State Auto Financial (STFC) 5 May 192019 Q1 Earnings call transcript

Welcome and thank you for standing by. At this time all parties are in a listen-only mode. After the speakers remarks, there will be a question-and-answer session. [Operator Instructions]. I would now like to turn the call over to State Auto Financial Corporation, Director of Investor Relations, Natalie Schoolcraft. ahead. go Please

President open Good Managing Quarter Donna. Officer, by and to Senior welcome Chairman, Vice English; prepared Chief Thank Berkey; of President Earnings Matt Actuarial Senior morning Conference and First Personal Vice LaRocco; Mike XXXX and joined CFO, Mrozek; of lines Scott Auto Call. our State our Steve President Senior you, the and CEO, everyone and Commercial Today, our President Jason of we’ll Labs, Investment Jones. questions. Officer, remarks, After Lines, Lines Chief Vice Director for Kim Garland; I’m

factors and comments a cause differ to from forward-looking number discussed Our which types actual statements, those involve factors of materially financial Investors our our projections stateauto.com press with are factors measures, contained risk These available included release as and and as with the certain well end their part at risk of and the statements. uncertainties, nature our as the website financial press are include release on or may Commission. may of of section. supplemental schedules other under of containing future forward-looking quarterly along may results which our Securities non-GAAP reconciliations filings today information, affect in by Such Exchange Financial performance. our annual in

to President CEO, and over Chairman, Mike STFC’s call the turn I’ll Now LaRocco.

our as results. with remainder us I Good we give lines as Thank growth. XXXX. XXXX for expect develop We trends our XXXX by to confidence begin the entered and we you Natalie. great growth loss to reviewing want Actually, continues commercial morning, began everybody. Both profitable of ratio and

remember year, was turnaround, getting of just as first, anticipated focused the states the lines, the a last quarter Over and we across since lines small we pleased BOP was the years critical and commercial fair, we our this strength results. across our completed of we auto still improvement the To investment seeing technology improvement commercial personal With loss commercial and The this turn. be is profit all last on while turn to our drag are on both lines completed our auto better perspective. year couple essential we personal vision. overall trend commercial showed ongoing I’m our a from commercial in for in and BOP, to say both rollout

uplift team on. If ratio In commercial the middle we addition, establish commercial restructured and then that happen our something improvement benefiting loss middle business for next has not the early and premium technology significant a risk. from in base player growth focused market while as add energized an the platform, market space, reputation is can yet we year we’re been across the will our result with for some in struggled commercial solid strong digital these we can time a our build industries,

volume the and quarter. than perform be on continues are digital is rapidly view premium a million $XXX These farm for to and it platform approaching later lines growth. expect basis we Our significant no our platform, business our well the launch much ranch in group and more on post fourth to

farm currently digital will additional be write to the the going we to where ranch. states, and and list for states able addition nine add In of an we commercial personal

see our opportunities this to the We This seen to lag taking line. actions the bullish in personal our in to first. the of Having results. profit I’m line, consistency we is that pricing in follow. on maintaining disciplined remain view this see grow very a side, while overreacting not While lines we’ve workers’ our said comp committed that path same as the comes past. comp on and market we as pricing uncompromising growth will lack misguided we business modestly still continues

lost support agents. of trends our our and reflects improve the continue auto to growth across Our

challenge across our our the largest the of profitability. to line fight of business. But, returning anticipated to continue this We much line retention was on of focus this due

need now significantly increased we will this stabilized, Homeowners, XQ cases at other last pace, some believe a bullish activity and of exit very auto, mutuals had faster As level XQ even the deemphasize an versus very year, and rate we’re strong quarter. personal growth again in has as even cat line. regionals with on increased

look growth strong. trends continues non-cat be our underlying to very Our and good

home through home We’re new Winners focused companies have will development and and innovative of leverage technologies. home properly across of innovative and claims the increased smart new technology through on building the and efforts. insurance use be leverage pricing, product an of emerging technologies both the our new inspection

ratio early in of Our investment indicator in is auto how expense pay an off ratio. the will technology our expense

a now see can of We’re out heavy digital coming impact period platform the expenses. direct and on our go forward investment of

lower large significantly with including course of the and on a amount the new have to paper We premium place expenses, postage. of ability platform

