Hanover Insurance Group Inc (THG) 2024 Q2 法說會逐字稿

Good day, and welcome to the Hanover Insurance Group's Second Quarter Earnings Conference Call. My name is Betsy, and I'll be your operator for today's call. (Operator Instructions) Please note this event is being recorded.

美好的一天，歡迎參加漢諾威保險集團第二季財報電話會議。我叫貝特西，我將擔任您今天通話的接線生。 （操作員說明）請注意此事件正在被記錄。

I would now like to turn the conference over to Oksana Lukasheva. Please go ahead.

我現在想將會議交給奧克薩娜·盧卡舍娃。請繼續。

Thank you, operator. Good morning, and thank you for joining us for our quarterly conference call. We will begin today's call with prepared remarks from Jack Roche, our President and Chief Executive Officer; and Jeff Farber, our Chief Financial Officer. Available to answer your questions after our prepared remarks are Dick Lavey, President of Agency Markets; and Bryan Salvatore, President of Specialty Lines.

謝謝你，接線生。早上好，感謝您參加我們的季度電話會議。我們將以我們的總裁兼執行長傑克·羅奇 (Jack Roche) 準備好的講話開始今天的電話會議；和我們的財務長傑夫法伯。在我們準備好發言後，Agency Markets 總裁 Dick Lavey 可以回答您的問題。以及專線公司總裁 Bryan Salvatore。

Before I turn the call over to Jack, let me note that our earnings press release, financial supplement and a complete slide presentation for today's call are available in the Investors section of our website at www.hanover.com. After the presentation, we will answer questions in the Q&A session. Our prepared remarks and responses to your questions today, other than statements of historical fact include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995.

在我將電話轉交給傑克之前，請允許我指出，我們的收益新聞稿、財務補充和今天電話會議的完整幻燈片演示文稿可在我們網站 www.hanover.com 的投資者部分中找到。演講結束後，我們將在問答環節回答問題。我們今天準備的評論和對您問題的答复，除了歷史事實的陳述外，還包括 1995 年《私人證券訴訟改革法案》中定義的前瞻性陳述。

These statements can relate to, among other things, our outlook, reserve position, economic conditions and related effects, including economic inflation, potential recessionary impact as well as other risks and uncertainties such as severe weather, catastrophes in social inflation that could affect the company's performance and or cause actual results to differ materially from those anticipated. We caution you with respect to reliance on forward-looking statements and in this respect to refer you to the forward-looking statements section in our press release, the presentation deck and our filings with the SEC.

除此之外，這些陳述可能與我們的前景、儲備狀況、經濟狀況和相關影響有關，包括經濟通膨、潛在的衰退影響以及其他風險和不確定性，例如惡劣天氣、可能影響公司業績的社會通膨災難。我們提醒您不要依賴前瞻性陳述，在這方面，請參閱我們的新聞稿、簡報和我們向 SEC 提交的文件中的前瞻性陳述部分。

Today's discussion will also reference certain non-GAAP financial measures, such as operating income and accident year loss and combined ratios, excluding catastrophes, among others, have reconciliation of these non-GAAP financial measures to the closest GAAP measure on a historical basis can be found in the press release, the slide presentation or the financial supplement, which are posted on our website as I mentioned earlier. With those comments, I will turn the call over to Jack.

今天的討論還將參考某些非公認會計原則財務指標，例如營業收入和事故年損失以及綜合比率（不包括災難），這些非公認會計原則財務指標與歷史上最接近的公認會計原則指標之間的調節可以是正如我之前提到的，這些內容可以在我們網站上發布的新聞稿、幻燈片簡報或財務補充中找到。有了這些評論，我會將電話轉給傑克。

Thank you, Oksana. Good morning, everyone, and thank you for joining our call. I'm pleased to report our second quarter results demonstrate the strength and diversification of our business, our financial discipline and our ability to execute in a dynamic market environment. Despite significant catastrophe activity, we delivered strong earnings with a 9% operating return on equity in the quarter at 12% operating ROE through the first half of this year.

謝謝你，奧克薩娜。大家早安，感謝您加入我們的通話。我很高興地報告我們第二季的業績證明了我們業務的實力和多元化、我們的財務紀律以及我們在動態市場環境中執行的能力。儘管發生了重大災難活動，我們仍實現了強勁的盈利，本季的營運股本回報率為 9%，今年上半年的營運股本回報率為 12%。

Our performance reflects strong execution on two critical priorities. First, ex-CAT margin enhancement. We significantly improved our underlying margins in personal lines and delivered consistent strong profitability in core commercial and specialty in the quarter. This focus on profitability yielded outstanding results as demonstrated by an ex-cat combined ratio of 88.5% compared to 92.8% year over year. And second, the progress in execution of our catastrophe mitigation actions. Although severe convective storms in the Midwest and South Central US made the second quarter more challenging than anticipated, we continue to have a high level of confidence that our proactive approach to managing catastrophe exposure will clearly bear fruit.

我們的業績反映了對兩個關鍵優先事項的強大執行。首先，CAT 利潤率提高。本季度，我們大幅提高了個人業務的基礎利潤，並在核心商業和專業領域實現了持續強勁的獲利能力。這種對獲利能力的關注產生了出色的業績，除稅後綜合成本率為 88.5%，而去年同期綜合成本率為 92.8%。其次，我們的減災行動的執行進度。儘管美國中西部和中南部的強烈對流風暴使第二季度比預期更具挑戰性，但我們仍然充滿信心，我們積極管理災難風險的方法顯然會取得成果。

In personal lines. Our actions to address convective storm exposure are well underway. We remain optimistic about the rapidly growing impact of increased all peril deductibles and the introduction of wind and hail deductibles on our cat claims intake and ultimately lost severity. As a reminder, these terms and condition changes only began impacting renewals in April of this year.

在個人方面。我們解決對流風暴暴露問題的行動正在順利進行中。我們仍然樂觀地認為，所有危險免賠額的增加以及風和冰雹免賠額的引入對我們的貓索賠攝入量和最終減輕嚴重程度的影響迅速增長。提醒一下，這些條款和條件的變化直到今年 4 月才開始影響續約。

We expect as a higher proportion of the book of business rolled. Under these terms, the impact will dramatically increase in each of the next few quarters. Additionally, we are anticipating that close to two thirds of our homeowners business in the Midwest will have wind and hail deductibles applied to the policy by the end of 2024. And the vast majority of the book will have the desired deductibles, both all peril and wind and hail ahead of the spring storm season.

我們預期營業額的比例將會上升。根據這些條款，未來幾季的影響將急劇增加。此外，我們預計到2024 年底，我們中西部近三分之二的房主業務將在保單中應用風和冰雹免賠額。危險和危險春季風暴季節來臨前的風和冰雹。

The current effect of property and cat actions in core commercial is more significant after several quarters of increasing deductibles and pricing as well as risk specific PML pricing and risk prevention initiatives. As a result, our modeled cat loads are significantly reduced in middle market, especially in states exposed to convective storms. And 75% of the most vulnerable middle market accounts have been addressed through underwriting actions or center deployments.

經過幾季增加免賠額和定價以及針對特定風險的 PML 定價和風險預防措施後，目前財產和巨災行動對核心商業的影響更加顯著。因此，我們模擬的貓負荷在中間市場顯著減少，特別是在遭受對流風暴的州。 75% 的最脆弱的中間市場帳戶已透過承保行動或中心部署得到解決。

Our second quarter results also reflect our commitment to balanced and thoughtful growth. We grew written premiums by 5.1% in the second quarter, up 2.8 points from the first quarter of this year, and we expect growth to increase sequentially each quarter for the remainder of the year as we elevate our new business and renewal retention in areas where profitability is strongest and where we'll benefit from continued diversification.

我們第二季的業績也反映了我們對平衡和深思熟慮的成長的承諾。我們第二季的承保保費成長了5.1%，比今年第一季成長了2.8 個百分點，我們預計，隨著我們在以下領域提高新業務和續保保留率，今年剩餘時間裡每季的成長都會環比成長。

Now let's look at the second quarter performance of our business segments in more detail, starting with specialty. Specialty achieved top line growth of 8.2%, 3.4 points higher than in the first quarter of the year, helped by strong retention and accelerated double digit new business growth. Retention remained strong at 83%, with continued renewal pricing momentum of 11.7%, further reinforcing the specialty segment's integral role with our agents as a key element in our value proposition.

現在，讓我們從專業業務開始，更詳細地了解我們業務部門的第二季業績。由於強勁的保留率和加速的兩位數新業務成長，特種業務實現了 8.2% 的收入成長，比今年第一季高出 3.4 個百分點。保留率仍保持在 83% 的強勁水平，續訂定價勢頭持續達到 11.7%，進一步強化了專業細分市場在我們代理商中的不可或缺的作用，作為我們價值主張的關鍵要素。

The specialty market in our target markets remained strong. We achieved double-digit growth across multiple lines, including surety, marine, industrial, property, health care and management liability. Our excess and surplus lines business also grew double digits in the second quarter. The E&S market remains very attractive as freedom of rate and form allow us to capture opportunities at good margins while helping us further diversify our portfolio with respect to catastrophe risk.

