Rob Cox

Rob Cox inquired about the embedded E&S market growth in the 2026 organic guidance and whether Ryan Specialty expects to continue outperforming the E&S market, and the reasons behind increased competitiveness in certain casualty business segments.

Answer

CEO Tim Turner noted that stamping results are 8% and Ryan Specialty aims to outpace this by capturing new and existing E&S business, expecting continued flow into E&S from standard markets shedding high-hazard areas. CFO Janice Hamilton added that E&S will outpace the admitted market long-term, and Ryan Specialty will gain market share. CEO Tim Turner explained that increased casualty competitiveness is seen in low-to-medium hazard segments, with high-hazard niches remaining solidly in E&S. Founder and Executive Chairman Pat Ryan attributed some of this to carriers shifting capital into casualty due to property profitability from benign storm seasons.

Rob Cox asked about the E&S market growth embedded in Ryan Specialty's high single-digit organic growth guidance for 2026 and if the company expects to continue outpacing the E&S market, and the reasons for increased competitiveness in certain segments of the casualty business.

Answer

CEO Tim Turner noted that stamping results are currently at 8% and Ryan Specialty aims to outpace this by capturing new and existing E&S business, expressing confidence in continued dumping and shedding of high-hazard risks by standard markets. CFO Janice Hamilton added that the E&S market is expected to outpace the admitted market long-term. CEO Tim Turner explained that increased competitiveness in casualty is seen in medium-hazard business, with some rate cuts and movement back to the admitted market, particularly in small commercial. Founder and Executive Chairman Pat Ryan added that profitability from benign storm seasons in property has driven carriers to become more competitive in casualty.

Rob Cox inquired about the growth of E&S binding in small commercial and its role in future growth, and sought The Hartford's view on the divergence in casualty trend opinions among carriers, specifically regarding the potential for reemerging caution in 2026.

Answer

CEO Christopher Swift highlighted E&S binding in small commercial as a strong business with 30% Q4-over-Q4 growth and potential to reach over $300 million in premium in 2026, despite softening pricing. Head of Business Insurance A. Morris Tooker noted strong submission flow due to enhanced tools. Swift emphasized that casualty is a high-focus area, with trends elevated and requiring discipline in rate across primary, umbrella, excess, and commercial auto. Tooker added that the casualty market feels stable and disciplined, with no expected change in 2026.

Rob Cox asked about the E&S binding growth this quarter and its role in achieving strong small commercial growth next year. He also inquired about the divergence in views among carriers regarding casualty trends and whether a reemerging casualty caution is possible in 2026.

Answer

CEO Christopher Swift noted that E&S binding in small business is a strong segment with 30% Q4-over-Q4 growth and 35% for the year, projecting it to be a $300+ million premium business in 2026 with strong margins despite softening pricing. A. Morris Tooker, Head of Business Insurance, added that submission flow remains strong due to bringing retail agency tools to the wholesale space. Christopher Swift stated that casualty is a high focus, with elevated trends requiring discipline in rate for primary, umbrella, excess, and commercial auto. A. Morris Tooker believes the casualty market is holding up well and expects it to remain disciplined in 2026.

Rob Cox from Goldman Sachs asked about The Hartford's loss trend assumptions for its major lines of business, specifically if any were adjusted this quarter, and sought clarification on the exposure-related component of the all-in pricing versus the pure renewal rate.

Answer

Chairman and CEO Chris Swift reiterated that liability trends remain elevated, but The Hartford feels 'on top' of loss cost trends, excluding workers' compensation, with stable comp severity trends. President Mo Tooker added that teams are actively keeping rates above loss costs in liability lines. Regarding pricing components, Mr. Swift clarified that the exposure-related portion contributed 1.8% this quarter, maintaining a consistent breakdown of approximately 75% from pure rate and 25% from exposure for the 7.3% ex-comp rate.

Rob Cox asked for an update on loss trend assumptions for major lines of business, particularly liability trends, and if any assumptions were touched up this quarter. He also inquired about the exposure-related component of the 5.2% all-in pricing (or 7.3% ex-comp), asking how it has been trending versus the pure renewal rate and its contribution.

Answer

Chairman and CEO Christopher Swift reiterated that liability trends remain elevated, as reflected in pricing, and emphasized that The Hartford feels it is on top of loss cost trends, particularly ex-workers' compensation. President Mo Tooker added that trends are relatively stable, with teams actively keeping rates above loss costs in liability lines. Regarding pricing components, Christopher Swift stated that the exposure-related portion was 1.8% in the quarter, consistently representing about 25% of the 7.3% ex-comp rate, with 75% being pure rate.

Rob Cox with Goldman Sachs inquired about Arthur J. Gallagher & Company's positioning to capitalize on the digital infrastructure build-out, such as data centers, and the recent performance of its construction practices. He also asked for an update on casualty pricing trends and the outlook for Renewal Premium Change (RPC) embedded in the 2026 organic growth forecast.

