All right. Good afternoon, everybody. Before we get started, for important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosure. The taking of photographs and use of recording devices is also not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative. With that out of the way, we're privileged to have Jack Roche, the President and CEO of Hanover Insurance, as well as Jeff Farber, the Executive Vice President and CFO of Hanover. Gentlemen, welcome. It would be nice to kind of maybe do a brief intro on Hanover, especially as we head into the rest of this relatively interesting year, so to speak. Yeah. 1st and foremost, Bob, thanks for having us and appreciate the conference. I think some of you know us, some may be less familiar with us, but we're really excited, frankly, in the position that we've put ourselves in, in this most dynamic time in our business. There isn't much that isn't changing or that doesn't require constant evaluation and collaboration. In a lot of ways, what we've been through over the last few years in terms of addressing some challenges head-on related to inflation and the severe convective storms in the Midwest have given us an opportunity to really strengthen the company on a number of dimensions and allowed us, frankly, a marketplace that has allowed us to accelerate the diversification of our business. As we look forward, we're excited about the fact that we have the most diversified earnings stream that we've had in the company and that we see the emerging opportunities that are coming to those companies that have a really good access to the better business through the better agents, but also have the capability inside of their firms to evaluate loss trends, to be able to look forward and not just look backward. We really believe that we've not only put ourselves back in a nice trajectory from a financial standpoint, but we've strengthened our ability to understand the business trends that are going on around us and to accelerate our profitable growth. Last but not least, I would just say our value proposition for those that know us less is that we have a unique partnering strategy with the best agents in the country. We bring a broad set of diversified, specialized capabilities to the marketplace, and we have an increased focus on the end consumer in terms of leveraging technology and some of the transformation opportunities to better serve customers in a more efficient way. We think that's a winning strategy, and we're really excited to share more. Excellent. In that spirit, right, if we think about what has happened recently, you've executed on multiple initiatives: reducing concentration in the Midwest, introducing terms and condition changes, adjusting rates, proactively manage property mix in commercial, and a variety of other things. Right? What are the experiences that you're taking out of this process? What can you maybe say about the state of the marketplace and your overall strategic positioning going forward? What are the things you're excited about? Yeah. I think the silver lining of what we've been through is that I think we've got the chance to test drive our company's capabilities. How sophisticated are we in terms of analyzing the trends that surround us? How agile are we in terms of moving our portfolio management and our pricing and being able to lead in some ways the marketplace, particularly in the Midwest? I think we learned that our partner strategy with agents not only gives us some offense in the good times, but has borne fruit on the defensive side when we had to make some pretty substantial changes in terms and conditions, in particular in the Midwest, and get the full support of our agents in doing so. I think it's both an internal and an external view that we have. Our relevance to the best agents in the country and our ability to maneuver through some pretty challenging times, I think, is a testament to the strength of that distribution strategy. I got to see firsthand that we have a very talented and engaged team that's up for the challenge of managing through this very dynamic and uncertain time in our business. Got it. No, that's very helpful. Maybe if we think about the overall performance, right, despite some macro volatilities earlier in the year, you've given out relatively solid guidance. Your 1st quarter ex-CAT combined ratio was very strong compared to the full year guided range. As additional pricing is coming in, it feels like you should be in a very good position to achieve your combined ratio 88.5%-89.5%. Can you maybe talk about maybe are there any additional incremental that we should think about? Are there any additional opportunities on the expense side or on the loss ratio side? What are some of the critical areas that you can think about from an underwriting perspective? We're really pleased with the performance in the 1st quarter. Things are really going well, notwithstanding the somewhat anomalous elevated property losses in the commercial space, which happens really once every few years. You get that kind of a quarter. In terms of specialty, it is really performing well. Personal lines has improved so dramatically and is great, and I think we're optimistic about core commercial. Having said that, we're only one quarter in, and I think it's a little early in the year to be updating a view on guidance. We would love to outperform, and we hope to do that, but we'll see how that goes. We're getting price above loss trend, and that bodes well for our future. Of course, the NII is really strong. We're quite bullish about our ability to deliver this year. Got it. On your 6-7% premium growth guidance, from that perspective, how much would you say is coming from pricing, and how much of it was more volume