我們目標市場的專業市場依然強勁。我們在擔保、海事、工業、財產、醫療保健和管理責任等多個領域實現了兩位數的成長。我們的超額和剩餘線路業務在第二季度也實現了兩位數成長。 E&S 市場仍然非常有吸引力，因為利率和形式的自由使我們能夠以良好的利潤抓住機會，同時幫助我們進一步實現巨災創投組合的多元化。

In marine, we are pursuing growth initiatives by expanding our portfolio geographically and by class of business to further limit us from concentration related cap and market volatility. Across most of our specialty portfolio. We continue to expand distribution points, including substantially growing the wholesale channel to capture broader market opportunities.

在海事領域，我們正在透過擴大我們的地域和業務類別的投資組合來尋求成長舉措，以進一步限制我們與集中度相關的上限和市場波動。涵蓋我們大部分的專業產品組合。我們持續擴大分銷點，包括大幅擴大批發管道，以抓住更廣泛的市場機會。

In addition to broadening our portfolio of specialty offerings, we are accelerating key technology investments as well to ensure we are optimally positioned to compete in the evolving digital environment and help agents create efficiencies, particularly with their smaller specialty policies. These investments should result in significantly improved, quote turnaround times and allow us to capture more of the robust new business opportunities in the market.

除了擴大我們的專業產品組合外，我們還在加速關鍵技術投資，以確保我們處於最佳位置，能夠在不斷發展的數位環境中競爭，並幫助代理商提高效率，特別是在較小的專業政策方面。這些投資應該會顯著改善報價週轉時間，並使我們能夠抓住市場上更多強勁的新商機。

More broadly, our technology investments have positively impacted all of our businesses. We deploy digital APIs to work with our distribution. We use advanced analytics for pricing, sophistication and risk selection, and we have targeted general AI use cases to achieve operational efficiencies.

更廣泛地說，我們的技術投資對我們的所有業務產生了積極影響。我們部署數位 API 來與我們的發行版搭配使用。我們使用先進的分析來進行定價、複雜性和風險選擇，並針對一般人工智慧用例來實現營運效率。

Turning to core commercial. This segment also delivered strong performance this quarter, achieving solid net written premium growth of 5.5%, driven primarily by an 8.5% increase in small commercial. We remain very optimistic about opportunities in small commercial with accelerated new business growth to be driven by several key initiatives. These include the continued build-out of our TAP sales platform with the rollout of our workers' compensation product in the first half of next year, the expansion of virtual sales capabilities across all states and deeper market share penetration with our best agents.

轉向核心商業。該部門本季也表現強勁，實現了 5.5% 的淨承保保費穩健成長，這主要是由小型商業保費成長 8.5% 推動的。我們對小型商業領域的機會仍然非常樂觀，在幾項關鍵舉措的推動下，新業務將加速成長。其中包括繼續建立我們的 TAP 銷售平台，並在明年上半年推出我們的工人賠償產品，在所有州擴展虛擬銷售能力，以及透過我們最好的代理商更深層次地滲透市場份額。

Additionally, we are very pleased with the pricing, class, geographic mix and quality of new business and renewals as the TAP sales platform includes enhanced capabilities for pricing, sophistication and product expansion. While focusing on small commercial growth, we are simultaneously implementing profitability and property improvement initiatives in middle market, including the catastrophe management work I referenced earlier.

此外，我們對新業務和續約的定價、類別、地理組合和品質非常滿意，因為 TAP 銷售平台包括增強的定價、複雜性和產品擴展功能。在專注於小型商業成長的同時，我們同時在中型市場實施獲利能力和財產改善舉措，包括我之前提到的災難管理工作。

Although middle market growth remained low at 1%, it showed sequential improvement and we have executed very well on the key margin and cap management initiatives. As we near the end of our portfolio optimization, we expect to elevate our growth in middle market beginning in the fourth quarter. Looking ahead, the commercial lines market is expected to remain firm and disciplined for the remainder of this year and into 2025, supported by challenging liability trends.

儘管中間市場成長率仍然較低，為 1%，但它顯示出連續改善，並且我們在關鍵利潤率和上限管理舉措方面執行得非常好。隨著我們的投資組合優化即將結束，我們預計從第四季開始將提高中間市場的成長。展望未來，在充滿挑戰的責任趨勢的支持下，商業險市場預計在今年剩餘時間和 2025 年將保持堅挺和紀律。

While we continue to closely monitor liability trends and proactively work to manage through the environment. We remain highly confident in the strength of our reserves and discipline in our loss ratio picks over the past several years, we have dedicated significant effort to analyzing the expected trajectory of liability severity and its potential impact on our operations. This proactive approach led us to adopt a more defensive posture, both in terms of strengthening our balance sheet and refining our underwriting practices.

同時，我們繼續密切監控責任趨勢並積極努力透過環境進行管理。過去幾年，我們對我們的儲備實力和損失率選擇的紀律仍然充滿信心，我們投入了大量精力來分析責任嚴重程度的預期軌跡及其對我們運營的潛在影響。這種積極主動的做法導致我們在加強資產負債表和完善承保實務方面採取了更為防禦的姿態。

And from where we stand today, we believe our current liability profile is very well positioned to navigate social inflation challenges. Our strategy includes maintaining lower limits, reducing risks in large metro areas in difficult geographies, reducing premises liability exposure and refraining from writing stand-alone excess umbrella policies. Additionally, we have implemented rate increases above our prudent loss trend assumptions, maintain a low reinsurance attachment point and have a lower reserve duration, which is inherent in a small account sized book of business.

從我們今天的立場來看，我們相信我們目前的負債狀況非常適合應對社會通膨挑戰。我們的策略包括維持較低的限額、降低困難地區大都會區的風險、減少場所責任風險以及避免制定獨立的超額保障傘保單。此外，我們實施了高於審慎損失趨勢假設的利率上調，保持較低的再保險附加點，並具有較低的準備金期限，這是小帳戶規模業務所固有的。

These tactical decisions have collectively enhanced our resilience in the face of evolving market conditions. As we look ahead, we remain committed to navigating the evolving liability environment with vigilance and agility. Turning to Personal Lines, we delivered tremendous year-over-year improvement of 7.6 points in our ex-cat current accident year loss ratio, reflecting the outstanding execution of our margin recapture initiatives.

這些戰術決策共同增強了我們面對不斷變化的市場條件的應變能力。展望未來，我們仍然致力於保持警惕和敏捷，應對不斷變化的責任環境。談到個人保險，我們的除巨災當前事故年損失率同比大幅提高了 7.6 個百分點，反映出我們的利潤收回計劃的出色執行。

Personal lines net written premiums grew 3.3% in the quarter, in line with expectations, although we continue to project segment growth in the low single digits in 2024, we expect to see the pace accelerate slightly in the second half of this year. Higher all peril deductibles in new wind and hail deductibles are being applied to new business and renewals in all targeted states judiciously and on schedule.

本季個人險淨承保保費成長 3.3%，符合預期，儘管我們繼續預期 2024 年該細分市場成長將維持在較低的個位數，但預計今年下半年成長速度將略有加快。新風和冰雹免賠額中的所有危險免賠額正在明智地按計劃應用於所有目標州的新業務和續保。

We continue to operate in a hard market across our geographies, especially in homeowners and believe this will continue at least for the foreseeable future, as many of our peers continue to file for higher rate increases as well as terms and conditions changes. We are seeing a number of carriers starting to follow our actions, particularly in the Midwest, and we have continued support from our agent partners. The elevated catastrophe experience across the industry reinforces the importance of our terms and conditions changes as well as the more aggressive approach based on specific underwriting metrics such as quality of risk score.

我們繼續在各個地區的艱難市場中運營，尤其是房主，並相信這種情況至少在可預見的未來將持續下去，因為我們的許多同行繼續申請更高的加息以及條款和條件的變化。我們看到許多業者開始關注我們的行動，特別是在中西部，我們得到了代理商合作夥伴的持續支持。整個行業災難經驗的增加強化了我們的條款和條件變更以及基於風險評分品質等特定承保指標的更積極方法的重要性。

In conclusion, our strong second quarter and year-to-date performance serves as compelling evidence that we are on the path to meaningfully improved financial outcomes. While the industry landscape remains dynamic with increasing liability trends and more frequent severe weather events, we are confident in our ability to navigate these complexities.

總之，我們第二季和年初至今的強勁業績有力地證明了我們正在顯著改善財務表現。儘管隨著責任趨勢的增加和惡劣天氣事件的頻繁發生，行業格局仍然充滿活力，但我們對應對這些複雜情況的能力充滿信心。

Our distinctive strategy is a key advantage, positioning us to capitalize on emerging opportunities in the current market. Our flexibility and agility allow us to pivot quickly in response to changing conditions and to maintain our competitive edge. With this formidable foundation in place, combined with our inherent strengths and talented team, we are exceptionally well-positioned for future success.

