SIGI - Earnings call transcript Q4 2019 | Selective Insurance Group, Inc.

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Operator

Good day everyone, welcome to Selective Insurance Group's Fourth Quarter 2019 Earnings Call. At this time, all participants will be on listen-only mode until the Q&A portion of the call. [Operator Instructions]

At this time, for opening remarks and introductions, I would like to turn the call over to Senior Vice President, Investor Relations and Treasurer, Rohan Pai.

Rohan Pai

Good morning everyone and welcome. on until selective.com March call will the this available be X, simulcasting our and website replay We're XXXX.

on today Our GAAP supplemental is referenced reconciliations includes page available also of any our investor non-GAAP financial package, website. the Investors which of measures

will quarterly and performance. unrealized and operations redemption business discuss quarter, equity gains income or Securities Securities in filed of realized believe of statements we our net of the the forward-looking after-tax use under security of about These and measures current income, performance losses and GAAP debt operations to Private filings our our early and easier results future are our XXXX costs risks included Commission. US are investments, investors makes excluding subject also reports the Non-GAAP operating for and securities related of are to trends in it income, which projections debt statements our Exchange and to insurance analyze with we using financial business. first Act Today, in gains uncertainties. is that future our annual, or the and and to not on Reform evaluate retirement Non-GAAP Litigation on impact guarantees operating with losses net

reports For a quarterly US to with filed detailed Commission. and discussion of annual the these and risks refer and uncertainties, our please Securities Exchange

no that take revise Selective obligation aware forward-looking You undertakes update be to statements. should any or

Operating Mark Chief Officer; management Greg the call Murphy, are executive and Chief today's Executive Wilcox, Chief Marchioni, and following John team. Officer. members Selective's of Financial President On Officer;

to will turn I Greg. now, the call over And

Greg Murphy

level continue results and proud underwriting some our execution detail, I'll that generate and We're financial focus to and superior Rohan, strategy, full will results, Mark well functions. remarks positioning additional strong and high introductory out investment XXXX fourth make key quarter to and discuss John you, on and then our some more color and extremely strategic morning. across of our enhance review initiatives performance. will on our us underwriting good our insurance themes initiatives. year providing continued operations stand reflecting Thank in

per which fully to For the diluted an earnings annualized we translated record of of XX.X%. $X.XX, generated operating non-GAAP operating share ROE quarter,

Our contributing combined and ratio and of overall after-tax investment quarter capped million. XX.X% an a fourth X.X X% was ROE. points was with to generated ratio net an XX.X%, of stellar company up the exceptional year strong operations X% of The income solid underwriting growth which premium for we off in $XX combined

were X.X excellent income Our investment XX% contributing increasing results with ROE. of investment after-tax net points and

XXXX, was our which non-GAAP financial target. exceeded overall XX.X%, ROE operating XX% our For

on In operating share, $X.XX gains by basis addition, our change for points. million available XX the reduced after-tax our $XXX per in or of securities sale unrealized ROE

these operating XXXX, as will that about reduce age. and unrealized For will reverse ROE these gains by points XXX basis securities

to and year elite the flexibility recognized X% put for first million rating A year strength AMBest increases a being our was superior agency of markets; access XXXX financial the ratings senior X% peers industry [ph] significantly similar among on consecutive double-digit our in capital by delivering XX-year and expected us that of written standout debt long-term group offering, average; premium for of which many growth respects us highlights issuing ever some institutional operational who driving including: omnichannel our with and dissemination customer performance of have such versus sixth attractive through our which with of results; ROEs, notes initiatives offered notification with of free reduce places to our generated our alerts, Drive charge delivering million in an $XXX superior society operating a net for October; financial approximately at by provides our building to progress in our energy America's of as make outlook as Selective communities Forbes; customers; highlighting energy, the our midsize and a a recall farm distracted and communities continuing employers one kilowatts of lines of coupled commitment to expansion receiving and generate as positive making will strategic solar X annually best our recognition experience; corporate product on our commercial office, geo which whole. efforts safer to

off few I'd like on. specific XXXX, a topics to there are Starting comment

commercial standard upward in First, we're further and pleased trajectory its only of the continues XXXX. direction increase with should lines which industry-wide pricing

pricing will Selective, For for expect renewal overall establish XXXX. X.X%, a floor we which clearly fourth quarter reached pure pricing

allow Our to and level, commitment maintaining steadfast while growth increases granular rates. retention and balancing administer us at been price to our underwriting in tools underwriting sophisticated modeling an extremely We've having underwriting pure price lines Renewal expected primary increases exceeded renewal have matched trends. implemented commercial of future performance. discipline, loss versus price that is or trend consistently indicator loss pure the

more For five-year Towers than twice the the was XX.X%, our X%. renewal of pricing Watson commercial past price period, CLIPS about pure compounded lines

look we price, execute we As are best-in-class pure and trend excellent people strategic our on of positioned plans. line loss with book renewal the expected the to year, well and business tools, sophisticated to forward with and coming in technology

close settlements. costs Second, on trends, loss rising litigation into premium two especially to expected there's down Estimated broken principal respect average on two measurements: been counts; and estimated and are for pure the rates or considerable keeping focus loss overall ultimate trend. claim industry certainly severity. a with one, We eye are potential loss

embedded expectation loss overall two Over increased the X%. our approximately has our in for picks past is which loss from to trend, X% years,

process as that detail an independent as conducted position reviews by In addition, quarterly semi-annual well actuarial Big firm. we maintain X accounting reserve in reviews a very includes internal ground-up a disciplined methodology with

book business classes. business less We injury as focused smaller of type hazard headline susceptible to awards our are lower account is on and

XX,XXX limits excluding Our policies, or have $X average commercial compensation, account and XX% million our less. is of size workers' lines of casualty

not reduces The best our We exposure has to achieving over a that price pure per is consistently million, that casualty done this protect limits also your even purchased Inflation, concept. Selective reinsurance to inflation. by is $X exposure policies long-term new on years. over protection book's renewal way many time. performance medical social inflation consistent event to

losses were relatively quarter remains catastrophe to losses year, catastrophe Climate-related of such unexpected of hurricanes, risks convective are the generally fourth pronounced. large unpredictability as of while floods wildfires. events leading moderate the risks in Third, and storms, the

program our past property our year, losses for been years. was few the a X.X limit effort to total loss our expectation which on have protects probability on an X% our equity. ratio also catastrophe below only us For catastrophe of stockholders points. impact a to was the X.X% Non-catastrophe In X.X elevated event exposure, reinsurance consistently points,

need property manage sharing, including pricing. appropriately, mitigation industry, we to do and As more through underwriting to more risk-based an diligent consistent risks risk initiatives,

will a results our put from for improve in downward industry returns. environment and maintain portfolio industry-wide result tailwinds lines' adequate ability greater and continue order feel are consequently very Finally, to attractive pricing our pricing the the low generate positioned prolonged should in agile to confident and returns pressure sophistication ROEs to benefit in underwriting With we execution commercial well the capabilities, impetus investment This ROEs. interest to in to on coming rate year.

