Kemper Corp (KMPR) 2024 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to Kemper's First Quarter 2024 Earnings Conference Call. My name is Ina, 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 2024 年第一季財報電話會議。我叫伊娜，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, Michael Marinaccio, Kemper's Vice President of Corporate Development and Investor Relations. Mr. Marinaccio, you may begin.

現在我想介紹今天電話會議的主持人 Michael Marinaccio，他是 Kemper 的企業發展和投資者關係副總裁。 Marinaccio 先生，您可以開始了。

Thank you, operator. Good afternoon, everyone, and welcome to Kemper's discussion of our first quarter 2024 results. This afternoon, you'll hear from Joe Lacher, Kemper's President and Chief Executive Officer; Brad Camden, Kemper's Executive Vice President and Chief Financial Officer; and Matt Hunton, Kemper's Executive Vice President and President of Kemper Auto.

謝謝你，接線生。大家下午好，歡迎參加 Kemper 對我們 2024 年第一季業績的討論。今天下午，您將聽到 Kemper 總裁兼執行長 Joe Lacher 的演講； Brad Camden，Kemper 執行副總裁兼財務長；以及 Kemper 執行副總裁兼 Kemper Auto 總裁 Matt Hunton。

We'll make a few opening remarks to provide context around our first quarter results, followed by a Q&A session. For any interactive portion of the call, our presenters will be joined by Chris Flint, Kemper's Executive Vice President and President of Kemper Life; Duane Sanders, Kemper's Executive Vice President and Chief Claims Officer, P&C; and John Boschelli, Kemper's Executive Vice President and Chief Investment Officer.

我們將做一些開場白，提供有關第一季度業績的背景信息，然後進行問答環節。對於電話會議的任何互動部分，我們的演講者將由 Kemper 執行副總裁兼 Kemper Life 總裁 Chris Flint 參加； Duane Sanders，Kemper 執行副總裁兼 P&C 首席索賠官；以及 Kemper 執行副總裁兼首席投資長 John Boschelli。

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

今天收盤後，我們發布了收益報告，向 SEC 提交了 10-Q 表格，並發布了收益報告和財務補充報告。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 operation 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 2023 Form 10-K and our first 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》安全港條款意義內的前瞻性陳述。我們未來的實際結果和財務狀況可能與這些陳述有重大差異。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 2023 年 10-K 表格和第一季度收益發布。

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 non-GAAP financial measures to GAAP where required in accordance with SEC rules. You can find each of these documents in the Investors section of our website, kemper.com.

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。

Lastly, all comparative references will be to the corresponding 2023 periods unless otherwise stated.

最後，除非另有說明，所有比較參考都將針對相應的 2023 年期間。

I will now turn the call over to Joe.

我現在會把電話轉給喬。

Thank you, Michael. Good afternoon, everyone, and thanks for joining us today. I'll start by noting that overall, we're pleased with our results and the progress we've made this quarter. We continue to deliver significantly improved profitability in our Specialty P&C business where we're now exceeding target margins. While as expected, policies in force continued to decline, we initiated our new business expansion activities and are on track to return to more typical new business rates by midyear.

謝謝你，麥可。大家下午好，感謝您今天加入我們。首先我要指出的是，總的來說，我們對本季的結果和所取得的進展感到滿意。我們持續大幅提高特種財產保險業務的獲利能力，目前我們已經超越了目標利潤率。正如預期的那樣，現行政策繼續下降，但我們啟動了新業務擴張活動，並有望在年中恢復到更典型的新業務利率。

As pricing loss trend and new business levels return to a more normal balance, our underlying competitive advantages are becoming more visible. With our story and results becoming clearer and simpler, we believe the underlying strength and long-term value creation of the franchise will be consistently apparent.

隨著定價虧損趨勢和新業務水準恢復到更正常的平衡，我們的潛在競爭優勢變得更加明顯。隨著我們的故事和結果變得更加清晰和簡單，我們相信該系列的潛在優勢和長期價值創造將始終顯而易見。

Let's move to Page 4 and jump into results. Overall, we delivered $71 million of net income and annualized ROE over 11% and a tangible ROE of over 17%. We are once again achieving our -- or exceeding our target returns. Specialty P&C generated a 93.6% underlying combined ratio. That is a 4.6-point improvement sequentially, a 14.4-point improvement year-over-year and the fourth consecutive quarter of underlying improvement. We're pleased that once again, we're exceeding our target combined ratio of 96% in this business.

讓我們轉到第 4 頁並跳到結果。總體而言，我們實現了 7,100 萬美元的淨利潤，年化 ROE 超過 11%，有形 ROE 超過 17%。我們再次實現或超越我們的目標回報。專業財產險和意外險產生了 93.6% 的基礎綜合成本率。這比上一季提高了 4.6 個百分點，年比提高了 14.4 個百分點，並且是連續第四個季度實現基本改善。我們很高興再次超過了該業務 96% 的目標綜合成本率。

Let me acknowledge that historically, we've only provided a long-term consolidated ROE target and not a specific Specialty P&C target combined ratio. We recognize this has caused some confusion, and we're fixing that now. Brad is going to comment further on that a little later.

讓我承認，從歷史上看，我們只提供了長期綜合股本回報率目標，而不是具體的專業財產和意外險目標綜合比率。我們認識到這引起了一些混亂，我們現在正在解決這個問題。布拉德稍後將對此發表進一步評論。

Relative to our life business, while demonstrating modest quarterly volatility, we continue to deliver consistent returns. I'll spend more time talking about this later in the call.

相對於我們的壽險業務，雖然季度波動不大，但我們繼續提供穩定的回報。我稍後會在電話中花更多時間討論這個問題。

Shifting to Specialty P&C production. We're acutely aware that PIF growth or rather lack thereof is the most significant issue on investors' minds at the moment. We made significant progress in this area during the quarter. On that, we'll dig into this in much greater detail. I'm going to hit a few highlights and offer an overriding perspective.

轉向專業 P&C 生產。我們敏銳地意識到，PIF 成長或缺乏成長是投資者目前最關心的問題。本季我們在這一領域取得了重大進展。關於這一點，我們將更詳細地探討這一點。我將重點介紹一些要點並提供一個重要的觀點。

Throughout 2023, we committed to a nearly exclusive focus on restoring underwriting profitability, deliberately foregoing new business and potential growth. As we discussed last quarter, we did not rev the new business engine, if you will, until we delivered a sub-100 combined ratio. When it was clear that this had been accomplished with fourth quarter results and we had optimism about the margin outlook, we initiated our new business expansion.

在整個 2023 年，我們致力於幾乎完全專注於恢復承保獲利能力，故意放棄新業務和潛在成長。正如我們上個季度所討論的，如果您願意的話，我們沒有調整新的業務引擎，直到我們實現了低於 100 的綜合比率。當第四季度的業績顯然已經實現這一目標並且我們對利潤率前景感到樂觀時，我們開始了新的業務擴張。

This decision was made in late January. There are 2 key points that will help you interpret our numbers and see why we have confidence in our ability to stabilize PIF quickly. First, since the execution of the new business expansion began in mid-February, only half the quarter realized the benefit. And second, consider the prudent nature of the expansion we're utilizing. We did not turn new business on similar to flipping on a light switch and going from 0 to 100% immediately. We're expanding new business more analogously to driving a stick shift. You don't go from first gear to fifth gear without stalling. The first quarter represented perhaps moving through first and early second gear.

