Hi everyone. Welcome to the annual Bank of America Securities 2022 Insurance Conference. We are virtual again. This is the last one. We couldn't tell with Omicron, we wanted to do this one in person, but 2023, we already have the dates. We'll talk about that when everything's over. Let's talk about the conference today. We're really excited to kick off the first presentation discussion with Hartford Financial. We have Chairman and CEO, Chris Swift, and CFO, Beth Costello, here to present. Couldn't ask for a better start to the conference. We got a busy day, of course. I know everyone has wonderful meetings, but let's just get started with Beth and Chris for a few preliminary remarks. I have a lot of questions. You can send me questions on the Veracast app, and I can ask them. I will screen them, of course, to make sure there's nothing bawdy or anything like that. Please send in your questions, and I have plenty. Let me turn it over to you, Chris, for a little introduction. Sure. Thank you, Josh. We're always happy to be with you, particularly in the lead-off position to your annual conference. We always look forward to the dialogue with you and the constructive conversations we have with our investors. I would just say that 2021 was an outstanding year for The Hartford. We generated a 12.7% ROE for actually the second year in a row. I think it really demonstrates the improvement in our performance on a consistent basis. We've been building and investing in our organization for a while, and I think it's really starting to come through. We also have continued high confidence in our business, particularly through our capital management actions. During 2021, we returned over $2.2 billion to shareholder in the form of share repurchases and cash. I've never been more excited about the future of The Hartford, and I'm very confident in our portfolio, our capabilities, our expertise, our talent, and how everything's coming together. I think at the right time to continue to outperform, in a period of what we believe is new, sustainable, profitable growth for us. As I say, the better days for The Hartford continue to be ahead of us. We will continue to pursue underwriting excellence, combined with our ongoing capital management to produce targeted returns in that 13%-14%, Josh. That's what I would open up with. My first question is in term, atypical one. Given that we are remote and hopefully this is the end of remote, I'm trying to figure out what remote worked and The Hartford's culture being an enduring franchise. I think we have 150 years with The Hartford. Is work just a place to collect a paycheck? Is there a culture at The Hartford how in this new environment, or maybe we'll have a more normal environment in the next six months, we'll see. What is The Hartford doing to maintain its enduring franchise and that its employees feel like they're part of a team and something that's going to last longer than just their nine to five moment? Actually, it's a very good question, Josh. The Hartford's been around for 211 years. We do have some legacy. As I said before, we're not your grandfather's Hartford anymore. We are a modern version of what a national insurance company looks like, and we're very proud of it. Equally proud of our performance-driven culture that I think is collaborative, that's supportive, that allows people to bring their entire self into the organization. It's that culture, one of the reasons why I'm so optimistic about the future. Our talent is strong and deep in the businesses and all our functions. I think the pillars to our performance that we've talked about is really our execution-oriented mindset, our leadership, our underwriting excellence, and as you said, our enduring culture. We're really proud of the talent that we have. That we put on the field every day, and it only continues to grow over the years. I think it will continue to grow going forward. When you talk about the future of work, to me, these days, you want to be flexible. You also want to keep your culture that has worked so well for you. We've always put the safety and the health of our employees first. We'll come back into the office over the next couple of months. Begin to sort of work in our new environment, one that takes the best of the old world that we just lived through, the pandemic. I hope that it is the old world sooner than later. Combined, obviously, with office work where we come together to be more purposeful about strategy, innovation, coaching, learning, mentoring. I think those things are done very well in an office setting where you get to establish interpersonal skills. On the other hand, we proved that we could work remote and offer people flexibility two, three days a week. We're trying to create the best of everything going forward, Josh. All right. This sounds like a silly question, but it's the essence of The Hartford. What is small commercial? I mean, some people, is that a $1,000 policy? Is that a $5,000 policy? How can we think about what is Hartford's market share? Is it growing? Everyone counts it differently. Tell me about what small commercial is for The Hartford, who's the leader, but what does that actually mean? Well, I was going to just start there. I think we are the leader. Principally because we've been at it for 30 plus years. We've invested in it heavily. We've been in tune with our customers, both the end customer and our agent and broker customer, what their needs are. It's been a business that has just performed superiorly over a