment. This growth was partially offset by the timing of later reporting of crop acreage, which affects premium recognition and to a lesser extent, a proactive approach to managing exposures in our social inflation-exposed businesses. Taking these factors and seasonality into consideration, we expect growth in net written premiums to be a healthy 7% for the full year 2024. Average renewal pricing across our Property and Casualty group, excluding our workers' comp business, was up 8% for the quarter. Including workers' comp, renewal rates were up 6% overall. Both measures are in line with the previous quarter.

與2023年同期相比，2024年第二季毛簽單保費與淨簽單保費分別成長2%與1%。在新業務機會增加、曝險上升以及良好的續保率環境共同作用下，我們持續實現年對年保費成長。此成長部分被作物種植面積較晚申報的時點所抵銷，該因素影響保費認列時點；此外，我們在受社會通膨影響的業務上採取更積極的曝險管理作法，也在較小程度上造成影響。綜合考量上述因素與季節性，我們預期2024年全年淨簽單保費成長將維持健康的7%。本季我們財產與意外險事業群的平均續保定價（不含勞工補償業務）上升8%。若包含勞工補償，整體續保費率上升6%。兩項指標皆與前一季一致。

We reported overall renewal rate increases for 32 consecutive quarters, and we believe we're achieving overall renewal rate increases in excess of prospective loss ratio trends to meet or exceed targeted returns.

我們已連續32個季度回報整體續保費率上調，並且我們相信，為了達成或超越目標報酬，我們取得的整體續保費率上調幅度已高於預期損失率趨勢。

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

接下來我想切換到第9頁投影片，回顧我們各個專業財產與意外險業務群的一些重點。詳細內容已載於我們的財報新聞稿，因此我在此將聚焦於摘要結果。

The businesses in the Property and Transportation Group achieved a 92.9% calendar year combined ratio overall in the second quarter of 2024, an improvement of 1.3 points from the 94.2% reported in the comparable 2023 period.

2024年第二季，財產與運輸事業群整體達成92.9%的曆年綜合率，較2023年同期的94.2%改善1.3個百分點。

Second quarter 2024 gross and net written premiums in this group were both 2% higher than the comparable prior year period. Year-over-year premium growth was primarily attributed to new business opportunities, a favorable rate environment and increased exposures in our commercial auto businesses.

本事業群2024年第二季毛簽單保費與淨簽單保費皆較去年同期增加2%。年對年保費成長主要歸因於新業務機會、有利的費率環境，以及我們商業汽車業務曝險增加。

Later reporting of crop acreage, which impacts the timing of crop premiums more than offset additional crop premium associated with the CRS acquisition. This timing difference is more pronounced because we experienced the opposite scenario in the second quarter of 2023. The acreage reporting was early last year. This timing difference will reverse in the third quarter. Excluding crop, gross and net written premiums in this group grew by 7% and 5%, respectively. At this point in the growing season, we're optimistic about the crop year. The drought monitor continues to be significantly better than the prior two years in most growing regions of the country. And while we have some areas of the country that could use more moisture, we don't have any current concerns about widespread drought affecting our crop results this year.

作物種植面積較晚申報影響了作物保費入帳時點，其影響幅度超過因收購CRS所帶來的額外作物保費。由於我們在2023年第二季遇到相反情況，因此此時點差異更為明顯。去年種植面積申報較早。此時點差異將在第三季反轉。若排除作物，本事業群毛簽單保費與淨簽單保費分別成長7%與5%。就目前生長季進度而言，我們對本作物年度持樂觀態度。乾旱監測指標在全國多數種植區域持續顯著優於前兩年。雖然國內部分地區仍需要更多水分，但目前我們並不擔心今年會出現影響作物結果的廣泛乾旱。

Actually Hurricane Beryl pushed moisture up through the Midwest, providing some relief to crops that were experiencing significant heat. While current commodity futures pricing is lower than spring discovery prices, it remains within acceptable ranges.

事實上，颶風貝里爾（Beryl）將水氣推送至中西部，為遭遇高溫的作物帶來一些緩解。雖然目前大宗商品期貨價格低於春季發現價格，但仍處於可接受區間。

Overall [renewal] rates in this group increased 8% on average in the second quarter of 2024, about a point lower than the pricing achieved in the group for the first quarter of this year. I'm particularly pleased with the renewal rates achieved in our commercial auto liability line of business, where rates were up 16% in the second quarter. This follows a 21% increase in the first quarter, demonstrating our commitment to achieving rate adequacy and underwriting profits in this line of business. This is our 12th year of rate increases in this line.

2024年第二季，本事業群整體

Now, the businesses in our Specialty Casualty Group achieved an excellent 85.4% calendar year combined ratio in the second quarter of 2024, an improvement of 1.2 points from a very strong 86.6% reported in the comparable period in 2023. I'm especially pleased with the continued strength of our underwriting margins produced by our excess and surplus lines business, as well as those within our executive liability and workers' compensation operations.

接著，我們專業意外險事業群在2024年第二季達成優異的85.4%曆年綜合率，較2023年同期非常強勁的86.6%改善1.2個百分點。我尤其滿意我們超額與剩餘線（E&S）業務持續展現強勁的核保利潤率，以及我們董監事責任與勞工補償營運所貢獻的表現。

Second quarter 2024 gross and net written premiums increased 1% and 2%, respectively, when compared to the same prior year period. Approximately two-thirds of the businesses in this group reported year-over-year growth as a result of new business opportunities, higher rates and strong policy retention.

與去年同期相比，2024年第二季本事業群毛簽單保費與淨簽單保費分別增加1%與2%。本事業群約三分之二的業務因新業務機會、較高費率與強勁的保單留存而呈現年對年成長。

The growth in this group was partially offset by a planned measure of caution around some of our social inflation-exposed businesses, which reduces the impact of significant rate increases on overall premium growth. For example, we non-renewed several large housing accounts in our social services business, where we had poor loss experience. In our public entity business, we non-renewed or reduced capacity in several programs, and have generally increased the retention required for insureds. We also chose to cede more business in our excess liability business through the use of facultative reinsurance placements. Although these activities tempered growth, we believe these to be prudent underwriting actions.

本事業群的成長部分被我們對部分受社會通膨影響業務所採取的審慎計畫所抵銷，該作法降低了大幅費率上調對整體保費成長的貢獻。例如，在我們的社會服務業務中，因損失經驗不佳，我們對數個大型住宅帳戶不予續保。在我們的公共實體業務中，我們對數個方案不予續保或降低承保容量，並且整體上提高了被保險人需自留的額度。我們也選擇透過臨分再保安排，在超額責任險業務中分出更多業務。儘管這些作法抑制了成長，我們認為這些都是審慎的核保行動。

Excluding our workers' compensation businesses, renewal rates for this group were up approximately 7% in the second quarter, about a point lower than the first quarter. Overall renewal rates in this group including workers' comp, were up about 5%, consistent with the first quarter of this year. And I'm pleased that we continued to achieve renewal rate increases in excess of 10% during the quarter in several of those social inflation exposed businesses that I mentioned, including our public entity, social services and excess liability businesses.

排除勞工補償業務後，本事業群第二季續保費率約上升7%，較第一季低約1個百分點。若包含勞工補償，本事業群整體續保費率約上升5%，與今年第一季一致。我也很高興本季我們在我先前提到的數個受社會通膨影響的業務中，仍持續達成超過10%的續保費率上調，包括公共實體、社會服務與超額責任險業務。

The Specialty Financial Group continued to achieve excellent underwriting margins and reported an 89.7% combined ratio for the second quarter of 2024, an improvement of 5.3 points from the comparable period in 2023. Second quarter 2024 gross written premiums were flat and net written premiums were up 3% in this group, respectively, when compared to the prior year period. Growth in our financial institutions business was partially offset by the decision to pause writing of new intellectual property-related coverage in our innovative markets business. Renewal pricing in this group was up approximately 6% for the quarter, about one point lower than the previous quarter.

