Jimmy Bhullar

Jimmy Bhullar of JPMorgan Chase & Co. asked for an assessment of the competitive environment in personal auto as peers shift toward growth. He also inquired about the long-term impact of autonomous vehicle technology on the total addressable market for auto insurance.

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Tricia Griffith, CEO, President & Director, acknowledged the environment is increasingly competitive but stated Progressive thrives in such conditions and will maintain its goal of growing as fast as possible at its target profit margin. On autonomous technology, she noted that while it reduces claim frequency, this is often offset by higher severity (repair costs), and slow fleet turnover means there is still a large addressable market for the next 5-10 years.

Jimmy Bhullar asked about the sustainability of the turnaround in investment management flows, investor sentiment, and the impact of recent weaker investment performance on net flow expectations.

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President Kamal Bhatia noted the high quality of current flows, driven by longer-term mandates in market troughs, and a 5% increase in management fee rate. He observed a shift in RFP questions towards new ideas. While multi-asset products, particularly some target date funds, have underperformed, international equity performance has strengthened, and efforts are underway to enhance risk management and talent.

Jimmy Bhullar followed up on the impact of recent weaker performance across various asset classes on Principal Asset Management's net flows and pipeline.

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Kamal Bhatia (President, Asset Management) acknowledged underperformance in multi-asset products, particularly certain target date funds, which impacted both on- and off-platform retirement flows. However, he highlighted stronger performance in international equity and a data center product. He mentioned ongoing efforts to enhance risk management and add talent, especially on the equity side. CEO Deanna Strable emphasized the long-term priority of alpha generation despite short-term market volatility.

Jimmy Bhullar from JPMorgan Chase & Co. asked about the outlook for asset management flows turning positive after a string of negative quarters. He also questioned if the guidance for performance fees to be flat with last year was overly conservative given the strong first half.

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Kamal Bhatia, President & CEO of Principal Asset Management, noted that while the pipeline is strong, market volatility causes clients to defer decisions, impacting flows. He highlighted strong unfunded mandates as a positive indicator. On performance fees, he and CEO Deanna Strable explained that some Q3 fees were pulled into Q2 and that the real estate equity engine, a key historical driver, has not fully kicked in, justifying the more modest second-half outlook.

Jimmy Bhullar questioned Globe Life's 2025 guidance, specifically the implied Q4 EPS, which appeared lower than recent quarters even after excluding remeasurement gains, asking for reasons behind this conservatism. He also inquired about claims trends and sales in the health business, margin recovery, and how Medicare Advantage plan changes are affecting demand for Medicare Supplement products.

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Tom Kalmbach, EVP and CFO, explained that the Q4 implied EPS reflects favorable Q3 results, but Q3 benefited from timing (R&D tax credit) and exceptionally favorable mortality and health experience not expected to fully continue into Q4, which typically sees an uptick in claims due to seasonality. Regarding health, Kalmbach noted favorable Medicare Supplement and group retiree health trends, with medical claim cost trends flattening. He anticipates margin increases in Q2-Q4 2026 due to rate increases. Matthew Darden, Co-CEO, added that Medicare Advantage price increases and carrier exits are providing a tailwind for Medicare Supplement sales, though 2026 growth is projected moderately due to significant 2025 sales.

Jimmy Bhullar asked about the implied Q4 EPS from the 2025 guidance, noting it's lower than recent quarters, and sought clarification on any conservative assumptions or specific business trends. He also inquired about health business claims trends, margin recovery, and the impact of Medicare Advantage pricing on Medicare Supplement demand.

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CFO Tom Kalmbach explained that Q3 benefited from favorable timing on a research and development tax credit and exceptionally favorable mortality and health experience, which are not expected to fully recur in Q4. He noted that Q4 typically sees an uptick in claims due to seasonality. Regarding health trends, Kalmbach stated that medical claim cost trends have flattened, and rate increases implemented throughout 2026 are expected to restore target profitability. Co-CEO Matthew Darden added that Medicare Advantage price increases are creating a tailwind for Medicare Supplement sales, benefiting Globe Life's products.

Jimmy Bhullar of JPMorgan Chase & Co. sought to quantify the earnings guidance increase, asking how much was a one-time Q3 impact versus ongoing earnings improvement. He also inquired about the sustainability of the recovery in direct-to-consumer sales and the potential EPS impact from the Bermuda entity's future cash flow.