and exposure growth? Is there a way for us to think about that? Sure. Obviously, the 1st quarter came through a little bit lower than we had planned for and that we were hoping for, mainly attributable to our small commercial business, which just simply got off to a bad start on new business. We already feel like we're making the adjustments there to get ourselves back on that trajectory in a business that, frankly, is generating terrific returns. If you look at the overall guidance and the initial plan, a substantial amount of it is price and exposure. We look at each business in terms of what not just the PIP growth is, but what the absolute growth is in the business. One of the dynamics in that, if you just look at even personal lines, is that if we grow at 3-5% this year, that clearly means that we're moving backwards from a PIP perspective. Part of that is by the design in that we're gradually moving up in the coverage A position with our Prestige product that is geared for kind of the upper middle market and over time allowing some of the lower end that is more commoditized to kind of move out of the portfolio and certainly not replace from a new business standpoint. We're actually, I think, right where we wanted to be in terms of overall growth, but we believe that if we navigate this year well, as we hope to, that there is plenty of additional growth opportunity in the future. Our aspiration is to increase our market share in our businesses, not simply ride the pricing wave. Right. No, for sure. Speaking of pricing, though, if we think about the personal lines, right, you took some pricing increase, and you're probably looking to prioritize profitable growth. From that perspective, can you maybe talk about what are the additional opportunities you are seeing in the personal line? Also, further, can you maybe give us a little bit more color on how you're managing the Midwest exposure as well? 1st and foremost, I'd be remiss if I didn't once again compliment our personal lines team. I think the execution over the last 18 months has been nothing short of flawless. We have driven market-leading price. We've introduced deductible terms and conditions in the Midwest that were not in place and, frankly, are being relatively well perceived. That's because we move so fast that many of the people we compete against, the regionals and the mutuals, are still in the third or fourth inning of getting the price they need and for whatever reason are not deciding to leverage deductibles quite the same way we are. It puts us in a relatively good position in that we're not only kind of coming down from the high watermark of our pricing, but we are giving some marginal credit for the deductible implementation. When a customer in the Midwest is looking at the price that they can get today from an alternative versus the way we're positioned on a go-forward basis, it comes through quite favorable. That leads us to the other part of your question. We are committed towards using this time to further diversify our portfolio, not just in personal lines, but particularly in personal lines, making sure that the earnings volatility that we witnessed in 2023 does not get replicated. That is what is causing us to continue to be very cautious on new business. In the vast majority of the other states, we are already making our way into a more elevated growth. We like the margins that we are seeing in almost every state. That, as you can imagine, the growth in those states combined with some suppression in new business in Michigan and a few Midwest counties that surround that actually really catapult that diversification on a modeled basis. We are seeing that come through pretty dramatically. Got it. No, that's very helpful. One thing in that business mix is that talking about the increased frequency and severity of catastrophe events and its previous impact on your business, right? Particularly given the recent weather patterns and loss patterns, can you maybe talk about how is the company addressing those increased frequencies and severities? Sure, I'll jump in. We've been extremely active at addressing those frequencies, particularly across and severity across the Midwest. Number one, it's been price, price, price. Over the last several years, we've gotten dramatic increases as necessary. Number two are the terms and conditions. We've increased our all-peril and wind and hail deductibles, and those are proving to be useful in addressing particularly roof issues and hail issues, but really across both the CAT and ex-CAT portfolio, they've been really helpful. Finally, micro concentrations throughout the Midwest, and particularly in Michigan, disaggregating some of those, thinning those, particularly with new business, but in terms of some non-renewals, it's dramatically improved and enhanced the performance and how that portfolio behaves. I think also, Bob, the thing strategically is that we believe if we can continue to navigate those property aggregations and pricing our product appropriately, the competition on the homeowner side of the business obviously is lessening. People are not as anxious to write home. We see some companies that their aspirations were to be more of a bundler and do account round and to target that, they have kind of calmed that part of their strategy down. That, I think, longer term plays to our advantage that we are the best account writer in the independent agency channel. If we can solidify that position and find a way to navigate the weather appropriately, I think in some ways these dynamics might play to our advantage over time. I think that's an interesting point, right? Because from kind of like what you said before, right, like Homeowners side, the intent for people to