The Hanover Insurance Group, Inc. (THG) 28 Oct 202020 Q3 Earnings call transcript

Good day and welcome to The Hanover Insurance Group's Third Quarter Earnings Conference Call. My name is Nick and I'll be your operator for today's call. [Operator Instructions]. Please note that this event is being recorded.

Now I'd like to turn the conference over to Oksana Lukasheva. ahead. go Please

Good for Operator. thank for you Thank quarterly morning conference us our call. joining you, and

We will President Specialty Jeff begin Roche, today's remarks President answer call with prepared of our after Markets and Financial Available prepared Executive and your Chief Salvatore, questions our Dick remarks Chief Officer Agency our Lines. and Lavey, Farber, are Officer. to of President from Jack Bryan

to and Before press Jack, complete the I over let earnings today's supplement call that of our for in release, note presentation website financial available at the a section me slide our are www.hanover.com. turn call Investors

includes in I the the earlier. as presentation on the on actual With fourth Our loss and anticipated. our which year our mentioned measure among XXXX, to filings a the non-GAAP and financial differ reference non-GAAP forward-looking impacts accident website, you release, these factors remarks statements the financial certain are to ratios to this respect other include on full in Jack. forward-looking the call materially or the of as conditions. GAAP those are also will could questions today basis, to income slide A ongoing supplement, respect forward-looking historical COVID-XX combined and economic pandemic, be closest performance. supplemental deck and presentation comments, with release, others. results to with the turn factors than related the which found risk you factors posted refer the can statements regarding, the other among those prepared our conditions of excluding cause statements from reliance quarter economic over measures and to SEC, historical will Company things, and caution in section to discussion fact responses There that pandemic year measures of and other reconciliation COVID-XX your Today's for general press statements certain the our on We and operating I catastrophes financial such outlook press

strategic Oksana. the and you, call. you in the Thank by I quarter context current highlights morning, Good and joining environment. discussing for of questions. a today's our I financial each and will detail review business will thank economic our and third then begin everyone outlook during our happy segments results Jeff of quarter accomplishments will provide and and our of be take then financial your more to in we'll the review

was quarter pleased the third for are $X.XX it across We active particularly equity on performance reported per earnings quarter. given our operating the catastrophe with industry. and XX.X% especially a We of of quarter financial return an share

business results our execution strategic on the Our strong forward. tenants reflect drive that

volatility of Our challenges, withstand weather and the focused downs diversified hallmarks on us of company economy are well to including and the and and We company. environmental market. the ups earnings position stream well and steadfastly our remain

that to strategy Our management based capital unique a expense approach, distribution and returning thoughtful profitability, effective excess shareholders. disciplined strategy capital allocation our underwriting, broad includes and

with the from which one-time the pleased of momentum in in the represents X.X% our the decline building signs highlights; consistent second trajectory and line. growth of returns. achieved quarter, for expected top very a X.X% reported first, quarter our we growth to quarter significant our Turning We are we premium recovery premium third third and in the normalized

relevant our broad by quickly again are and and improving support production once encouraged of our commitments, differentiated offering. agency strategy we leading indicators which and the are product strength Our validate and

the ahead, we confident to Looking ability had drive continue to our portfolio on momentum strong established. are growth in we our and across pre-pandemic build

lesser particular, losses XXth, extent, Hurricane October wildfires storm as quarter a to California the tropical on prerelease were our in slightly in result Oregon. a of in noted as in our systems Second, cat Isaias and elevated and

reinsurance mitigate have this we in and adjusting geographic a while to Southeast, address our grow. we business. actions past is weather balance struck of mix. over potentially and our proactive West have other Coast, reflection Our we of expanded Coast capabilities as enhancing manage have enabled efforts risks concentrations increasing decade the the impact to weather end, ability weather-related we proactively losses, and the right reducing We concentrations specialty concerted, our quarter counted of and diligently reduced to Gulf our the while business frequency of mix and To of made and our liability the in protections. regions between our These to us increasing the property events exposures the continuing micro property vulnerable prudently refine risks,

confident are use us along of strong Going and position analytics advanced to increasing deliver our our tools actions these consistently across we forward, continue to with business. results will

in Third, frequency quarter, claim we continue to lower benefit personal the from particularly in auto.

