Good morning, ladies and gentlemen. Welcome to the fourth quarter results teleconference for Travelers. We ask that you hold all questions until the completion of formal remarks, at which time you will be given instructions for the question and answer session. As a reminder, this conference is being recorded on January 20th, 2022 . At this time, I would like to turn the conference over to Ms. Abbe Goldstein, Senior Vice President of Investor Relations. Ms. Goldstein, you may begin.
Thank you. Good morning and welcome to Travelers discussion of our fourth quarter 2021 results. We released our press release financial supplement and webcast presentation earlier this morning. All of these materials can be found on our website at travelers.com under the Investors section. Speaking today will be Alan Schnitzer, Chairman and CEO, Dan Frey, Chief Financial Officer, and our three segment Presidents, Greg Toczydlowski of Business Insurance, Jeff Klenk of Bond & Specialty Insurance, and Michael Klein of Personal Insurance. They will discuss the financial results of our business and the current market environment. They will refer to the webcast presentation as they go through prepared remarks, and then we will take questions. Before I turn the call over to Alan, I would like to draw your attention to the explanatory note included at the end of the webcast presentation. Our presentation today includes forward-looking statements.
The company cautions investors that any forward-looking statement involves risks and uncertainties and is not a guarantee of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are described under forward-looking statements in our earnings press release and in our most recent 10-Q and 10-K filed with the SEC. We do not undertake any obligation to update forward-looking statements. Also, in our remarks or responses to questions, we may mention some non-GAAP financial measures. Reconciliations are included in our recent earnings press release, financial supplement and other materials available in the Investors section on our website. Now I'd like to turn the call over to Alan Schnitzer.
Thank you, Abbe. Good morning, everyone, and thank you for joining us today. For the quarter and full year, we are very pleased to report excellent bottom-line results as well as successful top line growth. We attribute these results to our strong franchise value and excellent execution day in and day out in every aspect of our business. At the same time, we're full steam ahead on strategic initiatives designed to position Travelers for continued success. Core income for the quarter was $1.3 billion, $5.20 per diluted share, generating quarter return on equity of 19.8%. These results benefited from strong underlying underwriting income, driven by record net earned premiums of $8 billion and a very strong underlying combined ratio of 88.7%.
That brings full year core income to $3.5 billion, to $13.94 per diluted share, and full year core return on equity to 13.7%. Our full year core income includes record underlying underwriting profit, $2.9 billion pre-tax, catastrophe losses that were once again favorable compared to our market share. More than half a billion dollars of favorable pre-tax prior year reserve development and outstanding investment returns. In short, we're firing on all cylinders. We are particularly pleased with the continued strong underlying fundamentals in our commercial businesses, where we are seeing the margin expansion we anticipated. The underlying combined ratio for the quarter improved by almost four points year-over-year in Business Insurance and almost two points in Bond & Specialty Insurance.
Looking at the two commercial segments together, the combined BI BSI underlying combined ratio was 90.4% for 2021, a significant improvement from 94.1% the prior year. Underlying results in Personal Insurance were impacted by auto loss frequency returning to more normal levels as miles driven has increased, and to a lesser extent, elevated severity in both auto and property. Nonetheless, with a 96.5% all-in combined ratio, PI results for the year were solid. Our consolidated results demonstrate the value of our diversified group of businesses. Turning to investments, our high-quality investment portfolio generated net investment income of $624 million after tax for the quarter and $2.5 billion for the year, reflecting reliable results from our fixed income portfolio and another quarter of terrific returns from our non-fixed income portfolio.
Our very strong operating results, together with our solid balance sheet, enabled us to grow adjusted book value per share by 10% during the year, after making important investments in our business and returning $3.1 billion of excess capital to shareholders, including $2.2 billion of share repurchases. In the fourth quarter, we repurchased $801 million of our stock. Turning to the top line, net written premiums grew 10% to $8 billion. Each of our three segments again contributed meaningfully to the top line growth. In Business Insurance, net written premiums grew by 9%, with renewal premium change of 9.2% near an all-time high. At the same time, retention was higher. As we've shared before, strong retention is an important indicator of continued stability in the marketplace. New business levels were up 16%.
Pure renewal rate change in Business Insurance was down about a point sequentially. Exposure growth was about 4.5 points, continuing an improving trend and reaching its highest level in 15 years. That's a very encouraging sign, both in terms of economic activity and its contribution to written margin expansion. Excluding the workers' comp product line, renewal rate change in BI for the quarter was nearly 7%, a historically strong result. Rate in workers' comp is a little more negative than we've seen over the past year, which is consistent with the strong profitability of the line. Overall renewal premium change in the workers' comp line was positive as exposure growth was meaningfully positive, about as high as we've seen in a few years.
According to the U.S. Bureau of Labor Statistics, average hourly earnings rose at a nearly 6% annualized rate over the past six months, up from about 3.5% in the first six months of the year. Wage inflation is a benefit in terms of margin contribution. In Bond & Specialty Insurance, net written premiums increased by 13%, driven by strong renewal premium change of 10.9% in our Management Liability business and continued strong retention. In both of our commercial business segments, written margins continue to expand as written pricing outpaces estimated loss trends, and we expect that to continue for a while. In Personal Insurance, net written premiums increased by 10%. Renewal premium change in auto improved by more than a point. Renewal premium change in homeowners remains strong at 8.7%.
Policies in force in both auto and homeowners increased to record levels. The Innovation and Technology investments we've been making over the past number of years have had a meaningful impact on our 2021 results, and we're confident that ongoing and planned initiatives will continue to drive successful top and bottom-line results going forward. Our scale, profitability, and cash flow support our ability to invest well over a billion annually on technology. By way of example, we're digitizing the value chain, leveraging cloud technology, leaning into artificial intelligence for everything from simple automation to deep learning, tapping into new data sources, and building increasingly accurate predictive models. With meaningful opportunities to transform the way business is done, scale is going to be an increasingly important differentiator.
Through our focus on optimizing productivity and efficiency, we have been able to meaningfully increase our overall technology spend over the last five years, while at the same time significantly reducing our expense ratio. Importantly, over that period, we have improved the mix of our technology spend. We have increased our spending on strategic technology initiatives by 50% while reducing routine but necessary expenditures. In 2021, our leading claim organization completed a strategic three-year plan we call Right Touch. That effort resulted in more than $125 million of annual run rate savings, which is reflected in our results. In addition to creating efficiencies for us, investments in digital capabilities over the past few years have enabled us to improve the customer experience. Our timing was good.
