Good morning, and welcome to the Cincinnati Financial Corporation third quarter 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Dennis McDaniel, Investor Relations Officer. Please go ahead. Hello, this is Dennis McDaniel at Cincinnati Financial. Thank you for joining us for our third quarter 2023 earnings conference call. Late yesterday, we issued a news release on our results, along with a supplemental financial package, including our quarter and investment portfolio. To find copies of any of these documents, please visit our investor website, cinfin.com/investors. The shortest route to the information is the Quarterly Results link in the navigation menu on the far left. On this call, you'll first hear from Chairman and Chief Executive Officer, Steve Johnston, and then from Executive Vice President and Chief Financial Officer, Mike Sewell. After their prepared remarks, investors participating on the call may ask questions. At that time, some responses may be made by others in the room with us, including President Steve Spray, Chief Investment Officer Steve Soloria, and Cincinnati Insurance's Chief Claims Officer, Marc Schambow, and Senior Vice President of Corporate Finance, Theresa Hoffer. First, please note that some of the matters we discuss today are forward-looking. These forward-looking statements involve certain risks and uncertainties. With respect to these risks and uncertainties, we direct your attention to our news release and to our various filings with the SEC. Also, a reconciliation of non-GAAP measures was provided with the news release. Statutory accounting data is prepared in accordance with statutory accounting rules and therefore is not reconciled to GAAP. Now, I'll turn over the call to Steve. Good morning, and thank you for joining us today to hear more about our results. We are pleased with our operating performance in the third quarter, as we again saw improved underwriting ratios for almost every major line of business compared with the first half of this year. The net loss of $99 million for the third quarter of 2023 included recognition of $362 million on an after-tax basis for the reduction of fair value of equity securities still held. We continue to believe the value of our equity portfolio will increase over the long term. As of September thirtieth, it had $5.6 billion in appreciated value. It decreased 8% during the third quarter, but has increased 2% since the end of last year. Non-GAAP operating income of $261 million for the third quarter more than doubled last year's $116 million, including a decrease of catastrophe losses of $58 million on an after-tax basis. The 94.4% third quarter 2023 property casualty combined ratio was 9.5 percentage points better than the third quarter of last year, including a decrease of 4.8 points for catastrophe losses. Our 2023 ex-cat accident year combined ratios are also better than 22, improving 3.4 percentage points for the third quarter and 1.7 points on a nine-month basis. Similar to last quarter, we also see signs of positive momentum in operating performance. Pricing segmentation by risk and significant average price increases contributed to the increase in our underwriting profit, combining with risk selection and other efforts to address elevated inflation effects on incurred losses. On a current accident year basis, measured at September 30, before catastrophe losses, our 2023 consolidated property casualty loss and loss expense ratio improved from 2022 by 4.3 percentage points on a case-incurred basis. For the same time period, we increased the Incurred but Not Reported, or IBNR, component of the ratio by 3.0 points as we continue to recognize uncertainty regarding ultimate losses, remaining prudent in our reserve estimates until longer-term loss cost trends become more clear. Agencies appointed by Cincinnati Insurance are producing profitable business for us, working with associates who provide outstanding service to agents and their clients. Our underwriters are working diligently to retain profitable accounts while managing ones that we determine have inadequate pricing. They are also careful in selecting risks and pricing new business policies. Estimated average renewal price increases for the third quarter continued at a healthy pace. Our commercial line segment again averaged near the low end of the high single-digit percentage range, while our excess and surplus lines insurance segment continued in the high single-digit range. Personal lines for the third quarter included auto rising to the low double-digit range and homeowner rising to the low end of the high single-digit range. We reported 12% growth in consolidated property casualty net written premiums for the quarter. That included an 11% increase in third quarter renewal written premiums, reflecting higher levels of insured exposures in addition to price increases. Considering operating performance by insurance segment, I'll comment on premium growth and how profitability is improving compared to a year ago. Commercial lines grew net written premiums 5% in the third quarter, reflecting pricing discipline. For