a rate income view guidance of from investments. assumes of X.X reflecting tax no income of the million effective XX.X%. for after-tax catastrophe XX.X% an million, all investment a income of X.XX% approximately weighted million excluding our tax-advantaged effective investment XX.X losses shares rate ratio, XX of for XX% overall diluted development. our investment Three, of year losses which for rate on Turning tax of catastrophe of of to includes other municipal on XX.X% tax is Five, our average prior-year Two, and GAAP alternative a One, XXXX Four, This current points. items. following. incorporates tax the combined the -- includes $XX products after-tax on expectations, marketplace of $XXX and based about basis. an rate which

Mark to Now, quarter. I will for results the the turn to review the call

Mark Wilcox

and Thank morning. good you, Greg,

ROE quarter, annualized we generated XX.X%. the $X.XX reported company We operating non-GAAP of of of share which and fully at For strong of are earnings share, very records. diluted a a earnings operating XX.X% per of both ROE per non-GAAP $X.XX

These of the operating portfolio that after-tax is insurance share. target. unrealized $XXX target by operating full-year interest low million weighted basis on the equity based gains above average reflect $X.XX our conditions. non-GAAP rates, market increased or XX gains environment. overall per that annualized income rate our fixed was least on our XXXX, ROE P&C XXX ROE operating and establish XX.X% significant an Each by For basis about GAAP capital, cost net the outlook points we to over ROE at year, our for due interest of was spread reduced The XX% [ph] point

capital a lower which pressure and function non-GAAP operating ROE a rate of yields, established interest also average is cost lower weighted GAAP investment of increased we've lower XXXX, has target and our estimated equity. principally of XX%. For has the put on environment, The target

XX.X%, XXXX our and combined increased quarter in and increased remained and catastrophe On year loss and accident and quarter declines by the Underwriting offset XX.X% elevated modest touch Consolidated with of of basis business X% excluding in XX% effects, by Personal casualty I'll minute. by driven our by net accelerating in losses growth or increases and combined written an quarter excellent segment, a ratio an reserve reserve underlying Standard E&S. pure was ratio Lines partially premium in new fourth level renewal footprint our increases. strong low Commercial on to retention development, casualty favorable some just ratio to strong driven This losses driven price development. prior-year which fourth in expense more premiums Lines growth with profitability a catastrophe

X% segments. XXXX, Commercial contributions our and increased net from For consolidated E&S Standard Lines premiums written strong with

XX Our driven X combined underlying year, profit-based drove ended XXXX. quarter points excellent was profitable improvement above XX.X%, in an by basis our XX.X%, points our to loss loss delivering some which of basis combined almost forecast year the ratio reported above ratio ratio was XX.X% ratio casualty compensation driven the XX.X% a XXXX the basis that in Despite points modest at the was XXXX This very margin ratio excellent at largely picks. combined due part with by by to adjustments expense XX combined up going points the calendar ratio highly in fourth profitable underlying of XX expectations, ratio expectations. which ahead remainder the combined year was into and in reflects of ratio full underlying

or the ratio and points year, the was $XX.X for million additions the to XX or these quarter, picks impact impact the For million loss was XXXX $XX.X basis X.X%. [ph] of

Catastrophe in property the losses, resulted fourth than reminder were PCS in expected. slightly which the to losses combined modest expected, is catastrophes designated by a which declines also quarter ratio only XX.X related by lower and were a than point non-cat better X point, is related and specifically impacted while impact

X.X for which came for was X.X in the expectations the on points accounted losses year. expected points of points basis XX.X than losses higher For combined non-cat catastrophe our the about annual year, while XX better property than ratio of

and quarter commercial $X general E&S in and $X in unchanged ratio expectations prior-year for line $XX quarter, workers' XXXX the by $XX of liability million for prior-year impact points catastrophe X.X combined in $X development, million The year. we the million the and remain Our of points segment. for for development points. in partially million losses million $X at on casualty driven favorable development the was by auto, net fourth reserve favorable of development casualty offset reserve net favorable X experienced liability, X.X compensation million In in personal of auto

in for and basis points results. our at Moving underwriting compensation year The excellent came partners to XX.X% employees, by of principally was our by XX increase the driven the expenses, for distribution expense our profit-based year. for for quarter driven XX.X% the higher ratio and

a level agency year. pay We the record out to for commissions expect XXXX supplemental of

We which expect improvement combined ratio is forecast. in some underlying our modest in reflected ratio XX.X% XXXX, expense

Company continue efficiency continued expansion next we our in term. geographic other for to enhancing improving still product ratio important believe and manage drive expense developing to investments our and customer operational making the few years, down Over the can our significant development experience, investments people, feel we the while our long also we and capabilities, improve underwriting

principally and totaled compensation million decrease stock million price. $X.X Corporate holding a in in expenses, the in driven comprised soft which with company principally the long-term decline costs by comparative are the of quarter quarter our $X.X compared with

related the included principally XXXX totaled compared $XX million million one-time For $X million in items, $XX corporate year, to of severance. and to expenses

from for million investments, the to income net quarter. of investment quarter, $XX up the X% Turning after-tax was comparative

a overall from on year when our rate For in -- after-tax drive base with combined income income pressure lower the periods the five at contraction proceeds with on was quarter $XXX year, coming of declines interest new March offset invested higher. which the investment partially X.X% The by was high-yield averaged by helped all management and average excellent the was in and now yield senior net This up the million active was the put The was income quarterly fourth for fixed both The yields. flows, credit after-tax, driven in after-tax XX%. although portfolio up spreads portfolio, environment we've money note new that cash sequential improvements X.X% offering asset at bonds money on portfolio including purchase fixed during X.X% seen the after-tax. yield year. the our

find a LIBOR our very from still book in our approximately similar yield the In these our portfolio now the attractive a on addition, basis all-in which down XX all, which allocation basis Despite decline year, income securities. managing fixed XX%. down in XX% last the of core pre-tax was income on and decreased represent rate points basis of the peak with in quarter comparative floating for the we of we've year. securities, securities down points X is fixed yield rate over fixed portfolio, the All

we yield book pressure a the low given our On on basis, interest rate expect go-forward continued environment.

