Kemper Corp (KMPR) 2023 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to Kemper's Second Quarter 2023 Earnings Conference Call. My name is J.P. and I will be your coordinator today. (Operator Instructions) As a reminder, this conference call is being recorded for replay purposes.

女士們、先生們，下午好，歡迎參加 Kemper 2023 年第二季度收益電話會議。我叫 J.P.，今天我將擔任你們的協調員。 （操作員說明）謹此提醒，本次電話會議正在錄音以供重播之用。

I would now like to introduce your host for today's conference call, Karen Guerra, Kemper's Vice President of Investor Relations. Ms. Guerra, you may begin.

現在我想介紹今天電話會議的主持人凱倫·格拉 (Karen Guerra)，她是肯珀 (Kemper) 投資者關係副總裁。格拉女士，您可以開始了。

Thank you, operator. Good afternoon, everyone, and welcome to Kemper's discussion of our second quarter 2023 results. This afternoon, you'll hear from Joe Lacher, Kemper's President and Chief Executive Officer and Chairman; Jim McKinney, Kemper's Executive Vice President and Chief Financial Officer; and Matt Hunton, Kemper's Executive Vice President and President of Kemper Auto. We'll make a few opening remarks to provide context around our second quarter results, followed by a Q&A session. During the interactive portion of our call, our presenters will be joined by John Boschelli, Kemper's Executive Vice President and Chief Investment Officer.

謝謝你，接線員。大家下午好，歡迎參加 Kemper 對 2023 年第二季度業績的討論。今天下午，您將聽到 Kemper 總裁兼首席執行官兼董事長 Joe Lacher 的講話； Jim McKinney，Kemper 執行副總裁兼首席財務官；以及 Kemper 執行副總裁兼 Kemper Auto 總裁 Matt Hunton。我們將做一些開場白，提供有關第二季度業績的背景信息，然後進行問答環節。在電話會議的互動部分，Kemper 執行副總裁兼首席投資官 John Boschelli 將與我們的演講者一起參與。

After the markets closed today, we issued our earnings release and published our earnings presentation, financial supplement and Form 10-Q. You can find these documents on the Investors section of our website, kemper.com.

今天收盤後，我們發布了收益報告，並發布了收益報告、財務補充報告和 10-Q 表格。您可以在我們網站 kemper.com 的投資者部分找到這些文件。

Our discussion today may contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, the company's outlook and its future results of operations and financial condition. Our actual future results and financial condition may differ materially from these statements. For information on additional risks that may impact these forward-looking statements, please refer to our 2020 Form 10-K as well as our second quarter earnings release.

我們今天的討論可能包含 1995 年《私人證券訴訟改革法案》安全港條款含義內的前瞻性陳述。這些陳述包括但不限於公司的前景及其未來的經營業績和財務狀況。我們未來的實際結果和財務狀況可能與這些陳述存在重大差異。有關可能影響這些前瞻性陳述的其他風險的信息，請參閱我們的 2020 年 10-K 表格以及我們的第二季度收益發布。

This afternoon's discussion also includes non-GAAP financial measures we believe are meaningful to investors. In our financial supplement, earnings presentation and earnings release, we have defined and reconciled all the non-GAAP financial measures to GAAP where required in accordance with the SEC rules. You can find each of these documents on the Investors section of our website, kemper.com. All comparative references will be to the corresponding 2022 period unless otherwise stated.

今天下午的討論還包括我們認為對投資者有意義的非公認會計準則財務指標。在我們的財務補充資料、收益報告和收益發布中，我們根據 SEC 規則的要求定義了所有非 GAAP 財務指標，並將其與 GAAP 進行了協調。您可以在我們網站 kemper.com 的投資者部分找到這些文件。除非另有說明，所有比較參考均針對相應的 2022 年期間。

I will now turn the call over to Joe.

我現在將把電話轉給喬。

Thanks, Karen. Good afternoon, everyone, and thank you for joining us today. The industry continues to operate in what I believe is the most disruptive personal lend environment we've ever experienced. Recent competitors' earnings reports underscore this. While our financial results through the first half of 2023 fell short of our targets, we believe the actions we've taken and continue to take have positioned us to succeed in this difficult environment. Before talking about our results, I want to take a moment to explain a bit about this operating environment.

謝謝，凱倫。大家下午好，感謝您今天加入我們。我認為該行業繼續在我們經歷過的最具破壞性的個人貸款環境中運作。最近競爭對手的收益報告強調了這一點。雖然我們到 2023 年上半年的財務業績未達到我們的目標，但我們相信我們已經採取和繼續採取的行動使我們能夠在這個困難的環境中取得成功。在談論我們的結果之前，我想花點時間解釋一下這個操作環境。

Traditionally, historical patterns are used by the industry to predict future behavior, and they're producing patterns outside their historical norms. This variance is seen in broad aspects of consumer behavior. A few examples include buying triggers, price elasticity and changes in driving patterns, propensities to file claims, seek medical treatments and repair vehicles, and the willingness to litigate.

傳統上，行業使用歷史模式來預測未來的行為，並且他們正在產生超出歷史規範的模式。這種差異體現在消費者行為的各個方面。一些例子包括購買觸發因素、價格彈性和駕駛模式的變化、提出索賠、尋求醫療和修理車輛的傾向以及訴訟的意願。

These pattern changes are exacerbated by subsequent broad swings in competitors' action. We believe this environment will continue for at least the next couple of years. Correspondingly, it has created a hard market that will likely persist for an extended period of time. Our specialty market expertise and our nimble and efficient operating model position us to effectively navigate this environment.

隨後競爭對手行動的大幅波動加劇了這些模式的變化。我們相信這種環境至少會持續幾年。相應地，它創造了一個可能會持續很長一段時間的硬市場。我們的專業市場專業知識和靈活高效的運營模式使我們能夠有效地駕馭這種環境。

We're continuing to evolve our capabilities. This includes investing in broad enhancements and business intelligence and accelerating the speed that we digest and execute on insights. We have and continue to increase the forward-looking predictive analytics we use to operate our business. At the same time, we've increased our execution margin of safety. Our ultimate priority is to achieve target returns, and we are continuing to focus ourselves and our business to facilitate this and ultimately, to position ourselves to grow profitably and safely at the right time.

我們正在繼續發展我們的能力。這包括投資於廣泛的增強功能和商業智能，並加快我們消化和執行見解的速度。我們已經並將繼續增加用於運營業務的前瞻性預測分析。與此同時，我們提高了執行安全邊際。我們的首要任務是實現目標回報，我們將繼續專注於我們自己和我們的業務，以促進這一目標，並最終使我們自己在適當的時間實現盈利和安全的增長。

Against this backdrop, let's discuss our results. Turning to our presentation. I hope you'll take away the following: first, we had strong sequential improvement in the underlying profitability of each of our businesses; second, the strategic initiatives we announced last November are on track to realize their anticipated benefits and produce meaningful value for our stakeholders; third, we reiterate our guidance. We expect to achieve an underwriting profit in the second half of 2023. And for 2024, we expect to generate a return on equity equal to or greater than 10%.