long period of time. I believe it will continue to perform at that high level for the foreseeable future. Partly it's because we've invested in it. What I always like to say is that you got to be really intentional in what you're trying to drive. Over the last five to six years, we've been intentional in trying to drive a better digital experience, trying to drive speed and accuracy for our agents, cutting down on questions. In fact, during the fourth quarter, 74% of our business went through without any human touch, our business activity. I think that speaks to what we've been investing in, particularly data science, data and analytics, that really generate, I think, that superior customer experience. Small commercial is a little amorphous for some, but we really define it as businesses that have less than $20 million in revenues, generally less than $50 million of property. But again, the vast majority of our business is in policies less than $10,000. We bring our full suite of products, whether it be comp, general liability, our Spectrum product, our auto capabilities. Recently we're bringing more of our management and professional liability capabilities through the Global Specialty into this segment. Again, we know the business well. I think if you look at it from a market side, it's probably a $110 billion market. We probably have 4% of the market share evidenced by our $4 billion of premium. I would tell you that we are capturing market share. If you look at our PIF count on a year-to-date basis, that was up 6.5%. If you look up our written premium, totally a little over $4 billion, that grew about 11%. We are gaining market share. We plan to continue to gain market share. Part of what the real secret sauce is, if Stephanie Bush were here, who leads this business, she would say is we're trying to meet the customer where they want to be met, whether it be in an agent or broker's office, whether it be through a payroll vendor, whether it be through alternative distribution channels, whether it be through our direct consumer channel. We are truly a multi-channel distribution organization that's bringing our skills and our products to customers every day. Are there still parts of the country where Hartford's underrepresented? We're focused on the top- I'm sorry, we have a glitch. Is Chris glitching out? Say it again, Josh. I'm sorry. You had a glitch for a second. I hope. Okay. Are there still parts of the country where you're underrepresented in your market share goals? I would say we have great strength in the Coast, the East and West Coast. I have good strength in the Midwest. Our top 10 states are growing. Actually, our next top 20 states are growing three times as fast as our top 10 states. I think that positions us well for continued growth. We've been continuing to appoint new agents. Really the ease and speed. When I sit down with agents, why they like doing business with us, and they do business with others too, but they really do like our ease and speed, our timeliness, our turnaround time, the ability to see a bindable quote on the glass, press the button, bind it, and there's nothing else to do. Speed does count in this business, Josh. Would Hartford benefit from being in every agency, or does it benefit from being selective about its agencies? Our best position is when we're the top three. If we're not top three in an agent, it's just going to be hard to get meaningful business and flow. It doesn't mean we don't have contracts and relationships where we don't have the top three. If you look at our metrics, if we're in the top three position, top one or two particularly, that does drive superior market share in that agency's office. Growth was fantastic in 2021, you've given two-year commercial premium growth guidance. It feels to me like you're well ahead of plan. Should we expect deceleration this year? I'm ahead of your forecast in my numbers, but maybe you'll right-size me a little bit here and tell us what to expect. Well, you're right, I'll ask Beth to add her comments in this area, is that when we did our investor day, we wanted to continue to give people a look into the future. We're really proud of the growth that we enjoyed in 2021. If I look at our commercial businesses, in particular, all of them were up low double digits, which is just outstanding. Now, some of that, as you know, is from exposures coming back, particularly in workers' comp and other lines, but primarily workers' compensation. We do feel that was a one-time pull forward or a one-time recovery as the economy got back to normal, which is hard to replicate going forward of just expanding exposures. Now, on the other hand, the rate environment continues to be supportive, as we said in our fourth quarter call. We think pricing is going to continue to exceed our cost of goods sold in most lines, with most of the exception being workers' comp. That will provide opportunities to continue to grow. Likewise, when we capture more market share, that will add to our PIF count, and it has also add into our premium. When you put it all together, we affirmed the 4%-5% into 2022. As we sit here today, that's imminently achievable, and we're trying very, very hard and with focused activities to achieve that. Beth, what would you add? Well, Chris, I think you covered off on all of the pieces. One thing to keep in mind, which you did mention, is that we did see increased exposure growth, kind of the bounce back from the lows that we saw in 2020. Some of that really kicked in the