這項決定是在一月下旬做出的。有 2 個關鍵點將幫助您解讀我們的數據，並了解為什麼我們對快速穩定 PIF 的能力充滿信心。首先，自2月中旬開始執行新業務擴張以來，只有一半的季度實現了效益。其次，考慮我們正在利用的擴張的審慎性質。我們沒有像打開電燈開關並立即從 0% 變為 100% 那樣開啟新業務。我們正在拓展新業務，就像駕駛變速桿一樣。從一檔換到五檔時，你不可能不失速。第一季可能代表進入第一檔和第二檔早期。

This resulted in new business apps written, growing by nearly 2.6x the fourth quarter of 2023 volume. For the month of April, we wrote about as many new business apps as we did in all of the first quarter. On a run rate basis, this suggests the second quarter approaching roughly 3x the first quarter volumes. This might be characterized as the new business engine moving through third and perhaps fourth gear.

這導致新的商業應用程式編寫量比 2023 年第四季成長了近 2.6 倍。 4 月份，我們編寫的新業務應用程式數量與第一季全年的數量一樣多。從運行率來看，這顯示第二季的銷售量約為第一季的三倍。這可能被描述為新的業務引擎正在經歷第三檔甚至第四檔。

The takeaway, we have confidence that PIF will stabilize midyear. Growth will follow subject to traditional seasonality patterns. In the 6 quarters prior to the pandemic disruption, this business generated unit growth between 6% and 13%. We expect our competitive advantages will allow us to deliver similar results for 2025 and beyond.

結論是，我們有信心 PIF 將在年中穩定下來。成長將遵循傳統的季節性模式。在疫情中斷之前的 6 個季度中，該業務的單位成長率在 6% 到 13% 之間。我們預期我們的競爭優勢將使我們能夠在 2025 年及以後取得類似的成果。

For a short time, we're going to profile a new more responsive metric, new business apps, to help you measure the speed of PIF stabilization. Matt is going to go through more detail on Slides 9 and 10. As discussed last quarter, the bulk of the strategic initiatives we've been profiling have either been completed or require less frequent updates given their long-term nature, so there's not much to discuss on those this quarter.

在短時間內，我們將介紹一個新的響應速度更快的指標，即新的業務應用程序，以幫助您衡量 PIF 穩定的速度。馬特將在幻燈片9 和10 上介紹更多細節。沒有太多內容本季討論這些問題。

I'll leave you with one last thought. We remain committed to delivering an overall low double-digit ROE throughout the cycle. Within our Specialty P&C business, we're targeting a 96 combined ratio and then growing the business as much as possible. We've successfully corrected a major profitability challenge and are now exceeding our target combined ratio. We're addressing declining PIF and expect it to stabilize midyear. We hope you leave today sharing our confidence that we will return to a more traditional consistent long-term profitable growth profile by early next year.

我要留給你最後一個想法。我們仍然致力於在整個週期中實現低兩位數的整體 ROE。在我們的專業財產與意外險業務中，我們的目標是實現 96 的綜合比率，然後盡可能地發展業務。我們已經成功糾正了重大的獲利挑戰，現在已經超過了我們的目標綜合成本率。我們正在解決 PIF 下降的問題，並預計將在年中穩定下來。我們希望您今天離開時與我們分享我們的信心，即我們將在明年初恢復到更傳統、持續的長期盈利增長狀況。

With that, I'll turn it over to Brad.

有了這個，我會把它交給布拉德。

Thank you, Joe. I'll begin on Page 5 with our consolidated financial results. Before reviewing our first quarter results, I want to take a moment to review the metrics we use to evaluate our performance and reaffirm our guidance. If you recall from prior presentations, we strive to deliver a low double-digit return on equity, grow book value per share and generate premium growth in line with the market or higher. These metrics have not changed. For 2024, we've guided to return on equity of 10% or higher, and we are reaffirming this metric.

謝謝你，喬。我將從第 5 頁開始介紹我們的綜合財務表現。在回顧我們第一季的業績之前，我想花點時間回顧一下我們用來評估業績並重申我們的指導的指標。如果您還記得先前的演示，我們會努力實現兩位數的低股本回報率，增加每股帳面價值，並產生與市場一致或更高的溢價增長。這些指標沒有改變。對於 2024 年，我們的股本回報率目標是 10% 或更高，我們正在重申這一指標。

As Joe mentioned for the Specialty P&C business, we have not historically provided a target combined ratio. To help simplify our messaging, we are now providing a target combined ratio of 96 for that business. Do not interpret this as guidance but rather how we will run the business over the long term. Our goal is to achieve our target combined ratio or better and maximize growth.

正如 Joe 在專業財產保險業務中提到的那樣，我們歷來沒有提供目標綜合比率。為了幫助簡化我們的訊息傳遞，我們現在為該業務提供 96 的目標綜合比率。不要將此視為指導，而是我們將如何長期經營業務。我們的目標是實現我們的目標綜合成本率或更好，並實現成長最大化。

Moving to first quarter results. As Joe highlighted, we delivered a fourth consecutive quarter of underlying business improvement and a second straight quarter of solid operating and underwriting profits. Rate actions and the realized benefits of several completed strategic initiatives, such as our cost structure optimization program, led to this positive outcome.

轉向第一季業績。正如喬所強調的那樣，我們連續第四個季度實現了基礎業務的改善，並連續第二個季度實現了穩健的營運和承保利潤。評級行動和幾項已完成的策略性舉措（例如我們的成本結構優化計劃）所實現的效益帶來了這一積極成果。

For the quarter, we had net income of $71.3 million or $1.10 per diluted share and adjusted consolidated net operating income of $69.7 million or $1.07 per diluted share. Annualized return on equity was 11.2%, a strong first step towards achieving the 2024 ROE guidance of 10% or better. Specialty P&C's 4.6-point sequential improvement in the underlying combined ratio helped drive improvements in our consolidated results. This business benefited primarily from the earned rate within PPA of approximately 9 points offset by seasonally normal loss trends. Frequency trended favorably while severity remained elevated.

本季度，我們的淨利潤為 7,130 萬美元，即稀釋後每股 1.10 美元，調整後合併淨營業收入為 6,970 萬美元，即稀釋後每股 1.07 美元。年化股本回報率為 11.2%，是實現 2024 年 10% 或更高 ROE 指導目標的有力第一步。 Specialty P&C 基礎綜合成本率連續提高 4.6 個百分點，有助於推動我們綜合業績的改善。該業務主要受益於 PPA 內約 9 個點的賺取率，但被季節性正常虧損趨勢所抵消。頻率趨勢良好，而嚴重程度仍較高。

Moving to the preferred P&C business, which is reported below the line as noncore operations, generated net income of $5 million, including approximately $12 million in current year catastrophe losses.

轉向首選的財產與意外傷害業務（線下報告為非核心業務）產生了 500 萬美元的淨利潤，其中包括本年度約 1200 萬美元的巨災損失。

And lastly, Specialty P&C adverse prior year development was $5.3 million related to several specific litigation matters.

最後，專業財產與意外險去年的不利發展為 530 萬美元，與幾項具體訴訟事項有關。

Turning to Page 6. Our insurance companies are well capitalized and have significant sources of liquidity. At the end of the quarter, parent company liquidity was approximately $1.1 billion consisting of revolver capacity, intercompany lending capacity and holding company cash and investments. Our healthy liquidity balances allow us to pay holding company dividends and interest payments and support our operating subsidiaries as needed.