Pre-pandemic, we anticipated a higher rate of digital adoption, and when the pandemic accelerated the trend, we were prepared to meet the need. We are now using virtual claim handling capabilities on a significant majority of both auto appraisals and wind hail claims without the need for an inspection by a Travelers claim professional. We are also handling significantly more water claims virtually as compared to pre-pandemic levels. In other words, we're delivering great experiences for our customers and a more efficient outcome for our shareholders. Throughout Travelers, we see a lot of benefit and opportunity from artificial intelligence. We've shared in recent quarters the success we've had in deploying aerial imagery coupled with proprietary deep machine learning to accelerate damage assessment and claim resolution in the wake of catastrophes.
In the recent Colorado wildfire, we were able to serve some customers before they even had a chance to return to their homes. In severe wind events, our latest model can identify the extent of exterior property damage with a high degree of accuracy. These are some of the capabilities we use to meet our objective of closing 90% of all claims arising out of catastrophe events within 30 days and exclusively with Travelers claim professionals instead of also relying on independent adjusters. Resolving claims quickly and with Travelers employees, again, it's about delivering great experiences for our customers and a more efficient outcome for our shareholders. Other initiatives across the company leverage technology, data, and models to support decision-making. We have more than 60 million data records related to businesses, individuals, and distributors, including virtually every business in the U.S.
These records are curated into well-designed proprietary data products. We leverage this with more than 2,000 external datasets, including high-resolution aerial imagery covering substantially all property exposures in the United States. All of this data fuels our more than 1,000 advanced analytical models. Our models support risk selection and segmentation, pricing, reserving, claim response, and more. Our tech data and analytics advantage is significant and hard to replicate. We deploy these capabilities across the value chain, from customer acquisition to underwriting to claim handling. For example, understanding the size, condition, and geometry of a roof can be significant to segmenting risk. Most homeowners understandably wouldn't know if they had a hip roof or a gable roof, let alone its size or condition, so it's hard to get accurate information through the application process.
We've developed and trained AI to evaluate those roofing characteristics using aerial imagery and are integrating that intelligence into our underwriting segmentation and pricing. Powering all of this is our exceptional workforce. We start with world-class expertise in traditional insurance-related disciplines and enhance that with leading computer data and industrial engineers, design professionals, geophysicists, behavioral scientists, AI experts, roboticists, meteorologists, specialized healthcare professionals, and so on. It takes all 30,000 of our Travelers colleagues to deliver the financial performance and strategic achievements we're reporting today, and I'm grateful to them all.
To sum it up, we are very pleased with our results for the quarter and the year. With cutting-edge expertise in risk and risk management, complemented by the strengths we've built in digital excellence and innovation, we are well-positioned to identify and execute on the most promising opportunities in our industry. By extending our advantage in risk expertise, delivering industry-leading experiences, and continuing to improve productivity and efficiency, we will continue to deliver meaningful shareholder value over time. With that, I'm pleased to turn the call over to Dan.
Thank you, Alan. Core income for the fourth quarter was a terrific $1.289 billion, which brings the full-year result to $3.522 billion. For the quarter, core return on equity was 19.8%, and for the full year, core ROE was 13.7%. Our strong and consistent performance has resulted in double-digit core ROE in 9 of the past 10 years, averaging 12.6% over that time frame. We have consistently delivered a meaningful margin over both the 10-year Treasury and our cost of capital, and we've done so with industry-low volatility. Underlying underwriting income was a very strong $867 million pre-tax, reflecting increased levels of earned premium in all three segments and an excellent underlying combined ratio of 88.7%.
As was the case in the third quarter, improvements in the underlying combined ratio in both Business Insurance and Bond & Specialty Insurance were offset by an increase in the underlying combined ratio in Personal Insurance. Business Insurance and Bond & Specialty Insurance results both reflected the benefit of earned price that continues to exceed loss trend. The higher underlying combined ratio in Personal Insurance resulted from the comparison to unusually low auto losses related to the pandemic in last year's quarter, as well as higher severity in this year's quarter. Greg, Jeff, and Michael will provide more detail on each segment's results in a few minutes. The fourth quarter expense ratio improved in all three segments, and the consolidated expense ratio of 28.5% for the quarter brings the full year expense ratio to a historically low 29.4%.
Even as we make significant investments in initiatives that we believe will drive our continued success, our ongoing focus on productivity and efficiency drove a 50 basis point improvement in this year's expense ratio, which is now more than 200 basis points lower than it was just five years ago. As we continue to grow the business and maintain our focus on productivity and efficiency, we expect to remain in this mid-29% range in the near term and then gradually move down to around 29% over the next couple of years. Of course, there will be variability in any given quarter, but on a full year basis, that is the path we're on. Our fourth quarter cat losses were $36 million pre-tax.
In this year's fourth quarter, we recognized recoveries of $255 million from the property aggregate catastrophe XOL treaty, a $221 million benefit for the quarter's cat losses, and a $34 million benefit to underlying losses. The cat benefits by segment was $109 million in Business Insurance, $108 million in Personal Insurance, and the remainder in Bond & Specialty Insurance. The underlying benefit by segment was $10 million in Business Insurance and $24 million in Personal Insurance. Turning to prior year reserve development, we had net favorable development of $95 million pre-tax on a consolidated basis. In Business Insurance, net favorable PYD of $74 million was driven by better than expected loss experience in workers' comp across multiple accident years.
The Bond & Specialty segment saw a net favorable development of $24 million, while in Personal Insurance, modest favorable PYD in homeowners and other was offset by modest unfavorable development in auto, with the net result to PI being $3 million unfavorable. After-tax net investment income of $624 million reflected another quarter of very strong returns in the non-fixed income portfolio and fixed income results that were modestly better than our expectations. Looking forward to 2022, we expect that after-tax fixed income NII, including earnings from short-term securities will be between $430 million and $440 million per quarter, modestly higher than in 2021, as the benefit of expected growth in invested assets will be partially offset by a lower average yield on the portfolio given the continued low interest rate environment.
Although interest rates have moved up somewhat recently, we still expect that new purchase yields will be lower than the yields on the bonds running off. Page 20 of the webcast presentation provides information about our January 1st cat treaty renewals. Our long-standing corporate cat XOL treaty continues to provide coverage for both single cat events and the aggregation of losses from multiple cat events. While the treaty renewed on terms that were generally in line with the expiring treaty, providing coverage for the $2 billion layer above the unchanged $3 billion retention, we increased our coverage in the $2 billion layer from 75% to 90%, thus increasing the amount of coverage available from $1.5 billion to $1.8 billion.