as levels the in frequency correlation reopens. our related multi-peril, experienced large themselves year-over-year, our of to the At losses is After circumstances, While also book between to we and time, occurred the the carefully trend property in causes reviewing beginning commercial declined same which losses we the prevailing or time of toward several economy environment. business found time. economic loss pre-pandemic from no clear it

we risk profitability mix manage management. prudent to rate confidence our such management our Given and through to drive have and in increases strong continuing risks guidelines while underwriting ability practices,

one Lastly, us the was from capital third a quarter management a perspective. very for active

to into our capital to repurchase we excess accelerated agreement, This night, strong our further will provide the have these confidence so As moving and deliver shortly. year our reflecting items announced on the we $XXX in details more far last strong million prospects value earnings. have Jeff share generated forward. this from shareholders we demonstrates a commitment entered decision

highlights, Lines. growth of of Moving on in or third starting X.X% excluding quarter premium the to compared our X.X% delivered a quarter to business review written net premium in We Personal flat second return. the with decline

renewal were fuel moratoriums to retention the over the created backlog growth, of lifting consistent the with territories. across quarter third the premiums quarter Contributions continued year third although impacted last in from summer. was cancellation submissions non-renewal business the and of New from by somewhat most

strategy account enabled effectively drive environment manage in and a our disciplined highly business profitability. competitive Our to to us

Our on rate second quarter price balance in the with need and striking temporary are the where while underlying Personal increases. trends between Lines the we the prior right non-renewals, adjusted for a fairly following achieving cancellations Overall, increases most. X.X% them the performance increases focus were retention, in consistent reflects rate with the and satisfied retention temporary we increase when of quarter and

the move retention more a of XXs is Personal measure persistency back of time. mid over year-to-date to Our indicative our XX% and Lines should

deep accelerated are our accounts with adding signed offering, consolidation the each of success Additionally, through unique continuing of further by which months encouraged cultivating approach activity continued is Book first to we independent of is million validates at an month. Prestige exceeding also across the agency year, $XX our XXX the pace, expectations nine level channel. our This the the for activity year. new partnerships full

and and and significant broaden in relationships to address and those geographic enhance announced during Lines strategic to of our Lines progress Maryland, business presence expanding we we Personal XX by expansion needs book our quarter. From week, standpoint, of reach our expanding the Earlier unmet further Personal to a business states. made the introducing footprint. diversifying our this our across operational continue We customer product capabilities

existing recently a solutions our businesses. suite throughout home products, expanding Lines. to are also product country capabilities our in cover that product gap, Personal policies, businesses Prestige homeowner launched new nearly Entrepreneurs of of businesses We lack To the starting home record adequate provides be these home numbers, carte We la based business address insurance. XX% could based with are in yet our the options offering. including that bundled à

a regulatory auto Personal environment reform, effect exceptionally in well to went in in Lines July. As new which personal Michigan, importantly, continues our into execute team following

overall substantially the As the the protection operational, premiums control excel XX% reform such a The in for an reduced Cost the we At decade that plan year, in for advocated in was personal schedules mid that year. in ability and for next to and money last controls provides self-service with claims exchange than with as injury a we the reform Michigan the transition insurer our and included limit. of implemented educational of foundation auto, should reduce utilization our laid for leader consumers. a tools save we thought once it and of beginning increase auto efficiency premiums Michigan proactive Michigan implementation. more essential system, for the on measures personal consumers and a industry fee and top severity with agents of

approximately performance underwriting we Michigan, premium average quarter our while outperforming relatively state the very for will while share time. summary, and we in are risks we third we with customer X%, the over in navigating auto of Lines Overall, our In Michigan how us pleased market. are high-quality premium the per Our profitability we remain remain confident that market gain grew consistent. maintain net the Personal

predominantly in Our complex customer profile competitive position and well account the us more full environment.

our closely the are right profit. We to our adjusting growth the rates products and between of and watching strike balance competitiveness

an anticipation of on levels. eye returning keeping it are We frequency to in more normal

great allows agency our with distribution Our us rate monitoring tool provides within comparative market navigate transparency successfully. and unique inside to coupled the

Lines. Commercial to Turning

in very business. delivered of We the from a pleased growth our written in the with up X.X%, are quarter. X.X% growth of net premium momentum We decline second

are trending subdued in pace by in levels, still higher most which second pre-pandemic for historical which new averages production But encouraged quarter. which quarter. metrics are business we Commercial, policy including the are than a In compared pleased We to rebounded exposure turned levels. premiums, the positive accelerated Small with has renewal the low point from and remain

returned second businesses Although significantly our middle have pre-pandemic Notably, back has the in momentum come levels. the market exposures still quarter. negative, growth slightly almost specialty from to