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Executive VP & CFO Thomas Kalmbach and Co-Chairman & Co-CEO Frank Svoboda attributed the guidance lift to ongoing favorable mortality, lower admin expenses, and Q2 share repurchases. Co-Chairman & Co-CEO J. Matthew Darden confirmed the direct-to-consumer turnaround is sustainable due to technology improving lead conversion. Kalmbach affirmed that using the $200M future cash flow for buybacks would imply a roughly two-percentage-point uptick in growth.

Jimmy Bhullar from JPMorgan Chase & Co. sought to quantify the drivers behind the raised earnings guidance, asking how much was attributable to the one-time Q3 reserve release versus ongoing earnings improvement. He also inquired if the recent uptick in direct-to-consumer sales marks a sustainable recovery and asked for confirmation on the potential EPS growth impact from the Bermuda entity's cash flow benefits.

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Executive VP & CFO Thomas Kalmbach confirmed that ongoing favorable mortality and some health segment benefits contribute to the improved outlook, with fourth-quarter life margins expected around 41%. Co-Chairman & Co-CEO Frank Svoboda added that lower admin expenses and higher share repurchases also contributed. Co-Chairman & Co-CEO J. Matthew Darden stated the DTC sales improvement is a sustainable recovery driven by new technology. Kalmbach affirmed Bhullar's thinking on the potential buyback impact from Bermuda cash flows was correct.

Jimmy Bhullar of JPMorgan Chase & Co. questioned the components of the increased earnings guidance, the sustainability of the turnaround in direct-to-consumer sales, and the potential EPS growth impact from the Bermuda entity's future cash flow benefits.

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Executive VP & CFO Thomas Kalmbach attributed the guidance increase to ongoing favorable mortality trends, not just the one-time Q3 assumption update, and confirmed the potential EPS impact from using Bermuda cash flows for buybacks was calculated correctly. Co-Chairman & Co-CEO J. Matthew Darden stated the direct-to-consumer sales improvement is the start of a recovery, driven by new technology enhancing lead conversion and enabling higher marketing spend.

Jimmy Bhullar followed up on the impact of an uptick in capital markets activity, such as M&A and IPOs, on Marsh and MMA's business, asking if it provides a sufficient tailwind to be visible in reported results over the next few quarters.

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John Doyle, President and CEO of Marsh McLennan, confirmed that an uptick in M&A activity was helpful to growth in the quarter. He noted that middle market businesses, including MMA globally, are performing better, with growth in this segment surpassing that in the upper market. He expressed confidence in MMA's continued performance due to strategic capital deployment and investments in capabilities.

Jimmy Bhullar asked about Oliver Wyman's continued strong performance despite economic and geopolitical uncertainties, seeking insight into the pipeline and the sustainability of this growth level. He also inquired if the uptick in capital markets, M&A, and IPOs is providing a sufficient tailwind to Marsh and MMA's reported results, or if its impact is not yet significant enough for investors to observe in the near term.

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President and CEO John Doyle expressed satisfaction with Oliver Wyman's growth, noting the third quarter benefited from favorable timing. Nick Studer, President and CEO of Oliver Wyman, highlighted it as the best quarterly growth in six quarters, driven by performance transformation work, strong growth in consumer telecoms and technology, insurance and asset management, and transportation practices, as well as AI-related client engagements. He expects moderating growth in Q4 but remains optimistic about the pipeline. Mr. Doyle confirmed an uptick in M&A activity was helpful to growth in the quarter, noting that middle market businesses like MMA are performing better, with growth in this segment surpassing that in the up-market.

Jimmy Bhullar of JPMorgan Chase & Co. asked if the slowdown in M&A and IPO activity has troughed and questioned the drivers behind Guy Carpenter's strong growth, which occurred despite a soft reinsurance pricing environment and tough prior-year comparisons.

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President & CEO John Doyle stated it was too early to determine if M&A and IPO activity has bottomed out, reiterating the company's full-year outlook. Dean Klisura, President & CEO of Guy Carpenter, attributed the segment's 5% growth to a record new business quarter, strong international performance, significant ILS and cat bond issuance activity, and continued demand for property cat limits.