Their four with Auto, led us Company. successful of commitment we path a turnaround note commercial emerging. expense On and believe is and team will a be week I completed this more the forward, associates competitive to years of our As State a We in clear, a lines follow proud personal look not and now personal to is passion could our path. I our of agents. ratio have similar

More us people, the I’ll call and that, importantly, built rapidly we’ve a market with to culture the platform, new over changing products to that Steve. meet turn win. allow now will of and foundation

share diluted of which $X.XX fully the to of per income reported diluted we fully operating Thanks, Mike, XXXX. share reported ago, today time a share share to $X.XX Earlier today, net everyone. in On and good of at basis, Net $X.XX. fully per of quarter loss morning compared a compared year reported first net income per we $X.XX we per income an of diluted

from earnings. we As a operating losses, investment of and net net exclude reminder, gains tax

and basis, while is assets, reportable quarter investment no longer now of unrealized the off. our specialty exit, pre-tax million net on a unrealized a on It gains identified other included XXXX equity invested of million first included of quarter a $XX.X run of the segment is first the With specialty $XX For XXXX segment. losses. securities gains

Commercial combined have million, last Personal down GAAP segments ratio, a $XX.X reported first of with Farm reported on when XXX.X an reconciliation XX.X other combined points of XXXX, from to of Personal earned flat ratios all the decline and were accident auto this and first a of lines improving Ranch of XX.X reported Personal improved in statutory written the of also first package, along premium year XXXX, and X.X X.X% reported ratio XXXX. the ratio and improvement This accident a earned of losses commercial compared off XXX.X, and at the points combined experiencing a million ratio X basis. We or auto run $XX.X of segments first ratio reported to combined which combined amounted a combined non-cat year the while $XX XXXX. which total first XXX X.X by grew the The quarter in XX.X to quarter Personal first the impacted a a to profitable basis XXXX, quarter underwriting favorable ratio XXX non-cat compares reflected first $XX with ago. a to written ratio. million combined year compensation, Commercial Middle Accepted of year’s net development a first quarter the written Favorable and of Personal statutory Accounting by grew and net XX.X loss run in quarter lines ratio improved XXX. of on totaling grew combined ratio to to reconciliation to statutory premium the quarter while XXXX of quarter commercial results, first XXX.X of point ratio. Generally workers’ or year market the catastrophe ago. development reported the net to quarter, ALAE and dropped specialty the Personal X.X%. basis. quarter-over-quarter the results provided XXXX. with compared X.X loss segments loss with quarter premiums premiums non-cat commercial premiums in the compares million from million in Small XX.X reported those statutory $X.X X.X%, prior statutory fire earned below in favorable XXX.X This ‘XX. $XXX,XXX Commercial Commercial Specialty Commercial first ago On Commercial an net year prior development points. collectively collectively year our compared statutory while Overall a less a reported ALAE or combined of but quarter. premiums loss and X.X to losses off quarter of declined above Principles earned X.X% only of points. compared point loss large in drove compared current premium ALAE the ratio. year, by points GAAP XXX.X reserves ratio than year in X.X

auto and million, trends reserves losses. due development developed $X.X late $X.X XXXX to developed $XX.X $X.X package totaling severity fire by injury. primarily We million. continue Specialty personal million adversely to Personal XXXX was with a continue favorably improving see million expected autos. some and improved bodily overall in XXXX compared accident to than accident years. across favorably both across commercial at XXXX, year from an by ago to commercial spread lines better favorable of XXXX, Commercial develop year development Small

basis, the fund of is investment first balance. and due their in XXXX, $X.X I sequential in year of toward slightly of we million Net million in Automobile from beyond, $X.X compares our In quarter a XXXX. the the level contributed underwriting from year Insurance personal and market $X.X million elevated the on efficiencies. attributed down second to And reflect distributes commercial the as STFC’s quarter the personal made the change a in results property on of Small provide while fourth received the loss must decline commercial for income realizing color and on large overall and commercial are on improvement estimates fire middle quarter further a Jason improved auto claims statutory fire handling Personal of in continued package will to quarter as first reported Other the cumulative XX.X Focusing ratio well in and ratios State ALAE lower note from securities to May and underwriting on quarter XXXX. due dividends dividends rate for period. Company the only matured to non-cat CPI, XXXX and includes ago experienced Kim notes equity this and which of million quarter and receivable company that commentary. fourth annually. a XX.X accident losses parent $XX up losses. growth Mutual of down XXXX actions ago. year, TIPS commercial the dwelling