我們獨特的策略是一個關鍵優勢，使我們能夠抓住當前市場的新興機會。我們的靈活性和敏捷性使我們能夠快速回應不斷變化的條件並保持我們的競爭優勢。憑藉著這強大的基礎，再加上我們固有的優勢和才華橫溢的團隊，我們為未來的成功做好了充分的準備。

With that, I'll turn the call over to Jeff.

這樣，我就把電話轉給傑夫。

Thank you, Jack, and good morning, everyone. We are pleased to report strong performance in light of catastrophe losses while demonstrating significant enterprise-wide ex-CAT margin improvement. Notably, all three of our business segments achieved underlying loss ratio improvements year over year, surpassing our projections. We're observing stable property loss trends and maintaining discipline over liability activity, which positions us well for continued growth and improved profitability.

謝謝你，傑克，大家早安。我們很高興地報告在災難性損失的情況下表現強勁，同時展示了整個企業範圍的除 CAT 利潤率的顯著改善。值得注意的是，我們的所有三個業務部門都實現了同比基本損失率的改善，超出了我們的預測。我們觀察到穩定的財產損失趨勢，並保持對負債活動的紀律，這使我們有利於持續成長和提高獲利能力。

Our combined ratio for the second quarter was 99.2%, which included 10.7 points of catastrophe losses, largely the result of severe convective storm activity in personal lines. It's worth noting that 10.7 points included 1.4 points of favorable catastrophe prior year development much of it relating to commercial lines, events that are at least 18 months old ex-CAT prior year development was favorable by $17.4 million in the quarter, paced by broad-based property favorability and specialty personal lines and core commercial.

我們第二季的綜合成本率為 99.2%，其中包括 10.7 個百分點的巨災損失，主要是個人線路中嚴重對流風暴活動造成的。值得注意的是，10.7 分包括1.4 分的上年發展有利的災難，其中大部分與商業線有關，至少18 個月前的前一年發展的事件在本季度有利地增加了1,740 萬美元，步調廣泛，基於財產優惠和專業個人線和核心商業。

In core commercial, all the major lines of business developed favorably. We experienced healthy favorability in most property coverages, and we took the opportunity to position our reserves more defensively in liability lines in response to industry headlines as well as our own experience in certain pockets of our core commercial business. Our financial discipline, reserve prudence and proactive risk selection and underwriting allow us to effectively manage liability trends.

核心商業方面，各主要業務發展良好。我們在大多數財產保險中都受到了良好的青睞，並且我們藉此機會將我們的儲備金配置在責任險中更具防禦性，以應對行業頭條新聞以及我們自己在核心商業業務某些方面的經驗。我們的財務紀律、準備金審慎以及主動的風險選擇和核保使我們能夠有效管理負債趨勢。

As Jack mentioned, our previous actions relating to geographic industry limit and other underwriting choices have significantly advantage the portfolio. Our liability severity assumptions have been and continue to be very prudent. While we benefited from significant frequency reductions in recent years relative to pre pandemic trends. In specialty favorable prior year reserve development was $11.3 million or 3.4 points, primarily driven by lower than expected losses in our professional and executive lines claims made business.

正如傑克所提到的，我們先前與地理產業限制和其他承保選擇相關的行動對投資組合具有顯著的優勢。我們的責任嚴重性假設一直並將繼續非常謹慎。儘管我們受益於近年來相對於大流行前趨勢的頻率大幅減少。上一年的專業有利準備金開發為 1,130 萬美元或 3.4 個百分點，主要是由於我們的專業和行政部門索賠業務損失低於預期。

In personal lines. Overall, prior year development was favorable by $4 million with property favorability primarily in auto, offsetting unfavorability in the umbrella line reported in home and other. We continue to experience pressure related to elevated personal umbrella losses stemming from auto bodily injury coverage, which we are addressing by increasing our prior year loss expectations. Current year picks and achieving higher personal umbrella rates in virtually all states. Our team continues to prudently manage expenses. The expense ratio for the quarter totaled 30.8%, in line with our expectations.

在個人方面。總體而言，去年的開發收益為 400 萬美元，主要是汽車領域的房地產開發，抵消了家庭和其他領域報告的不利影響。我們繼續面臨因人身傷害保險造成的個人雨傘損失增加相關的壓力，我們正在透過提高上一年的損失預期來解決這個問題。今年的選擇幾乎在所有州都實現了更高的個人保護傘率。我們的團隊繼續審慎管理費用。本季費用率為30.8%，符合我們的預期。

The year-over-year increase of 20 basis points primarily reflected talent and technology investments in our specialty segment as well as increased variable compensation. We remain on track to achieve our expense ratio guidance of 30.7% for the full year. Now I'll turn to our segment ex-CAT underwriting ratios and loss trends. Starting with personal lines. This business generated an excellent ex-cat combined ratio of 89.5% for the second quarter, a 10.5 point improvement from the prior year period.

年比成長 20 個基點主要反映了我們對專業領域的人才和技術投資以及可變薪酬的增加。我們仍有望實現全年費用率 30.7% 的目標。現在我將談談我們的細分市場前 CAT 承保比率和損失趨勢。從個人台詞開始。該業務第二季的除貓綜合成本率為 89.5%，較去年同期提高 10.5 個百分點。

Margin recapture initiatives in both auto and home and other drove a 7.6 point improvement in the underlying current accident year loss ratio. The auto current accident year loss ratio excluding catastrophes, improved nine points to 70.1%. The comparison was somewhat impacted by elevated loss picks in the second quarter last year, which subsequently developed favorably by 1.7 points. The vast majority of the improvement, however, is the result of earning in double digit price increases and to a lesser extent, lower than expected auto loss frequency collision loss severity has stabilized as costs have leveled for parts and used vehicles and labor cost inflation has reduced, although bodily injury frequency remains well below pre-COVID levels. Severity continues to be elevated due to a higher proportion of large catastrophic claims, including pedestrian bicycle and motorcycle hits and also high speed crashes. As of the second quarter, we have achieved target returns on an earned basis in personal auto homeowners and other current accident year loss ratio improved meaningfully in the quarter to 57.5%, reflecting earned rate increases well above contemporary loss trends as well as normalization of large losses as compared to a higher than usual level of large losses in the second quarter of 2023. Our other initiatives, including more frequent home inspections and underwriting restrictions in specific pockets of our book of business are also helping to improve our ex-cat home results. We continue to see the benefit of earned pricing substantially building in the homeowners portfolio. We expect that trend together with loss pressures, normalizing should help drive substantial margin improvement through the back half of this year, positioning us to return to target profitability in personal lines on an earned basis in 2025.

汽車、家庭和其他領域的利潤收回措施使當前事故年損失率提高了 7.6 個百分點。扣除災難因素後，目前汽車事故年損失率提高了 9 個百分點，達到 70.1%。這一比較在一定程度上受到去年第二季度損失選擇上升的影響，隨後該損失增加了 1.7 個百分點。然而，絕大多數的改善是由於兩位數的價格上漲所帶來的收入，並且在較小程度上，低於預期的汽車損失頻率、碰撞損失嚴重程度已經穩定，因為零件和二手車的成本已趨於平穩，且勞動成本上漲也已趨於穩定。由於大型災難性索賠的比例較高，包括步行自行車和摩托車碰撞以及高速碰撞事故，嚴重程度持續升高。截至第二季度，我們已經實現了個人汽車房主的盈利目標回報率，本季其他事故年損失率顯著改善至57.5%，反映出盈利率增幅遠高於當代損失趨勢，以及大型汽車事故年損失率的正常化。前貓房屋表現。我們繼續看到贏得定價的好處在房主投資組合中顯著增強。我們預計，這一趨勢加上損失壓力、正常化應有助於推動今年下半年利潤率的大幅改善，使我們能夠在 2025 年恢復個人險種盈利目標盈利能力。

On the top line, personal lines, net written premiums improved sequentially to 3.3% in the second quarter, and we expect growth to modestly increase throughout the remainder of the year. As expected, renewal price increases for personal lines in the quarter moderated sequentially to 18.5% from 22.8% in the first quarter of this year. As I noted on our Q1 call, we expected home exposure increases to begin ticking down in the second quarter as insurance to value inflation adjustments normalized and as we began to apply all payroll and wind and hail deductibles to the majority of our renewals. Nevertheless, we are achieving strong rate increases in both lines of business. We believe rates will remain robust and ahead of loss trends. Personal lines retention improved by over two points to 82%. Pin count, a lagging indicator was down as expected with a year-over-year reduction of about 10% in the Midwest and 3% in other areas.

