Release Date: February 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide more details on the losses from the California wildfires? A: The losses are primarily from our property-oriented businesses, including lender-placed property, property in marine, and nonprofit businesses with property exposures in California. - Carl Lindner, Co-CEO
Q: Could you elaborate on the expense ratio pressures mentioned? A: The higher expense ratio is due to growth in businesses like our financial institution business, which has a higher commission ratio compared to others like workers' comp. We focus on overall return rather than just the expense ratio. - Brian Hertzman, CFO
Q: Can you explain the casualty reserve development in the quarter? A: The adverse development is mainly from an excess liability unit focusing on larger entities like Fortune 500 companies. We assess each business quarterly and adjust reserves based on loss ratio trends. - Carl Lindner, Co-CEO
Q: Regarding the 92.5% combined ratio guide for 2025, are you expecting higher workers' comp and casualty loss ratios? A: Yes, we anticipate a higher workers' comp loss ratio due to tempered expectations for favorable development. However, we expect improved loss ratios in other casualty businesses due to underwriting actions and rate increases. - Brian Hertzman, CFO
Q: How should we view the growth potential in specialty casualty given the strong rate increases? A: Excluding workers' comp, we are growing at high-single digits. We could see additional growth if workers' comp pricing stabilizes. - Carl Lindner, Co-CEO
Q: What is the impact of crop yield changes on your 2025 guidance? A: The main change was due to lower-than-expected soybean yields in certain states, which affected our 2024 results. We are still settling claims, and this variability impacts our guidance. - Carl Lindner, Co-CEO
Q: Can you discuss the commercial auto line's profitability and social inflation impact? A: We are achieving small underwriting profits in commercial auto overall, with strong ROE. We are focused on improving margins, especially in commercial auto liability, which is affected by social inflation. - Carl Lindner, Co-CEO
Q: How are you addressing increased severity in older accident years? A: We adjust loss picks based on increased severity observed in older years and apply these trends to more recent years. This is offset by positive impacts from rate increases and underwriting actions. - Brian Hertzman, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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