### WordPress - Web publishing software Copyright 2011-2019 by the contributors This program is free software; you can redistribute it and/or modify it under the terms of the GNU General Public License as published by the Free Software Foundation; either version 2 of the License, or (at your option) any later version. This program is distributed in the hope that it will be useful, but WITHOUT ANY WARRANTY; without even the implied warranty of MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE. See the GNU General Public License for more details. You should have received a copy of the GNU General Public License along with this program; if not, write to the Free Software Foundation, Inc., 51 Franklin St, Fifth Floor, Boston, MA 02110-1301 USA This program incorporates work covered by the following copyright and permission notices: b2 is (c) 2001, 2002 Michel Valdrighi - m@tidakada.com - http://tidakada.com Wherever third party code has been used, credit has been given in the code's comments. b2 is released under the GPL and WordPress - Web publishing software Copyright 2003-2010 by the contributors WordPress is released under the GPL --- ### GNU GENERAL PUBLIC LICENSE Version 2, June 1991 Copyright (C) 1989, 1991 Free Software Foundation, Inc. 51 Franklin Street, Fifth Floor, Boston, MA 02110-1301, USA Everyone is permitted to copy and distribute verbatim copies of this license document, but changing it is not allowed. ### Preamble The licenses for most software are designed to take away your freedom to share and change it. By contrast, the GNU General Public License is intended to guarantee your freedom to share and change free software--to make sure the software is free for all its users. This General Public License applies to most of the Free Software Foundation's software and to any other program whose authors commit to using it. (Some other Free Software Foundation software is covered by the GNU Lesser General Public License instead.) You can apply it to your programs, too. When we speak of free software, we are referring to freedom, not price. Our General Public Licenses are designed to make sure that you have the freedom to distribute copies of free software (and charge for this service if you wish), that you receive source code or can get it if you want it, that you can change the software or use pieces of it in new free programs; and that you know you can do these things. To protect your rights, we need to make restrictions that forbid anyone to deny you these rights or to ask you to surrender the rights. These restrictions translate to certain responsibilities for you if you distribute copies of the software, or if you modify it. For example, if you distribute copies of such a program, whether gratis or for a fee, you must give the recipients all the rights that you have. You must make sure that they, too, receive or can get the source code. And you must show them these terms so they know their rights. We protect your rights with two steps: (1) copyright the software, and (2) offer you this license which gives you legal permission to copy, distribute and/or modify the software. Also, for each author's protection and ours, we want to make certain that everyone understands that there is no warranty for this free software. If the software is modified by someone else and passed on, we want its recipients to know that what they have is not the original, so that any problems introduced by others will not reflect on the original authors' reputations. Finally, any free program is threatened constantly by software patents. We wish to avoid the danger that redistributors of a free program will individually obtain patent licenses, in effect making the program proprietary. To prevent this, we have made it clear that any patent must be licensed for everyone's free use or not licensed at all. The precise terms and conditions for copying, distribution and modification follow. ### TERMS AND CONDITIONS FOR COPYING, DISTRIBUTION AND MODIFICATION **0.** This License applies to any program or other work which contains a notice placed by the copyright holder saying it may be distributed under the terms of this General Public License. The "Program", below, refers to any such program or work, and a "work based on the Program" means either the Program or any derivative work under copyright law: that is to say, a work containing the Program or a portion of it, either verbatim or with modifications and/or translated into another language. (Hereinafter, translation is included without limitation in the term "modification".) Each licensee is addressed as "you". Activities other than copying, distribution and modification are not covered by this License; they are outside its scope. The act of running the Program is not restricted, and the output from the Program is covered only if its contents constitute a work based on the Program (independent of having been made by running the Program). Whether that is true depends on what the Program does. **1.** You may copy and distribute verbatim copies of the Program's source code as you receive it, in any medium, provided that you conspicuously and appropriately publish on each copy an appropriate copyright notice and disclaimer of warranty; keep intact all the notices that refer to this License and to the absence of any warranty; and give any other recipients of the Program a copy of this License along with the Program. You may charge a fee for the physical act of transferring a copy, and you may at your option offer warranty protection in exchange for a fee. **2.