翻到第 6 頁。截至本季末，母公司流動性約為 11 億美元，包括循環能力、公司間借貸能力以及控股公司現金和投資。我們健康的流動性餘額使我們能夠支付控股公司的股息和利息，並根據需要支援我們的營運子公司。

Our life business continues to be well capitalized, and the P&C business continues to improve its capital ratios. Operating profit and the preferred business wind-down are helping to improve P&C capital levels. As we previously mentioned, we anticipate over $130 million of capital to be released from the preferred business exit this year. Over $45 million of capital was released in the first quarter.

我們的壽險業務資本充足，財產險業務資本比率持續提高。營業利潤和首選業務縮減有助於提高財產險資本水準。正如我們之前提到的，我們預計今年將從首選業務退出中釋放超過 1.3 億美元的資本。第一季釋放了超過 4500 萬美元的資本。

We continue to focus on improving our balance sheet metrics and reducing our debt-to-capital ratio. As we mentioned in late 2022, we expect to pay down at least $150 million of debt when we address our $450 million February 2025 debt maturity to help reduce our leverage ratio.

我們繼續專注於改善資產負債表指標並降低債務資本比率。正如我們在 2022 年底提到的，當我們解決 2025 年 2 月到期的 4.5 億美元債務時，我們預計將償還至少 1.5 億美元的債務，以幫助降低我們的槓桿率。

Moving to Page 7. Net investment income for the quarter was $100 million, and our pretax equivalent annualized book yield was 4.3%. Lower returns on our alternative investment portfolio reduced net investment income from the prior quarter. We continue to maintain a high-quality investment portfolio that generates stable income to support our operating businesses and is aligned with our liabilities.

轉到第 7 頁。我們的另類投資組合報酬率下降減少了上一季的淨投資收入。我們繼續維持高品質的投資組合，產生穩定的收入來支持我們的經營業務，並與我們的負債保持一致。

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, Brad, and good afternoon, everyone. Moving to Page 8 in our Specialty P&C business. I'll start with overall comments for both private passenger auto and commercial vehicle. For the segment, we closed the first quarter with an underlying combined ratio of 93.6%, representing a 4.6-point improvement sequentially and a 14.4-point improvement year-over-year. This resulted in an outperformance against our target of 96%. Once again, the cumulative benefit of our profit actions exceeded incremental loss trend.

謝謝布拉德，大家下午好。前往我們的專業財產保險業務第 8 頁。我將首先對私人乘用車和商用車進行總體評論。對於該部門，我們第一季的基本綜合成本率為 93.6%，季增 4.6 個百分點，年增 14.4 個百分點。這使得我們的表現超出了 96% 的目標。我們的獲利行為的累積收益再次超過了增量損失趨勢。

Our PPA business reported a strong underlying combined ratio of 93.5%. We have additional unearned rate, which will remain a tailwind. Our CV business generated an underlying combined ratio of 93.8%. Our specialization and underwriting discipline continue to create value.

我們的 PPA 業務的基本綜合成本率為 93.5%。我們還有額外的非應得利率，這仍將是一個有利因素。我們的CV業務的基本綜合成本率為93.8%。我們的專業化和承保紀律不斷創造價值。

Turning to production. Our explicit near-term goal is to stabilize PIF levels. There are several factors that will help to support this goal. First, customer and agent demand for our products is strong. Second, policy retention remains stable. And finally, the most impactful opportunity comes from re-expanding our new business availability.

轉向生產。我們明確的近期目標是穩定 PIF 水準。有幾個因素將有助於支持這一目標。首先，客戶和代理商對我們產品的需求旺盛。二是政策保留保持穩定。最後，最有影響力的機會來自於重新擴展我們的新業務可用性。

In an effort to provide more insight into PIF and new business level changes, we've temporarily added 2 new slides. The last 2 years have uncharacteristically dramatic swings in our new business volumes. We believe multiple metrics can be helpful in identifying and evaluating periods of change. Page 9 details policy-in-force trends. Year-over-year change in PIF is a valuable metric in relatively stable times because it accounts for seasonality. It's a rolling 4-quarter measure of activity and therefore acts as a trailing indicator.

為了更深入了解 PIF 和新業務層級的變化，我們暫時新增了 2 張新投影片。過去兩年，我們的新業務量出現了異常劇烈的波動。我們相信多種指標有助於識別和評估變革時期。第 9 頁詳細介紹了現行政策的趨勢。在相對穩定的時期，PIF 的同比變化是一個有價值的指標，因為它考慮了季節性。它是滾動的 4 個季度的活動指標，因此可以作為追蹤指標。

In periods of significant change, it masks the underlying dynamics. Year-over-year PIF decline in the quarter and the fourth quarter of 2023 were effectively constant at approximately 32%. The sequential quarter trend is a more responsive measure of how our policy-in-force base is evolving. It measures 1 quarter's activity. As noted, our sequential quarter PIF decline slowed by 3.4 points from 8.9% in the fourth quarter to 5.5% this quarter. On an annualized basis, this represents an improvement from minus 31% to minus 20%. Progress is more clearly visible here. It was driven by our new business expansion.

在重大變化時期，它掩蓋了潛在的動態。 2023 年本季和第四季的 PIF 年減率實際上穩定在 32% 左右。連續季度趨勢是衡量我們的有效政策基礎如何演變的更靈敏的指標。它衡量 1 季度的活動。如前所述，我們連續季度的 PIF 下降幅度從第四季的 8.9% 放緩至本季的 5.5%，下降了 3.4 個百分點。按年化計算，這意味著從-31% 改善到-20%。這裡的進展更加明顯。這是由我們的新業務擴張所推動的。

Let's turn to Page 10 for more detail. Here, we highlight how new business apps are trending. In this chart, the bar shows new business apps. As Joe highlighted, the re-expansion of new business writings is underway. Apps have increased by greater than 2.6x our fourth quarter volumes, and in the month of April, new business apps were approximately equal to the total of Q1. On a run rate basis, the second quarter is on pace to be about 3x Q1.

讓我們翻到第 10 頁了解更多詳細資訊。在這裡，我們重點介紹新業務應用程式的趨勢。在此圖表中，長條圖顯示新的業務應用程式。正如喬所強調的那樣，新商業著作的重新擴展正在進行中。第四季度應用程式數量增加了 2.6 倍以上，4 月的新業務應用程式數量大約等於第一季的總數。從運行率來看，第二季的運行速度約為第一季的 3 倍。

This trajectory demonstrates the pace of our reopening. The line on the chart represents new business relative to the beginning of quarter PIF or new business rate. As you can see, the first quarter and the run rate of the second quarter are approaching 4Q 2020 levels. This gives us great confidence in stabilizing PIF by midyear. Given seasonally lower activity late in the year, app volumes will likely level off. We don't expect significant sequential unit growth until the early part of 2025.

這一軌跡顯示了我們重新開放的步伐。圖表上的線代表相對於季度初 PIF 或新業務率的新業務。可以看到，第一季和第二季的運行率已經接近2020年第四季的水平。這讓我們對年中之前穩定 PIF 充滿信心。鑑於今年稍後的季節性活動減少，應用程式數量可能會趨於平穩。我們預計到 2025 年初，銷量才會出現顯著的環比成長。

Let's shift gears and bring this back up a level. Our long-term goal is to achieve a 96 or better combined ratio and to maximize growth. We remain confident in our competitive advantages. These advantages position us to effectively navigate the ongoing market environment. Both the profile and loss performance of our new business writings are in line or better than expectations.

讓我們換個方向，將其提升到一個水平。我們的長期目標是實現 96 或更高的綜合成本率並最大化成長。我們對我們的競爭優勢仍然充滿信心。這些優勢使我們能夠有效應對當前的市場環境。我們新商業著作的概況和虧損表現均符合或優於預期。

In conclusion, despite a quarter where PIF continued to decline, we're happy with our overall progress and are confident in achieving PIF stabilization by midyear.

