The Travelers Companies, Inc. (TRV) 24 Apr 182018 Q1 Earnings call transcript

Company Profile

Participants

Gabriella Nawi	Senior Vice President of Investor Relations
Alan Schnitzer	Chairman and Chief Executive Officer
Jay Benet	Chief Financial Officer
Greg Toczydlowski	President of Business Insurance
Tom Kunkel	President of Bond & Specialty Insurance
Michael Klein	President of Personal Insurance
Bill Heyman	Chief Investment Officer
Kai Pan	Morgan Stanley
Jay Cohen	Bank of America Merrill Lynch
Amit Kumar	Buckingham Research Group
Elyse Greenspan	Wells Fargo
Jay Gelb	Barclays
Ryan Tunis	Autonomous Research
Josh Shanker	Deutsche Bank
Larry Greenberg	Janney
Meyer Shields	KBW
Sarah DeWitt	JPMorgan
Yaron Kinar	Goldman Sachs
Brian Meredith	UBS

Call transcript

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Operator

Good morning, ladies and gentlemen. Welcome to the First Quarter Results Teleconference for Travelers. We ask that you hold all questions for the completion of formal remarks at which time you’ll be given instructions for the question-and-answer session.

As a reminder, this conference is being recorded on April 24, 2018. At this time, I would now like to turn the conference over to Ms. President Relations. Vice Senior Nawi, of Investor Gabriella Ms. Nawi, begin. you may

Gabriella Nawi

our morning, welcome you. all discussion supplements seen this of released Thank webcast of release, Travelers’ presentation and have Hopefully, our and morning. results. to Good earlier financial XXXX first you press quarter

the these under can at materials of found on section. All website our be www.travelers.com Investors

Personal Tom & today be Alan Greg Benet, Insurance; Insurance. and go Officer; Financial the to financial They our and of segment the current Klein will results will prepared Schnitzer, Presidents, refer Jay through the market of Bond They will Speaking we will they our of discuss business questions. Toczydlowski Kunkel then and Michael and as remarks webcast Insurance; presentation Business take Chief environment. Specialty Chairman and of three CEO;

Alan, webcast. Before to attention end explanatory draw turn over I it would of like to at your I note the the included the to

The presentation release Schnitzer. any statements. Our section some in financial and And in These filed future in remarks supplement mention investors responses involves measures. our financial our in materials factors. materially our Also to or guarantee available SEC. results Investor release, may with a forward-looking Alan is performance. includes described We the update do questions, to Reconciliations statement are from XX-Q recent and statements. XX-K our and of in in earnings Actual non-GAAP that due now our website. obligation not recent the or variety undertake may a forward-looking are today any uncertainties to forward-looking press implied included press expressed other on not factors of differ and forward-looking company those earnings cautions statements most risks and we

Alan Schnitzer

thank in historically basis, states. a underlying those XX meaningful in up on over areas D.C. lower factor. XX.X%. of income losses impacted on of those year the joining quarter U.S. corporate four catastrophe the income Thank was Washington, slightly quarter tax driven generating tax among you high you, today. $XXX we were pretax morning, first Results XX% underwriting of Core Good quarter one return March hour. with the catastrophe severe income we claim in Both were and of by than the income other equity California a everyone, us of for and strong generated core continuing reported were unusually us to a Catastrophe going by while record all higher in rate. Results after in deliver nor’easters This returns contributing so achieve risk accordingly growth also the the were increased XX.X%. unusual winter winds losses, in in an by impacted underwriting up weather UK, to design Mid-Atlantic some and ratio a the forward an market QX quarter. shares quarter Despite earned storm combined topline mudslides and for and million and prior events storms premiums have experiencing level cat morning, Gabby. of net the core the of $XXX miles year prior high We hurricane and model this also high by force we million Virginia, like Maryland quarter. level losses adjusted higher XX counts income in of

what strategic expense with initiatives we’ve managing invest We you carefully ratio. discussed also in continue the to our

and slightly shortly. prior accomplished level ratio has have the point from efficiency expense the Our the also disciplined the from will in portfolio our topline, about more discipline first We investment time XXXX. Also down noteworthy quarter. increased and X successful that and that quarter, expense execution since income to year in of about Jay income pretax the our growth to by initiatives. management improved XXXX productivity in say our fixed

to topline quarter a of are record highest on the our billion in successful change again another very of we cases, $X.X premiums large also business take premium levels compared that more degree quarter domestic environment. I’ll and reflects accounts at high-quality renewal both all marketplace the That this change. first the a segment renewal high execution pleased pricing provide strategies. growth X% our points continued and strong market To with growth of of grew more to with but middle production, again tom production by Michael detail speaks recent comment in commercial the in level, note quarter Renewal with change segments. on a years. renewal growth. In the the insurance premium across minute rate positive retention will rate points. I’ll to to X.X levels gains once in once period. three X.X Turning the achieved the we broadly Net of premium of Greg, written reached

We’re of line. pleased with the favorable comp that workers pricing last so pressure nothing the in environment workers particularly the surprises these light pricing comp far given us experience. results about industry’s in There’s the

a pure change for points in domestic quarter. quarter year fourth ago renewal rate business the for comp, insurance to of compared X.X nine-tenths points workers the and a was Excluding up point X.X

retention. we pricing and achieved record Importantly, improvement

there’s be and a us trending looking to ahead, of where like we’d gap you’ve trending. heard what return them between say As BI in terms to

provide I’ll we’ll So update and a deliberately. strategic to to just thoughtfully initiatives. see an on minute continue take gains great

changing Investor in our making investing world. at us last sure and we’re explained that fall, continue advantages we our competitive apart As set Day the to

our lead productivity focused enhancing efficiency. extending a and We’re and brokers for and in customers, experience agents the improving risk expertise on

underwriting lower them. discussed a we our with to to complex support and plan was all pilot program our centers compliment online with all accounts eligible renewal through flowing the initiatives expertise of step underwriting have accounts One less local touch centralized Today, of centers. specific we commercial business business four in business

handled next quarters. of business it over all eligible, through be expect the business We will couple also centers new the