The 2022 renewal of the underlying property aggregate catastrophe XOL treaty resulted in placing 45% of the coverage layer. The treaty provides aggregate coverage of $225 million for the $500 million of losses above our aggregate retention of $2 billion. The per event deductible has increased from $5 million in 2021 to $10 million for 2022. Hurricane, wildfire, and earthquake events once again have a $250 million per occurrence cap. Turning to capital management. Operating cash flows for the quarter of $1.7 billion were again very strong. All our capital ratios were at or better than target levels, and we ended the quarter with holding company liquidity of approximately $1.5 billion.
For the full year, operating cash flow exceeded $7 billion for our strongest year ever, reflecting the benefit of continued increases in premium volume, strong profitability, and lower than normal overall claim payouts as courtroom and other settlement activity remained below historical levels. As we've said previously, we are assuming that this lower level of payment activity is ultimately a timing issue. When establishing our reserves and when pricing our products, we assume that elevated severity related to social inflation has not abated at all. Our substantial cash flow gives us the flexibility to continue to make important investments in our business, return excess capital to our shareholders, and grow our investment portfolio, which increased to $87 billion at year-end 2021. We've added an impressive $15 billion, or more than 20% to our investment portfolio in just the past three years.
Interest rates increased modestly during the fourth quarter, and accordingly, our net unrealized investment gain decreased from $2.7 billion after tax as of September 30 to $2.4 billion after tax at year-end. Adjusted book value per share, which excludes unrealized investment gains and losses, was $109.76 at year-end, a healthy 10% increase from a year ago. We returned more than $1 billion of capital to our shareholders this quarter, comprising dividends of $216 million and share repurchases of $801 million. For the year, we returned $3.1 billion of capital to shareholders, including $2.2 billion of share repurchases.
Overall, we had an excellent year with accelerating top line growth, strong and improved margins in our commercial businesses, an improved expense ratio, and a balance sheet that positions us very well for the future. Now I'll turn the call over to Greg for a discussion of Business Insurance.
Thanks, Dan. Business Insurance had another strong quarter rounding out a terrific year with respect to financial results, execution in the marketplace, and progress on our strategic initiatives. Segment income for the quarter was $867 million, up more than $150 million from the fourth quarter of 2020, driven primarily by higher underlying underwriting income and net investment income. We're once again particularly pleased with the underlying combined ratio of 89.8%, which improved by 3.8 points from the fourth quarter of 2020. A little more than a point and a half of the improvement was from earned pricing that continued to exceed loss cost trends. Another half a point came from the improvement in the expense ratio.
The remaining approximately 1.5 resulted from a combination of a lower level of property losses than we expected and a favorable impact associated with the pandemic. Net written premiums for the quarter were up 9% from the prior year quarter, benefiting from strong renewal premium change, high retention, and an increase in new business levels. We're very pleased with these outstanding financial results for the quarter and more broadly for the full year. Before turning to production, let me provide a little color on the full year results to put the quarter in context. The top line of $16.1 billion was an all-time high. Segment income of $2.4 billion and the underlying combined ratio of 91.7% were both excellent.
These results were driven by the successful execution of our thoughtful and deliberate strategies and we're well positioned for continued profitable growth. Turning to domestic production for the quarter, renewal premium change was once again historically high at 9.2%, while retention remained exceptional at 85%. New business of $505 million was up 16% from the fourth quarter of last year, driven by our success with large accounts in middle market. The 9.2% renewal premium change was up a point from the fourth quarter of last year, with renewal rate change of 5.2% and continued improvement in exposure growth to levels we haven't seen in more than a decade. The 5.2% renewal rate was down a bit sequentially, similar to the trends we saw in the first three quarters.
The rate gains we achieved reflect our deliberate execution, given the significant improvements in profitability across the portfolio after several years of meaningful rate increases and improvements in terms and conditions. Written pricing, including the portion of exposure that behaves like rate, remains in excess of loss trend. All other things equal, margins will continue to improve as this price earns in. Given social and other inflation, the frequency and severity of weather-related loss activity, in the persisting low interest rate environment, we will continue to seek pricing gains to further improve the profitability of our business. As always, our execution in terms of rate and retention will be granular at the account or class level.
In addition to our granular price execution, we also remain focused on careful management of deductibles, attachment points, limits, sub-limits, and exclusions, which also contribute to an increase in the price per unit of risk. As for the individual businesses, in Select, renewal premium change was a strong 9.4%, while retention was 82%. New business was up 12% from the prior year quarter, driven by the continued success of our new BOP 2.0 product, which is now live in 44 states. As a reminder, BOP 2.0 is our completely redesigned state-of-the-art product, which includes industry-leading segmentation and a fast, easy quoting experience. Looking back on the year for Select, we're pleased with the progress we've made in improving the profitability of this business while continuing to invest for future growth.
In middle market, renewal premium change remained strong at 8.8%, while retention was once again historically high at 87%. New business was up 25% from the prior year quarter, driven predominantly by our success with large accounts, as I mentioned earlier. To sum up, Business Insurance had a great fourth quarter and full year. We continued to improve the profitability of the book while investing in digital assets, analytics, and industry-leading expertise to enhance our position as the undeniable choice for the customer and an indispensable partner for our agents and brokers. With that, I'll turn the call over to Jeff.
Thanks, Greg. Bond & Specialty ended a strong year with another terrific quarter. Segment income was $170 million, up 4% from the prior year quarter, driven by higher underlying underwriting income. The underlying combined ratio of 83.3% improved by 1.7 points from the prior year quarter, reflecting earned pricing that exceeded loss cost trends and a lower expense ratio. Turning to the top line, net written premiums grew a very strong 13% in the quarter, with contributions from all our businesses. In domestic Management Liability, we achieved double-digit renewal premium change for the fifth consecutive quarter at a level just modestly below our record high third quarter. Retention was higher sequentially and remained strong, despite the impact of our strategy to non-renew cyber accounts that do not meet our minimum cyber hygiene protocols.
Early indications are that those underwriting actions are having a meaningful favorable impact on the frequency of cyber claims we're seeing. Domestic surety posted solid growth in the fourth quarter, reflecting our market-leading position and continued investments in providing meaningful value added products and services to our customers. Our international businesses again posted excellent growth, reflecting strong Management Liability, retention, and rate. Both top and bottom line results for Bond & Specialty were terrific this quarter, capping off a great year and demonstrating the strong value proposition we offer to our customers and distribution partners, and excellent execution across our businesses. Now I'll turn the call over to Michael.