XXXX, in expected cash contribution However, our $XXX stockholders' million growth reflects strong modest net given income although equity. investment of given after-tax from our flow, growth the the ROE lower a XXXX guidance

assets, end and range the the year securities Our at and for of credit our of which strong duration accounted have include fixed remain minus at at low the Risk investments Overall, alternative rating longer-term of portfolio end total and conservatively fixed principally of short-term the effective positioned. our assets continue portfolio investment X.X high-yield income target. is and portfolio, underway X% as average of fixed invested remained the we years. income income AA to the

gain equity, in for Our alternative million which credit a partnerships was lag, the year, with private asset investment real of portfolio, one-quarter investment generated XXXX. private which reports pre-tax a includes and limited and on line in $XX

with flexibility. GAAP XX.X% Tuning to XX% which below $X.X billion strong is equity, capital, year. our balance capital and ratio our very the provides Adjusted for was of at target, well sheet us financial remained an year-end, increase of with

with at combined We low million to of operating continue X.X present times the under ROE. operating our to level, if us opportunities the $XXX target X.X themselves. times combine provides each surplus At meaningful premiums liquidity, grow company This range at to operate point when of our holding capacity end our to times. ratio leverage, to market equates of with just flexibility of X X.X point

ROE. addition, times approximately on book of In points investment that our of X.XX point results our yield investment in pre-tax means each X.X portfolio leverage

renewal With maintained the net successful risk, catastrophe a XXX reinsurance that of very and nets regards at maximum GAAP of of equity. structure equity We amount US enjoyed a GAAP our from in program X. January hurricane, of or X P&L probability X% of X% to on manageable major in X% our loss keeps at a X.X% program, existing our XXX X catastrophe we probable

generate continued our We expansion Texas free our and five our catastrophe million our non-footprint from retention strong of program original states states our efforts Florida, to states portfolio our continued E&S in our state also loss well property for efforts to cat $XX which as of account reflected $X drops as that renewed the diversify California. our outside as million and status on such our new exposure. pricing XX Pricing footprint, includes and renewal to program

Individual losses loss occurrences reinsurance our individual to effect $X the and impact about us agreements, under reminder, to loan both loss also million property are includes $X to the access losses. for of ceded agreements. million of the a program limits As which

call insurance With I our over operations. will that, John turn the to to discuss

John Marchioni

Thanks, good morning. and Mark,

results Let segment begin of some overview me provide and with operations strategic full-year with a our an you by initiatives. our discussion of of of then

of combined in X% generated profitable of consistent X.X% quarter, -- record XX% of the Commercial quarter. approximately of strong from sequentially year, which growth. new Standard track up the increases price for Line on of an segment, renewal growth an and base. of stable a price pure third written growth in fourth Our continuing represents retention generated premiums pure XX%, Segment Commercial X%, X.X% premiums, business the or and XX.X% renewal Lines increases underlying excellent X.X% ratio XX.X% increased net

happy standard are lines in specialty rate by for profitability. and renewal for larger of pricing We with the cohort fashion, worth our while far monitoring granular expected been highly and and mid-market ourselves have than increases risks noting small the managing our pride strategy the accounts direction book. the market of so that of closely greater it We pricing on overall make is accounts a up retention majority that

Our of prior we that canceled a the our analysis think that uses the of measure pricing retention of renewal to removes expiration, policies that's as point strategy. indicator best effectiveness

On accounts, of X.X% pure of our of Standard quality lines renewal rate retention achieved which Lines our we point highest premiums, renewal commercial XX%. and represented of Commercial XX%

quality On XX% achieved X.X% renewal the while of at point represented pure premiums, of of which rate accounts, we renewal. retaining lower XX%

Our to return ratio ability extremely improvement the at overall while to through additional maximizing an analyze risk level, each of mix policy retention. granular allows loss renewal changes business of us achieve characteristics and

line, Drilling general million $X development the favorable down the liability, year prior XX.X% combined commercial which for results of line totaling X.X our reserve to achieved by business, or largest year included ratio points. an

closely recent including been for this litigation rates, to in frequency relatively line monitor trends, which severity will quarters. have We and continue stable

of we for price line, expect into umbrella environment, pricing and pure increases renewal achieved firming the this For excluding year, XXXX. X.X% heading

$XX down ratio, prior. and for lower-than-expected pricing to pricing for combined development and accident we loss was approach ratio. cautious development take us the market underwriting and for trend combined rate XX.X% which aided comp to favorable accounted continues totaling XX.X primarily XXXX disappointing produce years increase. favorable line remains as This as aggressive. to X.X% points Renewal workers' the results a severities pure continue generated elevated related to by industry auto a Our million, Commercial consumes on line reserve this earned overall

this Our combined ratio was line XXX.X%. for

trends averaged two added million the of generally years, each accident we prior and in top on in of Price the prior increases reserves expectations. line XXXX, both remained increases price loss in current in While similar years. X.X% with $X of have

and renewal and managing been business level. at new We've in classification individual account an rating actively and portfolios improving segments target

book X.X Our XX.X% from of property losses combined the commercial bulk a Lower generated drove levels improvement ratio non-catastrophe or point catastrophe XXXX. improvement. and

market has for improved pricing rate and While remain loss need indicate additional trends elevated level. the

averaged higher excluding Our increases through safety management loss efforts. and to mix the we the the business X% renewal and drivers marine price in shifts of taking steps pure are address experience

reflecting Our in the which Lines premiums, written, premiums pure in Personal competitive represented auto. X% XX% increases, averaged price remained market more segment, decline a solid Renewal mostly XX%. XXXX and X% at of reported net conditions personal retention

New personal produced segment this pronounced personal in on for the was year. more has combined The competition business year. for lines, a XX% far or basis. an XX.X% Market auto underlying down become of however particularly XX.X% ratio

customization, our profitability to will a position segment. this adequate and distribution be in optimizing areas of product doing remains more we modeling maintaining While the are we ensure in focus, enhancements core

points of personal accident X.X% prior personal was which Renewal averaged liability casualty XXX.X%. the net added and year pure written ratio. price physical premiums million X% the the on combined $X ratio strengthening In for and included year for auto, Results for damage. combined X.X auto X.X% increases declined for reserves,

diminishing, picks the these the line with deteriorating for and pricing increases loss of to putting price again. benefit results business, pressure new improved and industry on impact are pricing While we would this less market up favorable of in expect trends clearly pressure under profitability

ratio decline combined The homeowners a premium X% line losses. relative year of that XX.X reported XX.X% to included ago of and catastrophe points

auto the year. homeowners' Renewal our has in pure account of growth. majority averaged the hurt our line written our positioning competitive for on price As X% an basis, increases the premium is

to business, premium Our in in quarter E&S generated decline premiums, X% The of decision XXXX. pure Overall to last combined fourth XXX.X% compared ratio renewal The which in price to the written we averaged segment, our generated the growth total removal increases exit which X%. XX.X% represented snow premiums call. quarter's X% discussed the primarily XXXX. on related net segment a for year

mix performance Over have to price business changes few classes exiting in of combined the underperforming past years, specific ratio targeted the and business improved contributed this increases, segment.

