I'd like to welcome Chris Swift, CEO of The Hartford, and Beth Costello, CFO. Thank you very much for taking the time. Let me just ask if you've got any opening comments that you want to share before we run into Q&A. Well, it's great to be with everyone in person. Hopefully this continues a trend of getting back together out and about. All I wanted to share with you is that, through the first six months, I think that The Hartford is performing at a high level, executing very well. If you look at some of our metrics with the 12-month trailing ROE, if you look at our margin expansion in commercial lines, if you look at what we're rolling out in personal lines with the new platform and product offering. Investment portfolio is performing well. We announced a new capital management plan through 2024, which I think should give investors a great insight into how we're thinking about what we're doing with our excess capital. Pleased to be here and share more of our story. All right. Let's jump into that. Again, I'll start off with questions. Then see if there are any in the room. One perspective that I've heard about The Hartford, and this is my opinion, so put it in your series, ridiculously undervalued relative to your returns, is that it's a little bit more complicated than your typical story because of the various units, both within and beyond P&C. So I want to spend some time really digging into those individual components. One is middle market. Over time, maybe if you go back three, four, five years, middle market wasn't putting up the same level of combined ratio that small business has. More recently, we've seen improvement across the board, but we've seen convergence, or in simpler terms, middle market's gotten a lot better. Can you talk about what's actually informing that, and how persistent those changes are? We're still in a hard market, I think. We won't be forever. Well, first, thanks for noticing. My job. I think Mo Tooker and Doug Elliott have worked really hard to improve that segment of the marketplace. Just maybe a little nuance, when we talk about middle market, we also combine large commercial, which is an excess play in there. By definitions, those combined ratios run a little higher than a pure middle market segment of the market. Even so, through the first six months, I think we were 92.5%, 92.7% of an underlying combined ratio, which is pretty strong for that line of business. I think there's probably three or four themes that I would share with you that we really focused on over a longer period of time. Some of it was just re-underwriting a book of business in certain segments, certain territories. We shed some workers' comp in certain territories like Florida. There was also a great deal of emphasis placed on our toolkit, whether it be an underwriting cockpit, whether it be advanced data science to help our underwriters make more informed and better decisions, whether it be a focus on timeliness and ingesting data, less chasing data, ingesting data into our toolkit, again, to help cycle times. I would also say the acquisition we did in Global Specialty added some products and skill sets that we didn't have. We always talked about why we did that acquisition. I would still do it again today knowing the benefits that we're getting out of it. I think it is helping convince our distribution partners just the broad range of capabilities we have that we didn't have five years ago. That was ultimately also centered around our industry vertical specialization. We were known as a generalist in the day. I think we're beginning to be known as more of a specialist that really does have deep industry knowledge and experience in a full range of particularly general liability and property skills that we can bring. In fact, I hear repeatedly when I talk to our agents about how we've been able to bring total solutions to the table when others haven't been able to do that. Yeah. Phenomenal. The things that you're describing, none of them are dependent on the pricing cycle itself. Yeah, they're independently sustainable. Obviously, we did get a tailwind benefit, we'll take credit for it. Again, I think the insights, particularly the data science and the analytics that we have to support our underwriters today is night and day different than it was five years ago. Yeah. Phenomenal. I want to spend a little time on small commercial just to explain the marketplace. The context for this question is, again, we've got the public markets that are out there are a few companies that focus on smaller commercial accounts, there are dozens, maybe more regional players, in many cases of limited reach, limited resources, limited data. I was hoping you could talk about how that marketplace, the small account marketplace from the insurer perspective, how that's been evolving over the last five or 10 years. Well, you're highlighting another great strength that we have in our small business orientation, principally because we've been focused on it for over 30 years. We made investments in it. We've thought about digital experience. We thought about products. That has come to fruition, I think, very well over an extended period of time. That said, there is good competition. I think we really differentiate ourselves in a couple of areas with speed, sort of cycle times, accuracy, so that when we give a quote on a class to a CSR, they know it's bindable and they could go to bind real