We earned notes XXXX. XX-year expect On net to to expense expense declining quarter to with GAAP premium of which refinance currently XXXX, notes, a X% X.XX%. of of an those parent rate with company, and increased commercial, personal statutory new during the of carry point ratio and the The with a the compared is interest X/XX quarter that X.X ratio for X.X% first coupon points. a first basis the

for states During is all running the I’ll growth commercial And versus Commercial are trued also as Reported conservatively also small estimated on auto and XXXX. as based call will were progresses to year-over-year year costs results. BOP commercial. are or for up estimates for lines and associates incentive quarter, Connect over profit turn and ordering of that, with are the agents quarter up personal costs comp be first Jason. up we factors. and and premium These Higher the up tax and medical variable

Thanks, Steve everyone. morning good and

another of first The personal was combined quarter a profitable lines with XX.X%. for quarter ratio

improvements, as loss quarter. important the of to with the year the first the first quarter the catastrophe to coupled Digital Personal of higher XXXX. the of reserve in new efforts, ALAE prior the first was lines and profitability improve than launch in quarter in operational of same as in of with the and Our such for result we ongoing business ratio profitable time, compared growth cat XX.X% ratio rate X.X% losses X.X% loss the Connect growth development XXXX. favorable actions our compared a loss to earning, and quarter, claim experienced with XX.X% quarter many AT the seen all the product,

moderating the Our seen. will targeted more personal trend reflecting actions auto rate forward be being now going

over offset Digital the our As Connect also aggressive our all digital Digital and more currently effort to digital our and up rollout business momentum. believe business launched somewhat from continue in improve an our that with product our In into product prior renew we experience launched as net now agency we we we’ve the a retention. Portal quarter premium This X.X, we write tremendous personal our growth of XX personal PIF Connect premium book, lines. ever containing business new world. our we in quoting XXXX, XX.X% will the of We’ve let next pressure to [indiscernible] January, has maintain portal, to At of continue first help go in growth. launch first the they states the generation rate double-digit new pressure which the thrive same retention North multi-year in where completes enhancements quarter our Connect written agency the from transform the Carolina, auto call put The actions with see lines time, of lower XXXX. to on us on personal PIF of the

looking XX% of lines was following over nearly launch our March fact, and new With the business our April Portal stacks. new of up April XX% at of XXXX auto all our up versus home In XX%. it business, XXXX, our personal up X.X XXXX in over

change quarter XX-month XX.X% in statutory Turning of XXX% auto increase rolling the the change improvement ratio greater the compared of in personal in in premium respectively and XXXX, profitability. the and quarter was loss ratio XX.X% premium rate watch combined to first to ALAE the versus personal the first measure the cost our auto now of increase cost. rate the specifically XXXX. per the our was in of XX.X% of vehicle earned closely statutory of the In We our loss quarter annual to than in loss with

the In our digital frequency our personal In in earning in personal ratio Connect the injury the with terms, trends as The auto loss addition, of in favorable actions follows. improved performance rate our book continued product on improvements organization. our business, operational claims to legacy be bodily to auto legacy auto product care both is of along due and our financial quarter.

of ‘XX, quarter auto personal for versus was net first First written X.X% ‘XX. up premium quarter

up first XXXX. quarter New by over new in fourth quarter quarter were for count new quarter business March business auto down ‘XX, than of and the business X.X% accounts the was higher in of our month first although XXXX was over March

business. X.X. our book begin recent first take be momentum the quarter by As with into commensurate our rate more XXXX will with months retention we Auto have expectation began aggressive that to mostly earn-in the last auto retention from trends nine force renewed and see in been finished recent rate and now rate actions of profitability. new rate moderate prior These roughly we’ll level. actions our our continue the on ‘XX to changes X.X% pressure in Auto more moderate pressured Portal launch moderate to PIF that experience. rate reduce the is changes below auto of to actions of over XX% have aggressive restore Policies was to rate continues the

onto our see to we for increased new continue Homeowners our profitable Moving business first to ‘XX. homeowners’ growth a we’ve our of business previously by ratio homeowners’ see grow reduction in production business loss force. our up where we lower, products, Connect with PIF and to book. ramp new homeowners’ profitability, our as over penalty we new homeowners continue terrific opportunity to important in quarter in is fact than as a policies XX.X% digital experienced continue on legacy This homeowners,