compete is lessening. On the Personal Auto side, it does feel like from all the data we're seeing, people are much more willing to compete, almost a decoupling of the bundling story. Curious is your view as to how do you navigate that change in competitive environment? Is this something that you can take advantage of going forward? Just curious your thoughts. We've been very aggressive, myself, Dick Lavey, and other parts of our management team getting out and talking to agents about this dynamic that at the end of the day, we bring value to the value channel. It's really important that the agents across the country realize that this is an inflection point and one in which they need to reinforce that value proposition with their customers and not let that decoupling happen. We're not seeing that in a dramatic fashion. In fact, if you look at the direct-to-consumer and the captive and the IA channel, the IA channel is showing real resilience. There is more shopping going on, but that's different than cross-channel movement. I would tell you that we are getting a really favorable response from agents that they realize this is an opportunity to, and people want somebody to talk to when these dynamics are happening. The trusted advisor model is very valid given all the volatility and uncertainty that surrounds us. Got it. Maybe on the question of tariff, this is probably for Jeff. From this perspective, if we think about our first quarter earnings call, you kind of talked about limited impact, probably mid-single digit one-time impact, tariff impact for your business. Things have since calmed down a little bit, a little bit being the emphasis here. Just curious, have your views changed on tariff or given the narrative today, are you preparing differently in terms of how you think about the financials? Yeah, things change regularly coming out of the administration, for sure. I think we're getting better data and better analysis, and we've got metrics that we look at, and we can see what's happening quickly, and we've got plenty of time to prepare. I suspect my view really has not changed that much, Bob. I think it'll be largely in auto. It'll be largely in personal lines. That's really the biggest area. We'll have time to deal with it. If and when tariffs go in and really start to show themselves, I suspect there'll be a small delay for when it starts to impact the price of particular goods, think used cars, new cars, auto parts, there's some inventory. How does it build into steel and lumber and all those issues? We're extremely well prepared to be able to address in terms of price, and I think we can react to it. I suspect at this point, as we're getting later in the year, it's less of a 2025 issue and probably shows itself on an earned loss basis really in 2026. I think we're very well positioned to deal with it. For sure. Yeah, time flies when you're having fun. It sure does. Maybe pivot a little bit to specialty, right? If we look at specialty excluding programs, you are seeing very strong results. Can you maybe comment on the opportunity set here and then how should we think about the growth trajectory as many other carriers also find the segment to be attractive as well? Sure. Yeah, I think, listen, we are really excited about our specialty business, what we built over time, a billion 5+ portfolio across nine really business areas and 20 something products. What makes us unique in the specialty space is that we focus on a variety of property and casualty-oriented specialties. The average account size tends to be on the lower side. Your opportunity set is more about do you have operating models and visibility within particularly the retail channel to extract that business out in a cost-effective way and help independent agents improve their EBITDA margins in this aspect of their business. We are not running and hanging around exclusively in the wholesale channel or working on large accounts that always have pricing pressure both ways through the cycle. It's a more stable subset of the specialty business, but it requires technology and distribution to be able to get in and bring that business over and help agents genuinely operate their business models more effectively. You can imagine with the distribution consolidation that continues, that's just a really high priority, not just from the top 25 agents, but we see it well all the way down into the mid-size agents. They need help. If they do not have companies that have done the work to help streamline, to make the appetite broader, and to be able to leverage technology and operating model changes to help their margins, not just the company's margins, then it does not help them go forward. We are really excited about the progress we are making in specialty and the value proposition we present. You feel fairly insulated from the competitive environment? Yeah, there's always competition, but I do think that we are not in the more volatile parts of the business. Even in the E&S sector, we write small face value E&S business, both retail and wholesale, but we also have a lot of our E&S businesses like the 6th line of business associated with other parts of our business. So we're not really just an E&S for E&S play. Got it. No, that's helpful. If we can maybe pivot into the commercial auto a little bit, commercial auto industry as a whole is seeing some clear reserving pressure, uncertainty around loss cost trend, other factors, social inflation. Can you maybe talk about how you feel about your operating environment in commercial auto and then maybe also a little bit of commentaries on your reserves? I believe you're fairly adequately reserved, but just curious as your view on how you think about reserving in this line, how you think