Mark Hughes • Truist Securities

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CFO Christo Riloff clarified that the 23% effective tax rate was influenced by a significant one-time tax provision catch-up of $12.2 million related to the IPO, but noted that 23% is also the expected go-forward rate. He provided the adjusted cash EBITDA numbers: $204 million for Q2 2025 and $127 million for Q2 2024. CEO David Burton added that the performing Conn's portfolio continues to exceed underwriting expectations.

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CFO Mark Harmsworth explained that while weather claims were slightly higher, a significant drop in non-weather claims frequency drove the loss ratio down. He confirmed Exeo's financials will be in the 10-Q, that current investment income is a good run-rate, and that quarterly interest expense will drop to about $950,000. CEO Paresh Patel noted the pool of desirable takeout policies is shrinking but HCI's technology helps select the right ones. Harmsworth added that the 70% normalized combined ratio accounts for the full reinsurance load, policy acquisition costs, and a buffer for the loss ratio.

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Chairman and CEO Paresh Patel and CFO Mark Harmsworth confirmed the plan is for a total separation, resulting in two distinct, non-consolidated public companies. Harmsworth reported no prior period reserve development and noted that the loss experience on Citizens take-outs was slightly better than expected and similar to the rest of the book. Patel explained that while rate filings are an ongoing process, no changes are imminent. He differentiated Exzeo from peers by comparing it to a complete solution like Uber, rather than just a software product.

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CEO Paresh Patel stated that Axio is already profitable with its internal clients and the separation allows it to serve external carriers in other states. He distinguished HCI's model from fronting, emphasizing their focus on underwriting profitability with their own capital at risk. CFO Mark Harmsworth and CEO Paresh Patel attributed the low loss ratio to fundamental improvements in claim frequency and the strong performance of takeout business, driven by technology. Patel confirmed this success opens up more takeout opportunities and noted that the reinsurance market now views Florida as a stable, 'boring' market compared to more volatile regions like California.

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Executive Mark Harmsworth clarified that the $35 million in Q4 premium from the takeout is prorated and that the normalized quarterly ceded premium is about $102 million, excluding a $50 million Q4 adjustment for Milton. He confirmed holding company cash is over $200 million and the G&A run rate is stable. Executive Paresh Patel added that the new carrier, Taro, is a Florida-based reciprocal set to launch in 2025 to drive future growth, and that the competitive environment is currently focused on claims processing.

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CEO Mike Nolan reported no significant regulatory changes, viewing the FHFA pilot as a limited-scope program and emphasizing ongoing collaborative discussions. He confirmed the new hires are "100% revenue attached," functioning like mini-acquisitions. He also provided July's open order growth figures: national commercial orders were up 22% and local orders were up 8% year-over-year.

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CEO Mike Nolan reported no significant changes to the FHFA's limited-scope pilot, noting a collaborative call with the director. He confirmed that the recruiting was 100% focused on revenue-attached professionals, which is akin to making mini-acquisitions. For July, Nolan provided that national open orders were up 22% year-over-year, and local open orders were up 8%.

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CEO Mike Nolan stated that federal regulatory concerns from the CFPB have abated and the title waiver pilot program has a de minimis impact. On the state level, he noted the proposed Texas rate reduction is being contested and is not yet in effect. CFO Tony Park quantified the potential pre-mitigation impact of the Texas change at approximately $15 million in profit. Regarding the inHere platform, Mr. Nolan highlighted its full rollout across the company's footprint and its role in driving future margin improvements.

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CEO Mike Nolan stated that the impact from the wildfires is de minimis, as the affected areas have low transactional volume. Regarding the NAR settlement, he reported seeing no significant changes in business flow, noting it seems to be 'business as usual,' although there has been increased interest from brokers in the company's SkySlope transaction management platform.

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CEO Mike Nolan stated that while commercial orders typically see a seasonal falloff, October's decline was less pronounced than the prior year, indicating underlying strength, particularly in national orders. CFO Tony Park clarified that the $1.37 adjusted EPS is reached by adjusting for F&G's alternative investment underperformance and other smaller significant items. F&G CEO Chris Blunt added that F&G's sales outlook remains robust, driven by policy exchanges and demographics, with spreads holding up well and benefiting from flow reinsurance and owned distribution.

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CEO Glenn Williams opined that shifts in product mix are driven by longer-term sentiment, not short-term market moves. He stated that Primerica's performance is largely in line with peers in its core middle-market demographic, as overall industry growth is skewed towards older ages and larger face amounts.

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Executive Nicole Russell confirmed the corporate segment's strength, driven by portfolio growth and higher yields, is expected to be a predictable contributor going forward. She also reiterated the full-year ADP growth guidance of around 5%, noting it's a stable business. CEO Glenn Williams added that the shift to annuities in uncertain times is a common phenomenon and he is not certain it will be more extreme than in the past.

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CEO Glenn Williams confirmed that VA growth is driven by favorable demographics, product enhancements, and strong markets. CFO Tracy Tan reported that mortality trends have been stable and favorable, particularly in the U.S. She clarified the remeasurement loss was due to a technical software improvement for actuarial calculations under LDTI, not a change in assumptions or experience.

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CFO Tracy Tan confirmed the senior health exit generated a tax saving of approximately $98 million, with the cash benefit being realized in Q3 and Q4 of 2024. Regarding YRT premiums, she explained that while the ratio to direct premiums can fluctuate, it is offset by growing mortality risk, and the overall benefits and claims ratio is expected to remain stable around 58%.