Jimmy Bhullar of JPMorgan Chase & Co. asked if the slowdown from M&A and IPO activity is troughing and questioned the drivers behind Guy Carpenter's strong growth despite a soft reinsurance pricing environment and tough comparisons.

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President & CEO John Doyle stated it was too early to call a meaningful uptick in M&A or IPO activity. Dean Klisura, President & CEO of Guy Carpenter, attributed his segment's 5% growth to a record new business quarter, strong international performance, significant activity in the ILS and cat bond markets, and winning new M&A advisory mandates.

Jimmy Bhullar of JPMorgan Chase & Co. asked about the company's plans for stock buybacks following the pause in May and management's confidence in the company's ability to thrive as a standalone entity amidst M&A rumors. He also questioned the reasons for the recent slowdown in Shield annuity sales.

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President & CEO Eric Steigerwalt stated that the company historically uses 10b5-1 plans for repurchases and the last one expired in May, offering no further guidance. Regarding the company's strategy, Steigerwalt expressed confidence in their premier carrier status, product innovation, and operational capabilities, while declining to comment on market rumors. Executive VP & Chief Distribution & Marketing Officer Myles Lambert attributed the Shield sales performance to a competitive but rational market and noted the company is growing off a large base while maintaining pricing discipline.

Jimmy Bhullar questioned the basis for management's optimism on improving non-medical health results and sought clarification on Asia's earnings power, given that Q2 earnings seemed weak despite strong sales.

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Ramy Tadros, Regional President - U.S. Business, based his optimism on established seasonal patterns in dental, stable disability trends, and the expected normalization of voluntary product claims, noting positive signs already in July. Lyndon Oliver, Regional President - Asia, explained that Asia's lower earnings were driven by below-target variable investment income and a short-term headwind from lower surrender income due to a strengthening yen, which simultaneously boosts sales and AUM for future earnings.

Jimmy Bhullar of JPMorgan Chase & Co. questioned the basis for optimism on non-medical health results improving in Q3, asking if it was based on expectations or actual July trends. He also asked if Asia's weaker Q2 earnings represented a new normal.

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Ramy Tadros, Regional President - U.S. Business, confirmed his confidence is based on both established seasonal patterns in dental and the absence of macro impacts on disability, with trends inclusive of July data supporting the outlook. Lyndon Oliver, Regional President - Asia, explained that Asia's lower earnings were driven by below-average VII and a short-term headwind from lower surrender income due to a strengthening yen, but underlying full-year earnings are expected to remain strong and in line with guidance.

Jimmy Bhullar of JPMorgan Chase & Co. asked about the execution of the $500M incremental buyback, specifically whether it would be opportunistic, and how the remaining undeployed capital would be prioritized between M&A and further buybacks.

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CFO Robin Raju confirmed the $500M buyback will be actively and opportunistically executed starting in Q3. CEO Mark Pearson and Raju both emphasized that any potential M&A or other use of the remaining capital must be highly disciplined and accretive, beating the baseline value created by share repurchases, with deployment expected by 2026.

Jimmy Bhullar pointed out the consistently weaker-than-expected U.S. sales growth over the last couple of years and asked for an explanation and future expectations. He also followed up on the dental product's sales performance.

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Virgil Miller, President of Aflac, attributed the results to deliberate actions to improve business quality, evidenced by strong premium persistency and a lower expense ratio. He expects a stronger second half driven by a robust pipeline, particularly in the group life and disability business. On dental, Miller noted strong double-digit growth in H1, exceeding his high-range expectations. Chairman & CEO Daniel Amos added that dental and vision are key strategic door-openers and that early operational issues are now behind them.

Jimmy Bhullar of JPMorgan Chase & Co. asked for an explanation for the sluggish U.S. sales growth and the outlook for the business, and also inquired if the dental product has reached a normal level of sales.

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Virgil Miller, President of Aflac, attributed the modest sales growth to deliberate actions to improve business quality, highlighting strong persistency and expense management. He anticipates a stronger second half driven by Q4 bookings. On dental, Miller noted that while sales growth was high, it was on a small prior-year base, but performance is at the high end of his expectations. CEO Daniel Amos added that dental is a strategic door-opener for supplemental products.

Jimmy Bhullar from JPMorgan Chase & Co. asked about the potential for a lag in health insurance results and if the situation could worsen before improving. He also questioned the large excess capital figure relative to traditional metrics and the lack of recent share buybacks, asking about capital priorities.

