The Hartford Insurance Group, Inc.

Good morning. My name is Shelby, and I'll be your conference operator for today. At this time, I would like to welcome everyone to the Hartford Announce's fourth quarter and full year 2018 financial results, as well as 2019 Outlook conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. I would now like to turn the call over to Ms. Sabra Purtill, Head of Investor Relations. Please go ahead, ma'am.

Thank you. Good morning and happy Chinese New Year. Thank you for joining us today for our webcast to discuss the 2019 Key Business Metric Outlook and fourth quarter and full year 2018 financial results, which were all released yesterday afternoon. The news release, investor financial supplement, and financial results presentation slides are available on our website as well. The 10-K will be filed by the end of February 22nd. Our speakers today are Chris Swift, Chairman and CEO of the Hartford, Doug Elliott, President, and Beth Bambara Costello, Chief Financial Officer. Following their prepared remarks, we will have a Q&A period. Just a few comments before Chris begins. Today's call includes forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance, and actual results could be materially different. We do not assume any obligation to update information or forward-looking statements provided on this call. Investors should also consider the risks and uncertainties that could cause actual results to differ from these statements. A detailed description of those risks and uncertainties can be found in our SEC filings. Our commentary today includes non-GAAP financial measures. Explanations and reconciliations of these measures to the comparable gap measure are included in our SEC filings as well as in the news release and financial supplement. No portion of this conference call may be reproduced or rebroadcast in any form without the Hartford's prior written consent. Replays of this webcast and an official transcript will be available on the Hartford's website for one year. Finally, please note that Chris and Beth will be at the Bank of America Maryland Insurance Conference on February 13th with a fireside chat at 10 a.m. And in addition, John Wilcox, our Chief Strategy and Ventures Officer, will be on an innovations panel that starts at 11.45 a.m. that day. Both will be webcast. I'll now turn the call over to Chris.

Good morning, and thank you for joining us today. 2018 was another great year at the Hartford Foundation. We had numerous accomplishments, including excellent financial results, despite a second consecutive year of high catastrophe losses. Full year 2018 net income was $1.8 billion, and core earnings were $1.6 billion, or $4.33 per diluted share, up 58%. The core earnings ROE for the year was $11.6, well in excess of our cost of capital. With the exception of catastrophe losses, business metrics were in line or better than our outlook. Group benefits had an outstanding year with better than expected disability experience and investment income. Commercial lines delivered strong results including superb small commercial underwriting performance, new business production, and retention. The commercial lines underlying combined ratio improved about 50 basis points to 91.5 among the best in the industry. Personal lines results were negatively impacted by two hurricanes and the largest U.S. wildfire loss in insurance industry history. However, the underlying personal lines combined ratio of 91.2 was in line with our outlook and two points better than 2017. New business levels were up in personal lines this year, which was a key goal that aligns with AARP objectives. This partnership, which is approaching 35 years, is truly unique and collaborative. We provide their membership with unique products in quality service, and we are working together to grow the book with a focus on AARP's younger cohort, ages 50 to 60. In addition to financial results, I am pleased with our effective and consistent operational execution in 2018. We continue to make investments in people, processes, and technology, enhancing service quality and speed. Our customers and distribution partners value the enhanced digital capabilities, broader product offerings, and an expanded risk appetite that we are bringing to them. Net promoter scores continue to decline and claims quality ratings are strong. This year, we also made progress on our innovation agenda, including the launch of the Small Business Innovation Lab located in New York City and the purchase of YRISK, a company specializing in the sharing and demand economy. Finally, major strategic activities in 2018 included the sale of Talcott, substantial progress on the integration of group benefits, and the announcement of the Navigator's acquisition. Related to the acquisition, yesterday we announced the new operating model and organizational structure and the formation of a new global specialty business. This structure aligns with the Hartford's commercial lines businesses, with the Navigator's U.S. and global operations, and will optimize underwriting expertise and distribution relationships. Integration planning is well underway, and the new teams will be out in the market quickly after closing. In addition to its strategic contributions, we expect it to generate an attractive financial return with incremental annual core earnings before amortization of intangibles of approximately $200 million within four to five years after closing. In 2019, we will build on our accomplishments and momentum. Doug will cover the outlook for key business metrics in more detail, but I have a few macro observations. Overall, we expect our businesses to perform well. The US economy remains in a relatively strong position compared to Europe and other parts of the world. That said, we expect some slowdown in the US economy. In addition, With Brexit still unresolved, volatile equity and bond markets, slowing global growth, and continued uncertainty about global trade and tariffs, previous tailwinds may become headwinds, particularly for investment performance. In P&C generally, we expect underwriting margins and earnings to remain strong in 2019. With lower catastrophe losses, we expect personal lines to improve, in underlying margins to remain healthy. In commercial lines, we expect underlying margins to remain very attractive, but with some modest pressure on workers' comp. Finally, we expect the group benefits core earnings margin to remain very strong, although slightly down from 2018 due to lower projected limited partnership returns consistent with our long-term view. For 2019, Our strategic priorities remain consistent, and we will strive to maintain core earnings ROEs well above our cost of equity capital. Achieving this, along with growing book value, excluding AOCI, and dividends per common share will drive long-term shareholder value creation. Turning to operational goals, expanding product capabilities and risk appetite remain key pillars of our strategy. With the recent acquisitions, we will have what we need and will be intensely focused on realizing the combined potential, including deepening distribution relationships and meeting a broader array of customer needs. In addition to product depth and breadth, our strategy also emphasizes customer focus and talent management, as well as building capabilities that make us an easier company to do business with. We take pride in our ability to attract and retain talent and having a diverse and inclusive workforce with a strong ethical culture. We are consistently recognized for leadership in these areas, including being designated the world's most ethical company for the past 10 years by Ethisphere and a member of the Bloomberg Gender Equality Index for the fourth consecutive year. Recently, we were named a Best Employer for Women by Forbes in their first ranking on gender equality. Finally, we expect our organic capital generation to remain strong in 2019 and beyond, which will help fund the $1 billion share repurchase authorization we announced yesterday. Beth will discuss our approach in using the plan, but I want to emphasize that our capital management philosophy has not changed. We remain committed to a strong balance sheet and will continue to balance investing in the businesses for profitable growth with returning excess capital to shareholders that exceed business requirements. To conclude, 2018 was an excellent year and I'm really pleased about our operating performance and execution mindset. We are working hard to maintain and expand the momentum of progress and look forward to sharing the results with you. Now I'll turn the call over to Doug.