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CEO Chris Blunt stated that MYGA sales will likely see a 'more normalized rate' with some volatility, as they are opportunistic. He noted the new sidecar makes FIAs more attractive, potentially shifting the sales mix. President & CFO Conor Murphy added that the funding agreement market looks 'reasonably attractive' for Q3 and that RILAs remain a key, though smaller, part of their expansion. Regarding ROA, Mr. Blunt confirmed they are tracking well towards their 2023 Investor Day goals, with the TTM ROA in the high 120s bps, and noted alternative investments contributed about 37 bps to that figure.

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CEO Christopher Blunt clarified that the MYGA rebound was a company-driven decision to lean back in after gaining clarity on rates and spreads. He compared the current volatility to the COVID period, noting that the business model proved resilient then by recapturing spread targets within a year. He described the distribution partner's investment as an opportunistic and attractive acquisition of a stake in a smaller IMO, which he expects to be a one-time event. CFO Conor Murphy added that the MYGA rebound did not detract from strong sales in other retail products.

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CEO Christopher Blunt clarified that the Q4 reduction in MYGA sales was a deliberate capital allocation decision to fund record FIA demand, not a result of market weakness. He confirmed the full-year 127 basis points is the correct ROA baseline, with future growth expected to be more moderate. The $65M to $90M owned distribution EBITDA growth is driven by both the full-year impact of an acquisition and strong organic performance from well-chosen partners. He attributed the strong FIA growth to both a rising tide of industry adoption and F&G's success in deepening penetration within its distribution channels.

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EVP & CFO Tomas Hernanz confirmed the $285 million interest expense guidance for the year is accurate and not affected by one-time items. He also explained that the cash from operating activities calculation was impacted by the non-cash accounting for 'changes in recoveries'. President & CEO Ashish Masih added that the U.S. supply environment remains highly favorable, expecting record 2025 purchasing for the MCM business. He also provided the 2025 vintage collection multiples: 2.3x for MCM and 2.4x for Cabot.

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President and CEO Ashish Masih explained that Cabot's performance was a combination of operational improvements and updated forecasts. He stated that both the U.S. (MCM) and Cabot businesses achieved a 2.3x collections multiple on Q1 purchases. Masih characterized the U.S. supply environment as very favorable and stable at elevated levels, expecting MCM to achieve another record purchasing year. He also noted that the U.S. tax season was normal to slightly better, with overall consumer payment behavior remaining stable.

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President and CEO Ashish Masih projected continued improvement in cash efficiency, driven by technology and scale, noting MCM's headcount was flat despite 20% collections growth. He detailed that G&A was impacted by a $6M restructuring charge and a $19M IT asset write-down. He specified the Cabot ERC reduction was ~$453M ($129M revenue impact), primarily from older vintages, resulting from a holistic review rather than a sudden Q4 event. He confirmed U.S. pricing remains stable with strong returns.

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President and CEO Ashish Masih clarified that buying portfolios at strong returns remains the top priority and that the capital allocation update is not a signal of a changing U.S. market. He explained that the company sees limited value in strategic M&A and is more likely to repurchase stock as leverage declines toward the midpoint of their target range. He confirmed the 2024 vintage purchase multiples for both the U.S. and Cabot are 2.3x and noted the large Q4 Cabot purchase was a lumpy spot deal in a steadily improving, but still competitive, European market. He also affirmed that operating leverage should continue to improve, pointing to the recent increase in the cash efficiency margin.

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CFO Kirk Lusk explained that attritional losses are stabilizing as frequency trends level off after a period of decline. He noted that while new competition is entering Florida, it is primarily focused on Citizens depopulation, not direct competition. Lusk anticipates that primary rate increases will moderate as the company has now achieved rate adequacy in most markets. He also stated that growth in the Northeast is expected to be beneficial for the overall loss ratio, as those markets are still seeing some rate increases.

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CEO Ernesto Garateix stated that Heritage will maintain rate adequacy but is open to rate decreases if they correspond with falling loss trends, as seen in Florida. He clarified that they are reopening business with existing distribution partners and are prepared for responsible competition from new entrants. CFO Kirk Lusk added that current favorable loss trends, aided by legislative impacts, appear sustainable.

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Executive Kirk Lusk explained that while the third quarter is seasonally strong, the improved attritional loss ratio is 'more close to a new norm' due to successful underwriting actions and legislative reforms. CEO Ernesto Garateix added that significant rate increases will continue to earn through in 2025, and that Florida remains attractive alongside Northeast states like New York and New Jersey, where rates are approaching adequacy. Kirk Lusk confirmed that more rate, on an absolute basis, is expected to earn through in 2025 than in 2024.

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CFO Robin Raju attributed lower Group Retirement surrenders to market volatility in April and ongoing client retention efforts. On RILAs, President Nick Lane noted that growing advisor awareness is expanding the total market. He highlighted that Equitable's position as a pioneer allowed it to secure 'privileged distribution' with key third-party partners.

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Onur Erzan, Head of AllianceBernstein's Global Client Group, noted a positive start to the year for flows, driven by retail and insurance channels, though institutional equities remain a headwind. CFO Robin Raju projected alternative investment returns would start the year around 5-6% and ramp up to the lower end of the 8-12% target range for the full year, contingent on improving M&A and IPO markets.

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Jackie Marks, AB's CFO, stated that while the 2025 baseline is 33%, they expect further margin expansion over time as the business scales, particularly in private markets. CFO Robin Raju clarified that the annuitization transfers from Legacy are not material, amounting to a consistent $10 million in the quarter, and result in the creation of favorable long-duration, spread-based products.