to E&S consists book with account lines. small business profile primarily Our our a a standard risk similar

is large business property. for muted account is don't, as pricing market casualty While we that than classes coastal increasing, more lower such riskier for for we a hazard write the it

drive me and to switch Let operating strategic financial initiatives, strong continue of now to our our some performance. which

of in tools superior profitability with and omni-channel loss new and on capitalizing efficiencies existing price XXXX. investments book deliver objectives and making our the embedded distribution We the enhance of as We that One, XXXX proud expense partners. time, overall renewal lines our following using over been move our standard in accomplishments our reduce operational redesign in of are on business. the on price expected to And partners very identifying pure through and opportunities sophisticated four, addressing achieve strategically and process our enhancements. remain through a trend. experience. increases adequacy Three, line share appointing with technology focused are to we four commercial wallet confident expanding customer pricing ratio Two, to and we've

expect, we our tracking achieved underwriting fourth with quarter, higher further expectation our as basis we to to profitability well increase during appropriate, price renewal of line in industry price expectations. We XXXX the targeting where lines are increases achieve are positioned pricing margins. are for trend. increases The a loss course and are meeting X.X% to continue commercial improve on in that not If granular continues of we level accounts pure move the seeing

clear Second, sophisticated underwriting our superior and are advantages. relationships tools distribution competitive

in as the seek we will them coming generate on on profitable years. to our capitalize We execute growth strategy to

built wallet that lines objective markets average share is Our around their a achieving approximately relationships across to stated partner XX% obtain of control commercial long-term X% appointing an of share. relationships. and is XX% those of That market objective

long-term lines if We and risk appetite or excess having of have do stretch time profile. hit we without in premium additional over our opportunity our to plans shift our an commercial so $X.X can billion underwriting

XXXX, fronts. bringing the new XX X,XXX appointed During we total store to partners, distribution X,XXX approximately or

made experience. enhance in have the years we recent strides customer to major Third,

customer During XXXX, self-service made to and a continue in our XXXX, us. a to digital to improve out more customers. speaks core Investing technologies we create have enhancements we We which value. program a experience allows a you and of degree remains distribution value number that that rolled legally of and "Do as process chat XXX proposition proactive for building live us tagline, In customers' differentiated focus activation streamlined our communication seek out our partners our new view customers and now to option. including offerings, marketing to insure?", enhance our we our for

goals experience, sophisticated process related Finally, including our workflow efficient and committed an also efficiencies, technology while leveraging operating platforms, number in We'll and improve at underwriting investing balancing to initiatives look these customer we a and automation of robotics. continue to areas by tools essential the recognize it improvements to with we're better to is structure.

than management XXXX be initiatives. to expense ratio slightly we XXXX expect our investment as balance expense We lower and our

year XX% and end We ratio are of seek targeting of the improvements years. in an to by subsequent next we'll further closer expense

well are XXXX superior recent we years. we in position financial beyond, results and strategic positioned to continue extremely generating are to Looking have in like and strong and

to his He have leader and in in attractive keeps created into truly a In of guidance I'd distribution like CEO industry much in-force stewardship believe differentiated path We've franchise and customers. worked a the transition continue new the and in service an his strategy Greg for be Selective. have by wisdom have business years of we into put franchise on Selective close and transformed of from outstanding and Company with as generate will close I that XX place to Greg partners Executive years Greg's unique of new outperformance. a to sincerely as I thanking book of a Chairman, We a partnership sustained role for and the industry. as XX our decade. I responsibilities. benefit my past consistent

the turn I'll over Greg. Now, call to back

Greg Murphy

To John. group excellent similar results. year which places up, us double-digit that wrap a our delivering of of by have consecutive sixth peers Thanks, year among very ROEs, another elite generated

We the one, industry. partners we a by have best and by: teams do in we're about At helping proud very what lives put employees customers the company back our of Selective, as together distribution their responding a with vehicle, loss; as two, such after empathy tools our providing promptly by well and recall guides as communities preparation to our weather safer food and technologies product and insurers notifications. as experiencing making

commercial seeking Selective to providing free are our customers; with charge reckless to of distracted lines mitigate the driving risk and and of to of We the offering Drive, three, financial stability our customers.

tools, have plans. the leader. role truly I marketplace technology execute this are Executive book unique confidence of in into John industry the people of Chief Officer and and in assume to marketplace our I will with be continue the happier not transform the a to and could best-in-class who best in business of on the industry an he reigns excellent will that positioned the We an full pass the Company and tomorrow. Selective complete company to effective to

As in one-year period. we Chairman mentioned on our stay conference call, Executive of the last role will I for

With operator. up questions. that operator, you, to Thank open we'll

Operator

you. Thank

the begin Zaremski Instructions] from session. First Credit now is will question-and-answer from coming [Operator Mike We Suisse. question

Your open. line is now

Mike Zaremski

Hey, good morning.

couple got on questions. some clarification question, First combined a maybe I've ratio guidance. the of just

catastrophes, changes the reserve excluding is to the for the and -- compares that correct, XX.X% XXXX any that's if So, XX.X%. and number being

releases incorrect or and reserve good in there's which -- am deal in I potential some of for are So, you improvements imply would a 'XX? baking

Greg Murphy

with Yes, Mike, that. let me start

you there things agents. XX.X% That in -- compensation has in profit-based employees amount number is XXXX, to ratio 'XX, lot development now, there. generated the of to it. one with a certain is a over And releases of a and So improvement number have no there's no development favorable expense remember, the reserve to the of in The 'XX 'XX.

mismatch. a you bit So, of get a little

the underwriting in developments item of a were you incurred expense the rolling incremental favorable but exclude, in ratio. some see expenses 'XX through You the line in that

to agents So, make XX employee want I just and between overall. basis that points that's approximately point got and sure you've about

have there's the John comes improvement. with you you in rest improvement so, outside to mentioned, that some of rolling and the And of claim of 'XX, some from, mentioned, Then, I line add improvements of that and trend element. to then and look that renewal the when price also it the as underwriting at

John Marchioni

And, Mike, is this John.

one ratio relative We between underwriting forward. add that, that just business, is me we business, the -- ratio combined the that cite produce difference to a By our addition XX% expected trends. of improvement believe every think has made and be cohort on or retention we having higher benefit that rating expect combined loss will in higher on to future or profitability and where a difference lower a lower higher That combined business excuse mix you give ratios, retention going me. additional quarter we we mix Let on to routinely that generate portfolio Greg improvement to XX% the point what point between to best our that in the based final by particular.

was that with tie to So, just the wanted point making. together Greg

Mike Zaremski

And I don't there you the deficiency this I'll said you accident reserve next, development can in have the in of of kind also, have remarks, me, of XXXX Okay. year remind was current liability of full-year kind you basis Yes, points if that's well take GL prepared And Mark, -- terms mentioned? the but helpful. kind versus Do the general of Mark, part offline. and 'XX a reserve in the might the GL the you true-up sounded it as have minimal. was -- it,

Mark Wilcox

Mike. Yes,

you that. through prior year accident adjustments was some of the in in in favorable general We related some liability we year. modest but So, the did prior the to $X earlier fourth on let quarter the walk million, reflected It had development year. increase an me make reserves

XXXX, actually that year liability for million $XX on full So, the TL for line million in XXXX. favorable under reserve the there's million, the development $X compares $X.X to and year of XXXX full just

did million we year. quarter, current related earlier the in you're pick modest liability consistent relatively which $X specifically the reserves. the prior-year a accident year, for increase loss We So, the general benefit impact. when had was points X.X about very XXXX, by thinking to In in

