The paragraph introduces a conference call and webcast for Hartford Financial's fourth quarter and full-year 2024 earnings. The operator notes that participants are in listen-only mode, and a Q&A session will follow the speakers' remarks. Susan Spivak Bernstein, Senior VP of Investor Relations, presents the call, outlining the agenda which includes remarks from Chris Swift, CEO, and Beth Costello, CFO, followed by a Q&A session with the management team. The call includes forward-looking statements subject to risks and uncertainties detailed in the company's SEC filings, and it mentions the use of non-GAAP financial measures, with explanations available in their filings. The call's content cannot be reproduced without permission.

The paragraph discusses a webcast from The Hartford, where Christopher J. Swift addresses recent Los Angeles wildfires and expresses sympathy for those affected. He commends the team's efforts to assist customers. Swift introduces Mo Tooker, who will become President and lead the company's property and casualty businesses, focusing on strategic growth and customer solutions. The paragraph highlights The Hartford's strong financial performance in the fourth quarter and throughout 2024, emphasizing underwriting execution and customer experience. It notes a 6% growth in commercial lines for the quarter and a 9% growth for the year, with consistent underlying combined ratios. Swift thanks employees for their dedication to the company's success.

In the quarter, Personal Lines saw a significant improvement in its underlying combined ratio, notably in auto, contributing to an annual underwriting gain surpassing expectations. The company achieved strong renewal pricing increases across property and casualty lines, with significant double-digit growth in various sectors. Group Benefits reported core earnings margins of 7.8% for the quarter and 8.2% for the year, driven by strong life and disability results. The investment portfolio also delivered solid returns, resulting in an impressive core earnings ROE of 16.7% for the year. The Commercial Lines business experienced substantial topline growth with maintained profitable margins due to strong pricing and new business growth, particularly in SME-focused sectors, and exposure growth from a resilient economy. Despite industry-wide liability challenges, favorable underwriting results in property and effective pricing offset these pressures. Additionally, general liability reserves were strengthened by $130 million before tax following a fourth quarter review.

The Hartford has successfully adjusted for recent industry trends, achieving strong growth and profitability across its Commercial Lines businesses. The company's Small Commercial segment has been ranked number one in digital capabilities for the sixth year by Keynova Group, contributing to a record-breaking written premium of $5.5 billion in 2024. This success is reflected in a decade-long trend of annual sub-90 underlying combined ratios. The Middle & Large Commercial segment also shows robust growth and profitability, aided by strategic investments in product capabilities and broker efficiency. Despite a slower fourth quarter, the company maintained strong full-year topline growth and margins.

The paragraph highlights a strong performance in written premium growth, driven by successful renewal rates and a 16% increase in new business, particularly in Middle Market with construction and marine leading the growth. The Global Specialty division maintained outstanding margins and contributed to the strong growth, supported by Global Re and wholesale business. The company attributes its competitive advantage to transformational work in technology, data science, and a skilled workforce. Expansion in Commercial Lines resulted in 16% premium growth, reaching a $3 billion goal for the year, and the company plans to build on this success in 2025. Despite industry-wide catastrophe losses, the company's cat ratio remained stable. Additionally, renewal written pricing in Commercial Lines rose by 40 basis points, reflecting a disciplined approach to risk management and pricing.

The paragraph discusses the company's performance in its Commercial and Personal Lines of insurance. In Commercial Lines, pricing outpaced loss cost trends, despite slight declines in workers' compensation pricing. The company aims to maintain this trend through 2025, using a diverse product portfolio and innovation to grow market share. In Personal Lines, 2024 marked a transformative year with new products, capabilities, and technology resources. Significant rate increases in auto insurance improved the loss ratio, and further improvement is expected in 2025. The homeowners insurance line saw its best combined ratio in over a decade despite high catastrophe losses, with strong pricing and improved underwriting contributing to a confident market position. The paragraph concludes with a mention of Group Benefits.

The paragraph highlights the company's strong core earnings margin in 2024, driven by effective execution, a resilient economy, and favorable mortality and disability trends. While group life mortality rates remain above pre-pandemic levels, long-term disability trends are positive despite challenges in paid leave products. The benefit landscape is evolving, enhancing the appeal of supplemental products. The company is investing in innovation and digital transformation, anticipating increased sales in 2025 with stable core earnings margins of 6% to 7% as disability trends normalize. The investment portfolio continues to align with strategic goals. The year ended with excellent financial performance, setting a strong foundation for 2025.