Quote broker opportunities. we’re activity with but we’re outcome days more underwriters of Again the type early across productivity the local its gains all larger increases more still account and the agent with partners spend pursuing its which with the pleased designed up seeing our free our Although accounts time coming centers this business sizes. to complex create. is early, up were is to

in we’re on We’re our also so initiatives BOND rollout in making Personal in SPECIALTY with progress both and progress our Lines product. key Lines. new Home the for pleased Personal Quantum far business of In X.X the & example,

more about hear Michael. You’ll that from

bringing our X% quarterly increase Jay, has Directors marks of $X.XX dividend of increases per consecutive a of in I’ll turn it the over XXth St. the dividend reflection the that Lastly, XX% compound report year back annual share. in to I’m to before Paul rate growth confidence Jay. declared over to over that with about Travelers to turn to our merger dividend the I is pleased to our period. it that, business, in dating This Board And

Jay Benet

Thanks, Alan.

cat cat did the an pleased losses number winter hail March of Northeast high comparable first U.S. was As windstorm On that tornado damage storms States. was a Alan which year million the net $XXX prior storm income million to number accounted high which $XXX were in Two United with million we’re prior in quarter, or pretax, versus for the pretax favorable higher XX.X%. the ROE last prior development, positive in resulted million XX% this said, contributing. was and year of in in the quarter. considerable the $XX detail significant losses, a Catastrophe $XXX note unusually up reserve year first although almost XX shortly, than unusual XX year’s of more quarter cat for in in segments each more unusually quarter XX% discuss which core core I’ll our $XXX quarter, million with Southeast

$XXX to the Our income underneath. up strong weather quarter heard underlying net due NII activity remained and of low past, normal there investment from expenses. is and story quarter, In rates. your loss non-cat historically declined over in over both XX.X% combined mostly at important quarterly say prior income to from again slightly year an variability but below million ratio was fixed that and Pretax the prior slightly only you’ve me interest due XX.X%, the

in NII increase in interest rate favorable by recent to time quarter million This first seen for $XX the year an the net compared income invested particularly to our in of increased many written increase an assets years. as quarter rates more $XXX by periods. as million fixed environment This premiums we’ve prior pretax due short-term growing driven was well average

the NII after on you basis tax million. fixed benefit increased by $XX the of income rate, income corporate in add U.S. quarter-over-quarter lower tax If

Partially to million perform approximately the rate of NII the tax $XX of the non-fixed the of and that closing million Looking for we’d from exempt XXXX, lower tax by forward all by the income $XX tax our $XX quarter income, $XXX fixed prior well increase income the the quarter in core out as benefit XXXX. current by expense resulted from quarters million each income continued to compared $XX expect to XXXX. rest to of to delivering million than Within portfolio million by year was Te income expense after corresponding the pretax NII. tax lower quarter in for million corporate that quarter the successfully benefit inclusion offset U.S. driven resulted income tax prior $XX federal income. XXXX year

in or workers Specialty’s lines basis remained quarter compared reserve million comp lower years all in year the to and flows million $XXX was all quality and investment year reserve changes remind after tax pretax than end considerably were to per gains investment million all level from $XX not decrease domestic and income million which consolidated developed million experience help after prior favorably liability, remains of of payments. X% our combined to We target and decrease in year impact expected year investments management to or our quarter or $XX.XX had compared for mentioned the lines, auto, pretax. all in beginning aggregate share while with was the better do expected prior de in was in investment $X.X partially and or by of of Business was from primarily the net compared the little PI high Operating the capital the pretax XXXX development year’s recent is domestic net And benefiting compared $XX this net million or $XX million auto. share, had XXXX, value unfavorably driver no product ended net the capital. in better company of which matter X% quarter, or I by driven to a billion end ratios or offset by approximately loss cash to the all maturity, development million first $XX liquidity property, cat The unrealized subsidiaries, quarter. $XX favorable billion development manage except you to On NII on commercial we gains investment across due gains than P commercial end $XX.XX net cause & of quarter, quarter. value decrease $XX generally commercial have in book product first Bond losses than domestic than the than Schedule Adjusted the in or years our fixed losses prior As in the the by our Insurance’s in year auto. quarter. very experience pretax first rates the of year-end of fixed relatively investment in levels. run which $X.X and quarter quarter, per at higher high of pretax gains unrealized $XXX loss behind holding accident and to million driven domestic We little book gains regulatory developed – $XX.XX. the by business. portfolio in the $XXX X% aggregate, primarily unrealized prior PYD changes XXXX net unrealized up to our although unrealized primarily strong, primarily than year prior driven impact higher claim of was reserve unfavorable this this the development net regular at quarter million interest higher almost statutory favorable income year tax losses homeowners from no $XX $X million favorable in accident across U.S. excludes at last minimis I

repurchase almost of of our businesses. share raised plans high We that program million performance offset shareholders due under the upon to million capital cat our million mostly and $X.XX $XXX million repurchase consistent quarter, to $XXX announced employee management million and losses, level to and the to more cover publicly $XXX including to shares We continue to stock said, $XX partially vesting our per quarterly this strategy. issued capital common $X.XX we as restricted employee to ongoing our the board allowing to microphone us paid turn shares with awards. taxes our now generate And share. dividends $XXX of quarter, than from return need support this capital the With of payout and withholding me much dividend over Alan let of our incentive Despite excess under Greg.

