Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| I think what Greg said is really the way to think about it, which is as Alan just mentioned, we’ve been getting a good level of written price increase and that’s earning its way through, so there is still definitely a benefit from earned pricing |
| We’re also encouraged with the early performance of our new state-of-the-art commercial auto product, which has been rolled out in 12 states |
| Alan Schnitzer And strong retention |
| We are very pleased with the underlying fundamentals of our business |
| Underlying underwriting income of $868 million pre-tax was up more than 40% over the prior year quarter, driven by record net earned premiums of $9.7 billion and a consolidated underlying combined ratio which improved almost two points to an excellent 90.6% |
| The underlying combined ratios in our commercial segments remained excellent |
| Our business insurance segment once again delivered very strong results with an underlying combined ratio of 89.7% |
| The underlying combined ratio on our bond and specialty business was also excellent at 80.7% |
| Looking at the two commercial segments together, the aggregate BI/BSI underlying combined ratio was 88.3% for the quarter, among our best ever |
| In our personal insurance segment, the underlying combined ratio improved more than five points to 94.2% as the strong written rate from prior quarters is earning in |
| Our underlying results in personal insurance are improving and heading in the right direction |
| Turning to investments, our high quality investment portfolio continued to perform extremely well, generating after-tax net investment income of $640 million, reflecting strong and reliable returns from our growing fixed income portfolio and solid returns from our non-fixed income portfolio |
| In terms of production, thanks to great execution by our colleagues in the field and the strong franchise value they have to sell, we grew net written premiums by $1.3 billion or 14% to a record $10.5 billion |
| Alan Schnitzer Yes Yaron, just to be clear, we feel great about the workers’ comp line, we feel great about our results this quarter, this year, and we feel great about the outlook |
| Renewal premium change in the segment was very strong at 12.9%, driven by renewal rate change which accelerated year-over-year and sequentially to 7.9% |
| For the segment, even with higher pricing at record levels, retention remained very strong at 87%, a reflection of a rational market |
| New business was strong and higher broadly across the segment |
| In bond and specialty insurance, we grew net written premiums to a record $1 billion, achieved 91% retention of our high quality management liability business, and grew net written premiums in our industry-leading surety business by 13% |
| Given the attractive returns, we are very pleased with the strong production results in both of our commercial business segments |
| Where we’re really encouraged, when we also look at our audit premium which is more of a going backwards view in our core middle market business, we continue to have real strong audit premium also, so both backwards and forward, we’re encouraged with how exposure is playing out in the business and we’ll continue to report out what we see with that line |
| Renewal premium change was 19.4% in our home owners and others business and increased to a record high 18.2% in our auto business |
| Another quarter of strong production across the board positions us well for the rest of the year and into 2024 |
| With the end of the year in sight and 2024 on the horizon and coming into focus, we feel very well positioned for what’s ahead and quite confident |
| In our business insurance segment, written margins are expanding |
| Pricing has been strong and the components of core goods inflation that impact our loss costs are moderating |
| In terms of the top line in business insurance, we’re pleased that economic output and consumption so far remain robust given our leading workers’ compensation business, we benefit in particular from the near 50-year low in unemployment, the prime age labor participation rate, which is at its highest level since 2007, and ongoing wage inflation, which contributes to premium growth and margins |
| As a result of strong pricing in recent years and higher fixed income NII, returns to the segment are currently attractive; nonetheless, given the uncertainty generally in terms of weather volatility, economic and social inflation, a hardening reinsurance market and the geopolitical landscape, we plan to continue pursuing strong price increases in both the property and casualty lines to achieve our over time return objectives |
| Turning to our industry-leading bond and specialty business, we just reached a milestone $1 billion in net written premiums and returns are terrific |
| Relative to the comments last quarter, we feel a little bit better sitting here today than we did 90 days ago, given the record level of RPC that we achieved in the third quarter and the fact that we’re seeing loss trends stabilize, and that’s coming through in our underlying combined ratio |
| Earned margins are improving and additional price increases will earn-in from here |
| Statement |
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| Some of your peers have seen that as well, and I think there is some concern that this could be the beginning of a trend, given what’s gone on in personal auto over the past two years or so |
| The lack of growth in policies in force reflects our continued actions to further balance rate adequacy, catastrophe risk, and regulatory risk |
| In personal insurance, the third quarter segment loss of $193 million was significantly impacted by catastrophe losses |
| Similar to my comments on last quarter’s call, the significant level of catastrophe losses we’ve experienced this year have resulted in lower year-to-date earnings than we expected, so share repurchases in the fourth quarter will likely be lower than the quarterly share repurchases made in the first half of the year |
| This was 8.7 points lower than the prior year quarter, which included catastrophe losses resulting from Hurricane Ian |
| Our third quarter results include $850 million of pre-tax catastrophe losses resulting from another quarter of both frequency and severity of weather across North America |
| We experienced elevated losses from weather activity specifically related to wind and hail events |
| What we’ve seen is inside the underlying--the combined ratios that we’re reporting in business insurance, so we do think that it continues to be an important issue to watch |
| Core income for the third quarter was $454 million and core return on equity was 6.9% as heavy cat activity impacted our results |
| There was some favorable CYPQ this year as well, just not as much, so the year-over-year is unfavorable given less of a good guy |
| We saw a premium decline there year-over-year |
| But you mentioned in your prepared remarks that we might see some premium growth deceleration because of what you referred to as automatic increase in limits |
| Maybe you can give us a little context around what kind of drives that exposure growth? I would think that with the economy moderating some here, that that exposure growth would start to slow here |
| In business insurance, net unfavorable PYD of $263 million was driven by charges in our run-off business, including $284 million related to our annual asbestos review as well as increased reserves for abuse and molestation resulting from the volume of claims related to the closing of the reviver window in California |
| This was a significantly higher number of severe convective storms for a third quarter that created a bunch of catastrophes, so this was not a definitional bucketing close call issue |
| We’ve taken a lot of price in part in response to that, so it’s an issue and we think we’re on top of it |
| I would point you to year-to-date - it is just up 2%, so it wasn’t a meaningful change for the particular quarter, and obviously where you’re seeing not the level of net written premium growth on the other product lines that we’re seeing in workers’ comp, is clearly the rate pressure that the entire industry is seeing there |
| I think you’re referencing the slight down in the net written premium for the quarter |
| The unfavorable prior year reserve development was driven by the results of our annual asbestos review in our run-off book |
| I mean, it sounds like they’ve gotten a bit more cautious in their stance on U.S |
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