ProAssurance Corp (PRA) 2024 Q3 法說會逐字稿

Good morning, everyone. Welcome to ProAssurance's conference call to discuss the company's Third-quarter 2024 results. (Operator Instructions).

大家早安。歡迎參加 ProAssurance 的電話會議，討論該公司 2024 年第三季的業績。（操作員說明）。

Now I will turn the call over to Heather Wietzel. Heather, please go ahead.

現在我將把電話轉給 Heather Wietzel。希瑟，請繼續。

Good morning, everyone. ProAssurance issued its news release, investor presentation and report on Form 10-Q on third quarter results yesterday, November 7, 2024.

大家早安。ProAssurance 於 2024 年 11 月 7 日昨天發布了關於第三季業績的新聞稿、投資者介紹和 10-Q 表格報告。

Included in those documents were cautionary statements about the significant risks, uncertainties and other factors that are out of the company's control and could affect ProAssurance's business and alter expected results. Please review those statements.

這些文件中包含有關重大風險、不確定性和其他公司無法控制的因素的警告聲明，這些因素可能會影響 ProAssurance 的業務並改變預期結果。請查看這些陳述。

This morning, our management team will discuss selected aspects of the results on this call, and investors should review the 10-Q and news release for full and complete information. We expect to make statements on this call dealing with projections, estimates and expectations and explicitly identify these as forward-looking statements within the meaning of the US federal securities laws and subject to applicable safe harbor protection.

今天早上，我們的管理團隊將在本次電話會議上討論結果的選定方面，投資者應查看 10-Q 和新聞稿以獲取完整的資訊。我們希望在本次電話會議上發表有關預測、估計和預期的聲明，並明確將這些聲明視為美國聯邦證券法含義內的前瞻性聲明，並受到適用的安全港保護。

The content of this call is accurate only on November 8 and except as required by law or regulation, ProAssurance will not undertake and expressly disclaim any obligation to update or alter information disclosed as part of these forward-looking statements.

本次電話會議的內容僅在 11 月 8 日準確，除非法律或法規要求，否則 ProAssurance 將不承擔並明確否認更新或更改作為這些前瞻性聲明的一部分披露的資訊的義務。

We also expect to reference non-GAAP items during today's call. The company's recent news release provides a reconciliation of these non-GAAP numbers to their GAAP counterparts.

我們也希望在今天的電話會議中提及非公認會計準則項目。該公司最近的新聞稿提供了這些非公認會計原則數據與公認會計原則對應數據的調節。

On the call with me today are Ned Rand, President and CEO; and Dana Hendricks, Chief Financial Officer. Also joining on the call are executive leadership team members: Rob Francis, Kevin Shook and Karen Murphy.

今天與我通話的是總裁兼執行長 Ned Rand；和財務長 Dana Hendricks。參加電話會議的還有執行領導團隊成員：羅布·弗朗西斯 (Rob Francis)、凱文·舒克 (Kevin Shook) 和凱倫·墨菲 (Karen Murphy)。

Now I will turn the call over to Ned.

現在我將把電話轉給內德。

Thank you. And I'd like to start by welcoming everyone to our call. Yesterday, we reported operating earnings for the third quarter of $17.3 million or $0.34 per share, reflecting the 99.5% combined ratio for our Specialty P&C segment, which is predominantly made up of our Medical Professional Liability business.

謝謝。首先我想歡迎大家來參加我們的電話會議。昨天，我們報告第三季營業利潤為 1,730 萬美元，即每股 0.34 美元，反映了我們的專業財產與意外險部門的 99.5% 綜合成本率，該部門主要由我們的醫療專業責任業務組成。

The segment's combined ratio benefited from 10.5 points of favorable prior accident year reserve development as we saw claims close favorably relative to our expectations for accident years 2018 and prior in the ProAssurance Legacy business as well as for accident year 2021 for our NORCAL book.

該部門的綜合成本率受益於前一年事故準備金的10.5 個百分點的有利發展，因為我們看到索賠情況接近於我們對ProAssurance Legacy 業務的2018 年和之前的事故年以及我們的NORCAL 賬簿的2021年事故年的預期。

In addition, the current accident year net loss ratio improved by almost 1 point from last year, but that gives only a glimpse of the progress we are making. Since 2019, the accident year loss and LAE ratio has improved more than 20 points, reflecting the impact of the re-underwriting efforts and renewal premium increases we have obtained plus the benefits of other strategic initiatives. We're pleased to be seeing actions we have taken over the past several years generate positive outcomes.

