Old Republic International Corp (ORI) 2023 Q3 法說會逐字稿

Good afternoon. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Old Republic International Third Quarter 2023 Earnings Conference Call. Today's conference is being recorded. (Operator Instructions). At this time, I would like to turn the conference over to Joe Calabrese with Financial Relations Board. Please go ahead.

午安.我叫奧德拉，今天我將擔任你們的會議操作員。在此，我歡迎大家參加舊共和國際2023年第三季財報電話會議。今天的會議正在錄製中。 （操作員說明）。這次，我想將會議交給金融關係委員會的喬‧卡拉布雷斯 (Joe Calabrese)。請繼續。

Thank you. Good afternoon, everyone. Thank you for joining us for the Old Republic conference call, Third quarter 2023 results. This morning, we distributed a copy of the press release and posted a separate financial supplement which we assume you have seen and/or otherwise have access to during the call. All of the documents are available at Old Republic's website, which is www.oldrepublic.com.

謝謝。大家下午好。感謝您參加我們的舊共和國電話會議，2023 年第三季業績。今天早上，我們分發了一份新聞稿，並發布了一份單獨的財務補充資料，我們假設您在通話期間已經看到和/或以其他方式獲得了該補充資料。所有文件均可在 Old Republic 網站 www.oldrepublic.com 上取得。

Please be advised that this call may involve forward-looking statements as discussed in the press release and financial supplement dated October 26, 2023. Risks associated with these statements can be found in the company's latest SEC filings.

請注意，本次電話會議可能涉及 2023 年 10 月 26 日的新聞稿和財務補充資料中討論的前瞻性陳述。與這些陳述相關的風險可以在該公司最新的 SEC 文件中找到。

This afternoon's conference call will be led by Craig Smiddy, President and CEO of Old Republic International Corporation and several other senior executive members as planned for this meeting. At this time, I would like to turn the call over to Craig. Please go ahead, sir.

按照計劃，今天下午的電話會議將由 Old Republic International Corporation 總裁兼首席執行官 Craig Smiddy 以及其他幾位高級管理人員主持。這時，我想把電話轉給克雷格。請繼續，先生。

Okay. Thank you, Joe. Well, good afternoon, everyone, and welcome again to Old Republic's Third Quarter Earnings Call. With me today is Frank Sodaro, our CFO of ORI; and Carolyn Monroe, our President and CEO of Title Insurance.

好的。謝謝你，喬。好吧，大家下午好，歡迎再次參加舊共和國第三季財報電話會議。今天和我在一起的是 ORI 財務長 Frank Sodaro；以及我們的產權保險總裁兼執行長卡洛琳·門羅 (Carolyn Monroe)。

Well, during the third quarter, General Insurance continued to produce strong underwriting results, which drove a 28.6% increase in pretax operating income for the quarter and a 32.3% increase year-to-date. The decline we saw in Title insurance pretax operating income continues to reflect what we're seeing from the effects of mortgage interest rates.

第三季度，普通保險持續產生強勁的承保業績，帶動該季度稅前營業收入成長 28.6%，年初至今成長 32.3%。我們看到的產權保險稅前營業收入的下降繼續反映了我們從抵押貸款利率的影響中看到的情況。

However, our focus on specialization and diversification across Title and P&C segments allowed us to produce $251 million of consolidated pretax operating income in the third quarter compared to $257 million in the third quarter of '22, alongside of a consolidated combined ratio of 91.9% for the quarter and 92.4% year-to-date. So our conservative reserving practices continue to produce favorable reserve development, and we saw that in all 3 segments, led by strong favorable reserve development in general insurance.

然而，我們對產權和財產與意外險領域的專業化和多元化的關注使我們在第三季度實現了2.51 億美元的綜合稅前營業收入，而2022 年第三季度為2.57 億美元，同時綜合綜合成本率為91.9%。本季為 92.4%，年初至今為 92.4%。因此，我們保守的準備金做法繼續產生有利的準備金發展，我們在所有三個細分市場中都看到了這一點，以普通保險領域強勁的有利準備金發展為主導。

Our balance sheet remains solid even as we continue to return capital to shareholders through both dividends and share repurchases and as we continue to invest in the long term, including our September announcement of yet another new underwriting venture Old Republic Accident and Health.

儘管我們繼續透過股利和股票回購向股東返還資本，並繼續進行長期投資，包括我們在 9 月宣布成立另一家新的承保企業 Old Republic Accident and Health，但我們的資產負債表依然穩健。

So I'll now turn the discussion over to Frank, and then Frank will turn things back to me to go into some details on general insurance, followed by Carolyn, who will discuss some details on Title insurance. And then we'll open up, as we always do, for conversation and Q&A. So Frank, I hand it to you.

所以我現在將討論轉給弗蘭克，然後弗蘭克將把事情轉回給我，討論一般保險的一些細節，然後是卡羅琳，她將討論產權保險的一些細節。然後我們將像往常一樣進行對話和問答。法蘭克，我把它交給你了。

Thank you, Craig, and good afternoon, everyone. This morning, we reported net operating income of $200 million for the third quarter compared to $206 million last year. On a per share basis, comparable year-over-year results was $0.72, up from $0.68.