The Hartford is seeing strong financial performance across its various business lines. Commercial Lines are maintaining excellent margins and experiencing robust growth, while Group Benefits are also performing well. The company has set milestones in Personal Lines with plans to achieve auto profitability by mid-2025. Investment income is strong, aided by high yields and a diversified portfolio. Capital management focuses on share repurchases and dividends. Core earnings for the quarter were $865 million or $2.94 per diluted share, with a 16.7% full-year core earnings ROE. Commercial Lines reported strong results with 6% premium growth and an 87.1 underlying combined ratio. Small Commercial experienced a 9% premium growth and continued strong performance. Middle & Large Commercial showed strong profitability with an improved combined ratio and disciplined business practices. Global Specialty had an excellent quarter with an 83.6 combined ratio and record earned premium.

The paragraph reports on the financial performance of various sectors within an insurance company for a specific quarter. It highlights a 3% growth in written premiums, hindered by a decrease in new business in primary and excess casualty, and a 14% decline in Global Reinsurance, mainly due to lower premiums in Latin America. However, Global Specialty premiums rose by 6%. Personal Lines saw core earnings rise to $155 million, marking the first underwriting gain in two years and driven by a significant improvement in the loss ratio. The auto sector improved its combined ratio, while Homeowners had an outstanding combined ratio. Premiums in Personal Lines grew by 12%, supported by rate increases and robust new business growth in Homeowners and Auto. However, the expense ratio increased due to higher marketing, staffing, and commission costs. The total property and casualty (P&C) unfavorable prior year development was $97 million, mainly due to Asbestos & Environmental Development. Excluding this, there was a favorable development of $44 million, despite a $130 million strengthening of general liability reserves.

The paragraph discusses various financial adjustments and strategies related to insurance claims and reserves. It highlights the strengthening of reserves for accident years 2015 to 2018 due to higher-than-expected construction defect claims, and an increase in incurred but not reported reserves for recent years due to rising claim severity and settlement costs. An A&E (Asbestos and Environmental) reserve study led to a $203 million increase in reserves, with $141 million affecting core earnings. The company's Navigators ADC is anticipated to see the remaining balance of a deferred gain amortized in 2025, benefiting net income. It also outlines the impact of catastrophes, with P&C (Property & Casualty) catastrophes costing $80 million before tax in Q4, and a total of $768 million for the year. To manage these risks, the company uses aggregation management, underwriting discipline, and a comprehensive reinsurance program.

The paragraph discusses the company's successful renewal of its catastrophe reinsurance program on January 1, which saw a 10% decrease in cost on a risk-adjusted basis due to strong underwriting and relationships. They strategically combine traditional reinsurance with catastrophe bonds to provide $1.5 billion coverage for peak peril events, with most coverage secured for multiple years. Their aggregate treaty was also renewed at a favorable cost reduction. As they monitor ongoing California wildfires, their program includes coverage for wildfires with specific attachment and exhaustion points. Additionally, they achieved $139 million in core earnings for Group Benefits, with improved life results and strong disability performance.

The group disability loss ratio rose to 66.9 due to higher paid family and medical leave product losses, while group life loss ratio improved to 79.9 due to better mortality trends. The expense ratio increased to 26.7 because of higher staffing costs and technology investments. Fully insured ongoing sales reached $68 million, contributing to a 1% growth in premiums, aided by strong account persistency. The investment portfolio remains strong, with a net investment income of $714 million and an annualized yield of 4.6%. Looking ahead to 2025, a growth in invested assets is expected to increase net investment income, with slightly higher yields. LP returns were 6.4% and are anticipated to improve in 2025. As of year-end, holding company resources totaled $1.3 billion.

The paragraph discusses financial expectations and activities for a company in 2025. It anticipates net dividends from the operating company to reach approximately $2.5 billion, a 9% increase over 2024. During the quarter, the company repurchased 3.4 million shares for $400 million and intends to maintain this level in the first quarter. As of the year's end, there was $3.15 billion remaining on the share repurchase authorization, set to last until December 31, 2026. The company reports excellent business performance for 2024, indicating it is well-positioned to achieve targeted returns and enhance stakeholder value. The subsequent Q&A sees Andrew Kligerman from TD Securities asking about the previous year's $130 million development in general liability and inquiring about the mix between different underwriting years and future confidence regarding GL charges, particularly focusing on construction defect policies. Christopher J. Swift thanks Andrew and refers the detailed response to Beth.

