NASDAQ:SIGI Selective Insurance Group Q4 2023 Earnings Report $87.68 +0.79 (+0.91%) Closing price 05/2/2025 04:00 PM EasternExtended Trading$87.70 +0.02 (+0.03%) As of 05/2/2025 05:34 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Selective Insurance Group EPS ResultsActual EPS$1.94Consensus EPS $1.92Beat/MissBeat by +$0.02One Year Ago EPSN/ASelective Insurance Group Revenue ResultsActual Revenue$1.11 billionExpected Revenue$1.11 billionBeat/MissMissed by -$8.19 millionYoY Revenue GrowthN/ASelective Insurance Group Announcement DetailsQuarterQ4 2023Date1/31/2024TimeN/AConference Call DateThursday, February 1, 2024Conference Call Time11:00AM ETUpcoming EarningsSelective Insurance Group's Q2 2025 earnings is scheduled for Thursday, July 17, 2025, with a conference call scheduled on Friday, July 18, 2025 at 8:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Selective Insurance Group Q4 2023 Earnings Call TranscriptProvided by QuartrFebruary 1, 2024 ShareLink copied to clipboard.There are 10 speakers on the call. Operator00:00:00Good day, everyone. Welcome to Selective Insurance Group's 4th Quarter 2023 Earnings Call. At this time, for opening remarks and introductions, I would like to turn the call over to Senior Vice President, Investor Relations and Treasurer, Brad Wilson. Speaker 100:00:15Good morning and thank you for joining us for Selective's 4th quarter and full year 2023 earnings conference call. Yesterday, we posted our earnings press release and financial supplement on selective.com under the Investors section. A replay of this webcast will be available there shortly after the end of this call. Today, we will discuss our financial performance, market conditions and our expectations for 2024. Joining us on the call are John Marchioni, our Chairman of the Board, President and Chief Executive Officer and Tony Harnett, our Senior Vice President, Chief Accounting Officer and Interim Chief Financial Officer. Speaker 100:00:53They will make remarks before we move to our Q and A session. We're excited to welcome Tony to his first conference call since becoming Interim CFO. He's been with Selective since 1999 and has held several senior finance positions. Our commentary today includes references to non GAAP measures, which we believe make it easier for investors to evaluate our insurance business. These non GAAP measures include operating income, operating return on common equity and adjusted book value per common share. Speaker 100:01:23We include GAAP reconciliations to any referenced non GAAP financial measures in the financial supplements on our website. Also, we will make statements and projections about our future performance. These forward looking statements under the Private Securities Litigation Reform Act of 1995 are not guarantees of future performance. They are subject to risks and uncertainties that we disclose in our annual, quarterly and current reports filed with the SEC. We undertake no obligation to update or revise any forward looking statements. Speaker 100:01:57With those introductory remarks, I'll now turn the call to John. Speaker 200:02:01Thanks Brad and good morning. 2023 was another excellent year for Selective. We grew net premiums written by 16%, produced a 96.5% combined ratio, increased after tax net investment income by 33% to $310,000,000 and produced an operating ROE of 14.4%. Catastrophe losses ended the year approximately 2 points above our initial expectations, offset by a better than expected non cat property loss ratio, improved expense ratio and favorable prior year casualty reserve development. We achieved 2 significant milestones in 2023, exceeding $4,000,000,000 in net premiums written for the first time and delivering our 10th consecutive year of double digit non GAAP operating return on equity. Speaker 200:02:52Over the last decade, we have more than doubled net premiums written and book value per share and almost tripled operating income. Average operating ROE of 12.2% over the past decade exceeded our target. When we set an ROE target, it's not aspirational. We expect to achieve it consistently. Our disciplined profitable growth and approach to enterprise risk management have served our shareholders well. Speaker 200:03:19Over the past 10 years, Tangible book value per share plus accumulated dividends grew at a compound annual rate of 10%. We believe this is our industry's best long term indicator of value creation. Over the same period, annualized total shareholder return was 15.6%, exceeding the S and P Property Casualty Index by 2.2 points per year and the S and P 500 by 3.6 points per year. We are proud of this track record of strong operating performance, growth and excellent shareholder returns that few in our industry can match. Although we reported our 18th consecutive year of net favorable prior year casualty reserve development, we recorded net adverse casualty development of $10,000,000 in the 4th quarter. Speaker 200:04:07Included in this development was an increase of $55,000,000 in general liability. We believe this is attributable to the social inflation discussed in previous earnings calls that also is impacting the rest of the industry. Over recent years, we have increased our loss trend assumptions and have seen severities follow suit, partially offset by favorable frequencies. We believe our prudent planning and reserving approach has served us well. While favorable frequency trends continue, General liability severities have emerged somewhat higher than expected. Speaker 200:04:41The development was mostly on accident years 2015 through 2020 with an average impact of about 1 loss ratio point to general liability for these years. In the 4th quarter, The adverse general liability development was largely offset by $50,000,000 of favorable workers' compensation development. For accident year 2023, we increased casualty loss costs by $14,000,000 primarily due to elevated frequencies and severities in personal auto and to a lesser extent commercial auto. Our 2023 accident year loss ratios for general liability remained unchanged. With these adjustments, we remain confident about our overall booked reserves. Speaker 200:05:23However, we will continue to monitor these trends and their impact. Our competitive and crowded market makes it critical that we clearly demonstrate our value proposition to customers, distribution partners, employees and investors. Our success is based on a unique combination of competitive advantages. Taken together, these competitive advantages create a winning formula for Selective. They are a unique field model placing empowered underwriting staff in close proximity to our distribution partners and customers, Our ability to develop sophisticated risk selection, pricing and claims management tools and embed them in the workflows of our frontline employees. Speaker 200:06:04A franchise value distribution model defined by meaningful and close business relationships with a group of top notch independent agents and brokers, a commitment to delivering a superior omnichannel customer experience enhanced by digital platforms and value added services and a highly engaged and aligned team of extremely talented employees. We continue to align the interest of our employees and our shareholders. While our combined ratio performance was profitable, it was higher than our 95% target. Our variable compensation incentive plan, which all includes all employees reflects this. We are focused on delivering improved underwriting results even though our 2023 operating ROE exceeded our target. Speaker 200:06:51Our Standard Commercial Lines and Excess and Surplus Lines segments represent approximately 90% of our business. They are delivering underwriting profitability that is in line with or better than our 95% combined ratio target. Maintaining underwriting discipline and price adequacy in these segments remains a top priority. In Standard Commercial Lines, the marketplace continues to be constructive. Our pricing is holding up and our retention metrics remain historically high. Speaker 200:07:20This segment's strong underwriting performance and growth allow us to focus our more significant actions on the underperforming portions of the portfolio. Sophisticated tools with granular pricing and retention data allow us to manage our renewal inventory by profitability cohort. This includes non pricing actions such as in property We are increasing wind and hail deductibles in the most catastrophe prone areas and pushing the use of hail cosmetic damage exclusions. We are also increasing all other peril deductibles. Our unique operating model resonates with our distribution partners, providing opportunities to grow our business organically. Speaker 200:07:59We are a stable market and the trust we build with our distribution partners supports our renewal goals and helps speed our new business pipeline with quality opportunities. While submission activity has been elevated given marketplace disruptions, we remain disciplined as our team's focus on recognizing quality business and walking away from opportunities that do not align with our appetite, pricing or terms and conditions. Net premium as written growth has been excellent, mainly coming from rate and exposure with policy counts in standard commercial lines up 3% for the year. Within property, we achieved renewal pure rate of 12.1 percent and 4.9 percent of exposure increases for the year, producing a 17.6% increase in total renewal premium. In commercial auto renewal pure rate was 9.8% with increased exposure of 4.4% for the year resulting in a 14.6% total renewal premium increase. Speaker 200:08:59At the line of business, strategic business unit and regional levels, we have detailed plans to continue refining our portfolio and build on our flagship segment's success. We are also seeing high levels of excitement from our distribution partners as we prepare to launch 5 new states for standard commercial lines in 2024. By every important measure, our excess and surplus lines segment had a record year. Net premium as written grew 24% with an 86% combined ratio. E and S results are benefiting from both the portfolio repositioning we formed in past years and attractive market dynamics. Speaker 200:09:38Our contract binding and brokerage operations delivered strong top and bottom line performance. Contract binding is similar to our standard lines small business and benefited from improved ease of doing business from our technology investments. Brokerage is akin to our standard lines middle market business. We see significant growth opportunities within our current appetite, which is mainly unchanged. Growth in brokerage along with rate and exposure increases has increased the average E and S account size from approximately $3,800 at the end of 2022 to approximately $4,600 at year end 2023. Speaker 200:10:17As with general liability and standard lines, We are very comfortable with our underwriting discipline, business mix, pricing and terms and conditions. Personal lines represents approximately 10% of our business. Its combined ratio is well above our target. However, renewal pure price increased 8.9% during the quarter And we expect rate to further accelerate in 2024 into a range of 20% to 25% subject to regulatory approvals. We continue transitioning the personal lines book to our mass affluent target market. Speaker 200:10:51For the quarter, over 80% of new business and homeowners Coverage A values in excess of $500,000 While new business premiums increased 16% in the quarter, New policy counts declined 8% from deliberate curtailed production. Higher average premium sizes driven by both rate and exposure increases the premium increase. In addition to rate actions, we seek to improve homeowners performance through the continuing transition to the target market and improved terms and conditions. We stated last quarter that we are introducing depreciation schedules similar to actual cash value on older roofs implementing mandatory wind and hail deductibles in states most exposed to severe convective storms. We strive to have all three Insurance segments meet