在此背景下，讓我們討論一下我們的結果。轉向我們的演示。我希望您能明白以下幾點：首先，我們每項業務的基本盈利能力都取得了強勁的連續改善；其次，我們去年 11 月宣布的戰略舉措正在實現其預期效益，並為我們的利益相關者創造有意義的價值；第三，我們重申我們的指導。我們預計將在2023年下半年實現承保利潤。2024年，我們預計將產生等於或大於10%的股本回報率。

Moving to Page 4. The consolidated results included strong aligned profitability improvement against the backdrop of elevated catastrophe losses and adverse prior year element largely related to the second half of 2022. The 6 point sequential improvement in Specialty P&C was the result of accelerating impacts of earned rate and non-rate actions exceeding loss trend as well as the normalizing of the episodic items we experienced last quarter. This improvement demonstrates that our actions are taking hold and producing the anticipated benefits.

轉到第4 頁。綜合業績包括在巨災損失增加和上一年不利因素主要與2022 年下半年相關的背景下，盈利能力的強勁一致改善。專業財產險的6 個百分點的連續改善是盈利影響加速的結果。利率和非利率行動超過了損失趨勢，以及我們上季度經歷的偶發項目的正常化。這一改進表明我們的行動正在發揮作用並產生預期的效益。

One final financial highlight I'd like to point out is our recent approval of approximately 30 points of rate by the California Department of Insurance for our Specialty P&C private passenger auto book. The collaborative effort between our teams and the CDI enabled the successful outcome. The rate change was effective August 4.

我想指出的最後一個財務亮點是，加州保險部最近批准了我們的專業 P&C 私人客運汽車保費大約 30 個百分點。我們的團隊和 CDI 之間的協作努力促成了成功的結果。利率變更於 8 月 4 日生效。

I'd like to now move to our strategic projects. As a reminder, last November, we announced a series of initiatives to unlock additional shareholder value. All these programs are on track to be completed on time and produce or exceed their financial targets and operational benefits. Key updates on these initiatives include: we received approval from the Illinois Department of Insurance for the formation of our reciprocal. Phase 2 of our Bermuda optimization effort is outperforming initial benefit projections. We completed the strategic review of our Preferred P&C segment and announced our decision to exit that business. This action will enhance our return on capital and support profitable growth in our core businesses.

我現在想談談我們的戰略項目。提醒一下，去年 11 月，我們宣布了一系列旨在釋放額外股東價值的舉措。所有這些計劃都有望按時完成，並產生或超過其財務目標和運營效益。這些舉措的主要更新包括：我們獲得了伊利諾伊州保險部批准成立互惠機構。我們百慕大優化工作第二階段的表現超出了最初的效益預測。我們完成了對首選財產和意外險部門的戰略審查，並宣布決定退出該業務。此舉將提高我們的資本回報率並支持我們核心業務的盈利增長。

And finally, we are achieving the expected expense savings with our cost structure initiatives. We are highly focused on maximizing shareholder value, and this begins with returning the business to profitability. The solid progress we achieved this quarter is proof that the actions we have taken are generating the intended outcomes. All the while, we are advancing our long-term initiatives to enhance Kemper's strategic and financial profile.

最後，我們通過成本結構舉措實現了預期的費用節省。我們高度關注股東價值最大化，而這首先是讓業務恢復盈利。我們本季度取得的紮實進展證明我們所採取的行動正在產生預期成果。與此同時，我們正在推進長期計劃，以增強 Kemper 的戰略和財務狀況。

I'll now turn the call over to Jim to talk about more details.

我現在將把電話轉給吉姆，討論更多細節。

Thank you, Joe. I'll begin on Page 5 with our consolidated financial results. We are pleased that each of our segments had strong underlying improvements that position us for profitability in the back half of the year. Several factors offset this progress, including goodwill impairment, catastrophes and prior year development.

謝謝你，喬。我將從第 5 頁開始介紹我們的綜合財務業績。我們很高興我們的每個部門都有強大的潛在改進，這使我們能夠在今年下半年實現盈利。有幾個因素抵消了這一進展，包括商譽減值、災難和上一年的發展。

For the quarter, we had a net loss of $1.52 per diluted share and an adjusted consolidated net operating loss of $0.26. The net loss included approximately $46 million of goodwill impairment charge connected to the strategic review of the Preferred P&C segment. The noncash charge represents the full value of the goodwill associated with this business. The net loss and adjusted consolidated net operating loss included $39 million of current year catastrophe losses, the result of a very active cat quarter for the industry and $26 million of adverse reserve development.

本季度，我們攤薄後每股淨虧損為 1.52 美元，調整後合併淨運營虧損為 0.26 美元。淨虧損包括與優先財產和意外險部門的戰略審查相關的約 4600 萬美元商譽減值費用。非現金費用代表與該業務相關的商譽的全部價值。淨虧損和調整後的合併淨運營虧損包括 3,900 萬美元的本年度巨災損失，這是該行業非常活躍的巨災季度和 2,600 萬美元的不利準備金開發造成的結果。

Turning to the prior year reserve development on Page 6. The adverse development was primarily driven by bodily injury and property damage activity that occurred during the second half of 2022. This was caused by pattern changes between the second and the third quarters of 2022. These include an extension in claim reporting time lines and more claims closing with payment. The first quarter of 2023 and accident quarters prior to the third quarter of 2022 generally aligned with or were favorable to our prior loss selections. The short-tail nature of our business and the speed with which we collect and assess data provide us with high confidence in our reserving processes and their continued ability to react quickly to evolving conditions.

轉向第6 頁上一年的儲備發展。不利的發展主要是由2022 年下半年發生的人身傷害和財產損失活動造成的。這是由2022 年第二季度和第三季度之間的模式變化造成的。這些包括延長索賠報告時間以及更多付款後結束的索賠。 2023 年第一季度和 2022 年第三季度之前的事故季度總體上與我們之前的損失選擇一致或有利。我們業務的短尾性質以及我們收集和評估數據的速度使我們對我們的預訂流程及其對不斷變化的條件做出快速反應的持續能力充滿信心。

Turning to Page 7. As Joe mentioned, we are reiterating our previous financial guidance. Despite the dynamic environment, we are committed to producing an underwriting profit in the second half of 2023 and achieving an ROE equal to or greater than 10% in 2024.

翻到第 7 頁。正如 Joe 提到的，我們重申了之前的財務指導。儘管環境充滿活力，我們仍致力於在 2023 年下半年實現承保利潤，並在 2024 年實現股本回報率等於或大於 10%。

Turning to Page 8. Here, we outlined Specialty Auto's path to underwriting profitability. Our second quarter underlying combined ratio guidance was 103% to 107%. We reported an underlying combined ratio of 102%, slightly below the low end of our range. In the third quarter, we expect further improvement and to generate an underlying combined ratio between 99% and 101%. Assumptions and risks are outlined on Pages 7 and 8.