latter half of 2021, which obviously will make those compares that much more difficult as we get into the second half of the year. As you said, we're very focused on doing what we can to meet or beat those expectations and feel really good about our start to the year. Excellent. If we go back a few years when you guys acquired Navigators, you bought a $300 million adverse development cover. At the time, it felt like a lot. Here we are through 2021, and the cover has basically been extinguished at this point, which surprised me. I'm a big believer for a lot of liability that it's a self-graded exam. You can be as punitive or as aggressive as you want in terms of allocating losses or whatnot. It feels pretty good when you have $300 million protection on your side, that you can be comfortable being conservative about things. When I look at the evolution of the $300 million adverse development, I say, well, this says to me that 2016-2019 is bad, but Hartford had the protection in place. There was no reason to be shy about it. When you look at the industry and think about pricing, and obviously things are great right now, how much of a hole do you think your competitors have to fill for 2016-2019? How conservative do you think you were because you had this protection, that you might be ahead of the curve? I realize you don't want to talk too much about competitors, but you do have the market sense going on. What do you think is happening right now, given the inflection from being underpriced to adequate price here in this moment? Yeah, that's a lot to unpack. We're going to refrain from commenting on competitors and speculating there. I think you would appreciate that. I'll ask Beth that. Well, Beth, you might be on. I wasn't sure if we lost Chris or me, everyone. He'll come back. He'll come back. As it relates to Navigators and the reserves, I think one thing's important, just to put it in context. The reserves that we're talking about for the Navigators portion of Global Specialty is a little over 10% of our total carried reserves. A relatively small portion. We apply the same process that we do to all of our reserves. We look at things quarterly. We make adjustments as appropriate. I don't think I can say that because we had adverse development cover that impacted the judgments and decisions that we made along the way. We were very pleased that we had it. We put it in place for a reason, because we knew that it was necessary. As I said on our earnings call, feel very good about the overall strength of the reserves. If you were to look at the Navigators balance sheet and the percentage of IBNR to case reserves that we have now compared to when we purchased it, definitely would see some strength in the overall reserve position there. I have a question coming in from the audience, and no one should feel comfortable to ask. They're also asking about guidance for 2022, particularly in Group. They want to know, given that COVID is still present, do we need to be concerned that guidance might be a little bit aggressive given the current environment we're in right now? As part of the guidance that we provided for Group Benefits, we did put a range out for potential COVID impacts as we see it today, coming from both excess mortality and short-term disability. From an excess mortality perspective, we talked about $100 million-$200 million pre-tax, and then $25 million for short-term disability. As we said, and Chris's comments that he covered on the call, is that is based on our view that things are going to get better as we go through the year. We do expect to have impacts in the first part of the year, and particularly in the first quarter because of what we're experiencing right now. We're really pleased to see that case counts have come down significantly. Deaths will then should follow that. Our guidance is predicated on not having an additional variant like Omicron come through, and we'll continue to watch it. I think as we've all seen throughout this pandemic, it can be challenging to make some of these estimates. We take into consideration the information that we have. Those are our estimates, and we'll continue to update. As we said, we do expect that a big portion of those estimates we'll experience in the first quarter, just again, given what's currently going on. I think what's equally important is when you look beyond that and underneath to the actual performance of the business, performing very well, very pleased with the top-line growth that we've been seeing, the products that we have in the marketplace. All in all, Group Benefits continues to be a strong performer for us, again, when you look through sort of the underlying performance. If we can talk a little bit about the reserve up for the Boy Scouts sexual molestation litigation. Just two things. The agreement, in principle, only had 73% support. There was news that more of the claimants might be online. It looks like it may actually settle for the amounts that are currently planned. You've put up $787 million for The Hartford's exposure to that litigation. Chubb recently announced their exposure to it as well. You've said in the past that some of your exposure might be contingent on how much Chubb settles for. Can you sort of explain what that means a little bit? Given Chubb's $800 million settlement, your $787 million, your confidence level that this is approximately where it will come out for you. You don't have to comment about Chubb, I suppose. Yeah. As you said, we did reach an agreement for $787 million. That was up from our $650 million agreement that we had reached earlier. And I would say, is the way that that amount was determined and the way we settled on that, it's really not predicated on others. Our agreement's a little different than the original agreement that we came to. We continue to watch the process, and we're optimistic that things will progress and I'll leave it at that. Okay. Can we talk about direct-to-consumer and The Hartford's initiatives there? You can go to smallbizquote.hartford.com and get a policy direct without an agent. I don't know. Sometimes there's been hybrid sort of models where, yes, you can get a direct quote, but you'll be serviced by an agent who's direct too. What is the nature of The Hartford's direct consumer offering right now? How does it work? What kind of traffic is coming through? What kind of product seems to be getting traction? Is there traction for a direct consumer product? Yeah. We've had a direct-to-consumer product for a while in small commercial. We continue to see traffic there. It is by no means the primary way that businesses come to us. We still find that for the vast majority, businesses are still looking to work with an agent. Those that want to get a quote directly from us and get their policy issued can do that. It really is probably, we'd say, only about 3%-4% of businesses are really looking to operate in that channel. As we've said through the years, if that continues to grow and that's how businesses want to come to us, we're prepared and overall been pleased with how that product has worked. There are opportunities if people are in the channel and want to talk to an agent or talk to us if they can. As I said, just we're ready if the way that businesses operate changes and they want to do more of that direct-to-consumer model. Is there any indication, if your answer, I'm guessing not, but is there any indication that there is increased uptake and desire for purchasing? It seems like that direct consumer seems obvious if the market can get it right. Yeah. Maybe it's just not there yet, and it's been still customers are hesitant to buy. They want advice. They're not ready to buy online. Maybe 2021, 2022 is too early. Yeah. I think that's what we're seeing. We're just not seeing significant uptick there. I still think that for some, if you think about a small business owner and they're starting their business, I'm not sure that focusing on the nuances of insurance are necessarily where their expertise is, and they value that relationship that they have with their agent to make sure that they're protected. That hasn't really changed. We have seen through 2020 and 2021 and living in this pandemic world that consumers are looking to do more things online. We see that just even with our customers overall, but that initial sort of placing of a policy and getting kind of insurance for a commercial company by themselves, I haven't seen that really explode yet. We're ready, if that trend were to change. Not that we don't have excellent information right now, but just want to know. Chris is trying to get back in. We'll see if he's successful, but that's kind of as of 8:19. For anyone, you can, of course, ask questions on the Veracast app to send them to me. Let's talk about AARP, the changes in the underwriting requirements that you've gone through the last couple of years. Can you talk about how that's different than it was in the past? Especially given what we're seeing right now in the auto market making underwriting for the industry is very unprofitable. Is it not really a possibility to determine whether or not that the current underwriting changes are going to be successful because it's just very hard to get a correctly priced auto business at the moment? Can you talk about what changes have gone on, what indications you have that it's working, that this is going to be a success? A lot of places you can go there. Yeah, absolutely. There's a lot there. Yes, we are in the process of rolling out our new auto and home model. We call it Prevail. Launched in seven states, continuing to execute that through 2022. Overall, just our initial feedback that we're getting on the product and the experience, because it is a new platform, has been very strong and very pleased with the initial rollout. It is leveraging and working with our AARP relationship and, as you mentioned, we did make some changes to how we go to market as it relates to our AARP contract specifically. We've talked about this before, that previously we had a feature of the product that was a lifetime continuation benefit. Which, what that meant was that if you purchase a policy from us, auto or home, you were guaranteed to always then get renewed. Not guaranteed to get renewed at any price. The price decision was obviously up to us, but we couldn't non-renew you. The reason why we think the fact that has that is no longer in the product is important is because of that, we had to be very thorough initially with our screening to look at what customers we were bringing in and the price associated with that. Not having to have that lifetime continuation benefit provides us the opportunity to not have to ask so many questions up front, because it's not like you have just one opportunity to assess the risk that you're bringing on. What we found is that benefit really wasn't very valuable to AARP members. As we went through and renegotiated the contract, we took that part out. Again, as we think about the overall product suite and