XXXX, So was net-net, $X a relatively million lawsuit together it it put you was for flat. when stable, all increase

consider bit new that of little accident just into year. I'd So, fine-tuning a

Mike Zaremski

you that's both? firms we you lastly, rates to And in prepared representation rates I referring the remarks, some when -- stable other and I mean, -- -- Okay, increasing it, in lawsuits that John, those attorney or believe for -- rep have or what are the called cost the the, auto the think along guys industry factors of, one relatively I is lines, you risk your GL or is perfect. kind or past few the is especially attorney of loss is about it biggest about commercial said quarters, think the unknowns the litigation line, of and that severity rate, predominantly

John Marchioni

question. Mike, John. I'll parts is of hit that this So I'll and to both start try

attorney to litigation rep that's all our and and in difference last rates in for prepared of our a the litigation quarters between several over stability our comments is rates there referred what rates relative liability we the and lines. was So,

and as litigated to litigation. time. in is, one measure track change over is a So, and file easy are that name the Those see indicates,

going are is representing attorney an -- to rates litigation, Our are there that attorney a beliefs include are in just yet rep client. also but files are that not they

likely have work modeling adjusters some lifecycle attributes rates, one, What the -- to will that I help the that many more tell not Those sure on how the that whether for an is ultimately in sure are in claims are hey, that, around I our to early cases, is, adjusted bit measure in there leads can easy any fronts that going numbers make file, past. understand knowledge communication put Those, claim files litigation that think of anybody will result stressed on you than do litigation to many part will in and not topic with litigation those bit attorney that provide or a early as They're not say, road. make been I on obviously, going a ease little litigated ultimately the us down it's that that adjuster we because to on very really the to communication. this is right important claim we any would the and bounce more. you, this. higher that Number at more two or of does else of there are in result that be about little we going us on them point claimant avoid resolved file. more will, be and but a is to have have to

litigated a Now, part of to that sort unlitigated which are but ties be the your going files than to higher carry severity going the of generally litigated of files. the claimant, and speaking, because by generally injuries it's claim point, into severity of files, is, second

of there's to damage the it side company, cost be attorney to as injury going and but also you're of generally levels Some on the part including of own involved. because the both when because side your have lawyers is of involvement higher is property that going attorney involvement bodily the

Greg Murphy

Yes.

So me is Mike, let Greg. -- this just

So, you We pure loss the think closely it's severity. the that breakdown, to indicator of is in claims and cost, frequency our of leading obviously, generally composite terms coming your activity are times frequency about find premium that in. monitor what

between we and the the ratio went John is So, over loss and loss that and what closely amount [indiscernible]. of that the monitor drives that really severity overall

Mike Zaremski

little little trend? the the I color way to extremely lastly, -- your always bit seeing bit, bit, were by loss are given that; you on in of uplift seeing helpful. just a you little guess, clearly, Are clear a the And a be Okay. texts changed is

John Marchioni

John. is Mike, this

last which closer of been As comments, X%, to Greg during adjusted up over commented couple had expectations, are future our years running have just his pushing of we prepared now X%. the trend around under view X%,

reflective this. we the you also industry, has our feel which trends in picks and about own I this loss about loss is is company about think think critical -- when So, you established stress really very an want causality and in to is start consideration that transparent for been Yes, by lines you changing we've about important very consistent just understanding their that initial this point the experience. we've is how think are of what probably what to seen

prior achieving great talk In increases for pick. the strength about you been to having price think or loss a meet trends all changing memory, think stressed rate that claims which picks an those exceed one years. the trend, consideration of And in you We've loss always happen and of also does that that's the has I or of of think on sit important environment extent note future every when is pure we embedded just to the in and very industry-wide, about that it our about years older way accident that but happens increases an the will embedded that picks, embedded that prior recent in have our it assumption accident also it accident hit had will pure and expected that we our claims consistently. assumption current importance years, loss loss the hit for inflation

Mike Zaremski

of Executive you. new role Okay, understood. your And in Thank Board. as Chairman the Greg, all the best

Greg Murphy

thanks. Operator? Mike,

Operator

Paul Thank you. Newsome The coming Sandler. next from is from question Piper

is line Your open.

Paul Newsome

John again, and good Hi, and Greg. congratulations morning to

talk about So, we versus follow-up. little bit claims Can the rate a inflation. of a

little keep you're and increase X% for essentially things next -- I equal, up at if read the does true rate, I your year the more that to it that next be levels are being us a right, think pushing year below you'll all inflation? bit rate rate mean to

Greg Murphy

going this will that's quarter, as X.X% when X.X% rate floor, Yes, XXXX. we view why got that's establish and Paul, that is we we fourth what -- the in floor said the that Greg. the the into so the So

yes. So,

Paul Newsome

to else, And obviously at It Okay. least we doesn't think reason much. like behind? auto has keeps that or is you helping pure falling seem which are much. for I'd on there rate that hear struggled everybody thoughts, love generally be pretty speaking why your industry commercial then, What business, re-underwriting could the the you missing and the

Greg Murphy

accident the societal -- people issues I the and through and I it was frequency in was led I also Yes, various and on higher lot underestimation a what rolled question regarding dropping, just issues 'XX counts I over on that with by that started I driving tell you the -- people that's great think in think distracted what so, that's I'll think then it misstating in core regarding principally of unemployment a driving, road. roads, lot think also expected, a less part some habits, congestion got and think, years way of regarding of the industry, higher driving, reflected experienced

free just terms place the when fleet, of that they're -- week the think, hard just that added what I allows a that It like, important added of deterioration. you that's that. road at All of their the the but end their the product that, of it's it our it offer it's mean, I braking, tell seems products that phone, only gives includes to of maintenance all to not which charge. avoiding I'm manage most on the of how turning, in score the the they're Drive We would the anything. deterioration hard the and the driver customers at records, that. them driving to well that puddles I Selective we over And one general but general offer, now specifically infrastructure, earmarked

fleets. big effect, big factor we a at that's So a Hawthorne that's -- you the offer look that can to commercial when additive our

the is And would then, its say around part way then that in. other whole worked this issue I severity

at but it standpoint took woods And probably and two recently. more And rate, and trend their commercial to only X%, X.X% of in was that from was was a line started it then -- that's that so, that neck the ran X% X%. areas of lines, about normally so X% pushed maybe rate getting everybody that in like where a getting everybody the to

tell little pretty of think from in behind that the area. you So, commercial big on ratios year looking at this at XXX% everybody all the much would improvement. a of dropped bit is like auto -- a there current a We're up caught by in build but year I XXX%, basis, X-ball, an accident XXX% kind Combined basis.

our from lead where line of and in rate, just that's our rate terms obviously good that's getting we under improvement about and renewal when you So, rate. it's actually pretty look we're and feel pure X% our at

it now. we So, kind can relative that of that we vehicles also counts right and the frequency we of feel feel, ahead maybe to has get apexed

Paul Newsome

the for color [indiscernible]. the answers year. the luck and on good Yes, I Thanks in next appreciate

Greg Murphy

Thank you.