Thanks, Jeff, and good morning, everyone. In Personal Insurance for the fourth quarter, segment income was $327 million, and our combined ratio was 91.1%, both solid results in the context of a challenging environment. We were pleased that our top line momentum continued in the quarter with net written premium up 10%. In automobile, the fourth quarter combined ratio was 104.1%, an increase of 18 points compared to the prior year quarter, which reflected unusually low loss activity due to the pandemic. Automobile loss levels increased mainly due to miles driven and claim frequency effectively returning to pre-pandemic levels, and to a lesser extent, higher loss severity as vehicle replacement and repair costs remained elevated. These profitability challenges are environmental, and we anticipate that they will persist into 2022.
In response, we began implementing rate increases. Rate increases have taken effect in 11 states since August. We anticipate additional increases in approximately 25 states throughout the first quarter, with more actions planned in subsequent quarters. As we indicated last quarter, although it will take time for these rate actions to earn into our results, we remain confident we are on track to address the near-term profit challenges and continue to profitably grow our book over time. In homeowners and other, the fourth quarter combined ratio improved by four points from the prior year quarter to 77.8%, despite the fact that we continued to see higher severity related to a combination of labor and material price increases. As a reminder, for homeowners, we expect the fourth quarter to be the seasonally lowest quarter for loss levels.
Notwithstanding the relatively low fourth quarter combined ratio, the homeowners product line continues to experience elevated weather and non-weather loss activity, and we will continue to seek rate in response. In addition, we are increasing insured values to align with labor and materials inflation, which will further contribute to higher renewal premium changes in the coming quarters. Turning to production, we were very pleased to deliver another strong quarter in both auto and home. Domestic automobile policies in force grew 6% to a record level, driven by strong retention at 85%, while new business growth slowed to 4%. Renewal premium change improved from the prior quarter to 1.2% as the impact of our recent rate actions started to take effect. Renewal premium change accelerated during the quarter, and we expect it to accelerate further over the next several quarters.
Domestic homeowners and other delivered another excellent quarter, with policies in force up 7%, also to a record level, driven by retention of 85% and renewal premium change of 8.7%. New business levels were strong and consistent with the prior year quarter. As I mentioned, we expect higher renewal premium changes going into 2022. Our Personal Insurance success continues to benefit from ongoing investments to modernize our suite of products, expand our distribution partnerships, and leverage the power of technology. One notable example was highlighted in our press release last week regarding the introduction of IntelliDrivePlus in three states. IntelliDrivePlus builds on our existing IntelliDrive capabilities by capturing mileage in addition to driving behavior, demonstrating our continued investment in telematics solutions to offer customers even more options to personalize their insurance.
Reflecting on the full year, we are pleased with our Personal Insurance results, which include segment income of $760 million, a combined ratio of 96.5%, 10% net written premium growth, and record policies in force in both product lines. In closing, while we face some environmental headwinds in the near term, we remain confident in our ability to execute in the face of these challenges and are well-positioned to profitably grow our business over time. On behalf of Greg, Jeff, and myself, I'd like to thank our distribution partners and our teams for a successful 2021. Now I'll turn the call back over to Abbe.
Thanks, Michael, and we're ready to open up for your questions.
At this time, I would like to remind everyone that if you would like to ask a question, you may press star one on your telephone keypad. Again, that's star one for any questions. We'll pause for just a moment to compile the Q&A roster. Your first question will come from Michael Phillips with Morgan Stanley. Please go ahead.
Thank you. Good morning, everybody. My first question goes to auto and the speed to which, I guess, you think you can get improvements there, given you're more of a package writer. We've seen retention held steady, PIF relatively steady. Others are seeing drops there as they kind of curtail growth. Your pricing of 1.2%, clearly not enough, obviously, but I'm sure you'll take more, as you said. Is the fact that you're more of a package writer more of a hindrance to your ability to get the improvements that you think you need over the course of a year versus peers that you know don't have as much package? Is that more of a hindrance? You know, will that create more of a slowdown in profitability as the year comes out? Thanks.
Sure, Michael. It's Michael Klein. I would say the short answer is no. Let me unpack that a little bit, you know. First, the fact that we're a package writer, I actually think the benefit of being a portfolio solution provider showed through in our results this quarter, with relatively strong performance in homes balancing some of the challenges we see in auto, number one. Number two, because we have a balanced portfolio of about 50% property, 50% auto, our overall segment results are actually less sensitive to the trends in auto than the average competitor who is more, say, 60/40, 70/30. Probably most importantly, though, is there's nothing about our being a portfolio solution provider that influences our resolve to improve profitability in auto.
As you mentioned, the 1.2% that we posted in the quarter is encouraging, but clearly not enough, which is why, you know, we're on a path towards accelerating renewal premium change over time. We're in the process of continuing to evaluate our loss experience, file adjusted rates based on that loss experience and file for and get approval for the rate we need to improve the profitability of the line.
Okay, Michael, thank you. That's helpful. I appreciate that. Obviously, the package and the homeowner benefits really helps. Thank you. Second question is specific to reserves and specifically on COVID reserves that you set up at the beginning of COVID. You know, almost two years ago, everybody, the sky is falling, it's gonna be the worst industry I've ever. Clearly, it's not the case. With that Delta, with that Omicron, and there's still some concerns. I guess, you know, last I've seen from you guys comments on that is still the bulk of your reserves there, which I think are north of $250 million, are in IBNR.
At what point do you get comfort in saying that either comes down because they're not going to get reported, or have you seen anything that's been reported that it is still the bulk of IBNR? You know, where do you get comfort that it's time to maybe move that number down?
Hey, Michael, good morning. It's Alan. Let me start, and then I'll just kick it over to Dan. Just to clarify, we never said the sky was falling. We never said this was gonna be the worst industry.
Yeah, yeah. No, I didn't say you did. Yeah, I know.
Just to clarify industry commentary, but let me turn it over to Dan for the substantive response.
Sure, Michael. You know, it's a fair question. You know, we say the same thing exiting 2021, as we've been saying for the past several quarters, which is when we look back, you know, back to the beginning of the pandemic and the reserves that we established related to losses specifically for the pandemic, sitting here at the end of 2021, it's still the case that the majority of those losses are sitting in IBNR. As we've said, you know, in each of the last few quarters, I think we've taken a cautious approach in that regard. I think there's uncertainty as to what the ultimate severity may be for some of those claims. We know courts are not yet, you know, fully reopened, so reporting patterns may be slowed.