此外，目前事故年淨損失率比去年提高了近1個百分點，但這只是我們所取得進展的冰山一角。自 2019 年以來，事故年損失和 LAE 比率已改善超過 20 個百分點，反映了我們獲得的再承保努力和續保保費增加的影響以及其他策略性舉措的好處。我們很高興看到我們過去幾年採取的行動產生了積極成果。

As we previously noted, about five years ago, we recognized and began responding to rising Medical Professional Liability severity driven by social inflation and eroding tort reforms that were affecting the loss environment. We believe we have stayed ahead of many in the space in achieving rate levels in MPL that outpaced severity trends that continue to be challenging.

正如我們之前指出的，大約五年前，我們認識到並開始應對社會通貨膨脹導致的醫療專業責任嚴重程度的上升以及影響損失環境的侵權改革的侵蝕。我們相信，在實現 MPL 速率水平方面，我們在該領域保持領先地位，超過了仍然具有挑戰性的嚴重趨勢。

We also continue to forgo renewal and new business opportunities that we believe do not meet our expectation of rate adequacy in the current loss environment. Since 2018, we have increased renewal premiums within our MPL lines of business by over 65% cumulatively with renewal premium increases this quarter of 14% for our Standard business and 18% for our Specialty business.

我們也繼續放棄續約和新的業務機會，我們認為這些機會不符合我們在當前虧損環境下對利率充足性的預期。自 2018 年以來，我們的 MPL 業務範圍內的續保費累計增加了 65% 以上，本季標準業務的續保保費增加了 14%，專業業務的續保保費增加了 18%。

We are encouraged that retention of existing insureds remained a solid 84% in the quarter with strong retention of the more profitable small to midsized accounts, reinforcing our relevance in the market. New business continues to be impacted by our focus on rate adequacy and was below last year at $8 million.

我們感到鼓舞的是，本季現有被保險人的保留率仍然穩定在 84%，其中利潤更高的中小型帳戶的保留率也很高，這增強了我們在市場中的相關性。新業務繼續受到我們對利率充足性的關注的影響，低於去年的 800 萬美元。

Along with our pricing actions, we remain intently focused on disciplined underwriting and managing claims to address market conditions. Innovation tools also continue to enhance our risk selection, pricing decisions and workflows. Work is ongoing to maximize the use of predictive analytics to leverage our extensive data and to identify geographic markets and specialty subsectors where there are opportunities to write business that we believe will meet our profitability objectives.

除了我們的定價行動外，我們仍然專注於嚴格的承保和管理索賠，以應對市場狀況。創新工具也持續增強我們的風險選擇、定價決策和工作流程。我們正在努力最大限度地利用預測分析來利用我們廣泛的數據，並確定有機會開展我們認為能夠實現盈利目標的業務的地理市場和專業子行業。

We're also committed to ensuring that our insured and distribution partners find us easy to do business with, helping distinguish us in the marketplace. In the next six weeks, we'll be launching a new web portal on an AI-ready platform that delivers a variety of enhanced self-service options for policyholders and agents, such as real-time credentialing. Next year, workflows across the group will be enhanced by using the new system functionality, and we'll start revising forms and manuals to improve engagement and efficiency.

我們也致力於確保我們的被保險人和分銷合作夥伴發現我們很容易與我們開展業務，從而幫助我們在市場上脫穎而出。在接下來的六週內，我們將在人工智慧就緒平台上推出一個新的入口網站，為投保人和代理人提供各種增強的自助服務選項，例如即時認證。明年，整個集團的工作流程將透過使用新的系統功能來增強，我們將開始修改表格和手冊以提高參與度和效率。

Turning to our Workers' Compensation segment. We continue to observe and to address the higher medical loss trends that we initially saw in mid-2023, although they have begun to moderate this year. In addition, we believe our focus on operational discipline is having a positive impact.