quickly. Part of our investments that we've made, again, is in that data science area where we're able to pre-fill a lot of data. We use imagery in property. We have small business scores that score businesses by industry. When you have the data sets that we have, we are able to do things more quickly and more swiftly, I should say, and respond to our agent and customer needs. Feel good about where we're at. I think the thing that I'd like to leave with you is we're always going to continue to invest in small business. We tend to focus in on the small end of the market, but we're also working on those cases that are a little larger, maybe the $25,000 to $75,000 premium where, again, we could bring our advanced technologies and data sets to that market. Right now, that continues to be underwriter interfaced, more than it is automation. The goal would be to try to get to that same level of automation on the small end of the market, because on that small end, 75% of our business could be rated online without human intervention and bound in a matter of hours. That is a big differentiator in the marketplace and why we've been able to grow this block of business. If I look back when I joined The Hartford, we had maybe about $3 billion of premium. Last year, we ended at $4 billion of premium. If you look at sort of run rate, we're going to get to $5 billion sooner than you think. How much sooner? Time will tell. Okay. I mean, not predicting when, but you could see the run rate, and it's principally based on we're doing about $200 million of new business every quarter. You got a 90% retention rate. You got sub-90 combined ratios. I mean, it's full steam ahead as far as to capture additional market share, and I believe we are. Conceptually, I'm trying to think how much of that is a function of the fact that your resources, and again, I'm lumping together a lot of small mutual regional companies, and imagining that your capabilities are. The gap is surging. How much of a driver is that? Huge. Okay. It's huge. Again, there's a lot of good relationships out there, but from a pure competency side, technical architecture, data science, digital experience, we're pretty good. Okay, perfect. If there are questions, please let me know. More than happy to make sure that you're getting the questions answered that you want to ask. A few years ago, one of the strategies, one of the components of The Hartford was to diversify its line of business. There's a perception that there's maybe more comp than was ideal. We've seen, it's tough to look at, let's say, the last 12 or 18 months simply because of so much fluctuation in exposure unit bases. I was hoping you could update us on where you see The Hartford in terms of that diversification. What comes next? I would say The Hartford's been a comp leader for many, many decades. It is one of our strong suits. Again, data sets, capabilities, insights, actuarial techniques. It is a real strong suit. We're second largest player behind Travelers. The goal in diversifying was never to shrink per se, because it's a highly profitable line of business. Beth and I always talk about that. Even if you look at comp pricing trends over the last couple of years, it's still a high ROE business for us, with strong margins. That's given our investments in that product line, both in small and middle, and we do some excess comp even in national accounts. You combine that then with a strong claims capability and getting people back to work. We still like that product line, the real goal was to grow the other lines of business, product lines faster. That was part of our industry specialization, particularly in middle. It's been our push in property to have more robust property capabilities. It's been our push, particularly with next-gen Spectrum in small to add that more robust property and liability capabilities in small. It's been our cross-sell with what we're trying to do with Global Specialty. It's one of the reasons why we did the Global Specialty acquisition that we did 3, 4 years ago was, again, to diversify and have some product lines that we didn't have. Again, 5 years ago, we were probably 46%, 45% workers' comp net written. Today, we're low 30s, the real goal is to still drive that percentage down by growing the other lines faster. Phenomenal. If there are questions, please don't hesitate to signal. If we can move to personal lines briefly. I imagine the near-term priority is to catch up with severity, which has been an issue. Can you update us, first of all, where you see yourself in terms of that particular effort? More broadly, once that happens, and I think it will happen, it's just a matter of time, what's next for personal lines at The Hartford? Let me just make sure everyone's on the same page. When we talk about personal lines at The Hartford, we think about auto and home in a direct response model to AARP Affinity members, where we solicit in various forms, and that solicitation generally has a lower price point than the mass marketing that is done by some of our good competitors. We are a focus on the 50-plus marketplace, a preferred segment. That generally wants a high-value content product, not just minimums to supply sort of a check-the-box on your insurance forms when you renew your car license. But someone that really wants thoughtful protection, both from bodily injury, property, and then we could bundle a home. What we have been doing, as