Elyse Greenspan: Hey. Thanks. My first question is on capital, I guess, following up on the earlier discussion. So Beth, you said $350 million buyback in the Q1, which is in line with the Q4 level. But you did point out, right, like the dividends out of group are going to be a few hundred million dollars higher in 2024 relative to 2023. So I think that that would give you a tailwind to perhaps have a higher level of buybacks in 2024. Is it just timing of dividends? And should we think about buybacks picking up in the back three quarters?
Beth Costello: Well, Elyse, I’ll start with. I mean, we’re executing on the share repurchase authorization that we have in place. And that is what we’re executing to and as I said, we expect $350 million in the first quarter, and we’ll continue to execute on that. As we think about dividends in total for 2024 operating company dividends versus 2023, they’re up about $100 million in total. So that all obviously goes into how we think about the balance sheet strength going forward, but not making any changes on our current share repurchase plans.
Elyse Greenspan: Okay. Thanks. And then my second question is on the Commercial Lines guidance. So I think you said underlying margins would be consistent but did point to a headwind in workers’ comp. As Chris, I know you said pricing there would be flat-to-negative and we’ve gone through The Hartford Next program. So how do you think about the split between the loss and the expense ratio within commercial when you’re coming to like an overall stable underlying margin in 2024?
Chris Swift: Yes. Again, Elyse, what I tried to describe is that the setup is similar, right? So if there’s pressure in comp, it needs to be offset by other components, non-comp in our product lines. You’ve seen what we’ve done with accelerating pricing, particularly in the fourth quarter. That mindset continues into 2024. So when I say hold or expand, that’s what I mean. And look, I can’t predict with great precision the top line, but I think there’ll be some slight expense leverage. That will also contribute overall. So that’s what I would say.
Elyse Greenspan: Thank you.
Operator: Your next question comes from the line of Josh Shanker from Bank of America. Your line is open.
Josh Shanker: Yes. Thank you for taking my question. Question about adverse development covers. You have the NICO cover for the asbestos in 2017. You have the Navigators cover from a few years ago. Both are having or about to be exhausted. As a sort of operating principle, when you buy an adverse development cover, do you buy with the expectation that it’s likely it’s going to be exhausted? Is that how it’s structured? Or do you – is it kind of a surprise that you get to the end of the cover?
Chris Swift: So ADC utilization, all I would say is it really depends, obviously, right I mean on the obviously on the navigators acquisition. It was part of the purchase price and funding there and dealing with it. So that’s different. The A&E deal that we did with NICO was just slightly different as far as long term. So if we would do anything again in the future, it would have to be economic for us first off, and a lot of those deals that we did prior were just in a lower interest rate environment, just a different part of our development as an organization. And our performance, so the guiding principle that Beth and I talk about all the time is just what makes sense from an economic side, because they’re not cheap and they’re actually expensive.
So you give up things to do it, to have that economic cover. So I would just say, Josh, it depends, and we’re going to always try to think in terms of what is the best economics for the shareholders and pursue then the right strategy from there.
Josh Shanker: And back when you did the 2017 Governor, you were in a different capital position than you are today. I assume so. Even if there was a deal available to you today, perhaps it doesn’t the urgency is different than it was seven, eight years ago.
Chris Swift: Yes, I think you got it right. Totally. Six, seven, eight years ago, we were just in a different place. And I just think we’re in a better place. We have prudence on the balance sheet. That feels good. And so, yes you’re right. Totally different place.
Josh Shanker: And the other question, also a philosophical one. I was talking to Aileen [ph] last night, and I think that these are the best commercial results you guys have had almost ever looked at. Going back to 2006, there was one quarter that might be better, and clearly it’s the best group benefits results ever. What do you say to concerns that these might be peak margins?
Chris Swift: Well, we never give up. We keep on pushing ourselves to reset the bar higher, perform better. We have a growth orientation now that I think we’ve earned the right to think differently and creatively about the marketplace and activities we could pursue that are profitable and accretive to our shareholders. Josh. So I would never, ever bet against us.
Josh Shanker: Thank you very much.
Operator: Your next question comes from the line of David Motemaden from Evercore ISI. Your line is open.
David Motemaden: Hey, thanks. Good morning. Just had a question on the property book within Commercial Lines. It sounds like you guys had really good growth last year in line with what you guys are saying. How are you thinking about growth growing the property line in 2024 and if there’s any sort of mix shift benefit that we should think about coming through incrementally to margins next year?
Chris Swift: David, I would say, yes we’re pleased with what we accomplished this year, but it’s not the end of the mission or it’s really just sort of the beginning. So growing that book about 20% to $2.5 billion, I’m looking at my pricing sheet, with overall pricing up on the full portfolio, about 16%. Our non-CAT property weather was essentially on plan for the year between our various business units. So feel really good about the underwriting, the tools. Obviously, our reinsurance programs that Beth talked about, we made adjustments to. So we have all the components. Obviously, it’s still a constructive marketplace to really build that national diversified book of business that we want to have. So just because you asked, and I like you, I’m going to tell you that I think we could produce about $3 billion of premium next year.
David Motemaden: Awesome. That’s great. Thanks for that Chris. And then maybe just following up, good growth last year in Commercial Lines, up 10%. I was just wondering if you could just maybe talk about how much exposure maybe contributed to that in 2023.
Chris Swift: Well, the exposure piece I can give you right now that I have in my mind is related to pricing, right? So if you look at our pricing expanding to 8.5% this quarter, about 2.5 points of it is exposure-related. So if you go back and look at – it’s been generally consistent, sort of, I would say, one-third, two-third. So that’s what I have there. But I’ll look to Mo and Stephanie to see if they want to add any color on exposure and Personal Lines or Middle Market.