example, lower written premiums this year for workers' compensation and commercial umbrella together reduced the third quarter 2023 growth rate for total commercial lines by 2 percentage points. The commercial lines combined ratio improved by 3.8 percentage points, despite an increase of 2.2 points from higher catastrophe losses. Personal lines grew net written premiums 29%, with growth in middle market accounts, in addition to Cincinnati Private Client business for our agency's high net worth clients. The combined ratio was 4.6 percentage points better than last year, including 2.0 points from lower catastrophe losses. Excess and surplus lines improved its combined ratio by 3.4 percentage points and continued to grow profitably, with net written premiums up 6%. Both Cincinnati Re and Cincinnati Global again enhanced our overall combined ratio and continued to demonstrate risk diversification benefits. Cincinnati Re's combined ratio for the third quarter of 2023 was an excellent 81.0%, with net written premiums essentially matching last year's third quarter. Casualty premiums again decreased as we saw fewer attractive opportunities in certain segments of the market. Property premiums increased 24%, largely due to higher pricing, while specialty premiums increased 31% due to attractive opportunities in pricing. Cincinnati Global's combined ratio was an excellent 79.5%, while reporting strong growth, with net written premiums up 21%. Our life insurance subsidiary again performed well, with third quarter 2023 net income up 9% and term life insurance earned premiums growing 2%. I'll conclude with our primary measure of long-term financial performance, the Value Creation Ratio. While our VCR on the nine-month basis is 4.4%, our third quarter 2023 VCR was -2.6%. Net income before investment gains or losses for the quarter contributed +2.4%. Lower valuation of our investment portfolio and other items contributed -5.0%. Next, Chief Financial Officer Mike Sewell will add his commentary about our financial performance. Thank you, Steve, and thanks to all of you for joining us today. Investment income again contributed nicely to improved operating results, growing 17% for the third quarter 2023 compared with the third quarter of 2022. Dividend income was up 5% for the quarter, in part due to net equity security purchases for the first nine months of 2023 that totaled $89 million. Bond interest income continued to show strong growth, up 19% for the third quarter of this year. We added more fixed maturity securities to our investment portfolio, with net purchases totaling just over $1 billion for the first nine months of the year. The third quarter pre-tax average yield of 4.44% for the fixed maturity portfolio rose 36 basis points compared with last year. The average pre-tax yield for the total of purchased taxable and tax-exempt bonds during the third quarter of 2023 was 6.4%. Valuation changes in aggregate for the third quarter of 2023 were unfavorable for both our equity and bond portfolios. Before tax effects, the net loss was $463 million for the equity portfolio and $369 million for the bond portfolio. At the end of the quarter, total investment portfolio net appreciated value was approximately $4.4 billion. The equity portfolio was in a net gain position of $5.6 billion, while the fixed maturity portfolio was in a net loss position of $1.2 billion. Cash flow continued to boost investment income, adding to the benefit of rising bond yields. Cash flow from operating activities for the first nine months of 2023 was nearly $1.5 billion, up $54 million from a year ago. We always strive for our expense management efforts to strike an appropriate balance between controlling expenses and making strategic investments in our business. The third quarter 2023 property casualty underwriting expense ratio was 0.6 percentage points higher than last year, primarily due to an increase in associate and travel-related expenses. On a nine-month basis, it was 0.4 points lower. Moving on to loss reserves. Our approach consistently aims for net amounts in the upper half of the actuarially estimated range of net loss and loss expense reserves. As we do each quarter, we consider new information such as paid losses and case reserves, and then updated estimated ultimate losses and loss expenses by accident year and line of business. For the first three quarters of 2023, our net addition to property casualty loss and loss expense reserves was $655 million, including $539 million for the IBNR portion. During the third quarter, we experienced $53 million of property casualty net favorable reserve development on prior accident years that benefited the combined ratio by 2.7 percentage points. On an all lines basis by accident year, net reserve development for the first nine months of 2023 included favorable $123 million for 2022, $7 million for 2021, $72 million for 2020, and $11 million in aggregate for accident years prior to 2020. In terms of capital management, we also have a consistent long-term approach. During the third quarter of 2023, we paid $115 million in dividends to