Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How do you see the adequacy of pricing in the casualty market, particularly in excess, and do you think it will be a growth area this year? A: Andrew Robinson, CEO: We are taking a cautious approach to growth in the casualty market due to increasing loss inflation. While some companies report significant rate increases, we are selective about where we grow, avoiding areas with high personal injury exposure. We believe that the current rate increases may not be sufficient if loss inflation continues to rise.
Q: How do you view M&A as part of your growth strategy? A: Andrew Robinson, CEO: While we are more actively looking at opportunities, the bar for M&A is exceptionally high. We prioritize our successful organic growth engine and are cautious about taking on balance sheet risk. We hired a head of corporate development to explore opportunities, but any acquisition must not disrupt our organic growth.
Q: Can you provide an update on submission flows and any changes in the quote-to-submission or bind-to-quote ratios? A: Andrew Robinson, CEO: We are seeing strong submission flows, and there are no significant concerns. The quality of submissions varies, but we are confident in our ability to write new business. There are no notable changes in the quote-to-submission or bind-to-quote ratios.
Q: What implications does the shift towards less PNC cycle-exposed lines have on the expense ratio? A: Andrew Robinson, CEO: We expect acquisition costs to rise slightly, but our other underwriting expenses benefit from scale. We aim to maintain a sub-30% expense ratio. Some lines, like A&H, have higher loss ratios but are capital-efficient, contributing positively to our return on capital.
Q: How do you approach new product launches and the associated loss picks? A: Andrew Robinson, CEO: We apply a margin above indicated loss picks for new businesses, with a greater margin for newer lines. We also hold back corporate IBNR to add further risk margin for new launches, ensuring a cautious approach to new product development.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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