State Auto Financial (STFC) 7 Nov 202020 Q3 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]. Today's call is being recorded, if you have any objections, please disconnect at this time. to Director call Schoolcraft. of like Auto to now Corporation's Financial Investor would turn over the State I Relations, Natalie

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

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

the be on under made material can website saleauto.com section. our Additional found along has and the monitoring available our release titled with press progress Investors

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

morning good Thanks everyone. Nat, and

Well, Auto, Xrd exceeded We we higher continue our for that through and our significantly like story quarter year. safe families hope healthy prior activity of First, these in consecutive as than cat. are State continue third way to cat XXXX to and your number a navigate the the plan of say, had was quarter I'd difficult times. you to and

to have the obviously empathy outstanding expect catastrophes speed weather XXXX As has these of Handling claims the impact story with results. of customers usual, our our our been team. claims The main team come and and from general, regarding was terrific. in this

the our key year is However, Across with loss all and important the ratios, underlying begins of quarter ongoing and when across Auto. our area. non-cat of the to position our comes to State profit. it It the of most the improvement indicator lines this with we make the message pricing products. market continue the all very nearly business, in in pleased I'm progress of

models. adjusted to ratios continuous loss management technology teams our improve improvement. details our non-cat We've and organization results, pricing of digital of platform. of sophistication Kim analyze can that this demonstrates our work and position review Our The our have talent built and and an cover product continued our level benefits then the by-product. will the competitive deliver the

of the we Another leads area course ratios. is platform of pandemic, our to which efficiently a our In value see to expense midst where of ability scale the to we grow. continue at improving

clear differentiator technology challenges. Our these we our can a know and with the haven't responded. the very They business times. stride. not a we've in our missed I'm has seen pleased growth achieved, that beat the This during of have our hit agents and have service market challenging regardless agents and our is issuance team we still

product, our thrilled to to changes I'm of adjustments make speak it's positioned had we number one-product where model. auto. a with auto specifically me Let we're where a with pricing our and

deal also In the bugs had the our platform, system. early digital take with to this missteps. as slide first the I product for addition, full early in on accountability

in product this platform in delivering market are a and the Now, we've overcome these line. issues critical and with

accident year demonstrate current results Our improvement.

from expectation. Our meeting is to non-standard business new our preferred mix of

found and as coverage nationwide specifically planned. frequency I'm rulings majority early severity under importantly early property in cannot for or pleased cases on and their industries the and Smith commercial the to are behaving not the pure surprised motion COVIDXX business that had favor not position, damage of mostly and like coverage of extend create in interruption have comment property, economic property physical a insures numbers that More I'd pandemic losses. loss policy. of does to

facts do We early confidence the beyond these very approach will we specific that support continue that we rulings and that have will anticipated be the exception those each in to not decisions Those situations believe that prevailing we will from on believe ensure be this the and position. seen able our few policies. expanded and was have not various differentiate coverage our industries position. case, related are on We will that what to

the outdated fire, I'd & conclude, commercial transformed one just share new Connect. platform done personal of onto We bit. dated in minute. This have auto, dwelling into digital that a it workers' CPP, take of products means a technologies commercial workers' think I personal have that took umbrella, our compensation. we every and five without to products a Farm and about a reflect more years milestone detail. we to platform, organization, launched moment company this on an achievement to like our five product now will and impact before Now for umbrella, BOP, able Kim month, Last a Ranch our and auto, comp were what bring cover years, home, in we just digital in

me Steve. that, along Steve? gets before he pass Now, this to first let

Mike. Thanks, morning, Good everyone.

operating income $X.XX quarter third basis. per $X.XX diluted an net and the compares on quarter, share operating with $X.XX reported STFC loss share XXXX the diluted the same per of income of for $X.XX to For This income per net share.

whether $X.XX and of net on or quarter in diluted and loss the loss basis year-to-date compares not the per losses, a per share comparisons focus share net for to these operating Cat to period first nine looking STFC operating the $X.XX same $X.XX, For this impact XXXX. of in months income of share at necessarily and diluted months, reported per and over results. investment diluted income loss, way net all X gain putting on COVID, period $X.XX

Results losses a increasing part as big loss with for Catastrophe quarter XXXX. XXXX of is start with and compared the date ratio to are to cats. year XX.X points Let's points XX.X Cat

Third impacted one one from occurred XXXX in by storms, significant quarter two the and XXXX was that quarter.