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CFO Keith Meyer attributed the prior year development to regulatory improvements in Florida, lower claim frequencies, and inflation being lower than expected. President and CEO Keith Demings stated that tariff impacts were minimal in H1 and are considered manageable in the full-year outlook. Demings also confirmed that lender-placed policies are being retained longer due to the hard voluntary market and Assurant's competitive rates, a duration Meyer quantified as 6-12 months longer. Regarding the pipeline, Demings described strong momentum and planned investments for new business, hinting at upcoming announcements for new clients, expanded services, and new products.

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President and CEO Keith Demmings described the Verizon deal as a new launch that will ramp over several years and deepen a key client relationship. On homeowners, CFO Keith Meier noted continued policy growth, which Mr. Demmings added has slowed sequentially but is still expected to grow modestly. Regarding the renters book, Mr. Demmings explained it was a strategic acquisition of 250,000 policies that adds scale and reinforces market leadership.

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CEO Keith Demmings explained that the 16% policy growth in lender-placed homeowners was driven one-third by client growth, one-third by the hardening California market, and one-third by the rest of the country. For Global Lifestyle, he anticipates continued top-line growth momentum, supported by major mobile client renewals and new programs. He specified the 2025 headwind as a couple of points from FX and 1-2 points from new investments. CFO Keith Meier noted that Q4 prior year development stemmed from the post-inflationary environment and lower-than-expected claims frequency. Finally, Mr. Demmings elaborated that the 'better appreciated' comment refers to the market sometimes overlooking the fundamental strength, low volatility, and consistent outperformance of the Global Housing business, which has a 10-year average combined ratio of 89%.

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President and CEO Keith Demmings explained that the higher placement rate in Housing is driven equally by new client growth and a hard voluntary insurance market. He clarified that the Q3 device count growth was a 'natural evolution' rather than a one-time step-change. Regarding GAAP losses, CFO Keith Meier noted the impact is short-term and risk participation has been significantly reduced from 40% of written premium in 2022 to 12% in 2024, with Demmings adding the headwind should not persist into 2025.

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Frank D'Orazio, Director & CEO of James River Group Holdings, explained that the excess casualty portfolio has significantly reduced its commercial auto-driven component, now focusing more on manufacturers, premises risks, and hospitality. He noted that while policy count retention remains stable in the 60-65% range, premium retention has dropped due to a deliberate strategic shift away from larger, more competitive accounts towards smaller, more profitable ones.

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CEO Frank D'Orazio responded that while portfolio management is a continuous process, the company intends to profitably grow the E&S book through initiatives in efficiency, technology, and new leadership. He noted the new segment leader will be charged with driving growth. CFO Sarah Doran added that the reinsurance renewal is at the end of June and appears orderly, with more details to be provided next quarter.

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CFO Sarah Doran clarified that the normalized group expense ratio should be around 28%. CEO Frank D'Orazio explained that the reserve charge was driven by increased severity trends in prior years, not frequency, and expressed strong confidence in recent accident years due to significant underwriting actions and compounded rate increases, which have not yet been fully recognized in the reserves.

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CFO Patrick McClymont explained that strong Q2 Marketplace revenue was driven by private and inventory sales, with second-half growth fueled by new auctions in Europe and Las Vegas. He clarified the incremental tech spend is a pre-revenue investment that will be leveraged, not eliminated. McClymont detailed that the new Markel arrangement will boost profitability through incremental underwriting profit and investment income. He also clarified the State Farm partnership is a pure, profitable agency relationship with a commission in the 'low 30ish percent' range, leveraging existing infrastructure.

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CFO Patrick McClymont reaffirmed full-year guidance, noting the strong Q1 Marketplace performance was anticipated. CEO McKeel Hagerty described 'Enthusiast Plus' as a new program for modern collectible cars, enabled by the Duck Creek platform. McClymont clarified the $20 million spend creates a new expense baseline to be leveraged for future growth, rather than being a one-time cost.

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CEO McKeel Hagerty confirmed that the hard standard auto market continues to drive shopping behavior that benefits Hagerty, though the rate of increase may be leveling off. CFO Patrick McClymont added that Hagerty's significant price advantage over the industry is a compelling value proposition, contributing to a record pace of new customer acquisition, with a projection of 275,000 new members in 2024.

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Mac Armstrong, Chairman, CEO & Founder, responded that the company's practice is to be conservative and consistently beat and raise guidance, noting they have raised it three times this year. He added that the guidance still contains a full catastrophe load. Regarding casualty, he specified that pricing remains strong in excess liability (high-teens increases) but has softened in professional liability, where Palomar has consequently pulled back.

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Chairman and CEO Mac Armstrong attributed the casualty growth to new underwriters capitalizing on a dislocated E&S market. Executive T. Uchida detailed that 65-75% of crop earned premium is expected in Q3, impacting ratios for that quarter. Armstrong added that commercial earthquake competition stems from new entrants and increased capacity within layers, particularly from London markets.

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Executive T. Uchida confirmed the net earned premium ratio would peak in Q1/Q2 in the low 40s before dropping to the 'low 30s' in Q3 due to increased crop participation. CEO Mac Armstrong attributed commercial quake softness to the 'all risk' market re-entering large layered accounts, but noted terms and conditions are holding firm. Armstrong credited the strong 2025 outlook to broad portfolio strength, highlighting margin improvement in Earthquake, a seasoned and profitable Other Property book, conservative growth in Casualty, and increased risk-taking in the high-performing Crop business.

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Mac Armstrong, Chairman and CEO, stated that Palomar expects to sustain high-teens growth in its earthquake business, with a balanced approach between commercial and residential lines, though residential may see slightly more relative growth. He noted that while commercial rates are plateauing, the profitability metrics remain compelling, and the CEA's pullback creates more reinsurance capacity. Chris Uchida, executive, explained that the net earned premium ratio improvement is driven by favorable rates, business mix, and a strong 2024 reinsurance placement. He anticipates Q3 will be the ratio's low point, with increases expected through early 2025. Mac Armstrong added that slower growth in the Fronting business also positively impacts this ratio.

