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spk07: 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 filing. Our commentary today include non-GAAP financial measures. Explanations and reconciliations of these measures to the comparable GAAP measure are included in our SEC filings, as well as in the news release and financial supplement. Finally, note that 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. I'll now turn the call over to Chris.
spk03: Good morning and thank you for joining us today. Last April on our first quarter earnings call, I had said I'd never been more excited about the future of the Hartford and was extremely bullish about our prospects for growth and further margin expansion. Since then, We have demonstrated our ability to deliver on these commitments through exceptional execution quarter after quarter. We continued that momentum in the first quarter with core earnings of $561 million or $1.66 per diluted share up from $203 million or $0.56 per diluted share in the prior quarter. Book value per diluted share excluding AOCI was $51.42. and our 12-month core earnings ROE was 14.8%. During the quarter, we were pleased to return $530 million to shareholders through share repurchases and common dividends. These results are an investment in our business and a return of capital to shareholders.
spk02: We delivered these results during a very dynamic period with ongoing challenges from COVID. COVID, the secondary impacts of the Ukraine conflict, anticipated Fed actions to raise while shrinking its balance sheet to address of inflation. And yet there are reasons for remains very low. 3.6% at the end of years are historically holding low levels of debt with health Home prices have appreciated 17% on average over the past year, providing homeowners healthy earnings profiles, while new U.S. business applications are up 65% from the pre-pandemic levels, a trend that is We view the economic environment as favorable to our business. where growth is fueled by new business startups and commercial exposure expansion. We are confident that the Hartford is well positioned to perform across its portfolio of businesses, maximizing value for our stakeholders.
spk03: Highlights from the quarter, which illustrates how our strategy translates into consistent and sustainable financial performance.
spk02: Overall, Commercial Line's results outperform margins in all businesses. We hold a clear lead for innovative products, digital platform, and data analytics, setting us apart from the competition. a record growth, eclipsing $4 billion in annual premium. And in the first quarter, we continued this positive momentum with very strong new business and increased premium retention.
spk03: Middle and large commercial results are benefiting from sustained investments in underwriting capabilities, broader product offerings, as well as innovative digital, and data science tools. In global specialty, we continue to maximize our expertise to gain market share while expanding margins with overall profitability improvement of more than 10 points from the second half of 2019. As it relates to the Ukraine conflict, first let me say we share the world's outrage at the tragic and senseless death suffering and destruction, and pray for an end to this needless violence. From the Hartford's perspective, we have very modest direct exposure within the region, which is meaningfully reinsured. We have a diminished amount of premium there and have actively controlled our exposure in the run-up to the conflict and subsequent to the start of the hostilities. Beth will cover the financial impacts to the quarter. In personal lines, results were in line with expectations and reflect our transformative work and unique AARP relationship. I am pleased with the progress we are making as we will out prevail. Our innovative and cloud-based platform that provides a simplified digital customer experience and uses data science to drive new business growth in a profitable 50%.
spk02: As expected, we continue to be impacted by the pandemic. Performance was solid. It continues to demonstrate our market leadership position. Fully insured ongoing premium was up 5% in the quarter and reflects both increased premium from existing customer and a full point improvement in persistency
spk03: over the prior year. Favorable employment trends and rising wages also contributed to premium growth. Sales for the current quarter are down year over year as the first quarter of 2021 benefited from the expansion of paid family medical leave products in several states. Adjusting for that one-time lift, sales are comparable to prior year across our life, disability, and supplemental health products. Through the first three months of the year, our long-term disability book is performing as expected with modestly higher disability incidence trends. A higher incident rate is reflected in our future pricing and was anticipated when we set forth our margin expectations for 2022. Modestly higher expenses in the quarter reflect higher staffing costs to manage elevated short-term disability claims and accelerated investments in capabilities, including digital, claims automation, and administrative platforms. We expect the full year 2022 expense ratio to be generally consistent with first quarter results. During the quarter, the number of U.S. COVID cases were at their highest levels of the pandemic, and deaths were elevated. However, both cases and deaths have rapidly declined in March and April. Clearly, the past two years have shown that predicting the pandemic impacts is impossible. But with cases and deaths at their current levels, we are cautiously optimistic about the remaining quarters of 2022. In conclusion, the Hartford is off to a strong start in 2022. We are optimistic about macro factors impacting our business, including improving pandemic outcomes and the potential for easing of inflationary pressures. We continue to manage our investment portfolio prudently and expect the portfolio yield to benefit from rising interest rate environment over time. And We are continuing to proactively manage our capital. All these factors underpin my confidence that we will generate a 13 to 14% core earnings ROE in 2022 and 2023. Our strategy and the investments we've made in our business have established the Hartford as a proven performer with consistent results. We are competitively positioned with a complementary and a well-performing portfolio of businesses and a winning formula to consistently achieve superior risk-adjusted returns. Now I'll turn the call over to Beth.