在營收方面，第二季個人險種淨承保保費較上季成長至 3.3%，我們預計今年剩餘時間成長將小幅成長。如預期，本季度個人線路續保價格漲幅從今年第一季的 22.8% 環比放緩至 18.5%。正如我在第一季電話會議上指出的那樣，隨著保險價值通膨調整正常化，並且我們開始將所有工資以及風和冰雹免賠額應用於我們的大部分續保，我們預計房屋風險敞口的增加將在第二季開始下降。儘管如此，我們的兩條業務線都實現了強勁的利率成長。我們相信利率將保持強勁並領先於損失趨勢。個人線路保留率提高了兩個多點，達到 82%。滯後指標針數如預期下降，中西部地區較去年同期下降約 10%，其他地區較去年同期下降 3%。

Turning to core Commercial Lines, we delivered a combined ratio excluding catastrophes of 88.7% 0.6 points better than the prior year period. The underlying loss ratio improved to 55.7%, supported by the successful execution of our margin improvement plan, including strong pricing and effective property underwriting, particularly in middle market. We continue to capture the benefit of earned rate above loss trend in core commercial workers' compensation liability trends remained stable, albeit with a slight increase in indemnity.

就核心商業業務而言，剔除災難後的綜合成本率為 88.7%，比去年同期高出 0.6 個百分點。由於我們的利潤改善計劃的成功執行，包括強勁的定價和有效的房地產承保，特別是在中間市場，基本損失率改善至 55.7%。我們繼續捕捉到盈利率高於損失趨勢的好處，核心商業工人的賠償責任趨勢保持穩定，儘管賠償略有增加。

Consistent with the NCCI reported trends, we are observing a slowdown in claims emergence, which merits caution as we think about current year loss selections. We were satisfied with the solid performance of commercial multi-peril in the quarter as continued strength in property was partially offset by our move to proactively increase current accident year loss selections in liability. On the top line, core commercial delivered net written premium growth of 5.5% in the quarter. Paced by small commercial renewal price change remained in the double digits consistent with Q1.

與 NCCI 報告的趨勢一致，我們觀察到索賠出現放緩，這在我們考慮本年度虧損選擇時值得謹慎。我們對本季商業多重險業務的穩健表現感到滿意，因為我們主動增加當前事故年責任損失選擇的舉措部分抵消了財產業的持續強勢。核心商業業務本季的淨承保保費增加了 5.5%。由於小幅商業續訂，價格變動與第一季維持在兩位數不變。

The specialty segments combined ratio, excluding catastrophes, increased 80 basis points to 86.4% compared to the prior year period, driven by higher expenses. As noted before, the segment's underlying loss ratio of 53.1%, aligned with our expectations and our target of a low 50s loss ratio. Property, large loss activity remained within anticipated levels.

由於費用增加，專業業務部門綜合成本率（不包括災難）較上年同期增加 80 個基點，達到 86.4%。如前所述，該部門的基本損失率為 53.1%，符合我們的預期以及 50 倍低損失率的目標。房地產方面，大額虧損活動仍處於預期水準。

We are monitoring select lines for inflationary indicators and maintaining a prudent approach in our current accident loss selections. Specialty net written premiums grew 8.2% driven by robust performance across several business lines. Retention remained strong at 83%, while renewal pricing metrics ticked up again, with average renewal increase standing at 11.7% in the second quarter.

我們正在監控某些項目的通膨指標，並在當前的事故損失選擇中保持審慎的態度。由於多個業務線的強勁表現，特種險淨承保保費增加了 8.2%。保留率仍維持在 83% 的強勁水平，而續約定價指標再次上升，第二季的平均續約成長率為 11.7%。

Turning to reinsurance, we completed a successful renewal of our property treaties on July 1. We experienced very favorable market responses, which speak to the strength of our pricing, underwriting and data quality. The market was especially complimentary of the underwriting work we have done with regard to commercial properties as well as our continued work on cat exposures. Key elements and highlights of our current property reinsurance program are as follows.

談到再保險，我們在 7 月 1 日成功續簽了財產條約。市場對我們在商業房地產方面所做的承保工作以及我們在巨災風險方面的持續工作尤其表示讚賞。我們目前財產再保險計劃的關鍵要素和亮點如下。

We renewed both treaties, property per risk and cat occurrence, maintaining a very consistent structure from expiring treaties. Pricing was significantly better than our expectations helped by our property work in particular, in middle market and specialty. We secured full capacity across our catastrophe reinsurance program, maintaining our $200 million retention, and we purchased an additional $150 million in the traditional reinsurance market at the top of the existing cat occurrence tower.

我們更新了兩項條約、每種風險的財產和巨災發生率，並保持了與即將到期的條約非常一致的結構。由於我們的房地產工作，特別是在中間市場和專業市場，定價明顯優於我們的預期。我們確保了巨災再保險計畫的全部容量，維持了 2 億美元的保留，並在現有巨災發生塔頂部的傳統再保險市場額外購買了 1.5 億美元。

Taken together, these changes have resulted in increased reinsurance limits in our CAT occurrence program that exhausts at $1.9 billion compared to the previous $1.75 billion for our highest concentration states. Overall, the success of these renewals provides third-party validation of our underwriting and catastrophe mitigation actions.

總而言之，這些變化導致我們的 CAT 發生計劃的再保險限額增加了 19 億美元，而之前我們最集中的州的再保險限額為 17.5 億美元。總體而言，這些續約的成功為我們的核保和減災行動提供了第三方驗證。

Moving to investment performance. Net investment income increased $2.8 million or approximately 3% to $90.4 million in the second quarter compared to the prior year quarter, as higher interest rates drove strong fixed maturity and short-term income. This was partially offset by a decrease in partnership income. Income from limited partnerships was subdued in the quarter, driven by underperformance in a handful of funds. Variability in quarterly results is inherent in private fund valuations and fully expected in this long duration asset class.

轉向投資績效。與去年同期相比，第二季淨投資收入增加了 280 萬美元，約 3%，達到 9,040 萬美元，因為利率上升推動了固定期限和短期收入的強勁增長。這被合夥收入的減少部分抵銷。由於少數基金表現不佳，本季有限合夥企業的收入受到抑制。季度業績的波動是私募基金估值所固有的，並且在這種長期資產類別中也是完全可以預料到的。

Adjusting for the nonrecurring $6.8 million benefit in the second quarter of 2023, partnership results for the first six months of 2024 are only $1 million lower than the first six months of 2023. We remain comfortable with our partnership investments, excluding partnerships, net investment income was up approximately 20% in the second quarter of 2024 as compared to the year ago quarter.

在調整2023 年第二季680 萬美元的非經常性收益後，2024 年前六個月的合夥表現僅比2023 年前六個月低100 萬美元。營收）仍感到滿意2024 年第二季與去年同期相比成長約 20%。

During the quarter, we completed the previously announced transfer of our investment grade fixed maturity portfolio to an external manager. We expect this move will broaden our asset class exposure and further optimize investments' contribution to overall results. In conjunction with this transfer and considering investment tax gains expiring this year, we repositioned sector exposures within investment grade fixed income and realized approximately $30 million in pretax losses.

在本季度，我們完成了先前宣布的將投資等級固定期限投資組合轉移給外部管理人的工作。我們預計此舉將擴大我們的資產類別曝險，並進一步優化投資對整體績效的貢獻。結合此次轉移並考慮到今年到期的投資稅收收益，我們重新定位了投資級固定收益中的行業風險敞口，並實現了約 3000 萬美元的稅前損失。

From an asset allocation perspective, we reduced exposure to CMBS with reinvestment of proceeds into other high-quality subsectors of securitized product, including RMBS and CLOs. We also repositioned within corporate bonds to extend duration slightly and move out of less favored credits at attractive spread levels.

從資產配置的角度來看，我們減少了CMBS的風險敞口，將收益再投資於其他優質的證券化產品子行業，包括RMBS和CLO。我們還重新配置了公司債券，以略微延長久期，並以具有吸引力的利差水平退出不太受青睞的信貸。

Looking ahead, we believe a more normalized partnership income expectation is approximately $7 million to $8 million per quarter, though we remain cognizant of the tendency for private fund returns to follow a lumpy pattern. The current rate environment should continue to provide an accumulating benefit to NII in 2024 and subsequent years, we expect overall growth in NII of at least 10% in 2024 compared to '23.

展望未來，我們認為更正常化的合夥人收入預期約為每季 700 萬至 800 萬美元，但我們仍然認識到私募基金回報呈現波動模式的趨勢。目前的利率環境應會繼續為 2024 年及隨後幾年的 NII 提供累積效益，我們預計 2024 年 NII 的整體成長將比 2023 年至少 10%。

Moving on to book value and capital position. GAAP book value per share increased 1.1% sequentially to 70.96% per share, reflecting net income, partially offset by shareholder dividends. Our capital management strategy continues to balance reinvestment in the business, maintaining strong financial ratings and providing returns to shareholders through consistent quarterly dividends and share buybacks when warranted. Our outlook for the second half of 2024 remains consistent with our original expectations and our third quarter plan cat load is 7.4%.

