Thank you for standing by. My name is Gail, and I will be your conference operator today. At this time, I would like to welcome everyone to the Chubb Limited First Quarter 2026 Earnings Call. I would now like to turn the conference over to Susan Spivak, Senior Vice President, Investor Relations. You may begin.

Thank you, and let me add my welcome to our March 31, 2026 first quarter earnings conference call. Our report today will contain forward-looking statements, including statements relating to the company's performance, pricing and business mix, growth opportunities and economic and market conditions, which are subject to risks and uncertainties, and actual results may differ materially. See our recent SEC filings, earnings release and financial supplement, which are all available on our website at investors.chubb.com for more information on factors that could affect these matters. We will also refer today to non-GAAP financial measures, reconciliations of which to the most direct comparable GAAP measures and related details are provided in our earnings release and financial supplement. Now I'd like to introduce our speakers. First, we have Evan Greenberg, Chairman and Chief Executive Officer; followed by Peter Enns, our Chief Financial Officer. Then we'll take your questions. Also with us to assist with your questions are several members of our management team. And now it's my pleasure to turn the call over to Evan.

Good morning. We had an excellent quarter and start to the year. Our results speak to the strength and resilience of our company in a period of elevated uncertainty. They also speak to our globally diversified business opportunities on the one hand and our disciplined approach to underwriting on the other. I want to first start with a few words about the external environment. War in the Middle East raises the specter globally of higher inflation and potentially slower economic growth. To what degree, the timing and the pattern are all unknowable at this time. However, the impact of the war adds a degree of pressure to certain financial, fiscal and economic stresses, such as underlying inflation, fiscal deficits and sovereign debt, global supply chains and financial valuations, including equity and credit and a growing energy shortage to name a few. In times of stress, I like Chubb's position. Given the strength of our balance sheet, earnings power and liquidity. Now turning to our results, strong growth in P&C underwriting, investment and life income led to core operating earnings of $2.7 billion or $6.82 per share, both up substantially over the prior year first quarter, which was, of course, impacted by the California wildfires. Adjusting for this, excluding catastrophe losses, core operating income was up 10.7% and EPS was up 13.5%. And most important, tangible book value per share grew 21.5%. Total company net premiums grew 10.7% for the quarter to more than $14 billion. P&C premiums grew 7.2% and Life grew more than 33%, both benefited from foreign exchange. Our underwriting performance in the quarter was excellent. P&C underwriting income was $1.8 billion with a combined ratio of 84%. And on a current accident year basis, excluding catastrophes, underwriting income grew 9.8% and a combined ratio of 82.1%. On the investment side of our business, adjusted net investment income of $1.8 billion was up more than 10%. Our fixed income portfolio yield was 5.1%, and our current new money rate average was 5.5% as of March 31. Our invested assets now stand at $170 billion, up from $152 billion a year ago. Again, these results, top and bottom line, put a point on the broad-based, diversified nature of the company by geography and product by both commercial and consumer customer segments and by distribution channel. Our annualized core operating return on tangible equity was 20.6% and our core operating ROE was 14%. Peter is going to have more to say about financial items. Turning to growth, pricing and the rate environment. P&C premiums grew 7.2% with consumer up 14.2% and commercial up 4.6%. Overseas General grew 14.4% or 6.1% in constant dollar. Total North America was up 4.1% or 7.8%, excluding large account property both admitted and E&S, which we purposely shrank given what we judge to be inadequate pricing levels in a number of important markets. Property and financial lines pricing conditions are soft, with property pricing in those markets softening in a pace that, frankly, I'll only describe as dumb. With that, as a baseline, I'll give you some more color on the quarter by division and region. I'm going to begin, as I did last quarter, with our international P&C business. Premiums in our international retail business, which operates in 51 countries and is 90% of overseas general, were up more than 15%. Consumer-related premiums, both Accident & Health and personal lines were up over 20% with commercial lines up over 11%. Europe grew 17.5% with consumer and commercial both up double digit. Asia grew more than 12% and Latin America grew almost 18%. In our international retail commercial business, P&C rates were down 2.5%, and financial lines rates were down 7.4%. Our selected loss cost trends in our international retail business was 3.7%, or 130 basis points lower than 2025. In our London wholesale business, the market has become highly competitive, particularly but not only in property, and we purposely shrank our open market property business. Premiums in our London wholesale