shareholders. We did not repurchase any shares. Our assessment of our financial flexibility and our financial strength is that both are in excellent condition. As usual, I'll conclude with a summary of third quarter contributions to book value per share. They represent the main drivers of our Value Creation Ratio. Property casualty underwriting increased book value by $0.56. Life insurance operations increased book value $0.73. Investment income other than life insurance and net of non-insurance items added $1.04. Net investment gains and losses for the fixed income portfolio decreased book value by $1.86. Net investment gains and losses for the equity portfolio decreased book value by $2.33, and we declared $0.75 per share in dividends to shareholders. The net effect was a book value decrease of $2.61 per share during the third quarter to $67.72 per share. Now, I'll turn the call back over to Steven. Thanks, Mike. I'm proud of the way our associates continue to help the independent agents who represent Cincinnati Insurance navigate this challenging market. We're sticking to our fundamentals, listening, offering solutions, and building strong relationships. Because our field associates live in the communities our agents serve, we see and respond quickly to market pressures most impacting them. We are then able to find solutions that contribute to our agent success, leading to long-term shareholder value. As a reminder, with Mike and me today are Steve Spray, Steve Soloria, Marc Schambow, and Theresa Hoffer. Gary, please open the call for questions. We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. Our first question is from Greg Peters with Raymond James. Please go ahead. Well, good morning, everyone. Good morning, Greg. Can we start off with, in your press release, you've talked about the 193 new agent appointments this year. How long does it take them once they've been appointed, to get up to some minimum levels of premium on a per agent basis? Or put it another way, you know, what's sort of the production targets you have in mind when you appoint the new agents? And can you just clarify the comments of the agents that are just doing personal lines only? Sure. Yeah, Greg, this is Steve Spray. You know, it really depends agency by agency. You know, one thing I think as a company, we've always prided ourselves on is we do business with the best independent agents out there, and we are very deliberate about the agencies we appoint. We spend a lot of time kind of making sure that it's a fit for both us and the agency. So when we go into a relationship, we feel pretty confident that we're aligned and that the future will bear fruit. It just depends on the size of the agency, maybe the state and community. You know, over time, we're the number one or number two carrier, as measured by premium volume, in the majority of the agencies we do business with for at least five years or more. That gives you a little, you know, just a little flavor of the trajectory that we have. You know, it just depends. ... but, you know, we don't want to be just an inconsequential player in any agency. And the percentage of, I think you called out in the press release, a chunk of those were personal lines only. Was that geographically focused, or can you add some color on that? Yeah, sure, Greg. Sorry, you asked that. Typically, personal lines only agencies will be Private Client or high net worth, you know, focused agencies. To where, maybe, maybe as an example, let's say in the state of California, we're not active there for commercial lines right now. So if we make an agency appointment in California, it would be personal lines only, and it would be high net worth or Private Client focused. Got it. All right. I guess pivoting to the commercial lines side of the business, if we look at new business trends in your commercial, it's kind of flattish the last couple of quarters. By the way, we've heard some other carriers talk about pockets of increased competition. Maybe you can give us some perspective inside your book of commercial, where you're seeing some headwinds from competition and where you're seeing some opportunities. Yeah. Again, Steve Spray, Greg. That new business that you're pointing to is all around underwriting discipline and pricing, segmentation, and just discipline from our field underwriters on the pricing front. You know, it's a very competitive... You know, it's always a competitive market, and it varies by state, it varies by territory on who we're competing with. We have just, you know, over the years, our proven model of appointing the best agents, assigning field associates to those agencies, making decisions locally, that has served us really well over the long pool. In the last 10 years, the pricing precision, the pricing segmentation, the tools that we have, have really been what's driving, quite frankly, the profitability that you see that we're producing. Our new business underwriters, working with our agents out in the field, are executing on that discipline strategy. It's put pressure, candidly, it's put some pressure on the new business, this