spk08: Thank you, Chris. Core earnings for the quarter of $561 million, or $1.66 per diluted share, reflect excellent PNC underwriting results, a significant contribution from the investment portfolio, and reduced pandemic-related impacts and group benefits. As Chris commented, visits written related to Russia-Ukraine exposure had a modest impact on results. We recorded $27 million of net catastrophe losses primarily related to political violence and terrorism, including aviation war, and credit and political risk insurance. As a result of incurred losses covered by our reinsurance treaties, we recorded a provision for seated reinstatement premium of $11 million. The company's direct investment exposure is limited to corporate bonds issued by Russian entities with an amortized cost of $16 million, and we recorded an allowance for credit losses of $9 million in the quarter. We do not have any investments in Belarus or Ukraine. Moving on to the business line results. In commercial lines, core earnings were $456 million, up $351 million from the prior first quarter, primarily driven by the reserve increase in the 2021 period for Boy Scouts and a stronger top line and lower catastrophes in the current period. Commercial lines reported 12% written premium growth, reflecting an increase in new business and small commercial, strong policy retention, written pricing increases, and exposure growth. The underlying combined ratio of 88.3 improved 2.9 points from the first quarter of 2021 due to COVID losses in the prior year and a lower expense ratio and slightly improved margins across several product lines in 2022. In personal lines, core earnings were $84 million, and the underlying combined ratio of 88.5 reflects increased auto loss costs as anticipated. I would note that from a seasonality perspective, the first quarter typically has lower loss costs in the balance of the year. As Doug will comment upon, we are making progress and getting more rate into the book given the impact of inflation on loss costs. Although our view of inflation impact is a bit higher than where we were a quarter ago, we expect to be within the underlying combined ratio guidance of 90 to 92 for the full year, albeit at the high end. PNC current accident year catastrophes in the first quarter were 98 million before tax, which included the 27 million related to Russia-Ukraine exposures that I just mentioned. PNC prior accident year reserve development was a net favorable 36 million, with workers' compensation being the largest contributor. Turning to group benefits, core earnings of 8 million compared to a core loss of 3 million in first quarter 2021. Core earnings reflect a lower level of excess mortality losses in group life, partially offset by a higher disability loss ratio and an increase in the expense ratio. All-cause excess mortality in the quarter was 96 million before tax compared to 185 million in the prior year quarter. The 96 million included 122 million with dates of loss in the first quarter, which was partially offset by favorable development on prior quarters. The disability loss ratio increased 4.8 points over the prior year period, primarily due to less favorable prior and current year development in long-term disability, as the 2021 loss ratio benefited from low incidence levels from earlier in the pandemic. The long-term disability loss ratio in the quarter was in line with our expectations, which included an assumption for increased incidence relative to the past couple of years. Long-term disability claim recoveries remain strong and are consistent with prior year. Lastly, the expense ratio for group benefits increased by 0.6 points. Consistent with expectations, the expense ratio was impacted by higher staffing costs to handle elevated short-term disability claims and increased investments in technology, partially offset by incremental Hartford Next expense savings and the effect of earned premium growth. Before excess mortality and COVID short-term disability losses, the group benefits core earnings margin was 5.7%. From a seasonality perspective, we experienced higher under-uplying loss costs in the first quarter, so we would expect the margin to be lower than our full-year estimate. We remain confident in our guidance of a 6% to 7% core earnings margin for full-year 2022, excluding COVID impacts. Turning to Hartford funds, due to equity market declines and higher interest rates, AUM decreased during the quarter