轉向我們的工人賠償部分。我們繼續觀察並解決我們最初在 2023 年中期看到的較高醫療損失趨勢，儘管這一趨勢今年已開始放緩。此外，我們相信我們對營運紀律的關注正在產生積極的影響。

For the quarter, the segment's current accident year loss ratio was about 4 points below the full year 2023 ratio, and it was 6 points below last year's third quarter. We continue to carefully manage our underwriting appetite as we work to obtain the necessary rate with net written premiums up only $2 million due to higher audit premiums. New business was below last year at $3 million.

就本季而言，該部門目前的事故年損失率比 2023 年全年比率低約 4 個百分點，比去年第三季低 6 個百分點。我們繼續謹慎管理我們的承保胃口，努力獲得必要的費率，由於審計保費較高，淨承保保費僅增加 200 萬美元。新業務低於去年，為 300 萬美元。

We also continue to leverage our investment in a new integrated policy claims, risk management and billing system implemented earlier in 2024. Not only is that system working well, it is paving the way for innovation initiatives that will help us address the challenging market conditions, where we will be using AI, along with underwriting and claims data analytics to enhance profitability, productivity and efficiency.

我們也持續利用 2024 年初實施的新綜合保單理賠、風險管理和計費系統的投資。該系統不僅運作良好，還為創新舉措鋪平了道路，幫助我們應對充滿挑戰的市場條件，我們將使用人工智慧以及核保和理賠數據分析來提高獲利能力、生產力和效率。

Last quarter, I mentioned one innovation project, our partnership with workers' comp claims specialist, CLARA Analytics. CLARA is ramping up with our systems and will be on board this quarter to help us enhance medical outcomes for injured workers, improve our case reserve estimation capabilities and lighten the administrative burdens of our claims professionals.

上個季度，我提到了一個創新項目，即我們與工人賠償索賠專家 CLARA Analytics 的合作夥伴關係。CLARA 正在加強我們的系統，並將於本季度加入，幫助我們改善受傷工人的醫療效果，提高我們的案件準備金估算能力，並減輕理賠專業人員的管理負擔。

We will be leveraging their platform to address aspects of escalating medical costs, including their medical document intelligence platform that will assist us with directing care to the best-performing providers, and their tool to help identify high severity claims early in the claims life cycle. And that's just one example of what's underway in this segment.

我們將利用他們的平台來解決醫療成本不斷上升的問題，包括他們的醫療文件智慧平台，該平台將幫助我們將護理指導給表現最好的提供者，以及他們的工具，以幫助在索賠生命週期的早期識別高嚴重性索賠。這只是這一領域正在發生的事情的一個例子。

We're also making innovation investments in proprietary underwriting tools that expand the use of data analytics to guide and support operational decisions, improving penetration in a more profitable small account market segment.

我們也對專有核保工具進行創新投資，擴大數據分析的使用範圍，以指導和支持營運決策，提高在利潤更高的小帳戶細分市場的滲透率。

Across the organization, our attention remains intently focused on our long-term objectives and the results that we need to achieve. We are pleased with our progress this quarter, and we are continuing to choose to shrink our book in some markets while we wait for conditions to improve so that we can then turn our focus to growth. We will not compromise to achieve the short-term fix at the expense of protecting our balance sheet and our insureds over the long term.

在整個組織中，我們的注意力仍然集中在我們的長期目標和我們需要實現的結果上。我們對本季的進展感到滿意，我們將繼續選擇縮減某些市場的帳面規模，同時等待情況改善，以便我們可以將重點轉向成長。我們不會為了實現短期解決方案而妥協，而犧牲長期保護我們的資產負債表和被保險人的利益。

Our long history in both Medical Professional Liability and Workers' Compensation has taught us that these cyclical lines will respond to our focused efforts as demonstrated this quarter. We remain confident in our ability to ultimately achieve sustained underwriting profitability in both businesses despite market headwinds. We know that maintaining our discipline is key to delivering positive long-term results. I think you'll see more signs of our progress as Dana looks further into the results. Dana?

我們在醫療專業責任和工人賠償方面的悠久歷史告訴我們，這些週期性項目將對我們的重點工作做出回應，正如本季度所展示的那樣。儘管面臨市場阻力，我們仍然對我們最終在兩項業務中實現持續承保盈利能力充滿信心。我們知道，保持紀律是取得積極的長期成果的關鍵。我想，當 Dana 進一步研究結果時，您會看到更多我們取得進展的跡象。達納？

Thanks, Ned. I'm going to dive a bit deeper into aspects of the Specialty P&C and Workers' Compensation segments and overall results before turning to investments. As expected, net written premiums for the Specialty P&C segment declined in part because of our decision to discontinue participation in Lloyd's. Ned talked about the factors that contributed to lower Medical Professional Liability premiums as well as the strategic initiatives that are leading to an improved net loss ratio.