our profitability goals throughout the market cycles. Speaker 200:11:43Diversification across and within these segments position us to provide value to our distribution partners, enhancing our revenue and income streams, while providing the operational flexibility needed to succeed in today's market. I'll now turn the call over to Tony to discuss our Q4 and full year results and I'll be back with color on our 2024 guidance. Tony? Speaker 300:12:06Thanks, John, and good morning. We reported $2.01 of fully diluted EPS in the 4th quarter, up 46% from a year ago. Non GAAP operating EPS was $1.94 up 33%. Consequently, we had a very strong 18.9% return on equity with an 18.2% operating return on equity for the quarter. For the year, fully diluted EPS was $5.84 up 65% from 2022. Speaker 300:12:36Non GAAP operating EPS was $5.89 up 17%. We produced return on equity of 14.3% for the year with operating return on equity of 14.4%. As John noted, this marks our 10th consecutive year of double digit operating return on equity. Over those 10 years, Our operating return on equity averaged 12.2 percent exceeding our target, which is set approximately 300 to 400 basis points above our weighted average cost of capital. Our GAAP combined ratio for the quarter was 93.7%, a one point improvement from 94.7 percent to $0.01 of fully diluted EPS in the 4th quarter, up 46% from a year ago. Speaker 300:13:21And one non GAAP operating EPS was $1.94 up 30 3 percent. Consequently, 2023's combined ratio was 96.5 consistent with our original guidance. Modest favorable development, which we do not plan for, reduced the combined ratio by 0.2 points. Better than expected non cat property losses and a lower expense ratio were offset by elevated catastrophe losses of 6.4 points, which was 1.9 points above our expected 4.5 points. Our expense ratio for the year was 31.4%, better than the 32% long term target we established in 2019. Speaker 300:14:03We maintain expense discipline while making investments that support our strategic objectives. Consequently, we expect our 2024 expense ratio to be relatively stable and this assumption is embedded in our combined ratio guidance. In the quarter, net unfavorable prior year causative reserve development of $10,000,000 added 1 point to the combined ratio. At the line level, dollars 50,000,000 of favorable prior year development in workers' compensation was more than offset by $55,000,000 of adverse development in general liability and $5,000,000 in personal auto. The favorable prior year workers' compensation development was primarily driven by better than expected severity in older accident years impacting our tail development factors. Speaker 300:14:49While the factor changes were relatively small, These factors are applied to all accident years. Frequency in the line continues to be favorable in more recent accident years. While we are starting to see medical CPI increase, wage growth, which directly impacts premiums, is providing a meaningful offset. Adverse prior year general liability reserve development was severity driven and spread across prior accident years, predominantly 2015 through 2020. We attribute this largely to the continued elevated impacts of social inflation. Speaker 300:15:22We see this as an industry dynamic with higher propensity for attorney representation and litigation, longer settlement times and higher settlement values. Nonetheless, the composition of our general liability book has remained relatively consistent over time as we focus on our business within our appetite. Putting this reserve increase in context, it represents about 3% of our general liability net reserves. We remain comfortable with our current accident year loss pick for this line, while acknowledging the inherent risks. For the current accident year, we took action in Personal Auto in the quarter, increasing loss cost by $9,200,000 which added 9.1 points to the personal lines combined ratio. Speaker 300:16:05The adjustment was driven by increased claim frequency. We also increased loss costs in commercial auto by $4,900,000 impacting the quarterly standard commercial lines combined ratio by 0.6 points. The commercial auto adjustment responded to higher paid loss expenses driven by elevated litigation rates. Consistent with recent quarters, our overall underlying combined ratio continues to be very strong. The underlying combined ratio for the year was 90 point 3%, 3 points better than 2022. Speaker 300:16:37The 4th quarter's 90.2% underlying combined ratio was 3.7 points better than last year. After tax net investment income was $78,000,000 in the 4th quarter, up 20% from the prior year period. For the year, after tax net investment income was $310,000,000 above our original 2023 guidance of 300,000,000 and up 33% from 2022. Over the last 2 years, we focused on building the portfolio's book yield as interest rates rose. During the quarter, we invested $429,000,000 of new money at an average pre tax yield of 6.7%. Speaker 300:17:18As a result, average pre tax book yield increased 11 basis points to the end to end the year at 4.7%. We expect this higher embedded book yield will provide a persistent source of elevated investment income going forward. For 2023, Investments generated 12.4 points of return on equity, up 3 points from 9.4% in 2022. The portfolio remains conservatively positioned with total fixed income and short term investments representing 92% of the portfolio at year end an average credit quality of AA- and a duration of 4 years. Alternative investments, which report on a 1 quarter lag, generated $900,000 of after tax income in the quarter $21,200,000 for the year, up 16% from full year 2022. Speaker 300:18:122023 was an important year for us as a reinsurance buyer. During the Q4, We entered into our 1st catastrophe bond transaction through High Point Re Limited. The transaction received strong support providing a new and valuable source of fully collateralized reinsurance capital from a broad panel of investors. The transaction was upsized by 62.5 percent to $325,000,000 from the initial $200,000,000 target. Pricing was within the initial guided range. Speaker 300:18:42The coverage sits within the top layer of our program at $500,000,000 in excess of 700,000,000 and provide 65% of that layers limit. We also successfully renewed our property catastrophe green tranche program effective January 1, Going to market with a $1,100,000,000 limit in excess of a $100,000,000 retention. This compared to our expiring $915,000,000 limit in excess of $60,000,000 retention. While the expiring program had various co participations, we fully placed all layers in the new treaty. The increase in retention is largely comparable with the growth in our property portfolio and reflects our ability to obtain more losses. Speaker 300:19:24A 1.250 year net probable maximum loss is now only 4% of GAAP equity for our peak peril of U. S. Hurricane. This is well within our risk tolerance and 3 percentage points lower than last year's 7%. The increased limit we purchased reflects our business' strong growth and expected future growth. Speaker 300:19:45We had modest risk adjusted pricing increases consistent with the overall market. We also achieved our marketed key terms and conditions. Our reinsurance program includes casualty excess and property per risk treaties that renew on July 1. The retentions on these treaties are currently $2,000,000 per occurrence for casualty and $5,000,000 per risk for property. Our capital position remains extremely strong with $3,000,000,000 of GAAP equity and $2,700,000,000 of statutory surplus at year end. Speaker 300:20:17Book value per share increased 13% in the 4th quarter due to our profitability and the interest rate rally that reduced after tax unrealized losses for fixed income securities. For the year, book value per share increased 18%. Adjusted book value per share was up 10% for the year. Year end premium to surplus was 1.51 times, up from 1.44 in 2022. The ratio increased due to strong insurance operations growth. Speaker 300:20:48Our internal operating target for premium to surplus is 1.35 to 1.55 times, although we are comfortable moving above that range. Our debt to capital ratio of 14.6% and strong operating cash flow provide ample financial flexibility to support organic growth plans and execute our strategic initiatives. We did not repurchase any shares during the quarter or year and have $84,200,000 remaining capacity under our share repurchase authorization. We view organic growth within our insurance operations as the most attractive opportunity to deploy capital. Turning to 2024 guidance. Speaker 300:21:28We expect our GAAP combined ratio to be 95.5%, including 5 points of catastrophe losses. As always, we assume no prior accident year reserve development. After tax net investment income is expected to be $360,000,000 This represents a 16% increase over 2023, primarily reflecting our fixed income securities portfolios meaningful increase in book yield. After tax net investment income guidance includes $32,000,000 from alternative investments. Our guidance includes an overall effective tax rate of approximately 21% with a 20.5 percent effective tax rate on investments and 21% on all other items. Speaker 300:22:11Weighted average shares are estimated to be 61,500,000 on a fully diluted basis. This does not reflect any assumption for share repurchases we may make under our existing authorization. Now I'll turn the call back to John. Speaker 200:22:26Thanks, Tony. On this call, we have highlighted the industry's elevated and uncertain loss trends that are influenced by economic inflation, social inflation, increased catastrophe loss frequency and the unusual frequency and severity patterns in recent years. These dynamic industry wide factors have pressured loss costs, necessitating our continued focus on adequate pricing. In 2023, we entered the year with an expected loss trend of 6.5%. Our overall renewal pure price excluding exposure change was 6.8%. Speaker 200:22:59We remain confident in our ability to execute our renewal strategy and achieve renewal pure price commensurate with expected loss trends. We have demonstrated this throughout market cycles and it continues to be the cornerstone of our consistently profitable combined ratio performance. Our 2024 combined ratio guidance reflects an overall expected loss trend 7%, up from 6.5% a year ago. This consists of 4% for property and 8% for casualty, reflecting our updated views of both economic and social inflation and expected frequency trends. In light of recent experience, Particularly related to secondary perils, we've also increased our catastrophe load to 5%. Speaker 200:23:45These trends are all embedded in our 2024 loss picks and reflected in our guidance. Our guidance implies a healthy ROE outlook for 2024 that exceeds our 12% target with ample runway to continue our trajectory of profitable growth. We have the team, sophisticated tools and disciplined execution to manage through these market dynamics and believe we are operating from a position of strength. I'll now turn the call over to the operator to begin our question and answer session. Operator00:24:17Thank you. We will now begin the question and answer session. We have questions on queue. The first question is coming from the line of Michael Phillips of Oppenheimer. Your line is now open. Speaker 400:24:42Thank you. Good morning, everybody. My first question is on the GL stuff, John and Tony, the 55,000,000 You talked a lot about the severity piece, which we get, hear a lot of that from other people too. But have you seen anything in terms of just a different reporting pattern that's lengthened because of that as well? Speaker 200:25:02Yes, Mike. Appreciate the question. This is John. So As you highlighted, severity is really the driver of what we've been seeing. Frequencies and we're talking GL in particular, frequency trends have continued to be, I'll call them favorable, but there's no question there has been an extension of reporting patterns, but we've seen that for a couple of years now. Speaker 200:25:24And