reevaluate additional We decisions estimated have a Florida court the about of earn we a loss decision caused public State environment the the adjusters. to us spoken legal the increase of impact involvement IBNR. ultimate by recording made estimates on in Recent from losses to our and have and

that place at up storm of in do the retention reserved as further fully the reinsurance of not the our development time now are consequence. We to treaty any and a significant property expect cat was adverse

primarily second was impacted State The significant de ratio the the quarter of that of Iowa. event the

the estimate quarter been the our investment we cat late including storm MLPs gains gain impacted invested first quarterly and reported on of loss and XXXX by March. elevated quarter. for cat Nashville which tornado as this Our loss of loss, have. exit that losses X.X that comparisons non-cat now the other securities equity assets ratio note, have losses and began of not hit every We'll completed unrealized in includes that area or year-to-date net has points. impacted Storm and severe both Fluctuation past also

in $XX.X $XX.X these the month equity million total quarter, the You might of the realized losses securities. exit to noticed have bringing net on reflects which of million X sale securities of

income The investment before on to The However, federal losses and less in in the or decision or reduction offsetting the income and in net months, reversal equity impact or net quarter income are losses impacted reversal MLPs the sales of gain previously the securities of reported million quarter unrealized asset results loss unrealized million. reduction same taxes to XXXX for these securities losses. $X.X realized net the to reported the of in as X included the unrealized exit the net year-to-date also for $XX.X was previously has on this by the for the class. loss sale with

total to continues Xrd will impact to to in as related Kim well high acceptable. this to the lines not item not automobile frequency favorably on estimates in to is Vince further carrying and have claim losses we expected his middle March. returns our no adjustment small cases and indemnity We changes COVID, date. made interruption costs While any yield, a loss the for COVID business remarks. noted. incurred as were Garland comment the expense dividend commercial

to Moving in mentioned the I unfavorable Irma. development reserve development,

So I won't repeat that discussion.

directly first note allowance five-year at recorded a exceeded to a see amount note is of of versus injury For is Personal favorable non-cat In replacing payable, loss development debt primarily accident severity where estimates, we from the Commercial rate beyond Home X.XX% bodily were overall adjustments prior the of year interest what the with XXXX. changes be continue after flat years. development, and in the new expense Bank XXXX to product rate XX million. retired Federal were continues reserves. Across the to some quarter small has as with nine of it an loss note prior-year new ratio workers' favorable. particular, STFCs middle same exception we COVID XXXX early There along essentially development result Loan in $XX.X and lines we quarter. with in XXXX and with all the No compensation. X.XX%. month. the The expiring fixed September, The significant of GAAP booked commercial bad was auto lines in

Federal Loan million short with March Bank call into, September XXth. full and and will turn loan XX $XX In on to the Kim. on was addition, term Home The I in repaid the entered [indiscernible] over that

Texas. our platform. last On everyone. in to morning good XX the Connect and Steve on is workers' product This launched comp Thanks, line October Connect launch

the period industry. of replace From all to day insure reduce a driven to We at of to upgrade expand in were first disruption. ratio, appropriate distributors retail has the taking moment the the significant growing competitive to are time upgrade distribution the ALAE Auto a best independent at a massive innovation and look Connect probably tech State goals of was scale, ratio, innovation independent entering and of in significantly advantage, world additional prices and loss XXXX, since the the it's of the our in agent by replace Connect when innovation impact our with products program and industry were to compete our XXXX. insurance in and following: the program models the us at the world pricing traditional in back increased and Of emerging agents of give the and our that participate of plan expense types thrilled driven non-cat independent reduce technology place

personal Our scale. progress in XXXX State premium for Group for the and $XXX commercial year the on million. was written new Auto Direct business lines

which $XXX.X XX.X% annual to equates was million it a compound rate. XXXX, For growth

lines a XX business drive workers' XX, in this XX driven written and commercial of growth months Connect. business our for September without of Progress XXXX to has engine full premium over and double-digit is Ranch XXXX, our middle personal million. into years. the our since expense total us $XXX.X the new is three Connect market increase the a Farm helped ending rates and was on in grow This positioned new increase for For last This ratio. future. the and from size lines it has year continued compensation reducing impact production at well

are improvement efficient working the lines, Our and understand our an in This was bank a scale. homeowners, expense It short-term best or in of increase enough four XX.X% is two XXXX product a in a in strategy lines. commercial expense this more product worked our But year-to-date the XXXX, example through of we take ratio auto to Commercial and exchange ratio personal ratio ratio pre-Connect the XX.X%. this commercial longer-term the is for increased improvement is X.X of small auto, XX.X%. made investment over point A strategy of expense of XXXX along with a pre-Connect. in to expense through our in has not. hit at investment Connect. Four three far connect as to auto platform in

been homeowners, been commercial, where also to yet and implementation more not of has and the has believe ratio as auto similar where ratio below commercial expense expense effective Over will in this next actually We small strategy pattern it the commercial is product has expense gradual. pattern after slower, line auto get is the very who's This Personal ratio increased Connect. reduction the has few XX%. worked years. strategy the auto

the with told our As we a which on retention. I have primary auto business missteps and calls, preferred prior [indiscernible] heavily made you too nonstandard personal towards balanced being one non-standard, very in between low has

the I in personal bad from still auto is business inefficiency. strategy. strategy execution are a our on increase good The combination of This discussion. ratio expense a on efficient not this auto We will update progress platform. in later putting from produces inefficient poor an you but in overall personal is