** You may modify your copy or copies of the Program or any portion of it, thus forming a work based on the Program, and copy and distribute such modifications or work under the terms of Section 1 above, provided that you also meet all of these conditions: **a)** You must cause the modified files to carry prominent notices stating that you changed the files and the date of any change. **b)** You must cause any work that you distribute or publish, that in whole or in part contains or is derived from the Program or any part thereof, to be licensed as a whole at no charge to all third parties under the terms of this License. **c)** If the modified program normally reads commands interactively when run, you must cause it, when started running for such interactive use in the most ordinary way, to print or display an announcement including an appropriate copyright notice and a notice that there is no warranty (or else, saying that you provide a warranty) and that users may redistribute the program under these conditions, and telling the user how to view a copy of this License. (Exception: if the Program itself is interactive but does not normally print such an announcement, your work based on the Program is not required to print an announcement.) These requirements apply to the modified work as a whole. If identifiable sections of that work are not derived from the Program, and can be reasonably considered independent and separate works in themselves, then this License, and its terms, do not apply to those sections when you distribute them as separate works. But when you distribute the same sections as part of a whole which is a work based on the Program, the distribution of the whole must be on the terms of this License, whose permissions for other licensees extend to the entire whole, and thus to each and every part regardless of who wrote it. Thus, it is not the intent of this section to claim rights or contest your rights to work written entirely by you; rather, the intent is to exercise the right to control the distribution of derivative or collective works based on the Program. In addition, mere aggregation of another work not based on the Program with the Program (or with a work based on the Program) on a volume of a storage or distribution medium does not bring the other work under the scope of this License. **3.** You may copy and distribute the Program (or a work based on it, under Section 2) in object code or executable form under the terms of Sections 1 and 2 above provided that you also do one of the following: **a)** Accompany it with the complete corresponding machine-readable source code, which must be distributed under the terms of Sections 1 and 2 above on a medium customarily used for software interchange; or, **b)** Accompany it with a written offer, valid for at least three years, to give any third party, for a charge no more than your cost of physically performing source distribution, a complete machine-readable copy of the corresponding source code, to be distributed under the terms of Sections 1 and 2 above on a medium customarily used for software interchange; or, **c)** Accompany it with the information you received as to the offer to distribute corresponding source code. (This alternative is allowed only for noncommercial distribution and only if you received the program in object code or executable form with such an offer, in accord with Subsection b above.) The source code for a work means the preferred form of the work for making modifications to it. For an executable work, complete source code means all the source code for all modules it contains, plus any associated interface definition files, plus the scripts used to control compilation and installation of the executable. However, as a special exception, the source code distributed need not include anything that is normally distributed (in either source or binary form) with the major components (compiler, kernel, and so on) of the operating system on which the executable runs, unless that component itself accompanies the executable. If distribution of executable or object code is made by offering access to copy from a designated place, then offering equivalent access to copy the source code from the same place counts as distribution of the source code, even though third parties are not compelled to copy the source along with the object code. **4.** You may not copy, modify, sublicense, or distribute the Program except as expressly provided under this License. Any attempt otherwise to copy, modify, sublicense or distribute the Program is void, and will automatically terminate your rights under this License. However, parties who have received copies, or rights, from you under this License will not have their licenses terminated so long as such parties remain in full compliance. **5.** You are not required to accept this License, since you have not signed it. However, nothing else grants you permission to modify or distribute the Program or its derivative works. These actions are prohibited by law if you do not accept this License. Therefore, by modifying or distributing the Program (or any work based on the Program), you indicate your acceptance of this License to do so, and all its terms and conditions for copying, distributing or modifying the Program or works based on it. **6.** Each time you redistribute the Program (or any work based on the Program), the recipient automatically receives a license from the original licensor to copy, distribute or modify the Program subject to these terms and conditions. You may not impose any further restrictions on the recipients' exercise of the rights granted herein. You are not responsible for enforcing compliance by third parties to this License. **7.** If, as a consequence of a court judgment or allegation of patent infringement or for any other reason (not limited to patent issues), conditions are imposed on you (whether by court order, agreement or otherwise) that contradict the conditions of this License, they do not excuse you from the conditions of this License. If you cannot distribute so as to satisfy simultaneously your obligations under this License and any other pertinent obligations, then as a consequence you may not distribute the Program at all. For example, if a patent license would not permit royalty-free redistribution of the Program by all those who receive copies directly or indirectly through you, then the only way you could satisfy both it and this License would be to refrain entirely from distribution of the Program. If any portion of this section is held invalid or unenforceable under any particular circumstance, the balance of the section is intended to apply and the section as a whole is intended to apply in other circumstances. It is not the purpose of this section to induce you to infringe any patents or other property right claims or to contest validity of any such claims; this section has the sole purpose of protecting the integrity of the free software distribution system, which is implemented by public license practices. Many people have made generous contributions to the wide range of software distributed through that system in reliance on consistent application of that system; it is up to the author/donor to decide if he or she is willing to distribute software through any other system and a licensee cannot impose that choice. This section is intended to make thoroughly clear what is believed to be a consequence of the rest of this License. **8.