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    Grace Carter • BofA Securities

    Grace Carter's questions to Ryan Specialty Holdings Inc (RYAN) leadership

    Grace Carter's questions to Ryan Specialty Holdings Inc (RYAN) leadership • Q3 2024

    Question

    Grace Carter questioned how the decline in property pricing during the quarter affected customer purchasing behavior, such as buying more coverage versus taking savings. She also asked for an update on the level of competition coming from the London market.

    Answer

    An executive, with additional comments from Director of Investor Relations Miles Wuller, stated that the company maintained very high retention rates and did not lose business to the admitted market. They observed that clients often used the enhanced purchasing power to buy lower deductibles or increase coverage towards the total insured value of their assets. Regarding competition, an executive described the London market as a great partner and a competitive leader in the E&S space but did not indicate any unusual changes in competitive pressure.

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    Grace Carter's questions to Brown & Brown Inc (BRO) leadership

    Grace Carter's questions to Brown & Brown Inc (BRO) leadership • Q3 2024

    Question

    Grace Carter asked about the pressure on contingent commissions within the Retail segment from higher carrier loss ratios, inquiring which lines of business were the primary cause and whether this trend is expected to continue.

    Answer

    R. Watts, an executive, identified both personal and commercial auto lines as the primary drivers of the pressure, citing ongoing challenges with claim frequency and severity. He stated that the company does not see this trend changing in the near term and expects continued pressure on contingent commissions from these lines.

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    Grace Carter's questions to Aon PLC (AON) leadership

    Grace Carter's questions to Aon PLC (AON) leadership • Q3 2024

    Question

    Grace Carter requested a quantification of NFP's accretive impact on organic growth in Commercial Risk and Wealth and asked about the mix of discretionary versus defensive offerings in Health and Wealth.

    Answer

    CFO Edmund Reese stated that NFP's contribution was less than 50 basis points to any solution line's growth. President Eric Andersen added that the business model intentionally avoids revenue bucketing to foster collaboration. CEO Gregory Case and Andersen described the Health and Wealth businesses as having very high retention. They clarified that while some work is project-based, it is often driven by recurring regulatory needs, making it more defensive than truly discretionary.

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    Grace Carter's questions to Cincinnati Financial Corp (CINF) leadership

    Grace Carter's questions to Cincinnati Financial Corp (CINF) leadership • Q3 2024

    Question

    Grace Carter asked about the core loss ratio increase in the smaller 'other commercial' and 'other personal' lines. She also sought more clarity on why the commercial casualty loss ratio in Q3 moved above Q1 levels and if this represents a new run rate.

    Answer

    President and CEO Steve Spray explained the 'other' lines are small and subject to inherent volatility, with no underlying concerns found in deep dives. For commercial casualty, he attributed the Q3 loss pick to ongoing macro uncertainty from litigation costs and social inflation, which requires continued prudence, rather than a specific event or a new definitive run rate.

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    Grace Carter's questions to Arthur J. Gallagher & Co. (AJG) leadership

    Grace Carter's questions to Arthur J. Gallagher & Co. (AJG) leadership • Q3 2024

    Question

    Grace Carter asked about the risk of casualty market pressures impacting future contingent commissions and whether the timing issue with lumpy life sales would be fully resolved in Q4.

    Answer

    CFO Douglas Howell downplayed the risk to contingents, stating any impact would be a 'few million bucks' and not systemic, partly due to caps on payouts. He confirmed that half of the life sales shortfall was already recouped in October and they have a pipeline to potentially recover the full amount by year-end, adding that the product has 'long legs' for future growth.

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    Grace Carter's questions to Selective Insurance Group Inc (SIGI) leadership

    Grace Carter's questions to Selective Insurance Group Inc (SIGI) leadership • Q3 2024

    Question

    Grace Carter questioned the sustainability of strong retention in Standard Commercial Lines given the material step-up in renewal rates. She also asked about the timeline for the premium-to-surplus ratio to return to its target range.

    Answer

    John J. Marchioni, Chairman, President & CEO, responded that the rate increases, while significant, are not a dramatic departure from recent trends, which supports retention. He emphasized that profitability is the primary goal, even if it requires trading some growth. Regarding the premium-to-surplus ratio, he acknowledged it is above target but noted it's one of several capital metrics and that the company has a clear path to normalize it over time.

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    Grace Carter's questions to Selective Insurance Group Inc (SIGI) leadership • Q3 2024

    Question

    Grace Carter questioned the sustainability of high retention in the Standard Commercial book despite significant rate increases and asked about the timeline for the premium-to-surplus ratio to return to its target range.

    Answer

    CEO John J. Marchioni explained that the overall commercial rate increase was not a dramatic enough shift to significantly disrupt retention, though he acknowledged a dynamic market and a focus on profitability over growth. On the premium-to-surplus ratio, Marchioni acknowledged it is above target but emphasized it's one of several capital metrics and doesn't account for holding company capital, which provides flexibility.

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    Grace Carter's questions to Selective Insurance Group Inc (SIGI) leadership • Q2 2024

    Question

    Grace Carter of BofA Securities asked if Selective plans any changes to its reserve review process following recent adverse development and how it might approach recognizing potential good news in the future. She also questioned why the E&S book has performed well despite industry-wide social inflation and if the company might shift more casualty growth to the E&S segment.

    Answer

    John J. Marchioni, Chairman, President & CEO, stated that the company's robust quarterly reserving philosophy remains consistent, though they continuously incorporate enhanced actuarial methods. He explained that the E&S segment's outperformance is due to more pronounced favorable frequency trends, historically higher assumed severities, and significantly stronger pricing over a longer duration compared to the admitted market. He noted that any shift of business to E&S is largely driven by broader market dynamics.

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    Grace Carter's questions to Marsh & McLennan Companies Inc (MMC) leadership

    Grace Carter's questions to Marsh & McLennan Companies Inc (MMC) leadership • Q3 2024

    Question

    Grace Carter requested details on the 'below-the-line' financial impacts of the McGriff acquisition, such as amortization and integration costs. She also asked about the 2025 tax rate outlook and the utilization timeline for the acquired deferred tax asset (DTA).

    Answer

    President and CEO John Doyle stated that the company was not providing further financial details on the McGriff deal, describing its performance as strong and similar to MMA. He deferred 2025 guidance to the next earnings call. CFO Mark McGivney clarified that the value of the DTA represents the present value of a future tax deduction stream that will be realized 'over a long period of time.'

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