We robust have on renewals. plan business year-to-date rebounded with and new premium XXXX direct a basis written to our

independent posted double in distinctive goes healthcare, and Specialty to agents. in was the delivered proposition back standing X%. customers Commercial, business in Commercial high and of and rate success to are providing while have property. Rate Specialty a are and while rates specialty are led set overall to our growth property by Our management through businesses and management now auto. commercial Property products quarter, in of core liability, Core continue of while The Specialty relevant accelerate exclusively the X.X% value our we growth meaningfully significant liability, capabilities professional Lines, E&S to our In double-digit broad specialty digits that Lines in push quality healthcare at firming seeing book, we rate continues higher

Over insurance to rising the commercial The rates we the across rates last space. the push social commercial should lower need for rate up continued have cumulative inflation, others in and severe term. quarters, the continue interest weather and several on impact commented of help near

of backlog economic the less While our was exceed height expect reemerge fully perhaps to of obvious we the with dockets it inflation and and the court overall social levels. during pandemic even previous distress,

that excess On focusing currently long-term achieving are we the meaningfully on trend. loss of basis of we these the trends, believe is rate in loss

We upward very continue. that are optimistic rate trajectory Lines will Commercial

the with technology expand double markets. growing On innovation and accelerating launches growth our agents continue and best product in with target our to newer front, E&S digits our

broadly Specialty core We growth. leverage and continue drive our to infrastructure relationships to commercial

recently and enabling a As partners businesses, in easily professional to with are quote and management issue products, standalone miscellaneous base importantly, Small our we've end, TAP execute and liability the expanded meaningful with drive our on for remain enabling strategy innovation example focus quarter staying centric our sales we include all grow many quote, logical us our this discussed investments all our customers. over CIAB meetings step distribution We of capability and growth. to issuance to we liability of we and making The serve and connected agency continue important account solutions. and help enhance Specialty XX technology executive online partners. around we efficiency agent our this incredibly to committed leverage broad our buy which Most agents that can capabilities top To virtual our better our policies. differentiated how rate, we in country, evolution, conducted future XXX to during with the of Business

in in to key our across digital our of been our distribution process senior our with virtual capabilities management are addition, engagements country. response over agents these have points, the XXX touch the shows of agents, team fruitful. our enhance our In In have marketing of connected are extremely these and efforts front to we road holding center. To-date, markets with members

analytics and agents. proprietary of our We tool, our is the our of finger having our As next the needs Insight. generation pride on capabilities Agency on of contemporary forward on pulse the The bringing meet to ourselves market

efforts have performance these so will and about Our of the company very I foundation, to are we very we contribute proud outstanding agents our we our to this opportunities build I and established year. trajectory we much have of our as in our the favorably growth forward. adversity forward. team responding going excited solid face drive expect accelerated the on am am

Over new product invest for we to will as in the across launches underwriting capabilities success. and our capabilities, heavily advance firm the continue quarters, next several finalize position digital we portfolio long-term

today level, casualty premier our franchise independent delivering to We be to positioned stakeholders agency next take our of better ever than of to and achieving and are property for company the in channel. goal all the the our

will I it Now, Jeff. turn over to

performance. our to of morning, Jack, everyone. business, want I book in the terrific reflected bottom-line comments good Thank you, Jack's is strength and reiterate which of about our

per million a per year income net share for with per $XX.X last million earlier. share We with year. we the combined year share was the income period operating reported or recorded After-tax all million fully $X.XX $X.XX XX.X% diluted in or same in ratio diluted of of For the diluted per quarter, compared income quarter. diluted or XX.X% $XXX.X or share $X.XX of $X.XX an compared $XXX.X with million compared fully $XX.X prior third net

continued was ratio primarily compared Our prior year reflects quarter. ex-cat improvement to combined XX.X% benefit the the in excellent the XX.X%, an auto. The personal frequency favorable of result in

we our be industry normal the million maintain the our experience. came But of above our lines, are continue impact longer given We as lower premiums signs quarter. been earned economic lines the to we time, the as a believe we approach more has portfolio, liability expectation severity. resumes. benign in that continues as to several slightly and frequency While increasing prudent much in At X.X% social across never returning inflation, $XX.X sheet of in to continued same activity or reserving well uncertainty at for it's the claim the potential shape. more Catastrophe balance better tail increased levels seeing were in net for losses than potential

underwriting footprint. a Our geography approach to performance of by over our maintain testament line disciplined exposures decade to is and business our to the to manage actions to proactive our taken past and better diversify

from well favorable a extent, In benefited much cat favorable accident addition, which we the to from years recent a of stems development year from of $X.X quarter in the as million, from prior variety as wildfires. events remaining settlement lesser a XXXX small

by the ex-cat prior year we us our to focus of auto with partially net concern in a home, and and continues for strong commercial reported compensation development favorable other development, area Commercial industry. million be Turning in CMP. $X.X offset auto to favorability in workers' additions for a Lines, Commercial

to variety achieved Over our consistently executed the past couple actions XX% of rate increases have a on years, around and of underwriting better we position portfolio.