接下來是帳面價值和資本狀況。 GAAP 每股帳面價值較上一季成長 1.1%，達到每股 70.96%，反映淨利潤，但被股東股利部分抵銷。我們的資本管理策略繼續平衡業務再投資，保持強勁的財務評級，並透過持續的季度股息和必要時的股票回購為股東提供回報。我們對 2024 年下半年的展望與我們最初的預期保持一致，我們第三季的計畫負載率為 7.4%。

In summary, our margin recapture initiatives are yielding excellent results. While our disciplined growth strategies are effectively targeting our most profitable lines of business. Looking ahead to the next 12 to 18 months, we are confident our positive trajectory will continue. Underwriting margin should continue to improve as past and current rate increases earn in and we execute against our catastrophe exposure initiatives.

總而言之，我們的利潤收回措施正在取得優異的成果。我們嚴格的成長策略有效地瞄準了我們最賺錢的業務線。展望未來 12 至 18 個月，我們有信心我們的積極發展軌跡將持續下去。隨著過去和當前的利率上漲以及我們執行巨災風險計劃，承保利潤率應該會繼續改善。

Furthermore, we expect the current interest rate environment should continue to provide an accumulating benefit of higher investment yields. We couldn't be more excited about our prospects and remain committed to delivering value to our stakeholders through sustainable, profitable growth and top-tier performance.

此外，我們預期當前的利率環境應繼續提供更高投資收益率的累積效益。我們對我們的前景感到無比興奮，並繼續致力於透過可持續、盈利的成長和頂級業績為利益相關者創造價值。

With that, we'll be happy to take your questions.

這樣，我們將很樂意回答您的問題。

(Operator Instructions)

（操作員說明）

Michael Phillips, Oppenheimer.

麥可·菲利普斯，奧本海默。

First question is on Personal Lines, specifically homeowners, ex-CAT question. Given your Core margins are really doing well and expanding there, I guess, do you expect your right below 20% rates, does that accelerate from here? Is that -- we are at a peak for that?

第一個問題是關於個人線路，特別是房主，前 CAT 問題。鑑於你們的核心利潤率確實表現良好並且不斷擴大，我想，你們是否預計你們的利率會低於 20%，這是否會從這裡開始加速？我們正處於這方面的巔峰嗎？

Mike, thanks for your question. I'm going to make sure I clarify, you're speaking specifically to homeowners pricing?

麥克，謝謝你的提問。我要確保澄清一下，您是專門針對房主定價嗎？

Just under, it looks like 20% for the quarter, right?

就在下面，這個季度看起來像是 20%，對嗎？

Right. Yes. I think, as we said in our prepared remarks, Mike, that we're obviously coming off of the peak of combination of significant insurance to value enhancement as well as increased rate and so we're very pleased, frankly, with our Personal Lines team's ability to meet the market and in some ways, lead the market, and we're now at the point where insurance to value is very adequate, and we'll continue to look at that in terms of staying on top of that adequacy and maintaining strong rate consistent with what we think the market is enabling us to do. So it's going to be, I think, pretty stable from here on out, but we'll continue to watch the weather and the overall patterns and stay disciplined in the market.

正確的。是的。我認為，正如我們在準備好的發言中所說，邁克，我們顯然已經擺脫了重大保險與價值提升以及費率提高相結合的頂峰，因此坦率地說，我們對我們的個人保險感到非常滿意團隊滿足市場需求並在某些方面引領市場的能力，我們現在正處於價值保險非常充分的階段，我們將繼續關注這一點，以保持充分性和保持與我們認為市場使我們能夠做的事情一致的強勁利率。因此，我認為，從現在開始，它將相當穩定，但我們將繼續關注天氣和整體模式，並保持市場紀律。

Mike, I think it's also important to remember, while written rate will be relatively consistent for a short period of time, earned rate will actually increase because of the higher written rate that we've gotten in the last few quarters. So you'll start to see that impact in the financials.

麥克，我認為記住這一點也很重要，雖然寫入率在短時間內會相對穩定，但由於過去幾個季度我們獲得了更高的寫入率，賺取率實際上會增加。因此，您將開始看到這種對財務的影響。

Okay. Good. Second question, Jeff, you said something -- first, I didn't really catch and so maybe I want to make sure I got it right and then expand upon a little bit. You were talking comp, and I think you said something about a slowdown in claims emergence. Did I get that right? And if so, what's driving that? And maybe go back a little bit on that one.

好的。好的。第二個問題，傑夫，你說了一些話——首先，我沒有真正聽懂，所以也許我想確保我理解正確，然後再擴展一點。你在談論補償，我認為你談到了索賠出現放緩的情況。我做對了嗎？如果是這樣，是什麼推動了這一點？也許再回顧一下。

I think it relates to the indemnity portion and what we're seeing is some people that originally were out for a period of time, that's getting extended a little bit. But it's important to remember that the offset to that is the increased payroll that we've gotten over the last few years. So I think we've been extraordinarily prudent with our workers' comp releases and workers comp loss picks. So I'm feeling comfortable with that, Mike.

我認為這與賠償部分有關，我們看到有些人原本缺席一段時間，現在又延長了一點。但重要的是要記住，抵消這一影響的是過去幾年我們增加的工資。因此，我認為我們對工人補償的發布和工人補償損失的選擇一直非常謹慎。所以我對此感到很舒服，麥克。

Was part of the payroll -- your comp growth was a little bit higher than expected. Was that part of the payroll or anything else behind that 8% or so growth in the quarter?

是薪資單的一部分——你的薪資成長略高於預期。該季度 8% 左右的成長背後是薪資的一部分還是其他因素？

Yeah. This is Jack, Mike. I think again, we have been very disciplined in the workers' comp market and watching both medical cost inflation and indemnity trends. I think the net-net of that is that the increase in payroll overall has been extremely helpful in making sure that we have pricing adequacy, but I think what we're sharing in our prepared remarks is that we're watching to make sure that particularly the indemnity side of it that isn't constrained by fee schedules like medical costs that there isn't something going on there that would cause some margin compression. We're not seeing any dramatic changes there, but we're just signaling to folks that we're maintaining a level of discipline in our analysis and looking ahead.

是的。這是傑克，麥克。我再次認為，我們在工人補償市場上一直非常自律，並關注醫療費用通膨和賠償趨勢。我認為最重要的是，整體工資的增加對於確保我們的定價充足性非常有幫助，但我認為我們在準備好的評論中分享的是我們正在關注以確保特別是其賠償方面，不受醫療費用等費用表的限制，不會發生會導致利潤率壓縮的事情。我們沒有看到任何巨大的變化，但我們只是向人們發出信號，表明我們在分析和展望未來方面保持一定程度的紀律。

Yeah. And I'll just add, Mike, our work comp book as a percentage of our portfolio is less than 18% of our book. So it is Core Commercial. Thank you. We are targeting growth in work comp in the Small Commercial business, which performs very well. So our Small Commercial initiatives include rounding out accounts and writing more of that business.

是的。麥克，我要補充一點，我們的工作補償帳簿占我們投資組合的百分比不到我們帳簿的 18%。所以它是核心商業。謝謝。我們的目標是提高小型商業業務的工作薪酬，這項業務表現非常好。因此，我們的小型商業計劃包括完善帳目和撰寫更多該業務的內容。

Mike Zaremski, BMO.

邁克·扎倫斯基 (Mike Zaremski)，BMO。

Trying to reread the part of the transcript on your prepared remarks is always great. I think it was said that in Core Commercial, there was healthy maybe favorability better than expected in property, and you took that to be more defensive in casualty lines. I don't know if you're saying you added that -- am I understanding that correctly that you're saying you're -- once the stat data comes out, I guess, not until next year, we'd see more IBNR? Or what did you -- just want to unpack that comment?

試著重讀你準備好的發言稿中的部分總是很棒的。我認為有人說，在核心商業領域，房地產領域的健康狀況可能比預期的好，而且您認為在傷亡方面更具防禦性。我不知道你是否在說你補充了這一點——我是否正確理解你所說的——一旦統計數據出來，我想，直到明年，我們才會看到更多國際銀行業研究理事會？還是你只是想解壓縮該評論？

Yeah. So the property favorability in Core was very useful. Some of that was recorded and some of it allowed us to be more prudent or defensive in the casualty lines across the book. And at this point, it's generally IBNR as those claims haven't shown themselves, you're seeing those in prior years.

是的。所以Core的房產優惠是非常有用的。其中一些被記錄下來，其中一些讓我們在整本書的傷亡情況上更加謹慎或防禦。在這一點上，通常是 IBNR，因為這些說法還沒有表現出來，你會在前幾年看到這些。

Got it. Okay. And are you just staying with the theme on cash lines since it's been a big topic of conversation for especially recently. I feel like you all have done a good job of explaining to us that over the last five-plus years, you have taken proactive decisions to exit certain metros where there is higher social inflation, et cetera. Have you -- is there a way to unpack or have you looked at data to try to help us triangulate whether your loss trend assumptions might be different than others? Or are you -- just anything that you feel that you want to better unpack to give folks more confidence that the reserve trends we've been seeing for you all, which have been excellent our run rateable?