專業金融事業群持續達成優異的核保利潤率，並在2024年第二季回報89.7%的綜合率，較2023年同期改善5.3個百分點。與去年同期相比，本事業群2024年第二季毛簽單保費持平，淨簽單保費增加3%。我們金融機構業務的成長，部分被我們決定在創新市場業務中暫停承作新的智慧財產權相關保障所抵銷。本事業群本季續保定價約上升6%，較前一季低約1個百分點。

Our Specialty Other group, although small, includes our internal reinsurance facility that we typically don't discuss on our earnings calls, as it is small. Over the many years, this group has enabled us to corporately keep more net in certain historically profitable Specialty businesses when those individual business unit leaders opt to cede more of their business. Over time, this has been a successful strategy for us.

我們的「專業其他」事業群雖然規模不大，但包含我們的內部再保平台；由於其規模小，我們通常不會在法說會中討論。多年來，當個別事業單位主管選擇分出更多業務時，該事業群使我們能在公司層級於某些歷來獲利良好的專業業務中保留更多淨自留。長期而言，這對我們是一項成功的策略。

More recently, we've recorded some adverse development here that would have been otherwise attributed to our other business units, most notably those in our Specialty Casualty Group, had they retained that risk. Of course, these results are also included in our overall second quarter of 90.5% Specialty Group combined ratio. For perspective, however, if the results for our internal reinsurance facility were simply pushed in to the Specialty Casualty results in the second quarter of this year, that Group's calendar year combined ratio would still be under 90%.

近期，我們在此處記錄了一些不利發展；若當初由其他事業單位（尤其是專業意外險事業群）保留該風險，這些不利發展原本會歸屬於那些事業單位。當然，這些結果也已納入我們第二季整體90.5%的專業事業群綜合率之中。不過，作為參考，若將我們內部再保平台的結果在今年第二季直接併入專業意外險結果，該事業群的曆年綜合率仍將低於90%。

Craig and I are pleased to report these strong results for the second quarter, and we're proud of our proven track record of long-term value creation. Our insurance professionals have exercised their specialty P&C 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 this year and beyond.

Craig 和我很高興向各位報告第二季的強勁成果，我們也為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（P&C）方面的知識與經驗，巧妙地因應市場環境；而我們的內部投資團隊在管理我們 150 億美元投資組合時，兼具策略性與把握機會的能力。我們已做好充分準備，在今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 Q&A on today's call and Craig, Brian and I would be happy to respond to any questions.

接下來我們將開放電話線進行今天會議的問答環節，Craig、Brian 和我都很樂意回應任何問題。

Thank you. At this time, we will conduct a question-and-answer session. (Operator Instructions)

謝謝。此時我們將進行問答環節。（接線員指示）

Our first question comes from the line of Michael Zaremski of BMO Capital Markets.

我們的第一個問題來自 BMO Capital Markets 的 Michael Zaremski。

Hey, good morning. Thanks. First question, just, I guess it's kind of high level, unless you want to unpack any more details, but clearly results overall were excellent. But as an analyst trying to sometimes, we focus a little bit on some of the negative items or less good items.

嗨，早安。謝謝。第一個問題，我想可能比較高層次，除非你們想再拆解更多細節，但整體而言結果顯然非常出色。不過作為分析師，有時我們會稍微更聚焦在一些負面項目或相對不那麼好的項目上。

So in terms of the pulling back in certain lines of business, especially the social inflationary lines, I guess what's changed versus, a quarter or two ago that's causing the pullback? And I guess then if you're continuing to see loss prices in excess of loss trend, but now you're pulling back, does that mean that there are certain lines where there's either more uncertainty in loss trend or maybe right, pricing just isn't meeting loss trend in certain social inflationary lines? Thanks.

因此，關於在某些業務線（特別是受社會通膨影響的業務線）上縮手，我想問相較於一兩季前，現在是什麼改變導致你們縮手？另外，如果你們仍看到損失價格（loss pricing）高於損失趨勢（loss trend），但現在卻在縮手，是否代表某些業務線的損失趨勢不確定性更高，或是對某些受社會通膨影響的業務線而言，定價其實沒有跟上損失趨勢？謝謝。

Yeah, I think, it's some of all of the above that you mentioned. Again, we fastidiously do quarter-by-quarter reviews, actuarial reviews of all of our businesses in that and we're continually adjusting our quarterly loss ratio trends according to what we're seeing. And over the past couple of years or even longer in lines like commercial auto liability, clearly the loss ratio trends have moved upward.

是的，我想你提到的各種因素都有一些。我們一向非常嚴謹地逐季進行檢視，對所有業務做精算審視，並且會依據我們所觀察到的情況，持續調整每季的損失率趨勢假設。而在過去幾年甚至更長時間裡，像商業車險責任（commercial auto liability）這類業務線，損失率趨勢顯然是往上走的。

I do think, in certain businesses, I like the rate that we're getting, particularly the double-digit rate that we're getting in a lot of the social-exposed lines. But yeah, I think there are accounts that at no matter what price or terms or at what price or terms the given market will accept, our appetite may be less aggressive than other of our competitors.

我確實認為，在某些業務上，我喜歡我們目前取得的費率水準，特別是在許多暴露於社會通膨的業務線上，我們拿到的是兩位數的費率提升。但沒錯，我想有些帳戶不論以市場可接受的價格或條款來看，我們的承保偏好（appetite）可能會比某些競爭對手更不積極。

I do think that there is - that may be part of the reason, though, over time, we really have some of the best underwriting results and returns over - as you've seen a sheet that we've had in our deck from time to time over a one-year, five-year, 10-year and 15-year period of time. So I think there's a reason for that. Where we see that we need to make adjustments in our appetite and in a given line or given areas of our business, we're going to do that.

我確實認為這可能是原因之一；不過長期來看，我們的承保成果與報酬率一直是同業中最好的之一——正如你們也看過我們簡報中不時出現的那張表，涵蓋 1 年、5 年、10 年與 15 年期間。所以我認為這背後是有原因的。當我們看到需要在承保偏好、特定業務線或特定業務領域做調整時，我們就會這麼做。

Got it. And you might have said this just, commercial auto pricing had really accelerated in recent quarters, pretty high levels. Can you give us an update on kind of how that's trending currently in the portfolio?

了解。另外你可能剛剛有提到，商業車險定價在最近幾季加速上升，幅度相當高。你能否更新一下，目前在你們投資組合中的趨勢大概如何？

Sure. Actually, I think I just mentioned in the script that in the quarter, commercial auto liability increases were about 16% on top of 21%. In our case, when we look at year-to-date, our overall commercial auto results in that, we're kind of breakeven to a small underwriting profit overall. It's the commercial auto liability line that has a small underwriting loss in that.

