[Call starts abruptly] International gross written premiums grew 4% and 12%, excluding currency fluctuation. Net written premiums grew 1% or 8% excluding currency fluctuation. Renewal premium change in international was plus 12% with rate and exposure, both up 6%. Retention was also strong at 82%. We are very pleased with our international operation as it increasingly contributes to the success of the overall company. And with that, I will turn it over to Scott.

Thank you, Dino and good morning, everyone. As Dino noted, we are pleased with our third quarter results, highlighted by a 95.8% combined ratio with outstanding underlying fundamentals, coupled with strong gross written premium ex captives growth of 9%. Before providing more information on the financials, I will first discuss Life & Group. As you know, each year in the third quarter, we undertake our annual reserve reviews for the Life & Group segment. These reviews include the annual review of assumptions underlying our long-term care active life reserves which we also refer to as the gross premium valuation, or GPV, as well as our long-term care and structured settlements claim reserves. I would like to point you to Slides 12 through 14 in our earnings presentation. Slide 12 contains key demographic information about both our individual and group long-term care blocks. As a reminder, both blocks are closed with no new policies issued for individual since 2004 and no new group certificates since 2016. As a result, the average attained age for the individual block is 81 years old and the group block is 68. While the group block is less mature in age, you can see from the table in the top right of Slide 12 that the benefits features on average for the group block are considerably narrower than the features for the individual block. As we have discussed in past calls, we have proactively reduced risk in both blocks over the years while obtaining meaningful rate increases and using a prudent approach in setting assumptions in our reserve analyses both for active life and claim reserves. One clear result of our efforts is the 38% reduction in policy count since 2015 which is shown on the bottom left graph on Slide 12. As we continue to…

Hello. We understand there were some technical difficulties for those who are joining via the webcast. So to make sure that you are all able to hear Dino's remarks, he will repeat his opening remarks now.

Thank you, Ralitza and good morning, all. Take two. So before beginning my remarks on our third quarter results, I'd like to take a moment to acknowledge the terrible impact of Hurricane Ian on so many lives and businesses. All of us at CNA are saddened by the devastation and our thoughts are with those that lost loved ones in the communities that suffered and are working to recover. Turning to results; despite the elevated industry catastrophes, including the effects of Ian and pressure on equity markets, CNA recorded impressive third quarter results. The P&C all-in combined ratio improved to 95.8% from 100% in the third quarter of last year and we achieved continued strong production performance, including 9% gross written premium ex-captives growth and 10% excluding currency fluctuations. Our core income declined by $24 million to $213 million. On a pretax basis, in the quarter, limited partnerships and common equity returns were lower by $121 million year-over-year which was largely offset by an increase in the P&C underwriting gain of $85 million and an increase in income from fixed income portfolio of $28 million due to an increase in yield and a higher asset base. In the third quarter, the P&C all-in combined ratio of 95.8% is 4.2 points lower year-over-year, reflecting a stable underlying combined ratio, lower catastrophe losses and increased favorable prior period development. Pretax catastrophe losses were $114 million or 5.5 points of the combined ratio compared to $178 million or 9.2 points in the prior year period. Hurricane Ian pretax catastrophe losses were $87 million of the total. Our disciplined re-underwriting and portfolio management strategies that we have referenced over the last several years helped mitigate our losses from yet another elevated industry cat quarter. For P&C overall, prior period development was favorable 0.8 points…

Just before taking questions, I would like to repeat that today's call may include forward-looking statements and references to non-GAAP financial measures. Any forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from the statements made during the call. Information concerning those risks is contained in the earnings press release and in CNA's most recent SEC filings. In addition to the forward looking -- in addition, the forward-looking statements speak only as of today, Monday, October 31, 2022. CNA expressly disclaims any obligation to update or revise any forward-looking statements made during this call. Regarding non-GAAP measures, reconciliations to the most comparable GAAP measures and other information have been provided in our earnings press release, financial supplement and other filings with the SEC. This call is being recorded and webcast. A replay of the call may be accessed on our website. If you are reading a transcript of this call, please note that the transcript may not be reviewed for accuracy, thus it may contain transcription errors that could materially alter the intent or meaning of the statements. And now we'll be happy to take your questions.

[Operator Instructions] The first question comes from the line of Josh Shanker from Bank of America.

Well, I like the second time better, for what it’s worth.

Thank you, Josh. Greatly appreciate it.

Yes. So in terms of the -- thinking about the upcoming year of renewals and whatnot, can you talk a little about your net cat exposure versus your gross cat exposure and how pricing of reinsurance changes might affect you? You’ve been a great cat manager for a number of years. And is that because you’re a successful buyer of reinsurance or that’s because you’re a successful risk manager on what risk is coming out of the book on a gross basis?