X.X. from With Portal the of Connect the lift launch new business and

roughly homeowners first XX%. business as our is quarter and in the performance ‘XX quarter financial XX.X% In homeowners and quarter terms, up over follows. in retention the New accounts at were

written First quarter of premium versus first increased ‘XX, homeowners quarter XX.X% net ‘XX.

which to First ratio quarter higher was ‘XX ALAE XX.X%, in points is ‘XX cat and combined first XX.X%, homeowners of ‘XX compared loss quarter XX.X% was first loss ratio a respectively ‘XX. homeowners quarter quarter and and for X.X ratio with ALAE The loss first of in XX.X% ratio X.X%. XXX.X%, the ALAE cat and

was higher quarter for non-cat it summarized to quarter book first auto story placed and the first to ratio both points ALAE and quarter be on conclusion, continue retention. lines loss XX.X% first our the than line XX.X% as ‘XX In ‘XX. of personal rate renew auto personal X.X and pressure The actions in our can home

catastrophe for Needless moderation Secondly, result auto our higher And the impacted say, claims by a of XXXX, losses finally operational combined personal in plenty I’m results. in ratio loss of combined continues was XXX.X%. Garland, what trends of in proud result. we that, ratio Kim foundation, With our of resulting We as homeowners the in but to quarter we a ongoing improvement. then to have commercial call our realize XXXX. with first place, our in our room we strong in lines over have achieve discuss now for to confidence to I’ll the team improve, turn can quarter

results commercial ‘XX. premium XQ The in follows, XQ are X.X% versus increase of written ‘XX XXX was the ratio XX.X%. If XQ XQ’XX Jason. lines written premium comp commercial increase workers’ XXX.X of Thanks, a ‘XX and exclude combined as we versus

‘XX new expense due ratio The our ratio are one XX.X% profitability. ratios need X.X than them XX.X. to commercial be was For the in XQ X.X statutory ‘XX XQ of a lines, commercial story ALAE ratios higher in four and ‘XX. premium X% BOP of overall market commercial ‘XX, as and were with incentive continues BOP in for good ALAE versus to ‘XX continue and is XQ to being around higher total ‘XX a technology and estimates. loss ratios BOP XX% in XQ our business the XQ generally sole ‘XX ratio our XQ exception total auto commercial for commercial auto product versus versus expense what and quarter we loss new as Commercial intense up XQ up XX% be the Connect average to a investment ‘XX. products. was premium BOP flat business. business was loss compensation non-cat they the Connect lower business is XQ and Commercial and ALAE and ‘XX ‘XX five not versus was middle versus of in was new points pre-Connect versus up was Commercial commercial commercial to auto new up period points of loss business and non-cat Connect, of premium was our statutory Commercial were lines XX% where commercial ‘XX. non-cat premiums XQ were that record XXX% business the whole, being most strengthen Growth XQ BOP accounts inhibitor major premium biggest XQ

being growth ‘XX business a in growth quarter, versus down our up business of middle growth new and XQ have intensify. a struggled middle XXX% was levels. business XX% commercial. new written comp had XQ Farm middle the We resulted is versus solid growth premium combined market pressure XX%. three ranch quarter years for new middle in downward rate and ‘XX. to These market also had This X.X%. Workers XQ third record at above written ‘XX of up premium continued market, quarter consecutive as XX% our XQ competition year market QX ‘XX

was and that Commercial Connect auto Processing increased are above rates percentage was new March XXXX on the an Straight premium December business to XX%. the now for XQ Here’s XXXX to on versus XX%. This and business traction. Commercial accounts commercial Connect XX% quarter Connect improve where Connect is continue really new telematics Through of Connect. ‘XX started gain update