知道了。好的。您是否只是停留在現金額度主題上，因為它一直是最近的熱門話題。我覺得你們都很好地向我們解釋了，在過去五年多的時間裡，你們已經做出了積極的決定，退出了某些社會通膨較高的城市，等等。您是否有辦法解壓縮或查看數據來幫助我們三角測量您的損失趨勢假設是否可能與其他假設不同？或者你是——只是你覺得你想要更好地解開的任何東西，讓人們對我們為你們所有人看到的儲備趨勢更有信心，這對我們的運行率來說是非常好的？

Mike, during 2016, you may remember, we strengthened our balance sheet with a large reserve charge. At that time, we became increasingly concerned with the liability and legal trends in major metropolitan cities and with certain industries being more prone to losses. We also removed any remaining monoline or unsupported umbrella. We were talking externally and demonstrating these underwriting actions in 2018 and '19. As a result of those geographic and industry portfolio choices, we're experiencing, as you referenced, a very substantial commercial liability frequency decline since pre-COVID 2019 levels.

麥克，您可能還記得，2016 年我們透過巨額準備金支出強化了資產負債表。當時，我們越來越關注主要大城市的責任和法律趨勢，以及某些更容易遭受損失的行業。我們也移除了任何剩餘的單線或無支撐的雨傘。我們在 2018 年和 19 年對外進行了討論並展示了這些承保行動。正如您所提到的，由於這些地理和行業投資組合的選擇，我們正在經歷自 2019 年新冠疫情之前的水平以來商業責任頻率的大幅下降。

For example, having a relatively small contractor book is serving us well. This overall frequency decline has generally offset our actions to consistently and meaningfully increase our casualty severity assumptions since 2019. This decline along with more recent property line favorability has allowed more prudent reserving and increases in loss picks. Loss trend severity is intense broadly in the industry, but we're relatively well positioned to navigate the challenges. It's hard to say whose loss picks might be higher, but our loss picks since '19 have gone up consistently very dramatically.

例如，擁有相對較小的承包商書籍對我們很有幫助。這種整體頻率的下降總體上抵消了我們自 2019 年以來持續且有意義地提高傷亡嚴重程度假設的行動。整個產業的損失趨勢嚴重程度普遍較高，但我們處於相對有利的位置來應對挑戰。很難說誰的損失選擇可能更高，但自 19 年以來我們的損失選擇一直在大幅上升。

Okay. That's helpful. And if this is a stat, you don't want to show you don't have, that's fine, but any way you can dimension what percentage of your reserves are umbrella and I'll just say many of your competitors don't want to disclose that. So I'm not saying you need to. But just curious if you could help us to mention that.

好的。這很有幫助。如果這是一個統計數據，你不想表明你沒有，那很好，但是你可以通過任何方式來衡量你的儲備的百分比是保護傘，我只想說你的許多競爭對手不希望披露這一點。所以我並不是說你需要這樣做。但只是好奇你是否可以幫助我們提及這一點。

Yeah, I don't have that right in front of me, but that's something that we can get back to people if they're interested.

是的，我面前沒有這個，但如果人們感興趣的話，我們可以將其送回給他們。

Okay. Great. And just lastly, back to Personal Lines. In terms of clearly, the plan to redimension the -- especially the home portfolio well in action. Can you remind us -- I believe you glide past us to a CAT ratio that would eventually fall over time as the actions took place. Is that based on the trajectory of the portfolio repositioning over the last 6 months, has anything changed at a high level in terms of that glide path down over time in the CAT ratio -- catastrophe load ratio over time?

好的。偉大的。最後，回到個人專線。顯然，重新調整投資組合的計畫——尤其是家庭投資組合正在順利實施。你能提醒我們嗎——我相信你的 CAT 比率會隨著行動的發生而最終隨著時間的推移而下降。根據過去 6 個月投資組合重新定位的軌跡，CAT 比率（隨著時間的推移災難負荷率）的下滑路徑是否發生了重大變化？

Mike, this is Jack. I'll talk broadly. From an enterprise perspective, middle market has dramatically changed the profile of their CAT exposure over the last couple of years. And as we looked at some profit improvement opportunities, we also looked at what types of classes and within which geographies could we reset our catastrophe exposure and, frankly, enable the enterprise to have some maneuvering relative to our property aggregations across the country.

麥克，這是傑克。我會廣泛地談論。從企業的角度來看，過去幾年中中間市場極大地改變了他們的 CAT 暴露狀況。當我們研究一些利潤改善機會時，我們還研究了哪些類型的類別和哪些地區可以重置我們的災難風險，坦白說，使企業能夠對我們在全國範圍內的資產聚合進行一些操作。

So I think that's having a profound effect. I also think that we can't state enough that when you combine dramatic price increase in our Personal Lines book, combined with the deductible implementation that we're well underway with and some PIF growth patterns that further enable a better diversification, all of that aids us in having confidence looking forward that our CAT loads will certainly start to move in a better direction.

所以我認為這產生了深遠的影響。我還認為，當你將我們的個人險種賬簿中的大幅價格上漲與我們正在進行的免賠額實施以及一些進一步實現更好的多元化的 PIF 增長模式相結合時，我們無法說得足夠多。幫助我們充滿信心，期待我們的CAT 負載肯定會開始朝著更好的方向發展。

And we'll continue to, frankly, monitor the weather patterns and make additional adjustments if that's required. But based on what we know today and based on the actions, we have the highest level of confidence we've ever had that we are addressing our CAT loads and further diversifying our portfolio.

坦白說，我們將繼續監控天氣模式，並在需要時進行額外調整。但根據我們今天所了解的情況和所採取的行動，我們對我們正在解決 CAT 負載並進一步使我們的產品組合多樣化充滿信心。

Paul Newsome, Piper Sandler.

保羅‧紐瑟姆，派珀‧桑德勒。

I guess a little bit of a follow-up on Mike's question about CAT. I mean, specifically looking at the terms and conditions on the Personal Lines side, is there any way to think about the quantification of those changes? Does it have an impact you can measure on PMLs or anything that you could tell us or maybe if you can describe what you've known internally as a description for that impact? Or maybe just have to know a direction is a good idea?

我想這是 Mike 關於 CAT 問題的一些後續行動。我的意思是，特別是查看個人線路方面的條款和條件，是否有任何方法可以考慮這些變化的量化？它是否對您可以衡量的 PML 產生影響，或者您可以告訴我們的任何內容，或者您​​可以描述您內部已知的對該影響的描述？或者也許只需要知道一個方向是個好主意？

Listen, first of all, we understand the desire to be able to get more specific KPIs or more transparency to metrics. The reality is, the way you answer the question for us is exactly how we're trying to pursue it is that we have to take our measured steps that we've taken, both in Personal Lines and more broadly and continuously model the business and look at where our AALs micro concentrations are and how that affects ultimately the PML first for earnings volatility metrics driven by severe convective storms, but also relative to our tail. And I think we are more effective than we've ever been.

聽著，首先，我們理解希望能夠獲得更具體的 KPI 或更透明的指標。現實是，您為我們回答問題的方式正是我們試圖追求的方式，即我們必須採取我們已經採取的謹慎步驟，無論是在個人方面還是在更廣泛和持續的業務建模中，看看我們的AAL 微濃度在哪裡，以及它如何最終影響PML，首先是由嚴重對流風暴驅動的獲利波動指標，但也相對於我們的尾部。我認為我們比以往任何時候都更有效率。

We've added some additional resources to make sure that we're as proficient as we possibly can be in measuring the impact that we're making on the actions we're taking today and thinking about what else we could do if that's necessary. But as I said earlier, we are really confident that we are moving our CAT loads in the right direction and also providing ourselves additional incentives to grow in other less concentrated areas because of the diversification credit that is more visible to us now as we use the enhanced models.

我們增加了一些額外的資源，以確保我們盡可能熟練地衡量我們對今天採取的行動所產生的影響，並思考如果有必要我們還可以做些什麼。但正如我之前所說，我們確實有信心將 CAT 負載移向正確的方向，並為自己提供額外的激勵，以在其他不太集中的領域實現增長，因為現在當我們使用增強模型。

Paul, the impact on the second quarter of additional deductibles was extremely limited because it only started going in April 1 for renewal business, but as you think about coming around to what we consider the severe convective storm primary season second quarter of next year, it's going to be a completely different story. We're very optimistic.

保羅，額外免賠額對第二季度的影響極其有限，因為它從 4 月 1 日才開始進行續保業務，但當你想到明年第二季度我們所認為的強對流風暴初選時，它是這將會是一個完全不同的故事。我們非常樂觀。

Second question, I wanted to ask maybe a broader question about the expense ratio and the target over time. At one point, you had, I think it was 20 basis points per year goal that changed with the profit struggles that you had several years ago. Are we back to that theme? Or has the nature of the company changed such that that's not something that necessarily makes a lot of sense if we look forward over the long term?