business, which is 10% of international P&C, were up almost 8%. Turning to North America. Total premiums again grew 4.1%, including 8.3% growth in personal lines and 2.8% in commercial, excluding large account property, both admitted and E&S, and that's shared and layered property. Total North America commercial premiums rose 7.7%, a very good underlying result. Breaking it down further, premiums in major accounts and Specialty or E&S grew 1.5% or 10.9%, excluding shared and layered property, which again, we shrank. Growth was driven by a broad range of casualty, marine, surety and risk management businesses. Premiums in middle market and small grew 3.3% with P&C lines up almost 5.5% and financial lines down 5.7% or flat when adjusting for the impact of just additional reinsurance we chose to purchase. In North America, pricing for commercial property and casualty, excluding financial lines and workers' compensation, was up 4.6%, with rates up 2.2% and exposure change of 2.3%. Property pricing was down 2.6%, with rates down 6.3% and exposure up 4%. However, going a step further, property pricing was down 14.3% in shared and layered major and specialty for the business we wrote. Market pricing for the business we gave up or passed on was down between 30% and 40%. The larger the premium, the greater the price discount. On the other hand, in middle market and small commercial, property pricing was up 1.5%. Casualty pricing in North America was up 9.6% with rates up 8.4% and exposure of 1.1%. Workers' compensation pricing was up 4.3%, and financial lines pricing was about flat. Our overall selected loss cost trend in North America commercial was little changed, with no change in casualty or other long-tail lines. On the consumer side of North America, our high net worth personal lines business had a very good quarter with premium growth of 8.3% and renewal retention on an account basis of 92%. Homeowners' pricing was up 7.7% in the quarter. And in our international life insurance business, premiums rose 37%. Premiums in North America Chubb Worksite Benefits business were up almost 16%. Our Life division produced $316 million of pretax income in the quarter, up 8.5%, and adjusted for a few one-time items that benefited last year's first quarter, life was up 11.5%. In sum, we're off to a very good start in 2026. And we had an excellent first quarter. From a macro perspective, over time, in a difficult environment, generally strong companies have advantage over weaker ones. Chubb's diversification, market-leading presence and capabilities and operating discipline provide us with resilience when the macro environment is uncertain. We are patient and have many sources of opportunity on both the liability and the asset side of the balance sheet. From what I can see, catastrophes aside, I remain confident in our ability to continue generating strong growth in operating earnings and double-digit growth in EPS and most important tangible book value. I'll turn the call over to Peter, and then we're going to come back and take your questions.

Thank you, Evan. Our first quarter results were strong, and we concluded March in an excellent financial position. Supported by balance sheet strength and liquidity, including record cash and invested assets of nearly $173 billion and $3.8 billion of adjusted operating cash flow. During the quarter, we issued CHF 200 million or approximately $250 million of 6-year debt at a very attractive cost of 1%. We returned $1.5 billion of capital to shareholders, including $1.1 billion in share repurchases at an average price of $325.06 per share and $380 million in dividends. We ended the period with an all-time high in book value of nearly $74 billion or $189.93 per share. Book and tangible book value per share, excluding AOCI, grew 12.1% and 16.5% from last year. Our core operating return on tangible equity and core operating ROE in the quarter were 20.6% and 14%. Pretax catastrophe losses were $500 million for the quarter, principally from weather-related events split 87% U.S. and 13% international. Pretax prior period development in the quarter in our active companies was favorable $301 million, comprising $322 million of favorable development in short-tail lines and $21 million of unfavorable development in long-tail lines. Our corporate run-off portfolio had adverse development of $15 million. Our paid-to-incurred ratio for the quarter was 87%, and our net loss reserves increased to nearly $69 billion, representing growth of 5% from first quarter last year. Turning to our investments. Our A-rated portfolio increased about $1.5 billion from strong operating cash flow and positive foreign exchange gains partially offset by $1.6 billion of net unrealized losses from an increase in interest rates and widening of credit spreads. Adjusted net investment income of $1.84 billion was at the top end of our previously guided range, primarily due to the increase in our invested asset base and stronger private equity returns. We expect adjusted net investment income in the second quarter to be between $1.825 billion to $1.85 billion. Our core operating effective tax rate of 19.3% for the quarter was slightly below our previously guided range, primarily due to compensation-related equity awards, which vested in the first quarter. We continue to expect core operating effective tax rate for the full year to be in the range of 19.5% to 20%. I'll now turn the call back over to Susan.