Operator

Thank Amit Kumar from is Buckingham you. Research. from next And coming question the

is line open. Your

Amit Kumar

as Thanks a had and good discussion morning. few well. the same follow-ups on I

a Just press maybe of but of bit, over book, trends going to the back pricing I bit think, the I just to, margin, loss would be I trajectory this tad the that on I pricing time you thought a would different? and loss would your the been on have have help accounts. better. maybe me now guess, Is the XXXX, thought can the oversimplifying the cost of a your Paul's I'm it would that launching But versus that in and question of function understand a slope line have pricing

John Marchioni

Yes.

So Amit, this is I'll John. start.

conversation here, the margins target is the of on about more our So, for in commercial we that basis. overall than also fact about based believe and focus portfolio price price adequacy us, in I achieving it's are guess, That's and on terms account-by-account the is we our lines and price for what first that maximization. it is us, on adequacy

margins included it You look are change. more or have does don't that when of you that at where include are the those exposure, seeing put while exposure there some We pricing when with exposure of our are, any improvement what's And a portion exposure happening numbers and sequential that change be price lot I rate, numbers there much like in is and might it in the improvement our number any that you slight think industry, at positive not. in out a some act being sequential though might in appear you mind seen indication. that but slight, look

you we give view what's So, into insight most probably conservative pricing. the and

our we our comp from And our analysis ratios if exclude would we view, to workers' Let's exclude from in also it make number. complete. combined well remember, don't workers' the we exclude probably should as comp,

bit -- a of that's it's still a drag. So,

as closer little X% therefore, us think we higher on. our it expectation our that up by the view that to and loss to as a need trend do to the raising Now our goes reacted future caused and rate -- that push to year bit and we loss said, we in expect has portfolio that

very we that This Now, portfolio. it a going won't one than to flip in view desired focus and the portfolio our levels is of going we meaningful increase is that a can do that though. be rate side combined basis XX% worse we combined because to to portfolio view doesn't XX% are do the that is targeted -- our as there. effort the we're protect going having what of ratio ratios our to to to on get going still to future is, justify rate we're higher The achieve

Watson cited also other Towers look So, for And look if I about guess, survey, it at Willis terms site sub earlier in would and you the CLIPS frequently pricing that's how I segment. think we the account the overall we in which at how point small I'd environment. do the of respond reinforces

and a of property sharply is accounts. You're there is price see the in a very the and out specialty lot coastal large coming E&S much coming going headline out of number and areas to lower the of

We in predominantly market seen space much our and small core haven't risk as it we're that middle hazard focused lower on. medium

Amit Kumar

fair comment. That's a

completely I is and appreciate it your agree and possible So, comment exposures. on

it, number do exclude pricing? could the even but delta talk not you your if looking from others, like would generalities So, for quarter comp it's about at workers' how or comp of, apples-to-apples, versus excluding sort maybe we in the workers' simply numbers the much you be, the have

John Marchioni

Yes, then, and commercial you've smaller BOP workers' for a you pieces. at Commercial wait gave calculate have we'd slide some I X.X%, minus GL can't umbrella X.X%. be was we comp quarter. X.X% X.X%. it excluding on it for but you was ex-comp, X.X% the would got to the a auto which so of And and the was property -- was And line, so is -- out, what us, for

an above roughly, a at were looking on you're closer bit something basis. So, look you probably to at little to X% probably if X% an -- ex-comp maybe ex-comp number,

Amit Kumar

thought. what I that's Got it. And

Okay, that's good.

seen and at look -- we you Can not and expect about your the The look trend the reports on look on in you to you on is the on trends, sort and a calls Reviver. you of several then other etc., at talk past we've talked about we all question Reviver. line talked know this. I litigation trends trends litigation litigation when at the follow-up there, is about question this This when we've look also conference out should think the these size, all geographical it's about we just of of the but get because little maybe of companies? trends more haven't it can book, of increased own will the it why some your level is a account larger do more we of mix, a so some remain of at that stable larger the Is activity versus maybe or other some Thanks. the you that that talk versus companies? combination confidence it, that reason

John Marchioni

Yes.

think it the it's will difference to don't differences So, expect make differences we I trends entirely to is bar and think or way the and that would its is litigation target, the settlements focused of not amount there type clearly headline of plaintiffs' down headline ultimately right terms but on and individual when companies you of we To look as I geographic in see. just be up footprint. happening, are do at where claims our less in you marketplace. a is there you I think company a inflationary extent to going going at do target terms inflation start or look of the the

US the but the we Southwest expansion, to profile. concentrated limits is do the half footprint of Our and a look in hazard still low also levels hazard of class medium you some business want with predominantly with low and a Eastern the at us, right of for

with focus a profile fact, our in on see some I'll and moved we we've litigation and that do of on what view that what relative being for really is Y experience, say companies provide of to in potentially attention in to and to claims. the our the terms is comfortable are emerge, but years clarity to an a pay here know just while our end haven't certainly limits or X I going are their cite And as severity protection, we will trends certainly lower own stated reserves we industry rates be broader that of sit say and of get what's with. or on mentioned our lot tough that frequency and saying and eye most might own in ours to if others acceleration have keen also future

Amit Kumar

it. Got development. is The question GL the last I have on

I'll back of I my that go in didn't there but the million? I $X and was you from at $X get was to think responding AY that and details terms Thanks. adverse moving and million, of was, did were parts you understanding 'XX. of XXXX, -- the transcript, Mike look the

Mark Wilcox

in liability development to it's full general Yes. favorable year, Amit, in it's the the at I was $X million of the of development adverse Mark. It was million $X quarter, but lines. think best look which

obviously quarterly I the it million business. is the clarification, always we modest just year, the and year benefit fine-tuning in year sake some mentioned and accident small earlier, It's accident current respects there's the new to for had This a into then also of number on but little earlier related was So, on a volatility. it year. book of a as this $X so a some reflected of the relatively bit big in going XXXX

the for full year, it So, $X million. was

million, of $X stable GL prior we've the $X a it's a of that So, million against a line, current related the net the reasonably line to wash bit in trends. if business you the reflects and it had

Amit Kumar

was just Got then, is to it. an And across fine-tuning or the then account that more related that book? like

John Marchioni

across across would going 'XX. it book. about multiple would think that year you be there's recent more more prior of small look would the And years, definitely even dollar year not say, been accident -- you accident the more to I have It's in at, when but number individual 'XX, an

Amit Kumar

John. answers That's Greg luck have. for it. good Thanks. Thanks all and the and in your I roles, new Got

Greg Murphy

next Operator, question?