第二個問題，我想問一個更廣泛的問題，關於費用率和一段時間內的目標。曾經一度，我認為每年 20 個基點的目標隨著幾年前的利潤鬥爭而改變。我們又回到那個主題了嗎？或者公司的性質是否發生了變化，以至於從長遠來看，這不一定有意義？

So I think the 30.7%, Paul, that we guided to and are still guiding to for this year's expense ratio is a consistent 20 basis points improvement. Now from time to time, it's been 30 or 10, but it's -- over time, it's been pacing that way. Generally speaking, we're still committed to that, and we should be able to drive that. Having said that, our mix could change, and that could change the trajectory a little bit overall. Most importantly, we're looking for hundreds of basis points improvement in the combined ratio and in any given year, a little less focused on whether it's 10 basis points more or 10 basis points less of the expense ratio. I think there's more action right now in the loss ratio for us.

因此，保羅，我認為我們今年的費用比率指導為 30.7%，並且仍在指導中，這是持續的 20 個基點的改善。現在有時會達到 30 或 10，但隨著時間的推移，它一直是這樣的節奏。總的來說，我們仍然致力於這一點，並且我們應該能夠推動這一點。話雖如此，我們的組合可能會改變，這可能會稍微改變整體軌跡。最重要的是，我們希望綜合成本率能提高數百個基點，並且在任何一年中，不太關注費用比率是多10個基點還是少10個基點。我認為我們現在在損失率方面有更多的行動。

Grace Carter, Bank of America.

格蕾絲·卡特，美國銀行。

While we've listened to peer results this quarter, it sounds like everyone is concerned with social inflation, obviously. But the commentary has varied a bit from one period to another with some industry participants more concerned on general liabilities, some more with commercial auto, some commentary is focused more on primary layers and others on excess. I guess I'm wondering, in your opinion, is there a particular area of commercial liability that deserves more attention than others these days? Or is the potential pressure from social inflation, pretty widespread in your view?

雖然我們聽取了本季的同行業績，但顯然每個人都擔心社會通膨。但不同時期的評論略有不同，一些行業參與者更關註一般負債，一些評論更關注商用汽車，一些評論更關注初級層，另一些評論更關注過度負債。我想我想知道，在您看來，如今是否有一個特定的商業責任領域比其他領域更值得關注？還是您認為社會通膨的潛在壓力相當普遍？

Grace, this is Jack. Thanks for the question. I think ultimately, social inflation and legal system abuse are just affecting the severity of the severity of liability trends. And more broadly, you see, obviously, in auto accidents or in business-to-consumer type of exposures, you have individuals being harmed that lend themselves to higher jury awards, higher litigation rates and the court system clearly has changed and that more cases are going further into duration and that's somewhat helped by litigation finance.

格蕾絲，這是傑克。謝謝你的提問。我認為最終，社會通膨和法律制度的濫用只會影響責任趨勢的嚴重程度。更廣泛地說，顯然，在車禍或企業對消費者類型的風險中，個人受到傷害，從而獲得更高的陪審團裁決、更高的訴訟率，而且法院系統顯然已經發生了變化，更多的案件正在進一步延長期限，這在一定程度上得到了訴訟融資的幫助。

So I think those are pretty broad-based. Some of the differences, I think you're observing are what portfolio one has and how much of that is susceptible two, those social inflationary trends, whether that be limits profile or classes of business and to some degree, geography that you play in.

所以我認為這些基礎相當廣泛。我認為你觀察到的一些差異是，一是投資組合有什麼，二是其中有多少是容易受到影響的，二是那些社會通膨趨勢，無論是限制形象還是商業類別，以及在某種程度上，限制你所處的地理位置。

But also, I think as Jeff has been articulating both in his prepared remarks and in his response to the previous question, what changes have you been making along the way that could be running against some of those liability severity trends. And in our case, we know that we have made some real portfolio actions, particularly in middle market that are giving us some advantages. And that frequency of severity improvement is offsetting the natural severity of the severity trends that's going up.

而且，我認為，正如傑夫在他準備好的發言和對前一個問題的回答中所闡述的那樣，您在此過程中所做的哪些改變可能會與某些責任嚴重性趨勢相悖。就我們而言，我們知道我們已經採取了一些真正的投資組合行動，特別是在中間市場，這給我們帶來了一些優勢。嚴重性改善的頻率正在抵消正在上升的嚴重性趨勢的自然嚴重性。

And then last but not least, the decision we made eight years ago, starting eight years ago to really get out of the excess umbrella business, particularly over other companies is proving to be very beneficial because we obviously know our book of business well and we know how to provide umbrella coverage above our own business, I think where some companies might be getting quite short as they don't do the primary underwriting and so they have an excess book of business that tends to be much more vulnerable and harder to understand where those trends are coming from.

最後但並非最不重要的一點是，我們八年前做出的決定，八年前開始真正擺脫多餘的保護傘業務，特別是相對於其他公司而言，事實證明這是非常有益的，因為我們顯然很了解我們的業務，而且我們知道如何在我們自己的業務之上提供保護傘，我認為有些公司可能會變得相當短缺，因為他們不進行主要承保，因此他們擁有過多的業務，而這些業務往往更容易受到攻擊且更難以理解這些趨勢來自哪裡。

And we've also seen some of the pressure on casualty reserves spilling out of the soft market years into more recent accident years over the past couple of quarters. I mean, I guess, could you talk about your observations from that standpoint? And you mentioned some of the repositioning that you've done in your casualty portfolio starting maybe 2018, 2019. And if those actions have insulated you so far from some of the pressure that we started to hear about in the experience from the past couple of years?

在過去的幾個季度中，我們也看到傷亡準備金的一些壓力從疲軟的市場年份蔓延到了最近的事故年份。我的意思是，我想，你能從這個角度談談你的觀察嗎？您提到了您可能從 2018 年、2019 年開始在傷亡投資組合中所做的一些重新定位。 ？

Grace, I think the frequency benefits that were evident in 2020 year, during the COVID year unrelated to what we were talking about a few minutes ago, have provided an opportunity to cushion those phenomena that you were just referring to. So we weren't really sure whether liability matters were delayed or whether they just didn't happen in 2020. And so prudence with those picks in that year, have proven to be quite useful as we roll forward and deal with, as you referred to, the softer market periods. So it really is the combination of all those things coming together, and how thoughtful and conservative were you along the way with your picks and you're reserving, and that's where I think we want to share our confidence that particularly on a relative basis, we think we have done extremely well.

格蕾絲，我認為 2020 年（新冠疫情期間）明顯的頻率優勢與我們幾分鐘前討論的內容無關，為緩解您剛才提到的這些現象提供了機會。因此，我們不太確定責任問題是否被推遲，或者它們是否在2020 年沒有發生。非常有用的到市場疲軟時期。所以這確實是所有這些事情的結合，以及你一路上的選擇和保留是多麼深思熟慮和保守，這就是我認為我們想要分享我們的信心的地方，特別是在相對的基礎上，我們認為我們做得非常好。

Meyer Shields, KBW.

邁耶·希爾茲，KBW。

If we go back to workers' compensation, two things. First, you mentioned an uptick in, I guess, indemnity-related severity. And I'm wondering, doesn't that be covered by the exposure unit growth in line. Is that a reserve concern or an adequacy concern?

如果我們回到工人賠償，有兩件事。首先，我猜你提到了與賠償相關的嚴重程度的上升。我想知道，這不是被曝光單位的成長所覆蓋嗎？這是儲備問題還是充足性問題？

I don't believe it's a reserve concern. I think what we're making is more of an observation that we see some evidence that lost time cases on average have moved out a little bit further. And that the payroll -- increased payrolls that obviously are captured in our premium base are also showing up in the indemnity dollar. So we're not sending out any alarms.

我不認為這是儲備問題。我認為我們所做的更多的是觀察，我們看到一些證據表明，平均損失時間案件已經向前移動了一些。顯然，我們的保費基礎中包含的工資單——增加的工資單也反映在賠償金中。所以我們不會發出任何警報。

We're trying to address the fact that in the industry, everyone is trying to determine where are we in the workers' comp, medical cost inflation and the broader workers' comp trends, and we're trying to reinforce investors that we are on top of these trends. We're not being overly optimistic, we're, if anything, being conservative with our picks, and I wouldn't read any more into it than that.

我們正在努力解決這樣一個事實：在這個行業中，每個人都在試圖確定我們在工人補償、醫療成本通膨和更廣泛的工人補償趨勢中處於什麼位置，並且我們正在努力向投資者強調我們的立場這些趨勢的頂部。我們並沒有過於樂觀，如果有的話，我們對我們的選擇持保守態度，我不會對此有更多的解讀。

Also on workers compensation, is anything happening on the medical side of things, I guess it goes beyond comp, but since you called that [indiscernible] today, I'm wondering about medical trends?