Greg Toczydlowski

activity rate, points it pricing, referenced pricing results. ratio net moderated cats International earned prior quarter high $X were X% recent XX.X% X.X tax trends and quarterly our as for level as year I as premiums of The loss year. written loss driven quarter earned as strong as premiums just higher up in for the written exceeding segment fluctuations by that benefiting modestly year income well the that was a impact currency The and million, normal an the production foreign expectations. quarter of points higher the combined with $XX of just was cost the a cost loss The X%, from premium has the X earned both was prior impact quarter by of exceeded million in up underlying last unusually well over trends with first from driven under up excluding written quarter strong line in combined billion, prior were $XXX than net Net with quarters expenses. rates. of had changes lower from up volume. quarter premiums X% domestic included ratio XX.X% from insurance Business Jay. Thanks year

to high business Turning to XX% from million. new record $XXX at domestic already a an was improved production, retention strong a level

As Alan points. renewal points was and mentioned, X.X X.X renewal rate was change change premium

with the these considering workers’ to across we impacted has we of improved that broadly a rate CMP, pleased profitability. pressure achieved comp comp, rate for areas. increased Outside as strong Auto on sequential particularly renewal were auto, We’re with industry product associated results in property, encouraged in gains the the umbrella, portfolio of the particularly line the highest while both consecutive level ago, ENGL third basis. be quarter rate, from continues year the and loss property with year-over-year in pricing meaningfully

the quarter the in continued successful our for results reflect Our deliberate and execution marketplace.

to positive. year making. XX% businesses, Select, from drive with prior workflow and rate and initiatives to was at our Turning encouraged and strategic all business remains with as progress we’re Retention X% we’re businesses making the change strong technology in the we’re up quarter. growth Renewal the remains new in investments

Given the returns these pleased in production this results. with business, we’re

from high historically remained X.X% up retention ago. rate up quarter X XX%. in point year renewal X.X% Market, was with Middle of to points change at fourth X.X a and from premium Renewal Turning change the

$XXX strong the year and with were prior of million quarter. premiums business consistent New

Tom the to So given initiatives execution With for and good all to start encouraged in the the results. partners, workflow our it to that, & distribution we’ll talk our that segment, turn adoption our we’re XXXX technology over from Specialty pleased Bond a was in market we’re early I’ll with about about and impact our have Insurance. and it

Tom Kunkel

volume. favorable results of level with higher the segment PYD prior loss reflecting underlying lower ratio million the up higher improvement X the than quarter, and ratio. Specialty’s year strong The & operating year than XX.X% to strong, Bond a both combined prior underlying very also Greg. from due at in expense and premium Thanks, million were point quarter, $XX $XXX income earned very was of more

was As a the growth for bonds to X%, the quarter businesses. management solid domestic liability quarter. premium the the up increase domestic premiums larger top driven relatively were line our both written in surety net net by by in of The and written surety mix in driven

to business. pursuing liability while in portfolio, to continue production substantial we execute of high new domestic quality attractive to percentage our our management retain our Turning businesses, a strategy

We the fourth business are the that a change in XX% due of pleased from and Renewal was quarter the points for of up was new premium retention an X.X XX% at quarter up first quarter to from last came exposure. high record strong year. that increase in the

present our Insurance. Personal Michael, So Bond feel & Specialty advantages as strong and will growth competitive to great future. for as and turn results were talk the it excellent over opportunities and positions to we to that about you And continue the about now, who I’ll our returns, well market

Michael Klein

and an level –primarily continuing the Personal billion $X.X losses premiums to on growth written of Thanks, up by ratio once Tom, auto improving improvement basis, reserve unusually of points Insurance began auto year driven higher Catastrophe in momentum to million maintaining Insurance grew good by improved weather Net everyone. of an but the essentially non-cat by in last homeowners’ for morning year. quarter, in losses business. objectives from profitability X $XX and again in an profitability, auto development. in first policies was deliver income homeowners a our in higher the Personal contributed our while quarter, year XX.X% driven the pricing to primarily X%, to of favorable combined, property. combined offset high enforce. healthy On level with in was primarily million prior segment similar $XXX to underlying higher due our

point of our the quarter, that down point worth underlying prior rate about several expense development. driven by from improvement the X.X segment Agency benefit from by combined the we cost expense the the In the start the points actions favorable reduction three-fold in ratio X.X the prior Importantly, taken initiatives. combined ratio we ratio for Auto, pleased remain past has XXXX, for improved the year along with It’s considerably XX.X%. the the due to announced of in noting the ratio was a quarters, with XX.X%, quarter year from year

ratio than quarter weather X.X the almost and XX.X% a than higher due quarter average typically the ratio Homeowners, to As included prior couple favorable lower a a quarter ratio benefit of reminder, losses points XX underlying losses. of by higher XX.X%, In development. is first first primarily year of combined of cat points of from was points combined combined X.X non-cat driven seasonality. Agency year The prior the points

Agency top down actions and the premium by change of line, XX premiums XX Auto quarter, to X% Turning peak achieved from plans. last points grew Retention of by declined points modestly fifth pricing continued we’re renewal Agency with the growth. our X%, fifth increased line with in been & of slightly and momentum a quarter in as healthy auto have Other, given the another steady. premiums levels In expected holding Homeowners demonstrating

in increase Our policies to even the have steady in efforts property slowed fifth the have intentionally enforce successful, maintain as growth been we auto.

property growth waves implementation to we’ve already Alan. With going second the back should quarter rollout so As in and agents more at the use. line XXXX, quarter or profitable turn out of We’ll Early then X.X’s forward. in the and with X.X generated states from continue and our five the a Home sustain time Alan is states, I’ll enable mentioned, during demonstrating and sophistication Home Quantum throughout of Quantum us to we customers returns are that, product, The XXXX benefits the and steady states of ease response far flexibility gradual support newest fourth during three several roll momentum of XXXX. introduced over the call our and and expectations. so with

Alan Schnitzer

Thanks, Michael.

