Maxwell Fritscher • Truist Financial Corporation

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CFO Brian Costanzo confirmed that the workers' comp line has seen gradual favorable development and that medical inflation is a key watch area. Simon Wilson, CEO of Markel Insurance, added that the new organizational structure allows for closer monitoring of inflation and rates. Costanzo also affirmed that the Q2 current accident year loss ratio represents a good run rate for the remainder of the year, reflecting the positive impact of recent underwriting actions.

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An executive from the team responded that the pipeline remains consistent, with over half of Q1 deal flow coming from existing borrowers through add-ons and refinancings, and Q2 is trending similarly. Regarding PIK income, the executive noted that five borrowers transitioned to full cash pay in Q1 and that the company has visibility into others doing the same, expecting the overall PIK level to remain consistent and range-bound.

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Chief Investment Officer & Co-President Daniel Pietrzak suggested that activity for larger companies could be more muted as it relies more heavily on an active M&A market. However, he noted that FSK benefits from a large base of incumbent portfolio companies, which provides a consistent and valuable source of repeat opportunities, even if broader market activity slows.

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Chief Investment Officer Daniel Pietrzak explained that the firm has been proactively analyzing the portfolio for risks related to tariffs and government policies, noting that while the overall exposure is not large, it could be material for individual names. He stated that as M&A activity increases, the percentage of new investments from incumbency would naturally trend down, but emphasized that the incumbency advantage in both origination and diligence remains a key strength for a large platform like FSK.

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CEO Kenneth Kencel explained that market volatility gives scaled core middle market lenders like NCDL an advantage, allowing them to step into the void left by the BSL market and finance larger, high-quality companies. He anticipates seeing more A+ credits and expects spreads to widen. Kencel also noted the deal pipeline remains strong, skewing larger and focusing on non-tariff-impacted businesses. CFO Shai Vichness addressed the final point, confirming a roughly one-quarter lag for base rate changes to filter through the portfolio's asset yields.

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Co-CEO Brad Marshall stated that while underwriting standards are unchanged, the firm was more cautious in Q1, passing on more deals and underwriting less economic growth. CFO Teddy Desloge explained there was no single theme for repayments; they included refinancings in the securitization market and sales to strategic buyers. He expects repayment volumes to be muted in the near term due to market volatility and low M&A activity.

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Co-Chief Executive Officer Brad Marshall confirmed that the public BSL market has "come roaring back," increasing competition and leading to some repayments of larger deals. In response, he said BXSL has skewed more toward the upper-middle market where it sees better relative value and can differentiate with its scale and brand, noting that new private credit entrants tend to compete more in the smaller end of the market.

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CEO Joshua Easterly stated there would be no negative impact. He highlighted the firm's proactive balance sheet management, including a recent credit facility amendment and an opportunistic bond issuance that pre-funded a maturity. He noted the balance sheet is in 'really, really good' shape and is liability-sensitive, which is beneficial in a declining rate environment. CFO Ian Simmonds and the team were credited for their excellent work.

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CEO Joshua Easterly responded that the origination mix will depend on market opportunities, though they prefer to reinvest in existing portfolio companies. He clarified that the increase in average commitment size was not due to a single large outlier, noting the TRP deal was $54 million and the median size was around $40 million.

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CEO Joshua Easterly stated that the mix of incumbent and new borrowers will depend on market opportunities, though they always prefer to deploy more capital with existing, known portfolio companies. He clarified that the average commitment size was not skewed by a single large deal like TRP Energy, with the median commitment being around $40 million.

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CFO Robin Raju stated it was too early to comment on April mortality but reiterated that the pending life reinsurance transaction is designed to eliminate this volatility. Onur Erzan, Head of AB's Global Client Group, attributed international outflows to pressure on the Asian taxable fixed income business due to rate uncertainty, which was offset by other regional strengths.

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CEO Ernesto Garateix explained that the E&S product is used strategically to adapt to market dynamics on a state-by-state basis. Executive Kirk Lusk added that California business is entirely E&S and has been the main driver of its growth. Lusk also clarified that the plan to reopen territories for new business applies to the company's entire footprint, including the Northeast and Southeast, not just Florida.

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CEO McKeel Hagerty noted that while shopping behavior is seasonal and can be affected by events like wildfires, transactional volume has been strong and is expected to ramp up. CFO Patrick McClymont clarified that potential tariff impacts are not pre-emptively included in pricing, as any changes would require regulatory approval based on demonstrated cost impacts, which is a long-cycle process.

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Executive Kevin Shook clarified that Workers' Comp renewal rates were +2.3% for the quarter, heavily influenced by a single large account; without it, rates were -0.5%. President and CEO Edward Rand noted no significant changes in the competitive environment from mutual companies and explained that favorable reserve development stems from closing older claims at levels better than anticipated.

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President and CEO Adam Pollitzer provided a broader market outlook rather than intra-quarter guidance. He stated that National MI expects the new business opportunity in 2025 to be similar to the strong environment of 2024, which is pacing towards roughly $285 billion in industry NIW. He cited resilient home prices, larger loan sizes, and affordability constraints as key drivers of sustained demand for private mortgage insurance.

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CFO Jessica Ross confirmed an $11 million year-over-year revenue increase from new HVAC sales. CEO Bill Cobb added that while its margin is lower than the core warranty business, the focus is on the total P&L. Ross attributed lower Q2 service requests to higher trade service fees and the new HVAC program converting requests into sales. Management declined to comment on Q3 trends, stating they are incorporated into the full-year guidance.

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