總之，儘管 PIF 持續下降，但我們對整體進展感到滿意，並有信心在年中實現 PIF 穩定。

I'll now turn the call over to Joe to cover the life business and closing comments.

現在我將把電話轉給喬，介紹人壽業務和結束語。

Thanks, Matt. Turning to our life business on Page 11. Net operating income was $12 million for the first quarter. Mortality was in line with pre-pandemic levels. As expected, the inflationary environment continued to place modest pressure on this business. Although overall persistency remained in line with historical trends, new business levels were down slightly compared to the first quarter of last year.

謝謝，馬特。轉向第 11 頁的人壽業務。死亡率與大流行前的水準一致。正如預期的那樣，通膨環境繼續給該業務帶來適度壓力。儘管整體持續性仍符合歷史趨勢，但新業務水準較去年第一季略有下降。

Turning to Page 12. In closing, to reiterate our highlights for the quarter, overall profitability improved and exceeded targets, led by the Specialty P&C underlying combined ratio of 93.6%, and we delivered our fourth consecutive quarter of underlying business improvement with more rate to earn in over the next few quarters. The new business expansion we initiated midway through the quarter is delivering solid results. We expect to see PIF stabilize midyear as new business rates continue to ramp up throughout 2024. Lastly, our life business continues to produce stable earnings.

翻到第12 頁。業務改善，成長率更高。我們在本季中期啟動的新業務擴張正在帶來可觀的成果。隨著新業務利率在 2024 年持續上升，我們預計 PIF 將在年中穩定下來。

While we're pleased with the results for the quarter and our ability to achieve target profitability, we're clearly continuing to focus on stabilizing PIF. Effective execution of our profit improvement actions, combined with the successful completion of several strategic initiatives, has enabled Kemper to weather the storm and come out a stronger company, dedicated to delivering on our promises of providing attractive long-term intrinsic growth to our shareholders and value to all our stakeholders. This could not have been accomplished without the strong efforts and dedication of our entire Kemper team.

雖然我們對本季的業績以及實現目標獲利能力的能力感到滿意，但我們顯然會繼續專注於穩定 PIF。有效執行我們的利潤改善行動，再加上成功完成多項策略舉措，使Kemper 能夠渡過難關，成為一家更強大的公司，致力於兌現我們的承諾，為我們的股東和客戶提供有吸引力的長期內在成長。如果沒有整個 Kemper 團隊的大力努力和奉獻精神，這是不可能實現這一目標的。

Operator, I'll now turn it back to you to take questions.

接線員，我現在將其轉回給您提問。

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

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

Thanks for the additional color on new business apps. I was just -- I guess as I'm looking at the charts and digesting the information you provided, the quarterly run rate being 3x what it was in the first quarter, I'm trying to reconcile that with the fact that you expect PIF to stabilize in the first half. It seems like with that type of production that we might actually pivot to actually being up in PIF. So maybe you can help me with some of the math there.

感謝您為新的商業應用程式增添色彩。我只是 - 我想當我查看圖表並消化您提供的資訊時，季度運行率是第一季度的 3 倍，我試圖將其與您期望 PIF 的事實相協調上半年趨於穩定。看起來，對於這種類型的製作，我們實際上可能會轉向真正出現在 PIF 中。所以也許你可以幫我解決一些數學問題。

Yes, sure, Greg. Thanks for the question. And this is Joe. I'll start, and Matt, you jump in too. The issue you get in specialty auto is a relatively significant amount of seasonality relative to new buyers. If you think about the first quarter, it might be -- if you started at x, the second quarter is probably 25% bigger, the third quarter is a hair smaller, and the fourth quarter is maybe 1/3 or 40% smaller than that first. So there's definitely a surge in the second quarter and a bigger than quarterly average in the first compared to the third and fourth.

是的，當然，格雷格。謝謝你的提問。這是喬。我開始，馬特，你也加入進來。與新買家相比，特種汽車面臨的問題是季節性相對較大。如果你考慮第一季度，可能是——如果你從 x 開始，第二季度可能會大 25%，第三季度會小一點，第四季度可能會小 1/3 或 40%首先。因此，與第三和第四季度相比，第二季度肯定會激增，並且第一季的增幅高於季度平均水平。

So what will happen is we will write new business at a greater rate. We will write maybe more of the available new business apps in the marketplace, but it may be about the same amount of new business apps at the -- there's a seasonality element. That's one of the reasons we've historically looked at the year-over-year PIF, because you get a rolling 4 quarters in that process, so it tamps out the seasonality effect.

因此，我們將以更高的速度開發新業務。我們可能會在市場上編寫更多可用的新業務應用程序，但可能會有相同數量的新業務應用程式——存在季節性因素。這是我們歷來關注同比 PIF 的原因之一，因為在這個過程中你會得到滾動的 4 個季度，因此它消除了季節性影響。

Right now, with the change that's going on, you really very much need to look at the sequential PIF and you need to look at the increase of new business apps. What we were trying to give you a comfort with is that as you saw that April annualized, it was up significantly, that may be -- and to use our analogy, might be late second, early third gear. As we continue to move through the gears, we'll have an increasing percentage of the available new business, maybe a comparable count number. So that may just wind up holding steady for the fourth quarter.

現在，隨著正在發生的變化，您確實非常需要查看順序 PIF，並且需要查看新業務應用程式的增加。我們試圖讓您感到安慰的是，正如您所看到的，四月份的年率化後，它可能會顯著上升，用我們的類比來說，可能是第二檔晚期，第三檔早期。隨著我們繼續前進，我們將擁有越來越多可用的新業務，也許數量相當。因此，第四季度這一情況可能會保持穩定。

What you're going to see is in the second quarter, direct written premium will be up low double digits. It will be up much higher than that for the second half of the year. You'll see PIF count growing in the first quarter next year and earned premium growing in the first quarter next year. So this new business app look should give you a view -- particularly as you look at that line on Page 10, not the bars but the line, you can see that new business relative to the policies in force at the beginning of the year is a very comparable rate to where it had been in late 2020. Premiums are going to be growing next quarter, written premiums, significant written premium growth in the back half of the year and then PIF and earned premium in the first quarter of next year. Does that help?

您將在第二季度看到，直接承保保費將上漲兩位數。漲幅將遠高於下半年。您將看到 PIF 數量在明年第一季有所增長，並且賺取的保費在明年第一季有所增長。因此，這個新的業務應用程式外觀應該會給您一個視圖 - 特別是當您查看第 10 頁上的那一行時，不是條形而是線條，您可以看到相對於年初生效的政策的新業務是與2020 年底的水準非常相似。這樣有幫助嗎？

That does. And as you were talking, I was actually looking at the chart that you have on Page 10. As further just clarification or reconciling the different moving pieces, you're running your specialty auto at target margins, you're going to start growing your new business, and typically, there's some sort of new business penalty that's associated with that.

確實如此。正如您所說，我實際上正在查看第 10 頁上的圖表。某種與之相關的新業務處罰。

So I guess the first question, any negative surprises inside when you've started opening up the markets again? And two, how should we think about new business penalties as you open up your marketing and new business spigot?