** If the distribution and/or use of the Program is restricted in certain countries either by patents or by copyrighted interfaces, the original copyright holder who places the Program under this License may add an explicit geographical distribution limitation excluding those countries, so that distribution is permitted only in or among countries not thus excluded. In such case, this License incorporates the limitation as if written in the body of this License. **9.** The Free Software Foundation may publish revised and/or new versions of the General Public License from time to time. Such new versions will be similar in spirit to the present version, but may differ in detail to address new problems or concerns. Each version is given a distinguishing version number. If the Program specifies a version number of this License which applies to it and "any later version", you have the option of following the terms and conditions either of that version or of any later version published by the Free Software Foundation. If the Program does not specify a version number of this License, you may choose any version ever published by the Free Software Foundation. **10.** If you wish to incorporate parts of the Program into other free programs whose distribution conditions are different, write to the author to ask for permission. For software which is copyrighted by the Free Software Foundation, write to the Free Software Foundation; we sometimes make exceptions for this. Our decision will be guided by the two goals of preserving the free status of all derivatives of our free software and of promoting the sharing and reuse of software generally. **NO WARRANTY** **11.** BECAUSE THE PROGRAM IS LICENSED FREE OF CHARGE, THERE IS NO WARRANTY FOR THE PROGRAM, TO THE EXTENT PERMITTED BY APPLICABLE LAW. EXCEPT WHEN OTHERWISE STATED IN WRITING THE COPYRIGHT HOLDERS AND/OR OTHER PARTIES PROVIDE THE PROGRAM "AS IS" WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. THE ENTIRE RISK AS TO THE QUALITY AND PERFORMANCE OF THE PROGRAM IS WITH YOU. SHOULD THE PROGRAM PROVE DEFECTIVE, YOU ASSUME THE COST OF ALL NECESSARY SERVICING, REPAIR OR CORRECTION. **12.** IN NO EVENT UNLESS REQUIRED BY APPLICABLE LAW OR AGREED TO IN WRITING WILL ANY COPYRIGHT HOLDER, OR ANY OTHER PARTY WHO MAY MODIFY AND/OR REDISTRIBUTE THE PROGRAM AS PERMITTED ABOVE, BE LIABLE TO YOU FOR DAMAGES, INCLUDING ANY GENERAL, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OR INABILITY TO USE THE PROGRAM (INCLUDING BUT NOT LIMITED TO LOSS OF DATA OR DATA BEING RENDERED INACCURATE OR LOSSES SUSTAINED BY YOU OR THIRD PARTIES OR A FAILURE OF THE PROGRAM TO OPERATE WITH ANY OTHER PROGRAMS), EVEN IF SUCH HOLDER OR OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. ### END OF TERMS AND CONDITIONS ### How to Apply These Terms to Your New Programs If you develop a new program, and you want it to be of the greatest possible use to the public, the best way to achieve this is to make it free software which everyone can redistribute and change under these terms. To do so, attach the following notices to the program. It is safest to attach them to the start of each source file to most effectively convey the exclusion of warranty; and each file should have at least the "copyright" line and a pointer to where the full notice is found. one line to give the program's name and an idea of what it does. Copyright (C) yyyy name of author This program is free software; you can redistribute it and/or modify it under the terms of the GNU General Public License as published by the Free Software Foundation; either version 2 of the License, or (at your option) any later version. This program is distributed in the hope that it will be useful, but WITHOUT ANY WARRANTY; without even the implied warranty of MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE. See the GNU General Public License for more details. You should have received a copy of the GNU General Public License along with this program; if not, write to the Free Software Foundation, Inc., 51 Franklin Street, Fifth Floor, Boston, MA 02110-1301, USA. Also add information on how to contact you by electronic and paper mail. If the program is interactive, make it output a short notice like this when it starts in an interactive mode: Gnomovision version 69, Copyright (C) year name of author Gnomovision comes with ABSOLUTELY NO WARRANTY; for details type `show w'. This is free software, and you are welcome to redistribute it under certain conditions; type `show c' for details. The hypothetical commands \`show w' and \`show c' should show the appropriate parts of the General Public License. Of course, the commands you use may be called something other than \`show w' and \`show c'; they could even be mouse-clicks or menu items--whatever suits your program. You should also get your employer (if you work as a programmer) or your school, if any, to sign a "copyright disclaimer" for the program, if necessary. Here is a sample; alter the names: Yoyodyne, Inc., hereby disclaims all copyright interest in the program `Gnomovision' (which makes passes at compilers) written by James Hacker. signature of Ty Coon, 1 April 1989 Ty Coon, President of Vice This General Public License does not permit incorporating your program into proprietary programs. If your program is a subroutine library, you may consider it more useful to permit linking proprietary applications with the library. If this is what you want to do, use the [GNU Lesser General Public License](http://www.gnu.org/licenses/lgpl.html) instead of this License. The Hartford Financial Services Group, Inc. (NYSE:HIG) Q3 2023 Earnings Call Transcript - sinth.info