Thank you, Peter. At this point, we're happy to take your questions.

Your first question comes from the line of Jian Huang of Morgan Stanley.

My first question is on the geopolitical commentaries you had in your opening remarks. Can you maybe help us unpack this concept a little bit? We're hearing inflationary concerns out of Asia and parts of Europe due to the conflict in Iran. Do you see that at some point in time affecting pricing expectations in the U.S. market if the conflict drags on longer than expected? Just curious your thoughts on that.

As I said, the degree, the pattern, the timing is unknowable. However, global supply chains depend substantially. You mentioned Asia. The U.S. depends on supply chain through Asia. We depend on supply chain through Mexico and other parts of the world. The impact of the Gulf on supply chain availability of commodities and other inputs and the impact to shipping, of course, is going to have an inflationary impact. How that passes through to inflation in the U.S., the degree of it and where it actually shows up is not really knowable at this time. But it isn't going to be zero. That's for sure. And how transient it is, is unknowable also. The longer it goes on, the stickier it will be. That's sort of the mental model I have. How it will pass through on insurance, I don't know. I'm not—it's not something that I'm really ringing my hands about. I'm concerned about it. It will likely be short-term transient. We'll see what it is when it shows up, and we will respond to it accordingly.

Got it. Really appreciate the thoughts. My second question is on the small market E&S business and AI. So when we think about your small market E&S business, that has grown fairly well over the past. And as we think about you deploying more AI capabilities either maybe through distribution or just internal capabilities on underwriting. Can you maybe help us to think about the growth trajectory over the next 5 years. Is it fair to say the E&S market for you, specifically the smaller end of that can grow multiple times bigger in 5 years' time? Is that the right way to think about it?

I think about it a little differently. I think about the small commercial market, retail and E&S. I actually think the greater opportunity for growth is in the vast retail end of it versus the E&S. But it's both. And what we have done to transform that business and what we're continuing to do to transform it, including with the use of AI and now with what's in front of us with agentics within AI, evolving large language model capabilities and enterprise software that emerges from that as well. Yes, it is a real growth area for our company over the next 5 years. And by the way, not simply North America, we expect significant growth in various markets internationally that may ultimately—really.

Your next question comes from the line of Michael Zaremski of BMO Capital Markets.

Question regarding some of your commentary around the pricing cycle, specifically in the larger account marketplaces where you called out pricing power is declining, I think, more than you feel makes sense to Chubb. You also called out kind of the London specialty market is getting more competitive. Curious, you've been through lots of cycles. You and your team have been through lots of cycles. What's causing the competition this time? Is it just simply what you've seen before and folks are getting excited about increasing their top line growth in a softening marketplace? Or is there some other causes this time that you want to call out?