We're just gonna continue to take a cautious approach. Having said that, within our PYD figures, there is favorability from accident year 2020. There's also favorability from accident years 2019, 2018, 2017, 2016, 2015, 2014, and so on. I think we're trying to be cautious. We're not ignoring where there's good news. I just think the degree to which we're reacting to that good news has been pretty cautious.
Okay. Thank you, guys. Makes sense. Appreciate it.
The next question is from Brian Meredith with UBS. Please go ahead.
Yeah, thank you. A couple of questions here. First, I'm just curious, when we take a look at the renewal, you know, rate trend here and, you know, take in your historical kind of loss trend that you've talked about, I think it was around 5%, you know, how close are we to that? I think I just want to clarify, I think you also said that you're expecting to continue to take rates that'll kind of be margin accretive throughout 2022.
Yeah. Brian, good morning. It's Alan. I think we said price. You know, there's industry observers get very focused on that rate and loss trend number. I think you know, in some circumstances, that's appropriate, in some it's just not. You know, you look at the overall 9.2 points of price, you look at our effective execution and segmentation of that across the book. You know, that 9.2, if you look back over 15 or 20 years, you can't find that many quarters with price at that level. The combination of the rate we're getting and the exposure continues to contribute to written margin expansion.
Gotcha. Makes sense. I'm just curious, taking a look at your full year underlying combined ratio, you know, in your Business Insurance, I mean, it's probably as low as it's been in the last decade or more. I guess my question there is, you know, are you thinking or pleased to get lower here, or are you kind of at an acceptable level kind of from a return perspective at this point?
You know, I think we're gonna stay away from giving a lot of specific forecasts. I mean, you know, Greg did speak to that in his prepared remarks. You know, we do think that there continue to be headwinds, and Greg specified what they were. We continue to think that we've got to do more to offset those. We'll, you know, continue to price and execute to do that. I think we're gonna avoid giving specific outlook on a metric.
Gotcha. Thanks.
Thanks, Brian.
The next question will come from Ryan Tunis with Autonomous Research. Please go ahead.
Hey, thanks. I had a couple on the ag treaty. First of all, was there any benefit on the underlying loss ratio this quarter for the recoveries on that, or was it all just cats?
Hey, Ryan, it's Dan. I know I go through the comments fast, but in my comments, I gave you $34 million of benefit to the underlying in the quarter, which was $10 million to BI and $24 million to PI. The lion's share, $220+ million, was to cats.
Got it. Follow-up is, I think in the past, you've sort of set the self-retention on that treaty in such a way kind of in line with your internal view of what your cat load was. Should we interpret the higher self-retention on that aggregate as you guys having raised your internal view of your cat load? Or was that just a function of renewal discussions, harder terms and conditions?
A couple of comments there, Ryan. One, I think some of the analysts have assumed that the attachment point was a proxy for our cat load. We've never said that, and it doesn't work quite that way. Having said that, the increase in the attachment point is generally gonna be reflective of the growth of our business. As the business is bigger, we would expect cat losses on a dollar basis to grow. Then the attachment point and the change from $5 million deductible per event to a $10 million deductible per event, that's the combination of, you know, what was available in the marketplace and what we felt was an appropriate deal to pursue.
Thank you.
The next question is from Jimmy Bhullar with JPMorgan. Please go ahead.
Hi, good morning. Had a couple of questions. First, just on the auto business, you mentioned the 1.2% increase on rates that you got. Can you compare that to what you're actually seeking in terms of price hikes and just the process of sort of getting approvals and how they should flow through? Just trying to get an idea on whether you think margins can begin to improve if inflation does not cool down. I have another one.
Sure, Jimmy. Thanks for the question. It's Michael. So the 1.2%, right, is the written renewal premium change across the portfolio. You could sort of think of it as including a weighted average of the rate we've achieved in the states we've gotten it, right? So 11 out of, call it 46 states, we got rate in. The other important thing is the number of the 11 that I gave you is a new business effective date, not a renewal effective date. So there's a little bit of a lag in the impact on renewals underneath that 1.2%. What I would say is, you know, in terms of the process, we are largely being successful in achieving the rate we're asking for state by state. Obviously, you know, every state's a little bit different.
As I mentioned, we're pursuing the rate we think we need based on the trends we see. Your point about, you know, what happens with severity and loss trend from here is a really good one, right? The filings we got approved in the fourth quarter of last year were based on our, you know, experience and our outlook for trends at that point in time. As we seek additional rate as we move into 2022, we'll continue to update those assessments and those assumptions and that'll drive the rate we request on a state-by-state basis. The 1.2% is really mostly a function of the fact that it's in, you know, 20% of the states we're writing in, and as we get more rate approved in more states, that'll drive that acceleration.
Besides California, are there any major states where you're having a hard time getting price increases? 'Cause I think California hasn't approved anything so far.
Again, I would say most of the states that we are working with, we've been able to get approved what we've sought. I really wouldn't point to any states that have been a particular challenge.
Okay. Then on workers' comp, I think there's been hope for almost two years now that pricing would turn. What are you seeing, and what are your expectations on pricing for that line?
It-
Go ahead.
Yeah. Morning, Jim, this is Greg Toczydlowski. You know, in Alan's prepared comments, he mentioned that we saw a little more of a negative than we have in prior quarters on that. That really is generated based on the strong industry profitability and profitability from ourselves also. A couple quarters back, you know, we would've thought that we would've been getting above zero, but the pandemic had with the contraction of the economy some very favorable results overall on frequency on workers' comp. The bureaus that really regulate that particular product are all at a state level looking at direct COVID losses and indirect COVID losses. They do a pretty good job of predicting where the future loss costs are. We think it's gonna be a little bit longer than what we did a couple quarters ago just because of that strong profitability before it might get above zero.
Okay. Thank you.
The next question will come from Elyse Greenspan with Wells Fargo. Please go ahead.
Hi. Thanks. Good morning. My first question is just on, related to inflation and loss trends. Are you guys seeing any upward pressure on loss trends from social inflation, climate change, or any other factors? I know it came up a couple times on the call, but can you just confirm that with BI, your loss trend assumption does still sit at that 5% level that you've been talking about?