to $148 billion, resulting in a sequential quarterly decrease in core earnings, though core earnings were up 11% compared to first quarter of 2021. Our investment portfolio delivered another strong quarter. Net investment income was $509 million, benefiting from very strong annualized limited partnership returns of 14.6%, driven by relatively balanced contributions from our private equity and real estate equity investments. Total annualized portfolio yield, excluding limited partnerships, was 2.9% before tax. With the increase in interest rates and wider credit spreads, the portfolio's reinvestment rate was 3.3%, which compared favorably to the average sales maturity yield of 3%. Not surprisingly, the portfolio value was also impacted by higher interest rates and wider credit spreads. The portfolio moved from an unrealized gain position of $2.1 billion at year-end to an unrealized loss of approximately $300 million. Additionally, the portfolio had a net realized loss of $145 million, which includes $107 million of mark-to-mark losses on the public equity portfolio, reflecting the decline in equity markets in the quarter. While it is still early, as we look ahead to the second quarter, we anticipate the limited partnership annualized return will be in the 8% to 10% range. Both private equity and real estate equity investments contribute to our LP return, and this diversification has proven to be beneficial. So while interest rates and capital markets may remain volatile, we are confident that our high-quality and well-diversified portfolio will continue to support our financial goals and objectives. The confidence we have in our business is also evidenced by our capital management actions. As of March 31st, approximately $900 million of share repurchase authorization remains for 2022. From April 1st through April 27th, we repurchased approximately 1.9 million common shares for $139 million. On April 15th, we redeemed 600 million of hybrid securities with a rate of 7.875%. We had pre-funded this redemption with the issuance of 600 million of 2.9% senior notes last September, which will result in net annual after-tax savings of approximately $24 million. In summary, our first quarter financial performance demonstrates the positive results that building and investing in our businesses have yielded. Combined with prudent capital management, we are positioned to deliver on our goals. I will now turn the call over to Doug.
spk06: Thanks, Beth, and good morning, everyone. The Harper's Property and Casualty's strong first quarter results are evidence of the substantial progress achieved to expand product breadth, advance technology and data science, deepen our distribution footprint, and differentiate the customer experience. These accomplishments are powered by our skilled talent base, positioning us well for profitable growth. Starting with commercial lines, I'm pleased with the underwriting performance across product lines and the improving expense leverage. Written premium growth was strong in the quarter, sustaining the top-line momentum achieved last year. With the acceleration of growth during 2021, the year-over-year compares will get more challenging in subsequent quarters, but we're confident there is upside to our initial target of 4% to 5%. Starting with pricing, in January, we shared with you our 2022 commercial lines guidance, which contemplated moderated renewal pricing, and first quarter was largely in line with those expectations. Commercial written pricing excluding moderating about a point from the fourth quarter, but continuing to exceed lost cost trends across most products. This moderation was late. Workers' compensation pricing declined slightly from the fourth quarter as expected. The dynamic of higher by negative filed rates will likely persist throughout 2020. New written premium and small commercial was up 6% driven by Spectrum, and retention improved two points from last year. Outstanding product capabilities and rising no-touch bindability levels are driving business to the Hartford as customers continue to embrace our consistent pricing and underwriting approach, leading to higher sales.
spk02: Middle market pricing was up 6.5%, a very sellable
spk06: start to the year. Retention was up four points from the first quarter of 2021, while new business premium was essentially flat.
spk02: Pricing remained strong in global especially at 8.3%, with U.S. wholesale pricing just over 9%.