share who represent to our Gabby of just from strategic that large community. strength to replicate. Choice of tremendous all great initiatives premium. for the partners, and one side, with with significant business annual confidence reminder RIMS, receive is position distribution it of hard our we’ve that’s It’s company. I’ll business, the for lines about the customer firms left you competitive relationships of just to continued support On risk and Before a the returned for these in half to that we a our management important their We have Underwriters most our back annual it were and up with that account I any the an advantage from Manager open underway. collectively leaders our also returned feeling with Risk conference most turn Q&A, in we honored National conference the We Awards with five distribution

we’re to on Taken feedback provide agents the customers risk work we’re in products experiences. together, need in and the them and understanding market services, our to the that receiving our right track and to from customers, the lead continue brokers our in a great suggest

Relations a after recruited Personal great Lastly, take decade for as team. is which for me of continued we leading and some great a been has own in and her valuable success. Gabby Nawi to insight has Investor us, been by group, grateful of Travelers role you incredibly I’m our Insurance to leadership know, and away Gabby’s team for the her us. finance entire wish all their

that, I’ll We her successor will And shortly. with it be back Gabby. to turn announcing

Gabriella Nawi

Thank you. to thank Chris, we’re start kind for those the ready portion. Q&A words. you And

Operator

first [Operator go Instructions] Please And from of Kai ahead. you. Pan question Morgan comes with Stanley. line the Thank our

Kai Pan

Thank you. Good morning.

congrats, you quarter. I we’ll First, and miss guess Gabby, next

Gabriella Nawi

Kai. you, Thank

Kai Pan

quarter in Market, is if and X.X, you increased increase look X up pricing. If by first others math, X.X%. the do and My the is I But Middle National BI, more. implied point first Select Property which question Accounts up Yes. maybe on segments, much

in and the for us term Why deceleration in So price big accounts? increase can compare you national like accounts. the the increase small contrast in

Greg Toczydlowski

is Hey Greg Kai, this Good Toczydlowski. morning. this is

business. is you’re because two The the that the Yes, below the you’re that seeing the of the the what why national reason in and particularly into in rate, achieving illustrated up cat We’ve answer number. rolls areas in of in correct. documents first that exposed the total businesses Just Property of very when part are National are total successful been property that’s the question.

we’ve around and with of that very the of with thinking terms set adequate about focused time the now we’ve of that Select, In shared some business right been comfortable how have question, how returns an business that now. your we’re business we’ve in for and in part to been very you second returns

So our that’s returns the a threshold in lot deliberate growing that we thoughtfully that a today execution that of hit are because really are business returning of of output business. in

that. So underneath that’s what

Kai Pan

Alan. follow-up My for is question Great.

transform letter. mentioned I And annual transform more your on want on potential internally well in bit as both You follow-up could just us to performance front? the a that part. initiatives, tell about as you acquisitions

Alan Schnitzer

for in be to Yes. you reading the or impacting degree Sure, successful. Kai. over make annual to changed, discussed the Thanks us sure back advantages we the that’s decade – But make apart question. obviously forces for competitive they over to we’re set next are continue Thanks We’ve see us letter. we had competitive our the business the the I very to us advantages has made two, will serviced refer our the last changing. us that guess and incredibly I’ll some successful need been and Day, that and very decade than different have our to they well. the what’s world we’ve successful going what’s mindful Investor

broad undeniable three that. that, And so and choice set an be for for we to to letter underneath We our be got want level, we’ve And two at a brokers. the and to partner agents priorities up indispensable that customer the we’ve want objectives.

risk we’ll pedestal on in the a services put that’s on that put So for we need a in – an that. long the to that’s continue our one that’s and things products successful them and and made the invest of long that a customer’s time expertise for pedestal and time

So think data that of third-party analytics, data, thing. type

and we focused for brokers. are In the experience agents our and customers on highly our addition,

you’ve of to and designed the investments do heard productivity some and about And that. technology And third, talk efficiency. are then us workflow

line the on flexibility that and new take focused got gives highly or and to We’re to. We’ll bottom and in do the just other we’ve put with us. if for creates we invested output strategic of the to making less us that efficiency that the productivity opportunity let fall It ability the either more sure initiatives. price and in the to need

is latter of in specifically there of segments, things for more company And group, we’re claim. going on that But our working of Investor across a back of in we’ve and on at to three framework. of about the that that all refer our all business So things a those specifics. the technology lot you talked really I’ll up in inside lot Day maybe

Kai Pan

Do transform you need business? to acquisitions the

Alan Schnitzer

we strategic acquisitions? right? do So think a and nobody away on acquisitions not that that our need provide said if long them. deals do it, I we we we’re continue time not I’ll should need deals highly focused to we’re continue Kai, were in, we do, in shareholders M&A. say return what in lens of that some our interested benefits are to we’re we’re the best lower lines we should say so for from do transactions, that and if demand active for times do active so many of that very they volatility we of will about important for And I’ve it. often we’ve but to take of another are disciplined us. the and If you or anxious geographies terms improve we And that highly business We about with – the the is they best we in thinking are be. shared they the don’t profile, interested

think there’s think in years again that more distraction. lack I We to things highly And the in more that maybe And world. to it. today the about benefit we’ve and the away to any the you the a about we potential got XX Kai, that if got focused a deal. a the say, that. to cost change this really that We’ve didn’t ago or a got from we doing think so got doing. we up organic We that focus that like feel innovation take is we’re distraction we’ve on of we X that match no, real from do shouldn’t think it’s propensity changing But resources, intellect, talent, we’ve do But things one looking don’t of years need would on all criteria. important opportunity or and the at

a you And that’s M&A. again, to we do we take propensity we so change but think of deal, – away assess shouldn’t about any a when wrinkle

Kai Pan

Great. you Thank much. so

Alan Schnitzer

you. Thank

Gabriella Nawi

you. Thank

Next question please.