所以我想第一個問題是，當你再次開始開放市場時，內部有什麼負面的意外嗎？第二，當您打開行銷和新業務龍頭時，我們應該如何考慮新的業務處罰？

This is Matt. I'll take the first part of that question and then flip it to Joe for the second. In terms of the re-expansion of new business, as we mentioned to you guys that we're taking a methodical approach in terms of how we're reopening to ensure that we're understanding the market dynamics, the loss dynamics as they come through. As we're priming the pump, so to speak, we're working through normal as expected operational efforts, working that through.

這是馬特。我將回答該問題的第一部分，然後將其轉給喬來回答第二部分。在新業務的重新擴張方面，正如我們向你們提到的，我們正在採取有條不紊的方法來重新開業，以確保我們了解市場動態和損失動態通過。可以這麼說，當我們啟動泵浦時，我們正在按照預期進行正常的運作工作，並完成這項工作。

In terms of profile, in terms of volumes, in terms of loss performance, everything is coming in in line or better than expectation. So nothing to note there, no surprises, absolutely no surprises. Everything is coming in right in line with what we would have expected to see at this point in time.

就概況而言，就數量而言，就損失表現而言，一切都符合或比預期好。所以沒有什麼值得注意的，沒有驚喜，絕對沒有驚喜。一切都與我們此時預期看到的情況完全一致。

Yes. And the second piece, I'll 100% reiterate with Matt, absolutely, no negative surprises at all on what we're seeing. The team is very thoughtfully moving through that expansion to protect from that. I think what I might suggest to you, Greg, is the aggregate new -- the aggregate benefit we got from slowing down new business was maybe 3 or 4 points on the overall combined ratio. So the aggregate penalty that will come back in on the aggregate combined ratio is probably roughly of the same order over -- when we get to full new business. So it's not going to happen all this calendar year. It will happen as that expands.

是的。關於第二點，我將 100% 向馬特重申，絕對不會對我們所看到的情況產生任何負面意外。該團隊正在深思熟慮地完成該擴展，以防止這種情況發生。格雷格，我想我可能向你建議的是整體新業務——我們從放緩新業務中獲得的整體收益可能是整體綜合成本率的 3 或 4 個百分點。因此，當我們開始開展全新業務時，總綜合比率的總損失可能大致相同。所以這不會發生在整個日曆年。隨著這種情況的擴大，它將會發生。

What -- again, the good news that came off will be the bad news that comes on. We're running at a 93-plus combined ratio right now. We have an additional 15 points of earned rate that we'll earn in over the year against 3 quarters of a year of a loss trend that's running roughly 7% or 8%. There is absolutely more than enough room inside of the margins we're at right now and that rate to cover that.

再次強調，傳來的好消息將是壞消息。我們現在的綜合比率為 93 以上。我們還有額外的 15 個百分點的賺取率，我們將在一年中賺取額外的 15 個百分點，以對抗一年中 3 個季度大約 7% 或 8% 的虧損趨勢。我們現在所處的利潤空間絕對有足夠的空間，而這個速度可以涵蓋這一點。

That reversal, if you will, or the re-adding the new business penalty is 100% contemplated in what we described as reversing some of those non-rate actions. It's contemplated in the rate we took. It's contemplated in how the earned rate comes in. And it's contemplated with our confidence that we will meet or exceed that 96 combined target over the course of this year and into next year as we do that.

如果您願意的話，這種逆轉，或重新增加新的業務處罰，是我們所描述的逆轉某些非利率行動的 100% 考慮因素。我們所採取的費率中已經考慮到了這一點。我們有信心在今年和明年達到或超過 96 的綜合目標。

Okay. I guess just the final question and I'll let others ask is just on geography. Any -- as you're opening up new business, is there any skewing of geography? Or does it match what the legacy book is running at on a percentage basis?

好的。我想我會讓其他人問的最後一個問題只是關於地理。任何－當你開拓新業務時，是否有地理上的偏差？或者它與舊書的百分比相符？

Yes. This is Matt again. As we reopen, I think we talked about it's going to be a little bit lumpy as we turn things back on. And so there's -- in one state, we may see production increase that's maybe outside of normal percentage distributions. And then as we get other states up and running, they come back in line.

是的。這又是馬特。當我們重新開放時，我想我們討論過當我們重新開放時，情況會有點不穩定。因此，在一個州，我們可能會看到產量成長可能超出正常的百分比分佈。然後，當我們讓其他州啟動並運行時，它們就會恢復正常。

But generally, over the course of the next few quarters, we're expecting distribution to be very similar in terms of what we've seen in our historical patterns, and we'll continue to look for further geographic diversification opportunities as we work. Short term, lumpy; long term, similar patterns to what we've seen in the past.

但總的來說，在接下來的幾個季度中，我們預計分佈將與我們在歷史模式中看到的非常相似，並且我們將在工作中繼續尋找進一步的地理多元化機會。短期，波動較大；從長期來看，與我們過去看到的模式類似。

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

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

Maybe a little bit of additional focus on retention. Is there any reason why the retention rate would be different or changing given the change in the non-rate actions and the increase in new business as we prospectively go forward? I was a little bit surprised that it's been as stable as it has been given all of the changes in the company over time. But any thoughts there that would be helpful would be great.

也許需要額外關注保留率。鑑於非利率行動的變化和我們未來新業務的增加，是否有任何原因導致保留率會有所不同或改變？我有點驚訝的是，隨著時間的推移，它一直保持穩定，因為公司發生了所有的變化。但任何有幫助的想法都會很棒。

Sure, Paul. And this is Joe. I'll give you a high-level overall answer then I'll double-click on it once. Overall, we're seeing a fairly consistent stability in retention. That's how it's performing. That's what we'd expect going forward. Now I'm going to double-click slightly on it. Imagine, if you will, a couple of different segments of the book of business we have. Some parts of this business have a very short-term tenure. They might be somebody trying to get an SR-22. They might run the policy for 3 months, 4 months and then lapse. Some parts of this business tend to have a much longer policy life. It might be 2, 3, 5 years. A lot of times, people think of nonstandard auto as only being stuff that's around for 6 or 8 months. There's parts of our business that stays around longer.

當然，保羅。這是喬。我會給你一個高級的總體答案，然後我會雙擊它一次。總體而言，我們看到保留率相當穩定。這就是它的表現。這就是我們對未來的期望。現在我將稍微雙擊它。如果你願意的話，想像一下我們的業務手冊中有幾個不同的部分。該業務的某些部分的任期非常短。他們可能是想獲得 SR-22 的人。他們可能會執行該保單 3 個月、4 個月，然後失效。該業務的某些部分往往具有更長的保單壽命。可能是2年、3年、5年。很多時候，人們認為非標汽車只能使用 6 或 8 個月。我們的某些業務能夠持續更長時間。

As we -- and each of those -- think of those almost as segments. Each segment is running a retention very consistent to what we would have expected for the long term. In this environment, when we reduce new business, some of those that churn a little faster as a mix of the total are not in the book and some of those that hang around a little longer, they're a bigger percentage of the book. So that will change slightly in total, but the segments are operating as exactly as we expect them and very consistent.

因為我們——以及每個人——幾乎將這些視為細分市場。每個細分市場的保留率都與我們的長期預期非常一致。在這種環境下，當我們減少新業務時，一些在總量中流失得更快的業務不會出現在賬簿中，而一些停留時間更長的業務，它們在賬簿中所佔的比例更大。因此，整體而言，情況會略有變化，但各細分市場的營運情況與我們的預期完全一致，並且非常一致。

In hard markets and soft markets, you tend to get slightly different views. In a hard market, you see retentions go up. In a soft market, you see them go down. This is very much a hard market right now. So we're seeing the benefits of the hard market. We're seeing the benefits of the mix change. What we fully expect as we roll forward over the next 18, 24 months is what I would describe as generally consistent, recognizing there's going to be a modest mix, but we're measuring that for you in PIF, not in retention, and the benefits of a hard market.