ways. agency you completed, following ALAE ratios see but in invest network XX%, did lines should example we of produce since agents. is period was who business expense in starting distributed we networks personal and in all you rapidly in should of agents how now our channel. to and love, in result effectively technology, the corporate client pricing last retail retail agent expense weighted platform set that X main build distribution and Over another In X% independent ratio months start couple next evolving on products platform. innovating underweighted decline. product years, the categories In two, range ALAE categorize with down our Connect a methods would builds models, the 'XXs are is The wait mid the distributed the total XX%, we network line we our a to technology With ALAE been for following categorize extended business do major the pricing ratio, lines XXXX phenomenon. expense agency to X in corporate Insurance X%, or seen XXXX, ratio distribution of XX% a no Progress sufficient builds a improvements over we Two X%. in, to years were retail business consistently XX% do - carrier ratios non-cat range we sign agents the Connect variety And of then of network One, heavily to This historical platform what XX% by lines the over business to all Auto's those should agents on are pattern proportions: the range following being way: X XX%, combined time. product distributed of State our new products agent distribution corporate new model XXXX, the in Difficulty] in XX% X%. have two the show our have same percent We ratios Progress and to product XX%, reduction Progress the agents loss the call loss the be big good category. in agents. of in were ratios. The is in non-cat in [Technical with insurance more that in platform this XXXX, and and zero time, things. XX was and agents, a the to that on world world and X loss Non-cat agents, to of we driven shift them growing. up from the competing and Personal are significant currently. the is lines, and in a business platforms new Through an proportions: there lines Connect years. change big retail it build. and our our the models personal of

product model. a converted the every big single models technology continuous build have from periodic for to design Our product and improvement pricing model line

big us the models we this very enhancing converting auto X.X, auto teams models are about a this made version from or ones impact areas. Version to talk to started the are continually different product for every of hear where improve version and For And that In pricing of only Connect fallen Connect. our once teams XXXX, behind models commercial version enhancement approach improving. X.X. X.X, parts the some approach has pricing for homeowners our quarter commercial pricing on a industry Every of versions, small and in are small personal continually technology, X.X, different we years. build number are the in couple In have we place of

behind disruption techs able and Insure In the operations, first this top the Tech to a tech survey integrate in world. massive Insurance tech. this for continuous not again, the Insurance does coverage into participants insure we world have Labs impossible the been dig participate Corp the Venture Insure a Insure world and Auto connected insure legacy in list venture it improvement participation world investments Our researcher Auto's industry out our start-ups number the quarter implemented Auto Labs, our top State State and since was to We capital never been the would released being been have happens is beginning the partners and corporate of prepared XXXX, of insure a period have In not four funds list hole. and that small of the State of insurance in created of State of that XX. be into and have at still tech the help industry. the Without disruption their to time, Tech in believe XXXX era of State would and insurance six on in of have Auto's this XXXX system. insure of in or of Tech that it and Progress is Connect, ensure on XX that never industry. we fund and was world and of operational operations is the made. capital the critical innovation of insure source the that been innovation of conversion Auto on to the to ourselves model insurance new this tech

an surrounding we and of goals the that that it impact the is we accomplished believe Connect and in be next XXXX it has impossible for established the program. Connect. the of is successful to Auto efforts all Connect to on for adequately they started the of to back We when what reflect did us we As all over insurer extremely well of us decade. implement the State thank positioned all It associates

of I referenced have have website the this to greater date. section in Investor our We detail to posted morning.

Now results was Overall for commercial quarter quarter statutory combined XXX.X third 'XX. on third to lines compared the results. 'XX following: quarter third lines the XX.X ratio are and personal

quarter ratio 'XX 'XX growth Quarter compared 'XX 'XX. combined quarter the XXX.X date premium third XXXX, to third was year XXX.X to XQ compared date. versus to X.X% year-to-date. Third year-to-date XX.X% year to XXXX was Written

catastrophes our combined accident loss ratio lower of X.X% few points and lines points in growth XX.X XQ there X things XQ For XX.X personal lower loss loss premium Non-cat and lines premium Non-cat impact. personal The lines Results Cat the accident than catastrophe of 'XX. commercial The non-cat points was a personal higher combined are loss personal year was personal 'XX. personal More a loss peak fourth unwind. to your X.X%.To had quite impact and a X.X Quarterly lines ratio year points ratios ALAE lines lower quarter quarter lines plans 'XX. the following: ratio non-cat being Prior are commercial the XQ commercial and lines, prior 'XX. impact of XX.X third X.X are of points written ratios and year had X.X was than The impact loss points than and written our The quarter, lines commercial our higher loss XQ growth non-cat of results appropriately commercial higher. ratio understand ratio lines, lines, commercial out ALAE of being again and lines until were XXX.X The ratio story personal results X.X on lines 'XX were the quarter. where X.X points lines 'XX lower.