謝謝，內德。在轉向投資之前，我將更深入地探討專業財產保險和工人賠償領域的各個方面以及整體結果。正如預期的那樣，特種財產險部門的淨承保保費下降，部分原因是我們決定停止參與勞合社。內德談到了導致醫療專業責任保費降低的因素以及導致淨損失率改善的策略性舉措。

For Workers' Compensation, the trend in renewal rate change remains favorable, rising about 2 points for the quarter because of a large account that renewed at a higher level than last year. The increase in net written premiums was largely due to higher audit premiums that reflects continued wage inflation. The segment's combined ratio was 111%, with the current accident year net loss ratio at 77% or 4 points below full year 2023.

對於工傷賠償，續保率變化趨勢仍然有利，由於大量帳戶的續保水準高於去年，本季上升了約 2 個百分點。淨承保保費的增加主要是因為審計保費增加，反映出薪資持續上漲。該部門的綜合成本率為 111%，目前事故年度淨損失率為 77%，比 2023 年全年低 4 個百分點。

With the improvement in the loss ratios across all lines of business and in consolidated operating earnings, we are seeing higher incentive-based compensation costs compared to last year. This is leading to an increase in the expense ratio despite an overall reduction in headcount.

隨著所有業務線的損失率和合併營業利潤的改善，我們看到與去年相比，基於激勵的薪酬成本更高。儘管員工總數有所減少，但這仍導致費用比率上升。

Turning to investment results. We had another solid quarter. Net investment income rose by $5 million or 14% as we continue to take advantage of this rate environment. New purchase yields in the quarter were 5.2% or 160 basis points higher than our average book yield of 3.6%.

轉向投資成果。我們又度過了一個穩定的季度。隨著我們繼續利用這種利率環境，淨投資收益增加了 500 萬美元，即 14%。本季新購買收益率為 5.2%，比我們 3.6% 的平均帳面收益率高出 160 個基點。

The fixed maturity portfolio remains high quality with 93% in investment-grade bonds with an average duration of 3.2 years. We continue to manage our asset duration to largely match that of our liabilities and to optimize our portfolio to generate yields. Our investments in limited partnerships and LLCs, reported as equity and earnings of unconsolidated subsidiaries added another $5 million to earnings. These typically report on a one quarter lag, and they are continuing to produce strong results.

固定期限投資組合維持高品質，其中93%為投資等級債券，平均久期為3.2年。我們繼續管理資產久期，使其與負債的久期基本匹配，並優化我們的投資組合以產生收益。我們對有限合夥企業和有限責任公司的投資（作為未合併子公司的股本和收益報告）又增加了 500 萬美元的收益。這些報告通常會有四分之一的滯後，但它們仍在繼續產生強勁的業績。

As we previously discussed, our tax credit partnership investments are nearing the end of their life cycle and the associated operating losses and related tax benefits are generally expected to be nominal. Reported book value per share has risen by over $2 since year-end to $24.07 driven by earnings per share of $0.71 and the change in accumulated other comprehensive income of $1.56, largely due to after-tax holding gains of $77 million on our fixed maturity portfolio, which flows directly to equity.

正如我們之前所討論的，我們的稅收抵免合夥投資已接近其生命週期的終點，相關的營運損失和相關的稅收優惠通常預計只是名義上的。自年底以來，報告每股帳面價值已上漲超過2 美元，達到24.07 美元，原因是每股收益0.71 美元，累計其他綜合收益變化1.56 美元，這主要是由於我們固定期限投資組合的稅後持有收益為7,700 萬美元，直接流入股權。

Adjusted book value per share has also increased to $26.52. Our portfolio still includes a number of fixed maturity securities in an unrealized loss position. We have both the intent and ability to hold these securities until maturity, so should bond yields decline or as our portfolio matures, those unrealized losses will accrete back to book value. Further, there is upside because our current investment leverage is 3 times GAAP equity.