當然可以。其實我在講稿裡剛提到，本季商業車險責任的費率上調約 16%，是在先前 21% 的基礎上再上調。就我們而言，若看年初至今，我們整體商業車險的結果大致持平到小幅承保獲利。其中只有商業車險責任這條線呈現小幅承保虧損。

So we're particularly focused with workers' comp with National Interstate, the business is really good, really solid underwriting profit. We're focused on the commercial auto liability part of the business and where the loss ratio trends are higher. I think for that reason, that's why we're getting a double-digit plus price increase. And I think we're also looking to make other underwriting adjustments over time. We're serious about wanting to improve our commercial auto and particularly our commercial auto liability results. Now at a small underwriting profit breakeven, we have a solid return on equity in that business and with the workers' comp in the transportation business, we're making very good return. I think our results are probably five or six points better is what our guys would tell me than the industry. But we're an underwriting-focused company and we'd like to see the commercial auto liability and the overall commercial auto at more of a solid underwriting profit in that. Does that help?

因此我們特別關注 National Interstate 的勞工補償險（workers' comp），那塊業務表現非常好，承保獲利相當穩健。我們也聚焦在商業車險責任這部分，因為那裡的損失率趨勢較高。我想也正因如此，我們才會取得兩位數以上的費率調升。同時我們也在評估，隨時間推進再做其他承保調整。我們很認真希望改善商業車險，尤其是商業車險責任的結果。目前在小幅承保獲利、接近損益兩平的情況下，該業務仍能帶來穩健的股東權益報酬率（ROE）；而在運輸業務中的勞工補償險方面，我們的報酬非常好。我想我們團隊會告訴我，我們的結果大概比產業平均好 5 到 6 個點。但我們是一家以承保為核心的公司，我們希望商業車險責任以及整體商業車險能呈現更扎實的承保獲利。這樣有回答到嗎？

Yes, that helps. And just lastly, if there were material crop reserve releases, we heard your commentary and we can see the data, on the prospectively crop returns, knock on wood, looking good. But if there were a material amount of crop reserve releases this quarter, is that unusual in terms of seasonality? And if so, what is the seasonality on crop, if you could remind us, releases and what happened?

有，這很有幫助。最後一個問題，如果本季有顯著的農作物準備金釋出（crop reserve releases），我們聽到你們的說明，也看到數據；就目前看來，未來的作物收成（prospective crop returns）應該不錯，希望如此。但如果本季確實有顯著的農作物準備金釋出，這在季節性上是否不尋常？如果是的話，能否提醒我們農作物業務在準備金釋出方面的季節性，以及這次發生了什麼？

Yeah. Brian can add some color on that, and I can add additional color on crop here in a minute also here.

好的。Brian 可以補充一些背景，我稍後也可以再補充一些關於農作物的說明。

Sure, so on the profit margins for crop, we tend to book the profit in that business when the crops come out of the ground and for the corn and soybeans, the main products that sort out at the end of the year. So we're booking our crop profit, it tends to be heavily weighted into the fourth quarter, but there's still a lot of crop business to be settled after that.

當然。就農作物業務的利潤率而言，我們通常在作物收成出土後才會認列該業務的利潤；以玉米和黃豆這兩個主要產品來說，主要會在年底結算。因此我們認列的農作物利潤通常高度集中在第四季，但之後仍有不少農作物業務需要結算。

So we typically have a significant amount of reserves still up at the end of the year and that - because we're conservative in our booking, that has tended to lead to some favorable development in the first quarter of the subsequent year. And then sometimes, with some of the products like area coverages and things like that, some of that takes a little bit longer to settle. So there can be some favorable or adverse development in the second quarter of the year. That's kind of the final settlements from the prior crop year. In this particular case, that was a little bit higher level of favorable development this year than last year. So when we talk about favorable development in the Property and Transportation Group, a good chunk of that's coming off of crop and it's a little bit more than it would have been in a typical second quarter.

所以我們通常在年底仍會保留相當可觀的準備金；由於我們在認列上較為保守，這往往會在次年第一季帶來一些有利發展（favorable development）。另外，有些產品例如區域型保障（area coverages）等，結算時間會更長一些。因此在第二季也可能出現有利或不利發展。那大致上是前一個作物年度的最終結算。就這次而言，今年的有利發展水準比去年稍高。因此當我們談到財產與運輸事業群（Property and Transportation Group）的有利發展時，其中相當一部分來自農作物，而且比典型的第二季要多一些。

Yeah, I'll maybe add a little bit more color on crop overall. When you look at the corn and soybean good and excellent percentages, they're much higher as of the latest USDA report, August 4, than what they were last year.

我再補充一些關於整體農作物的背景。從最新的 USDA 報告（8 月 4 日）來看，玉米與黃豆的「良好與優良」比例（good and excellent percentages）遠高於去年同期。

As far as the current commodity prices, I was just looking this morning, corn is down 13.6%, soybeans, 11.7%, and that's weighed against an average deductible excluding rainfall on our business of around 23%. So we don't have a tendency to get too concerned until you start seeing price declines of closer to 20% or so, as it would impact on your losses and that.

至於目前的大宗商品價格，我今天早上剛看，玉米下跌 13.6%，黃豆下跌 11.7%；相較之下，我們業務的平均自負額（deductible）（不含降雨因素）約為 23%。因此通常在價格跌幅接近 20% 左右之前，我們不太會過度擔心，因為那才會開始對損失造成影響。

I think additional positive things at this point is winter wheat, which is, I think maybe 8% or 9% of our business, is in much better results this year, I think, than the prior year. The same thing with rainfall. And somebody was asking me today - I think my brother, Craig was asking me about Hurricane Debby and how much that might impact on us.

我想目前其他正面因素還包括冬小麥，約占我們業務的 8% 或 9%，今年的結果我認為比前一年好很多。降雨方面也是如此。而且今天有人問我——我想是我弟弟，Craig 問我颶風 Debby 可能會對我們造成多大影響。

We think that's probably a non-event as far as the crop business. And one particular reason is we do write rainfall in Florida. So that actually offsets any exposure that comes out of Debby. We don't have - we have a very - almost an insignificant amount of our premiums come from the Debby-affected area in that. So, a little bit of additional color there. Overall, again, I think we're very optimistic about the crop year.

我們認為，就農作物業務而言，這大概不會造成什麼影響。其中一個特別的原因是，我們在佛羅里達有承作降雨保險。因此，這實際上會抵銷任何因 Debby 而產生的曝險。我們沒有——我們有一個非常——幾乎可忽略不計的保費是來自 Debby 影響區域。所以，補充一點背景說明。總體而言，再次強調，我們對今年的作物年度非常樂觀。

Thank you for the insights.

謝謝你的見解。

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

我們的下一個問題來自 Raymond James 的 Gregory Peters。

Good morning, everyone. So in one of your previous answers, you spoke of the favorable development and the Property and Transportation components. and I think you called out the crop impact there. I'm wondering if you provide any color to moving pieces of favorable development in either the Casualty business or the Specialty Finance business?

各位早安。所以在你們先前的一個回答中，你們談到有利發展以及財產與運輸（Property and Transportation）組成部分，我想你們也特別提到其中的作物影響。我想請問，你們能否就責任險業務或專業金融（Specialty Finance）業務中，有利發展的變動因素提供一些補充說明？

Sure, Greg. This is Brian. So in the Casualty Group, we do have net favorable development overall. And what we have going on there, there are things going in both directions. The workers' comp business, which has historically been a source of favorable development for us, has continued to be favorable - similar amounts of favorable development relative to recent quarters.

當然可以，Greg。我是 Brian。在責任險集團（Casualty Group）方面，我們整體確實有淨有利發展。而我們那邊的情況是，有些因素往兩個方向在變動。工傷補償（workers' comp）業務歷來一直是我們有利發展的來源，且目前仍然維持有利——相較於最近幾季，有利發展的幅度相近。

The second quarter of 2023, we had a little bit less favorable development than we had kind of in a typical quarter, but this quarter was a fairly normal quarter there. There are other areas of favorable development, as Carl mentioned, in things like executive liability and some other areas. But offsetting that is a modest amount of adverse development in different business units.