you know, over the last 18 months, is revamping the entire portfolio and platform, both from a technology side and then a product set side. That was accomplished principally by renegotiating a long-term 10-year extension to our AARP endorsement. Some of the bigger features of that new contract were the requirement not to offer guaranteed renewable policies and basically going to six-month auto policies. Home was still in the 12-month category. We chose a new vendor, Duck Creek, up in Boston, for those that know that, to really be the cloud-based platform to host this. And we really wanted more digital capabilities. I can remember on one earnings call, we'll protect the guilty here, one of the analysts sort of laughed that said, "You're trying to create a digital capability for your mature market?" Yeah, because the 50-plus market is increasingly savvy with digital capabilities and digital tools and digital native skills, and we needed a response, and we have it today. We're in 16 states with our new platform. I suspect we'll roll out the new platform in all 50 states in the first quarter in 2024. There are certain states these days that, those states will go nameless, that are creating little problems for the industry. I've heard. I suspected you might have. It's full steam ahead to complete the rollout of that product, and then ultimately to grow our PIF count. As you know, we've been shrinking our PIF count over the last two, three years. Actually, I have minded that, given where we are today, as opposed to trying to aggressively grow our PIF count. We were more disciplined in our new growth orientation because we were rolling out Prevail and make sure we wanted to get that right in all the states. Your ultimate question on where is personal lines these days and how is it going to play out? It is aggressively trying to get rate back into the book. I think the only benefit that I would share, I think we have is we did not grow as fast as others did during the last three years. We didn't discount as heavily. Our gap to where we want to be from an overall return side is less. Doesn't mean we don't have work to do, doesn't mean we're not pushing aggressively for rate in our book of business, but the gap is different than maybe some of our competitors that we need to fill. I think you'll see in the third quarter and into the fourth quarter us increasing our auto rates. We've been increasing our ITB rates, which is sort of the automatic inflation device and policies for home. We're working as hard as we can to get back to rate adequacy in our entire portfolio. Phenomenal. Let me ask this differently. How do you think about scale? Obviously dominant in the AARP channel, but I imagine that other insurers would want to compete for that business in one form or another as well. How big does The Hartford need to be to maintain, to grow its position in the 50 plus? I would say right now on a direct response model basis, we're the fifth largest carrier. There's a couple big names ahead of us that will be really hard to sort of catch. I think we have a level of scale today that allows us to compete effectively. The simple fact is, the more scale you have, the more economic benefits you have, a lower expense ratio. We'd like to be a little bigger. We want to grow thoughtfully and profitably. Again, with our new product offering, Prevail, I think we have opportunities to be a little more offensive-minded in opening up our aperture, appetite, knowing that we don't have a lifetime commitment to live into. Right. That means we could green the book through pricing, through lapses, more aggressively than we could maybe in the old days. If I had to pick a number on it, and I know you're a numbers person, Blair, if we had $1 billion more premium, that would get into a sweet spot of a direct response platform having scale. Okay. Phenomenal. One issue that I've been debating, and this is auto-related, but it's a little bit of an awkward segue, is medical inflation. When we look at it, the metrics we use are the consumer price index. Medical inflation seems to trail overall inflation, which implies that medical inflation is going to get worse, maybe painfully worse over the next 12 months. How are you thinking about that? Obviously, there's a lot of medical exposure in personal commercial auto, workers' compensation. Am I overthinking that? How do you price and reserve for that contingency? I would say the primary lines, and you said it, I'll just say it again, that we have medical inflation exposure is clearly workers' comp, and getting people back to work if they were actually injured and need medical treatment. I would say, obviously in our bodily injury line of business, both commercial auto and maybe even the GL side. What we don't have medical inflation exposure to is in our group benefits. Remember, that's a wage replacement indemnity program. We replace wages. Someone else sort of fixes the body and gets people back together. What I would say is that if you look at the way the comp system, particularly we'll focus on comp is organized. It's a state-based system. It's highly regulated, and most national carriers have fee schedules with healthcare providers that sort of lock in a cost that is generally below retail, consumer-driven medical trends that you see. If, said another way, if you observe an index of broad-based medical that's operating, say, at the 5% level, we could be 2 to 3 