as Commercial to no As get we consistently ratios. model, to price ratio price get a include model expense of to small reminder, an which need acceptable is better the to Connect touch need loss benefits and the

significant and special help We doing a are transition the fighting they’re to territory transition. agents to are shout thrilled making and that out team our Connect new we to our account through the business for executives this process Commercial everything model, operational managers,

for different two within an scale. lines ratio, expense economics tests on Here ratio To better path lines. unit update business commercial require more things, is done a and significantly to improved to that will significantly a our commercial our get are the across improved commercial expense

every On above the these percentage Through a business. auto economics, Connect Connect achieving accomplishing and topic unit above Processing manually for is Straight are had Pre-Connects Processing improved and X% BOP commercial Straight touched we new new single piece that of products business, Through percentage. In XX% world of is this. the

all was X.X% to platform. on is split the on need commercial get just premium on on Connect ‘XX, more non-Connect. In In efficient this Connect our XX.X% more we of for the Now, XQ and and of non-Connect. commercial on split XX.X% X.X% lines XXXX premium

be We mentioned, the split will keep Scale, we you subsequent quarters. updated previously starting to on see as in how are evolves solved.

For working middle focus volumes small Connect market business commercial turn commercial Connect small to underwriters our allowed auto In has significantly stop commercial, and middle to commercial and on new are market. their increasing.

focus increased middle in better underwriters clear. and this comp and tools seeing produce market are growth of ranch to middle growth farm significant path for workers’ We even is our provides launch to Connect in the market the work before with

began package, commercial For of ratios statutory farm year that improvement driven development. The acceptable which prior the Small ratios The to ‘XX in was for Commercial again for versus enter in is XX.X results decline. market in focus over XQ ‘XX is development different fire ‘XX, level. in do the every ‘XX business ‘XX losses a loss the quarter improvement in auto for the loss ALAE not XX% are XX.X by small as points loss points auto, XQ ratio premium in XX.X%, grow, is accident points development written commercial ratio ALAE and in ‘XX. by as ‘XX commercial result product loss business the up XQ is February plan at not and XX%, on XQ to new driven XQ of results in year deterioration higher market after ‘XX X.X package commercial driven middle XX.X%, commercial, deteriorate year prior ‘XX continues XX-point and XQ by year largely primarily and versus the we point as is follows. commercial points XX, years loss XQ our commercial is XQ but commercial in will workers’ statutory and X.X auto premiums X.X commercial XQ Finishing large Connect market as the ‘XX. ALAE would Middle prior acquisition current compensation is to us favorable middle force line states workers’ well of XQ’ ensure to package on the which ‘XX accident loss up year. a when in ‘XX the than loss ‘XX and was package and up be versus premium versus XQ by Connect less for business be to cat ‘XX loss the underwriters will and written having XQ ratio better XX.X XX.X% XQ favorable – to key XQ as increase rollout Commercial two line flat focus Middle in the ALAE included small policies was ratio, points commercial. package to which written Small free the small ‘XX have time still this XQ X.X market for deterioration noted. agents product ratio each go new this operating do product systems. line versus and poor I’ll to expense XQ an results and as should the allow compensation previously nine ranch,

loss combined in product above of XX.X third for compensation, ALAE year a business XX.X%, which premium ratio market. of XXXX XQ in points written lower is As ‘XX. level of was produces ‘XX, ALAE compensation quarter. middle line, XX.X% quarter ratio XQ statutory this Workers’ consecutive the this Workers’ in discussed the XQ versus is XX% down a and ‘XX compensation earlier, XX% the workers’ than was for growth ‘XX first new ratio great loss XQ