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EVP & Global Chief Risk Officer Jonathan Porter expressed confidence in their health reserves, citing close client collaboration and the nature of large claims. President & CEO Tony Cheng and EVP & CFO Axel André addressed capital, confirming they will now consider share repurchases opportunistically as part of their 20-30% total payout target, and noted their capital metrics are consolidated across multiple regulatory frameworks.

Jimmy Bhullar questioned competition across RGA's businesses, especially from P&C companies, and how RGA can profit from Equitable's block when Equitable lost money.

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CEO Tony Cheng emphasized RGA's Creation Re strategy and consistent market presence. CIO Leslie Barbee, CFO Axel André, and CEO Tony Cheng cited asset repositioning, expense differences, and accounting as factors.

Jimmy Bhullar of JPMorgan Chase & Co. inquired about the primary tailwinds and headwinds for personal auto policies in force (PIF) growth, particularly concerning the impact of inactive brands and the potential for growth in New York and New Jersey. He also asked about the lifetime profitability of new business from the independent agent and direct channels compared to the traditional captive agent channel.

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Tom Wilson, Chairman, President & CEO, emphasized Allstate's commitment to growth, citing the company's 28% return on equity and the success of its Transformative Growth strategy. Mario Rizzo, President of Property-Liability, added that the drag from inactive brands is diminishing and that New York and New Jersey are now profitable, with growth expected to resume upon approval of new products. Regarding profitability, Mr. Wilson stated that Allstate uses a sophisticated analytical system to ensure a positive lifetime value for all new business, regardless of the channel.

Jimmy Bhullar asked to differentiate between attractive growth areas and less compelling lines based on pricing adequacy, and questioned whether a decline in interest rates would be a net positive for the MI business.

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CEO Nicolas Papadopoulo identified casualty lines, particularly specialty E&S, as attractive growth areas where pricing exceeds loss trends, while cyber and E&S property are more challenged by competition. CFO & Treasurer François Morin explained that a modest rate drop would be a net positive for the MI business, as new production would likely outweigh a small increase in refinancing from the high-quality in-force book.

Inquired whether Unum is seeing the disability market become more competitive with some pricing pressure, as peers have suggested, and asked if there are any external metrics that can help predict the need for future long-term care (LTC) reserve increases.

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Management described the disability market as consistently competitive but did not signal a major shift, emphasizing their focus on capabilities over price. For LTC, they noted that while they provide several metrics (NPR, earnings, rate increase progress), the reserve review process is too complex for any single external indicator to reliably predict the outcome.

Jimmy Bhullar of JPMorgan Chase & Co. asked about the growth contributions from M&A services and new talent hires, and also inquired about Aon's appetite for large-scale M&A as a use of free cash flow.

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CEO Greg Case described the M&A services market as "better, but not back," noting it was a tailwind but that overall growth was broad-based. CFO Edmund Reese confirmed new hire contributions are on track, projecting 30-35 basis points to full-year organic growth from the 2024 cohort. Regarding capital allocation, Reese emphasized the priority of deleveraging post-NFP but stated Aon has the flexibility to evaluate strategic M&A that meets its strict financial criteria, a disciplined approach Case reiterated.

Jimmy Bhullar of JPMorgan Chase & Co. inquired about the growth contribution from capital markets activities and new hires, and the company's preferred uses of free cash flow, particularly regarding large-scale M&A.

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CEO Greg Case described the M&A environment as "better, but not back," noting that while pipelines are improving, overall growth remains broad-based. CFO Edmund Reese added that new hire contributions are on track and that strong free cash flow provides flexibility, with the primary focus on deleveraging post-NFP acquisition while remaining open to strategic M&A that meets strict financial criteria.

Jimmy Bhullar of JPMorgan questioned the confidence in sustained rate adequacy amid recent price declines and asked whether the recent aggressive pace of share buybacks is sustainable.

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President & CEO Kevin O'Donnell asserted that while prices fluctuate, the market remains at a highly adequate level following the 2023 structural reset. EVP & CFO Robert Qutub noted that the accelerated buybacks were fueled by freeing up trapped capital and capitalizing on attractive valuations, and while the company remains opportunistic, it will be mindful of deploying capital during the wind season.