Employers Holdings Inc (EIG) 2024 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the 2024 second quarter employers holdings, Inc. Earnings Call. (Operator Instructions) Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Lori Brown, General Counsel. Please go ahead.

美好的一天，感謝您的支持。歡迎參加雇主控股公司 2024 年第二季財報電話會議。（操作員指示）請注意，今天的會議正在錄製中。現在我想將會議交給今天的第一位發言人，總法律顧問洛里布朗 (Lori Brown)。請繼續。

Thank you, Marvin. Good morning, and welcome, everyone, to the second quarter 2024 Earnings Call for Employers. Today's call is being recorded and webcast from the Investors section of our website, where a replay will be available following the call.

謝謝你，馬文。早安，歡迎大家參加 2024 年第二季雇主獲利電話會議。今天的電話會議正在我們網站的投資者部分進行錄音和網路直播，電話會議後將進行重播。

Presenting today is Kathy Antonello, our Chief Executive Officer; and Mike Paquette, our Chief Financial Officer. Statements made during this conference call that are not based on historical facts are considered forward-looking statements. These statements are made in reliance on the safe harbor provision of the Private Securities Litigation Reform Act of 1995.

今天發言的是我們的執行長凱西安東內洛 (Kathy Antonello)；和我們的財務長 Mike Paquette。本次電話會議期間發表的並非基於歷史事實的聲明被視為前瞻性聲明。這些聲明是根據 1995 年《私人證券訴訟改革法案》的安全港條款做出的。

Although we believe the expectations expressed in our forward-looking statements are reasonable, risks and uncertainties could cause actual results to be materially different from our expectations, including the risks set forth in our filings with the Securities and Exchange Commission.

儘管我們認為前瞻性陳述中表達的預期是合理的，但風險和不確定性可能導致實際結果與我們的預期有重大差異，包括我們向美國證券交易委員會提交的文件中提出的風險。

All remarks made during the call are current only at the time of the call and will not be updated to reflect subsequent developments. The company also uses its website as a means of disclosing material nonpublic information and for complying with disclosure obligations under the SEC's Regulation FD. Such disclosures will be included on the Investors section of our website.

通話期間發表的所有言論僅在通話時有效，且不會更新以反映後續進展。該公司還利用其網站作為披露重大非公開資訊和遵守 SEC FD 法規規定的披露義務的​​手段。此類披露將包含在我們網站的投資者部分。

Accordingly, investors should monitor that portion of our website in addition to following our press releases, SEC filings, public conference calls and webcasts. In our earnings press release and, in our remarks, or responses to questions, we may use non-GAAP financial measures. Reconciliations of these non-GAAP measures to our GAAP results are included in our financial supplement as an attachment to our earnings press release, our investor presentation and any other materials available in the Investors section on our website. And now I'll turn the call over to Kathy.

因此，除了關注我們的新聞稿、美國證券交易委員會文件、公開電話會議和網路廣播之外，投資者還應該關注我們網站的這一部分。在我們的收益新聞稿中以及在我們的言論或對問題的答覆中，我們可能會使用非公認會計準則財務指標。這些非公認會計原則措施與我們的公認會計原則結果的調節包含在我們的財務補充資料中，作為我們的收益新聞稿、投資者介紹和我們網站投資者部分提供的任何其他材料的附件。現在我將把電話轉給凱西。

Thank you, Lori. Good morning to everyone, and welcome to our second quarter 2024 earnings call. Today, we will follow our typical agenda, where I'll begin by providing some highlights of our second quarter 2024 financial results. I'll then hand it over to Mike for more details on our financials and prior to Q&A, I'll come back to you with some additional commentary.

謝謝你，洛瑞。大家早安，歡迎參加我們的 2024 年第二季財報電話會議。今天，我們將遵循我們的典型議程，首先我將提供 2024 年第二季財務業績的一些亮點。然後我會將其交給邁克，以獲取有關我們財務狀況的更多詳細信息，在問答之前，我將向您提供一些額外的評論。

Our second quarter results were very strong. Our adjusted net income per share of $1.10 was highest quarterly result in our last 10 years of operations. Higher new and renewal premiums, strong net investment income and continued net investment gains drove year-over-year increases in revenue for both the quarter and the first 6 months of 2024. Our steady growth in written premium resulted from a 9% increase in new business and a 10% increase in renewal business, partially offset by lower final audit premium recognition.