Yes. And let's step back and put a perspective on it too. The market rates, so I gave you what Chubb lost business for. If I step back and look at overall market rate in shared and layered in North America and in London, pricing overall is off 25% in the quarter, heading to 30%. It's accelerating in that trend. And by the way, loss cost to put a point on it, loss costs are moving at about 4% to 5% in shared and layered property. So you can work out the math there. It's always supply and demand. So it's the amount of supply, which is capital that is chasing a relatively finite amount of business. And by the way, in a concentrated way, if it's E&S and it's London or it's in the United States, it's boxed up and brought to underwriters. You can access it. It's not like retail business generally. It doesn't take a lot of capability. It takes some balance sheet capital and a couple of underwriters. And you're in the market. So it's a hunger that way. The difference—and I wrote about it in the shareholder letter—you can read that. This structural difference this time is simply how the capital is showing up. And it's showing up a lot of it in a volume-based incentive system—MGAs. The majority of them, it's just volume-based. What do they bring? They bring a cheaper price and a higher commission. And it's the reinsurance market, and it's alternative capital. And the number of bites of the apple in the supply chain being taken by intermediation. That is what you are reflecting here. And by the way, the loser at the end of the day is the ultimate risk taker who puts up the capital. This is short-tail business. The report card comes home rather quickly, so stay tuned.

That's helpful. And my follow-up is just on Chubb's digital transformation. You gave us an update back in December, but you've been talking about digital transformation for many, many years, probably much longer than peers. Just curious, has your view changed in recent months given advances in technology on the cadence of the digital transformation, front-end loaded, back-end loaded or just pro rata over time? And also, do you feel that your digital transformation goals since they're longer term could change fairly materially over time given the pace of change in technology?

I haven't changed my view of our goals in the last three months, and it is steady, and we are executing and we are on track. The technology is evolving at a rapid pace. And the most interesting in the last number of months that will, frankly, is still emerging. There's a lot of talk about it, but how it actually operationalizes is the notion of what agentics now really brings, and the notion of enterprise solutions that some of the developers of frontier large language models are working to actually monetize all that they've spent in development. I think those trends as they emerge will only accelerate, improve, lower cost, make it easier. So I'll stop right there. It's an exciting time. And you have to spend—and I spend much more time on this subject than I did even two years ago or a year ago. You need to have knowledge. You can't just be listening to others. You have to have firsthand knowledge. And otherwise, you yourself start to become irrelevant. So as a leader, all that's on my mind.

Your next question comes from the line of Gregory Peters of Raymond James.

So I'm going to ask a follow-up question to some of your comments you just made. Some of your shareholders have reached out to me. Specifically, there's so much news in the marketplace about the rapid evolution of technology, specifically the new piece of information we're all processing is Anthropic’s Mythos. And I'm just curious how you view this type of technology and its risks to the cyber insurance market, how you think it might affect contingent business interruption. And then these tech companies are rolling out this technology. If it causes problems, I'm sure they're going to face some liability costs. So just trying to come at it from a slightly different angle, but anyways, your views would be appreciated.

Sure, Greg. That's not a slightly different angle. That's a different angle, and it's the right question. First, just on Mythos and the notion of finding vulnerabilities—we've redefined vulnerabilities, the threshold for vulnerability has been lowered. What were minor vulnerabilities can now be aggregated in a much more insightful way. Anthropic is a code generator. So it can read code. So it shouldn't be shocking that since it can read code, another use that has emerged is finding vulnerabilities. And there are others, think of other models. And the companies' business models—they do searches for information. That means they know systems, computers. They know how systems are accessed. So frankly, it can look at code and find vulnerabilities in your estate. Right now, it's not just that you can use this to find your own vulnerabilities. Many companies use open source in their estate and so third-party components. To the degree it's open source, you can find vulnerabilities maybe even before suppliers do. That doesn't mean the patch has been created. So in a word, the arms race is on. Now it is about hygiene and services to monitor and to support clients in identifying and fixing. Clearly, how diligent are you? Do you identify and patch? Imagine now the tools to patch are more automated and that automation is improving quickly. So you can patch faster. You can identify, you can patch if you choose to, see how faster speed. So that's the defense side of it, while we know the offense side is just around the corner. By the way, from what we can tell so far in AI in cyber attacks using AI, there really is only one instance we're aware of so far where it didn't involve a human. Other than that, humans are in the cockpit when they were using agentics so far. From an underwriter's point of view, policy conditions and pricing are on our minds. Large accounts will be much better at hygiene and have much stronger perimeters to get through to penetrate than small companies. Small companies, on the other hand, are less targeted individually, but create more systemic concern. And then finally, the biggest issue there is middle market companies. They're a target. They have more money and they're less capable at hygiene and focus on it less and defense. So all of that is on our minds as underwriters. I give you all this so you have a sense that we're thoughtful about this.