Answer

J. Patrick Gallagher, Jr. (Chairman and CEO) stated that construction practices are their largest and emphasized their vertical capabilities, particularly for data centers, highlighting their ecosystem approach. Doug Howell (CFO) provided specific casualty renewal data, noting that rates have remained stable around 8% over recent years and are expected to continue in the 7%-8% range for 2026, not seeing a significant pullback.

Rob Cox inquired about Arthur J. Gallagher & Company's positioning to capitalize on the digital infrastructure build-out and the recent performance of its construction practices. He also asked for the outlook on casualty pricing and renewal premium change (RPC) for 2026, specifically if the observed drop in casualty RPC indicates a trend.

Answer

Chairman and CEO J. Patrick Gallagher, Jr. highlighted the company's strong vertical capabilities, particularly in construction, and its comprehensive ecosystem for data center projects, noting the significant demand for cover. CFO Doug Howell confirmed construction practices are their largest. Regarding casualty pricing, Mr. Gallagher stated they are not seeing softening, with underwriters remaining cautious. Mr. Howell provided historical casualty RPC figures (8.4% in 2022, 8.4-8.7% in 2023, 8.5% in 2024, 8.1% in the current year) and projected 7-8% for 2026, indicating no significant pullback.

Rob Cox asked about Gallagher's confidence in achieving high single-digit organic growth in reinsurance brokerage if pricing declines further, and whether this growth is driven by new or existing accounts. He also inquired if strong insurer profitability for contingents plays into stable organic growth expectations for next year.

Answer

Chairman and CEO J. Patrick Gallagher, Jr. stated that growth comes from both new and existing accounts, benefiting from integrated operations and new trading partners from AssuredPartners. He expressed bullishness on reinsurance. He and CFO Douglas K. Howell confirmed that good carrier profitability supports contingents, and strong growth drives supplementals, contributing to stable organic growth expectations for next year, with potential upside.

Rob Cox asked for clarification on the comments about the property cat environment 'leaking into casualty dynamics,' its significance, and if strong net investment income is a contributing factor. He also sought views on regulators' 'excess profit' discussions, particularly New York state's two-year look back for home insurance, and its rationality.

Answer

CEO Rob Berkley suggested that capital pressure and budget targets are driving companies to seek premium in casualty when property cat falls short, with investment income likely contributing. He expects more clarity after Q1. Regarding regulation, he believes regulators often focus on a moment in time and need to consider historical results and volatility in homeowners, noting Berkley One is less on their radar.

Rob Cox asked for an explanation of how the property cat environment is influencing casualty dynamics and whether strong net investment income is contributing to this trend, and also inquired about the rationality of regulators' 'excess profit' discussions in home insurance.

Answer

CEO Rob Berkley suggested that participants, struggling to meet property cat premium targets, are leaning into casualty, potentially influenced by investment income, though he couldn't quantify it. Regarding regulators, he believes they focus on a 'moment in time' rather than historical volatility, particularly in homeowners, and noted Berkley One is less on their radar.

Rob Cox inquired about catastrophe losses in the insurance segment, comparing them to peers and asking if specific geographies, large losses, or growth in short-tail lines were contributing factors. He also asked about opportunities in the homeowners market and Berkley One's performance.

Answer

Rob Berkley, President and CEO, attributed CAT losses to frequency with modest severity and increased exposure from leaning into the property market, advising against over-interpretation. He praised Berkley One's success as a $500M+ business, growing by deepening presence in existing states rather than expanding into high-CAT exposure areas like California.

Rob Cox asked about catastrophe losses in the insurance segment, inquiring if there were specific geographies or large losses, or if it was a result of growth in short-tail lines. He also followed up on homeowners market opportunities and Berkley One's performance.

Answer

Rob Berkley (President and CEO) attributed cat losses to frequency with modest severity and increased exposure from leaning into the property market, advising against over-interpretation. He described Berkley One as a successful, growing business (over $500 million) that is deepening its presence in existing states rather than expanding into high-cat exposure areas like California.

Rob Cox asked about observations from the renewal of the MCE book, specifically on the delegated and non-delegated sides, and the progress of non-renewals in the programs book. He also sought Arch Capital's thoughts on the current credit environment, including any areas they are leaning into or out of, given noise in private credit.

Answer

Nicolas Papadopoulo (CEO) expressed satisfaction with the MCE acquisition, noting the stickiness of the business and the value of acquired property expertise. He stated that remediation of the delegated (MGA) side is proceeding as expected, with the impact of non-renewals likely to be seen in 2026. François Morin (EVP, CFO, and Treasurer) advised caution in the credit environment, distinguishing USMI borrowers from subprime auto risks. He affirmed comfort with current credit exposure, which is well-understood and monitored. Nicolas Papadopoulo added that COFAS, a short-term credit business, is adept at managing exposure to weaker credits.