我們第二季的業績非常強勁。我們調整後的每股淨利潤為 1.10 美元，是我們過去 10 年營運中最高的季度業績。更高的新保費和續保保費、強勁的淨投資收入以及持續的淨投資收益推動了 2024 年季度和前 6 個月的收入同比增長。我們的承保保費穩定成長是由於新業務成長 9% 和續保業務成長 10%，但最終審計保費確認的下降部分抵消了這一成長。

Excluding audit premium adjustments, our gross written premiums increased 10% for the quarter, with all major distribution channels contributing to the growth. Our investment performance was also a boost to revenue with strong net investment income and further net unrealized gains from our common stocks and other investments.

不包括審計保費調整，本季我們的總保費成長了 10%，所有主要分銷管道都對成長做出了貢獻。我們的投資績效也促進了收入的成長，強勁的淨投資收入以及來自普通股和其他投資的進一步的未實現淨收益。

From an underwriting standpoint, our midyear full reserve study led to the recognition of $9.3 million of net favorable prior year loss reserve development from our voluntary business. That action, coupled with a meaningful decrease in underwriting expenses, led to a combined ratio of 95.4% excluding the LPT and our current accident year combined ratio, excluding both the LPT and prior year development, was 100.2%, which is the lowest it's been since the fourth quarter of 2018.

從承保的角度來看，我們的年中全額準備金研究確認了我們自願業務產生的 930 萬美元的上一年淨有利損失準備金。這項行動，加上承保費用的大幅下降，導致不包括LPT 的綜合成本率為95.4%，而我們目前的事故年綜合成本率（不包括LPT 和上一年的開發）為100.2%，這是有史以來的最低水準自2018年第四季以來。

We believe that our accident year 2024 loss ratio of 64%, along with our existing provision for a potential increase in medical inflation positions us well from a reserving standpoint.

我們認為，從準備金的角度來看，我們 2024 年的事故損失率為 64%，加上我們現有的針對醫療通膨可能增加的準備金，使我們處於有利地位。

I'm particularly pleased with our underwriting and general and administrative expense ratio this quarter of 22%, which is down sharply from 26% a year ago and is the lowest it's been since the third quarter of 2018. The decrease was primarily the result of the Cerity integration plan, which we executed in the fourth quarter of 2023. With that, Mike will now provide a deeper dive into our financials, and then I'll return to provide my closing remarks. Mike?

我對本季 22% 的核保和一般及管理費用比率感到特別滿意，該比率比一年前的 26% 大幅下降，是 2018 年第三季以來的最低水準。這一下降主要是我們在 2023 年第四季執行的 Cerity 整合計畫的結果。接下來，麥克將更深入地介紹我們的財務狀況，然後我將返回進行結束語。麥克風？

Thank you, Kathy. Our gross premiums written were $208 million, an increase of 5%. As Kathy mentioned, the increase was primarily due to higher new and renewal premiums, partially offset by lower final audit premiums. Net premiums earned were $188 million, an increase of 6%. Our losses and loss adjustment expenses were $109 million versus $91 million a year ago. The increase was primarily the result of higher net earned premiums and less net favorable prior year loss reserve development.

謝謝你，凱西。我們的毛保費為 2.08 億美元，成長 5%。正如凱西所提到的，這一增長主要是由於新保費和續保保費的增加，部分被最終審計保費的下降所抵消。淨保費收入為 1.88 億美元，成長 6%。我們的損失和損失調整費用為 1.09 億美元，而一年前為 9,100 萬美元。這一增長主要是由於淨已賺保費增加和上一年淨有利損失準備金減少的結果。

We recognized $9 million of net favorable development during the second quarter versus $20 million of net favorable development a year ago to both mitigate our overall tail risk and generate additional reserve salvage, we've continued to settle claims throughout 2024 on an accelerated basis, consistent with that of prior years.

我們在第二季度確認了900 萬美元的淨有利發展，而一年前的淨有利發展為2000 萬美元，以減輕我們的整體尾部風險並產生額外的準備金救助，我們在2024 年繼續加速解決索賠，一致與往年一樣。

Commission expenses were $27 million versus $24 million a year ago, and our commission expense ratio was 14.3% versus 13.3% a year ago. The increase in our commission expense ratio was primarily related to an increase in new business writings, which are typically subject to a higher initial commission rate. The increase further resulted from a reversal of commission expense made in the second quarter of 2023 relating to uncollected premium.