翻到第 8 頁。在這裡，我們概述了 Specialty Auto 的承保盈利之路。我們第二季度的基本綜合成本率指引為 103% 至 107%。我們報告的基本綜合成本率為 102%，略低於我們範圍的下限。我們預計第三季度將進一步改善，基本綜合成本率將在 99% 至 101% 之間。第 7 頁和第 8 頁概述了假設和風險。

Pages 9 and 10 provide an update on our strategic initiatives. Each program is on track to be completed on time and produce or exceed its targeted financial and operational benefits. Starting with the reciprocal, the Illinois Department of Insurance approved the formation of Kemper Reciprocal. We expect to write business within the reciprocal in the third quarter. We will provide additional program schedule details during our third quarter call.

第 9 和 10 頁提供了我們戰略計劃的最新信息。每個計劃都有望按時完成，並產生或超過其目標財務和運營效益。從互惠保險公司開始，伊利諾伊州保險部批准成立肯珀互惠保險公司。我們預計第三季度的業務將在倒數範圍內完成。我們將在第三季度電話會議期間提供更多計劃時間表詳細信息。

Our Bermuda optimization initiative launched in 2022 is expected to unlock a higher amount of life dividend to the parent. We expect at least $200 million to be released before year-end, up from $100 million as previously indicated.

我們於 2022 年推出的百慕大優化計劃預計將為母公司釋放更多的人壽紅利。我們預計年底前將發放至少 2 億美元，高於之前指出的 1 億美元。

As Joe mentioned, we recently completed our review of the Preferred P&C segment. The business will be wound down and the focus will be on our people, policyholders and working with our regulators to achieve the best possible outcome. The wind down of the business will enable the redeployment of more than $300 million in capital to our core segments. This will simplify the business and enhance capital deployment efficiency. As a result, starting in the third quarter, our segment reporting will only reflect our Specialty P&C and Life & Health businesses.

正如喬提到的，我們最近完成了對首選財產和責任部分的審查。該業務將被縮減，重點將放在我們的員工、保單持有人以及與監管機構的合作上，以實現最佳的結果。該業務的結束將使超過 3 億美元的資本重新部署到我們的核心部門。這將簡化業務並提高資本配置效率。因此，從第三季度開始，我們的分部報告將僅反映我們的專業財產與意外險和生命與健康業務。

And finally, our cost reduction initiatives are on track to produce their intended benefits, consistent with our timing expectations. Since the program's inception, we have achieved approximately $117 million in run rate savings or roughly 80% of the intended run rate savings goal previously anticipated to be achieved by 2025. Once completed, we expect these initiatives will significantly enhance Kemper's financial profile, including enhancing cash flow generation and reducing volatility.

最後，我們的成本削減計劃有望產生預期效益，與我們的時間預期一致。自該計劃啟動以來，我們已經實現了約1.17 億美元的運行率節省，或大約是之前預計到2025 年實現的運行率節省目標的80%。一旦完成，我們預計這些舉措將顯著改善Kemper 的財務狀況，包括增強產生現金流並減少波動性。

Moving to Page 11. Our insurance companies are appropriately capitalized and have significant sources of liquidity. At the end of the quarter, we had approximately $1 billion in availability. We continue to have the capital needed to navigate this environment while continuing to appropriately invest in our advancing our core capabilities. Further, as previously disclosed, we are committed to reducing debt outstanding by $150 million and bringing our debt-to-capital ratio back to our long-term target of 17% to 22%.

轉到第 11 頁。我們的保險公司資本充足，並擁有大量流動資金來源。截至本季度末，我們的可用資金約為 10 億美元。我們繼續擁有應對這種環境所需的資本，同時繼續適當投資於提升我們的核心能力。此外，正如之前所披露的，我們致力於將未償債務減少 1.5 億美元，並將債務與資本比率恢復到 17% 至 22% 的長期目標。

Moving to Page 12. Net investment income for the quarter was $106 million. Our pretax equivalent annualized book yield was 4.5%. Average investment grade new money yields for the quarter were 5% to 6%.

轉到第 12 頁。該季度的淨投資收入為 1.06 億美元。我們的稅前等值年化賬面收益率為 4.5%。本季度平均投資級新貨幣收益率為 5% 至 6%。

I'll now turn the call over to Matt to discuss the Specialty P&C business.

我現在將電話轉給馬特，討論特種財產保險業務。

Thank you, Jim, and good afternoon, everyone. Moving to Page 13 in our Specialty P&C business. We closed the second quarter with an underlying combined ratio improvement of 6 points. This was driven by the combination of incremental earned rate, tightened underwriting action, the normalizing of episodic items and expense efficiencies. We observed loss trend continuing to moderate. Frequency was flat year-over-year, and severity was up 2% sequentially. Catastrophe losses in the quarter were elevated. The 2 points or $17 million we experienced was above average and included a higher level of events from Florida floods to Texas hailstorms.

謝謝吉姆，大家下午好。轉到我們的特種財產保險業務第 13 頁。第二季度末，我們的基本綜合成本率提高了 6 個百分點。這是由增量收益率、收緊承保行動、偶發項目正常化和費用效率共同推動的。我們觀察到損失趨勢繼續放緩。頻率同比持平，嚴重程度環比上升 2%。本季度的災難損失有所增加。我們經歷的 2 個點或 1700 萬美元高於平均水平，其中包括從佛羅里達州洪水到德克薩斯州冰雹等更高級別的事件。

Including the recent California rate approvals Joe mentioned, the cumulative written rate since the second quarter of 2021 is expected to increase to 54 points next quarter. Of this rate, 17 points have earned in and that will increase to approximately 23 points by the end of the third quarter. We expect earned-in rate to accelerate as the California book renews in future quarters. We will continue to file for additional rate in all states as needed.

包括Joe提到的近期加州利率批准在內，自2021年第二季度以來的累計書面利率預計下季度將增至54點。其中，已獲得 17 分，到第三季度末將增加到約 23 分。我們預計隨著加州書在未來幾個季度的更新，盈利率將會加快。我們將根據需要繼續在所有州申請額外費率。

Shifting to the commercial vehicle business. Our underwriting and rate actions are continuing to positively impact loss performance. In the second quarter, the underlying combined ratio was 93.9%. The business is expected to deliver strong underwriting profits in the second half of 2023.

轉向商用車業務。我們的承保和利率行動繼續對損失表現產生積極影響。第二季度，基礎綜合成本率為93.9%。該業務預計將在 2023 年下半年實現強勁的承保利潤。

The loss environment continues to be volatile, and we are being appropriately cautious in writing new business. We expect to continue to suppress new business throughout the third quarter. In the fourth quarter, we plan to selectively write incremental new business to test new customer cohort buying and claim behavior. Particular items of interest include price elasticity, reporting patterns, and treatment and repair propensity. This will enhance our ability to optimally manage customer acquisition in a more disruptive operating environment. We will make monthly and quarterly evaluations on the gradual expansion of new business based on, first, our current view of underwriting profitability as well as the learnings from these tests.