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CEO Bill Cobb reported that the 2-10 structural warranty sales team is performing well, hitting its targets, and that the business integration is proceeding smoothly. Regarding attach rates, Cobb noted that while he couldn't comment on the current quarter, market indicators suggest a favorable trend toward a more balanced market, which benefits attach rates. CFO Jessica Ross confirmed there was nothing to report regarding claims development on 2-10's reserves.

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CEO Bill Cobb stated that Q1 inflation was negligible, with HVAC costs even declining. He confirmed that conservatism for potential future tariff impacts is built into the second-half guidance. On refrigerants, he noted the company is managing the transition well, which has been a net benefit. CFO Jessica Ross clarified the favorable development was about $7 million, attributing it 'mostly' to the core Frontdoor business.

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CEO Bill Cobb and CFO Jessica Ross confirmed there is significant 'blue sky' growth potential for HVAC sales as the program continues its market-by-market rollout. Cobb deferred providing a 2025 outlook for the Moen partnership until the February Investor Day. Regarding trade service fees, Ross explained that the behavioral impact on claims frequency typically lasts about a year and confirmed that the effect from the recent increases has now largely run its course.

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Martin Sjolund, President and CEO, attributed the strong European overperformance to operational initiatives and conservative underwriting, while U.S. outperformance was linked to the success of recent initiatives, particularly a 24% growth in legal cash collections. He clarified the U.S. restructuring aims to create an empowered operational team under a single P&L for faster execution, not just cost savings. Both Sjolund and CFO Rakesh Sehgal explained that purchase price multiples fluctuate due to portfolio mix and that the company's global investment framework prioritizes net returns over headline multiples.

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President and CEO Vik Atal stated the strong cash efficiency was organic and not due to one-timers, reaffirming the 60%+ target. He and Martin Sjolund, President of PRA Group Europe, explained that lower U.S. purchases reflected a global capital allocation strategy, with attractive opportunities seized in Europe. On supply, management sees U.S. levels remaining elevated but stabilizing. EVP and CFO Rakesh Sehgal projected that legal cost growth would moderate significantly in 2025 and detailed that the noncontrolling interest relates to their 50-50 investment partnership in Brazil.

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Rakesh Sehgal, EVP and CFO, stated that U.S. pricing has stabilized around a 2.1x multiple, which does not yet fully reflect the upside from ongoing cash-generating initiatives. He clarified that legal spending is a strategic investment and is factored into the 2025 efficiency target. Vik Atal, President and CEO, added that offshore collectors are performing on par with similarly tenured U.S. collectors and provide significant cost savings of approximately $30,000 per collector annually.

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EVP and CFO Rakesh Sehgal stated that pricing is stable at an attractive 2.1x multiple, reflecting a market in equilibrium. CEO Vik Atal explained the U.S. footprint reduction to three sites is enabled by successful offshoring and work-from-home programs, which will minimize exit costs by retaining staff remotely. Vik Atal also confirmed that the strong Q4 purchase forecast is driven by continued robust supply in the U.S. and a seasonally strong, spot-driven market in Europe.

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CEO J. Patrick Gallagher advised not to read too much into the workers' comp figure, stating the line has been relatively flat for a decade and the quarterly numbers are just moving within a tight range. CFO Douglas K. Howell indicated that the benefits business organic growth was about 1.5 to 2 points better than the overall U.S. retail organic growth of 5%.

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CEO J. Patrick Gallagher characterized the workers' comp market as being in a "pretty tight range" for the last decade and advised against reading too much into quarterly fluctuations. CFO Douglas K. Howell indicated that the benefits business organic growth was about a point and a half to two points better than the overall U.S. retail organic of 5%.

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J. Gallagher, an executive, and CFO Douglas Howell suggested the workers' comp increase is likely due to a robust economy, higher medical inflation, and increased exposure from employment growth. On the property market, Gallagher described it as 'fragile,' noting that while clients currently deserve some rate relief, the market could change 'on a dime' due to a significant catastrophe season, given increased storm and wildfire risks.

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CFO Douglas Howell clarified that the initial AssuredPartners revenue guidance is a straight-line assumption based on timing and does not yet factor in seasonality, which exists in their benefits and public entity businesses. He then broke down the specialty growth, noting U.K. specialty was around 7% and U.S. specialty was around 10%, which contributed to the overall 9% growth for the combined group in the quarter.

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CFO Douglas Howell indicated that with 6-8% organic growth, there is 'absolutely' an opportunity for 2025 margin expansion, driven by scale and technology. He broke down wholesale/reinsurance growth with most components around 8-9%. Executive J. Gallagher noted that submission flow to their wholesale operation (RPS) remains tremendous and accounts are not flowing back to the primary market, indicating sustained growth in the E&S space.

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CFO Mark Haushill stated there is no change to the full-year cat loss guidance of roughly two points. Both he and CEO Andrew Robinson confirmed they are not changing loss picks, attributing the strong quarterly result to favorable business mix rather than a new run rate. Robinson projected a 'very good third quarter' driven by broad-based strength across the portfolio, not just lumpy program business, underscoring their ability to pivot capital to the most attractive areas.

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CEO Andrew Robinson advised that while Q1 delivered the company's best-ever ex-cat accident year loss result, the full-year guidance remains the most appropriate reference point. On hiring, he described a more selective approach compared to the 'pedal to the metal' pace of prior years, with resource decisions now more closely tied to market conditions in specific lines. CFO Mark Haushill estimated that cash from operations for the quarter was approximately $100 million.