inflation on continuing rate this the social will to in of We continue firm stay to line. effects overcome

limited. Coincidently, few about from events. $X.X this randomness at recent claims of portfolio this million a of of to to property level of second from in we expect development large that years. accident a our losses favorable the held a our report we Our business large good development quarter we stemmed is unusual that CMP quarter results remains this. from reserves catastrophe I'm million example from $XX quarter, the property related CMP prior pleased loss three year to experienced adverse certain are COVID in activity the end related There losses and incurred

to business including comp to workers' related in needed event resumption endorsements claims interruption orders. they pay those related reserves hold We sub continue to are limited the these COVID-XX and

in of recent legislated recent court to environment and pronouncements and favorable closely. been monitor regulatory very the believe have US the We of supportive ongoing contracts. and activity sanctity the We continue

Turning to expenses. now

expense is ratio our subdued costs. expected the basis a Our discipline expenses planning basis XX ratio growth, ticked well. XXXX. our extremely for of up sight serving investment year of and the our of us and XX the deliberate have with of business to we budget certain points full timing incentive original year to a agent in quarter due expense is line point employee clear In and consistent XX.X% improvement Year-to-date, expense

continue We going ratio in point expect improvement the a basis to XX delivering expense forward.

of quarters. from non highs, from bad expense and we net Additionally, the $X.X quarter. debt momentum the premiums written see ratio million, recorded first we to the we decline Consolidated recorded in as in X.X% the the point which gradually approximately a low quarter, second continues second continue to grew from third increasing

renewals a and new continued fueled lower Our by strong book with economic activity, this robust business trajectory of consolidation of activity. and all increasingly backdrop was agency

continue We over quarters. will coming the have confidence momentum this that

of Personal by points delivered personal ratio review excluding a from In improvement representing driven segment. we benefit improvement almost of performance combined an frequency to was quarter. catastrophes entirely underwriting in Moving the temporary year prior the a of This by XX.X%, Lines, X.X auto.

continues toward back frequency such to While is trending be lower, historical it averages.

prudent reserving exposures or to continue reporting, in inflation. liability We for social from delayed costs legal be potential especially

vigilant We carefully, ratio, XX.X%, higher current accidents for was from prior our are monitoring speeds. remaining severity Homeowners from increased period. flat also the year essentially book year excluding cats loss accident at

Turning also year with ex-cat with in of to loss was comfortable a we auto points ex-cat catastrophes ratio an Commercial ratio loss benefit feel rate XX.X%, line with reported line The Commercial rate the we prior although consistent lower improved temporary current Commercial not challenging including excluding Lines, accident the in combined frequency Lines achieve year. in prior by extent above the frequency property auto. to reviewed XX.X%, correlation we reflecting ratio, in year or quarter. reported X.X ex-cat large in to in types relatively causes year elevated ratio several time, time our year was property and loss claims, We underwriting to continue long-term large issues. CMP, current occur as prior accident losses These this by the from any to driven offset pricing loss up our in was X.X XX.X%, coverages find did physical points losses. property of damage activity in CMP. temporary and quarter. loss certain environment not we loss underwriting the of to current increase from trends personal overall quarter,

some prior we XX.X% flat still particularly that in are favorable accident trends effects. for liability ensuring seeing in Workers' ratio a are we the have the focused with was loss but comp we Given years, more of frequency conservative quarter. approach diminishing, losses on at

we trends improved and prudent commercial points our with improved in percentage Other continue the short-tail to favorable, due reserve in our growth dynamics performance Overall, underwriting be XX.X% While losses remain lines. slightly decisions. to very in underlying property quarter. pleased we are lines X.X third lower to

Now moving to $XX.X on slightly pressure to same period last yields. income from investments. experience down was new we Net of million of year as continued investment the from lower money

quarter. of at performed some total. volatility XX% [ph] Our contributing levels. interest low and that partnerships in environment end NII the representing increasingly Barring moving million to continue consistent invested the fixed with unusual well portfolio income of assets earn billion expect over will forward, in partnership see third the were income to Cash securities With we $X and any to we impact the cash $X time. be pre-pandemic market said, quarter rate of with the

a diversified investment portfolio of X.X A investment with maturity portfolio quality fixed high well is duration grade. has weighted laddered average and years The plus. and a Our of remains XX%