調整後每股帳面價值也增加至 26.52 美元。我們的投資組合仍包括一些處於未實現損失部位的固定期限證券。我們有意願也有能力持有這些證券直至到期，因此，如果債券收益率下降或隨著我們的投資組合到期，這些未實現的損失將重新回到帳面價值。此外，還有上升空間，因為我們目前的投資槓桿是 GAAP 股本的 3 倍。

To close, let me reiterate that we remain committed to protecting our balance sheet and our insureds over the long term. We are seeing signs that our actions are delivering positive results and that pricing levels are meeting our objectives. We will continue to be intentional on capital management. Ned?

最後，讓我重申，我們仍然致力於長期保護我們的資產負債表和被保險人。我們看到有跡象表明我們的行動正在帶來積極的成果，而定價水平正在達到我們的目標。我們將繼續用心做好資本管理。內德？

Thanks, Dana. I just want to remind everyone that we know there is more to be done to achieve our long-term profitability objectives, but we are encouraged by the progress we are making with nine month operating earnings of $0.64 per share. We expect continued progress and look forward to sharing results in coming quarters.

謝謝，達納。我只是想提醒大家，我們知道要實現我們的長期獲利目標還有更多工作要做，但我們對所取得的進展感到鼓舞，九個月的營運收益為每股 0.64 美元。我們期望持續取得進展，並期待在未來幾季分享成果。

Thanks, Ned. That concludes our prepared remarks. Operator, we're ready for questions.

謝謝，內德。我們準備好的演講到此結束。接線員，我們準備好回答問題了。

(Operator Instructions) Maxwell Fritscher, Truist.

（操作員指示）Maxwell Fritscher，Truist。

I'm on for Mark Hughes. You've mentioned the improved renewal pricing in the Workers' Comp. I'm not sure if you quantified that, but can you give a figure for that pricing?

我代表馬克·休斯。您提到了工人賠償金中改進的續約定價。我不確定您是否對此進行了量化，但是您能給出該定價的數字嗎？

Yes. Kevin, could you give some details around that? Because I know there's some pieces to it.

是的。凱文，你能提供一些細節嗎？因為我知道其中有一些部分。

Yes. So in our Workers' Comp Insurance segment, the rate for the quarter was positive 2.3%. It was driven by one large renewal. And without that renewal, the rate for the quarter was 0.5%-minus.

是的。因此，在我們的工人補償保險部分，本季的利率為正 2.3%。它是由一次大規模更新推動的。如果沒有續訂，該季度的利率為負 0.5%。

Okay. Perfect. And then just a question about the competitive environment you're seeing in the physicians business. Have you noticed any change in the behavior from the mutual companies?

好的。完美的。然後是關於您在醫生行業中看到的競爭環境的問題。您是否注意到互助公司的行為有任何改變？

No, I would not say any significant changes in the marketplace in the last quarter or so.

不，我不會說上個季度左右市場發生任何重大變化。

And then just a little more color on what you're seeing in the same line, the Medical Professional Liability back book that's driving these reserve gains?

然後，對您在同一行中看到的內容，推動這些準備金增長的醫療專業責任背書，再多一點色彩？

So I think it's essentially what we laid out in our comments, which is as we've been closing claims in those older years, we're closing them at levels kind of that exceed our reserves and our expectations of where those claims might close. So as that happens, we gain greater and greater confidence in kind of how that book is ultimately going to mature. And that's really what's driven it.

因此，我認為這本質上就是我們在評論中所闡述的內容，即我們在過去幾年中一直在關閉索賠，我們關閉索賠的水平超出了我們的儲備以及我們對這些索賠可能關閉的預期。因此，當這種情況發生時，我們對這本書最終將如何成熟越來越有信心。這才是真正的推動力。

Paul Newsome, Piper Sandler.

保羅‧紐瑟姆，派珀‧桑德勒。

I got a couple of bigger picture kind of questions. The first one is this, if you look at both your Specialty business and the Workers' Comp business, I would imagine that you have order ranked the business basically policy by policy based upon the technical rate of -- versus what you're actually getting.