另外，在工人薪酬方面，醫療方面是否發生了任何事情，我想這超出了補償範圍，但既然你今天稱其為[音頻不清晰]，我想知道醫療趨勢？

I think we still see relatively modest increases in medical costs, particularly related to workers' comp because of the fee schedule phenomenon. And again, almost 2/3 of the loss costs in comp are medical costs related, we get a real tailwind from the surge in payrolls that have come along for the ride that make their way into our premium base. So I think that's why you're seeing more stability than people predicted is because you're getting both the premium side -- the premium side is getting aided by payrolls and medical costs on a relative basis are still relatively benign.

我認為我們仍然看到醫療費用相對溫和的增長，特別是由於費用表現象而與工人補償相關。再說一次，補償中近 2/3 的損失成本與醫療費用相關，我們從工資激增中得到了真正的推動力，這些工資隨之而來，進入了我們的保費基礎。所以我認為這就是為什麼你會看到比人們預測的更穩定的原因是因為你得到了溢價方面——溢價方面得到了工資的幫助，而相對而言醫療成本仍然相對溫和。

Bob Farnam, Janney.

法納姆、珍妮.

One more question on casualty reserves. I don't know if you've actually given it explicitly, but what underlying severity trend assumption are you using for your current loss picks and how has that changed over the years? And I guess, how does that compare to pricing these days?

還有一個關於傷亡準備金的問題。我不知道您是否確實明確給出了這一點，但是您在當前的損失選擇中使用了哪些潛在的嚴重性趨勢假設以及多年來這種情況發生了怎樣的變化？我想，這與現在的定價相比如何？

Well, we haven't given an individual severity assumption over time. And the reason is we just find it difficult to give one casualty severity assumption. The lines are so different, and we look at it individually. However, it has gone up dramatically, and it has gone up in our assumption similarly to price along the way, if not even higher. So as I said before, our frequency benefit has allowed us to increase that severity assumption without having to increase the loss pick or the loss ratio as dramatically as it otherwise would have them.

嗯，隨著時間的推移，我們還沒有給出單獨的嚴重性假設。原因是我們發現很難給出傷亡嚴重程度的假設。線路如此不同，我們單獨來看。然而，它已經大幅上漲，在我們的假設中，它的上漲與價格類似，甚至更高。正如我之前所說，我們的頻率優勢使我們能夠增加嚴重性假設，而不必像其他情況那樣大幅增加損失選擇或損失率。

Right. I think more importantly, I just wanted to make sure that the pricing these days was keeping up with sounds like you increased your expectations in this quarter. So I just want to make sure the pricing is still keeping pace?

正確的。我認為更重要的是，我只是想確保這些天的定價跟上您在本季度提高的預期的聲音。所以我只是想確保定價仍然保持同步？

So it is our belief that the core commercial rate of 9.3% and overall price change of 11.7%, and when you deconstruct the casualty component under that, it is our belief that we are getting more price than loss trend at the moment.

因此，我們相信核心商業利率為 9.3%，整體價格變化為 11.7%，當你解構該比例下的傷亡部分時，我們相信我們目前的價格趨勢大於損失趨勢。

Yeah, Bob, maybe to even link it up to a previous question regarding umbrella and, Dick, maybe you can speak to this. We have ratcheted up our pricing in the umbrella -- Commercial Lines, umbrella line significantly over the last few years with the assumption that the severity trends were going to deteriorate even before we saw it in our results. So maybe you could comment on that.

是的，鮑勃，也許甚至可以將其與之前有關雨傘的問題聯繫起來，迪克，也許你可以談談這個。在過去的幾年裡，我們已經大幅提高了傘類產品——商業產品線的定價，假設嚴重趨勢甚至在我們在結果中看到它之前就會惡化。也許你可以對此發表評論。

To put a number to it, I mean, over the last four years, we've seen our umbrella pricing upwards of almost 40%. So we've been getting ahead of it. We've been looking at the methodology of how we're rating and making the appropriate filings to make sure we're adequate.

舉個數字來說，我的意思是，在過去四年裡，我們的傘式定價上漲了近 40%。所以我們一直走在前面。我們一直在研究我們的評級方法並進行適當的備案，以確保我們足夠。

And I think that's a big part of how -- as you try to figure out how this is playing out in the industry is what was your starting point in terms of loss trend assumptions, how much have you priced over loss trend and what underwriting actions have you taken that might prove beneficial as those social inflationary effects start to kick in. And I think on all three of those dimensions, we've been very proactive.

我認為這是一個重要的部分——當你試圖弄清楚這在行業中是如何發揮作用時，你在損失趨勢假設方面的出發點是什麼，你對損失趨勢的定價是多少，以及承保行動是什麼隨著社會通膨效應開始顯現，您是否認為這可能是有益的。

(Operator Instructions)

（操作員說明）

Michael Phillips, Oppenheimer.

麥可·菲利普斯，奧本海默。

Just a quick one. If you could spend a second, maybe our could your Specialty Marine book. Can you just spend a second describing the nature of that book first?

只是快一點。如果您能花一點時間，也許我們可以為您提供專業海洋書籍。能先花點時間描述一下這本書的性質嗎？

Yeah. I think I heard a blip for a second there, but I think you said you wanted us to talk about the Marine book within Specialty.

是的。我想我聽到了一會兒的聲音，但我想你說過你想讓我們談論專業中的海洋書籍。

Correct. Yes.

正確的。是的。

Go ahead, Bryan.

繼續吧，布萊恩。

Yeah, sure. So I think it's a great question because we listed pretty simply, right, as marine, but under Marine, we have quite a number of product lines, right? Much of it is inland marine. It's a mix of builders risk business, contractors equipment business and things like that. But additionally, we have a lot of, what you would call, floaters for computers, musical equipment. So it's really diversified. I would say, there's probably 20 different product segments that we're going after in Marine.

是的，當然。所以我認為這是一個很好的問題，因為我們非常簡單地將其列為“海洋”，但在“海​​洋”下，我們有相當多的產品線，對嗎？其中大部分是內陸海洋。這是建築商風險業務、承包商設備業務等的混合體。但除此之外，我們還有很多電腦、音樂設備的漂浮物。所以它確實是多元化的。我想說，我們在海洋領域可能會追求 20 個不同的產品領域。

So that's one of the things we like about the book. It's very diversified, both geographically and it's also got a real diverse mix of product that's in there. So that I think for us, and maybe you've seen this, that's really helped to remain very profitable even throughout all this time of increased CATs, et cetera, right? We've been able to manage through that and have a diversified book that absorbs that.

這就是我們喜歡這本書的原因之一。它在地理位置上非常多元化，而且那裡的產品也非常多樣化。所以我認為對我們來說，也許你已經看到了這一點，即使在 CAT 增加的整個時期，這確實有助於保持非常有利可圖的，對吧？我們已經能夠解決這個問題，並且有一本多元化的書來吸收這個問題。

Yeah. No, that's helpful. So still a follow-up, right? I imagine the answer is no. But I mean, I would imagine given your book is so different, but there's been a lot of buzz, obviously, around Marine where the global accounts and stuff what's happening right here in Baltimore. None of that trickles down to -- none of that excitement, I guess, on the pricing, trickles down to your book, I imagine, right?

是的。不，這很有幫助。所以還是有後續吧？我想答案是否定的。但我的意思是，考慮到你的書是如此不同，我想，但顯然，圍繞《海軍陸戰隊》的全球帳戶和巴爾的摩發生的事情有很多討論。我想，這些關於定價的興奮都不會滲透到你的書中，我想，對吧？

So like I didn't completely hear, I think you're alluding to that, a crash that took place in Baltimore. And yeah, so we have a little bit of what you might call, Ocean Marine as well, but that's really more like docks and marinas and lobster boats and really simple stuff relative to what you're talking about. We don't do the large holes. We don't do that type of exposure that I think you're referring to.

就像我沒有完全聽到一樣，我想你是在暗示發生在巴爾的摩的一場車禍。是的，所以我們也有一些你可能稱之為海洋的東西，但這實際上更像是碼頭、碼頭和龍蝦船，以及相對於你所說的非常簡單的東西。我們不做大孔。我認為我們不會進行您所指的那種曝光。

And we certainly don't put up limits that support major infrastructure across the country. So that's not our -- predominantly, in the Marine book of business that is very diversified, like we said, and one of our most profitable businesses over a very long period of time.

我們當然不會設置支持全國主要基礎設施的限制。因此，這不是我們的業務——主要是在海洋業務中，正如我們所說，它是非常多元化的，也是我們在很長一段時間內最賺錢的業務之一。

This concludes our question-and-answer session and concludes the conference call. Thank you for attending today's presentation. You may now disconnect.

我們的問答環節和電話會議到此結束。感謝您參加今天的演講。您現在可以斷開連線。