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CEO Andrew Robinson expressed caution on casualty growth, citing uncertainty around loss cost inflation despite high rates, and affirmed a selective approach. He highlighted strong talent acquisition, with 19 underwriters hired in Q4, as a key advantage for 2025. CFO Mark Haushill confirmed full-year cash from operations was approximately $300 million.

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CEO Andrew Robinson detailed a varied property market: Marine sees pressure on terms, transactional E&S remains attractive despite some competition, but the Global Property market has 'irresponsible' pricing from competitors. Consequently, he stated Global Property is not planned as a growth business for the next four quarters, as Skyward will hold the line on pricing and let business go rather than follow the market down.

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President & CEO Katherine Antonello explained that while EIG's California book has historically outperformed the industry, a recent rise in CT claim frequency, particularly for older accident years like 2023, prompted the action. She attributed the trend to California's unique laws allowing post-termination and stress-related claims, amplified by attorneys using remote hearings to expand geographically from LA to the Bay Area. Antonello confirmed it's a frequency, not severity, issue and stated that over $50 million in favorable development from older accident years was prudently reallocated to more recent years. EVP & CFO Michael Pedraja added that the company maintains the highest level of excess capital and will be disciplined in its capital management, considering share repurchases when the ROI is compelling.

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CEO Katherine Antonello explained that the higher loss ratio reflects a competitive rate environment, pressure on recent accident years, and a notable rise in California's cumulative trauma claims, which she characterized as a form of social inflation. She noted that while overall medical severity remains below pre-pandemic levels, the company has taken targeted pricing actions. Antonello confirmed that California's rate filings are advisory, allowing for flexibility, and observed that Employers' own rates have increased 4-5% in the last six months, mirroring broader market firming.

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CEO Katherine Antonello explained that the 2024 accident year loss and LAE ratio was set at 64%, a slight increase from 63.3% in 2023, due to a prudent reserving philosophy and a competitive rate environment. She anticipates a further increase in 2025, driven by higher actuarial trend selections, which will be meaningfully offset by continued expense ratio reductions. Antonello noted that while claim frequency trends downward and severity remains stable, the change is influenced by industry-wide conservatism. She also confirmed that slowing wage inflation is pressuring net written premium and that the company will accelerate its successful appetite expansion program in 2025.

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CEO Katherine Antonello confirmed that the appetite expansion strategy is ongoing and will continue into 2025, with a dedicated working group actively seeking new, profitable class codes. Regarding audit premiums, she noted that while no specific cause was identified, the trend mirrored a broader labor market slowdown over the summer reported by NCCI, which has since seen some recovery. She added that while overall premium growth was modest, policies in force grew, driven by smaller policies. For 2025, she anticipates continued downward pressure on NCCI loss costs but emphasized that Employers retains pricing flexibility in most states.

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President of Health, Wealth & Career Julie Gebauer confirmed that the international Health growth was driven by strong underlying momentum and significant healthcare cost inflation. On the Risk & Broking trajectory, management stated they expect to continue delivering mid to high single-digit organic growth for the remainder of the year and in the medium term.

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President & CEO Adam Pollitzer described the pricing environment as 'balanced and constructive.' EVP & CFO Aurora Swithenbank attributed the low OpEx to typical Q2 seasonality and disciplined cost management, not one-time items. She also confirmed investment income growth was driven by reinvesting at higher rates. Regarding defaults, Swithenbank noted hurricane-related defaults are curing as expected and wildfire impact is minimal. Pollitzer added that cure activity is supported by the strong labor market, embedded home equity, and seasonal factors like tax refunds.

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CFO Aurora Swithenbank and CEO Adam Pollitzer explained that while the core yield is stable, the net yield can fluctuate with claims experience due to reinsurance accounting, though the bottom-line benefit remains. On the regulatory front, Pollitzer noted broad bipartisan support for the MI industry's role and expressed optimism about engaging with the new administration.

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President, CEO & Director J. Powell Brown explained that over half of the variance from consensus expectations was due to downward rate pressure, with the remainder from lower new business in the quarter. He expressed confidence in the new business pipeline for Q3 but emphasized the significant impact of moderating rates.

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Executive R. Watts explained that Quintes' Q1 revenue seasonality boosted retail margins, which will act as a drag in later quarters, but the full-year impact is as expected. He confirmed retail's Q1 organic growth was anticipated to be lower and that captive premium growth would level off. Executive J. Powell Brown stated that the non-cat property pricing outlook is uncertain and depends on the upcoming storm season. He also noted that the current cat property rate downturn follows an unusually long upcycle and that future rate direction will be heavily influenced by storm activity.

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R. Watts, an executive, confirmed that the $19 million negative adjustment in Q4 2023 created a favorable year-over-year comparison for Q4 2024 organic growth. J. Powell Brown, an executive, speculated that given the potential scale of wildfire damage, there would be an insufficient supply of quality contractors in California, necessitating a large-scale, expedited rebuilding plan from officials.

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R. Watts, an executive, clarified the $15 million is from onboarding new lender-placed business and will create a tough year-over-year comparison in Q3 2025 as the revenue normalizes. J. Powell Brown, an executive, described the investments in teammates as 'normal opportunistic investing' rather than a formal program and noted the advocacy business performance was similar to recent years.