points lower than that with our fee schedules for medical providers and even pharmacy. It's always a watch area. We watch it closely. I think we've talked about it in history that we generally think in terms of long-term medical inflation's in the 5%. They've been probably more benign over the last couple of years. Nonetheless, we're pricing for, and more importantly, reserving for, on a balance sheet side, that 5% trend. If that 5% trend doesn't emerge as reserves run off, voila, you got reserve releases. I think we've been prudent. I think we've been thoughtful. I think we've been ahead. If medical inflation really does spike, we will have to adjust pricing. We'll have to think about new business rate of growth in certain lines. Ultimately charge more for the customer because of that medical inflation. I don't see that on the horizon. I really don't. Okay. I really don't. Phenomenal. Again, if there are questions, please let me know. Yes, please. The cyber insurance market is definitely hot, changing, and risky. Our current writings in cyber, just giving round numbers, about $150 million, $175 million of premium. We tend to focus on our small commercial clients the most that really need cyber protection from data breach announcement to recovery. We do have some ransom exposure out there, but we're probably more cautious on that. We're not targeting the Fortune 100 or the Fortune 500 to write standalone cyber. I know some do. We've purchased reinsurance over the last two years to take some tail risk off, particularly on aggregation of events that the bad actors could really penetrate. We're cautious. We provide a product, again, to a certain segment of the marketplace, but you should not think of us of trying to grow that 50%, 60%, 70% a year. We view it as we want to account round with a cyber policy, but we're not going to lead with a cyber coverage to get other things. That's included within small commercial when you report it. That's not a specialty. Yes. Okay. I'm going to jump around a little bit. No, I take that back. It's a specialty product. It's mapped to specialty. Oh, okay. Sold through the, I'll call it the small commercial segment. Understood. Okay, perfect. Going to jump around a little bit because I know this is a priority for a lot of clients, and it's a greedy question, but that's what we're here for, I suppose. Is it greedy or gritty? It's a greedy- Gritty. No, greedy. Let's get gritty. Let's get gritty. Right. I'm not from Philadelphia, but okay. Okay. You've announced, I would say, an impressive and aggressive share repurchase plan. The question we keep getting is, how do you beat that? What would it take to outperform even this higher level of expectations? I was hoping the two of you could talk through that. Do you want to start, or do you want me to? You can start. I would say it's okay to be greedy in this area. Our long-standing preference is to just be a consistent market, consistent bidder for our stock. Over the last couple of years, we've had a philosophy of giving more of an extended view over a two-year, three-year period of time, what we want to do with our excess capital. I think that gives people, again, paints a good picture of what we're intending to do with our excess capital, particularly given the valuation comment that you mentioned early on. Obviously, we're aggressively buying shares back on a quarterly basis, but we do want to have a level of proration to it to be steady. Okay. Beth? I think Chris said it very well. Again, I think when you look at the plans that we've announced, I think speaks very highly to our view of the cash generation that we have from our businesses and the excess capital that we're generating, which is why we were pleased to announce with our earnings release in the second quarter, an extension of our plan through 2024. I think through 2024, Beth could hold me precise on the numbers. Through 2024, the five years, we'll have purchased in about 70 million shares during that time period. I think that's pretty powerful, particularly at these prices, but it's also pretty powerful as far as compounding our EPS growth rate ultimately helping to improve our price to earnings ratio. That gives people, hopefully, a view that we can be a more consistent earner and expander of our earnings profile going forward. I think it's pretty solid. Okay. Phenomenal. Again, looking around just to make sure that I'm not overlooking anything. The lights facing us are a little bit bright, so if I'm missing you, I apologize. I want to move along and spend a little bit of time on group benefits, and the synergies between that and P&C. You've discussed that many times, but I wanted to get in a little bit of more on the mechanics of the business. As I understand it, a lot of it's priced every three years. I was hoping you could talk about, first of all, what drives pricing. We know it's claim cost inflation on the P&C side. What's the analog in group benefits, and is it the opportunity to adjust rates more frequently so that you don't fall behind in case it's an inflationary problem? Let me just address your comment. We addressed it in Investor Day, but I think it's worth emphasizing. I really do view that our platform that we have today of P&C commercial, P&C personal lines, group benefits, and our investment in a mutual fund operation is somewhat separate and distinct, but the core businesses, the operating businesses, are