虧損環境繼續波動，我們在開展新業務時保持適當謹慎。我們預計整個第三季度新業務將繼續受到抑制。第四季度，我們計劃選擇性地編寫增量新業務，以測試新客戶群體的購買和索賠行為。特別感興趣的項目包括價格彈性、報告模式以及治療和修復傾向。這將增強我們在更具顛覆性的運營環境中優化管理客戶獲取的能力。我們將根據我們目前對承保盈利能力的看法以及從這些測試中獲得的經驗教訓，對新業務的逐步擴張進行月度和季度評估。

In summary, we expect a continued volatile operating environment for at least the next couple of years. We believe our actions will provide continued improvement to underwriting performance, delivering on our profitability targets during the second half of 2023 and 2024. Through this period, we will continue a test-and-learn approach to safely and profitably manage new customer acquisition.

總而言之，我們預計至少在未來幾年內經營環境將持續波動。我們相信，我們的行動將持續改善承保業績，在 2023 年下半年和 2024 年實現我們的盈利目標。在此期間，我們將繼續採用測試和學習的方法，以安全、有利地管理新客戶獲取。

I will now turn the call over to Joe to cover the preferred and life businesses.

我現在將電話轉給喬，負責優先業務和人壽業務。

Thanks, Matt. Moving to Page 14 in our Preferred P&C segment. This quarter, the benefits of profit restoration actions including the continuation of lower frequency from non-rate actions offset higher catastrophe losses of $21 million. Both auto and home and other had sequential improvement in their underlying combined ratios. Through the second quarter, our personal auto book had 10 points of rate earned that will increase to approximately 14 points in the third quarter. As previously discussed, our strategic review is complete. Going forward, the segment will be noncore.

謝謝，馬特。轉到我們的首選 P&C 部分的第 14 頁。本季度，利潤恢復行動的好處（包括繼續降低非利率行動的頻率）抵消了 2100 萬美元的巨災損失。汽車、家居和其他行業的基本綜合比率均出現連續改善。整個第二季度，我們的個人汽車預訂獲得了 10 個積分，第三季度將增加到約 14 個積分。如前所述，我們的戰略審查已經完成。展望未來，該細分市場將成為非核心細分市場。

Turning to our Life & Health business on Page 15. I think we're all still getting used to how to read and interpret life financial statements post LDTI adoption. To help provide clarity into items that impact distributable cash flow trends, my comments will focus on the drivers that impact this measure. These items have not been impacted by LDTI adoption.

轉向第 15 頁的人壽與健康業務。我認為我們仍在習慣如何閱讀和解釋採用 LDTI 後的人壽財務報表。為了幫助澄清影響可分配現金流趨勢的項目，我的評論將重點關注影響該指標的驅動因素。這些項目並未受到 LDTI 採用的影響。

This quarter, we saw the lowest level of mortality frequency in at least the last 10 years. It is 12% below the 2018 and 2019 averages. Year-over-year, the average incurred gross debt benefit is down over 1%. Issued premium is up 0.5%. Life persistency is aligned with pre-pandemic levels. The combination of these items positions the business for continued improved profitability and attractive distributable cash flow.

本季度，我們看到死亡率頻率達到至少過去 10 年來的最低水平。比 2018 年和 2019 年的平均水平低 12%。與去年同期相比，平均產生的總債務收益下降了 1% 以上。發行溢價上漲0.5%。生命持久性與大流行前的水平一致。這些項目的結合使該業務能夠持續提高盈利能力和有吸引力的可分配現金流。

Turning to Page 16. In summary, I'll leave you and remind you of this. The strong sequential results we generated this quarter demonstrate a meaningful step in the right direction. I continue to be confident about our ability to return the business to underwriting profitability in what is a difficult and dynamic operating environment. Highlights for the quarter again include significant rate progress in the state of California receiving approximately 30 points of specialty personal auto rate; strong progress in our strategic initiatives, including our Bermuda optimization effort and the establishment of the reciprocal exchange; the realization of over half of the desired benefits from the restructuring and integration initiatives and the completion of the strategic review of our Preferred P&C segment.

翻到第 16 頁。總而言之，我將離開您並提醒您這一點。我們本季度取得的強勁連續業績表明，我們朝著正確的方向邁出了有意義的一步。我仍然對我們在困難且充滿活力的運營環境中使業務恢復承保盈利能力的能力充滿信心。本季度的亮點再次包括加利福尼亞州的顯著費率進步，專業個人汽車費率獲得約 30 個點；我們的戰略舉措取得了強勁進展，包括百慕大優化工作和互惠交易所的建立；重組和整合計劃實現了一半以上的預期效益，並完成了對我們的首選財產和意外險部門的戰略審查。

In closing, I'd like to thank our entire Kemper team for their continued dedication to executing our strategic priorities to generate consistent long-term shareholder value.

最後，我要感謝我們整個 Kemper 團隊持續致力於執行我們的戰略重點，以創造一致的長期股東價值。

With that, operator, we may now take questions.

接線員，現在我們可以提問了。

(Operator Instructions) Your first question comes from the line of Greg Peters from Raymond James.

（操作員說明）您的第一個問題來自 Raymond James 的 Greg Peters。

So I'll ask a couple of (technical difficulty)

所以我會問幾個（技術難度）

Greg, I'm not sure -- unfortunately, we can't hear you.

格雷格，我不確定——不幸的是，我們聽不到你的聲音。

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

您的下一個問題來自 Piper Sandler 的 Paul Newsome。

I was hoping you could talk a little bit more about the impact of non-rate actions in the quarter on the underlying business, whether we've seen the full impact there and it's just going to be sort of the impacted rate prospectively or if there's some other things that are happening under the hood that would be helpful.

我希望您能多談談本季度非利率行動對基礎業務的影響，無論我們是否已經看到了那裡的全部影響，並且它只是未來受影響的利率，或者是否有其他一些在幕後發生的事情也會有幫助。

Sure, Paul. And maybe I'll take a start, and we'll tag team this a little bit. I'm going to give you a broad comment, and then the guys can talk a little bit specifically. We're going to continue to have a set of non-rate actions that are going on, and they're going to have differing potential impacts. As an example, we significantly slowed down new business last quarter and will likely have that slow down largely in the third quarter. That provides -- it's a non-rate action that provides an immediate benefit to calendar year losses. When we think about a cohort or its experience, it tends to have higher losses in its first year and lower losses in subsequent years. So if you slow that new business down in the period, to do it, it gives you a little juice.