So I'd make a couple of observations, Josh. We're not going to go through the gross to net. I mean we got some benefit from our quota share relative to Hurricane Ian and so we benefited from some of that. But as we have highlighted in the past, we've also done a considerable amount of work on our cat management strategy. We started off, if you recall, with our syndicate Hardy that was principally a cat syndicate, both on primary and reinsurance. And whenever we would have large U.S. events, you would see a considerable contribution from the syndicate which you clearly did not see. We also, over the course of the last roughly 18 months, had exited from our property exposures on our aging services portfolio because that had a heavy coastal footprint and one that we just didn't think we could get the right returns on based on the terms and conditions that were out there. So honestly, I think it is a function of a lot of the discipline and we did get a little bit of benefit from our quota share treaty. Now our property treaties renew June 1. So we'll see how the 1/1s play out. But what I would say is that based on the discipline, I think it's fair to say that we and our reinsurers did well from a property standpoint and we expect that to be reflected in how they treat our renewal.

Okay. And then I'm not asking for a forecast for CNA in particular. But do you expect 1 year from today, given all the pressures in the market that ultimately, we're talking about a reacceleration of pricing from the current position we're in right now or that the rate of rate increases will hold somewhat steady?

I mean I can only go by what you're hearing also, Josh, right, from the reinsurers. And clearly, it would appear that we'll see some additional acceleration on the property lines. It's difficult to know how that affects the other lines. I guess I can intuit an argument that says they may take a much more broad-brush approach as they attempt to mitigate the fixed from the elevated cat activity over the last 5-plus years. But I don't know. We'll just have to wait and see how that plays out. But I think it's fair to assume you'll see an acceleration on the property side.

And in terms of the positioning of the company. And obviously, the -- there's admitted and there's non-admitted papers. There's regulation. When we think about the Specialty book, I assume almost everything is in a non-admitted sort of way and that you can price at what you think is an effective price immediately. Is there any lag on you getting pricing through the commercial book to mitigate higher reinsurance costs?

So just to clarify, so some of our professional liability programs clearly are in the surplus lines. And we’ve also began to expand in E&S sort of from a more traditional property and casualty but still relatively modest volume. And I think like you’ve seen over the course of the hard market, we should be able to take advantage of what might be some additional acceleration in pricing through the course of the year.

The next question comes from the line of Gary Ransom from Dowling & Partners.

I wanted to ask about -- on the investment income, the new money rate and how that is likely to flow forward. And just helping us with our models, is there anything unusual about how the portfolio is rolling over? Is this kind of a uniform roll? Or is there more -- is it a barbell? Is there anything we should be considering when we -- in this 150 basis point increase that you’re talking about?

Gary, it's Scott. Thanks for the question. So as I said in my remarks, on the P&C side, new money is about 125 to 150 basis points higher than book yield. It's actually higher now as we sit here today end of October and it's about flat with Life & Group. So I think the best thing I could point you to is really the average duration of our portfolio. The P&C is 4.8. Right now, Life & Group is considerably longer, in the high 9s right now. So that's going to be a much longer turn in that portfolio relative to the P&C. I don't really have anything to point you to as any particular lumpiness or barbell nature of our cash flows. I think that's probably the best guidance I could give you right now, is just looking at the durations.

Okay. You also mentioned about the expense ratio in Specialty going up and I wanted to -- you did mention in the prepared remarks a little bit of what that is. But can you give us a little more color about what technology and what kind of talent you’re adding there or if there’s particular areas that you’re targeting?

Sure, Gary. It's Scott again. So I would say really and we've been talking about this for a while, we've been making substantial investments in technology, not only overall infrastructure but specific technology that enhances our ability to underwrite profitable -- or business, particularly in the Specialty area and to serve our customers significant investment in the analytics side, really getting a lot more granular, analytical data around supporting our underwriting decisions. And then talent, we’ve been very successful and aggressive in the marketplace at attracting and retaining underwriting talent and that’s certainly playing out in what you’re seeing in the Specialty expense ratio.

And that's why, Gary, just to add on Scott's point which is why we have said -- because we're going to continue to make these investments. And I think investment is really -- the way to take a look at it is that probably in and around 31% is a fair sort of run rate on the expense ratio. And presuming we made the right investments, it'll pay off for us going forward, as I think it has over the last several years with our expense ratio coming down.