The Hartford Financial Services Group, Inc. (NYSE:HIG) Q3 2023 Earnings Call Transcript

[ad_1]

The Hartford Financial Services Group, Inc. (NYSE:HIG) Q3 2023 Earnings Call Transcript October 27, 2023

Operator: Good morning, ladies and gentlemen. My name is Abby and I will be your conference operator today. At this time, I would like to welcome everyone to the Third Quarter 2023 The Hartford Financial Results Webcast. Today’s call is being recorded and all lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] thank you. And I will now turn the conference over to Susan Spivak, Senior Vice President, investor relations, you may begin.

Susan Spivak: Good morning and thank you for joining us today for our call and webcast on third quarter 2023 earnings. Yesterday, we reported results and posted all the earnings related material on our website. For the call today, our participants are Chris Swift, Chairman and CEO of The Hartford; Beth Costello, Chief Financial Officer; Jonathan Bennett, Group Benefits; Stephanie Bush, Small Commercial and Personal Lines; and Mo Tooker, Middle & Large Commercial and Global Specialty. Just a few comments before Chris begins. Today’s call includes forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and actual results could be materially different.

A financial advisor giving advice to a couple, illustrating the personal finance and insurance products the company offers.

We do not assume any obligation to update information or forward-looking statements provided on this call. Investors should also consider the risks and uncertainties that could cause actual results to differ from these statements. A detailed description of those risks and uncertainties can be found in our SEC filings. Our commentary today include non-GAAP financial measures. Explanations and reconciliations of these measures to comparable GAAP measure are included in our SEC filings as well as in the news release and financial supplement. Finally, please note that no portion of this conference call may be reproduced or rebroadcast in any form without The Hartford’s prior written consent. Replays of this webcast and an official transcript will be available on The Hartford’s website for one year.