That's good detail. For my follow-up question, I'm just going to focus on—if you look at the P&C consolidated operations, you're generating in the first quarter an 84 combined ratio. You're on track to have a heck of a year. How do you think, broadly speaking, about the new business penalty, the fact that writing new business could be dilutive to that 84% combined ratio versus retention. So just walk us through your mental model on some of the points in that.

Well, we run in our various businesses, call it, mid-80s at retention. Large account E&S, the property I talked about is where we're—well, we shed half the volume. And by the way, that half the volume we shed, most of it was because we walked away. We also purchased additional reinsurance that impacted our premium growth and reduced our exposure. But we always have the new business penalty. So I don't see—I'm thinking about what you're saying, and I don't really see much of an impact. I don't see any impact, frankly. And when I'm maintaining underwriting discipline in property, if anything, what I'm doing is ameliorating impacts to combined ratio in our minds because we're only shedding business that is woefully inadequately priced if we were to write it.

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

I guess one modeling question to start with. Obviously, you called out the savings-oriented single premiums in life insurance in terms of written premiums. And we saw a similar, I guess, uptick in policy benefits. Does that stay elevated in future quarters also if the sales of these products normalize or go back to what it was before?

Do you want to take that offline? Do you want to answer?

Yes, I'll just do it real quick. So the savings-oriented products, as you know, are more spread-based than underwriting margin based, and that's how you have to think about it. So if we're selling elevated amounts of premium, there'll be a policy benefit that would match it. But over time, the margin comes through the investment product.

I don't—just to understand, it's Asia. And first quarter in Asia, classically an agency business, very fast start. I don't expect to see this kind of growth continue in single premium business. Return on capital for it is brilliant. I'm not in love with the margin of it. But I'll tell you what, it's like mutual fund business, you write a lot of it, and you make some money. But I expect more growth in regular premium on risk-based product as we go forward in the year.

Okay. Fantastic. That's very helpful. And if I can sort of switch gears back to AI. One of the debates out there right now is whether—if the insurance brokers collectively use AI to lower their own expenses or expand their margins. Does that provide an opportunity for companies like Chubb to reduce acquisition expenses?

Pick your moment and at the right moment, it does. Ultimately, I have to tell you, and I have been in this business a long time. This industry has certain idiosyncrasies about it. And there is a belief that, therefore, these things will be durable like the cost of intermediation. The cost of intermediation in many parts of the industry—and this is not a slam against brokers; they are partners—but the intermediation costs overall in numerous parts of the business are excessive. In an age of digitalization, in an age of AI and what technology does, one of the hallmarks is that it ought to ultimately, and it will, in so many areas, bring down cost. If you look at the economics of the business and the cost of intermediation, I think in the longer term, it will— it should decline.

Your next question comes from the line of Tracy Benguigui of Wolfe Research.

My question is for Tim Boroughs. There's been a noticeable change in tone by the market around private credit recently. From your perspective, how does that influence how you're thinking about the role of private credit to play in your portfolio going forward? And if you could also touch on the health of the existing book, particularly any trends you may be seeing in underlying borrower performance or early signs of stress?