謝謝你，克雷格，大家下午好。今天早上，我們報告第三季淨營業收入為 2 億美元，而去年同期為 2.06 億美元。以每股計算，可比年業績為 0.72 美元，高於 0.68 美元。

Net investment income increased over 26% for the quarter, driven primarily by higher yields on the fixed income and short-term investment portfolios. Our average reinvestment rate and corporate bonds during the year was 5.3%, while the comparable book yield on bonds disposed of was just under 2.8%.

本季淨投資收入成長超過 26%，主要是由於固定收益和短期投資組合收益率上升。年內我們的平均再投資率和公司債為 5.3%，而已處置債券的可比帳面殖利率略低於 2.8%。

The bond and short-term investment portfolios increased to 83% of the total, with the remaining 17% allocated to large cap dividend paying stocks. We continue to evaluate this allocation in light of current interest rate environment. The quality of the bond portfolio remains high with 99% in investment-grade securities with an average maturity of 4.3 years and an overall book yield of nearly 3.8% compared to 3.1% at the end of the third quarter last year.

債券和短期投資組合佔總數的83%，其餘17%分配給大盤股股息股票。我們繼續根據目前的利率環境評估此配置。債券投資組合的品質仍然很高，99%為投資等級證券，平均期限為4.3年，整體帳面收益率接近3.8%，而去年第三季末為3.1%。

The valuation of our fixed income securities decreased by approximately $180 million during the quarter, driven by higher interest rates, while the value of the stock portfolio declined nearly $106 million, but ended the period in an unrealized gain position of just under $1.1 billion.

由於利率上升，本季固定收益證券的估值下降了約 1.8 億美元，而股票投資組合的價值下降了近 1.06 億美元，但本季末未實現收益略低於 11 億美元。

Now moving to the other side of the balance sheet. Our strong reserve position once again led to all 3 operating segments, recognizing favorable loss reserve development for all periods presented. The consolidated loss ratio benefited by 4.5 percentage points for the quarter compared to 3.4 points for the same period a year ago.

現在轉向資產負債表的另一邊。我們強大的準備金部位再次帶動了所有 3 個營運部門，在所有期間均實現了有利的損失準備金發展。本季綜合虧損率提高了 4.5 個百分點，而去年同期為 3.4 個百分點。

The Mortgage Insurance group paid a $25 million dividend at the parent holding company in the quarter, bringing the year-to-date total to $85 million, with plans to return another $25 million in the fourth quarter subject to regulatory approval.

Mortgage Insurance集團本季向母公司支付了2,500萬美元的股息，使年初至今的股息總額達到8,500萬美元，並計劃在第四季再返還2,500萬美元，但須經監管部門批准。

We ended the quarter with book value per share of $21.37. When adding back dividends, book value increased just under 5% from the prior year-end driven by our strong operating earnings, partially offset by unrealized investment losses. In the quarter, we paid $68 million in dividends and repurchased nearly $125 million worth of our shares for a total of just over $190 million returned to shareholders.

本季末，每股帳面價值為 21.37 美元。當計入股息時，在我們強勁的營業利潤的推動下，帳面價值比上年末增長了近 5%，但部分被未實現的投資損失所抵消。本季度，我們支付了 6,800 萬美元的股息，並回購了價值近 1.25 億美元的股票，總共向股東返還了超過 1.9 億美元。

Since the end of the quarter, we repurchased another $52 million worth of shares, leaving us with about $90 million remaining in our current repurchase program. I'll now turn the call back over to Craig for a discussion of General Insurance.

自本季末以來，我們又回購了價值 5,200 萬美元的股票，目前的回購計畫還剩下約 9,000 萬美元。現在我將把電話轉回給克雷格，討論一般保險問題。

Okay. Thanks, Frank. In the third quarter, General Insurance net written premiums were up a hefty 12% and pretax operating income increased to $216 million, up from $168 million in the third quarter of 2022. Our combined ratio was 89% compared to 90% in the third quarter of 2022.

好的。謝謝，弗蘭克。第三季度，普通保險淨承保保費大幅增加 12%，稅前營業收入從 2022 年第三季的 1.68 億美元增至 2.16 億美元。我們的綜合成本率為 89%，而第三季為 90% 2022 年。

So thanks all the hard work of our associates, along with our underwriting excellence efforts. We continue to produce overall very profitable results. The loss ratio for the quarter in General Insurance was 60.4%, which included 6 points of favorable reserve development and the expense ratio was higher at 28.6%, but that's in line with our line of coverage mix trending toward lower loss ratio, higher commission ratio lines over the last few years

因此，感謝我們員工的辛勤工作，以及我們卓越承保的努力。我們繼續創造整體上非常有利可圖的業績。本季普通保險的損失率為 60.4%，其中包括 6 個有利準備金發展點，費用比率較高，為 28.6%，但這與我們的保險組合趨勢一致，即損失率較低、佣金率較高過去幾年的線路

We had strong renewal retention ratios and new business growth, including new business produced through our new underwriting ventures that helped drive that 12% increase in net premiums written and we're continuing to achieve rate increases across the portfolio with the exception of D&O in our financial [lines] and workers' compensation.