我有幾個更大的問題。第一個是這樣的，如果您同時查看您的專業業務和工人補償業務，我想您已經根據技術費率對業務進行了排序，基本上是逐個政策地進行排序的——與您實際獲得的情況相比。

And my question is, if you do that kind of analysis, what kind of percentage of the business is sitting in a place where it's not really achieving your targeted returns versus what is the kind of the core business that really is? And I'm trying to get at whether or not we're still looking at a business or we're all ever been looking at a product portfolio where it's a fairly small part of the business that's driving the underperformance versus if it's something that's more broad-based?

我的問題是，如果你進行這種分析，沒有真正達成目標報酬的業務比例是多少，而真正的核心業務是什麼？我試圖弄清楚我們是否仍在關注某項業務，或者我們是否一直在關註一個產品組合，其中只有一小部分業務導致了業績不佳，而是否有更多業務導致了業績不佳基礎廣泛？

There's a lot to unpack in that question, Paul. So maybe we'll take it in kind of three big chunks and ask my team to jump in where I go astray. If we think about the physician business, I would say that is the best performing of the Specialty business and kind of breaking it down probably more at a state-by-state level as opposed to order ranking of individual policy level.

保羅，這個問題有很多東西要解開。因此，也許我們會將其分為三大塊，並要求我的團隊跳入我誤入歧途的地方。如果我們考慮醫生業務，我會說這是專業業務中表現最好的，並且可能更多地在州與州之間進行細分，而不是按個人保單級別的順序排名。

There are certainly states where we feel very comfortable with the rates, but there are still a number of states where we believe more rate is needed. And as we work to complete the year and as we look forward to 2025, we will continue to be driving rate, in particular, in those states where we think more rate is needed.

當然，我們對某些州的費率感到非常滿意，但仍有一些州我們認為需要更高的費率。當我們努力完成這一年並展望 2025 年時，我們將繼續提高利率，特別是在我們認為需要更高利率的州。

Within the Specialty Health Care side of the book, I would say that, that's an area where we continue to push rate, 18% in this last quarter, but more rate is still needed there. I think what's really important for our book of business within that is not just the rate, but it's the underwriting decisions we're making in the classes of business and the individual risk that we're willing to insure.

在本書的專業醫療保健方面，我想說的是，這是我們繼續提高費率的領域，上個季度為 18%，但仍需要更高的費率。我認為對我們的業務而言真正重要的不僅僅是費率，而是我們在業務類別中做出的核保決策以及我們願意承保的個人風險。

And that is -- I would say there's more re-underwriting of that business that happens on an annual basis than there is in the physician book just because it's a more dynamic part of the business that changes more frequently, but definitely more rate there.

那是 - 我想說，每年發生的該業務的重新承保比醫生書中的情況要多，因為它是業務中更具活力的部分，變化更頻繁，但肯定有更多的比率。

And then in the Work Comp space, we've looked hard at this, and it's really not an individual state. The challenge in work comp is the decline in frequency over the last 10 years has led to this push down pretty dramatic in certain marketplaces of loss cost multipliers and loss cost factors. We think, by and large, the industry has overshot the mark on that, and there is a need to push rate up in the marketplace. And that's certainly the efforts that we're undergoing. I would say that, that's broad across the whole Work Comp space in our view.

然後在工作補償領域，我們認真研究了這一點，這實際上不是一個單獨的狀態。工作補償的挑戰是過去 10 年頻率的下降，導致某些市場的損失成本乘數和損失成本因素大幅下降。我們認為，總的來說，該行業在這方面已經超出了標準，有必要提高市場利率。這當然是我們正在做的努力。我想說的是，在我們看來，這在整個工作補償領域都是廣泛的。

And then, if there's -- I'm sorry, is there more you want to add to that or I have the second question?

然後，如果有—抱歉，您還有更多要補充的嗎？

No, go ahead, Paul.

不，繼續吧，保羅。

Sorry. My second question is different. Looking at the expense ratio, if you look at '24 versus '23, and obviously '24 is not completely over, it looks like you're increasing the expense ratio by a little bit under 2 points. And I would assume that most of that, if we look at the nine months, may be just higher compensation as the business recovers its profitability.

對不起。我的第二個問題有所不同。看看費用比率，如果你看一下“24”和“23”，顯然“24”還沒有完全結束，看起來你的費用比率增加了一點點，不到 2 個百分點。我認為，如果我們看看這九個月，隨著企業恢復獲利能力，其中大部分可能只是更高的薪資。

So my second question is that if -- let's call it, when ProAssurance reaches its targets, how much of that expense ratio could -- how much could the expense ratio rise if you hit the kind of ROE targets that you will do in the future?