increasingly complementary, whether it be from an underwriting focus, right? I mean, underwriting personal lines, underwriting commercial, underwriting morbidity, mortality. It is a risk-based, margin-based business that we have deep expertise on. We have differentiated capabilities. We're market leaders in most of those segments that we participate in. In fact, we're the number one disability writer, the number five group life writer. We share a common claims platform. Increasingly, a lot of our technology, data science, and operations are integrated, which ultimately for an investor point, means we're able to lower our expense ratios by leveraging all those capabilities within the platform that we have today. I think it's producing superior returns. I think we're a more consistent underwriter, more consistent performer than we ever have been in my 12, 13 years with The Hartford. I feel really good about where we're at today. Your specific question on group benefits. I would say the simple model is incidences, and you can think of an incidence as a disability or a death. That's pretty easy. You die, the beneficiaries get paid, and it's usually a stated face amount. A lot of times through work, it is viewed as sort of supplementary. It's maybe any other personal coverages that you have. Some companies do offer retiree death benefits, usually at a 25%-30% reduction from an average face amount if you're working. Lower exposures for the retiree amount. On disability, it's a disabling incident. We know how to adjudicate that. We know what to look for. Similar, again, to our comp capabilities of ultimately identifying if it's a disabling condition defined by the policy. Some policies are standard, and some policies are tailored for national account clients that might define a disabling event differently. From there, the disabling event is we got the experience to say, how long will someone be out? We know what their wage is, and if it's a 66% or 70% wage replacement, number of days times average wage. That then goes up as a reserve once an event happened. Until then, we're carrying sort of a booked loss ratio based on history. Just think of it as a pick on the P&C side. The nature of the businesses are very similar, except for P&C, you get to renew and price every year. Benefits is generally three-year rate guarantees, both on life and disability. How we really think about that, and I think it's been proved out over the last seven years, is we've been fairly conservative in our incident picks, in our severity, average salary picks, so much so that they produce redundant reserve releases over that period of time. The technique that we use is generally a five-year look back period that informs sort of a base where you start from, and then you project the future incidence trends based on that industry, based on that specific client. Generally, a client that has more than 2,000 lives, 2,500 lives, we would say is statistically relevant to price that case on its own. Okay. Meaning you got history, you got five years of data, loss trends, incident rates, recoveries, and you're able to statistically price for that risk. Anything smaller, we go into our manual rates, which is just an aggregation of experience in our book in similar industries. It's actually remarkably simple. Maybe my tongue doesn't explain it well, we got deep history and as I said, particularly on the disability side, we're the number 1 disability player. We bounced number 1, number 2 with Unum, which is also pretty good in this space. Our national account orientation does allow us to specifically price for risk and exposure in that account. That's particularly important because we still believe we're going to be living in an endemic world with COVID, affecting both mortality and morbidity somewhat, and that's why we've talked about trying to get a couple more points of rate into the book for that endemic state. That's how we do it mechanically. How should we think about rising wages as a risk? No, actually, rising wage is a benefit. Oh, okay. It really is. On the premium side. Yeah. Okay. Generally, there is no COLA or cost of inflation built into someone's benefit. You go out on a disable, you know what your salary is at that point in time, that's sort of locked in. As wages rise, we charge more. Generally, you only have a certain percentage of your population that goes out on disability, that's where the little bit of a pickup of margin occurs. Now, you got to pay higher claims, that's matched up. Right. The lack of incidence that flows through. Okay, perfect. Mike? Good morning, Doug. Thanks for your time. No, this is Chris. Oh, Chris. Excuse me, Chris. Good morning, Chris. Yeah. Remember we played golf. I had a question. Doug is on my mind. We played golf in Wisconsin. Yeah, sorry. I thought we won money together. I'm getting old. Alzheimer's, short-term memory- That's all right loss issues coming in the summer. Anyways, Doug was on my mind. I wanted to give you the opportunity. Doug announced his retirement today, and I wanted to give you the opportunity to comment on what, if any, change in your P&C strategy does this reflect, one. two, change in your capital management strategy does this reflect. three, outlook on commercial loss reserves, which I know you have expressed quite a bit of confidence in the recent past. Yeah. It's good to see you again. I would say, in a nutshell, there is no change. Obviously, this