我們擁有強勁的續保保留率和新業務成長，包括透過新承保企業產生的新業務，幫助推動淨保費成長 12％，並且我們將繼續實現整個投資組合的費率成長，但我們的 D＆O 除外財務[額度]和工人賠償。

So turning specifically to our 2 largest lines of coverage. First, commercial auto, net premiums written grew at a 19% clip while the loss ratio came in at 66.3% compared to 64.8% in the third quarter of '22. And in both of those periods, we had favorable loss development, although there was somewhat less favorable development in the third quarter of this year compared to last year.

因此，請特別注意我們最大的兩條承保範圍。首先，商用汽車的淨承保保費增加了 19%，而損失率為 66.3%，而 2022 年第三季為 64.8%。在這兩個時期，我們都取得了良好的虧損發展，儘管今年第三季的發展與去年相比有些不太有利。

Severity trends holding around 10% with frequency trend relatively stable. And our rate increases are commensurate with these trends we're observing which implies that we continue to cover our loss cost trend on commercial auto.

嚴重程度趨勢維持在10%左右，頻率趨勢相對穩定。我們的費率上漲與我們觀察到的這些趨勢相稱，這意味著我們將繼續涵蓋商用汽車的損失成本趨勢。

Workers' compensation net premiums written declined 6% and while the loss ratio came in at 33.2% compared to 35.8% in the third quarter of '22. And here too, both of these periods saw a favorable reserve development. Frequency for workers' compensation continues to trend down, while severity trend is relatively stable. So we think our rate levels remain adequate even with rate decreases in the low to mid-single digits.

工人賠償淨承保保費下降了 6%，損失率為 33.2%，而 22 年第三季為 35.8%。在這裡，這兩個時期都出現了有利的儲​​備發展。工傷賠償頻率持續呈下降趨勢，而嚴重程度趨勢則相對穩定。因此，我們認為，即使利率下降到中低個位數，我們的利率水準仍然足夠。

We overall expect solid growth and profitability and General Insurance to continue for the rest of the year and into '24, reflecting again our specialty strategy and our excellence initiatives. So I'll turn it now over to Carolyn to report on Title Insurance. Carolyn?

我們總體預期穩健的成長和獲利能力以及普通保險將在今年剩餘時間內持續到 2024 年，這再次反映了我們的專業策略和卓越舉措。因此，我現在將其交給卡羅琳，報告產權保險的情況。卡洛琳？

Thank you, Craig. For the third quarter, the Title group reported premium and fee revenue of $684 million. This represents an improvement of around $35 million from last quarter, but it was down 29% from third quarter of 2022. Our agency premiums were down 31% and direct premium and fees were down 22% from last year's third quarter. And our pretax operating income of $37 million compared to $73 million in the third quarter of 2022. We had a combined ratio of 96.7%, which compared to 93.7% in the third quarter of 2022.

謝謝你，克雷格。第三季度，Title Group 的保費和費用收入為 6.84 億美元。這意味著比上季增加了約 3,500 萬美元，但比 2022 年第三季下降了 29%。我們的代理保費比去年第三季下降了 31%，直接保費和費用下降了 22%。我們的稅前營業收入為 3,700 萬美元，而 2022 年第三季為 7,300 萬美元。我們的綜合成本率為 96.7%，而 2022 年第三季為 93.7%。

As the challenging market continues, our approach is cost management with a long-term view of focused on our strategic initiatives. This approach helped to maintain an incremental improvement and our pretax operating income this quarter as compared to second quarter 2023 results.

隨著充滿挑戰的市場的持續，我們的方法是成本管理，並著眼於我們的策略舉措的長期觀點。與 2023 年第二季的業績相比，這種方法有助於維持本季稅前營業收入的增量改善。

Since the end of 2022, interest rates have been the headline story in our market. And as interest rates continue to rise, housing affordability dropped to its lowest level in more than 30 years. This issue impacts the availability of existing homes for sale, pushing buyers towards new homes. Low levels of inventory will continue to affect the volume of transactions in our markets. The commercial market remains an important focus for us. Our transformed nationwide footprint has allowed us to grow market share in this segment.

自 2022 年底以來，利率一直是我們市場的頭條新聞。隨著利率持續上升，住房負擔能力降至 30 多年來的最低水準。這個問題影響了現有待售房屋的供應，促使買家轉向新房。低庫存水準將繼續影響我們市場的交易量。商業市場仍然是我們的一個重要關注點。我們在全國範圍內的業務轉型使我們能夠擴大該領域的市場份額。

Our commercial premiums in the third quarter increased from last quarter, but were down 32% over third quarter of 2022. Commercial premiums represented 22% of our earned premiums this quarter compared to 21% in the third quarter of 2022.