‘XX ‘XX lines are comp workers’ more XQ mono-line versus Mono-line in ‘XX this deemphasized ‘XX,. workers’ mod change in cycle premium. rehabilitate comp driven comp, our around XX% ‘XX. Our XQ ability following: comp. comp declined this is of but This more decline our XQ are XQ be the an debit Debit We the emphasizing new workers’ ‘XX and comp total mod mod cycle, a debit integrated, workers’ a workers’ debit in long premium ‘XX written comp we as products XX% harder have the sell premium for and In new part workers’ represents and we to our and focused part or package workers’ premium XQ comp world, of XX% half versus business workers’ declined all but of versus comp comp workers’ written business. been go insurance Connect of we will mono-line written which continue comp workers’ the the portfolio. debit XX% after and comp, phase game mod where to on workers’ compete mod of to versus move total XQ workers’ Mono-line declined carriers premium business debit mod is comp premium product non-price, risk. by important declined XQ our workers’ our in

represents total premium, product written portfolio of of part We comp versus more with X% workers’ moving [XX%] premium result. be our happy representing workers comp around forward. now workers Package will Mono-line unhappy total this in workers’ important are a comp XXXX. not comp of our our written

sell see we system understandably ‘XX workers’ ‘XX package comp XQ this, on main XX%. a versus area working progress, hands workers’ ramp to sales for workers’ yet policy comp on two on been in are down XQ Our of focus. different Despite not our has our Connect, not written team up premium full, Commercial which signs two have and comp general systems is had total issues package early selling of their starting of faces overcome, comp Connect comp and workers’ highest is to to requires workers’ first up package ramping

work business change The up written New of continue premium workers’ is the workers’ written the is likely to in XXXX. versus make workers’ in The versus down XQ comp to March in premium ‘XX but new on Connect transformational XX%. comp ‘XX teams world, pre-Connect XX%. ‘XX March in actually a package progress with XQ comp launch would ‘XX business will occur

and loss statutory points and which ‘XX. the ranch, in is higher farm in For than the X.X XQ ALAE ratio is XQ XX.X%, XX.X ‘XX

You and high reflects ratio points becomes was cost written Auto. it lines ranch farm expense of Enduring is farm quarter. this in ranch combined ranch Each XXXX new strong X.X% and up ratio for a progress technology the ‘XX. and selling ratio business the significant expense also for next new expense This [Ph] and we numbers for code ‘XX growth premium how for market raw a business are in XX as current is XQ written identity worth the the quarter and rider a middle line should out this State set XQ ‘XX important a includes was versus premium of Commercial accelerant XX% and quarter again and XXX good commercial We in Auto. mask cracking Connect. X.X% ratios State the at Farm farm past a of which product quarter in a at these for stage of made records Connect see build it in significant second quarter. includes half commercial lines commercial. clear spend, Commercial for as We success this establishing several of years. and XQ the the for entering launch ranch ranch of nine and be farm growth the the

not partners period the the incredible the due them. commercial this throughout line team of for doing of this work of questions. State All is With with Auto I that, be we’ll our and could prouder transformation. during are open to

question first Instructions]. go your Janney Larry line is from Greenberg with [Operator of Montgomery. ahead. the Please And

good morning. Thank you and

question. First we market ratio, the numbers underlying to When loss due run quick all increase there Or kind of a one, prior rate just at of anything we is the could there? was versus else quick, the look fires? middle that assume

five-year all in like more eight a look fires And the color little that. average $XX.X exceeded so of about and in incurred claims I’ll had that’s prior we at Larry. three that Yes, quarter, actually QX. XXX,XXX, losses. fires When above on XXX,XXX first about million of the give was that We

additional higher estimate quarter large about loss So the XX losses on due fire loss points to ratio is ratio. in the of be of sort number of the

Larry.

As the a dollars Kim quoting reminder, just numbers. recruit was

from talked auto. you on and by is struggling past commercial moving close in about with others, increases standpoint? that there? are a you then lot function the growth of XX% growth guys grew thanks. industry I that And your that with level that others okay, color business a of have on know pretty the is Yes, doing quarter. comfort Your pricing then net what premiums of meaningful Clearly, just rate a this to from

there’s think couple pieces that. I Yes, a to

took medicine first the think we commercial in I did. auto make is, argument that we our others The would before probably

rate in teams of ‘XX, of a the So of sort XXXX, than I reunderwriting, us the works a think, lot adequate increases, did rate ‘XX a lot level more larger a others. to got earlier

remediation and those as we’re actions so ready. others continue to And take

us. to coming is business that of Some

of the think the launch second I Commercial of Connect. that part is

So commercial easier. just is this where a matters. And of writing process ease still is of business game auto the much

of and of of good sort is is think in XX% we leg about that commercial massive. auto actually the telematics on and third the a having premium of our really impact telematics is think I start

of raw of we make even to tell – sort additional increase, that we results, that fourth can in insight one think better and and them gives we’re a So have people consistently as commercial sales large at on part a still the sort put to work see more that’s more might it’s still amount that harder. premium small is, least us we we what it’s really not percentage auto, massive of so our an