2023 年第二季，我們的有利發展比典型季度略少一些，但本季在那部分算是相當正常的一季。另外也有其他有利發展的領域，如 Carl 提到的高階主管責任（executive liability）以及其他一些領域。但與此相抵的是，在不同業務單位出現了小幅不利發展。

We particularly mentioned an excess liability business, and that really is because that's the only line of business that had any kind of sort of a larger amount of adverse development, but even that wasn't a material amount overall. So it's not that we have huge takedowns out of the normal course in workers' comp offsetting other things. It's just that there were small blips in a couple of business units across a couple of accident years in the social inflation-exposed business there. So overall, we feel really good about where our reserves are and are pleased that we have favorable development overall in that category.

我們特別提到超額責任險（excess liability）業務，主要是因為那是唯一一條出現相對較大不利發展的業務線，但即便如此，整體而言也不算重大。所以並不是說我們在工傷補償上有超出常態的大幅回沖去抵銷其他項目。只是因為在那類暴露於社會通膨（social inflation）的業務中，跨幾個事故年度、在少數幾個業務單位出現了一些小波動。因此整體來看，我們對準備金水位非常有信心，也很高興在該類別中整體仍呈現有利發展。

In the Financial segment, there were ins and outs, but nothing individually material there so we had some favorable development in some lines, some adverse in others, and that just netted down to a very small amount. But none of those are large amounts going in either direction.

在金融（Financial）分部方面，有進有出，但單一項目都不具重大性；我們在某些業務線有有利發展、在其他業務線有不利發展，最後淨額下來只是一個非常小的數字。但這些項目不論正負方向都不是很大的金額。

Okay, great. Then just maybe step back on the Specialty Financial segment. Gosh, it's been producing pretty stable results and excellent results for an extended period of time. Just curious, when you go through planning, what does a bad year in Specialty Financial look like for you guys? Because I'm not sure we've really had it. And what kind of loss events should we be on the lookout for that might trigger a less than desirable result inside Specialty Financial?

好的，很棒。那再退一步談談專業金融（Specialty Financial）分部。天啊，它在很長一段時間內都產出相當穩定且非常優異的結果。我只是好奇，你們在做規劃時，專業金融所謂的「不好的一年」對你們來說會是什麼樣子？因為我不確定我們是否真的看過。以及有哪些損失事件是我們應該留意、可能會觸發專業金融內部出現較不理想結果的？

Well, obviously, a major hurricane would cause a year not to be as good. But one way we do business in FIS, our lender-placed property business, is a little different than maybe Assurant or some others, is that with our producers, we have a sliding scale kind of a commission type of agreements where, to a certain extent, if the loss ratio is worse in a given year, some of the ceding commission goes down. Conversely, if it's really great results, the ceding commission goes up. That's why I think Brian's pointed out, in different years, there can be an aberration in our expense ratio tied to the way that we do business in lender-placed property. We kind of like that approach because it helps to limit - it helps to soften your downside when you have larger event years in that. So I think that would be the main thing that would be a driver there on Specialty Financial because of the size of the lender placed property business. That business today will be $600 million-plus in gross written premium.

嗯，顯然，一場大型颶風會讓某一年沒那麼好。但我們在 FIS（我們的貸款人置入式財產保險 lender-placed property 業務）上的作法，和 Assurant 或其他一些公司可能有點不同：我們與通路（producers）之間有一種滑動式的佣金協議，也就是在某種程度上，如果某一年的損失率較差，部分分出佣金（ceding commission）就會下降。反過來，如果結果非常好，分出佣金就會上升。這也是我想 Brian 曾指出的原因：在不同年度，我們的費用率可能會因為這種貸款人置入式財產保險的商業模式而出現異常波動。我們其實喜歡這種作法，因為它有助於限制——也有助於在發生較大型事件年度時，緩和下行風險。所以我認為，因為貸款人置入式財產保險業務規模很大，這會是專業金融最主要的驅動因素。該業務目前的毛簽保費（gross written premium）將超過 6 億美元。

Thanks for that detail, Carl. Maybe building on just my last question would be, Carl, I believe in your comments you mentioned inside the Casualty business, the use of some facultative reinsurance in certain circumstances. Maybe you could, to the extent you're willing, provide us with a little more information about what's going on with that decision. And maybe from a different view, what was the pricing like? Obviously, it's favorable, I guess, for you to utilize the product, but maybe you can just talk about the decision behind that and where it was used?

謝謝你提供這些細節，Carl。延續我上一個問題，Carl，我記得你在評論中提到，在責任險業務內，你們在某些情況下會使用一些臨分再保（facultative reinsurance）。如果你願意的話，能否就這個決策背後的情況再多提供一些資訊？另外從另一個角度看，當時的定價大概是什麼樣子？顯然，使用這個產品對你們來說應該是有利的，但你能否談談做出這個決策的原因，以及它用在了哪些地方？

Yeah. Well, first of all, overall on pricing, on our - I think you're kind of asking me to address kind of the excess liability part of our business, I think.

可以。嗯，首先就整體定價而言——我想你是在請我談我們業務中的超額責任險（excess liability）部分，對吧。

Yeah.

對。

When you look at it - we have a couple of businesses that write - that are major writers of that. Happy that we're seeing double-digit price increase in those - in both of our large businesses in that. We have - one of the businesses in particular has a bigger emphasis on Fortune 500, Fortune 1,000 type of business. That's the business that we've seen more unfavorable loss reserve development. But in both businesses - and in that business, we would be using more facultative reinsurance, maybe on certain risks, if we want to downsize our exposure, risk-by-risk, depending on the risk profile. I think that's what the strategy is. Obviously, we, along with other carriers, have also been moving up the tower to potentially move farther away from risks, particularly that have heavy commercial auto liability exposures. So those would be a few examples of the kind of things that we're doing in excess liability, obviously, besides price.

你看——我們有幾個業務會承作——而且是該領域的主要承保人。很高興看到我們兩個大型業務在那部分的價格都出現雙位數的調升。其中有一個業務特別更偏重《財富》500 強、1000 強（Fortune 500、Fortune 1,000）類型的客戶。那個業務就是我們看到較多不利損失準備金發展的地方。但在兩個業務中——而在那個業務裡，如果我們想要縮小曝險，我們會在某些風險上更多使用臨分再保，按個別風險（risk-by-risk）視其風險輪廓而定。我想這就是策略。顯然，我們和其他承保公司一樣，也在提高承保層級（moving up the tower），以便可能離某些風險更遠一些，特別是那些具有大量商業車險責任（commercial auto liability）曝險的風險。所以，除了價格之外，這些就是我們在超額責任險方面正在做的一些事情的例子。

Got it. Thanks for the answers.

了解。謝謝你的回答。

Our next question comes from the line of Charlie Lederer of Citigroup.

我們的下一個問題來自花旗集團（Citigroup）的 Charlie Lederer。

Hey. Thank you. The improvement in the Specialty Casualty current accident year loss ratio ex-cat accelerated in the quarter. Can you talk about what drove that, whether it's changes to prospective loss trends or if it's due to some of the underwriting actions you've taken?