我們第三季的商業保費較上季有所成長，但比 2022 年第三季下降了 32%。商業保費佔本季我們所賺取保費的 22%，而 2022 年第三季為 21%。

The cornerstone of our business is our independent agents. 88% of our 2023 premiums came from independent agents. Over 60% of U.S. title insurance premiums are written by independent agents. So our strategy is to utilize bundling of technology solutions to optimize the business processes of our agents and internal productivity, resulting in better customer and employee engagement. We believe these strategies will position us to take advantage of market opportunities in the future.

我們業務的基石是我們的獨立代理商。我們 2023 年保費的 88% 來自獨立代理商。超過 60% 的美國產權保險保費由獨立代理人承保。因此，我們的策略是利用技術解決方案捆綁來優化代理商的業務流程和內部生產力，從而提高客戶和員工的參與度。我們相信這些策略將使我們能夠利用未來的市場機會。

And with that, I will turn it back to Craig.

說到這裡，我會把它轉回給克雷格。

Okay. Carolyn, thank you. Well, we remain pleased with our profitable growth in General Insurance, which is helping to mitigate the lower revenue and lower profit levels and Title Insurance. And we also remain pleased with our capital management efforts, including the $684 million we've returned to shareholders through dividends and share repurchases in the first 9 months of this year.

好的。卡羅琳，謝謝你。嗯，我們對普通保險的獲利成長仍然感到滿意，這有助於緩解收入和利潤水平以及產權保險的下降。我們也對我們的資本管理工作感到滿意，包括今年前 9 個月透過股利和股票回購向股東返還 6.84 億美元。

For the remainder of '23 and into '24, we're optimistic for continued profitable growth within General Insurance, as I commented on earlier. While we remain of the view that Title Insurance will continue to face mortgage interest rate and real estate market headwinds through '24.

正如我之前評論的那樣，對於 23 年剩餘時間和 24 年，我們對普通保險業務的持續盈利增長持樂觀態度。雖然我們仍然認為產權保險將在 2024 年繼續面臨抵押貸款利率和房地產市場的不利因素。

So that concludes our prepared remarks, and we'll now open up the discussion to Q&A and either I'll take your questions or ask Frank or Carolyn to respond.

我們準備好的發言就到此結束，現在我們將開始問答討論，我要么回答你們的問題，要么請弗蘭克或卡羅琳做出回應。

(Operator Instructions) We'll take our first question from Greg Peters at Raymond James.

（操作員說明）我們將回答 Raymond James 的 Greg Peters 提出的第一個問題。

I guess I had a couple of questions for you. First of all, from a written premium standpoint, it seems like things have accelerated a little bit in the third quarter relative to the rest of the year. Perhaps you can give us sort of a perspective on how the third quarter is really going to shape the cadence of what we should think about for next year? Specifically, as we look at the strong top line results, I guess, general expectation is we'd expect growth to moderate into next year. But with pricing and exposure growth maybe an expectation of elevated growth going through '24 might be reasonable. Any comments on that?

我想我有幾個問題想問你。首先，從書面保費的角度來看，相對於今年剩餘時間，第三季的情況似乎有所加快。也許你可以給我們一些關於第三季將如何真正影響我們明年應該思考的節奏的觀點？具體來說，當我們看到強勁的營收結果時，我猜，普遍預期是我們預計明年成長將放緩。但隨著定價和風險敞口的成長，預計 24 年成長速度加快可能是合理的。對此有何評論？

Sure, Greg. I'd be happy to comment. So the strong net written premium growth we saw in commercial auto is somewhat of a reflection on the fact that it became very clear that our pricing for commercial auto was appropriate and that we could be competitive in that space at the pricing levels that we were at as long as we kept up with severity trends. So again, we saw not only the lift that we got from, say, 10% rate increases on commercial auto on average, but also a lift from some new business there as well.

當然，格雷格。我很樂意發表評論。因此，我們在商用汽車領域看到的強勁的淨保費增長在某種程度上反映了這樣一個事實：很明顯，我們對商用汽車的定價是合適的，並且我們可以在該領域以我們所處的定價水準具有競爭力。只要我們跟上嚴重趨勢。因此，我們不僅看到了商用汽車平均費率上漲 10% 帶來的提升，還看到了一些新業務帶來的提升。

And I would -- we feel very good about where we sit with commercial auto, and we had favorable development again on that line of business. So we're very well positioned relative to the marketplace to continue to be competitive on commercial auto into '24.

我想——我們對商用汽車領域的處境感到非常滿意，並且我們在該業務領域再次取得了良好的發展。因此，我們相對於市場處於非常有利的位置，可以在 24 世紀繼續在商用汽車領域保持競爭力。

The other thing that I commented on, we had 4 out of 6 new underwriting ventures that have been in recent years, more recent years, and they are starting to produce premium and I anticipate that we will start to see some considerable lift from those new underwriting ventures as we get into '24 and '25 based on the pro forma that we have now.