Yes. Sure. On our private credit, our exposure to private credit is less than 4% of total investments and just over 50% of that total is in direct lending consisting of first lien senior secured loans that are at the top of the capital structure. This portfolio is in separately managed accounts. And I think that's important—not BDCs—where we have control of deployment and enforce conservative guidelines to our managers. While the direct lending sector has grown rapidly in the last few years, we've remained disciplined and have not grown our allocation. Our small group of experienced managers has consistently delivered strong conservative results with a loss experience we estimate to be only one-third of the broader direct lending universe. This discipline is further evident in our very modest exposure to software, which at less than $150 million or 4% of the direct lending portfolio is a fraction of the 20% average across the sector and less than 0.25% of our total investment portfolio.

That's super helpful. I'd also love to get your thoughts on how you're thinking about the duration of this soft cycle. Does that steep pace of property pricing decline suggest something shorter-lived, maybe less sustainable? Or do the structural and capital factors you discussed with Mike point to a longer soft cycle? And if you could also touch on if you've seen any deterioration on terms and conditions that may play into the duration of this soft cycle.

Yes. Terms and conditions just on the margin, not zero, but on the margin. And as to duration, well, I don't know. What I do know is if you underprice business in property, I haven't noticed much change in the attritional loss environment. That's pretty steady, with some volatility because of the size of losses, but pretty steady. On the catastrophe side, unless you believe the models are wrong or that somehow the climate environment is going to change materially, then we have an adequate pricing. Adequate pricing in property tends to reveal itself pretty quickly. The only way out for capital providers at that point is to adjust pricing and ensure they have the right terms and conditions. Generally, in my mind, you go to a dumb place pretty quick, then the reaction the other way ought to be quicker. But I don't know with certainty. That's my mental model.

Your next question comes from the line of David Motemaden of Evercore.

I had another market question for North America Commercial. I noticed that the cash pricing has held in pretty well here and actually accelerated a little bit this quarter. I get that it's nuanced, but as property returns come under pressure, do you expect to see increased competitive behavior shifting into casualty? Are you seeing any early signs of that? Just sort of wondering your outlook there.

So far, the pattern in pricing is about what I observed to you in prior quarters. In the cohorts that need price, you're getting price in excess of loss cost. And where the pricing is adequate, it is generally flat to or in some instances below loss cost increases. I see it at this point as pretty rational overall, not everywhere of course—it's a market. But overall, I do. I've even been surprised in certain areas where the market response has been the correct response and it creates more opportunity where rate adequacy is required.

Got it. That's encouraging. Maybe just switching gears, Chubb Worksite Benefits' 16% growth there, that's pretty solid, especially after similar growth last year. Could you just talk a little bit about the strategic role of the Worksite Benefits business within the broader portfolio and how you're thinking about the key building blocks to scale it from here, whether that's distribution, product expansion or potentially M&A?

Yes. There's no M&A in there on the horizon. We've built it organically and we're continuing to scale it. It's fundamentally part of our Accident & Health strategy. We pursue it in two ways. We have the legacy agency force combined that we have retooled to not sell individual insurance but small group, worksite benefits business. It is predominantly supplemental A&H business—dread disease, hospital cash, etc.—aimed to lower middle income to middle income people and provides a supplemental product to them. We also pursue it on middle market and upper middle market to large jumbo where we're awarded business. It works very closely with our P&C distribution and our brokers that represent us. They've expanded greatly over the years into employee benefits. The relationships on the accounts benefit us in the growth of Chubb Worksite Benefits. It's a similar product mix and may include some term life built into it as well. It's risk-based on Life paper. When you look at our broader story—our international Life business, which is over two-thirds risk-based supplemental A&H type business growing through agency distribution, digital distribution, banks, and has savings and other protection products within it—it's part of a coherent story between accident & health and life, which both are growth areas for the company.

Your next question comes from the line of Alex Scott of Barclays.

First one I have is on the Middle East conflict. Can you talk about your involvement in some of the solutions that are being contemplated for marine and trade credit and so forth? And to what degree that could support some growth near term?