what we're bringing to market, very pleased with that. Doug did mention, and you mentioned, what we and others are experiencing as it relates to the auto line right now. Because of that, we did slow a bit down our rollout of Prevail into 2022. We're really focused right now on getting rate into the book. We want to make sure that we have the rates appropriate before we launch into further states. It's part of the reason why when we talked about our growth expectations in personal lines, we said flat to slightly down in 2022 because of that. Again, early indications are very positive on the product, the feel of it, and just really excited to be able to sort of relaunch this product suite. In November, the guidance was flat. In late January, the guidance was flat to slightly down, right? Yeah. That was the change that we made. Again, just taking into consideration the environment that we and others are in. Yeah. Chris is back. Just in terms of- Sorry about that, Josh. the harder questions. I have a question coming in, although it seems like a Beth question, but probably both of you. There's a question. Can you talk about the starting point of your workers' comp business profitability? Is pricing below the loss cost trend today? Is this an issue for the foreseeable future? Yeah. I would start, Beth, you can add. Your color is, one, the line continues to be historically profitable. 21 was a profitable year, 20 was a very profitable year given some of the pandemic situation. It continues to perform exceedingly well from a return and ROE side. If you look at our long-term assumptions regarding our cost of goods sold, both frequency and severity, you would have to say that pricing is not keeping up with that as we head into 2022. Exactly when that would change, Josh, is hard to say because you need history and results to take the regulators to say you need a rate increase. As long as the line continues to perform as it has, it might be a little bit longer before rate increases are necessary. I'm going to go. We might get two more in, but we'll see. The time is running short. Can we talk a little about the Group Benefits product offering? You guys are the life and disability writer. We see a lot of competitors increasing products on their shelf to try and make themselves have a greater value to the employer, I guess. Does Hartford need to expand its offering? Is life and disability enough? How should we think about the future of that marketplace for any competing for shelf space there? Yeah, I would say if you think about our business, life and disability, both long-term and short-term, are the three main product lines. Over the last six years, we've built out a suite of supplemental or voluntary products that include critical illness, hospital indemnity, accident. We have some other A&H products that we would distribute. I believe we have the full product set that has been growing. I think that's the benefit of a group platform, is that I think agents and employers are looking to bundle more of the core life and disability and STD with these supplemental products to at least offer their employees choice as far as additional benefits. That book of business is growing rapidly for us. The profitability is strong, and we're trying to capture more of that voluntary business market share in the market every day, Josh. One last one, quick one. I don't know if it applies to Hartford and works for life insurance. Obviously, COVID's been a profitability crimp for the last couple of years. There's some life insurers who say, "Well, the book that persists after COVID's over will have better profitability to it." Is there any upside for The Hartford in a works sold product? Is there a healthier population post-COVID benefit there, or any upside we can cast? Yeah. If you think about it, there's a couple themes in there. Our life product is a simple term. It does have some portability if people choose to it with additional underwriting, but that's not selected very often. Most employers do provide some retiree death benefits after they retire, so we would provide product for that area. We're really not in the mainstream life insurance, more with permanent insurance, ours, again, is a simple term product. There's been a lot of debate. Did we pull forward mortality results over the next couple of years due to COVID? I think the math is really hard and the science to prove that the people who actually died this year would have died three years hence. There's trends in mortalities, both negative and positive. The negative is clearly COVID's going to be with us, I think, in an endemic state for at least the next three to five years, some might say. Health trends and medical advances in science continue to provide longer lifespans for people, and those trends will continue. It's hard to see how things are really going to flush out here. I would tell you that our belief is that at least in the near term, the next three to five years, we do need to get a little more rate in the book due to the endemic state that I think the virus is going to turn into. We're targeting the start in 2022 here and into 2023 with 1%-2% price increases on our term life products. Well, we're out of time. You guys have a busy schedule today with other things. Thank you for giving me your time for this half hour. Be well, we'll be in touch, and have a wonderful day. Sorry about the technical issues, Josh. No worries. Thank you very much. Lincoln Financial coming up, everybody. Thank you. Take care. Thanks.