我評論的另一件事是，近幾年來，我們有六分之四的新承保企業，它們開始產生保費，我預計我們將開始看到這些新承保企業帶來了一些可觀的提升根據我們現在的預估，我們將在進入「24」和「25」時承銷企業。

On the other end of the spectrum is workers' comp. I think the rest of the year, certainly, it does not look like rate increases are going to be the case. I think rate decreases continue there. Again, we're -- while on the surface, we don't like giving up rate and we do our very best to hold on to rate. The frequency trends continue to go down and consequently, the marketplace is reducing rates. So that creates a bit of drag on our net premiums written. And I would hope that as we get into '24 that at least it flattens out, and we're not continuing to see rate decreases there.

另一方面是工人補償。我認為今年剩下的時間裡，升息的情況似乎不會出現。我認為利率下降會持續下去。再說一遍，從表面上看，我們不喜歡放棄利率，我們會盡最大努力維持利率。頻率趨勢持續下降，因此市場正在降低費率。因此，這對我們的淨保費造成了一些拖累。我希望當我們進入 24 世紀時，它至少會趨於平穩，我們不會繼續看到利率下降。

So fairly optimistic about top line as we move into '24, our portfolio is at a very good place profitability-wise. And it's not as though we're having to take underwriting actions, reducing large portions or even small portions of our portfolio. We're in a very good place, and we're able to grow the business.

當我們進入 24 年時，我們對營收相當樂觀，我們的投資組合在獲利能力方面處於非常好的位置。我們並不是必須採取承保行動，減少我們投資組合的大部分甚至一小部分。我們處於一個非常好的位置，我們能夠發展業務。

Just as a follow-up on the workers' comp, I mean, the loss ratios that you're reporting are clearly reflecting the prior year development. Can you give us a sense of where you're [pegging] the current accident or loss pick with inside workers' comp?

正如工人補償的後續行動一樣，我的意思是，您報告的損失率清楚地反映了上一年的發展。您能否讓我們了解一下您將當前事故或損失與內部工人補償掛鉤的情況？

Yes. Well, we're holding it fairly consistent with where we had it in the past. As a matter of fact, it might even be about 1 point higher. So the current accident year on work comp is around 64, and that compares to around 63 last year. So we're being conservative there. We're not reducing the loss pick and we would expect that as we get into our planning sessions and set our picks for '24, we'll take a close look at what's happening with severity and frequency again and take both of those things into consideration, along with anticipated rate changes in '24 when we look to reset that lost bit.

是的。嗯，我們認為它與過去的情況相當一致。事實上，甚至可能高出1個點左右。因此，目前工作補償事故年度約為 64 起，而去年約為 63 起。所以我們對此持保守態度。我們不會減少損失選擇，我們希望當我們進入計劃會議並設定 24 年的選擇時，我們將再次仔細研究發生的事情的嚴重性和頻率，並將這兩件事納入考慮考慮因素，以及當我們希望重置丟失的位元時，24 年的預期利率變化。

And then I just pivot real quickly to the Title business. I know the expense ratio has popped up as revenues have come in. Do you think we're sort of nearing the peak in terms of where the expense ratio is? And I know you commented a little bit in your prepared remarks, but is it expected that that's going to gradually come down over time?

然後我很快就轉向產權業務。我知道隨著收入的增加，費用比率也隨之上升。您認為我們在費用比率方面是否已接近高峰？我知道你在準備好的發言中發表了一些評論，但隨著時間的推移，這種情況是否會逐漸下降？

Well, I'll start off and then I'll hand it over to Carolyn to give a little more detail. So we have been very consistent in what we've communicated the last several quarters on this call, and that is that we were anticipating that '23 would have a combined ratio around 97. And we're still looking at that as where we likely think the year will end.

好吧，我先開始，然後將其交給卡羅琳提供更多細節。因此，我們在過去幾季在這次電話會議上傳達的訊息非常一致，那就是我們預計 23 年的綜合比率將約為 97。我們仍在考慮這一點，因為我們可能會這樣做認為這一年即將結束。

And of course, I'm speaking about combined ratio because that's what we talked about previously and, of course, 95 points of that combined ratio or expense ratio. So as Carolyn mentioned in her comments, we're managing expenses, and as is also very clear, it's -- the top line has a heck of a lot to do with where we end up on those ratios. And so we're being cautious, but Carolyn, I'll turn it to you more specifically to respond to Greg's questions about where that expense ratio might be for the year and into next year.

當然，我說的是綜合比率，因為這就是我們之前討論過的，當然，綜合比率或費用比率為 95 點。正如卡羅琳在她的評論中提到的，我們正在管理費用，而且也很清楚，頂線與我們最終的這些比率有很大關係。因此，我們持謹慎態度，但卡羅琳，我將更具體地轉交給您，以回答格雷格關於今年和明年的費用比率可能會在哪裡的問題。

Yes. I think that where we are is pretty consistent with where we think it will stay. We were able to although slightly, I mean, we did improve our combined ratio from the second quarter to the third quarter. And I just think that's just because of some of the things that we have been doing throughout the year. And I just expect it to stay right around this for at least the rest of this year on into 2024.