about the risk and things of that nature. Yeah, it's a relatively small line for us. We don't really do long-haul trucking. It's a truck which is related to a small business generally. In many cases, it's a private passenger vehicle, which actually is used in their business, so it becomes commercial. We're certainly not immune. It has, I think, been shocking to anybody in P&C just how long the underperformance of commercial auto has been. The severity of issues continues to worsen even though people keep getting price upon price. Obviously, the litigation environment, it's the epicenter of lawyer involvement. It seems to be easy for them to go after a commercial auto claim. They have a formula. They know how to do it. Having said that, we've been reserving prudently for a long period of time, and we feel comfortable with our reserves. Going back to 2016 when we took a reserve charge and even since 2020 when we took a prudent position about the frequency benefits coming out of COVID, I think one has to have uncertainty reserves, and this certainly is defined and meets the classification of uncertainty. I think we're well positioned from a balance sheet perspective. Got it. So we're certain to be uncertain in some way. But how do you feel about pricing in this environment? Do you feel you have enough pricing for commercial auto? Yeah, listen, we don't write, we're an account writer, and we try to look at every line of business and have some integrity in our pricing by line of business. As Jeff said, this is kind of the industry has suffered for over a decade to get on top of a trend that clearly has been deteriorating. I think the way we approach it is we have restructured, frankly, the way we price commercial auto in a more disciplined, particularly in areas like fleets where people will unit rate them and kind of move away from the integrity of the base rates and how that works. We have strengthened that tremendously. The real issue is the umbrella. At the end of the day, the severity lives in the umbrella limits. How have you attacked your pricing there? What kind of retention do you have in your reinsurance? Not that you can avoid the issues just by passing it on to the reinsurer forever, but it does allow you to kind of protect the short-term earnings volatility while you solve for the longer-term severity trends that are becoming more evident. I feel really good about the way we're pricing our product today. As Jeff said, I think we've done a really nice job of being pretty prudent on our reserves. Got it. No, that's very helpful. Maybe take a step back. Just looking at core commercial overall, right? You're obviously seeing favorable pricing trend. Staying on the concept of pricing, obviously there is some competition in properties, but broadly speaking in commercial, is there anything in pricing that you feel is improving or any parts of pricing where you feel you might need to do more work on? I would say that on the improvement side, I see the early indications of the liability lines gaining some more respect. You can't cry wolf about liability trends and then go out and price mid-single digits, which is where the market has been for too long. I see people, now that's coming on simultaneously with some aspects of the property lines becoming more competitive, some of that appropriately in some areas, maybe a little bit too quick, particularly in the E&S side of property. I think I see it's probably recovering a little too fast for our liking. At the end of the day, I think the pricing, I still think in aggregate, Bob, the pricing is pretty rational. I started in this business in the mid-1980s. I know what a real hard market looks like, and I know what a real soft market looks like after a real hard market. I think the better companies that can underwrite prudently, that have better pricing integrity are going to be really well positioned because the market is responding. The reinsurance, I think, landscape is changing to make sure that the discipline comes at least just in time to deal with some of these trends. Right. You essentially exert that prudence on the company to make sure that nothing is. Yeah, we're a gross line underwriter and pricer, and we don't plan on giving our problems to reinsurers. We have formidable relationships there. In some ways, what you're going to see is the companies that do a good job in the marketplace, pricing their product, underwriting appropriately, will get rewarded by reinsurers either in terms of relative price or being able to maintain their attachment points, which I think is going to be a really important aspect to watch over the next two or three years. No, that's helpful. On earnings, one thing we're seeing is middle market business is rebounding. Also, you'll see expecting better growth out of the small market as well. For a small commercial space, can you maybe talk about the momentum in both and then maybe what indicators that we should pay attention to heading into the rest of the year as well? Yeah, listen, I think we admitted in our first quarter call that we were disappointed with how we came out of the block in small commercial. We've had tremendous momentum. We've got as much submission, we've had more submission activity than we've ever had, more account manager and CSR engagement. The reality is, I think we just were probably too ambitious with our pricing for too long, particularly given the margins that we're generating. We have really made some adjustments on the new business pricing. We believe that we can get back on the trajectory that we've been and that we intended to be on, and that is a very strong business for us. Middle market, while we got out of the gates relatively good in the first quarter, this is still