Gregory Peters • Raymond James

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Greg Tislowski, President of Business Insurance, clarified that any pricing pressure was in National Property and would have minimal impact on the middle market. Alan Schnitzer, Chairman and CEO, reinforced the overall strength of the market. Michael Klein, President of Personal Insurance, stated that relaxing property restrictions reflects progress on profitability and is expected to support auto growth, with most actions completed by year-end 2025.

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Greg Tislowski, President of Business Insurance, clarified that the subscription market pressure was specific to National Property and would have minimal impact on the middle market. Alan Schnitzer, Chairman and CEO, added that strong retention indicates a stable market. Michael Klein, President of Personal Insurance, explained that relaxing restrictions reflects progress in profitability and is expected to be a tailwind for auto production, with most actions completed by the end of 2025.

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CEO Andrew Robinson characterized the E&S submission flow as high-quality but facing more competition, and highlighted a 19% increase in surety bid bonds and a 59% rise in A&H RFPs as strong leading indicators. He sized the federal contractor surety book at roughly $20 million. For programs, Robinson reiterated the 'Rule our niche' strategy, which involves partnering with specialized MGAs, ensuring alignment through ownership stakes, requiring robust data exchange, and critically, retaining claims handling in-house whenever possible.

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CEO Andrew Robinson clarified the share repurchase is a tool for opportunistic buybacks when the stock is undervalued, not a signal of weak growth prospects, and affirmed a strong growth outlook. He attributed robust submission growth to underwriter efficiency, new talent, and strong E&S market flow. Regarding the MGA market, he described it as 'frothy' and stated Skyward is highly selective, partnering only with top-tier MGAs in strategic niches to 'Rule our Niche'.

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Thomas Wilson (executive) explained the goal is to continuously lower the expense ratio through digitization, with no specific numerical target. On catastrophes, Mario Rizzo (executive) confirmed they would pursue any potential subrogation recoveries. Jesse Merten (executive) detailed that the reinsurance limit was increased by $1.5 billion to reflect the growing homeowners business, with the placement going well and risk-adjusted costs expected to be down.

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CEO Thomas Wilson stated that there are no plans to change agent compensation, as it is already heavily tied to renewals, making branded agents ideal for retention efforts. Executive Mario Rizzo added that strong new business trends indicate competitive pricing. Regarding ROE, Wilson explained that the previous 14-17% target is outdated due to structural changes and a different interest rate environment. He emphasized that the current strategic priority is driving shareholder value through growth, particularly in auto policies, rather than setting a new ROE target.

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CEO Jim Williamson explained that while property cat rates are softening, they are coming off historically high levels, and expected returns remain excellent and well above the company's threshold for deploying capital. Regarding the wildfire, he stated that while subrogation recoveries could benefit Everest over time, the company is taking no credit for them in current financials due to the lengthy process involved.

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COO Jenni Klobnak attributed earthquake rate pressure to a long period without major losses, causing insureds to retain more risk and creating a competitive environment. She noted that while RLI's reinsurance costs are slightly lower due to reduced exposure, it's not directly tied to primary rate declines. For inland marine, she cited growth drivers as an expanded local underwriting team, a healthy construction market, and a willingness to underwrite unique risks, which has increased submissions.

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COO Jen Klobnak stated that limit profiles for both personal umbrella and transportation remain unchanged, with a primary focus on $1 million limits. President and CEO Craig Kliethermes added that rate increases can reflect market opportunity, not just inadequacy, and noted the challenge of getting timely rate approvals in certain states. Regarding the special dividend, he explained it's based on a Q3 evaluation of capital adequacy against A.M. Best benchmarks, internal metrics, and growth opportunities, not a fixed formula.

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COO Jen Klobnak provided a detailed breakdown, explaining their construction portfolio focuses on general contractors in E&S and subcontractors in admitted lines. For transportation, she detailed their focus on trucking, public transport, and specialty commercial auto, plus newer investments in moving and storage. Klobnak then gave examples of technology investments, including streamlining the application process for personal umbrella and contractors, and automating policy issuance in the marine division to free up underwriter time.

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Edward Rand, President and CEO, stated there were no material changes in agent relationships, though consolidation continues to put pressure on commissions. Dana Hendricks, Chief Financial Officer, explained the higher 2024 expense ratio was driven by a significant year-over-year swing in incentive compensation costs, as 2023 achievement was very low. She noted the ratio will likely remain pressured due to the focus on risk selection impacting the earned premium base. The executives did not have the specific RBC ratio on hand but confirmed it had improved year-over-year.

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Edward Rand, President and CEO, stated that no new entrants are making a significant impact in the MPL space and that there have been no material changes in attorney involvement. Regarding Workers' Comp, he explained that ProAssurance's shorter-tail book and faster claim closures result in less opportunity for favorable reserve development but also less risk. He suggested ProAssurance may be recognizing and reacting to medical cost inflation faster than its peers.

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President and CEO Steve Spray declined to provide a gross loss number for the active catastrophe, sticking to the net range of $450M-$525M. He noted that 77% of their California homeowner premiums are non-admitted and a post-event review will determine any strategy changes. On pricing, Mr. Spray stated that commercial lines rates are still in the high single-digits and emphasized that policy-by-policy underwriting continues to drive profitable growth.

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President and CEO Steve Spray stated he doesn't believe in a 'new business penalty,' citing confidence in prospective pricing. He explained the personal lines book has evolved with significant growth in high-net-worth clients, providing diversification. He confirmed plans to continue expanding agency distribution at a clip similar to recent years, focusing on professional, aligned agents.

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CEO J. Gallagher stated that the company is actively managing hundreds of claims from the wildfires and, as a major player in California, expects to be very busy for months. CFO Douglas Howell addressed the contingent commissions, explaining the shortfall was not a trend but a ~$7 million blip caused by slightly higher year-end loss ratio estimates from carriers and poor results on three specific contracts in Canada. He expects contingents to bounce back.

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Chairman and CEO Evan G. Greenberg projected continued double-digit income growth for the Life Insurance business, driven by margin expansion and growth in Asia. He described the P&C cycle as being in a sustained inflationary period, with competition rising in large accounts and financial lines. However, he noted that over 80% of Chubb's business, particularly middle market and consumer lines, has favorable growth opportunities due to secular shifts.

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CFO Peter Enns explained that international life income growth was indeed tracking closely with premium growth and that year-over-year comparisons for the combined business were affected by a non-recurring item in the prior year. Chairman and CEO Evan G. Greenberg added that the capital management approach is 'steady as she goes,' balancing healthy capital returns with retention for growth opportunities.

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CEO Jayme Mendal described the new platforms as simplifying tech to improve scale and feature velocity, noting the AI-powered bidding and new agent platform. He clarified that while they integrate with some agency management systems, their platform is primarily for referral delivery, setting the stage for future features. CFO Joseph Sanborn stated that cash is not needed for organic growth and the company is considering M&A to accelerate its P&C-focused strategy, especially given the challenging funding environment for private insurtechs.

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J. Powell Brown, an executive, stated that one quarter does not make a trend and the company feels good about its Retail business. R. Watts, an executive, explained that the 2024 free cash flow conversion ratio guidance is raised to 24-26% due to deferred tax payments related to recent hurricanes. He confirmed these payments are due in Q2 2025, which will subsequently lower the 2025 conversion rate.

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