當然，保羅。也許我會開始，我們會稍微標記一下團隊。我將給你們一個廣泛的評論，然後大家可以具體談談。我們將繼續採取一系列非利率行動，它們將產生不同的潛在影響。舉例來說，我們上個季度大幅放緩了新業務，並且可能會在第三季度大幅放緩。這提供了一種非利率行動，可以為日曆年的損失帶來直接的好處。當我們考慮一個群體或其經歷時，它往往在第一年遭受更高的損失，而在隨後的幾年中損失更低。因此，如果你在此期間放慢新業務的發展速度，那麼它會給你帶來一點動力。

Eventually, we're going to be writing more new business, and that will expand. Matt was very careful in his comments and so was I that we are likely to do some gradual expansion in the fourth quarter but very much with a test-and-learn orientation to look at the patterns of what's going on in the environment. That may provide a nominal pressure, but we're going to be focused first on underwriting profitability and making sure that it's not a significant driver there and that we're using it to learn what patterns are going on. That will likely cause us to add underwriting tools to our toolbox or how we use them given the volatile nature of the current environment. So I'm going to expect we're going to continue to find different non-rate actions to manage things going forward.

最終，我們將編寫更多新業務，並且規模將會擴大。馬特的評論非常謹慎，我也是如此，我們可能會在第四季度進行一些逐步擴張，但很大程度上以測試和學習為導向，以了解環境中正在發生的情況的模式。這可能會帶來名義上的壓力，但我們將首先關注承保盈利能力，並確保它不是一個重要的驅動因素，並且我們將利用它來了解正在發生的模式。這可能會導致我們將承保工具添加到我們的工具箱中，或者考慮到當前環境的不穩定性質，我們如何使用它們。因此，我預計我們將繼續尋找不同的非利率行動來管理未來的事情。

I think what you're asking is how to model in what you're looking for, and what I might guide you to is you might want to take an earned rate measure for improvement for a while until we target or we get close to target profitability. And then you're going to work off our guidance from there. The measure should be focusing on our guidance and the timing that comes from that. As we hit those targets, we don't anticipate dropping to a 75 combined ratio. We anticipate that once we've clearly solidly and comfortably gotten there with our expanded margin of safety, we'll move towards growing. Again, I'm not signaling to growing in the third or the fourth quarter, but we'll move in that direction. So we will start offsetting some of that.

我認為您要問的是如何對您正在尋找的內容進行建模，我可能會指導您的是，您可能需要暫時採取賺取率措施來改進，直到我們達到目標或接近目標盈利能力。然後你將從那裡開始執行我們的指導。該措施應側重於我們的指導以及由此產生的時機。當我們實現這些目標時，我們預計綜合比率不會下降到 75。我們預計，一旦我們以擴大的安全邊際明確、堅實、舒適地實現了這一目標，我們將走向增長。再說一次，我並不是在暗示第三季度或第四季度會出現增長，但我們會朝這個方向前進。所以我們將開始抵消其中的一些。

Paul, this is Jim. The only thing I would add on to what Joe said is I think you have a couple -- a little bit of incremental benefit that you might see coming in, in the third quarter from underwriting actions. But most of what you're going to see at this stage is going to be incremental earned rate that will flow into the book. And that will, again, similar -- aligned with Joe's comments on the other, that will begin to offset and take the place of some of the underwriting actions that have been put in place to date to help us get to this position as we move forward.

保羅，這是吉姆。我對喬所說的唯一要補充的是，我認為您可能會在第三季度從承保行動中看到一些增量收益。但在此階段您將看到的大部分內容將是流入本書中的增量賺取率。這將再次類似——與喬對另一方的評論一致，這將開始抵消並取代迄今為止已採取的一些承保行動，以幫助我們在行動中達到這一立場向前。

We started, Paul, giving you guys some rate and non-rate direction a year or so ago, partly to try to help get to a number. And we acknowledged at the time that as the rate came in, we might unwind some of those non-rate actions. And I think I want to go back to what I said a moment ago. All of those crossing items are in our guidance, and we're trying to give you the answer rather than ask you to sort of work the components underneath because it's on -- be almost impossible for you to work the individual components or just trying to give you the answer at this point. And it's probably a little less important to try to break those 2 apart going forward, and we're going to have more trouble helping you break them apart because they're going to move in multiple directions.

保羅，大約一年前，我們開始給你們提供一些利率和非利率方向，部分原因是為了幫助得出一個數字。我們當時承認，隨著利率的上升，我們可能會解除其中一些非利率行動。我想我想回到剛才所說的話。所有這些交叉項目都在我們的指導中，我們試圖給您答案，而不是要求您對下面的組件進行排序，因為它已經打開 - 您幾乎不可能操作單個組件或只是嘗試此刻給你答案。未來嘗試將這兩者分開可能不再那麼重要，而且我們在幫助您將它們分開時會遇到更多麻煩，因為它們將朝多個方向發展。

But still nevertheless helpful to understand what could be happening so [we see] it. I want to ask a little bit more about the life operation and the capital optimization. So a couple of hundred million bucks potentially moved from the life U.S. subsidiary to the parent. Maybe you can talk about sort of what ends up being the actual capital behind the life operation? Because I was looking at the statutory statements. It looks like there's not that much more than a couple of hundred million dollars of statutory capital in the life subsidiaries at least to [core and the SML]. And -- but I also presume that there's an amount of life capital that's sitting in the Bermuda subsidiary as well. So can you talk about sort of where that total life capital ends up and maybe both in size as well as where it ends up being distributed?

但仍然有助於理解可能發生的事情，以便[我們看到]它。我想多問一點關於生命運營和資本優化的問題。因此，幾億美元可能會從美國壽險子公司轉移到母公司。也許你可以談談最終成為生命運作背後的實際資本的是什麼？因為我正在查看法定聲明。看起來人壽子公司的法定資本不超過幾億美元，至少對於[核心和SML]來說是這樣。而且 - 但我也認為百慕大子公司也有大量的人壽資本。那麼，您能談談總生命資本的最終去向嗎？也許是規模以及最終分配的地方？

Yes, happy to kind of walk through it, Paul. Good question. Big picture-wise, yes, there is capital in the Bermuda entity. When you think about it across both, you're talking about $280 million that would be sitting there today. In total, one of the things I think you need to look at is we're resetting or there's a component that is resetting some of our reserves that will release reserves and equity that is currently held inside those entities. So it will increase up. So you won't see a meaningful change in the actual capital level that's inside the life companies.

是的，很高興能夠經歷它，保羅。好問題。從大局來看，是的，百慕大實體有資本。當你綜合考慮這兩個方面時，你會發現今天的金額為 2.8 億美元。總的來說，我認為你需要關注的一件事是我們正在重置，或者有一個組件正在重置我們的一些儲備金，這將釋放這些實體當前持有的儲備金和股權。所以會增加。因此，您不會看到壽險公司內部的實際資本水平發生有意義的變化。

Some of the things that we've done is essentially we had initial filings and placements with the Department of Illinois and others that go back many years as it relates to our mortality trends. And we said that we would come back and update those appropriately once we had really strong mortality tables and experience. We've done that coupled with our Bermuda initiative, and that is essentially freeing up equity basically from a statutory perspective that will then be able to come up. And so you won't see a meaningful change in the overall capital dollars to that. You'll just see a difference in the reserve level in total, as those reserves are reset to represent more of a true mortality curve and the benefits that we've had from an experience perspective.