在硬市場和軟市場中，您往往會得到略有不同的觀點。在艱難的市場中，您會看到保留率上升。在疲軟的市場中，你會看到它們下跌。目前這是一個非常艱難的市場。所以我們看到了硬市場的好處。我們看到了混合變化的好處。當我們在接下來的18、24 個月中前進時，我們完全期望的是我所描述的總體一致，認識到將會有一個適度的組合，但我們正在PIF 中為您衡量這一點，而不是保留率，並且硬市場的好處。

A second question, maybe some more on the competitive environment. The big states are California and Texas. Goosehead was out earlier talking about State Farm being extremely competitive -- well, some other mutuals. I realize that's probably more standard business, but I don't know, they write everything in the world. With California, it's obviously a new feature. Maybe you could talk about sort of whether or not there's more -- within the -- particularly the non-standard business, there's more or less competition. And obviously, lots of folks are raising rates, but not everyone is raising rates as much. And just how you are thinking about that as you contemplate the expectations you've laid out today.

第二個問題，也許更多關於競爭環境。最大的州是加利福尼亞州和德克薩斯州。 Goosehead 早些時候曾表示 State Farm 的競爭非常激烈——嗯，還有其他一些互助機構。我意識到這可能是更標準的業務，但我不知道，他們寫了世界上的一切。對於加州來說，這顯然是一個新特徵。也許你可以談談是否有更多的競爭，特別是非標準業務，有或多或少的競爭。顯然，很多人都在升息，但不是每個人都升息那麼多。當你思考你今天提出的期望時，你是如何看待這個問題的。

This is Matt. Yes, obviously, the texture there varies quite a bit by state. Think about our -- one of our larger markets, California, as companies are getting more rate adequate there and taking a little bit longer potentially, we're seeing fewer competitive dynamics in that marketplace, especially the larger players, a little bit less supply than what we normally would have seen in that market, creating more hard market opportunity. That said, as the carriers are getting their rates approved and adequacy is coming back in line, we expect that market to continue to get more competitive over the outlook.

這是馬特。是的，顯然，不同州的質地有很大差異。想想我們的——我們較大的市場之一，加利福尼亞州，隨著公司在那裡獲得更多的充足率，並且可能需要更長的時間，我們看到該市場的競爭動態減少，特別是較大的參與者，供應量減少了一點比我們通常在該市場看到的情況，創造了更多的硬市場機會。也就是說，隨著營運商的費率獲得批准並且充足性恢復正常，我們預計該市場的前景將繼續變得更具競爭力。

A Florida, which is a big state for us, and a Texas, which is a large state but to a lesser degree, they've been relatively competitive over the last few quarters as the carriers there are more adequate and more confident in their new business price. And so we see Florida operating not very dissimilar to how we would have seen Florida operate pre-pandemic. It's an elastic marketplace. It's a competitive marketplace. And Texas is very similar, along with our smaller states.

佛羅裡達州對我們來說是一個大州，德克薩斯州是一個大州，但在較小程度上，它們在過去幾個季度中相對具有競爭力，因為那裡的運營商對他們的新產品更加充足和更有信心。因此，我們看到佛羅裡達州的運作方式與疫情前的佛羅裡達州運作方式並沒有太大不同。這是一個富有彈性的市場。這是一個競爭激烈的市場。德克薩斯州以及我們較小的州也非常相似。

So it's a bit -- it varies a bit by state. But generally, across the board, we would characterize the market as hard for us but with a bit of texture that sits underneath by state.

所以這有點——不同州的情況略有不同。但總體而言，我們認為市場對我們來說很難，但按州劃分有一些紋理。

(Operator Instructions) Your next question comes from the line of Andrew Kligerman from TD.

（操作員說明）您的下一個問題來自 TD 的 Andrew Kligerman。

Maybe help me out with Slide 8 a little bit. I think on the -- in the remarks, you've mentioned that you've earned rate in the quarter of 9%. As I look at the -- as I look at the graph in the right-hand corner, it would imply to me that there's maybe another 11, 12 points to go in the year.

也許可以幫我解決一下投影片 8 的問題。我認為，在評論中，您提到您本季的收益率為 9%。當我看著右上角的圖表時，這對我來說意味著今年可能還有 11、12 個點。

But then I think, Joe, you mentioned 15 points. So I guess part A is, can you clarify that differential? And then part B of the question is, what do you see as the kind of cadence of that rate earning in over the next 3 quarters? And maybe I'll even throw in a C. Are you filing for new rate increases as we speak? And could you quantify that?

但後來我想，喬，你提到了 15 點。所以我想 A 部分是，你能澄清一下這個差異嗎？問題的 B 部分是，您認為未來 3 個季度的利率收益節奏是怎樣的？也許我甚至會加上 C。你能量化一下嗎？

This is Brad. Happy to help, and if I miss something, the 3-part question, 1A, B, C, let me know. Looking at the upper right-hand chart on Slide 8, for the year, for 2024, we have a total of 24 rates to earn in. We earned in about 9 points of that rate in the first quarter, and then that means we've got 15 points for the rest of the year.

這是布拉德.很樂意提供協助，如果我錯過了什麼，請告訴我由 3 部分組成的問題 1A、B、C。看看幻燈片 8 的右上角圖表，對於 2024 年，我們總共有 24 個比率可以賺取。裡我們得到了15分。

I would tell you, about half of that rate, we'll earn in the second quarter, and then the remaining of that, we'll earn in Q3 and Q4. Does that answer your question?

我會告訴你，大約一半的比率，我們將在第二季度賺取，然後剩下的，我們將在第三季和第四季賺取。這是否回答你的問題？

That's perfect, Brad. And then just are you filing for new rate? And could you quantify that?

太完美了，布拉德。然後您只是申請新的費率嗎？你能量化一下嗎？

We're always looking to find rate adequacy and keep up with loss trend. When we look at our indications, certain states say we have, we need to file for additional rate, we'll continue to do so as part of normal course. But the big part where we're trying to -- where earned rate was trying to catch up with loss trend, we've done that, and you're seeing that gap now close. And that's indicative of what's going on and what I just told you, right? We had 9 points in the first quarter, 7 in the second and a little trend smaller in the back half of the year. And then we'll file for rate as we need and as our states indicate.

我們一直在尋找利率充足性並跟上損失趨勢。當我們查看我們的跡象時，某些州說我們有，我們需要申請額外的費率，我們將繼續這樣做，作為正常過程的一部分。但我們正在努力的重要部分——收益率試圖趕上損失趨勢，我們已經做到了，你會看到差距現在正在縮小。這表明了正在發生的事情以及我剛剛告訴你的，對吧？我們第一季拿到了9分，第二季拿到了7分，下半年略有下降。然後我們將根據需要和各州的指示申請費率。

I think -- Andrew, this is Joe. The way I might encourage you to think about it is we're filing what I might describe as the maintenance rate going forward. And what that would mean is we're trying to get rate that matches what loss trend is and hold ground on the profit margins as a result. So we believe what we've displayed for you in Page 8 shows the rate required to rebalance the organization to get rate in excess of loss trend to allow us to adjust the non-rate actions and to get things back at a sub-96 or below combined and growing.