Operator

line Lynch. comes of question Please Jay America Merrill ahead. Cohen of the next Bank with Our go from

Jay Cohen

you. Thank

the business as an is too you’ve talk higher. you be that year balance multiple your obviously will maybe On is high? even if pricing, now, too and about getting guess, Insurance retention up that I high? would the being new retention high, a retention. plan? the business I mean feel what Or Certainly, you got side, Do all-time

Greg Toczydlowski

Greg. Good Yes, But morning, of lot not all is new at the Jay. spent a business at we’ve most rate combination the time. time the the of time, looking it’s retention, and of what execution. where level high-quality local It book at. macro and we’re at. think so of very really granular we it’s a We is like of of we a the business, looking and retention have This

right possible. three and competitive rate, when We’re much you we’re we’re there marketplace retention, comfortable combination look a comfortable very those new all But the retain with of with that where that, of out book now. as as trying to are. and at business Obviously,

Jay Cohen

Thank helpful, That’s Greg. you.

what normally lot weather. on to Homeowners. The year of the you on quantify non-cat was relative due it last to Just one number, the some a deterioration expect? you that would possible or mentioned of follow-up that underlying it to from Is

Michael Klein

the from dollars that I say weather, first cat would and I between and another that magnitude parse we’re mean is when on that you to other, experiencing. we non-cat This look have you based think type the all, of Sure, I the way can the to the remember at one events of one jay. move and category is bucket the what Michael.

or relative little weather non-cat you the to quarter. and point dependent sort is give points I So But round say again, quarter. it number But adverse mix between as it’s would but the non-cat for can some bit a numbers, events, X that in a think the or to point you of expectations artificial of of events X the points cat X upon X in variance. of a

Jay Cohen

it. Got

Jay Benet

that remember companies, terms it draw – of we cat define the line cat you’re If across in to and in about places different non-cat. got thinking we you

Jay Cohen

do good year-to-year. you the news so it Absolutely. we is least consistently, compare yourself, for at can as But guys

Alan Schnitzer

Yes.

Jay Cohen

lot. a Thanks

Alan Schnitzer

Thanks for question. the

Gabriella Nawi

question please. Next

Operator

line Our with next Please Amit ahead. Kumar Research comes the Buckingham from question go of Group.

Amit Kumar

quick questions. morning. good and Thanks Two

back, the on to Would pricing. specificity? more goes be and the cost guess, inflation letter, it and factor outpacing your In question view with on some talk your about first loss significant gains. interest get to being rates rates pricing the you The discussion interest cost inflation I possible loss low

Alan Schnitzer

different And Good what you’re I’m as as certainly in consistently the about BI, a over trend Yes. we different about whole we it trends different think not four. what four morning. them, sure think for. not Amit, have – a Obviously, sure lines, in loss we’ve I’m businesses is said, time, looking specificity book. across loss but

Amit Kumar

should was guess Has of the pricing they that’s guess I cost. say, going what is the your view? XX-year asking. and thinking in assertion? investors real urgency based helpful. I answer, there loss amongst cost. on I been has the That’s any Is based into Okay. on debate how thinking what versus, your terms a rising rate of that the there near-term to I you’re Or ask I a about of with there loss the view And is be in trying changed let’s that no change QX? fair if end and rise interest how versus about long-term was lot guess obviously

Alan Schnitzer

your it. I got got I question.

assume we have loss been, in say is would a more trends there I normal levels where to So that that inflation. return despite always

panic been inside seeing from but as moving, medical us, most of you we’re or there’s wage our and CPI is poor see we’ve of when So generally expectations. to heavily no leveraged what generally know We urgency certainly, inflation. that sense

to we is sometimes do. is necessarily some right? would probably is data and contributing loss And to the inflation us of inflation in of it that’s investment That one payrolls cost. benefits workers To that. our example what wage expectations When example, we rising see that. exposure from we and is and know-how wherewithal think that comes, because important analytics do expect have it What’s to do we when relative wouldn’t that surprise good to for us, extent inflation, be contributes that on you’ve environment. got that there a income rate the There’s for comp

less So say businesses, of with or line in I expectations. would no of sense our across urgency. all And more generally speaking

Amit Kumar

there’s companies Kai’s we The that’s is rule I on cut? letter? question to, reinsurance And would that that the I’m out, letter, discussion based debate just So that I my much am et reason the about a comments be you into guess, non-starter ask reading of going the okay, guess, question why wondering talk final I your you And helpful. companies have other then is Or seen the cetera, the a I excel for opportunities, volatility? validation volatility. regarding And making too lot the In acquisitions? back or and companies. question. amongst will look Does hybrid lower clearly, our your of

Alan Schnitzer

or think me think and I too much it to you’re that ways. Yes, mean in answer two exclude we into well, I include let don’t reading anything categorically.

I’ll read Having that, been that time attractive our exclude and sets of capabilities particularly has given I period core skill pretty you recently to we’ve that reinsurances explicit that the So anything. long tell to been just wouldn’t over business us. and said

Amit Kumar

years. future very for it. for good luck Thanks all the thanks, over Got answer. and the helpful. the for And your help Gabby That’s

Gabriella Nawi

Thanks, Amit.

Alan Schnitzer

Thanks, Amit.

Gabriella Nawi

Next please. question

Operator

line next question Fargo. Our Elyse of go Please from Greenspan with the Wells ahead. comes

Elyse Greenspan

I’m in Hi, looking XX-Q. the outlook good first morning. My question, at your

be and you you quarter tie March in went How great can it you Insurance year Business level. compare last going the to what higher the change year-endreference up the premium to The months? renewal the you January? same in you within first it’s quarters do question, if than that X was seen than three your the higher XXXX we guys that rates to meaning did point also, You see as back momentum then see had And through response quarter? to pick

Alan Schnitzer

think it you throughout going the there three higher quarters quarter-to-quarter the the on in leave year. the we And come will quarter. some be to year, gave And period that relative so to where was of the probably than the this back not way first quarters yes, Elyse, outlook for there we it first back three pricing momentum tell and was it’s the Yes. quarter. of comment prior the I to

Elyse Greenspan

then And my great. Okay, question… second

Alan Schnitzer

month-to-month I’m say. the throughout sorry. is what Elyse, meant I’m increase quarter to I sorry. It