return a particularly now the Turning XX.X% on equity quarter. year-to-date XX.X% in a in despite operating of basis quarter strong capital second and and cash, We the delivered to elevated position. on equity our

by a in operating dividend. management increased our quarterly gains realized and partially driven of the share active by regular Our quarter, $XX.XX book perspective, From value investment X% was per the payment capital this period. both very our portfolio, a of offset income unrealized and during

earnings allocation capital. entered mind strategic considering generate our capital of into share as With about million strengths the a Jack in earlier our One consistently year ability and strategy. highlighted accelerated excess talked have this levels, This has is repurchase to agreement. quality well $XXX our of we current market the as

shares will delivery total X% later early After all shares to agreement, receive than anticipate X.X of of on and the XX% of of under the million final XXth repurchased no the XXXX. receiving shares expect the ASR shares the the approximately or we October remaining of from the have beginning outstanding XXXX. February delivery final We shares

the of a We XX-year million with this cost structure. share subordinate a existing strategy million we coupon issuance have $XXX proceeds we very for X.X%. growth portion a issued note underscores retire improving support future the repurchase August, will to approximately In investor strong our at capital authorization. they senior $XXX used We remaining capital million unsecured received our have $XXX of attractive under annual the prospects. The confidence X.XX% and coupon, overall of debentures in and a

enhances transaction financial uses. this move flexibility other organic we well As as support across further and opportunities business, growth into XXXX, our capital as our will

to the are generate and in often We to and support of committed We on is our future that confident excess resilience prospects forward return going earnings stated believe equity fully targets. to earnings capital our use remain growth ample that trajectory, capital shareholders, and we best capital growth it with to the We we're believe shareholders. seriously of actions words, serve mandate continuing with our at interest that and in to investors' our we are not but such our as only especially commitment, demonstrate return best to take of stewards valuations.

written we be net guidance, expect positive slightly XXXX. growth premiums full to Turning to compared to XXXX year

XXXX performance We quarter. are income to to the full investment net our in increasing third target year reflect $XXX million

has ratio XX%. expectation combined to ex-cat improved quarter fourth around Our

As point maintaining points of I to full a XXXX XX improvement XXXX in from basis basis year XXXX our we forward. improvement then mentioned in are XX returning ratio earlier, and expectation expense

an assume to equal rate tax of fourth We premiums the roughly of quarter of XX%. rate statutory net and load have a effective cat X.X% earned

are have wide to our closing, in quarter. In third to still our the too faced trajectory challenges this moving we year. XXXX, confident are we comment are guidance planning items the pleased on related and headwinds many in where with is we financial early performance forward we our improving despite profitability line in Given but it and the most corporate top process,

always market and challenges, and strong a remaining the While agile on advance financial enter stretch goals opportunistic of of ever proven a the now strategy, a strong with us Operator? and in customers. position and imperatives, that, the team we in continue opportunities team our ahead. enable strategic on to our we We successfully our the than growing will continues unique line presents that questions. whole those our open committed and to XXXX focused deliver the more With will year agents for as profitability

[Operator Please Instructions] Zaremski Credit First question Mike comes from of Suisse. go ahead.

morning been to development, me for you kind in the tell do, elaborate in the kind we I the remark, prepared point. of year-to-date any points year been small it's insights to look Good that to, Jeff us question, balance development in at in Commercial can you're incorrect, I to reserves trending remarks. of ex speaking in prepared of never sheet insights but on we - it's that. first less to reserve to better guys the have since Lines been lot am I the you point loss Are prior Thinking there comment? believe if have feel am more than catastrophe thanks all when that and referring fairly data your and clearly, reserve positive, maybe You terms shape. loss free has mentioned order been in

you So help elaborate any can that on anything there could us?

lot the down it it have it down particularly previous quarter, as much frequency in quarter in more than auto to the second continuing and second the substantially. we really was the quarter know, board second was was the said in in lines. had been quarter in Overall, and lower and down still third years Mike. it previous Sure. a But as across the quite even been quarters, Thanks, the you

our a So about other approach be whether was was legal delay whether any inflation claims social was reporting additional there to costs. or in concerned there

be So tail prudent on to we in the particularly took matters, really more lines. the reserving those for opportunity longer

are anything we've can confidence it expectation how prior it's behaving are don't with We in nicely, comp. trade running to been very to years, specifically, say to do two we we on it's of in quite cancellations, keeping hard So percentage there look event I holding at And million a perspective last in is $XX me very really for of able On travel, point terms a little comfortably. quarters. low things lot but that we're of COVID credit, further COVID if reserves. the workers' reserve a off that that along

we're our the So, feeling very and reserve Mike. really about positioned, moment at well good levels