spk06: Premium retention was steady, and growth from our reinsurance business was significant. We continue to be pleased with our growing momentum, deeper product suite, and improved underwriting execution. Turning to lost costs, our 2022 guidance also reflected our disciplined and long-term consistent approach to lost trend selection. including the expected impact of supply chain inflationary pressures in our auto and property books, along with social and economic headwinds in other lines. Overall loss trends and loss ratios for the quarter were in line with a few puts and takes. In summary, for commercial, I'm very pleased with the continued excellent performance of each of our businesses, and I expect to achieve our underlying full-year guidance of 86.5 to 88.5. Small commercial delivered yet another sub-90 underlying combined ratio quarter and our best first quarter since 2014. At 91.5, middle and large commercial has now achieved four straight quarters of strong underlying performance, and this quarter's result is the best first quarter in over a decade. And Global Specialty's underlying combined ratio of 88.2 is equally impressive, reflecting the recent strong pricing environment, improved underwriting execution, and significant underwriting actions taken since the acquisition. As these results demonstrate, we are effectively balancing the rate and retention tradeoff while maintaining disciplined underwriting and leveraging risk segmentation tools to continue driving profitable growth. Flipping over to Purselines, we're very pleased with the first quarter underlying combined ratio of 88.5, acknowledging the typical first quarter seasonality benefit and industry loss cost headwinds. Maintaining profitability of the legacy book has been a primary focus while developing our new product, Prevail. Consequently, over the past several years, we continue to selectively tune pricing. In Purselines Auto, loss costs were elevated quickly in physical damage. We have not been immune to supply chain and inflation. We have completed over 50 auto filings with an average rate increase of 6.2% and will impact approximately half of our book going forward.
spk02: In addition, we continue to recalibrate prevailed pricing to reflect these elevated loss trends.
spk06: We're confident our filing execution, combined with prudent rate increases taken during the past few years, will continue to position our auto book for profitable growth.
spk02: In home, at historically high levels, we're similarly taking pricing actions in home.
spk06: our current action year home loss ratio of 47.3 is very healthy. Starting to personalize production, retention remained steady while we generated new business growth in the quarter. Responses and conversion rates are in line with expectations. In addition, Prevail is now available in 13 states, including the launch of Florida in January and Texas in April, a couple of our larger states. We're actively managing our new business flow through an accelerated view of key metrics and enhanced analytics. To date, we're pleased with the quality of the new business we're writing. We're going to start to 2022 across property casually and represent mounting evidence that we have and will continue to deliver on our critical strategic goals. Our commercial lines business grew at a double-digit clip with exceptional operating margins, and in personal lines, pricing actions are taking hold while new business growth is emerging with increasing contributions from Prevail.
spk02: The seamless integration, distribution, and talent continue to drive our success in the marketplace.
spk06: The momentum is clear, the results are strong, and our future is bright. I look forward to our next update in 90 days. Let me now turn the call back to Susan.
spk07: Thank you. We have about 30 minutes for questions. Operator, could you please repeat the instructions for asking a question?
spk01: Thank you. If you would like to ask a question, please.
spk02: Again, to ask a question, it is star followed by one.
spk01: As a reminder, if you are using a speakerphone, please remember to pick up your hands. Our first question today comes from Brian Meredith from UPS. Brian, please go ahead. Your line is now open.
spk05: Yes, thank you. A couple of questions here. First, Beth, I'm just curious, could you give us what the current rate that you're getting right now in your portfolio? And how does that compare to what your book yield is? And then how much of your portfolio kind of turns? And then on that also, Chris, why consistent are we 22 to 23 given the rise in interest rates?
spk08: Sure, Brian, I'll start. So, yeah, if you look today, the new money rate is probably closer to 3.8% compared to the 3.3% average that we had for the quarter. So obviously it compares very favorable to the overall portfolio yield. So you may recall a quarter ago when we were talking about our expectations for yield for 2022, I had said that we expected to see a slight decline from where we were in 21. Given where we are today, we'd expect 2020 to be relatively consistent with 21 and then see increases as we go into 2023.
spk03: Yeah, and Brian, on the range question, 13 to 14 is obviously what we've been talking about for the last year. As you heard my confidence and optimism today, I believe we will achieve that in both those years, and you should not view the 14 as a limit, and we will try to achieve it if the conditions are appropriate, particularly, as Beth said, we'll have to see how the portfolio lift really plays out over a longer period of time, but You know, that can be meaningful, particularly as you get into 2023. Gotcha.
spk05: And then my second question is, I guess, more Doug and Chris. Rush Ukraine, what was your gross loss? Seems like you had a fairly, you know, the reinstatement premium. Obviously, you had some reinsurance recoveries. And then also on that topic, Rush Ukraine, maybe a little more kind of details as far as where your exposures are and where could there potentially be some more losses coming from Rush Ukraine?