I’ll now turn the call over to Chris.

Chris Swift: Good morning, and thank you for joining us. The Hartford’s third quarter financial and operational performance builds upon the momentum achieved in the first half of the year. Once again, Commercial Lines and Group benefits, which in aggregate represent over 85% of earned premium delivered exceptional results. We continue to expand our strong competitive position, successfully executing on priorities and delivering superior returns for shareholders. Let me now call your attention to highlights from the third quarter. Top-line growth in Commercial Lines of 8% with an underlying combined ratio of 87.8. Strong pricing across P&C including double digit increases in Commercial Property, Personal Lines, Auto and Home.

Group benefits fully insured premium growth of 8% with a core earnings margin of 9.8%. Strong investment performance with reinvestment rates, climbing to 6%, driving higher portfolio yield and the trailing 12-month core earnings are already of 14.9%. These results are outstanding and keep us on track to deliver a full year core earnings ROE in the range of 14% to 15%. As I look across the markets, the U.S. economy has remained resilient in recent data points, including robust payroll, strong retail sales, in solid levels of industrial production point to an environment, which continues to be supportive of the Hartford’s businesses. Now let me dive deeper into the third quarter performance by business. In Small Commercial, written premiums were $1.2 billion with 16% growth in new business and another sub-90 underlying margin.

Our best-in-class package product, which we call Spectrum continues to outperform in a competitive marketplace, contributing new business premium of approximately $100 million, up 20% over the prior year. In addition, written premium for excess and surplus lines grew 34% in the quarter with new business growth of over 50%. We expect E&S premium to approach $200 million for the full year. I am incredibly pleased with the overall performance in Small Commercial, which continues to deliver outstanding results with industry leading products and unmatched ease of conducting business and unrivaled pricing accuracy. This business is poised to exceed $5 billion have written premium this year. Middle & Large Commercial had another great quarter Written premiums grew 5% reflecting strong rate execution and new business growth in our excess lines.

Our general industries properties book grew 13% while large property grew 15%. Looking across Commercial Lines, we are taking a thoughtful and disciplined approach to grow property premium within favorable market conditions to the level of approaching $2.5 billion for the full year or a 25% increase. We are focused on managing our CAT exposure, as evidenced by our year to date CAT losses, which were lower than our market share. Coming back to Middle & Large Commercial, underlying margins were exceptional, reflecting the advancements made in data science capabilities, pricing, and underwriting tools. Margin has also benefited from favorable property losses. Those advancements combined with our best-in-class talent position as well to sustain profitable growth in this business.

Global Specialty continues to deliver outstanding results with net written premiums up 11% driven by new business growth and strong renewal written pricing in a number of key lines. Submission flow in the U.S. was up 11% in the quarter, including 15% growth in wholesale and international saw strong new business growth in marine and Energy. Within renewal written pricing, momentum has been building in the wholesale access market. Property pricing has been above 20% all year, and international casualty is above 10%. In addition, we remain excited about the ongoing benefits to the top-line from our expansive product portfolio. Our underwriting discipline, along with enhanced capabilities, developed over the past few years in Global Specialty are driving targeted market share gains with a stellar underlying combined ratio that has hovered in the mid-80s for the past six quarters.

In short, our execution has never been stronger. Turning to pricing, Commercial Lines’ renewal written pricing was 5.4% flat with the second quarter. Excluding workers’ compensation, renewal written pricing rose to 8% up four tenths sequentially with strong pricing in Property, Auto and General Liability. Across Commercial property pricing is over 10% with Auto and General Liability nearing that level as well. Pricing and other liability and casualty lines also remained strong, while public D&O is still pressured. In workers’ compensation, renewal written pricing continues to exceed expectations, remaining slightly positive in the quarter. All in ex-comp renewable written pricing and Commercial Lines remains on top of last cost trends, reinforcing my confidence and achieving our margin expectations for the year.