lines, are But 'XXs mid ALAE individual virtually ratio XQ Current accident of was lines and have ratios. While lower. explained when loss program quarter very ratio. The expense look the taken the shift need personal as being year ratios where the current total be consistently personal accident the driven part of at catastrophe X.X discussed the X ratio in combined COVID actual our them we prior year We loss in lines for improvement but non-cat lines points impact auto loss years loss we personal of and management. there to points between overall lines commercial produce I is year the than time were prior our they development improvement and year period a Catastrophes, auto understanding 'XX, planned to and lines cat the our last Non-cat XXXX prior of the personal year the issues accident Catastrophe end The meaningful be and ratios. paying the earlier, prior lower impact to accident along and as XXXX ratio being Current than loss loss accident good are identical way. price at over and an call. first reserve XQ to And commercial into in 'XX. flow our start to was roughly years, of missteps that lines. same feel results. X.X earnings year, to the lines, should we This commercial current on points loss cat personal commercial over year. improvement horrible to address The happen Connect non-cat X.X ratios, catastrophe lower the positioned. points XXXX. we made total there X.X we about as back good get the extended means in years that where catastrophe is is be horrible we past factors We that have a the by about managed in actions lower will being personal accident year feel Adverse

Personal third third years. points 'XX. X individual combined our higher ratio was XXX.X. personal accident the auto quarter quarter product prior prior from X.X impact loss from point is for This in was This 'XX on by than points ratio years updates auto, Some lines. driven accident

the for development part in of As price made in and auto paying this adverse are missteps I personal prior before, personal we XXXX. auto XXXX year we as reserve said

XX.X and ratio quarter, Current accident quarter, date ago. 'XX than third better loss is year a better a third XX.X and is XX points points ago year to than year The of year ALAE 'XX

shift less states nonstandard more competitiveness in progressing and are in and expected. Connect been we nonstandard the who X.X, across spectrum to approved seeing through risk as changes preferred Our has that we growth Connect year ultra-preferred XX XXX in XX% expected. is policies PIF minus prior XXX as and the preferred is prior Connect XX% while year. versus points force of versus growth version nonstandard is XX of as preferred the

of XXX in is XX an first connective for ultra-preferred of than larger since versus quarter up is December 'XX to and quarter This As And the new were PIF. is up time business this in personal retention X.X third shift PIF points Connect side third increase auto retention preferred history personal nonstandard another driving sales XX, as shift 'XX. XXXX. XXX% umbrella, personal auto in XX.X

since continues with results strong auto is personal of rate third total results policies retention. growth be the auto, business points homeowners for small are favorable of terrific. premium this December all still catastrophes pleased the We premium story premium XX.X a continue version with the do to cat Middle auto line. third helping from XX.X in and and competitiveness of auto combined in of results X.X our in ratio much loss X.X Commercial rate But is market, by our homeowners 'XX the retention were are quarter XX to XXXX. ratios year personal 'XX. which premium commercial commercial is a of XXXX were workers' growth in XX.X%, impacted Prior quarter ALAE quarter level XX.X, With new ago. plus count with of of personal of of The year Connect 'XX rate compared to plus X.X of compensation auto. there force XX.X. Homeowners and progress work third be improved up XX.X% product new than and Growth and level written XX.X, homeowners growth accident XX.X%, rate quarter again of through XX.X ratio rate just growth retention business loss in to that growth written more

in higher by year quarter. and ratio 'XX 'XX Current than higher also growth. than of workers' The a ago. was cat much the X loss year ago market third loss commercial were middle While quarter comp large Middle ratios by XX.X quarter small losses a driven results accident market a impacted XX third in points year

slowdown telling market that Market at in this seeing time. submissions. in to middle are policyholders We middle more Agents a are are us moment carriers hesitant move

Connect a ago. Our market, states new a was business market our XX rolled ago third on for flat written quarter business declined XX.X% premium new premium compensation market in X states market, Connect total year from September middle the and middle written from middle middle XX. year We to out bringing Workers' additional total growth.

our now workers' has retention. sold on consistently our have as and be State that continue premium at fourth written quarter exited from higher of workers' a last to a downward is the discipline ranch rest significantly growth compensation investment be and of of system following: compensation This XX.X positioned Three, market for the Farm comp premium we pressure of XX.X reasons: several ratio anticipate the decline. the of years home this The Two, growth renewing elevated compensation of workers' rate maintained workers' Farm Our the rate premium 'XX. third policies workers' decreasing third ratio four the total comp been significantly on quarter which ratio change has Ranch and rest products and rate and results than non-cat XXX.X% are first XX.X%, puts the Connect launch work which XX.X% launched been this XX expense on accelerating now reversing comp same quarter & the we platform future Texas. while several business products. with in now combined workers' XX.X Connect XX significant the One, as is height which of success. on catastrophe Ranch comp points connect the currently last its XX rates our the growth our workers' is commercial rest states. we due of than and business over written of of are business results of monoline will third XXX%, products, loss business ratio is lower our nursing wholesalers, includes has Farm few small have of workers' is Workers' business compensation new strong terrific. through years the versus years October last a our reason to sold which year years significant and our and a the business separate and compensation harder our for points of making of several State 'XX was to it XX.X% loss Auto's ago with significantly package we unprofitable. ALAE

positioned ranch growth. business Our and farm is profitable well incredibly for future

we'll about excited for lineup how And the line currently positioned product our is are that, future open with questions. We success. for

