Loews (US:L)2023-05-01 12:00Financial Data and Key Metrics Changes - Core income increased by $27 million to $325 million in Q1 2023, representing a 9% year-over-year growth [6][24] - Net investment income rose by $77 million year-over-year to $525 million pretax, a 17% increase [6][24] - The all-in combined ratio was strong at 93.9%, with pretax catastrophe losses of $52 million, which is below the 10-year Q1 average [6][7] Business Line Data and Key Metrics Changes - The P&C underlying combined ratio improved to 90.8%, down 0.6 points year-over-year [7] - Specialty segment's all-in and underlying combined ratios were both strong at 90% [11] - Commercial segment's all-in combined ratio was 96%, with an underlying combined ratio of 91.8%, the lowest on record [15] - International segment's all-in combined ratio was 97.2%, with an underlying combined ratio of 89.3%, a record low [22] Market Data and Key Metrics Changes - Gross written premiums in the commercial segment grew by 19% in Q1 2023 [15] - International gross written premiums increased by 10% or 17% excluding currency fluctuations [22] - Retention rates remained high at 86% for commercial and 83% for international segments [11][22] Company Strategy and Development Direction - The company is focused on growing profit dollars across business segments and strengthening industry verticals [10][11] - There is a continued emphasis on securing high-quality new business opportunities, particularly in commercial and international markets [11][21] - The company aims to maintain strong retention levels and capitalize on improved terms and conditions in the marketplace [18][36] Management's Comments on Operating Environment and Future Outlook - Management highlighted strong top and bottom line performance, with pricing resiliency persisting in several lines of business [36] - The company does not foresee significant changes in the marketplace, with rates expected to continue to rise in certain areas [18] - Management remains conservative in underwriting and is focused on maintaining appropriate insurance to value during inflationary times [18][19] Other Important Information - The effective tax rate on core income was 20% for Q1 2023, with expectations for similar rates throughout the year [35] - The company announced a regular quarterly dividend of $0.42 per share to be paid on June 1, 2023 [35] Q&A Session Summary Question: Can you discuss reserve development in the Specialty and Commercial segments? - Management noted that development was flat for both segments, with unfavorable claim settlements in older accident years offset by favorable reserve development in other parts of the specialty portfolio [39][40] Question: What is the outlook for catastrophe losses in 2023? - Management refrained from providing specific guidance but emphasized conservative management practices [41] Question: How has D&O pricing been affected by recent banking sector issues? - Management indicated that D&O pricing had stabilized closer to flat after a negative trend in Q4 [44]