I would say that's incorporated into how we evaluate the more recent accident years in terms of But I think that started in the kind of latter part of the pandemic and has persisted. And I would say that's factored into how we evaluate the more recent accident years. Speaker 400:25:44Okay. Thanks. I mean, I asked because That was interesting that you included in that 55 comments that part of that included ex year 2020. So I guess that means that The higher severity you talked about offsetting any kind of frequency benefit that I think was there in that accident year. So I guess want to make sure that's the case. Speaker 400:26:01And then If so, does that mean any risk of the more recent accident year is also being affected, which is kind of what you just alluded to as well? Speaker 200:26:12Yes, Don, I appreciate the follow-up point. Just a couple of additional points there. First of all, with regard to 2020, The comment relative to GL is accurate and that was included in our updated view and the $55,000,000 that we booked That was included in those accident years. But I do want to kind of reinforce the other point, which is that accident year in total has emerged favorably across all lines and even within casualty has emerged favorably. But we've got movements in between individual lines and that's what you saw us report with regard to the GL emergence. Speaker 200:26:49With regard to the more recent accident years, in addition to the point we just talked about with regard to Recognizing that slight extension in reporting patterns, I think the other important point to consider is if you look back at our disclosures and our guidance, We've been moving expected loss trends higher on a pretty consistent basis. So if you look back to 2020, 2021, Our forward trend assumption for casualty was around 4%. And then in 2022, we moved that up to 5.5%. In 2023, it was 6% and now we're at 8% and actually on an ex workers' comp basis is a little bit higher than that. And those are fully embedded in our loss ratios that were in our guidance and were in our booking. Speaker 200:27:37And I think that's probably one of the more important pieces to understand in terms of how companies are reacting to this. The other thing I'll say is and this has been the case not just for the 2024 but for the last the most recent accident years as well is despite what was a consistent pattern of better than expected frequencies, We have not assumed that in our forward loss trends either for 2024 or for the last three accident years. That was really a severity move and assumed claim counts or frequencies to remain relatively stable. And I think that's also the right way for us to be thinking about it and approaching it. Speaker 400:28:17That's perfect. Thanks for the color, John. I guess second question is just kind of related to all this is you're not seeing any of this spillover into your commercial auto book, it sounds like and I want to make sure that's the case. I think recently you've talked pretty positively about your views and the outlook of commercial auto. So Nothing's going over there right now, is the question and just kind of your outlook for that segment, commercial auto? Speaker 200:28:43We made a very minor adjustment in commercial auto, but if you look back over the last several quarters, I would say that commercial auto has been pretty stable. I think what happened in commercial auto is the severity impacts hit a little bit quicker and probably more so in 2021 And that then got incorporated at the forward expectations and a lot stronger pricing. And I think not just for us, but for the industry, commercial auto pricing has been a lot firmer for a lot longer than we've seen in G and A. Has been a lot firmer for a lot longer than we've seen in GL. So I would say there you've seen some moderation In the commercial auto loss trends in recent quarters and I think that in the context of continued strong rate, which for us was 10% in the quarter And just a hair under 10% on a full year basis, I think sets up well. Speaker 200:29:30Again, there's uncertainty just because of the environment we're in. I think when you look at those factors in commercial auto, I think we do have a better outlook on that line. Speaker 100:29:41Okay. Thank you, John. Appreciate it. Operator00:29:45Thank you. We will move now to the next question coming from the line of Mike Zaremski of BMO. Your line is now open. Speaker 500:29:54Could you walk us through, you did a good walk through of kind of how you've Increasing your loss trend on casualty over the years, the same holds true On the catastrophe loss ratio, maybe you can kind of help us understand what caused the increase that you picking to a higher Is it picking to yes, if you could help us think through that and if there's any business mix impact there 2 or is it just being out trends been worse and you're trying to get ahead of it? Speaker 200:30:30Yes. Appreciate the question. It's really a combination of our updated modeling and our more recent experience. So if you were to look at so the 5 points that we have in our guidance for 2024 is kind of right in between the 5 10 year averages. So if you were to just look at the 10 year average, it's about 4.7%. Speaker 200:30:51And if you look at 5 year average is about 5.4%. So we think just based purely on our more recent experience plus modeling update, That's a pretty solid assumption for us. And now there's always going to be a little bit of business mix in there and the growth by segment will influence that. But that's really how we landed at a 5 point assumption. Speaker 500:31:16Got it. And I guess just going thinking about just the trends on loss costs have been Inching higher, but not just for, I guess, overall for years now. And you guys are in a very good spot where you have very consistent returns, you've got good pricing power. But Do you think that the marketplace, which also seems to be experiencing similar trends, this kind of bodes well for pricing power in 2024, because I feel like The consensus amongst investors is more that pricing is more likely to fall than increase. I don't know if you have any comments there. Speaker 200:32:08Yes. So my sense is pricing remains constructive in our business. And again, I think with different companies you have to cut through their portfolio and to the extent They're more weighted towards professional liability or cyber or D and O. You might see a different pattern, but for us when you focus on core general liability, workers' compensation, property, Automobile and business owners, I would suggest that based on what we're seeing and I think everybody else is seeing from these social inflationary factors, The pricing environment that we've seen in the last couple of quarters will persist and there's even potential for a little bit of acceleration at least on a line by line basis. I think that's where you really have to take this in pieces. Speaker 200:33:03I think GL is the line that I would expect to firm a little bit more. And I know when you talk liability, it does include GL Plus Professional Liability and D and O and Cyber. I'm talking just standard general liability. I think that's where some more of the pressure has been and that hasn't been As strong from a pricing perspective as auto and commercial property have been for the last couple of years. So while you might see auto come down a little bit, I think it'll still be strong and I think you might see some movement higher in GL, We feel good. Speaker 200:33:39If we look at our retentions pretty closely and measure them a number of different ways to understand the market reaction to our pricing And our retentions continue to run really strong on standard commercial lines. And I think that bodes well. Speaker 500:33:54Got it. And if I could sneak one final one in. You've had some management changes in recent months. Has a new set of eyes or different set of eyes or different people in charge of any process Recently, does that any impetus for some of these changes that were made in terms of the loss assumptions and reserve changes? Speaker 200:34:22Not at all. So it's actually the same eyes and I want to reinforce that point. So obviously, Mark left at the end of Q3, but the rest of us who are always involved alongside of Mark are the same group and have the same philosophy and the same approach to evaluating our results, evaluating our reserves. And that includes myself and includes our Chief Actuary who's been here for a long time and continues to be here and it includes Tony who has the Chief Accounting Officer, He's been with the company 24 plus years, but the last 7 as the Chief Accounting Officer before becoming Interim CFO was also deeply involved in all decisions, not just related to reserves, but all accounting matters. So that it's a very consistent leadership group and a very consistent philosophy. Speaker 200:35:12I appreciate the question because I think it's a great opportunity to kind of reinforce that point. Speaker 500:35:17Thank you. Operator00:35:20Thank you. We will move now to the next question coming from the line of Paul Newsome of Piper Slander. Your line is now open. Speaker 600:35:38Good morning. Sorry about that. I was hoping we could switch to Investment income and remarkably large expected improvement next year. That new money yield number that you mentioned seemed pretty darn good. Is there anything under the hood there in terms of A shift in what you're investing in or anything else that would give you that sort of lift. Speaker 600:36:09I mean, everyone's seen a lift, but it seems to be a bigger lift than a lot of folks are talking about for 2024? Speaker 200:36:19Yes, Paul. Great question. So I think a lot of this is really indicative of the hard work that was done over the last 2 years to really build the embedded book yield. So since the beginning of the interest rate cycle from year end 2021, we've picked up 173 basis points of embedded book yield. And that allows us to really have a solid view of our ability to continue to pick up investment income on a go forward basis and have that strong contribution to operating ROE. Speaker 200:36:53The overall profile of the portfolio remains relatively consistent. But when you have the opportunity to put money to work at an investment grade fixed income at 5.5% or 6% on a pre tax basis, It allows you to really lock in those yields for an extended period of time. I mean that's really allowed us to boost that return. And with an invested asset leverage a little over 3 times, we don't have to take on a lot of additional risk to produce that kind of upside from an ROE perspective. So nothing significant in terms of shifting the strategy. Speaker 200:37:28In fact, I would say the overall bias would remain up in quality. When you think about those investment grade fixed income returns that we're getting, it really raises the bar on investing in risk assets, which and we've been sitting at the lower end of our kind of target range from a risk asset perspective at just over 10%. Speaker 600:37:50No shift in duration, no shift in within Great quality statement. Speaker 200:37:56The ratio is right around 4 years. I think we finished that 4 years. Operator00:38:00It's been Speaker 300:38:01around 4 years for the last 3 years And we've been at AA- or A plus for the last 3 years. Speaker 600:38:08Okay. That's great. Thank you very much. Appreciate the help as always. Speaker 200:38:14Thank you. Operator00:38:16Thank you so much. We will move now to the next question coming Bank of America. Your line is now open. Speaker 700:38:25Hi, everyone. Speaker 200:38:28Good morning, Grace. Speaker 700:38:29I was hoping we could get maybe a little bit more color on the workers' comp reserve release. I think that you all had previously flagged that just given the extended period of favorability in that line that going forward it might slow a little bit. That seems that has not been the case this quarter. So I was just curious if anything has changed in just kind of the drivers of the favorability there? Speaker 200:38:54I think the biggest difference