是的。我認為我們現在所處的位置與我們認為它將保持的位置非常一致。我的意思是，我們確實能夠從第二季到第三季略微提高綜合成本率。我認為這只是因為我們全年所做的一些事情。我只是預計至少在今年剩下的時間裡直到 2024 年它都會保持在這個水平。

(Operator Instructions) We'll go next to Paul Newsome at Piper Sandler. Mr. Newsome your line is open, please go ahead.

（操作員指示）我們將前往 Piper Sandler 的 Paul Newsome 旁。紐瑟姆先生，您的電話已接通，請繼續。

I had a couple of Title questions. I wanted to ask if the change in the -- if there's really -- if we're seeing anything that affects the mix between Title Insurance sold through independent agents versus Title through the direct channel. And I was just curious if that has -- the downturn has had any effect on sort of where customers go? And does that change your positioning in the Title business as you see those changes? If at all.

我有幾個標題問題。我想問一下，如果真的有的話，我們是否看到任何影響透過獨立代理銷售的產權保險與透過直接管道銷售的產權保險之間的組合的變化。我只是好奇經濟低迷是否對顧客的去向產生了任何影響？當您看到這些變化時，這是否會改變您在產權業務中的定位？如果有的話。

Carolyn, I'll just chime in real briefly and then turn it to you. But our observations on direct and independent are based, of course, on our portfolio. And just to give you a sense, our direct operations are mostly West Coast, California. So the real estate market there has had more headwind than we've seen in other places in the country. So for us, we have a view of direct business that is mostly California-centric and then of course, the rest of our view is nationwide. But Carolyn, I'll turn it to you now to comment on what you think about any shifts in direct and agency and where things are.

卡洛琳，我只是簡單地插話一下，然後轉給你。但我們對直接和獨立的觀察當然是基於我們的投資組合。只是為了讓您了解一下，我們的直接業務主要集中在加州西海岸。因此，那裡的房地產市場比我們在該國其他地方看到的阻力更大。因此，對我們來說，我們對直接業務的看法主要以加州為中心，當然，我們的其餘觀點是全國範圍的。但是卡羅琳，我現在請您評論一下您對直接和代理方面的任何轉變以及情況的看法。

Sure. We've tracked for years. We're able to look at numbers of how much business is written by independent agents compared to directly owned operations. And at least for the last 10 years, it has stayed in the 60%, low 60%. There just hasn't been much shift. And I don't see it changing because really [direct and agency] is also like a lot of market driven. On the East Coast, you see mainly independent agents. And in some of the bigger states, it's about a 50-50 split. So as long as we are able to keep our independent agents in business, I don't see that changing much.

當然。我們已經追蹤了很多年。我們能夠查看獨立代理商與直接擁有的營運商相比的業務量。至少在過去10年裡，它一直維持在60%，低60%。只是沒有太大的轉變。我認為它不會改變，因為真正的[直接和代理]也像很多市場驅動的。在東海岸，您看到的主要是獨立代理商。在一些較大的州，比例約為 50:50。因此，只要我們能夠讓我們的獨立代理商繼續營業，我認為這種情況不會有太大變化。

That makes sense. Does it matter -- you've seen this shift within the housing business to new sales of new homes versus old homes, existing homes, does that make any difference to you as a Title insurer from a marketing perspective?

這就說得通了。這很重要嗎？您已經看到了住房業務中新房銷售與舊房、現房的這種轉變，從行銷角度來看，這對您作為產權保險公司有什麼影響嗎？

Go ahead, Carolyn.

來吧，卡洛琳。

No. I mean it's just -- for an agent, they market to someone different. They're marketing to a builder rather than to a real estate client, that type of thing. And it just depends on what market you're in, whether an underwriter or a direct operation has a relationship with a builder. It's a -- our business is always relationship driven. So it's really just about who has the relationship with the builder and who has the relationship with the realtor.

不，我的意思是，對於代理商來說，他們向不同的人行銷。他們向建築商而不是房地產客戶進行行銷，諸如此類。這僅取決於您所在的市場，承銷商或直接運營商是否與建築商有關係。我們的業務始終是關係驅動的。所以這實際上只是關於誰與建築商有關係以及誰與房地產經紀人有關係。

A question about reserves, perhaps because I always want to put Frank in the hot seat. A lot of the companies are today and recently are reporting issues with accident years sort of in the casualty reserves for accidents or sort of 2016 to 2019. Obviously, you folks have had a great track record overall. I'm just curious if in some of your books, you're seeing some of that? Or is that some of the differentiation amongst your book versus others that they're seeing these problems during casualty lines in those years.

關於儲備的問題，也許是因為我總是想讓法蘭克陷入困境。許多公司現在和最近都報告了事故傷亡準備金中的事故年份或 2016 年至 2019 年的問題。顯然，你們總體上有著良好的記錄。我只是好奇你是否在你的一些書中看到了其中的一些內容？或者說，您的書與其他書之間的一些區別在於，他們在那些年的傷亡事故中看到了這些問題。

Yes. And the years where you say others are experiencing problems with unfavorable development are in accident years did you say '16 to '19, Paul?

