Speaking today will be Jay Fishman, Chairman and CEO; Jay Benet, Chief Financial Officer; and Brian MacLean, President and Chief Operating Officer. Other members of senior management are also in the room, available for the question-and-answer period. 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 open it up for questions.Before I turn it over to Jay, I would like to draw your attention to the explanatory note included at the end of the webcast. 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 projected in the forward-looking statements due to a variety of factors. These factors are described 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 and 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 that are available in the investors section on our website. And now, Jay Fishman. Jay S. Fishman Thank you, Gabby. Good morning, everyone, and thank you for joining us today. We're pleased to report a very strong start to 2012 driven by solid underwriting as well as investment results. In the quarter, we produced net income of $806 million or $2.02 per share and generated a 13.1% return on equity and a 14.7% operating return on equity. Even excluding the impact of net favorable prior-year development, which states the returns on an absolute year basis, the corresponding percentages are 9.9% and 11.1%. Net income of $806 million compares to $839 million last year, but last year included a $104 million benefit from the favorable resolution of prior-year tax matters.
As we've shared with you previously, our current operating focus is simple and on course. Given the potential for continued severe weather in the United States as well as the outlook for continued low interest rates, we remain committed to improving our profitability by actively but selectively seeking price increases and improve terms and conditions on the products we sell.In Business Insurance, we continued to achieve improved pricing. Renewal rate change in the quarter was a positive 8%, up from 6% in the fourth quarter of 2011, while retention remained stable. Importantly, we believe that we differentiate ourselves from many in the marketplace by not taking a "one size fits all" approach to pricing. In our individual underwriting businesses, each customer's needs, characteristics, geographies and risk and loss profile is different, and as such, each transaction is analyzed and priced separately. In Select Accounts, analyzing the returns we earn from our insurance industry segment in conjunction with the individual insured characteristics is critical to success. We continue to leverage what we believe is industry-leading data and analytics to help us optimize rate and retention, that is, achieving higher retentions on our best customer relationships while simultaneously identifying the walk away point for our least-profitable relationships. This differentiation is best evidenced by an analysis of rate and retention by historical loss ratio performance that Brian will share with you later. We're very pleased how we're executing in the field, and this analysis summarize and demonstrates the effectiveness of our analytics and the thoughtful way we're approaching business pricing. In our Personal Insurance segment, we continue to take the necessary actions to increase returns, which include improved pricing, terms and conditions. Renewal price change in the quarter improved in automobile and Homeowners to 4% and 10%, respectively. In many states, we have implemented higher deductibles and changes to underwriting terms and conditions predominantly for new business. And while Personal Insurance new business in these states has been and may continue to be impacted for some time following these changes, we are convinced we are on the right course. Read the rest of this transcript for free on seekingalpha.com