year. I can tell you, each quarter of this year, as that commercial market has gotten a little more disrupted, we are seeing more and more opportunities at the underwriting terms, conditions, quality, and pricing that we feel are adequate. Okay. And then I guess the final question would be on personal lines, because, you know, your-- if we look at your results for the quarter, actually, you know, you're doing, you know, pretty well as opposed, you know, in the context of how the rest of the market's performing. And you're also reporting some substantial growth in new business written. So, maybe give us sort of an updated view on the trends you're seeing inside your personal lines business, and I'm thinking about auto and property, clearly. So if you could separate the two, that'd be great. Sure. First of all, I might comment just, we're pleased and encouraged by the improvement in ex cat, [actually, or] that core loss ratio that we're seeing in personal lines as well. Certainly had some pressure with inflation and with increased cat levels, but feel like we are. I shouldn't say feel like, we're confident that we're getting the rate on a prospective go-forward basis that's adequate. The fact that, you know, about 55% of our personal lines today would be what we call private client, 45%, roughly middle market. We think that is a key for us with our agency model in the marketplace, that we can be a go-to carrier for our agents on, regardless of the size of the home. And the way we handle claims locally, fast, fair, with empathy, we think puts us in a really good position going forward on all personal lines. Yeah, it's the loss ratio has certainly been under pressure with inflation and the increased cat activity, but we're confident in where it's headed going forward. We've seen a lot of opportunity out there, a lot of disruption in that personal lines market. Candidly, I've never seen a harder market than the personal lines market we're seeing today. And we think with our balance sheet and, again, our agency strategy, the way we're approaching it, the expertise, the pricing precision, we think it's going to bode well for us in the future to grow that personal lines book. Great. Thanks for the detail. Yeah, absolutely. Thank you, Greg. The next question is from Mike Zaremski with BMO. Please go ahead. Hey, thanks. Good morning. I guess maybe going back to kind of the topic of growth and risk selection, and maybe just sticking with commercial lines. So if I kind of just step back, you know, Cincinnati Financial's pricing power levels, you know, are fairly similar to a number of your peers. Yet your growth rate, just overall growth rate, is much lower than your historical growth rate relative to the industry, which, you know, you've been talking about this, you know, about changing your appetite a bit, and, you know, every quarter, this isn't like a surprise. But just kind of then curious, like, are—I would have thought, you know, it doesn't seem like you're losing business because of pricing if I'm—if because your pricing levels are similar to peers. So is it or maybe I'm wrong, and in just certain lines, actually, you know, you're actually you know, we're looking at all-in rate and certain lines, you actually are, you know, casualty raising a lot more than the average. Or has your fundamental, like, risk selection process changed, and that you're just not willing to take on certain risks, or you're trying to shed certain risks? And trying to just kind of see where we are in this kind of journey to whether your historical growth rate, you know, will get back to what it used to be historically, relative to the industry, as if your appetite decides to change. Yeah. Mike, Steve Spray again. You know, Steve Johnston commented in his opening remarks on the net written premium piece of commercial lines. I might start there in that we've got a 2 full point drag on commercial lines from workers' compensation and umbrella or excess, you could call it, both for different reasons. Work comp, about a 1 point drag, that has been going on now for several years. Just it's simply the price or the rate decreases that are being pushed through really for the industry. On umbrella, that is deliberate. It started probably a little over a year ago here at commercial, in commercial lines. In certain jurisdictions, certain states, we really took aggressive, appropriate underwriting action on our umbrella book, reducing limits, maybe shedding some of that business. So that's, that's putting a weight on the commercial lines growth as well. To your comment of returning to historical levels or, or walking away from, other business, you know, like I was saying before, I think we've got a winning strategy. We've got a winning model, doing business locally with the best agents in the business, face-to-face, that has served us well for many, many years. And our risk selection, our claims handling, our loss control, those things have all improved on a linear basis since I've been here, I think 32 years ago. Our pricing precision, segmentation, has, has improved exponentially over the last 