spk03: Sure. So I would say that most of the exposures that we have obviously have come through our syndicate in London, primarily through the political violence and credit and political risk book. We have about 45 million of net written premium in those lines. And as we said in our prepared remarks, it is heavily reinsured. So clearly the war is still evolving. And the loss picks that we made, I think, are very prudent and thoughtful about the, I'll call it, exposures that we have. I will give you a little insight. We've only had two notices of loss, and one we denied. So this is nearly just all I've been are at this point in time. And so I think we're with you right now, given it's a live event, but We used a lot of data and intel, including satellite imagery, to look at properties that were exposed and feel really good about the picks that were made.
spk06: Anything else? No, I think you nailed it, Chris. We have a very good handle on the risks located in those countries. I think we understand our book well, and this process has been deliberate and prudent, and I think that's when I feel really good about the call we made in the quarter for what we know.
spk01: Great. Thank you. Thank you. The next question today comes from Elise Greenspan from Wells Fargo. Elise, please go ahead. Your line is now open.
spk09: Thanks. Good morning. My first question, I noticed in your prepared remarks you gave us a sense of where you might fall within that personal line's underlying margin guide. But what about within commercial revenue? I know we're only one quarter in, but given how things have come together in the quarter, as well as your view on pricing and loss trend for the balance of the year, do you have a sense of where you might fall within that range within commercial lines?
spk06: At least we haven't changed our view. So as I said, we expect to be inside that range, but there's no nuance there. I don't think our view is any different than it was 90 days ago. So we clearly have our sights set and believe we'll achieve inside that range.
spk09: Okay, and then my second question is on the group business. I'm just looking to get, you know, some more color on how you think disability trends, especially within your long-term disability book, could be impacted as we potentially enter into recession and how that's kind of embedded within, you know, the guide for this year and even perhaps thoughts, you know, beyond this year into 23.
spk03: Yeah, I'm happy to try to give you color. Elise, I would share with you, first off, our base case of economic activities is not a recession in 2022, 2023. Obviously, there's still a lot of question marks, but we think the Fed will try to prudently balance growth and inflation and come to hopefully a good spot. As it relates to our disability trends, what I would share with you is You know, last year at this time, we just had more favorable development, particularly, you know, from the initial COVID year of 2020 than we are, you know, having this year. Also, I think in our prepared remarks, we talked about seasonality. So long-term disability claims are seasonally higher in normal conditions in the first quarter. But normal, but, you know, those are, you know, still the underlying conditions. trends that we see. As we sit here today, we still feel very confident of achieving our 6% to 7% margin during the year. And as I said, we are, both in our life book and disability book, putting additional price into our pricing models that we're going to try to achieve you know, obviously, as we go forward. So, you know, price, particularly in the life side, is probably going up, you know, 2% to 3%, and then, you know, roughly 1% to 2%, you know, for disability. So our incident trends, I would say, as we see here today, have stabilized. There was a little concern that we had in the fourth quarter heading into this quarter that they might be rising faster than we expected. That is not the case. So I think that's the color I can try to give you right now, Elise.
spk09: Okay, that's helpful. Thanks for the color.
spk01: Thank you. The next question today comes from Greg Peters of Raymond James. Greg, please go ahead. Your line is now open.
spk04: Great. Good morning, everyone. So the first question I wanted to ask was around employee retention and recruiting. One of the other publicly traded brokers had mentioned on their call that they were seeing of underwriters at the carrier level. And I'm just curious about what the Hartford is seeing and what their perspective is around recruiting and retention in very difficult employment markets.
spk03: Yeah, I'll start, and then I'll ask Doug to add his color, Greg. So thank you for joining us today. Yeah, talent retention is obviously key to most of any businesses, right? I mean, you've got to put a high-quality team on the field every day and compete, which I think we've done extremely well over an extended period of time. That said, we haven't been immune to, I'll call it, elevated people movement, particularly... in an environment where a lot of organizations were allowing employees to work from home or just work from just about anywhere. So I would say for calendar year 21, I'll call it turnover rates were probably elevated in the three to four to five point range, depending on business unit or function. I would say, though, that they've stabilized here in the first quarter. We've you know, I thought, you know, took an appropriate, you know, thoughtful point of view on bonuses and, you know, salary increases. So we're working hard at it. And the best way that we can combat, you know, people, you know, leaving us is to make sure our leaders, people, their needs, their desires, their career goals and objectives, giving them clear feedback and having that sense of belonging, you know, that we're invested in their career and I think that's part of our cultural advantage that we have. But, Doug, what would you say on the specifics of underwriters that are distributed throughout the country?
