Umbrella Reserve Strengthening
Q: Have you resolved issues with recent umbrella charges?
A: We strengthened reserves in our umbrella and general liability lines for accident years 2021 to 2023 due to higher claim costs driven by increased attorney representation rates, severity, jury awards, and longer claim development periods. We're confident that our proactive and decisive actions have comprehensively addressed these issues. - - -

Underlying Loss Ratio Improvement
Q: What's driving improvement in underlying loss ratio?
A: The underlying loss ratio improved by about 50 basis points year-over-year, mainly due to earned pricing benefits and favorable non-catastrophe property losses, without significant changes in loss trends or the impact of prior year development. -

Business Insurance Pricing Trends
Q: Why did BI renewal rate change decelerate?
A: The slight deceleration in Business Insurance renewal rate change was primarily due to national property, while our Select and Middle Market segments showed improvement, with Select up and Middle Market flat. -

Competitor Behavior in Personal Auto
Q: Is your Auto positioning aligned with the market?
A: While some competitors are gaining share in personal auto, our focus on package policies means we're more impacted by challenges in high-risk property geographies. We're pleased with auto new business growth in areas not affected by these challenges, and our actions are intentional to improve profitability. - -

Catastrophe Losses and Reinsurance Impact
Q: Will you absorb higher cat losses going forward?
A: We're not retaining more catastrophe risk. The higher cat losses this quarter resulted from the nature of events, not reduced reinsurance usage. Attachment points increased naturally with growth in premiums and insured values, and our net results aren't significantly impacted by reinsurance changes. - -

Workers' Compensation Outlook
Q: How does medical inflation affect Workers' Comp?
A: Workers' Compensation continues to perform well, with frequency and severity trends emerging favorably. We monitor state-level changes like medical cost inflation and adjust pricing as needed, maintaining a positive outlook on reserves and the overall health of the book. - - -

Growth in E&S Capabilities
Q: Why focus more on E&S markets?
A: While we're predominantly a standard lines writer, we've long had substantial Excess & Surplus lines capabilities. We're capitalizing on attractive opportunities in the E&S market without changing our core strategy, participating at very attractive margins. -

Underwriting Income Growth
Q: What's the message about underlying profitability?
A: Our underlying underwriting income has grown significantly, crossing $2 billion in 2020 and $3 billion in 2023, reflecting increased earnings power from top-line growth at consistent margins. This growth demonstrates the enhanced underlying earnings capability of our franchise compared to five or six years ago. -

Court Backlogs Resolved
Q: Is the court backlog from COVID resolved?
A: Yes, based on our data, the court backlogs from COVID-19 shutdowns have been resolved. This resolution likely reflects broader market conditions beyond our own observations. -

Reinsurance Impact on Combined Ratio
Q: Will reinsurance changes affect combined ratio?
A: Reinsurance pricing aligned with our expectations. Although costs slightly increased, direct pricing gains offset them, resulting in an insignificant impact on margins and no material effect on our combined ratio. -

National Accounts Growth
Q: Why did national accounts grow significantly?
A: Growth in national accounts can vary due to the size of individual accounts. We're pleased with the profitability of this book but not surprised by variability. Our Middle Market segment showed strong margins with 8% growth, contributing to a solid overall business growth of 7% year-to-date. -

Select Accounts Retention
Q: Why is retention lower in Select accounts?
A: We're optimizing our portfolio through normal housekeeping to enhance risk-return profiles, including in specific geographies. This is part of our continuous effort to improve the quality and profitability of our Select Accounts business. -

Supreme Court Impact
Q: Does overturning Chevron Doctrine affect exposure?
A: It's too early to determine the impact of the Supreme Court overturning the Chevron Doctrine on casualty lines. We hesitate to speculate without further analysis, but we're monitoring the situation closely. -

Non-Cat vs. Catastrophe Losses
Q: Are non-cat weather losses inversely related to cats?
A: The relationship varies. In some quarters, elevated catastrophe losses may coincide with expected non-catastrophe weather losses, as was the case this quarter. They're not always inversely or directly related, and the impact depends on the specific weather events. -

Competitive Pricing Trends
Q: Will pricing power trends remain stable or increase?
A: We expect renewal price changes to remain positive and strong, particularly in casualty lines. Industry uncertainties and anticipated adjustments from peers support the continuation of current favorable pricing trends. -

New Jersey Homeowners Pricing
Q: What's the rationale for NJ homeowner price increase?
A: New Jersey poses challenges due to a difficult loss environment and regulatory hurdles, leading us to reduce our homeowner book in the state. Without necessary rate approvals, we must adjust our exposure, and the regulatory dysfunction significantly impacts our ability to write new business there. -