10 years to where we just didn't have those tools, say, when I was a field rep, you know, 15 years ago. And the, and the look into each individual account that we do and price them on, on their own merits. Yes, our field underwriters and our renewal underwriters have those pricing precision tools that they use to where if we don't feel like we can get an adequate rate on a risk-adjusted basis, we'll walk away from an account, and we'll wait it out. First and foremost is we need an underwriting profit. You know, we've got 11 and a half years in a row now of 11 years and nine months of underwriting profit, and we wanna keep that rolling. I don't worry about growth over the long haul at Cincinnati Insurance Company. We are talking about agency appointments. We have plenty of runway to continue to do that. We're growing our E&S company. You see what's going on in personal lines. Well, I'm not, I'm not, I don't worry about growth prospects for the future. Okay, that's a thorough and helpful answer. My follow-up is, you know, you've been deliberate in your actions to kind of increase IBNR. And, you know, you've talked about uncertainty in terms of more uncertainty in terms of the loss cost trend environment. You know, growth is obviously, you just talked about maybe a little bit slower, too. So would it be fair to characterize that Cincinnati is taking a view that loss cost trend is a bit higher on a go-forward basis, you know, than it has been a year or two ago? Is that a fair characterization? Greg, this is Steve Johnston, and, you know, I think what we've, we've seen was kind of a rapid acceleration of inflation starting at the beginning of 2021. It has now, in the last several months, moderated, still going up, but moderated. I think just with the way that we time our rate increases and rolling onto the book, it takes a little while for them to actually reach all the policyholders. But the key point, I think, is that we are very prospective in terms of the way we look at inflation. The most important thing we can do is to look out into the prospective policy periods that we're pricing for right now, do our best to estimate the loss cost and the inflation impact on that prospective period, and set the pricing right, and do it on a individual policy-by-policy basis, the best we can. I think we're in a good position to continue doing that. Okay. So you yeah, clearly feel it sounds like pricing is in excess of loss trend, knock on wood, if everything plays out, if you don't agree with that. Yes. That's correct. Yeah, I would agree with that. Okay. Thank you very much. Thank you, Greg. The next question is from Grace Carter with Bank of America. Please go ahead. ... everyone. Morning, Grace. Good morning. Looking at kind of results line by line in the commercial segment, it seemed like quite a few saw year-over-year improvement, but the workers' compensation line sticks out a little bit, kind of the second quarter in a row, where we've seen a decent bit of pressure on the underlying loss ratio. I was just curious if we could get more color on what's going on there. I mean, obviously, y'all have referenced the pricing pressure for that book, but we've also heard some other peers talk about concerns regarding medical inflation. And if y'all could just give us some more color on what's happening there. Yeah, Grace, Steve Spray. Thanks for the question. The accident year combined ratio, loss ratio for work comp is, yes, it is, it's under pressure. Calendar year is still performing quite well. You know, it is—I hate to keep saying the same story, but it really is simply just pressure, downward pressure on the rates that are put out by the rating bureaus. You know, fortunately, I think for Cincinnati Insurance Company, we've always been conservative on the workers' compensation line. We've got tremendous expertise. We're ready to grow that business when we think that the pricing is at an attractive level. Right now, it's, you know, again, we're doing it risk by risk, and we are writing new workers' compensation business. But just, it's a line that, as you mentioned, medical inflation can impact it over time. I can't say that we're seeing anything out of the ordinary with the medical inflation at this point, but that line of business is definitely under pressure on an accident year basis and primarily from just rate pressure. Thank you. And I guess, on Cincinnati Re, y'all have mentioned, kind of reducing casualty premiums in that book for a couple of quarters now, and we've also heard some, some more, players in the market start talking about, concerns over casualty loss cost trends here lately. I mean, I was just curious if you think that there's anything particularly new going on in casualty reinsurance, or, if the recent comments are surprising to y'all at all, or, And I guess next year, just if you think opportunities from property, specialty, et cetera, will outweigh any sort of ongoing pressure on the, the casualty piece of that book to allow it to inflect back to growth. Thanks. Thank you, Grace. Really good question, and I think it boils down to our model at