Elyse Greenspan

rate of quarter, and was to you. mind your based thank margin, you question, about do the taking, for then terms rate you Okay, you trend? line And Business earned expectations. off rate outlook Insurance in of trend second exceed should think rate below when When with my the in think your that guys earned year you’re – the said in start in

Alan Schnitzer

exposure are because a that, There’s components lot like consider some with of of to that rate. be economically there estimation we involved Elyse,

give to there time tell going we’re a you not basis, date but the or that’s hard happen, least which written you I it’s at on So can to that close getting, pretty if already. precise at

Elyse Greenspan

And of you guys in see rate? up pick change? more Would quarter renewal in the exposure or that premium terms less two growth that the within

Alan Schnitzer

was I but pretty positive, the quarter. consistent think exposure pretty consistent throughout

Elyse Greenspan

much. very you thank Okay,

Alan Schnitzer

you. Thank

Gabriella Nawi

question Next please.

Operator

Barclays. line of comes from Jay go Gelb with the Please question next Our ahead.

Jay Gelb

little hoping full be the underlying was better just you. you the discuss some it you combined insight year for I can think it further, Business In ratio the was the know And Thank given year-over-year. Insurance, – on slightly to I that. expectation a gave year-over-year. I for deteriorated

Alan Schnitzer

Yes.

beyond things saw. volatility really normal So and we that’s impact There’s and the underlying its always give we you that insurance. be going to what

time direction, time. answering And of think in rest as and About see it said, just the that said Greg to rate better So half the where the on we was call in expenses, moderated. than and is way, let’s versus And heading about normal it was that’s right question. I prior by as lease’s of in that’s quarters just loss it volatility losses and It’s we trend. from a point. that

think weather, impact losses, sorts mix. to the All think period period volatility. of that large So think things

Jay Gelb

Okay.

a So think Insurance you full for be XXXX in still Business XXXX? year could than the better underlying

Alan Schnitzer

Well, and compared ratio we prior year. and gave we year prior to you slightly underlying set period combined to the compared lower to higher margins same the outlook underlying

Jay Gelb

I see, okay.

rate the comp, ex-worker’s was side, On change portion to of is pricing give a volumes. workers’ that premium the but the comp major helpful

pressure further on expect, the we downward improvement should wondering comp, in overall rate any given in I’m BI? pace the So of

Alan Schnitzer

you mean, I it’s to give year-over-year give well, me we And certainly stop the as to and continue the we’ll year. probably think be XX-Q – you relative you do I think We say, just prior to in outlook going heard the higher there. we

Jay Gelb

negative wondering personal X% auto, to I’m in although just then personal And slow certainly auto? that growth. if in the question, PIF Okay. PIF on growth sharp given profitability go slowdown switching improved. Could gears last

Michael Klein

could. It’s certainly Jay. Thanks, Klein. It Michael

to least at the on XXXX. at But of would negative, towards depend look plus we’re book is or where going around or how we market think slightly flat and and our put rate relative the to will does And to for the late and I business would be be upon it auto objective we it’s think it bottom. go say, growth obviously, point, absorbed. sort this point if it actions at minus a – back anticipating our trajectory they will the it are

Jay Gelb

XXXX. to return you. late Thank in growth Potentially, Okay.

Gabriella Nawi

Great.

question please. Next

Operator

Tunis Our Please line Ryan Research. of next question the comes go with from Autonomous ahead.

Ryan Tunis

guess just Hey, keeping on it I personal thanks. auto.

guess, bill? year, the could I us the how has competitive the of there’s just change tax in If been if about tell following maybe three changed, any first months you reform environment the

Michael Klein

typical broaden are has more to rate competitive little a tax consistent. filings I And The filed in a our the say which closes is slightly it be competitors, timing combined estimated we doesn’t the our that I competitor of predominantly XXX in you auto, environments it when to for of there. eliminate that tax at. broadly gap, but remain competitive when range, bit lot there We would filings a is track XXX you perspective the stage slowdown just but little remained of review auto about it. filings, industry our it probably bouncing in depending is estimates of look upon for that ratio rate with particularly the maybe quarter a you bit rate say tracking that does on would filings. And see impact rate, and made around do just of and amongst indicator with than on anything impact do if in the just the – first would was to think

need we don’t points, XX and it’s numbers, round think drop there. driver couple the at rate point need not key but reduced the think. of tax rate won’t industry being all for activity rate to of else a marketplace mitigate And So least at the equal, in a going maybe be a reform

Ryan Tunis

down into losses? Was That’s well? helpful. side, property – said I I guess volatility would a as mean, type guess to I’m that normal the in curious the BI an just on Or just was deterioration. increased to And that component going see casualty combined I then you was there claims. the related – of ratio related component maybe casualty frequency

Greg Toczydlowski

Greg. Hey, Ryan, is this

a Alan’s to Just of to was to was you product but It comment. and predominantly comments give lines, property. mix your earlier different echo texture

and certain of would You would time some had can think time be cat period large is activity the of can that we in loss a a volatility that like that quarter be think about some extreme that of driving beyond weather the a of that there. there frozen first and the extend you of window window pipes

Ryan Tunis

Got commercial identified development. auto. then million on one how $XX problematic. the align, more just adverse That’s just And as if you’ve of been it. we’ve somewhat

quarter this led saw was to the what that you addition. reserve and curious Just maybe different

Alan Schnitzer

story. is been react getting that in, In We’ve and it. claims watching a are we we quarter, have. not for new the It’s the data underwriting severity we actually on the the line Ryan, rate a to more smaller bit We we the obviously we’re saw. what it. little most

Gabriella Nawi

you. thank Great,

remind I follow-up you. question to just so one yourself question one before and Thank limit continue, can we please. also Next and you

Operator

ahead. Josh Our from Shanker of Deutsche the comes line Please go next with Bank. question