from what you had seen in previous quarters is as we do every year in Q4 is We update our tail factor study and the tail factor study is really designed to understand the movement to ultimate for your accident years that are outside of your typical reserving side of your typical reserving triangle. So I think 20 years and older and we update that based on our own experience blended with industry periods in data and that was a big driver of the overall movement in comp in the quarter. Speaker 700:39:30Thanks. And I guess thinking about the 95.5% combined ratio for next year, I mean, I think everyone's expecting some pretty strong improvement in personal lines over the course of the year, but E and S has been running quite favorable here lately. I guess Just trying to think about the timing for a potential return to that longer standing 95% combined ratio. And I guess just If we should consider E and S favorability to be kind of more enduring and maybe offset ongoing, reunderwriting in the personal lines book that might take beyond next year to improve to the target? Speaker 200:40:09Yes. So We pride ourselves in providing very detailed guidance, but we do stop short of guiding at the individual segment level. I think as you pointed out, overall, The guidance is a 95.5 percent and on an underlying basis when you take out that 5 point cat assumption, it's relatively stable year over year. I think the pieces you're pointing to are reasonable approaches, which is when you think about the run rate performance of E and S And the rate we've been achieving in that line and continue to earn in that line, we expect strong margins to continue. And I think from a Commercial line standpoint, which we're currently running right around that target, just a little over 95 Strong rate, which is running 7.3% in the quarter, 7% for the full year in line with where we had loss trends going into the year. Speaker 200:41:00So stability in commercial lines based on those major factors, I think would also be a good assumption. And then as we've talked about and reinforced, We expect to have rate level written in personal lines over the course of this year 2024 In that 20% to 25% range, again, we don't break down our loss trend assumptions by segment, but we've got a pretty healthy loss trend assumption in personal lines along with that rate level. This is not going to achieve our target margin in 2024, But we expect as we continue to earn that rate increase over 2024 and into 2025 on both a written and an earned basis and continue to transition that book and continue to refine our pricing models, that we will put ourselves on a good glide path to that target. Speaker 700:41:53Thank you. Speaker 200:41:55Thank you, Grace. Operator00:41:58Thank you so much. We will now move to the next question coming from the line of Scott Ryneak of RBC Capital Markets. Your line is now open. Speaker 800:42:15Good morning. Yes, just a quick question on the GL reserve development you had there. Is there any other detail you can provide on that just in terms of some of the risks or the classes where you have the development? And did you see any In particular on the contractor side, I was just curious if you can give more color on that. Speaker 200:42:38Yes, I would say there's nothing unique from a segment or class of business perspective. Now remember, we are Heavier reconstruction, we always have been, but there's nothing that I would point to because the portfolio hasn't shifted. And I think that's also important to understand. We haven't had a big shift in our portfolio in terms of limits profile or industry classification that we have in that book of business, But it is more heavily weighted towards construction. But that's been the case throughout the last few decades. Speaker 200:43:10So there's nothing that shifted there. But I would say what we've seen on the severity side is pretty broad based. And again, I think as you would expect from a social inflationary perspective, They don't that trend doesn't differentiate between construction and other products type exposures. Speaker 800:43:29Yes. Okay. That's good. And then just on workers' comp, you made a comment in the script about just seeing some higher medical trends, which I think there's a lot of people in the industry that are talking about that now. But how are you feeling about the line just for yourselves and for the industry? Speaker 800:43:46And do you expect that rate increases will finally start happening for the industry this year In that book? Speaker 200:43:55I don't think it will be this year. And I say that because we have a pretty good line of sight as everybody else into what the filed loss costs were For the majority of states for the almost the entirety of 2024, those loss cost filings are still negative. On a blended basis, They're probably in the call it mid single digit negative range across the entirety of our footprint. Now our actual rate change has been well below that running around 2% negative, 1.5% on a full year basis. I do think as we look into 2025 and maybe even the latter half of this year, you might see those temper back to flat. Speaker 200:44:35But I do think there's going to be a lag in the recognition of any movement from a loss experience perspective by the time the bureaus start to react to that. But just another word on medical inflation. When you look at the component parts of the CPI Inside of medical that impacts workers' comp the most, it's hospital services, which actually have moved A fair amount from a CPI perspective and then physician services, which is those 2 together are about 90% of the lost dollar and then add in pharmaceuticals, which is the remaining roughly 10%. On a blended basis, it's still running in the 3.5% to high 3% range and wages are still around 4%. So you still have a slight favorable gap there. Speaker 200:45:24I think the bigger question is at what point does The improved frequency that's been happening year after year start to subside and level out. And I think that's more of the open question. As you know and you've seen in our performance, our growth in workers' comp has been quite low because we've been hesitant to get overly aggressive on pricing And the market continues to be very actively competitive in that space and naturally hurt our ability to grow. Margins are good, but we do think over time you're going to see some pressure on those margins. Speaker 800:45:58Okay. That's good. And Yes. Just the last one I had was just on the property treaty. You took the retention up to $100,000,000 from 60,000,000 Was that I mean, I understand you're talking about it's kind of in line with the exposure now, increased size of the book and everything. Speaker 800:46:17But Was some of that rate driven as well? Just what kind of drove the $100,000,000 to $60,000,000 Was there anything else beyond that? And what did you see for kind of rate increases at oneone on reinsurance? Speaker 200:46:35Yes. So just in response to the first question, I think generally speaking, the majority of reinsurers have Establish the threshold of 1 in 10 year attachment points, generally speaking. They wanted to get out of the earnings volatility business And they generally didn't want to play below 1 in 10. Our current attachment point is right around 1 in 7. So it's still a little bit lower than where the majority of reinsurers like to play. Speaker 200:47:02But as we do every year for us, we're evaluating Expected ceded premium by layer versus expected ceded losses by layer and that had been a good economic trade for us for a long time. And based on how pricing has had moved, we decided to increase that retention last year. Now we also only placed about half of the first layer last year. So it was $60,000,000 attachment, but we were taking half of the first 40x of $60,000,000 So really For all practical purposes, it went from $80,000,000 retention to $100,000,000 retention. And that's really what drove it from our perspective was market Capacity had started to get a little bit tighter at that attachment point and then the pricing from our perspective wasn't as favorable. Speaker 200:47:46But all in and I think this is and I know Tony reinforced this point in his prepared comments is we were able to eliminate all co participations throughout program and in addition to increasing the limit and adding in that cat bond, our $1,250,000 impact to equity $1,250,000 impact to equity is now down to 4% and we feel good about that. The only thing I would say about pricing on the renewal is When you look across layers and even overall, I would say it was very much in line with where sort of industry prognostication was post oneone from an overall market perspective. So I think we felt good about where it landed from a pricing standpoint. Speaker 800:48:29Great. Appreciate all the answers. Thanks. Speaker 200:48:32Thank you. Operator00:48:35Thank you so much. We have the last Person has the question coming from the line of Meyer Shields of KBW. Your line is now open. Speaker 900:48:43Great. Thank you and good morning. I apologize if this has been covered already. But within Personal Auto, was there any screw up to prior quarters in 2023 In the loss mix, we take out the adverse development. Speaker 100:49:02Current year movement? Speaker 300:49:04Yes. In personal auto, we had roughly speaking a $9,000,000 update to the current accident year. And then on a full year basis that was about $16,000,000 $17,000,000 Speaker 900:49:19All right. That's helpful. Does that relate at all Like are the development patterns for the mass affluent book any different than they were in sort of the standard book that you're moving away from? Now Speaker 200:49:33we don't really attribute this to the shift in the book of business as much as just quick recognition of some elevated frequency and severity in the current year that we wanted to react to as quickly as possible. Speaker 900:49:49Okay. Perfect. Understood. And then again, apologies if I missed this, hoping to get Todastky losses by line of business in the quarter. Speaker 300:49:58Losses for commercial lines? Speaker 900:50:00Commercial, I assume that's personal is all home. Speaker 300:50:04Yes, personal the home was $8,100,000 of the $9,100,000 in personal lines. For the commercial lines, we had $13,800,000 in commercial property. We had $900,000 in commercial auto and we had $1,500,000 in business owners for a total of $16,100,000 or two points on commercial lines. Speaker 900:50:25Okay, perfect. Thank you so much. Speaker 200:50:29Thank you. Operator00:50:31At this time speakers, we don't have any questions on queue. You may proceed. Speaker 200:50:36Great. Well, thank you all for joining us this morning. We Appreciate your time and your questions. And as always, feel free to reach out to Brad with any follow-up. Thank you. Operator00:50:48And that concludes today's conference. Thank you so much everyone for joining. You may now disconnect and have a great day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallSelective Insurance Group Q4 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Annual report(10-K) Selective Insurance Group Earnings HeadlinesSelective Insurance Group Holds Annual Shareholder MeetingMay 3 at 3:55 PM | investing.comSelective Insurance Group (NASDAQ:SIGI) Price Target Raised to $96.00May 2 at 3:11 AM | americanbankingnews.comThe Robotics Revolution has arrived … and one $7 stock could take off as a result.Robots aren't coming to America in 2025. They are already here. Oxford Economics says, "The Robotics Revolution we predicted has arrived." In fact, I believe these robots could impact 65 million Americans lives — by August of this year.May 4, 2025 | Weiss Ratings (Ad)Selective Insurance: A Multifaceted Insurer Well-Positioned For 2025 And BeyondApril 30, 2025 | seekingalpha.comSelective Insurance Group, Inc. (NASDAQ:SIGI) Receives $95.17 Average PT from BrokeragesApril 29, 2025 | americanbankingnews.comSelective Insurance Group, Inc. Just Missed Earnings - But Analysts Have Updated Their ModelsApril 26, 2025 | finance.yahoo.comSee More Selective Insurance Group Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Selective Insurance Group? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Selective Insurance Group and other key companies, straight to your email. Email Address About Selective Insurance GroupSelective Insurance Group (NASDAQ:SIGI), together with its subsidiaries, provides insurance products and services in the United States. The company operates through four segments: Standard Commercial Lines, Standard Personal Lines, E&S Lines, and Investments. It offers casualty insurance products that covers the financial consequences of employee injuries in the course of employment and bodily injury and/or property damage to a third party; property insurance products, which covers the accidental loss of an insured's real property, personal property, and/or earnings due to the property's loss; and flood insurance products. The company also invests in fixed income investments and commercial mortgage loans, as well as equity securities, short-term investments, and alternative investments, and other investments. It offers its insurance products and services to businesses, non-profit organizations, local government agencies, and individuals through independent retail agents and wholesale general agents. The company was founded in 1926 and is headquartered in Branchville, New Jersey.View Selective Insurance Group ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Amazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2Palantir Earnings: 1 Bullish Signal and 1 Area of ConcernVisa Q2 Earnings Top Forecasts, Adds $30B Buyback PlanMicrosoft Crushes Earnings, What’s Next for MSFT Stock?Qualcomm's Earnings: 2 Reasons to Buy, 1 to Stay AwayAMD Stock Signals Strong Buy Ahead of Earnings Upcoming Earnings Palantir Technologies (5/5/2025)Vertex Pharmaceuticals (5/5/2025)Realty Income (5/5/2025)Williams Companies (5/5/2025)CRH (5/5/2025)Advanced Micro Devices (5/6/2025)American Electric Power (5/6/2025)Constellation Energy (5/6/2025)Marriott International (5/6/2025)Energy Transfer (5/6/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 10 speakers on the call. Operator00:00:00Good day, everyone. Welcome to Selective Insurance Group's 4th Quarter 2023 Earnings Call. At this time, for opening remarks and introductions, I would like to turn the call over to Senior Vice President, Investor Relations and Treasurer, Brad Wilson. Speaker 100:00:15Good morning and thank you for joining us for Selective's 4th quarter and full year 2023 earnings conference call. Yesterday, we posted our earnings press release and financial supplement on selective.com under the Investors section. A replay of this webcast will be available there shortly after the end of this call. Today, we will discuss our financial performance, market conditions and our expectations for 2024. Joining us on the call are John Marchioni, our Chairman of the Board, President and Chief Executive Officer and Tony Harnett, our Senior Vice President, Chief Accounting Officer and Interim Chief Financial Officer. Speaker 100:00:53They will make remarks before we move to our Q and A session. We're excited to welcome Tony to his first conference call since becoming Interim CFO. He's been with Selective since 1999 and has held several senior finance positions. Our commentary today includes references to non GAAP measures, which we believe make it easier for investors to evaluate our insurance business. These non GAAP measures include operating income, operating return on common equity and adjusted book value per common share. Speaker 100:01:23We include GAAP reconciliations to any referenced non GAAP financial measures in the financial supplements on our website. Also, we will make statements and projections about our future performance. These forward looking statements under the Private Securities Litigation Reform Act of 1995 are not guarantees of future performance. They are subject to risks and uncertainties that we disclose in our annual, quarterly and current reports filed with the SEC. We undertake no obligation to update or revise any forward looking statements. Speaker 100:01:57With those introductory remarks, I'll now turn the call to John. Speaker 200:02:01Thanks Brad and good morning. 2023 was another excellent year for Selective. We grew net premiums written by 16%, produced a 96.5% combined ratio, increased after tax net investment income by 33% to $310,000,000 and produced an operating ROE of 14.4%. Catastrophe losses ended the year approximately 2 points above our initial expectations, offset by a better than expected non cat property loss ratio, improved expense ratio and favorable prior year casualty reserve development. We achieved 2 significant milestones in 2023, exceeding $4,000,000,000 in net premiums written for the first time and delivering our 10th consecutive year of double digit non GAAP operating return on equity. Speaker 200:02:52Over the last decade, we have more than doubled net premiums written and book value per share and almost tripled operating income. Average operating ROE of 12.2% over the past decade exceeded our target. When we set an ROE target, it's not aspirational. We expect to achieve it consistently. Our disciplined profitable growth and approach to enterprise risk management have served our shareholders well. Speaker 200:03:19Over the past 10 years, Tangible book value per share plus accumulated dividends grew at a compound annual rate of 10%. We believe this is our industry's best long term indicator of value creation. Over the same period, annualized total shareholder return was 15.6%, exceeding the S and P Property Casualty Index by 2.2 points per year and the S and P 500 by 3.6 points per year. We are proud of this track record of strong operating performance, growth and excellent shareholder returns that few in our industry can match. Although we reported our 18th consecutive year of net favorable prior year casualty reserve development, we recorded net adverse casualty development of $10,000,000 in the 4th quarter. Speaker 200:04:07Included in this development was an increase of $55,000,000 in general liability. We believe this is attributable to the social inflation discussed in previous earnings calls that also is impacting the rest of the industry. Over recent years, we have increased our loss trend assumptions and have seen severities follow suit, partially offset by favorable frequencies. We believe our prudent planning and reserving approach has served us well. While favorable frequency trends continue, General liability severities have emerged somewhat higher than expected. Speaker 200:04:41The development was mostly on accident years 2015 through 2020 with an average impact of about 1 loss ratio point to general liability for these years. In the 4th quarter, The adverse general liability development was largely offset by $50,000,000 of favorable workers' compensation development. For accident year 2023, we increased casualty loss costs by $14,000,000 primarily due to elevated frequencies and severities in personal auto and to a lesser extent commercial auto. Our 2023 accident year loss ratios for general liability remained unchanged. With these adjustments, we remain confident about our overall booked reserves. Speaker 200:05:23However, we will continue to monitor these trends and their impact. Our competitive and crowded market makes it critical that we clearly demonstrate our value proposition to customers, distribution partners, employees and investors. Our success is based on a unique combination of competitive advantages. Taken together, these competitive advantages create a winning formula for Selective. They are a unique field model placing empowered underwriting staff in close proximity to our distribution partners and customers, Our ability to develop sophisticated risk selection, pricing and claims management tools and embed them in the workflows of our frontline employees. Speaker 200:06:04A franchise value distribution model defined by meaningful and close business relationships with a group of top notch independent agents and brokers, a commitment to delivering a superior omnichannel customer experience enhanced by digital platforms and value added services and a highly engaged and aligned team of extremely talented employees. We continue to align the interest of our employees and our shareholders. While our combined ratio performance was profitable, it was higher than our 95% target. Our variable compensation incentive plan, which all includes all employees reflects this. We are focused on delivering improved underwriting results even though our 2023 operating ROE exceeded our target. Speaker 200:06:51Our Standard Commercial Lines and Excess and Surplus Lines segments represent approximately 90% of our business. They are delivering underwriting profitability that is in line with or better than our 95% combined ratio target. Maintaining underwriting discipline and price adequacy in these segments remains a top priority. In Standard Commercial Lines, the marketplace continues to be constructive. Our pricing is holding up and our retention metrics remain historically high. Speaker 200:07:20This segment's strong underwriting performance and growth allow us to focus our more significant actions on the underperforming portions of the portfolio. Sophisticated tools with granular pricing and retention data allow us to manage our renewal inventory by profitability cohort. This includes non pricing actions such as in property We are increasing wind and hail deductibles in the most catastrophe prone areas and pushing the use of hail cosmetic damage exclusions. We are also increasing all other peril deductibles. Our unique operating model resonates with our distribution partners, providing opportunities to grow our business organically. Speaker 200:07:59We are a stable market and the trust we build with our distribution partners supports our renewal goals and helps speed our new business pipeline with quality opportunities. While submission activity has been elevated given marketplace disruptions, we remain disciplined as our team's focus on recognizing quality business and walking away from opportunities that do not align with our appetite, pricing or terms and conditions. Net premium as written growth has been excellent, mainly coming from rate and exposure with policy counts in standard commercial lines up 3% for the year. Within property, we achieved renewal pure rate of 12.1 percent and 4.9 percent of exposure increases for the year, producing a 17.6% increase in total renewal premium. In commercial auto renewal pure rate was 9.8% with increased exposure of 4.4% for the year resulting in a 14.6% total renewal premium increase. Speaker 200:08:59At the line of business, strategic business unit and regional levels, we have detailed plans to continue refining our portfolio and build on our flagship segment's success. We are also seeing high levels of excitement from our distribution partners as we prepare to launch 5 new states for standard commercial lines in 2024. By every important measure, our excess and surplus lines segment had a record year. Net premium as written grew 24% with an 86% combined ratio. E and S results are benefiting from both the portfolio repositioning we formed in past years and attractive market dynamics. Speaker 200:09:38Our contract binding and brokerage operations delivered strong top and bottom line performance. Contract binding is similar to our standard lines small business and benefited from improved ease of doing business from our technology investments. Brokerage is akin to our standard lines middle market business. We see significant growth opportunities within our current appetite, which is mainly unchanged. Growth in brokerage along with rate and exposure increases has increased the average E and S account size from approximately $3,800 at the end of 2022 to approximately $4,600 at year end 2023. Speaker 200:10:17As with general liability and standard lines, We are very comfortable with our underwriting discipline, business mix, pricing and terms and conditions. Personal