Okay, little ratio not view in quantify be, weather to trying bit, benefit. not to kind it's get kind that you accident if a can I'm talk if weather it's maybe a could guess, try and trend, on it's despite COVID picks that's but you was as the changed. you was helpful. a finally question long that the as ton loss Commercial quarter, potentially said even non-cat not you of are like may quantifiable at heavier this the non-cat on but flattish kind something and ex-catastrophe you've And underlying, your answer much you your the maybe it's next lowering called about loss winded of ties can my if been about on year can of too Lines, commercial into year-over-year maybe year-to-date improved talk maybe maybe and or you like guys your out I but it

Sure.

start. So I'll

sort anomalous and and referenced On not we quarter are third regular number those the think on the large of likely in lines of specifically, continue losses that of basis. had the handful CMP to so we a or Jack

was If fire which deductible. a the you happened roll back loss, to hit the loss, first large quarter, one we very to aggregate annual had which

loss. dollar XX a million was plus So

we in the both you when the So year-to-date put elevated an together, that experience quarter period. believe had property third we and

opportunity commercial, with the across interest more an us particularly our still then conservative, really with long prudent to being You really the be we that combine things sheet balance in saw. it tail lines, that our to in and gives react

cover the relatively pass loss we versus rate you those maybe Jack, of I'll which about. combination those to flat. two is it think keeping great ratios trend, feel I So loss to

lot listen, in to Yes. for profitability confidence Thanks, the ability a and profitably. overall, question Commercial and grow our we have to continue Lines Mike of our

years said, we significance. As XXs, had look isn't make property that We and always in some analysis the or that's there of loss we've five volatility emerging line quarter, CMP has sure find ratio. contemplate we the over back of something a terrific business averaging for this really the didn't us, really XXs anything didn't line do something to Jeff as extensive that high done, low we been last and

we that that time. line and and gets that beneficial when over will So line, and in prove reserves, have showing we're profitability confidence can back think liability picks that comp, favorable our show real every prudence the workers' I in we

We last following true XXXX, articulated although same and that's that Jeff, philosophy in also are for for few true the it's definitely that, years.

We philosophy reserving conservative more think pay dividends over will have that time. been exercising a we much

of we're it's underwriting trend, seven On substantially we go Mike, the commercial we're which getting of in side, getting long-term trend excess that rate of side on rate, loss margins loss quite as the versus north it, well of for substantial long-term forward. and When X.X to loss on compare rate. very points bodes points core it's you trend, specialty

to on it I your margin kind benefit. growth noise for all just Very switching trying of increases? you profitability outlook Personal off think to so to I if more single-digit mid is you where you and feel lastly guys thank level but the you auto be? and rate - Or of far Ex, there. we're you can just is still am And broadly? seems though. of in assuming Lines Lines the why do color rate continues think that's of on helpful. lot there's what's definitely pushing higher to Michigan good, versus more And kind Is guys think, kind It disagree - that through like asking on Personal or a increases, some just is, gas retention do let the there's you so so you be know in the needs frequency I falling profitability, dynamics are like profitability, think

Listen, being again. bounce very and Personal growth to confidence to are to able back of Jack kind is our with we this levels. overall, pleased Lines Mike, performance pre-pandemic continue in our Yes,

really you as premium moratoriums. know, well by, as as quarter was second the The significantly the impacted refunds

our I while of up market, in so up. running cancellations quarter some we at that's around for coming forces new kind acknowledge out to is when the business And is you third starting our those in of business and you retention the catch competitive retention at, an the and that normalize the the think account particularly ratio pick XX% moratorium that look there of

prepared the to think our business in we're highlighted and success market consolidation, has that continue a and I high opportunity is that believe the Prestige the in to remarks we signings our having we quality increased product, this grow.

toward is that and us our a in compete lot and protecting loss performance Inside we're I market upper a in trends, the that ratio strategy increasing high are we from competition competitive even kind making in really business while we're that there, providing hoping our pricing new mid So move a the of that's confidence can not sector adapting a our to our and you being resiliency to out and business we're our basis and you market ability confidence preferred that assure the persistency And that the were middle and I quality to of environment. high would account for. renewals. best in pricing pricing the getting on segmented suggest immune for quality market we those sure agents

So mid over And our retentions the drift new levels. you should see time, they our up be. elevate will pre-pandemic net-net, business will XXs that to back to we believe back where that

all for you the color. Thank

Mike. Thanks,

you. Thank

of from Please ahead. go question Carletti JMP. Next Matt comes

good morning. Thanks,

Good morning.