In summary, momentum persist in commercial lines, where I expect top-line growth and highly profitable margins to continue. Moving to Personal Lines, I am pleased with our continued response to elevated loss cost in both Auto and Home. In this challenging environment, our focus, objectives and execution are unwavering. During the quarter, we achieved auto renewal written price increases of nearly 20%, which we expect to continue at that rate into the fourth quarter. Current accident year lost trend expectations for the third quarter, as updated in June, held a promising development as we finished the year. In Homeowners, renewal written pricing of 14.1% comprised of net rate and insured value increases outpaced underlying loss cost trends. This is the fifth consecutive quarter of double-digit pricing increases in this book.

Our focus on the preferred market within Personal Lines business is a competitive advantage with our modern, innovative and digitally enhanced offering prevail. This product will be available in 39 states by the end of this month. And we are optimistic about future prospects for growth. In the fourth quarter, we expect to achieve Auto new business rate adequacy in over half the states representing two thirds of new business premium. I am confident in the pricing actions we are taking will return this business to targeted profitability in 2025. In Group Benefits, premium growth of 8% and a quarter earnings margin of 9.8% were both outstanding. Core earnings of $170 million was a quarterly record, reflecting focused execution, improved mortality trends, and continued strong disability results.

This quarter’s disability loss ratio reflects historically low, long-term disability incidents, trends, and favorable claim recoveries. In Group Life, mortality trends have improved both sequentially in year-over-year, but remain above pre-pandemic levels. Looking at the top-line, growth was driven by book persistency above 90%, plus strong year to date sales. Overall, the strength of our Group Benefits, diversified product portfolio, as well as our commitment to outstanding customer experience through the use of data and technology resonates in this marketplace, cementing our leadership position. Before I turn the call over to Beth, let me share some takeaways from the recent Council of Insurance Agents and Brokers Annual Conference. Throughout the course of the 60-plus meetings in touchpoints at CIAB, we heard a consistent acknowledgement of the strength of our franchise.

Partners called out our unique digital tools, broad product set, the strength of our innovation agenda, and the consistent execution of our strategy over a number of years. They also expressed their desire to grow their business with us, and they have come to view our team as best-in-class with relationships that have never been stronger. Confirmation from distribution partners that we are delivering on our strategy is strong validation of our leading position in the market. Through those relationships combined with enhanced capabilities, state-of-the-art technology and digital tools we are taking market share while delivering industry-leading returns. With that track record, I am confident in our ability to consistently deliver core earnings ROEs in the 14% to 15% range.

Now, I’ll turn the call over the best to provide more detailed commentary on the quarter.

Beth Costello: Thank you, Chris. Core earnings for the quarter were $708 million, or $2.29 per diluted share. Commercial Lines had a very strong quarter with core earnings of $542 million, and an underlying combined ratio of 87.8. Small Commercial continues to deliver excellent results with premium growth of 9% and an underlying combined ratio of 89.7, which includes some elevated non-CAT property losses. This is the 13th consecutive quarter with an underlying combined ratio of below 90. Middle & Large commercial delivered another quarter of written premium over $1 billion and an exceptional underlying combined ratio of 88.1. This was a 5.6 point improvement from the prior year, including favorable non-CAT property losses and expense ratio improvement.

Global Specialty’s underlying margin with a strong at 4.3, a 20 basis point improvement from a year ago, primarily due to lower loss ratios in Global Reinsurance and International Lines partially offset by higher loss ratios in U.S. financial lines due to public D&O rate pressure, and marine driven by a couple of large losses, as well as higher policyholder dividends in bonds due to the strong profitability of the book. In Personal Lines, core loss for the quarter was $8 million with an underlying combined ratio of 99. Homeowners’ underlying combined ratio of 78.1 was in line with expectations. The Auto underlying combined ratio was one 108.5 for the quarter, which is consistent with our expectation from second quarter. Importantly, we made no adjustments to loss picks from the first half of the year and prior accident years.