lines represents approximately 10% of our business. Its combined ratio is well above our target. However, renewal pure price increased 8.9% during the quarter And we expect rate to further accelerate in 2024 into a range of 20% to 25% subject to regulatory approvals. We continue transitioning the personal lines book to our mass affluent target market. Speaker 200:10:51For the quarter, over 80% of new business and homeowners Coverage A values in excess of $500,000 While new business premiums increased 16% in the quarter, New policy counts declined 8% from deliberate curtailed production. Higher average premium sizes driven by both rate and exposure increases the premium increase. In addition to rate actions, we seek to improve homeowners performance through the continuing transition to the target market and improved terms and conditions. We stated last quarter that we are introducing depreciation schedules similar to actual cash value on older roofs implementing mandatory wind and hail deductibles in states most exposed to severe convective storms. We strive to have all three Insurance segments meet our profitability goals throughout the market cycles. Speaker 200:11:43Diversification across and within these segments position us to provide value to our distribution partners, enhancing our revenue and income streams, while providing the operational flexibility needed to succeed in today's market. I'll now turn the call over to Tony to discuss our Q4 and full year results and I'll be back with color on our 2024 guidance. Tony? Speaker 300:12:06Thanks, John, and good morning. We reported $2.01 of fully diluted EPS in the 4th quarter, up 46% from a year ago. Non GAAP operating EPS was $1.94 up 33%. Consequently, we had a very strong 18.9% return on equity with an 18.2% operating return on equity for the quarter. For the year, fully diluted EPS was $5.84 up 65% from 2022. Speaker 300:12:36Non GAAP operating EPS was $5.89 up 17%. We produced return on equity of 14.3% for the year with operating return on equity of 14.4%. As John noted, this marks our 10th consecutive year of double digit operating return on equity. Over those 10 years, Our operating return on equity averaged 12.2 percent exceeding our target, which is set approximately 300 to 400 basis points above our weighted average cost of capital. Our GAAP combined ratio for the quarter was 93.7%, a one point improvement from 94.7 percent to $0.01 of fully diluted EPS in the 4th quarter, up 46% from a year ago. Speaker 300:13:21And one non GAAP operating EPS was $1.94 up 30 3 percent. Consequently, 2023's combined ratio was 96.5 consistent with our original guidance. Modest favorable development, which we do not plan for, reduced the combined ratio by 0.2 points. Better than expected non cat property losses and a lower expense ratio were offset by elevated catastrophe losses of 6.4 points, which was 1.9 points above our expected 4.5 points. Our expense ratio for the year was 31.4%, better than the 32% long term target we established in 2019. Speaker 300:14:03We maintain expense discipline while making investments that support our strategic objectives. Consequently, we expect our 2024 expense ratio to be relatively stable and this assumption is embedded in our combined ratio guidance. In the quarter, net unfavorable prior year causative reserve development of $10,000,000 added 1 point to the combined ratio. At the line level, dollars 50,000,000 of favorable prior year development in workers' compensation was more than offset by $55,000,000 of adverse development in general liability and $5,000,000 in personal auto. The favorable prior year workers' compensation development was primarily driven by better than expected severity in older accident years impacting our tail development factors. Speaker 300:14:49While the factor changes were relatively small, These factors are applied to all accident years. Frequency in the line continues to be favorable in more recent accident years. While we are starting to see medical CPI increase, wage growth, which directly impacts premiums, is providing a meaningful offset. Adverse prior year general liability reserve development was severity driven and spread across prior accident years, predominantly 2015 through 2020. We attribute this largely to the continued elevated impacts of social inflation. Speaker 300:15:22We see this as an industry dynamic with higher propensity for attorney representation and litigation, longer settlement times and higher settlement values. Nonetheless, the composition of our general liability book has remained relatively consistent over time as we focus on our business within our appetite. Putting this reserve increase in context, it represents about 3% of our general liability net reserves. We remain comfortable with our current accident year loss pick for this line, while acknowledging the inherent risks. For the current accident year, we took action in Personal Auto in the quarter, increasing loss cost by $9,200,000 which added 9.1 points to the personal lines combined ratio. Speaker 300:16:05The adjustment was driven by increased claim frequency. We also increased loss costs in commercial auto by $4,900,000 impacting the quarterly standard commercial lines combined ratio by 0.6 points. The commercial auto adjustment responded to higher paid loss expenses driven by elevated litigation rates. Consistent with recent quarters, our overall underlying combined ratio continues to be very strong. The underlying combined ratio for the year was 90 point 3%, 3 points better than 2022. Speaker 300:16:37The 4th quarter's 90.2% underlying combined ratio was 3.7 points better than last year. After tax net investment income was $78,000,000 in the 4th quarter, up 20% from the prior year period. For the year, after tax net investment income was $310,000,000 above our original 2023 guidance of 300,000,000 and up 33% from 2022. Over the last 2 years, we focused on building the portfolio's book yield as interest rates rose. During the quarter, we invested $429,000,000 of new money at an average pre tax yield of 6.7%. Speaker 300:17:18As a result, average pre tax book yield increased 11 basis points to the end to end the year at 4.7%. We expect this higher embedded book yield will provide a persistent source of elevated investment income going forward. For 2023, Investments generated 12.4 points of return on equity, up 3 points from 9.4% in 2022. The portfolio remains conservatively positioned with total fixed income and short term investments representing 92% of the portfolio at year end an average credit quality of AA- and a duration of 4 years. Alternative investments, which report on a 1 quarter lag, generated $900,000 of after tax income in the quarter $21,200,000 for the year, up 16% from full year 2022. Speaker 300:18:122023 was an important year for us as a reinsurance buyer. During the Q4, We entered into our 1st catastrophe bond transaction through High Point Re Limited. The transaction received strong support providing a new and valuable source of fully collateralized reinsurance capital from a broad panel of investors. The transaction was upsized by 62.5 percent to $325,000,000 from the initial $200,000,000 target. Pricing was within the initial guided range. Speaker 300:18:42The coverage sits within the top layer of our program at $500,000,000 in excess of 700,000,000 and provide 65% of that layers limit. We also successfully renewed our property catastrophe green tranche program effective January 1, Going to market with a $1,100,000,000 limit in excess of a $100,000,000 retention. This compared to our expiring $915,000,000 limit in excess of $60,000,000 retention. While the expiring program had various co participations, we fully placed all layers in the new treaty. The increase in retention is largely comparable with the growth in our property portfolio and reflects our ability to obtain more losses. Speaker 300:19:24A 1.250 year net probable maximum loss is now only 4% of GAAP equity for our peak peril of U. S. Hurricane. This is well within our risk tolerance and 3 percentage points lower than last year's 7%. The increased limit we purchased reflects our business' strong growth and expected future growth. Speaker 300:19:45We had modest risk adjusted pricing increases consistent with the overall market. We also achieved our marketed key terms and conditions. Our reinsurance program includes casualty excess and property per risk treaties that renew on July 1. The retentions on these treaties are currently $2,000,000 per occurrence for casualty and $5,000,000 per risk for property. Our capital position remains extremely strong with $3,000,000,000 of GAAP equity and $2,700,000,000 of statutory surplus at year end. Speaker 300:20:17Book value per share increased 13% in the 4th quarter due to our profitability and the interest rate rally that reduced after tax unrealized losses for fixed income securities. For the year, book value per share increased 18%. Adjusted book value per share was up 10% for the year. Year end premium to surplus was 1.51 times, up from 1.44 in 2022. The ratio increased due to strong insurance operations growth. Speaker 300:20:48Our internal operating target for premium to surplus is 1.35 to 1.55 times, although we are comfortable moving above that range. Our debt to capital ratio of 14.6% and strong operating cash flow provide ample financial flexibility to support organic growth plans and execute our strategic initiatives. We did not repurchase any shares during the quarter or year and have $84,200,000 remaining capacity under our share repurchase authorization. We view organic growth within our insurance operations as the most attractive opportunity to deploy capital. Turning to 2024 guidance. Speaker 300:21:28We expect our GAAP combined ratio to be 95.5%, including 5 points of catastrophe losses. As always, we assume no prior accident year reserve development. After tax net investment income is expected to be $360,000,000 This represents a 16% increase over 2023, primarily reflecting our fixed income securities portfolios meaningful increase in book yield. After tax net investment income guidance includes $32,000,000 from alternative investments. Our guidance includes an overall effective tax rate of approximately 21% with a 20.5 percent effective tax rate on investments and 21% on all other items. Speaker 300:22:11Weighted average shares are estimated to be 61,500,000 on a fully diluted basis. This does not reflect any assumption for share repurchases we may make under our existing authorization. Now I'll turn the call back to John. Speaker 200:22:26Thanks, Tony. On this call, we have highlighted the industry's elevated and uncertain loss trends that are influenced by economic inflation, social inflation, increased catastrophe loss frequency and the unusual frequency and severity patterns in recent years. These dynamic industry wide factors have pressured loss costs, necessitating our continued focus on adequate pricing. In 2023, we entered the year with an expected loss trend of 6.5%. Our overall renewal pure price excluding exposure change was 6.8%. Speaker 200:22:59We remain confident in our ability to execute our renewal strategy and achieve renewal pure price commensurate with expected loss trends. We have demonstrated this throughout market cycles and it continues to be the cornerstone of our consistently profitable combined ratio performance. Our 2024 combined ratio guidance reflects an overall expected loss trend 7%, up from 6.5% a year ago. This consists of 4% for property and 8% for casualty, reflecting our updated views of both economic and social inflation and expected frequency trends. In light of recent experience, Particularly related to secondary perils, we've also increased our catastrophe load to 5%. Speaker 200:23:45These trends are all embedded in our 2024 loss picks and reflected in our guidance. Our guidance implies a healthy ROE outlook for 2024 that exceeds our 12% target with ample runway to continue our trajectory of profitable growth. We have the team, sophisticated tools and disciplined execution to manage