level, to talk piece ask a about in relationships the your is little on a maybe of to those very question and gone opening past What I have of relationships you've you Can bit kind changed mean about six months? how if high I how three Jack, wanted remarks. agency period those relationships or a Hanover core to you asset any you strong mean over they've relationships pandemic differentiated a an and those way? during obviously as I learned in from approach. it's have touched your changed this Hanover

our more be about been this to we based high you if do everything in that out to that that significant. with that focused he give has do me ask reach we on showing Dick us our well, I'll Listen, strategy, help is growth. assume with environment and chime net-net, distribution And we to level Bryan. strategy response we our on the think and to the partnership through prepared let then driving hard to them has Yes, be caused as can Sure. some rewarded in our remarks we'll profitable along maybe going partner all work even agents that that we pandemic spoke successful are be

have on our work. us senior been of extensive the of doing leaders all field All team,

doing new doing important getting we're them increased these there's activity to our also I they're generating and times. how are us person. instead spending it, need on And, just that, but to affecting of as do one talking not because had for ability so dynamic we're this partners what only business it to expect agency of replicated instead help an that and they would a time of innovation function positive of help this of expertise about and we're to only to agency a branch but We've being agents more how visits lot through part focus you building the we're that based and environment. virtually done of claims content from and ability We're in relevant all the able the frankly better way becoming companies the that to digital to in our of capabilities customers, is think that service number actually our with work need doing is just ability do because our town agency they in really navigating emotional we recognition Colorado halls, in that virtually the annual CIAB industry we of response calls the the is not function. go are bring unique a that

the So ever. Dick, think add? agencies, the Internationals, more they're I all the I the down of appreciation and strength the folks USIs, consolidators, those the do from feeling we're to the say than you agencies, mid-size HUB small partnership would want all way market to getting our the

would briefly, in suggest if mean, many real anything, thirst also this Yes. have I more importantly Only our and answer, And we've situations deepened shown data it's relationships insight. great time during a I for Jack. us they and that

that insights So working generation we're referenced as more to in next opening our comments, bring is the that demand of Agency try bringing We're bring to higher on tool table. capabilities, and in and Insight them times, during insights. to tool our we in relevant to a the right, to claims virtual expert need responding or demand these or industry marketing their for some interesting content some digital whether that's

So is during our accessibility our and plug this period. to paying agility us quickly and in allows connectedness dividends really

new you That's piece past, question further that obviously curious, I'd helpful. focus a detailed a really the follow-up were think big line those color about comments and the have Right, on them with then pre-existing that some on versus to or in Specialty you thanks. really capability just kind the of just has success that in so business. fairly And Hanover. of you relationship about the in relationship great, follow-up, this a consolidate a along Hanover has lines Specialty the will customers have of is cross-sell? a been allow customers much if some talked guys How the elsewhere buy Specialty kind Jack, it And far. you to be had provide you've could in Hanover one of when to existing seen building I product My this been

this industry better agents economics and been a increasingly for looking been a get important no how are their much just that, really make And few but share ability comments, on company the a very agency provide to that what customers out should now. only specialized Specialty growth, have large that? will But lot terms the back look and our more at a I think, the data bounce to of serve either be standpoint. placing a at and data the the capability I the Specialty better after directly. capacity agents just the that they think paying built exercising was There in have was love not we the carrier interaction, relying I and have wholesalers. that they will but get for there around points be Specialty of from to wholesalers. it's terms business. need right dividends model is some third mid-size or And we've and portfolios even on mistake, what the make I how at remarket business, of expertise don't more with side They the don't in Listen, make a think around, to versus also their that's direct you Bryan, their function figure quarter over focus, of you And to few significant. both M&A would saw, Yes. Bryan have but few that agents to always in points operating in can around want an of consolidating

Jack, Matt. Thanks, thanks, Yes, sure. and

a Just few things.

growth getting our marine had X% even mentioned, E&S, our of healthcare, our And growth. liability, also specialty property increases. double-digit areas of getting number management So in earlier our right liability honestly, professional a all and Jack decent areas,

from, growth nice book. coming it's So disproportionately we across coming where our And better it's the when from agents. at look Hanover

the In subset that of agents fact, driving really the a it's Hanover majority business. of our are vast

purchasing institutions We accounts resonating the a is that's asking it's or just good our some to and quarter, and proposition the for and the coordinated both but to of for XX% some of E&S up agents the us financial we're seeing introduced of beginning capability that in we're the was customers by those and bringing with plan year, growing we from retailer, areas a on it's one So expanded those, new us capability focused be really still are them in year the we're its it. exceeding that Hanover place Matt, across of independent purchases, way. to seeing existing the

our relevance points So, really agent we've that Specialty really I that helps. think, good from the been offerings. to from doing we drive to our of proof have work Hopefully a that lot

you Thank going the helpful. forward. for and best of Very color luck

Thank you, Matt.