我想——安德魯，這是喬。我可能鼓勵您考慮的方式是，我們正在歸檔我可能會描述的未來維護率。這意味著我們正在努力獲得與損失趨勢相符的利率，並因此保持利潤率。因此，我們相信我們在第 8 頁中為您展示的內容顯示了重新平衡組織所需的利率，以使利率超過損失趨勢，從而使我們能夠調整非利率行動並將事情恢復到低於 96 或下面合併並增長。

The rate actions going forward will be just designed to keep that in balance and shouldn't be materially moving profit margins around. They should be holding them in that spot and allowing us to grow and staying that way because, if you told me 6 months from now, loss trend was a point, we'd have one view. If you told me 6 months from now, loss trend was 7 points, we'd have another. But if it was 1, we'd be looking for 1. If it was 7, we'd be looking for 7.

未來的利率行動將只是為了保持平衡而設計，不應大幅改變利潤率。他們應該讓他們保持在那個位置，讓我們成長並保持這種狀態，因為如果你告訴我 6 個月後，損失趨勢是一個點，我們就會有一個觀點。如果你告訴我 6 個月後，虧損趨勢是 7 點，我們就會再多一個。但如果它是 1，我們就會尋找 1。

Got it. That makes sense. And just to wrap up, on Slide 15, you've got a chart showing severities. And it looks like first quarter was indeed somewhat significant. So the question is -- or what you were just answering, maybe there is some rate that you need to keep up with that trend. And are you always pricing to 96%? You said that number a few times.

知道了。這就說得通了。最後，在投影片 15 上，您可以看到一張顯示嚴重性的圖表。看起來第一季確實有些重要。所以問題是——或者你剛剛回答的是什麼，也許你需要一定的速度才能跟上這個趨勢。你們的定價總是96%嗎？這個數字你說過好幾次了。

So a couple of things. Slide 15 is price indices of certain components of loss trend. Those are there informationally. They're not in and of themselves intended to be pure items that you can go to loss trend or intended to give you some sense of how they're moving. What I would describe to you is on an annualized basis, we're seeing severities -- continue to see severity increase annualized that are high single digits.

有幾件事。投影片 15 是損失趨勢某些組成部分的價格指數。這些都是資訊性的。它們本身並不是為了讓您可以了解損失趨勢而純粹是為了讓您了解它們的走勢。我要向您描述的是，在年化基礎上，我們看到了嚴重性——繼續看到年化嚴重性以高個位數增長。

That's roughly consistent with what we saw and described last quarter. There's always some normal modest volatility around that, plus or minus a point. They're generally there. That varies somewhat by coverage, it varies somewhat by state, but it aggregates to roughly that level.

這與我們上季度看到和描述的情況大致一致。周圍總是會有一些正常的適度波動，加上或減去一個點。他們一般都在那裡。這因覆蓋範圍不同而有所不同，因州而有所不同，但總體大致達到這個水平。

And we're not -- I'm trying to remember exactly how you phrased the second part of your question. You were asking, are we always pricing to a 96?

我們不是——我正在努力準確地記住你是如何表述問題的第二部分的。您問，我們的定價總是 96 嗎？

Yes.

是的。

What we're pricing to is to make economically astute equations with that being a target or better. There are times when it might be astute to let it run to a 96.5. There will be times when it might be astute to let it run to a 92. If as an example, the fastest we could grow and still hire enough claim people might be x percent of PIF, and we were at a 92 combined, there would be no reason to actually get more price competitive and try to write more new business. We couldn't operationally handle it. That would actually produce a bad answer. You deteriorate the profitability, provide a bad customer experience, bad customer service, something else.

我們的定價目標是製定經濟上精明的方程式，並將其作為目標或更好的目標。有時讓它運行到 96.5 可能是明智之舉。有時，讓它運行到 92 可能是明智的。價格競爭力並嘗試開發更多新業務。我們無法在操作上處理它。這實際上會產生一個糟糕的答案。你會惡化獲利能力，提供糟糕的客戶體驗、糟糕的客戶服務等等。

If we were shrinking 2% and running at 92, that's a bad long-term economic answer. We should move back towards the 96. So we're going to be good long-term operators and managers on that. What we've been trying to describe in the last couple of years is a shock to the system and how we got the system out of shock and back rebalanced. And what I'd tell you, the conversation we probably would have had with you in '18, '19, early '20 would have been, we're trying to get to roughly a 96 and grow as much as possible. And that moves around a little bit depending on where the market conditions or environment are. Does that help?

如果我們收縮 2% 並以 92 的速度運行，那麼從長期經濟角度來看，這將是一個糟糕的答案。我們應該回到 96。過去幾年我們一直試圖描述的是系統受到的衝擊以及我們如何使系統擺脫衝擊並重新平衡。我要告訴你的是，我們可能會在 18 年、19 年、20 年初與你進行的對話是，我們正在努力達到大約 96 並盡可能成長。根據市場條件或環境的不同，情況會略有不同。這樣有幫助嗎？

Perfect.

完美的。

And your next question comes from the line of Brian Meredith from UBS.

您的下一個問題來自瑞銀集團 (UBS) 的布萊恩梅雷迪思 (Brian Meredith)。

I'm just curious, I didn't hear any comments about the reciprocal and kind of the progress there. And I'm just wondering, Joe, maybe you can comment on the fact that you're actually increasing new business, I know you can only put new business to reciprocal, could that actually accelerate that process on?

我只是好奇，我沒有聽到任何關於那裡的相互和進展的評論。我只是想知道，喬，也許你可以評論一下你實際上正在增​​加新業務的事實，我知道你只能將新業務進行互惠，這實際上可以加速這一過程嗎？

Sure, Brian. In theory, we could put something other than new business in there. We could populate the reciprocal with reinsurance. Our strategy is to populate it with new business. So there are ways to accelerate the process. I don't think that's prudent, and that's not what we're trying to do, and I'm not sure that's the best way for us to populate it given all the various things we're trying to balance in that.

當然，布萊恩。理論上，我們可以把新業務以外的東西放在那裡。我們可以用再保險來填滿倒數。我們的策略是用新業務來填充它。因此，有一些方法可以加速這一過程。我認為這並不謹慎，這也不是我們想要做的，考慮到我們試圖平衡的各種事情，我不確定這是否是我們填充它的最佳方式。

It is continuing to operate. We're continuing to write some new business there. This is in the category of, it's going to have a long-term view before this is going to see it. Not much is going to change quarter-to-quarter for at least 3, 4, 5 quarters. There's going to be a little bit of increasing volume. Because it's new business, it's likely to have a new business penalty. It may not be making -- it's likely not to be making an underwriting profit. It's got to actually get some of those renewing before they produce a little bit -- the second renewal produces some underwriting profit. The new business that comes on doesn't.

它仍在繼續運作。我們將繼續在那裡開展一些新業務。這是屬於這樣的範疇，在看到它之前，要有長遠的眼光。至少在 3、4、5 個季度內，季度與季度之間不會發生太大變化。數量將會有一點增加。因為是新業務，所以很可能會受到新的業務處罰。它可能不會賺取承保利潤。在產生一點點之前，它必須真正讓其中一些續約——第二次續約產生一些承保利潤。新出現的業務則不然。

This thing sort of hovers on neutral for a little while until it gets some volume and grows. And the analogy I was fussing with is it's a little bit like having kids. They suck resources for a little while then they get a little bit of job and make some money, then eventually they're productive and move on. This is going to take a little while to get going there, and it really just isn't conducive to a lot of 90-day updates. We'll continue to give them to you, but it's a good question. I understand the interest. We're moving as quickly as we reasonably can but trying to keep all of those pieces in balance.