我們所做的一些事情本質上是我們向伊利諾伊州和其他部門進行了初步申請和安置，這些事情可以追溯到很多年前，因為這與我們的死亡率趨勢有關。我們說，一旦我們有了真正強大的死亡率表和經驗，我們就會回來並適當更新這些內容。我們已經做到了這一點，再加上我們的百慕大倡議，這基本上是從隨後能夠出現的法定角度釋放股權。因此，您不會看到總體資本金額發生有意義的變化。您只會看到準備金水平總體上的差異，因為這些準備金被重置以更多地代表真實的死亡率曲線以及我們從經驗角度獲得的好處。

Your next question comes from the line of Greg Peters from Raymond James.

您的下一個問題來自雷蒙德·詹姆斯 (Raymond James) 的格雷格·彼得斯 (Greg Peters)。

Hopefully, you can hear me now.

希望你現在能聽到我的聲音。

Welcome back.

歡迎回來。

That's good. So I wanted to start my question -- the first question off with, Joe, in your comments, you talked about this being an unprecedented time for the personal lines business. And you mentioned buying triggers embedded in that as we mentioned. I'm just curious, with all the rate that's being thrown at the consumer -- and it's just not your company. It's other companies, but particularly when I think about your company being in the specialty business, which is lower limits, I'm curious how the consumer is responding to this because it feels like you're probably pushing the envelope of what the consumers can afford. So do you have some perspective on that?

那挺好的。所以我想開始我的問題 - 第一個問題是，喬，在您的評論中，您談到這是個人線路業務前所未有的時期。正如我們提到的，您提到了其中嵌入的購買觸發器。我只是好奇，所有向消費者收取的費用都不是你的公司。這是其他公司，但特別是當我想到貴公司從事專業業務時，這是較低的限制，我很好奇消費者對此有何反應，因為感覺你可能正在挑戰消費者所能做到的極限買得起。那麼您對此有什麼看法嗎？

Yes, sure. Let's tag team this. I know Matt has a couple of thoughts. Then, I'll add some in a second.

是的，當然。讓我們標記團隊吧。我知道馬特有一些想法。然後，我會在一秒鐘內添加一些。

Greg, so what we're seeing from a consumer perspective is that persistency or take rates, retention rates are at or higher than what we would have observed historically. And that is against, right, what we would have modeled in normal times. The function of this is less of a demand dynamic and more of a lack of supply dynamic. So as we're seeing competitors in the market slow down appetite, specifically in markets like California and Florida and now we're starting to see it rise in Texas, we're seeing that the take rate on pretty high average premium dislocations is actually sticking.

格雷格，所以我們從消費者的角度看到的是，持久性或採用率、保留率等於或高於我們歷史上觀察到的水平。這與我們在正常時期的模式是相反的。其作用與其說是需求動態，不如說是供應動態缺乏。因此，當我們看到市場上的競爭對手放緩胃口時，特別是在加利福尼亞州和佛羅里達州等市場，現在我們開始看到德克薩斯州的胃口有所上升，我們發現相當高的平均保費錯位的接受率實際上是粘著。

And we'll see, as the markets start to get more rate adequate and as consumers are moving through sort of elasticity maturing, if those persistency rates will hold. But for now, we're actually seeing that, that rate is sticking. But when we think about the outlook of our business and how we're managing through, that's a highly sensitive variable for us in terms of our projections.

我們將會看到，隨著市場開始變得更加充足，隨著消費者正在經歷某種彈性的成熟，這些持久性利率是否會保持不變。但就目前而言，我們實際上看到，這個比率一直在持續。但當我們考慮我們的業務前景以及我們如何應對時，就我們的預測而言，這對我們來說是一個高度敏感的變量。

A part of what we're thinking, Greg, as we go through this, I'll give you an example, and this is a generalization, not a specific item, but a rule of thumb might have been that if somebody gets more than a 10% rate increase, they're likely to shop and that's likely to start to impact your retention or persistency. In a normal environment, there's a -- this is a supply issue Matt's talking about. There's generally broad availability and there's some place to go.

格雷格，我們正在思考的一部分，當我們討論這個問題時，我會給你一個例子，這是一個概括，而不是一個具體項目，但經驗法則可能是，如果有人得到超過比率增加10%，他們可能會購物，這可能會開始影響您的保留率或持久性。在正常環境中，存在一個——這是馬特談論的供應問題。通常有廣泛的可用性並且有一些地方可以去。

In a more restricted environment where folks are either tightening underwriting, competitors are tightening underwriting, are also raising rates, they might not have an option that's more competitive, so that 20 or 30 point rate change, they might take. In a very low unemployment environment, those folks are needing to have the car to get to work. They've got incoming cash, so that likely has a very important value to them. They need the insurance. They need the car. They need to work that. So that's triggering.

在一個更受限制的環境中，人們要么收緊承保，競爭對手要么收緊承保，要么提高費率，他們可能沒有更具競爭力的選擇，因此他們可能會採取20 或30 個百分點的費率變化。在失業率非常低的環境下，這些人需要擁有汽車才能上班。他們有收到的現金，因此這對他們來說可能具有非常重要的價值。他們需要保險。他們需要汽車。他們需要努力做到這一點。所以這就是觸發。

And part of what we've been highlighting and sort of a normal model, hypothetically, if we took -- pick your number. 25 points of rate, we'd expect a certain persistency drop. We saw persistency go up. If that in fact occurs, one of the questions that comes out is will that result in a buying decision change a year from now. Or will people just get used to the new rate and we reset later? When we talk about test and learn from gradual expansion, what we're actually looking for is trying to measure each of those behavior changes.

我們一直強調的部分內容是一個正常模型，假設我們選擇你的號碼。 25個點的利率，我們預計持久性會出現一定程度的下降。我們看到毅力有所提高。如果這種情況確實發生，那麼出現的一個問題是，這是否會導致一年後的購買決策發生變化。或者人們會習慣新的費率，然後我們會重置？當我們談論測試並從逐步擴展中學習時，我們實際上正在尋找的是嘗試衡量每一個行為變化。

Right now in this strong employment, low unemployment environment, we're seeing behaviors that sort of make sense to us, but it's different than historical patterns. We're asking ourselves and are aware, and that's why we have a wider margin of safety going forward, to say what might happen in the future, and we're very much focused on increasing our business intelligence, increasing our predictive analytics, increasing our very scientific method of testing and watching to see whether those behavior changes will move going forward. Does that help?