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CEO & President G. Janelle Frost attributed the premium growth to enhanced agent effectiveness and scalability, which drove a 3.4% increase in policy count while maintaining disciplined risk selection. She noted that wage inflation has now balanced out with loss cost changes, keeping average policy size relatively stable. Regarding medical inflation, Frost acknowledged industry-wide severity increases but stated AMERISAFE's long-term reserving practices remain unchanged due to their consistent claims experience. On the construction sector, she observed continued wage growth but a slight decrease in new employee counts, which could impact frequency trends. Frost also explained that the rise in policyholder dividends reflects a combination of competitive positioning and loss experience, particularly in key states like Florida.

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President and CEO G. Frost stated that competition is stable, state loss cost rates continue to decline by an average of 6-8%, and medical inflation is noticeable in physician care. She also noted wage inflation is slightly above the national average and confirmed two large losses in the quarter. CFO Anastasios Omiridis added that the expense ratio increased due to a $1.9 million rise in investments to support growth, which he expects to moderate.

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President and CEO G. Frost clarified that policy count grew 9.6% for the full year and 2.6% sequentially in Q4. She noted that strong policy retention of 94.1% was impactful and that favorable reserve development included gains from 2020-2022. Frost also addressed large claims, calling them 'lumpy' at 18 for the year, up from 2023 but near the five-year average. She expects the 2025 loss pick to hold at 71% and believes the market remains highly competitive. CFO Anastasios Omiridis explained that higher ceded premiums were due to growth and a Q4 true-up, expecting them to normalize around 6% of gross written premiums.

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President and CEO G. Frost explained that growth stems from internal strategic positioning and reinforcing their underwriting appetite with agents, not a change in the competitive landscape. She noted the business mix remains consistent and that while competition is intense, AMERISAFE's value proposition is resonating. Frost also reported 13 large claims year-to-date, in line with prior years, and sees no immediate threat from medical inflation. CFO Anastasios Omiridis stated the new money yield was approximately 5% and the portfolio's tax-equivalent book yield was 3.84%.

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CFO Mark Jones Jr. specified the $4 million recovery consisted of $3 million in renewal commissions and $1 million in renewal royalty fees. He noted that lead conversion is currently affected by an increase in 'false starts' from mortgage application cancellations. Regarding hiring, he stated this year's class was more front-loaded in June compared to last year, but headcount will still grow sequentially in Q3.

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CFO Mark Jones Jr. explained that the corporate channel's retention is lower due to its heavy concentration in Texas, a challenging market, whereas the franchise book is more geographically diversified. For interest expense, he guided analysts to use the $300 million term loan at a rate of SOFR plus 3.50%.

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CFO Mark Jones Jr. stated that based on strong core loss ratio performance with underwriters, there is potential upside to the previous full-year contingent commission expectation of 35 basis points of total written premium. He clarified that the premium-to-revenue gap is not driven by business mix but by the accelerated growth of the franchise channel, where 100% of premium is recognized immediately but only 20% of the revenue.

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President & CEO W. Robert Berkley, Jr. attributed the recalibrated growth outlook to headwinds in commercial property, while noting the opportunity in casualty remains. Regarding MGAs, he stated that while every opportunity is evaluated, the company maintains a very high hurdle for acquisitions, prioritizing expertise and capital stewardship.

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President & CEO W. Robert Berkley, Jr. attributed the moderated growth outlook primarily to headwinds in commercial property, while noting that opportunities in casualty remain strong. Regarding MGAs, he stated that while all opportunities are evaluated, the hurdle for an acquisition is very high given the company's focus on internal expertise and capital stewardship.

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Executive W. Berkley expressed pleasure with continued submission flow in the E&S market, particularly for liability lines, noting the quarter unfolded encouragingly after a challenging January. Principal Financial Officer Richard Baio explained that the reinsurance impact is not due to timing but to the changing composition of business across operating units with different cession levels, while the overall cession rate remains consistent around 14-15%.

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W. Robert Berkley, Jr. (Executive) stated that submission flow to the E&S market remains robust, with more momentum on the casualty side than property, and confirmed that the E&S business is growing considerably faster than the admitted business. He attributed confidence in future underwriting margins to the significant rate achieved over a long period, growing visibility into underwriting actions, and a favorable view of rate versus loss trend, leading to cautious optimism.

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Executive W. Berkley explained that the primary driver of the current accident year loss ratio improvement was progress on the property ex-cat attritional loss ratio. While the delta between rate increases and loss trend should theoretically benefit margins, the company is not prematurely declaring victory. CFO Richard Baio projected the tax rate for next year would be in the 23.5% to 24% range, similar to the current year, assuming foreign earnings contributions remain consistent.

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CEO Dwayne Hyzak and Managing Director Nicholas T. Meserve stated that while recent events are positive, it's too early to predict a meaningful impact on activity. Regarding leverage, CEO Dwayne Hyzak and CFO Cory Gilbert explained the focus is on deploying capital from the recent IPO. They are targeting a leverage ratio of 0.85 to 0.95, up from the current 0.79, and noted that regulatory leverage capacity will expand significantly in January 2026.

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Arthur Penn, Chairman and CEO, responded that recent market volatility put an end to repricing activity, so the vast majority of originations for existing borrowers are for growth, primarily through add-on acquisitions. Regarding tariffs, Penn asserted that PFLT's portfolio has very limited exposure due to its focus on sectors like healthcare and government services. He added that most impacted companies had already adjusted their supply chains following the first Trump administration and are structured with low leverage to withstand shocks.

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Arthur Penn, Chairman and CEO, stated that tariff exposure is limited and the portfolio is well-positioned in its key healthcare and government services sectors by focusing on companies that provide cost savings. He explained that asset transfers to the PSSL JV ebb and flow based on deal flow and the need to accumulate sufficient assets (around $300M+) to execute a securitization efficiently.