The company made adjustments to their reserves, adding $130 million in prior year development (PYD) across multiple accident years in Product Lines and making changes in commercial auto. They are confident that these actions address past issues and are focusing on pricing products to align with current trends. They have adjusted expectations for the 2024 accident year and are preparing for 2025, expecting higher loss cost trends. The team is responding with increased pricing, aiming to maintain margins consistent with 2024. The liability reserve increases are split evenly between older (2015-2018) and more recent years.

The paragraph discusses a financial strategy related to reserve adjustments in light of increased costs post-COVID and inflation for older years, attributed to legacy issues. For recent years, adjustments address social inflation impacts. This quarter, a different approach was taken by reacting to ongoing elevated activity and increasing severity assumptions for unsettled and unreported reserves, which led to a larger increase in Incurred But Not Reported (IBNR) reserves. These adjustments have been incorporated into the 2024 accident year's estimates, positioning the company well for 2025. The discussion also emphasizes integrating these trends into pricing models to exceed loss trends, with the company's business leaders focusing on achieving pricing increases. Andrew Kligerman finds this information helpful and is interested in net written premium in commercial.

The paragraph discusses the strong performance of the Small Commercial segment, which experienced a 9% growth, and the Mid Large segment, which grew by 5%. The company has been successful in capturing market share amidst some disruptions by competitors. Christopher J. Swift and Morris Tooker express confidence in sustaining this growth by maintaining disciplined underwriting, proper pricing, and strategic advantage. They emphasize the importance of consistent growth and serving clients and agency needs on their terms.

The paragraph discusses a company's strategic investments in technology to enhance customer and agent experiences, particularly in the E&S binding and Middle & Large Commercial sectors. Despite a competitive market, especially in workers' compensation, general liability, and umbrella insurance, the company has managed respectable growth, with a 9% increase for the year. It acknowledges the competitive pressures but remains optimistic about gaining market share, especially in the Middle Market, by leveraging its strengths from the Small sector. The company is confident in its ability to grow market share over time despite challenges. The paragraph concludes with a transition to questions from Brian Meredith of UBS.

The conversation involves a discussion on insurance metrics and performance. Christopher J. Swift explains that for the GL line, there was a one-point true-up on a year-to-date basis due to an elevated combined ratio and approximately 2.5 points impact in the quarter compared to the previous year, partly influenced by prior year developments. Brian Meredith inquires about property performance, and Swift notes an improvement in non-catastrophic property experience by 0.9 points year-to-date and better by 1.5 points than expectations. Beth Costello agrees and adds that underwriting actions in 2023 may continue to benefit their results. Meredith then asks about exposure to the LA wildfires. Swift, with Costello, acknowledges it will affect both Commercial and Personal Lines, noting their Personal Lines market share for home and auto is less than 1%.

The paragraph discusses the management of insurance risks in California over the past seven to eight years, focusing on remediating risks and conducting inspections. The company has a significant market share in Middle Market and Small Commercial segments and is evaluating its exposure through its reinsurance program. The reinsurance coverage involves multiple layers, with the first layer providing $150 million in protection for losses exceeding $200 million, of which 60% is retained and 40% is reinsured. The next layer offers the same coverage for losses above $350 million, with a retention of 25% and 75% reinsured. The Global Re program has separate coverage starting at $60 million in U.S. property losses. The company is being cautious in assessing its exposure and will share more details when ready.

The paragraph discusses the impact of different factors on a company's financials, specifically focusing on wildfire losses and group disability insurance. It mentions that up to $350 million in wildfire losses would contribute to the aggregate treaty, which is similar to the previous year's terms. Elyse Greenspan from Wells Fargo inquires about the increase in the loss ratio for group disability insurance, noting a three-point rise from the previous year. Christopher J. Swift explains that elevated trends in Paid Family and Medical Leave (PFML) incidents account for three points of the increase, with long-term disability incidents adding one point, while recoveries improve by one point. Additionally, he touches on the commercial lines outlook for 2025, addressing assumptions of flat underlying combined ratios and considerations of factors like non-catastrophe events and higher General Liability (GL) picks.

In the paragraph, Christopher J. Swift expresses confidence in ending the year with an 87.9 underlying combined ratio in Commercial Lines and aims for consistent results by 2025. He emphasizes focusing on delivering overall results rather than breaking down performance by product line. The emphasis is on strong execution, particularly in general liability lines. Bob Huang from Morgan Stanley asks about the impact of the GL reserve charge on loss picks, to which Christopher Swift suggests waiting for detailed filings like the 10-K for specific information. He mentions that current trends, such as attorney involvement and settlement challenges, are consistent, and the company is taking a holistic approach to anticipate these continuing, which is reflected in the charge.