是的。你說其他人遇到發展不利的問題的年份是意外年份，你是說「16到」19嗎，保羅？

Yes. They're sort of all the pre-pandemic years. Seems to be where the source of some problems are for a lot of companies.

是的。那是大流行前的所有年份。對許多公司來說，這似乎是一些問題的根源。

Yes. Well, I think we are very different, certainly on commercial auto. We have been very successful at identifying trends early, responding quickly, and that started well before the pandemic, 5, 6, 7, 8 years ago. And achieving the necessary rate to offset those trends we were seeing. So while I know I've observed in the marketplace, some of the -- our competitors that are experiencing unfavorable development on commercial auto in those years. That is not the case for us, we're actually -- we have favorable development.

是的。嗯，我認為我們非常不同，尤其是在商用汽車方面。我們非常成功地及早發現趨勢並迅速做出反應，這一點早在疫情爆發之前就開始了，即 5、6、7、8 年前。並達到必要的速度來抵消我們所看到的這些趨勢。因此，雖然我知道我在市場上觀察到，我們的一些競爭對手這些年來在商用汽車領域經歷了不利的發展。我們的情況並非如此，我們實際上——我們有良好的發展。

And on general liability, it's a little bit different. We are seeing some unfavorable development on general liability. And we're -- just like we did on auto, we're responding to that and some of the general liability growth in premium you're seeing is because of increases in rates on a general liability to respond to any social inflation severity trend that's leaking from auto into general liability.

在一般責任方面，情況略有不同。我們看到一般責任方面出現了一些不利的發展。就像我們在汽車領域所做的那樣，我們正在對此做出反應，您所看到的保費中的一些一般負債增長是因為一般負債率的增加，以應對任何社會通貨膨脹嚴重程度趨勢這正從汽車洩漏到一般責任。

We'll take our next question from Evan Tindell at Bireme Capital.

我們將回答 Bireme Capital 的 Evan Tindell 的下一個問題。

My question has to do with interest rates and competition in really all lines of insurance that involve flows. So I'm just generally you can obviously get much higher yield on insurance flow these days. Do you guys expect various lines to become more competitive over the next few years in terms of pricing? And relatedly, do you guys still think that 90% to 95% combined ratio in the General Insurance business is a good sort of range because you guys have been at 90 for a few years now? Or do you think you guys could start to push into the 80s. Thank you.

我的問題與涉及流量的所有保險領域的利率和競爭有關。所以我只是一般來說，現在你顯然可以獲得更高的保險流量收益。你們是否預期未來幾年各種產品線在定價方面會變得更具競爭力？與此相關的是，你們是否仍然認為普通保險業務 90% 至 95% 的綜合成本率是一個不錯的範圍，因為你們幾年來一直保持在 90% 的水平？或者你認為你們可以開始進入 80 年代嗎？謝謝。

Sure. I'd be happy to address both of those. And actually, I think your questions are related. In my 37-year career, I've experienced hard and soft markets, some of them that have been driven by the issue of underwriting float and investment income that was given too much attention relative to underwriting income. So I understand your question.

當然。我很樂意解決這兩個問題。事實上，我認為你的問題是相關的。在我 37 年的職業生涯中，我經歷過硬市場和軟市場，其中一些市場是由承保浮存金和投資收入問題驅動的，相對於承保收入，這些問題受到了過多的關注。所以我理解你的問題。

I think where we sit in this cycle, there is a far greater concern in the marketplace about social inflation, about general inflation, the need to continue with and rate increases that are commensurate with those trends that I don't believe. And certainly, we here are not adjusting our target combined ratios because we're achieving greater levels of investment income. We think that is important to continue to target combined ratios between 90% and 95%, depending on the line of business.

我認為，在我們所處的這個週期中，市場對社會通膨、整體通膨、持續升息的必要性以及與我不相信的趨勢相稱的升息的擔憂要大得多。當然，我們不會調整我們的目標綜合比率，因為我們正在實現更高水準的投資收益。我們認為繼續將綜合成本率目標定在 90% 到 95% 之間非常重要，具體取決於業務線。

And we say between 90% and 95% because there is a little bit of difference if it's shorter tail or if you're receiving investment income on the longer tail business, so you can write it to a few points higher combined ratio. But generally speaking about competitiveness in the marketplace. I think there's far greater concerns that outweigh the potential advantages of greater investment income. Of course, you could always have new entrants that come in and are disruptive and and underpriced business. But generally speaking, the P&C marketplace is remaining very disciplined and more concerned about achieving appropriate levels of rate relative to inflationary trends.

