Travelers Companies Earnings Call Insights: Loss Estimates and Lack of PIF Growth
Randy Binner – FBR Capital Markets & Co.: I have a question on the Sandy loss. Just trying to get a sense of where you might be in kind of the finality of your loss estimates, particularly interested in kind of cost inflation on reconstruction. If there is a tail from business interruption and if you can quantify closed versus open claims at this point?
Brian W. MacLean – President and COO: This is Brian. Obviously, with this magnitude of event there are always claims and issues that are still outstanding, but broadly speaking there is no significant issue that we are looking at from the business interruption or liability or whatever side that leaves us feeling that there is a big tail. I’d turn to Doreen on the specifics with the closed claims if you’ve got some of that data, Doreen and want to share it.
Doreen Spadorcia – Vice Chairman: This is Doreen Spadorcia. Jay quoted you some statistics as to where we were 30 days from (indiscernible) reported from first notice of loss at this point and toward further on then 30 days. Probably on the property side, we are at about 95% of losses in that position. In terms of tail issues on auto, we still have salvage losses to collect and we are in the middle of doing that, but those we have factored in. On both (indiscernible) those losses tend to take a little bit longer as well. But again all of them have been factored into our analysis. So, we are pretty well through most of those claims that were reported.
Jay S. Fishman – Chairman and CEO: During my comments for the Personal Insurance, your comments were to (indiscernible).
Doreen Spadorcia – Vice Chairman: Absolutely, thank you, Jay.
Randy Binner – FBR Capital Markets & Co.: So, just to clarify, you’re saying 95% closed on those property claims?
Doreen Spadorcia – Vice Chairman: Yeah.
Randy Binner – FBR Capital Markets & Co.: Then just one on demand surge, a lot of reconstruction going on in New Jersey, is that becoming an issue like it has over the past events or is that under control?
Doreen Spadorcia – Vice Chairman: I would say at this point, our estimates of what we saw when we initially evaluated the property are holding. We always have situations, Randy, when someone has additional damage and we look at those and that’s kind of the normal course, but at this point nothing out of the ordinary.
Lack of PIF Growth
Jay Cohen – Bank of America – Merrill Lynch: Just two questions. The first is, in the Personal Auto side, the PIF count shrank a bit more than it had been. It looks like renewal is relatively stable. New business is down. I’m wondering if you could just give us some color around that PIF growth, because that was down a bit more than it had been more than we had expected.
Jay S. Fishman – Chairman and CEO: Jay, this is Jay Fishman, and I think you are analyzing it correctly. The PIF is being impacted by our pricing increases. We recognize that where in some areas that there are less expensive alternatives that are available to agents and in some cases they are embracing it. Our pricing strategy is based on what our loss trends look like and the severity dynamic is real and it is substantive and doesn’t appear. We may be wrong about this, but it doesn’t appear to be a Travelers only phenomena. This seems to be broad-based. So, we’re taking the actions that we know we have to, to produce appropriate returns over time and if the policies in force shrink somewhat, that’s fine, and we will just continue to price it as we know we have to, to achieve the returns that we speak about.
Jay Cohen – Bank of America – Merrill Lynch: Second question, in the past you have given some discussion or guidance around capital management and kind of forward-looking, as you look at 2013, can you talk about your buyback expectations relative to your earnings?
Jay S. Benet – VC and CFO: This is Jay Benet. I’d go back to the wording that we had in the Ks and the Qs. Nothing’s really changed. We have earnings that we’re going to be generating. From those earnings we need to have capital to support whatever business growth we have. There may be some needs like pension contributions and to our qualified plan, whatever, we lay those out, but ultimately, the idea behind our capital management strategy is to return all the excess capital that we have to the shareholders and that’ll go back to shareholders in the form of dividends as well as common stock repurchases and it’s really going to be driven by the level of earnings ultimately.
Jay S. Fishman – Chairman and CEO: It’s Jay Fishman. Let me just come back with one (indiscernible) on the PIF count, you did see it, but I just want to make sure it’s clear. Our retention remains stable. We are not losing existing accounts. What we have done is experience a lower level of new business than historical trends, but retention importantly is remaining stable.
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