Josh Shanker

much. very on I some Thank questions you, want also congratulate but to dividends. you the

view of flow years, your the XX%. been has increase the slowdown repurchases You how XX getting the it’s dividend But it two growth? rate cash I’m consider from I dividends? that over the the guess of growth? And pointed the And past last out policy How dividend up does the EPS to X. why by versus relate do finally, you gone in years,

Jay Benet

a at the What judgment. ratio This lot How is. is in is looking Josh. that the the And One the to payout look of and relation industry. behind dividend science in to yield of it we Jay. a what well is. In our number others Hi, is other as at things. dividends, as compares

If all because same also you you buying size that outstanding saw actions the we’re things of amount, shares. before. into at look level translated shares out. the that of given that balancing average several decreases And our all back back buybacks, where now, dollar that even at of the the buying were years of the the the ago, number all fewer With price it’s stock at back in

terms payout caused back in dollars looked at with more relatively of So at ratios to look or yield we X% period in to that the time million keeping short getting the something in of But in payout make XX%. earnings has to range, how somewhere opposed going we we’re to million $XXX think what are be our us again, to as determination. line and $XXX future

Alan Schnitzer

dividend hopefully for to add level want of we’re pay don’t for a to competitive just lot the there’s looking would group. we just we our a there’s I set that it. of uncertainty, understand paying we of that. and component to insurance the where that shareholder circumstance, that dividend rethink sure also this that’s at and shareholder and make any base make foreseeable we’ve our have Josh, about a continue and But want it to sure under rate to component We that a dividend

into in So shared, two those the play decision what as to Jay addition well. that, factors

Greg Toczydlowski

shareholders. would one to business to thing you don’t ongoing we that, support other an as I that capital policy we what to know, then just have And our returning need add Alan of said the

to an repurchases, the it’s increase a and out not whether excess capital it’s returning So in that’s share whether changed. the all or of balances dividends

Josh Shanker

but get my and to regards appreciate the I Gabby, answers won’t stranger. I’ll she just Well, add hope I sendoff

Gabriella Nawi

Thanks, Josh.

please. question Next

Operator

the Please Greenberg Our question Larry ahead. Janney. of go next from with comes line

Larry Greenberg

you. thank and morning Good

but when development and maybe to thought recognizing on XXXX the still the look then that have you year. in at in little quarter Is would than coming seasonality the point? ratio auto to back first looks quarter, Just going auto, And a some good in better favorable at you there’s this strong. the addition, bit loss underlying a

Michael Klein

Michael. coming I we Larry, Thanks would question. the say expected. it’s where about autos in for

Jay year mostly I adjustment auto. we But loss did development prior As think mentioned, and driven really by that importantly, in have catastrophes was favorable expenses.

driver one-off our view then underlying more a of a in of of So that of of sort PYD dynamics. sort change

pleased much it. would in the in auto too expected, it’s and PYD broadly So say read I about that commentary. wouldn’t I as But coming we’re with into

Larry Greenberg

lag this there income of give, Great, second the thanks. jay, for piece non-fixed is that? then the is guess reporting color And in the quarter, for any could on given you I NII

Jay Benet

I’ll Bill Heyman that. address let

Bill Heyman

this talking is the about currently you quarter. quarter, Hi, in? the the we Or is are the about Are quarter which quarter Bill. ended, that just first

Larry Greenberg

Yes, I’m talking about the quarter in. we’re

Bill Heyman

it. Well, have not only And about we’re we XX days seeing. on really into what historically, commented

to think I’m to I So going keep that.

Gabriella Nawi

Great.

Next question please.

Alan Schnitzer

question? missing are the Larry, we

Larry Greenberg

Excuse me.

Alan Schnitzer

missing But second you’re are question? comment that. quarter? about the the If couldn’t the first asking Are about the we quarter, we missing question obviously, on we

Larry Greenberg

I’m no, No, no, sorry.

the months think given volatility or a reported – a income months quarter I in I Just quarter… is non-fixed on few of a your depending saw that lag. of couple a first We lag bit

Alan Schnitzer

give too have to meaningful. many relationships combine anything GP probably we and discrete them think, I you

Larry Greenberg

you. thank enough, Fair

Alan Schnitzer

Larry. Thanks,

Operator

Please from comes go the question of line Our ahead. next KBW. with Shields Meyer

Meyer Shields

The it morning. going good general quarters. in had can you PI on? in been also Thanks, explain was than and both administrative And what’s up expenses previous BI faster

Alan Schnitzer

Yes. Meyer. Good morning,

segments, now happy we’re be it me on relatively timing. and be go other the would base. FX for the half half, I’m with but a would into and a the total let total simply getting G&A of business And Other further start to So half dollars into the small about total.

to of then and Personal Insurance, timing. Simply FX. explained per variability segments Business out through most extrapolating Insurance, Business So contingent it’s through and some the it In and gets commissions

Meyer Shields

to model, then terms that of When Travelers plan question, in to growth going that respond but And maybe think obviously great. the agency opportunities? independent not. an Okay, distribution nationwide I personalized, to does are predominately how so they

Michael Klein

be BI, and It’s Thanks, right. than sort address broader Michael. I’ll could think Meyer. you’re It of take but that I broadly. it I’ll

First, they a it’s did making know brand them. it’s recently but to announce important new that that they’re not changes, initiative for those

fact, trade [indiscernible] already access brand, they’ve agents agents that even certainly, through the of and that the that services well broker actually as aware nationwide underneath organization. you’re Harvey But captive all captive agent trade with that have agents market a So with independent I’m already. markets operation nationwide independent number Travelers a to of brokerage nationwide corporation. in had is services sure they And those had called have can they an other companies and many access one that through,

So observations. And a, and of we’ve it’s have. on been trading relationship have fact, It’s balance, say brand-new. it’s I would we monitoring. that seen couple not in a a something we that

First of our mentioned agent distribution. independent all, Alan strength with

change primarily we and our terms of that franchise, explore view we a opportunity continued in distribution that’s as to But I it say points. this for As think focus advantage would an a is competitive primary additional us distribution.