嗨。謝謝。本季專業責任險（Specialty Casualty）當期事故年度損失率（current accident year loss ratio）在扣除巨災（ex-cat）後的改善加速了。你能談談是什麼驅動了這點嗎？是前瞻性損失趨勢（prospective loss trends）的變化，還是因為你們採取的一些核保措施所致？

Sure, Charlie. This is Brian. The biggest driver of the improvement in the accident year loss ratio ex-cat for Casualty is coming out of our targeted markets businesses. So not only have we been getting good rate increases there and taking underwriting actions in areas like our specialty human services business that we talked about last quarter, or our public entity business that we talked about last year, where we've been making some decisions on pricing as well as, for example, on the public entity business, looking at the insureds' retention. So there we're writing coverage over pooled retentions, and we've been requiring higher retentions by insureds. So all of that's leading to improved profitability in our targeted markets business. Offsetting that a little bit is, in our workers' comp, we are being cautious in our accident year picks there, as you know, though, a portion of our business is in Florida where there have been rate decreases as well as we're just being cautious on costs going forward, on medical costs. So the big driver of the improvement there really is, I would say, is the underwriting actions and pricing in the targeted markets.

當然，Charlie。我是 Brian。意外年度（accident year）除巨災（ex-cat）的意外險（Casualty）損失率改善，最大的驅動因素來自我們的目標市場（targeted markets）業務。因此，我們不僅在那裡取得了良好的費率調升，也在我們上季提到的專業人力服務（specialty human services）業務、或我們去年提到的公共機構（public entity）業務等領域採取了承保行動；在這些業務上，我們也在定價方面做了一些決策，並且例如在公共機構業務上，檢視被保險人的自留額（retention）。因此，我們在那裡承保的是超過共同自留額（pooled retentions）之上的保障，並且要求被保險人提高自留額。所以，這些都帶動了我們目標市場業務獲利能力的提升。稍微抵銷的一點是，在我們的勞工補償險（workers' comp）方面，如你所知，我們在意外年度的估計上採取較為審慎的態度；此外，我們有一部分業務在佛羅里達州，那裡出現了費率下調，同時我們也對未來成本、尤其是醫療成本，保持謹慎。因此，我會說，那裡改善的主要驅動因素，確實是目標市場中的承保行動與定價。

Got it. That's helpful. Thanks. I guess, on the top-line headwinds in Specialty Financial, can you help us kind of think about, I guess, the runway for that? The pause you mentioned in the innovative markets business, how long do you see that playing out and how big of a headwind that is still over the next two or three quarters?

了解。這很有幫助。謝謝。我想就 Specialty Financial 的營收端（top-line）逆風而言，你能否幫我們思考一下，這個逆風大概還有多長的「跑道」（runway）？你提到創新市場（innovative markets）業務的暫停（pause），你認為這會持續多久？在接下來兩到三個季度，這仍會是多大的逆風？

Sure. So there's a few things going on in Financial. The first thing that I'll remind you of is the biggest business in there is our financial institutions business, where the lender-placed insurance is, and that's a business that really started growing significantly in the second quarter of last year and that continued on to where now it's more leveled off. So in the second half of the year there, we kind of think things will be - not as much growth coming out of FIS just because we had the growth last year and it's more of a maintaining it there. In the innovative markets business that we mentioned the pause in, that's been a small business for us. We, in our innovative markets business, we write a number of different coverages and not only the IP-related coverages, but also unemployment risks as well as some environmental-related compensatory mitigation products. Where we paused in the new IP risk, that's two products really, a patent infringement defense expense product, as well as an intellectual property collateral protection product.

當然。所以 Financial 這邊有幾件事同時在發生。第一點我先提醒你，裡面最大的業務是我們的金融機構（financial institutions）業務，也就是放款人置入保險（lender-placed insurance）所在的業務；這個業務在去年第二季開始顯著成長，並持續到現在，成長已經比較趨於平穩。因此在今年下半年，我們認為 FIS 的成長不會那麼多，主要是因為去年的成長已經發生了，現在更像是在維持既有規模。至於我們提到暫停的創新市場業務，對我們而言一直是較小的業務。在創新市場業務中，我們承作多種不同的保障，不僅是與智慧財產（IP）相關的保障，也包含失業風險（unemployment risks），以及一些與環境相關的補償性緩解（compensatory mitigation）產品。我們暫停承作新的 IP 風險，主要是兩個產品：一個是專利侵權抗辯費用（patent infringement defense expense）產品，另一個是智慧財產擔保品保護（intellectual property collateral protection）產品。

They're not real big businesses. But when you sort of look at the financial institutions business, that growth there is - kind of already happened that with intellectual property-related coverages on pause, that kind of makes it flat for that by segment.

它們都不是很大的業務。但當你把金融機構業務的成長（基本上已經發生）與智慧財產相關保障的暫停放在一起看，這使得該分部（segment）整體大致呈現持平。

Okay. I guess, so in your - in the Great American Insurance statutory statements, there is a separate line for collateral protection. Is that, I guess what businesses are in that? Is that just the IP business or is that also the patent infringement business? Just curious, I guess.

好的。我想問一下，在 Great American Insurance 的法定財報（statutory statements）裡，有一個單獨的科目是 collateral protection（擔保品保護）。那裡面包含哪些業務？那是只有 IP 業務，還是也包含專利侵權業務？我只是好奇。

We could, we'd probably have to look at that to figure out all that rolls up in there to make sure that we give you the right answer. But maybe Diane can follow up with you on that later.

我們可能需要再查一下，確認那個科目底下究竟彙總了哪些內容，才能確保給你正確的答案。不過也許 Diane 之後可以再跟你追蹤回覆。

Okay. Yeah, okay no problem. Just lastly, I guess can you just talk about how you're feeling about, I guess, the cat exposure in the lender-placed business and heading into kind of peak wind season?

好的。嗯，沒問題。最後一個問題，你能否談談你們對放款人置入（lender-placed）業務的巨災（cat）曝險的看法，以及進入風季高峰期（peak wind season）時的感受？

Well, we not only manage our lender-placed property business, but our exposures overall through our modeling and that. We still have, when you look at our one in 250 and one in 500-year projected average kind of hurricane exposures, Brian or Diane, today, I mean, those would be roughly what, 2 points and 4 points?

嗯，我們不僅管理放款人置入的不動產（property）業務，也透過模型等方式管理我們整體的曝險。我們目前仍然有——當你看我們 1/250 年與 1/500 年事件下的預估平均颶風曝險時，Brian 或 Diane，今天大概會是什麼水準？大概是 2 個點和 4 個點左右？

Yeah, even at one in 500-year event, it looks like about a 4% of shareholders' equity. So not something that's going to be overly material at AFG, should that happen.

對，即使在 1/500 年事件下，看起來大約是股東權益的 4%。所以即便真的發生，對 AFG 來說也不會是特別重大的影響。

That said you know, in our lender-placed property business, we just don't lollygag around in the risks that we pick. We're continuing with our less desire to have coastal exposure relative to others. We try to pick accounts that would have a lower Florida, lower Southeast Coast or Texas exposure. Generally over time, we like our profile of our business to be lower than what the industry generally is from a cat exposure. But as that business has grown tremendously over the past 18 months, clearly, it added to our exposures. We still feel comfortable with the cat cover and the cat bond that we have in place, and at $70 million, a reasonable retention for the risks that we write.

話雖如此，你知道，在我們的放款人置入不動產業務中，我們在挑選風險時不會掉以輕心。相較於其他同業，我們持續維持較不偏好沿海曝險的策略。我們會盡量挑選在佛羅里達、東南沿岸或德州曝險較低的帳戶。長期而言，我們希望我們的業務輪廓（profile）在巨災曝險上低於整體產業的一般水準。但由於該業務在過去 18 個月大幅成長，顯然也增加了我們的曝險。我們仍對目前配置的巨災再保（cat cover）與巨災債券（cat bond）感到安心，而以 7,000 萬美元的自留額（retention）來看，對我們承作的風險而言屬於合理水準。

Got it. Thank you, guys.