目前，在就業強勁、失業率較低的環境中，我們看到了一些對我們來說有意義的行為，但這與歷史模式不同。我們問自己並意識到這一點，這就是為什麼我們未來有更大的安全邊際，來預測未來可能發生的情況，我們非常專注於提高我們的商業智能，增加我們的預測分析，增加我們用非常科學的方法來測試和觀察這些行為變化是否會繼續下去。這有幫助嗎？

Yes. It does provide some color. It's surprising that retention is going up because your rates are going up. I wanted to pivot and sort of in connection with those comments and then some of the other things you said in your prepared remarks. On Slide 13, I like that 1 chart you have where you do the cumulative PPA rate activity since the second quarter '21. And what I was intrigued by this chart is the filed rates that pops up to 54.8% in the second quarter and then only goes to 56% in the third quarter. Yet in the third quarter of this year, you've just got this 30% rate approval that's effective. So I would have expected the filed rate to go up even more relative to where it was in the second quarter. Does that question make sense to you?

是的。它確實提供了一些顏色。令人驚訝的是，由於您的費率上升，保留率也在上升。我想圍繞這些評論以及你在準備好的發言中所說的其他一些事情進行調整。在幻燈片 13 上，我喜歡第 1 張圖表，其中顯示了自 21 年第二季度以來的累積 PPA 利率活動。這張圖表讓我感興趣的是，第二季度的申請率飆升至 54.8%，第三季度僅降至 56%。然而在今年第三季度，你剛剛獲得了有效的 30% 的批准率。因此，我預計申請率相對於第二季度的水平會上升更多。這個問題對你來說有意義嗎？

It's the -- the filed, don't overthink that as much as just the delayed. You're expecting it to go up further. Let me make sure I got your view.

這是--已提交的，不要想太多，而只是延遲。你預計它會進一步上漲。讓我確定我明白了你的觀點。

Yes, I would expect the 54.8% to go up to 70% or 65% or something with the additional California approval.

是的，如果加州額外批准的話，我預計 54.8% 會上升到 70% 或 65% 之類的。

The 54.8% included the California filed rate. It hadn't been approved. This is filed, not approved.

54.8% 包括加州備案率。它沒有被批准。這是已提交，未批准。

Got it. Okay.

知道了。好的。

And so when that is approved and you're starting to see the written go up because on August 4, we started writing it, and so in the third quarter, it will become part of the written rate. And remember, the entire book won't have it, but everything written in the quarter will have it. So that's why it moves up there, and we will renew them over the course of their policy term.

因此，當批准後，您就會開始看到書面費用上升，因為我們從 8 月 4 日開始編寫它，因此在第三季度，它將成為書面費用的一部分。請記住，整本書不會有它，但本季度寫的所有內容都會有它。這就是為什麼它會上升，我們將在他們的政策任期內更新它們。

Greg, to your point, that's the secondary piece, which is following that earned, right, which is the 23% moving towards that 56% or that 54% that we're representing. So that's where it earns across the totality of the book.

格雷格，就你的觀點而言，這是次要部分，緊隨贏得的部分之後，對吧，即 23% 的人正在朝著我們所代表的 56% 或 54% 的方向發展。這就是整本書的亮點所在。

Got it. It makes sense now. And then on Slide 6 in discussion of your adverse reserve development, you talked about some elongated development patterns in the second half of '22, more claims closing with payments, how do you see those trends in the first half of '23 versus what you saw in the second half of '22? And are we going to be looking at another situation 6 months from now where there's going to be another reset because there's been another adverse change in how those patterns are looking in your book of business?

知道了。現在這是有道理的。然後在幻燈片6 中，在討論您的不利準備金發展時，您談到了22 年下半年的一些長期發展模式，更多索賠以付款結束，您如何看待23 年上半年的這些趨勢與您的趨勢22年下半年看到的？我們是否會在 6 個月後考慮另一種情況，因為這些模式在您的業務記錄中出現了另一個不利的變化，因此將再次進行重置？

So yes, a great question. A couple of points on that. The first point is what we saw at least across our book, and it's really become much more transparent at this stage, is a jump up in terms of the ultimate losses that we incurred between Q2 and Q3, which then has continued forward of last year. If you think about the trajectory on we were consistently for 3 quarters in a row, had been down 1.5 points, 2 points, a little bit more at times, kind of averaging that 2 point trajectory. And then now as you would see if you push everything back, we actually have an increase that occurred in Q3. And so that pattern changed, and we've effectively incorporated that going forward.

所以是的，這是一個很好的問題。關於這一點有幾點。第一點是我們至少在整個書中看到的，並且在現階段確實變得更加透明，那就是我們在第二季度和第三季度之間遭受的最終損失的跳躍式增長，然後這種損失一直持續到去年。如果你考慮一下我們的軌跡，我們連續 3 個季度持續下降 1.5 分、2 分，有時甚至更多一點，有點平均 2 分的軌跡。現在，正如你所看到的，如果你把一切都推後，我們實際上在第三季度出現了增長。因此，這種模式發生了變化，我們已經有效地將其納入未來。

So I don't think that it's likely to repeat again. When we look at our Q1 results, those actually developed favorable from an entry year about $6 million that was inside of it, so modest. But based on what we're seeing at this stage, we feel really good about kind of our -- well, we feel really good about our loss picks. We had obviously a pattern or a trend change that was very unusual from an industry perspective and from what we've seen across our book. We dove underneath that. We continue to segment that. And that pattern change, whether it's an environmental or other, is essentially what has led to the development that we've had to date. It's unfortunate but we think we've got it covered, and we feel pretty good about the book as a whole.

所以我認為這種情況不太可能再次重演。當我們查看第一季度的業績時，這些業績實際上從入門年開始就表現良好，其中包含大約 600 萬美元，非常適度。但根據我們現階段所看到的情況，我們對我們的損失選擇感覺非常好。顯然，從行業角度以及我們在書中看到的情況來看，我們有一種非常不尋常的模式或趨勢變化。我們潛入了它的下面。我們繼續對其進行細分。這種模式的變化，無論是環境的還是其他的，本質上都是導致我們迄今為止的發展的原因。這很不幸，但我們認為我們已經解決了這個問題，而且我們對整本書感覺很好。

If I can add a little bit, Greg, and I think Jim was completely clear, we saw that pattern change between second and third quarter, and the new pattern is incorporated in all our current picks. I think you had a second -- I think part of your question was did we include it in our current picks and part of it is will there be another pattern change. I'd like to be able to forecast that for you.

如果我可以補充一點，格雷格，我認為吉姆完全清楚，我們看到第二季度和第三季度之間的模式發生變化，並且新模式已納入我們當前的所有選擇中。我想你有第二個問題 - 我認為你的部分問題是我們是否將其納入我們當前的選擇中，部分問題是是否會出現另一種模式變化。我希望能夠為您預測這一點。

What we've tried to highlight is this is a disrupted environment. Your question on pricing is a great one. Okay? What if somebody gets a 20 or 30 point price increase and then a year later, they get another 20? At what point do they stop buying insurance? At what point does a claim pattern change? We're watching all of that. And when I say our margin of error is wider, we intentionally are looking at that and having our radar up watching for it.