佣金費用為 2,700 萬美元，去年同期為 2,400 萬美元，佣​​金費用率為 14.3%，去年同期為 13.3%。我們的佣金費用率的增加主要與新業務著作的增加有關，這些新業務著作通常會受到較高的初始佣金率的影響。這一增長進一步歸因於 2023 年第二季與未收取保費相關的佣金費用的沖銷。

Underwriting and general and administrative expenses were $41 million versus $46 million, and our underwriting and general administrative expense ratio was 22% versus 26% a year ago. The decrease was primarily the result of the success of our Cerity integration plan, as Kathy previously mentioned.

承保及一般管理費用為 4,100 萬美元，而一年前為 4,600 萬美元，承保及一般管理費用比率為 22%，而一年前為 26%。正如 Kathy 之前提到的，這一減少主要是由於我們的 Cerity 整合計劃取得了成功。

Our net investment income was $27 million for the quarter, a slight increase from a year ago. The increase was primarily due to higher yields on our fixed maturity investments largely offset by the unwinding of our former Federal Home Loan Bank leveraged investment strategy in late 2023.

本季我們的淨投資收入為 2,700 萬美元，比去年同期略有成長。這一增長主要是由於我們固定期限投資的收益率較高，但在很大程度上被 2023 年底我們前聯邦住房貸款銀行槓桿投資策略的解除所抵消。

When considering the nearly $2 million of interest expense that we incurred from that former strategy in the second quarter of 2023, our net investment income was actually up more than 8% year-over-year. Our fixed maturities currently have a duration of 4.4 and an average credit quality of A+.

考慮到我們在 2023 年第二季度因先前的策略而產生的近 200 萬美元的利息支出，我們的淨投資收益實際上同比增長了 8% 以上。我們的固定期限目前的期限為 4.4，平均信用品質為 A+。

Our weighted average book yield was 4.3% at quarter end, which is up nicely from 4.1% a year ago. Our net income this quarter was favorably impacted by $4 million of net after-tax unrealized gains generated from equity securities and other investment holdings, both of which are reflected on our income statement and our stockholders was unfavorably impacted by $5 million of net after-tax investment losses generated from fixed maturity holdings, which are reflected on our balance sheet.

截至季末，我們的加權平均帳面收益率為 4.3%，遠高於一年前的 4.1%。我們本季的淨利潤受到股本證券和其他投資控股產生的400 萬美元稅後淨未實現收益的有利影響，這兩者都反映在我們的損益表中，而我們的股東受到500 萬美元稅後淨收益的不利影響固定期限持有產生的投資損失反映在我們的資產負債表上。

During the second quarter, we repurchased $19 million of our common stock at an average price of $41.53 per share and thus far, we have repurchased an additional $3 million of our common stock in the third quarter at an average price of $42.56 per share. Our remaining share repurchase authority currently stands at $44 million.

在第二季度，我們以每股41.53 美元的平均價格回購了1900 萬美元的普通股，到目前為止，我們在第三季度以每股42.56 美元的平均價格額外回購了300 萬美元的普通股。目前我們剩餘的股份回購權為 4,400 萬美元。

And yesterday, our Board of Directors declared a third quarter 2024 regular quarterly dividend of $0.30 per share. This dividend is payable on August 28 to stockholders of record on August 14. And with that, I'll now turn the call back to Kathy.

昨天，我們的董事會宣布 2024 年第三季定期季度股息為每股 0.30 美元。該股將於 8 月 28 日支付給 8 月 14 日登記在冊的股東。現在，我將把電話轉回給凱西。

Thank you, Mike. This quarter, we returned $27 million to our stockholders through a combination of regular quarterly dividends and share repurchases at an average price that was highly accretive to our adjusted book value per share. After considering dividends declared over the last 12 months, our book value per share, including the deferred gain has increased 14% to $44.91 and our adjusted book value per share has increased by more than 10% to $48.89.

謝謝你，麥克。本季度，我們透過定期季度股息和股票回購相結合的方式向股東返還了 2700 萬美元，平均價格大大提高了我們調整後的每股帳面價值。考慮到過去 12 個月宣布的股息後，我們的每股帳面價值（包括遞延收益）增長了 14%，達到 44.91 美元，調整後的每股帳面價值增長了 10% 以上，達到 48.89 美元。

Both the combined ratio and the growth in our adjusted book value per share continue to be our preferred metrics for measuring our success. And we're confident we will see further improvement in these metrics in the future. In closing, last month, we made the bitter sweet announcement that Mike will be retiring at the end of March in 2025. And I want to personally acknowledge his tremendous contributions to the organization over the past seven years. And with that, operator, we will now take questions.