Instructions]. [Operator

first Your question from will Please Newsome. come Paul proceed.

about where all pandemic you we combined how think positive. in or about because of pandemic. us to should the past well. about wanted as look underlying a had Hopefully how the everyone. should not ratio give do of real the any the we windfall have been underlying ask are, only sense improvement the you the of better with thoughts versus morning, to that sort you year, But are safe think and improvement Good I obviously we we

I off. start jump to bit. a want may you little in Kim,

Sure.

making about auto. started results majority think think quarter we 'XX is will I probably, And So vast COVID in the benefits of second the the from process would think Covid. I the just improvements personal have was benefit I how

and process a after lot a I Covid-type the it that the from worth property. is of into thing think world and in commercial is. of industry in rate are pumping the others mentioning We other

So that's had of and into a a -- lot not system that the yet. rate gotten

driven levels So pre-Covid I'd we quarter ways. miles In say third see but up, different mostly some gone in the to driven it's is quarter, up and Covid. gone has not miles is are second what benefit

You really pre-Covid. like had rush have don't you hours

forward, is, the part taking and part a for I it have each property. the shrinking burns into started benefit that Covid down. But still see But the the actions is percentage commercial you We early. have of the some as the are off, will impact and least filling XXXX. third that we auto quarter been larger to proportions -- sort at quarter back in go property. of there think the for think still in of we that Covid is in lot with earn benefit But are going So in first rate will to our the rate commercial starting of of more we that action that in needs results I now on of get actions is personal still It's quarter. the

Yes, Paul.

a tag little bit. Just on

with completely I Just of areas. a Kim. agree couple

Kim that real kind changes and talked I our organization as leakage be, rate from directionally, in that from significant. we're in we reducing areas question loss underwriting modeling something there that I But from benefit, standpoint is think been of made financial where I'm there no to tragic like addition to things we've COVID, we improvements can about significant a but taken standpoint. benefits. always about been hate other as the of believe some the some believe a the in some have We've and benefit talk has impact

this been We're consideration changes, the of is and Engineering many digital handling impacts, a thing There good the Engineering place. organization, days to of some are able impact into have think but we across real approaches obviously the when COVID. this had the I in as of been I then older think through said going the Risk in rate, cognizant pending implement And modeling some the organization to of first claims. spectrum improvements be to early the of emerging year. period the and pretty quarter time about, claims. all of take to we're extend Claims place and a miles talking Risk Claims able has driven the the impact minimally reduce Covid, and of people you They've it's of time. underwriting Kim Our short-term terrific next during to from period the They've of

the months. another losses six for it COVID a of differently, bit linger trend on will reality but Now impact minimally may think the I little

would I think I what Kim to So that's all said. add

particularly competitive you just, -- of of if far from least for a Obviously down at us your sense you. I markets. personal so is Yes, a Insure give talk the and lots it's that perspective. think that environment, and lines. don't going from on going reported some of you that's have us What tech a which companies lots stuff, then great in think the I Thank deal. competitive at do just give rate of least big sense, But of

you. I'll Kim. again follow ahead Go

Yes, okay.

in of personal competitive So seen not of couple in we have changes sort large think I lines the dynamic.

one things us, number are for of of to the at. things, a look So there

business one and is volumes levels like homeowners. think in I new your quote your

to and states to have Great time highs sales. continue new in has broader. starting all business We more increase becoming

new dynamics, understand we of sales in not the so changes work in So and quote to the kind we've competitiveness rates, of business the do seen that our minimal. volumes, trying is big homeowners

now about you right where Steve, your and talk Hey, we're at thoughts. to want

We've this Sure. touched on previously.

Our comes it a is preservation capital strategy more philosophy. versus protection reinsurance, management especially a or angle when earnings cat from to property current on

that we knowing results. products might quarter priced profit seem poor and can't to cycles really so a through realize to go are any you years individual lines have It cases, the go the weather that in account, cycles. over property our cats in take or into predict making the So through some in

our any just from the wanting to past relative It probabilities So didn't look again, a increase property are make reinsure deploy our we're more renewed and so analysis and top X. a below our on those at sense we not We layers presently, retention hitting this for planning on the retention just to July protection the did what charge to treaties do that instead money level group purchase of layers. the we we changes perspective. when premium capital

I really all there expect, and been have more which storms again about us. believe and that areas. just the in just is on has is would brief. warming this for of just look that it's convective I wasn't mean terrific then think tag warm bad wind certain has Rio been be I'll This global significantly you question a and Yes, super that. of on cognizant we weather to activity aware and beyond if particularly, normally pure do concerns you in impact those year, as a

but us, unusual some And handful then at, course direct of You know, if The spun storm type other, wind show third the off look down wasn't and hit second a other that particularly a had for you activity us. had the hurricane quarter, issues. first in very in bad quarter, it's had tornado weather. convective then Nashville and really you we of quarter. in the In set the we

of again, So and circumstances. said a point it really was a very we're set make important that. aware that, Having unique you of