所以我的第二個問題是，如果——讓我們稱之為，當 ProAssurance 達到其目標時，費用比率會上升多少——如果你達到了未來將要做的 ROE 目標，費用比率會上升多少？

A lot there as well. So let me just touch on two things about the kind of the current expense ratio. I remind you that last year, we had the benefit of employee credits coming out of COVID, I believe, and that had an impact in bringing down the expense ratio in 2023. In 2024, we do have higher compensation costs that are tied to our short-term incentive plans.

那裡也有很多。因此，讓我簡單談談有關當前費用比率的兩件事。我提醒大家，我相信去年我們從新冠疫情中獲得了員工積分，這對降低 2023 年的費用率產生了影響。到 2024 年，我們確實有更高的薪酬成本，這與我們的短期激勵計劃相關。

But those plans are designed to ensure that the vast majority of any increase in profitability goes to our policy -- or our shareholders, excuse me, but that our employees do benefit as we improve our results.

但這些計劃的目的是確保盈利能力的大部分增長都歸我們的政策或我們的股東所有，對不起，但我們的員工確實會在我們改善業績時受益。

I don't know that I have a great answer for you kind of looking out. We -- it's a challenge when you're shrinking your top line through disciplined underwriting and the pressures that puts on the expense ratio, especially as you want to kind of keep the talent within the organization whole.

我不知道我是否有一個很好的答案供您關注。當您透過嚴格的承保和對費用比率施加壓力來縮小收入時，特別是當您希望將人才保留在組織內時，這對我們來說是一個挑戰。

So we're very focused on that and then looking at other places where we can bring that expense ratio down over time. It doesn't happen overnight. I don't know, Dana, if you've got any more detail to provide on that. I don't think we would anticipate a significant increase in the expense ratio in the fourth quarter, certainly, kind of based on what we know today.

因此，我們非常關注這一點，然後尋找其他可以隨著時間的推移降低費用比率的地方。這不會在一夜之間發生。我不知道，Dana，你是否有更多的細節可以提供。當然，根據我們今天所了解的情況，我認為我們預計第四季度的費用比率不會大幅增加。

And then looking out into 2025, I think it's going to be kind of that tug of inflationary trends on payroll and the efforts we have underway to manage headcount and other expenses. But I don't have a specific number for you, Paul, I'm sorry.

展望 2025 年，我認為通貨膨脹趨勢將對薪資單以及我們為管理員工和其他支出所做的努力產生拉動。但我沒有具體的電話號碼給你，保羅，對不起。

No, I think you've (technical difficulty)

不，我想你已經（技術難度）

Sorry, Paul, I believe we lost connection with your line there.

抱歉，保羅，我相信我們與您的線路失去了聯繫。

No, I was just thanking Ned for the answers.

不，我只是感謝內德的回答。

Bob Farnam, Janney.

法納姆、珍妮.

A question for Kevin. I know you spoke about medical trend, medical cost inflation moderating this year, but it's still remaining high. And just asking if maybe you can provide a little bit more color as to what you saw last year? What you see this year? How much has it come down? Maybe just numbers, what inflationary trends are you assuming in the business right now?

問凱文一個問題。我知道你談到了醫療趨勢，今年醫療費用通膨有所放緩，但仍然居高不下。只是問你是否可以為去年看到的內容提供更多的色彩？今年你看到了什麼？降了多少了？也許只是數字，您目前認為該行業的通膨趨勢是什麼？

Sure, Bob. So Ned mentioned that it's moderating. So when we look at average medical, it's down about 3%. And look, Workers' Comp medical is made up of its unit cost, its mix of injury, its utilization. We are seeing increases in unit costs, notably in Pennsylvania, where the fee schedule is based off of average weekly wages, which is a multiple of a state where the fee schedule is based off of Medicare.