我們之所以說在90% 到95% 之間，是因為如果它是短尾業務，或者您在長尾業務上獲得投資收益，那麼會有一點差異，所以您可以將其寫成高幾個點的綜合比率。但一般來說是市場競爭力。我認為，更大的擔憂遠遠超過了更高投資收入的潛在優勢。當然，你總是可能會有新的進入者進入，並且是顛覆性的和定價過低的業務。但總體而言，財產和意外險市場仍然非常自律，並且更關注相對於通膨趨勢實現適當的利率水準。

And so therefore, like I said, I think the second part of your question was related because that involves where do we set target combined ratios. And I can tell you that our target combined ratios will not change as we go into planning for the 2024 year, and we'll still be targeting combined ratios in the low 90s to 95%. It's -- will we be able to move into the '80s and target something in the 80s.

因此，正如我所說，我認為你問題的第二部分是相關的，因為這涉及我們在哪裡設定目標綜合比率。我可以告訴你，我們的目標綜合成本率不會隨著我們對 2024 年的規劃而改變，我們的目標綜合成本率仍將在 90% 至 95% 之間。我們是否能夠進入 80 年代並在 80 年代設定目標。

I think that is very difficult to do because, again, there is some pressure that will inevitably come in the marketplace from the greater investment income. And typically, when there's greater investment income, combined ratios go up. So being able to drive that down in general insurance much further is unlikely.

我認為這很難做到，因為更大的投資收入不可避免地會對市場造成一些壓力。通常，當投資收入增加時，綜合比率就會上升。因此，不太可能進一步降低一般保險的這一比例。

And then you also have to remember that a good portion of that is coming from favorable development. And as we said on the earnings call last couple of quarters, but the current level of favorable development that we're experiencing is not sustainable over the long term, 6 points is extremely robust. We try to err on the side of having favorable development ideally in the 2% range.

然後你還必須記住，其中很大一部分來自良好的發展。正如我們在過去幾季的財報電話會議上所說，但從長遠來看，我們目前所經歷的有利發展水準是不可持續的，6 個點是非常穩健的。我們嘗試在理想的 2% 範圍內實現有利的發展。

But right now, that overall calendar year combined ratio is reflective of some very strong favorable development that won't continue. So we're going to continue to target and the combined ratios that we currently are targeting on an accident year basis.

但目前，整個歷年綜合比率反映了一些非常強勁的有利發展，但這種發展不會持續下去。因此，我們將繼續以事故年為基礎，以目前的目標和綜合比率為目標。

And one other question. Do you guys have an internal forecast for when you think autonomous vehicles might start to impact the commercial auto insurance market? Or do you guys think it's so far off that it's not worth worrying about right now?

還有一個問題。你們對自動駕駛汽車何時可能開始影響商業汽車保險市場有內部預測嗎？還是你們認為這還很遙遠，現在不值得擔心？

Well, we certainly keep an eye on it. We don't have any type of internal forecast. But we think it's a long way off before the public gets comfortable with autonomous driving.

嗯，我們當然會關注它。我們沒有任何類型的內部預測。但我們認為，距離大眾適應自動駕駛還有很長的路要走。

And for us, you really have to think about long-haul trucking and commercial vehicles. And because that's the majority of our commercial auto exposure. We don't have the personal lines, commercial exposure -- ours is commercial, not personal lines.

對於我們來說，您確實必須考慮長途卡車運輸和商用車輛。因為這是我們商業汽車曝光的大部分。我們沒有個人線路、商業曝光——我們的是商業線路，而不是個人線路。

So when it comes to commercial, the idea of an 80,000-pound truck running down a highway, without a driver is probably a long way off before the public is going to accept that kind of catastrophic potential. And then if you look at the other commercial auto business that we write across our companies, it's commercial auto business that's transporting workers and goods and those vehicles will always have drivers because they are the workers that we're insuring.

因此，就商業而言，一輛重達 80,000 磅的卡車在沒有司機的情況下在高速公路上行駛的想法可能距離公眾接受這種災難性的可能性還很遙遠。然後，如果你看看我們在公司中寫的其他商用汽車業務，你會發現這是運輸工人和貨物的商用汽車業務，這些車輛總是有司機，因為他們是我們承保的工人。

So for us, the autonomous question is not perhaps as relevant as it may be if you're a personal auto carrier because, again, I think it's a long way off for the type of exposures that we underwrite.

因此，對我們來說，自主問題可能不像您是個人汽車承運商那樣相關，因為我再次認為，對於我們承保的風險類型來說，這還有很長的路要走。

And that does conclude the question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

問答環節到此結束。我想將會議轉交管理層發表閉幕詞。

Okay. Well, we, again, I appreciate everyone that has join the call and listen in and those that have asked questions, we are appreciative of that as well, and I appreciate the support, and we feel good about the third quarter and looking forward to reporting to you on our fourth quarter results. And until then, thank you very much, and have a good day.

好的。好吧，我們再次感謝所有加入通話並傾聽的人和提出問題的人，我們也對此表示感謝，並且感謝支持，我們對第三季度感覺良好並期待著向您報告我們第四季度的業績。在此之前，非常感謝您，祝您有美好的一天。

And that does conclude today's conference call. Thank you for your participation. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。