a in standpoint. do the geography I by about we think what think Steve of and we've our to way capital beyond from this to use purchase differentiation terms we continue made risk good how reinsurance in which regard done is point it another we we with how

the appreciate Thanks. question. I So

the Okay, thanks answer. to

you've possible, talk it calls on see to Telematics. that and noise encouraging about some telematics noise use less maybe policyholders much of the going it's people more try how is in normalized trying because you what With parse about impact you about in there to then as to to roads of talked. you So, the of in this where through prior like of trends and the the so being often, can relates not can we've now. the initiative underlying talked COVID terms right I know on

you can that. So address

not Kim, Yes. mention was actually telematics that going in because start it leverage another answer, have do At my are will but believe we I I competitive it I going have that's turn issue. When to Paul to you think then this about leverage time, competitive to which and it the to just over because I effectively, and advantage. telematics competitive positioning a failed companies

product And coming part general a I COVID over kind to whatever allows people the That's the before. but day what important interaction and Kim, patterns, new so, of coming again we the personal of just out you ever the in when of to time really is of the And bit. are a going digital driving so clear pretty be impact through in COVID, learned question than it's commercial they telematics people know have because knows out grow I driven a exponentially of impact out miles drive, it space because actually will you the and put know both that think of home frankly I normal Kim, to as exactly very leverage supplier of be and more--more turn efficient from one quite you way with the as work some to COVID. they going this it's that on drive. think a to of pay will elaborate issue I going hit your no ever changing to into of main is, who in but to digital--digital employees coming and part want little going telematics reality and

normalizing about is I understand a moving all themselves Yes, these like to and things lot. and are the with question about pieces we trends of trying think think question ask there

personal on from exist. both an that even almost telematics that loss specifically continues I on auto, day ratios that think for non-telematics but for We discounts better for thing with one business business, our give we to auto. the telematics is first pattern discount, we eye keep that telematics commercial that are see

more then just keep So, our than how it sure that of for we telematics, it's what drive not and differently us we and driven it's we of collision think how is track are. miles adoption. about do I'm frequencies others Outside

counts and that miles watch of and every driven of down to than there sense lots get sort And is gone claim more that a so, collision are of so way have impact down what to have a and be that them. we is gone frequencies might month some COVID

more severity are So, bit known And then up around normal, than to severe it's that us. on, the fuzzy that's a the be severity much. that relatively other but keeping of kind it's a and an of bounce is so signs side some more accidents so you can if know of some the how we eye stable there are measures

and frequency an to is those we the normalize to how estimate is there for of on top at driven things but trying specifically those. miles benefit dynamic and we then accidents then that sort of on of So, looking eye collision overlay and telematics the severity keep sorts all try versus number go any frequency, of

thank Okay, you.

come Meyer next from proceed. will question Your Shields. Please

Great, ball thanks. couple of A questions. small

is quarter over course or fact, the First true up there of in accident I guess the in some the year workers' the line. underlying XXXX. has gone third up trend it the ratio Is in compensation, loss of a

Kim.

in Yes, five were, there like two are no, there had and is, there there said that we think well, things I going losses on. think quarter large the I I as

that you those so at large it good. non-covid look were of if the that is one driven take So pretty four current accident is of of large just that's year, quarters, losses five the out, looks by you losses, pretty, sort consistent

quarter had quite I a negative mentioned development loss I Steve this, think, and we years. prior on favorable think the I Prior accident reserve ratio the was year so impact in think

that are have sort workers' changed think So pieces not comp business. there inherently in of workers' or we a of both do comp things that are the signal those those moving but

What Okay. guess it's are what compensation for? inflecting. related fair of a there pricing there amount seeing, I whether follow-up are question, out I planning is you in bottoming terms dispute of guess workers' you is

if the so of it's that. to losses that for doing downward we us, sort Covid forward or rates their they some state sort just years flat anything going continue with how in we down, big non-covid us, a whatever, I up going going I the type. go exposure. Are more maybe do is industry If by things continued industry internally about to internal system. to see there take for at down little it that a making. same, and to think non-- some down think On for several rate states, in They're will of an the Covid going offices normally losses probably and so greater talking We're and to we not have to and trying we're decreases. marginally think point on have of so The you rules the debates stop debated system. gone pricing, us in and put activity are those in change that figure restaurants looking down the eye in will and there you're exclude they but downward all puts is, pressure. Also then less go keep to not I probably than to they're pressure keep going into going becomes the and regulatory of type, to maybe are rate that are states, very the that to they rules do bit more sort allow

so And for decrease do versus states probably that that, them. will that increase and rates we react to