you. Thank

Sandler. Piper go from question ahead. is Next Paul with Please Newsome

I you management capital sense And behind of thinking million to material how perspective, a could call. well? hoping Just to Thanks from well a are capital good as and accelerated where of you're how changes review with as has of got us as was kind for the there you $XXX you your morning. the math any give just us kind of if the buyback? it, about

Paul. Thanks,

a own had with. we S&P also redundancy to and economic redundancy then number plenty something use, underwriting of a before, As growth, around in is and different True had has PMLs, leverage that framework we the earnings of capital etc. we our we keep have terms capital of so sort that model of and But have a gross current strong of has or a we growth. capital we and Moody's which our were cushion plenty North, of opportunities a for subdued our we've year, very about we talked In more capital, keep our have capital metrics always to substantial do created feel modest set

terms million already a in extraordinarily felt the over an $XXX capital had with of million comfortable stock. coupled with bought and we in little probably ASR. period very provides the $XXX of levels low we today say, valuation buying That let's through, back payback So an

guess, we not materially If without think changed? buybacks saying has goes future the prioritization. it that I about

was still of subordinated and we and in that's million X.XX% that down have debt the coupon. ample capital has excluding a paid which issued million capital when we Well, raised August $XXX debentures $XXX

larger the So level capital anticipate we stock digits economy year, feel grow industry be to cat in improving of you above the redeployed. at any into have even level can much single in that or can that given loss better the be or capital about as we XXXX mid rebound and that with on depending the of of hopefully for buyback good earnings, levels opportunities again, rate margins, We redeployed still with well. trend, the growth is getting in earmarked rebounded XXXX. versus But

Thanks, guys. it. Appreciate Terrific.

Paul. you, Thank

[Operator KBW. Next from question Shields, comes ahead. Please Meyer Instructions] go

you like auto, the personal public matches with evolve want I to working to it you're there's Can these people but market? how talk quickly what your of in home moving had a parts understand can on now an of focus it important I level recovering from the higher and frequency, right factors since more to or past Thanks. guess, agility I about, or as than does maybe rate is target in transportation. they make you with regard seem aversion how lot changes saying unemployment and that

critical, It's for Meyer, question. so thanks asking that

As benefit infrastructure our Lines years build you in market no point of platform agent, of added be doing and Personal models money purpose spent for pricing mind. to more may also that ease update of infrastructure to couple new better is rebuilding multivariate of recall, Personal our amount our and more a to to home But to get quickly. have we and investing be a sophisticated mistake, execs. business major The a significant was able them Lines account able rapidly of have the in exact make appeal Lines in pricing rationale ago, with sale much product to that the better and Personal much a this a we

and inside pricing critical, to effective. is be be is each lot provide it your some a to variance potent super and each though So it and allows to of and strategy with kind there direct to that our level try even of agents our is customers segmentation our of pricing stability, state

in market continues multi-variant but is set pricing a this it part getting of to to maneuver that you need product, you're way but of our that you're to as customer to right able isn't deliver pricing, sensitive, huge be a Personal a of then improve. base but our a your pricing so segmentation that still have capabilities Lines the the is getting where customer So quality of to strategy

Okay. exactly know. what needed I That's to

it all an in are have in be been as of those fourth or will of September, effect question, quarter? the the Second the cleared delayed end cancellation non-renewals

actually Right. other the back as our to adjustment. are on so coming we cancellations seen coming think and some of will are We've even people vehicles endorsements have I through to majority reverse them. positivity we're through, normal the start and trend adding seeing

I majority that's Meyer. of So the behind believe us,

at carefully remember, the the quickly in reconcile beyond weren't you are second that in out back pushed even basis if And our we capturing exposure to Lines sure also Commercial coming the making that to that so make moratoriums, that we as sure very that as were the of XXXX. much as we possible, business really were of and to having hard looking ourselves cancellations we quarter,

us we'll can, get trying earned see I as industry, think that as and how in premium can as conscious all grow plays the a about out going that we been our forward. for we've so we way to but accurate substantial for So

much. Okay, excellent. Thanks so

you. Thank

session. question-and-answer our concludes This

I'd Oksana conference to the like remarks. go Lukasheva over turn closing Please back Ms. for to ahead. Now

Thank you forward and to we're speaking everyone for your to today looking your quarter. participation next

you attending concluded. presentation. Conference for is Thank now today's

now may disconnect. You