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Chairman and CEO Arthur Penn stated that the government services portfolio is focused on stable areas like cybersecurity and intelligence, not hardware. He emphasized a conservative approach with low leverage to mitigate risks across sectors, including healthcare. Penn estimated that new investments are outpacing repayments at a ratio of roughly 2-to-1 due to a more active M&A environment. He confirmed that the equity co-investment strategy remains a stable part of their approach, citing its strong historical performance.

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CEO Tanner Powell explained that strong Q2 funding is a lagging indicator of deals initiated before recent market volatility. He noted that spreads stabilized in Q1 and expects a balance between available capital and a muted M&A environment. Regarding the dividend, Mr. Powell expressed confidence in MFIC's earnings power, citing below-target leverage, the low yield from the Merx investment which is being rotated, and potential for higher prepayment fees as factors supporting future NII growth.

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CEO Tanner Powell explained that the spread increase was not a market trend but was driven by the 'power of incumbency' in redeploying capital to existing, well-performing borrowers. He noted it's tough to estimate future refinancing activity. President Ted McNulty added that PIK income trends depend on interest rates and the performance of a few specific names, but overall credit quality remains stable.

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CEO Tanner Powell attributed the strong origination volume to a healthy M&A market in Q2 and early Q3 and a strategic effort to deploy capital following the deleveraging merger event. President Ted McNulty described the current market as more 'borrower-friendly,' noting that spreads have compressed from their 2023 highs due to increased competition and a slowdown in M&A. However, he stated that deal terms remain attractive on a historical basis and that MFIC's incumbency provides a competitive advantage.

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Executive Dwayne Hyzak acknowledged that dividend income is variable but stated that many portfolio companies are performing very well with low leverage, allowing for continued cash distributions. He clarified that the two major anticipated exits have now occurred, so realization activity should return to 'business as usual.' Hyzak and Executive David Magdol confirmed that market uncertainty absolutely creates opportunities, citing that their strong liquidity and long-term view allowed them to execute highly successful investments during the COVID-19 pandemic. They remain positioned to be active and find best-in-class partners in any environment.

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Dwayne Hyzak (Executive) clarified that the Q4 valuation increase was driven by market-based multiples of publicly traded peers and consistent fee income, not the future MSC Income Fund offering. He explained that the new fee structure for MSC Income Fund is designed to be roughly breakeven at current performance levels. Regarding bank competition, Hyzak and Nicholas Meserve (Executive) noted that while they occasionally lose refinancing deals to banks on seasoned assets, they don't see banks as significant competitors on new LBO transactions.

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Executive Dwayne Hyzak asserted that the election had no impact on deal flow; transactions fell through due to due diligence issues and an owner's change of mind. He confirmed the new non-accrual was also a consumer-focused business and that while progress is expected, a full recovery will be a longer-term process. Qualitatively, he described the lower middle market portfolio's top performers as doing 'exceptionally well,' with the middle of the portfolio remaining flat to slightly down. Executive Ryan Nelson characterized the repayment activity from local banks as 'idiosyncratic' rather than a broad trend, often involving banks with long-standing prior relationships with the portfolio companies.

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CEO of Markel Insurance Simon Wilson described 2025 as a transitional year, with the heavy lifting of re-underwriting complete and growth expected to accelerate in the second half. CFO Brian Costanzo noted that constant-currency international growth was 6%. Wilson expressed optimism for U.S. wholesale and specialty due to a structural shift toward the E&S market, strong customer demand, and significant compounding rate increases in casualty lines (13% in Q1 2025 on top of 10% in 2024), which Markel is now positioned to capitalize on.

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Executive Thomas Gayner stated that the review addresses both structure, to improve clarity for investors, and execution, particularly in the Insurance business. He explained the intrinsic value calculation is a consistent methodology to show the rate of change over time, not a precise point estimate, and is higher than carrying value. COO Michael Heaton added it's a blended metric for the entire company. Regarding growth, Gayner prioritized profitable growth, while Executive Jeremy Noble noted that once corrective underwriting actions are fully cycled through in 2025, more normalized growth should resume.

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Jeremy Noble, President of Insurance Operations, explained that the ceded recovery adjustment was a refinement to align reinsurance estimates with higher gross loss reserves, an effect more pronounced in the quarter. He noted that while casualty reinsurance pricing is expected to rise, Markel's strong underwriting and relationships should be beneficial during renewals.

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EVP Timothy Arnold attributed the 17% recruiting growth primarily to internal initiatives, like a social media campaign, not macro factors. EVP Chris Pyne stated that while the Social Security disability backlog is an industry topic, it is not a major factor in Unum's current performance.

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CEO Rick McKenney stated that a full, single-transaction solution is unrealistic given the block's size. He confirmed Unum's strategy is to approach a potential risk transfer in tranches, focusing on divesting the block piece by piece over time.

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CEO Rick McKenney stated that a full solution in one transaction is unrealistic given the block's size. The company's strategy is to approach it piece-by-piece, structuring different tranches of the block to appeal to potential counterparties. The ultimate long-term goal is to be off the entire risk, but this will likely be achieved through multiple, smaller transactions over time.

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CFO Steven Zabel noted that natural growth was steady in Q3 at just over 3%, having normalized from higher post-pandemic levels, and that 2-3% is a historical norm. Mark Till, CEO of Unum International, stated that the strong international growth reflects deliberate investments in their proposition and broker relationships in an attractive market, expressing confidence in their choices.

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Incoming CEO Kort Schnabel stated that the 40% incumbent share in the backlog is around the long-term average of 50% and implies a healthy flow of new borrowers. He clarified that potential realized gains would boost taxable spillover income, not necessarily NAV, and that the company is hopeful a couple of appreciated assets could be monetized this year.