was a personal decision. I've worked with Doug for the last 11 years, Beth and I have. It's been some of the best 11 years. I think we've been a great team. I think we've fundamentally transformed The Hartford. We're grateful for his leadership, his passion, his experience in driving the results that he's driven. I always like to say that someone like that leaves many gifts behind. We're going to benefit for many years to come from the many gifts that he leaves with us. The biggest gift is a ready-made team to continue the strategy, continue executing and performing like we have. I think some of you have gotten exposure to our next leaders over the last 12 to 15 months. You'll continue to get exposure to them. They are fully capable executives in their own right. Capable of continuing performing at the high level that we have. There's no balance sheet issues. There's no issues with a natural retirement for Doug at this point in time, Michael. All right. Thank you. Again, looking around just to make sure that I'm not overlooking anyone. Can we get an update on Hartford Next? At the risk of being too cute, what's next after that? Cute, gritty, greedy. You've got all these adjectives these days. That's pretty good. I never said tall. Maybe I'll start, and you can add in. We're very pleased with how we've executed on Hartford Next. We announced it back in 2020, and we've exceeded our initial estimates that we put out for expense reduction and continuing to execute on that. As far as what's next, we really, through this process, have established just a view of just continuous improvement, continuously looking for ways to become more efficient, that isn't going to change. It's not part of a new program. Our focus on just making sure that we are harvesting all the benefits that we should get out of all of the various initiatives that we have, and I think continuing to execute very well, just, again, pleased with across the board, on how Hartford Next has gone. As I've said in other forums, it really was a company-wide initiative, hit every aspect of the company and the leadership team all working together on making sure that we delivered on our goals. I would just add, one element of particularly the last couple of years, the amount of savings that we've disclosed and generated has allowed us to think differently about reinvesting in the business, particularly in group benefits, with some new platforms and technology and data. Also, Global Specialty, I think, is another beneficiary. We've probably reinvested more than we anticipated when we started the program, the program has allowed us to maintain and drive our expense ratios down while, I think, making good investments for the future in a couple of our major platforms. Okay. Can we talk a little bit more about the technological investment priorities? Okay. In other words, you've talked about group benefits, but specifically, what is it that we can now do that wasn't available two years ago? Yeah. I would share with everyone here that one of the reasons why we did the Aetna acquisition was to improve our, obviously, scale. Aetna had, we thought, a world-class claims system, and it turned out to be the case. It's world-class. We've expanded it. We've added some digital capabilities that we thought we needed and that we had in our environment. I feel really good on the claims side. I would say over the last 15 months, we've installed a new underwriting platform for our group benefit underwriters. Again, more digital, more end-to-end, less rekeying of data, and then able to feed our claims systems automatically, which is important because you want to know who's covered before you start paying claims. The last phase in group benefits, I would call it just the administrative platform to maintain 15 million-20 million policies on individual people. We have maybe 30-year-old technology there, a lot of connected tissue that needs to be re-engineered. We picked, again, a vendor platform. This is very similar to what we did with the Guidewire side on the P&C side. We had 30, 40-year-old systems, and we went to a third-party vendor called Guidewire. Likewise, we're doing that here, going to a third-party vendor. We will roll out that new platform to all our products, all segments, over a four-year period of time. It'll be a multi-year project. We do that somewhat for dollar side but also pacing and teamwork. I think that will eventually, our two big businesses, commercial and benefits, will have modern platforms for the next 20, 25 years. We'll have some, I'll call it, final, my words, Beth, integration activities with Global Specialty in simplifying their platform. That's one business unit that's already in the cloud. All their apps are in the cloud, and we'll continue to simplify that, particularly on the claims side. The other corporate-wide initiative is we will move all our apps and data to the cloud over a five-year period of time. Again, another multi-year period. We will get out of the business of on-prem with our apps and applications. IBM Kyndryl manages our on-prem services today. We get to eliminate that and then utilize all the skills that AWS has in managing an infrastructure for a Fortune 200 company. Okay. That's what we're up to. That's very helpful. Thank you very much to Chris and to Beth for a very helpful session. Hope meetings today go well. It's good being with you. Yeah, thanks again. Thank you so much.