We the margin a we than with been the will competitors, evaluate independent evaluate something and on as say independent and on more balance, for that’s we’d monitor any agents performance But while again, developing an certainly monitor threat. and channel. in opportunity results probably a agent nationwide’s

Meyer Shields

Okay. Thanks and Gabby. very good much. all luck, And

Gabriella Nawi

Thank you.

please. question Next

Operator

Our DeWitt of comes from JPMorgan. ahead. Sarah go next line question Please the with

Sarah DeWitt

just like your thoughts that to mortgage pass company industries and other impact of one I in change U.S. tax reform impact the to you’ve on the you competition wanted on morning. your on insurance, at now competition. benefit follow-up latest given pricing? and entire good about the view seen saw Hi, along And all customers. Does

Jay Benet

pretty No, close doesn’t Sarah. GAAP. in really pricing good you reform have Hi, consistently it We’ve to ground helps, but objectives doesn’t. got cover at said morning, And holistically. our tax that some really it the look we’ve to

need. and into out the rate blender adequacy as prices and look So and to put those is requirements ahead tax and you’ve We of the trend we loss take comes what all things got account the rate. capital into expiring

tax from just think to the market and speed. market whole you a perspective, And continue not remind that I’ll from current again, we benefits So course reform.

got underwriting benefit And U.S. domestic tax You’ve same significant or even U.S. a among those are profit insurers differently positioned underlying degree who don’t underwriting to that lost and perspective. those as profit. both competitors, the don’t from within have

the target – U.S. a The So returns business. sudden flush are levels. trades think, like it’s not the at of I entire in all is P&C and

Sarah DeWitt

It Okay. following-up which X%. And about previously with price think Great, think keep pace for seems just you do But would Business to lot get inflation, what subsegments wondering to increase like there flat? keeping thanks. in if can I pricing, that’s of increases you need you’ve Insurance then a you you the and I’m achievable? on loss of just is are talked the price pushing Select extent Accounts Business other about Insurance

Alan Schnitzer

Sarah. Yes,

returns that So it’s sense, to look loss you to the sign pricing account like with trend. We don’t was would try what sort execution, the is at achieve that. are. execute that think every broad then function keep numbers, at we up where right. of and that we need given the say, of the And Greg for that account. aspirational headline and of a it deliberate we but what circumstances comment end, did, We a to look heard, We small makes on rate

you that all got that So got things number. you’ve will sorts drive workers’ comp, headline the you’ve of factor, got

account account basis. though, on reminder by a we’re As really executing

Sarah DeWitt

you. thank Okay,

Gabriella Nawi

please. question Next

Operator

Please with from Our Kinar the of Sachs. comes next Yaron question line ahead. go Goldman

Yaron Kinar

good Hi, morning everybody.

renewal rate First Business Insurance question change and there. on

be quarters months the guess comp to the will fair or acceleration of quarter workers’ change? remaining months would be three the waited. the that less the for you’ve of given maybe just during of of momentum your the seen comp renewals So over the I the less and it expect workers’ year, And rate fact

Alan Schnitzer

comp probably observation this in going workers’ I’m a way. true. I – not sections of in a I terms say by sure agree XX-Q we’re the be and not that’s that. perspective give waiting going outlook, you to Outlook we wouldn’t beyond go sure driver. we the the significant not with And of that’s I’m Yaron, the don’t to

So helpful. I hope that’s

Yaron Kinar

regards in regards waiting, had I as to XX% non-cat was with the the With the first guess, I XX opposed renews was of of I quarter the large rest question to And just year. losses. some weather workers’ the to referring to just the other comp

still those for quarter. remain So guidance seen outlook the year at in Insurance? improvement you we’ve the Are if comfortable the in level of with this terms margin Business

Alan Schnitzer

exclusively two, you, the assumes it a so The cats. of do And is lower in one and normal we it excludes an to say guidance underlying other we activity. return that basis, that levels whether XX-Q, more give loss

So a more we to levels. normal are assuming return

Yaron Kinar

thank very Okay, you much.

Gabriella Nawi

last will please. this be question And our

Operator

Our line final go from Brian question Please ahead. the of with will UBS. Meredith come

Brian Meredith

thanks. Yes,

on a more of talk or bit the expecting environment kind pricing pressures month-to-month I look pricing drilling down line, we’re it fourth kind less? had conference saw the here. it like. what Can to of to maybe call We your in more than Is competitive said. So you about it thinking quarter you today. guess, little But bit better, you worse if improved Business Insurance about of how – little kind you’ve just were you

Alan Schnitzer

into than want We information finer sensitive we getting probably it. It’s parse there. to start competitively

my probably That’s was quarters across broadly that’s it. accounts. parse and So trend that’s and than or achieve gains – true throughout in did year say I did think back the probably that finer we remarks to rate I so. we want that it more a going quarter-to-quarter five

detail will that beyond share to but I provide. color, than more want probably that parsing it So we

Brian Meredith

part has it? there’s last of percentage there it? kind Is we on as think of talked that And how of that of exposure general change, and half impact at it Is look exposure actually an here. then I kind of that margins? question margins. change should a you’ve the of of Great. two-thirds If it it that, part Is about

Alan Schnitzer

giving there’s because resisted much estimation involved. always that, so We’ve and

So all but is said stopped that. of it’s that we we’ve quantifying not insignificant, sort really

Brian Meredith

it Keep thanks. Thanks. try, to

Alan Schnitzer

Thanks you.

Gabriella Nawi

today. soon. Okay, years. for I’ll you And all all hear I’m you. been you joining sure again great you XX from it’s Have working and us day, pleasure thank with over the a thank last a And

Operator

and We that your your lines. for please the disconnect participation, today. thank Ladies for gentlemen, ask you conclude does and conference you call that

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