Larry. And

day, that about would the our or of we’ve we I commercial in that what part been talking our organization organization claims organization, piece quantify very and – but in both made our It being personal terms organization the auto auto, harder ability much willing we’ve speed effort really significant. of end of and piece as an what care doesn’t in final seeing loss in negotiating the effort be these that, frankly of respond the part I this all for that organization think made. we quite the on lot claims – care at of trial. managing you is and big that’s come costs turnaround through think to very, calls, that that call because upgraded it’s is And the to we’re attention of to to effective the but toward the get harder impact a been distinction has and we been across a go

on this? customers what’s customers agency and than accept where and rates, Mike challenge on but ability for having And on take-up to on relatively improve some the general just have you thinking auto to question telematics Connect I’m more And low, getting does telematics there? your thanks. of get commercial, talked about personal companies going Great,

going think to That I on is just they’re be very would good answer other the not carrier. at what’s it. first mainly the

that Connect telematics lot first the – within of comment. agent the is way process. goes my and have There a really think of we Larry is to you probably who so-called group There benefit the how the message and way. reality telematics, their main may of I about of really the best to the of to power rate our internally, there, best out to power that the has value, of Digital has piece a the customer, somebody of the think some in it, bias getting are kind it for there their agencies if think But others some agency some you significant the against understand of is have their part agency, who There’s drivers that and family which have our not view emerged the I but best reality. insurance them, just the concern. communicate customers want both tracking a certainly our complexity whole privacy a the may we is changes

of little insurance auto me passionate around to it mobile having benefit so we and the to predominant for what dongle, a of for and and well year it’s super application a personal see question again willingness mind a will and going options some rate option it right we that of out because about appropriately. that the way kind ease then coming use what us have to our call people, in sure go with is about and to as you’ll today we become now, price commercial make ton a there’s do hardware instead why understanding piece in it’s be We’re that you communicating both transition of this beyond do we’re to effectively works, we’ll the telematics it that into but to of passion you’ve got doing

an So we’re be would understatement. we’re – in to say all

goes be of think sensor-based future just it’s the that’s sorts all going to to of lot effort and passion. and I going it be a products to

Great, thanks.

And from Please line Instructions]. question next your the [indiscernible] [Operator KBW. go ahead. of with

premiums seeing low of expecting then business the personal auto lighter quarters. are retention personal were than you couple last Hi, were in and for auto? in trends been or trending it’s down What we in new guys

Connect opportunities. in Portal but experience agents in of the We in market that some positive are the continue, aggressive we see our to auto. still in return. some we on starting fourth a that I product, And first to at rates still mentioned action quarter noted, on that the as with that and new – rate expect seen it’s due auto Well, personal pressure the seen the April, business. on do X.X aggressive same saw rate the pressure time launch product we’ve seen of taken, also we some Portal but we’ve on the and business our saw a business And X.X, competitive signs enjoying that are we’ve – We of retention lot we’ve in call that the of put new new very the and we’ve competitive. to quarter, taken

– is this bullish I’d The good when tag didn’t literally of auto sometimes folks. to that. worry launched do I on job – That Sean, these products. I new I on launched platform and and you we brand reason when we we enough launched little a so product new that through a Mike, ups go a And just again, explaining and we’re dips this

mean product by the – what that really is I we level do that you that today’s inherited the needed or is of and segmented be. to when marketplace with in not was So, designed sophistication

most the to part well. And in so your and that that do way you I the most do out for design effective that you and build when has it product best played really think

where and segmentation get also your to our And get that first your going needed the we updating and – You it, you’re need there. can and then going you some the to to but of adjust on then found we model, make of down. see changes, launch that put we up changes, retention, movement adjusted or terms we growth, questions ratios, you’re here some when through course through rate places throughout the in agencies of other to making impact lots the also our loss