Operator

Capital coming The you. question Mark Markets. Dwelle is next from from RBC Thank

is now open. line Your

Mark Dwelle

Yes, good morning.

the just good valuable of by my in you much forward. giving and I to very start going luck League be insights well-wishes me So to Ivy Greg, will my book, among you appreciated CEOs your always Let

Greg Murphy

you. you, Mark. Thank Thank

Mark Dwelle

fairly than corporate is line First lower question item the expense just something other simple, the much quarters.

ago. year same as I a think the this was

million I a have quarter. Just, comp is credit some than would there is something the the or or something, $X.X there have -- alone expense thought would more seasonality in been

Mark Wilcox

bit as Mark, expense and can Yes me well. jump on of to John let it's volatility have in an little item, of and and The seasonality line Mark Greg does element Wilcox, follow it. corporate a

So $XX million running the was few at in range back $XX it a million year. years per

we've as down also drove includes a factor; what the in in -- total mainly It And there this as quarter big credit call that seller, stock-based call driven it that of of it portion pretty aware was a in that XX% So soft really year or of you're return so benefit the factor. a reason two was compensation QX, couple there's line some the shareholder a and kind is item quarter. we in so liability the is mainly well gone one group include peer and is a based that, by factors, volatility.

Greg Murphy

if some just XXXX, there to a seasonality. is you And reminder, as look ahead

end our typically expense compensation are the given award. for mean those a corporate the see and year requirement individuals related full of stock-based the line expensing QX item, receive front retirement eligible eligibility load, heavier and to You that the I an

John Marchioni

just overall plan you that say, X-year are be expensed to reduce that the line. in the all to plan And theory of made have amount under now we period, changes that the years new I in overall, eligible will now would that the the volatility it the

Mark Dwelle

helpful, thanks. That's Okay.

similar you information some you to John, with commercial E&S book. related can respect good had share pretty question, Second you information provided segmentation the book? lines Do have to pricing the

John Marchioni

our the segmentation, do that haven't traditionally, we granular levels that we way pricing it's same reported but just do industry in about can we on more and segment. target business But achieve ROE very certainly targets new we to tell it classification E&S not based that Well, it's a you I and our similar externally. managing manage the renewal something both approach internally. It's we take in

Mark Dwelle

I insight Okay. about trend back Staying in the loss gone of the additional related years. addition that and share forth mean E&S But is know I or kind book, on you anything litigation anything there can reserve over different business. there? the any it's to or

John Marchioni

Mark, it's it's so small, that large. even not

our not it's so modifications, really based all. at it's slight year-end I So come material, adjustments that just not significant on say through minor would

Greg Murphy

current was sure to in Yes, It's and Again relatively in roll year current $X nothing, prior we'd new point bit think $X year. million to modest. feel current accident of over we confident the fine-tuning little in I quarter million the we terms the inventory going reserve our year accident a the of in trend. quarter of as making but accident on

obviously the news But E&S. obviously to a a of level done work profitability, had towards with strong segment I its the drive addition. in think E&S reserve, is we be the yet, some profitability to million level best highlighted Still good targeted a year from the in of profitability perspective E&S. $XX

adjustments. right fourth the in some minor direction. trending So And just quarter

John Marchioni

are several Yes, joining where that, exactly side. been target satisfied US for on we I we've been totally surcharges what we in amount need we're the track come the to getting years. have the we this been and about increases new of you market would Mark, that [ph], with past we the add renewal normal a -- or we that tell way that to I have is never just getting long

change in seen that. have We

them we that is work new our get very to have relative renewal surcharges a surcharge. been be closer need lot to target inventory that business to and on and We where have done of to our books relative closer we where and the the to target put happy on

again, that way us, know down, of market long that a based discipline is in and in more put a think conditions come told I We've you we will it profitable. on we will happen that's always topline that will sure or up and lot the So that business it make -- you want and go overtime. to

Mark Dwelle

the then this it's as anything suppose thought more the trying is and question where else, I'm from is customers' question, is And perspective. sense the -- almost -- kind -- helpful. market tone a a last of to that's I of Okay, one but -- of gauge

they As kind what adversarial? whatever, you back that at people it How go X% mean go be, to of the customers happen need conversation getting? with renewal this Are of rate I level requests, Is more push X%, are to increase whatever stage? than X%, rate? you understanding does unusually for

John Marchioni

John. it's Mark, Yes,

individual us, have to relationship on will of So I answer it for price producer trend is their say going the routine approach depends maintaining and really size that ourselves balance at obviously, depends independent It agency period time. on managing process. long the intense. our the increase and to who rate owns on be a of that prided between over the we and that

we're in rate So overall the a on situation XX% where you've not XX% a got portfolio. need or

asking that terms of So agents think minimizes you we're selling the in impact our about of increases. what overall, when

that Now agency will average that I be distribution smaller and we the retention do our based explaining our have than the that of able by of that of going expect get account. retention a understand say inventory higher with that. on specific percentage and to that on partners discussions and job cohorts, risk partners that specific increase customers characteristics to that our overall our based experience have And or very good to discussion do a is said,

impediment with point, out feel this when because are, to are at to ratio companies taking I pricing an well those loss were huge strategy, executing necessarily our pricing on we're like in company of be sophistication, an environment it across positioned enough the kind a opportunities this a will are an like and and attractive fix don't take I execute increase. trying to go So harder their but board that there is lot that which we the not, a rate look that's we a approach took would if just board say problem, across

Greg Murphy

And Greg. Mark, this is

really too comes economic So side that the the other to than conditions. to down general more

and And figure P&L little growing take ago trying was through as everybody's looking make versus customer to GDP not bit little does relative balance that. with when GDP their lines revenue a increases -- bit a to businesses raise line years expense you're it their are top That what looking So out price growing, to rate it easier through they growing. to easier cut. growing,

customer made we're that rolled it's other And point that we doing everything connectivity, our relative mentor security the to to whether drive our customer recently what to we're product, more we're earlier experience, that build product offering. that doing recalls John relative the product out,

it All make increase of we build Selective getting the we to it's -- it's larger and ability policy, our help someone need help OSAT not that that over than internally all we way that believe customer, make do scores of is everything and to else sure should there more more that that we sit want to time, this net and the just more that that. And the additional make our from track retention, would all value say we scores insurance that the when our contact long-term. price to okay end do sell work help I'm will promoter different

Mark Dwelle

the Thanks insight. appreciate very for Thanks. much that. I additional

Operator

the JMP. you. Carletti coming Thank question from is from Matt next And

is Your now open. line

Matthew Carletti

thanks. right, All

I number was on actually workers' in we've the one, we've seen wanted quick while. growth in while, a strongest first a the a to have Just up quarter. in That's a comp, X% seen question ask positive

there. I we audit new some gave activity, ask, Just I rates wanted production of know that that, growth to the going of on kind the you there just quarter? what's was us mean, the us what is work not underlying kind premium gave in economic it's think business catch-up, it

John Marchioni

predominantly and again monoline I Yes say, workers' very little John. write would account is comp. and we remember Matt, business this

I of would quarter. the lines. Commercial growth don't about overall strong materially it's when driven retention in comp that you line want in was solid had quarters. growth new both bit in I still the -- you quarter growth wasn't say first strong than comp the look I context quarter at the as growth said in lines, three overall stronger business we growth comp by we think at and in to quarter And but that other we just a commercial certainly. helped that workers' So XX% at a I necessarily relative the the growth pricing and percent, a workers' to you saw lowest wouldn't lines little and think that the the was in very stronger different the had segment.