我們試圖強調的是這是一個混亂的環境。你關於定價的問題是一個很好的問題。好的？如果某人的價格上漲了 20 或 30 個百分點，一年後又上漲了 20 個百分點，該怎麼辦？他們什麼時候停止購買保險？索賠模式在什麼時候會發生變化？我們正在關注這一切。當我說我們的誤差範圍更大時，我們有意地關注這一點並讓我們的雷達監視它。

We can't tell you if it's going to happen because, by definition, a pattern change has -- like it's a change. But we're way more sensitive to watching it and way more cautious in what we're doing and way quicker to respond on a defensive posture to those items in this environment, and we expect to have that margin of safety and defensiveness for some period of time.

我們無法告訴你這是否會發生，因為根據定義，模式變化已經——就像它是一種變化一樣。但我們對觀察它更加敏感，對我們正在做的事情更加謹慎，並且更快地對這種環境中的這些項目做出防禦姿態的反應，我們預計在一段時間內能夠擁有安全邊際和防禦能力的時間。

Okay. I guess the final question sort of comment I have. It's going to be on your guidance, the third quarter but the ROE guidance for next year, too. I guess considering all the volatility that's going on, I just questioned whether it's worthwhile to put out the guidance that we understand that's your objective, but it seems that there's risk that we've observed with other companies of putting numbers out there or missing them, especially the near term considering the volatility. But when I look at your ROE targets and then you talk about the preferred business being run off, does the ROE targets include or exclude the preferred business? And from an accounting perspective, is that going to go into a discontinued bucket, so it's going to be just below everything, below line in the income statement?

好的。我想我的最後一個問題是我的評論。第三季度將取決於您的指導，明年的淨資產收益率也將取決於您的指導。我想考慮到正在發生的所有波動，我只是質疑是否值得提出我們理解的目標指導，但我們觀察到其他公司似乎存在公佈數字或遺漏數字的風險，特別是考慮到波動性的近期。但是，當我查看你們的 ROE 目標，然後你們談論首選業務被淘汰時，ROE 目標是否包括或排除首選業務？從會計角度來看，這是否會進入停產階段，因此它會低於所有資產，低於損益表中的線？

So a couple of points. The guidance does not include the redeployment of capital from the personal insurance or the preferred personal insurance business. That will be a positive as it comes through or a tailwind. It does include what our expected results were and where we thought the business would triangulate to. So it's in from that perspective, but there'll be an enhancement from a capital deployment element that will be a slight tailwind. I would not think about that as a major tailwind. It's much more a tailwind over the 2-, 3-, 4-year period.

所以有幾點。該指引不包括個人保險或首選個人保險業務的資本重新部署。這將是積極的一面，也可能是順風的一面。它確實包括我們的預期結果以及我們認為業務將達到的目標。因此，從這個角度來看，但資本部署元素將會有所增強，這將是一個輕微的推動力。我不認為這是一個主要的推動因素。這對於 2 年、3 年、4 年期間來說更是順風順水。

The secondary component that I would highlight is we expect to report our core businesses going forward. And then noncore would include things, likely the preferred personal insurance business. That election would likely be made through our review in the third quarter, but our core businesses are the KA business and the life business. So hopefully, that's helpful.

我要強調的第二個部分是我們希望報告我們未來的核心業務。然後非核心業務將包括一些東西，可能是首選的個人保險業務。這個選擇可能會通過我們第三季度的審查來決定，但我們的核心業務是KA業務和人壽業務。希望這會有所幫助。

We understand completely your question around the guidance, and we're trying to do a couple of things. One, you pointed to Slide 13, and you saw the written and filed rate connecting and Jim made a distinct point of saying looking at the difference between the earned rate and the written rate. That rate will earn in. It's filed. It's approved. It's being written right now. That's not anymore -- when we filed something and it hadn't been approved, you might argue there was some hope involved in that.

我們完全理解您對指南的疑問，並且我們正在嘗試做一些事情。第一，你指向幻燈片 13，你看到書面費率和歸檔費率相連接，吉姆明確表示要考慮賺取費率和書面費率之間的差異。這個利率會賺錢。它已提交。已獲批准。現在正在寫呢。現在情況已經不一樣了——當我們提交一些東西但尚未獲得批准時，你可能會說這其中還有一些希望。

Now it's not hope. It's processing that works its way through. So we're recognizing that. And we're also highlighting that there's a lot of things going on in the environment. We're very quick to respond. It's a very short-tail business, but we're also highlighting that there's things we don't know. And we're confident we're on the right path, and we're confident we're going to find those things quicker. And we're making very significant and thoughtful test-and-learn investments to respond quickly, but don't, in any way, shape or form, anticipate that we've got a crystal ball and we'll be able to see those things before they happen. We're not promising we're going to see them, but we are promising we're going to respond quick.

現在已經不是希望了。它的處理是按其方式進行的。所以我們正在認識到這一點。我們還強調環境中正在發生很多事情。我們的回應非常快。這是一個非常短尾的業務，但我們也強調有一些我們不知道的事情。我們相信我們走在正確的道路上，我們相信我們會更快地找到這些東西。我們正在進行非常重要且深思熟慮的測試和學習投資，以快速做出反應，但不要以任何方式、形狀或形式期望我們有一個水晶球，我們將能夠看到那些事情發生之前。我們不承諾會見到他們，但我們承諾我們會迅速做出回應。

Got it. And just one final cleanup question because I can't help myself. But litigation was mentioned, increased attorney rep. Is that just state specific? Or is that across your entire footprint?

知道了。最後還有一個清理問題，因為我無法控制自己。但提到了訴訟，增加了律師代表。這只是國家特定的嗎？或者你的整個足跡都是如此？

Greg, no, great question. It's across the entirety of the footprint. We're seeing different behavior there and some might call it social inflation. Others might call it attorney abuse. I'll let you decide which it is. But we're definitely seeing more of it. I think that's something that's an industry pattern, and we're doing what we can to create the best outcomes we can for our customers.

格雷格，不，很好的問題。它遍布整個足跡。我們在那裡看到了不同的行為，有些人可能稱之為社會通貨膨脹。其他人可能稱之為律師濫用。我會讓你決定是哪一個。但我們肯定會看到更多這樣的情況。我認為這是一種行業模式，我們正在盡我們所能為客戶創造最好的結果。

(Operator Instructions) There are no further questions at this time. I will now hand over the call to Joe Lacher. Please continue.

（操作員說明） 目前沒有其他問題。我現在將把電話轉給喬·拉徹。請繼續。

Thank you, operator, and thank you, everybody, for joining our call today. We appreciate your time and attention and look forward to speaking to you again with our third quarter results.

謝謝接線員，也謝謝大家今天加入我們的電話會議。我們感謝您的時間和關注，並期待再次與您交談我們的第三季度業績。

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

女士們、先生們，今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。