All right. And then I do want to ask the bigger picture inflation question too and we've had this, call it, unexpected inflation for over a year. And it seems to be hitting different things at different times and I wanted to focus in on the medical trends that might have an impact on liability lines where there seems to be somewhat more of a lag and perhaps there's a risk that those costs might trend higher. And I know everyone thinks rate is ahead of loss trend but that might not be true in all cases. And I just wondered if there are areas or lines where you think there is a little bit greater risk that the loss cost trends might accelerate further.

I mean, Gary, when we look at -- I mean, clearly, you see the medical CPI and that is up. But I think we need to be a little careful. And I believe I mentioned that at length also last quarter, right? It's not really a great proxy for severity trends, in particular, relative to comp but for other areas. So we pay attention to the subcomponents, physicians, hospital services. Those have been up less than the overall CPI. And I think the reforms also, when you look at comp in terms of the fee schedules, that also has dampened volatility, giving you a little bit more predictability. So look, I mean, I think it's clearly something we'll watch. And we have acted quite proactively on all forms of inflationary pressures in the past, both social and economic. And as we watch it closely, we'd act -- if it starts to escalate more than the components that impact our portfolio, then we'll act. But for now, still relatively benign.

Yes. I guess I’m just thinking about how the -- you talked about acceleration of rate potential for property that, that could be -- there could be some other forces that might cause some acceleration in rate in casualty. And I just wondered if you’re thinking about that as well.

Well, like we said about social inflation, right, it's about 6% in our book but it has doubled, as I've indicated before, over the last 3 years. COVID probably only obfuscated the dynamics, probably still some lingering obfuscation or dockets not all fully backed. So there's always a potential that it can increase. It is the driving force behind our decision to be prudent and not taking down -- taking the margin from the earned rates being above loss cost trends. So we're probably not far apart, you and us.

The next question comes from the line of Meyer Shields from KBW.

Dino, this is, I guess, a follow-up on Josh’s question. I just want to understand sort of bottom line. What’s I’s appetite for expanding its exposure in catastrophe-exposed property if, as you expect and I expect, pricing improves fairly significantly?

Unfortunately, I didn't get that. So if one of you here...

Cat exposure expanding -- exposure -- if he could repeat it [indiscernible] just repeating it.

Yes. Can you repeat it? We're just sort of trying to -- we all sort of strained over and I apologize, Meyer...

I’m happy to yell [ph]. I’m just trying to understand bottom line. If we see significant rate increases in catastrophe-exposed property, how does -- what’s I’s appetite for actually growing exposure there? Obviously, [indiscernible] is positive but I think you can write a lot more.

I see. I see. Okay. Thank you. I apologize for making you repeat that. You might recall, back in the second quarter of 2021, I had told you that property was about a little less than 20% of our portfolio and we thought that -- we felt it was an opportunity to increase it in a smart way when we also had purchased our quota share treaty. Now interestingly, the proportion today, Meyer, is still about the same at 20% and that's really because during that time, as I mentioned on -- to Josh's question, that we exited our entire aging services property exposure that had a lot of coastal exposure. But since it's roughly the same percent, what we did is essentially made some very smart trades and replaced it with property where the terms and conditions offered a much better risk return trade-off. And so we're going to continue to make those decisions and still believe, as we did in 2021, that there's some room, given the size, its contribution to the overall book, that there is some opportunity for us to grow the property portfolio.

Okay, fantastic. Also, a question for Scott. I'm just trying to put together the various pieces for rate filings in long-term care. So you've got higher interest rates and higher inflation. How does that impact regulatory responsiveness to file rate increases?

Thanks, Meyer. Well, listen, as I said in my remarks, we obviously addressed both in our latest GPV and what we're seeing in that will obviously flow through our rate indications as we file with the respective departments of insurance. I've remarked that we've been fairly successful in our filings. We have actually overachieved our expectations in the past year and we find that, generally speaking -- exceptions will apply but generally speaking, regulators we have been dealing with have been receptive with what we've been presenting for rate increases.

Okay. So the reason I’m asking is GPV doesn’t include sort of long-term expected rate increases and assumes that has been changed. So if I understand you correctly, you’re saying that just going forward, you’re not seeing any increasing friction?

I'm sorry, increasing what?

Friction.

Friction. No, not really. Not at all. And so just to remind you, our assumption is conservative. The weighted average duration of rate increases we've included is under 2 years. That's consistent with past years. So I would characterize that assumption as prudent and conservative.

We currently have no questions coming through. [Operator Instructions] There are no further questions. I will now hand you back to your host to conclude today's conference.

Great. Thank you very much and I appreciate all your patience in having to repeat the script twice. Thank you and we’ll talk to you next quarter.

Thank you for joining today's call. You may now disconnect your lines.