這個東西在中立狀態徘徊一段時間，直到它達到一定的體積並增長。我一直在爭論的類比是，這有點像生孩子。他們吸收一段時間的資源，然後找到一些工作並賺一些錢，然後最終他們變得富有成效並繼續前進。這需要一些時間才能實現，而且這確實不利於大量 90 天的更新。我們將繼續向您提供它們，但這是一個很好的問題。我理解興趣。我們正在盡可能快地採取行動，但努力保持所有這些部分的平衡。

And then my second question, I guess given what's happened with policies in force, and now we're going to get ramping things back up, does it give you or are you thinking about kind of reshaping the portfolio geographically, as a result, maybe having some more restrictions possibly in California to make sure that's not so heavy in your portfolio going forward? How are you doing that? Is that something you're thinking about?

然後是我的第二個問題，我想考慮到現行政策所發生的情況，現在我們將加大力度，這是否會給您帶來好處，或者您是否正在考慮在地理上重塑投資組合，因此，也許加州可能會有更多限制，以確保您的投資組合不會受到太大影響？你怎麼樣？這是你在想的事情嗎？

Sure. Great, great question. I'm going to give you 3 thoughts. I'm going to echo what Matt said earlier, remind you of some history and then point you where we're going forward. And I'll do this in a little bit of an order.

當然。很好，很好的問題。我將給你 3 個想法。我將重複馬特之前所說的話，提醒您一些歷史，然後向您指出我們前進的方向。我會按照一點順序來做這件事。

If you go back in the not-too-distant past when this team got here, I think in 2016, we were 90-some percent in California in our specialty auto business. When the pandemic hit, we were 50%. We have been systematically geographically diversifying the portfolio and actually very rapidly. And we were doing that not by shrinking California but by growing other geographies more rapidly. That is a backwards look.

如果你回到不遠的過去，當這個團隊到達這裡時，我想在 2016 年，我們 90% 的專業汽車業務都在加州。當疫情來襲時，我們的比例是 50%。我們一直在系統地實現投資組合的地域多元化，而且速度實際上非常快。我們不是透過縮小加州規模來做到這一點，而是透過更快地發展其他地區。那是一種向後看。

Forward, we will continue to operate with the thought process of finding a reasonable geographic balance, not because we're trying necessarily to shrink something but because we think there's other opportunities to grow in other places, and that will naturally result. Our best guess is maybe California ends in that 30%, 35% range overall.

展望未來，我們將繼續以尋找合理的地理平衡的思維過程進行運作，不是因為我們一定要縮小某些規模，而是因為我們認為在其他地方還有其他增長的機會，這自然會導致結果。我們最好的猜測是，加州總體上可能會落在 30% 到 35% 的範圍內。

Now the middle bucket, which is what Matt said before, and this echoes what we said last quarter. As we're re-expanding new business and reopening items and as there's the lumpiness with different competitive pieces in markets, you may see California growth -- write more new business and recover faster than a Florida or Texas. You may see Florida or Texas go a little faster than California. And that may actually change month-to-month.

現在是中間的桶，這就是馬特之前所說的，這與我們上個季度所說的話相呼應。隨著我們重新擴展新業務並重新開放項目，並且市場上存在不同競爭產品的混亂，您可能會看到加利福尼亞州的增長- 比佛羅裡達州或德克薩斯州創造更多新業務並恢復得更快。您可能會發現佛羅裡達州或德克薩斯州的進展速度比加利福尼亞州快一些。這實際上可能每個月都在變化。

We actually have watched it over the course of the last 60 days sometimes change week-to-week in terms of how that's moving in. That is normal, a little chop in the harbor, if you will, that we expect while we're rebalancing. So we're not going to give you any kind of target monthly or quarterly or really any kind of picture of that profile over the next 6 months while we're trying to get the system reprimed and rebalanced.

事實上，我們在過去 60 天裡一直在觀察它的情況，有時每週都會發生變化。因此，在我們試圖重新啟動和重新平衡系統的同時，我們不會向您提供任何類型的月度或季度目標，或未來 6 個月內該配置文件的任何類型的圖片。

As we work our way through '25 and '26, I would fully expect it to look very similar to what we described to you pre-pandemic. And I'd expect that top right corner of Page 8 to going back to something that was showing some growth in California, some growth faster than that in Florida and Texas and some growth even faster than that in the other geographies, which effectively was diversifying us away from California by growing other places more rapidly.

當我們努力度過 25 年和 26 年時，我完全希望它看起來與我們在大流行前向您描述的情況非常相似。我預計第 8 頁的右上角將顯示加州的一些增長，一些增長速度比佛羅裡達州和德克薩斯州更快，一些增長速度甚至比其他地區更快，這實際上是多元化的我們通過更快地發展其他地方來遠離加利福尼亞州。

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

你的下一個問題來自雷蒙德·詹姆斯的格雷戈里·彼得斯。

Okay. So I get to -- I have 2 follow-ups. One, I know it's discontinued, but the progress on the runoff preferred business. And then the second question would be around the alternative investment portfolio results in the first quarter. Just wondering if what we saw in the first quarter, is that the type of result we should expect out of that portfolio for the balance of the year?

好的。所以我要──我有兩個後續行動。一，我知道它已經停產，但徑流首選業務的進展。第二個問題是關於第一季另類投資組合的結果。只是想知道我們在第一季看到的情況是否是我們應該期望從該投資組合中獲得今年剩餘時間的結果類型？

This is Brad. On the preferred business, the runoff is going as planned, if not a little bit quicker than expected. So the $130 million we indicated this year is on track, maybe a little bit better, so $85 million plus left to go this year. On the alternative investment portfolio, I think that that's on Page 22 of the supplement. If you look there, there's a -- I think it was down about $5.7 million Q4 to Q1 in average returns. That's related to a few investments. I don't expect that to be the run rate going forward.

這是布拉德.在首選業務上，決選將按計劃進行，甚至比預期快一點。因此，我們今年表示的 1.3 億美元已經步入正軌，也許會好一些，所以今年還剩下 8500 萬美元以上。關於另類投資組合，我認為那是在增刊第 22 頁的。如果你看一下，我認為第四季到第一季的平均回報率下降了約 570 萬美元。這與一些投資有關。我不認為這會成為未來的運行率。

The other thing I'd point out, though, the core of the portfolio, the high-quality fixed income has been very stable in that $98 million, $99 million a quarter range.

不過，我要指出的另一件事是，投資組合的核心，高品質的固定收益一直非常穩定，在每季 9,800 萬美元至 9,900 萬美元的範圍內。

There are no further questions at this time. I'd like to turn the conference back to Mr. Joe Lacher for closing remarks.

目前沒有其他問題。我想請 Joe Lacher 先生致閉幕詞。

Thank you, operator, and thank you, everybody, for your questions today. Hopefully, you're, as we described, feeling a little bit better about where the direction of the PIF is going and the speed with which it's recovering. I know we're enthusiastic and excited about it and think it's moving in the right direction, albeit it's a little bit of work to do. And with that, look forward to speaking with you all again next quarter. Thanks.

謝謝接線員，也謝謝大家今天提出的問題。正如我們所描述的，希望您對 PIF 的發展方向及其恢復速度感覺好一些。我知道我們對此充滿熱情和興奮，並認為它正在朝著正確的方向發展，儘管還有一些工作要做。就這樣，期待下個季度再次與大家交談。謝謝。

Thank you. And that does conclude our conference for today. Thank you for participating. You may all disconnect.

謝謝。我們今天的會議到此結束。感謝您的參與。你們都可以斷開連線。