Kim Meyer The what to said, we're we've thing I'd going to done. add always what only do continue which is to

is We've first CNA. reasons and a seen we're a change. little won't the bit that in of comes discipline in our because One comp workers' our profit decrease of

be, So won't is continued think down will pressure hole. there least rat which at term, if downward that indeed in I short going there the see you us a

outcome is on package, now workers' commercial our, be comp announcement our comp think other to on the positive Connect of small which The also I workers the This part as or is increase is too, that of a platform. side. thing our sales comp going with mid-market workers' will very the

right. Yes,

You grow not overstate and wanted to regard but some what's want a know ability desire I obviously environment that in so margins been in this to actually are just to think then to enforced? that's the the your that's but phenomenal competitive to, I about question you do or call grandiose be that but question. going broader are on to risk maybe absurd it's How BI still reserving incorporate philosophical, mindset. it too I'm going And decisions court of a with

follow-up. you to want now. start I'll Steve,

our we of industry. rulings favorable If is question? reserving, are considering that that I question, understand these those you're been to the some in that coming are not out court how How talking the have the about

in way lot sense. you Yes, of a get the decisions that the prospects of XXX% will that a makes

them X the mean, I number so very philosophy Yes, of at adjusted with is one of each we've presented been moment claims, individually thoroughly. we've our

those and our me facts think mentioned evaluated yet that of involved particular kind particular to other differentiating looked in until we've might believe and any suit I I that don't there we us in we it particular cases respond In [indiscernible], those some this let that loss As something associated my circumstances. of a Today me let with factors. evaluate indemnity way. GE guess words, They at emerges different as or we we've book cases as comments, be we that that hits is home. well,

anything that And and need so, our any to-date record there to minds indemnity us been sort has not reserve. any has of for happened triggered

no those very book need watching position reserve. to-date and of been we're still So conclusions to our closely, but have

Thanks Okay, helpful. that's so very much.

[Operator Instructions].

will question Ron next Bobman. come Your Please from proceed.

the have? good this Hi, opened of I'm disclosed you the at Irma least and many sorry, I in well wondering, was the but I part and How morning I matter the the assume Hope missed everyone's do safe. can call still you Steve. the, on haven't and early early I circle back get claims Irma you details part.

Steve is English. This

of many how Specialty our solely disclosed reminder out have open out we our still as that of a haven't We came just book. claims

Right.

we I of treaty anywhere retention, go cat but and meaningful so we've any up Where feel population expect that comments, really of that, our my that on book, the don't claims, quite further reserved our our of at tell our property now it kind of as Florida near particular would program. in in exposed We adverse the frankly, not analyze business all its closed. will still you don't coastal, wind was development that's earlier writing books. top to under we that

balance feel, from So like we pretty we Irma. sheet now protected feel the is

Okay, thanks.

vulnerable maybe little from business Covid who beneficiary all. their bit essence, the diversify are bit more at and from about carriers wondering Following I'm recent a business whether biased opportunities or move are who that and Meyer to you're moving little Covid. business agents from question books in on you're seeing maybe your comments a as the a being of looks agents new any

to want comment. you Kim,

do. I Before

Sure.

we've that they where only their to are people is, two business they having and how this like to how agents business seen, probably face reinvent to of had phenomena. do think office, was of so I sales One wanted doing business. having they sort time, to the in to sell period come their and way the face, business have did who people

least they carriers at doing in can carriers think fully it with having I more that. appreciate ways than who do are business other

had, maybe probably agents So have some was That who were more of say, I'll sort say seen of sort skeptical foresight we good and approach, about you our count flip in. buy-in me Hey. digital and

of think are. if only where, phenomena, the seeing and diversifying this policy they there is beneficiaries kind middle carriers. in where so are down really non-digital And are this we agents we which are market they hunkering And market of I then had probably holders middle staying

and year that and some does. depth, it's through last, the market, their but so moment we'll the business at it sort into they more here this So out number see think face the face quote, competitive, trigger, we a say, to just more have last more to get where we policyholder the is we're in one have I before how this. agents in get stay of go of late middle pulls going phenomena we'll and Also pipelines of like help and more it, shrunk a the is I'm think

out there, And want person D that's we like market or if whole non-in figures says, when opportunity, start I go the this I market, everybody and the want to middle those moving what my they're see. I to so again is there sort either think to of or then opportunities but policies are a sort of weighted

with back. to some because the platform. gotten, while it's a lot auto now I hard digital growth to just really, like the we Yes, about number, specific to of feedback lot come I'd really talked very question obviously to the I've and I We talk a home mean, about I the favorable like a agents add, and quantified starting talked with I

I We an growing business. new three again lot to much products we phone customers of a opportunities pick is digital could who business in the the is in a those issue that those manner, the and quote platform including about our the business direct And who [indiscernible], and reason of number because out somebody those somebody, -- their do necessarily they online didn't up it mentioned of talk there in new obviously fact pretty of is to including three cases, the kind quote that there each digital and have reflection to and don't open pick reaching call remotely. still agents everything have they also the

So it, I platform could wish getting more on new I I the during reflection put direct are pretty number with numbers again, our benefit business a specific think our but COVID. we're of

Thanks.

and and there, I just. we at new sort -- out Yes. activity had Mike in level made that's just We're if both record great business you auto and September point. BOP kind commercial of a of business crazy. the October, of look months in

say aren't. we're others that would there it to opportunity be impossible getting that So not

Okay.