spk06: The area is a top three item for us across our leadership ranks. We're talking about it. We're working on it. And the other thing I would share, Chris, is we've had some very significant hires ourselves in the past 90 days. So I feel really good about some of the talent that has joined the Hartford. I like where we are. We've worked hard at it, and I think it will continue to be an asset for us as we compete forward.
spk04: Got it. And the second question, I wanted to pivot. Doug, I think in your comments you talked about how in the commercial lines area, you know, your reserving has – You know, contemplated the lost cost trends, you know, the social inflation, the supply chain issues, et cetera. And, you know, there's rhetoric in the marketplace right now. I'm not sure if it's going to come to pass, but that there could be further disruptions in supply chain as we move through the balance of the year. And I'm just curious from your perspective how you look at data as you see that. And, you know, do you make changes now or do you wait until it materializes? Just some granularity with respect to your approach on that.
spk03: And then I'll ask, you know, Doug, so as I tried to say in my commentary, you know, we're optimistic, you know, that some of the supply chain shock due to demand is The demand side of the equation is starting to ease, particularly as we head into the second half of the year. Now, the other shock, obviously, on the supply chain from manufacturing and the war in Ukraine and China's lockdown are new factors that will continue to impact just our overall view of cost of goods sold through our supply chain. So those are the dynamics. But at least from what we could see right now, there's a level of optimism that a lot of this is going to work through the system. Maybe not as quick as we initially expected, but I think beginning in the fourth quarter, heading in 2023, we could be in a different position, Doug.
spk06: The only other item I would add is that it did comment. that we had adjusted, primarily in auto physical damage, our supply chain loss trends around severity. So, you know, our expectations in December and our reality in March were slightly different. We made those adjustments. Lastly, I'd point out, we make very specific quarterly calls in both our planning and our reserving. You know, know this is a quarterly march every 90 days as we close our books. We make sure that everything we can see in our results and anticipate in the risks around us, we built into those calls. But, you know, the machine is finally tuned to have a 90 day period by period march. And so, yeah, as we if we feel more pressure in the back half of the year, we will deal with it. But right now we're hoping for some easing as we move July through December.
spk04: Got it. Thank you for the answers.
spk01: Thank you, Greg. The next question today comes from David McMaden from Evercore ISI. David, please go ahead. Your line is now open.
spk00: Hey, good morning. This is sort of a related question for Doug. Just a question on the loss cost trends. Doug, you had mentioned some puts and some takes, but net-net came in in line with your expectations. Wondering if you could just elaborate a bit more on what you're seeing by line.
spk06: Well, you know, I'd start with just my last comments, which is, you know, one of those puts was a little bit more pressure in auto-fizz dam. So we adjusted for supply chain. Generally, our frequency is holding, so I feel good about our frequency calls and what we're seeing with experience. And we're watching medical carefully, but, you know, so far we feel pretty good about what we're seeing in the medical front. So, you know, all in as we go through, and, you know, we've got probably close to 40 lines that we're looking at on a quarterly basis. I'd say largely our calls are holding, and other than a few adjustments, first quarter came in as expected.
spk00: Got it. Okay. And then switching gears to the benefits business, Chris, I hear your comments, you know, expense ratio coming in around 26 for the year. I guess I'm wondering, within that, it sounds like you're having higher staffing for the short-term disability claims. Is there a rule of thumb that you can give us For example, for every 10 million of short-term disability claims, it's an extra million or 2 million in extra claims handling expenses. And I guess how should we think about that as we enter into a more endemic state with COVID?
spk03: Yeah, I don't have a metric that I can give you today. I think, you know, the surge that we really felt, you know, beginning in late third quarter into the fourth quarter and then early, which is sort of unprecedented as far as volume. We did build some new digital claim intake tools that helped relieve some of the call center pressure, but you still had to process thousands and thousands and thousands of claims. So just know that as much as we had some elevation of expenses, our Hartford next objectives for this business are still being met. We did, as I said in my prepared remarks, take the opportunity to look at investing maybe a little faster than we thought. That is part of what's driving that. As I said, that's mostly in the digital area and continuing in claims. But all that is still contemplated, David.
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