I was approached by our government to put together the program that we announced. The government wanted to support shipping through the Gulf and open when they think that the risk environment is such that they can support with military convoys ships that would transit the Gulf. The program is to ensure shipping under those conditions and the purchase of our insurance program is a condition to being part of a convoy that the U.S. military would run. The program is supported by U.S. insurers taking 50% of the risk and the other half of the risk is taken by an arm of the federal government. We did it to support our country and our military, and to support the global commons and the economy, to the degree that practicing our craft can provide that service. It is in place for when conditions are such. If they are, this could generate premium revenue. Stay tuned.

That's helpful. Second, on your partnership with KKR and some of the funds that you're putting together, I wanted to check on the timing of when some of those newer things you've been working on will potentially contribute to net investment income or if they're already contributing to NII. I wasn't clear. And has some of the AI disruption changed anything about the timing of that work?

I think you may have missed some prior disclosures. We have disclosed quite clearly, particularly at the investor dinner and in quarters before, quite a bit of detail about our alternative assets and the investment activity there, what's our strategy. Half of it is in our partnership called Strategic Holdings. We've described what that is about, and we've been clear about the income it is producing and the income we expect it to produce over the next few years as we deploy. We've talked about the capital deployment. That's all out there, but we're happy to separately take it offline and give you detail around it. I think Peter wanted to add something.

No, that's fine, Alex. I can talk to you offline, but it does show up in our adjusted NII, and you can see it on the income statement as income from private equity partnerships. That's a substantial part.

Your next question comes from the line of Matthew Heimermann of Citi.

Just one on reinsurance. I'm curious, should we think about relative to any softening in pricing how you're thinking about rate adequacy and just opportunistic reinsurance purchases on a go-forward basis? Or was this acute, particularly on the property side, and you felt compelled to do so?

I'm not really going to go into great detail, except to say that axiomatic in here, when pricing becomes marginal or inadequate, we have various tools to manage exposure and our appetite for exposure. It's not about premium. Reinsurance is simply one of those tools.

You were clear to me. Willing to add anything with respect to if shrinking risk appetite in places in proper response to market conditions, does that create some flexibility to take more risk on the asset side? Or are there any things from a complex change in the portfolio that influence that?

No. The way we run a business doesn't trade off one to the other. We've got plenty of capital, and we maximize the amount of risk we take based on how we judge risk and reward, and there's no trade-off one to the other.

Your next question comes from the line of Brian Meredith of UBS.

Evan, we keep hearing a lot about price, what's happening in the property markets. I wonder if you could talk about terms and conditions. I'm hearing a little bit more about some softening terms and conditions from people. Are you seeing that at this point? Maybe dive into that a little bit because that can be kind of scary.

Welcome to insurance, Brian. It's not scary. It just is what it always turns out to be. No, as I said earlier, we're seeing it only on the margin right now. Other than that, we're not, at this point, seeing changes to terms and conditions. And by the way, when we look at pricing changes, we value term and condition changes. We don't just say price goes this. Changes in BI waiting periods, deductibles, CPI adjustments, etc., we actually put value on it in pricing. We're seeing it very marginally at this point.

Great. And then the second question is I've heard a little bit from some other companies about admitted markets getting, call it, more competitive in taking business back from the E&S or wholesale non-admitted markets. Are you seeing that at this point?

I am on the margin of it so far. Frankly, what's interesting to me is I look at middle market and small commercial E&S versus admitted. Admitted is much, much more disciplined; E&S less so. That goes back to distribution capital and the incentive system for volume. It's, to some degree, illogical to me. I'm seeing some go back towards the admitted. It wouldn't surprise me to see more. It's a classic pattern in a softening market. Where I'm seeing it is more on the margin in the property side. Retail will all of a sudden get so excited to write habitational wood frame business in Texas. Good luck to you.

Thank you. We've run out of time for questions. This concludes today's Q&A session. I'll now pass the conference back over to Susan Spivak for closing remarks.

Thank you, everyone, for joining us today. If you have any follow-up questions, we will be around to take your call. Enjoy the day, and thanks again.

This concludes today's conference call. You may now disconnect.