through these market dynamics and believe we are operating from a position of strength. I'll now turn the call over to the operator to begin our question and answer session. Operator00:24:17Thank you. We will now begin the question and answer session. We have questions on queue. The first question is coming from the line of Michael Phillips of Oppenheimer. Your line is now open. Speaker 400:24:42Thank you. Good morning, everybody. My first question is on the GL stuff, John and Tony, the 55,000,000 You talked a lot about the severity piece, which we get, hear a lot of that from other people too. But have you seen anything in terms of just a different reporting pattern that's lengthened because of that as well? Speaker 200:25:02Yes, Mike. Appreciate the question. This is John. So As you highlighted, severity is really the driver of what we've been seeing. Frequencies and we're talking GL in particular, frequency trends have continued to be, I'll call them favorable, but there's no question there has been an extension of reporting patterns, but we've seen that for a couple of years now. Speaker 200:25:24And I would say that's incorporated into how we evaluate the more recent accident years in terms of But I think that started in the kind of latter part of the pandemic and has persisted. And I would say that's factored into how we evaluate the more recent accident years. Speaker 400:25:44Okay. Thanks. I mean, I asked because That was interesting that you included in that 55 comments that part of that included ex year 2020. So I guess that means that The higher severity you talked about offsetting any kind of frequency benefit that I think was there in that accident year. So I guess want to make sure that's the case. Speaker 400:26:01And then If so, does that mean any risk of the more recent accident year is also being affected, which is kind of what you just alluded to as well? Speaker 200:26:12Yes, Don, I appreciate the follow-up point. Just a couple of additional points there. First of all, with regard to 2020, The comment relative to GL is accurate and that was included in our updated view and the $55,000,000 that we booked That was included in those accident years. But I do want to kind of reinforce the other point, which is that accident year in total has emerged favorably across all lines and even within casualty has emerged favorably. But we've got movements in between individual lines and that's what you saw us report with regard to the GL emergence. Speaker 200:26:49With regard to the more recent accident years, in addition to the point we just talked about with regard to Recognizing that slight extension in reporting patterns, I think the other important point to consider is if you look back at our disclosures and our guidance, We've been moving expected loss trends higher on a pretty consistent basis. So if you look back to 2020, 2021, Our forward trend assumption for casualty was around 4%. And then in 2022, we moved that up to 5.5%. In 2023, it was 6% and now we're at 8% and actually on an ex workers' comp basis is a little bit higher than that. And those are fully embedded in our loss ratios that were in our guidance and were in our booking. Speaker 200:27:37And I think that's probably one of the more important pieces to understand in terms of how companies are reacting to this. The other thing I'll say is and this has been the case not just for the 2024 but for the last the most recent accident years as well is despite what was a consistent pattern of better than expected frequencies, We have not assumed that in our forward loss trends either for 2024 or for the last three accident years. That was really a severity move and assumed claim counts or frequencies to remain relatively stable. And I think that's also the right way for us to be thinking about it and approaching it. Speaker 400:28:17That's perfect. Thanks for the color, John. I guess second question is just kind of related to all this is you're not seeing any of this spillover into your commercial auto book, it sounds like and I want to make sure that's the case. I think recently you've talked pretty positively about your views and the outlook of commercial auto. So Nothing's going over there right now, is the question and just kind of your outlook for that segment, commercial auto? Speaker 200:28:43We made a very minor adjustment in commercial auto, but if you look back over the last several quarters, I would say that commercial auto has been pretty stable. I think what happened in commercial auto is the severity impacts hit a little bit quicker and probably more so in 2021 And that then got incorporated at the forward expectations and a lot stronger pricing. And I think not just for us, but for the industry, commercial auto pricing has been a lot firmer for a lot longer than we've seen in G and A. Has been a lot firmer for a lot longer than we've seen in GL. So I would say there you've seen some moderation In the commercial auto loss trends in recent quarters and I think that in the context of continued strong rate, which for us was 10% in the quarter And just a hair under 10% on a full year basis, I think sets up well. Speaker 200:29:30Again, there's uncertainty just because of the environment we're in. I think when you look at those factors in commercial auto, I think we do have a better outlook on that line. Speaker 100:29:41Okay. Thank you, John. Appreciate it. Operator00:29:45Thank you. We will move now to the next question coming from the line of Mike Zaremski of BMO. Your line is now open. Speaker 500:29:54Could you walk us through, you did a good walk through of kind of how you've Increasing your loss trend on casualty over the years, the same holds true On the catastrophe loss ratio, maybe you can kind of help us understand what caused the increase that you picking to a higher Is it picking to yes, if you could help us think through that and if there's any business mix impact there 2 or is it just being out trends been worse and you're trying to get ahead of it? Speaker 200:30:30Yes. Appreciate the question. It's really a combination of our updated modeling and our more recent experience. So if you were to look at so the 5 points that we have in our guidance for 2024 is kind of right in between the 5 10 year averages. So if you were to just look at the 10 year average, it's about 4.7%. Speaker 200:30:51And if you look at 5 year average is about 5.4%. So we think just based purely on our more recent experience plus modeling update, That's a pretty solid assumption for us. And now there's always going to be a little bit of business mix in there and the growth by segment will influence that. But that's really how we landed at a 5 point assumption. Speaker 500:31:16Got it. And I guess just going thinking about just the trends on loss costs have been Inching higher, but not just for, I guess, overall for years now. And you guys are in a very good spot where you have very consistent returns, you've got good pricing power. But Do you think that the marketplace, which also seems to be experiencing similar trends, this kind of bodes well for pricing power in 2024, because I feel like The consensus amongst investors is more that pricing is more likely to fall than increase. I don't know if you have any comments there. Speaker 200:32:08Yes. So my sense is pricing remains constructive in our business. And again, I think with different companies you have to cut through their portfolio and to the extent They're more weighted towards professional liability or cyber or D and O. You might see a different pattern, but for us when you focus on core general liability, workers' compensation, property, Automobile and business owners, I would suggest that based on what we're seeing and I think everybody else is seeing from these social inflationary factors, The pricing environment that we've seen in the last couple of quarters will persist and there's even potential for a little bit of acceleration at least on a line by line basis. I think that's where you really have to take this in pieces. Speaker 200:33:03I think GL is the line that I would expect to firm a little bit more. And I know when you talk liability, it does include GL Plus Professional Liability and D and O and Cyber. I'm talking just standard general liability. I think that's where some more of the pressure has been and that hasn't been As strong from a pricing perspective as auto and commercial property have been for the last couple of years. So while you might see auto come down a little bit, I think it'll still be strong and I think you might see some movement higher in GL, We feel good. Speaker 200:33:39If we look at our retentions pretty closely and measure them a number of different ways to understand the market reaction to our pricing And our retentions continue to run really strong on standard commercial lines. And I think that bodes well. Speaker 500:33:54Got it. And if I could sneak one final one in. You've had some management changes in recent months. Has a new set of eyes or different set of eyes or different people in charge of any process Recently, does that any impetus for some of these changes that were made in terms of the loss assumptions and reserve changes? Speaker 200:34:22Not at all. So it's actually the same eyes and I want to reinforce that point. So obviously, Mark left at the end of Q3, but the rest of us who are always involved alongside of Mark are the same group and have the same philosophy and the same approach to evaluating our results, evaluating our reserves. And that includes myself and includes our Chief Actuary who's been here for a long time and continues to be here and it includes Tony who has the Chief Accounting Officer, He's been with the company 24 plus years, but the last 7 as the Chief Accounting Officer before becoming Interim CFO was also deeply involved in all decisions, not just related to reserves, but all accounting matters. So that it's a very consistent leadership group and a very consistent philosophy. Speaker 200:35:12I appreciate the question because I think it's a great opportunity to kind of reinforce that point. Speaker 500:35:17Thank you. Operator00:35:20Thank you. We will move now to the next question coming from the line of Paul Newsome of Piper Slander. Your line is now open. Speaker 600:35:38Good morning. Sorry about that. I was hoping we could switch to Investment income and remarkably large expected improvement next year. That new money yield number that you mentioned seemed pretty darn good. Is there anything under the hood there in terms of A shift in what you're investing in or anything else that would give you that sort of lift. Speaker 600:36:09I mean, everyone's seen a lift, but it seems to be a bigger lift than a lot of folks are talking about for 2024? Speaker 200:36:19Yes, Paul. Great question. So I think a lot of this is really indicative of the hard work that was done over the last 2 years to really build the embedded book yield. So since the beginning of the interest rate cycle from year end 2021, we've picked up 173 basis points of embedded book yield. And that allows us to really have a solid view of our ability to continue to pick up investment income on a go forward basis and have that strong contribution to operating ROE. Speaker 200:36:53The overall profile of the portfolio remains relatively consistent. But when you have the opportunity to put money to work at an investment grade fixed income at 5.5% or 6% on a pre tax basis, It allows you to really lock in those yields for an extended period of time. I mean that's really allowed us to boost that return. And with an invested asset leverage a little over 3 times, we don't have to take on a lot of additional risk to produce that kind of upside from an ROE perspective. So nothing significant in terms of shifting the strategy. Speaker 200:37:28In fact, I would say the overall bias would remain up in quality. When you think about those investment grade fixed income returns that we're getting, it really raises the bar on investing in risk assets, which and we've been sitting at the lower end of our kind of target range