了解。謝謝各位。

Our next question comes from the line of Paul Newsome of Piper Sandler.

下一個問題來自 Piper Sandler 的 Paul Newsome。

Good morning. Congrats on the quarter. I was hoping to ask a couple of maybe bigger picture questions. One of your peers talked a little bit about - a couple of your peers have talked about the challenge of talent and expanding into new segments, in the specialty commercial world and that perhaps it's gotten a little bit more competitive. Is that your perspective or do you have any thoughts on sort of the challenges with new talent?

早安。恭喜本季表現。我想問幾個可能比較宏觀的問題。你們的一些同業談到，在專業商業保險（specialty commercial）領域，人才與擴展到新分項（segments）面臨挑戰，而且競爭可能變得更激烈了一些。這也是你們的看法嗎？或你們對新人才方面的挑戰有什麼想法？

Well, I guess first of all, from a macro standpoint, our turnover overall as a company would be much lower than our peers and others in general. That said, I think to attract and keep good people, I think, is a continual challenge, both in providing the right compensation packages within our industry and that.

嗯，我想首先從宏觀角度來看，我們公司整體的離職率（turnover）會明顯低於同業以及一般水準。不過話說回來，我認為吸引並留住優秀人才，一直都是持續性的挑戰，包含在本產業內提供合適的薪酬方案等。

I think we've had a number of our 35 business units at one time or another over the past couple of years where we've lost some key personnel, but nothing that we couldn't handle. As a company, for 20, 25 years or so, we not only do business reviews of every one of our businesses strategically every couple of years, we do people development reviews every year of all of our businesses. And we have - we're very fastidious about developing very specific succession plans for each of those 35 businesses with fairly detailed - laying out ideas of how - what each of the potential successors, what they need to do to develop into being the lead person in those businesses. So I think one thing that's helped us is that succession planning that we do, that could be a little bit different and more intensive than some of our peers.

我想在過去幾年裡，我們 35 個事業單位中，有不少單位在某些時點流失過一些關鍵人員，但都在我們可控範圍內。作為一家公司，過去大約 20、25 年，我們不僅每隔幾年會對每一項業務做策略性的業務檢討（business reviews），我們也會每年對所有業務做人才發展檢討（people development reviews）。而且我們——我們非常嚴謹（fastidious）地為這 35 個業務中的每一個制定非常具體的接班計畫（succession plans），內容相當細緻——列出各個潛在接班人需要做什麼、如何培養，才能發展成為該業務的負責人。所以我認為，這種接班規劃對我們很有幫助；相較部分同業，我們可能做得更深入、更密集。

Great. And then another bigger picture question. Maybe an update on capital management thoughts and special dividends versus buybacks versus M&A, and where you sit and think the most likely use of your future cash flow will go.

很好。接著另一個比較宏觀的問題。想請你更新一下資本管理（capital management）的想法：特別股利（special dividends）相對於庫藏股回購（buybacks）相對於併購（M&A），你們目前的立場如何？以及你們認為未來現金流最可能的用途會是什麼？

Sure. Paul, this is Craig. As Carl stated in the past, there's always a flow of M&A deals that our group is looking at. And as he said, we're pretty selective. We expect that the right returns, not just a deal that is accretive, which is very easy to do with interest rates where they are today, but you're constantly looking at potential acquisitions.

當然。Paul，我是 Craig。如同 Carl 過去提到的，我們團隊一直都有一批 M&A 案件在持續評估。而且如他所說，我們相當挑剔、審慎。我們期待的是合適的報酬，不只是做一筆具增益性（accretive）的交易——在目前利率水準下，要讓交易具增益性其實很容易——但我們會持續尋找潛在的收購機會。

As you know, we have a significant amount of excess capital today that is expected to build through the balance of the year. And consistent with what we've said in the past, we're always looking at the possibility of share repurchases and additional special dividends. Probably want to get a little further along in the hurricane season before we make final decisions on that. But those are two things that we're certainly considering.

如各位所知，我們目前有相當可觀的超額資本，預期在今年剩餘期間還會持續累積。而且一如我們過去所說，我們一直在評估股票回購以及額外特別股利的可能性。在做出最終決定之前，我們可能希望在颶風季再往後推進一些。但這兩件事我們確實都在考慮之中。

Yeah, terrific. Appreciate the help, as always.

是的，太好了。一如既往，感謝你的協助。

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

下一個問題來自 Jefferies 的 Andrew Anderson。

Hey, good morning. You had mentioned some adverse development on excess liability. Could you talk about what accident years that was from and maybe size the magnitude there?

嗨，早安。你提到超額責任險出現一些不利發展。可以談談那是哪些事故年度造成的，以及大概的規模幅度嗎？

So, it's small amounts over multiple accident years. So it covers a little bit from 2019 to 2023, so a little bit in several of those years. It's not a huge amount overall. It's just the largest individual line of business that has had any adverse development at all. So it's not a real big dollar amount. It was spread across multiple accident years.

所以，這是在多個事故年度上的小額變動。大致涵蓋 2019 到 2023 年，因此其中好幾個年度都有一些。整體金額並不大。只是它是所有業務線中，出現任何不利發展的最大單一業務線。所以並不是很大的金額。而且是分散在多個事故年度。

Okay. And on the IP collateral protection product, can you talk about the frequency trends that you're seeing there? And I guess, is that in reaction to increased default rates that some peers have been talking about? And if so, has there been any impact on the underlying margins or reserves?

了解。另外關於 IP 擔保品保護產品，你們看到的出險頻率趨勢如何？我想問的是，這是否是在回應一些同業提到的違約率上升？如果是，對於底層利潤率或準備金是否有任何影響？

It's a very small business for us with a limited amount of exposure. We're reacting to what we're seeing in our individual products. We're not able to comment on competitors' products of their experiences, but the losses do occur in that business if there is a default on the loan, as well as a decline in the value of the collateral which wouldn't cover the loan. And we're reacting to the information that we have available at the time. We have strengthened reserves in that area in the first six months of this year. We're monitoring it closely, but it's just not a real big business for us.

這對我們來說是非常小的業務，曝險也有限。我們是根據自身各項產品所觀察到的情況來因應。我們無法評論競爭對手的產品或其經驗，但在該業務中，若貸款發生違約，以及擔保品價值下跌而不足以覆蓋貸款時，就會產生損失。我們會依據當下可取得的資訊來做出反應。今年上半年我們已在該領域強化了準備金。我們會密切監控，但這對我們而言確實不是很大的業務。

Thank you.

謝謝。

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

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

Great. Thanks so much. A couple of small questions. First, given the current level of rate increases and loss trends in commercial auto, when do you think you'll be at target margins for commercial auto liability?

很好。非常感謝。有幾個小問題。第一，考量目前商用車險的費率上調幅度與損失趨勢，你認為商用車責任險何時能達到目標利潤率？

That's a good question, considering we're in our 10th or 12th year of taking rate, I would have thought that we would have been at the right margins now. But with the prospective loss ratio trends for everyone that have kind of gone up with it's -- we're continuing to even maintain adequate and good solid returns, we're having to take double-digit rate and commercial auto liability over many years so far. So I wish I had a specific answer there for you. I'm - we're doing everything we can, both price and underwriting action-wise to drive towards an underwriting profit. I'm hopeful that over the next 12 months that we'll see some positive improvement.