As Chris indicated, we continue to pursue rate increases to offset the loss cost trends we are experiencing. Written premium in Personal Lines increased 8% over the prior year, driven by steady and successful rate actions. In Auto, we achieved written pricing increases of 19.7% and earned pricing increases of 11.7%. In Homeowners, pricing increases of 14.1% on a written basis and 13.7% unearned. The expense ratio improved by 2.9 points, primarily driven by lower marketing spend. With respect to CAT, P&C current accident year catastrophe were $184 million before tax, which compares to catastrophe losses of $293 million in the prior year quarter, which included Hurricane Ian losses of $214 million. Although CAT losses were elevated for the industry again this quarter, our results were in line with our expectations as we believe that our effective aggregation management and underwriting discipline has helped to limit our losses from the increased number of convective storms.

Total net favorable prior accident year development was $43 million, with $46 million in Commercial Lines as reserve reductions in workers’ compensation and package businesses were modestly offset by reserve increases in general liability. Moving to Group Benefits. Core earnings in the third quarter were $170 million with a core earnings margin of 9.8%, reflecting strong premium growth and long-term disability results. Group disability continues to deliver strong results with a loss ratio of 67.3% for the quarter down 1.1 points from prior year. The Group Life loss ratio of 80.2% improved 2.9 points versus prior year, reflecting an improving mortality trend. The expense ratio improved 1.4 points and reflects strong top-line performance and expense efficiencies, somewhat offset by continued investments to meet our customers’ evolving needs and drive greater efficiency.

Fully insured ongoing sales in the quarter of $143 million contributed to a year-to-date sales total of $768 million. This, combined with excellent persistency at above 90%, resulted in fully insured ongoing premium growth of 8% for the third quarter. Our diversified investment portfolio produced strong results. For the quarter, net investment income was $597 million. Our fixed income portfolio is continuing to benefit from higher interest rates, and we continue to be pleased with the positive 150 basis point differential between our reinvestment rate and the yield on sales and maturities. The total annualized portfolio yield, excluding limited partnerships, was 4.1% before tax, slightly higher than the second quarter. We expect the full yield excluding LPs will be about 80 basis points higher than the prior year.

Looking forward to 2024, we anticipate another 25 basis points of improvement based on the current yield curve, which will contribute to about a $200 million before tax increase in investment income excluding LPs. Our annualized LP returns were 6.3% in the quarter. Results during the first nine months of 2023 reflect the resiliency of our private equity return and the absence of any real estate equity sales. The overall credit quality of the portfolio remains high with an average credit rating of A plus. This maturity valuation decreased as a result of higher interest rates. Net credit losses, including intent-to-sell impairments remain insignificant, along with an increase of $5 million in the allowance for credit losses on the mortgage loan portfolio.

All of our mortgage loans continue to be current with respect to interest and principal payments. Turning to capital management. During the quarter, we repurchased 4.8 million shares under our share repurchase program for $350 million, and we expect to remain at that level of repurchases in the fourth quarter. We were also pleased to announce yesterday an 11% increase in our common quarterly dividend payable on January 3. This is the tenth increase in the dividend in the last decade and another proof point of the consistent capital generation of the company. Our third quarter results demonstrate that our franchise continues to deliver consistent, sustained industry-leading results. We believe that we have the strategies, talent and technology in place to continue to succeed.

I will now turn the call back to Susan.

Susan Spivak: Thank you, Beth. We have about 30 minutes for questions. Operator, we will now take our first question.

See also 12 Best Cryptocurrency Exchanges and Apps in 2023 and 12 Best Advertising Stocks To Invest In.

To continue reading the Q&A session, please click here.

[ad_2]

Source link

Previous Article

Wealth Planning: It's for Everyone [But It's Not the Same for Everyone] - Barchart

Next Article

I’m a Financial Planner: Here Are 3 Ways ChatGPT Can Save You Money