Yeah. Elise, good morning. Yeah, we have not changed our, you know, general view of loss trend in BI. Remember, you know, loss trend is a long-term view of a loss inflation. There are other levers for us to account for other sort of loss activity going on that we don't necessarily think is part of long-term trends. We can change the base year, we can book losses relative to what we see in any particular quarter. You know, I think you heard from Michael in particular. I know your question was about BI, but you know, you heard from Michael in particular that we did book some losses in PI. We did in BI as well for, you know, severity, think labor and material inflation.
We did see a little bit of that, and that's reflected in our numbers. You know, I think you heard from Dan in his prepared remarks that in terms of social inflation, you know, while I would say what we're seeing maybe is a little bit better than what we saw a few years ago, but we're assuming that's due to distortion in the data and that hasn't abated at all. We continue to account for that. You mentioned climate change. Climate change is a hard one to think about in any given period 'cause you think about weather patterns over a long period of time. You know, clearly, if you just look at four of the last five years, our cat experience was worse than what we would've expected.
You know, whether that's climate change, whether that's, you know, other factors, you know, think demographic changes, people moving into harm's way, people building larger homes, I mean, there's all sorts of things that are contributing to that. But we do see weather patterns, and we do take weather patterns, you know, into account in our loss picks and our pricing.
Great. My second question, Alan, you made the comment that within, you know, written premium should outpace loss trend for a while. I know when you make that comment, you just responded to an earlier question, right, that you're more looking at, you know, the RPC, so that 9.2% as it relates to trend. How should we think about, you know, thinking about the gap, I guess, continuing to narrow between that 9% and that 5%? Would you expect, when you say some time, is that a comment pertaining to all of 2022?
You know, Lisa, you know, as we look out into the future, and this is, you know, always the case, there's nothing unusual about this moment in time, but, you know, the crystal ball gets a little bit hazy sometimes. You know, it's hard for us to be very specific about, you know, how long anything is gonna last, any trend is gonna last in this business. When we look at overall pricing, you know, in BI in excess of 9% and think about where loss trend is, we're comfortable where the trends are heading. I shared as we do from time to time that, you know, our pricing, you know, ex workers comp was 7%, which is, you know, also a historically very strong number.
We look at all that and say it's gonna continue to certainly based on our view of estimated loss trend continue to contribute to margin expansion. For exactly how long, I don't know. It's gonna vary by line. Greg pointed out, and you can see in the data, we've been getting pretty good price increases for a while now, which has changed our overall return profile and view of rate adequacy. From here, some lines will keep going up, some will go sideways, some the rate of increase will decrease. We're very comfortable. We execute on a very deliberate basis. We've got the data, we've got the insight.
Really importantly, we've got the underwriting expertise at the point of sale to know what we want to do on that marginal account. It's about getting the right price on the account and either putting it in the portfolio if we don't have it or keeping it if we do. We're very comfortable with the execution and what the outlook is.
Okay, thanks for the color.
Thank you.
The next question is from Alex Scott with Goldman Sachs. Please go ahead.
Hi, thanks and good morning. The first one I had is on Bond & Specialty. You know, if we consider the COVID that I think was included in the year ago number, I wanna say it was two points or so, you know, the underlying loss ratio got a touch worse despite a lot of rate being taken. I just was interested if you could unpack that for us a little and what some of the drivers were.
Alex, it's Dan. Just to be clear, you're looking at the Bond & Specialty underlying combined ratio for the fourth quarter?
Yeah, just the year-over-year. I think, you know, by our math, it got a little worse when we exclude COVID, although I'm not totally sure exactly if there was any COVID impact that maybe was in this quarter. Could you just talk about sort of that year-over-year comp ex COVID and what some of the drivers are?
Yeah, the printed number, just to make sure we're looking at the same thing, is 83.3% this quarter down from 85% last quarter. That improvement is mostly driven by the impact of earned price relative to loss trend. COVID in the fourth quarter of last year was not a big factor.
Got it. Okay. Maybe switching over to Business Insurance for my second question. It was mentioned, I think, a couple of times that there's a lot of other factors beyond just the pure rate versus loss trend. You know, some of those being exposure acting like rate, terms and conditions changes. You know, you spoke a lot about what you're doing on claims handling and becoming more efficient. Is there a way for us to think about order of magnitude impact from some of those things and how much improvement could kind of continue from those elements that are a little harder to quantify?
Yeah, Alex, I don't know that there really is. I mean, there's, you know, there's a lot of potential things in there. You know, in addition to pricing and wherever interest rates go, you've got risk selection and mix and reinsurance and claims handling expenses, terms and conditions. I think it's hard on the inside to calibrate the impact of those. We've obviously got more insight into it than you do and methodology for doing it, but I'm not sure how you do it from the outside. Dan, am I missing something?
I don't think so. There's a lot of things around the edges. I think the fundamental point is margins are not just gonna necessarily behave in line with the headline rate versus trend.
Okay. Thank you.
Thank you.
The next question will come from Paul Newsome with Piper Sandler. Please go ahead. Paul, your line is open.
Good morning. Congratulations on the quarter.
Thanks, Paul.
My first question is on auto. I don't even know if we have enough data, but my sense is that driving behavior changed. Even though frequency is kind of back where it was pre-pandemic, people are driving at different times and in different ways. Is there any way to quantify that impact? You know, because I think we're thinking of severity as sort of a pure inflation impact, but I don't know if that's the case, and was wondering if your data suggests one way or the other.
Sure, Paul. Michael. It's Michael. It's a great question. I think it's something that we continue to monitor. I would say that there are a couple of places that we have data that demonstrate changes in driving behavior. One is just the driving patterns, right? Commuting versus non-commuting, time of day. Whether you look at external data sources, whether we look at our own IntelliDrive data, we do see a shift in those driving patterns. The other item that, again, I think you'll see in here talked about quite a bit is just change in driving behavior. In the context of those new driving patterns, we and industry observers have observed increased speeds. When you look at the...
Unfortunately, the continued rise in fatalities on highways, some of the data shows increased evidence of fewer people wearing seatbelts having an impact on fatality data. And again, our own data and that from others also indicates increases in distracted driving, you know, interacting with the phone while operating the vehicle. I think we do see changes in, again, time of day, type of driving, and actual driving behavior that will have an impact on losses. Quantifying exactly how much of the change is driven by that is more challenging. You know, frankly, when we look at increased severity in auto, the biggest drivers continue to be used car prices and labor and parts to repair vehicles, particularly in the context of coverages like collision and property damage.