the business where I think the earnings volatility of the industry kind of resides. Even though we play on the lower side of the middle market sector, that's where the limits are more exaggerated both for property and for liability. We are going to be more cautious. We have aspects of our middle market business that are incredibly profitable, and we're competing quite robustly, but we do have other areas that are maybe still coming into their own in terms of profit margins, and we're being more cautious. Our belief is that heading into 2026, the companies that can prove that they are on the right profitability trajectory will get rewarded with growth. There will definitely be some new retrenching heading into the new year. Got it. Maybe if we think about capital allocation, share repurchase, right? You have about $275 million remaining on your share repurchase capacity as of April. Just going forward, can you maybe help us think about the capital allocation framework? Because you are generating a decent amount of cash, and you are essentially just curious as how you think about that cash generation abilities going forward and how you're going to allocate that capital going forward as well. We generate a lot of capital, and we're in a very good capital position. Growth will use less than half of that organic growth, at least for the growth that we expect to have this year, not the growth that we had in the first quarter. That still leaves a fair bit of capital to be deployed. We're committed to the ordinary dividend. We've increased our ordinary dividend each year for more than 20 years, and that's something I expect we'll be committed to again. Share buyback at these levels. In this market, I think share buyback will play a meaningful role in the capital management of the firm. Got it. No, that's helpful. One thing we kind of skipped a little bit earlier was on the program side, right? Obviously rest of specialty is very strong, but can you maybe give us some updates on the profit improvement plans and then also the work that you've done around the program business segment? Yeah, listen, first off, we write program or programmatic business across a broader subset of our company than just our program business unit. The reason why we've given some cautionary wording around programs is that it has more to do with kind of the macroeconomic situation or the macro environment that we're seeing in programs in the MGA, MGU space that causes us to pause a little bit. The actual portfolio, so less than half of our programmatic business resides in the program unit, and that business is in probably the best financial shape that it's been in a decade. Our commentary more is about new business growth and wanting to not over-participate in what we think is a challenging time for the primary carrier in the program space. We will see how that plays out. Occasionally, we get some non-traditional programs that come to us through our retail agents that do not fit into that MGA, MGU kind of environment, and we are entertaining those. That is why the growth that we give in specialty is a little bit of, hey, if we keep programs in the box for a little bit longer until the opportunities are more fruitful, we can focus on what we think is the most profitable part of our specialty portfolio. Okay. No, that's very helpful. Maybe last one from our side is commercial multi-peril, right? That's a large portion of your business. And then as we think about that book's performance overall, can you maybe give us some commentaries on how should we expect the overall core loss ratios going forward in terms of when will that revert to a more normalized range just going from where the performance is today? Yeah, if you look at the last five quarters, and I think about it as core commercial, which is small and middle versus just narrowly the CMP unit versus BOP, et cetera, it's generally been in the 58 and change range for a loss ratio. There was one quarter, maybe 2nd quarter of 2024, where it dipped to 55. Of course, the reason we're talking about it is it ballooned to 61 in the 1st quarter of 2025 on the back of a half a dozen or so extra losses, which were large losses from what we normally would get, think fires or $3 million plus each. It happens from time to time. It is every few years you see one quarter where it happens. No reason to believe that it is part of a pattern. There's no commonality of those losses. I have every optimism really about the core commercial business and a return to normalcy on those loss ratios. Got it. No. Got it. No. I think if you look at strategically what we've been saying over multiple quarters is that we're growing our small commercial business. We've been more conservative on our middle market business, which is where the limits and frankly a lot of the bigger large losses reside. I don't think this is a situation where anybody would look at us and say, well, they've just been growing the wrong business at the wrong time. We've been probably very disciplined in the core space, particularly in middle market. That's what gives me confidence that this is an anomalous every few quarters type of situation. All you have to do is look back to the 2nd half of last year where we were guiding people away from a couple of quarters that were better than our run rate, and we did not want people to think that that was kind of the go-forward run rate going for our business. We are really proud of what we have done in core commercial, got really great leadership, and we are bullish that we will continue to perform. All righty. Really thank you very much for your time. It sounds like you're well positioned for profitable growth going forward. Once again, thank you. Thank you, Bob. Appreciate it.