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Then-CEO Robert DeVeer indicated that spreads, after declining 100-150 basis points last year, have now plateaued, with no further declines seen in early Q1. He affirmed his belief that ARCC is outperforming peers in gaining wallet share with existing borrowers, noting the company has been very focused on this and is 'doing even better than we have in the past.'

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Co-President Kort Schnabel advised against over-interpreting the short post-quarter-end period, highlighting the strong $2.8 billion investment backlog as a better indicator of future activity. CEO Robert Kipp DeVeer and Schnabel confirmed that the improved interest coverage was a result of both portfolio company EBITDA growth and slightly lower rates.

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CEO Mark Seaton explained that a recession would likely soften the purchase and commercial markets but could be offset by a refinance wave from lower rates. Regarding buybacks, he stated the company acts when it believes the stock is undervalued, which it is currently. He also highlighted the bank as a key strategic asset, providing operational efficiencies and countercyclical earnings, with a key growth initiative being the agent banking strategy to attract third-party deposits.

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CFO Mark Seaton confirmed the $6 million change in estimate negatively impacted both revenue and pretax income in Q4 but will be recaptured over 2025. CEO Ken DeGiorgio stated that while office was not a major component of Q4 commercial revenue, it is 'coming off the sidelines,' particularly suburban office. He also affirmed that a buyer-driven market should boost home warranty sales through the real estate channel, a trend that was already a driver of performance in Q4.

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CEO Kenneth DeGiorgio noted that price discovery is occurring broadly across asset classes, with the exception of office properties, and highlighted the company's diversified commercial presence. CFO Mark Seaton added that fee per file is difficult to forecast. Regarding the CFPB, DeGiorgio stated there have been no recent developments but expects activity could increase after the election.

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Daniel Frey, CFO, responded that the change primarily impacts the casualty lines. He specified that it is mostly General Liability (GL) but also broadly helps with core GL and umbrella claims, declining to provide a more granular breakdown.

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An executive explained that ARR loan exposure has been more than halved, with a highly selective approach to new deals. They attributed spread compression to a capital supply-demand imbalance and robust BSL market activity. Co-CEO David Miller added that the bulk of portfolio repricing has likely already occurred, with future repricings tied to credit-enhancing events for the borrower.

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Co-Chief Executive Officer Alex Chi confirmed a post-election sense of excitement and optimism. He noted that conversations with Goldman Sachs bankers and other industry participants point to an energetic outlook for M&A in 2025, particularly from the sponsor community.

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CFO Shai Vichness stated that most portfolio repricing is complete (estimating 70-75%) and expects PIK income to remain low at around 4%, as it's tied to junior capital, not portfolio stress. CEO Ken Kencel added that he expects direct lenders to maintain their dominance in the core middle market for new LBOs due to advantages in speed, certainty, and relationships, which insulates them from BSL market competition in that specific segment.

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Kenneth Kencel, Chairman, President and CEO, acknowledged modest spread compression of roughly 25-50 basis points in the core middle market over the last six months, which is significantly less than the 150-200 basis points of compression seen in the broadly syndicated loan (BSL) market. He described the competitive landscape as a consolidating market where a handful of large, established players like Churchill are capturing quality deal flow, while new, smaller entrants are not significantly impacting the core middle market where NCDL operates.

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Edward Rand, President and CEO, responded that the competitive landscape in Q4 was consistent with the rest of 2024, marked by excess market capital leading to aggressive behavior from some players. He reiterated that ProAssurance will continue to prioritize profitability and rate adequacy over growth in 2025. Rand specified that reserve development came from more recent years for the NORCAL business and from 2020 and prior for the legacy business. He did not provide a specific outlook for the 2025 loss pick but emphasized the continued push for rate increases.

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Executive Kevin Shook provided the workers' comp rate change (down 3%). Edward Rand, President and CEO, noted nothing specific in recent accident year reserve development. He agreed lower rates should improve pricing discipline but cautioned that overcapitalized competitors might not react. He described the California market as rational and similar to the broader picture, with less irrational pricing than in other markets.

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President Logan Nicholson characterized spreads as having stabilized in the 475 to 500 basis point range for the last three quarters, attributing the small sequential change to deal mix rather than a broader trend. CEO Craig Packer responded that they are not seeing a significant wave of dividend recapitalizations; he stated that most refinancings are like-for-like transactions aimed at lowering borrowing costs, not large-scale equity extractions by sponsors.

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Co-CEO Brad Marshall clarified that PIK income, representing 6% of total income, declined due to one issuer rolling off PIK to pay full cash. For fee potential, he noted the portfolio's amortized cost is just above 98.5 and suggested that a normalized repayment rate of 15-25%, compared to 6% year-to-date, would significantly increase income generation from accelerated fee amortization.

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Daniel Pietrzak, CIO, explained that repricing activity is driven by new deal data points and is typically seen in well-performing businesses. He noted the activity has slowed recently as spreads found a floor. Pietrzak emphasized that the primary reason for passing on deals is a focus on credit quality and structure, not just pricing. Brian Gerson, Co-President, added that with leverage in the middle of its target range, FSK feels no pressure to deploy capital.

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CEO Joshua Easterly stated that interest coverage improved from 2.1x to 2.2x, driven mostly by portfolio company earnings growth with some help from lower base rates. He noted that amendment activity was very low and primarily positive, indicating strong credit quality. He also clarified that the fixed-rate portion of new investments was attributable to a single deal, Arrowhead Pharmaceuticals, representing a $32 million funding.

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