綜合成本率和調整後每股帳面價值的成長仍然是我們衡量成功的首選指標。我們相信，未來這些指標將會進一步改善。最後，上個月，我們發布了一個苦澀而甜蜜的消息：麥克將於 2025 年 3 月底退休。我想親自感謝他在過去七年裡對該組織做出的巨大貢獻。接線員，我們現在開始提問。

(Operator Instructions) Mark Hughes, Truist.

（操作員說明）Mark Hughes，Truist。

Thank you. Good morning. Hello. In California, does the workers comp reimbursement follow Medicare fee schedules in whole or in part?

謝謝。早安.你好。在加州，工人補償報銷是否全部或部分遵循醫療保險費用表？

Yes. It is my understanding that the California medical fee schedules are tied to Medicare, I believe there are some adjustments, it's not dollar per dollar, but yes, they are tied to Medicare.

是的。據我了解，加州的醫療費用表與醫療保險掛鉤，我相信有一些調整，不是一美元一美元，但是是的，它們與醫療保險掛鉤。

Yes. And under the circumstances, are we to think that the risk of future medical inflation is limited if fee schedule is there and many other states, I'm not exactly sure of the numbers, but if those are tied to those fee schedules, but I assume the government is going to be just as motivated to suppress those costs in the future as they had done in the past so should we think that medical inflation as less of a risk.

是的。在這種情況下，如果有費用表和許多其他州，我們是否認為未來醫療通膨的風險是有限的，我不太確定這些數字，但如果這些數字與這些費用表掛鉤，但我假設政府未來會像過去一樣有動機抑制這些成本，那麼我們是否應該認為醫療通膨的風險較小。

Well, I think generally speaking the industry has done a really nice job over the last more than a decade of putting medical cost containment measures into place, and those would include medical fee schedules for hospitals, physicians, inpatient and outpatient and so forth. Many but not all of those fee schedules are tied to Medicare and so I would think they would move somewhat in tandem, but the fee schedules that have been put in place have been very successful. I mean you mentioned California, in particular, I think it was back in 2013 when they passed Senate Bill 863 that was highly successful wildly more successful than I think anyone predicted. And so I would just say, generally speaking, these schedules in workers' compensation are working, and they are helping to keep medical costs under control.

嗯，我認為總的來說，在過去十多年裡，該行業在落實醫療成本控制措施方面做得非常好，其中包括醫院、醫生、住院病人和門診病人等的醫療費用表。許多但不是全部的費用表都與醫療保險掛鉤，所以我認為它們會在某種程度上同步變化，但已經制定的費用表非常成功。我的意思是你特別提到了加州，我想那是在 2013 年，當時他們通過了參議院第 863 號法案，該法案非常成功，比我認為任何人預測的都要成功。所以我想說，一般來說，這些工人賠償計畫正在發揮作用，它們有助於控制醫療費用。

When we think about the top line outlook, audit premiums are still positive, not as positive as they've been. But we've talked about the kind of your expansion and appetite and you can throw in competition. Any kind of general commentary about what you expect when it comes to top line growth, keeping in mind all the different drivers?

當我們考慮營收前景時，審計溢價仍然為正，但不像以前那麼樂觀。但我們已經討論過您的擴張和胃口以及您可以投入的競爭。考慮到所有不同的驅動因素，您對營收成長的期望有什麼一般性評論嗎？

Yes. I mean I'm pleased with the level of top line growth that we're seeing. We did see some pressure this quarter in terms of offsetting the new and renewal business growth, there was an offset in terms of audit pickup slowing down. We also decreased our audit accrual during the quarter. None of it, I would say, is surprising to me, though, when you look at the underlying economic conditions as of June, just to give you a few numbers, the BLS annual change in employment and hourly wages for leisure and hospitality, which is where a lot of our focus is...

是的。我的意思是，我對我們所看到的營收成長水準感到滿意。本季我們確實看到了抵銷新業務和續訂業務成長的一些壓力，審計成長放緩也抵銷了這一壓力。我們也減少了本季的審計應計費用。不過，我想說的是，當你看看截至6 月份的基本經濟狀況時，我並不感到驚訝，只是給你一些數字，美國勞工統計局(BLS) 的就業年度變化以及休閒和酒店業的時薪，其中這是我們很多關注的地方...