Cincinnati Re, in that we didn't really actually form a company, Cincinnati Re. It writes on Cincinnati Insurance paper, so there's an A, A+ quality there. And then it's an allocated capital model, so what we try to do is just look at every contract as it comes up. You know, we don't try to do things this much in property, this much in casualty, this much in specialty. Just look at each contract that becomes available to us on its own merits, and if we can get the target hurdle rate that we're looking for, and feel good about how it fits into our overall risk model, we'll go ahead and write that. So I would think that we will see movements in the various business lines that reflect that. I think right now, just what we're seeing is certain lines, like professional liability, transactional liability, and so forth, are areas where, you know, we've felt that the pricing and sometimes the opportunity are not as good as they've been in the past, where we are seeing really good opportunity in the property and specialty lines. So we'll just go at that contract by contract and, you know, very bullish with everything that Cincinnati Re is bringing to us in terms of profitability and diversification. Thank you. Again, if you have a question, please press star, then one. The next question is from Meyer Shields with KBW. Please go ahead. Great, thanks, and good morning, all. Good morning, Meyer. Hello, hello. Sorry. Two quick questions on personal lines. First, is there any appreciable difference in the profitability of Private Clients and, and middle market? You know, Meyer, Steve Spray. You know, we don't— Right now, we are, we are disclosing the difference in loss ratios for our specific book between middle market and high net worth or private client. But I can tell you, over the long haul, the industry, private client has outperformed middle market by a pretty good margin, and we feel like we can create those same results over time as well. Not that we want to subsidize middle market. That middle market book needs to stand on its own. We've got the pricing precision there. Again, we've got the agency force. So we expect both segments to be profitable, but we do think over the long haul, the high net worth or the private client will outperform. Okay. That's very helpful, and completely understood. Second question, a couple of companies have talked about moderating claim cost inflation specifically for auto physical damage, and I was wondering whether you're seeing that in the third quarter as well. We have seen it in just certain areas within physical damage, you know, as we look at replacement vehicles, rental cars, that sort of thing. But again, we're still kind of looking at inflation on a, how it's been- ... cumulatively since 2021, is we use that data to forecast the loss cost and the premium needed in the prospective periods. And so we're being cautious, I think, in terms of where we are with our inflation rates, but we do feel that we're getting ahead of our loss cost trends. We are ahead of our loss cost trends with our pricing, and I think we benefited that while we had a stay-at-home credit, during 2020, we did not actually - we ran that through the expense ratio. We did not actually decrease the auto rates, and I think that's helping us now as we contemplate inflation in our pricing. Yeah, totally agree, and that's very helpful. Thank you so much. Thank you, Meyer. The next question is from Fred Nelson, a private investor. Please go ahead. I got a call last night from a lady pushing ninety, thanking me for Cincinnati Financial, and I told her that I would repeat that today on the phone, on the conference call, and she didn't even know you had one. But the question is: battery-operated vehicles of all types, has that changed the pricing of insurance, replacement costs and accidents? Do you have any comments you can share? Yeah, Fred, this is Steve Johnston, and I think what we just have to do is make sure that we contemplate the costs involved. You know, as we go to having more electric vehicles in the fleet, there will be more of that cost in the battery. They are less complex, I believe, in terms of all the different parts that are involved. So you know, it is different. It will create, you know, a challenge to stay on top of, as we contemplate those costs and price, but we feel that we're up to the task. And please thank your friend that called us. We appreciate her comments. Well, thank you. The battery-operated cars, I have people in the farming business with pickup trucks and other machinery, and they say it's not an easy thing to work with, and they're well, ask the question about insurance, and so thank you for, you know, the best you do. I really appreciate it. Well, thank you, Fred. It's always good to hear from you. Mm-hmm. This concludes our question and answer session. I would like to turn the conference back over to Steve Johnston for any closing remarks. Thank you, Gary, and thank you to all for joining us today. We look forward to speaking with you again on our fourth quarter call. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.