當然，鮑伯。所以內德提到它正在緩和。因此，當我們觀察平均醫療水準時，會發現下降了約 3%。看，工人補償醫療由其單位成本、傷害組合和利用率組成。我們看到單位成本增加，特別是在賓州，該州的費用表是基於平均每週工資，這是基於醫療保險的費用表的州的倍數。

Mix of injuries, average severity is up slightly, but in line with the industry. And we are seeing increases in utilization, notably in Pennsylvania through vertical integration. There was a study that we referenced a couple of quarters ago on vertical integration. And Pennsylvania is listed as one of the top companies -- top states, excuse me, with respect to health care being very vertically integrated, which naturally increases utilization.

傷害混合，平均嚴重程度略有上升，但與業界一致。我們看到利用率有所提高，特別是在賓州，透過垂直整合。幾個季度前我們引用了一個關於垂直整合的研究。賓州被列為頂級公司之一 - 頂級州，對不起，醫療保健非常垂直整合，這自然會提高利用率。

And then all of that is exacerbated by an aging workforce where older workers get injured more frequently and more severely. So those are hopefully some helpful points for you.

而勞動力老化又加劇了這一切，老年工人受傷的頻率更高、更嚴重。希望這些對您有幫助。

Yes. No, that's good color. So I don't want to just blame Pennsylvania, but is Pennsylvania like obviously, it's a key state for you. So is that one of the key drivers of kind of where you're seeing higher inflationary trends than maybe peers are? I understand you have -- your book has a shorter tail. Maybe others haven't seen it yet, but I'm just -- we're always trying to figure out how your book is different than others? And it could be -- Pennsylvania could be one of the big factors.

是的。不，這個顏色很好。所以我不想只是責怪賓州，但賓州顯然是一個關鍵州。那麼，這是導致通膨趨勢高於同業的關鍵驅動因素之一嗎？我知道你的書的尾巴較短。也許其他人還沒看過，但我只是──我們總是試著找出你的書與其他人的書有何不同？賓州可能是重要因素之一。

Yes. I mean there's two things. It's the short tail and certainly the fee schedule. The medical fee schedules, if you were to lift them up in Pennsylvania, is definitely having an impact. When I look at the last three years of increases in Pennsylvania, the fee schedules are up about 14 points, 15 points. And look, we're underwriting for it. So it's -- as Ned said, it's not a state that we don't want to do business in. It's just a state that we got to be very careful around. And it is a large piece of our book of business.

是的。我的意思是有兩件事。這是短尾，當然還有費用表。如果你要提高賓州的醫療費用表，肯定會產生影響。當我查看賓州過去三年的漲幅時，費用表上漲了約 14 點、15 個點。看，我們正在為其承保。所以，正如內德所說，我們不想在這個州做生意。這只是我們必須非常小心的狀態。這是我們業務的很大一部分。

Kevin, I want to -- I do want to -- while we are seeing that in Pennsylvania, I mean it is not exclusive to Pennsylvania. The trends -- the overall trends that we talk about, we're seeing across the entire footprint.

凱文，我想——我確實想——雖然我們在賓州看到了這一點，但我的意思是這並不是賓州獨有的。趨勢——我們談論的整體趨勢，我們在整個足跡中看到的趨勢。

Yes. Totally agree with that. --

是的。完全同意這一點。--

I didn't mean to just blame Pennsylvania for it, but like I said, we're trying to dig around and trying to figure out what's going on.

我並不是想把這件事歸咎於賓州，但就像我說的，我們正在努力挖掘並試圖找出到底發生了什麼事。

Thank you. We have no further questions registered by the telephone line. So I'll hand back over to Heather Wietzel for any closing remarks.

謝謝。我們透過電話線路沒有收到任何進一步的問題。因此，我將把結束語交給 Heather Wietzel。

Thank you, and thank you to everyone who joined us today. Feel free to reach out if you'd like to arrange for additional conversations. And I would flag we're scheduled to be part of several virtual events in the coming weeks. So if you'd like to know any details on those, reach out. And of course, we look forward to speaking to you again on the year-end call. So thank you. Appreciate it.

謝謝你們，也謝謝今天加入我們的所有人。如果您想安排其他對話，請隨時與我們聯繫。我想指出，我們計劃在未來幾週內參加幾場虛擬活動。因此，如果您想了解有關這些的任何詳細信息，請聯繫我們。當然，我們期待在年終電話會議上再次與您交談。所以謝謝你。欣賞它。

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

女士們、先生們，今天的電話會議到此結束。感謝您的加入。現在您可以斷開線路。