from a risk asset perspective at just over 10%. Speaker 600:37:50No shift in duration, no shift in within Great quality statement. Speaker 200:37:56The ratio is right around 4 years. I think we finished that 4 years. Operator00:38:00It's been Speaker 300:38:01around 4 years for the last 3 years And we've been at AA- or A plus for the last 3 years. Speaker 600:38:08Okay. That's great. Thank you very much. Appreciate the help as always. Speaker 200:38:14Thank you. Operator00:38:16Thank you so much. We will move now to the next question coming Bank of America. Your line is now open. Speaker 700:38:25Hi, everyone. Speaker 200:38:28Good morning, Grace. Speaker 700:38:29I was hoping we could get maybe a little bit more color on the workers' comp reserve release. I think that you all had previously flagged that just given the extended period of favorability in that line that going forward it might slow a little bit. That seems that has not been the case this quarter. So I was just curious if anything has changed in just kind of the drivers of the favorability there? Speaker 200:38:54I think the biggest difference from what you had seen in previous quarters is as we do every year in Q4 is We update our tail factor study and the tail factor study is really designed to understand the movement to ultimate for your accident years that are outside of your typical reserving side of your typical reserving triangle. So I think 20 years and older and we update that based on our own experience blended with industry periods in data and that was a big driver of the overall movement in comp in the quarter. Speaker 700:39:30Thanks. And I guess thinking about the 95.5% combined ratio for next year, I mean, I think everyone's expecting some pretty strong improvement in personal lines over the course of the year, but E and S has been running quite favorable here lately. I guess Just trying to think about the timing for a potential return to that longer standing 95% combined ratio. And I guess just If we should consider E and S favorability to be kind of more enduring and maybe offset ongoing, reunderwriting in the personal lines book that might take beyond next year to improve to the target? Speaker 200:40:09Yes. So We pride ourselves in providing very detailed guidance, but we do stop short of guiding at the individual segment level. I think as you pointed out, overall, The guidance is a 95.5 percent and on an underlying basis when you take out that 5 point cat assumption, it's relatively stable year over year. I think the pieces you're pointing to are reasonable approaches, which is when you think about the run rate performance of E and S And the rate we've been achieving in that line and continue to earn in that line, we expect strong margins to continue. And I think from a Commercial line standpoint, which we're currently running right around that target, just a little over 95 Strong rate, which is running 7.3% in the quarter, 7% for the full year in line with where we had loss trends going into the year. Speaker 200:41:00So stability in commercial lines based on those major factors, I think would also be a good assumption. And then as we've talked about and reinforced, We expect to have rate level written in personal lines over the course of this year 2024 In that 20% to 25% range, again, we don't break down our loss trend assumptions by segment, but we've got a pretty healthy loss trend assumption in personal lines along with that rate level. This is not going to achieve our target margin in 2024, But we expect as we continue to earn that rate increase over 2024 and into 2025 on both a written and an earned basis and continue to transition that book and continue to refine our pricing models, that we will put ourselves on a good glide path to that target. Speaker 700:41:53Thank you. Speaker 200:41:55Thank you, Grace. Operator00:41:58Thank you so much. We will now move to the next question coming from the line of Scott Ryneak of RBC Capital Markets. Your line is now open. Speaker 800:42:15Good morning. Yes, just a quick question on the GL reserve development you had there. Is there any other detail you can provide on that just in terms of some of the risks or the classes where you have the development? And did you see any In particular on the contractor side, I was just curious if you can give more color on that. Speaker 200:42:38Yes, I would say there's nothing unique from a segment or class of business perspective. Now remember, we are Heavier reconstruction, we always have been, but there's nothing that I would point to because the portfolio hasn't shifted. And I think that's also important to understand. We haven't had a big shift in our portfolio in terms of limits profile or industry classification that we have in that book of business, But it is more heavily weighted towards construction. But that's been the case throughout the last few decades. Speaker 200:43:10So there's nothing that shifted there. But I would say what we've seen on the severity side is pretty broad based. And again, I think as you would expect from a social inflationary perspective, They don't that trend doesn't differentiate between construction and other products type exposures. Speaker 800:43:29Yes. Okay. That's good. And then just on workers' comp, you made a comment in the script about just seeing some higher medical trends, which I think there's a lot of people in the industry that are talking about that now. But how are you feeling about the line just for yourselves and for the industry? Speaker 800:43:46And do you expect that rate increases will finally start happening for the industry this year In that book? Speaker 200:43:55I don't think it will be this year. And I say that because we have a pretty good line of sight as everybody else into what the filed loss costs were For the majority of states for the almost the entirety of 2024, those loss cost filings are still negative. On a blended basis, They're probably in the call it mid single digit negative range across the entirety of our footprint. Now our actual rate change has been well below that running around 2% negative, 1.5% on a full year basis. I do think as we look into 2025 and maybe even the latter half of this year, you might see those temper back to flat. Speaker 200:44:35But I do think there's going to be a lag in the recognition of any movement from a loss experience perspective by the time the bureaus start to react to that. But just another word on medical inflation. When you look at the component parts of the CPI Inside of medical that impacts workers' comp the most, it's hospital services, which actually have moved A fair amount from a CPI perspective and then physician services, which is those 2 together are about 90% of the lost dollar and then add in pharmaceuticals, which is the remaining roughly 10%. On a blended basis, it's still running in the 3.5% to high 3% range and wages are still around 4%. So you still have a slight favorable gap there. Speaker 200:45:24I think the bigger question is at what point does The improved frequency that's been happening year after year start to subside and level out. And I think that's more of the open question. As you know and you've seen in our performance, our growth in workers' comp has been quite low because we've been hesitant to get overly aggressive on pricing And the market continues to be very actively competitive in that space and naturally hurt our ability to grow. Margins are good, but we do think over time you're going to see some pressure on those margins. Speaker 800:45:58Okay. That's good. And Yes. Just the last one I had was just on the property treaty. You took the retention up to $100,000,000 from 60,000,000 Was that I mean, I understand you're talking about it's kind of in line with the exposure now, increased size of the book and everything. Speaker 800:46:17But Was some of that rate driven as well? Just what kind of drove the $100,000,000 to $60,000,000 Was there anything else beyond that? And what did you see for kind of rate increases at oneone on reinsurance? Speaker 200:46:35Yes. So just in response to the first question, I think generally speaking, the majority of reinsurers have Establish the threshold of 1 in 10 year attachment points, generally speaking. They wanted to get out of the earnings volatility business And they generally didn't want to play below 1 in 10. Our current attachment point is right around 1 in 7. So it's still a little bit lower than where the majority of reinsurers like to play. Speaker 200:47:02But as we do every year for us, we're evaluating Expected ceded premium by layer versus expected ceded losses by layer and that had been a good economic trade for us for a long time. And based on how pricing has had moved, we decided to increase that retention last year. Now we also only placed about half of the first layer last year. So it was $60,000,000 attachment, but we were taking half of the first 40x of $60,000,000 So really For all practical purposes, it went from $80,000,000 retention to $100,000,000 retention. And that's really what drove it from our perspective was market Capacity had started to get a little bit tighter at that attachment point and then the pricing from our perspective wasn't as favorable. Speaker 200:47:46But all in and I think this is and I know Tony reinforced this point in his prepared comments is we were able to eliminate all co participations throughout program and in addition to increasing the limit and adding in that cat bond, our $1,250,000 impact to equity $1,250,000 impact to equity is now down to 4% and we feel good about that. The only thing I would say about pricing on the renewal is When you look across layers and even overall, I would say it was very much in line with where sort of industry prognostication was post oneone from an overall market perspective. So I think we felt good about where it landed from a pricing standpoint. Speaker 800:48:29Great. Appreciate all the answers. Thanks. Speaker 200:48:32Thank you. Operator00:48:35Thank you so much. We have the last Person has the question coming from the line of Meyer Shields of KBW. Your line is now open. Speaker 900:48:43Great. Thank you and good morning. I apologize if this has been covered already. But within Personal Auto, was there any screw up to prior quarters in 2023 In the loss mix, we take out the adverse development. Speaker 100:49:02Current year movement? Speaker 300:49:04Yes. In personal auto, we had roughly speaking a $9,000,000 update to the current accident year. And then on a full year basis that was about $16,000,000 $17,000,000 Speaker 900:49:19All right. That's helpful. Does that relate at all Like are the development patterns for the mass affluent book any different than they were in sort of the standard book that you're moving away from? Now Speaker 200:49:33we don't really attribute this to the shift in the book of business as much as just quick recognition of some elevated frequency and severity in the current year that we wanted to react to as quickly as possible. Speaker 900:49:49Okay. Perfect. Understood. And then again, apologies if I missed this, hoping to get Todastky losses by line of business in the quarter. Speaker 300:49:58Losses for commercial lines? Speaker 900:50:00Commercial, I assume that's personal is all home. Speaker 300:50:04Yes, personal the home was $8,100,000 of the $9,100,000 in personal lines. For the commercial lines, we had $13,800,000 in commercial property. We had $900,000 in commercial auto and we had $1,500,000 in business owners for a total of $16,100,000 or two points on commercial lines. Speaker 900:50:25Okay, perfect. Thank you so much. Speaker 200:50:29Thank you. Operator00:50:31At this time speakers, we don't have any questions on queue. You may proceed. Speaker 200:50:36Great. Well, thank you all for joining us this morning. We Appreciate your time and your questions. And as always, feel free to reach out to Brad with any follow-up. Thank you. Operator00:50:48And that concludes today's conference. Thank you so much everyone for joining. You may now disconnect and have a great day.Read morePowered by