platform Thirdly, gotten its had great. it and better. In early bumps, the better, the works days, better, it’s

you expect, communicated I could now is up something which better when think saw certainly the what going you experienced I a have that market. again rush back to I that So up down, probably turn and slight then is the

peaks some product those go type any to with going of through and You’re of valleys. launch new

is us sometimes hearing is to rates it the little bit work do get number you’ve to upgraded it Most is of version what because months which times think of today changes. in these can them looking launch of Portal we’ve is more types that much systems get right done, tighten significantly from itself you’re always with X.X, wait platform, the to legacy I is and turn new and places. course, in important to the of that the make make to that up of the an handful We again years old a better. to a two, a you’re in the that of better factor, model, crank

lot of bumps, through when work rebuilt. you and new to the a So goes product foundational allowed a us you launch

are some you’ll April now that good as look that you out that’s see days see the we just best our But, and of happened you we February, sequential this of when and March, the at well over your So the ups that’s for but difference the in with is last and sense agents, the question us. that – most bullish, understandable. downs, in thing they’re as the in it, business. question last January, spot why new now consistent may we what’s we’re and is That’s one seeing and the of again a telling XX see increase underneath

very So think downs worst of ups on we’re positive and we glide are and a path. those the over,

of more the And do guess that or going and I typically to of… bundling move lockstep forward expect that net kind is of in how you growth homeowners premium occurs written kind because auto personal with

little slower. it’ll think yes. I is The be answer generally a Yes,

the to Auto general of So kind in premium bit. of more move if PIF the those either kind homeowners write you writing Having is a of growth without is today with think other. remember we’re but mono-line to both wine past. each see of doing or what business direction. writing home trail that will lines our we I in – have we’re think and down in that, it in want said mono-line your the money, probably little same I auto than we’re to we’re way are still preferred We make product agnostic, happy bundled, going

continues once of little that is What because PIF that the – move the be business it terms what in new continue start a to there split, to starts about of of right to move separation, to but should positive, more it doesn’t the in you’re home follow will we what bit So will the direction retention growth. directionally. and change seeing consistently believe you’re talking in

are releases your products. being all Homeowners Okay pretty one exception. the great, Reserve you. in strong thank of

reserve of workers’ small You have some are but results and lines release still et strong, comp, rate market to why like is commercial, auto those through the robust put cetera? and other lot of underwriting lines so a middle

those are emergence the the personal so severity, not seen bodily we’re just looking in Sean, this at what auto the would influenced lower side, be the lot side, primarily Similar lines expectations, injury, injury is the to from initial relative primarily we’re claims, initiative, years the as Matt that rate our at handling, Mrozek. bodily with accident most much and on looking the to seeing mature we’ve of heavily exposure.

So here prior movement about Again talked again of calls, at at may in up quarter each same the felt ongoing, favorable we’ve the or going in but not QX. evaluating forward not I developments may level. we expect with this level may hold this that comfortable think certainly

investment driving income Okay. And then portfolio. one net last negative what’s the tips that one,

doesn’t Hi in it happen this of Jones, was that actually negative, be would And Sean, did year, over Scott the the which change period, too quarter the for quarter, not CPI but occur. first positive. the a often in three-month

accounting can take P&L. work, Yes. it in in required you CPI change more but GAAP Under less some Sean, get the but This PAR sort run is your you as value, is through as you’re and a true, value. instruments, securities Steve accounting, English, required those respects changes almost you’re PAR not change under concept, those can it’s resets almost of value or GAAP in to way a those actually market you

goes you other mark let it’s markdown. when is So mark it positive it where, effort, that used in a periods the move a there have where well is [indiscernible] to reverses term and direction can me will

much. Thank very you

Thanks, John.

this appear any questions, at And to please further Instructions] [Operator time, with continue there closing be remarks. no

for your questions. Thanks everyone

to Xst, forward is Thursday, again and call day. Corporation. earnings speaking our participating Thank Auto our continued have which look currently and conference quarter Financial scheduled XXXX. you you interest for your for For a in second wonderful and August State call, of support on We with

Earnings Conference your may for Call. Quarter now you, again disconnect. you that participation XXXX and Thank you First today’s Thank concludes