The paragraph discusses the trends in long-term disability (LTD) claims and how they have changed from previous quarters. Bob Huang asks about the normalization of these trends, considering the last two years had unusually low incidents and fast claims recovery. Christopher J. Swift explains that many LTD policies have 90 to 180-day elimination periods, which affects the observation of trends. Over the past two years, incidence trends were at all-time lows, but now they are returning to a more typical level to avoid reserving issues. Mike Fish agrees with Swift's explanation and notes the historically low incidence levels in the 2022 and 2023 accident years.

The paragraph begins with a discussion about recent trends in incidence rates, which are aligning with a historical five-year average, and about pricing being set accordingly. The recovery experience is described as favorable, with strong claims performance expected in the future. Josh Shanker from Bank of America then asks a philosophical question regarding whether the company has added caution beyond their best actuarial estimates to avoid revisiting issues, particularly regarding a $130 million reserve, which is relatively small compared to the general liability book. Beth Costello responds by saying that while she wouldn't necessarily call it caution, the reserves were evaluated differently this quarter, resulting in a higher reserve charge than in previous quarters.

The paragraph discusses the strategy and performance of a company's Personal Lines business, particularly in homeowners insurance. The company primarily sells home insurance bundled with auto insurance, with about 75% of homeowners policies sold this way, and is not heavily involved in selling standalone homeowners insurance (monoline), though they do so occasionally. The performance of their home insurance business is strong, with favorable combined ratios in the low 90s, demonstrating effective risk management and thoughtful growth strategies. Investments and improvements have bolstered the business, aided by the company's risk management team and underwriters who carefully model potential risks, such as weather and natural disasters.

The paragraph discusses the company's confidence in improvements made in modeling, risk selection, and pricing in the homeowners market, despite disruptions. Josh Shanker acknowledges this effort. The conversation then shifts to David Motemaden from Evercore ISI, who questions Christopher J. Swift about the severity assumptions in general liability reserves, particularly for recent years and projections for 2025. Swift explains they are currently in a low-double-digit range for liability lines, with primary lines slightly lower and umbrella/excess lines higher. This severity is accounted for in pricing models, and the focus for the next year is on maintaining margins by addressing elevated loss cost trends effectively, especially in liability lines like commercial auto, while prioritizing customer and agent relationships.

In the paragraph, David Motemaden asks about changes in the reserving process and detection of trends related to hiring attorney representation. Christopher J. Swift responds that there haven't been dramatic changes in their approach, although they might have been too optimistic about the severity and duration of trends like slip and fall claims. Beth Costello adds that in the last quarter, the company observed activity exceeding expectations, such as increased attorney representation and time limit demands, leading to adjustments in their assumptions.

In the discussed paragraph, the conversation covers a decrease in claim frequency in the general liability business, with non-attorney, non-litigated claims seeing the largest drop. Transitioning to personal lines, Gregory Peters from Raymond James inquires about an increase in the expense ratio despite premium and rate increases, alongside new business restrictions. Christopher J. Swift suggests the rise might be due to changes in the business mix and ongoing investments in agency strategies and platform rollouts. Melinda Thompson mentions an increase of about two points in the quarter, echoing earlier comments by Beth.

The paragraph discusses the impact of marketing spend and commissions on business growth, noting that these are primary drivers for premium and PIP growth in the quarter. Gregory Peters raises a question about A&E reserves, highlighting that despite expectations for a decline, claims seem to persist in the industry. Christopher J. Swift responds by noting a decrease in the frequency of claims, especially in the MISO area, but an increase in their severity as plaintiffs seek higher economic outcomes per claim. He mentions the effectiveness of the A&E cover implemented years ago and acknowledges the ongoing management challenges. Beth Costello adds that their expectations around claim frequency have slightly decreased, impacting their annual studies on insured claims.

The paragraph summarizes a section of a conference call where Gregory Peters asks about observed increased activity on certain accounts and higher remediation costs, particularly related to a coal ash claim. Susan Spivak Bernstein then offers closing remarks, thanking participants and inviting further questions while expressing eagerness to engage with attendees in the coming week. The operator concludes the call.

This summary was generated with AI and may contain some inaccuracies.