Financial Data and Key Metrics Changes - Core earnings for Q2 2025 reached $981 million, or $3.41 per diluted share, with a trailing twelve-month core earnings ROE of 17% [19] - The company reported a strong performance with an underlying combined ratio of 88% in Business Insurance and 84.8% in Global Specialty [20][10] - The expense ratio for Business Insurance improved to 30.6%, a 0.5-point improvement from Q2 2024 [20] Business Line Data and Key Metrics Changes - Business Insurance saw written premium growth of 8%, with small business delivering a 9% growth and an underlying combined ratio of 89% [19] - Personal Insurance reported core earnings of $94 million, with a 7% increase in written premium, driven by a 12.7% renewal written pricing in homeowners [20][21] - Employee Benefits achieved a core earnings margin of 9.2%, driven by strong life and disability results [24] Market Data and Key Metrics Changes - Global Specialty reported a 9% growth in written premium, with strong performance in casualty, auto, and inland marine [11] - The company expects to exceed $6 billion in annual written premium in 2025, fueled by double-digit increases in auto and packaged products [8] - Business insurance renewal pricing, excluding workers' compensation, was strong at 8.1% [12] Company Strategy and Development Direction - The company is focused on expanding market presence and investing in technology and data science to enhance underwriting processes and efficiency [6][9] - Strategic investments in AI are expected to drive enhanced efficiency and profitable growth [9][16] - The introduction of the Prevail offering aims to unlock additional opportunities in the agency channel [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in capturing additional market share and delivering profitable growth, citing strong execution and market opportunities [17][18] - The competitive dynamics in personal lines are expected to intensify, but the company feels well-positioned to grow responsibly [36] - Management remains optimistic about the investment portfolio, expecting limited partnership returns to improve in the second half of the year [26] Other Important Information - The company repurchased 3.2 million shares for $400 million during the quarter, with $2.35 billion remaining on the share repurchase authorization [27] - Catastrophe losses for the current accident year were $212 million before tax, primarily related to tornado, wind, and hail events [22] Q&A Session Summary Question: Mix of in-force business in Global Specialty and growth areas - Management highlighted a diverse product mix in Global Specialty, with strong growth opportunities in casualty lines and a focus on small and middle customers [30][33] Question: Timing for growth in personal lines - Management indicated readiness to grow in personal lines, with expectations for policy count growth in 2026 [36] Question: Changes to full-year guidance for Business Insurance - Management expressed satisfaction with current performance and maintained guidance for consistent margins [40][42] Question: Drivers of strong results in employee benefits - Strong recoveries in long-term disability and favorable mortality trends contributed to the strong results [43][46] Question: Dynamics in commercial property markets - Management noted strong growth in the property book, with pricing trends being monitored closely [52][55] Question: Impact of tariffs on personal auto - Management expressed optimism regarding tariffs, indicating that recent agreements may mitigate potential impacts [100] Question: Sustainability of improved expense ratios - Management attributed improved expense ratios to operating leverage and efficiency gains, with plans for continued marketing investment [103][104] Question: Trends in workers' compensation and medical severity - Management confirmed that medical severity remains within expected ranges, with no significant changes anticipated [110]