Kathy, can you hear me?

凱西，你聽得到我說話嗎？

Can. My apologies for that.

能。我對此表示歉意。

Yes. No, it's probably me. I'm sure I did something wrong. I asked a question about the growth outlook. And you had just started to comment. So I'll say it again, competition, appetite, all that, kind of what should we be thinking about the top line?

是的。不，可能是我。我確信我做錯了什麼。我問了一個關於成長前景的問題。而你才剛開始發表評論。所以我再說一遍，競爭，胃口，所有這些，我們應該考慮什麼？

Yes. So I am not terribly surprised with the decrease we saw in audit pick-ups this quarter, especially given the underlying economic conditions that we're seeing. And so just to give you a few numbers, as of June the BLS annual change in employment and hourly wages was 6% for leisure and hospitality. That compares to 10.5% a year ago. And that reduction in the change in employment and wages is what's putting pressure on our audit pickup.

是的。因此，我對本季審計數量的下降並不感到非常驚訝，特別是考慮到我們所看到的基本經濟狀況。因此，僅給您幾個數字，截至 6 月份，美國勞工統計局休閒和酒店業的就業和時薪年度變化為 6%。相比之下，一年前為 10.5%。就業和工資變化的減少給我們的審計帶來了壓力。

Can you hear me Mark?

馬克，你聽得到我說話嗎？

Yes, I can hear you. You're coming through loud and clear.

是的，我聽得到你的聲音。你的聲音響亮而清晰。

Okay, right. So that is what is putting pressure on our audit pick-ups and it's also causing us to decrease our audit accrual and it's bringing our top line growth down a bit. We're not seeing decreases in terms of the new business premium that's coming through and our renewal premiums continue to be strong too so just to give you a couple of numbers, we ended the quarter with an audit accrual of $34.2 million, and that's a decrease of $5.1 million this quarter. That compares to an increase in the second quarter of 2023. So that decrease in accrual was a meaningful contributor to both written and earned premium this quarter. But then when you look at audit pickup, they were $4.9 million this quarter versus $7.7 million in the second quarter of 2023. Like I said earlier, if you exclude the final audit pickup in accrual, our gross written premium was up about 10% in the second quarter of '24 relative to the second quarter of 2023.

好吧，對。因此，這給我們的審計成長帶來了壓力，也導致我們減少了應計審計，並導致我們的收入成長略有下降。我們沒有看到新業務保費下降，而且我們的續保保費也繼續強勁，因此僅給您幾個數字，我們在本季度末的審計應計費用為 3420 萬美元，這是一個本季度減少510萬美元。相比之下，2023 年第二季有所成長。因此，應計費用的減少對本季承保保費和賺取保費均產生了有意義的貢獻。但當你查看審計費用時，會發現本季的審計金額為 490 萬美元，而 2023 年第二季為 770 萬美元。正如我之前所說，如果排除應計費用中的最終審計增加，我們的毛承保保費在 2024 年第二季度相對於 2023 年第二季度增長了約 10%。

Endorsement premium is also coming in very strong. We recognize about $13 million in endorsements and about $3 million in noncompliant premium. So the growth that we're seeing is coming from all of our major distribution channels, like I said, strong endorsement premium, you mentioned appetite expansion that is a meaningful contributor to the growth. I think about $41 million of our premium this quarter, came from our appetite expansion efforts. And that's performing at a very good loss ratio very similar to what we're seeing for all of our other classes.

代言溢價也非常強勁。我們確認了約 1300 萬美元的代言和約 300 萬美元的不合規保費。因此，我們看到的成長來自我們所有主要的分銷管道，就像我說的，強勁的代言溢價，你提到的胃口擴張對成長做出了有意義的貢獻。我認為本季我們的保費中約有 4,100 萬美元來自我們擴大胃口的努力。它的損失率非常好，與我們在所有其他類別中看到的非常相似。

I appreciate that detail. And then 1 final one on the expenses, Mike, the step down sequentially this quarter, is pretty striking historically the progression from 1Q to 2Q is steady or up a little bit. What's the right run rate? First, was there anything unusual this quarter, one-timers, that sort of thing? And then is this kind of the starting base so to speak and apply whatever expense growth or seasonality, that sort of thing. But the $41.4 million is that a good number as a base starting base?