Thank you. My second question is, Business Insurance. Normally, at least my history, normally when I think of seeing exposure increases, that has, you know, essentially, a related claim increase, as you can imagine, with higher exposures. There's also an embedded piece of effective price increase in exposure, which, you know, ordinarily is very hard to figure out, but it's there. Is there anything that would make this time different from the past with the impact of exposures? Because, you know, what we're seeing today is exposures rising in some parts because of a relief from COVID, as opposed to what I think we would normally think of as sort of ordinary economic growth.
Well, I don't know how to answer that question with great precision. I mean, it's in part why I chose to point out the wage inflation from the U.S. Bureau of Labor Statistics, because, you know, wage inflation relative to, you know, headcount increase, for example, you'd think of as a relatively larger increase to margin contribution. But, you know, other than that, you know, it's all sort of a blunt instrument. We, you know, spend a lot of time thinking about how we should be thinking about, you know, the contribution of exposure to margins. You know, it's complicated for us and again, another place where we probably have more insight into the data. It's a complicated analysis, and there's a lot of judgment involved. You know, at least one component to think of is, you know, wage inflation versus, you know, headcount increases.
Great. Thank you very much. Appreciate the help.
Thank you.
The next question will come from Josh Shanker with Bank of America. Please go ahead.
Yeah, thank you. Hello, everyone. It was an outstanding quarter in the homeowners silo. Obviously, you guys are taking rates there. One quarter does not make the show. How close are we to rate adequacy in homeowners? When we look at the margins in homeowners versus auto, when you're thinking about a bundled customer, do you need to make profit in both the home and the auto part, or do you look at the customer as, let's make a profit on the customer's complete package of policies?
Sure. Thanks, Josh. It's Michael. I would say the answer to the second part of your question is yes. You know, we like to make money on the customer. We really do. We price the lines as lines of business. You know, while we talk about account pricing sort of across the organization, Greg talks about it all the time in Business Insurance, you know, the way that pricing works in the personal lines space, you get rate filed and approved by product. Now we have some interline dynamics in terms of the way our pricing models work, but we really do seek to earn our target margins by line and in aggregate, whether that's across the business or customer by customer.
In terms of the profitability in Home, again, I think in my prepared remarks, I indicated this, right? I wouldn't overreact to the 78% in the fourth quarter. We're pleased with it. We're happy with it. You know, that said, the full year is still a 98%, which is up from last year. Underlying is an 85%, up from last year. The fourth quarter really hasn't changed our resolve in terms of our need to continue to drive price and terms in property. The other thing I think is an important dynamic to watch for in 2022 is RPC for property will also be impacted by insured values. I mentioned it in the script, but we're seeking to increase values in the homeowners line in response to home prices and labor and material inflation. You'll see that start to show up in pricing in 2022.
Okay. Thank you for the very clear answers.
Thanks, Josh.
The next question will come from David Motemaden with Evercore ISI. Please go ahead.
Hey, good morning. Thank you for taking my question. I had a follow-up just for Alan. You gave a 7% renewal rate change in Business Insurance, and that was excluding workers' comp. Could you just talk about how that's trended over the last few quarters and maybe some of the drivers behind it?
You know, David Motemaden, we typically actually don't give that number. We give it from time to time episodically when we think it's relevant for providing an insight into the results we're achieving. But we don't give it routinely. I'm not even sure I know offhand how that number's necessarily trended, although you know, I would probably just you know, pull the lens back a little bit and say you know, over the last few years, pricing's been very strong. I mean, that's probably the lens I'd give you on that.
Got it. Thanks. And then, you know, maybe just moving, you know, I guess sticking in Business Insurance and, you know, great to see the premium written growth this quarter. You mentioned the renewal premium change, obviously the 9.2%. But, you know, I noticed that new business really moved the needle this quarter, and that's, you know, a change versus, you know, the prior couple quarters. So I'm just wondering, you know, did something change in terms of, you know, your appetite for new business? Any enhancements that you've made this quarter versus the last few? You know, I'm just trying to get a sense for how sustainable you think the 9% growth is as we head into 2022.
Hey, David, this is Greg. Yeah, in my prepared comments, I did share with you that we were more successful in some larger accounts in middle market. You know, if you go back, I've shared with you that that's lumpy at times. Last quarter, we didn't hit on as many large accounts. In the quarter before, we did. You get a little bit of lumpiness when you get into accounts greater than 500,000. That was one dynamic. Generally, also, you know, our underlying combined ratio is across our full portfolio of the book of business, and that includes new business.
As we continue to improve the margins on the business, we continue to have better outlooks in terms of what our new business is o ur underwriters are incredibly disciplined around risk selection and, you know, they wanna be active partners for our agents and brokers. As our business continues to improve, we continue to be more active with our hits on our new business.
David, I'll just share, just stepping back from the results in the quarter. You know, key to everything we do, I think, the success we had in BI is franchise value. It's having products and services our customers, agents and brokers value. It's having, you know, the data and analytics to segment the risk and get the right price on it. It's making sure we've got great experiences for all of our constituencies. It's a lot of hustle. All of our innovation priorities and all the investment we're making are generally speaking, aligned to those things. You know, I do think that has an impact on, you know, on everything. It's on our retention, on our ability to get the price increases that we did and on the new business.
Yep, got it. That makes sense. Thank you.
Thank you.
The next question is from Tracy Benguigui with Barclays. Please go ahead.
Thank you. Just a quick follow-up question on your Jan 1st underlying aggregate reinsurance renewal. If I just look at the upper limit, it looks like your $225 million coverage is down from $350 million last year. I guess I'm wondering, was the objective to remain cost neutral in response to rising reinsurance pricing or less appetite by reinsurers to offer aggregate cover?
Hey, Tracy, it's Dan. It's really more the latter. If you look at, you know, this is now the fourth year we've had this treaty, and it's always covered a $500 million layer. How much of that layer we place each year is a function of our view of appropriate price and terms and conditions and the reinsurer's view of appropriate price and terms and conditions. We went from, you know, 86% the first year down to 56% the second year. This last year was up to 70%. This year it's in at 45%. We're not trying to manage the total cost of the treaty. Pricing did not move that significantly on the treaty. It's really just an intersection of our appetite and the reinsurance market's appetite.
Got it. Just a quick follow-up on personal auto. Similar to last quarter, you sound pretty confident of all the rate increases you're taking. I noticed your 6% PI's growth was pretty high number year- over- year for Travelers. Do you think that's something that could slow down in subsequent quarters? Could that be like a new normal given some of the strategic stuff you're doing, like IntelliDrive?
