Release Date: April 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you give us a sense of what loss frequency and severity looks like for the personal umbrella business considering the growth that you're generating?
A: (Jennifer Leigh Klobnak - COO) Loss frequency has remained fairly stable in the personal umbrella book. We use industry loss trends for our analysis, which tend to be higher than our actual results. We are cautious and continuously analyze rate needs by state to ensure adequate coverage for our exposure.
Q: I wanted to pivot to the expense ratio piece. It didn't seem to move much with casualty, but there was some movement in the quarter in property. Is there anything worth revisiting in the Q&A portion of this call to talk to us about trends in the expense ratio?
A: (Todd Wayne Bryant - CFO) The property segment benefited from a volume perspective due to revenue growth, which is noticeable in the property expense ratio. There's an overall increase in incentive-related amounts affecting all segments, but no significant trend changes in the property segment outside of the revenue increase.
Q: Can you provide an updated perspective on how retentions look for this year and how your reinsurance costs are shaping up?
A: (Jennifer Leigh Klobnak - COO) The reinsurance market is becoming more reasonable. We increased our retention on surety due to economic sense. Costs for reinsurance are up slightly due to additional CAT limit purchases, but we expect a more flat rate change going forward.
Q: I think I heard you mention increased conservatism in loss picks. Was that specific to construction GL or are you reflecting that across the casualty book?
A: (Todd Wayne Bryant - CFO) Our approach is generally cautious across the board, not just in construction. The underlying loss ratio on casualty is not significantly different from last year, but we are vigilant, especially with the tail on our excess.
Q: Can you talk about maybe some nonrate actions that you've gone through in the property book to address the convective storm and non-catastrophe activity?
A: (Jennifer Leigh Klobnak - COO) We focus on coverage and deductibles alongside rate adjustments. We analyze each loss scenario to decide on coverage terms and have made minor adjustments to clauses like water damage. We're cautious about growth in areas like the Midwest due to underpricing in the habitational market.
Q: Just on NII, I guess I would have thought there would be a little bit more expansion quarter-over-quarter. Is there anything kind of one-off in this quarter's number? And way to think about the full year.
A: (Aaron Paul Diefenthaler - CIO & Treasurer) There's nothing unusual in this quarter's NII. Operating cash flow is typically lighter in Q1 due to reinsurance renewals and bonus payments. We expect it to pick up in the rest of the year, sticking to high-quality assets in our investment strategy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