我很欣賞這個細節。然後是最後一個關於費用的問題，麥克，本季連續下降，從歷史上看，從第一季到第二季的進展是穩定的或略有上升，這是相當驚人的。正確的運行率是多少？首先，這個季度有沒有什麼不尋常的事情，一次性的，諸如此類的事情？然後就是這種起始基礎可以這麼說並應用任何費用增長或季節性，諸如此類的事情。但 4,140 萬美元作為起始資金是否合適？

It's hard to say, Mark. And the reason why is our expenses can ebb and flow. I'm not aware of anything that's particularly unusual in terms of our second quarter of 2024 expenses. But they can vary dramatically based on incentive accruals, timing of IT projects and all of those types of things. If you recall, when we had this call at year-end, we kind of mentioned that the Cerity runoffs or the Cerity integration was going to provide at least 1.5 points of release on our expense ratio versus what it would otherwise be. So that's probably the same thing to bring into the balance of the year. But keep in mind, it will ebb and flow.

很難說，馬克。原因是我們的開支會潮起潮落。我不知道我們 2024 年第二季的支出有什麼特別不尋常的地方。但它們可能會根據應計激勵、IT 項目的時間表以及所有這些類型的因素而發生巨大變化。如果你還記得，當我們在年底召開電話會議時，我們提到了 Cerity 徑流或 Cerity 整合將為我們的費用比率提供至少 1.5 個百分點的釋放。因此，這可能與今年剩餘的時間是一樣的。但請記住，它會潮起潮落。

And so if we think of last year, I think it was 25%. Is that the way to think about it, 1.5 point off of that is a good way to look at?

所以如果我們想想去年，我認為是 25%。這是考慮問題的方式嗎，1.5 分是個很好的看法嗎？

With expenses and commissions, I would always look at the year-to-dates because that will take out some of the noise. But if you look at, say, the year-to-dates and then look at least 1.5 percentage points of savings or so, that's about what the best guess I could give you right now.

對於費用和佣金，我總是會查看今年迄今的數據，因為這會消除一些噪音。但如果你看一下年初至今，然後看看至少 1.5 個百分點左右的節省，這就是我現在能給你的最佳猜測。

Yes. Okay. I'll squeeze in 1 more, if I might. Kathy, competition, anything you would say about level of competition that people see more competitors more enthused about workers comp about the same. .

是的。好的。如果可以的話，我會再擠1個。凱西，競爭，關於競爭程度，你會說什麼，人們看到更多的競爭者對工人的薪酬更加熱情。。

Yes, I'd say it's about the same. When you look at the sectors and policies that we write, we would continue to say that the environment is fairly competitive. We look at our renewal book and adjust for changes in exposure, our 2024 average rate showed a year-over-year rate decrease of between 3% and 4%, and that's pretty typical of what we've been seeing over the last several quarters. So yes, things are lot of that is being driven by the decreases in loss costs that the securities are filing, but it's still competitive.

是的，我想說的是差不多。當您查看我們撰寫的行業和政策時，我們會繼續說環境具有相當的競爭性。我們查看我們的續約帳簿並根據風險敞口的變化進行調整，我們 2024 年的平均費率顯示同比下降了 3% 至 4%，這是我們在過去幾個季度所看到的非常典型的情況。所以，是的，很多事情都是由證券提交的損失成本下降所推動的，但它仍然具有競爭力。

Matt Carletti, Citizens JMP.

Matt Carletti，公民 JMP。

Hey, thanks. Good morning. Kathy, my first question kind of actually follows on from one of Mark's questions on Medicare. But my understanding is specific to Florida, there's somewhat significant fee schedule changes coming. I was hoping you could comment on kind of your ability to manage that, particularly in the context of Florida being more of an administered pricing state, so less, I guess, flexibility on how you can price each risk.

嘿，謝謝。早安.凱西，我的第一個問題實際上是馬克關於醫療保險的一個問題的後續。但我的理解是針對佛羅裡達州的，即將發生一些重大的費用表變化。我希望你能評論一下你管理這一點的能力，特別是在佛羅裡達州更像是一個定價管理州的背景下，所以我想，你如何為每種風險定價的靈活性較小。

Yes. That's a great question, Matt. I'll say internally, we haven't analyzed the legislation in Florida. Yes, or NCCI's recent filing in response to those medical fee changes. My understanding is the changes are effective in January of 2025. And the primary driver of the increase is expected to be physician services and the cost of those services, a little bit coming from hospital outpatient. But I believe NCCI is projecting a 5.6% increasing costs as a result of those legislative changes but as you said, the truth of the matter is with Florida being the last remaining administered pricing state, there isn't a whole lot that we can do if we disagree with the pricing. Other than tighten our underwriting standards. But in terms of pricing for disability in Florida, we have none. So we'll just have to look at the business that we're writing and if we feel it's necessary, tighten our underwriting standards from a definition standpoint.