這是個好問題。考量我們已經連續第 10 或第 12 年在調升費率，我原本以為現在應該已經達到合適的利潤率了。但由於大家的預期損失率趨勢都有所上升，為了持續維持足夠且穩健的報酬，我們多年來在商用車責任險仍不得不採取雙位數的費率調升。所以我希望能給你一個明確答案，但目前做不到。我們正在盡一切努力，無論在定價或核保措施上，推動達成核保獲利。我希望在未來 12 個月內能看到一些正向改善。

Okay. No, that's very helpful. The press release mentioned improved workers' compensation profitability year-over-year. Last year, obviously, there was sort of a accident year true-up and adjusted approach to reserve development. Was there any other issue translating into better profitability this year than last year in workers' comp?

好的。不，這很有幫助。新聞稿提到工傷補償險（workers' compensation）獲利能力年增改善。去年顯然有某種事故年度的調整（true-up）以及對準備金發展的調整方法。今年工傷險獲利比去年更好，還有其他因素嗎？

No, not really. Last year, in the same quarter, we just experienced a lower level of favorable development than we did this year in the second quarter. So the second quarter of this year was more of a - it was more consistent with what's been happening in recent quarters. It's just the second quarter of last year was a lower level of favorable development, so overall, workers' comp profitability is better this year than last year because of that.

沒有，並沒有。去年同一季度，我們只是經歷了比今年第二季更低的有利準備金發展。所以今年第二季更像是——更符合近幾季的情況。只是去年第二季的有利發展較低，因此整體而言，工傷險今年的獲利比去年更好就是因為這點。

Yes, as far as our overall workers' comp results through the second quarter and six months, they're excellent. I think - we still think the 2024 accident year combined ratio will be higher than last year, but still at a solid underwriting profit. And still pleased, even with a 15% rate decline there in Florida. I think Summit's overall prices are down maybe 13% through six months, but we're still projecting, even with that rate decline in Florida, a solid accident underwriting profit this year. So I think that's a positive. And the comp business at National Interstate and Strategic Comp, the other large businesses continue to have good calendar and accident year underwriting results through the first six months. Our California comp business is the only one that has an underwriting loss through six months. And we are seeing some positive - actually, I think there was a 3% price increase that we got on our book in California, through the first six months, which was a positive. And we're getting some price increase in our Strategic Comp business. So overall, continue to be very pleased with the excellent results and premiums are pretty flat with an overall price decline, I think, within our comp business of about 3%. And so all in all, we're in a very competitive business, and continue to be very happy with the workers' comp results. And overall prospective loss ratio trends continue to be very favorable.

是的，就我們截至第二季與上半年整體工傷險結果而言，表現非常出色。我想——我們仍認為 2024 事故年度的綜合率會高於去年，但仍將維持穩健的核保獲利。即便佛羅里達州費率下調 15%，我們仍然感到滿意。我認為 Summit 的整體價格在上半年可能下滑約 13%，但即使在佛州費率下調的情況下，我們仍預期今年事故年度仍可達成穩健的核保獲利。所以我認為這是正面的。此外，National Interstate 與 Strategic Comp 的工傷險業務（其他大型業務）在上半年持續呈現良好的曆年與事故年度核保結果。我們的加州工傷險業務是唯一在上半年出現核保虧損的。而我們也看到一些正向——其實我認為上半年我們在加州的保單組合取得了 3% 的價格上調，這是正面的。我們在 Strategic Comp 業務也取得了一些價格上調。因此整體而言，我們仍對優異的結果非常滿意；在整體價格下滑的情況下，保費大致持平，我想我們工傷險業務的整體價格下滑約 3%。總之，我們身處競爭非常激烈的市場，但仍對工傷險結果感到非常滿意。而整體預期損失率趨勢仍然非常有利。

Right. Understood. No, thank you. And then final question, you talked about the, I guess, the late acreage reports. Given the seasonality of earned premiums for crop, did that have a significant impact on the earnings side of things? I understand that written premium was delayed.

好的。了解。不，謝謝。最後一個問題，你提到我想是耕地面積報告延後。考量農作物保險已賺保費的季節性，這對獲利端是否造成顯著影響？我理解已簽保費（written premium）是延後了。

It won't, it should not affect the earning of the premiums. So we earn the premium in the crop business during the growing season. So what you'll find is, with our biggest products being the corn and soybeans, that most of the earned premium is in the third quarter, and that'll be consistent. So it's just a -it's just the timing, almost like a flip from June to July on the corn and soybean premium reporting. So it won't affect the earned.

不會，它不應該影響保費的認列（earning）。我們在農作物保險業務中，是在作物生長季期間認列保費。因此你會看到，以我們最大的產品玉米與黃豆而言，大部分已賺保費會落在第三季，而且會維持一致。所以這只是——只是時間點的問題，幾乎像是玉米與黃豆保費申報從 6 月翻到 7 月的切換。因此不會影響已賺保費。

Okay. Perfect. Thank you so much.

好的。完美。非常感謝。

Our next question comes from the line of Bob Farnam of Janney Montgomery Scott.

下一個問題來自 Janney Montgomery Scott 的 Bob Farnam。

Yeah. Hey, there. Good morning. I had a question on the excess and surplus lines market. Just trying to get an idea for submission flow today and how the competitive environment is in that market today relative to maybe where it has been the past few years.

是的。嗨。早安。我想問超額與剩餘線（excess and surplus lines）市場的問題。我想了解目前的投保申請（submission）流量，以及相較於過去幾年，該市場目前的競爭環境如何。

I think, since submission flow for us has been pretty consistent with what it has been over the past 12 months.

我認為，就我們而言，投保申請流量與過去 12 個月的情況相當一致。

Okay. So no encroachment yet from the admitted market that you're seeing, anything of note?

好的。所以就您所見，目前還沒有看到來自核准市場（admitted market）的任何侵蝕或值得注意的情況嗎？

No, I don't think we're seeing any migration back to the admitted market. Again, we're not as aggressive on coastal property as a lot of our competitors are in the E&S side. And I think some of the strong submission increases that are getting reported are tied to both California, Florida, maybe even Texas, property kinds of submissions in that.

沒有，我不認為我們看到任何回流到核准市場的情況。再說一次，在沿海財產險方面，我們不像許多在 E&S 端的競爭對手那麼積極。而且我認為，外界所報告的一些強勁投保申請（submission）增長，與加州、佛州，甚至可能德州的財產險類投保申請都有關。

Right. Okay. And just one quick question continuing on workers' comp. So it sounds like you're being conservative with your medical inflation expectations, but have you actually seen any change in medical inflation at this point? I'm just trying to have an idea of maybe kind of what you're seeing relative to the broader medical indices.

了解。好的。另外延續勞工補償險（workers' comp）再問一個快問。聽起來你們對醫療通膨的預期比較保守，但到目前為止你們實際上有看到醫療通膨有任何變化嗎？我只是想了解一下，你們看到的情況相對於更廣泛的醫療指數大概是怎樣。

Yeah, not really, you know at this point.

是的，沒有，現在這個時間點其實沒有。

Great. Okay. Thank you.

很好。好的。謝謝。

Our next question comes from the line of Charlie Lederer of Citigroup.

下一個問題來自花旗（Citigroup）的 Charlie Lederer。

Hey. Thanks. Just a couple for Craig. I guess, why - I guess, your use of buybacks is really kind of - I don't think you've done any this year, so it has slowed a little bit. I guess, can you just talk about the reasons for that, just given attractive valuation?