Yeah, Tracy, great question. You know, I would say, you know, you got to look at both the year-over-year and versus sequential quarter-over-quarter numbers there. You know, 5%-6%, 1%-2% sequential quarter-over-quarter growth, we do think is driven by the investments we're making in the product. But it's also a function of, you know, our pricing relative to the market. You know, notwithstanding the fact that the 6% is up from the 5%.
Policies grew less than 40,000 in this quarter versus more than 40,000 in the prior two, which is why you see the sequential quarter growth coming down. Again, in my prepared remarks, I talked about the fact that new business production has slowed. Again, we're focused on, you know, the rate we think we need to drive into the product in improving the profitability in response to the loss trends. The growth is really gonna be an outcome, as opposed to a target, and we'll see how our pricing strategy plays out relative to the market over the next several quarters.
Okay. Got it. If I could just sneak, sorry, one more in. I think there's been a lot of earlier talk about packaging, but if I could just focus on your policies being written on 12-month paper for auto. Do you think you have to push rate increases a little bit harder? 'Cause others are just talking about taking multiple bites on the apple, so they may be more agile.
Yeah. Again, it's Michael. I'd say those are two different things. Right? One is your filing strategy, the other is your product mix. We do tend to write more 12-month policies than a lot of our auto monoline or auto-focused competitors, but we do write a mix of 12 and six month policies. The fact that we write, you know, more 12-month policies, though it doesn't mean that we can't take multiple rate changes in a jurisdiction in a year. We may, in some states, you know, take a couple of rate increases in 2022, and those will hit the renewals as they hit them, depending upon the policy terms. I think our filing strategy, we can be as agile as anyone else. When that impacts renewals will vary a little bit based on our policy mix.
Okay.
We don't see it as a significant barrier in terms of our ability to make progress.
Got it. Thank you.
Thanks, Tracy.
The next question is from Yaron Kinar with Jefferies. Please go ahead.
Thank you. Good morning, everybody. Thanks for still squeezing me in here. My first question may be a little bit long-winded, but hopefully you bear with me. In personal auto, looking back to the 2014 through 2016 cycle, I think many had pointed to the deterioration of bodily injury severity, particularly for high limit policies. Whereas this time around, I think the deterioration is really coming from physical damage severity. If you agree with that premise, is it reasonable to think that Travelers, given that it is more weighted to higher limit preferred insurance, would need less rate than more standard and non-standard books, and therefore would maybe benefit from market share gains here?
I guess I would say that it's reasonable to. I wouldn't assume it. I think it's reasonable to monitor that. I would say that our pricing strategy is reflective of both our book of business and our loss experience. You know, we have a different rate need than another competitor because of the profile of our book, the mix of our book. We also do tend to write more full coverage. Even the product we're providing to the customer, right? When you get into the non-standard, standard market, you tend to see a little more liability only. That's gonna change the pricing dynamics.
Again, I would say, you know, we're seeking the rate we think we need based on our loss experience, on the trends we see. Profile and mix of business could definitely, in addition to what you just described, state mix, is gonna also have an impact on the aggregate headline numbers that any given carrier needs.
Right. Okay. That's helpful. Then my second question, probably for Alan. You talked about the investment in technology. I think we've over a billion dollar, well over a billion dollar in annual spend. I don't remember seeing an acquisition related to technology, at least in Simply Business 2016. I was wondering maybe you could elaborate on why we are not seeing more through M&A. Is it just a function of valuations? Is it that the idea doesn't belong outside or not compelling enough? Maybe you can help understand that.
Yaron, your question came through a little bit garbled, and we couldn't quite understand it here. Could you try one more time?
Sure. I'm trying to get a better understanding of the investment in technology. I don't remember seeing any M&A from Travelers since Simply Business back in 2017, and I'm just trying to understand why is it that you're choosing to really build all this organically as opposed to pursue maybe opportunities that are presented through, you know, third parties. Is it a function of valuations only? Is it a function of just the ideas that are presented by these third parties not being compelling enough for the company? What's driving the choice to build organically?
Yeah. Well, one, I guess that's not exactly true. I mean, you know, just to give you an example off the top of my head, you know, we acquired InsuraMatch not too long ago. I think you're asking a philosophical question, so let me give you a philosophical answer. We approach it pretty agnostically. We're happy to buy it, we're happy to build it, or happy to license it. In virtually every significant investment we make, we take a step back and we say, "What are the capabilities we need, and what's the fastest, most cost-effective, least risky way to get it?" If it's proprietary, we wanna own it or control it or buy it or develop it. If it's not, you know, we're happy to go get it in other ways. In any significant investment we make, we do a very thorough evaluation of all the opportunities.
Got it. Thank you very much.
Thank you.
Ladies and gentlemen, we do have time for one final question. That question will come from Mike Zaremski with Wolfe Research. Please go ahead.
Hey, Greg. Good morning. Maybe moving to auto, I guess, are you seeing a frequency benefit from a spike in COVID cases? 'Cause otherwise it just feels like there's still a big gap between severity, or just overall loss trend and the pricing you're seeking.
Yeah. Great question, Mike. It's Michael. You know, I think our own data in terms of miles driven and external sources, whether you look at Department of Transportation or others, show a little bit of a slowdown in the back half of December. I'd say it's too soon to call that a trend. You know, you've got the holiday in there, you've got weather impacts in there. There's a lot of noise around, you know, whether you got a good baseline comparison in terms of the data we're seeing. But it's certainly something we're paying attention to. But again, broadly speaking in the quarter, we saw miles driven and claim frequency, you know, again, largely approaching pre-pandemic levels across the period.
Okay, great. My follow-up is on Bond & Specialty. Greg mentioned non-renewing of a number of cyber accounts having a meaningful favorable impact. Any kind of color you can provide on whether cyber has been a negative impact in 2021 and which might kind of help results into 2022?
Yeah. Thanks for the question, Mike. This is Jeff. We've been fairly vocal that the cyber trends for the last few years relative to ransomware have been an impact not just for us, but you've also seen that in the broader marketplace. We took actions in the middle of 2021 to get pretty affirmative and deliberate relative to the cybersecurity protocols, multi-factor authentication on our new and renewed business. While the results are still early, we did think that it was important to point out, we're seeing that the quality of the cybersecurity does have a value to the organizations that have it in place. We're already seeing it in the frequency, and we thought that it was important not to mention that just for our own results, but for the broader market.
Thank you.
Thank you.
Thanks, everyone. We appreciate your joining the call this morning. As usual, if there's any follow-up, please reach out directly to Investor Relations. Have a good day.
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