是的。這是一個很好的問題，馬特。我會在內部說，我們還沒有分析佛羅裡達州的立法。是的，或 NCCI 最近針對這些醫療費用變化提交的文件。據我了解，這些變更將於 2025 年 1 月生效。預計成長的主要驅動力將是醫生服務和這些服務的成本，其中一點來自醫院門診。但我相信 NCCI 預計由於這些立法變化，成本將增加 5.6%，但正如你所說，事實是佛羅裡達州是最後一個管理定價州，我們無能為力如果我們不同意定價。除了收緊我們的承保標準之外。但就佛羅裡達州的殘障定價而言，我們沒有。因此，我們只需看看我們正在撰寫的業務，如果我們認為有必要，請從定義的角度收緊我們的承保標準。

Okay. That's helpful. And just one for Mike, on reserves and the favorable reserve development in the quarter. Can you give us any color on trends by accident year or just kind of anything kind of peel back the onion a little bit on some of the movements behind the scenes that led to that good result.

好的。這很有幫助。麥克只想講一個關於儲備和本季有利的儲備發展的問題。您能否給我們一些關於意外年份的趨勢的信息，或者只是稍微揭開一些導致這一良好結果的幕後運動的內容。

Sure. So the favorable development that we saw this quarter was predominantly years 2022 and prior. We did have a little bit of unfavorable experience in 2023 that partially offset the amount that we recognized relating to other states with some large losses that occurred late in the year and have developed a little bit unfavorably in this calendar year. And that's where we came out.

當然。因此，我們本季看到的有利發展主要發生在 2022 年及之前。我們在2023 年確實經歷了一些不利的經歷，部分抵消了我們認識到的與其他州相關的金額，這些州在今年晚些時候發生了一些重大損失，並且在本日曆年中出現了一些不利的情況。這就是我們出來的地方。

Bob Farnam, Janney Montgomery Scott.

鮑伯法南，珍妮蒙哥馬利史考特。

Yes, hey there. Good morning. My primary question was on the performance of the book of expansion business. But Kathy, it sounds like that business is performing as expected or in line with your other business. I guess I'll focus on another question I had was, is there much of a difference between the performance of the book that you're getting from ADP versus your non ADP book?

是的，嘿，那裡。早安.我的主要問題是關於擴張業務帳面的表現。但是凱西，聽起來該業務的表現符合預期或與您的其他業務一致。我想我會集中討論另一個問題，即您從 ADP 獲得的書與非 ADP 書的表現之間是否存在很大差異？

We do analyze this results separately. And the ADP book of business for us has always been very favorable and it continues to be. We have a very strong relationship with them and continue to. And I think it's a very strong book. We haven't seen any changes in that book of business.

我們確實單獨分析了這個結果。ADP 業務對我們來說一直非常有利，而且仍然如此。我們與他們有著非常牢固的關係，並將繼續保持下去。我認為這是一本非常強大的書。我們沒有看到該業務手冊有任何變化。

Okay. Yes, that's it for me. Just again, I want to think more interested in the expansion book of business, but again, you kind of already entered that so.

好的。是的，對我來說就是這樣。再說一遍，我想對商業擴展書更感興趣，但再說一遍，你已經進入了這個領域。

Yes. That expansion book, we've been very, very pleased with the results that we're seeing there. And our intention is to continue to expand into new classes as we see the environment is favorable. So continuing to do that.

是的。那本擴展書，我們對在那裡看到的結果非常非常滿意。當我們看到環境有利時，我們的目的是繼續擴展到新的類別。所以繼續這樣做。

I'm showing no further questions at this time. I would now like to turn it back to Kathy and Antonello for closing remarks.

我目前沒有提出任何進一步的問題。現在我想請凱西和安東內洛致閉幕詞。

Okay. Thank you, Marvin, and thank you all for joining us this morning. I look forward to meeting with you again in October.

好的。謝謝馬文，也謝謝大家今天早上加入我們。我期待十月再次與您見面。

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

感謝您參加今天的會議。這確實結束了該程式。您現在可以斷開連線。