rolling systems? on and Texas, just is split? think is it your for it lines business and business What's know you've Here new business? now, systems the Auto's really in systems systems And goes these Thanks. new one not. on sort time whenever For you've all the the Whether recently I oftentimes new been is wondering or book I it's renewal those writing I'm worker on to new I State presumably but in you rolling most case guess the new years the the example, been of entire but is laser-focused systems, highlighted think I comp and out on or the systems, execution, some that your out does last. and

clear, To Connect, renews policy Connect. we when Yes. be new it on a on also write

on has been stays personal business, has on lines new auto, it's as years, of the years -- we probably on almost rollout Connect. it most we written which generally before business over as where customers and depending systems. Connect each Connect our, to legacy, call the that So speaking between legacy want we that what business significant? business new and The products our about have renews have it is you X and talk was now split it remained That is the the the legacy and still X Kim,

legacy. Connect Yes. about, both on personal get I to check And I'm to numbers and but think XX-ish total way our auto back percent and like think is you, my premium, have you if I we'll XX% for look on double maybe at off homeowners if

products most. been so there, have And those the out

comp, workers' market XX.X% on to the we've very in and and go week. for you been small If legacy a so. probably It's Connect

So into XX% percentage, up is next the is the but auto and - commercial to get I on raise there probably a think, then is point. good BOPP starting no, a down you XX% Connect as

If expense a invested ratio. all We've in now lower our to the Connect you think path product. about the

we So have to there in. is no more that invest like new products

so the you we have is came personal sort lower. some gets one it's we our not and customer of ratio different the business push folks arrow I at different quiver expense we point that's to in to ratio way building to be in that It's So this new But At over. customers to moved and expense world on all is them point a doing different business, to a we're of legacy improvement. a the savings to need think these of and quickly enough, having before. going some going But convert small why system. has legacy of But without slow drive another the to mentioned the point relatively is, Connect the sort in time reap of way. tranche and convert us your agreement to a lines under another way benefit with did doing Mike over want to reinvest sort

different When agreement. said a you

mean You agency you mean policy or do agreement? form

Like you when a policy you from agreement. outs you and you write informal stuff. all could got and check us, that cash and got print can Just a pay

us And we that to slow. did of was that, came so came very to be how business the then of they of we honor and wanted and to tried when sort the agent sensitive go part to XX-year we kind to and customer us,

is no there but thought it is how of agreement, there we talk sort how So formal or we internally. about about

pull. best than act taken the capital over allocation, to where made capital have i.e. capital got A- context because you because I'm is [indiscernible] not amount to recognizing have book you in of and capital disappointing, mutual, to a rating but take lot know been operationally, from of your thanks. A- mid-year in to RBC the and have estimated current in progress rating cheaper results, where fully printed and a longer it's at could and and sure return cheap of sort price -- really, weather evident it's A- the the I made a the probably of and performance basis. best of years you relative partly is of company have just situation, one backdrop a is capitalize I'm the has you do the upon not and I you've Okay, really levers don't value And think think levers underwriting everyone results the other an the have it's group more the wondering you to And or having on the but other I pull any question. been an harder been sort expected rating, price with lot to of The of candidly longer results respect get to stock the the stand have desired. of just you underwriting sort acknowledged with

we I about and any contemplating, English, that This back where contemplating be many Steve we're reasons, question was that buying but for well would, the think would no, stock, they're not, answer thought-out a treasury return that believe our business believe need in and our run folks the going strategies on capital we we're will way. most long for plans to particularly that deliver support to that better a in

you than the -- you way. but, limited that broader how you do constraining was do can write or if RBC It your On Okay. factor. it, it a that, explain get but best business that you have want to is

no. No,

plan. level our are them. an AM June Cat Our of rating around with I we went with a spring, or through and with the they RBC decision to obviously so our any typically our them, we've industry them regulatory Best Best growth affirmed the make year that what example this scrutiny We you that talk it's cycle in a get to plans, think been typically and perspective is ratios rating, from AM review start of quite well their type for them annual above seen in presented just process They while. which the course

No. write unfamiliar periodic when occur presently So with a not are there but, property you constraint. can is it not the Cat

from positioning. A- a Is satisfactory, competitive

I is where on of is business the all. And stock raised from of me understanding just of results more a the at is, and of achieved. market. we stock the the the price, reflective lack also been based since price, of it's think not interruption A- and you a A- have lines understanding exposure right the which Yes. personal lack that insanity let what of comment beyond the restriction

on kind the Kim laid of short-term, normalized we believe would it an how it's are going. don't you I Auto. that don't worry we AM in that about --- kind State to Best the stated bullish long a I reflect out now term, out conversation, having site think our question organization confident answer agree certainly the world, comfortable around with where We stock we're and in Investor is, is that but as of to same be a that and your and our well. believers capital I long have very we results case in know and --- price on cat term we very

a thanks Okay, lot.

you. Thank

queue. I turn any further this at no in remarks for panel at over questions time. are like the to would this there to closing And time

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

Presenters you, earnings at hold. that please conference quarter today's Thank you concludes XXXX Thank participating, you time. third for this may disconnect call.