Rob Cox inquired about Arch Capital's observations during the renewal of the MCE book, specifically regarding delegated and non-delegated business, and the progress of non-renewals in the programs book. He also asked for Arch's thoughts on the current credit environment, considering its mortgage book, investment in Coface, and private credit portfolio, and any areas they are leaning into or out of.

Answer

CEO Nicolas Papadopoulo expressed satisfaction with the MCE acquisition, noting strong stickiness, ability to offer additional lines, and valuable property expertise. He confirmed the entire book has been transferred to Arch. For the delegated MGA side, remediation is underway, with impacts of non-renewals expected more in 2026 due to notice periods. CFO Francois Morin clarified that the identified non-renewed premium from programs is roughly $200 million. Regarding the credit environment, Mr. Morin stated that subprime auto loan issues are distinct from Arch's USMI borrowers, where performance remains strong. He acknowledged headlines about insolvencies potentially affecting Coface but expressed comfort with Arch's overall credit exposure, which is well understood and monitored. Mr. Papadopoulo added that Coface's strategy of cutting lines to weaker credits helps manage exposure.

Rob Cox inquired about the performance of Brown & Brown's international businesses, particularly in the U.K., relative to the U.S., and the prevailing market factors.

Answer

Powell Brown, President and CEO, stated that U.K. performance is not dissimilar to the U.S., but with slower GDP growth and rate decrease pressure. He noted that liability rates are lower due to less plaintiff's bar activity.

Rob Cox sought clarification on the retail segment's margin comments, specifically if there was a benefit from AssuredPartners' seasonality, and asked about the performance and market factors of international businesses, particularly in the UK, relative to the U.S.

Answer

CEO Powell Brown confirmed that the retail segment's margin saw a positive benefit from AssuredPartners' seasonality, a negative headwind from Quintus, and a positive contribution from underlying business management. Regarding international operations, he stated that UK performance is not dissimilar to the U.S., but noted slower GDP growth and continued rate decrease pressure, with liability rates being lower due to a less active plaintiff's bar.

Rob Cox asked about the deceleration of pricing in international geographies compared to the U.S., and if Marsh McLennan is more sensitive to pricing fluctuations in certain regions. He also inquired if the Thrive program, combined with the current environment, presents an opportunity for above-average margin expansion, or if it primarily helps maintain similar levels of margin expansion amidst potentially slowing organic growth.

Answer

President and CEO John Doyle noted the competitive market due to strong insurer ROEs and an uneven economy, emphasizing the long-term mismatch between price and loss cost inflation. Martin South, CEO of Marsh, detailed strong international growth (5% in Q3, 6% YTD underlying), with notable performance in Asia-Pacific, EMEA, and Latin America, despite slightly lower rates internationally, particularly in the Pacific. Mr. South stated that rate fluctuations do not overwhelmingly impact revenue. Mr. Doyle affirmed that Thrive would support future margin expansion, building on 18 consecutive years of margin growth, and is a critical focus for the leadership team, leveraging technology, automation, and talent optimization.

Rob Cox followed up on the Thrive program, asking if it, combined with the current environment, presents an opportunity for above-average margin expansion or if it primarily helps maintain past levels of margin expansion amidst potentially slowing organic growth.

Answer

John Doyle, President and CEO of Marsh McLennan, stated that Thrive would 'help support margin expansion into the future.' He highlighted the benefits of integrating operations and technology, leveraging lower-cost capability centers, and deploying AI. He reaffirmed the company's track record of 18 consecutive years of margin expansion through various economic and P&C cycles, indicating that Thrive will be an important element in continuing this trend.

Rob Cox of Goldman Sachs asked about the drivers behind the increased tax rate guidance to 19% and its potential persistence into 2026. He also inquired about the anticipated pace of execution for the new share repurchase authorization.

Answer

CFO Alan Declare confirmed the higher 2025 tax rate is due to a greater proportion of profits being generated in higher-tax jurisdictions like the UK. He noted it was too early to guide for 2026. Regarding buybacks, Declare described a multi-factored approach where capital is first prioritized for reinvestment in the business, followed by reinsurance and then shareholder returns, making the pace dependent on market conditions and opportunities.

Rob Cox noted pressure on new business and retention in the Select (small commercial) business and asked for help in sizing the company's annual expected catastrophe load.

Answer

Greg Toczydlowski, President of Business Insurance, explained that the retention dip in Select was intentional, resulting from optimizing the book for severe convective storm risk. Chairman and CEO Alan Schnitzer did not provide explicit cat load guidance but noted that recent heavy cat years are being weighed more heavily in their planning.