嗨。謝謝。我有幾個問題想問 Craig。我想，你們使用庫藏股回購（buybacks）這件事——我想你們今年好像都沒有做，所以節奏有放慢一些。考量到估值很有吸引力，你能談談原因嗎？

Yeah, Charlie. What I would say to you is, if you look at our long-term record of repurchases, I think we've kind of picked some - like our timing has been pretty good. There have been periods when the market was soft, where we were trading at a significant discount to what we thought was the underlying value, where we repurchased a very large number of shares. It is something that we're constantly looking at. We do think that our stock today is trading at a discount to peers. So I mean, repurchases are something that we're taking a look at.

好的，Charlie。我會這樣說：如果你看我們長期的回購紀錄，我認為我們在一些時點的選擇——也就是時機掌握——其實相當不錯。在市場疲弱、而我們股價相對於我們認為的內在價值有顯著折價的期間，我們回購了非常大量的股份。這是我們一直在持續關注的事情。我們確實認為，今天我們的股價相對同業是有折價的。所以回購是我們正在評估的選項之一。

Thanks. And I guess my other question was just on the alts portfolio. I don't think you mentioned if the 6% guide for the year is still how you're thinking about it. And then you said 10% is kind of the longer-term expectation. But I guess, can you just update us on the outlook for the multi-family real estate?

謝謝。另外一個問題是關於另類投資（alts）投資組合。我不確定你是否有提到，今年 6% 的指引是否仍是你們的看法。然後你說 10% 是比較長期的預期。不過，你能否更新一下多戶住宅（multi-family）不動產的展望？

Sure. I mean, what I would say to you is, in the first six months of the year, we generated a 7% return. The guidance, look we didn't give guidance, but what we put into our plan, the assumption we put into our plan, was a 6% return for the year. So for the first six months, we outperformed by a small amount. The multi-family piece, I mean, let me talk about at least my perspective of multi-family. The operations in multi-family are doing fine, even though we do have a lot of new supply in several of our markets. We're in markets with very strong population growth, very strong job growth, and that's where a lot of the new building has taken place. It's probably going to take another 12 months or so for that new supply to get absorbed. But even with the new supply, our underlying properties are doing just fine. We're projecting that the operating income for the group of properties for the year will be flattish, give or take a little bit. The negative marks that we incurred earlier in the year were really interest rate-related as opposed to deterioration of the operations. We don't do the marks, our general partners do the marks. But you would think with the decline in interest rates that certainly the bulk of any interest rate-related changes should be behind us. We're very optimistic about the longer-term prospects. There's still a shortage of housing, still a very high cost of homeownership. And so we're very optimistic about the long-term prospects of our multi-family portfolio.

當然。我會這樣說：今年前六個月，我們產生了 7% 的報酬。至於指引——我們其實沒有對外給指引——但我們放進內部計畫的假設，是全年 6% 的報酬。所以前六個月我們小幅超越。多戶住宅這一塊，我至少談談我對多戶住宅的看法。多戶住宅的營運表現是好的，儘管我們在幾個市場確實有大量新增供給。我們所在的市場人口成長很強、就業成長也很強，而很多新建案也集中在這些地方。這些新增供給大概還需要再 12 個月左右才能被市場吸收。但即使有新增供給，我們底層資產的表現仍然很好。我們預估這組資產今年的營運收入大致持平，可能上下小幅波動。我們今年稍早承受的負向評價（negative marks），主要是利率因素所致，而不是營運惡化。評價不是我們做的，是我們的一般合夥人（general partners）在做。但你會認為，隨著利率下滑，任何與利率相關的變動大部分應該都已經在我們身後了。我們對長期前景非常樂觀。住房仍然短缺，自有住宅的成本仍然非常高。因此我們對多戶住宅投資組合的長期前景非常樂觀。

Thanks for the color.

謝謝你補充這些細節。

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

下一個問題來自 BMO 的 Michael Zaremski。

Thanks. Quick follow-up too for Craig. Just curious, I think there's the understanding that you all have been great investors on the real estate side. Just curious, if you've ever sized up or are willing to share what you think kind of the mark-to-market gains are in your real estate portfolio that aren't reflected kind of versus your carrying value, if that's something you're willing to share?

謝謝。也想對 Craig 再追問一下。我想大家都理解你們在不動產投資方面一直是很出色的投資人。我好奇的是，你們是否曾經估算過、或願意分享一下，你們不動產投資組合中，相對於帳面價值（carrying value）但尚未反映出來的按市價計價（mark-to-market）未實現增值大概有多少？如果你們願意分享的話。

I can give you the marks on multi-family for the year, if that's helpful. As I said, the negative marks that we have incurred this year are not related to deterioration of the operations. It's related to higher interest rates, which resulted in higher cap rates. That has reversed here recently. But to size things for you, in the first quarter, we incurred mark-to-market losses of around $22 million pre-tax. In the second quarter, it was around $2 million pre-tax, so $24 million year-to-date.

如果有幫助的話，我可以提供今年多戶住宅的評價變動（marks）。如我所說，我們今年承受的負向評價與營運惡化無關。而是與利率上升有關，利率上升導致資本化率（cap rates）上升。而這點最近已經有所反轉。為了讓你有個量級概念，第一季我們產生約 2,200 萬美元（稅前）的按市價計價損失。第二季約 200 萬美元（稅前），所以年初至今合計 2,400 萬美元。

Okay. Got it. And there wouldn't be any - I'm just curious, with some of your peers who have also been opportunistic in real estate have sold properties that they partially or fully owned and realized some very large gains that weren't marked on the balance sheet. So my question is more on that. You don't think that's reflective of some assets in your portfolio that are marked at much lower values than what their mark-to-market appraisal values might be today, if they were sold?

好的。了解。我只是好奇——有些同業也在不動產上把握機會，出售部分或全數持有的資產，實現了非常可觀、但資產負債表上並未反映的收益。所以我的問題比較是在這方面。你不認為你們投資組合中也有一些資產，其帳面評價遠低於如果今天出售時可能反映的按市價評估價值嗎？

So what I would say to you is, our multi-family properties are owned in partnerships. We have general partners and they're doing a regular review of the value of the property. So those are marked-to-market on a regular basis. We do have several other real estate properties. The large ones are the Charleston Harbor Resort and Marina, and then we have a major marina right outside of Palm Beach by the name of Sailfish Marina. We believe that those are on our books for significantly less than the current market value.

我會這樣說：我們的多戶住宅資產是以合夥架構持有。我們有一般合夥人，他們會定期檢視資產價值。所以這些資產會定期按市價計價。我們也確實還有幾個其他不動產資產。較大的包括 Charleston Harbor Resort and Marina，另外我們在棕櫚灘外有一個大型碼頭，名為 Sailfish Marina。我們相信，這些資產在帳上列示的價值顯著低於目前的市場價值。

Okay. Got it. That's good to know. Okay. So the majority are marked-to-market and there's those properties. Okay. Thank you for the clarification.

好的。了解。這很有幫助。好的。所以大多數資產是定期按市價計價，而另外還有那些資產。好的。謝謝你澄清。

Thank you. I'm showing no further questions at this time. I would now like to turn it back to Diane Weidner for closing remarks.

謝謝。目前顯示沒有其他提問。接下來我想把時間交回給 Diane Weidner 做結語。

Thank you all for joining us this morning and for the opportunity to share a little bit more about our story for the second quarter. We look forward to talking with all of you next quarter. Have a great day.

感謝各位今天早上加入我們，也謝謝大家給我們機會分享第二季我們的最新進展。我們期待在下個季度再與各位交流。祝各位有美好的一天。

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

感謝各位參與今天的電話會議。本次議程到此結束。您現在可以掛線。