We the change workers' be landscape in to comp hazard segment that I continues most -- tell probably will in. have market not in for small comp. seen meaningful that you especially in aggressive the play competitive we lower any

been love our book You've we overall good aggressive of and book trends line we business that frequency severity, cautious recognize just of the also seen the in have, our downward continue be Commercial results, about lot operation. we're Lines growth feel growing business. of for the love We a can very loss to being but that on trajectory we to we relative companies continue and both and of about the they've that

Matthew Carletti

you. Got

be I infer of for to component component am tweak it's a there that margin of I continues gave tying comment not the overall might I year through improvement, kind as little trend mean assumption the percent. might that accident last it together, the that the kind 'XX that -- goes might sounds that a versus a where mean that a component less implies guidance little direction book rates other go that that bit bit forward. down make you'd a way other in pieces you as And off few way 'XX this Just which us it that that obviously go we the right -- like in an be of

John Marchioni

ratio trends, based we you by we I description. overall to fairly and of guidance, but I the described about comp how rate talk you it would you I accurate way -- our will on be think give and view combined a give line,

Matthew Carletti

and best Well, and luck going John forward. of Great. Greg congrats

Greg Murphy

Matt. Thanks,

Operator

is Capital question Bobman Thank from you. Ron the from coming [ph]. next And Research

Your line is open.

Unidentified Analyst

I in have lot. you've the been And and always pointed smart direction. have Greg Hi, awesome. thanks you've lot us a a sure learned

thanks So a ton.

Greg Murphy

you. Thank

Unidentified Analyst

if referencing window mentioned in I'm wondering call, what have ago you auto over. quarter, But occurred XXX. combined the those year commercial Greg, now the were you or a what date sort of movement was at that, I XXX at and numbers what the of little it's right, -- what sort while

Greg Murphy

second, on spread here. let out so let a in lines me me Yes, that just hold the pull a second,

year. -- like was so we're and a for it cap was ratio could year for combined running, in work. the combined now So rate, that $X.XX ratio year trend the and $X.XX this XXXX it for 'XX, year-to-date underlying ratio [ph], that the was it commercial -- auto $X.XX to the auto, -- XXX call And combined year, ratio was a the underlying the combined call pretty commercial the XXXX XXXm close in and the call calendar accident that

a So and happening the that earlier. was to you was little movement gives that's idea what referring and bit I as to what

Unidentified Analyst

for rate And whole given consistent? better been have that has was been you. Got are would year increase the XXX pretty numbers 'XX think rates -- or -- XXX how and booked it be the that should than marginally QX the I

Greg Murphy

put you're we're plan we build year and process way, base forward. the our is, planning this think works, way average -- way I that a it our that the X-year the let's Ron, projecting is

quarter. we're then price or adjusting not pretty down We're year. liability market number break look at ratio we throughout any in it severity is consistent that line, a to So liability quarter estimating weighing, through ultimately frequency the and about

do you'll So see quarter. volatility making What could that you specific. generally to as on same in it the would modifications line, weather auto be speaking any be property liability every side unless though could we're the be and it, ratio see commercial

the this -- line from also that's virtually versus GL a side. the from more straight of damage come could and side, or little quarters. up physical the a it create but kind on number like see that that through throughout workers' whether bit So down liability what same ratio where you compensation, liability frequency comes And could could come it on damage on property

Unidentified Analyst

thanks. Okay,

but to to know think missed as I'm compared was curious just have I in QX You could QX, mentioned, retention. please. I retention it, qualitatively sequentially, Commercial Lines how

Mark Wilcox

Yes.

commercial in QX the and was our the year XX%. it XX%, was relatively individual I three then have ago XX%. suggest and I little which would XX%, stable. quarters. bit the a year you don't throughout in was year 'XX, XX% number, first at XX% for that lower was full lines retention quarter, So A give But that the it

XX% the relatively year, full So stable in the year. retention throughout so

Unidentified Analyst

Got a I you. that to more support said you That's as great push like guess, elasticity far baseline. you as rate or

XXXX. think into I going said what Greg

Greg Murphy

picking that. for you Thank up on

Unidentified Analyst

be resilient another. you're in more not think to delta attorney portion both, perspective, increased E&S by going book being the an you this loss distinction is question. it's small you quarter challenge from challenge book or highlighted litigation claims, by putting that E&S to Last driven book, more inflation driven as or a and an The or representation. sort aside of from and general loss of admitted compared that would same really which -- Selective of to that than a the book your And admitted cost representation one attorney between face cost, litigated do

John Marchioni

exposure Ron, market, think I going about. I the that say segment if higher E&S speaking, see in don't us. writing classes really just terms claims a but this E&S in an to would more of do be the on it acceleration But space you're little products, would that I different. you generally the market John. for of hazard bit business, we're also it's of I is of depends is trends, talking high the think of say might

be service [indiscernible] exposures. and not akin profile small limits small our and book. see more habitation, expect lines in standard Our what restaurants businesses, to to small book small It is high we predominantly contractors, profile would would

John Marchioni

million than Greg Yes. with the of a stated commercial and quoted million $X casualty is below XX% and E&S earlier number less limits the of the casualty profile, XX%. book that on for lines $X

So a very similar limits profile even perhaps a little bit more conservative.

Greg Murphy

we the the is to work that find the at you longer some also out got those losses, well. loss of in are credit to there any get starting ratios, of to certain raise look everybody I education loss There see analyzing, is efforts losses get they And the tech in how through not do litigation we're claims, the on do some reduce tremendous are propensity the relative to that, we it's the internally complex -- come we the what things but on we've say sit the And whether on know normally of on in models we and models, term be loss it costs. that we we notification, lot that the then analyzing will to as I are back touched have, we areas. off part can you mitigate of again, relative -- out. analyzing cost, on a could John the of to rise and to we're of doing need in costs, ensure whether focuses strength, amount when term, things issues and pay it's do just What things sure that mitigate the that other we and escalation want and help are on would can effort of to what organization. a help that doing focused near do the all we're area how some make to robotics loss that

time. those are but will So over underway, efforts off pay

Unidentified Analyst

well Thanks. well time you're And protected and Greg, John. with led for us great leaving been again, think thanks care. Take I and

Operator

questions no we And in you. time. this at further show queue Thank

Greg Murphy

comments from you. Thank and everybody, everyone. right, All I the appreciate

Thank available. you any all you. Thank If questions follow-up, very and have today, you are interactive much Rohan Mark very your for call.

Operator

conference. all today's your concludes that And for you participation. Thank

disconnect. now may You

Selective Insurance (SIGI) 31 Jan 202019 Q4 Earnings call transcript